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RIZAL COMMERCIAL BANKING CORPORATION v. FEDERICO A. SERRA

FACTS:

Petitioner Rizal Commercial Banking Corporation (RCBC) filed a motion for execution before the RTC-Makati seeking to execute a previous order directing respondent Federico A. Serra to sell a parcel of land to RCBC. Serra mortgaged the property to Spouses Andueza during the pendency of the case. The RTC-Makati denied RCBC's motion for execution and RCBC filed a petition for review before the Supreme Court. Meanwhile, Andueza filed a petition for extrajudicial foreclosure and the subject property was sold to them. RCBC filed a motion to divest Serra of his title, but the RTC-Masbate denied the motion. The certificate of sale was issued in favor of Andueza.

Serra claimed to be the registered owner of two parcels of land and executed a mortgage agreement with Spouses Andueza to secure a loan. The Spouses Andueza filed a case for foreclosure of the mortgage. RCBC filed a separate case against Serra for the collection of a sum of money and foreclosure of mortgage. The RTC-Makati declared RCBC as the legal mortgagee of the subject property. The Supreme Court reversed the RTC-Makati's decision and declared RCBC as the rightful owner of the subject property.

RCBC filed a petition for contempt, seeking to enjoin the enforcement of the writ of possession. RCBC argued that Serra was liable for indirect contempt for refusing to obey court orders and colluding with Spouses Andueza for the illegal mortgage and foreclosure. Serra claimed he is not liable for contempt and executed the mortgage in good faith. Spouses Andueza and their lawyers filed their respective comments.

Spouses Andueza executed a real estate mortgage in favor of Rural Bank of Estancia (RBE). RBE assigned its rights to Rural Bank of Cauayan, Inc. (RBCI), which assigned it to RCBC. RCBC filed an action for foreclosure of mortgage. The RTC ruled in favor of the Spouses Andueza, declaring the foreclosure invalid. RCBC appealed to the CA and filed a petition for review on certiorari before the Supreme Court. The Spouses Andueza filed a motion to cite RCBC and its lawyers in contempt for allegedly disobeying the CA decision. The RTC-Makati issued an order citing RCBC's counsel in contempt. The CA affirmed the RTC's order and found Spouses Andueza and RCBC's counsel guilty of contempt. Both parties filed separate petitions for review on certiorari before the Supreme Court.

ISSUES:

  1. The issue in this case is whether respondents are liable for indirect contempt.

  2. Whether or not respondents are guilty of indirect contempt for disregarding the final and executory decisions of the Court, particularly in G.R. Nos. 103338, 182478, 182664, and 203241.

  3. Whether the Spouses Andueza and Federico Serra are guilty of indirect contempt of court for their actions that impeded the administration of justice.

  4. Whether the other respondents are also guilty of indirect contempt of court.

RULING:

  1. The petition is granted in part.

  2. ndirect Contempt

  3. n Castillejos Consumers Association, Inc. v. Dominguez, the Court defined contempt of court, as follows:

  4. Contempt of court has been defined as a willful disregard or disobedience of a public authority. In its broad sense, contempt is a disregard of, or disobedience to, the rules or orders of a legislative or judicial body or an interruption of its proceedings by disorderly behavior or insolent language in its presence or so near thereto as to disturb its proceedings or to impair the respect due to such a body. In its restricted and more usual sense, contempt comprehends a despising of the authority, justice, or dignity of a court.

  5. There are two (2) kinds of contempt of court, namely: direct and indirect. Indirect contempt or constructive contempt is that which is committed out of the presence of the court. A person who is guilty of disobedience or of resistance to a lawful order of a court or who commits any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice may be punished for indirect contempt.

  6. The Court held that respondents are guilty of indirect contempt. The Court found that respondents, particularly Serra, disobeyed the final and executory decisions of the Court, which affirmed RCBC's superior right over the subject property. By defaulting on his loan obligation and allowing the foreclosure of the real estate mortgage, Serra effectively allowed the removal of RCBC from the subject property, in contravention of the clear directive in the decision and restraining order in G.R. No. 203241. Additionally, the Court noted that there was no supervening event that occurred which would effectively prevent the execution of the decision in G.R. No. 203241.

  7. The Spouses Andueza and Federico Serra are found guilty of indirect contempt of court for their actions that impeded the administration of justice. They are ordered to pay a fine of P30,000 each.

  8. The other respondents are not found guilty of indirect contempt of court as there is no clear and convincing evidence that they willfully disobeyed the decision and restraining order or committed any act that impeded the administration of justice.

PRINCIPLES:

  • Disobedience of or resistance to a lawful writ, process, order, or judgment of a court constitutes indirect contempt (Section 3(b), Rule 71 of the Rules of Court).

  • Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice also constitutes indirect contempt (Section 3(d), Rule 71 of the Rules of Court).

  • A supervening event may be invoked to stay the execution of a judgment or to seek its modification or alteration, but the party invoking it must establish the facts by competent evidence (Abrigo v. Flores).

  • Final and executory orders must be complied with and not be delayed through raising technicalities.

  • Knowledge of the pendency of a case and court orders must prevent parties from taking actions that impede the administration of justice.

  • Contempt of court may be imposed on parties who impede the administration of justice.

  • Indirect contempt of court requires clear and convincing evidence of willful disobedience or acts that impede the administration of justice.