Hometown decision
It may not be considered a landmark decision but it certainly illustrates, practically in living color (i.e., nary an obfuscation), the worst—and the best—in our judicial system. I am referring to the Supreme Court’s decision (GR 145817) in regard to a case involving Magdaleno M. Peña, Urban Bank, some of its directors (including a person who was wrongly impleaded as a director) and officers in their personal capacity.
The decision, penned by Justice Maria Lourdes P.A. Sereno (368 footnotes, which must be some kind of record), walks the reader through the case in all its horror (my words, not hers): obviously hometown court decisions, hometown sheriff actions, executions of judgment where the value of some of the properties levied and/or sold at auction were calculated to be at least six times the amount awarded by the hometown judge, and were actually appraised at something closer to 35 times the value.
And there’s more. There is the spectacle of the case passing through 10 Supreme Court justices (including the ponente) between 2001 and 2011, courtesy of the something like one letter of complaint, 12 motions to inhibit, two very urgent motions to inhibit, one urgent consolidated motion to reiterate request for inhibition, one reiteratory motion to recuse, one urgent motion for re-raffle, one supplement to the urgent motion for re-raffle, one urgent consolidated motion for re-raffle, and one very urgent motion to re-raffle—all filed by Peña in that period of time. This information can be gleaned from Footnote 351 of the decision.
Sereno was the target of the two very urgent motions to inhibit and the most recent, very urgent motion to re-raffle, although the names of Justice Antonio Carpio, Justice Conchita Carpio Morales, and Justice Artemio Panganiban (his seems to be the most frequently named) also crop up more than once. She was also the target, along with Carpio, of Peña’s letter of complaint to the Court’s Committee on Ethics and Ethical Standards—and for which both have been the objects of a negative publicity campaign, which fortunately is very hard to sell. In any case, Sereno has stood her ground (which is more than one can say, alas, for some of her colleagues).
But what is this case all about? Would you believe that it started out as a simple case for payment for services rendered and for reimbursement of costs, filed by Peña? In a nutshell, Peña was a member of the board and corporate secretary of a company (ISCI) which sold a piece of property in Pasay to Urban Bank for P241 million. He was tasked by his company to clear the property of overstaying tenants, and in the process required authorization from Urban Bank to do so. The authorization was requested by ISCI , and Urban Bank gave it. Peña successfully cleared the property, giving the 23 tenants a total negotiated amount of P1.5 million for their cooperation. He claims that he had to borrow P3 million from a friend to defray the costs of his operations. He also claims that the Urban Bank president (the late Ted Borlongan) agreed in a phone conversation to pay him 10 percent of the cost of the property in agent’s compensation and attorney’s fees, although ISCI had made it very clear in writing that they would defray all costs of clearing the property.
When Urban Bank refused to honor his claim for P24 million plus costs, Peña went to court. And that’s when the s–t hit the fan, so to speak.
First, he sued not only Urban Bank, and two top officers, but also six of the 11 members of its board (why not all 11 is not explained). Second, the court he chose was not in Pasay, where the property was, or in Makati, where Urban Bank was, but the regional trial court of Bago City, Negros Occidental.
That’s where the hometown factor comes in. Because the judge found in his favor, awarding him everything he wanted: a total of P28.5 million, plus the costs of the suit.
Not only that, the judge found the two bank officers and six bank directors (including one wrongly impleaded) solidarily liable with Urban Bank.
Not only that, the RTC-Bago City (under another judge now) granted Peña’s motion for execution pending appeal of the court’s decision, and issued a special order to that effect.
There’s still more of the hometown flavor. On the very same day that the special order was signed, the clerk of court and ex-officio sheriff issued a writ of execution directed at properties owned by Urban Bank as well as the eight individuals.
And then they went to town. Remember, the judgment was for P28.5 million. Yet, the properties that were levied/sold at auction (Sereno notes that Peña was one of the bidders) were valued at amounts ranging from P181 million (the total figure of the amounts listed in the Sereno ponencia), and about P1.4 billion, based on an appraisal report of independent appraisers in 2002 (just for a subset of Union Bank properties that were levied/sold at auction).
So much for hometown decisions, surely part of the weak underside of the judicial system. (But used to great effect: one recalls when then GSIS president Winston Garcia filed suit against unaccommodating COA auditor Leonor Boado—in Cebu; when Comelec Chair Ben Abalos filed suit against me and Letty Magsanoc—in Mandaluyong .)
By the time the Peña case got to the Supreme Court at the end of 2000, three cases had to be consolidated. And for 11 years, one justice after another (sometimes together) was subjected to the motions described earlier. Delay. Unwarranted. Unnecessary.
So far, we have seen the worst of the case. What about the best?
Ah. That’s for next week. Abangan.
