EFREN JAVIER AND PEDRO JAVIER, COMPLAINANTS, VS. JUDGE SALVADOR P. DE GUZMAN, JR., RESPONDENT.

Javier versus De Guzman

The Case

This is an administrative proceeding brought by Efren Javier and his father Pedro Javier against Judge Salvador P. de Guzman, Junior, then Presiding Judge of the Regional Trial Court of Makati, Metro Manila. The complainants charged him with four counts of dishonorable conduct, arising from a private loan he had extended to the Javier family at what they called usurious interest, from his filing of a collection suit in his own court, and from the several criminal and administrative complaints he lodged against them. The case matters because it fixes the standard of judicial deportment: a judge's private financial dealings and personal behavior must be beyond reproach, and even acts that are legally permissible may be censured when they erode public confidence in the judiciary.

Procedural History

The complainants first filed a disbarment complaint before the Committee on Bar Discipline of the Integrated Bar on 8 August 1989. Under Supreme Court Circular Number 3-89, complaints against judges of the lower courts filed with the Integrated Bar must be promptly referred to the Supreme Court, and so the complaint was transmitted to the Court. After the respondent filed his comment and the complainants their reply, the Court referred the case to a Justice of the Court of Appeals for investigation, report, and recommendation. The Investigating Justice submitted her report on 20 September 1990, finding valid grounds for the first three charges and recommending reprimand with warning, and recommending dismissal of the fourth charge. The case then came before the Supreme Court itself, which reviewed the evidence and rendered its own decision.

Facts

On 7 December 1987, Efren Javier and his mother Lolita borrowed 200,000 pesos from the respondent judge, with interest orally agreed at ten per cent monthly. They tendered a postdated check for 220,000 pesos, drawn by Efren's brother-in-law Donato Belen because the Javiers had no personal checking account. The next day, the respondent required them to sign a Memorandum of Agreement, which imposed interest of twenty per cent per month compounded monthly, and provided that if the loan and interest were unpaid at maturity and the check were dishonored, a charge for violation of Batas Pambansa Blg. 22 could be filed at his option.

The Javiers defaulted because of business reverses, but made partial payments totaling 177,000 pesos between 6 January 1988 and 16 June 1988. The check, deposited on 14 April 1988, was dishonored. On 8 September 1988, the respondent filed a suit for sum of money and damages with prayer for preliminary attachment in the Regional Trial Court of Makati, against the spouses Pedro and Lolita Javier and their son Efren, seeking 220,000 pesos with twenty per cent interest and penalty a month compounded monthly, computed at 622,871 pesos. Judgment on the pleadings was rendered in his favor on 3 February 1989, ordering payment of 608,871 pesos with the same compounded interest, plus ten per cent of the amounts due as attorney's fees and litigation expenses. Execution pending appeal was later ordered, and the Javiers appealed to the Court of Appeals, where the case remained pending.

The respondent also filed two criminal complaints in Manila, one for violation of Batas Pambansa Blg. 22 against Efren, who was acquitted, and one for estafa against the complainants and Lolita, which was dismissed. He further filed administrative charges against Pedro with the Bureau of Internal Revenue and the Civil Service Commission, accusing him of estafa, dishonesty, and conduct unbecoming of a government official. Feeling harassed, the Javiers filed this administrative charge.

Issues

• Whether or not the respondent was in fact the lender and charged an exorbitant and unconscionable rate of interest.
• Whether or not the respondent took advantage of his position as a Makati trial judge by filing his collection suit in his own court.
• Whether or not the respondent committed harassment in continuing the criminal prosecution for violation of Batas Pambansa Blg. 22 against Efren despite knowledge that Efren was not the drawer of the check.
• Whether or not the respondent filed false administrative charges against Pedro Javier in violation of the Revised Penal Code provisions on false testimony.

Applicable Provisions

Canon 3 of the Canons of Judicial Ethics, which governed at the time of the transaction in 1987, provides:

A judge's official conduct should be free from the appearance of impropriety, and his personal behavior, not only upon the bench and in the performance of judicial duties, but also in his everyday life, should be beyond reproach.

This is the core standard the respondent was measured against in all three sustained charges.

Rule 5.02 of the Code of Judicial Conduct provides:

A judge shall refrain from financial and business dealings that tend to reflect adversely on the court's impartiality, interfere with the proper performance of judicial activities, or increase involvement with lawyers or persons likely to come before the Court. A judge should so manage investments and other financial interests as to minimize the number of cases giving grounds for disqualification.

This rule bears on the respondent's private lending and his aggressive collection of the debt.

Rule 1.03 of the Code of Professional Responsibility provides:

A lawyer shall not, for any motive or interest, encourage any suit or proceeding.

This bears on his continued prosecution of the criminal charge against Efren.

Ruling

On the first issue, the Court upheld the Investigating Justice. The Memorandum of Agreement named the respondent as the lender, the check was made out in his name, and it was he who collected payments and filed the suits. The Court found the interest exorbitant: after receiving 177,000 pesos on a 200,000 peso loan, he still sought 622,871 pesos. His claim that the twenty per cent compounded monthly was a penalty rather than interest did not excuse it, because however termed, it remained a charge for the use of his money, blatantly out of proportion to the amount lent.

On the second issue, the Court agreed that although the venue stipulation gave him the legal option to sue in Makati, he fell short of what is expected of a judge. A sense of propriety should have impelled him to desist, because in the eyes of the public it arouses suspicion that advantage is being taken of his position. The Court noted that he even used his official stationery to upbraid the sheriff enforcing the writ of attachment.

On the third issue, the Court held that having been informed that Efren was not the drawer of the check, it was the respondent's bounden duty to disregard his personal animosity and move for the dismissal of the case. His explanation that making and issuing a check are separate offenses exhibited, in the Court's words, a splitting of hairs and a misuse of court processes to promote his own interests.

On the fourth issue, the Court found no reason to differ from the Investigating Justice. Pedro was not a signatory to the agreement, but his wife and son were the parties, and there was reason for the respondent to believe Pedro was the prime mover behind the transaction. The filing of the administrative charges sprang from a sense of grievance, not from malice or a desire to harass.

Doctrine

A judge's official conduct must be free from the appearance of impropriety, and his personal behavior, both on the bench and in everyday life, must be beyond reproach. Public confidence in the judiciary is eroded by irresponsible or improper conduct, and a judge must avoid all impropriety and the appearance of it. Being the subject of constant public scrutiny, a judge should freely accept restrictions on conduct that might be viewed as burdensome by the ordinary citizen. A judge is not a hard-boiled and callous businessman; even a lawful contract may be rendered unconscionable by an exorbitant penalty, and legality does not necessarily make an act moral and fair. A judge must refrain from financial and business dealings that reflect adversely on the court's impartiality, and must not, for any motive or interest, encourage any suit or proceeding.

Disposition

The Court found Judge Salvador P. de Guzman, Junior guilty on three counts of irresponsible, improper, and dishonorable conduct in disregard of the Code of Judicial Ethics, and severely censured him, with a stern warning that a repetition of the acts or similar acts would receive graver sanctions, and ordered the decision spread upon his personal records.

Remember This

The one line to memorize: a judge's personal behavior, not only upon the bench but also in his everyday life, should be beyond reproach. Examiners use this case on judicial ethics and the Code of Judicial Conduct, especially on a judge's private financial dealings, on filing suit in one's own court, and on the appearance of impropriety as a ground for administrative liability.