G.R. No. 196415 - Commissioner of Internal Revenue vs. Toledo Power Company

The administrative case arose from the directive issued by the Supreme Court in its January 24, 2001 decision in G.R. No. 139519 (Conchito J. Oclarit vs. Judge Maximo G.W. Paderanga).
The Office of the Court Administrator (OCA) was instructed to file an administrative charge against Judge Maximo G.W. Paderanga for gross misconduct and grave abuse of authority.
Petitioner, Atty. Conchito J. Oclarit, is a practicing lawyer in Cagayan de Oro and Misamis Oriental, who was involved in a case where he served as counsel for the plaintiffs in Civil Case No. 99-194 at Regional Trial Court, Misamis Oriental, Branch 38.

On June 1, 1999, the pre-trial hearing for Civil Case No. 99-194 was underway at the Regional Trial Court presided over by Judge Paderanga.
During the hearing, petitioner filed a motion to have a compromise agreement approved, explaining that the settlement was reached before a barangay captain.
Counsel for the defendants opposed the motion, arguing that the compromise was improperly submitted before the court.
The judge directed petitioner repeatedly to “shut up” as he attempted to explain the submission of the compromise agreement.
Petitioner’s respectful request for the judge to cease shouting was met with a rhetorical question pointing to a contempt citation, including threats such as “I will put you in jail. Get a policeman.”
Consequently, the judge issued a verbal order of direct contempt on petitioner, imposing a fine of P1,000.00 and mandating one (1) day of incarceration.
Petitioner was detained, served one day in jail, and paid the fine, and he later challenged the ruling as being an overreach of judicial discretion.

In compliance with the directive of the Supreme Court, the OCA filed an administrative complaint against Judge Paderanga on October 4, 2001, charging him with gross misconduct and grave abuse of authority.
The initial administrative process included orders and resolutions requiring the respondent to file his comment; however, the respondent initially failed to do so promptly.
Subsequent resolutions noted that copies of the administrative complaint were either not furnished or omitted, and only after repeated directives did the respondent eventually file his comment on July 28, 2004.
The case was referred to Justice Magdangal M. de Leon of the Court of Appeals for a preliminary investigation, report, and recommendation.

Both Atty. Oclarit (private complainant) and Judge Paderanga indicated a willingness to settle the controversy outside the contentious merits of the case.
Atty. Oclarit filed an Affidavit of Desistance on February 22, 2005, and respondent subsequently filed a Manifestation with Motion confirming that both parties had come to an amicable resolution.
This settlement led to the parties not appearing at a scheduled hearing on February 24, 2005, although the administrative matter continued with the investigation still proceeding.

In his Report and Recommendation dated April 8, 2005, Justice de Leon evaluated the incident, emphasizing the following:

The judge’s action in summarily citing petitioner for direct contempt without stating a specific cause was inappropriate.
The misuse of contempt powers, notably taken in an emotionally charged situation where petitioner’s explanation did not justify a drastic sanction.

Justice de Leon opined that although respondent Paderanga’s actions constituted misconduct and an abuse of authority, they did not rise to the level of gross misconduct.
Accordingly, Justice de Leon recommended a reprimand with stern warning, highlighting that similar acts in the future would meet with harsher penalties.

Whether the respondent judge’s decision to immediately declare petitioner in direct contempt without adequate warning was within the bounds of judicial discretion.
Whether the judge’s conduct in ordering confinement and imposing a fine violated the principle of using contempt powers in a preservative and corrective manner rather than as a vindictive act.

Whether the judge’s failure to state the specific cause for the contempt citation and his refusal to entertain petitioner’s motion for a bond (bail) constituted a breach of procedural due process.
The significance of furnishing copies of the administrative complaint to the respondent and the resulting delay in his filing of comment.

Whether the submission of an Affidavit of Desistance and the parties’ mutual agreement to resolve their differences should automatically result in the dismissal of the administrative case.
The Court’s jurisdiction to continue the disciplinary investigation notwithstanding the settlement between the parties.

Whether the actions of respondent judge amounted to gross misconduct or should be classified merely as simple misconduct.
What penalty is appropriate given the facts, the judicial standard, and the need to preserve the dignity of the court without undermining judicial authority.