Martirez vs. Crespo

A judge should voluntarily inhibit from a case where his or her actions, taken together, show badges of bias in favor of one party, even absent a compulsory ground under Rule 137, Section 1 of the Rules of Court; nevertheless, after judgment on the merits, the denial of a motion to inhibit should be raised on appeal, not via certiorari.

Anastacio R. Martirez and Marilu San Juan Martirez were the plaintiffs in Civil Case No. 73228 before the Regional Trial Court of Pasig City, Branch 70. Their complaint named Mario B. Crespo a.k.a. Mark Jimenez, Taxinet, Inc. (renamed Pinoy Telekoms, Inc.), and Latitude Broadband, Inc. as defendants. The controversy arose from a proposed business arrangement involving Pinoy, a P49-million loan, shares in Pinoy, and a condominium unit in Essensa East Forbes Condominium, Taguig City. The proceedings implicated Rule 137, Section 1 of the Rules of Court on judicial disqualification and Rule 65, Section 1 on certiorari.

Anastacio R. Martirez and Marilu San Juan Martirez were the plaintiffs in Civil Case No. 73228 before the Regional Trial Court of Pasig City, Branch 70. Their complaint named Mario B. Crespo a.k.a. Mark Jimenez, Taxinet, Inc. (renamed Pinoy Telekoms, Inc.), and Latitude Broadband, Inc. as defendants. Sometime in January 2011, Crespo proposed to make Anastacio the Chairman and Chief Executive Officer of Pinoy. Crespo promised to give Anastacio 7% equity in Pinoy worth P49 million for free, although they would make it appear that Anastacio paid for the shares. Crespo then persuaded Anastacio to secure a P49-million loan for Pinoy and offered a condominium unit in Essensa East Forbes Condominium, Taguig City as collateral.

On May 11, 2011, Crespo allegedly handed Anastacio three documents: a Deed of Assignment with Crespo as Assignor and Anastacio as Assignee; another Deed of Assignment with Crespo as Assignee and Anastacio as Assignor; and a Declaration of Trust providing that Anastacio held title to the Taguig condominium unit in trust for Crespo. Crespo then transferred the shares he had promised to Anastacio. To make it appear that Anastacio purchased his shares in Pinoy, Anastacio and Marilu made remittances to Crespo from May 20, 2011 to August 2, 2011, for which Crespo issued Acknowledgment Receipts. After the last payment, Anastacio received an e-mail from Crespo's counsel informing him that the transfer of the shares would be deferred due to the non-compete provisions in his employment contract with Qatar Telecoms. After their written demands were ignored, Anastacio and Marilu filed the Complaint. They prayed for the return of their money, or in the alternative, the rescission of the Deed of Assignment and Declaration of Trust, for them to be declared the absolute owner of the condominium unit, and for its possession and certificate of title to be surrendered to them.

In their December 23, 2011 Answer with Special and Affirmative Defenses, Crespo, Pinoy, and Latitude alleged that Crespo built Pinoy, which was granted a telecommunications franchise in July 1996. Crespo engaged the services of Anastacio as Chairman and Chief Executive Officer after Anastacio had resigned from his employment. They alleged that the assignment of the condominium unit was consideration for Anastacio to secure a loan from Citibank, which he failed to obtain. They further claimed that the amounts remitted by Anastacio were payment for the Pinoy shares valued at P49 million, as evidenced by the Acknowledgment Receipts, and that dividends from these shares would help recoup Anastacio's investments. As special and affirmative defenses, they argued that the complaint failed to state a cause of action because there was no evidence of the alleged loan, and that the Deeds of Assignment were unenforceable and superseded by the parties' intention to enter into a contract of sale of Pinoy shares.

On November 22, 2011, the Regional Trial Court, through Judge Louis P. Acosta, granted Anastacio and Marilu's prayer for a writ of preliminary attachment after an ex parte hearing and formal offer of documentary evidence on November 21, 2011. On November 28, 2011, Judge Acosta issued a Writ of Preliminary Attachment directing the sheriff to attach all real and personal properties of Crespo, Pinoy, and Latitude. On January 26, 2012, Crespo, Pinoy, and Latitude filed a Motion to Lift Writ of Preliminary Attachment and to Lift Lis Pendens. In a July 5, 2012 Order, the trial court granted the motion and directed the Register of Deeds to cancel the notice of lis pendens. Anastacio and Marilu filed a Motion for Reconsideration on July 23, 2012. The resolution of that motion was delayed: the hearing on respondents' posting of a counterbond was reset from November 7, 2012 to February 6, 2013, and then to March 15, 2013. During the March 15, 2013 hearing, Anastacio and Marilu submitted a certification issued by the Supreme Court that PMT Insurance Consultancy was not accredited to deal with bonds, and informed Judge Acosta that a certain Lutz Kunack claimed he had already bought the condominium unit subject of the preliminary attachment. Only on May 22, 2013 did the trial court revoke its July 5, 2012 Order for failure of Crespo, Pinoy, and Latitude to post the required counterbond.

On July 17, 2013, Anastacio and Marilu filed a Motion to Resolve with Motion to Set Case for Pre-trial, while Crespo, Pinoy, and Latitude filed a Motion to Resolve Defendant's Motion for Preliminary Hearing on Affirmative Defenses. In an October 11, 2013 Order, the Regional Trial Court dismissed the Complaint for failure to state a cause of action. The trial court also ordered the lifting of the Writ of Attachment, directed the Register of Deeds of Taguig City to cancel the Notice of Lis Pendens, and directed the Sheriff to lift the Notice of Garnishment on all personal properties, including bank accounts, of the defendants. Anastacio and Marilu filed a Motion for Reconsideration on October 25, 2013. On November 26, 2013, they filed a Motion for Inhibition and a Request for Investigation and/or Administrative Complaint against Judge Acosta, claiming extreme bias in favor of Crespo, Pinoy, and Latitude. In a December 13, 2013 Order, the trial court denied the Motion for Inhibition for lack of merit, finding the bias allegations baseless and unsubstantiated and stating that even the defendants had been recipients of orders adverse to their interests. A motion for reconsideration was denied on December 16, 2013. The trial court later denied another motion for reconsideration on January 29, 2014, after petitioner's Notice of Appeal had been given due course on January 14, 2014, rendering the motion moot and academic.

• Propriety of Certiorari: Petitioner argued that the special civil action of certiorari, and not an appeal, is the proper remedy to assail the denial of a judge's inhibition, which is interlocutory in nature, and that all the requisites for filing a petition for certiorari were satisfied.
• Due Process: Petitioner claimed he was deprived of due process when Judge Acosta denied the Motion to Inhibit without any hearing and subsequently ruled upon the Motion for Reconsideration on the merits of the case on December 16, 2013.
• Bias and Partiality: Petitioner insisted that he and his wife adduced sufficient proof showing Judge Acosta's partiality, and that the Court of Appeals erred in not finding that the judge should inhibit.
• Specific Acts of Bias: Petitioner cited the following as supporting bias: (1) dismissal of the Complaint without a hearing and without a motion to dismiss by respondents, who only filed an Answer; (2) almost a year taken to resolve the Motion for Reconsideration from the July 5, 2012 Order lifting the Writ of Preliminary Attachment and Notice of Lis Pendens; (3) failure to rule upon respondents' Motion for Preliminary Hearing on Affirmative Defenses despite it being deemed submitted for resolution; (4) failure to act on the Motion to Resolve with Motion to Set Case for Pre-trial; and (5) issuance of the October 11, 2013 Order after one year, six months, and one day from the time the last pleading was filed.
• Justiciable Controversy / Mootness: Petitioner claimed the issue on inhibition was a justiciable controversy because the motion for reconsideration on the main case was still pending; assuming the Motion to Inhibit was mooted, petitioner argued the case fell under the exception to the moot and academic principle as it involved violation of due process and was capable of repetition yet evading review.
• Voluntary Inhibition: Petitioner admitted that while there is no ground for compulsory inhibition, Judge Acosta should have voluntarily inhibited from the case considering that his conduct showed extreme bias for respondents and was tainted with the appearance of impropriety.
• Questions of Law: In rebuttal, petitioner claimed that he raised questions of law, not questions of fact as respondent Crespo claimed.

• No Ground for Inhibition: Respondent alleged that the Court of Appeals did not err in upholding the validity of Judge Acosta's non-inhibition as there is no compulsory ground for the judge to inhibit and petitioner failed to prove his bias and partiality.
• Mootness: Respondent Crespo claimed that the issue on inhibition had been rendered moot, or ceased to present a justiciable controversy, when the Court of Appeals granted petitioner's appeal and ordered the trial court to reinstate the complaint.
• Improper Remedy: Respondent alleged that certiorari cannot be availed of because petitioner chose the remedy of appeal.
• No Practical Use: Respondent argued that the determination of the issue on inhibition would be of no practical use.
• No Exception to Mootness: Respondent argued that the present case does not fall in any of the exceptions for when a moot case may still be reviewed by the Supreme Court.
• Procedural Violation: Respondent argued that petitioner violated procedural rules for alleging factual questions in a Rule 45 case.

• Propriety of Certiorari: Whether a special civil action for certiorari, rather than an appeal, is the proper remedy to assail the denial of a motion to inhibit where a judgment on the merits has already been rendered by the trial court.
• Grave Abuse of Discretion / Voluntary Inhibition: Whether the Court of Appeals erred in not finding that Judge Louis P. Acosta committed grave abuse of discretion when he did not voluntarily inhibit from the main case.
• Mootness: Whether the issue of inhibition was rendered moot by Judge Acosta's appointment as Associate Justice of the Court of Appeals and/or by the appeal from the main case, and if so, whether the petition should still be reviewed under exceptions to the moot and academic principle.

• Propriety of Certiorari: No. Certiorari was improper because a judgment on the merits had already been rendered before the denial of the motion to inhibit; the issue should have been raised on appeal.
• Grave Abuse of Discretion / Voluntary Inhibition: Yes, on the merits. Judge Acosta's actions, taken together, showed badges of bias against petitioner, and he should have voluntarily inhibited; no compulsory ground was necessary.
• Mootness: Yes. Judge Acosta's appointment as Associate Justice of the Court of Appeals rendered the inhibition issue moot, and the Petition for Review was denied for being moot and academic.

• Propriety of Certiorari: Rule 65, Section 1 of the Rules of Court requires that there be no appeal or plain, speedy, and adequate remedy in the ordinary course of law. In Ong vs. Spouses Basco, the Court held that when appeal affords adequate and expeditious relief, a special action for certiorari is improper. Rule 137, Section 2 of the Rules of Court provides that no appeal or stay shall be allowed from a judge's decision in favor of his or her own competency until after final judgment in the case. Here, Judge Acosta rendered judgment on the main case on October 11, 2013 before he denied the Motion to Inhibit and the Motion for Reconsideration. Because a judgment on the merits had already been rendered, petitioner's resort to certiorari was no longer proper; the issue of whether Judge Acosta acted erroneously on his competency should have been raised in the appeal from the main decision. Nonetheless, the Court proceeded to determine whether there were grounds for Judge Acosta to inhibit.
• Grave Abuse of Discretion / Voluntary Inhibition: Due process of law requires that hearings be held before an impartial and disinterested tribunal and that a decision must come from an impartial and unbiased judge. Rule 137, Section 1 of the Rules of Court contemplates two kinds of inhibition: compulsory and voluntary. The first paragraph enumerates specific grounds for compulsory inhibition, while the second paragraph refers to voluntary inhibition, or when judges are given discretion to determine whether they should sit in a case for other just and valid reasons with only their conscience to guide them. In Umale vs. Villaluz, Pimentel vs. Salanga, Gutang vs. Court of Appeals, Castillo vs. Juan, and Latorre vs. Ansaldo, the Court recognized that voluntary inhibition depends on the circumstances of each case and on the judge's conscience, but also that a judge should conduct a careful self-examination when circumstances induce doubt on his or her impartiality. Here, petitioner sought Judge Acosta's voluntary inhibition on the ground of bias or partiality, as manifested in the following actions: (1) Judge Acosta dismissed the Complaint even without a hearing and without the filing of a motion to dismiss by respondents, who only filed an Answer; (2) petitioner's Motion for Reconsideration from the Order lifting the Writ of Preliminary Attachment and Notice of Lis Pendens was pending for almost a year before it got resolved; (3) Judge Acosta did not act upon the Motion for Preliminary Hearing on Affirmative Defenses filed by respondents despite it being deemed submitted for resolution; (4) the Motion to Resolve with Motion to Set Case for Pre-trial was also not acted upon by Judge Acosta; and (5) Judge Acosta issued the October 11, 2013 Order dismissing the Complaint after more than a year from the time the last pleading was filed. These circumstances taken together showed badges of bias against petitioner. The records showed that respondents filed an Answer with Special and Affirmative Defenses and subsequently moved for a Preliminary Hearing on Affirmative Defenses, but Judge Acosta did not act on the motion or conduct a hearing; still, he dismissed the Complaint based on the affirmative defense raised by respondents. It took Judge Acosta almost a year, or only on May 22, 2013, to resolve petitioner's Motion for Reconsideration of the July 5, 2012 Order which lifted the writ of preliminary attachment, despite being informed of respondents' failure to post a valid counterbond. Judge Acosta repeatedly reset the hearing for respondents' posting of a counterbond to November 7, 2012, then to February 6, 2013, and then to March 15, 2013. During the March 15, 2013 hearing, petitioner submitted a certification issued by the Supreme Court stating that the bonding company from which respondents obtained their counterbond was not accredited to deal with bonds, and informed Judge Acosta that a certain Lutz Kunack already bought the condominium unit subject of the preliminary attachment. Yet, it was only on May 22, 2013, or almost a year after the July 5, 2012 Order, that another Order revoking the lifting of the writ of preliminary attachment and notice of lis pendens was issued for failure of respondents to post the required counterbond, to the prejudice of petitioner. This was in contrast with Judge Acosta's action when respondents filed a Motion to Lift Writ of Preliminary Attachment and to Lift Lis Pendens on January 26, 2012; there, Judge Acosta granted their Motion and cancelled the Notice of Lis Pendens within a period of six months. Also, the Motion to Resolve with Motion to Set Case for Pre-trial filed by petitioner on July 17, 2013 was not acted upon while respondents' Motion to Resolve Defendant's Motion for Preliminary Hearing on Affirmative Defenses was deemed submitted for resolution by Judge Acosta. To create further doubt on his partiality, it took Judge Acosta an inordinate amount of time to resolve the Complaint, finally ruling in favor of respondents in an October 11, 2013 Order although the last pleading was submitted for resolution on May 14, 2012. Article VIII, Section 15(1) and (2) of the Constitution mandates that all cases or matters filed after the effectivity of the Constitution must be decided or resolved within three months from the filing of the last pleading, brief, or memorandum required by the Rules of Court or by the court itself for all other lower courts. Given that his actions under the circumstances, taken as a whole, cast doubt on his partiality, Judge Acosta should have exercised his discretion in a way that the people's faith in the judiciary would not be impaired—that is, he should have disqualified himself. A judge may not be legally prohibited from sitting in a litigation, but when circumstances appear that will induce doubt on his or her honest actuation and probity in favor of either party, or incite such a state of mind, he or she should conduct a careful self-examination and exercise discretion in a way that the people's faith in the courts of justice is not impaired; the better course for the judge is to disqualify himself or herself.
• Mootness: Although the Court found that Judge Acosta should have voluntarily inhibited, his appointment as Associate Justice in the Court of Appeals rendered the issue of his inhibition in the pre-trial and trial of the main case before the trial court moot. The Petition for Review was therefore denied for being moot and academic.

• Voluntary Inhibition of Judges — Under Rule 137, Section 1, second paragraph, of the Rules of Court, a judge may, in the exercise of sound discretion, disqualify himself or herself from sitting in a case for just or valid reasons other than the compulsory grounds. The discretion is guided by conscience, and each case is judged by its peculiar circumstances; the reviewing tribunal will not disturb the judge's decision absent manifest arbitrariness or whimsicality. However, when circumstances induce doubt on the judge's honest actuation and probity in favor of either party, the judge should conduct a careful self-examination and should exercise discretion so that the people's faith in the courts is not impaired; the better course is to disqualify himself or herself. Applied: Judge Acosta's actions taken together showed badges of bias, so he should have voluntarily inhibited.
• Compulsory vs. Voluntary Inhibition — Rule 137, Section 1, first paragraph, lists compulsory grounds for inhibition, such as pecuniary interest, relationship, or previous participation in the matter in adjudication. The second paragraph covers voluntary inhibition for other just or valid reasons. No compulsory ground was alleged in this case; petitioner sought voluntary inhibition.
• Certiorari and the Adequate Remedy of Appeal — Under Rule 65, Section 1, certiorari lies only when there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law. When appeal affords adequate and expeditious relief, certiorari is improper. After judgment on the merits, the denial of a motion to inhibit should be raised on appeal, not through certiorari. Applied: certiorari was improper because Judge Acosta had already rendered judgment on the main case before denying the motion to inhibit.
• Due Process and an Impartial Tribunal — Due process requires that hearings be held before an impartial and disinterested tribunal and that decisions come from an impartial and unbiased judge. Applied: Judge Acosta's conduct cast doubt on his impartiality.
• Moot and Academic Principle — An issue is moot when it ceases to present a justiciable controversy. Here, Judge Acosta's appointment as Associate Justice of the Court of Appeals rendered the inhibition issue moot, and the petition was denied for being moot and academic.
• Timeliness of Decisions in Lower Courts — Article VIII, Section 15(1) and (2) of the 1987 Constitution requires lower courts to decide or resolve cases within three months from the filing of the last pleading, brief, or memorandum. Applied: Judge Acosta took an inordinate amount of time to resolve the Complaint, contributing to the doubt on his partiality.

• "A judge should have voluntarily inhibited from a case where his actions, taken together, show badges of bias in favor of one of the parties to the case." — This opening statement states the core ruling on voluntary inhibition and frames the Court's analysis of Judge Acosta's conduct.
• "These circumstances taken together, we find that Judge Acosta's actions showed badges of bias against petitioner." — This passage applies the voluntary inhibition doctrine to the facts, concluding that the judge's delays and selective action on motions warranted inhibition.
• "A judge may not be legally prohibited from sitting in a litigation, but when circumstances appear that will induce doubt on [their] honest actuation and probity in favor of either party, or incite such state of mind, [they] should conduct a careful self-examination. [They] should exercise [their] discretion in a way that the people's faith in the courts of justice is not impaired. The better course for the judge is to disqualify himself [or herself.]" — This is the Court's canonical formulation of the standard for voluntary inhibition, emphasizing judicial self-examination and public confidence in the courts.
• "However, considering Judge Acosta's appointment as Associate Justice in the Court of Appeals, the issue of his inhibition in the pre-trial and trial of the main case before the trial court has been rendered moot." — This passage explains why the Court denied the petition despite finding that Judge Acosta should have inhibited.

• Ong vs. Spouses Basco, 583 Phil. 248 (2008) — Cited for the rule that when appeal affords adequate and expeditious relief, a special action for certiorari is improper; after judgment on the merits, the issue of the judge's competency should be raised on appeal.
• Umale vs. Villaluz, 151-A Phil. 563 (1973) — Cited for tracing the roots of voluntary inhibition and recognizing that a judge may voluntarily inhibit for reasons other than the compulsory grounds.
• Pimentel vs. Salanga, 128 Phil. 176 (1967) — Cited for the guide by which a judge may exercise discretion on inhibition, including careful self-examination and the better course of disqualification when impartiality is doubted.
• Gutang vs. Court of Appeals, 354 Phil. 77 (1998) — Cited for the rule that each case of inhibition is treated based on its own circumstances and that voluntary inhibition is primarily a matter of conscience and sound discretion.
• Castillo vs. Juan, 159 Phil. 143 (1975) — Cited as an example where a judge was ordered to desist from further conducting trial after his conduct amounted to prejudgment and was not consonant with the cold neutrality of an impartial judge.
• Latorre vs. Ansaldo, 410 Phil. 570 (2001) — Cited for the holding that a judge should have inhibited himself after his actions cast a cloud over his impartiality.
• People vs. Kho, 409 Phil. 326 (2001) — Cited for the rule that the Rules of Court contemplate two kinds of inhibition: compulsory and voluntary.
• Webb vs. People, 342 Phil. 206 (1997) — Cited for the rule that due process requires hearings before an impartial and disinterested tribunal and that a decision must come from an impartial and unbiased judge.
• Fit-Estate Properties, Inc. vs. Reyes, G.R. No. 152797, September 18, 2019 — Cited in relation to the grounds for compulsory inhibition.
• Orola vs. Alovera, 390 Phil. 950 (2000) — Cited in Latorre vs. Ansaldo for the proposition that the better course for a judge is to disqualify himself or herself when impartiality is doubted.

• Rule 65, Section 1, Rules of Court — Provides the requisites for a petition for certiorari, including that there be no appeal or plain, speedy, and adequate remedy in the ordinary course of law. Applied: certiorari was improper because appeal was available after the judgment on the merits.
• Rule 137, Section 1, Rules of Court — Governs disqualification of judges. The first paragraph lists compulsory grounds; the second paragraph allows voluntary inhibition for just or valid reasons other than those enumerated. Applied: no compulsory ground was alleged, but Judge Acosta should have voluntarily inhibited because his actions showed badges of bias.
• Rule 137, Section 2, Rules of Court — Provides that a party objecting to a judge's competency may file a written objection, and no appeal or stay shall be allowed from the judge's decision in favor of his or her own competency until after final judgment in the case. Applied: the pendency of the motion for reconsideration did not stay the main case, and after judgment on the merits, the issue should have been raised on appeal.
• Article VIII, Section 15(1) and (2), 1987 Constitution — Requires lower courts to decide or resolve cases within three months from the filing of the last pleading, brief, or memorandum. Applied: Judge Acosta took an inordinate amount of time to resolve the Complaint, contributing to the doubt on his partiality.

Hernando, Inting, Rosario, and J. Lopez, JJ., concur. Rosario was designated additional Member per Special Order No. 2833.