RE: LETTER OF ERLINDA ILUSORIO-BILDNER, POTC, PHILCOMSAT, REQUESTING INVESTIGATION OF CERTAIN MEMBERS OF THE JUDICIARY

Ilusorio-Bildner versus Lokin

The Case

This is an administrative matter that began with a letter, not a complaint. Erlinda Ilusorio-Bildner wrote to then Chief Justice Reynato Puno, claiming that the accounting books of Philcomsat Holdings Corporation showed disbursements for "representation" in favor of the Supreme Court, and asking that erring judges, justices, and lawyers be administratively dealt with. The Court created a three-member Investigating Committee, which found no case against any member of the judiciary but observed that two persons invited to shed light on the allegations — Atty. Luis K. Lokin, Jr., legal counsel of the company, and Desideria Casas, an accounting clerk — did not conduct themselves with candor. The case matters because it is the Court's own ruling on when a witness's refusal to disclose the truth before a judicial inquiry becomes indirect contempt, and on the self-restraint a court must exercise in wielding that power.

Procedural History

The matter arose from Bildner's letter to the Chief Justice, which the Court acted upon by creating a three-member Investigating Committee. The Committee conducted inquiries in February 2008 and submitted a Report, which the Court adopted in its Resolution dated July 22, 2008. In that Resolution, the Court noted that Bildner failed to make a case against any Member of the Court, and that there was no need for further investigation as to their identities. However, the Court required Lokin and Casas to show cause why they should not be cited for indirect contempt for their obstinate refusal to disclose the truth. Lokin filed a Compliance and Explanation; Casas filed a Submission and Motion with an attached Affidavit. Later, Concepcion A. Poblador wrote to the Court asking that Philip Brodett and Johnny Tan instead be investigated, and the Court required them to respond. The case was resolved by the Supreme Court sitting en banc, in a per curiam decision promulgated in April 2015.

Facts

On October 10, 2007, Bildner wrote to then Chief Justice Puno alleging irregularities in the management of Philcomsat Holdings Corporation. She referred to a Senate investigation which supposedly found, through the company's accounting entries, that individuals who fraudulently asserted control of the Philcomsat companies held on to their positions by using company funds to obtain favorable judicial decisions. Specifically, she claimed that the Court was listed next to a representation item of 206,000 pesos. In January 2008, Senator Juan Ponce Enrile delivered a privilege speech alleging that 11.3 million pesos of company funds went to direct payments or cash gifts to government agencies, including the Court, and that Lokin received 2 million pesos supposedly for public relations for a Supreme Court injunction. Newspaper columns repeated the allegations, including one describing a check for 2 million pesos recorded as "Luis K. Lokin, Jr., PR for Supreme Court injunction."

The Investigating Committee established two notations in the company's checkbook ledger, both handwritten by Casas: one for 206,000 pesos marked "representation to Supreme Court," and one for the 2 million peso check marked "PR for Supreme Court injunction." Casas admitted making the entries but denied making the two notations, and when pressed as to who instructed her, she said she had no idea. As to the 2 million peso check, it was originally typed in Lokin's name as payee; this was crossed out and the name Veronica Nepomuceno typed in its place, with the crossing out countersigned by Lokin himself. The Committee found a strong probability that Lokin was the recipient, that he was lying through his teeth in denying knowledge of the recipient, and recommended contempt proceedings against both Lokin and Casas.

In his defense, Lokin claimed he had no part in preparing the checks, merely signed them in the regular performance of his functions, and did not know Nepomuceno. Casas claimed her statements arose from confusion and inexperience, and that the notations were unwitting errors; she attached a supplier's invoice to show the 206,000 pesos was actually paid to a company supplier. The Court ultimately found Lokin's explanations grossly unsatisfactory and Casas deserving of clemency.

Issues

• Whether or not the accounting notations themselves may be the basis of liability for indirect contempt.
• Whether or not Desideria Casas may be held liable for indirect contempt for failing to conduct herself with candor before the Investigating Committee.
• Whether or not Atty. Luis K. Lokin, Jr. may be held liable for indirect contempt for willfully withholding the truth from the Court.
• Whether or not Lokin may likewise be proceeded against for disciplinary liability as a member of the bar.

Applicable Provisions

Section 3, paragraph d, of Rule 71 of the Rules of Court defines the act of indirect contempt involved here:

Section 3. Indirect contempt to be punished after charge and hearing. — After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt: (d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice.

The Court uses this provision to test whether the notations and the witnesses' conduct tended to impede, obstruct, or degrade the administration of justice.

Ruling

On the first issue, the Court held that liability for contempt with respect to the accounting entries themselves is no longer in issue. The entries were internal company records, not meant for publication; they became public only through a Senate investigation and newspaper columns by interested parties expressing genuine concern, and publication in good faith of matters of public interest is not in itself contemptuous. To be contemptuous, the danger must cause a serious imminent threat to the administration of justice. The Court also found the 206,000 peso notation equivocal, since the check was not drawn in favor of any Court officer and the decision Bildner complained of was rendered even before the check was drawn.

On the second issue, the Court absolved Casas. She was but a part of the accounting staff, answering to several superiors, not sufficiently situated in the hierarchy to make decisions herself; given the volume of records she handled daily, it was plausible that she did not remember the details of every entry. It worked in her favor that she made an effort to shed light on the entries, explaining the 206,000 pesos as payment to a supplier and attaching an invoice. The Court appreciated her deferential attitude and extended clemency.

On the third issue, the Court found Lokin guilty. Withholding the truth in the course of judicial proceedings tends to impede, obstruct, or degrade the administration of justice, and willfully doing so is contumacious. The Court stressed that even though it did not proceed against the entries themselves, any act of willfully withholding the truth by persons called upon precisely to shed light on those entries impeded the Court's business of unearthing relevant facts. Lokin's defenses were grossly unsatisfactory: he himself countersigned the crossing out of his own name as payee, and unless he were a mindless automaton, common sense dictated that he must have had at least a vague idea why. His references to internal check preparation processes only muddled the issue, and he continued to insist on his denial without shedding light.

On the fourth issue, the Court held that Lokin's offense was rendered more grievous by his being a lawyer, an officer of the court charged with the highest standards of truthfulness and candor, so that disciplinary liability was equally proper. The Court noted he had previously been suspended from the practice of law for three months and sternly warned that a repetition would be dealt with more severely, and that he had not mended his ways.

Doctrine

First, indirect contempt is one committed out of or not in the presence of the court that tends to belittle, degrade, obstruct, or embarrass the court and justice. Second, the mere publication of internal records is not contemptuous; the danger must cause a serious imminent threat to the administration of justice. Third, willfully withholding the truth from a court or its investigating committee, by persons called upon to shed light on facts, tends to impede, obstruct, or degrade the administration of justice and is contumacious. Fourth, the power of contempt must be exercised judiciously and sparingly, with utmost self-restraint, for correction and preservation of the dignity of the Court, not for retaliation or vindication. Fifth, a lawyer's willful withholding of information violates the highest standards of truthfulness and candor and warrants disciplinary referral to the Integrated Bar of the Philippines.

Disposition

Atty. Luis K. Lokin, Jr. was found guilty of indirect contempt and ordered to pay a fine of 20,000 pesos, and the matter was referred to the Integrated Bar of the Philippines for investigation of his administrative liability as a member of the bar; Desideria Casas was absolved of liability.

Remember This

Memorize the line: willfully withholding the truth from a court that called you precisely to shed light on facts is contumacious and degrades the administration of justice. Examiners use this case on indirect contempt under Rule 71, on the sparing exercise of the contempt power, and on the higher candor demanded of lawyers as officers of the court.