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FACTS: In 1980, an examination of the books and affairs of Buhi was ordered conducted by the Rural Banks and Savings and Loan Association, Central Bank, which by law, has charge of the supervision and examination of rural banks and savings and loan associations in the Philippines. However, said petitioner refused to be

examined and as a result, financial assistance was suspended.

On January 10, 1980, a general examination of the bank’s affairs and operations was conducted and there were found by DRBSLA massive irregularities in its operations consisting of loans to unknown and fictitious borrowers, where the sum of Php 1,704,782.oo was past due and another sum of Php 1,130,000.00 was also past due in favor of the Central Bank.

The promissory notes evidencing these loans were rediscounted with the Central Bank for cash. As a result the bank became insolvent and prejudiced in its depositors and creditors.

Respondent Consolacion Odra, submitted a report recommending to the Monetary Board of the Central Bank the placing of Buhi under receivership in accordance with Sec. 29 of RA No. 265.

The Monetary Board adopted the Resolution placing Buhi under receivership and designated respondent Odra as Receiver.

Imelda del Rosario, manager of Buhi filed a petition for injunction with Restraining Order against respondent Odra and DRBSLA deputies in the CFI of Camarines Sur, which assailed the action of respondent Odra in recommending the receivership over Buhi as violating Sections 28 and 29 of RA 265 and Section 10 of The Rural Banks Act and as being ultra vires and done with grave abuse of discretion and in excess of jurisdiction.

Respondent Central Bank filed a motion to dismiss alleging that the petition did not allege a cause of action and not sufficient in form and substance.

On August 22, 1980, the CBMB (Central Bank Monetary Board) issued a resolution ordering the liquidation of the Rural Bank of Buhi.

Respondent CB filed a Supplemental Motion to Dismiss on the ground that the receivership of Buhi in view of the MB Resolution had completely become moot and academic.

On March 9, 1982, herein Judge Buenviaje issued an order denying the respondents’ Motion to dismiss, supplemental motion to dismiss and granting a TRO enjoining respondents from further managing and administering the rural Bank of Buhi and deliver the possession and control thereof to the petitioner Bank.

ISSUES:

1. Under Sec. 29, RA 265, may the Monetary Board of the Central Bank place Rural Bank under receivership without prior notice to said bank to enable it to be heard on the ground relied upon for such receivership?

2. Under the same law, is such action of the Monetary Board of the Central Bank placing the Bank under receivership subject to judicial

review? If so, which court may exercise such power and when may it exercise the same?

RULING:

1. The Act does not require whether express or implied that a hearing be first conducted before a banking institution may be placed under receivership. On the contrary, the law is explicit as to the conditions prerequisite to the action of the Monetary Board to forbid the institution to do business in the Philippines and to appoint a receiver to immediately take charge of the bank’s assets and liabilities. They are:

a) An examination made by the examining department of the CB; b) report by said department to the MB; and c) prima facie showing that the bank is in a condition of insolvency or so situated that its continuance in business would involve probable loss to its depositors or creditors.

Upon finding that the bank can no longer resume business with safety to depositors, creditors and the public, etc. its liquidation will be ordered and a liquidator appointed by the MB. The CB shall then file a petition on the RTC praying for assistance in the liquidation of the bank.

Section 29, RA 265 did not intend to disregard the Constitutional requirement of due process before a property shall be taken. It has long been established and recognized that closure and liquidation of bank may be considered as an exercise of police power. Such exercise may be considered as an exercise of police power.

2. Yes. Such exercise of power by the Central Bank may be subject to judicial inquiry and could be set aside if found to be capricious, discriminatory, whimsical, arbitrary, unjust or a denial of the due of the process and equal protection clauses of the Consitution.

The evident implication of the law is that the appointment of a receiver may be made by the Monetary Board without notice and hearing but its action is subject to judicial inquiry to insure the protection of the banking institution. Stated otherwise, due process does not necessarily require a prior hearing; a hearing or an opportunity to be heard may be subsequent to the closure.

One can just imagine the dire consequences of a prior hearing: bank runs would be the order of the day, resulting in panic and hysteria. In the process, fortunes may be wiped out, and disillusionment will run the gamut of the entire banking community.

The same Central Bank Act provides that the RTC has jurisdiction to adjudicate the question of whether or not the action of the MB directing the dissolution of the

subject Rural Bank is attended by arbitrariness and bad faith.

The issuance of the Order of the Court dismissing the Motion to Dismiss and Supplemental Motion to Dismiss for lack of sufficient merit. The court merely acted on n incident and has not yet inquired as mandated by Section 29 of the CB Act, into the merits of the claim that the MB’s action is plainly arbitrary and made in bad faith. It has not appreciated certain facts which would render the remedy of liquidation proper and rehabilitation improper, involving as it does an examination of the probative value of the evidence presented by the parties properly belonging to the trial court and not properly cognizable on appeal.

Without a hearing held for both parties to substantiate their allegations in their respective pleadings, there is lacking that “convincing proof” prerequisite to justify the temporary restraining order issued by the trial court in its Order of March 9, 1982. Remanding the case to the RTC for further proceedings but lifting the TRO issued by the RTC.

POLLUTION ADJUDICATION BOARD, petitioner vs.

COURT OF APPEALS and SOLAR TEXTILE FINISHING CORPORATION, respondents.

FACTS: On Sept 22, 1988, the Pollution Adjudication Board (Board) issued an ex parte order directing Solar Textile Finishing Corp (Solar) to immediately cease and desist from utilizing its wastewater pollution source installations. These said installations were discharging untreated wastewater directly into a canal leading to the Tullahan-Tinejeros River. The Board’s chair, Factoran, Jr.

signed the said order.

Solar’s business involved bleaching, rinsing and dying textiles, which naturally produces wastewater. But this was being discharged untreated into the sewers leading to the river because Solar’s treatment facility was not operational. After inspection of the National Pollution Control Commission (old name of the Board) and the DENR, it was found that there was a violation of sec 8 of PD 984 and Sec 103 of its IRR and the 1982 Effluent Regulations. Chemical analysis of samples of Solar's effluents showed the presence of pollutants on a level in excess of what was permissible under the law. This was the basis for the cease and desist order.

Solar went to the RTC in QC praying for a petition for certiorari with preliminary injunction against the Board. The RTC dismissed this petition because the proper remedy was an appeal, not certiorari and that the Board granted Solar to temporarily operate anyway so the petition was moot.

Solar appealed to the CA where the RTC’s decision was reversed. CA remanded the case and declared the writ of execution issued by the Board as null and void but without prejudice to the Board conducting the inspections.

The Board claims it has legal authority to issue ex parte orders to suspend the operations of an establishment under P.D. No. 984, Section 7(a). It claims that when there is prima facie evidence that such establishment is discharging effluents or wastewater, the pollution level of which exceeds the maximum permissible standards set by the Board.

However, Solar argues that the Board may issue ex parte orders only if and when the effluents pose an

"immediate threat to life, public health, safety or welfare, or to animal and plant life." Here, Solar claims that the Board never mentioned in its inspection reports that the wastewater posed such a threat.

ISSUE: W/N the EX PARTE Order to cease and desist and the Writ of Execution issued by the Board were issued in accordance with law and were not violative of the requirements of due process.

HELD/RATIO: No!

Section 7(a) of P.D. No. 984 states an ex parte cease and desist order may be issued by the Board (a) whenever the wastes discharged by an establishment pose an

"immediate threat to life, public health, safety or welfare, or to animal or plant life," or (b) whenever such discharges or wastes exceed "the allowable standards set by the Board."

It is not essential that the Board prove that an

"immediate threat to life, public health, safety or welfare, or to animal or plant life" exists before an ex parte cease and desist order may be issued. It is enough if the Board finds that the wastes discharged do exceed "the allowable standards set by the Board."

it is clear to this Court that there was at least prima facie evidence before the Board that the effluents emanating from Solar's plant exceeded the maximum allowable levels of physical and chemical substances set by the Board and that accordingly there was adequate basis supporting the ex parte cease and desist order issued by the Board.

The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. The Board's ex parte Order and Writ of Execution would, of course, have

compelled Solar temporarily to stop its plant operations, a state of affairs Solar could in any case have avoided by simply absorbing the bother and burden of putting its water treatment plant on an operational basis.

Where the establishment affected by an ex parte cease and desist order contests the correctness of the prima facie findings of the Board, the Board must hold a public hearing where such establishment would have an opportunity to controvert the basis of such ex parte order.

That such an opportunity is subsequently available is really all that is required by the due process clause of the Constitution in situations like that we have here. The Board's decision rendered after the public hearing may then be tested judicially by an appeal to the Court of Appeals in accordance with Section 7(c) of P.D. No. 984 and Section 42 of the Implementing Rules and Regulations. A subsequent public hearing is precisely what Solar should have sought instead of going to court to seek nullification of the Board's Order and Writ of Execution and instead of appealing to the Court of Appeals. It will be recalled the at the Board in fact gave Solar authority temporarily to continue operations until still another inspection of its wastewater treatment facilities and then another analysis of effluent samples could be taken and evaluated.

Board’s orders reinstated.

CASTILLO V JUAN

FACTS: CASTILLO and another girl, two young maidens, and victims in rape cases, wanted to disqualify Judge Juan for being biased and prejudiced. This is because on two separate chambers, JUAN informed them that their cases (rape) are weak and the verdict will most likely be for an acquittal and they should just settle. JUAN also told them to just settle as this would spare them from embarrassment. This took place even before the prosecution finished presenting its evidence (one of the victims hasn’t testified yet). JUAN countered that he did it as an act of charity and an attempt to humanize justice.

ISSUE: W/N JUAN should be disqualified. - YES

RATIO: It is said that in criminal cases, the manner and attitude of a trial judge are crucial to everyone concerned.

He is to refrain from reaching hasty conclusions or prejudging matters and more so that he should avoid any conduct that casts doubt on his impartially.

Due process of law requires a hearing before an impartial and disinterested tribunal, and that every litigant is entitled to nothing less than the cold neutrality of an impartial Judge. Although JUAN’s argument was that his final decision would be dependent on the evidence that could be presented by CASTILLO, it is clear that after his

actions, the latter could no longer be expected to have faith in his impartiality. Even before they had been fully heard, they were told that their cases were weak. They could very well conclude then that there was a prejudgment. Even if JUAN acted from a sense of “charity”

for them as he thought any monetary settlement would benefit CASTILLO, is unavailing as his conduct cannot be said to be consonant with the exacting standard of the cold neutrality of an impartial judge.

The Rules of Court provides for a disqualification of a judge by virtue of their pecuniary interest, relationship, previous connection, his having presided in an inferior court when his ruling or decision is the subject of review, or [this is the amendment] for just or valid reasons other than those mentioned. JUAN’s actions fall within the amendment. JUAN=DQ.

WEBB v. PEOPLE

Facts: Petitioners Webb, et al. were charged with the crime of rape with homicide for raping Carmela Vizconde and on the occasion thereof, killing her, her mother, and her sister, Jennifer in their residence in BF Homes.

Prior to the arraignment, Webb and his co-accused Biong, had sought the disqualification of Judge Tolentino on the ground that she allegedly told that media that “failure of the accused to surrender following the issuance of the warrant of arrest is an indication of guilt.”

She denied the motion. Webb filed a second motion for disqualification because she allegedly told the media that he “should not expect the comforts of home” pending the resolution of his motion to be committed to the custody of the PNP in Paranaque. This was denied. Biong filed another motion on the ground of bias and partiality, denied again.

They were arraigned and they filed separate petitions for bail. Webb filed an Urgent Motion for Hospitalization alleging that he was sick of dermatitis of asthma of the skin, which aggravated due to his commitment at the municipal jail. This was denied.

During the hearing for bail, the star witness Jessica Alfaro was presented. During the cross examination, the defense tried to impeach her credibility by showing the inconsistencies in her two affidavits. The prosecution objected and moved that the first affidavit be removed from the records for being inadmissible for not being executed in the presence of a counsel. The judge sustained the objection. The judge also sustained the prosecution’s objections when the defense tried to prove Alfaro’s motive in testifying against petitioners (irrelevant daw, concerning her drug addict of a brother) and her educational attainment to show that she lied about finishing second year when she only earned 9 academic units (irrelevant again). She also disallowed Webb from

taking deposition of witnesses residing in the US for failing to allege that the witnesses did not have the means to go to the place of trial. On the formal offer of evidence, she admitted only 10 out of 142 exhibits offered by Webb.

They filed another motion to disqualify the judge due to bias and prejudice, denied again. Hence, petition for certiorari with SC, referred to CA. During this time, the judge denied the petitions for bail.

The CA reversed the judge’s ruling refusing to admit Alfaro’s first affidavit, but denied all the other reliefs prayed for. Hence, petition for certiorari with the SC.

(Grounds: shown bias and hostility, rejection of exhibits paved the way for denial of bail and eventual conviction, and trip to Vizconde residence shows her propensity to consort with complainant). They alleged that the CA did not honor the fact that a fair trial requires an impartial judge.

Issue: Whether Judge Tolentino should inhibit herself on the ground of bias and prejudice – NO

Ratio: The Bill of Rights guarantees that “no person shall be held to answer for a criminal offense without due process of law.” A critical component of due process is a hearing before an impartial and disinterested tribunal.

Every litigant is entitled to nothing less than the cold neutrality of an impartial judge for all the other elements of due process would be meaningless. Hence, the ROC allows a judge to voluntarily inhibit himself from hearing a case for just and valid reasons other than those referring to his pecuniary interest, relation, previous connection, or previous rulings.

Under Sec.1 of rule 137, a party has the right to seek the inhibition or disqualification of a judge who does not appear to be wholly free, disinterested, impartial, and independent in handling the case. But to do so on the ground of bias and prejudice, the movant must prove the same by clear and convincing evidence.

Petitioners harp on the alleged adverse and erroneous rulings of the judge on their various motions.

By themselves, they do not sufficiently prove bias and prejudice. To be disqualifying, it must be shown that it stemmed from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from the case. Opinions formed in the course of judicial proceedings, although erroneous, as long as they are based on the evidence presented and conduct observed, do not prove personal bias or prejudice on the part of the judge. As a general rule, repeated rulings against a litigant, no matter how wrong and vigorously expressed, are not a basis for disqualification of a judge on grounds of bias and prejudice. Extrinsic evidence is required to establish bias, bad faith, and malice or corrupt purpose. The only exception to the rule

is when the error is so gross and patent as to produce an ineluctable inference of bad faith or malice.

Records show that petitioners failed to adduce

Records show that petitioners failed to adduce