6. RURAL BANK OF BUHI VS. CA

procedural due process

  • Buhi Bank was a rural bank. Its books were examined by the Rural Banks division of the Central Bank
  • However, it refused to be examined. As a consequence, its financial assistance was suspended
  • Later, a general examination of the bank’s affairs and operations were again conducted.
  • The rural bank’s division found out massive irregularities in the operations, giving out loans to unknown and fictitious borrowers, and sums amounting to millions past due to the Central Bank. There were also promissory notes rediscounted with the Central Bank for cash.
  • As a result, the Buhi Bank became insolvent.
  • The division chief, Odra, recommended that Buhi be placed under receivership.
  • Thus, the Monetary Board adopted a Resolution # 583, placing the bank under receivership. Odra, the division chief, was made the receiver.
  • Odra thus implemented the resolution, authorizing deputies to take control and possession of Buhi’s assets and liabilities.
  • Del Rosario, the Buhi Bank Manager, filed an injunction against the receiver, arguing that the resolution violated the Rural Banks Act and constitutes gadalej. The bank claims that there was a violation of due process. They claim that the bank was not given the chance to deny and disprove the claim of insolvency or the other grounds and that it was hastily put under receivership.
  • Later on, the Central Bank Monetary Board ordered the liquidation of the Bank.
  • The judge ruled in favor of the Bank and issued a writ of execution.
  • The CA however restrained the enforcement of execution, citing that the Judge did not follow the orders, and thus required the Bank to yield to the CB.

ISSUE: Was due process observed?

SC: YES. CLOSURE VALID.

Under Sec 29 of the RA 265, on proceedings regarding insolvency, there is NO REQUIREMENT that a hearing be first conducted before a bank may be placed under receivership. The law explicitly provides that the Monetary Board can IMMEDIATELY forbid a banking institution from doing business and IMMEDIATELY appoint a receiver when: 1) there has been an examination by CB, b) a report to the CB, and c) prima facie showing that the bank is insolvent.

As to the claim that the RA 265 violates due process, the claim is untenable. The law could not have intended to disregard the constitutional requirement of due process when it conferred power to place rural banks under receivership.

The closure and liquidation of the bank is considered an exercise of POLICE POWER. It maybe subject to judicial inquiry and could be set aside if found to be capricious, discriminatory, whimsical, arbitrary, etc. The appointment of a receiver may be made by the Monetary Board, WITHOUT NOTICE AND HEARING, but subject to the JUDICIAL INQUIRY, to insure protection of the banking institution.

Due process does NOT necessarily require a PRIOR HEARING. A hearing or an OPPORTUNITY TO BE HEARD may be made SUBSEQUENT to the closure. One could just imagine the dire consequences of a prior hearing: bank runs would happen, resulting in panic and hysteria. In that way, fortunes will be wiped out, and disillusionment will run the gamut of the entire banking industry.

There is no question that the action of the MB may be subject to judicial review. Courts may interfere with the MB’s exercise of discretion. Here, the RTC has jurisdiction to adjudicate the question of whether the MB acted in bad faith when it directed the dissolution of Buhi Bank.

7. POLLUTION BOARD VS. CA

procedural due process

  • The board issued an EX PARTE ORDER directed against Solar Textile to immediately cease and desist from utilizing its waste water pollution source installations. The installations were allegedly discharging untreated waste water directly into a canal leading to the adjacent TullahanTinejerosRiver.
  • The ex parte order was signed by Factoran, the Board’s Chair.
  • The order was based on the findings made after inspection of Solar’s Plant by the National Pollution Control Commission, and by the DENR. They found out that the installation generated 30 gallons per minute of wastewater pollutants, in excess of that allowed under PD 984.
  • The order was received by Solar. A writ of execution was issued.
  • Solar assailed the order, contending that the same was issued without due process
  • The Board claims that it has authority to issue ex parte orders to suspend operations, under PD 984, when there is prima facie evidence of waste water discharge beyond the allowable limits. According to the investigator’s reports, there was prima facie evidence.
  • Solar insists that the order may issue only when there is immediate threat to life, public health, safety and welfare. It contends that there was no such finding.

ISSUE: Order valid?

SC: YES.

It is clear to this Court that, based on the numerous reports, THERE WAS AT LEAST PRIMA FACIE EVIDENCE before the board that the effluents emanating from the plant exceeded the maximum allowable lmits of chemical substances, and that accordingly there was adequate basis supporting the ex parte order to cease and desist. (it will be noted that the previous owner of the plant had earlier been issued a similar cease and desist order way back in 1985).

It will also be noted that Solar was earlier summoned by NPCC for a hearing in 1986, yet the Board refrained from issuing an ex parte order until after 1986, and 1988 when they conducted re-inspections. Thus, the Board appears to have been forbearing in its efforts to enforce the applicable standards against Solar. Solor however, remain casual about its continued discharge of untreated wastewater. Here, the order was issued not by a local government, but directly by the Pollution Adjudication Board, the very agency tasked to determine whether the emissions of a particular industrial establishment comply with the anti-pollution law.

Ex parte cease and desist orders are permitted by law and regulations in situations like these since stopping the continuous discharge of pollutants into the river cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and sequential appeals (which Solar has taken), which may take several years.

The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of animal and plant life, commonly known as POLICE POWER. The ordinary requirements of procedural due process may yield to the necessities of protecting vital public interests, through the exercise of police powers.

The court is not saying that the ex parte order could no longer be contested by Solar. It may still do so, in a hearing before the Board itself. Where the establishment affected by an ex parte case and desist order contests the correctness of the prima facie findings of the Board, the Board must hold a public hearing where such establishment will have an opportunity to controvert the basis of the order. That such opportunity is SUBSSEQUENTLY AVAILABLE, is really all that is required by the due process clause. Thereafter, the Board’s decision may again be tested by an appeal to the CA.

What Solar should have done is to contest the order in a public hearing rather than going to court to have the order nullified.

8. CASTILLO VS. JUAN

due process – right to be heard – fair and impartial judge

 another case by Justice Fernando kaya wordy…

  • Castillo, et al are 2 young maidens who are offended parties in 2 rape cases. They ask for the disqualification of the judge on the ground of bias and prejudice.
  • Judge Juan allegedly approached them, and in the secrecy of his chambers, he informed them of the weakness of their case, the likelihood of an acquittal, and impressed on them that it would be to their advantage to just settle and make the accused indemnify them.
  • Judge Juan also said that settling can spare them from embarrassment occasion by suits of this character.
  • These conversations took place even before the prosecution had finished presenting its evidence and one of the victims have not yet testified.
  • Judge Juan’s defense was that he was merely acting out of charity, and as a clear attempt to humanize justice.

ISSUE: Should the judge be disqualified?

SC: YES.

Due process cannot be satisfied in the absence of that degree of objectivity on the part of the judge sufficient to reassure the litigants of his being fair and being just. There is the legitimate expectation that the decision arrived at would be the application of the law to the facts as found by the judge who does not play favorites. Justice Dizon once said that in fact, due process of law requires a hearing before an impartial. And disinterested tribunal, and that every litigant is entitled to nothing less than the COLD NEUTRALITY OF AN IMPARTIAL JUDGE.

A Judge should strive at all times to be wholly free, disinterested and independent. Elementary due process requires hearing before an impartial and disinterested tribunal. A judge has both the duty of rendering a just decisions, and the duty of doing it in a manner completely free from suspicion as to its fairness and as to his integrity.

In every litigation, perhaps much more so in criminal cases, the manner and attitude of a trial judge are crucial to everyone concerned, the offended party, no less than the accused. It is not for him to indulge or even to give the appearance of catering to the attimes human failing of yielding to first impressions. He is to refrain from reaching hasty conclusions or prejudging matters. It would be deplorable if he lays himself open to the suspicion of reacting to feelings rather than to facts, of being imprisoned in the net of his own sympathies and predilections. It must be obvious to the parties as well as the public that he follows the traditional mode of adjudication requiring that he hear both sides with patience and understanding to keep the risk of reaching an unjust decision at a minimum. It is not necessary that he should possess marked proficiency in law, but it is essential that he is to hold the balance true.

This is not to discount in its entirety the submission of respondent Judge, who argued on his own behalf, that his final decision would be dependent on the evidence that could be presented by petitioners. What cannot be denied, however, is that after such conferences, they could no longer be expected to have faith in his impartiality. Even before they had been fully heard, they were told that their cases were weak. They could very well conclude then that there was a prejudgment. Under the circumstances, the fact that he acted as he did because any monetary settlement would benefit petitioners, considering their straitened financial circumstances, was of no moment. Even if it be admitted that, according to his beat lights, respondent Judge acted from a sense of sympathy or "charity", his conduct cannot be said to be consonant with the exacting standard of the cold neutrality of an impartial judge. The administration of justice would thus be subject to a reproach if there be a rejection of the plea for disqualification.

NOTE: cold neutrality of an impartial judge is an element of due process. Due process does not only mean a CHANCE TO BE HEARD, but also refers to the QUALITY OF THE HEARER.

Last saved by CHAMP8/16/200511:09 PM

9. WEBB VS. PEOPLE

due process – right to be heard – fair and impartial judge

  • This is the same Hubert Webb- Vizconde Massacre case.
  • Webb sought the disqualification of judge Amelita Tolentino on the ground that the judge allegedly told allegedly told the media that "failure of the accused to surrender following the issuance of the warrant of arrest is an indication of guilt." Respondent judge denied the motion.
  • Later, Webb filed a second motion to disqualify respondent judge as the latter allegedly told the media that the accused "should not expect the comforts of home," pending the resolution of his motion to be committed to Bicutan, Paranaque. Respondent judge again denied the motion to inhibit.
  • Again, Biong filed another motion to disqualify respondent judge on the ground of bias and partiality. This was likewise denied by respondent judge.
  • After arraignment, Webb filed an Urgent Motion for Hospitalization. He alleged that he was sick of dermatitis or asthma of the skin which aggravated due to his continuous commitment at the Paranaque Municipal Jail. The motion was denied by respondent judge.
  • During trial, there were other incidents when during cross examination (regarding Jessica Alfaro’s affidavit, and another regarding departure for the US), whenever the prosecution objects, Judge Tolentino sustains the objection.
  • Webb thus filed another motion to inhibit on ground of bias and prejudice of Judge. As usual, Judge Tolentino denied it.
  • Also, Judge denied the taking of deposition of Webb’s witness who was in the US.
  • Later, during formal offer of evidence, Judge admitted only 10 out of 142 exhibits offered by Webb.
  • According to Webb, all these sets irreversibly, the eventual conviction of the accused.

ISSUE: Should Judge Tolentino inhibit herself on the ground of bias and prejudice?

SC: NO.

The Bill of Rights guarantees that "(n)o person shall be held to answer for a criminal offense without due process of law."19 A critical component of due process is a hearing before an impartial and disinterested tribunal. We have ingrained the jurisprudence that every litigant is entitled to nothing: less than the cold neutrality of an impartial judge for all the other elements of due process, like notice and hearing, would be meaningless if the ultimate decision would come from a partial and biased judge.20 Hence, the Rules of Court allows a judge to voluntarily inhibit himself from hearing a case for "just or valid reasons" other than those referring to his pecuniary interest, relation, previous connection, or previous rulings or decisions.

A party has the right to seek the inhibition or disqualification of a judge who does not appear to be wholly free, disinterested, impartial and independent in handling the case. This right must be weighed with the duty of a judge to decide cases without fear of repression. Hence, to disqualify a judge on the ground of bias and prejudice the movant must prove the same by clear and convincing evidence. This is a heavy burden and petitioners failed to discharge their burden of proof.

he alleged adverse and erroneous rulings of respondent judge on their various motions. By themselves, however, they do not sufficieritly prove bias and prejudice to disqualify respondent judge. To be disqualifying, the bias and prejudice must be shown to have stemmed from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case. Opinions formed in the course of judicial proceedings, although erroneous, as long as they are based on the evidence presented and conduct observed by the judge, do not prove personal bias or prejudice on the part of the judge. As a general rule, repeated rulings against a litigant, no matter how erroneous and vigorously and consistently expressed, are not a basis for disqualification of a judge on grounds of bias and prejudice. Extrinsic evidence is required to establish bias, bad faith, malice or corrupt purpose, in addition to the palpable error which may be inferred from the decision or order itself. Although the decision may seem so erroneous as to raise doubts concerning a judge's integrity, absent extrinsic evidence, the decision itself would be insufficient to establish a case against the judge.

The only exception to the rule is when the error is so gross and patent as to produce an ineluctable inference of bad, faith or malice.

Petitioners simply lean on the alleged series of adverse rulings of the respondent judge which they characterized as palpable errors. This is not enough. We note that respondent judge's rulings resolving the various motions filed by petitioners were all made after considering the arguments raised by all the parties. It is true that the respondent judge erred in some of her rulings such as her rejection of petitioners' one hundred thirty two ( 132) pieces of evidence. It appears, however, that respondent judge reversed this erroneous ruling and already admitted these 132 pieces of evidence after finding that "the defects in (their) admissibility have been cured through the introduction of additional evidence during the trial on the merits."

There is still another reason why we should! observe caution in disqualifying respondent judge. The trial of the petitioners is about to end and to assign a new judge to determine the guilt or innocence of petitioners will not be for the best interest of justice. The records of the case at bar run into volumes. These voluminous records cannot capture in print the complete credibility of witnesses when they testified in court. As the respondent judge observed the demeanor of witnesses while in the witness chair, she is in the best position to calibrate their credibility.