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JOSE TEOFILO T. MERCADO v. SECURITY BANK CORPORATION

FACTS:

The case involves a petition for review on certiorari filed by Jose Teofilo T. Mercado and Ma. Agnes R. Mercado. The Supreme Court initially denied the petition but granted their motion for reconsideration. Security Bank Corporation (SBC), the respondents, argued that the issues raised in the petition had already been raised before the Appellate Court and that the petitioners' counsel's alleged negligence did not constitute extrinsic fraud. The Supreme Court ultimately denied the petition for lack of reversible error.

Petitioner Mercado wrote a letter to Chief Justice Hilario G. Davide, Jr., alleging that the ponente succumbed to pressure from the Chief Justice himself and that SBC financed the ponente's travel to the United States.

Atty. Joseph Mercado, representing petitioner Sen. Panfilo Lacson, submitted a letter to the Supreme Court accusing Justice Conchita Carpio Morales of bias and partiality in relation to the denial of their petition. The letter claimed that Justice Morales denied the petition due to pressure from the Chief Justice.

Upon receiving the letter, the Third Division of the Supreme Court required Atty. Joseph Mercado to appear before them and explain why he should not be held in contempt of court. Mercado confirmed the truth of the statements made in the letter and stated that he only relayed what his former counsel had told him. The Third Division issued an order for Mercado to show cause why he should not be held in contempt of court.

ISSUES:

  1. The issue in this case is whether the respondent, Mercado, should be held in contempt of court for his derogatory remarks against Chief Justice Davide and the ponente.

  2. Whether Mercado's letter amounted to contempt of court.

  3. Whether Mercado's invocation of freedom of speech and privacy of communication is valid.

  4. Whether Atty. Villanueva violated the Code of Professional Responsibility by stating or implying that he can influence the ponente in the case.

  5. Whether Atty. Villanueva committed contempt of court by degrading the integrity and dignity of Chief Justice Davide and the ponente.

RULING:

  1. The court ruled that Mercado should be held in contempt of court. Although there was no showing of malice or bad faith, Mercado's letter addressed to Chief Justice Davide showed a clear intent to degrade the administration of justice. His derogatory and disrespectful remarks not only humiliated the Chief Justice and the entire Judiciary but also went beyond the permissible bounds of fair comment and criticism. Therefore, Mercado was found guilty of improper conduct and was fined five thousand pesos (P5,000.00) as a penalty.

  2. Mercado's letter was found to be contemptuous and characterized by malice, bad faith, and gross disrespect. The accusations made in the letter had no basis in fact and law, and they caused pain and humiliation to Chief Justice Davide and the ponente. Thus, Mercado was held guilty of indirect contempt of court under Section 3, Rule 71 of the 1997 Rules of Civil Procedure.

  3. The invocation of freedom of speech and privacy of communication by Mercado was not accepted. While freedom of speech is protected, it does not cover abuse of such liberty. Mercado's accusations and statements cast aspersions on the reputation and integrity of Chief Justice Davide and the ponente, thus creating a distrust in the Judiciary. Furthermore, the fact that the letter was addressed only to the Chief Justice did not exempt it from being considered contemptuous.

  4. Atty. Villanueva violated the Code of Professional Responsibility by stating or implying that he can influence the ponente in the case, which is prohibited under Rule 15.06 of Canon 15. His statements led Mercado to believe that the entire Court could be pressured or influenced, thereby degrading the integrity and dignity of Chief Justice Davide and the ponente.

  5. Atty. Villanueva committed contempt of court by degrading the integrity and dignity of Chief Justice Davide and the ponente. The court has inherent power to impose a penalty for contempt reasonably commensurate with the gravity of the offense. As such, Atty. Villanueva and Mercado were fined P50,000.00 each and warned that a repetition of similar acts will warrant a more severe penalty.

PRINCIPLES:

  • Bad faith imputes a dishonest purpose or moral obliquity and conscious doing of a wrong.

  • Malice connotes a sinister motive.

  • Contempt of court may be imposed for actions that tend to degrade the administration of justice.

  • Fair comment and criticism should remain within the permissible bounds and not go beyond insulting and disrespectful remarks.

  • An action for annulment of judgment is not a substitute for the lost remedy of appeal, and a party must have availed of appeal, motion for new trial, or petition for relief before an action for annulment can prosper.

  • The Court has discretion to formulate decisions and/or minute resolutions, provided a legal basis is given depending on its evaluation of a case.

  • Letters addressed to individual Justices, in connection with the performance of their judicial functions, become part of the judicial record and are a matter of concern for the entire court.

  • Liberty of speech must not be abused, and statements that constitute contempt of court may not be justified by invoking freedom of speech.

  • Lawyers should not state or imply that they can influence any public official, tribunal, or legislative body. (Rule 15.06 of Canon 15, Code of Professional Responsibility)

  • Lawyers must impress upon their clients compliance with the laws and principles of fairness. (Rule 15.07, Code of Professional Responsibility)

  • Lawyers should not make bold assurances to their clients regarding the outcome of litigation, as it may lead to heavy pressure and unscrupulous means to win the case. (Doctrine)

  • Responsibility enjoins lawyers to observe and maintain the respect due to courts and judicial officers. (Doctrine)

  • Courts have inherent power to punish for contempt to preserve the honor and integrity of the judiciary. (Doctrine)