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517 Phil. 366


[ A.M. NO. RTJ-03-1796, February 10, 2006 ]




The Case

This is an administrative complaint against respondent Judge Alfredo E. Kallos ("respondent Judge") of the Regional Trial Court, Legaspi City, Branch X  ("Branch X"), for "Gross and Serious Misconduct."

The Facts

In his Complaint dated 12 July 2002, complainant Gary P. Rosauro ("complainant") alleged that in June 1997, respondent Judge, a friend and kumpadre, offered to sell to him an unregistered parcel of land in Penaranda[1] Street, Legaspi City ("Lot No. 1470") measuring 235 square meters. Respondent Judge allegedly claimed ownership over Lot No. 1470. Complainant orally agreed to buy Lot No. 1470 for P2 million provided that respondent Judge take care of its registration in complainant's name, at no additional cost. Complainant wanted to donate Lot No. 1470 to his two children, Marivic and Allan Rosauro ("Marivic and Allan").

Starting 30 June 1997, complainant, on respondent Judge's demands, made several partial payments for Lot No. 1470 for which respondent Judge issued receipts.[2] In the course of collecting complainant's payments, respondent Judge also obtained from complainant a P50,000 loan, payable in two months from 28 March 1998.[3] By August 1998, complainant's total payments amounted to P1,695,000.[4]

Meanwhile, in February 1998, a certain Atty. German Mata ("Atty. Mata") filed with the Regional Trial Court, Legaspi City, Branch I  ("Branch I"), a petition ("LRC Case No. N-683") to register Lot No. 1470 in Marivic and Allan's name. Branch I initially dismissed LRC Case No. N-683. However, on Atty. Mata's motion,  Branch I reconsidered, reinstated the case, and received petitioners' evidence.[5] Nevertheless, on 19 June 1999, Branch I eventually dismissed the case.[6]

Complainant subsequently learned, from a receipt[7] and the Deed of Absolute Sale[8] respondent Judge gave him, that a certain Rodelia Esplana-Guerrero ("Guerrero") owned Lot No. 1470. Complainant also learned that Guerrero had sought the reconstitution of her alleged title to Lot No. 1470 in the Regional Trial Court, Legaspi City, Branch IV ("Branch IV") but Branch IV dismissed Guerrero's petition on 16 November 1993.

With this new information and respondent Judge's failure to register Lot No. 1470, complainant hired a lawyer to rescind his contract with respondent Judge. Accordingly, complainant's counsel wrote respondent Judge on 21 August 2001, demanding rescission. On 12 September 2001, respondent Judge, using his sala's official stationery, replied that he needs more time to confer with Guerrero. After a few months, complainant's counsel reiterated the demand for rescission. Again using his sala's official stationery, respondent Judge replied on 8 May 2002 that Guerrero is still raising the amount to refund complainant.[9]

For respondent Judge's failure to refund the payments, his misrepresentations on Lot No. 1470's ownership and registrability, and Lot No. 1470's non-registration, complainant filed this Complaint.

In his Comment, respondent Judge admitted offering to sell Lot  No. 1470 to complainant but denied claiming ownership over that property. Respondent Judge alleged that at the outset, he informed complainant that Guerrero is the owner of Lot No. 1470. Complainant also allegedly knew that respondent Judge merely acted as Guerrero's representative so he could apply part of the sale's proceeds to satisfy legal fees Guerrero owed him for services rendered before his appointment to the Bench. Respondent Judge further alleged that he informed complainant of Guerrero's unsuccessful attempt to reconstitute her title to Lot No. 1470. On the non-registration of Lot No. 1470, respondent Judge stated that since LRC Case No. N-683 was still pending in Branch I, it was premature to conclude that he failed to comply with his undertaking to register that property.  Respondent Judge also claimed that complainant hired Atty. Mata to file and litigate LRC Case No. N-683.

In his Reply, complainant maintained that respondent Judge never informed him that Guerrero owned Lot No. 1470 or that respondent Judge was merely acting as Guerrero's representative. On LRC Case No. N-683, complainant countered that respondent Judge hired Atty. Mata as part of his undertaking to register Lot No. 1470. Complainant also disclosed that respondent Judge tried to have this Complaint withdrawn.[10] Complainant added that respondent Judge is known for borrowing money from "tennis court buddies" in exchange for empty promises to render legal services.[11]

Respondent Judge filed a Rejoinder reiterating the claims in his Comment. Respondent Judge denied soliciting the withdrawal of this Complaint or borrowing money from "tennis court buddies."

The Court referred this matter to Associate Justice Salvador J. Valdez, Jr. ("Justice Valdez") of the Court of Appeals for investigation, report, and recommendation.

The Report and Recommendation of
Justice Valdez

In his Report and Recommendation ("Report"), Justice Valdez found respondent Judge liable for gross misconduct and recommended his suspension from service for six months. The Report reads:
Quite obviously, the respondent judge importuned the complainant to buy the subject lot because he knows the latter to be a man of means as he unwittingly revealed in his Comment wherein he stated, inter alia, that "the deed of absolute sale was made pursuant to the desire of the complainant that the vendee(s) shall be his children Marivic and Allan because his other commercial lot and building in the heart of Legazpi Port w[ere] already placed in the name of his other two (2) children."  That the respondent had first ascertained the paying capacity of his buyer, is a rule of thumb in any financial dealing. What is deplorable is that he did not make a full disclosure of the nature of the property involved in the case at bar.  As earlier pointed out, he did not let the complainant know that it is not owned by him but by a certain Rodelia Esplana-Guerrero.  He insidiously made the revelation only after the complainant had already given him P130,000.00.

What is more, he assured the complainant of the lot's regist[ra]bility as evidenced by the receipt of the latter's payment of P100,000.00 as shown by Exhibits "A" and "B", wherein he made it appear that the first payment of P30,000.00 was "for follow (up) of papers of LRA (Land Registration Authority), Manila x x x preparatory to the issuance of title to said lot" and the second, in the amount of P70,000.00 was for "the expenses in securing the title x x x."  He did not level with the complainant by disclosing that there was issued on December 12, 1927, a Decree No. 287130 for the lot but no title was derived therefrom; hence, Rodelia  Esplana's   petition for reconstitution of  title  was peremptorily denied way back on [November] 16, 1993. In all likelihood, the decree was not in the name of Rodelia. Instead, he subsequently caused to be filed a petition for original registration on February 18, 1998.  As a judge, he knows or is chargeable with knowledge that such a petition would hardly prosper in light of the earlier decree of registration.  Accordingly, even that subsequent petition was eventually denied.  Even his testimony as the sole witness in the land registration case afforded no help, presumably because he has no personal knowledge about the lot's genesis.  In the interim, he persisted in getting money from the complainant for the titling of the lot, apart from payments on the purchase price.  From the receipts and other documents presented, respondent has received from the complainant the aggregate amount of [P1,695,000] on the account of the lot.

Respondent's defense that he merely brokered for Rodelia Esplana-Guerrero so that it should be the latter who should return the payments made by the complainant when the lot could not be titled, is no defense at all.  On the contrary, his acting in a fiduciary relation with the real owner of the lot, if true, transgressed Rule 5.06 of the same Canon 5.  More than that, when he assured the complainant that the lot will be titled, he wittingly or unwittingly dragged the Regional Trial Court of Legazpi, of which he is a presiding judge of one of its Branches, into the failed transaction as the complainant must have believed him because of his position in the court.

Unfortunately, the complainant, x x x, was left by the respondent judge holding an empty bag.

Respondent's cupidity for complainant's money was not confined to the sale of the lot but even included a loan of P50,000.00 on March 28, 1998 which he promised to pay in two (2) months, but which he failed to prove to have paid.  Obtaining such a loan is already forbidden by Rule 5.04 of Canon 5.  Willful failure to pay the loan is also an administrative offense under Section 52(c)(10), Rule IV of Memorandum Circular No. 19, s. 1999 of the Civil Service Commission.

PREMISES CONSIDERED, the undersigned recommends that the respondent judge be found GUILTY OF GROSS MISCONDUCT as charged and that he be SUSPENDED from office without salary and other benefits for SIX (6) MONTHS. [12]
The Court's Ruling

The Court finds respondent Judge liable for violation of Rules 5.02, 5.06, and 2.03 of the Code of Judicial Conduct[13] ("Code") and for Impropriety.

Respondent Judge Violated
Rule 5.02 and Rule 5.06 of the Code

Rule 5.02

Rule 5.02 of the Code provides that "[a] judge shall refrain from financial and business dealings that tend to x x x, interfere with the proper performance of judicial activities, or increase involvement with lawyers or persons likely to come before the court x x x." This provision, which filled the void left by Article 14(1)[14] of the Spanish Code of Commerce (prohibiting judges from engaging in commerce within their jurisdiction), is meant to limit judges' commercial affairs except to the extent allowed in Rule 5.03[15] of the Code.[16]

Here, respondent Judge took part in a commercial transaction falling outside of the area delineated in Rule 5.03. Worse, respondent Judge did so in an underhanded manner, concealing vital information on Lot No. 1470's ownership and non-registrability until after the sale had been consummated. By involving himself in such a transaction, respondent Judge not only allowed himself to be distracted from the performance of his judicial duties,[17] he also increased his involvement with persons likely to come before his sala regarding Lot No. 1470, thus increasing the chances of his disqualification from future litigation concerning that property. As we observed in Berin v. Judge Barte,[18] also involving a judge who brokered a real estate sale:
By allowing himself to act as agent in the sale of the subject property, respondent judge has increased the possibility of his disqualification to act as an impartial judge in the event that a dispute involving the said contract of sale arises.  Also, the possibility that the parties to the sale might plead before his court is not remote and his business dealings with them might [not only] create suspicion as to his fairness but also to [his ability to] render it in a manner that is free from any suspicion as to its fairness and impartiality, and also as to the judge's integrity x x x.
Rule 5.06

By serving as Guerrero's attorney-in-fact, respondent Judge also violated Rule 5.06 of the Code which provides:
A judge should not serve as the executor, administrator, trustee, guardian, or other fiduciary, except for the estate, trust, or person of a member of the immediate family, and then only if such service will not interfere with the proper performance of judicial duties. xxx (Emphasis supplied)
and accordingly negated its purpose, namely  —
to limit a judge's involvement in the affairs and interests of private individuals to minimize the risk of conflict with his judicial duties and to allow him to devote his undivided attention to the performance of his official functions.[19] x x x
As Guererro's attorney-in-fact, respondent Judge fell under the purview of "other fiduciary" as contemplated in Rule 5.06. We held in Ramos v. Barot:[20]
Being and serving as an attorney-in-fact is within the purview of "other fiduciary" as used in Rule 5.06. As a noun, "fiduciary" means "a person holding the character of a trustee, or a character analogous to that of a trustee, in respect to the trust and confidence involved in it and the scrupulous good faith and candor which it requires." A fiduciary primarily acts for another's benefit, pursuant to his undertaking as such fiduciary, in matters connected with said undertaking. x x x
Respondent Judge Also Violated Rule 2.03

The Court also finds respondent Judge liable for violating Rule 2.03 of the Code in using official stationery for his correspondence with complainant and the latter's counsel regarding Lot No. 1470. A court's stationery, with its official letterhead, should only be used for official correspondence.[21] By using his sala's stationery other than for official purposes, respondent Judge evidently used the prestige of his office to benefit Guererro (and himself) in violation of Rule 2.03[22] of the Code.

Respondent Judge is Liable for Impropriety
for Non-Payment of Loan

A judge may obtain a loan if no law prohibits such loan.[23]  Respondent Judge does not deny obtaining a loan from complainant on  28 March 1998, payable in two months.  Respondent Judge does not also controvert Justice Valdez's finding that this loan remains unpaid. For this, we find respondent Judge liable for impropriety, absent any proof that he willfully refused to pay the loan despite demands from complainant.[24]

Respondent Judge's Transgressions do not
Constitute Misconduct

Nevertheless, we cannot adopt Justice Valdez's characterization of respondent Judge's transgressions as amounting to (gross) misconduct. Misconduct in office is one that affects the officer's performance of his duties as an officer and not one that affects his character as a private individual.[25] Here, respondent Judge's questioned acts do not relate to the performance of his duties but flow from his involvement in a private commercial transaction. While this Court has held judges liable for misconduct for acts unrelated to the performance of official functions,[26] the judges' conduct in those cases were deemed prejudicial to the best interest of the service.[27]  This exceptional circumstance is absent here.

The Applicable Penalty

Under Section 11(B), in relation to Section 9(4) of Rule 140, as amended by  A.M. No. 01-8-10-SC,[28] violation of Supreme Court rules constitutes a less-serious charge punishable by any of the following sanctions:
  1. Suspension from office without salary and other benefits for not less than one (1) nor more than three (3) months; or

  2. A fine of more than P10,000.00 but not exceeding P20,000.00.
On the other hand, impropriety, which we have treated as a light charge,[29] is punishable by:
  1. A fine of not less than P1,000.00 but not exceeding P10,000.00 and/or
  2. Censure;
  3. Reprimand;
  4. Admonition with warning.[30]
Considering the nature and extent of respondent Judge's transgressions, we find it proper to impose on him the following penalties: (1) suspension from office without salary and other benefits for a period of three  months for violation of Rules 2.03, 5.02, and 5.06 of the Code and (2) a fine of P10,000 for impropriety. We warn respondent Judge that his further commission of administrative offenses shall merit more severe sanctions.

WHEREFORE, we find respondent Judge Alfredo E. Kallos of  the Regional Trial Court, Legaspi City, Branch X, GUILTY of  (1) violating Rules 2.03, 5.02, and 5.06 of the Code of Judicial Conduct, and (2) Impropriety. We SUSPEND him from office for three months without salary and other benefits for the  violation  of  the  Code of Judicial Conduct, and FINE him P10,000 for the Impropriety, with WARNING that his further commission of administrative offenses shall merit more severe sanctions.


Quisumbing, (Chairperson), Carpio-Morales and Tinga, JJ., concur.

[1] Also spelled as "Peñaranda"  in other parts of the rollo.

[2] In the receipt dated 30 June 1997, respondent Judge acknowledged receiving P30,000 from  complainant as "advance payment for follow[-up] of papers in [Land Registration Authority], Manila x x x." Also in the receipt dated 24 July 1997, respondent Judge acknowledged receiving P70,000 from  complainant as "payment of the expenses in securing the title to Lot [No.] 1470, x x x." (Rollo, pp. 7-8)

[3] Rollo, p. 118.

[4] Id., pp. 101, 101-A, 102-105, 111-113, 117, 119.

[5] Respondent Judge testified as the petitioners' lone witness.

[6] TSN, 9 June 2003, p. 16.

[7] Dated 21 November 1997 (rollo, p. 104).

[8] The undated Deed of Absolute Sale, notarized on 2 December 1997, indicated a purchase price of only  P500,000 (rollo, p. 13). According to complainant, respondent Judge lowered the price "to save on taxes" (TSN, 9 June 2003, p. 16).

[9]  Respondent Judge also used official stationery in his letters to complainant dated 7 May 2002  (requesting a meeting to discuss the second letter sent by complainant's counsel), 13 October 1997, 27 October 1997, and 19 January 1998 (requesting additional advance payments) (rollo, pp. 114-116, 127).

[10] Complainant alleged (rollo, pp. 26-27):
  1. [C]omplainant was verbally advised by Atty. Mata during the first week of September that the Regional Trial Court, Legaspi City Branch I, presided by Judge Romeo S. Danas has set the case (LRC [Case. No.] N-683) for hearing on September 10, 2002.  x x x

  2. Complainant appeared in Court on the scheduled date at the sala of Judge Danas, but the case was not included in the court calendar for that day.  Instead, Judge Danas met the complainant and urge[d] him to forgive x x x respondent [Judge] and talk over his differences with respondent Judge Kallos. [Respondent Judge] then emerged from a room of the Court and proceeded to hug the complainant, asking him to sign a prepared draft of a "Motion to Withdraw Complaint" as he could be in trouble with the Supreme Court especially under the administration of the incumbent Chief Justice [Hilario G. Davide, Jr.]. x x x
[11] Rollo, pp. 23-28.

[12] Report, pp. 15-17 (capitalization in the original).

[13] This was the Code of Judicial Conduct in effect when the acts complained of  took place.  On 1 June 2004, the New Code of Judicial Conduct for the Philippine Judiciary took effect.

[14] "The following can not engage in the commercial profession, neither in person nor by proxy, nor can they hold any direct administrative or economic position in commercial or industrial associations within the bounds of their districts, provinces, or towns in which they discharge their duties:
  1. Associate justices, judges, and officials of the department of public prosecution (ministerio fiscal) in active service.
This provision shall not be applicable to mayors (alcaldes), municipal judges, and municipal prosecuting attorneys, nor to those who by chance are discharging judicial or prosecuting functions." (U.S. Division of Customs and Insular Affairs, Translation of the Code of Commerce 9 [1899]).

[15] "Subject to the provisions of the preceding rule, a judge may hold and manage investments but should not serve as an officer, director, manager, advisor, or employee of any business except as director of a family business of the judge."

[16] Berin v. Judge Barte, 434 Phil. 772 (2002).

[17] Respondent  Judge's hiring of Atty. Mata to file and litigate LRC No. N-683 and his decision to testify in that case undoubtedly interfered in the performance of his judicial functions.

[18] Supra at 777-778 (internal citations omitted).

[19] Carual v. Judge Brusola, 375 Phil. 464, 475 (1999).

[20] A.M. No. MTJ-00-1338, 21 January 2004, 420 SCRA 406, 411 (internal citations omitted).

[21] See Oktubre v. Velasco, A.M. No. MTJ 02-1444, 22 July 2004, 434 SCRA 636.

[22] "A judge shall not allow family, social, or other relationships to influence judicial conduct or judgment. The prestige of judicial office shall not be used or lent to advance the private interest of others, nor convey or permit others to convey the impression that they are in a special position to influence the judge." (Emphasis supplied)

[23] Rule 5.04 of the Code provides: "A judge or any immediate member of the family shall not accept a gift, bequest, favor or loan from anyone except as may be allowed by law." (Emphasis supplied)

[24] Under  Section 8(6), Rule 140 of the Rules  of  Court, as amended by A.M. No. 01-8-10-SC, willful failure to pay a just debt constitutes a serious charge.

[25] Beltran v. Rafer, A.M. No. MTJ-04-1553, 18 August 2005, 467 SCRA 272.

[26] E.g. Saburnido v. Madrono  (Adm. Mat. No. MTJ-90-383, 15 June 1992, 209 SCRA 755) where the respondent Judge pointed an armalite rifle at a police officer; Ompoc v. Torres (A.M. No. MTJ-86-11, 27 September 1989, 178 SCRA 14) where the respondent Judge, after "advising" a litigant how to "win" his case then pending in the respondent Judge's sala, solicited and obtained favors (repair/installation work on the respondent Judge's vehicle) and loans from the litigant; Arban v. Judge Borja (227 Phil. 597 [1986]) where the respondent Judge, without provocation, pistol-whipped an engineer.

[27] See Gil v. Judge Son, 311 Phil. 523 (1995).

[28] Effective 1 October 2001.

[29] See Miranda v. Judge Mangrobang, Sr., 422 Phil. 327 (2001).

[30] Section 11(C), Rule 140, as amended by A.M. No. 01-8-10-SC.

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