Title
Source: Supreme Court
Mercado vs. Security Bank Corp.
Case
G.R. No. 160445
Decision Date
Feb 16, 2006
Petitioners filed for annulment of judgment; denied twice. Mercado wrote contemptuous letter accusing justices of bias, leading to indirect contempt charges. Court upheld dignity, fined Mercado and counsel, and reiterated proper legal remedies.

Case Digest (G.R. No. 160445)
Expanded Legal Reasoning Model

Facts:

  • Initial Filing and Proceedings
    • Petitioners Jose Teofilo T. Mercado and Ma. Agnes R. Mercado filed with the Supreme Court a Petition for Review on Certiorari dated December 12, 2003, assailing:
      • The Court of Appeals (CA) Decision dated May 27, 2003, which dismissed their petition for annulment of judgment; and
      • The CA Resolution dated October 23, 2003, denying their motion for reconsideration.
    • On January 12, 2004, the Supreme Court denied the petition for failure to show reversible error by the CA.
    • Petitioners moved for reconsideration, alleging the CA merely relied on technical rules and that their former counsel's gross negligence amounted to extrinsic fraud.
    • On March 24, 2004, the Court granted the motion for reconsideration and reinstated the petition, directing Security Bank Corporation (respondent) to comment.
  • Respondent's Comment and Further Resolutions
    • Security Bank Corporation argued the issues raised were mere rehash and that petitioner’s former counsel’s negligence could not be extrinsic fraud since petitioners actively pursued other claims.
    • The Court, on June 7, 2004, issued a Resolution denying petitioners’ petition due to lack of reversible error.
    • Petitioners filed a motion for reconsideration, which was denied on September 15, 2004, emphasizing:
      • That action for annulment of judgment is not a substitute for appeal or other remedies;
      • Petitioners’ failure to avail of available remedies barred their annulment petition;
      • Alleged counsel’s negligence did not constitute extrinsic fraud.
  • Contempt Proceedings Arising from Petitioners’ Letter
    • On October 18, 2004, petitioner Mercado wrote a letter to Chief Justice Hilario G. Davide, Jr. alleging:
      • That the ponente (Justice Angelina Sandoval-Gutierrez) succumbed to “tremendous pressure” from Chief Justice Davide to deny their petition;
      • That Security Bank Corporation financed the ponente’s travels abroad;
      • The ponente gave respondent a “go signal” to sell their property despite pending litigation and annotated lis pendens.
      • That the sale and demolition of their property were irregular and conducted without due process.
      • He accused the Court and Chief Justice of “unthinkable, ungodly, and malicious” acts and decried the absence of justice in the Supreme Court.
    • On November 2, 2004, Chief Justice Davide required petitioner Mercado’s counsel, Atty. Jose P. Villanueva, to comment and show cause regarding these allegations.
    • On November 17, 2004, the Court’s Third Division ordered Mercado’s personal appearance to show cause why he should not be held in contempt.
    • At the hearing on November 22, 2004, Mercado, with new counsel Atty. Pablo G. Macapagal, affirmed the truth of his letter's contents, including the claim that the petition’s denial was due to pressure from the Chief Justice.
    • Mercado confused the name of the ponente, calling Justice Conchita Carpio Morales as Justice Sandoval-Gutierrez.
  • Further Proceedings and Investigations
    • The Third Division directed Atty. Macapagal to explain why Mercado should not be held in contempt.
    • Atty. Villanueva denied Mercado’s allegations and presented documentary proof of his trip to London unrelated to the ponente’s travel to the US.
    • Mercado submitted an explanation, apologizing but claiming his letter echoed Atty. Villanueva’s statements and was written under personal stress.
    • On January 26, 2005, both Mercado and Atty. Villanueva were ordered to clarify their positions. Mercado testified Atty. Villanueva informed him of the ponente’s identity and close friendship, while Villanueva denied pointing out the ponente at his mother’s wake but admitted acquaintance since 1964.
    • The Third Division appointed CA Justice Renato C. Dacudao as Commissioner to investigate the contempt incident.
    • On May 18, 2005, Justice Dacudao found Mercado guilty of improper conduct but without malice or bad faith, recommending a fine of P5,000.
  • Supreme Court’s Review and Findings
    • The Supreme Court found Mercado’s letter was marked with malice and bad faith due to baseless and malicious accusations against the Chief Justice and the ponente.
    • The Court ruled Mercado's statements degraded the integrity of the judiciary and were an assault on the administration of justice.
    • The Court regarded Atty. Villanueva’s conduct as professional misconduct for improperly impressing upon Mercado that he had a favorable friendship with the ponente, thus leading to false hope and eventual disparagement of the Court.
    • Both Mercado and Villanueva were found guilty of indirect contempt of court.
    • The Court imposed fines of P50,000 each and warned against repetition of similar acts.

Issues:

  • Whether petitioner Jose Teofilo T. Mercado’s letter alleging undue influence and misconduct by the Chief Justice and a ponente justice constitutes contempt of court.
  • Whether Atty. Jose P. Villanueva’s statements to Mercado regarding his relationship with the ponente justice amounted to professional misconduct and contempt.
  • Whether the Court erred in dismissing the petition for annulment of judgment on grounds of failure to avail of proper remedies.
  • The appropriate penalty for the contempt committed by Mercado and Atty. Villanueva.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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