Case Summary (G.R. No. 246995)
Case Background and Parties' Claims
Blas C. Britania filed a judicial foreclosure case against Melba C. Panganiban based on loan agreements titled "Magkasanib na Kasunduan" dated July 13, 2011, and February 14, 2012. Britania loaned Panganiban P1,500,000 with stipulated interests, secured by a 120-square-meter property in Valenzuela City, which Panganiban was paying under an installment contract with Florencia Francisco. Panganiban allegedly defaulted on her payments despite repeated demands.
Panganiban denied ownership of the mortgaged property at the time of the agreements, asserting that she only had a contract to sell with Florencia Francisco, which was canceled due to nonpayment. She admitted to borrowing money from Britania and paying some amounts but reasoned that funds meant for loan repayment were diverted to her son’s medical expenses. She also alleged Britania encashed a check under promise of non-enforcement.
Trial Court Proceedings and Decision
The Regional Trial Court denied the foreclosure complaint, ruling that Panganiban did not own the property and therefore could not validly mortgage it. The court ordered Panganiban to pay Britania the principal with interest and attorney’s fees instead. Subsequent to the final judgment dated June 30, 2015, a writ of execution was issued, and personal properties of Panganiban were levied and sold at sheriff’s sale.
Britania later filed a motion to examine Panganiban as the judgment debtor under Section 36, Rule 39 of the Rules of Court, and an oral motion to cite her for indirect contempt due to her failure to appear during the scheduled hearing. The trial court denied both motions, finding Britania's allegations unmeritorious and ruling that it lacked jurisdiction to examine Panganiban about a property not subject to the judgment.
Appeal to the Court of Appeals
Britania escalated the matter via certiorari and mandamus, claiming grave abuse of discretion by the trial court in denying his right to examine the judgment debtor and penalty for contempt. The Court of Appeals affirmed the trial court's ruling, emphasizing that Panganiban's non-appearance did not constitute contempt and that the court correctly ruled it had no jurisdiction to compel examination on a property not legally owned by Panganiban nor covered by the foreclosure decision.
Issues on Examination of Judgment Debtor and Contempt
The core issue involved whether Britania had the right to compel Panganiban’s examination as judgment debtor concerning the unsatisfied part of the judgment, and whether failure to appear justified a contempt citation.
Section 36, Rule 39 of the Rules of Court permits examination of a judgment obligor concerning his or her property and income only when the judgment remains unsatisfied in whole or in part. Further, examination applies solely to property owned by the judgment obligor. A judgment creditor acquires only such interests as the obligor had at the time of the levy. Since Panganiban was adjudged not to own the mortgaged property, examination about it was improper.
Contempt of court is an inherent judicial power to maintain respect for and obedience to court orders. It must be exercised sparingly and requires strict compliance with procedural safeguards. Indirect contempt, punishable after a charge and hearing, includes disobedience of lawful orders or resistance to legal process but requires a clear, specific court order violated in a contumacious manner.
Analysis on the Exercise of Contempt Powers
The failure of Panganiban to appear at the hearing did not amount to indirect contempt because there was no express court order mandating her attendance. The trial court characterized her absence as a waiver of the right to be heard, not as a contemptuous act. Moreover, Britania’s oral motion for contempt did not comply with the written charge requirement under Section 3, Rule 71, and the court’s conduct must be interpreted in favor of the accused given the penal nature of contempt proceedings.
The Supreme Court underscored that contempt powers are discretionary and should correct behavior to preserve court authority rather than retaliate. Since the trial court found no ill intent or contumacious refusal by Panganiban, and no specific order wa
Case Syllabus (G.R. No. 246995)
Case Background and Parties Involved
- Petitioner: Blas C. Britania filed a judicial foreclosure of mortgage case against respondent Melba C. Panganiban.
- The litigation stemmed from a loan agreement where Britania loaned Panganiban ₱1,500,000.00 secured by a 120-square meter property.
- Two separate agreements ("Magkasanib na Kasunduan") were executed on July 13, 2011, and February 14, 2012, defining payment schemes.
- Panganiban failed to comply with the agreed terms, leading to Britania’s foreclosure action.
- The case was assigned Civil Case No. 216-V-12 at the Regional Trial Court (RTC), Branch 75, Valenzuela City, presided over by Hon. Lilia Mercedes Encarnacion Gepty.
Respondent’s Answer and Counterclaims
- Panganiban, engaged in a buy-and-sell business, admitted borrowing funds regularly at 6% monthly interest until the loan reached ₱1,000,000.00.
- She claimed regular payments totaling ₱309,000.00.
- Highlighted tragic personal circumstances involving the illness and death of her son which affected her ability to pay.
- Issued a Banco de Oro check for ₱1,500,000.00 promising not to cash it, but Britania allegedly reneged and cashed it leading to dishonor.
- A second "Magkasanib na Kasunduan" was executed under duress, with reservations.
- Stated that a contract to sell the mortgaged property with Florencia Francisco failed due to financial difficulties.
- Emphasized that Britania had no claim over Francisco’s property as she was not party to the loan agreement.
Trial Court Decision and Monetary Award
- On June 30, 2015, the RTC denied Britania’s complaint for judicial foreclosure for lack of merit.
- However, the Court ordered Panganiban to pay Britania ₱1,193,000.00 plus 6% annual interest from November 16, 2012, attorney’s fees of ₱30,000.00, and costs.
- The decision clarified that Panganiban did not own the 120-square meter property subject to the mortgage.
- A Writ of Execution was issued on January 29, 2016 to enforce monetary awards.
Execution Proceedings and Motion to Examine Judgment Debtor
- Sheriff’s Sale of Panganiban’s personal properties was conducted, approved with Britania as the highest bidder.
- Britania filed a Motion to Examine Panganiban alleging fraudulent transfer of the 120-square meter property to third parties shortly before the RTC decision.
- Panganiban failed to appear at the scheduled hearing on June 7, 2016, prompting Britania’s oral motion to cite her for indirect contempt.
- The trial court ordered Panganiban to submit comment, which she filed on June 28, 2016, stating non-involvement