G.R. No. 165606 ; February 6, 2006
DEUTSCHE BANK MANILA, Petitioner, vs. SPOUSES CHUA YOK SEE and REBECCA SEE, et al., Respondents.

FACTS

Petitioner Deutsche Bank Manila filed a complaint for sum of money and damages against the respondents. The bank alleged that the respondents, through their agent, engaged in foreign exchange forward transactions and incurred substantial losses when the peso depreciated in July 1997. Despite the application of the respondents’ deposits from Hold-Out Accounts, an unpaid balance remained. The respondents, in their answer, denied entering into such transactions and asserted that the contracts were unenforceable under the Statute of Frauds and for lack of authority of the purported agent.
During trial, after the petitioner presented its evidence, the presiding judge, Judge Reinato G. Quilala, issued an order admitting all of the bank’s documentary exhibits but only as part of the testimonies of its witnesses. The order explicitly stated that the exhibits were not being admitted as independent evidence of the truth of their contents. The petitioner filed a motion for reconsideration, arguing this limited admission rendered its evidence meaningless. The motion was denied. The petitioner then filed a motion for the judge’s voluntary inhibition, alleging bias and partiality, which was also denied.

ISSUE

Whether the trial judge committed grave abuse of discretion warranting his inhibition from the case.

RULING

No. The Supreme Court affirmed the Court of Appeals’ dismissal of the petition and held that the trial judge did not commit grave abuse of discretion. The legal logic is grounded on the distinction between the admission of evidence for a limited purpose and a ruling on its probative value. The trial court’s order admitting the exhibits only as part of the witnesses’ testimonies was a proper interim procedural ruling on their admissibility. It did not constitute a final evaluation of their weight or credibility, which is reserved for the final judgment after a full trial. An allegation of bias must be substantiated by clear and convincing evidence of prejudgment. The judge’s procedural ruling, even if potentially erroneous, does not in itself prove bias or partiality. The Court emphasized that a judge’s official conduct is presumed regular, and the remedy for an adverse interlocutory order is not inhibition but an ordinary appeal. The petitioner failed to overcome this presumption, as the judge’s actions were within his discretionary authority to control the proceedings.