FACTS:

The case involves administrative complaints filed against Judge Ma. Cecilia I. Austria by Antonio M. Lorenzana, the Executive Vice President and Chief Operating Officer of Steel Corporation of the Philippines (SCP). Lorenzana alleged that Judge Austria committed various acts in the case "In the Matter of the Petition to have Steel Corporation of the Philippines Placed under Corporate Rehabilitation with Prayer for the Approval of the Proposed Rehabilitation Plan," such as gross ignorance of the law, abuse of authority, misconduct, incompetence, irregularity, bias, and violation of professional responsibility. The allegations include Judge Austria appointing a rehabilitation receiver with a conflict of interest, conducting meetings outside of her jurisdiction, dictating the terms of the rehabilitation plan she wanted to approve, concealing her favoritism towards a bank, having secret meetings with the bank without the knowledge of SCP and its creditors, appointing a financial advisor with a conflict of interest, encouraging the bank to file complaints against SCP, refusing to conduct an evidentiary meeting, making condescending remarks to SCP's counsel, and approving the rehabilitation plan beyond the prescribed period. Additionally, Judge Austria displayed personal photos and details on a social networking website, suggesting impropriety.

The Office of the Court Administrator referred the complaints to Judge Austria for comment. Judge Austria denied the allegations and argued that the complaints were premature as judicial remedies were still available. She also claimed that the informal meetings were allowed and asserted she followed the prescribed period. The case was referred to the Court of Appeals for investigation and recommendation. The investigating justice found the complaints partly meritorious, noting the judge's unnecessary bickering with the complainant's lawyer. However, she ruled that the complainant failed to present clear proof of intentional bias and partiality on the judge's part. She also found the informal meetings acceptable and approved the rehabilitation plan beyond the prescribed period.

In another aspect of the case, Judge Austria maintained a personal social networking account on Friendster where she displayed photos of herself and disclosed personal details about her life as a magistrate. The complainant argued that this constituted an act of impropriety. The Office of the Court Administrator recommended that Judge Austria be found guilty of conduct unbecoming of a judge and fined. They also noted a previous case where she was found guilty of grave abuse of discretion. The OCA maintained that the charges of bias and partiality were unsupported by evidence. They further stated that allegations of abuse of authority and incompetence should not be the subject of disciplinary action, but Judge Austria's act of posting seductive photos on her Friendster account contradicted the standards of propriety set forth in the Code of Professional Responsibility.

ISSUES:

1. Whether the respondent judge should be held administratively liable for grave abuse of authority, irregularity in the performance of duty, grave bias and partiality, and lack of circumspection.

2. Whether the respondent judge should be held administratively liable for grave incompetence and gross ignorance of the law.

3. Did the respondent violate due process and fair play by ordering the creation of a management committee without conducting an evidentiary hearing?

4. Did the respondent fail to observe the reglementary period for approving a rehabilitation plan?

5. Did the respondent exhibit conduct unbecoming of a judge?

6. Whether or not the respondent judge exhibited conduct unbecoming of a judge in violation of the Code of Judicial Conduct.

7. Whether or not the respondent judge's act of posting her pictures on a social networking site in a manner viewable by the public constitutes impropriety.

8. Whether or not the act of the judge constitutes gross ignorance of the law.

9. Whether or not the judge's conduct qualifies as conduct unbecoming of a judge.

RULING:

1. The allegations of grave abuse of authority, irregularity in the performance of duty, grave bias and partiality, and lack of circumspection are devoid of merit. The complainant failed to prove the respondent's bad faith, malice, or ill will. Mere conjectures and suppositions are not sufficient to prove the accusations. Unless the acts were committed with fraud, dishonesty, corruption, malice or ill-will, bad faith, or deliberate intent to do an injustice, a judge may not be held administratively liable for misconduct, ignorance of the law, or incompetence in the exercise of judicial functions. Errors in the exercise of judicial functions should be assailed through judicial remedies, not through administrative proceedings.

2. The charge of gross ignorance of the law against the respondent should be dismissed. While the respondent may have made errors in the application of the law, it was not proven that she was moved by bad faith, fraud, dishonesty, corruption, or egregious error. To constitute gross ignorance of the law, it must be proven that the judge was motivated by such factors. In this case, there was no evidence of bad faith or malice on the part of the respondent.

3. Yes. The respondent's act of ordering the creation of a management committee without conducting an evidentiary hearing was deemed gross ignorance of the law and bad faith. Due process and fair play require that parties must be given an opportunity to prove or disprove the existence of an imminent danger of dissipation, loss, wastage, or destruction of the debtor-company's assets and properties. The rehabilitation court should hear both sides and allow them to present evidence before deciding on the appointment of a management receiver.

4. No. The respondent's explanation for failing to observe the reglementary period for approving a rehabilitation plan was deemed satisfactory. The previous rules did not clearly indicate whether the rehabilitation court could grant an extension by itself or whether Supreme Court approval was required. Since the new rules clarifying this ambiguity took effect after the respondent's approval of the rehabilitation plan, she cannot be held liable for the extension granted and the consequent delay.

5. Yes. The respondent's conduct was considered unbecoming of a judge. Judges are required to maintain order and decorum in all proceedings, be patient, dignified, and courteous to litigants, lawyers, and others. They should exhibit sobriety, self-restraint, and choose their words carefully. The respondent's unnecessary bitter language and harsh comments were deemed to violate the code of judicial conduct.

6. The respondent judge exhibited conduct unbecoming of a judge and violated Section 6, Canon 6 and Section 1, Canon 2 of the New Code of Judicial Conduct. Her unnecessary bickering, expressions of exasperation, snide remarks, and condescending attitude towards the legal counsel demonstrate arrogance and a violation of the principle of judicial temperament required by the Code.

7. While judges are not prohibited from being members of and engaging in social networking activities, they carry with them the ethical responsibilities and duties that judges are expected to follow. Joining a social networking site is an exercise of freedom of expression, but judges should conduct themselves in a manner that preserves the dignity of the judicial office and the impartiality and independence of the Judiciary. The respondent judge's act of posting suggestive photos and making them available for public viewing disregarded the propriety and appearance of propriety required of a judge.

8. The judge is found guilty of gross ignorance of the law and is fined Twenty-One Thousand Pesos (P21,000.00).

9. The judge is admonished to refrain from further acts of impropriety and conduct unbecoming of a judge, with a stern warning that repetition of the same or similar acts will be dealt with more severely.

PRINCIPLES:

• In administrative cases, the complainant bears the burden of proving the allegations by substantial evidence.

• Mere allegations and speculation are not sufficient to prove bias and partiality on the part of a judge. Clear and convincing evidence is required.

• Errors committed by a judge in the exercise of adjudicative functions should be assailed through judicial remedies, not through administrative proceedings.

• Not every error or mistake of a judge renders him/her liable unless there is fraud, dishonesty, corruption, bad faith, or egregious error.

• To constitute gross ignorance of law, it must be proven that the judge was moved by bad faith, fraud, dishonesty, corruption, or committed an error so egregious that it amounted to bad faith.

• Due process and fair play are fundamental requirements in rehabilitation proceedings, and parties must be given the opportunity to present evidence and confront witnesses.

• Judges must observe basic principles of law and exercise due care in performing their duties. Gross and patent errors can lead to an inference of bad faith and gross ignorance of the law.

• The observation of reglementary periods must be based on the applicable rules in effect at the time, and judges cannot be held liable for failing to observe rules that were not clear or unambiguous.

• Judges are expected to maintain order and decorum, be patient, dignified, and courteous to all persons involved in court proceedings, and avoid the use of harsh or disrespectful language.

• Judges should ensure that their conduct is above reproach and perceived to be so in the view of a reasonable observer.

• Judges should avoid impropriety and the appearance of impropriety in all of their activities.

• In exercising freedom of expression, judges should conduct themselves in a manner that preserves the dignity of the judicial office and the impartiality and independence of the Judiciary.

• Judges are held to higher standards of conduct and must comport themselves accordingly, both in the performance of their duties and in their personal lives.

• Gross ignorance of the law or procedure is classified as a serious charge and may merit dismissal from service as a penalty.

• Gross ignorance of the law is a serious offense that may lead to dismissal, forfeiture of benefits, disqualification from reinstatement or appointment to public office, or a fine.

• Conduct unbecoming of a judge is a light offense which may be penalized with a fine, censure, reprimand, or admonition with warning.

• In determining the appropriate penalty, the court may consider the judge's past record of administrative charges and liability.