Supreme Court E-Library
Information At Your Fingertips

  View printer friendly version

805 Phil. 141


[ A.M. No. P-15-3315 (Formerly OCA IPI No.12-3978-P), February 06, 2017 ]




This administrative case stemmed from a letter-complaint[1] filed by complainants, Spouses Rodel and Eleanor Caños (Sps. Caños), against respondent Louise Marie Therese B. Escobido (Escobido), Clerk of Court, Branch 19, Regional Trial Court (RTC), Digos City, before the Office of Court Administrator (OCA) for grave misconduct, gross violation of oath as a public official, and violation of the Code of Professional Responsibility.

The Facts

According to Sps. Caños, they have known Escobido since the latter part of 2009 when she assisted them on the cases they filed before RTC Branch 19. When Escobido learned that Sps. Caños are engaged in selling jewelry and imported goods, she offered to get some items to resell as she used to be in the same business. Since Sps. Caños trusted Escobido as clerk of court and as a lawyer, they agreed to her proposal.[2]

Sometime between January and November 2010, Escobido purchased from Sps. Caños, on credit, various jewelry and imported goods amounting to P4,777,945.00. The purchases were covered by Trust Receipt Agreements.[3]

As payment for the goods, Escobido issued postdated checks, some of which were made good during the first ten months. However, the rest of the checks amounting to P3,827,299.30 were returned or refused payment by the drawee banks for the reason "ACCOUNT CLOSED."[4]

Aside from Escobido's purchases on credit, she also borrowed money from Sps. Caños. As payment, she issued postdated checks in the total amount of P164,866.10. The checks were likewise dishonored by the drawee banks for the reason "ACCOUNT CLOSED." Escobido never informed Sps. Caños on the status of her bank account until they received the returned checks and asked her on the reason for the dishonor.[5]

On February 15, 2012, Escobido executed an Undertaking[6] and acknowledged only P2,545,339.25 as the amount she owed to Sps. Caños.

Sps. Caños made verbal and written demands on Escobido for her to pay her debts.[7] Despite demand,[8] she refused to pay her obligations amounting to P3,604,065.40.

Sps. Caños claimed that because of Escobido's large amount of debts, they were forced to pay some of Escobido's account with their suppliers.[9]

Finally, Sps. Caños alleged that Escobido, as clerk of court and as a lawyer, also used her position and profession to intimidate and coerce them from filing cases against her. She allegedly told them that should they decide to file a case against her, she could always find ways to delay the filing of the same as she has friends and batchmates in the City Prosecution Office of Davao City.[10]

In her defense, Escobido claimed that what transpired was a business opportunity she and Sps. Caños took advantage of, but which, unfortunately turned unsuccessful.[11]

She also belied Sps. Caños' allegation that they have known her only in 2009. She claimed she had known Rodel since 1993 when she was still studying law. Rodel became her boyfriend when she was in law school, but their relationship did not last long. In 2009, Escobido met Rodel again as he frequented her office to follow up cases which he filed and were pending before RTC Branches 18 and 19. Rodel even introduced Escobido to his wife. This new friendship paved the way for business transactions and opportunities.[12]

Escobido denied that she offered to get jewelry and other imported items from Sps. Caños. Instead, it was Rodel who persuaded her to help them sell their goods.[13] Under their agreement, Escobido signed trust receipts for imported goods obtained from Sps. Caños. She was allowed a certain period to sell the goods, after which the unsold items were returned to Sps. Caños. She would pay for the total amount of the items sold by issuing checks covering three equal monthly installments.[14]

The business was doing well for months until Sps. Caños introduced the jewelry business to Escobido. Rodel persuaded her that the business is lucrative and that she can get more profits. Sps. Caños proposed that they will give Escobido a "dealer's price," provided that anything she gets from them will be considered sold unless defective. In effect, what Sps. Caños and Escobido entered into was a contract of sale.[15]

In January 2010, Sps. Caños started giving jewelry to be sold, which Escobido received by signing trust receipts. She usually issued checks for the amounts due, payable in eight to ten monthly installments per transaction. At first, she was able to pay her debts until most of her customers started to miss their payments. Escobido allegedly told Rodel about her problem and he merely advised her to be careful next time and gave her an extended period within which to pay. Thus, despite her outstanding balance, Sps. Caños continued to sell her jewelry.[16]

Escobido went on to get more items from Sps. Caños until she decided to stop due to her increasing bad debts. She told them that she would just return whatever jewelry she could get back from her customers who had been remiss in their payments.[17] Sps. Caños refused because the jewelry was already considered sold and they feared that their quality might have already deteriorated.[18] She tried to pay her debts, even borrowing from loan sharks until she could no longer pay.[19]

In November 2010, Escobido recounted that aside from the checks to cover business transactions, she also had to cover the checks she issued for accommodation on behalf of her relatives and friends. Since she could no longer cover all these checks, Escobido allegedly requested Sps. Caños not to deposit her checks and to give her more time to pay them with cash. Thus, contrary to their claims, she did inform them of the status of her bank account.[20] In fact, Sps. Caños made her believe that they understood her situation and assured her of their help in solving her problem.[21]

Escobido likewise denied refusing to pay Sps. Caños. She was paying them even with meager amounts from December 2010 to February 2013. She claimed that she paid Rodel in March 2013 which he did not acknowledge since he gave back her checks.[22]

When Sps. Caños realized that Escobido would never be able to pay them, they agreed to accept the return of some of the jewelry.[23] These were supposed to be deducted from her outstanding accounts. When she asked for the checks covering the returned jewelry, Sps. Caños told her that the checks were still with their suppliers and that they would just sign the acknowledgment receipts in the meantime. However, they failed to give her the said checks.[24]

Escobido further claimed that she executed the Undertaking upon Rodel's initiative and after consultation with her sister, Atty. Genevieve Marie Dolores B. Paulino (Paulino).[25] The amount of P2,545,339.25 was arrived at after deducting the value of the jewelry that she returned to Sps. Caños.[26]

On March 14, 2012, however, Rodel gave to Escobido the final letter-­demand in the amount of P3,604,065.40.[27] She was hesitant to accept and sign the letter-demand because the previous Undertaking indicated a lower amount. She was forced to receive and sign the letter-demand in the midst of family and financial problems.[28]

Escobido also denied the allegation that Sps. Caños did not file a case against her due to lack of funds. They, in fact, filed a complaint against her for estafa and violation of Batas Pambansa Blg. (BP) 22.[29] She did not use her position as clerk of court or profession as a lawyer to dissuade them from filing a case against her. She did not boast about her connections in the Office of the City Prosecutor of Davao City.[30]

Furthermore, Escobido claimed that Rodel promised to be lenient with her if she would help him with his cases. Escobido's sister, Paulino, agreed to render legal services to Rodel, provided that compensation for such services would be deducted from the amount owed by Escobido. Thus, Escobido asserted that the amount of debt demanded by Sps. Caños is bloated.[31] The amount she owed would be greatly reduced if her payments, the value of the returned jewelry, and the legal services of her sister would be deducted from her total debt.[32]

Finally, Escobido argued that she should not be held liable for any administrative violations attributed to her by Sps. Caños because she never denied her debt. She never refused to pay, but was only unable to do so. She was also not motivated by ill-will against Sps. Caños since her only desire to venture into business with them was to augment her family income.[33]

The Report and Recommendation of the OCA

In a Memorandum[34] dated December 10, 2014, the OCA found that Escobido is guilty of deliberate failure to pay just debts. The OCA noted the more than 100 postdated checks she issued amounting to more than P4,000,000.00, which all bounced. The willfulness in not paying her obligation was shown by the several years her debt remained unpaid from November 2010 to May 2013. The measly payments Escobido made served as mere tokens to appease Sps. Caños and did not show a serious intention to clear her debt.[35]

The OCA also noted that two administrative complaints have been previously filed against Escobido for non-payment of debt.[36] The first complaint, docketed as A.M. OCA IPI No. 03-1705-P (Pham Duc Nhuan v. Louise Marie Therese B. Escobido, Clerk of Court V, RTC, Branch 19, Digos City), charged Escobido with Conduct Unbecoming a Public Officer and Failure to Pay Just Debts. She allegedly failed to return P1,390,000.00, which was given by the complainant as part of a business transaction between them despite repeated demands. As guarantee, Escobido issued a check which was dishonored by the bank. The Court dismissed the complaint for being premature as the complainant has filed a criminal complaint involving the same issue, which was then pending review before the Department of Justice. In March 2014, a criminal case for violation of BP 22, docketed as Criminal Case No. 109,581-B-F-C-2003, with Pham Due Nhuan as private complainant, was filed against Escobido before Branch 3, Municipal Trial Court in Cities (MTCC), Davao City.[37]

The second complaint, docketed as A.M. No. P-06-2259 [formerly A.M. OCA IPI No. 06-2386-P] (Fe Lutero Cajegas, et al. v. Louise Marie Therese B. Escobido, Clerk of Court, RTC, Branch 19, Digos City, Davao Oriental), charged Escobido with non-payment of debts to six persons despite repeated demands. She borrowed money from complainants, who were her former officemates at the Commission on Human Rights, Region XI, Ecoland, Davao City, and issued checks as payment for the loans. When presented to the bank, the checks were dishonored because the accounts against which they were drawn had been closed. In a Resolution dated October 16, 2006, Escobido was reprimanded for willful failure to pay just debts.[38]

Upon review of the three administrative cases, the OCA found that the cases show a disquieting parallelism among them. In these cases, Escobido paid her debts with checks which upon presentment to the drawee banks, were dishonored because the accounts from which payments were drawn had to be closed. It was also found that she indiscriminately opened checking accounts in different banks, with numerous checkbooks per account to cover the amounts she owed her creditors.[39]

The OCA discovered that three criminal complaints for estafa and violation of BP 22 are pending before Branch 3, MTCC, Davao City. Two of these, Criminal Cases No. 150,071-D-B-C-14 and 150,072-D-B-C-14, were filed by Sps. Caños as private complainants, while Criminal Case No. I09,581-B-F-C-2003 was filed by Pham Due Nhuan as private complainant.[40]

The OCA also found that Escobido should be held liable for conduct prejudicial to the best interest of the service. Her insidious and repeated acts of issuing worthless checks with considerable amounts involved, her cavalier treatment of the affidavit of undertaking to pay the debt which she claimed she was forced to sign, and her second time to commit the offense of willful failure to pay just debts evince bad faith and a disposition to defraud.[41]

The OCA further noted that the recommendation is without prejudice to the outcome of the pending criminal cases filed against Escobido.[42]

The OCA recommended the following:
the instant administrative complaint be RE-DOCKETED as a regular administrative matter against Atty. Louise Marie Therese B. Escobido, Clerk of Court V, Branch 19, Regional Trial Court (RTC), Digos City;

respondent Atty. Lou[i]se Marie Therese B. Escobido be found GUILTY of conduct prejudicial to the best interest of the service and willful failure to pay just debts and that she be SUSPENDED for a period of one (1) year, with a STERN WARNING that the commission of the same or similar acts in the future shall be dealt with more severely; and

the Presiding Judge and/or the Branch Clerk of Court of Branch 3, Municipal Trial Court in Cities, Davao City be DIRECTED to apprise the Court on a quarterly basis, relative to the progress of Criminal Case Nos. 150,071-D­ B-C-14; 150,072-D-B-C-14 and 109,581-B-F-C-2003 and to furnish the Court with copies of the decision in said criminal cases.[43]
In a Manifestation[44] dated July 17, 2015, Sps. Caños informed the Court that aside from the three criminal cases filed against Escobido, they have filed another complaint for estafa against her. The case is docketed as Criminal Case No. 27(15) and is pending before Branch 18, RTC, Digos City.

On November 25, 2015, the Clerk of Court of Branch 3, MTCC, Davao City, submitted[45] the Orders of Dismissal[46] of Criminal Cases No. 150,071-D-B-C-14, 150,072-D-B-C-14, and 109,581-B-F-C-2003 filed against Escobido.

The Court's Ruling

The Court agrees with the OCA that Escobido should be held administratively liable for willful failure to pay just debts and conduct prejudicial to the best interest of the service.

Executive Order No. (EO) 292, otherwise known as the Administrative Code of 1987, provides that a public employee's failure to pay just debts is a ground for disciplinary action.[47] Section 22, Rule XIV of the Rules Implementing Book V of EO 292, as modified by Section 46, Rule 10 of the Revised Rules on Administrative Cases in the Civil Service (RRACCS), defines "just debts" as those: (a) claims adjudicated by a court of law; or (b) claims the existence and justness of which are admitted by the debtor.

Classified as a light offense, willful failure to pay just debts is punishable by reprimand for the first offense, suspension of one to thirty days for the second offense, and dismissal from the service for the third offense.[48]

Record shows that Escobido admitted the existence of her debt to Sps. Caños. First, she admitted in her Comment that she owed sums of money to Sps. Caños, but she is only contesting the amount of the debt. She also executed an Undertaking acknowledging the debt. The record likewise shows that Escobido did not exert any sincere effort to settle her obligation to Sps. Caños. As the OCA correctly observed, Escobido allowed her obligation to remain unpaid from November 2010 to May 2013. The total amount of P93,000.00 she paid from December 2010 to February 2013 was indeed paltry as to provide a significant dent on her million-peso obligation.[49] As the OCA also aptly observed, this is not the first instance that she faces a complaint for not paying her debts.

The Court has ruled that the penalty for willful failure to pay just debts is imposed at a civil servant's actuation unbecoming a public official, thus tarnishing the image of the public office:
In this relation, note that the penalty imposed by law is not directed at respondent's private life, but rather at her actuation unbecoming of a public official. As explained in In re: Complaint for Failure to Pay Just Debts Against Esther T. Andres, willful refusal to pay just debts, much like misconduct, equally contemplates the punishment of the errant official in view of the damage done to the image of the Judiciary:
The Court cannot overstress the need for circumspect and proper behavior on the part of court employees. "While it may be just for an individual to incur indebtedness unrestrained by the fact that he is a public officer or employee, caution should be taken to prevent the occurrence of dubious circumstances that might inevitably impair the image of the public office." Employees of the court should always keep in mind that the court is regarded by the public with respect. Consequently, the conduct of each court personnel should be circumscribed with the heavy burden of onus and must at all times be characterized by, among other things, uprightness, propriety and decorum. x x x.
Also, as instructively held in Tan v. Sermonia:
Indeed, when [respondent] backtracked on her promise to pay her debt, such act already constituted a ground for administrative sanction, for any act that would be a bane to the public trust and confidence reposed in the judiciary shall not be countenanced. [Respondent's] unethical conduct has diminished the honor and integrity of her office, stained the image of the judiciary and caused unnecessary interference, directly or indirectly, in the efficient and effective performance of her functions. Certainly, to preserve decency within the judiciary, court personnel must comply with just contractual obligations, act fairly and adhere to high ethical standards. Like all other court personnel, [respondent] is expected to be a paragon of uprightness, fairness and honesty not only in all her official conduct but also in her personal actuations, including business and commercial transactions, so as to avoid becoming her court's albatross of infamy.[50]
Public employees may likewise be penalized for conduct prejudicial to the best interest of the service.[51] Acts may constitute conduct prejudicial to the best interest of the service as long as they tarnish the image and integrity of his/her public office.[52] Such violation is classified as a grave offense, punishable by suspension of six months and one day to one year for the first offense and dismissal from the service for the second offense.[53]

We agree with the OCA that Escobido's repeated acts of contracting loans and paying them with worthless checks reflect bad faith on her part. We must note that Escobido, as clerk of court, is not a mere public employee. She is both an employee of the Court and a member of the Bar. Thus, she is expected to meet a high standard of uprightness and propriety. By deliberately failing to meet her contractual obligations, she fell short of such standard.

We likewise agree that Escobido holds a position of trust and confidence with concomitant duties and responsibilities that require from its holder competence, honesty, and integrity so essential for the proper and effective administration of justice. Her actuation, although arising from a private transaction, tarnished the image of the Judiciary.

Finally, we find the penalty of one year suspension appropriate. In the imposition of penalties, Section 50, Rule 10 of the RRACCS provides that if the respondent is found guilty of two or more charges or counts, the penalty to be imposed should be that corresponding to the most serious charge and the rest shall be considered as aggravating circumstances. Thus, the penalty to be imposed should be that of the graver offense of conduct prejudicial to the best interest of the service. The charge of willful failure to pay just debts, being a light offense, shall be considered as an aggravating circumstance.

WHEREFORE, respondent Louise Marie Therese B. Escobido, Clerk of Court V, Branch 19, Regional Trial Court, Digos City is adjudged GUILTY of willful failure to pay just debts and conduct prejudicial to the best interest of the service, for which she is hereby SUSPENDED for a period of ONE (1) YEAR. Further, she is STERNLY WARNED that commission of the same or similar acts in the future shall be dealt with more severely.

Velasco, Jr., (Chairperson), Bersamin, Reyes, and Caguioa,* JJ., concur.

February 16, 2017


Sirs / Mesdames:

Please take notice that on February 6, 2017 a Decision, copy attached hereto, was rendered by the Supreme Court in the above-entitled case, the original of which was received by this Office on February 16, 2017 at 2:05 p.m.

Very truly yours,


Division Clerk of Court

* Designated as Fifth Member of the Third Division per Special Order No. 2417 dated January 4, 2017.

[1] Rollo, pp. 2-8.

[2] Id at 3.

[3] Id.

[4] Rollo, p. 4.

[5] Id.

[6] Rollo, p. 74.

[7] Id. at 5.

[8] Id. at 5, 70.

[9] Id. at 6.

[10] Id.

[11] Rollo, p. 82.

[12] Id.

[13] Id.

[14] Id., p. 83.

[15] Id. at 83-84.

[16] Id. at 84.

[17] Id.

[18] Rollo, pp 84-85.

[19] Id. at 85.

[20] Id.

[21] Rollo, pp. 85-86.

[22] Id. at 86.

[23] Id.

[24] Rollo, p. 87.

[25] Id. at 87-88.

[26] Id. at 88.

[27] Id. at 88, 70.

[28] Id. at 88.

[29] Id.

[30] Rollo, pp. 88-89.

[31] Id. at 89.

[32] Id. at 89-90.

[33] Id. at 91.

[34] Id. at 125-133.

[35] Id. 129.

[36] Id.

[37] Rollo, pp. 129-130.

[38] Id. at 130.

[39] Id. at 130-131.

[40] Id. at 131.

[41] Id.

[42] Rollo, p. 132.

[43] Id. at 132-133.

[44] Id. at 142-143.

[45] Id. at 157.

[46] Id. at 158-159.

[47] Book V, Chapter 7, Sec. 46(b)(22).

[48] RRACCS, Rule 10, Sec. 46(F)(9).

[49] Rollo, p. 129.

[50] Tordilla v. Amilano, A.M. No. P-14-3241, February 4, 2015, 749 SCRA 487, 493-494, citing In Re: Complaint for Failure to Pay Just Debts Against Esther T. Andres, A.M. No. 2004-40-SC, March 1, 2005, 452 SCRA 654, 663, and Tan v. Sermonia, A.M. No. P-08-2436, August 4, 2009, 595 SCRA 1, 9-10.

[51] EO 292, Book V, Title I, Chapter 7, Sec. 46(b)(27).

[52] Pia v. Gervacio, Jr., G.R. No. 172334 June 5, 2013, 697 SCRA 220, 231, citing Avenido v. Civil Service Commission, G.R. No. 177666, April 30, 2008, 553 SCRA 711, 720.

[53] RRACCS, Rule 10, Seo. 46(B)(8).

© Supreme Court E-Library 2019
This website was designed and developed, and is maintained, by the E-Library Technical Staff in collaboration with the Management Information Systems Office.