This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside and reverse the June 7, 2001 Decision^[1] of the Court of Appeals in CA-G.R. SP Nos. 59173 & 59576 which dismissed the petition for certiorari and prohibition filed by petitioner and affirmed the assailed Orders dated April 14, 2000 and May 8, 2000.

On August 16, 1995, respondent Banco Filipino Savings and Mortgage Bank (Banco Filipino, for brevity) filed with the Regional Trial Court of Batangas City, Branch 84, presided by respondent Judge Paterno V. Tac-an, an action for reconveyance of real property against petitioner Nancy Ty, together with Tala Realty Services Corporation, Pedro B. Aguirre, Remedios A. Dupasquier, Pilar D. Ongking, Elizabeth H. Palma, Dolly W. Lim, Cynthia E. Mesina, Rubencito M. Del Mundo, and Add International Services, Inc. (hereinafter collectively referred to as Tala, et al.).

On November 15, 1995, Tala, et al. filed a motion to dismiss the complaint on the ground of lack of jurisdiction. Respondent judge granted the motion and dismissed the complaint. However, on a motion for reconsideration by Banco Filipino, the complaint was reinstated.^[2]

Tala, et al., with the exception of Nancy Ty^[3] and Cynthia Mesina,^[4] filed a motion for reconsideration, which was however denied in an Order dated June 3, 1996. The pertinent portion of the Order reads:

On the Motion for Reconsideration filed by defendants, except Nancy Ty and Cynthia Mesina, the record shows that the Motion for Reconsideration filed by the plaintiff dated February 23, 1996 was sent by mail on February 2, 1996 to this Court and received by the Court on March 5, 1996. The copy of the said Motion for Reconsideration was furnished to Alampay Gatchalian Mawis Carranza and Alampay, Counsels for the defendants at their address in Makati City on February 26, 1996. The copy sent to the Court was received on March 5, 1996. It could safely (sic) assumed that copy sent to the defendant's counsel at the nearer address at Makati City even before March 5, 1996 or on March 1, 1996, at least 4 days in transit. In the normal course of events or as a matter of practice, counsels file comments or opposition to Motions without need of Court orders. So, from March 1, 1996, they could have filed comment and opposition within 10 days therefrom, or on March 11, 1996 without awaiting for a Court order. The Court does not believe that the said motion for reconsideration was received by said defendant's counsel on March 28, 1996 or one month and 2 days after mailing by plaintiffs counsel. The extension of 5 days given to defendants contained in the Order of March 7, 1996 was only a matter of grace extended by the court, a reminder that their opposition must be forthcoming. Lawyers must be vigilant in the defense of their clients. x x x. (Underscoring supplied)

On July 8, 1996, petitioner and Tala, et al. filed their respective answers to the complaint. Two days later, Tala, et al. also filed a motion to suspended proceedings, on the ground that an appeal by Banco Filipino to the April 1, 1996 Order of the respondent court is still pending resolution. The motion to suspend proceedings was, however, denied by respondent court.

On October 21, 1996, Banco Filipino moved for an order directing Tala, et al. to produce or make available books, documents and other papers relevant to the case.^[5] Notwithstanding Tala, et al.'s opposition thereto, the trial court directed Tala, et al. to produce certain documents within a specified period of time, despite failure by Banco Filipino to tender the costs for such production and inspection. In its Order dated November 20, 1996, the trial court justified Banco Filipino's failure to advance the expenses of production and inspection in this wise:^[6]

Further to the Order dated November 1996, requiring the defendant Tala to produce certain documents within the specified period of time, for those documents in which the defendant is bound to keep by law or regulation, their production cannot be the subject of assessment for cost against plaintiff-movant. Otherwise, cost maybe assessed and billed but the same shall be submitted to the Court for approval. x x x.

Thereafter, Taal, et al. filed their motion for reconsideration to the afore-quoted Order, on January 14 1997.

In the meantime, on December 20 1996, Banco Filipino filed a manifestation/omnibus motion^[7] praying, among others, for the declaration of certain allegations and propositions as being factually established and for the allegations/defenses in Tala, et al.'s answer to be stricken out.

The trial court granted Banco Filipino's motion to declare certain facts as established in an Order on February 26, 1998, the dispositive portion of which provides:^[8]

Premises considered, and pursuant to Rules 27 and Section 3, Rule 29 of the Revised Rules of Court, this Court hereby:

A)      Declares

1)         as having been established the fact that defendant TALA did not have the financial capacity to acquire by purchase the disputed Batangas property at the time of their acquisition;

2)         as having been established the fact that TALA had not the means of acquiring the Batangas property other than through the advanced rental payments made by plaintiff;

3)         as having been established the fact that the Batangas property had merely been transferred by way of trust to TALA, as trustee for the benefit of the plaintiff, which was there as purchaser of the property;

4)         prohibits defendant TALA from introducing any evidence contrary to sections (1), (2) and (3) of paragraph A, above.

B)        Strikes out allegations/defenses in defendant TALA's Answer and/or other pertinent pleadings averring that:

1)         TALA is an independent corporation, not a trustee of the plaintiff;

2)         TALA acquired the Batangas property independently and using its own funds through armslength transaction;

3)         TALA is the full and absolute owner of the disputed property.   

Meanwhile, Tala, et al. failed to produce the requested documents. In a Supplemental Order dated April 15, 1998, Tala, et al. were directed to produce additional documents. The Supplemental Order reads:^[9]

Further to the Order dated February 26, 1998 and considering that the documents presented so far by the defendant Tala are not complete in relation to those itemized in the said Order, defendant Tala is further ordered to produce the following documents from 1979 to 1985:  

1.  records of stocks subscribed, paid-in and issued;

2.  for loans payable leasees' deposit, subsidiary ledger, evidence of indebtedness;

3.  for lands purchased, the deeds of sale.

x x x                                         x x x                                  x x x

On May 4, 1998, Banco Filipino's urgent motion to reset hearing and for extension of time to appoint a commissioner, through its special counsel, was granted. On May 11, 1999, Banco Filipino was directed to present its next witness.^[10]

Thereafter, Banco Filipino formally offered its exhibits, all of which were admitted by the trial court.^[11] Tala, et al.'s motion for reconsideration of the order admitting the said exhibits was denied. Banco Filipino's motion to withdraw certain exhibits was granted.

Thereafter, Tala, et al. filed a motion for the voluntary inhibition and/or disqualification of respondent judge Tac-an on the grounds of manifest prejudgment and partiality.

On April 14, 2000, respondent judge denied the motion for inhibition and ruled that all the Orders of the court were based on facts and applicable law and jurisprudence. Respondent judge likewise reprimanded Tala, et al. for filing several motions designed to delay the proceedings.^[12]

Separate motions for reconsideration were filed by Nancy Ty and Tala, et al., but the same were denied by the trial court in an Order dated May 8, 2000.

Dissatisfied, Nancy Ty and Tala, et al. filed separate petitions for certiorari and prohibition with the Court of Appeals, docketed as CA-G.R. SP No. 59576 and CA-G.R. SP No. 59173, assailing the two Orders of respondent judge dated April 14, 2000 and May 8, 2000.

In a consolidated Decision dated June 7, 2000, the appellate court dismissed the two petitions and affirmed the assailed Orders by respondent judge.^[13]

Hence, the instant petition, based on the following grounds:

I

THE COURT OF APPEALS DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS, THUS CALLING FOR THE EXERCISE OF THIS HONORABLE COURT'S POWER OF SUPERVISION AND REVIEW, WHEN IT CHOSE TO EXAMINE ONLY SOME, NOT ALL, OF THE ASSAILED ORDERS OF JUDGE TAC-AN, WHICH, TAKEN COLLECTIVELY AND NOT INDIVIDUALLY, DEMONSTRATE A STRONG BIAS AND ANIMOSITY AGAINST PETITIONER AND TALA ET AL AND REVEAL AN OBVIOUS PARTIALITY IN FAVOR OF BANCO FILIPINO.

II

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH LAW AND JURISPRUDENCE WHEN IT REFUSED TO APPLY, OR EVEN CONSIDER THE APPLICATION OF THE DOCTRINES LAID DOWN BY THIS HONORABLE COURT IN FECUNDO V. BERJAMEN, LUQUE V. KAYANAN AND OTHER SETTLED JURISPRUDENCE. AS A CONSEQUENCE, THE COURT OF APPEALS ERRONEOUSLY FAILED TO CONCLUDE THAT THE INTEMPERATE AND ACCUSATORY LANGUAGE OF JUDGE TAC-AN IN HIS ORDER DATED 14 APRIL 2000 IS A MANIFESTATION OF THE LATTER'S "EXASPERATION BORDERING ON INDIGNATION" AT THE PETITIONER WHICH "MAY UNNECESSARILY CLOUD HIS IMPARTIALITY" AND WHICH WARRANTS HIS VOLUNTARY INHIBITION.

III

THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE NOT IN ACCORD WITH SETTLED JURISPRUDENCE WHEN IT AFFIRMED THE ORDERS OF THE LOWER COURT AND FOUND THAT THE ASSAILED ORDER DATED 20 MARCH 2000 DID NOT BETRAY THAT JUDGE TAC-AN HAD ALREADY PREJUDGED THE CASE PENDING BEFORE RTC BATANGAS BRANCH 84.

IV

THE COURT OF APPEALS DEPARTED FROM THE CONSTITUTIONALLY MANDATED, ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS, OR AT LEAST SANCTIONED SUCH DEPARTURE BY JUDGE TAC-AN, WHEN IT DELIBERATELY SELECTED ONLY A FEW OF THE BADGES OF BIAS, HOSTILITY AND PREJUDGMENT CITED BY THE PETITIONER AND, WORSE, WHEN IT WILLFULLY FAILED TO RESOLVE ISSUES RAISED IN PETITIONER'S AND TALA ET AL'S RESPECTIVE PETITIONS FOR CERTIORARI AND MOTION FOR RECONSIDERATION

V

THE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT PETITIONER'S OMNIBUS MOTION WAS INTENDED TO DELAY THE PROCEEDINGS BEFORE THE TRIAL COURT AND NOT TO AVAIL OF THE LEGAL REMEDIES PROVIDED BY THE RULES OF COURT TO ENSURE THAT HER CONSTITUTIONAL RIGHT TO DUE PROCESS IS PROTECTED AND GUARANTEED.^[14]

For resolution is the issue of whether or not respondent judge committed grave abuse of discretion in denying the motion for voluntary inhibition.

Petitioner argues that, by selectively appreciating some, and not all, of the orders of respondent judge cited as "badges of hostility, bias and prejudgment", the appellate court departed from the accepted and usual course of judicial proceedings and disregarded principles laid down by jurisprudence.

Petitioner asserts that the Orders which were issued by respondent judge demonstrated his predilection to act with bias in favor of Banco Filipino and manifested his escalating hostility and animosity towards petitioner and her co-defendants, Tala, et al.

In regard to the Order dated June 3, 1996, petitioner contends that it was not Tala, et al. but Banco Filipino, which was duty bound to establish the date of actual receipt of its motion for reconsideration. She complains that respondent judge contravened the express provisions of the Rules of Court when he "unilaterally relieved Banco Filipino of its statutory obligation to prove service of its motion for reconsideration and, instead, applied, x x x a so-called safe assumption in determining when petitioner and her co-defendants should have received the same."^[15] Moreover, she takes offense to the respondent judge's statement that he did not believe Tala, et al.'s claim of receipt of the pleading on 28 March 1996, thus, in effect branding them as "liars".

Rule 13, Section 8, of the Rules of Court provides that service by registered mail is complete upon actual receipt by the addressee; but if he fails to claim his mail from the post office within five (5) days from the date of the first notice of the postmaster, service shall take effect at the expiration of such time.

In the case at bar, there is no postmaster's certification that the registered mail was unclaimed by the addressee and thus returned to the sender, after first notice was sent to and received by addressee on a specified date. Absent such notice, the disputable presumption of completeness of service does not arise and by implication, respondent judge could not presume actual receipt by addressee.

Petitioner also alleges that the Order dated November 20, 1996 is another indicium of respondent judge's manifest partiality when he granted the motion for production of documents despite failure by Banco Filipino to advance the cost for such production and inspection. The respondent judge justified his Order with a sweeping declaration that "the amount is insignificant by any standard and could readily been resolved between the parties involved. Records reveal that Tala did not charge Banco Filipino for the documents it eventually produced pursuant to the motion for production."^[16]

Respondent judge's peremptory act of absolving Banco Filipino from paying the expenses for the production of documents is disturbing for its lack of basis. There was no basis for respondent judge to conclude that the amount involved was "insignificant" considering that, as the records would show, no reference of any amount was made by the parties. Moreover, his categorical declaration that Tala, et al. did not bother to charge Banco Filipino the amount of expenses runs counter to the evidence at hand. In opposing the motion for the production of documents,^[17] Tala, et al. cited, as one of their grounds, the excessive expense it would incur in case the motion would be granted. Sound judicial action dictates that he should have inquired first into the validity of Tala, et al.'s claim, whose rights were bound to be affected, instead of making a sweeping and dismissive Order exempting Banco Filipino from complying with its legal obligation.

Petitioner also assails the Orders dated: (1) April 15, 1998 Order directing Tala, et al. to produce certain documents not requested by Banco Filipino; and (2) May 11, 1999 Order directing Banco Filipino to present its witness.

The role of the trial judge in the conduct of judicial proceedings should only be confined to promote the expeditious resolution of controversies and prevent unnecessary waste of time or to clear up some obscurity. There is, however, undue interference where the judge's participation in the conduct of the trial tends to build or bolster a case for one of the parties. This is enjoined by the Code of Judicial Conduct, Rule 3.06 which provides:

While a judge may, to promote justice, prevent waste of time or clear up some obscurity, properly intervene in the presentation of evidence during the trial, it should always be borne in mind that undue interference may prevent the proper presentation of the cause or the ascertainment of truth.

There is undue interference if the judge, as in the instant case, orders the presentation of specific documentary evidence without a corresponding motion from any party, or directs a party when and who to present as a witness and what matters such witness will testify on. To our mind, respondent judge transgressed the boundaries of impartiality when he suggested to Banco Filipino what evidence to present to prove its case. While the trial court may interfere in the manner of presenting evidence in order to promote the orderly conduct of the trial, the final determination of what evidence to adduce is the sole prerogative of the contending parties. Courts, while not unmindful of their primary duty to administer justice, without fear or favor, and to dispose of cases speedily and in as inexpensive a manner as is possible for the court and the parties, should refrain from showing any semblance of bias or more or less partial attitude in order not to create any false impression in the minds of the litigants. For obvious reasons, it is the bounden duty of all to strive for the preservation of the people's faith in our courts.^[18]

Petitioner also questions the manner with which respondent judge resolved Banco Filipino's formal offer of exhibits. The records show that on November 29, 1999, petitioner filed her comment on Banco Filipino's formal offer of exhibits. On December 8, 1999, respondent judge granted Banco Filipino and Tala, et al. five (5) days each within which to file their respective reply and rejoinders. On December 9, 1999, Tala, et al. filed their comment. Yet the next day, December 10, respondent judge, without awaiting the reply and rejoinders of the parties, issued an order admitting all the exhibits offered.

The seeming haste with which respondent judge resolved Banco Filipino's formal offer of exhibits cannot simply be ignored. It is true, as the appellate court observed, that the filing of a reply lies in the sound discretion of the court. What is objectionable, however, is that respondent judge expressly granted the parties a period of time within which to file their respective pleadings, only to disregard in the end, the period he himself had set and, thus deprived the parties an opportunity to ventilate their respective sides and render the issues clearer.

Finally, petitioner argues that respondent judge prejudged the case when he issued the March 20, 2000 Order. She claims that the Order, which categorically and unqualifiedly stated the existence of an implied trust, rendered a definite resolution of one of the principal issues in the main case without awaiting her and Tala, et al.'s evidence.

In his April 14, 2000 Order, respondent judge brushed aside petitioner's argument by declaring that the "finding is only interlocutory because this can be rebutted by the defendants x x x. Necessarily, the Court must make an initial assessment of the evidence as presented by the plaintiff if they constitute prima facie evidence x x x."

There is no rule of procedure that requires a judge to conclude, out of necessity, the existence of a prima facie case on the basis alone of the evidence presented by the plaintiff. As correctly pointed out by petitioner, it is only when the plaintiff demurs to evidence that the trial court may rule on the case before the defense presents its evidence. Moreover, the assailed Order, being interlocutory in nature, is not the final decision. As such, it is inappropriate for respondent judge to rule, in an interlocutory order, on the principal issue that effectively disposes of the merits of the case. In the interest of substantial justice, the issue of whether or not there is a trust relationship between the parties must be threshed out in a full-dress hearing and not merely in an interlocutory Order.

It is of utmost importance that a judge must preserve the trust and confidence reposed in him by the parties as an impartial, unbiased and dispassionate dispenser of justice. When he conducts himself in a manner that gives rise, fairly or unfairly, to perceptions of bias, such faith and confidence are eroded. His decisions, whether right or wrong, will always be under suspicion of irregularity. In the case of Bautista v. Rebueno,^[19] we stated:

. . . The Judge must maintain and preserve the trust and faith of the parties litigants. He must hold himself above reproach and suspicion. At the very first sign of lack of faith and trust to his actions, whether well grounded or not, the Judge has no other alternative but inhibit himself from the case. A judge may not be legally prohibited from sitting in a litigation, but when circumstances appear that will induce doubt to his honest actuations and probity in favor of either party, or incite such state of mind, he should conduct a careful self-examination. He should exercise his discretion in a way that the people's faith in the Courts of Justice is not impaired. The better course for the Judge under such circumstances is to disqualify himself. That way, he avoids being misunderstood, his reputation for probity and objectivity is preserved. What is more important, the ideal of impartial administration of justice is lived up to. (Underscoring supplied)

In the case at bar, the consistency and regularity with which respondent judge issued the assailed directives gives rise, not to a fanciful suggestion or to a superficial impression of partiality, but to a clear and convincing proof of bias and prejudice. While we are not unmindful of this Court's previous pronouncements that to warrant the judge's inhibition from the case, bias or prejudice must be shown to have stemmed from an extra-judicial or extrinsic source,^[20] this rule does not apply where the judge, as in the instant case, displays an inordinate predisposition to deviate from established procedural precepts that demonstrate obvious partiality in favor of one party. It is also true that the Supreme Court, on several occasions, ruled that the issuance of the complained orders and decision that pertain to the judge's judicial functions may not be proper considerations to charge a judge of bias though these acts may be erroneous.^[21] However, where said complained orders, taken not singly but collectively, ineluctably show that the judge has lost the cold neutrality of an impartial magistrate, due process dictates that he voluntarily inhibits himself from the case.

WHEREFORE, in view of the foregoing, the petition is GRANTED. The June 7, 2001 Decision of the Court of Appeals in CA-G.R. SP Nos. 59173 & 59576 which dismissed the petition for certiorari and prohibition filed by petitioner and affirmed the Orders dated April 14, 2000 and May 8, 2000 is REVERSED and SET ASIDE. Respondent judge is directed to inhibit himself from presiding in Civil Case No. 4521. The Executive Judge of the Regional Trial Court of Batangas City is directed to re-raffle the said case to another judge.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Carpio, and Azcuna, JJ., concur.

Panganiban, J., no part. Former counsel of a party.

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^[1] Decision penned by Associate Justice Bernardo P. Abesamis and concurred in by Associate Justices Godardo A. Jacinto and Eleizer R. De Los Santos.

^[2] Original Records, p. 353.

^[3] Filing her own separate motion for reconsideration which was denied by respondent court, see: Original Records p. 376.

^[4] Dropped as defendant as per order by respondent judge on 8 January 1996.

^[5] Original Records, p. 549.

^[6] Id., p. 764.

^[7] Id., p. 725.

^[8] Id., p. 950.

^[9] Rollo, p. 157.

^[10] Id., p. 1176.

^[11] Id., p. 1362.

^[12] Id., p. 194.

^[13] Id., p. 86.

^[14] Id., p. 32.

^[15] Rollo, p. 38.

^[16] Court of Appeals Decision, p. 5.

^[17] Original Records, p. 527.

^[18] Campaner v. Alano, 46 O.G., 5029, 15 December 1948.

^[19] No. L-46117, 22 February 1978, 81 SCRA 535.

^[20] Aleria, Jr. v. Velez, G.R. No. 127400, 16 November 1998, 298 SCRA 611; Viewmaster Construction Corporation v. Roxas, et al., G.R. No. 133576, 13 July 2000, 335 SCRA 540.

^[21] Equatorial Realty Development Inc. v. Judge Casiano P. Asuncion, A.M. No. MTJ-91-562, 10 October 1997, 280 SCRA 571; Flores v. Court of Appeals, G.R. No. 101152, 29 July 1996, 259 SCRA 618.