Case Summary (A.M. No. RTJ-18-2535)
Allegations Against the Respondent
The complaint alleges that Judge Gellada demonstrated gross ignorance of the law and grave abuse of discretion through three specific actions: (1) issuing a May 5, 2016 Order that nullified the foreclosure proceedings despite the existence of a final termination order from March 19, 2015; (2) granting relief not specifically requested in MADCI's pleadings; and (3) acting on an ex-parte motion for issuance of a Writ of Execution without conducting a proper hearing.
Background of the Case
MADCI secured a loan from the Development Bank of the Philippines (DBP), which was secured by a mortgage on a property. Following MADCI's default, DBP transferred its rights to PI One. Subsequent rehabilitation proceedings were initiated by MADCI but were terminated by the court due to non-compliance with the rehabilitation plan. After the foreclosure of the property by PI One and its consequent acquisition, MADCI sought to reopen the rehabilitation proceedings through motions that Judge Gellada ultimately granted, leading to the current complaint.
Judge Gellada's Defense
In response to the allegations, Judge Gellada claimed that his actions were justified as the original termination order of rehabilitation proceedings was not final and executory. He argued that the rehabilitation proceedings had not been conducted properly under the Financial Rehabilitation and Insolvency Act of 2010 (FRIA) and that important procedural safeguards were ignored by PI One when they initiated foreclosure.
Findings of the Office of the Court Administrator
The Office of the Court Administrator (OCA) deemed Judge Gellada guilty of gross ignorance of law, primarily focusing on the immutability of judgments and the principle of non-interference among courts of co-equal jurisdiction. The OCA asserted that the termination order was indeed final, and Judge Gellada’s modifications constituted a clear violation of established legal principles.
Ruling of the Supreme Court
The Supreme Court upheld the OCA's findings, emphasizing that Judge Gellada's issuance of the May 5, 201
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Case Overview
- Complainant: Carlos Gaudencio M. MaAalac, representing Philippine Investment One (SPY-AMC), Inc. (PI One).
- Respondent: Hon. Epito B. Gellada, former Presiding Judge of Branch 53, Regional Trial Court of Bacolod City, Negros Occidental.
- Case Number: A.M. No. RTJ-18-2535, Decision dated October 08, 2018.
- Allegations against Judge Gellada included gross ignorance of the law and grave abuse of discretion in relation to foreclosure proceedings and rehabilitation of a corporate debtor.
Background of the Case
- PI One was established as a Special Purpose Vehicle under Republic Act No. 9182 to acquire assets from financial institutions.
- Medical Associates Diagnostic Center, Inc. (MADCI) had a loan from the Development Bank of the Philippines (DBP) secured by a mortgage on a property.
- MADCI defaulted, leading DBP to transfer its rights to PI One.
- MADCI initiated corporate rehabilitation proceedings, which were later terminated by the RTC Bacolod City Branch 53 due to non-compliance with the rehabilitation plan.
Key Proceedings and Orders
- On March 19, 2015, the RTC Bacolod City Branch 53 issued an order terminating MADCI’s rehabilitation proceedings.
- Following the termination, PI One foreclosed on the mortgage, consolidating ownership of the property under TCT No. 166-2015000786.
- On June 10, 2015, a final order was issued denying MADCI’s motion for reconsideration of the termination order.
- On October 7, 2015, MADCI filed a compla