[A.M. No. SC-96-1.

July 10, 1997]

DAMASO S. FLORES, complainant, vs. HON. BERNARDO P. ABESAMIS, Regional Trial Court, Branch 85, Quezon City (now Deputy Court Administrator), respondent. In re: Contempt Proceeding vs. Damaso S. FLORES, respondent.

This is a resolution treats of the liability of Damaso S. Flores for contempt of court in relation to several actions and proceedings in which he was a party. Flores was the defendant in Civil Case No. Q-45825 of the Regional Trial Court of Quezon city (Branch 85). The case involved an admitted indebtedness of Flores to the plaintiff, Rolando Ligon, of about 1.8 million pesos. A judgment based on compromise was rendered on September 26, 1985 by the late Judge Jose Castro, providing for payment of the debt in stated installments and, in the event of default, acceleration of the obligation and the surrender of the Paranaque Cockpit Stadium (held by Flores under lease) to Ligon for the latter to manage and operate. On April 10, 1986, the Trial Court promulgated an order declaring Flores to have breached the compromise judgment and directing execution thereof; and on May 22, 1986, a writ of execution issued. Flores appealed the Order of April 10, 1986 to the Court of Appeals, his appeal being docketed as CA-G.R. CV No. 10259; and to nullify the writ of execution, he filed a certiorari action in the same Court, docketed as CA-G.R. SP No. 09061. CA-G.R. SP No. 09061 was decided on September 19, 1986 in Flores favor -- vindicating his right to possess the cockpit on a finding that he had not infringed the compromise judgment. Ligons petition for review in the Supreme Court, G.R. No. 76039, was dismissed on February 23, 1987, and his motion for reconsideration denied on March 10, 1988. Flores then asked the Trial Court to restore possession of the cockpit to him in light of this dispositions of the Court of Appeals and this Court. His motion to this effect, dated April 5, 1988, was granted by Judge Abesamis, but only on April 20, 1988, because the latter (a) had to wait for the mittimus, which was not received until April 13, 1988, and (b) had to study the pleadings filed by Ligon and Flores on the issue, dated April 14 and 15, 1988, respectively. Despite Judge Abesamis Order of April 20, 1988 -- and two other orders of substantially the same tenor dated May 2, 1988 and August 31, 1988 in response to Flores motions dated June 9, 1988 and August 15, 1988 -- Flores was still unable to regain possession of the cockpit. This was due to Ligons actions in the Court of Appeals. In that Court Ligon challenged the order of execution of April 20, 1988 by a special civil action of certiorari, CA-G.R. SP No. 14588, and obtained a temporary restraining order. CA-G.R. SP No. 14588 was consolidated with CA-G.R. CV No. 10259. The cases were jointly decided on August 9, 1988 in Flores favor; and Ligons motion for reconsideration, denied on November 23, 1988. Ligons appeal to this Court, G.R. No. 84644 again resulted in failure. His review was denied on August 29, 1989, and reconsideration denied on October 23, 1989. It is noteworthy that in G.R. No. 84644, in an attempt to obtain a favorable verdict, Ligon drew attention to the fact that some years back he had purchased the Paranaque Cockpit Stadium from its owner (Flores lessor) and argued that this gave him a right of possession superior of that of Flores. The Court however declined to take cognizance of the matter and observed -- in its Resolution of October 23, 1989 denying Ligons motion for reconsideration was finality -- that any supervening event should properly be addressed to the Trial Court, not to this Court. Judge Abesamis received notice of the judgment of August 9, 1988 in the consolidated cases of CA-G.R. No. 14588 and CAG.R. CV No. 10259 on August 16, 1988; and after considering the pleadings presented by the parties, the last being a rejoinder dated August 26, 1988, ordered issuance of an alias writ of execution on August 31, 1988, to revert possession of the cockpit to Flores. But enforcement of the alias writ of execution was again effectively delayed by still other circumstances, to wit: (1) another temporary restraining order -- issued by the Court of Appeals on October 27, 1988 in CA-G.R. SP No. 14588 above mentioned -which was not lifted until November 23, 1988; (2) a temporary restraining order issued on December 5, 1988 by the Second Division of the Supreme Court in G.R. No. 84644, not lifted until October, 1989; and (3) the pendency in Civil Case No. Q-45825 itself of the matter of the appointment of a special sheriff sought by Flores precisely to carry out the writ. Surprisingly -- although aware of these circumstances precluding enforcement of Judge Abesamis order for reversion of the cockpit to him -- Flores filed criminal and administrative cases against said Judge, accusing him of partiality, evident bad faith, and gross negligence, as well as of serious misconduct, inefficiency and ignorance of the law, in deliberately delaying actions on his motion to obtain possession of the cockpit. These cases were: (a) Criminal Case No. OMB-0-89-01209 filed on May 22, 1989 in the Office of the Ombudsman; (b) A.M. No. 90-11-332-SBA, the administrative aspect of Case No. OMB 0-89-01209, supra, of which this Court took cognizance; and (c) A.M. No. RTJ-89-348, filed with this Court on June 27, 1989.

OMB Case No. 0-89-01209 was short-lived. It was dismissed by the Office of the Ombudsman on September 13, 1989 for lack of merit and insufficiency of evidence upon a finding that Judge Abesamis had acted promptly and properly on Flores motions. Indeed, upon the facts just recited, it was legally impossible to ascribe inaction or intent to delay to His Honor as regards Flores attempts to regain possession of the cockpit. Now, on November 20, 1989 -- after Ligons motion for reconsideration of the judgment in G.R. No. 84644 was denied with finality in the Resolution of October 23, 1989 -- Abesamis authorized the issuance of still another writ of execution in Flores favor. But again Ligon challenged this writ in yet another special civil action in the Court of Appeals, CA-G.R. SP No. 19348. The case was decided adversely to him on January 22, 1990. Once more, Flores asked the Regional Trial Court to restore possession of the cockpit to him, and once more Ligon opposed to him, this time asserting that such restoration was no longer legally possible because barred by a supervening event -- which, according to this Courts Resolution of October 23, 1989 in G.R. No. 84644, should properly be addressed to the Trial Court, not to this Court, supra. Ligon pointed out that since he had become the owner of the cockpit, his right of possession must be deemed superior to that of Flores, lessee of the former owner. After hearing the parties, Judge Abesamis sustained Ligons contention, in an Order dated February 16, 1990. That Order was later upheld by Judge Teodoro Regino, Abesamis pair judge, who acted on a subsequent motion of Flores to get back the cockpit while Abesamis was on leave. In his Order of April 16, 1990, Judge Regino ruled that Ligons lawful acquisition of title to the cockpit and Flores continuing failure to pay his debt of about P1.8 million to the former were supervening events warranting Ligons retention of the cockpit and precluding its restoration to Flores. Flores filed a motion for reconsideration, which was acted on by Judge Abesamis who had by then returned to duty. The motion was denied by Order of June 6, 1990. Flores challenged these three (3) orders -- of February 16, 1990 (of Abesamis), of April 16, 1990 (of Regino) and of June 6, 1990 (of Abesamis) -- in a certiorari suit filed with the Court of Appeals, docketed as CA-G.R. SP No. 22201. He also initiated on May 14, 1990, an administrative proceeding against Judge Teodoro Regino, docketed as A.M. No. RTJ-90505, in relation to his Order dated April 16, 1990, supra. The Court of Appeals, however, found no merit in Flores certiorari action (CA-G.R. SP No. 22201), and in a Decision promulgated on October 31, 1990 (shortly after the actions commencement), dismissed the same. It later denied reconsideration thereof, by Resolution dated February 26, 1991. Flores appeal to this Court, docketed as G.R. No. 97556, also failed. Also dismissed by this Court for lack of merit, about two and a half years later, were the administrative case against Judge Regino (A.M. No. RTJ-90-505) as well as those against Judge Abesamis (A.M. No. RTJ-90-11-332-SBA) and (A.M. No. RTJ-89-348). That Resolution of dismissal, dated September 14, 1993, reads as follows: **. Acting on the separate complaints filed by Damaso Flores in (a) A.M. No. RTJ-89-348 charging respondent Judge Bernardo P. Abesamis with serious misconduct, inefficiency and gross ignorance of the law relative to Civil Case No. Q-45825, entitled `Rolando R. Ligon vs. Damaso S. Flores' as well as the respondents comment thereon dated May 7, 1990 and the complainants reply (there)to **; and (b) A.M. No. RTJ-90-505 charging respondent Judge Teodoro P. Regino (who took over as pairing judge when Judge Abesamis was on sick leave) with serious misconduct, inefficiency and gross ignorance of the law for having issued in Civil Case No. Q-45825 his order of April 16, 1990 which, according to the complainant, unlawfully interpreted the final judgment he was supposed to enforce, and in doing so, he callously arrogated unto himself the power to reverse and said aside the said final judgments and rendered the same useless and nugatory as well as the respondents reply/memorandum dated November 14, 1990 filed in compliance with the Resolution of the July 16, 1990, the Court resolved to DISMISS all the charges against respondent Judge Bernardo P. Abesamis in A.M. no. RTJ-89-348 for lack of merit. Similarly, considering that the extensive discussion made by respondent Judge Teodoro P. Regino in A.M. No. RTJ-90-505 in his order of April 16, 1990 of the pertinent facts and law involved is utterly inconsistent with the truth of the charges levelled at him, all the charges against Judge Teodoro P. Regino in A.M. No. RTJ-90505 are hereby likewise DISMISSED. Further, the Court Resolved to DISMISS, for lack of merit, the charges against Judge Abesamis in the administrative aspect of OMB Case No. 0-89-01209, entitled `Damaso S. Flores vs. Hon. Bernardo P. Abesamis' in A.M. No. 90-11-332-SB, considering that the charges therein are fundamentally similar and are based on the facts and incidents as in A.M. No. RTJ-89-348. But two years after promulgation of this Resolution of September 13, 1993, or more precisely on December 21, 1995, Damaso Flores once more filed in the Office of the Ombudsman a complaint against Judge Abesamis, with respect to his Orders of February 16, June 6, and December 10, 1990. Specifically, he accused Judge Abesamis of transgressing Section (e) of R.A. 3019 (the AntiGraft and Corrupt Practices Act): for alleged bias and prejudice in granting a partys motion which caused undue injury to complainant. The case was docketed as CPL No. 95-3618, and was referred by Assistant Ombudsman Abelardo L. Aportadera, Jr. on February 27, 1996 to the Office of the Court Administrator, where it was docketed as A.M. No. SC-96-1. The case was dismissed for utter lack of merit in this Courts Decision of December 23, 1996. The decision also ordered Flores ** to EXPLAIN within ten (10) days from notice hereof why ** he should not be disciplinarily dealt with for wilful disregard of this Courts judgment and orders and those of the Court of Appeals; abuse of the processes of the courts; and forum-shopping. Flores submitted his explanation, denominated Compliance, under date of January 14, 1997. In it he reviews in some detail the relevant facts and submits that in filing all the cases, whether civil or administrative, he did not wilfully disregard the judgments and orders of this ** Court and those of the Court of Appeals, ** has not abused the courts processes nor engaged in forum-shopping, ** (having filed said cases in the firm belief) that they were meritorious and not intended for delay or to harass anyone or to abuse the courts processes**, and with a pure motive and that was to obtain justice -- to get what was due to him**.

It is in light of the material facts narrated herein (and in the Decision of December 23, 1996), in relation to Flores aforesaid explanation (Compliance) of January 14, 1997, that the Court now addresses the matter of Flores liability for disciplinary sanction. 1. His first complaints against Judge Abesamis in the OMB and this court were clearly without basis whatever and not susceptible of exculpatory explanation. The common theory under which he sought to hold Judge Abesamis administratively and criminally responsible -- in Case OMB 0-89-01209 (filed on May 22, 1989), A.M. No. 90-11-332-SB (the "administrative aspect" of OMB 0-89-01209) and A.M. No. RTJ-89348 -- was that His Honor had unduly delayed action on several motions filed by him to regain possession of the Paranaque Cockpit Stadium in accordance with the Decision of the Court of Appeals in CA-G.R. No. 09061 dated September 19, 1986, affirmed by this Courts Resolution of February 23, 1987 in G.R. No. 76039, reconsideration being thereafter denied on March 10, 1988. The motions were allegedly those dated April 5, 1988, June 9, 1988, August 15, 1988, October 14, 1988, and November 24, 1988. But, as already stated, since Judge Abesamis received the mittimus from the Court of Appeals only on April 13, 1988, he could not have acted earlier on Flores motion of April 5. Moreover, he had to study the pleadings exchanged by Ligon and Flores himself on the issue (dated April 14, and 15, 1988, respectively). Five days afterwards, or on April 20, 1988, he granted the latters motion for execution. In other words, he acted on the incident within five (5) days after it could be properly regarded as submitted for resolution. The trouble is, above related, Flores adversary, Ligon, lost no time in challenging Judge Abesamis order of execution of April 20, 1988, and other orders for restoration of possession of the cockpit to Flores, in a series of actions in the Court of Appeals and in this Court, in the course of which temporary restraining orders were issued against Abesamis. It was not until October 23, 1989, when Ligons motion for reconsideration was denied with finality in G.R. No. 84644, that the judicial restraints on Judge Abesamis were finally removed. Under the facts, to repeat, it is not possible fairly to ascribe inaction or intent to delay to His Honor as regards Flores motion for execution. It was precisely in light of these circumstances, among others, that the Office of the Ombudsman quickly threw out Flores complaint against Judge Abesamis. That Office found that ** (contrary to Flores claims) practically all of ** (his motions) before ** (Abesamis) sala have been favorably acted upon by the latter and with dispatch excepting those cases only where a directive had been received from the Court of Appeals ordering ** (him) to desist from restoring possession of subject cockpit to herein complainant until further orders ** or in cases where Ligon ** filed his Opposition to ** (Flores motions) and the latter filed his Answer/Comment thereto. And it was for the same reasons that this Court, on September 14, 1993, dismissed the administrative cases against Judge Abesamis -- A.M. No. RTJ-89-348 and A.M. No. 90-11-332-SB, as well as that filed by Flores against Judge Teodoro Regino, Abesamis pair judge. 2. Also patently without foundation in fact and incapable of tenable explanation, is the case filed by Flores on December 21, 1995 against Judge Abesamis in the Office of the Ombudsman -- CPL No. 95-3618 (A.M. No. SC-96-1) for alleged bias and prejudice attendant upon the Orders of February 16, June 6, and December 10, 1990. For on December 21, 1995, Flores was fully aware of the following material events indubitably demonstrating the absence of any cause for complaint on his part: a. Judge Reginos Order dated April 16, 1990 had been upheld in no uncertain terms by this Courts Resolution of September 14, 1993 (A.M. No. RTJ-90-505) which declared that the pertinent facts and law involved were utterly inconsistent with the truth of the charges levelled at him. The ruling is implicit but no less clear affirmation of the correctness of two Orders of Judge Abesamis (1) that of February 16, 1990 -- which Judge Regino sustained in his aforesaid Order of April 16, 1990 -- and (2) that of June 6, 1990 -which denied reconsideration of Judge Reginos order of April 16, 1990. b. Indeed, he (Flores) had directly assailed (a) Judge Abesamis Order of February 16, 1990, (b) Judge Reginos Order of April 16, 1990 confirming said Order, and (c) Judge Abesamis Order of June 6, 1990, denying Flores motion for reconsideration of Reginos Order of April 16, 1990, in a certiorari action in the Court of Appeals (CA-G.R. SP No. 22201), and said Court had confirmed the correctness of all three orders, in its decision dated October 31, 1990. The Appellate Court then denied reconsideration, by Resolution of February 26, 1991; and Flores appeal to this Court, docketed as G.R. No. 97556, was dismissed for lack of merit. c. So, too, Flores challenges to two other Orders of Judge Abesamis -- of June 25, 1990 (denying Flores motion for his inhibition) and of December 10, 1990(decreeing execution in favor of Ligon after Flores refused to present countervailing evidence on the matter) -- were decided adversely to him by the Court of Appeals in CA-G.R. SP No. 22881 (motion for reconsideration of decision denied on August 12, 1991). (N.B. Later, said orders were also sustained by this Courts First Division in G.R. No. 101152, decided jointly with G.R. No. 97556 on July 29, 1996). It is clear, in other words, that when Flores initiated CPL No. 95-3618 (A.M. No. SC-96-1), he knew that the specific Orders of Judge Abesamis upon which his criminal complaint was grounded had already been sustained by higher courts, and consequently, his complaint was completely devoid of merit. 3. Even assuming arguendo that there was reasonable ground on belief of Flores part that Judge Abesamis was refraining form acting on his motions, out of bias or hostility or other improper motive, there were obvious judicial remedies readily available to him to obtain relief -- the existence and availability of which precluded his resort to criminal, civil or administrative proceedings against the Judge. As everyone knows, the law provides ample judicial remedies against errors or irregularities being committed by a Trial Court in the exercise of its jurisdiction. The ordinary remedies against errors or irregularities which may be regarded as normal in nature (i.e., error in appreciation or admission of evidence, or in construction or application of procedural or substantive law or legal principle) include a motion for reconsideration (or after rendition of a judgment or final order, a motion for new trial), and appeal. Theextraordinary remedies against errors or irregularities which may be deemed extraordinary in character (i.e., whimsical,

capricious, despotic exercise of power or neglect of duty, etc.) are inter alia the special civil actions of certiorari, prohibition or mandamus, or a motion for inhibition, a petition for change of venue, as the case may be. Now, the established doctrine and policy is that disciplinary proceedings and criminal actions against Judges are not complementary or suppletory of, nor a substitute for these judicial remedies, whether ordinary or extraordinary. Resort to and exhaustion of these judicial remedies, as well as the entry of judgment in the corresponding action or proceeding, are pre-requisites for the taking of other measures against the persons of the judges concerned, whether of civil, administrative, or criminal nature. It is only after the available judicial remedies have been exhausted and the appellate tribunals have spoken with finality, that the door to an inquiry into his criminal. Civil, or administrative liability may be said to have opened, or closed. Flores resorted to administrative prosecution (or institution of criminal actions) as a substitute for or supplement to the specific modes of appeal or review provided by law from court judgments or orders, on the theory that the Judges orders had caused him undue injury. This is impermissible, as this Court has already more than once ruled. Law and logic decree that administrative or criminal remedies are neither alternative nor cumulative to judicial review where such review is available, and must wait on the result thereof (SEE In Re: Wenceslao Laureta, 148 SCRA 382, 417-418 [1987]; In Re: Joaquin T. Borromeo, 241 SCRA 405 [1995]. Indeed, since judges must be free to judge, without pressure or influence from external forces or factors, they should not be subject to intimidation, the fear of civil, criminal or administrative sanctions for acts they may do and dispositions they may make in the performance of their duties and functions; and it is sound rule, which must be recognized independently of statute, that judges are not generally liable for acts done within the scope of their jurisdiction and in good faith; and that exceptionally, prosecution of the judge can be had only if there be a final declaration by a competent court in some appropriate proceeding of the manifestly unjust character of the challenged judgment or order, and ** also evidence of malice or bad faith, ignorance of inexcusable negligence, on the part of the judge in rendering said judgment or order or under the stringent circumstances set out in Article 32 of the Civil Code (SEE In Re: Joaquin T. Borromeo, at pp. 464-465). Flores thus abused the processes of the court. He resorted in 1989 and 1990 to the administrative procedure for disciplining Judges prescribed by law, and even to criminal prosecution, notwithstanding that determination of the correctness of the orders of Judges Abesamis and Regino -- upon which the viability of his recourse depended -- had not yet been done by the Court of Appeals or this Court before which said orders when then pending review. For obviously, until and unless there was an authoritative pronouncement that those orders were indeed tainted by anomaly, as was his contention, there was no ground whatever to prosecute Judge Abesamis or Regino, either administratively or criminally, for rendering them. In fine, Flores filed his administrative and criminal complaints prematurely, before ascertainment of the existence of the foundation therefor; and it would appear that improper motives underlay the filing of his complaints: either to vent his wrath against someone, anyone, because of his frustrations in his attempts to regain possession of the cockpit, or to so intimidate the respondent Judges as to make them more malleable in their subsequent actuations with respect to his future motions. What is worse is that after his administrative and criminal accusations filed in 1989 and 1990, as well as his judicial assaults against particular orders of Judge Abesamis, had been thrown out for lack of merit, Flores again filed on December 21, 1995 charges involving same matters against Deputy Court Administrator Abesamis, in the Office of the Ombudsman where it was docketed as CPL No. 95-3618. As above stated, this complaint was later made the basis of another administrative proceeding in this Court, identified as A.M. No. SC-96-1, which Flores actively prosecuted. He thereby manifested what can only be considered an insolent disregard of this Courts adjudgments. Knowing that his earlier accusations and theories had already been ruled by this Court to be without merit and accordingly rejected, he resort to re-ventilate the same theories and accusation two years later, completely ignoring, and demonstrating disdain for, this Courts resolutions thereon. Not only was the complaint he filed utterly without merit, as very well knew; in filing it he also utilized the administrative disciplinary procedure provided by law for his own purposes. His motives must again be as suspect, as those attendant upon his earlier accusations. Finally, his initiation of the complaint was forum-shopping of the most blatant sort, a clear attempt to re-ventilate or re-litigate issues already passed upon and definitively resolved by this Court, affirming action on the same issues by the Court of Appeals and the Regional Trial Court. In fine, Flores is more than preponderantly shown by the evidence to have, more than once: (a) instituted criminal as well as administrative proceedings against Judge Abesamis (and Judge Regino) which he knew to be completely without basis in fact; (2) resorted to administrative and criminal prosecution contemporaneously with, and prior to exhaustion of, judicial remedies against the acts complained of; and (3) engaged in forum-shopping. He is guilty of abuse of the process or proceedings of the courts, and of improper conduct tending to obstruct or degrade the administration of justice (Section 3, Rule 71 of the Rules of Court). It would appear that Flores cannot accept the fact that the earlier judgments and orders rendered in his favor by this Court and others in several actions have already been superseded and rendered functus officio by later verdicts, in light of supervening events. Notwithstanding the pronouncements in said later verdicts which have since become final and executory, not to mention his long unpaid debt to Ligon, he remains inordinately obsessed with the prior adjudgments, insisting they have not been superseded and continually referring to them in his motions and pleadings as a source of right, even after their supersession; in fact, with no little obduracy, he has quite recently adverted to them again -- in substantiation of his claim of unjust deprivation of the cockpit in question -- in (1) a tract entitled Appeal for Justice Only for the Purpose of Securing Justice and Not To Malign or Smear Any One, which he has caused to be printed and distributed, as well as in (2) a pleading entitled Petitioners Appeal for Justice, filed without authority under date of April 18, 1997. It may well be that he felt and still feels sorely aggrieved by the procedural maneuvers of his adversary, Ligon, who thereby succeeded in not only delaying but eventually preventing execution of the previous orders of the Regional Trial Court of Quezon City, the Court of Appeals and this Court, and which maneuvers, it may be mentioned, were denounced in no certain terms as repetitious and dilatory, by the Court of Appeals. But those feelings of resentment and frustration engendered by Ligons maneuvers cannot justify the oppressive acts perpetrated against completely blameless Judges, and for which he (Flores) is himself made responsible in the contempt proceeding at bar. WHEREFORE, Damaso S. Flores is DECLARED GUILTY of contempt of court and SENTENCED to pay a FINE OF ONE THOUSAND PESOS (P1,000.00). IT IS SO ORDERED.

CESAR TALENTO TALENTO,

and

MODESTA Petitioner

HERRERA

A.C. No. 7433 [Formerly CBD Case No. 05-1554]

ATTY. AGUSTIN F. PANEDA, Respondent.

Promulgated: December 23, 2009

Before us is the administrative complaint filed by mother and son Modesta Herrera Talento and Cesar Talento charging Atty. Agustin

F. Paneda of violation of his oath as a lawyer and neglect of duty.

This case was initiated by petitioners with the filing of a Complaint [1] before the Integrated Bar of the Philippines (IBP)

on August 29, 2005. In the said Complaint, petitioners alleged the following:

a. Sometime in October 17, 2000, a civil complaint was filed by Leticia Herrera. The same complaint was raffled to Regional Trial Court Branch 31, Agoo, La Union presided by Hon. Clifton U. Ganay; b. This case was entitled: LETICIA HERERRA, Plaintiff vs. MODESTA H. TALENTO and CESAR TALENTO as Defendants for Quieting of Title, docketed as Civil Case No. A-2043; c. [Petitioners] secured the services of Atty. Agustin Paneda to help and defend [them] in the aforementioned case. [Petitioners] paid the attorneys fees he required from [them] in order that [they] could avail of his services as counsel; d. Atty. Paneda filed [petitioners] answer to the complaint on November 14, 2000 and the case was set for pre-trial. The Honorable Court in an order required both parties counsels to submit their respective pretrial briefs and appear during the scheduled pre-trial hearing on December 18, 2000; e. Despite the order and notice to [their] counsel, he did not file or submit a pre-trial brief for [petitioners] behalf. Much more to [their] surprise and predicament, although [petitioners] attended the pretrial hearing, he did not appear; f. As a result of his non-appearance, the counsel for the other party spoke of things beyond our knowledge which the Honorable Court granted being expressly stated and provided in the Rules of Court. [Petitioners] were declared in default because of the failure of [their] counsel to file and submit [petitioners] pre-trial brief. The Honorable Court allowed the case to be heard ex parte much to our damage and prejudice; g. The Honorable Court issued a decision against [petitioners] simply for failure of [their] counsel Atty. Paneda to submit [petitioners] pre-trial brief and for his failure to attend the pre-trial of the case. It was simply because of technicality and not based on the merits of the allegations of both parties that [petitioners] lost the case; h. Atty. Paneda filed a Motion for Reconsideration dated December 27, 2000, but the same was dismissed by the Honorable Court; i. Atty. Paneda told [petitioners] that he will appeal the case to the Court of Appeals and [they] agreed because [they were] confident of [petitioners] claim over the parcel of land subject of this case. He filed a notice of appeal on February 8, 2001. [Petitioners] paid the required fees and he even required [petitioners] to shell out more money for the preparation of the Appeal brief; j. [Petitioners] waited for so long for the decision of the Honorable Court of Appeals and [petitioners] found out later that [petitioners] appeal was dismissed due to lack of an appeal brief only when [petitioners] went to Atty. Paneda.[2]

In the Order[3] dated August 30, 2005 issued by the IBP Commission on Bar Discipline (Commission), respondent was

required to submit his Answer to the Complaint within fifteen (15) days from receipt of the notice. Respondent filed his

Answer[4] on October 24, 2005.

In his Answer, respondent states that he honestly believed that he had not violated his oath as a lawyer nor did he

commit negligence in handling the case of the petitioners. He likewise avers that there were other considerations and incidents

which had intervened in the case that produced adverse reactions. He cites as reason for the non-filing of the Pre-trial Brief the fact

that, before the date set for pre-trial hearing, respondent was informed by petitioners that they had already entered into an

Amicable Settlement with the plaintiff. Respondent advised petitioners to submit the said agreement to the Regional Trial Court

(RTC) in lieu of the Pre-trial Brief. Respondent did not appear during the pre-trial conference scheduled in the morning of December

19, 2000 because he chose instead to attend the pre-trial conference of the replevin case involving his personal vehicle

in Dagupan City which was also set on that same morning. [5] With regard to his failure to file the required Appellants Brief before

the Court of Appeals (CA), he points to his secretarys oversight in promptly informing him of the latters receipt of the Notice of

Submission of Appellants Brief.[6] Respondent insists that he was not negligent in his practice but there were circumstances beyond

his control and were unavoidable. He contends that petitioners should not altogether blame him but they should also accept that

the debacle was due to their inaction. [7]

Petitioners refute the foregoing assertions of the respondent. [8] They vehemently deny respondents claim that they

allegedly informed him of the Amicable Settlement prior to the date of pre-trial hearing. In fact, they intended to show the document

to him for the very first time at the pre-trial conference in which he did not appear. They likewise belie respondents claim that he

gave instructions to petitioners on what to do during the pre-trial conference in his absence. They further deny respondents claim

that he had informed them beforehand of his inability to attend due to a conflict of schedule. Granting that there was indeed a

conflict of schedule, petitioners maintain that respondent is required by Rule 18, Sec. 6 of the Rules of Court [9] to file the Pre-trial

Brief at least three (3) days before the date of pre-trial conference. Finally, petitioners insist that, contrary to respondents assertion

in his Answer, respondent did not exert his best efforts for his clients because, after negligently abandoning them at the RTC,

respondent likewise failed to fulfill his duty of safeguarding their interests in the CA when respondent failed to perform a basic legal

requirement of filing an Appeal Brief in order for the said court to take cognizance of their Appeal.

The parties were then required by the Commission to appear at a mandatory conference held on November 30,

2005. Petitioner Cesar Talento appeared together with his counsel, Atty. Matthew L. Dati. Co-petitioner Modesta Herrera Talento

executed a Special Power of Attorney in favor of Cesar Talento and Atty. Dati. Respondent appeared on his behalf.

After the termination of the hearing, the parties were directed to file their respective verified position papers within ten

(10) days from receipt of the Order [10]and were informed that with or without said position papers, the case shall be deemed

submitted for report and recommendation. Only petitioners submitted a Position Paper [11] which was received by the Commission

on January 4, 2009.

On April 28, 2006, Commissioner Rebecca Villanueva-Maala submitted her Report and Recommendation finding

respondent guilty of gross violation of his duties as a lawyer and of inexcusable negligence with the recommendation that

respondent be suspended from the practice of law for a period of one (1) year. The salient portion of the Report reads:

Respondents failure to file complainants Pre-trial Brief, his failure to appear during the Pre-trial Conference because he has to attend to another case, his failure to file complainants Appeal Brief and his failure to inform complainants of the dismissal of the case at the Court of Appeals are in gross violation of his duties as a lawyer and show inexcusable negligence on his part. His contention that he told complainants to present the Amicable Settlement agreed upon by the parties for the courts appreciation does not excuse him of his obligation to his clients, much more his allegation that he advised complainants of the futility of the case. It should be noted that the Amicable Settlement was forged by the parties after the case was already filed in court, therefore the same has no legal effect. The lawyer owes a duty to his client to be competent to perform the legal services which the lawyer undertakes on his behalf. The lawyer should serve his client in a conscientious, diligent and efficient manner and he should provide a quality of service at least equal to that which lawyers generally would expect of a competent lawyer in a like situation (citation omitted). WHEREFORE, premises considered, we hereby recommend that respondent ATTY. AGUSTIN F. PANEDA be SUSPENDED for a period of ONE YEAR from receipt hereof from the practice of his profession as a lawyer and as a member of the Bar.[12] On November 18, 2006, the IBP Board of Governors passed Resolution No. XVII-2006-495 adopting the aforequoted Investigating Commissioners Report and Recommendation, thus:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex A; and finding the recommendation fully supported by the evidence on record and the

applicable laws and rules, and considering Respondents inexcusable negligence, Atty. Agustin F. Paneda is hereby SUSPENDED from the practice of law for one (1) year. [13]

The only issue to be resolved in this case is whether or not respondent committed gross negligence or misconduct in handling

petitioners case both on trial in the RTC and on appeal in the CA which led to its dismissal without affording petitioners the

opportunity to present their evidence

After a careful consideration of the records of the instant case, this Court agrees with the IBP

in its findings and conclusion that respondents documented acts fall extremely short of the standard of professional duty that all

lawyers are required to faithfully adhere to.

The pertinent Canons of the Code of Professional Responsibility provide: CANON 17 A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM. CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. xxxxx Rule 18.02 A lawyer shall not handle any legal matter without adequate preparation. Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable.

There is no doubt that respondent was woefully remiss in his duty to display utmost diligence and competence in protecting

the interests of his clients. The records of this case clearly detailed dire instances of professional neglect which undoubtedly

showed respondents failure to live up to his duties and responsibilities as a member of the legal profession. Petitioners lost Civil

Case No. A-2043 in the RTC mainly because they were barred from presenting their evidence in court. This was a result of their

being

declared

in

default

in

the

said

case

as

consequence

of

respondents

failure

to

appear

at

the

pre-trial

conference. Respondent defended his non-appearance by stating that he had informed petitioners beforehand of a conflict of

schedule and that he had instructed them on what to do in his absence, but petitioners vehemently denied this claim.

Even if we are to give credence to respondents justification, this does not excuse him from the fact that he was unable to

file a Pre-trial Brief at least three (3) days prior to the scheduled pre-trial conference, as required by the Rules. Respondent alleges

that he already prepared the Pre-trial Brief but did not push through with filing it because he was allegedly furnished by petitioner

Modesta Herrera Talento with an Amicable Settlement that was forged between the parties before the Barangay Lupon of San

Pedro, Agoo, La Union. He claims that he instructed his clients to present said document during the pre-trial conference as he had

another hearing to attend. [14] However, respondents excuse is untenable as any lawyer worth his salt would readily know that once

a case has been filed in court, any amicable settlement between the parties must be approved by the court in order for it to be

legally binding in accordance with Section 416 [15] of the Local Government Code of 1991 in relation to the last paragraph of Section

408[16] of the same Code. Thus, he cannot assume that the case will be deemed closed by virtue of the supposed amicable

settlement so as to excuse him from filing the Pre-trial Brief and from appearing at the pre-trial set by the court.

With regard to his subsequent error of failing to file the required Appeal Brief which led to the dismissal of his clients appeal

before the CA, respondent did not give any plausible explanation other than merely placing the blame on the incompetence of his

secretary in not promptly informing him about her receipt of the Notice of Submission of Appellants Brief. [17] This mistake by

respondent is exacerbated by the fact that he did not care to inform his clients of the dismissal of their appeal in 2002 and it was

only in 2005 that his clients learned about this unfortunate turn of events.

It is beyond dispute that respondent is duty-bound by his oath as a lawyer to diligently prosecute the case of his clients to the

best of his ability within the bounds of law. Regrettably, the facts of this case illustrate respondents dismal performance of that

responsibility, which in its totality could amount to a reprehensible abandonment of his clients cause.

A lawyer, when he undertakes his clients cause, makes a covenant that he will exert all efforts for its prosecution until its

final conclusion. He should undertake the task with dedication and care, and he should do no less, otherwise, he is not true to his

lawyers oath.[18]

As held in the case of Vda. De Enriquez v. San Jose:[19]

The Code of Professional Responsibility in Rule 18.03 enjoins a lawyer not to neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. A lawyer engaged to represent a client in a case bears the responsibility of protecting the latters interest with utmost diligence. It is the duty of a lawyer to serve his client with competence and diligence and he should exert his best efforts to protect, within the bounds of the law, the interest of his client. It is not enough that a practitioner is qualified to handle a legal matter; he is also required to prepare adequately and give the appropriate attention to his legal work.

In Balatbat v. Arias,[20] the Court also held that:

It must be stressed that public interest requires that an attorney exert his best efforts in the prosecution or defense of a clients cause. A lawyer who performs that duty with diligence and candor not only protects the

interests of his client, he also serves the ends of justice, does honor to the bar and helps maintain the respect of the community to the legal profession. Lawyers are indispensable part of the whole system of administering justice in this jurisdiction. At a time when strong and disturbing criticisms are being hurled at the legal profession, strict compliance with ones oath of office and the canons of professional ethics is an imperative.

Accordingly, for seriously prejudicing his clients interests due to inexcusable neglect of his professional duties as a lawyer,

the IBP Investigating Commissioner recommended the suspension of respondent for one (1) year from the practice of law. The IBP

Board of Governors acceded to this recommendation.

WHEREFORE, we find respondent Atty. Agustin F. Paneda GUILTY of violating Canons 17 and 18 as well as Rules 18.02 and

18.03 of the Code of Professional Responsibility. Accordingly, we SUSPEND respondent from the practice of law for ONE (1) YEAR

effective upon finality of this Decision.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to respondents personal record as

attorney. Likewise, copies shall be furnished to the Integrated Bar of the Philippines and all courts in the country for their

information and guidance.

SO ORDERED.

JUAN PABLO P. BONDOC, Complainant,

A.M. No. RTJ-09-2204 (formerly A.M. OCA IPI No. 04-2137-RTJ)

Judge DIVINA LUZ P. AQUINO-SIMBULAN, Regional Trial Court, Promulgated: October 26, 2009 Branch 41, San Fernando City, Pampanga, Respondent.

DECISION We rule on the complaint dated November 11, 2004[1] of former Representative Juan Pablo P. Bondoc ( complainant) of Pampanga, charging Judge Divina Luz P. Aquino-Simbulan ( respondent), of the Regional Trial Court, Branch 41, San Fernando City, Pampanga, with partiality, gross ignorance of the law and gross misconduct in the handling of Criminal Case Nos. 12726 to 12728 entitled People of the Philippines v. Salvador Totaan and Flordeliz Totaan (for: Violation of R.A. 3019 and Falsification of Public Documents). The Complaint The complainant alleged that during the initial pre-trial conference on June 16, 2003, the respondent asked the lawyers of the parties to approach the bench and suggested that the cases be settled because she did not want the accused (the spouses Totaan) to be administratively suspended. [2] The respondents action came after she had issued an order (dated June 9, 2003) administratively suspending the accused pendente lite. The complainant further alleged that the respondent strongly requested the complainants counsel, Atty. Stephen David, to exert all efforts to convince the complainant and his family to settle the cases. At the continuation of the pre-trial, the respondent told the counsel for the accused, I will give you the option to choose your date. Do you want a speedy trial of the cases because of the suspension? If you want it weekly, the court can accommodate you. At the same hearing, the Court directed Atty. Cui-David to be prepared for the hearing of these cases considering that the accused have [sic] been suspended upon motion of the Private Prosecutor. [3] Atty. Lanee Cui-David (Atty. Lanee David), wife of Private Prosecutor Stephen David, was co-counsel for complainant in the criminal cases. Their law firm, David Tamayo & Cui-David Law Offices, entered its appearance as counsel for the complainant on December 14, 2004.[4] The complainant also alleged that the respondent had been taking the cudgels for the accused with her constant reminder about her desire to fast track the cases, cautioning that the accused had been suspended at the private prosecutors instance; she only ceased talking about the suspension of the accused when Atty. Lanee David called attention to the fact that the Order of June 9, 2003 suspending the accused had not been implemented as of the January 8, 2004 hearing; the respondent then answered that it was for the prosecution to check the record to see whether the suspension order had been served and implemented. [5] The complainant bewailed the respondents inaction on the suspension order despite the counsels reminders, in contrast with her persistence in requiring Ma. Hazelina Militante ( Atty. Militante), the Ombudsman Investigator (who recommended the filing of charges or information against the accused), to appear in court even after Atty. Militante had asked to be excused from testifying since the substance of her testimony could very well be covered by official documents. The respondent ignored Atty. Militantes explanation and instead directed Atty. Lanee David to furnish Atty. Militante a copy of her Order dated December 16, 2003 requiring Atty. Militante to explain why she should not be cited in contempt for failure to follow lawful orders of the court. Also, the complainant claimed that aside from showing partiality, bias, concern, sympathy and inclination in favor of the accused, the respondent humiliated Atty. Lanee David in open court; specifically, on November 3, 2003, the respondent gave the parties lawyers the option to choose the date; after Atty. Juanito Velasco, counsel for accused, gave his chosen date (December 16, 2003), the respondent told Atty. Lanee David to make herself available on this date despite any scheduled hearing in other cases. Finally, the complainant alleged that the bias, partiality, prejudice and inclination of the respondent for the accused culminated in her order on the demurrer to evidence dated September 10, 2004 [6] dismissing the charges against the accused despite the fact that the prosecution was able to prove by testimonial and documentary evidence the irregularities committed by the accused, Municipal Agrarian Reform Officer Salvador Totaan and Senior Agrarian Reform Technologist Flordeliz Totaan; they processed and approved the applications of at least thirteen (13) persons who were not qualified to become farmer-beneficiaries as they were neither farmers nor residents of the barangay or the municipality where the subject property is located, in violation of Section 23 of Republic Act No. 6657 (the Comprehensive Agrarian Reform Law). The complainant submitted to the Court the order on the demurrer to evidence and pertinent records of the case as the resunder the principle of res ipsa loquitur and asked the Court to

discipline the respondent even without formal investigation, in line with the Courts ruling in Consolidated Bank and Trust Company v. Capistrano. [7] The Respondents Comment The respondent submitted her comment on December 23, 2004[8] in compliance with the directive of the Office of the Court Administrator (OCA) datedNovember 30, 2004. The respondent pointed out that an examination of the complaint would readily show that it was prepared by the private prosecutors, Attys. Stephen David and Lanee David, who wove a tale of lies and distortions regarding the proceedings to cover up their own shortcomings as lawyers; had they performed their duty as officers of the court and members of the bar, they would have informed the complainant that they lost because of their blunders in the prosecution of the cases. While she admitted having asked both private prosecutor Stephen David and defense counsel Juanito Velasco to approach the bench at the pre-trial of the cases, she claimed that the conference with both counsels was to save Atty. Stephen David from embarrassment, as he could not answer the courts queries on the civil aspects of the case. She denied brokering a settlement of the cases; had she done so, she would not have issued the suspension order. She also denied fast-tracking the hearing of the cases in favor of the accused; her only objective was to have a weekly hearing and for this purpose, she instructed Atty. Lanee David to be prepared; it was her habit to act fast on all cases before her sala. The respondent likewise denied the charge of partiality for her failure to act on the suspension of the accused, contending that it was the duty of the private prosecutors to file a motion to cite the responsible heads of the government agencies for indirect contempt for their failure to implement lawful orders of the court. She claimed that in the absence of such motion, she assumed that the accused had already been preventively suspended. In Atty. Militantes case, the respondent explained that there was a misunderstanding between the private prosecutors and the Ombudsman Investigator; she therefore sought Atty. Militantes appearance to find out the truth. She desisted from issuing another subpoena to Atty. Militante in view of the plea of Atty. Lanee David that Atty. Militante would no longer be called as a witness; she also wanted to avoid an open confrontation between the two lawyers. Lastly, and in reply to the charge of unfair treatment, the respondent maintained that if ever she called the attention of and might have slighted Atty. Lanee David, the reason for her action was the latters appearance in court without preparation, to the prejudice of the accused and the government. Related Incidents In a supplemental complaint dated December 14, 2007, [9] the complainant charged the respondent with conduct unbecoming a judge for her denial of the private prosecutors motion for her inhibition on the ground that the motion did not comply with Sections 4, 5, and 6 (three-day notice rule, ten-day notice of hearing, and proof of service) of Rule 15 of the Rules of Court. The complainant claimed that the motion is non-litigable in nature and is an exception to the three-day notice rule. Thereafter, the parties filed additional pleadings the Opposition (dated January 10, 2005) to the Comment of the respondent dated December 21, 2004,[10]and a Rejoinder to the Complainants Opposition dated January 21, 2005.[11] The complainant harped on the respondents refusal to answer the serious charges of partiality, abuse of authority, and conduct unbecoming of a judge leveled against her. While the pleadings were essentially reiterative of previous allegations, they are significant because of the respondents rejoinder where she requested that the complainant be made to show cause why he should not be held in contempt of court, and Attys. Stephen David and Lanee David be required to show cause why they should not be administratively sanctioned as members of the bar and as officers of the Court pursuant to A.M. No. 03-10-01-SC. [12] In its Report dated June 2, 2005,[13] the OCA disclosed that the complainant had filed a special civil action for certiorari with the Court of Appeals (CA) raising the same issues in the complaint questioning the validity of the order granting the demurrer to evidence of the accused Totaans. [14] At the OCAs recommendation, the Court (Third Division) issued a Resolution on July 11, 2005[15] provisionally dismissing the complaint for being premature, without prejudice to the final outcome of the case with the CA (CA-G.R. SP No. 8911), and deferring action on the complaint of the respondent against Attys. Stephen and Lanee David until a decision is rendered in the CA case. The Court denied the complainants partial motion for reconsideration in a Resolution dated September 12, 2005.[16] On July 5, 2007, the respondent filed a manifestation with the information that the CA had rendered a decision in CA-G.R. SP No. 8911 denying the complainants petition. [17] On July 23, 2007, she received a copy of the CA resolution denying the complainants motion for reconsideration. The respondent reiterated her prayer that Attys. Stephen and Lanee David be sanctioned as members of the bar. In a Resolution dated June 2, 2008, the Court (Second Division) required Attys. Stephen and Lanee David to show cause why no disciplinary action should be taken against them for violation of A.M. No. 03-10-01-SC and the Code of Professional Responsibility. [18]

On June 27, 2008, the respondent filed a manifestation and motion stating that the Court, in a Resolution dated January 16, 2008, denied the complainants petition for review on certiorari in G.R. No. 178703 assailing the CA decision in CA-G.R. SP No. 8911. [19] Accordingly, the respondent prayed for the permanent dismissal of the present administrative matter and requested that her complaint against Attys. Stephen and Lanee David be acted upon and given due course. On July 17, 2008, Attys. Stephen and Lanee David submitted their explanation. [20] The two lawyers disputed the respondents claim that they orchestrated the filing of the complaint. They stressed that it was the complainants decision to file the case against the respondent, in the same manner that it was his decision to prosecute the accused despite the respondents request that the complainant withdraw the cases against them. They contended that since the matter brought before the court involves conduct violating the Canons of Judicial Ethics, the final outcome on the merits of the case filed before the CA and this Court should not be determinative of the innocence or guilt of the respondent on the administrative charges against her. Attys. Stephen and Lanee David insisted that the reason the complainant filed the administrative case against the respondent is the respondents bias and favoritism towards the accused Totaans, shown by the respondents request for Atty. Stephen David to ask his client (the complainant) to withdraw the case against the accused; after the respondent was informed of the decision of the complainant to proceed with the cases, the attitude of the respondent toward them changed and her actuations became harsh. Because of the respondents bias and favoritism towards the accused, they were compelled to move for the respondents inhibition from the case against the accused Totaans. Attys. Stephen and Lanee David further explained that the respondents complaint against them may be attributed to their zeal and enthusiasm in prosecuting their clients case; this notwithstanding, they endeavored to observe discipline and self-restraint, and to maintain their high respect for the court and for the orderly administration of justice. On July 29, 2008, the respondent filed her comment to the explanation of Attys. Stephen and Lanee David. [21] She pointed out that the comment was a mere rehash of the allegations in the complaint against her, for which reason she was repleading all her statements in her previous submissions [22] controverting the two lawyers baseless and malicious averments. On December 17, 2008, the Court (Second Division) resolved to dismiss the administrative complaint against the respondent and to require Attys. Stephen and Lanee David to show cause why they should not be disciplined or held in contempt for violating A.M. No. 03-10-01-SC.[23] In a Resolution dated June 22, 2009,[24] the Court took note of the following: 1. the manifestation filed by Attys. Stephen David and Lanee David that they were adopting the explanation they submitted pursuant to the Courts Resolution of June 2, 2008, as compliance with the Resolution dated December 17, 2008; and 2. the manifestation and motion of the respondent that her complaint against the lawyers David be deemed submitted for resolution. On the same day, the Court referred the matter to the OCA for evaluation, report and recommendation. [25] The OCA Report On August 13, 2009, the OCA submitted its report with the recommendation that Attys. Stephen David and Lanee David be found guilty of indirect contempt for violating A.M. No. 03-10-01-SC and be fined P1,000.00 each. The OCA found that the administrative complaint against the respondent could not have been filed without the active prodding and instigation of the two lawyers. The OCA noted that the complainant never personally appeared during the hearings of Criminal Case Nos. 12726 to 12728 where Attys. Stephen and Lanee David represented him. The OCA concluded that Attys. Stephen and Lanee David were the primary sources of the allegations in the complaint which involved intricate courtroom proceedings that the complainant did not personally witness. The OCA faulted the two lawyers for their continued emphasis in their July 17, 2008 explanation on the respondents alleged questionable behavior and conduct despite the CA decision of May 31, 2007 in CA-G.R. SP No. 8911 affirming the respondents findings in her order of September 10, 2004 in Criminal Case Nos. 12726 to 12728. The Courts Ruling In view of our dismissal of the administrative complaint filed by complainant against the respondent, [26] only the issue of the liability under A.M. No. 03-10-01-SC of Attys. Stephen and Lanee David remains to be resolved. We find the recommendation of the OCA to be in order; Attys. Stephen and Lanee David crossed the line of accepted and protected conduct as members of the bar and as officers of the court in the filing of the administrative complaint against the

respondent. As the OCA noted, while the complaint was filed in the name of former Representative Juan Pablo P. Bondoc, he never really appeared in court and could not have woven the tale of unfair treatment in the complaint which spoke of intricate courtroom proceedings. The complainant thus relied primarily on the information relayed to him by his lawyers for the particulars of the complaint. More to the point, the two lawyers can reasonably be considered to have authored the allegations in their clients complaint. Nothing is inherently wrong with the complainants dependence on Attys. Stephen and Lanee David for the substance of the complaint. They were his lawyers and therefore had the duty to report to him on the proceedings in court and the progress of the cases they were handling. Nonetheless, as officers of the court, counsels are expected to be as truthful and as objective as possible in providing information to their client regarding developments in the courtroom. Needless to say, they owe candor, fairness and good faith to the court.[27] In these regards, Attys. Stephen and Lanee David proved to be wanting. A close and careful reading of the case record shows that the two lawyers made it appear in their report to their client that the respondent unduly made it difficult for Attys. Stephen and Lanee David to prosecute the criminal cases and exhibited bias and partiality for the accused. The complainant bewailed: (1) the respondents attempt to have the cases settled in an off-the-record huddle with the parties lawyers because she did not want the accused to be administratively suspended, [28] and (2) the respondents order to fast track the cases because the accused had been suspended upon motion of the private prosecutors. The complainant then narrated the instances when his lawyers were allegedly given a hard time and subjected to indignities by the respondent in her desire to fast track the criminal cases. What we see from the records, however, is a different situation that belied the complainants charges against the respondent. From the pre-trial records quoted below, we find sufficient justification for the conclusion that the information Attys. Stephen and Lanee David supplied their client was patently misleading and slanted to cover up their gross shortcomings as lawyers, as the respondent aptly put it.[29] To quote from the records of the pre-trial of November 3, 2003: COURT: No surprise in my court. You better tell the name, who will be your witness. Your cases are very serious in nature, there would be no surprise. Reveal your witnesses now.

ATTY. DAVID: Because I am only a collaborating counsel in these cases.

COURT: Are you not prepared?

ATTY. DAVID: We will present one more witness, your Honor, because I am going to ask the complainant witness if he is ready to testify.

COURT: Why did you not ask him before the pre-trial conference today?

ATTY. DAVID: Actually my collaborating counsel, Atty. David, who is my husband, was the one who talked with the complainant, your Honor.

COURT: So you are not prepared for the pre-trial conference today?

ATTY. DAVID: I am sorry for that, your Honor. May we just request for the continuation of the pre-trial next time.

COURT: Where is your husband?

ATTY. DAVID: He is not actually feeling well, your Honor, that is why I am here.

COURT: You are supposed to be prepared when you appear in my Court.

ATTY. DAVID: I am sorry for that, your Honor.

COURT: Upon your motion, these cases had been suspended. The delay is attributable to your nonpreparation.

COURT: You know the Court gets peeved with this kind of manifestations from lawyers. I supposed you to be prepared, to be fair to all.

ATTY. DAVID: Ill promise I will be prepared next time, your Honor.

COURT: And tell your husband that he should be prepared. I will not tolerate postponements. [30] The hearing on December 16, 2003 further disclosed:

COURT: I will warn the prosecution that if you fail to present your witness on January 8, 2004, I have no qualms in dismissing the cases with prejudice. I request that the subpoena be served personally to these people as an officer of the Court.

ATTY. DAVID: We will do that your Honor.

COURT: Atty. Velasco, do you have any manifestation?

ATTY. VELASCO: Considering the confession of the prosecution that she is not ready to present any of her witnesses this afternoon, may we move to (____) [31] the cases invoking the right of the accused to a speedy trial.

COURT: I give the prosecution one last opportunity even without your motion x x x

I hope this will not happen again. [32]

Based on these proceedings, we find no evidence supporting the administrative complaint against the respondent. The allegations in the complaint were unfounded and baseless and should be dismissed, as the Court did in the Resolution dated December 17, 2008.[33] Other than the bare allegations of the complainant, no proof was presented to corroborate the charge that the respondent sought to have the criminal cases settled; neither was there a showing that the respondent fast tracked the cases to favor the accused. As we already stated above, given that the complainant never appeared in court, it is reasonable to conclude that the two lawyers crafted the complaint and incorporated therein all the unfounded accusations against the respondent in order to conceal their inadequacies in the handling of their clients cases. To say the least, the complaint was most unfair to the respondent who, as the record shows, was simply keeping faith with her avowed objective of expediting the proceedings in her court by, among other measures, requiring lawyers to be prepared at all times and to be fair and candid in their dealings with the court. The defense of Attys. Stephen and Lanee David that what they did is just a consequence of their commitment to their client x x x can hardly exculpate them. [34] As the Court held in Racines v. Judge Morallos, et al.,[35] a clients cause does not permit an attorney to cross the line between liberty and license. Lawyers must always keep in perspective that since they are administrators of justice, oath-bound servants of society, their first duty is not to their clients, as many suppose, but to the administration of justice. As a lawyer, he is an officer of the court with the duty to uphold its dignity and authority and not promote distrust in the administration of justice. In Alfonso L. Dela Victoria v. Maria Fe Orig-Maloloy-on,[36] we had occasion to state: Lawyers are required to act with the highest standard of truthfulness, fair play and nobility in the conduct of their litigation and their relations with their clients, the opposing parties, the other counsel and the courts. Attys. Stephen and Lanee David miserably failed to come up to the standards of these rulings. Accordingly, they are liable under A.M. No. 03-10-01-SC and should be held in indirect contempt under Section 3, Rule 71 of the Rules of Court. Considering that they have no previous derogatory record, we deem a fine ofP2,500.00 each to be the appropriate penalty for their infraction. WHEREFORE, premises considered, we hereby declare Attys. Stephen L. David and Lanee S. Cui-David GUILTY of Indirect Contempt for violation of A.M. No. 03-10-01-SC, and accordingly impose on each of them the FINE of Two Thousand Five Hundred Pesos (P2,500.00) with the STERN WARNING that a commission of a similar offense shall be dealt with more severely. SO ORDERED.

G.R. Nos. 112438-39 December 12, 1995 CHEMPHIL EXPORT & IMPORT CORPORATION (CEIC), petitioner, vs. THE HONORABLE COURT OF APPEALS JAIME Y. GONZALES, as Assignee of the Bank of the Philippine Islands (BPI), RIZAL COMMERCIAL BANKING CORPORATION (RCBC), LAND BANK OF THE PHILIPPINES (LBP), PHILIPPINE COMMERCIAL & INTERNATIONAL BANK (PCIB) and THE PHILIPPINE INVESTMENT SYSTEM ORGANIZATION (PISO), respondents. G.R. No. 113394 December 12, 1995 PHILIPPINE COMMERCIAL INDUSTRIAL BANK (AND ITS ASSIGNEE JAIME Y. GONZALES) petitioner, vs. HONORABLE COURT OR APPEALS and CHEMPHIL EXPORT AND IMPORT CORPORATION (CEIC), respondents.

Before us is a legal tug-of-war between the Chemphil Export and Import Corporation (hereinafter referred to as CEIC), on one side, and the PISO and Jaime Gonzales as assignee of the Bank of the Philippine Islands (BPI), Rizal Commercial Banking Corporation (RCBC), Land Bank of the Philippines (LBP) and Philippine Commercial International Bank (PCIB), on the other (hereinafter referred to as the consortium), over 1,717,678 shares of stock (hereinafter referred to as the "disputed shares") in the Chemical Industries of the Philippines (Chemphil/CIP). Our task is to determine who is the rightful owner of the disputed shares. Pursuant to our resolution dated 30 May 1994, the instant case is a consolidation of two petitions for review filed before us as follows: In G.R. Nos. 112438-39, CEIC seeks the reversal of the decision of the Court of Appeals (former Twelfth Division) promulgated on 30 June 1993 and its resolution of 29 October 1993, denying petitioner's motion for reconsideration in the consolidated cases entitled "Dynetics, Inc., et al. v. PISO, et al." (CA-G.R. No. 20467) and "Dynetics, Inc., et al. v. PISO, et al.; CEIC, Intervenor-Appellee" (CAG.R. CV No. 26511). The dispositive portion of the assailed decision reads, thus: WHEREFORE, this Court resolves in these consolidated cases as follows: 1. The Orders of the Regional Trial Court, dated March 25, 1988, and May 20, 1988, subject of CA-G.R. CV No. 10467, are SET ASIDE and judgment is hereby rendered in favor of the consortium and against appellee Dynetics, Inc., the amount of the judgment, to be determined by Regional Trial Court, taking into account the value of assets that the consortium may have already recovered and shall have recovered in accordance with the other portions of this decision. 2. The Orders of the Regional Trial Court dated December 19, 1989 and March 5, 1990 are hereby REVERSED and SET ASIDE and judgment is hereby rendered confirming the ownership of the consortium over the Chemphil shares of stock, subject of CA-G.R. CV No. 26511, and the Order dated September 4, 1989, is reinstated. No pronouncement as to costs. SO ORDERED.
1

In G.R. No. 113394, PCIB and its assignee, Jaime Gonzales, ask for the annulment of the Court of Appeals' decision (former Special Ninth Division) promulgated on 26 March 1993 in "PCIB v. Hon. Job B. Madayag & CEIC" (CA-G.R. SP NO. 20474) dismissing the petition for certiorari, prohibition and mandamus filed by PCIB and of said court's resolution dated 11 January 1994 denying their motion for reconsideration of its decision. 2 The antecedent facts leading to the aforementioned controversies are as follows: On September 25, 1984, Dynetics, Inc. and Antonio M. Garcia filed a complaint for declaratory relief and/or injunction against the PISO, BPI, LBP, PCIB and RCBC or the consortium with the Regional Trial Court of Makati, Branch 45 (Civil Case No. 8527), seeking judicial declaration, construction and interpretation of the validity of the surety agreement that Dynetics and Garcia had entered into with the consortium and to perpetually enjoin the latter from claiming, collecting and enforcing any purported obligations which Dynetics and Garcia might have undertaken in said agreement. 3

The consortium filed their respective answers with counterclaims alleging that the surety agreement in question was valid and binding and that Dynetics and Garcia were liable under the terms of the said agreement. It likewise applied for the issuance of a writ of preliminary attachment against Dynetics and Garcia. 4 Seven months later, or on 23 April 1985, Dynetics, Antonio Garcia and Matrix Management & Trading Corporation filed a complaint for declaratory relief and/or injunction against the Security Bank & Trust Co. (SBTC case) before the Regional Trial Court of Makati, Branch 135 docketed as Civil Case No. 10398. 5 On 2 July 1985, the trial court granted SBTC's prayer for the issuance of a writ of preliminary attachment and on 9 July 1985, a notice of garnishment covering Garcia's shares in CIP/Chemphil (including the disputed shares) was served on Chemphil through its then President. The notice of garnishment was duly annotated in the stock and transfer books of Chemphil on the same date. 6 On 6 September 1985, the writ of attachment in favor of SBTC was lifted. However, the same was reinstated on 30 October 1985. 7 In the meantime, on 12 July 1985, the Regional Trial Court in Civil Case No. 8527 (the consortium case) denied the application of Dynetics and Garcia for preliminary injunction and instead granted the consortium's prayer for a consolidated writ of preliminary attachment. Hence, on 19 July 1985, after the consortium had filed the required bond, a writ of attachment was issued and various real and personal properties of Dynetics and Garcia were garnished, including the disputed shares. 8 This garnishment, however, was not annotated in Chemphil's stock and transfer book. On 8 September 1987, PCIB filed a motion to dismiss the complaint of Dynetics and Garcia for lack of interest to prosecute and to submit its counterclaims for decision, adopting the evidence it had adduced at the hearing of its application for preliminary attachment. 9 On 25 March 1988, the Regional Trial Court dismissed the complaint of Dynetics and Garcia in Civil Case No. 8527, as well as the counterclaims of the consortium, thus: Resolving defendant's, Philippine Commercial International Bank, MOTION TO DISMISS WITH MOTION TO SUBMIT DEFENDANT PCIBANK's COUNTERCLAIM FOR DECISION, dated September 7, 1987: (1) The motion to dismiss is granted; and the instant case is hereby ordered dismissed pursuant to Sec. 3, Rule 17 of the Revised Rules of Court, plaintiff having failed to comply with the order dated July 16, 1987, and having not taken further steps to prosecute the case; and (2) The motion to submit said defendant's counterclaim for decision is denied; there is no need; said counterclaim is likewise dismissed under the authority of Dalman vs. City Court of Dipolog City, L-63194, January 21, 1985, wherein the Supreme Court stated that if the civil case is dismissed, so also is the counterclaim filed therein. "A person cannot eat his cake and have it at the same time" (p. 645, record, Vol. I). 10 The motions for reconsideration filed by the consortium were, likewise, denied by the trial court in its order dated 20 May 1988: The Court could have stood pat on its order dated 25 March 1988, in regard to which the defendants-banks concerned filed motions for reconsideration. However, inasmuch as plaintiffs commented on said motions that: "3). In any event, so as not to unduly foreclose on the rights of the respective parties to refile and prosecute their respective causes of action, plaintiffs manifest their conformity to the modification of this Honorable Court's order to indicate that the dismissal of the complaint and the counterclaims is without prejudice." (p. 2, plaintiffs' COMMENT etc. dated May 20, 1988). The Court is inclined to so modify the said order. WHEREFORE , the order issued on March 25, 1988, is hereby modified in the sense that the dismissal of the complaint as well as of the counterclaims of defendants RCBC, LBP, PCIB and BPI shall be considered as without prejudice (p. 675, record, Vol. I). 11 Unsatisfied with the aforementioned order, the consortium appealed to the Court of Appeals, docketed as CA-G.R. CV No. 20467. On 17 January 1989 during the pendency of consortium's appeal in CA-G.R. CV No. 20467, Antonio Garcia and the consortium entered into a Compromise Agreement which the Court of Appeals approved on 22 May 1989 and became the basis of its judgment by compromise. Antonio Garcia was dropped as a party to the appeal leaving the consortium to proceed solely against Dynetics, Inc. 12 On 27 June 1989, entry of judgment was made by the Clerk of Court. 13 Hereunder quoted are the salient portions of said compromise agreement: xxx xxx xxx 3. Defendants, in consideration of avoiding an extended litigation, having agreed to limit their claim against plaintiff Antonio M. Garcia to a principal sum of P145 Million immediately demandable and to waive all other claims to interest, penalties, attorney's fees and other charges. The aforesaid compromise amount of indebtedness of P145 Million shall earn interest of eighteen percent (18%) from the date of this Compromise.

4. Plaintiff Antonio M. Garcia and herein defendants have no further claims against each other. 5. This Compromise shall be without prejudice to such claims as the parties herein may have against plaintiff Dynetics, Inc. 6. Plaintiff Antonio M. Garcia shall have two (2) months from date of this Compromise within which to work for the entry and participation of his other creditor, Security Bank and Trust Co., into this Compromise. Upon the expiration of this period, without Security Bank and Trust Co. having joined, this Compromise shall be submitted to the Court for its information and approval (pp. 27, 28-31,rollo, CA-G.R. CV No. 10467). 14 It appears that on 15 July 1988, Antonio Garcia under a Deed of Sale transferred to Ferro Chemicals, Inc. (FCI) the disputed shares and other properties for P79,207,331.28. It was agreed upon that part of the purchase price shall be paid by FCI directly to SBTC for whatever judgment credits that may be adjudged in the latter's favor and against Antonio Garcia in the aforementioned SBTC case. 15 On 6 March 1989, FCI, through its President Antonio M. Garcia, issued a Bank of America Check No. 860114 in favor of SBTC in the amount of P35,462,869.62. 16 SBTC refused to accept the check claiming that the amount was not sufficient to discharge the debt. The check was thus consigned by Antonio Garcia and Dynetics with the Regional Trial Court as payment of their judgment debt in the SBTC case. 17 On 26 June 1989, FCI assigned its 4,119,614 shares in Chemphil, which included the disputed shares, to petitioner CEIC. The shares were registered and recorded in the corporate books of Chemphil in CEIC's name and the corresponding stock certificates were issued to it. 18 Meanwhile, Antonio Garcia, in the consortium case, failed to comply with the terms of the compromise agreement he entered into with the consortium on 17 January 1989. As a result, on 18 July 1989, the consortium filed a motion for execution which was granted by the trial court on 11 August 1989. Among Garcia's properties that were levied upon on execution were his 1,717,678 shares in Chemphil (the disputed shares) previously garnished on 19 July 1985. 19 On 22 August 1989, the consortium acquired the disputed shares of stock at the public auction sale conducted by the sheriff for P85,000,000.00. 20 On same day, a Certificate of Sale covering the disputed shares was issued to it. On 30 August 1989, 21 the consortium filed a motion (dated 29 August 1989) to order the corporate secretary of Chemphil to enter in its stock and transfer books the sheriff's certificate of sale dated 22 August 1989, and to issue new certificates of stock in the name of the banks concerned. The trial court granted said motion in its order dated 4 September 1989, thus: For being legally proper, defendant's MOTION TO ORDER THE CORPORATE SECRETARY OF CHEMICAL INDUSTRIES OF THE PHILS., INC. (CHEMPIL) TO ENTER IN THE STOCK AND TRANSFER BOOKS OF CHEMPHIL THE SHERIFF'S CERTIFICATE OF SALE DATED AUGUST 22, 1989 AND TO ISSUE NEW CERTIFICATES OF STOCK IN THE NAME OF THE DEFENDANT BANKS, dated August 29, 1989, is hereby granted. WHEREFORE, the corporate secretary of the aforesaid corporation, or whoever is acting for and in his behalf, is hereby ordered to (1) record and/or register the Certificate of Sale dated August 22, 1989 issued by Deputy Sheriff Cristobal S. Jabson of this Court; (2) to cancel the certificates of stock of plaintiff Antonio M. Garcia and all those which may have subsequently been issued in replacement and/or in substitution thereof; and (3) to issue in lieu of the said shares new shares of stock in the name of the defendant Banks, namely, PCIB, BPI, RCBC, LBP and PISO bank in such proportion as their respective claims would appear in this suit (p. 82, record, Vol. II). 22 On 26 September 1989, CEIC filed a motion to intervene (dated 25 September 1989) in the consortium case seeking the recall of the abovementioned order on grounds that it is the rightful owner of the disputed shares. 23 It further alleged that the disputed shares were previously owned by Antonio M. Garcia but subsequently sold by him on 15 July 1988 to Ferro Chemicals, Inc. (FCI) which in turn assigned the same to CEIC in an agreement dated 26 June 1989. On 27 September 1989, the trial court granted CEIC's motion allowing it to intervene, but limited only to the incidents covered by the order dated 4 September 1989. In the same order, the trial court directed Chemphil's corporate secretary to temporarily refrain from implementing the 4 September 1989 order. 24 On 2 October 1989, the consortium filed their opposition to CEIC's motion for intervention alleging that their attachment lien over the disputed shares of stocks must prevail over the private sale in favor of the CEIC considering that said shares of stock were garnished in the consortium's favor as early as 19 July 1985. 25 On 4 October 1989, the consortium filed their opposition to CEIC's motion to set aside the 4 September 1989 order and moved to lift the 27 September 1989 order. 26 On 12 October 1989, the consortium filed a manifestation and motion to lift the 27 September 1989 order, to reinstate the 4 September 1989 order and to direct CEIC to surrender the disputed stock certificates of Chemphil in its possession within twenty-

four (24) hours, failing in which the President, Corporate Secretary and stock and transfer agent of Chemphil be directed to register the names of the banks making up the consortium as owners of said shares, sign the new certificates of stocks evidencing their ownership over said shares and to immediately deliver the stock certificates to them. 27 Resolving the foregoing motions, the trial court rendered an order dated 19 December 1989, the dispositive portion of which reads as follows: WHEREFORE, premises considered, the Urgent Motion dated September 25, 1989 filed by CEIC is hereby GRANTED. Accordingly, the Order of September 4, 1989, is hereby SET ASIDE, and any and all acts of the Corporate Secretary of CHEMPHIL and/or whoever is acting for and in his behalf, as may have already been done, carried out or implemented pursuant to the Order of September 4, 1989, are hereby nullified. PERFORCE, the CONSORTIUM'S Motions dated October 3, 1989 and October 11, 1989, are both hereby denied for lack of merit. The Cease and Desist Order dated September 27, 1989, is hereby AFFIRMED and made PERMANENT. SO ORDERED. 28 In so ruling, the trial court ratiocinated in this wise: xxx xxx xxx After careful and assiduous consideration of the facts and applicable law and jurisprudence, the Court holds that CEIC's Urgent Motion to Set Aside the Order of September 4, 1989 is impressed with merit. The CONSORTIUM has admitted that the writ of attachment/garnishment issued on July 19, 1985 on the shares of stock belonging to plaintiff Antonio M. Garcia was not annotated and registered in the stock and transfer books of CHEMPHIL. On the other hand, the prior attachment issued in favor of SBTC on July 2, 1985 by Branch 135 of this Court in Civil Case No. 10398, against the same CHEMPHIL shares of Antonio M. Garcia, was duly registered and annotated in the stock and transfer books of CHEMPHIL. The matter of non-recording of the Consortium's attachment in Chemphil's stock and transfer book on the shares of Antonio M. Garcia assumes significance considering CEIC's position that FCI and later CEIC acquired the CHEMPHIL shares of Antonio M. Garcia without knowledge of the attachment of the CONSORTIUM. This is also important as CEIC claims that it has been subrogated to the rights of SBTC since CEIC's predecessor-in-interest, the FCI, had paid SBTC the amount of P35,462,869.12 pursuant to the Deed of Sale and Purchase of Shares of Stock executed by Antonio M. Garcia on July 15, 1988. By reason of such payment, sale with the knowledge and consent of Antonio M. Garcia, FCI and CEIC, as party-in-interest to FCI, are subrogated by operation of law to the rights of SBTC. The Court is not unaware of the citation in CEIC's reply that "as between two (2) attaching creditors, the one whose claims was first registered on the books of the corporation enjoy priority." (Samahang Magsasaka, Inc. vs. Chua Gan, 96 Phil. 974.) The Court holds that a levy on the shares of corporate stock to be valid and binding on third persons, the notice of attachment or garnishment must be registered and annotated in the stock and transfer books of the corporation, more so when the shares of the corporation are listed and traded in the stock exchange, as in this case. As a matter of fact, in the CONSORTIUM's motion of August 30, 1989, they specifically move to "order the Corporate Secretary of CHEMPHIL to enter in the stock and transfer books of CHEMPHIL the Sheriff's Certificate of Sale dated August 22, 1989." This goes to show that, contrary to the arguments of the CONSORTIUM, in order that attachment, garnishment and/or encumbrances affecting rights and ownership on shares of a corporation to be valid and binding, the same has to be recorded in the stock and transfer books. Since neither CEIC nor FCI had notice of the CONSORTIUM's attachment of July 19, 1985, CEIC's shares of stock in CHEMPHIL, legally acquired from Antonio M. Garcia, cannot be levied upon in execution to satisfy his judgment debts. At the time of the Sheriff's levy on execution, Antonio M. Garcia has no more in CHEMPHIL which could be levied upon. 29 xxx xxx xxx On 23 January 1990, the consortium and PCIB filed separate motions for reconsideration of the aforestated order which were opposed by petitioner CEIC. 30 On 5 reconsideration. 31 March 1990, the trial court denied the motions for

On 16 March 1990, the consortium appealed to the Court of Appeals (CA-G.R. No. 26511). In its Resolution dated 9 August 1990, the Court of Appeals consolidated CA-G.R. No. 26511 with CA-G.R. No. 20467. 32 The issues raised in the two cases, as formulated by the Court of Appeals, are as follows:

I WHETHER OR NOT, UNDER THE PECULIAR CIRCUMSTANCES OF THE CASE, THE TRIAL COURT ERRED IN DISMISSING THE COUNTERCLAIMS OF THE CONSORTIUM IN CIVIL CASE NO. 8527; II WHETHER OR NOT THE DISMISSAL OF CIVIL CASE NO. 8527 RESULTED IN THE DISCHARGE OF THE WRIT OF ATTACHMENT ISSUED THEREIN EVEN AS THE CONSORTIUM APPEALED THE ORDER DISMISSING CIVIL CASE NO. 8527; III WHETHER OR NOT THE JUDGMENT BASED ON COMPROMISE RENDERED BY THIS COURT ON MAY 22, 1989 HAD THE EFFECT OF DISCHARGING THE ATTACHMENTS ISSUED IN CIVIL CASE NO. 8527; IV WHETHER OR NOT THE ATTACHMENT OF SHARES OF STOCK, IN ORDER TO BIND THIRD PERSONS, MUST BE RECORDED IN THE STOCK AND TRANSFER BOOK OF THE CORPORATION; AND V WHETHER OR NOT FERRO CHEMICALS, INC. (FCI), AND ITS SUCCESSOR-IN-INTEREST, CEIC, WERE SUBROGATED TO THE RIGHTS OF SECURITY BANK & TRUST COMPANY (SBTC) IN A SEPARATE CIVIL ACTION. (This issue appears to be material as SBTC is alleged to have obtained an earlier attachment over the same Chemphil shares that the consortium seeks to recover in the case at bar). 33 On 6 April 1990, the PCIB separately filed with the Court of Appeals a petition for certiorari, prohibition andmandamus with a prayer for the issuance of a writ of preliminary injunction (CA-G.R. No. SP-20474), likewise, assailing the very same orders dated 19 December 1989 and 5 March 1990, subject of CA-G.R. No. 26511. 34 On 30 June 1993, the Court of Appeals (Twelfth Division) in CA-G.R. No. 26511 and CA-G.R. No. 20467 rendered a decision reversing the orders of the trial court and confirming the ownership of the consortium over the disputed shares. CEIC's motion for reconsideration was denied on 29 October 1993. 35 In ruling for the consortium, the Court of Appeals made the following ratiocination: 36 On the first issue, it ruled that the evidence offered by the consortium in support of its counterclaims, coupled with the failure of Dynetics and Garcia to prosecute their case, was sufficient basis for the RTC to pass upon and determine the consortium's counterclaims. The Court of Appeals found no application for the ruling in Dalman v. City Court of Dipolog , 134 SCRA 243 (1985) that "a person cannot eat his cake and have it at the same time. If the civil case is dismissed, so also is the counterclaim filed therein" because the factual background of the present action is different. In the instant case, both Dynetics and Garcia and the consortium presented testimonial and documentary evidence which clearly should have supported a judgment on the merits in favor of the consortium. As the consortium correctly argued, the net atrocious effect of the Regional Trial Court's ruling is that it allows a situation where a party litigant is forced to plead and prove compulsory counterclaims only to be denied those counterclaims on account of the adverse party's failure to prosecute his case. Verily, the consortium had no alternative but to present its counterclaims in Civil Case No. 8527 since its counterclaims are compulsory in nature. On the second issue, the Court of Appeals opined that unless a writ of attachment is lifted by a special order specifically providing for the discharge thereof, or unless a case has been finally dismissed against the party in whose favor the attachment has been issued, the attachment lien subsists. When the consortium, therefore, took an appeal from the Regional Trial Court's orders of March 25, 1988 and May 20, 1988, such appeal had the effect of preserving the consortium's attachment liens secured at the inception of Civil Case No. 8527, invoking the rule in Olib v. Pastoral,188 SCRA 692 (1988) that where the main action is appealed, the attachment issued in the said main case is also considered appealed. Anent the third issue, the compromise agreement between the consortium and Garcia dated 17 January 1989 did not result in the abandonment of its attachment lien over his properties. Said agreement was approved by the Court of Appeals in a Resolution dated 22 May 1989. The judgment based on the compromise agreement had the effect of preserving the said attachment lien as security for the satisfaction of said judgment ( citing BF Homes, Inc. v. CA, 190 SCRA 262, [1990]).

As to the fourth issue, the Court of Appeals agreed with the consortium's position that the attachment of shares of stock in a corporation need not be recorded in the corporation's stock and transfer book in order to bind third persons. Section 7(d), Rule 57 of the Rules of Court was complied with by the consortium (through the Sheriff of the trial court) when the notice of garnishment over the Chemphil shares of Garcia was served on the president of Chemphil on July 19, 1985. Indeed, to bind third persons, no law requires that an attachment of shares of stock be recorded in the stock and transfer book of a corporation. The statement attributed by the Regional Trial Court to the Supreme Court in Samahang Magsasaka, Inc.vs. Gonzalo Chua Guan, G.R. No. L-7252, February 25, 1955 (unreported), to the effect that "as between two attaching creditors, the one whose claim was registered first on the books of the corporation enjoys priority," is an obiter dictum that does not modify the procedure laid down in Section 7(d), Rule 57 of the Rules of Court. Therefore, ruled the Court of Appeals, the attachment made over the Chemphil shares in the name of Garcia on July 19, 1985 was made in accordance with law and the lien created thereby remained valid and subsisting at the time Garcia sold those shares to FCI (predecessor-in-interest of appellee CEIC) in 1988. Anent the last issue, the Court of Appeals rejected CEIC's subrogation theory based on Art. 1302 (2) of the New Civil Code stating that the obligation to SBTC was paid by Garcia himself and not by a third party (FCI). The Court of Appeals further opined that while the check used to pay SBTC was a FCI corporate check, it was funds of Garcia in FCI that was used to pay off SBTC. That the funds used to pay off SBTC were funds of Garcia has not been refuted by FCI or CEIC. It is clear, therefore, that there was an attempt on the part of Garcia to use FCI and CEIC as convenient vehicles to deny the consortium its right to make itself whole through an execution sale of the Chemphil shares attached by the consortium at the inception of Civil Case No. 8527. The consortium, therefore, is entitled to the issuance of the Chemphil shares of stock in its favor. The Regional Trial Court's order of September 4, 1989, should, therefore, be reinstated in toto. Accordingly, the question of whether or not the attachment lien in favor of SBTC in the SBTC case is superior to the attachment lien in favor of the consortium in Civil Case No. 8527 becomes immaterial with respect to the right of intervenor-appellee CEIC. The said issue would have been relevant had CEIC established its subrogation to the rights of SBTC. On 26 March 1993, the Court of Appeals (Special Ninth Division) in CA-G.R. No. SP 20474 rendered a decision denying due course to and dismissing PCIB's petition for certiorari on grounds that PCIB violated the rule against forum-shopping and that no grave abuse of discretion was committed by respondent Regional Trial Court in issuing its assailed orders dated 19 December 1989 and 5 March 1990. PCIB's motion for reconsideration was denied on 11 January 1994. 37 On 7 July 1993, the consortium, with the exception of PISO, assigned without recourse all its rights and interests in the disputed shares to Jaime Gonzales. 38 On 3 January 1994, CEIC filed the instant petition for review docketed as G.R. Nos. 112438-39 and assigned the following errors: I. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN SETTING ASIDE AND REVERSING THE ORDERS OF THE REGIONAL TRIAL COURT DATED DECEMBER 5, 1989 AND MARCH 5, 1990 AND IN NOT CONFIRMING PETITIONER'S OWNERSHIP OVER THE DISPUTED CHEMPHIL SHARES AGAINST THE FRIVOLOUS AND UNFOUNDED CLAIMS OF THE CONSORTIUM. II. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED: (1) In not holding that the Consortium's attachment over the disputed Chemphil shares did not vest any priority right in its favor and cannot bind third parties since admittedly its attachment on 19 July 1985 was not recorded in the stock and transfer books of Chemphil, and subordinate to the attachment of SBTC which SBTC registered and annotated in the stock and transfer books of Chemphil on 2 July 1985, and that the Consortium's attachment failed to comply with Sec. 7(d), Rule 57 of the Rules as evidenced by the notice of garnishment of the deputy sheriff of the trial court dated 19 July 1985 (annex "D") which the sheriff served on a certain Thelly Ruiz who was neither President nor managing agent of Chemphil; (2) In not applying the case law enunciated by this Honorable Supreme Court in Samahang Magsasaka, Inc. vs. Gonzalo Chua Guan, 96 Phil. 974 that as between two attaching creditors, the one whose claim was registered first in the books of the corporation enjoys priority, and which respondent Court erroneously characterized as mere obiter dictum;

(3) In not holding that the dismissal of the appeal of the Consortium from the order of the trial court dismissing its counterclaim against Antonio M. Garcia and the finality of the compromise agreement which ended the litigation between the Consortium and Antonio M. Garcia in the Dynetics case had ipso jure discharged the Consortium's purported attachment over the disputed shares. III. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT CEIC HAD BEEN SUBROGATED TO THE RIGHTS OF SBTC SINCE CEIC'S PREDECESSOR IN INTEREST HAD PAID SBTC PURSUANT TO THE DEED OF SALE AND PURCHASE OF STOCK EXECUTED BY ANTONIO M. GARCIA ON JULY 15, 1988, AND THAT BY REASON OF SUCH PAYMENT, WITH THE CONSENT AND KNOWLEDGE OF ANTONIO M. GARCIA, FCI AND CEIC, AS PARTY IN INTEREST TO FCI, WERE SUBROGATED BY OPERATION OF LAW TO THE RIGHTS OF SBTC. IV. THE RESPONDENT COURT OF APPEALS GRAVELY ERRED AND MADE UNWARRANTED INFERENCES AND CONCLUSIONS, WITHOUT ANY SUPPORTING EVIDENCE, THAT THERE WAS AN ATTEMPT ON THE PART OF ANTONIO M. GARCIA TO USE FCI AND CEIC AS CONVENIENT VEHICLES TO DENY THE CONSORTIUM ITS RIGHTS TO MAKE ITSELF WHOLE THROUGH AN EXECUTION OF THE CHEMPHIL SHARES PURPORTEDLY ATTACHED BY THE CONSORTIUM ON 19 JULY 1985. 39 On 2 March 1994, PCIB filed its own petition for review docketed as G.R. No. 113394 wherein it raised the following issues: I. RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN RENDERING THE DECISION AND RESOLUTION IN QUESTION (ANNEXES A AND B) IN DEFIANCE OF LAW AND JURISPRUDENCE BY FINDING RESPONDENT CEIC AS HAVING BEEN SUBROGATED TO THE RIGHTS OF SBTC BY THE PAYMENT BY FCI OF GARCIA'S DEBTS TO THE LATTER DESPITE THE FACT THAT A. FCI PAID THE SBTC DEBT BY VIRTUE OF A CONTRACT BETWEEN FCI AND GARCIA, THUS, LEGAL SUBROGATION DOES NOT ARISE; B. THE SBTC DEBT WAS PAID BY GARCIA HIMSELF AND NOT BY FCI, HENCE, SUBROGATION BY PAYMENT COULD NOT HAVE OCCURRED; C. FCI DID NOT ACQUIRE ANY RIGHT OVER THE DISPUTED SHARES AS SBTC HAD NOT YET LEVIED UPON NOR BOUGHT THOSE SHARES ON EXECUTION. ACCORDINGLY, WHAT FCI ACQUIRED FROM SBTC WAS SIMPLY A JUDGMENT CREDIT AND AN ATTACHMENT LIEN TO SECURE ITS SATISFACTION. II. RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN SUSTAINING THE ORDERS OF THE TRIAL COURT DATED DECEMBER 19, 1989 AND MARCH 5, 1990 WHICH DENIED PETITIONER'S OWNERSHIP OVER THE DISPUTED SHARES NOTWITHSTANDING PROVISIONS OF LAW AND EXTANT JURISPRUDENCE ON THE MATTER THAT PETITIONER AND THE CONSORTIUM HAVE PREFERRED SENIOR RIGHTS THEREOVER. III. RESPONDENT COURT OF APPEAL COMMITTED SERIOUS ERROR IN CONCLUDING THAT THE DISMISSAL OF THE COMPLAINT AND THE COUNTERCLAIM IN CIVIL CASE NO. 8527 ALSO RESULTED IN THE DISCHARGE OF THE WRIT OF ATTACHMENT DESPITE THE RULINGS OF THIS HONORABLE COURT IN BF HOMES VS. COURT OF APPEALS, G.R. NOS. 76879 AND 77143, OCTOBER 3, 1990, 190 SCRA 262, AND IN OLIB VS. PASTORAL, G.R. NO. 81120, AUGUST 20, 1990, 188 SCRA 692 TO THE CONTRARY. IV. RESPONDENT COURT OF APPEALS EXCEEDED ITS JURISDICTION IN RULING ON THE MERITS OF THE MAIN CASE NOTWITHSTANDING THAT THOSE MATTERS WERE NOT ON APPEAL BEFORE IT. V. RESPONDENT COURT OF APPEALS COMMITTED SERIOUS ERROR IN HOLDING THAT PETITIONER IS GUILTY OF FORUM SHOPPING DESPITE THE FACT THAT SC CIRCULAR NO. 28-91 WAS NOT YET IN FORCE AND EFFECT AT THE TIME THE PETITION WAS FILED BEFORE RESPONDENT APPELLATE COURT, AND THAT ITS COUNSEL AT THAT TIME HAD ADEQUATE BASIS TO BELIEVE THAT CERTIORARI AND NOT AN APPEAL OF THE TRIAL COURT'S ORDERS WAS THE APPROPRIATE RELIEF. 40 As previously stated, the issue boils down to who is legally entitled to the disputed shares of Chemphil. We shall resolve this controversy by examining the validity of the claims of each party and, thus, determine whose claim has priority. CEIC's claim CEIC traces its claim over the disputed shares to the attachment lien obtained by SBTC on 2 July 1985 against Antonio Garcia in Civil Case No. 10398. It avers that when FCI, CEIC's predecessor-in-interest, paid SBTC the due obligations of Garcia to the said bank

pursuant to the Deed of Absolute Sale and Purchase of Shares of Stock, 41FCI, and later CEIC, was subrogated to the rights of SBTC, particularly to the latter's aforementioned attachment lien over the disputed shares. CEIC argues that SBTC's attachment lien is superior as it was obtained on 2 July 1985, ahead of the consortium's purported attachment on 19 July 1985. More importantly, said CEIC lien was duly recorded in the stock and transfer books of Chemphil. CEIC's subrogation theory is unavailing. By definition, subrogation is "the transfer of all the rights of the creditor to a third person, who substitutes him in all his rights. It may either be legal or conventional. Legal subrogation is that which takes place without agreement but by operation of law because of certain acts; this is the subrogation referred to in article 1302. Conventional subrogation is that which takes place by agreement of the parties . . ." 42 CEIC's theory is premised on Art. 1302 (2) of the Civil Code which states: Art. 1302. It is presumed that there is legal subrogation: (1) When a creditor pays another creditor who is preferred, even without the debtor's knowledge; (2) When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor ; (3) When, even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter's share. (Emphasis ours.) Despite, however, its multitudinous arguments, CEIC presents an erroneous interpretation of the concept of subrogation. An analysis of the situations involved would reveal the clear inapplicability of Art. 1302 (2). Antonio Garcia sold the disputed shares to FCI for a consideration of P79,207,331.28. FCI, however, did not pay the entire amount to Garcia as it was obligated to deliver part of the purchase price directly to SBTC pursuant to the following stipulation in the Deed of Sale: Manner of Payment Payment of the Purchase Price shall be made in accordance with the following order of preference provided that in no instance shall the total amount paid by the Buyer exceed the Purchase Price: a. Buyer shall pay directly to the Security Bank and Trust Co. the amount determined by the Supreme Court as due and owing in favor of the said bank by the Seller . The foregoing amount shall be paid within fifteen (15) days from the date the decision of the Supreme Court in the case entitled "Antonio M. Garcia, et al. vs. Court of Appeals, et al." G.R. Nos. 82282-83 becomes final and executory. 43 (Emphasis ours.) Hence, when FCI issued the BA check to SBTC in the amount of P35,462,869.62 to pay Garcia's indebtedness to the said bank, it was in effect paying with Garcia's money, no longer with its own, because said amount was part of the purchase price which FCI owed Garcia in payment for the sale of the disputed shares by the latter to the former. The money "paid" by FCI to SBTC, thus properly belonged to Garcia. It is as if Garcia himself paid his own debt to SBTC but through a third party FCI. It is, therefore, of no consequence that what was used to pay SBTC was a corporate check of FCI. As we have earlier stated, said check no longer represented FCI funds but Garcia's money, being as it was part of FCI's payment for the acquisition of the disputed shares. The FCI check should not be taken at face value, the attendant circumstances must also be considered. The aforequoted contractual stipulation in the Deed of Sale dated 15 July 1988 between Antonio Garcia and FCI is nothing more but an arrangement for the sake of convenience. Payment was to be effected in the aforesaid manner so as to prevent money from changing hands needlessly. Besides, the very purpose of Garcia in selling the disputed shares and his other properties was to "settle certain civil suits filed against him." 44 Since the money used to discharge Garcia's debt rightfully belonged to him, FCI cannot be considered a third party payor under Art. 1302 (2). It was but a conduit, or as aptly categorized by respondents, merely an agent as defined in Art. 1868 of the Civil Code: Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. FCI was merely fulfilling its obligation under the aforementioned Deed of Sale.

Additionally, FCI is not a disinterested party as required by Art. 1302 (2) since the benefits of the extinguishment of the obligation would redound to none other but itself. 45 Payment of the judgment debt to SBTC resulted in the discharge of the attachment lien on the disputed shares purchased by FCI. The latter would then have a free and "clean" title to said shares. In sum, CEIC, for its failure to fulfill the requirements of Art. 1302 (2), was not subrogated to the rights of SBTC against Antonio Garcia and did not acquire SBTC's attachment lien over the disputed shares which, in turn, had already been lifted or discharged upon satisfaction by Garcia, through FCI, of his debt to the said bank. 46 The rule laid down in the case of Samahang Magsasaka, Inc. v. Chua Guan, 47 that as between two attaching creditors the one whose claim was registered ahead on the books of the corporation enjoys priority, clearly has no application in the case at bench. As we have amply discussed, since CEIC was not subrogated to SBTC's right as attaching creditor, which right in turn, had already terminated after Garcia paid his debt to SBTC, it cannot, therefore, be categorized as an attaching creditor in the present controversy. CEIC cannot resurrect and claim a right which no longer exists. The issue in the instant case, then, is priority between an attaching creditor (the consortium) and a purchaser (FCI/CEIC) of the disputed shares of stock and not between two attaching creditors the subject matter of the aforestated Samahang Magsasaka case. CEIC, likewise, argues that the consortium's attachment lien over the disputed Chemphil shares is null and void and not binding on third parties due to the latter's failure to register said lien in the stock and transfer books of Chemphil as mandated by the rule laid down by the Samahang Magsasaka v. Chua Guan. 48 The attachment lien acquired by the consortium is valid and effective. Both the Revised Rules of Court and the Corporation Code do not require annotation in the corporation's stock and transfer books for the attachment of shares of stock to be valid and binding on the corporation and third party. Section 74 of the Corporation Code which enumerates the instances where registration in the stock and transfer books of a corporation provides: Sec. 74. Books to be kept; stock transfer agent. xxx xxx xxx Stock corporations must also keep a book to be known as the stock and transfer book, in which must be kept a record of all stocks in the names of the stockholders alphabetically arranged; the installments paid and unpaid on all stock for which subscription has been made, and the date of payment of any settlement; a statement of every alienation, sale or transfer of stock made, the date thereof, and by and to whom made ; and such other entries as the by-laws may prescribe. The stock and transfer book shall be kept in the principal office of the corporation or in the office of its stock transfer agent and shall be open for inspection by any director or stockholder of the corporation at reasonable hours on business days. (Emphasis ours.) xxx xxx xxx Section 63 of the same Code states: Sec. 63. Certificate of stock and transfer of shares. The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the bylaws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number of shares transferred . No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation. (Emphasis ours.) Are attachments of shares of stock included in the term "transfer" as provided in Sec. 63 of the Corporation Code? We rule in the negative. As succinctly declared in the case of Monserrat v. Ceron, 49 "chattel mortgage over shares of stock need not be registered in the corporation's stock and transfer book inasmuch as chattel mortgage over shares of stock does not involve a "transfer of shares," and that only absolute transfers of shares of stock are required to be recorded in the corporation's stock and transfer book in order to have "force and effect as against third persons." xxx xxx xxx The word "transferencia" (transfer) is defined by the "Diccionario de la Academia de la Lengua Castellana" as "accion y efecto de transfeir" (the act and effect of transferring); and the verb "transferir", as "ceder or renunciar en otro el derecho o dominio que se tiene sobre una cosa, haciendole dueno de ella" (to assign or waive the right in, or absolute ownership of, a thing in favor of another, making him the owner thereof).

In the Law Dictionary of "Words and Phrases", third series, volume 7, p. 5867, the word "transfer" is defined as follows: "Transfer" means any act by which property of one person is vested in another, and "transfer of shares", as used in Uniform Stock Transfer Act (Comp. St. Supp. 690), implies any means whereby one may be divested of and another acquire ownership of stock. (Wallach vs. Stein [N.J.], 136 A., 209, 210.) xxx xxx xxx In the case of Noble vs. Ft. Smith Wholesale Grocery Co . (127 Pac., 14, 17; 34 Okl., 662; 46 L.R.A. [N.S.], 455), cited in Words and Phrases, second series, vol. 4, p. 978, the following appears: A "transfer" is the act by which the owner of a thing delivers it to another with the intent of passing the rights which he has in it to the latter, and a chattel mortgage is not within the meaning of such term. xxx xxx xxx. 50 Although the Monserrat case refers to a chattel mortgage over shares of stock, the same may be applied to the attachment of the disputed shares of stock in the present controversy since an attachment does not constitute an absolute conveyance of property but is primarily used as a means "to seize the debtor's property in order to secure the debt or claim of the creditor in the event that a judgment is rendered." 51 Known commentators on the Corporation Code expound, thus: xxx xxx xxx Shares of stock being personal property, may be the subject matter of pledge and chattel mortgage. Such collateral transfers are however not covered by the registration requirement of Section 63, since our Supreme Court has held that such provision applies only to absolute transfers thus, the registration in the corporate books of pledges and chattel mortgages of shares cannot have any legal effect. 52 (Emphasis ours.) xxx xxx xxx The requirement that the transfer shall be recorded in the books of the corporation to be valid as against third persons has reference only to absolute transfers or absolute conveyance of the ownership or title to a share. Consequently, the entry or notation on the books of the corporation of pledges and chattel mortgages on shares is not necessary to their validity (although it is advisable to do so) since they do not involve absolute alienation of ownership of stock (Monserrat vs. Ceron, 58 Phil. 469 [1933]; Chua Guan vs. Samahang Magsasaka, Inc., 62 Phil. 472 [1935].) To affect third persons, it is enough that the date and description of the shares pledged appear in a public instrument. (Art. 2096, Civil Code.) With respect to a chattel mortgage constituted on shares of stock, what is necessary is its registration in the Chattel Mortgage Registry. (Act No. 1508 and Art. 2140, Civil Code.) 53 CEIC's reliance on the Samahang Magsasaka case is misplaced. Nowhere in the said decision was it categorically stated that annotation of the attachment in the corporate books is mandatory for its validity and for the purpose of giving notice to third persons. The only basis, then, for petitioner CEIC's claim is the Deed of Sale under which it purchased the disputed shares. It is, however, a settled rule that a purchaser of attached property acquires it subject to an attachment legally and validly levied thereon. 54 Our corollary inquiry is whether or not the consortium has indeed a prior valid and existing attachment lien over the disputed shares. Jaime Gonzales' /Consortium's Claim Is the consortium's attachment lien over the disputed shares valid? CEIC vigorously argues that the consortium's writ of attachment over the disputed shares of Chemphil is null and void, insisting as it does, that the notice of garnishment was not validly served on the designated officers on 19 July 1985. To support its contention, CEIC presented the sheriff's notice of garnishment 55 dated 19 July 1985 which showed on its face that said notice was received by one Thelly Ruiz who was neither the president nor managing agent of Chemphil. It makes no difference,

CEIC further avers, that Thelly Ruiz was the secretary of the President of Chemphil, for under the above-quoted provision she is not among the officers so authorized or designated to be served with the notice of garnishment. We cannot subscribe to such a narrow view of the rule on proper service of writs of attachment. A secretary's major function is to assist his or her superior. He/she is in effect an extension of the latter. Obviously, as such, one of her duties is to receive letters and notices for and in behalf of her superior, as in the case at bench. The notice of garnishment was addressed to and was actually received by Chemphil's president through his secretary who formally received it for him. Thus, in one case, 56 we ruled that the secretary of the president may be considered an "agent" of the corporation and held that service of summons on him is binding on the corporation. Moreover, the service and receipt of the notice of garnishment on 19 July 1985 was duly acknowledged and confirmed by the corporate secretary of Chemphil, Rolando Navarro and his successor Avelino Cruz through their respective certifications dated 15 August 1989 57 and 21 August 1989. 58 We rule, therefore, that there was substantial compliance with Sec. 7(d), Rule 57 of the Rules of Court. Did the compromise agreement between Antonio Garcia and the consortium discharge the latter's attachment lien over the disputed shares? CEIC argues that a writ of attachment is a mere auxiliary remedy which, upon the dismissal of the case, dies a natural death. Thus, when the consortium entered into a compromise agreement, 59 which resulted in the termination of their case, the disputed shares were released from garnishment. We disagree. To subscribe to CEIC's contentions would be to totally disregard the concept and purpose of a preliminary attachment. A writ of preliminary attachment is a provisional remedy issued upon order of the court where an action is pending to be levied upon the property or properties of the defendant therein, the same to be held thereafter by the Sheriff as security for the satisfaction of whatever judgment might be secured in said action by the attaching creditor against the defendant . 60 (Emphasis ours.) Attachment is a juridical institution which has for its purpose to secure the outcome of the trial, that is, the satisfaction of the pecuniary obligation really contracted by a person or believed to have been contracted by him, either by virtue of a civil obligation emanating from contract or from law, or by virtue of some crime or misdemeanor that he might have committed, and the writ issued, granted it, is executed by attaching and safely keeping all the movable property of the defendant, or so much thereof may be sufficient to satisfy the plaintiff's demands . . . 61 (Emphasis ours.) The chief purpose of the remedy of attachment is to secure a contingent lien on defendant's property until plaintiff can, by appropriate proceedings, obtain a judgment and have such property applied to its satisfaction , or to make some provision for unsecured debts in cases where the means of satisfaction thereof are liable to be removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise placed beyond the reach of creditors. 62 (Emphasis ours.) We reiterate the rule laid down in BF Homes, Inc. v. CA 63 that an attachment lien continues until the debt is paid, or sale is had under execution issued on the judgment or until judgment is satisfied, or the attachment discharged or vacated in the same manner provided by law. We expounded in said case that: The appointment of a rehabilitation receiver who took control and custody of BF has not necessarily secured the claims of Roa and Mendoza. In the event that the receivership is terminated with such claims not having been satisfied, the creditors may also find themselves without security therefor in the civil action because of the dissolution of the attachment. This should not be permitted. Having previously obtained the issuance of the writ in good faith, they should not be deprived of its protection if the rehabilitation plan does not succeed and the civil action is resumed. xxx xxx xxx As we ruled in Government of the Philippine Islands v. Mercado: Attachment is in the nature of a proceeding in rem. It is against the particular property. The attaching creditor thereby acquires specific lien upon the attached property which ripens into a judgment against the res when the order of sale is made. Such a proceeding is in effect a finding that the property attached is an indebted thing and a virtual condemnation of it to pay the owner's debt. The law does not provide the length of time an attachment lien shall continue after the rendition of judgment, and it must therefore necessarily continue until the debt is paid, or sale is had under execution issued on the judgment or until judgment is satisfied, or the attachment discharged or vacated in some manner provided by law.

It has been held that the lien obtained by attachment stands upon as high equitable grounds as a mortgage lien: The lien or security obtained by an attachment even before judgment, is a fixed and positive security, a specific lien, and, although whether it will ever be made available to the creditor depends on contingencies, its existence is in no way contingent, conditioned or inchoate. It is a vested interest, an actual and substantial security, affording specific security for satisfaction of the debt put in suit, which constitutes a cloud on the legal title, and is as specific as if created by virtue of a voluntary act of the debtor and stands upon as high equitable grounds as a mortgage. ( Corpus Juris Secundum , 433, and authorities therein cited.) xxx xxx xxx The case at bench admits of a peculiar character in the sense that it involves a compromise agreement. Nonetheless, the rule established in the aforequoted cases still applies, even more so since the terms of the agreement have to be complied with in full by the parties thereto. The parties to the compromise agreement should not be deprived of the protection provided by an attachment lien especially in an instance where one reneges on his obligations under the agreement, as in the case at bench, where Antonio Garcia failed to hold up his own end of the deal, so to speak. Moreover, a violation of the terms and conditions of a compromise agreement entitles the aggrieved party to a writ of execution. In Abenojar & Tana v. CA, et al.,
64

we held:

The non-fulfillment of the terms and conditions of a compromise agreement approved by the Court justifies execution thereof and the issuance of the writ for said purpose is the Court's ministerial duty enforceable by mandamus. Likewise we ruled in Canonizado v. Benitez: 65 A judicial compromise may be enforced by a writ of execution. If a party fails or refuses to abide by the compromise, the other party may enforce the compromise or regard it as rescinded and insist upon his original demand. If we were to rule otherwise, we would in effect create a back door by which a debtor can easily escape his creditors. Consequently, we would be faced with an anomalous situation where a debtor, in order to buy time to dispose of his properties, would enter into a compromise agreement he has no intention of honoring in the first place. The purpose of the provisional remedy of attachment would thus be lost. It would become, in analogy, a declawed and toothless tiger. From the foregoing, it is clear that the consortium and/or its assignee Jaime Gonzales have the better right over the disputed shares. When CEIC purchased the disputed shares from Antonio Garcia on 15 July 1988, it took the shares subject to the prior, valid and existing attachment lien in favor of and obtained by the consortium. Forum Shopping in G.R. No. 113394 We uphold the decision of the Court of Appeals finding PCIB guilty of forum-shopping. 66 The Court of Appeals opined: True it is, that petitioner PCIB was not a party to the appeal made by the four other banks belonging to the consortium, but equally true is the rule that where the rights and liabilities of the parties appealing are so interwoven and dependent on each other as to be inseparable, a reversal of the appealed decision as to those who appealed, operates as a reversal to all and will inure to the benefit of those who did not join the appeal (Tropical Homes vs. Fortun, 169 SCRA 80, p. 90, citing Alling vs. Wenzel, 133 111. 264-278; 4 C.J. 1206). Such principal, premised upon communality of interest of the parties, is recognized in this jurisdiction (Director of Lands vs. Reyes, 69 SCRA 415). The four other banks which were part of the consortium, filed their notice of appeal under date of March 16, 1990, furnishing a copy thereof upon the lawyers of petitioner. The petition for certiorari in the present case was filed on April 10, 1990, long after the other members of the consortium had appealed from the assailed order of December 19, 1989. We view with skepticism PCIB's contention that it did not join the consortium because it "honestly believed that certiorari was the more efficacious and speedy relief available under the circumstances." 67 Rule 65 of the Revised Rules of Court is not difficult to understand. Certiorari is available only if there is no appeal or other plain, speedy and adequate remedy in the ordinary course of law. Hence, in instituting a separate petition for certiorari, PCIB has deliberately resorted to forum-shopping. PCIB cannot hide behind the subterfuge that Supreme Court Circular 28-91 was not yet in force when it filed thecertiorari proceedings in the Court of Appeals. The rule against forum-shopping has long been established. 68Supreme Court Circular 28-91 merely formalized the prohibition and provided the appropriate penalties against transgressors.

It alarms us to realize that we have to constantly repeat our warning against forum-shopping. We cannot over-emphasize its illeffects, one of which is aptly demonstrated in the case at bench where we are confronted with two divisions of the Court of Appeals issuing contradictory decisions 69 one in favor of CEIC and the other in favor of the consortium/Jaime Gonzales. Forum-shopping or the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition, 70 has been characterized as an act of malpractice that is prohibited and condemned as trifling with the Courts and abusing their processes. It constitutes improper conduct which tends to degrade the administration of justice. It has also been aptly described as deplorable because it adds to the congestion of the already heavily burdened dockets of the courts. 71 WHEREFORE, premises considered the appealed decision in G.R. Nos. 112438-39 is hereby AFFIRMED and the appealed decision in G.R. No. 113394, insofar as it adjudged the CEIC the rightful owner of the disputed shares, is hereby REVERSED. Moreover, for wantonly resorting to forum-shopping, PCIB is hereby REPRIMANDED and WARNED that a repetition of the same or similar acts in the future shall be dealt with more severely. SO ORDERED.

[G.R. No. 127683. August 7, 1998]

LETICIA P. LIGON, petitioner, vs. COURT OF APPEALS and IGLESIA NI CRISTO, respondents.

DECISION DAVIDE, JR., J.: This petition, as appeal under Rule 45 and at the same time as a special civil action for certiorari under Rule 65 of the Rules of Court, seeks to reverse the Decision [1] of the Court of Appeals of 11 September 1996 in CA-G.R. SP No. 40258 and its Resolution[2] of 3 January 1997 denying petitioners motion for reconsideration of the Decision. As far as could be gathered from the voluminous pleadings filed by the parties in this case and in CA-G.R. SP No. 40258, the factual antecedents are as follows: Petitioner Leticia P. Ligon (hereafter LIGON) is the mortgagee in three deeds of mortgage covering two parcels of land located along Tandang Sora, Barangay Culiat, Quezon City, covered by Transfer Certificates of Title (TCT) Nos. 170567 (now RT-26521) and 176616 (now RT-26520) belonging to the Islamic Directorate of the Philippines (hereafter IDP). These deeds of mortgage were executed by certain Abdulrahman R.T. Linzag and Rowaida Busran-Sampaco on 21 March 1988, 25 April 1988, and 29 July 1988 as security for the loans of P3 million, P2 million, and P4 million, respectively, which IDP allegedly obtained from LIGON. [3] It must be pointed out that two groups had earlier vied for control of the IDP, namely, (1) the Carpizo group headed by Engr. Farouk Carpizo and (2) the Abbas group led by Zorayda Tamano and Atty. Firdaussi Abbas. In its decision of 3 October 1986 in SEC Case No. 2687, the Securities and Exchange Commission (SEC) declared null and void the election of both groups to the IDP Board of Trustees. Nevertheless, on 20 April 1989, the Carpizo group caused the signing of an alleged Board Resolution authorizing the sale of the two parcels of land mentioned above to private respondent Iglesia ni Cristo (hereafter INC). The sale was evidenced by a Deed of Absolute Sale[4] dated 20 April 1989, wherein IDP and INC stipulated that the former would evict all squatters and illegal occupants in the two lots within forty-five (45) days from execution of the sale. IDP failed to clear the lots of squatters; hence, on 19 October 1990 INC filed with the Regional Trial Court (RTC) of Quezon City a complaint for specific performance with damages, which was docketed as Civil Case No. Q-90-6937. On 30 May 1991, IDPs original Board of Trustees headed by Senator Mamintal Tamano, or the Tamano group, filed a petition with SEC to annul the sale of the two lots to INC. The case was docketed as SEC Case No. 4012. On 5 July 1993, the SEC promulgated its decision in SEC Case No. 4012 annulling, inter alia, the sale of the two parcels of land to INC. Aggrieved, INC filed a special civil action for certiorari before the Court of Appeals, which was docketed as CA-G.R. SP No. 33295. In its decision of 28 October 1994, the Court of Appeals granted INCs petition and set aside the portion of the SEC decision declaring the sale null and void. Consequently, the Tamano group appealed to this Court in a petition for review in G.R. No. 117897 entitled Islamic Directorate of the Philippines v. Court of Appeals. Meanwhile, on 12 September 1991, the RTC rendered a partial judgment in Civil Case No. Q-90-6937; and on 7 October 1991, it rendered an amended partial judgment granting the reliefs prayed for by INC except the prayer for damages, which was to be resolved later. On 31 October 1991, the INC filed with the RTC of Quezon City a complaint [5] for the annulment of the deeds of mortgage over the two lots, impleading as defendants therein LIGON, Abdulrahman R.T. Linzag, Rowaida Busran-Sampaco, and the IDP. The case was docketed as Civil Case No. Q-91-10494. In its answer, [6] IDP interposed a cross-claim against LIGON. On the other hand, LIGON filed an answer[7] with counterclaim; a cross-claim against IDP; and a third-party complaint against Pablo de Leon, Guillermo Vina, and Aida Vina. Later, LIGON filed a motion [8] in Civil Case No. Q-91-10494 to declare INC and IDP in default for their failure to file an answer to her counterclaim and cross-claim, respectively. She further prayed that she be allowed to present evidence ex-parte. INC opposed[9]the motion, saying that some of the grounds raised by LIGON in her counterclaim were sufficiently dealt with in INCs complaint, while the other grounds were in the nature of a compulsory counterclaim and did not therefore require an answer. On 30 September 1992, the trial court granted LIGONs motion and allowed LIGON to present evidence ex-parte to support her crossclaim against IDP.[10] Then, on 2 August 1995, LIGON filed in Civil Case No. Q-91-10494, an urgent motion [11] for rendition of partial judgment against IDP in the cross-claim for the foreclosure of the mortgages. On 27 October 1995, the trial court rendered a partial judgment[12] (1) ordering IDP to pay LIGON the amounts of P3 million, P2 million, and P4 million with interest at 36% per annum compounded annually from the dates the loans became due and demandable; and (2) directing the foreclosure sale of the mortgaged properties in case of non-payment of said amounts. On 21 November 1995, INC filed a Motion for Reconsideration [13] of the partial judgment, which was, however, denied by the trial court in its Order[14] of 20 March 1996 on the following grounds: . . . [T]he INC has no personality to seek a reconsideration of the partial judgment. Firstly, the judgment involves a cross-claim in which INC is not a party; the right to appeal from a judgment or to move for a reconsideration thereof is a right inherent to the party in the cross-claim affected adversely by the judgment. Section 2, Rule 3 of the Rules of Court provides that a case shall be prosecuted and defended in the name of the real party-in-interest. INC is not a party to the mortgages hence it is not a real party-in-interest to the foreclosure thereof. ... Not being a party to the cross-claim, as indeed it cannot be being the plaintiff and cross-claim being a suit between co-parties, INC has no right to file the instant motion. Secondly, INC is the plaintiff in this case that sued IDP. Thus, the interests of INC as plaintiff are adverse to or in conflict with those of IDP, a defendant. The plaintiff cannot take up the cudgels for an adverse party, the defendant.

Thirdly, the right of the INC to file this motion rests on its being a subsequent purchaser of the property or its being the new owner; thus, it claims it steps into the shoes of IDP. The right of IDP as a party to a case should be distinguished from its rights as ownerseller of the property, especially in this case where not only did INC sue IDP but IDP also chose not to exercise its right to move for a reconsideration of the partial judgment or to appeal therefrom. More importantly, even assuming arguendo that INC is now the new owner of the mortgaged property, the fact remains that the sale to it on April 20, 1989, is admittedly after the execution of the real estate mortgages in 1988; the mortgages were registered in 1991 while the sale was never inscribed in the TCTs of the IDP. The INC is simply a subsequent buyer whose rights were explicitly defined in the case of Limpin vs. IAC (supra). Finally, this Court has already ruled that INC is not a party to the mortgages and may have no right to question the validity thereof .... Consequently, INC filed with the Court of Appeals a petition [15] for certiorari with prayer for the issuance of a temporary restraining order to annul the aforementioned partial judgment and the order denying private respondents motion for reconsideration. The case was docketed as CA-G.R. SP No. 40258. In its decision [16] of 11 September 1996 in CA-G.R. SP No. 40258, the Court of Appeals ruled in favor of INC and justified its ruling in this wise: Technically, while the IDP can be declared in default for failure to file its answer to Ligons counterclaim, and that Ligons motion to present her evidence ex-parte against the IDP is not irregular, the respondent court should not have rendered a partial judgment based on the evidence presented by Ligon, without giving the INC an opportunity to present its evidence contra as well as to substantiate its allegations in the complaint that the mortgage contracts are null and void and of no binding force and effect . ... Had respondent court, upon motion by respondent Ligon allowed her to introduce her evidence, and afterwards afforded the INC of the opportunity to be heard in its complaint to prove that the loans and the mortgages are invalid, such recourse could have prevented the most mischievous consequences in the administration of justice to suitors, that of depriving one of his day in court -the affording of an opportunity to be heard on the other. ... We find sufficient basis to hold that respondent court committed grave abuse of discretion tantamount to lack or in excess of jurisdiction in rendering a partial judgment at that stage of the proceedings, the dispositive portion of which would even indicate that respondent Ligon was awarded more than what she prayed for. We further find that respondent court exceeded its jurisdiction in rendering partial judgment in favor of respondent Ligon without first giving petitioner its day in court since the issues in the respective claims of the parties against each other are interrelated and inseparably intertwined with one another -- one maintains that the mortgages are null and void, while the other asks for foreclosure of the same mortgage contracts -- respondent court could have deferred disposition of one claim adverse to the claim of the other until the claim of both are heard and the parties afforded the opportunity to present their evidence in support of their opposing claim. This decision prompted LIGONs Urgent Motions to Vacate Null and Void Decision Dated September 11, 1996, Dismiss the Petition and/or for Reconsideration [17] and Motion to Recuse Associate Justices Artemon D. Luna, Ramon A. Barcelona, and Salvador J. Valdez, Jr.,[18] which was accompanied by Amended Urgent Motions to Vacate Null and Void Decision Dated September 11, 1996, Dismiss the Petition and/or for Reconsideration. [19] These were denied by the Court of Appeals in its Resolution [20] of 3 January 1997. Undaunted by the foregoing adversities in CA-G.R. SP No. 40258, LIGON filed the instant petition on 27 February 1997. LIGON claims that respondent Court of Appeals (1) acted with grave abuse of discretion in refusing to order INC to implead or include IDP as an indispensable party in the petition for certiorari; (2) acted without jurisdiction in annulling the decision of the lower court; and (3) erred in not dismissing INCs petition because INC was not aggrieved by the trial courts decision and was guilty of forumshopping. LIGON asserts that IDP was an indispensable party in INCs action in CA-G.R. SP No. 40258 because IDP is the mortgagor and defendant in the foreclosure suit instituted by petitioner Ligon before the lower court; it has such interest in the controversy that a final decree would necessarily affect its rights and interests; and, an action to annul a contract cannot be maintained without joining both contracting parties as defendants or respondents. Since IDP was not impleaded in said case, the petition should have been dismissed pursuant to Section 7, Rule 3 of the Rules of Court. [21] The Court of Appeals, therefore, acquired no jurisdiction over the case; and its decision was a total nullity. As to the second ground, LIGON claims that the Court of Appeals was powerless to annul the trial courts judgment because IDP was not a party in CA-G.R. SP No. 40258. Regarding the third ground, LIGON asserts that INC was not aggrieved by the trial courts decision because at no time was it a party to the action for foreclosure of the mortgages; moreover, INC did not show that it would suffer substantial injury or manifest injustice in case of foreclosure of the mortgages. She asserts that IDP was the aggrieved party, then tirelessly reiterates her argument that IDP should have been joined as petitioner or respondent in the certiorari proceeding.

As to forum-shopping, LIGON maintains that both litis pendentia and res judicata [were] irrepressibly present and attendant in INCs action before the appellate court. INC filed three actions, in all of which there was identity of (1) parties or interests represented, (2) right or causes, and (3) reliefs sought. Civil Case No. Q-90-6937 was for the enforcement of the stipulation in the Deed of Absolute Sale between INC and IDP obliging IDP to clear the properties sold of squatters. In Civil Case No. Q-91-10494, INC sought to stop the foreclosure of the mortgages. The third case was CA-G.R. SP. No. 40258, wherein the same relief was being sought by INC, that is, to enjoin the foreclosure of the mortgages. LIGON claims that the issues in the three cases were so intertwined that the resolution of any one would constitute res judicata in the others. For its part, INC argues that IDP was not an indispensable party in CA-G.R. SP No. 40258. LIGONs reliance on Section 7, Rule 3 of the Rules of Court on compulsory joinder of indispensable parties is misplaced. INC contends that the rules on ordinary civil actions, including said Section 7, apply only suppletorily to special civil actions. Section 5, Rule 65 of the Rules of Court declares that the defendants in a special civil action for certiorari shall be the person or persons interested in sustaining the proceeding in court to be joined with the court or judge whose act or omission is being contested. It is illogical and absurd to argue that IDP is interested in defending the validity of an adverse partial judgment. As regards LIGONs second ground, INC counters that the special civil action for certiorari was an independent action and not a continuation of the proceedings before the trial court. Thus, not all the parties in the case at the trial court could be included in the independent action for certiorari. Anent the third ground, INC maintains that it was aggrieved by the foreclosure judgment because, being the new owner of the subject lots, it would suffer substantial injury and manifest injustice from the foreclosure of the mortgages. INC relies on Article 1609 of the Civil Code, which subrogates the vendee to the rights and actions of the vendor. INC claims it did not engage in forum-shopping, as the cases it filed involved different issues. Civil Case No. Q-90-6937 involved the validity of the sale of the IDP properties to INC; Civil Case No. Q-91-10494, the validity of the mortgages; and CA-G.R. SP No. 40258, the validity of the partial judgment rendered by the trial court. The judgment in one case was not determinative of the issues in the other cases. As to the trial courts declaration that IDP was in default, INC contends that the same was illegal, since IDP did not have to file an answer to LIGONs cross-claim pursuant to Section 4, Rule 18 of the Rules of Court. [22] INC further argues that LIGONS cross-claim for foreclosure of the mortgages could not proceed ahead of the main action for annulment of said mortgages. Meanwhile, on 14 May 1997, this Court promulgated its decision [23] in G.R. No. 117897 (Islamic Directorate of the Philippines v. Court of Appeals). It set aside the decision of the Court of Appeals of 28 October 1994 in CA-G.R. SP No. 33295 and upheld the decision of the SEC holding null and void the sale of the two lots to INC. This Court clarified and decided the issue therein as follows: The main question though in this petition is: Did the Court of Appeals commit reversible error in setting aside that portion of the SECs Decision in SEC Case No. 4012 which declared the sale of two (2) parcels of land in Quezon City between the IDP-Carpizo Group and private respondent INC as null and void? We rule in the affirmative. There can be no question as to the authority of the SEC to pass upon the issue as to who among the different contending groups is the legitimate Board of Trustees of the IDP since this is a matter properly falling within the original and exclusive jurisdiction of the SEC by virtue of Sections 3 and 5 (c) of Presidential Decree No. 902-A: ... . . . If the SEC can declare who is the legitimate IDP Board, then by parity of reasoning, it can also declare who is not the legitimate IDP Board. This is precisely what the SEC did in SEC Case No. 4012 when it adjudged the election of the Carpizo Group to the IDP Board of Trustees to be null and void. By this ruling, the SEC in effect made the unequivocal finding that the IDP-Carpizo Group is a bogus Board of Trustees. Consequently, the Carpizo Group is bereft of any authority whatsoever to bind IDP in any kind of transaction including the sale or disposition of IDP property. ... Nothing thus becomes more settled than that the IDP-Carpizo Group with whom private respondent INC contracted is a fake Board. Premises considered, all acts carried out by the Carpizo Board, particularly the sale of the Tandang Sora property, allegedly in the name of the IDP, have to be struck down for having been done without the consent of the IDP thru a legitimate Board of Trustees. ... The Carpizo Group-INC sale is further deemed null and void ab initio because of the Carpizo Groups failure to comply with Section 40 of the Corporation Code pertaining to the disposition of all or substantially all assets of the corporation: ...

The Tandang Sora property, it appears from the records, constitutes the only property of the IDP. Hence, its sale to a third-party is a sale or disposition of all the corporate property and assets of IDP falling squarely within the contemplation of the foregoing section. For the sale to be valid, the majority vote of the legitimate Board of Trustees, concurred in by the vote of at least 2/3 of the bona fide members of the corporation should have been obtained. These twin requirements were not met as the Carpizo Group which voted to sell the Tandang Sora property was a fake Board of Trustees, and those whose names and signatures were affixed by the Carpizo group together with the sham Board Resolution authorizing the negotiation for the sale were, from all indications, not bona fide members of the IDP as they were made to appear to be . All told, the disputed Deed of Absolute Sale executed by the fake Carpizo Board and private respondent INC was intrinsically void ab initio. Before addressing the issues raised in the present petition, it must be recalled that LIGON describes her petition as an appeal under Rule 45 and at the same time as a special civil action of certiorari under Rule 65 of the Rules of Court. This Court cannot tolerate such a chimera. The remedies of appeal and certiorari are mutually exclusive and not alternative nor successive. [24] It is settled that the averments in the complaint, and not the nomenclature given by the parties, determine the nature of the action. [25] Considering that this petition primarily consists of allegations charging the Court of Appeals with having acted with grave abuse of discretion and without jurisdiction, this Court shall treat this petition as a special civil action for certiorari under Rule 65 of the Rules of Court. Returning to the instant petition, the first issue must be resolved against LIGON. At the time CA-G.R. SP No. 40258 was filed, the law on who should be parties in a special civil action for certiorari were Sections 1 and 5 of Rule 65 of the Rules of Court, [26]which provided: Section 1. Petition for certiorari. -- When any tribunal, board, or officer exercising judicial functions, has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings, as the law requires, of such tribunal, board or officer. Sec. 5. Defendants and costs in certain cases. -- When the petition filed relates to the acts or omissions of a court or judge, the petitioner shall join, as parties defendant with such court or judge, the person or persons interested in sustaining the proceedings in the court.... There can be no dispute on the fact that insofar as the partial decision in Civil Case No. Q-91-10494, challenged in CA-G.R. SP No. 40258, is concerned, IDP can by no yardstick be considered as a party interested in sustaining the challenged partial decision pursuant to the aforequoted Section 5. In fact, IDP was also an aggrieved party in said partial decision. It could have challenged the partial decision and the previous order declaring it in default. Neither is there merit in the second ground relied upon by LIGON. While LIGON may be correct in her argument that a crossclaim must be answered, and the party who fails to file an answer thereto may be declared in default, [27] one should not lose sight of the true nature of a cross-claim. Section 7[28] of Rule 6 of the Rules of Court defines a cross-claim as any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim. It may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant. The answer then to the cross-claim is meant to join the subsidiary issues between the co-parties in relation to the opposing partys claim against the cross-claimant. [29] Needless to state, until the principal issue between the plaintiff and the defendant cross-claimant shall have been heard and determined, it would be premature to decide the cross-claim. It may also be pointed out that in her cross-claim against IDP, LIGON alleged that IDP unjustly refused to pay the loans it contracted from her, which had become due and demandable. She thus prayed that the trial court render judgment 1. Ordering IDP, INC, VINA and DE LEON to pay solidarily defendant, third party plaintiff and cross claimant LIGON the sum of P9 Million plus stipulated interest of 36% per annum from the due dates of the obligations within ten (10) days from finality of the judgment and attorneys fees of P900,000.00 plus appearance fee of P1,000.00 per appearance in Court and conferences with adverse parties as attorneys fees; 2. Should they fail to pay the said sums within the abovementioned period of time, ordering the foreclosure of the real estate mortgages, the sale at public auction of the property subject matter of said mortgages and the application of the proceeds thereof to the satisfaction of the sums due defendant and cross claimant LIGON, including the taxes paid, attorneys fees and costs of foreclosure and litigation. Earlier however, IDP charged in its Answer with Cross-claim [30] that LIGON should have known that the persons she transacted with had no authority to bind IDP to the loans and mortgages she was trying to enforce. Further, IDP alleged that it never benefited from the money loaned from LIGON. Thus, IDP argued that as far as it was concerned, the subject loans and mortgages were null and void. IDP prayed that judgment be rendered 1. Declaring that the mortgages executed by ATTY. ABDULRAHMAN LINZAG and MRS. ROWAIDA BUSHRAN SAMPACO and annotated in the Transfer Certificates of Title are null and void as far as defendant IDP is concerned; 2. Ordering and directing the Register of Deeds of Quezon City to cancel the registered or annotated mortgages on the aforementioned Transfer Certificates of Title; 3. Ordering the cross-claim defendant Ligon to deliver the original of the reconstituted Transfer Certificates of Title.

From the foregoing, it is inevitable that IDPs cross-claim effectively joined the subsidiary issues between the coparties. Requiring an answer to LIGONs cross-claim would be superfluous. Consequently, declaring IDP in default on the crossclaim was improper. LIGONs contention that INC was not aggrieved by the trial courts order of foreclosure of mortgages cannot be taken seriously. INCs principal cause of action was the annulment of the mortgages. The partial decision resolved this issue against INC through the backdoor and without INC having presented its evidence. In short, the trial court disregarded the fact that LIGONs cross-claim was connected with, or dependent on, the subject of INCs original complaint. As regards the final issue, we hold that INC did not engage in forum-shopping. There is forum-shopping when as a result of an adverse decision in one forum or, it may be added, in anticipation thereof, a party seeks a favorable opinion in another forum through means other than appeal or certiorari,[31] raising identical causes of action, subject matter, and issues. [32] Forum-shopping exists when two or more actions involve the same transactions, essential facts, and circumstances; and raise identical causes of action, subject matter, and issues. [33] Yet another indication is when the elements of litis pendencia are present or where a final judgment in one case will amount to res judicata in the other case. The test is whether in the two or more pending cases there is an identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought. [34] INC instituted Civil Case No. Q-90-6937 to compel IDP to comply with its undertaking to clear of squatters the lots the latter sold to the former. On the other hand, in Civil Case No. Q-91-10494 INC sought to annul the mortgages and enjoin LIGON from foreclosing them. The two cases involved different transactions and sought different reliefs. Moreover, INC won in Civil Case No. Q90-6937; hence, it cannot be said that the later Civil Case No. Q-91-10494 was filed as a result of an adverse decision in one forum. On the other hand, CA-G.R. SP No. 40258 was a special civil action for certiorari, which was instituted, and correctly so, in reaction to an adverse partial decision in Civil Case No. Q-91-10494. Unfortunately, the dismissal of the instant petition cannot inure to the benefit of INC, since its opposition to LIGONs cause has been rendered moot and academic by the decision in G.R. No. 117897 declaring null and void the sale of the IDP properties to INC. Upon the other hand, the validity of the deeds of mortgage in favor of LIGON has yet to be settled in Civil Case No. Q-9110494. WHEREFORE, the instant petition is DISMISSED for lack of merit. Costs against petitioner LETICIA P. LIGON. SO ORDERED.

A.C. No. 6377

March 12, 2007

RUFA C. SUAN, Complainant, vs. ATTY. RICARDO D. GONZALEZ, Respondent. DECISION YNARES-SANTIAGO, J.: The instant administrative complaint filed by Rufa C. Suan charges respondent Atty. Ricardo D. Gonzalez with violation of the Code of Professional Responsibility, perjury and forum shopping, and prays for his suspension or disbarment. Complainant is a Director and Vice President of Rural Green Bank of Caraga, Inc., a rural banking corporation with principal place of business at Montilla Blvd., Butuan City, while respondent is one of its stockholders. The antecedent facts are as follows: On February 11, 2004, respondent filed a case for Mandamus, Computation of Interests, Enforcement of Inspection, Dividend and Appraisal Rights, Damages and Attorneys Fees against the Rural Green Bank of Caraga, Inc. and the members of its Board of Directors before the Regional Trial Court (RTC) of Butuan City, Branch 33, praying, inter alia, that a temporary restraining order be issued enjoining the conduct of the annual stockholders meeting and the holding of the election of the Board of Directors. On February 14, 2004, the trial court issued a temporary restraining order (TRO) conditioned upon respondents posting of a bond. Thereafter, respondent submitted JCL Bond No. 01626 issued by Stronghold Insurance Company, Incorporated (SICI) together with a Certification issued by then Court Administrator, now Associate Justice, Presbitero J. Velasco, Jr. that, according to the Clerk of Court of the Municipal Trial Court in Cities (MTCC) of Butuan City, SICI has no pending obligation and/or liability to the government insofar as confiscated bonds in civil and criminal cases are concerned.

Based on the foregoing, Suan filed this complaint alleging that respondent engaged in unlawful, dishonest, immoral or deceitful conduct when he submitted the certification to the RTC despite knowing that the same is applicable only for transactions before the MTCC; and that the bond was defective because it was released by SICI despite respondents failure to put up the required P100,000.00 collateral. Suan also claimed that in the complaint filed by respondent, together with Eduardo, Purisima, Ruben, and Manuel, all surnamed Tan, before the Bangko Sentral ng Pilipinas (BSP) against Ismael E. Andaya and the members of the Board of Directors of the Rural Green Bank of Caraga, Inc. for alleged gross violation of the principles of good corporate governance, they represented themselves as the banks minority stockholders with a total holdings amounting to more or less P5 million while the controlling stockholders own approximately 80% of the authorized capital stock. Suan averred that respondent committed perjury because the above allegations were allegedly inconsistent with respondents averments in the complaint pending before the RTC where he claimed that the majority stockholders own 70% ( and not 80%) of the outstanding capital stock of the Rural Green Bank of Caraga, Inc. while the minority stockholders stake amounted to P6 million (and not P5 million). Complainant finally claimed that respondent is guilty of forum shopping because the causes of action of the cases he filed before the RTC and the Bangko Sentral ng Pilipinas are the same. Respondent denied the allegations against him. He alleged that it was the bonding company which inadvertently attached the certification pertaining to the MTCC; that when he discovered the inadvertence, he immediately filed with the RTC an exparte motion to replace the certification with the one pertaining to the RTC; that he had satisfactorily complied with the requirements of SICI as shown in the letter of Ms. Evelyn R. Ramirez, SICIs Officer-in-Charge, dated March 19, 2004; that there is no inconsistency in the allegations contained in the complaints pending before the RTC and the Bangko Sentral ng Pilipinas thus he could not be held liable for perjury; that there is no forum shopping because the causes of action and the reliefs prayed for in the cases pending before the trial court and the Bangko Sentral ng Pilipinas are different; and that it is complainant who is guilty of forum shopping since this is the second disbarment suit that she filed against him. In her Reply, complainant insisted that she is not guilty of forum shopping; that she only filed one disbarment suit against respondent while the other two suits were filed by Joseph Omar Andaya and Dr. Arturo Cruz based on different acts committed by the respondent. On December 1, 2004, the instant administrative complaint was referred to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. After the mandatory conference, the parties were directed to submit their respective position papers. In a Report and Recommendation dated September 20, 2005, the Investigating Commissioner recommended that the administrative complaint be dismissed because complainant failed to prove by strong and substantial evidence the imputations of dishonesty against the respondent. In its Resolution dated December 17, 2005, the Board of Governors of the IBP approved the dismissal of the complaint. Complainant is now before us on appeal praying for the reversal and setting aside of the assailed Resolution arguing that it failed to state clearly the facts and the reasons on which it is based and that the evidence she presented were ignored and not considered. Complainant maintains that contrary to the findings of the IBP, respondents act of submitting a wrong certification to the RTC, relative to SICIs capacity to issue bonds, was deliberate and with intent to mislead, thereby constituting a violation of the Code of Professional Responsibility. She claims that respondent who is interested in the issuance of a temporary restraining order is expected to examine all the documents as well as the attachments, hence there is no reason why he would "inadvertently" attach the certification intended for the MTCC. We are not persuaded. Complainants insistence that respondent deliberately attached the MTCC certification instead of the RTC certification lacks merit. We are inclined to believe the findings of the IBP that the MTCC certification was inadvertently attached and that it was not deliberate. Indeed, respondent as well as every litigant is expected to examine all the documents he files in court. However, not every mistake or oversight he commits should be deemed dishonest, deceitful or deliberate so as to mislead the court. Respondent has nothing to gain by submitting the wrong certification. On the contrary, he runs the risk that his complaint be dismissed or denied outright.

There is no reason for respondent, or even the bonding company, to attach the wrong certification as the latter was equally qualified to issue bonds in civil or criminal cases pending before the RTC. Further, what militates against complainants insistence that the filing of the wrong certification was deliberate and with intent to deceive was the fact that after respondent knew of the inadvertence he immediately filed a manifestation with motion that the same be replaced with the certification applicable to the RTC. It is well-settled that in disbarment proceedings, the burden of proof rests upon the complainant and the case against the respondent must be established by clear, convincing and satisfactory proof. Considering the serious consequence of the disbarment or suspension of a member of the Bar, this Court has consistently held that clear preponderant evidence is necessary to justify the imposition of the administrative penalty. 1 In the instant case, complainant Suan failed to show that respondent willfully and deliberately resorted to falsehood and unlawful and dishonest conduct. She failed to show not only the dubious character of the act done but the motivation as well. 2 Complainant next claims that the injunction bond was wrongfully released to respondent by SICI as the latter failed to put up the required collateral, as shown in the February 28, 2004 letter of Evelyn R. Ramirez which the IBP allegedly ignored. She also insists that protesting the propriety of the bond before the trial court is not a pre-requisite to the filing of the instant administrative complaint. Besides, she argues that it would have been futile to file a protest before the trial court considering that she knew of the defects in the issuance of the injunction bond long after the bond has expired. The argument is without merit. The IBP correctly disregarded the February 28, 2004 letter of Ramirez considering that on March 19, 2004, Ramirez wrote another letter to the trial court informing the latter of respondents compliance with the required collateral. Anent the allegation of perjury, the same is likewise bereft of merit. In the case of Villanueva v. Secretary of Justice,3 the Court held that a mere assertion of a false, objective fact, a falsehood, is not enough to warrant a finding of perjury, thus: There are two essential elements of proof for perjury: (1) the statement made by the defendants must be proven false; and (2) it must be proven that the defendant did not believe those statements to be true. xxxx A conviction for perjury cannot be sustained merely upon the contradictory sworn statements of the accused. The prosecution must prove which of the two statements is false and must show the statement to be false by other evidence than the contradicting statement.4 (Emphasis supplied) Thus, it is necessary that there must be contradictory statements for perjury to exist. In the instant case, we find that respondent made no contradicting statements. Indeed, he alleged in the complaint before the Bangko Sentral ng Pilipinas that the minority stockholders own more or less P5 million while the controlling stockholders ownapproximately 80% of the authorized capital stock. These figures are mere estimates and in no way contradict respondents allegations in the complaint pending before the RTC that the minoritys stake is P6 million while the majoritys stockholdings is 70% of the outstanding capital stock. Besides, for perjury to prosper it is necessary that complainant prove the falsity of the statements and that respondent did not believe any of the statements to be true. We find that complainant failed to meet the required standard of proof to sustain the charge of perjury. The IBP correctly noted that no malice was shown when respondent made the foregoing allegations and that respondents failure to allege the exact shareholdings was due to the banks refusal to allow respondent to inspect the books. We agree with the findings of the IBP that there is no forum shopping. The essence of forum shopping is the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment.5 There is forum shopping when, between an action pending before this Court and another one, there exist: a) identity of parties, or at least such parties as represent the same interests in both actions, b) identity of rights asserted and relief prayed for, the relief being founded on the same facts, and c) the identity of the two preceding particulars is such that any judgment rendered in the other action, will, regardless of which party is successful amount to res judicata in the action under consideration; and said requisites also constitutive of lis pendens.6 The filing of the intra-corporate case before the RTC does not amount to forum-shopping. It is a formal demand of respondents legal rights in a court of justice in the manner prescribed by the court or by the law with respect to the controversy involved.7 The relief sought in the case is primarily to compel the bank to disclose its stockholdings, to allow

them the inspection of corporate books and records, and the payment of damages. It was also prayed that a TRO be issued to enjoin the holding of the annual stockholders meeting and the election of the members of the Board, which, only courts of justice can issue. On the other hand, the complaint filed with the Bangko Sentral ng Pilipinas was an invocation of the BSPs supervisory powers over banking operations which does not amount to a judicial proceeding. It brought to the attention of the BSP the alleged questionable actions of the banks Board of Directors in violation of the principles of good corporate governance. It prayed for the conduct of an investigation over the alleged unsafe and unsound business practices of the bank and to make necessary corrective measures to prevent the collapse of the bank. As such, the two proceedings are of different nature praying for different relief. Likewise, a ruling by the BSP concerning the soundness of the bank operations will not adversely or directly affect the resolution of the intra-corporate controversies pending before the trial court. Furthermore, to merit disciplinary action, forum shopping must be willful and deliberate. 8 Section 5, Rule 7 of the Rules of Court requires that, should there be any pending action or claim before any court, tribunal or quasi-judicial agency, a complete statement of its status should be given. The Certification of Non-Forum-shopping attached by respondent substantially complied with this requirement by providing therein that he has also filed a Complaint before the BSP. Likewise, such disclosure negates the allegation that he willfully and deliberately committed forum-shopping. It bears stressing that disbarment proceedings are matters of public interest, undertaken for public welfare and for the purpose of preserving courts of justice from the official ministration of the persons unfit to practice them. 9However, the power to disbar must be exercised with great caution and only in a clear case of misconduct which seriously affects the standing and character of the lawyer as an officer of the Court and member of the bar. 10 ACCORDINGLY, we AFFIRM the Resolution dated December 17, 1005, of the Integrated Bar of the Philippines recommending the dismissal of the instant complaint for disbarment/suspension against respondent ATTY. RICARDO D. GONZALEZ for lack of merit. SO ORDERED. CONSUELO YNARES-SANTIAGO Associate Justice WE CONCUR: MA. ALICIA AUSTRIA-MARTINEZ Associate Justice ROMEO J. CALLEJO, SR. Associate Justice MINITA V. CHICO-NAZARIO Asscociate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

Footnotes
1

Concepion v. Fandio, Jr., 389 Phil. 474, 481 (2000). Rudecon Management Corporation v. Camacho, Adm. Case No. 6403, August 31, 2004, 437 SCRA 202, 208. G.R. No. 162187, November 18, 2005, 475 SCRA 495. Id. at 514.

Tiboli Agro-Industrial Development, Inc. v. Solilapsi, 442 Phil. 499, 507 (2002).

Prubankers Association v. Prudential Bank & Trust Company , G.R. No. 131247, January 25, 1999, 302 SCRA 74, 83-84.
6 7

Supena v. De La Rosa, 334 Phil. 671, 677 (1997).

SECTION 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.
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Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or noncompliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.
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Urban Bank, Inc. v. Pea, 417 Phil. 70, 77 (2001). Resurreccion v. Sayson, 360 Phil. 313, 321 (1998).

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