Republic of the Philippines SUPREME COURT Manila FIRST DIVISION A.C. No.

6711 July 3, 2007

complainant further stated, a disciplinary case was also instituted against her before the Professional Regulation Commission. Complainant seeks the suspension and/or disbarment of respondent for the latter's act of disclosing personal secrets and confidential information she revealed in the course of seeking respondent's legal advice. In an order dated October 2, 2002, the IBP Commission on Bar Discipline required respondent to file her answer to the complaint. In her answer, styled as COUNTER-AFFIDAVIT,5 respondent denied giving legal advice to the complainant and dismissed any suggestion about the existence of a lawyer-client relationship between them. Respondent also stated the observation that the supposed confidential data and sensitive documents adverted to are in fact matters of common knowledge in the BFP. The relevant portions of the answer read: 5. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for reason that she never WAS MY CLIENT nor we ever had any LAWYER-CLIENT RELATIONSHIP that ever existed ever since and that never obtained any legal advice from me regarding her PERSONAL PROBLEMS or PERSONAL SECRETS. She likewise never delivered to me legal documents much more told me some confidential information or secrets. That is because I never entertain LEGAL QUERIES or CONSULTATION regarding PERSONAL MATTERS since I know as a LAWYER of the Bureau of Fire Protection that I am not allowed to privately practice law and it might also result to CONFLICT OF INTEREST. As a matter of fact, whenever there will be PERSONAL MATTERS referred to me, I just referred them to private law practitioners and never entertain the same, NOR listen to their stories or examine or accept any document. 9. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the truth of the matter is that her ILLICIT RELATIONSHIP and her illegal and unlawful activities are known in the Bureau of Fire Protection since she also filed CHILD SUPPORT case against her lover where she has a child . Moreover, the alleged DOCUMENTS she purportedly have shown to me sometime in 1998, are all part of public records . Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant case just to get even with me or to force me to settle and withdraw the CASES I FILED AGAINST HER since she knows that she will certainly be DISMISSED FROM SERVICE, REMOVED FROM THE PRC ROLL and CRIMINALLY CONVICTED of her ILLICIT, IMMORAL, ILLEGAL and UNLAWFUL ACTS. On October 7, 2004, the Investigating Commissioner of the IBP Commission on Bar Discipline came out with aReport and Recommendation, stating that the information related by complainant to the respondent is "protected under the attorney-client privilege communication." Prescinding from this postulate, the Investigating Commissioner found the respondent to have violated legal ethics when she "[revealed]

MA. LUISA HADJULA, complainant, vs. ATTY. ROCELES F. MADIANDA, respondent. DECISION GARCIA, J.: Under consideration is Resolution No. XVI-2004-472 of the Board of Governors, Integrated Bar of the Philippines (IBP), relative to the complaint for disbarment filed by herein complainant Ma. Luisa Hadjula against respondent Atty. Roceles F. Madianda. The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date September 7, 2002 and filed with the IBP Commission on Bar Discipline, complainant charged Atty. Roceles F. Madianda with violation of Article 2092 of the Revised Penal Code and Canon Nos. 15.02 and 21.02 of the Code of Professional Responsibility. In said affidavit-complaint, complainant alleged that she and respondent used to be friends as they both worked at the Bureau of Fire Protection (BFP) whereat respondent was the Chief Legal Officer while she was the Chief Nurse of the Medical, Dental and Nursing Services. Complainant claimed that, sometime in 1998, she approached respondent for some legal advice. Complainant further alleged that, in the course of their conversation which was supposed to be kept confidential, she disclosed personal secrets and produced copies of a marriage contract, a birth certificate and a baptismal certificate, only to be informed later by the respondent that she (respondent) would refer the matter to a lawyer friend. It was malicious, so complainant states, of respondent to have refused handling her case only after she had already heard her secrets. Continuing, complainant averred that her friendship with respondent soured after her filing, in the later part of 2000, of criminal and disciplinary actions against the latter. What, per complainant's account, precipitated the filing was when respondent, then a member of the BFP promotion board, demanded a cellular phone in exchange for the complainant's promotion. According to complainant, respondent, in retaliation to the filing of the aforesaid actions, filed a COUNTER COMPLAINT3 with the Ombudsman charging her (complainant) with violation of Section 3(a) of Republic Act No. 3019,4 falsification of public documents and immorality, the last two charges being based on the disclosures complainant earlier made to respondent. And also on the basis of the same disclosures,

information given to her during a legal consultation," and accordingly recommended that respondent be reprimanded therefor, thus: WHEREFORE, premises considered, it is respectfully recommended that respondent Atty. Roceles Madianda be reprimanded for revealing the secrets of the complainant. On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-2004-472 reading as follows: 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 the actuation of revealing information given to respondent during a legal consultation, Atty. Roceles Madianda is hereby REPRIMANDED. We AGREE with the recommendation and the premises holding it together. As it were, complainant went to respondent, a lawyer who incidentally was also then a friend, to bare what she considered personal secrets and sensitive documents for the purpose of obtaining legal advice and assistance. The moment complainant approached the then receptive respondent to seek legal advice, a veritable lawyer-client relationship evolved between the two. Such relationship imposes upon the lawyer certain restrictions circumscribed by the ethics of the profession. Among the burdens of the relationship is that which enjoins the lawyer, respondent in this instance, to keep inviolate confidential information acquired or revealed during legal consultations. The fact that one is, at the end of the day, not inclined to handle the client's case is hardly of consequence. Of little moment, too, is the fact that no formal professional engagement follows the consultation. Nor will it make any difference that no contract whatsoever was executed by the parties to memorialize the relationship. As we said inBurbe v. Magulta,6 A lawyer-client relationship was established from the very first moment complainant asked respondent for legal advise regarding the former's business. To constitute professional employment, it is not essential that the client employed the attorney professionally on any previous occasion. It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney consulted did not afterward handle the case for which his service had been sought. It a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the professional employments is established. Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship between the lawyer and the complainant or the non-payment of the former's fees.

Dean Wigmore lists the essential factors to establish the existence of the attorney-client privilege communication, viz: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be waived.7 With the view we take of this case, respondent indeed breached his duty of preserving the confidence of a client. As found by the IBP Investigating Commissioner, the documents shown and the information revealed in confidence to the respondent in the course of the legal consultation in question, were used as bases in the criminal and administrative complaints lodged against the complainant. The purpose of the rule of confidentiality is actually to protect the client from possible breach of confidence as a result of a consultation with a lawyer. The seriousness of the respondent's offense notwithstanding, the Court feels that there is room for compassion, absent compelling evidence that the respondent acted with ill-will. Without meaning to condone the error of respondent's ways, what at bottom is before the Court is two former friends becoming bitter enemies and filing charges and counter-charges against each other using whatever convenient tools and data were readily available. Unfortunately, the personal information respondent gathered from her conversation with complainant became handy in her quest to even the score. At the end of the day, it appears clear to us that respondent was actuated by the urge to retaliate without perhaps realizing that, in the process of giving vent to a negative sentiment, she was violating the rule on confidentiality. IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is hereby REPRIMANDED and admonished to be circumspect in her handling of information acquired as a result of a lawyer-client relationship. She is alsoSTERNLY WARNED against a repetition of the same or similar act complained of. SO ORDERED. Puno, (Chief Justice), Sandoval-Gutierrez,J., on leave. Corona, Azcuna, Garcia, JJ., concur.

SECOND DIVISION

Complainant contends that respondent is guilty of malpractice and misconduct by representing clients with conflicting interests and should be disbarred by reason thereof.[7] In his Comment,[8] respondent contends that he was never a direct recipient of any monetary support coming from the complainant. Respondent denies complainants allegation that he (respondent) did not inform complainant of the trial courts order dismissing the latters coun terclaim in Civil Case No. 1648. Respondent claims that within two days upon his receipt of the trial courts order of dismissal, he delivered to complainant a copy of the said order, apprising him of its contents. As to his representation of the persons against whom complainant filed criminal cases for theft, [9] respondent argues that he honestly believes that there exists no conflict between his present and former clients interests as the cases he handled for these clients are separate and distinct from each other. He further contends that he took up the cause of the accused in the criminal cases filed by complainant for humanitarian considerations since said accused are poor and needy and because there is a dearth of lawyers in their community. With respect to the case for ejectment filed by complainant against his nephew, respondent admits that it was he who notarized the deed of sale of the parcel of land sold to complainant. However, he contends that what is being contested in the said case is not the ownership of the subject land but the ownership of the house built on the said land.[10] On December 21, 1999, complainant filed a Reply to respondents Comment. [11] On January 19, 2000, the Court referred the instant case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.[12] On February 18, 2002, respondent filed a Rejoinder to complainants Reply adding that the instant complaint was orchestrated by complainants son who wanted political vengeance because he lost the vice-mayoralty post to respondent during the 1988 local elections.[13] On February 20, 2002, complainant filed a Sur-Rejoinder to respondents Rejoinder.[14] Thereafter, the parties filed their respective Position Papers, [15] after which the case was deemed submitted for resolution. In his Report and Recommendation dated February 20, 2004, Investigating Commissioner Agustinus V. Gonzaga found respondent guilty of violating Rule 15.03, Canon 15 of the Code of Professional Responsibility. He recommended that respondent be meted the penalty of suspension for one month. In a minute Resolution passed on July 30, 2004, the IBP Board of Governors resolved to annul and set aside the recommendation of the Investigating Commissioner and instead approved the dismissal of the complaint for lack of merit, to wit: RESOLUTION NO. XVI-2004-387 Adm. Case No. 5128 Elesio C. Pormento, Sr., vs. Atty. Elias A. Pontevedra RESOLVED to ANNUL and SET ASIDED [sic], as it is hereby ANNULED and SET ASIDE, the Recommendation of the Investigating Commission, and to APPROVE the DISMISSAL of the aboveentitled case for lack of merit of the complaint. We do not agree with the dismissal of the complaint. At the outset, we reiterate the settled rule that in complaints for disbarment, a formal investigation is a mandatory requirement which may not be dispensed with except for valid and compelling

[A.C. No. 5128. March 31, 2005]

ELESIO[1] C. PORMENTO, SR., complainant, vs. ATTY. ALIAS A. PONTEVEDRA, respondent. RESOLUTION AUSTRIA-MARTINEZ, J.: In a verified Complaint[2] dated August 7, 1999, Elesio C. Pormento, Sr. charged Atty. Elias A. Pontevedra with malpractice and misconduct, praying that on the basis of the facts alleged therein, respondent be disbarred. Complainant alleges that between 1964 and 1994, respondent is his familys legal counsel having represented him and members of his family in all legal proceedings in which they are involved. Complainant also claims that his familys relationship with respondent extends beyond mere lawyer -client relations as they gave respondent moral, spiritual, physical and financial support in his different endeavors.[3] Based on the allegations in the complaint, the rift between complainant and respondent began when complainants counterclaim in Civil Case No. 1648 filed with the Regional Trial Court of Bacolod City was dismissed. Complainant claims that respondent, who was his lawyer in the said case, deliberately failed to inform him of the dismissal of his counterclaim despite receipt of the order of dismissal by the trial court, as a result of which, complainant was deprived of his right to appeal said order. Complainant asserts that he only came to know of the existence of the trial courts order when the adverse party in the said case extrajudicially foreclosed the mortgage executed over the parcel of land which is the subject matter of the suit. In order to recover his ownership over the said parcel of land, complainant was constrained to hire a new lawyer as Atty. Pontevedra refused to institute an action for the recovery of the subject property.[4] Complainant also claims that in order to further protect his rights and interests over the said parcel of land, he was forced to initiate a criminal case for qualified theft against the relatives of the alleged new owner of the said land. Respondent is the counsel of the accused in said case. Complainant claims that as part of his defense in said criminal case, respondent utilized pieces of confidential information he obtained from complainant while the latter is still his client.[5] In a separate incident, complainant claims that in 1967, he bought a parcel of land located at Escalante, Negros Occidental. The Deed of Declaration of Heirship and Sale of said land was prepared and notarized by respondent. Since there was another person who claims ownership of the property, complainant alleges that he heeded respondents advice to build a small house on the property and to allow his (complainants) nephew and his family to occupy the house in order for complainant to establish his possession of the said property. Subsequently, complainants nephew refused to vacate the property prompting the former to file an ejectment case with the Municipal Trial Court of Escalante, Negros Occidental, docketed as Civil Case No. 528. Respondent acted as the counsel of com plainants nephew.[6]

reasons.[16] Formal investigations entail notice and hearing. However, the requirements of notice and hearing in administrative cases do not necessarily connote full adversarial proceedings, as actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies.[17] Due process is fulfilled when the parties were given reasonable opportunity to be heard and to submit evidence in support of their arguments.[18] From the records extant in the present case, it appears that the Investigating Commissioner conducted a hearing on January 16, 2002 where it was agreed that the complainant and the respondent shall file their respective position papers, after which the case shall be deemed submitted for resolution. [19] No further hearings were conducted. It is also disturbing to note that the abovementioned Resolution of the IBP Board of Governors, annulling and setting aside the recommendation of the Investigating Commissioner, is bereft of any findings of facts or explanation as to how and why it resolved to set aside the recommendation of the Investigating Commissioner and instead dismissed the complaint against respondent. Section 12(a), Rule 139-B of the Rules of Court provides: SEC. 12. Review and decision by the Board of Governors. (a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors upon the record and evidence transmitted to it by the Investigator with his report. The decision of the Board upon such review shall be in writing and shall clearly and distinctly state the facts and the reasons on which it is based. It shall be promulgated within a period not exceeding thirty (30) days from the next meeting of the Board following the submittal of the Investigators report. (Emphasis supplied)

Coming to the main issue in the present case, respondent is being accused of malpractice and misconduct on three grounds: first, for representing interests which conflict with those of his former client, herein complainant; second, for taking advantage of the information and knowledge that he obtained from complainant; and, third, for not notifying complainant of the dismissal of his counterclaim in Civil Case No. 1648. We shall concurrently discuss the first and second grounds as they are interrelated. Rule 15.03, Canon 15 of the Code of Professional Responsibility provides: A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. Corollary to this, Canon 21 of the same Code enjoins a lawyer to preserve the confidences and secrets of his clients even after the attorney-client relation is terminated. Rule 21.02, Canon 21 specifically requires that: A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto. In addition, Canon 6 of the Canons of Professional Ethics states: It is the duty of a lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties and any interest in or connection with the controversy, which might influence the client in the selection of counsel. It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose. The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed. Jurisprudence instructs that there is a representation of conflicting interests if the acceptance of the new retainer will require the attorney to do anything which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new relation, to use against his first client any knowledge acquired through their connection.[23] Another test to determine if there is a representation of conflicting interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof.[24] A lawyer is forbidden from representing a subsequent client against a former client when the subject matter of the present controversy is related, directly or indirectly, to the subject matter of the previous litigation in which he appeared for the former client.[25] Conversely, he may properly act as counsel for a

In Cruz vs. Cabrera,[20] we reiterated the importance of the requirement that the decision of the IBP Board of Governors must state the facts and the reasons on which such decision is based, which is akin to what is required of the decisions of courts of record. We held therein that: [A]side from informing the parties the reason for the decision to enable them to point out to the appellate court the findings with which they are not in agreement, in case any of them decides to appeal the decision, it is also an assurance that the judge, or the Board of Governors in this case, reached his judgment through the process of legal reasoning. Noncompliance with this requirement would normally result in the remand of the case. [21] Moreover, while we may consider the act of the IBP Board of Governors in simply adopting the report of the Investigating Commissioner as substantial compliance with said Rule, in this case, we cannot countenance the act of the IBP Board of Governors in merely stating that it is annulling the Commissioners recommendation and then dismiss the complaint without stating the facts and the reasons for said dismissal. However, considering that the present controversy has been pending resolution for quite some time, that no further factual determination is required, and the issues being raised may be determined on the basis of the numerous pleadings filed together with the annexes attached thereto, we resolve to proceed and decide the case on the basis of the extensive pleadings on record, in the interest of justice and speedy disposition of the case.[22]

new client, with full disclosure to the latter, against a former client in a matter wholly unrelated to that of the previous employment, there being in that instance no conflict of interests.[26]Where, however, the subject matter of the present suit between the lawyers new client and his former client is in som e way connected with that of the former clients action, the lawyer may have to contend for his new client that which he previously opposed as counsel for the former client or to use against the latter information confided to him as his counsel.[27] As we have held in Maturan vs. Gonzales:[28] The reason for the prohibition is found in the relation of attorney and client, which is one of trust and confidence of the highest degree. A lawyer becomes familiar with all the facts connected with his clients case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge must be considered sacred and guarded with care. No opportunity must be given him to take advantage of the clients secrets. A lawyer must have the fullest confidence of his client. For if the confidence is abused, the profession will suffer by the loss thereof. [29] The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter and is applicable however slight such adverse interest may be.[30] In essence, what a lawyer owes his former client is to maintain inviolate the clients confidence or to refrain from doing anything which will injuriously affect him in any matter in which he previously represented him.[31] In the present case, we find no conflict of interests when respondent represented herein complainants nephew and other members of his family in the ejectment case, docketed as Civil Case No. 528, and in the criminal complaint, denominated as I.S. Case No. 99-188, filed by herein complainant against them. The only established participation respondent had with respect to the parcel of land purchased by complainant, is that he was the one who notarized the deed of sale of the said land. On that basis alone, it does not necessarily follow that respondent obtained any information from herein complainant that can be used to the detriment of the latter in the ejectment case he filed. While complainant alleges that it was respondent who advised him to allow his nephew to temporarily occupy the property in order to establish complainants possession of said property as against another claimant, no corroborating evidence was presented to prove this allegation. Defendant, in his answer to the complaint for ejectment, raised the issue as to the right of the vendor to sell the said land in favor of complainant.[32] However, we find this immaterial because what is actually in issue in the ejectment case is not the ownership of the subject lot but the ownership of the house built on the said lot. Furthermore, the subject matter of I.S. Case No. 99-188 filed by complainant against his nephew and other members of his family involves several parts of trucks owned by herein complainant. [33] This case is not in any way connected with the controversy involving said parcel of land. In fine, with respect to Civil Case No. 528 and I.S. Case No. 99-188, complainant failed to present substantial evidence to hold respondent liable for violating the prohibition against representation of conflicting interests. However, we find conflict of interests in respondents representation of herein complainant in Civil Case No. 1648 and his subsequent employment as counsel of the accused in Criminal Case No. 3159. The subject matter in Civil Case No. 1648 is Lot 609 located at Escalante, Negros Occidental, the same parcel of land involved in Criminal Case No. 3159 filed by herein complainant against several persons, accusing them of theft for allegedly cutting and stealing coconut trees within the premises of the said lot. Complainant contends that it is in this criminal case that respondent used confidential information which the latter obtained from the former in Civil Case No. 1648.

To prove his contention, complainant submitted in evidence portions of the transcript of stenographic notes taken during his cross-examination in Criminal Case No. 3159. However, after a reading of the said transcript, we find no direct evidence to prove that respondent took advantage of any information that he may have been acquired from complainant and used the same in the defense of his clients in Criminal Case No. 3159. The matter discussed by respondent when he cross-examined complainant is the ownership of Lot 609 in its entirety, only a portion of which was purportedly sold to complainant. Part of the defense raised by his clients is that herein complainant does not have the personality to file the criminal complaint as he is not the owner of the lot where the supposed theft occurred. It is possible that the information as to the ownership of the disputed lot used by respondent in bringing up this issue may have been obtained while he still acted as counsel for complainant. It is also probable that such information may have been taken from other sources, like the Registry of Deeds, the Land Registration Authority or the respondents clients themselves. Nonetheless, be that as it may, it cannot be denied that when respondent was the counsel of complainant in Civil Case No. 1648, he became privy to the documents and information that complainant possessed with respect to the said parcel of land. Hence, whatever may be said as to whether or not respondent utilized against complainant any information given to him in a professional capacity, the mere fact of their previous relationship should have precluded him from appearing as counsel for the opposing side. As we have previously held: The relations of attorney and client is [are] founded on principles of public policy, on good taste. The question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorneys, like Caesars wife, not only to keep inviolate the clients confidence, but also to avoid the appearance of treachery and double dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice.[34] Moreover, we have held in Hilado vs. David[35] that: Communications between attorney and client are, in a great number of litigations, a complicated affair, consisting of entangled relevant and irrelevant, secret and well known facts. In the complexity of what is said in the course of dealings between an attorney and client, inquiry of the nature suggested would lead to the revelation, in advance of the trial, of other matters that might only further prejudice the complainants cause.[36] Thus, respondent should have declined employment in Criminal Case No. 3159 so as to avoid suspicion that he used in the criminal action any information he may have acquired in Civil Case No. 1648. Moreover, nothing on record would show that respondent fully apprised complainant and his new clients and secured or at least tried to secure their consent when he took the defense of the accused in Criminal Case No. 3159. Respondent contends that he handled the defense of the accused in the subject criminal case for humanitarian reasons and with the honest belief that there exists no conflict of interests. However, the rule is settled that the prohibition against representation of conflicting interests applies although the attorneys intentions and motives were honest and he acted in good faith.[37] Moreover, the fact that the conflict of interests is remote or merely probable does not make the prohibition inoperative. [38]

Respondent also asserts that when he accepted employment in Criminal Case No. 3159, the attorney-client relations between him and complainant in Civil Case No. 1648 had already been terminated. This defense does not hold water because the termination of the relation of attorney and client provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client.[39] Thus, we find respondent guilty of misconduct for representing conflicting interests. As to the third ground, we find that complainant failed to present substantial evidence to prove that respondent did not inform him of the dismissal of his counterclaim in Civil Case No. 1648. On the contrary, we find sufficient evidence to prove that complainant has been properly notified of the trial courts order of dismissal. The only proof presented by complainant to support his claim is the affidavit of his daughter confirming complainants contention that respondent indeed failed to inform him of the dismissal of his counterclaim.[40] However, in the same affidavit, complainants daughter admits that it was on December 4, 1989 that respondent received the order of the trial court dismissing complainants counterclaim. Respondent, presented a certification dated December 11, 1989, or one week after his receipt of the trial courts order, where complainants daughter acknowledged receipt of the entire records of Civil Case No. 1648 from complainant.[41] The same certification relieved respondent of his obligation as counsel of complainant. From the foregoing, it can be inferred that respondent duly notified complainant of the dismissal of his counterclaim. Otherwise, complainant could not have ordered his daughter to withdraw the records of his case from respondent at the same time relieving the latter of responsibility arising from his obligation as complainants counsel in that particular case. As to the penalty to be imposed, considering respondents honest belief t hat there is no conflict of interests in handling Civil Case No. 1648 and Criminal Case No. 3159, and it appearing that this is respondents first infraction of this nature, we find the penalty of suspension to be disproportionate to the offense committed.[42] Moreover, we take into account respondents undisputed claim that there are only three lawyers who are actually engaged in private practice in Escalante, Negros Occidental, where both complainant and respondent reside. One of the lawyers is already handling complainants case, while the other lawyer is believed by respondents clients to be a relative of complainant. Hence, respondents clients believed that they had no choice but go to him for help. We do not find this situation as an excuse for respondent to accept employment because he could have referred his clients to the resident lawyer of the Public Attorneys Office or to other lawyers in the neighboring towns. Nonetheless, in view of respondents belief that he simply adhered to his sworn duty to defend the poor and the needy, we consider such situation as a circumstance that mitigates his liability. Considering the foregoing facts and circumstances, we find it proper to impose a fine on respondent. In Sibulo vs. Cabrera,[43] the respondent is fined for having been found guilty of unethical conduct in representing two conflicting interests. Respondent is further reminded to be more cautious in accepting professional employments, to refrain from all appearances and acts of impropriety including circumstances indicating conflict of interests, and to behave at all times with circumspection and dedication befitting a member of the Bar, especially observing candor, fairness and loyalty in all transactions with his clients. [44] WHEREFORE, respondent Atty. Elias A. Pontevedra is found GUILTY of representing conflicting interests and is hereby FINED in the amount of Ten Thousand (P10,000.00) Pesos. He is WARNED that a repetition of the same or similar acts will be dealt with more severely. The Board of Governors of the Integrated Bar of the Philippines is DIRECTED to be heedful of the requirements provided for in Section 12(a), Rule 139-B of the Rules of Court as discussed in the text of herein decision. SO ORDERED.

Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.

Republic of the Philippines SUPREME COURT Manila EN BANC A.C. No. 6705 March 31, 2006

Complainant now charges respondent with the following violations: 1. Rule 15.03 of the Code of Professional Responsibility Complainant contends that respondent is guilty of representing conflicting interests. Respondent, being the former Personnel Manager and Retained Counsel of Taggat, knew the operations of Taggat very well. Respondent should have inhibited himself from hearing, investigating and deciding the case filed by Taggat employees. 14Furthermore, complainant claims that respondent instigated the filing of the cases and even harassed and threatened Taggat employees to accede and sign an affidavit to support the complaint. 15 2. Engaging in the private practice of law while working as a government prosecutor

RUTHIE LIM-SANTIAGO, Complainant, vs. ATTY. CARLOS B. SAGUCIO, Respondent. DECISION CARPIO, J.: The Case This is a disbarment complaint against Atty. Carlos B. Sagucio for violating Rule 15.03 of the Code of Professional Responsibility and for defying the prohibition against private practice of law while working as government prosecutor. The Facts Ruthie Lim-Santiago ("complainant") is the daughter of Alfonso Lim and Special Administratrix of his estate. 1Alfonso Lim is a stockholder and the former President of Taggat Industries, Inc. 2 Atty. Carlos B. Sagucio ("respondent") was the former Personnel Manager and Retained Counsel of Taggat Industries, Inc. 3 until his appointment as Assistant Provincial Prosecutor of Tuguegarao, Cagayan in 1992. 4 Taggat Industries, Inc. ("Taggat") is a domestic corporation engaged in the operation of timber concessions from the government. The Presidential Commission on Good Government sequestered it sometime in 1986, 5 and its operations ceased in 1997. 6 Sometime in July 1997, 21 employees of Taggat ("Taggat employees") filed a criminal complaint entitled "Jesus Tagorda, Jr. et al. v. Ruthie Lim-Santiago," docketed as I.S. No. 97-240 ("criminal complaint"). 7 Taggat employees alleged that complainant, who took over the management and control of Taggat after the death of her father, withheld payment of their salaries and wages without valid cause from 1 April 1996 to 15 July 1997. 8 Respondent, as Assistant Provincial Prosecutor, was assigned to conduct the preliminary investigation. 9 He resolved the criminal complaint by recommending the filing of 651 Informations 10 for violation of Article 288 11 in relation to Article 116 12 of the Labor Code of the Philippines. 13

Complainant also contends that respondent is guilty of engaging in the private practice of law while working as a government prosecutor. Complainant presented evidence to prove that respondent received P10,000 as retainers fee for the months of January and February 1995, 16 another P10,000 for the months of April and May 1995, 17and P5,000 for the month of April 1996. 18 Complainant seeks the disbarment of respondent for violating Rule 15.03 of the Code of Professional Responsibility and for defying the prohibition against private practice of law while working as government prosecutor. Respondent refutes complainants allegations and counters that complainant was merely aggrieved by the resolution of the criminal complaint which was adverse and contrary to her expectation. 19 Respondent claims that when the criminal complaint was filed, respondent had resigned from Taggat for more than five years. 20 Respondent asserts that he no longer owed his undivided loyalty to Taggat. 21 Respondent argues that it was his sworn duty to conduct the necessary preliminary investigation. 22 Respondent contends that complainant failed to establish lack of impartiality when he performed his duty. 23 Respondent points out that complainant did not file a motion to inhibit respondent from hearing the criminal complaint 24 but instead complainant voluntarily executed and filed her counteraffidavit without mental reservation. 25 Respondent states that complainants reason in not filing a motion to inhibit was her impression that respondent would exonerate her from the charges filed as gleaned from complainants statement during the hearing conducted on 12 February 1999: xxx Q. (Atty. Dabu). What do you mean you didnt think he would do it, Madam Witness? A. Because he is supposed to be my fathers friend and he was working with my Dad and he was supposed to be trusted by my father. And he came to me and told me he gonna help me. x x x. 26

Respondent also asserts that no conflicting interests exist because he was not representing Taggat employees or complainant. Respondent claims he was merely performing his official duty as Assistant Provincial Prosecutor. 27Respondent argues that complainant failed to establish that respondents act was tainted with personal interest, malice and bad faith. 28 Respondent denies complainants allegations that he instigated the filing of the cases, threatened and harassed Taggat employees. Respondent claims that this accusation is bereft of proof because complainant failed to mention the names of the employees or present them for cross-examination. 29 Respondent does not dispute his receipt, after his appointment as government prosecutor, of retainer fees from complainant but claims that it was only on a case-to-case basis and it ceased in 1996. 30 Respondent contends that the fees were paid for his consultancy services and not for representation. Respondent submits that consultation is not the same as representation and that rendering consultancy services is not prohibited. 31 Respondent, in his Reply-Memorandum, states: x x x [I]f ever Taggat paid him certain amounts, these were paid voluntarily by Taggat without the respondents asking, intended as token consultancy fees on a case -to-case basis and not as or for retainer fees. These payments do not at all show or translate as a specie of conflict of interest. Moreover, these consultations had no relation to, or connection with, the above-mentioned labor complaints filed by former Taggat employees. 32 Respondent insists that complainants evidence failed to prove that when the criminal complaint was filed with the Office of the Provincial Prosecutor of Cagayan, respondent was still the retained counsel or legal consultant. 33 While this disbarment case was pending, the Resolution and Order issued by respondent to file 651 Informations against complainant was reversed and set aside by Regional State Prosecutor of Cagayan Rodolfo B. Cadelina last 4 January 1999. 34 Hence, the criminal complaint was dismissed. 35 The IBPs Report and Recommendation The Integrated Bar of the Philippines Investigating Commissioner Ma. Carmina M. Alejandro -Abbas ("IBP Commissioner Abbas") heard the case 36 and allowed the parties to submit their respective memoranda. 37 Due to IBP Commissioner Abbas resignation, the case was reassigned to Commissioner Dennis A.B. Funa ("IBP Commissioner Funa"). 38 After the parties filed their memoranda and motion to resolve the case, the IBP Board of Governors issued Resolution No. XVI-2004-479 ("IBP Resolution") dated 4 November 2004 adopting with modification 39 IBP Commissioner Funas Report and Recommendation ("Report") finding respondent guilty of conflict of interests, failure to safeguard a former clients interest, and violating the prohibition against the private practice of law while being a government prosecutor. The IBP Board of Governors recommended the imposition of a penalty of three years suspension from the practice of law. The Report reads:

Now the issue here is whether being a former lawyer of Taggat conflicts with his role as Assistant Provincial Prosecutor in deciding I.S. No. 97-240. A determination of this issue will require the test of whether the matter in I.S. No. 97-240 will conflict with his former position of Personnel Manager and Legal Counsel of Taggat. I.S. No. 97-240 was filed for "Violation of Labor Code" (see Resolution of the Provincial Prosecutors Office, Annex "B" of Complaint). Herein Complainant, Ruthie Lim-Santiago, was being accused as having the "management and control" of Taggat (p. 2, Resolution of the Prov. Pros. Office, supra). Clearly, as a former Personnel Manager and Legal Counsel of Taggat, herein Respondent undoubtedly handled the personnel and labor concerns of Taggat. Respondent, undoubtedly dealt with and related with the employees of Taggat. Therefore, Respondent undoubtedly dealt with and related with complainants in I.S. No. 97-240. The issues, therefore, in I.S. No. 97-240, are very much familiar with Respondent. While the issues of unpaid salaries pertain to the periods 1996-1997, the mechanics and personalities in that case are very much familiar with Respondent. A lawyer owes something to a former client. Herein Respondent owes to Taggat, a former client, the duty to "maintain inviolate the clients confidence or to refrain from doing anything which will injuri ously affect him in any matter in which he previously represented him" (Natam v. Capule, 91 Phil. 640; p. 231, Agpalo, Legal Ethics, 4th ed.) Respondent argues that as Assistant Provincial Prosecutor, he does not represent any client or any interest except justice. It should not be forgotten, however, that a lawyer has an immutable duty to a former client with respect to matters that he previously handled for that former client. In this case, matters relating to personnel, labor policies, and labor relations that he previously handled as Personnel Manager and Legal Counsel of Taggat. I.S. No. 97-240 was for "Violation of the Labor Code." Here lies the conflict. Perhaps it would have been different had I.S. No. 97-240 not been labor-related, or if Respondent had not been a Personnel Manager concurrently as Legal Counsel. But as it is, I.S. No. 97240 is labor-related and Respondent was a former Personnel Manager of Taggat. xxxx While Respondent ceased his relations with Taggat in 1992 and the unpaid salaries being sought in I.S. No. 97-240 were of the years 1996 and 1997, the employees and management involved are the very personalities he dealt with as Personnel Manager and Legal Counsel of Taggat. Respondent dealt with these persons in his fiduciary relations with Taggat. Moreover, he was an employee of the corporation and part of its management. xxxx As to the propriety of receiving "Retainer Fees" or "consultancy fees" from herein Complainant while being an Assistant Provincial Prosecutor, and for rendering legal consultancy work while being an Assistant Provincial Prosecutor, this matter had long been settled. Government prosecutors are prohibited to engage in the private practice of law (see Legal and Judicial Ethics, Ernesto Pineda, 1994 ed., p. 20; People v. Villanueva, 14 SCRA 109; Aquino v. Blanco 70 Phil. 647). The act of being a legal consultant is a practice of law. To engage in the practice of law is to do any of those acts that are characteristic of the

legal profession (In re: David, 93 Phil. 461). It covers any activity, in or out of court, which required the application of law, legal principles, practice or procedures and calls for legal knowledge, training and experience (PLA v. Agrava, 105 Phil. 173; People v. Villanueva, 14 SCRA 111; Cayetano v. Monsod, 201 SCRA 210). Respondent clearly violated this prohibition. As for the secondary accusations of harassing certain employees of Taggat and instigating the filing of criminal complaints, we find the evidence insufficient. Accordingly, Respondent should be found guilty of conflict of interest, failure to safeguard a former clients interest, and violating the prohibition against the private practice of law while being a government prosecutor. 40 The IBP Board of Governors forwarded the Report to the Court as provided under Section 12(b), Rule 139B 41 of the Rules of Court. The Ruling of the Court The Court exonerates respondent from the charge of violation of Rule 15.03 of the Code of Professional Responsibility ("Code"). However, the Court finds respondent liable for violation of Rule 1.01, Canon 1 of the Code of Professional Responsibility against unlawful conduct. 42 Respondent committed unlawful conduct when he violated Section 7(b)(2) of the Code of Conduct and Ethical Standards for Public Officials and Employees or Republic Act No. 6713 ("RA 6713"). Canon 6 provides that the Code "shall apply to lawyers in government service in the discharge of their official duties." 43 A government lawyer is thus bound by the prohibition "not [to] represent conflicting interests." 44However, this rule is subject to certain limitations. The prohibition to represent conflicting interests does not apply when no conflict of interest exists, when a written consent of all concerned is given after a full disclosure of the facts or when no true attorney-client relationship exists. 45 Moreover, considering the serious consequence of the disbarment or suspension of a member of the Bar, clear preponderant evidence is necessary to justify the imposition of the administrative penalty. 46 Respondent is also mandated under Rule 1.01 of Canon 1 not to engage in "unlawful x x x conduct." Unlawful conduct includes violation of the statutory prohibition on a government employee to "engage in the private practice of [his] profession unless authorized by the Constitution or law, provided, that such practice will not conflict or tend to conflict with [his] official functions." 47 Complainants evidence failed to substantiate the claim that respondent represented conflicting interests In Quiambao v. Bamba, 48 the Court enumerated various tests to determine conflict of interests. One test of inconsistency of interests is whether the lawyer will be asked to use against his former client any confidential information acquired through their connection or previous employment. 49 In essence, what a lawyer owes his former client is to maintain inviolate the clients confidence or to refrain from doing anything which will injuriously affect him in any matter in which he previously represented him. 50

In the present case, we find no conflict of interests when respondent handled the preliminary investigation of the criminal complaint filed by Taggat employees in 1997. The issue in the criminal complaint pertains to non-payment of wages that occurred from 1 April 1996 to 15 July 1997. Clearly, respondent was no longer connected with Taggat during that period since he resigned sometime in 1992. In order to charge respondent for representing conflicting interests, evidence must be presented to prove that respondent used against Taggat, his former client, any confidential information acquired through his previous employment. The only established participation respondent had with respect to the criminal complaint is that he was the one who conducted the preliminary investigation. On that basis alone, it does not necessarily follow that respondent used any confidential information from his previous employment with complainant or Taggat in resolving the criminal complaint. The fact alone that respondent was the former Personnel Manager and Retained Counsel of Taggat and the case he resolved as government prosecutor was labor-related is not a sufficient basis to charge respondent for representing conflicting interests. A lawyers immutable duty to a former client does not cover transactions that occurred beyond the lawyers employment with the client. The intent of the law is to impose upon the lawyer the duty to protect the clients interests only on matters that he previously handled for the former client and not for matters that arose after the lawyer-client relationship has terminated. Further, complainant failed to present a single iota of evidence to prove her allegations. Thus, respondent is not guilty of violating Rule 15.03 of the Code. Respondent engaged in the private practice of law while working as a government prosecutor The Court has defined the practice of law broadly as x x x any activity, in or out of court, which requires the application of law, legal procedure, knowledge, training and experience. "To engage in the practice of law is to perform those acts which are characteristics of the profession. Generally, to practice law is to give notice or render any kind of service, which device or service requires the use in any degree of legal knowledge or skill." 51 "Private practice of law" contemplates a succession of acts of the same nature habitually or customarily holding ones self to the public as a lawyer. 52 Respondent argues that he only rendered consultancy services to Taggat intermittently and he was not a retained counsel of Taggat from 1995 to 1996 as alleged. This argument is without merit because the law does not distinguish between consultancy services and retainer agreement. For as long as respondent performed acts that are usually rendered by lawyers with the use of their legal knowledge, the same falls within the ambit of the term "practice of law." Nonetheless, respondent admitted that he rendered his legal services to complainant while working as a government prosecutor. Even the receipts he signed stated that the payments by Taggat were for "Retainers fee."53 Thus, as correctly pointed out by complainant, respondent clearly violated the prohibition in RA 6713.

However, violations of RA 6713 are not subject to disciplinary action under the Code of Professional Responsibility unless the violations also constitute infractions of specific provisions of the Code of Professional Responsibility. Certainly, the IBP has no jurisdiction to investigate violations of RA 6713 the Code of Conduct and Ethical Standards for Public Officials and Employees unless the acts involved also transgress provisions of the Code of Professional Responsibility. Here, respondents violation of RA 6713 also const itutes a violation of Rule 1.01 of Canon 1, which mandates that "[a] lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct." Respondents admission that he received from Taggat fees for legal services while serving as a government prosecutor is an unlawful conduct, which constitutes a violation of Rule 1.01. Respondent admitted that complainant also charged him with unlawful conduct when respondent stated in his Demurrer to Evidence: In this instant case, the complainant prays that the respondent be permanently and indefinitely suspended or disbarred from the practice of the law profession and his name removed from the Roll of Attorneys on the following grounds: xxxx d) that respondent manifested gross misconduct and gross violation of his oath of office and in his dealings with the public. 54 On the Appropriate Penalty on Respondent The appropriate penalty on an errant lawyer depends on the exercise of sound judicial discretion based on the surrounding facts. 55 Under Civil Service Law and rules, the penalty for government employees engaging in unauthorized private practice of profession is suspension for six months and one day to one year. 56 We find this penalty appropriate for respondents violation in this case of Rule 1.01, Canon 1 of the Code of Professional Responsibility. WHEREFORE, we find respondent Atty. Carlos B. Sagucio GUILTY of violation of Rule 1.01, Canon 1 of the Code of Professional Responsibility. Accordingly, we SUSPEND respondent Atty. Carlos B. Sagucio from the practice of law for SIX MONTHS 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 an attorney, the Integrated Bar of the Philippines, the Department of Justice, and all courts in the country for their information and guidance. SO ORDERED.

Republic of the Philippines Supreme Court Baguio City SECOND DIVISION

In our Resolution dated November 22, 1999, we referred the disbarment complaint to the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. In his Report and Recommendation datedNovember 28, 2003, IBP Commissioner Pedro A. Magpayo Jr. found Atty. Sabitsana administratively liable for representing conflicting interests. The IBP Commissioner opined: In Bautista vs. Barrios, it was held that a lawyer may not handle a case to nullify a contract which he prepared and thereby take up inconsistent positions. Granting that Zenaida L. Caete, respondents present client in Civil Case No. B -1060 did not initially learn about the sale executed by Bontes in favor of complainant thru the confidences and information divulged by complainant to respondent in the course of the preparation of the said deed of sale, respondent nonetheless has a duty to decline his current employment as counsel of Zenaida Caete in view of the rule prohibiting representation of conflicting interests. In re De la Rosa clearly suggests that a lawyer may not represent conflicting interests in the absence of the written consent of all parties concerned given after a full disclosure of the facts. In the present case, no such written consent was secured by respondent before accepting employment as Mrs. Caetes counsel -of-record. x x x x x x

JOSEFINA M. ANION, Complainant,

A.C. No. 5098 Present: BRION, J., Acting Chairperson, PERALTA,* PEREZ, SERENO, and REYES, JJ. Promulgated:

- versus -

ATTY. CLEMENCIO SABITSANA, JR., Respondent. x------------------------------------------------------------------------------------x DECISION BRION, J.:

April 11, 2012

Complainant and respondents present client, being contending claimants to the same property, the conflict of interest is obviously present. There is said to be inconsistency of interest when on behalf of one client, it is the attorneys duty to contend for that which his duty to another client requires him to oppose. In brief, if he argues for one client this argument will be opposed by him when he argues for the other client. Such is the case with which we are now confronted, respondent being asked by one client to nullify what he had formerly notarized as a true and valid sale between Bontes and the complainant. (footnotes omitted)[3]

We resolve this disbarment complaint against Atty. Clemencio Sabitsana, Jr. who is charged of: (1) violating the lawyers duty to preserve confidential information received from his client; [1] and (2) violating the prohibition on representing conflicting interests.[2] In her complaint, Josefina M. Anion (complainant) related that she previously engaged the legal services of Atty. Sabitsana in the preparation and execution in her favor of a Deed of Sale over a parcel of land owned by her late common-law husband, Brigido Caneja, Jr. Atty. Sabitsana allegedly violated her confidence when he subsequently filed a civil case against her for the annulment of the Deed of Sale in behalf of Zenaida L. Caete, the legal wife of Brigido Caneja, Jr. The complainant accused Atty. Sabitsana of using the confidential information he obtained from her in filing the civil case. Atty. Sabitsana admitted having advised the complainant in the preparation and execution of the Deed of Sale. However, he denied having received any confidential information. Atty. Sabitsana asserted that the present disbarment complaint was instigated by one Atty. Gabino Velasquez, Jr., the notary of the disbarment complaint who lost a court case against him (Atty. Sabitsana) and had instigated the complaint for this reason. The Findings of the IBP Investigating Commissioner

The IBP Commissioner recommended that Atty. Sabitsana be suspended from the practice of law for a period of one (1) year.[4] The Findings of the IBP Board of Governors In a resolution dated February 27, 2004, the IBP Board of Governors resolved to adopt and approve the Report and Recommendation of the IBP Commissioner after finding it to be fully supported by the evidence on record, the applicable laws and rules.[5] The IBP Board of Governors agreed with the IBP Commissioners recommended penalty. Atty. Sabitsana moved to reconsider the above resolution, but the IBP Board of Governors denied his motion in a resolution dated July 30, 2004. The Issue The issue in this case is whether Atty. Sabitsana is guilty of misconduct for representing conflicting interests.

The Courts Ruling After a careful study of the records, we agree with the findings and recommendations of the IBP Commissioner and the IBP Board of Governors. The relationship between a lawyer and his/her client should ideally be imbued with the highest level of trust and confidence. This is the standard of confidentiality that must prevail to promote a full disclosure of the clients most confidential information to his/her lawyer for an unhampered exchange of information between them. Needless to state, a client can only entrust confidential information to his/her lawyer based on an expectation from the lawyer of utmost secrecy and discretion; the lawyer, for his part, is duty-bound to observe candor, fairness and loyalty in all dealings and transactions with the client. [6] Part of the lawyers duty in this regard is to avoid representing conflicting interests, a matter covered by Rule 15.03, Canon 15 of the Code of Professional Responsibility quoted below: Rule 15.03. -A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. [7]The prohibition also applies even if the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. [8] To be held accountable under this rule, it is enough that the opposing parties in one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyers respective retainers with each of themwould affect the performance of the duty of undivided fidelity to both clients.[9] Jurisprudence has provided three tests in determining whether a violation of the above rule is present in a given case. One test is whether a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at the same time, to oppose that claim for the other client. Thus, if a lawyers argument for one client has to be opposed by that same lawyer in arguing for the other client, there is a violation of the rule. Another test of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyers duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or doubledealing in the performance of that duty. Still another test is whether the lawyer would be called upon in the new relation to use against a former client any confidential information acquired through their connection or previous employment.[10] [emphasis ours] Two, Atty. Sabitsana met with Zenaida Caete to discuss the latters legal interest over the property subject of the Deed of Sale. At that point, Atty. Sabitsana already had knowledge that Zenaida Caetes interest clashed with the complainants interests. Three, despite the knowledge of the clashing interests between his two clients, Atty. Sabitsana accepted the engagement from Zenaida Caete. Four, Atty. Sabitsanas actual knowledge of the conflicting interests between his two clients was demonstrated by his own actions: first, he filed a case against the complainant in behalf of Zenaida Caete; second, he impleaded the complainant as the defendant in the case; and third, the case he filed was for the annulment of the Deed of Sale that he had previously prepared and executed for the complainant. By his acts, not only did Atty. Sabitsana agree to represent one client against another client in the same action; he also accepted a new engagement that entailed him to contend and oppose the interest of his other client in a property in which his legal services had been previously retained. To be sure, Rule 15.03, Canon 15 of the Code of Professional Responsibility provides an exception to the above prohibition. However, we find no reason to apply the exception due to Atty. Sabitsanas failure to comply with the requirements set forth under the rule. Atty. Sabitsana did not make a full disclosure of facts to the complainant and to Zenaida Caete before he accepted the new engagement with Zenaida Caete. The records likewise show that although Atty. Sabitsana wrote a letter to the complainant informing her of Zenaida Caetes adverse claim to the property covered by the Deed of Sale and, urging her to settle the adverse claim; Atty. Sabitsana however did not disclose to the complainant that he was also being engaged as counsel by Zenaida Caete.[11] Moreover, the records show that Atty. Sabitsana failed to obtain the written consent of his two clients, as required by Rule 15.03, Canon 15 of the Code of Professional Responsibility. Accordingly, we find as the IBP Board of Governors did Atty. Sabitsana guilty of misconduct for representing conflicting interests. We likewise agree with the penalty of suspension for one (1) year from the practice of law recommended by the IBP Board of Governors. This penalty is consistent with existing jurisprudence on the administrative offense of representing conflicting interests. [12] We note that Atty. Sabitsana takes exception to the IBP recommendation on the ground that the charge in the complaint was only for his alleged disclosure of confidential information, not for representation of conflicting interests. To Atty. Sabitsana, finding him liable for the latter offense is a violation of his due process rights since he only answered the designated charge. We find no violation of Atty. Sabitsanas due process rights. Although there was indeed a specific charge in the complaint, we are not unmindful that the complaint itself contained allegations of acts sufficient to constitute a violation of the rule on the prohibition against representing conflicting interests. As stated in paragraph 8 of the complaint: Atty. Sabitsana, Jr. accepted the commission as a Lawyer of ZENAIDA CANEJA, now Zenaida Caete, to recover lands from Complainant, including this land where lawyer Atty. Sabitsana, Jr. has advised his client [complainant] to execute the second sale[.]

On the basis of the attendant facts of the case, we find substantial evidence to support Atty. Sabitsanas violation of the above rule, as established by the following circumstances on record: One, his legal services were initially engaged by the complainant to protect her interest over a certain property. The records show that upon the legal advice of Atty. Sabitsana, the Deed of Sale over the property was prepared and executed in the complainants favor.

Interestingly, Atty. Sabitsana even admitted these allegations in his answer.[13] He also averred in his Answer that: 6b. Because the defendant-to-be in the complaint (Civil Case No. B-1060) that he would file on behalf of Zenaida Caneja-Caete was his former client (herein complainant), respondent asked [the] permission of Mrs. Caete (which she granted) that he would first write a letter (Annex 4) to the complainant proposing to settle the case amicably between them but complainant ignored it. Neither did she object to respondents handling the case in behalf of Mrs. Caete on the ground she is now invoking in her instant complaint. So respondent felt free to file the complaint against her.[14] We have consistently held that the essence of due process is simply the opportunity to be informed of the charge against oneself and to be heard or, as applied to administrative proceedings, the opportunity to explain ones side or the opportunity to seek a reconsideration of the action or ruling complained of.[15] These opportunities were all afforded to Atty. Sabitsana, as shown by the above circumstances. All told, disciplinary proceedings against lawyers are sui generis.[16] In the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession. We likewise aim to ensure the proper and honest administration of justice by purging the profession of members who, by their misconduct, have proven themselves no longer worthy to be entrusted with the duties and responsibilities of an attorney.[17] This is all that we did in this case. Significantly, we did this to a degree very much lesser than what the powers of this Court allows it to do in terms of the imposable penalty. In this sense, we have already been lenient towards respondent lawyer. WHEREFORE, premises considered, the Court resolves to ADOPT the findings and recommendations of the Commission on Bar Discipline of the Integrated Bar of thePhilippines. Atty. Clemencio C. Sabitsana, Jr. is found GUILTY of misconduct for representing conflicting interests in violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility. He is hereby SUSPENDED for one (1) year from the practice of law. Atty. Sabitsana is DIRECTED to inform the Court of the date of his receipt of this Decision so that we can determine the reckoning point when his suspension shall take effect. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-961 September 21, 1949 My dear Mrs. Hilado: BLANDINA GAMBOA HILADO, petitioner, vs. JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD and SELIM JACOB ASSAD, respondents. Delgado, Dizon Vicente J. Francisco for respondents. TUASON, J.: It appears that on April 23, 1945, Blandina Gamboa Hilado brought an action against Selim Jacob Assad to annul the sale of several houses and lot executed during the Japanese occupation by Mrs. Hilado's now deceased husband. On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on behalf of the defendant; and on June 15, Attorneys Delgado, Dizon, Flores and Rodrigo registered their appearance as counsel for the plaintiff. On October 5, these attorneys filed an amended complaint by including Jacob Assad as party defendant. On January 28, 1946, Attorney Francisco entered his appearance as attorney of record for the defendant in substitution for Attorney Ohnick, Velilla and Balonkita who had withdrawn from the case. On May 29, Attorney Dizon, in the name of his firm, wrote Attorney Francisco urging him to discontinue representing the defendants on the ground that their client had consulted with him about her case, on which occasion, it was alleged, "she turned over the papers" to Attorney Francisco, and the latter sent her a written opinion. Not receiving any answer to this suggestion, Attorney Delgado, Dizon, Flores and Rodrigo on June 3, 1946, filed a formal motion with the court, wherein the case was and is pending, to disqualify Attorney Francisco. Attorney Francisco's letter to plaintiff, mentioned above and identified as Exhibit A, is in full as follows: and Flores for petitioner. Mrs. Manila, Philippines Blandina

July 13, 1945.

Gamboa

Hilado

From the papers you submitted to me in connection with civil case No. 70075 of the Court of First Instance of Manila, entitled "Blandina Gamboa Hilado vs. S. J. Assad," I find that the basic facts which brought about the controversy between you and the defendant therein are as follows: (a) That you were the equitable owner of the property described in the complaint, as the same was purchased and/or built with funds exclusively belonging to you, that is to say, the houses and lot pertained to your paraphernal estate; (b) That on May 3, 1943, the legal title to the property was with your husband, Mr. Serafin P. Hilado; and (c) That the property was sold by Mr. Hilado without your knowledge on the aforesaid date of May 3, 1943. Upon the foregoing facts, I am of the opinion that your action against Mr. Assad will not ordinarily prosper. Mr. Assad had the right to presume that your husband had the legal right to dispose of the property as the transfer certificate of title was in his name. Moreover, the price of P110,000 in Japanese military notes, as of May 3, 1943, does not quite strike me as so grossly inadequate as to warrant the annulment of the sale. I believe, lastly, that the transaction cannot be avoided merely because it was made during the Japanese occupation, nor on the simple allegation that the real purchaser was not a citizen of the Philippines. On his last point, furthermore, I expect that you will have great difficulty in proving that the real purchaser was other than Mr. Assad, considering that death has already sealed your husband's lips and he cannot now testify as to the circumstances of the sale. For the foregoing reasons, I regret to advise you that I cannot appear in the proceedings in your behalf. The records of the case you loaned to me are herewith returned.

Yours very truly, VICENTE Attorney-at-Law 1462 Estrada, Manila J. FRANCISCO (Sgd.) VICENTE J. FRANCISCO

VJF/Rag.

In his answer to plaintiff's attorneys' complaint, Attorney Francisco alleged that about May, 1945, a real estate broker came to his office in connection with the legal separation of a woman who had been deserted by her husband, and also told him (Francisco) that there was a pending suit brought by Mrs. Hilado against a certain Syrian to annul the sale of a real estate which the deceased Serafin Hilado had made to the Syrian during the Japanese occupation; that this woman asked him if he was willing to accept the case if the Syrian should give it to him; that he told the woman that the sales of real property during the Japanese regime were valid even though it was paid for in Japanese military notes; that this being his opinion, he told his visitor he would have no objection to defending the Syrian; That one month afterwards, Mrs. Hilado came to see him about a suit she had instituted against a certain Syrian to annul the conveyance of a real estate which her husband had made; that according to her the case was in the hands of Attorneys Delgado and Dizon, but she wanted to take it away from them; that as he had known the plaintiff's deceased husband he did not hesitate to tell her frankly that hers was a lost case for the same reason he had told the broker; that Mrs. Hilado retorted that the basis of her action was not that the money paid her husband was Japanese military notes, but that the premises were her private and exclusive property; that she requested him to read the complaint to be convinced that this was the theory of her suit; that he then asked Mrs. Hilado if there was a Torrens title to the property and she answered yes, in the name of her husband; that he told Mrs. Hilado that if the property was registered in her husband's favor, her case would not prosper either; That some days afterward, upon arrival at his law office on Estrada street, he was informed by Attorney Federico Agrava, his assistant, that Mrs. Hilado had dropped in looking for him and that when he, Agrava, learned that Mrs. Hilado's visit concerned legal matters he attended to her and requested her to leave the "expediente" which she was carrying, and she did; that he told Attorney Agrava that the firm should not handle Mrs. Hilado's case and he should return the papers, calling Agrava's attention to what he (Francisco) already had said to Mrs. Hilado; That several days later, the stenographer in his law office, Teofilo Ragodon, showed him a letter which had been dictated in English by Mr. Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon told him (Attorney Francisco) upon Attorney Agrava's request that Agrava thought it more proper to explain to Mrs. Hilado the reasons why her case was rejected; that he forthwith signed the letter without reading it and without keeping it for a minute in his possession; that he never saw Mrs. Hilado since their last meeting until she talked to him at the Manila Hotel about a proposed extrajudicial settlement of the case; That in January, 1946, Assad was in his office to request him to handle his case stating that his American lawyer had gone to the States and left the case in the hands of other attorneys; that he accepted the retainer and on January 28, 1946, entered his appearance. Attorney Francisco filed an affidavit of stenographer Ragodon in corroboration of his answer. The judge trying the case, Honorable Jose Gutierrez David, later promoted to the Court of Appeals, dismissed the complaint. His Honor believed that no information other than that already alleged in plaintiff's complaint in the main cause was conveyed to Attorney Francisco, and concluded that the intercourse between the plaintiff and the respondent did not attain the point of creating the relation of attorney and client.

Stripped of disputed details and collateral matters, this much is undoubted: That Attorney Francisco's law firm mailed to the plaintiff a written opinion over his signature on the merits of her case; that this opinion was reached on the basis of papers she had submitted at his office; that Mrs. Hilado's purpose in submitting those papers was to secure Attorney Francisco's professional services. Granting the facts to be no more than these, we agree with petitioner's counsel that the relation of attorney and client between Attorney Francisco and Mrs. Hilado ensued. The following rules accord with the ethics of the legal profession and meet with our approval: In order to constitute the relation (of attorney and client) a professional one and not merely one of principal and agent, the attorneys must be employed either to give advice upon a legal point, to prosecute or defend an action in court of justice, or to prepare and draft, in legal form such papers as deeds, bills, contracts and the like. (Atkinson vs. Howlett, 11 Ky. Law Rep. (abstract), 364; cited in Vol. 88, A. L. R., p. 6.) To constitute professional employment it is not essential that the client should have employed the attorney professionally on any previous occasion. . . . It is not necessary that any retainer should have been paid, promised, or charged for; neither is it material that the attorney consulted did not afterward undertake the case about which the consultation was had. If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in his professional capacity with the view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the professional employment must be regarded as established. . . . (5 Jones Commentaries on Evidence, pp. 4118-4119.) An attorney is employed-that is, he is engaged in his professional capacity as a lawyer or counselor-when he is listening to his client's preliminary statement of his case, or when he is giving advice thereon, just as truly as when he is drawing his client's pleadings, or advocating his client's cause in open court. (Denver Tramway Co. vs. Owens, 20 Colo., 107; 36 P., 848.) Formality is not an essential element of the employment of an attorney. The contract may be express or implied and it is sufficient that the advice and assistance of the attorney is sought and received, in matters pertinent to his profession. An acceptance of the relation is implied on the part of the attorney from his acting in behalf of his client in pursuance of a request by the latter. (7 C. J. S., 848-849; see Hirach Bros. and Co. vs. R. E. Kennington Co., 88 A. L. R., 1.) Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment;" and section 19 (e) of Rule 127 imposes upon an attorney the duty "to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client." There is no law or provision in the Rules of Court prohibiting attorneys in express terms from acting on behalf of both parties to a controversy whose interests are opposed to each other, but such prohibition is necessarily implied in the injunctions above quoted. (In re De la Rosa, 27 Phil., 258.) In fact the prohibition derives validity from sources higher than written laws and rules. As has been aptly said in In re Merron, 22 N. M., 252, L.R.A., 1917B, 378, "information so received is sacred to the employment to which it pertains," and "to permit it to be used in the interest of another, or, worse still, in the interest of the adverse party, is to strike at the element of confidence which lies at the basis of, and affords the essential security in, the relation of attorney and client."

That only copies of pleadings already filed in court were furnished to Attorney Agrava and that, this being so, no secret communication was transmitted to him by the plaintiff, would not vary the situation even if we should discard Mrs. Hilado's statement that other papers, personal and private in character, were turned in by her. Precedents are at hand to support the doctrine that the mere relation of attorney and client ought to preclude the attorney from accepting the opposite party's retainer in the same litigation regardless of what information was received by him from his first client. The principle which forbids an attorney who has been engaged to represent a client from thereafter appearing on behalf of the client's opponent applies equally even though during the continuance of the employment nothing of a confidential nature was revealed to the attorney by the client. (Christian vs. Waialua Agricultural Co., 30 Hawaii, 553, Footnote 7, C. J. S., 828.) Where it appeared that an attorney, representing one party in litigation, had formerly represented the adverse party with respect to the same matter involved in the litigation, the court need not inquire as to how much knowledge the attorney acquired from his former during that relationship, before refusing to permit the attorney to represent the adverse party. (Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.) In order that a court may prevent an attorney from appearing against a former client, it is unnecessary that the ascertain in detail the extent to which the former client's affairs might have a bearing on the matters involved in the subsequent litigation on the attorney's knowledge thereof. (Boyd vs. Second Judicial Dist. Court, 274 P., 7; 51 Nev., 264.) This rule has been so strictly that it has been held an attorney, on terminating his employment, cannot thereafter act as counsel against his client in the same general matter, even though, while acting for his former client, he acquired no knowledge which could operate to his client's disadvantage in the subsequent adverse employment. (Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201, Ann. Cas., 1912S, 181.) Communications between attorney and client are, in a great number of litigations, a complicated affair, consisting of entangled relevant and irrelevant, secret and well known facts. In the complexity of what is said in the course of the dealings between an attorney and a client, inquiry of the nature suggested would lead to the revelation, in advance of the trial, of other matters that might only further prejudice the complainant's cause. And the theory would be productive of other un salutary results. To make the passing of confidential communication a condition precedent; i.e., to make the employment conditioned on the scope and character of the knowledge acquired by an attorney in determining his right to change sides, would not enhance the freedom of litigants, which is to be sedulously fostered, to consult with lawyers upon what they believe are their rights in litigation. The condition would of necessity call for an investigation of what information the attorney has received and in what way it is or it is not in conflict with his new position. Litigants would in consequence be wary in going to an attorney, lest by an unfortunate turn of the proceedings, if an investigation be held, the court should accept the attorney's inaccurate version of the facts that came to him. "Now the abstinence from seeking legal advice in a good cause is by hypothesis an evil which is fatal to the administration of justice." (John H. Wigmore's Evidence, 1923, Section 2285, 2290, 2291.) Hence the necessity of setting down the existence of the bare relationship of attorney and client as the yardstick for testing incompatibility of interests. This stern rule is designed not alone to prevent the

dishonest practitioner from fraudulent conduct, but as well to protect the honest lawyer from unfounded suspicion of unprofessional practice. (Strong vs. Int. Bldg., etc.; Ass'n, 183 Ill., 97; 47 L.R.A., 792.) It is founded on principles of public policy, on good taste. As has been said in another case, the question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorneys, like Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice. So without impugning respondent's good faith, we nevertheless can not sanction his taking up the cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not necessarily to prevent any injustice to the plaintiff but to keep above reproach the honor and integrity of the courts and of the bar. Without condemning the respondents conduct as dishonest, corrupt, or fraudulent, we do believe that upon the admitted facts it is highly in expedient. It had the tendency to bring the profession, of which he is a distinguished member, "into public disrepute and suspicion and undermine the integrity of justice." There is in legal practice what called "retaining fee," the purpose of which stems from the realization that the attorney is disabled from acting as counsel for the other side after he has given professional advice to the opposite party, even if he should decline to perform the contemplated services on behalf of the latter. It is to prevent undue hardship on the attorney resulting from the rigid observance of the rule that a separate and independent fee for consultation and advice was conceived and authorized. "A retaining fee is a preliminary fee given to an attorney or counsel to insure and secure his future services, and induce him to act for the client. It is intended to remunerate counsel for being deprived, by being retained by one party, of the opportunity of rendering services to the other and of receiving pay from him, and the payment of such fee, in the absence of an express understanding to the contrary, is neither made nor received in payment of the services contemplated; its payment has no relation to the obligation of the client to pay his attorney for the services which he has retained him to perform." (7 C.J.S., 1019.) The defense that Attorney Agrava wrote the letter Exhibit A and that Attorney Francisco did not take the trouble of reading it, would not take the case out of the interdiction. If this letter was written under the circumstances explained by Attorney Francisco and he was unaware of its contents, the fact remains that his firm did give Mrs. Hilado a formal professional advice from which, as heretofore demonstrated, emerged the relation of attorney and client. This letter binds and estop him in the same manner and to the same degree as if he personally had written it. An information obtained from a client by a member or assistant of a law firm is information imparted to the firm. (6 C. J., 628; 7 C. J. S., 986.) This is not a mere fiction or an arbitrary rule; for such member or assistant, as in our case, not only acts in the name and interest of the firm, but his information, by the nature of his connection with the firm is available to his associates or employers. The rule is all the more to be adhered to where, as in the present instance, the opinion was actually signed by the head of the firm and carries his initials intended to convey the impression that it was dictated by him personally. No progress could be hoped for in "the public policy that the client in consulting his legal adviser ought to be free from apprehension of disclosure of his confidence," if the prohibition were not extended to the attorney's partners, employers or assistants. The fact that petitioner did not object until after four months had passed from the date Attorney Francisco first appeared for the defendants does not operate as a waiver of her right to ask for his disqualification. In one case, objection to the appearance of an attorney was allowed even on appeal as a ground for reversal of the judgment. In that case, in which throughout the conduct of the cause in the court below the attorney had been suffered so to act without objection, the court said: "We are all of the one mind, that the right of

the appellee to make his objection has not lapsed by reason of failure to make it sooner; that professional confidence once reposed can never be divested by expiration of professional employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A. L. R. 1316.) The complaint that petitioner's remedy is by appeal and not by certiorari deserves scant attention. The courts have summary jurisdiction to protect the rights of the parties and the public from any conduct of attorneys prejudicial to the administration of the justice. The summary jurisdiction of the courts over attorneys is not confined to requiring them to pay over money collected by them but embraces authority to compel them to do whatever specific acts may be incumbent upon them in their capacity of attorneys to perform. The courts from the general principles of equity and policy, will always look into the dealings between attorneys and clients and guard the latter from any undue consequences resulting from a situation in which they may stand unequal. The courts acts on the same principles whether the undertaking is to appear, or, for that matter, not to appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This summary remedy against attorneys flows from the facts that they are officers of the court where they practice, forming a part of the machinery of the law for the administration of justice and as such subject to the disciplinary authority of the courts and to its orders and directions with respect to their relations to the court as well as to their clients. (Charest vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.) Attorney stand on the same footing as sheriffs and other court officers in respect of matters just mentioned. We conclude therefore that the motion for disqualification should be allowed. It is so ordered, without costs. Moran, C.J., Ozaeta, Paras, Feria, Bengzon, Padilla, Montemayor, Reyes and Torres, JJ., concur.

SECOND DIVISION

III.

Prepared and defended monetary claims against the estate that retained him as its counsel and auditor.[2]

[A.C. No. 2040. March 4, 1998]

On the first charge, complainant alleged that she accepted respondents offer to serve as lawyer and auditor to settle her husbands estate. Respondents law firm then filed a petition for settlement of the estate of the deceased Nakpil but did not include the Moran property in the estates inventory. Instead, respondent transferred the property to his corporation, Caval Realty Corporation, and title was issued in its name. Complainant accused respondent of maliciously appropriating the property in trust knowing that it did not belong to him. She claimed that respondent has expressly acknowledged that the said property belonged to the late Nakpil in his correspondences[3] with the Baguio City Treasurer and the complainant. On the second charge, complainant alleged that respondents auditing firm (C. J. Valdes and Co., CPAs) excluded the Moran property from the inventory of her husbands estate, yet included in the claims against the estate the amounts of P65,000.00 and P75,000.00, which respondent represented as her husbands loans applied probably for the purchase of a house and lot in Moran Street, Baguio City. As to the third charge, complainant alleged that respondents law firm (Carlos J. Valdes and Associates) filed the petition for the settlement of her husbands estate in court, while respondents auditing firm (C. J. Valdes & Co., CPAs) acted as accountant of both the estate and two of its creditors. She claimed that respondent represented conflicting interests when his accounting firm prepared the list of claims of creditors Angel Nakpil and ENORN, Inc. against her husbands estate whic h was represented by respondents law firm. Complainant averred that there is no distinction between respondents law and auditing firms as respondent is the senior and controlling partner of both firms which are housed in the same building. We required respondent to answer the charges against him. In hisANSWER, [4] respondent initially asserted that the resolution of the first and second charges against him depended on the result of the pending action in the CFI for reconveyance which involved the issue of ownership of the Moran property. On the merit of the first charge, respondent reiterated his defense in the reconveyance case that he did not hold the Moran property in trust for the Nakpils as he is its absolute owner. Respondent explained that the Nakpils never bought back the Moran property from him, hence, the property remained to be his and was rightly excluded from the inventory of Nakpils estate. As to the second charge, respondent denied preparing the list of claims against the estate which included his loans of P65,000.00 and P75,000.00 for the purchase and renovation of the Moran property. In charging his loans against the estate, he stressed that the list drawn up by his accounting firm merely stated that the loans in respondents name were applied probably for the purchase of the house and lot in Moran Street, Baguio City. Respondent insisted that this was not an admission that the Nakpils owned t he property as the phrase probably for the purchase did not imply a consummated transaction but a projected acquisition. Respondent also disclaimed knowledge or privity in the preparation of a letter (Exhibit H) of his accounting firm to the Baguio City treasurer remitting the real estate taxes for the Moran property on behalf of the Nakpils. He contended that the letter could be a mere error or oversight. Respondent averred that it was complainant who acknowledged that they did not own the Moran property for: (1) complainants February 1979 Statement of Assets and Liabilities did not include the said property, and; (2) complainant, as administratrix, signed the Balance Sheet of the Estate where the Moran property was not mentioned.

IMELDA A. NAKPIL, complainant, vs. ATTY. CARLOS J. VALDES,respondent. DECISION PUNO, J.: The friendship of JOSE NAKPIL and respondent CARLOS J. VALDES dates back to the 50s during their schooldays in De La Salle and the Philippine Law School. Their closeness extended to their families and respondent became the business consultant, lawyer and accountant of the Nakpils. In 1965, Jose Nakpil became interested in purchasing a summer residence in Moran Street, Baguio City.[1] For lack of funds, he requested respondent to purchase the Moran property for him. They agreed that respondent would keep the property in thrust for the Nakpils until the latter could buy it back. Pursuant to their agreement, respondent obtained two (2) loans from a bank (in the amounts of P65,000.00 and P75,000.00) which he used to purchase and renovate the property. Title was then issued in respondents name. It was the Nakpils who occupied the Moran summer house. When Jose Nakpil died on July 8, 1973, respondent acted as the legal counsel and accountant of his widow, complainant IMELDA NAKPIL. On March 9, 1976, respondents law firm, Carlos J. Valdes & Associates, handled the proceeding for the settlement of Joses estate. Complainant was appointed as administratix of the estate. The ownership of the Moran property became an issue in the intestate proceedings. It appears that respondent excluded the Moran property from the inventory of Joses estate. On February 13, 1978, respondent transferred his title to the Moran property to his company, the Caval Realty Corporation. On March 29, 1979, complainant sought to recover the Moran property by filing with the then Court of First Instance (CFI) of Baguio City an action for reconveyance with damages against respondent and his corporation. In defense, respondent claimed absolute ownership over the property and denied that a trust was created over it. During the pendency of the action for reconveyance, complainant filed this administrative case to disbar the respondent. She charged that respondent violated professional ethics when he: I. II. Assigned to his family corporation the Moran property (Pulong Maulap) which belonged to the estate he was settling as its lawyer and auditor. Excluded the Moran property from the inventory of real estate properties he prepared for a client-estate and, at the same time, charged the loan secured to purchase the said excluded property as a liability of the estate, all for the purpose of transferring the title to the said property to his family corporation.

Respondent admitted that complainant retained the services of his law and accounting firms in the settlement of her husbands estate.[5] However, he pointed out that he has resigned from his law and accounting firms as early as 1974. He alleged that it was Atty. Percival Cendaa (from the law firm Carlos Valdes & Associates) who filed the inestate proceedings in court in 1976. As to the third charge, respondent denied there was a conflict of interest when his law firm represented the estate in the inestate proceedings while his accounting firm (C. J. Valdes & Co., CPAs) served as accountant of the estate and prepared the claims of creditors Angel Nakpil and ENORN, Inc. against the estate. He proffered the following reasons for his thesis: First, the two claimants were closely related to the late Nakpil. Claimant ENORN, Inc. is a family corporation of the Nakpils of which the late Nakpil was the President. Claimant Angel Nakpil is a brother of the late Nakpil who, upon the latters death, became the President of ENORN, Inc. These two claimants had been clients of his law and accounting firms even during the lifetime of Jose Nakpil. Second, his alleged representation of conflicting interests was with the knowledge and consent of complainant as administratrix. Third, there was no conflict of interests between the estate and the claimants for they had forged a modus vivendi, i.e., that the subject claims would be satisfied only after full payment of the principal bank creditors. Complainant, as administratrix, did not controvert the claims of Angel Nakpil and ENORN, Inc. Complainant has started paying off the claims of Angel Nakpil and ENORN, Inc. after satisfying the banks claims. Complainant did not assert that their claims caused prejudice to the estate. Fourth, the work of Carlos J. Valdes and Co. as common auditor redounded to the benefit of the estate for the firm prepared a true and accurate amount of the claim. Fifth, respondent resigned from his law and accounting firms as early as August 15, 1974. [6] He rejoined his accounting firm several years later. He submitted as proof the SECs certification of the filing of his accounting firm of an Amended Articles of Partnership. Thus, it was not he but Atty. Percival Cendaa, from the firm Carlos J. Valdes and Associates, who filed the intestate proceedings in court. On the other hand, the claimants were represented by their own counsel Atty. Enrique O. Chan. Sixth, respondent alleged that in the remote possibility that he committed a breach of professional ethics, he committed such misconduct not as a lawyer but as an accountant who acted as common auditor of the estate and its creditors. Hence, he should be held accountable in another forum. On November 12, 1979, complainant submitted her REPLY.[7] She maintained that the pendency of the reconveyance case is not prejudicial to the investigation of her disbarment complaint against respondent for the issue in the latter is not the ownership of the Moran property but the ethics and morality of respondents conduct as a CPA-lawyer. Complainant alleged that respondents Annexes to his Reply (such as the Statement of Assets & Liability of the Nakpils and the Balance Sheet of the Estate) which showed that complainant did not claim ownership of the Moran property were all prepared by C. J. Valdes and Co. as accountant of the estate of Jose Nakpil and filed with the intestate court by C. J. Valdes and Associates as counsel for the estate. She averred that these Annexes were not proofs that respondent owned the Moran property but were part of respondents scheme to remove the property from the estate and transfer it to his family corporation. Complainant alleged that she signed the documents because of the professional counsel of respondent and his firm that her signature thereon was required. Complainant charged respondent with greed for coveting the Moran property on the basis of defects in the documents he himself prepared. Complainant urged that respondent cannot disown unfavorable documents (the list of claims against the estate and the letter regarding Nakpils payments of realty tax on the Moran property) which were prepared by his law and accounting firms and invoke other documents prepared by the same firms which are favorable to him. She averred that respondent must accept responsibility not just for some, but for all the representations and communications of his firms.

Complainant refuted respondents claim that he resigned from his firms from March 9, 1976 to several years later. She alleged that none of the documents submitted as evidence referred to his resignation from his law firm. The documents merely substantiated his resignation from his accounting firm. In his REJOINDER,[8] respondent insisted that complainant cannot hold him liable for representing the interests of both the estate and the claimants without showing that his action prejudiced the estate. He urged that it is not per se anomalous for respondents accounting firm to act as accountant for the estate and its creditors. He reiterated that he is not subject to the jurisdiction of this Court for he acted not as lawyer, but as accountant for both the estate and its claimants. He alleged that his accounting firm merely prepared the list of claims of the creditors Angel Nakpil and ENORN, Inc. Their claims were not defended by his accounting or law firm but by Atty. Enrique Chan. He averred that his law firm did not oppose these claims as they were legitimate and not because they were prepared by his accounting firm. He emphasized that there was no allegation that the claims were fraudulent or excessive and that the failure of respondents law firm to object to these claims damaged th e estate. In our January 21, 1980 Resolution,[9] we deferred further action on the disbarment case until after resolution of the action for reconveyance between the parties involving the issue of ownership by the then CFI of Baguio. Complainant moved for reconsideration on the ground that the issue of ownership pending with the CFI was not prejudicial to her complaint which involved an entirely different issue, i.e., the unethical acts of respondent as a CPA-lawyer. We granted her motion and referred the administrative case to the Office of the Solicitor General (OSG) for investigation, report and recommendation.[10] In 1983, the CFI of Baguio dismissed the action for reconveyance. The trial court ruled that respondent held the Moran property in trust for the Nakpils but found that complainant waived her right over it. On appeal, the Court of Appeals reversed the trial court. The appellate court held that respondent was the absolute owner of the Moran property. The Decision was elevated to this Court. On February 18, 1986, during the pendency of complainants appeal to this Court, the OSG submitted its Report[11] on the disbarment complaint. The OSG relied heavily on the decision of the Court of Appeals then pending review by this Court. The OSG found that respondent was not put on notice of complainants claim over the property. It opined that there was no trust agreement created over the property and that respondent was the absolute owner thereof. Thus, it uphel d respondents right to transfer title to his family corporation. It also found no conflict of interests as the claimants were related to the late Jose Nakpil. The OSG recommended the dismissal of the administrative case. Prefatorily, we note that the case at bar presents a novel situation as it involves the disbarment of a CPA-lawyer for his demeanor in his accounting profession and law practice in connection with the property of his client. As a rule, a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith.[12] The measure of good faith which an attorney is required to exercise in his dealings with his client is a much higher standard than is required in business dealings where the parties trade at arms length.[13] Business transactions between an attorney and his client are disfavored and discouraged by the policy of the law. Hence, courts carefully watch these transactions to assure that no advantage is taken by a lawyer over his client. This rule is founded on public policy for, by virtue of his office, an attorney is in an easy position to take advantage of the credulity and

ignorance of his client. Thus, no presumption of innocence or improbability of wrongdoing is considered in an attorneys favor. [14] In the case at bar, we cannot subscribe to the findings of the OSG in its Report. These findings were based mainly on the decision of the Court of Appeals in the action for reconveyance which was reversed by this Court in 1993.[15] As to the first two charges, we are bound by the factual findings of this Court in the aforementioned reconveyance case.[16] It is well-established that respondent offered to the complainant the services of his law and accounting firms by reason of their close relationship dating as far back as the 50s. She reposed her complete trust in respondent who was the lawyer, accountant and business consultant of her late husband. Respondent and the late Nakpil agreed that the former would purchase the Moran property and keep it in trust for the latter. In violation of the trust agreement, respondent claimed absolute ownership over the property and refused to sell the property to complainant after the death of Jose Nakpil. To place the property beyond the reach of complainant and the intestate court, respondent later transferred it to his corporation. Contrary to the findings of the OSG, respondent initially acknowledged and respected the trust nature of the Moran property. Respondents bad faith in transferring the property to his family corporation is well discussed in this Courts Decision,[17] thus: x x x Valdes (herein respondent) never repudiated the trust during the lifetime of the late Jose Nakpil. On the contrary, he expressly recognized it. x x x (H)e repudiated the trust when (he) excluded Pulong Maulap from the list of properties of the late Jose Nakpil submitted to the intestate court in 1973. x x x xxx The fact that there was no transfer of ownership intended by the parties x x x can be bolstered by Exh. I-2, an annex to the claim filed against the estate proceedings of the late Jose Nakpil by his brother, Angel Nakpil, which was prepared by Carlos J. Valdes & Co., the accounting firm of herein respondent. Exhibit I-2, which is a list of the application of the proceeds of various FUB loans contracted as of 31 December 1973 by the late Jose Nakpil, x x x contains the two (2) loans contracted in the name of respondent. If ownership of Pulong Maulap was already transferred or ceded to Valdes, these loans should not have been included in the list. Indeed, as we view it, what the parties merely agreed to under the arrangement outlined in Exh. J was that respondent Valdes would x x x take over the total loan ofP140,000.00 and pay all of the interests due on the notes while the heirs of the late Jose Nakpil would continue to live in the disputed property for five (5) years without remuneration save for regular maintenance expenses. This does not mean, however, that if at the end of the five-year period petitioner (Nakpil) failed to reimburse Valdes for his advances, x x x Valdes could already automatically assume ownership of Pulong Maulap. Instead, the remedy of respondents Carlos J. Valdes and Caval Realty Corporation was to proceed against the estate of the late Jose M. Nakpil and/or the property itself. (emphasis supplied) In the said reconveyance case, we further ruled that complainants documentary e vidence (Exhibits H, J and L), which she also adduced in this administrative case, should estop respondent from claiming that he bought the Moran property for himself, and not merely in trust for Jose Nakpil. [18]

It ought to follow that respondents act of excluding Moran property from the estate which his law firm was representing evinces a lack of fidelity to the cause of his client. If respondent truly believed that the said property belonged to him, he should have at least informed complainant of his adverse claim. If they could not agree on its ownership, respondent should have formally presented his claim in the intestate proceedings instead of transferring the property to his own corporation and concealing it from complainant and the judge in the estate proceedings. Respondents misuse of his legal expertise to deprive his client of the Moran property is clearly unethical. To make matters worse, respondent, through his accounting firm, charged the two loans ofP65,000.00 and P75,000.00 as liability of the estate, after said loans were obtained by respondent for the purchase and renovation of the property which he claimed for himself. Respondent seeks to exculpate himself from this charge by disclaiming knowledge or privity in the preparation of the list of the estates liabilities. He theorizes that the inclusion of the loans must have been a mere error or oversight of his accounting firm. It is clear that the information as to how these two loans should be treated could have only come from respondent himself as the said loans were in his name. Hence, the supposed error of the accounting firm in charging respondents loans against the estate could not have been committed without respondents participation. Respondent wanted to have his cake and eat it too and subordinated the interest of his client to his own pecuniary gain. Respondent violated Canon 17 of the Code of Professional Responsibility which provides that a lawyer owes fidelity to his clients cause and enjoins him to be mindful of the trust and confidence reposed on him. As regards the third charge, we hold that respondent is guilty of representing conflicting interests. It is generally the rule, based on sound public policy, that an attorney cannot represent adverse interests. It is highly improper to represent both sides of an issue. [19] The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter[20] and is applicable however slight such adverse interest may be. It applies although the attorneys intentions and motives were honest and he acted in good faith. [21] However, representation of conflicting interests may be allowed where the parties consent to the representation, after full disclosure of facts. Disclosure alone is not enough for the clients must give their informed consent to such representation. The lawyer must explain to his clients the nature and extent of conflict and the possible adverse effect must be thoroughly understood by his clients.[22] In the case at bar, there is no question that the interests of the estate and that of it creditors are adverse to each other. Respondents accounting firm prepared the list of assets and liabilities of the estate and, at the same time, computed the claims of two creditors of the estate. There is clearly a conflict between the interest of the estate which stands as the debtor, and that of the two claimants who are creditors of the estate. In fact, at one instance, respondents law firm questioned the claims of creditor Angel Nakpil against the estate. To exculpate himself, respondent denies that he represented complainant in the intestate proceedings. He points out that it was one Atty. Percival Cendaa, from his law firm Carlos J. Valdes & Associates, who filed the intestate case in court. However, the fact that he did not personally file the case and appear in court is beside the point. As established in the records of this case and in the reconveyance case, [23] respondent acted as counsel and accountant of complainant after the death of Jose Nakpil. Respondents defense that he resigned from his law and accounting firms as early as 1974 (or two years before the filing of the intestate case) is unworthy of merit. Respondents claim of resignation from his law firm is not supported by any documentary proof. The documents on record[24] only show respondents resignation from his accounting firm in 1972 and 1974. Even these documents reveal that respondent returned to his accounting firm on July 1, 1976 and as of 1978, the intestate proceedings for the settlement of Joses estate had not yet been terminated. It does not escape us that when respondent transferred the Moran property to his corporation on February 13, 1978, the intestate proceedings was still pending in

court. Thus, the succession of events shows that respondent could not have been totally ignorant of the proceedings in the intestate case. Respondent claims that complainant knew that his law firm Carlos J. Valdes & Associates was the legal counsel of the estate[25] and his accounting firm, C.J. Valdes & Co., CPAs, was the auditor of both the estate and the two claimants against it.[26] The fact, however, that complainant, as administratrix, did not object to the set-up cannot be taken against her as there is nothing in the records to show that respondent or his law firm explained the legal situation and its consequences to complainant. Thus, her silence regarding the arrangement does not amount to an acquiescence based on an informed consent. We also hold that the relationship of the claimants to the late Nakpil does not negate the conflict of interest. When a creditor files a claim against an estate, his interest is per se adverse to the estate. As correctly pointed out by complainant, if she had a claim against her husbands estate, her claim is still adverse and must be filed in the intestate proceedings. Prescinding from these premises, respondent undoubtedly placed his law firm in a position where his loyalty to his client could be doubted. In the estate proceedings, the duty of respondents law firm was to contest the claims of these two creditors but which claims were prepared by respondents accounting firm. Even if the claims were valid and did not prejudice the estate, the set-up is still undesirable. The test to determine whether there is a conflict of interest in the representation is probability, not certainty of conflict. It was respondents duty to inhibit either of his firms from said proceedings to avoid the probability of conflict of interest. Respondent advances the defense that assuming there was conflict of interest, he could not be charged before this Court as his alleged misconduct pertains to his accounting practice. We do not agree. Respondent is a CPA-lawyer who is actively practicing both professions. He is the senior partner of his law and accounting firms which carry his name. In the case at bar, complainant is not charging respondent with breach of ethics for being the common accountant of the estate and the two creditors. He is charged for allowing his accounting firm to represent two creditors of the estate and, at the same time, allowing his law firm to represent the estate in the proceedings where these claims were presented. The act is a breach of professional ethics and undesirable as it placed respondents and his law firms loyalty under a cloud of doubt. Even granting that respondents misconduct refers to his accountancy practice, it would not prevent this Court from disciplining him as a member of the Bar. The rule is settled that a lawyer may be suspended or disbarred for ANY misconduct, even if it pertains to his private activities, as long as it shows him to be wanting in moral character, honesty, probity or good demeanor. [27] Possession of good moral character is not only a prerequisite to admission to the bar but also a continuing requirement to the practice of law. Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct of a member of the bar. Thus, a lawyer should determine his conduct by acting in a manner that would promote public confidence in the integrity of the legal profession. Members of the bar are expected to always live up to the standards embodied in the Code of Professional Responsibility as the relationship between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good faith. [28] In the case at bar, respondent exhibited less than full fidelity to his duty to observe candor, fairness and loyalty in his dealings and transactions with his clients. [29] IN VIEW WHEREOF, the Court finds respondent ATTY. CARLOS J. VALDES guilty of misconduct. He is suspended from the practice of law for a period of one (1) year effective from receipt of this Decision, with a warning that a similar infraction shall be dealt with more severely in the future.

Let copies of this Decision be furnished all courts, as well as the Integrated Bar of the Philippines and the Office of the Bar Confidant. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

xxxx 2. In Civil Case No. SM-951, ordering defendants-appellees to pay jointly and severally, plaintiff-appellant, with legal interest from the date when this decision shall have become final and executory, the following: A. Actual damages of Five Hundred Twenty Thousand Pesos (P520,000.00);

G.R. No. 169079

February 12, 2007 B. Moral Damages of Five Hundred Thousand Pesos (P500,000.00); and

FRANCISCO RAYOS, Petitioner, vs. ATTY. PONCIANO G. HERNANDEZ, Respondent. DECISION CHICO-NAZARIO, J.: This is a Petition for Review 1 of the Resolution dated 12 March 2005 of the Integrated Bar of the Philippines (IBP), dismissing petitioner Francisco Rayoss complaint for disbarment against respondent Atty. Ponciano Hernandez. Respondent was the counsel of petitioner in Civil Case No. SM-951 entitled, "Francisco Rayos v. NAPOCOR," filed before the Regional Trial Court (RTC), Malolos, Bulacan. The complaint alleged, among other things, that the National Power Corporation (NAPOCOR) recklessly, imprudently and negligently opened the three floodgates of the spillway of Angat Dam at midnight of 26 October 1978 until the early morning hours of 27 October 1978, during the occurrence of typhoon "Kading" causing the release of a great volume of stored water, the resultant swelling and flooding of Angat River, and the consequent loss of lives of some of petitioners relatives and destruction of his familys properties, for which he sought damages. Of the 10 members of petitioners family who perished, only four bodies were recovered and only petitioner and one of his sons, German Rayos, survived. On 21 December 1979, the complaint was dismissed 2 on the ground that the State cannot be sued without its consent as the operation and management of Angat Dam, Norzagaray, were governmental functions. Said dismissal was questioned directly to this Court which set aside the RTC decision and ordered the reinstatement of the complaint. 3 On 30 April 1990, however, the complaint was dismissed again by the RTC for lack of sufficient and credible evidence. 4 The case was subsequently appealed to the Court of Appeals, which reversed the RTC decision and awarded damages in favor of petitioner, the dispositive portion of which reads: CONFORMABLY TO THE FOREGOING, the joint decision appealed from is hereby REVERSED and SET ASIDE, and a new one is hereby rendered:

C. Litigation Expenses of Ten Thousand Pesos (P10,000.00). xxxx In addition, in all the four (4) instant cases, ordering defendants-appellees to pay, jointly and severally, plaintiffs-appellants, attorneys fees in an amount equivalent to 15% of the total amount awarded. 5 The case was appealed to this Court, which affirmed the Court of Appeals Decision. 6 The Decision of the Supreme Court became final and executory on 4 August 1993. Thus, a Writ of Execution 7 was issued by the RTC on 10 December 1993, upon motion filed by respondent. As a consequence, NAPOCOR issued Check No. 014710 dated 5 January 1994, in the amount of P1,060,800.00 payable to petitioner. Thereafter, the check was turned over to respondent as counsel of petitioner. Petitioner demanded the turn over of the check from respondent, but the latter refused. On 24 January 1994 , petitioner filed with the RTC a motion 8 to direct respondent to deliver to him the check issued by NAPOCOR, corresponding to the damages awarded by the Court of Appeals. Petitioner sought to recover the check in the amount of P1,060,800.00 from respondent, claiming that respondent had no authority to receive the same as he was already dismissed by petitioner as his counsel on 21 November 1993. 9 Respondent, on the other hand, justifies his retention as a means to ensure payment of his attorneys fees. On 7 April 1994, the RTC issued an Order directing respondent to deliver the check to the Sheriff of the court who will subsequently deliver it to petitioner. A Writ of Execution was subsequently issued. Despite the Court Order, respondent refused to surrender the check. However, on 4 July 1994, respondent deposited the amount of P502,838.79 with Farmers Savings and Loan Bank, Inc., Norzagaray, Bulacan, in the name of petitioner which was eventually received by the latter. Thus, petitioner initiated this complaint for disbarment for the failure of respondent to return the rest of the award in the amount of P557,961.21.

In his comment, 10 respondent alleged that he handled petitioners case, in Civil Case No. SM-951, for 15 years, from the trial court up to the Supreme Court. On 21 November 1993, he received a letter from petitioner dismissing him as counsel. Simultaneous thereto, respondent received a letter dated 15 November 1993 from Atty. Jose G. Bruno asking him to comment on the therein attached letter dated 19 November 1993 of petitioner addressed to NAPOCOR, requesting that the award of damages granted by the Court of Appeals and affirmed by the Supreme Court be paid to him. Respondent also averred that petitioner had a verbal contract for attorneys fees on a contingent basis and that the said contract was only reduced in writing on 6 October 1991, duly signed by both of them. By virtue of the contract, petitioner and respondent supposedly agreed on a 40%-60% sharing, respectively, of the court award. Respondent was entitled to receive 60% of the award because petitioner agreed to pay him 40% of the award as attorneys fees and 20% of the award as litigation expenses. Respondent further asseverated that because petitioner dismissed the respondent and refused to settle his obligation, he deposited the amount of P424,320.00 in a bank in petitioners name under Account No. 381 (representing petitioners share of 40% of the total award ) on 10 May 1994 11 ; and the amount of P63,648.00 in petitioners name under Account No. 389 (representing petitioners share of 40% of the P159,120.00 awarded as attorneys fees by the Court of Appeals) on 19 May 1994. 12 Petitioner already received the amount ofP502,838.79 in accordance with the RTC Order dated 7 April 1994. Respondent contended that the petitioners complaint was without basis and was meant only to harass and put him to shame before the residents of Norzagaray, Bulacan. In a Resolution dated 9 August 1995, 13 the Court referred the case to the Commission on Bar Discipline of the IBP for investigation, report and recommendation. A series of hearings were conducted by the Commission on Bar Discipline of the IBP at the IBP Building, Ortigas Center, Pasig City, from March to September 2001. On 1 February 2005, Investigating Commissioner Lydia A. Navarro B. Funa submitted her Report and Recommendation, 14 recommending the dismissal of the case. Thereafter, the IBP issued its Resolution dated 12 March 2005, approving and adopting the recommendation of the Investigating Commissioner, thus: RESOLVED to ADOPT and APPROVE, as it 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 that the case lacks merit, the same is hereby DISMISSED. 15 We do not agree in the recommendation of the IBP. The threshold issue in this petition is: whether respondent is justified in retaining the amount awarded to petitioner in Civil Case No. SM-951 to assure payment of his attorneys fees.

Moneys collected by an attorney on a judgment rendered in favor of his client constitute trust funds and must be immediately paid over to the client. 16 Canon 16 of the Code of Professional Responsibility provides as follows: CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. In the case at bar, when respondent withheld and refused to deliver the NAPOCOR check representing the amount awarded by the court in Civil Case No. SM-951, which he received on behalf of his client (petitioner herein), he breached the trust reposed on him. It is only after an Order was issued by the RTC ordering the delivery of the check to petitioner that the respondent partially delivered the amount of P502,838.79 to the former, but still retaining for himself the amount of P557,961.21 as payment for his attorneys fees. The claim of the respondent that petitioner failed to pay his attorneys fees is not an excuse for respondents failure to deliver the amount to the petitioner. A lawyer is not entitled to unilaterally appropriate his clients money for himself by the mere fact alone that the client owes him attorneys fees. 17 The failure of an attorney to return the clients money upon demand gives rise to the presumption that he has misappropriated it for his own use to the prejudice and violation of the general morality, as well as of professional ethics; it also impairs public confidence in the legal profession and deserves punishment. In short, a lawyers unjustified withholding of money belonging to his client, as in this case, warrants the imposition of disciplinary action. 18 It is true that under Canon 16.03 of the Code of Professional Responsibility, an attorney has the following rights; Rule 16.03- A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. (Emphases supplied.) But the fact alone that a lawyer has a lien for fees on moneys in his hands collected for his client, as above-stated, does not relieve him of his duty to promptly account for the moneys received; his failure to do so constitutes professional misconduct. 19 Thus, what respondent should have properly done in the case at bar was to provide the petitioner with an accounting before deducting his attorneys fees and then to turn over the remaining balance of the award collected to petitioner. The Court notes that respondent represented petitioner from the time of filing of the complaint in Civil Case No. SM-951 before what is now the RTC and of the appeal of the same case to the Court of Appeals and Supreme Court. But respondent was not justified to hold on the entire amount of award collected by him until his fees had been paid and received by him. The relationship of attorney and client has always been rightly regarded as one of special trust and confidence. An attorney must exercise the utmost good faith and fairness in all his relationship vis--vis his client. Respondent fell far short of this standard when he failed to render an accounting for the amount actually received by him on behalf of his client and when he refused to turn over any portion of said

amount to his client upon the pretext that his attorneys fees had not at all been paid. Resp ondent had, in fact, placed his private and personal interest above that of his client. We have held that lawyering is not a moneymaking venture and lawyers are not merchants. 20 Law advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from governmental interference, is impressed with a public interest, for which it is subject to State regulation. 21 A lawyer is not merely the defender of his clients cause and a trustee of his clients cause of action and assets; he is also, and first and foremost, an officer of the court and participates in the fundamental function of administering justice in society. 22 It follows that a lawyers compensation for professional services rendered is subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal profession to which he belongs. Upon taking his attorneys oath as an officer of the court, a lawyer submits himself to the authority of the courts to regulate his right to charge professional fees. 23 There is another aspect to this case which the Court cannot just gloss over. Respondent claimed that he charged petitioner, his client, a contingent fee comprising of forty percent (40%) as attorneys fees and twenty percent (20%) as litigation expenses. The agreement provides: UNAWAIN NG LAHAT SA PAMAMAGITAN NITO: Ako, si Francisco Rayos, Sr., Pilipino, may sapat na gulang at ngayon ay naninirahan sa Pinagbarilan, Baliwag, Bulacan, sa pamamagitan ng kasulatang ito, ay nagpapatunay sa mga sumusunod: Na, kaugnay sa aking usapin laban sa NPC at Benjamin Chavez (Rayos vs. NPC, et al.) na ngayon ay nakabinbin sa Court of Appeals, ako ay nakipagkasundo sa aking abogado, Atty. Ponciano G. Hernandez, gaya ng sumusunod: 1 Sakaling ipanalo ang aking usapin, ang ano mang aking makukuha ay hahatiin gaya ng sumusunod: 40% ang para sa akin; 40% ang para kay Atty. Ponciano G. Hernandez; 20% ay ilalabas bilang gastos sa kaso. 2. Kung matalo ako sa kaso ay wala akong sagutin sa aking abogado. Sa katunayan ng lahat, ako ay lumagda sa kasunduang ito dito sa Norzagaray, Bulacan ngayong ika-6 ng Oktubre 1991. (SGD)PONCIANO G. HERNANDEZ (SGD)FRANCISCO RAYOS Abogado May Usapin 24

A contingent fee arrangement is valid in this jurisdiction 25 and is generally recognized as valid and binding but must be laid down in an express contract. 26 The amount of contingent fee agreed upon by the parties is subject to the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much higher compensation is allowed as contingent fee in consideration of the risk that the lawyer may get nothing if the suit fails. 27 Contracts of this nature are permitted because they redound to the benefit of the poor client and the lawyer "especially in cases where the client has meritorious cause of action, but no means with which to pay for legal services unless he can, with the sanction of law, make a contract for a contingent fee to be paid out of the proceeds of the litigation. Oftentimes, the contingent fee arrangement is the only means by which the poor and helpless can seek redress for injuries sustained and have their rights vindicated." 28 Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients may be protected from unjust charges. 29 Section 13 of the Canons of Professional Ethics states that "a contract for a contingent fee, where sanctioned by law, should be reasonable under all the circumstances of the case including the risk and uncertainty of the compensation, but should always be subject to the supervision of a court, as to its reasonableness." Likewise, Rule 138, Section 24, of the Rules of Court provides: SEC. 24. Compensation of attorneys; agreement as to fees. - An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. (Underscoring supplied.) The reduction of unreasonable attorneys fees is within the regulatory powers of the courts. 30 When the courts find that the stipulated amount is excessive or the contract is unreasonable, or found to have been marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney, public policy demands that said contract be disregarded to protect the client from unreasonable exaction. 31 There is, therefore, now a corollary issue of whether the stipulated attorneys fees are unreasonable and unconscionable under the circumstances of the case as to warrant a reduction thereof. Stipulated attorneys fees are unconscionable whenever the amount is by far so disproportionate compared to the value of the services rendered as to amount to fraud perpetrated upon the client. This means to say that the amount of the fee contracted for, standing alone and unexplained would be sufficient to show that an unfair advantage had been taken of the client, or that a legal fraud had been perpetrated on him. 32 The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will not, however, preclude recovery. It merely justifies the fixing by the court of a reasonable compensation for the lawyers services. Generally, the amount of attorneys fees due is that stipulated in the retainer agreement which is conclusive as to the amount of the lawyers compensation. A stipulation on a lawyers compensation in a written contract for professional services ordinarily controls the amount of fees that the contracting lawyer

may be allowed, unless the court finds such stipulated amount unreasonable or unconscionable. 33 In the absence thereof, the amount of attorneys fees is fixed on the basis of quantum meruit, i.e., the reasonable worth of the attorneys services. Courts may ascertain also if the attorneys fees are found to be excessive, what is reasonable under the circumstances.34 In no case, however, must a lawyer be allowed to recover more than what is reasonable, pursuant to Section 24, Rule 138 of the Rules of Court. We have identified the circumstances to be considered in determining the reasonableness of a claim for attorneys fees as follows: (1) the amount and character of the service rendered; (2) la bor, time, and trouble involved; (3) the nature and importance of the litigation or business in which the services were rendered; (4) the responsibility imposed; (5) the amount of money or the value of the property affected by the controversy or involved in the employment; (6) the skill and experience called for in the performance of the services; (7) the professional character and social standing of the attorney; (8) the results secured; (9) whether the fee is absolute or contingent, it being recognized that an attorney may properly charge a much larger fee when it is contingent than when it is not; 35 and (10) the financial capacity and economic status of the client have to be taken into account in fixing the reasonableness of the fee. 36 Rule 20.1, Canon 20 of the Code of Professional Responsibility enumerates the following factors which should guide a lawyer in determining his fees: (a) The time spent and the extent of the services rendered or required; (b) The novelty and difficulty of the questions involved; (c) The importance of the subject matter; (d) The skill demanded; (e) The probability of losing other employment as a result of acceptance of the proffered case; (f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) The contingency or certainty of compensation; (i) The character of the employment, whether occasional or established; and (j) The professional standing of the lawyer. In the case at bar, respondent retained the amount of P557,961.21 out of the P1,060,800.00 award for damages paid by NAPOCOR to petitioner. Under the said scheme, respondent actually collected fifty-three percent (53%) or more than half of the total amount due the petitioner; indeed, he appropriated for himself more than the amount which he had already turned over to and actually received by his client.

As adverted to above, we note that petitioner was unschooled and frustrated and hopeless with the tragic loss of his loved ones caused by the inundation of the town of Norzagaray, Bulacan, on 26-27 October 1978 because of the negligent release by NAPOCOR of the water through the spillways of the Angat Dam. Petitioner also had to face the loss and destruction of his familys properties. Under such circumstances and given his understandable desire to recover the damages for the loss of his loved ones and properties, petitioner would easily succumb and readily agree to the demands of respondent lawyer regarding his attorneys fees. We believe and so hold that the contingent fee here claimed was, under the facts obtaining in this case, grossly excessive and unconscionable. Such a fee structure, when considered in conjunction with the circumstances of this case, also shows that an unfair advantage was taken of the client and legal fraud and imposition perpetrated upon him. Lawyers should not be permitted to get a lions share of the benefits due the poor and the helpless. Contracts for legal services between the helpless and attorney should be zealously scrutinized to the end that a fair share of the benefits be not denied to the former. This Court has the power to guard a client, 37 especially an aged and necessitous client, 38 against such a contract. A survey of existing jurisprudence regarding attorneys fees would reveal the following: in the case of Amalgamated Laborers Association v. Court of Industrial Relations, 39 the rate of attorneys fees allowed was 25%; in Law Firm of Raymundo A. Armovit v. Court of Appeals, 40 the rate allowed was 20%; in Polytrade Corporation v. Blanco, 41 25%; in Santiago v. Dimayuga, 42 20%; in Cosmopolitan Insurance Co., Inc. v. Reyes, 4315%; in Reyes v. Court of Appeals, 44 15%; and in Social Security Commission v. Almeda, 45 15%. In the present case, respondent Atty. Hernandez, after all, succeeded in obtaining a favorable decision for his client, the petitioner. At first, respondent failed to obtain a favorable judgment in the RTC as the case was dismissed. But on appeal to the Court of Appeals, the RTC Decision was reversed and petitioner was awarded the amount of P1,060,800.00 as damages and P159,120.00 as attorneys fees. Said award was sustained by the Supreme Court. We also take note respondents efforts in litigating petitioners case for a long period of 15 years. Lastly, the respondent took risk in representing petitioner on a contingent fee basis. In consideration of the foregoing, a fee of 35% of the amount awarded to petitioner would be a fair compensation for respondents legal services. The misconduct of a lawyer, whether in his professional or private capacity, which shows him to be wanting in moral character, honesty, probity and good demeanor, renders him unworthy to the privileges which his license and the law confer upon him, may be sanctioned with disbarment or suspension. 46 The court should also exercise a sound discretion in determining whether a lawyer should be disbarred or merely suspended. It should bear in mind that admission to the Bar is obtained only after years of labor and study and the office acquired often becomes the source of great honor and emolument to its possessor. To most members of the legal profession, it is a means of support for themselves and their families. To deprive one of such an office is often to decree poverty to the lawyer and destitution to his family. 47 Disbarment, therefore, should never be decreed where any lesser penalty, such as temporary suspension, would accomplish the end desired. 48

In the case of Schulz v. Atty. Flores, 49 a lawyer was suspended for six months for not returning his clients money despite demands, for unjustifiably refusing to return his clients papers, and for collecting excessive and unreasonable fees. Also in the case of Tanhueco v. Atty. De Dumo, 50 a lawyer was suspended for a period of six months for failure to return the money received by him on behalf of his client and for collecting excessive and unconscionable fees. Guided by our rulings in the abovestated cases, suspension of respondent for six months is justified in the case at bar.1awphi1.net WHEREFORE the Court Resolves that: 1. Respondent is guilty of violation of the attorneys oath and of serious professional misconduct and shall be SUSPENDED from the practice of law for six (6) months and WARNED that repetition of the same or similar offense will be dealt with more severely; 2. Respondent is entitled to attorneys fees in the amount equivalent to thirty-five percent (35%) of the total amount awarded 51 to petitioner in Civil Case No. SM-951; and 3. Respondent is to return the amount of Two Hundred Ninety Thousand One Hundred Nine Pesos and Twenty-One Centavos (P290,109.21), 52 which he retained in excess of what we herein declared as fair and reasonable attorneys fees, plus legal interest from date of finality of this judgment until full payment thereof. Let copies of this Decision be entered in the personal record of respondent as member of the Bar and furnished the Office of the Bar Confidant, the IBP, and the Court Administrator for circulation to all courts of the country. SO ORDERED.

Republic of the Philippines Supreme Court Manila SECOND DIVISION HECTOR TREAS, Petitioner, G. R. No. 195002 Present: CARPIO, J., Chairperson, PEREZ, SERENO, REYES, and PERLAS-BERNABE,* JJ. Promulgated: PEOPLE OF THE PHILIPPINES, Respondent. January 25, 2012

The pertinent facts, as found by the CA, are as follows: Sometime in December 1999, Margarita Alocilja (Margarita) wanted to buy a house-and-lot in Iloilo City covered by TCT No. 109266. It was then mortgaged with Maybank. The bank manager Joselito Palma recommended the appellant Hector Treas (Hector) to private complainant Elizabeth, who was an employee and niece of Margarita, for advice regarding the transfer of the title in the latters name. Hector informed Elizabeth that for the titling of the property in the name of her aunt Margarita, the following expenses would be incurred: P20,000.00P90,000.00P24,000.00P10,000.00Attorneys fees, Capital Gains Tax, Documentary Stamp, Miscellaneous Expenses.

- versus -

Thereafter, Elizabeth gave P150,000.00 to Hector who issued a corresponding receipt dated December 22, 1999 and prepared [a] Deed of Sale with Assumption of Mortgage. Subsequently, Hector gave Elizabeth Revenue Official Receipt Nos. 00084370 for P96,000.00 and 00084369 for P24,000.00. However, when she consulted with the BIR, she was informed that the receipts were fake. When confronted, Hector admitted to her that the receipts were fake and that he used the P120,000.00 for his other transactions. Elizabeth demanded the return of the money. To settle his accounts, appellant Hector issued in favor of Elizabeth a Bank of Commerce check No. 0042856 dated November 10, 2000 in the amount of P120,000.00, deducting from P150,000.00 the P30,000.00 as attorneys fees. When the check was deposited with the PCIBank, Makati Branch, the same was dishonored for the reason that the account was closed. Notwithstanding repeated formal and verbal demands, appellant failed to pay. Thus, the instant case of Estafa was filed against him.[3] On 29 October 2001, an Information was filed by the Office of the City Prosecutor before the Regional Trial Court (RTC), both of Makati City. The Information reads as follows: That on or about the 23rd day of December, 1999, in the City of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the abovenamed accused, received in trust from ELIZABETH LUCIAJA the amount of P150,000.00 which money was given to her by her aunt Margarita Alocilja, with the express obligation on the part of the accused to use the said amount for expenses and fees in connection with the purchase of a parcel of land covered by TCT No. T109266, but the said accused, once in possession of the said amount, with the intent to gain and abuse of confidence, did then and there willfully, unlawfully and feloniously misappropriate, misapply and convert to his own personal use and benefit the amount of P130,000.00 less attorneys fees and the said accused failed and refused and still fails and refuses to do so, to the damage and prejudice of complainant Elizabeth Luciaja and Margarita Alocilja in the aforementioned amount of P130,000.00. CONTRARY TO LAW.[4]

x--------------------------------------------------x DECISION SERENO, J.: Where life or liberty is affected by its proceedings, courts must keep strictly within the limits of the law authorizing them to take jurisdiction and to try the case and render judgment thereon. [1] This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of Civil Procedure, seeking to annul and set aside the Court of Appeals (CA) Decision dated 9 July 2010[2] and Resolution dated 4 January 2011.

Statement of the Facts and of the Case

During arraignment on 26 April 2002, petitioner, acting as his own counsel, entered a plea of Not Guilty. Allegedly due to old age and poor health, and the fact that he lives in Iloilo City, petitioner was unable to attend the pre-trial and trial of the case. On 8 January 2007, the RTC rendered a Decision[5] finding petitioner guilty of the crime of Estafa under section 1, paragraph (b), of Article 315 of the Revised Penal Code (RPC), with the dispositive portion as follows: WHEREFORE, in view of the foregoing, judgment is rendered finding accused Hector Trenas guilty of the crime of Estafa with abuse of confidence as penalized under Article 315 of the Revised Penal Code, and which offense was committed in the manner described in the aforementioned information. As a consequence of this judgment, accused Hector Trenas is sentenced to suffer a penalty of Ten (10) Years and One (1) Day of Prision Mayor to Seventeen (17) Years and Four (4) Months of Reclusion Temporal. Moreover, he is ordered to indemnify private complainant Elizabeth Luciaja the amount of P130,000.00 with interest at the legal rate of 12% per annum, reckoned from the date this case was filed until the amount is fully paid. SO ORDERED.[6] We note at this point that petitioner has been variably called Treas and Trenas in the pleadings and court issuances, but for consistency, we use the name Treas, under which he was accused in the Information. On 24 August 2007, petitioner filed a Motion for Reconsideration,[7] which was denied by the RTC in a Resolution dated 2 July 2008.[8]

SATISFIES THE REQUIREMENT OF DEMAND TO CONSTITUTE THE OFFENSE OF ESTAFA;[13] On the first issue, petitioner asserts that nowhere in the evidence presented by the prosecution does it show that 150,000 was given to and received by petitioner in Makati City. Instead, the evidence shows that the Receipt issued by petitioner for the money was dated 22 December 1999, without any indication of the place where it was issued. Meanwhile, the Deed of Sale with Assumption of Mortgage prepared by petitioner was signed and notarized in Iloilo City, also on 22 December 1999. Petitioner claims that the only logical conclusion is that the money was actually delivered to him in Iloilo City, especially since his residence and office were situated there as well. Absent any direct proof as to the place of delivery, one must rely on the disputable presumption that things happened according to the ordinary course of nature and the ordinary habits of life. The only time Makati City was mentioned was with respect to the time when the check provided by petitioner was dishonored by Equitable-PCI Bank in its De la RosaRada Branch in Makati. Petitioner asserts that the prosecution witness failed to allege that any of the acts material to the crime of estafa had occurred in Makati City. Thus, the trial court failed to acquire jurisdiction over the case. Petitioner thus argues that an accused is not required to present evidence to prove lack of jurisdiction, when such lack is already indicated in the prosecution evidence. As to the second issue, petitioner claims that the amount of P150,000 actually belongs to Margarita. Assuming there was misappropriation, it was actually she not Elizabeth who was the offended party. Thus, the latters demand does not satisfy the requirement of prior demand by the offended party in the offense of estafa. Even assuming that the demand could have been properly made by Elizabeth, the demand referred to the amount of P120,000, instead of P150,000. Finally, there is no showing that the demand was actually received by petitioner. The signature on the Registry Return Receipt was not proven to be that of petitioners. On 30 May 2011, this Court issued a Resolution directing the Office of the Solicitor General (OSG) to file the latters Comment on the Petition. On 27 July 2011, the OSG filed a Motion for Extension, praying for an additional period of 60 days within which to submit its Comment. This motion was granted in a Resolution dated 12 September 2011. On 23 September 2011, the OSG filed a Motion for Special Extension, requesting an additional period of five days. On 29 September 2011, it filed its Comment on the Petition. In its Comment, the OSG asserts that the RTC did not err in convicting petitioner as charged. The OSG notes that petitioner does not dispute the factual findings of the trial court with respect to the delivery of P150,000 to him, and that there was a relationship of trust and confidence between him and Elizabeth. With respect to his claim that the Complaint should have been filed in Iloilo City, his claim was not supported by any piece of evidence, as he did not present any. Further, petitioner is, in effect, asking the Court to weigh the credibility of the prosecution witness, Elizabeth. However, the trial courts assessment of the credibility of a witness is entitled to great weight, unless tainted with arbitrariness or oversight of some fact or circumstance, which is not the case here. With respect to the second issue, the OSG stresses that the defense of no valid demand was not raised in the lower court. Nevertheless, the demand letter sent to Elizabeth suffices, as she is also one of the complainants alleged in the Information, as an agent of Margarita. Moreover, no proof was adduced as to the genuineness of petitioners signature in the Registry Return Receipt of the demand letter.

On 25 September 2008, petitioner filed a Notice of Appeal before the RTC.[9] The appeal was docketed as CA-G.R. CR No. 32177. On 9 July 2010, the CA rendered a Decision[10] affirming that of the RTC. On 4 August 2010, petitioner filed a Motion for Reconsideration, which was denied by the CA in a Resolution dated 4 January 2011.[11] On 25 January 2011, petitioner filed a Motion for Extension of Time to File Petition for Review on Certiorari[12] before this Court. He asked for a period of 15 days within which to file a petition for review, and the Court granted his motion in a Resolution dated 9 February 2011. On 3 February 2011, petitioner filed his Petition for Review on Certiorari before this Court, with the following assignment of errors: 1. THE COURT OF APPEALS ERRED IN RULING THAT AN ACCUSED HAS TO PRESENT EVIDENCE IN SUPPORT OF THE DEFENSE OF LACK OF JURISDICTION EVEN IF SUCH LACK OF JURISDICTION APPEARS IN THE EVIDENCE OF THE PROSECUTION; 2. THE COURT OF APPEALS ERRED IN RULING THAT DEMAND MADE BY A PERSON OTHER THAN THE AGGRIEVED PARTY

The OSG, however, submits that the Court may recommend petitioner for executive clemency, in view of his advanced age and failing health. The Courts Ruling The Petition is impressed with merit. Review of Factual Findings While the Petition raises questions of law, the resolution of the Petition requires a review of the factual findings of the lower courts and the evidence upon which they are based. As a rule, only questions of law may be raised in a petition for review under Rule 45 of the Rules of Court. In many instances, however, this Court has laid down exceptions to this general rule, as follows: (1) (2) (3) (4) (5) When the factual findings of the Court of Appeals and the trial court are contradictory; When the conclusion is a finding grounded entirely on speculation, surmises or conjectures; When the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd or impossible; When there is grave abuse of discretion in the appreciation of facts; When the appellate court, in making its findings, went beyond the issues of the case, and such findings are contrary to the admissions of both appellant and appellee; When the judgment of the Court of Appeals is premised on misapprehension of facts; When the Court of Appeals failed to notice certain relevant facts which, if properly considered, would justify a different conclusion; When the findings of fact are themselves conflicting; When the findings of fact are conclusions without citation of the specific evidence on which they are based; and When the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are contradicted by the evidence on record.[14]

As clearly narrated by private complainant Luciaja, after accused Trenas had obtained the amount of P150,000.00 from her, he gave her two receipts purportedly issued by the Bureau of Internal Revenue, for the fraudulent purpose of fooling her and making her believe that he had complied with his duty to pay the aforementioned taxes. Eventually, private complainant Luciaja discovered that said receipts were fabricated documents.[15] In his Motion for Reconsideration before the RTC, petitioner raised the argument that it had no jurisdiction over the offense charged. The trial court denied the motion, without citing any specific evidence upon which its findings were based, and by relying on conjecture, thus: That the said amount was given to [Treas] in Makati City was incontrovertibly established by the prosecution. Accused Treas, on the other hand, never appeared in Court to present countervailing evidence. It is only now that he is suggesting another possible scenario, not based on the evidence, but on mere what ifs. x x x Besides, if this Court were to seriously assay his assertions, the same would still not warrant a reversal of the assailed judgment. Even if the Deed of Sale with Assumption of Mortgage was executed on 22 December 999 in Iloilo City, it cannot preclude the fact that the P150,000.00 was delivered to him by private complainant Luciaja in Makati City the following day. His reasoning the money must have been delivered to him in Iloilo City because it was to be used for paying the taxes with the BIR office in that city does not inspire concurrence. The records show that he did not even pay the taxes because the BIR receipts he gave to private complainant were fake documents. Thus, his argumentation in this regard is too specious to consider favorably.[16] For its part, the CA ruled on the issue of the trial courts jurisdiction in this wise: It is a settled jurisprudence that the court will not entertain evidence unless it is offered in evidence. It bears emphasis that Hector did not comment on the formal offer of prosecutions evidence nor present any evidence on his behalf. He failed to substantiate his allegations that he had received the amount of P150,000.00 in Iloilo City. Hence, Hectors allegations cannot be given evidentiary weight. Absent any showing of a fact or circumstance of weight and influence which would appear to have been overlooked and, if considered, could affect the outcome of the case, the factual findings and assessment on the credibility of a witness made by the trial court remain binding on appellate tribunal. They are entitled to great weight and respect and will not be disturbed on review.[17] The instant case is thus an exception allowing a review of the factual findings of the lower courts. Jurisdiction of the Trial Court

(6) (7) (8) (9) (10)

In this case, the findings of fact of the trial court and the CA on the issue of the place of commission of the offense are conclusions without any citation of the specific evidence on which they are based; they are grounded on conclusions and conjectures. The trial court, in its Decision, ruled on the commission of the offense without any finding as to where it was committed: Based on the evidence presented by the prosecution through private complainant Elizabeth Luciaja, the Court is convinced that accused Trenas had committed the offense of Estafa by taking advantage of her trust so that he could misappropriate for his own personal benefit the amount entrusted to him for payment of the capital gains tax and documentary stamp tax.

The overarching consideration in this case is the principle that, in criminal cases, venue is jurisdictional. A court cannot exercise jurisdiction over a person charged with an offense committed outside its limited territory. In Isip v. People,[18] this Court explained: The place where the crime was committed determines not only the venue of the action but is an essential element of jurisdiction. It is a fundamental rule that for jurisdiction to be acquired by courts in criminal cases, the offense should have been committed or any one of its essential ingredients should have taken place within the territorial jurisdiction of the court. Territorial jurisdiction in criminal cases is the territory where the court has jurisdiction to take cognizance or to try the offense allegedly committed therein by the accused. Thus, it cannot take jurisdiction over a person charged with an offense allegedly committed outside of that limited territory. Furthermore,the jurisdiction of a court over the criminal case is determined by the allegations in the complaint or information. And once it is so shown, the court may validly take cognizance of the case. However, if the evidence adduced during the trial shows that the offense was committed somewhere else, the court should dismiss the action for want of jurisdiction. (Emphasis supplied.) In a criminal case, the prosecution must not only prove that the offense was committed, it must also prove the identity of the accused and the fact that the offense was committed within the jurisdiction of the court. In Fukuzume v. People, this Court dismissed a Complaint for estafa, wherein the prosecution failed to prove that the essential elements of the offense took place within the trial courts jurisdiction. The Court ruled: More importantly, we find nothing in the direct or cross-examination of Yu to establish that he gave any money to Fukuzume or transacted business with him with respect to the subject aluminum scrap wires inside or within the premises of the Intercontinental Hotel in Makati, or anywhere in Makati for that matter. Venue in criminal cases is an essential element of jurisdiction. x x x In the present case, the criminal information against Fukuzume was filed with and tried by the RTC of Makati. He was charged with estafa as defined under Article 315, paragraph 2(a) of the Revised Penal Code, the elements of which are as follows: x x x The crime was alleged in the Information as having been committed in Makati.However, aside from the sworn statement executed by Yu on April 19, 1994, the prosecution presented no other evidence, testimonial or documentary, to corroborate Yu's sworn statement or to prove that any of the aboveenumerated elements of the offense charged was committed in Makati. Indeed, the prosecution failed to establish that any of the subsequent payments made by Yu in the amounts of P50,000.00 on July 12, 1991, P20,000.00 on July 22, 1991, P50,000.00 on October 14, 1991 and P170,000.00 on October 18, 1991 was given in Makati. Neither was there proof to show that the certifications purporting to prove that NAPOCOR has in its custody the subject aluminum scrap wires and that Fukuzume is authorized by Furukawa to sell the same were given by Fukuzume to Yu in Makati. On the contrary, the testimony of Yu established that all the elements of the offense
[19]

charged had been committed in Paraaque, to wit: that on July 12, 1991, Yu went to the house of Fukuzume in Paraaque; that with the intention of selling the subject aluminum scrap wires, the latter pretended that he is a representative of Furukawa who is authorized to sell the said scrap wires; that based on the false pretense of Fukuzume, Yu agreed to buy the subject aluminum scrap wires; that Yu paid Fukuzume the initial amount of P50,000.00; that as a result, Yu suffered damage. Stated differently, the crime of estafa, as defined and penalized under Article 315, paragraph 2(a) of the Revised Penal Code, was consummated when Yu and Fukuzume met at the latter's house in Paraaque and, by falsely pretending to sell aluminum scrap wires, Fukuzume was able to induce Yu to part with his money. xxx From the foregoing, it is evident that the prosecution failed to prove that Fukuzume committed the crime of estafa in Makati or that any of the essential ingredients of the offense took place in the said city. Hence, the judgment of the trial court convicting Fukuzume of the crime of estafa should be set aside for want of jurisdiction, without prejudice, however, to the filing of appropriate charges with the court of competent jurisdiction. (Emphasis supplied) In this case, the prosecution failed to show that the offense of estafa under Section 1, paragraph (b) of Article 315 of the RPC was committed within the jurisdiction of the RTC of Makati City. That the offense was committed in Makati City was alleged in the information as follows: That on or about the 23rd day of December, 1999, in the City of Makati, Metro Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, received in trust from ELIZABETH LUCIAJA the amount of P150,000.00 x x x. (Emphasis supplied.)[20]

Ordinarily, this statement would have been sufficient to vest jurisdiction in the RTC of Makati. However, the Affidavit of Complaint executed by Elizabeth does not contain any allegation as to where the offense was committed. It provides in part: 4. THAT on 23 December 1999, [Elizabeth] personally entrusted to ATTY. HECTOR TREAS the sum of P150,000.00 to be expended as agreed and ATTY. HECTOR TREAS issued to me a receipt, a photo copy of which is hereto attached as Annex B,

5. THAT despite my several follow-ups with ATTY. HECTOR TREAS, the latter failed to transfer the title of aforesaid property to MRS. MARGARITA ALOCILJA. He also failed to pay the capital gains tax, documentary stamps and BIR-related expenses. What ATTY. HECTOR TREAS accomplished was only the preparation of the Deed of Sale covering aforesaid property. A copy of said Deed of Sale is hereto attached as Annex C,

6. THAT in view of my persistent follow-ups, ATTY. HECTOR TREAS issued to me a check for refund of the sum given to him less the attorneys fee of P20,000.00 and the sum of P10,000.00 allegedly paid to BIR or in the net sum of P120,000.00. x x x 7. THAT when said check was deposited at EQUITABLE PCI BANK dela Rosa-Rada Branch at Makati City, the same was dishonored by the drawee bank for the reason: ACCOUNT CLOSED. x x x[21] Aside from the lone allegation in the Information, no other evidence was presented by the prosecution to prove that the offense or any of its elements was committed in Makati City. Under Article 315, par. 1 (b) of the RPC, the elements of estafa are as follows: (1) that money, goods or other personal property is received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same; (2) that there be misappropriation or conversion of such money or property by the offender, or denial on his part of such receipt; (3) that such misappropriation or conversion or denial is to the prejudice of another; and (4) there is demand by the offended party to the offender. [22] There is nothing in the documentary evidence offered by the prosecution[23] that points to where the offense, or any of its elements, was committed. A review of the testimony of Elizabeth also shows that there was no mention of the place where the offense was allegedly committed: Q A Q A After the manager of Maybank referred Atty. Treas to you, what happened next? We have met and he explained to the expenses and what we will have to and she will work for the Deed of Sale. And did he quote any amount when you got to the expenses? Yes. I gave him ONE HUNDRED FIFTY THOUSAND.

A Q A

1999. Will you please go over this document and inform this court what relation has this to the receipt which you said Atty. Treas issued to you? This is the receipt issued by Atty. Hector Treas. Now, after the amount of ONE HUNDRED FIFTY THOUSAND was given to Atty. Treas by you, what happened next? We made several follow-ups but he failed to do his job.[24]

Although the prosecution alleged that the check issued by petitioner was dishonored in a bank in Makati, such dishonor is not an element of the offense of estafa under Article 315, par. 1 (b) of the RPC. Indeed, other than the lone allegation in the information, there is nothing in the prosecution evidence which even mentions that any of the elements of the offense were committed in Makati. The rule is settled that an objection may be raised based on the ground that the court lacks jurisdiction over the offense charged, or it may be considered motu proprio by the court at any stage of the proceedings or on appeal.[25] Moreover, jurisdiction over the subject matter in a criminal case cannot be conferred upon the court by the accused, by express waiver or otherwise. That jurisdiction is conferred

by the sovereign authority that organized the court and is given only by law in the manner and form prescribed by law.[26] It has been consistently held by this Court that it is unfair to require a defendant or accused to undergo the ordeal and expense of a trial if the court has no jurisdiction over the subject matter or offense or it is not the court of proper venue.[27] Section 15 (a) of Rule 110 of the Revised Rules on Criminal Procedure of 2000 provides that [s]ubject to existing laws, the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where any of its essential ingredients occurred. This fundamental principle is to ensure that the defendant is not compelled to move to, and appear in, a different court from that of the province where the crime was committed as it would cause him great inconvenience in looking for his witnesses and other evidence in another place. [28] This principle echoes more strongly in this case, where, due to distance constraints, coupled with his advanced age and failing health, petitioner was unable to present his defense in the charges against him. There being no showing that the offense was committed within Makati, the RTC of that city has no jurisdiction over the case.[29] As such, there is no more need to discuss the other issue raised by petitioner. At this juncture, this Court sees it fit to note that the Code of Professional Responsibility strongly militates against the petitioners conduct in handling the funds of his client. Rules 16.01 and 16.02 of the Code provides: Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those others kept by him.

Q A Q A Q A

Q A Q A Q A Q

What was the amount quoted to you? ONE HUNDRED FIFTY THOUSAND. Did he give a breakdown of this ONE HUNDRED FIFTY THOUSAND? Yes, sir. And what is the breakdown of this ONE HUNDRED FIFTY THOUSAND? TWENTY THOUSAND is for his Attorneys fee, NINETY THOUSAND is for the capital gain tax TWENTY FOUR THOUSAND is intended for documentary sum (sic) and TEN THOUSAND PESOS is for other expenses for BIR. And did you give him this ONE HUNDRED FIFTY THOUSAND? Yes, sir. Did he issue a receipt? Yes, sir. If shown to you a receipt issued by Atty. Treas for this ONE HUNDRED FIFTY THOUSAND, will you be able to identify it? Yes, sir. I am showing to you a document, madam witness, already identified during the pre-trial as exhibit B. This appears to be a receipt dated December 22,

When a lawyer collects or receives money from his client for a particular purpose (such as for filing fees, registration fees, transportation and office expenses), he should promptly account to the client how the money was spent.[30] If he does not use the money for its intended purpose, he must immediately return it to the client. His failure either to render an accounting or to return the money (if the intended purpose of the money does not materialize) constitutes a blatant disregard of Rule 16.01 of the Code of Professional Responsibility.[31] Moreover, a lawyer has the duty to deliver his client's funds or properties as they fall due or upon demand.[32] His failure to return the client's money upon demand gives rise to the presumption that he has misappropriated it for his own use to the prejudice of and in violation of the trust reposed in him by the client.[33] It is a gross violation of general morality as well as of professional ethics; it impairs public confidence in the legal profession and deserves punishment.[34] In Cuizon v. Macalino,[35] this Court ruled that the issuance of checks which were later dishonored for having been drawn against a closed account indicates a lawyer's unfitness for the trust and confidence reposed on him, shows lack of personal honesty and good moral character as to render him unworthy of public confidence, and constitutes a ground for disciplinary action. This case is thus referred to the Integrated Bar of the Philippines (IBP) for the initiation of disciplinary proceedings against petitioner. In any case, should there be a finding that petitioner has failed to account for the funds received by him in trust, the recommendation should include an order to immediately return the amount of 130,000 to his client, with the appropriate rate of interest from the time of demand until full payment. WHEREFORE, the Petition is GRANTED. The Decision dated 9 July 2010 and the Resolution dated 4 January 2011 issued by the Court of Appeals in CA-G.R. CR No. 32177 are SET ASIDE on the ground of lack of jurisdiction on the part of the Regional Trial Court, Branch 137, Makati City. Criminal Case No. 01-2409 is DISMISSED without prejudice. This case is REFERRED to the IBP Board of Governors for investigation and recommendation pursuant to Section 1 of Rule 139-B of the Rules of Court. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC CORAZON T. NEVADA, Complainant, A.C. No. 7591 Present: CORONA, C.J., CARPIO, VELASCO, JR., LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO,* ABAD, VILLARAMA, JR., PEREZ, MENDOZA, SERENO, REYES, and PERLAS-BERNABE, JJ. Promulgated: March 20, 2012 x-----------------------------------------------------------------------------------------x DECISION

of its elders. According to Nevada, she has allowed the use of one of the Hotels functions rooms for church services. And in time, Casuga was able to gain her trust and confidence. Nevada further alleges that unbeknownst to her, Casuga, sometime in 2006, started to represent himself as the administrator of the Hotel. In fact, on March 1, 2006, he entered into a contract of lease[2] with a certain Jung Jong Chul (Chul) covering an office space in the Hotel. Notably, Casuga signed the lease contract over the printed name of one Edwin T. Nevada and notarized the document himself. Annex B[3] of the affidavit-complaint is a notarized letter dated May 15, 2007, wherein Chul attested that he gave Casuga, upon contract signing, the amount of ninety thousand pesos (PhP 90,000) as rental deposit for the office space. The amount thus deposited, so Nevada claims, was never turned over to her or to C.T. Nevada & Sons, Inc. Nevada adds that, in the course of their acquaintanceship, Casuga was able to acquire from her several pieces of jewelry: a K diamond solitaire ring, earrings with three (3) diamonds each and a ring with three (3) diamonds, with an aggregate value of three hundred thousand pesos (PhP 300,000), and a solid gold Rolex watch with diamond dials valued at twelve thousand US dollars (USD 12,000). Casuga took possession of the valuables purportedly with the obligation of selling them and to remit any proceeds to Nevada. However, despite repeated demands by Nevada for Casuga to return the valuables or otherwise remit the proceeds of the sale, no jewelry or money was ever returned. In compliance with a directive from the Court, Casuga submitted an Affidavit [4] dated December 5, 2007, as comment on the administrative complaint. In it, Casuga claims thatNevada informally instituted him as the administrator of the Hotel in a limited capacity but denied receiving the PhP 90,000 from Chul. With regard to the pieces of jewelry and the Rolex watch, Casuga stated that Nevada actually pawned them in a pawnshop and that she later asked his wife to redeem them using their own money. Thereafter, Nevada asked Casugas wife to sell the valuables and reimburse herself from the proceeds of the sale. By Resolution of July 2, 2008, the Court, thru the Office of the Bar Confidant, referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation/decision. The case was docketed as CBD Case No. 7591 entitled Corazon T. Nevada v. Atty. Rodolfo D. Casuga. On September 22, 2008, the IBP Commission on Bar Discipline (CBD), thru Commisioner Norberto B. Ruiz, issued and sent out a Notice of Mandatory Conference directing the parties to appear before it on October 23, 2008. On that date, only Nevadashowed up, prompting the designated commissioner to reset the conference to November 25, 2008, with a warning that he, Casuga, will be declared in default and the case submitted for resolution should he again fail to appear. November 25, 2008 came, but only Nevada was present at the conference. Thus, CBD Case No. 7591 was submitted for resolution on the basis of Nevadas Position Paper dated December 3, 2008 and the evidence she submitted consisting of, among others, twenty-one (21) official rental receipts Casuga issued to at least two (2) lessors of the Hotel. Results of the Investigation In its Report and Recommendation[5] dated January 14, 2009, the IBP CBD found Casuga guilty of the charges against him, disposing as follows: WHEREFORE, premises considered it is hereby recommended that Casuga be suspended for one (1) year for gross misconduct, violation of the notarial law and

- versus -

ATTY. RODOLFO D. CASUGA, Respondent.

VELASCO, JR., J.:

Corazon T. Nevada (Nevada) seeks the disbarment of Atty. Rodolfo D. Casuga (Casuga) for alleged violation of his lawyers oath and the 2004 Rules on Notarial Practice (Notarial Rules).

The Facts Nevada is the principal stockholder of C.T. Nevada & Sons, Inc., a family corporation which operates the Mt. Crest Hotel located at Legarda Road, Baguio City (the Hotel). In her affidavit-complaint[1] dated June 28, 2007, with annexes, Nevada alleges that she and Casuga are members of the One in Jesus Christ Church, a religious group which counts the latter as one

infidelity in the custody of monies, jewelries and a Rolex watch which pertain to the complainant and the family corporation. The IBP Board of Governors later adopted and approved the CBDs Report and Recommendation, with modification, as indicated in Resolution No. XIX-2010-461 dated August 28, 2010, to wit: RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner of the above entitled case x x x; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering Casugas violation of Canon 16 of the Code of Professional Responsibility, for misappropriation of his client[s] funds and jewelries, for viola tion of the Notarial Law when he signed as a party to a lease contract and notarized the same and also taking into consideration the gravity of the offense committed, Atty. Rodolfo D. Casuga is hereby SUSPENDED from the practice of law for four (4) years. In addition, Atty. Casuga is Suspended or Disqualified from reappointment as Notary Public for two (2) years and Ordered to Return the amount of P90,000.00, jewelries amounting to P300,000.00 and the Rolex watch valued at $12,000.00 or its equivalent to Mr. Jung Jong Chul, otherwise his Suspension shall continue. The CBD Report and Recommendation and a copy of Resolution No. XIX-2010-461 were subsequently forwarded to the Court along with the records of the case. In the meantime, Nevada, upon receipt of a copy of Resolution No. XIX-2010-461, wrote and asked the IBP Board of Governors to rectify said resolution. Instead of the return of the amount of PhP 90,000, the jewelry and the Rolex watch or their monetary value to Chul, as directed in the resolution, Nevada requested the return to be made in her favor. The letter-request of Nevada had remained not acted upon owing obviously to the fact that the records of the case have been transmitted to the Court in the interim. The Issues The principal but simple issues in this case pivot on the guilt of Casuga for the charges detailed or implied in the basic complaint; and the propriety of the return to Nevada of the items, or their money value, and the amount subject of the case. The Courts Ruling We agree with the CBDs inculpatory findings, as endorsed by the IBP Board of Governors, and the recommended upgrading of penalties, as shown in Resolution No. XIX-2010-461, but subject to the modification as shall be discussed. Casuga is guilty of gross misconduct for misrepresenting himself In re Horrilleno[6] defined gross misconduct in the following wise: The grounds for removal of a judge of first instance under Philippine law are two: (1) Serious misconduct and (2) inefficiency. The latter ground is not involved in these proceedings. As to the first, the law provides that sufficient cause must exist in

the judgment of the Supreme Court involving serious misconduct. The adjective is serious; that is, important, weighty, momentous, and not trifling. The noun is misconduct; that is, a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by the public officer. The word misconduct implies a wrongful intention and not a mere error or judgment. For serious misconduct to exist, there must be reliable evidence showing that the judicial acts complained of were corrupt or inspired by an intention to violate the law, or were in persistent disregard of well-known legal rules.(Lawlor vs. People [1874], 74 Ill., 228; Citizens' Insurance Co. vs. Marsh [1861], 41 Pa., 386; Miller vs. Roby [1880], 9 Neb., 471; Smith vs. Cutler [1833], 10 Wend. [N.Y.], 590;U.S. vs. Warner [1848], 28 Fed. Cas. No. 16643; In re Tighe [1904], 89 N.Y. Supra., 719.) (Emphasis supplied.) The above definition was to be reiterated in Ajeno v. Judge Inserto,[7] where the Court wrote: In the case of In re [Horrilleno], 43 Phil. 212, this Court previously ruled that For serious misconduct to exist, there must be reliable evidence showing that the judicial acts complained of were corrupt or inspired by an intention to violate the law, or were in persistent disregard of well-known legal rules. Of similar tenor is the definition provided in Jamsani-Rodriguez v. Ong:[8] x x x The respondent Justices were not liable for gross misconduct defined as the transgression of some established or definite rule of action, more particularly, unlawful behavior or gross negligence, or the corrupt or persistent violation of the law or disregard of well-known legal rules x x x. Respondent Casuga represented himself as a duly-authorized representative of Nevadawhen in fact he was not. Casuga admitted signing the subject contract of lease, but claimed that he was duly authorized to do so by Nevada. However, Casuga failed to adduce an iota of evidence to prove that he was indeed so authorized. One who alleges the existence of an agency relationship must prove such fact. The Court ruled in Yun Kwan Byung v. Philippine Amusement and Gaming Corporation,[9] The law makes no presumption of agency and proving its existence, nature and extent is incumbent upon the person alleging it. Plainly enough, Casuga is guilty of misrepresentation, when he made it appear that he was authorized to enter into a contract of lease in behalf of Nevada when, in fact, he was not. Furthermore, the records reveal that Casuga received the rentals by virtue of the contract of lease, benefitting from his misrepresentation. Chuls notarized letter of May 15, 2007 sufficiently shows that Casuga indeed received PhP 90,000 as rental deposit from Chul. In his affidavit-comment dated December 5, 2007, Casuga denied having received such amount, alleging that a certain Pastor Oh, who purportedly introduced him to Chul, received the money. However, Casuga again failed to adduce a single piece of evidence to support his contention. A bare denial must fail in light of the positive assertion of Chul, who appears to have no ulterior motive to incriminate Casuga. In Tan v. Gumba,[10] the respondent lawyer similarly misrepresented herself to have been authorized to sell a parcel of land by virtue of a Special Power of Attorney (SPA). By virtue of the SPA, the lawyer was able to obtain a loan from the complainant, secured by the said parcel of land through an open deed of sale. When the respondent lawyer defaulted in the payment of the loan, it turned out that the SPA only authorized the lawyer to mortgage the property to a bank. Thus, the complainant could not register the

deed of sale with the register of deeds and could not recover the amount that he loaned to the lawyer. In that case, the Court ruled: Here, respondents actions clearly show that she deceived complainant into lending money to her through the use of documents and false representations and taking advantage of her education and complainants ignorance in legal matters. As manifested by complainant, he would have never granted the loan to respondent were it not for respondents misrepresentation that she was authorized to sell the property and if respondent had not led him to believe that he could register the open deed of sale if she fails to pay the loan. By her misdeed, respondent has eroded not only complainants perception of the legal profession but the publics perception as well. Her actions constitute gross misconduct for which she may be disciplined, following Section 27, Rule 138 of the Revised Rules of Court, as amended x x x. (Emphasis supplied.) In the instant case, by maintaining an office within the Hotel, taking advantage of his apparent close relationship to Nevada, and through the use of false representations, Casuga led Chul to believe that he was the administrator of the Hotel, when in fact he was not. By doing so, he made it appear that he was duly authorized to enter into contracts for the Hotel and to receive rentals from its occupants. His fraudulent scheme enabled Casuga to collect rentals from the occupants of the Hotel, Chul in particular, which he did not transmit toNevada. Worse still, Casuga obtained money belonging to the Hotel. Following the principle laid down in Tan, Casugas misrepresentation properly constitutes gross misconduct for which he must be disciplined. Notably, in Tan, the respondent lawyer was held guilty of misconduct and suspended from the practice of law for six (6) months. Casuga also violated Canon 16 of the Code of Professional Responsibility With regard to the jewelry and watch entrusted to him, Casuga alleged that Nevadapawned them and thereafter instructed Casugas wife to redeem them with the latters money. He added that Nevada then instructed his wife to sell the valuables and use the proceeds to reimburse herself for the redemption price. Again, however, Casugas allegations are unsupported by a single shred of evidence. Pawnshop receipts would have provided the best evidence under the circumstances. But they were not presented, too. Moreover, Casugas admission that the valuables are indeed in his possession, without any adequate reason, supports Nevadas version of the story. Casugas failure to return such property or remit the proceeds of the sale is a blatant violation of Canon 16 of the Code of Professional Responsibility (the Code). The Codes Canon 16 and Rule 16.3 state: CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his profession. Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on

all judgments and executions he has secured for his client as provided for in the Rules of Court. Having been tasked to sell such valuables, Casuga was duty-bound to return them upon Nevadas demand. His failure to do so renders him subject to disciplinary action. To be sure, he cannot use, as a defense, the lack of a lawyer-client relationship as an exonerating factor. In Barcenas v. Alvero,[11] the Court suspended a lawyer from the practice of law for two (2) years after he failed to account for or return PhP 300,000 that was entrusted to him for deposit with the courts. The Court ruled: From the records of the case, there is likewise a clear breach of lawyerclient relations. When a lawyer receives money from a client for a particular purpose, the lawyer is bound to render an accounting to the client showing that the money was spent for a particular purpose. And if he does not use the money for the intended purpose, the lawyer must immediately return the money to his client. x x x Jurisprudence dictates that a lawyer who obtains possession of the funds and properties of his client in the course of his professional employment shall deliver the same to his client (a) when they become due, or (b) upon demand. x x x [Respondent] Atty. Alvero cannot take refuge in his claim that there existed no attorney-client relationship between him and Barcenas. Even if it were true that no attorney-client relationship existed between them, case law has it that an attorney may be removed, or otherwise disciplined, not only for malpractice and dishonesty in the profession, but also for gross misconduct not connected with his professional duties, making him unfit for the office and unworthy of the privileges which his license and the law confer upon him. Atty. Alveros failure to immediately account for and return the money when due and upon demand violated the trust reposed in him, demonstrated his lack of integrity and moral soundness, and warranted the imposition of disciplinary action. It gave rise to the presumption that he converted the money for his own use, and this act constituted a gross violation of professional ethics and a betrayal of public confidence in the legal profession. They constitute gross misconduct and gross unethical behavior for which he may be suspended, following Section 27, Rule 138 of the Rules of Court x x x. (Emphasis supplied.) Having failed to return, upon demand, the items entrusted to him by Nevada or remit the proceeds of the sale, Casuga violated Canon 16 and Rule 16.03 of the Code. In Almendarez, Jr. v. Langit,[12] the Court suspended a lawyer from the practice of law for two (2) years for failing to account for the money and properties of his client. Similarly, in Small v. Banares,[13] a lawyer was also suspended from the practice of law for two (2) years, as he failed to return the money of his client that he was holding in trust and for failing to file an answer to the complaint and his refusal to appear at the mandatory conference before the IBP. Thus, the same penalty should be imposed upon Casuga. Casuga violated the Notarial Rules The Notarial Rules, A.M. No. 02-8-13-SC, provides in its Rule IV, Section 1(c) and Sec. 3(a) when a notary public may sign a document in behalf of another person, thus:

SEC. 1. Powers. x x x xxxx (c) A notary public is authorized to sign on behalf of a person who is physically unable to sign or make a mark on an instrument or document if: (1) the notary public is directed by the person unable to sign or make a mark to sign on his behalf; (2) the signature of the notary public is affixed in the presence of two disinterested and unaffected witnesses to the instrument or document; (3) both witnesses sign their own names; (4) the notary public writes below his signature: Signature affixed by notary in presence of (names and addresses of person and two (2) witnesses); (5) the notary public notarizes his signature by acknowledgment or jurat.

So it was that in Lanuzo v. Bongon[14] the Court suspended a notary public from the practice of law for one (1) year for violation of the Notarial Rules. This was on top of the penalty of disqualification from being commissioned as a notary public for two (2) years. In Dela Cruz v. Zabala,[15] the Court adjudged the respondent notary public guilty of gross negligence for failing to require the parties to be physically present before him. In revoking the erring notarys commission, the Court, in Dela Cruz, stressed the significance of notarization and proceeded to define the heavy burden that goes when a lawyer is commissioned as a notary public. The Court wrote: x x x [N]otarization is not an empty, meaningless routinary act. It is invested with substantive public interest. It must be underscored that x x x notarization x x x converts a private document into a public document making that document admissible in evidence without further proof of authenticity thereof. A notarial document is, by law, entitled to full faith and credit upon its face. For this reason, a notary public must observe with utmost care the basic requirements in the performance of x x x duties; otherwise, the confidence of the public in the integrity of this form of conveyance would be undermined. xxxx A notary public should not notarize a document unless the persons who signed the same are the very same persons who executed and personally appeared before him to attest to the contents and the truth of what are stated therein. These acts of the affiants cannot be delegated because what are stated therein are facts they have personal knowledge of and are personally sworn to. Otherwise, their representatives names should appear in the said documents as the ones who executed the same. The function of a notary public is, among others, to guard against any illegal or immoral arrangements. By affixing his notarial seal on the instrument, he converted the Deed of Absolute Sale, from a private document into a public document. x x x As a lawyer commissioned to be a notary public, respondent is mandated to discharge his sacred duties with faithful observance and utmost respect for the legal solemnity of an oath in an acknowledgment or jurat. Simply put, such responsibility is incumbent upon him, he must now accept the commensurate consequences of his professional indiscretion.[16] x x x (Emphasis supplied.) The recommended penalty must be modified

On the other hand, the succeeding Sec. 3(a) disqualifies a notary public from performing a notarial act if he or she is a party to the instrument or document that is to be notarized. None of the requirements contained in Rule IV, Sec. 1(c), as would justify a notary signing in behalf of a contracting party, was complied with in this case. Moreover, Casugas act of affixing his signature above the printed name Edwin T. Nevada, without any qualification, veritably made him a party to the contract of lease in question. Thus, his act of notarizing a deed to which he is a party is a plain violation of the aforequoted Rule IV, Sec. 3(a) of the Notarial Rules, for which he can be disciplinarily sanctioned provided under Rule XI, Sec. 1(b)(10) of the Notarial Rules, which provides: SECTION 1. Revocation and Administrative Sanctions. x x x. (b) In addition, the Executive Judge may revoke the commission of, or impose appropriate administrative sanctions upon, any notary public who: (10) knowingly performs or fails to perform any other act prohibited or mandated by these Rules; Aside from being a violation of the Notarial Rules, Casugas aforementioned act partakes of malpractice of law and misconduct punishable under the ensuing Sec. 27, Rule 138 of the Rules of Court: SEC. 27. Disbarment or suspension of attorneys by Supreme Court; grounds therefor. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, x x x or for any violation of the oath which he is required to take before admission to practice x x x. (Emphasis supplied.)

Considering the various infractions Casuga committed, as discussed above, the aggregate penalty recommended by the IBP Board of Governors of suspension from the practice of law for four (4) years was correct. It hews with prevailing jurisprudence as cited above. However, Casugas disqualification from reappointment as notary public for two (2) years should match his suspension from the practice of law. The disqualification should accordingly be increased to four (4) years, since only a lawyer in good standing can be granted the commission of a notary public. The desired disbarment of Casuga, however, is too severe a sanction to impose under the premises; it cannot be granted. The penalty of disbarment shall be meted out only when the lawyers misconduct borders on the criminal and/or is committed under scandalous circumstance. [17]

The money, jewelry and Rolex watch should be returned to Nevada Nevadas plea that the rental deposit of PhP 90,000, the pieces of jewelry worth PhP 300,000, and the Rolex watch valued at USD 12,000 or its equivalent in Philippine Peso should be ordered returned to her instead of to Jung Jong Chul is well-taken. We need not belabor the fact that Chul has no right whatsoever over the amount or property mentioned above. WHEREFORE, the Court finds Atty. Rodolfo D. Casuga GUILTY of gross misconduct for violation of Canon 16 of the Code of Professional Responsibility and the Notarial Rules. He is hereby SUSPENDED for a period of four (4) years from the practice of law. The notarial commission of Atty. Casuga, if still existing, is hereby REVOKED and he is DISQUALIFIED from being commissioned as Notary Public also for four (4) years. Additionally, he is ordered to return the amount of PhP 90,000, the pieces of jewelry subject of this case or their equivalent of PhP 300,000, and the Rolex watch valued at USD 12,000 or its equivalent in Philippine Peso to Corazon T. Nevada within thirty (30) days from finality of this Decision; otherwise, he shall be cited for contempt. Lastly, Atty. Casuga is warned that a repetition of the same or similar acts will be dealt with more severely. Let a copy of this Decision be furnished the Office of the Bar Confidant, to be appended to the personal record of Atty. Rodolfo D. Casuga as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for dissemination to all trial courts for their information and guidance. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

It was during the pendency of these suits that these parcels of land were sold by petitioner to its sister corporation, Service Leasing Corporation on March 23, 1983 for the purported price of P600,000.00. On the same day, the properties were resold by the latter to Herby Commercial and Construction Corporation for the purported price of P2,500,000.00. Three months later, or on June 7, 1983, Herby mortgaged the same properties with Banco de Oro for P9,200,000.00. The lower court found that private respondent, did not have knowledge of these transfers and transactions. As a consequence of the transfer of said parcels of land to Service Leasing Corporation, petitioner filed an urgent motion for substitution of party on July 28, 1983. Private respondent, on its part, filed on August 16, 1983 a verified motion to enter in the records of the aforesaid civil cases its charging lien, pursuant to Section 37, Rule 138 of the Rules of Court, equivalent to twenty-five percent (25%) of the actual and current market values of the litigated properties as its attorney's fees. Despite due notice, petitioner failed to appear and oppose said motion, as a result of which the lower court granted the same and ordered the, Register of Deeds of Rizal to annotate the attorney's liens on the certificates of title of the parcels of land. Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid civil cases, which had been consolidated and were pending before the Regional Trial Court of Pasig, filed a motion to dismiss their complaints therein, which motion the lower court granted with prejudice in its order dated September 5, 1983. On December 29, 1983, the same court ordered the Register of Deeds to annotate the attorney's liens of private respondent on the derivative titles which cancelled Transfer Certificates of Title Nos. 453093 to 453099 of the original seven (7) parcels of land hereinbefore adverted to. On May 28,1984, private respondent filed a motion to fix its attorney's fees, based on quantum meruit, which motion precipitated an exchange of arguments between the parties. On May 30, 1984, petitioner manifested that it had fully paid private respondent; the latter, in turn, countered that the amount of P50,000.00 given by petitioner could not be considered as full payment but merely a cash advance, including the amount of P14,000.00 paid to it on December 15, 1980. It further appears that private respondent attempted to arrange a compromise with petitioner in order to avoid suit, offering a compromise amount of P600,000.00 but the negotiations were unsuccessful. Finally, on October 15,1984, the court a quo issued the order assailed on appeal before respondent court, granting payment of attorney's fees to private respondent, under the following dispositive portion: PREMISES CONSIDERED, the motion is hereby granted and the Metropolitan Bank and Trust Company (METROBANK) and Herby Commercial and Construction Corporation 4 are hereby ordered to pay the movant Arturo Alafriz and Associates the amount of P936,000.00 as its proper, just and reasonable attorney's fees in these cases. 5 On appeal, respondent court affirmed the order of the trial court in its decision promulgated on February 11, 1988. A motion for reconsideration, dated March 3, 1988, was filed by petitioner but the same was denied in a resolution promulgated on November 19, 1988, hence the present recourse. The issues raised and submitted for determination in the present petition may be formulated thus: (1) whether or not private respondent is entitled to the enforcement of its charging lien for payment of its attorney's fees; (2) whether or not a separate civil suit is necessary for the enforcement of such lien and

G.R. No. 86100-03 January 23, 1990 METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. THE HONORABLE COURT OF APPEALS and ARTURO ALAFRIZ and ASSOCIATES, respondents. Bautista, Picazo, Buyco, Tan & Fider for petitioner. Arturo A. Alafriz & Associates for and in their own behalf.

REGALADO, J.: This petition for review on certiorari impugns the decision of the Court of Appeals in CA-G.R. Nos. 0826508268 1affirming the order of Branch 168, Regional Trial Court, National Capital Judicial Region, in Civil Cases Nos. 19123-28, 19136 and 19144, fixing attorney's fees and directing herein petitioner Metropolitan Bank and Trust Company (Metrobank, for brevity), as defendant in said civil cases, to pay its attorneys, herein private respondent Arturo Alafriz and Associates, movant therein, the amount of P936,000.00 as attorney's fees on a quantum meruit basis. The records show that from March, 1974 to September, 1983, private respondent handled the abovementioned civil cases before the then Court of First Instance of Pasig (Branches I, II, VI, X, XIII, XIX, XX AND XXIV) in behalf of petitioner. 2 The civil cases were all for the declaration of nullity of certain deeds of sale, with damages. The antecedental facts 3 which spawned the filing of said actions are undisputed and are hereinunder set forth as found by the trial court and adopted substantially in the decision of respondent court. A certain Celedonio Javier bought seven (7) parcels of land owned by Eustaquio Alejandro, et al., with a total area of about ten (10) hectares. These properties were thereafter mortgaged by Javier with the petitioner to secure a loan obligation of one Felix Angelo Bautista and/or International Hotel Corporation. The obligors having defaulted, petitioner foreclosed the mortgages after which certificates of sale were issued by the provincial sheriff in its favor as purchaser thereof Subsequently, Alejandro, alleging deceit, fraud and misrepresentation committed against him by Javier in the sale of the parcels of land, brought suits against Javier et al., and included petitioner as defendant therein.

(3) whether or not private respondent is entitled to twenty-five (25%) of the actual and current market values of the litigated properties on aquantum meruit basis. On the first issue, petitioner avers that private respondent has no enforceable attorney's charging lien in the civil cases before the court below because the dismissal of the complaints therein were not, in the words of Section 37, Rule 138, judgments for the payment of money or executions issued in pursuance of such judgments. 6 We agree with petitioner. On the matter of attorney's liens Section 37, Rule 138 provides: . . . He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements. Consequent to such provision, a charging lien, to be enforceable as security for the payment of attorney's fees, requires as a condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main action by the attorney in favor of his client. A lawyer may enforce his right to fees by filing the necessary petition as an incident in the main action in which his services were rendered when something is due his client in the action from which the fee is to be paid. 7 In the case at bar, the civil cases below were dismissed upon the initiative of the plaintiffs "in view of the frill satisfaction of their claims." 8 The dismissal order neither provided for any money judgment nor made any monetary award to any litigant, much less in favor of petitioner who was a defendant therein. This being so, private respondent's supposed charging lien is, under our rule, without any legal basis. It is flawed by the fact that there is nothing to generate it and to which it can attach in the same manner as an ordinary lien arises and attaches to real or personal property. In point is Morente vs. Firmalino, 9 cited by petitioner in support of its position. In that case, movantappellant attorney sought the payment of his fees from his client who was the defendant in a complaint for injunction which was dismissed by the trial court after the approval of an agreement entered into by the litigants. This Court held: . . . The defendant having suffered no actual damage by virtue of the issuance of a preliminary injunction, it follows that no sum can be awarded the defendant for damages. It becomes apparent, too, that no amount having been awarded the defendant, herein appellant's lien could not be enforced. The appellant, could, by appropriate action, collect his fees as attorney.

Private respondent would nevertheless insist that the lien attaches to the "proceeds of a judgment of whatever nature," 10 relying on the case of Bacolod-Murcia Milling Co. Inc. vs. Henares 11 and some American cases holding that the lien attaches to the judgment recovered by an attorney and the proceeds in whatever form they may be. 12 The contention is without merit just as its reliance is misplaced. It is true that there are some American cases holding that the lien attaches even to properties in litigation. However, the statutory rules on which they are based and the factual situations involved therein are neither explained nor may it be said that they are of continuing validity as to be applicable in this jurisdiction. It cannot be gainsaid that legal concepts of foreign origin undergo a number of variegations or nuances upon adoption by other jurisdictions, especially those with variant legal systems. In fact, the same source from which private respondent culled the American cases it cited expressly declares that "in the absence of a statute or of a special agreement providing otherwise, the general rule is that an attorney has no lien on the land of his client, notwithstanding such attorney has, with respect to the land in question, successfully prosecuted a suit to establish the title of his client thereto, recovered title or possession in a suit prosecuted by such client, or defended successfully such client's right and title against an unjust claim or an unwarranted attack," 13 as is the situation in the case at bar. This is an inescapable recognition that a contrary rule obtains in other jurisdictions thereby resulting in doctrinal rulings of converse or modulated import. To repeat, since in our jurisdiction the applicable rule provides that a charging lien attaches only to judgments for money and executions in pursuance of such judgment, then it must be taken in haec verba. The language of the law is clear and unequivocal and, therefore, it must be taken to mean exactly what it says, barring any necessity for elaborate interpretation. 14 Notably, the interpretation, literal as it may appear to be, is not without support in Philippine case law despite the dearth of cases on all fours with the present case. In Caina et al. vs. Victoriano, et al., 15 the Court had the occasion to rule that "the lien of respondent is not of a nature which attaches to the property in litigation but is at most a personal claim enforceable by a writ of execution." In Ampil vs. JulianoAgrava, et al., 16 the Court once again declared that a charging lien "presupposes that the attorney has secured a favorable money judgment for his client . . ." Further, in Director of Lands vs. Ababa, et al., 17 we held that "(a) charging lien under Section 37, Rule 138 of the Revised Rules of Court is limited only to money judgments and not to judgments for the annulment of a contract or for delivery of real property as in the instant case." Even in the Bacolod-Murcia Milling case, which we previously noted as cited by private respondent, there was an express declaration that "in this jurisdiction, the lien does not attach to the property in litigation." Indeed, an attorney may acquire a lien for his compensation upon money due his client from the adverse party in any action or proceeding in which the attorney is employed, but such lien does not extend to land which is the subject matter of the litigation. 18 More specifically, an attorney merely defeating recovery against his client as a defendant is not entitled to a lien on the property involved in litigation for fees and the court has no power to fix the fee of an attorney defending the client's title to property already in the client's possession. 19

While a client cannot defeat an attorney's right to his charging lien by dismissing the case, terminating the services of his counsel, waiving his cause or interest in favor of the adverse party or compromising his action, 20 this rule cannot find application here as the termination of the cases below was not at the instance of private respondent's client but of the opposing party. The resolution of the second issue is accordingly subsumed in the preceding discussion which amply demonstrates that private respondent is not entitled to the enforcement of its charging lien. Nonetheless, it bears mention at this juncture that an enforceable charging lien, duly recorded, is within the jurisdiction of the court trying the main case and this jurisdiction subsists until the lien is settled. 21 There is certainly no valid reason why the trial court cannot pass upon a petition to determine attorney's fees if the rule against multiplicity of suits is to be activated. 22 These decisional rules, however, apply only where the charging lien is valid and enforceable under the rules. On the last issue, the Court refrains from resolving the same so as not to preempt or interfere with the authority and adjudicative facility of the proper court to hear and decide the controversy in a proper proceeding which may be brought by private respondent. A petition for recovery of attorney's fees, either as a separate civil suit or as an incident in the main action, has to be prosecuted and the allegations therein established as any other money claim. The persons who are entitled to or who must pay attorney's fees have the right to be heard upon the question of their propriety or amount. 23Hence, the obvious necessity of a hearing is beyond cavil. Besides, in fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, the elements to be considered are generally (1) the importance of the subject matter in controversy, (2) the extent of the services rendered, and (3) the professional standing of the lawyer. 24 These are aside from the several other considerations laid down by this Court in a number of decisions as pointed out by respondent court. 25 A determination of all these factors would indispensably require nothing less than a full-blown trial where private respondent can adduce evidence to establish its right to lawful attorney's fees and for petitioner to oppose or refute the same. Nothing in this decision should, however, be misconstrued as imposing an unnecessary burden on private respondent in collecting the fees to which it may rightfully be entitled. But, as in the exercise of any other right conferred by law, the proper legal remedy should be availed of and the procedural rules duly observed to forestall and obviate the possibility of abuse or prejudice, or what may be misunderstood to be such, often to the undeserved discredit of the legal profession. Law advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from government interference, is impressed with public interest, for which it is subject to State regulation. 26 ACCORDINGLY, the instant petition for review is hereby GRANTED and the decision of respondent Court of Appeals of February 11, 1988 affirming the order of the trial court is hereby REVERSED and SET ASIDE, without prejudice to such appropriate proceedings as may be brought by private respondent to establish its right to attorney's fees and the amount thereof.

SO ORDERED.

FIRST DIVISION PEDRO L. LINSANGAN, Complainant, A.C. No. 6672 Present: PUNO, C.J., Chairperson, CARPIO, - versus CORONA, LEONARDO-DE CASTRO and BERSAMIN, JJ. Respondent. ATTY. NICOMEDES TOLENTINO, Promulgated: September 4, 2009 x-----------------------------------------x RESOLUTION CORONA, J.: This is a complaint for disbarment[1] filed by Pedro Linsangan of the Linsangan Linsangan & Linsangan Law Office against Atty. Nicomedes Tolentino for solicitation of clients and encroachment of professional services. Complainant alleged that respondent, with the help of paralegal Fe Marie Labiano, convinced his clients[2] to transfer legal representation. Respondent promised them financial assistance [3] and expeditious collection on their claims.[4] To induce them to hire his services, he persistently called them and sent them text messages. To support his allegations, complainant presented the sworn affidavit[5] of James Gregorio attesting that Labiano tried to prevail upon him to sever his lawyer-client relations with complainant and utilize respondents services instead, in exchange for a loan of P50,000. Complainant also attached respondents calling card:[6] Front NICOMEDES TOLENTINO LAW OFFFICE CONSULTANCY & MARITIME SERVICES W/ FINANCIAL ASSISTANCE Fe Marie L. Labiano Paralegal 1st MIJI Mansion, 2nd Flr. Rm. M-01 Tel: 362-7820

6th Ave., cor M.H. Del Pilar Grace Park, Caloocan City

Fax: (632) 362-7821 Cel.: (0926) 2701719

Back SERVICES OFFERED: CONSULTATION AND ASSISTANCE TO OVERSEAS SEAMEN REPATRIATED DUE TO ACCIDENT, INJURY, ILLNESS, SICKNESS, DEATH AND INSURANCE BENEFIT CLAIMS ABROAD. (emphasis supplied) Hence, this complaint. Respondent, in his defense, denied knowing Labiano and authorizing the printing and circulation of the said calling card.[7] The complaint was referred to the Commission on Bar Discipline (CBD) of the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.[8] Based on testimonial and documentary evidence, the CBD, in its report and recommendation, [9] found that respondent had encroached on the professional practice of complainant, violating Rule 8.02 [10] and other canons[11] of the Code of Professional Responsibility (CPR). Moreover, he contravened the rule against soliciting cases for gain, personally or through paid agents or brokers as stated in Section 27, Rule 138[12] of the Rules of Court. Hence, the CBD recommended that respondent be reprimanded with a stern warning that any repetition would merit a heavier penalty. We adopt the findings of the IBP on the unethical conduct of respondent but we modify the recommended penalty. The complaint before us is rooted on the alleged intrusion by resp ondent into complainants professional practice in violation of Rule 8.02 of the CPR. And the means employed by respondent in furtherance of the said misconduct themselves constituted distinct violations of ethical rules. Canons of the CPR are rules of conduct all lawyers must adhere to, including the manner by which a lawyers services are to be made known. Thus, Canon 3 of the CPR provides: CANON 3 - A LAWYER IN MAKING KNOWN HIS LEGAL SERVICES SHALL USE ONLY TRUE, HONEST, FAIR, DIGNIFIED AND OBJECTIVE INFORMATION OR STATEMENT OF FACTS. Time and time again, lawyers are reminded that the practice of law is a profession and not a business; lawyers should not advertise their talents as merchants advertise their wares. [13] To allow a lawyer to advertise his talent or skill is to commercialize the practice of law, degrade the profession in the publics estimation and impair its ability to efficiently render that high character of service to which every member of the bar is called.[14] Rule 2.03 of the CPR provides: RULE 2.03. A LAWYER SHALL NOT DO OR PERMIT TO BE DONE ANY ACT DESIGNED PRIMARILY TO SOLICIT LEGAL BUSINESS.

Hence, lawyers are prohibited from soliciting cases for the purpose of gain, either personally or through paid agents or brokers.[15] Such actuation constitutes malpractice, a ground for disbarment.[16] Rule 2.03 should be read in connection with Rule 1.03 of the CPR which provides: RULE 1.03. A LAWYER SHALL NOT, FOR ANY CORRUPT MOTIVE OR INTEREST, ENCOURAGE ANY SUIT OR PROCEEDING OR DELAY ANY MANS CAUSE. This rule proscribes ambulance chasing (the solicitation of almost any kind of legal business by an attorney, personally or through an agent in order to gain employment)[17] as a measure to protect the community from barratry and champerty.[18] Complainant presented substantial evidence[19] (consisting of the sworn statements of the very same persons coaxed by Labiano and referred to respondents office) to prove that respondent indeed solicited legal business as well as profited from referrals suits. Although respondent initially denied knowing Labiano in his answer, he later admitted it during the mandatory hearing. Through Labianos actions, respondents law practice was benefited. Hapless seamen were enticed to transfer representation on the strength of Labianos word that respondent could produce a more favorable result. Based on the foregoing, respondent clearly solicited employment violating Rule 2.03, and Rule 1.03 and Canon 3 of the CPR and Section 27, Rule 138 of the Rules of Court. With regard to respondents violation of Rule 8.02 of the CPR, settled is the rule that a lawyer should not steal another lawyers client nor induce the latter to retain him by a promise of better service, good result or reduced fees for his services.[20] Again the Court notes that respondent never denied having these seafarers in his client list nor receiving benefits from Labianos referrals. Furthermore, he never denied Labianos connection to his office.[21] Respondent committed an unethical, predatory overstep into anothers legal practice. He cannot escape liability under Rule 8.02 of the CPR. Moreover, by engaging in a money-lending venture with his clients as borrowers, respondent violated Rule 16.04: Rule 16.04 A lawyer shall not borrow money from his c lient unless the clients interests are fully protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in a legal matter he is handling for the client. The rule is that a lawyer shall not lend money to his client. The only exception is, when in the interest of justice, he has to advance necessary expenses (such as filing fees, stenographers fees for transcript of stenographic notes, cash bond or premium for surety bond, etc.) for a matter that he is handling for the client. The rule is intended to safeguard the lawyers independence of mind so that the free exercise of his judgment may not be adversely affected.[22] It seeks to ensure his undivided attention to the case he is

handling as well as his entire devotion and fidelity to the clients cause. If the lawyer lends money to the client in connection with the clients case, the lawyer in effect acquires an interest in the subject matter of the case or an additional stake in its outcome.[23] Either of these circumstances may lead the lawyer to consider his own recovery rather than that of his client, or to accept a settlement which may take care of his interest in the verdict to the prejudice of the client in violation of his duty of undivided fidelity to the clients cause.[24] As previously mentioned, any act of solicitation constitutes malpractice [25] which calls for the exercise of the Courts disciplinary powers. Violation of anti -solicitation statutes warrants serious sanctions for initiating contact with a prospective client for the purpose of obtaining employment. [26] Thus, in this jurisdiction, we adhere to the rule to protect the public from the Machiavellian machinations of unscrupulous lawyers and to uphold the nobility of the legal profession. Considering the myriad infractions of respondent (including violation of the prohibition on lending money to clients), the sanction recommended by the IBP, a mere reprimand, is a wimpy slap on the wrist. The proposed penalty is grossly incommensurate to its findings. A final word regarding the calling card presented in evidence by petitioner. A lawyers best advertisement is a well-merited reputation for professional capacity and fidelity to trust based on his character and conduct.[27] For this reason, lawyers are only allowed to announce their services by publication in reputable law lists or use of simple professional cards. Professional calling cards may only contain the following details: (a) (b) (c) (d) (e) lawyers name; name of the law firm with which he is connected; address; telephone number and special branch of law practiced.[28]

Labianos calling card contained the phrase with financial assistance. The phrase was clearly used to entice clients (who already had representation) to change counsels with a promise of loans to finance their legal actions. Money was dangled to lure clients away from their original lawyers, thereby taking advantage of their financial distress and emotional vulnerability. This crass commercialism degraded the integrity of the bar and deserved no place in the legal profession. However, in the absence of substantial evidence to prove his culpability, the Court is not prepared to rule that respondent was personally and directly responsible for the printing and distribution of Labianos calling cards. WHEREFORE, respondent Atty. Nicomedes Tolentino for violating Rules 1.03, 2.03, 8.02 and 16.04 and Canon 3 of the Code of Professional Responsibility and Section 27, Rule 138 of the Rules of Court is herebySUSPENDED from the practice of law for a period of one year effective immediately from receipt of this resolution. He is STERNLY WARNEDthat a repetition of the same or similar acts in the future shall be dealt with more severely. Let a copy of this Resolution be made part of his records in the Office of the Bar Confidant, Supreme Court of the Philippines, and be furnished to the Integrated Bar of the Philippines and the Office of the Court Administrator to be circulated to all courts. SO ORDERED.

THIRD DIVISION

On May 16, 1991, Banco Filipino formally conveyed to petitioners the two (2) lots (Lots 1053-A and 1053-B) located in Lapasan, Cagayan de Oro City. On October 30, 1992, petitioners paid in full the total repurchase price for the three (3) lots. However, Banco Filipino refused to execute the corresponding deed of sale and turn over Lot 416-B to petitioners. Instead, Banco Filipino, on April 5, 1993, filed with the Regional Trial Court, Branch 38, Cagayan de Oro City, a complaint[4] against petitioners for quieting of title, recovery of ownership and possession, accounting and damages, docketed as Civil Case No. 93-186.

[G.R. No. 143783. December 9, 2002]

DANTE SARRAGA, SR. and MARIA TERESA SARRAGA, petitioners, vs.BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondent. DECISION SANDOVAL-GUTIERREZ, J.: Spouses Dante Sarraga, Sr. and Maria Teresa Sarraga, petitioners, were the absolute owners of three (3) parcels of land, one of which is Lot 416-B, situated in Poblacion, Cagayan de Oro City, and the other two, Lots 1053-A and 1053-B, in Lapasan, same city. Sometime in the early 1980s, petitioners mortgaged their lots to Banco Filipino Savings and Mortgage Bank (Banco Filipino), respondent, as security for a loan in the amount of P3,618,714.59. Petitioners defaulted in the payment of their loan. Consequently, Banco Filipino foreclosed the mortgage. On June 29, 1984, Banco Filipino was placed in conservatorship by the Central Bank of the Philippines. On January 25, 1985, it was ordered closed and placed under receivership and liquidation. On April 9, 1985, or before the expiration of the period for the redemption of the lots, petitioner Dante P. Sarraga sent a letter to Banco Filipinos receiver-liquidator offering to redeem the same. On July 2, 1985, Deputy Receiver Arnulfo B. Aurellano wrote petitioners that at this stage of the liquidation of the bank, we are not yet selling the aforesaid properties. Since petitioners were not allowed to redeem their lots within the period prescribed by law, titles thereto were consolidated in the name of Banco Filipino. On October 10, 1986, petitioners received a letter from Banco Filipino recognizing their intention to redeem their lots. Later, Banco Filipino, through its liquidators, started negotiating with petitioners on the terms of redemption. Finally, on October 30, 1990, Mr. Renan Santos, then Banco Filipinos liquidator, wrote petitioners allowing them to repurchase the lots for P8,506,597.73, with 12% interest per annum, under the terms stipulated therein.[1] The terms include, among others, that petitioners may pay by installments and that upon full payment of the repurchase price, Banco Filipino shall execute the corresponding deed of sale for the three (3) lots in their favor.[2] They were likewise granted the power to manage and administer the building located in Lot 416-B. The terms were later embodied in a Memorandum of Agreement[3] (MOA) signed by the parties.

On April 27, 1993, petitioners filed their answer with counterclaim. [5] They were represented by Atty. Florentino G. Dumlao, Jr. who formally entered his appearance as their counsel of record. However, prior to the pre-trial, Atty. Dumlao suffered a mild stroke, incapacitating him from participating actively in the proceedings, prompting petitioners to hire the services of another counsel, Atty. Rogelio Bagabuyo. While the latter appeared for the petitioners during the hearing and signed pleadings for them, Atty. Dumlao remained petitioners counsel of record. As such, the trial court continued to serve pleadings, motions, processes, and other documents upon Atty. Dumlao. On June 1, 1998, the trial court rendered a decision,[6] the dispositive portion of which states: Wherefore, judgment is hereby rendered, as follows: 1. Declaring the sale and conveyance of the two (2) parcels of land (denominated as Lots 1035-A and 1053-B) situated in Barangay Lapasan, Cagayan de Oro, as valid and title thereto shall pertain to defendant spouses Sarraga; 2. Declaring plaintiff Banco Filipino to be the true and lawful owners of Lot 416-B and the building therein (formerly known as the Lucar Building but now as Executive Centrum) situated along J.R. Borja Street, Cagayan de Oro City; 3. Ordering defendant spouses Sarraga to immediately relinquish and surrender possession of Lot No. 416-B and the building thereon to plaintiff Bank; and 4. All other claims of plaintiff Bank as well as counterclaims by the defendants are dismissed.

No pronouncement as to costs. SO ORDERED.[7] On July 1, 1998. petitioners filed a motion for reconsideration,[8] signed by both Attys. Dumlao and Bagabuyo. On September 3, 1998, the trial court issued an order[9] denying petitioners motion. On September 10, 1998, the order was received by Ms. Llerna Guligado, a newly-hired clerk at the office of Atty. Bagabuyo. Owing to her lack of work experience in a law office, she merely left the court order on her desk and eventually it was misplaced. She failed to bring the matter to the attention of Atty. Bagabuyo when she

resigned on September 15, 1998. The day before, or on September 14, 1998, Atty. Bagabuyo was appointed Senior State Prosecutor in the Department of Justice. Due to his excitement and relocation to Manila, he failed to apprise Atty. Dumlao on the status of the case. Concerned that no action had been taken on their motion for reconsideration of the Decision, petitioners, on December 7, 1998, verified its status. In the trial court, they found that the records of the case were already transmitted to the Court of Appeals due to a partial appeal interposed by Banco Filipino. This prompted petitioners to file with the trial court a notice of appeal which was denied for being late. Eventually, they filed a petition for relief from judgment.[10] During the hearing, they came to know that the order dated September 3, 1998 denying their motion for reconsideration was served upon Atty. Bagabuyo only. On February 12, 1999, the trial court issued an order[11] dismissing the petition for relief on the ground that it was filed out of time. Petitioners filed a motion for reconsideration but was denied.[12] They then filed a petition for certiorari with the Court of Appeals, docketed as CA GR-SP No. 53765, ascribing to the trial court grave abuse of discretion for dismissing their petition for relief from judgment. On June 20, 2000, the Appellate Court rendered a Decision[13] dismissing the petition, thus: WHEREFORE, foregoing premises considered, we hold that public respondent did not err much less act with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the disputed orders, for which reason, the herein petition has to be, as it is hereby DISMISSSED. SO ORDERED.[14] Hence this petition for review on certiorari. The fundamental issues for our resolution are: 1) whether there was a valid service of the trial courts order denying petitioners motion for reconsideration upon Atty. Bagabuyo; 2) whether Atty. Bagabuyo was negligent which prevented petitioners from filing a timely notice of appeal; and 3) if so, whether such negligence is binding upon petitioners. Petitioners maintain that Atty. Bagabuyo is not their counsel of record since he did not file with the trial court a formal appearance. Consequently, the service upon him of the trial courts order denying their motion for reconsideration is not valid. Such posture is untenable. It is undisputed that petitioners were represented by two (2) lawyers, Attys. Dumlao and Bagabuyo. Pursuant to Section 2, Rule 13 of the 1997 Rules of Civil Procedure, as amended,[15] service of the trial courts order denying petitioners motion for reconsideration may be made upon either counsel.[16] The Court of Appeals correctly found that indeed petitioners counsel was Atty. Bagabuyo, thus: We find no merit in the first ground invoked by petitioners. As explained by the court a quo in its May 24, 1999 order-

The records of this case show that Atty. Rogelio Zosa B. Bagabuyo did not merely enter his appearance orally at every hearing which he attended. He filed several pleadings in this case as counsel for the defendants in which he indicated his address. The first pleading that he filed x x x was a MOTION TO HEAR SPECIAL AND AFFIRMATIVE DEFENSES AS IF A MOTION TO DISMISS HAD BEEN FILED, dated November 28, 1994, which he signed alone as counsel for Defendants and in which he indi cated his address as Suite 201, Travellers Life Building, corners Tiano & J.R. Borja Streets, City of Cagayan de Oro. Atty. Bagabuyo, since he started appearing in this case, acted alone, signed pleadings alone, made decisions alone, without in any way indicating to the court and the adverse party that he had to defer to the judgment of Atty. Dumlao on any matter pertaining to the instant case. He presented the defendant Dante Sarraga and the latters witness, Mr. Gaudencio Beduya, at the trial of this ca se and terminated the presentation of the defendants evidence without consulting, or intimating to the court and the adverse party that he had to consult Atty. Dumlao on the matter. The MEMORANDUM FOR THE DEFENDANTS dated April 8, 1996 was signed by him alone as counsel for the defendants. Atty. Rogelio Zosa Bagabuyo signed as lead counsel the defendants Motion for Reconsideration dated 26 June 1998 and the Urgent Rejoinder to Plaintiffs Opposition To Our Motion for Reconsideration dated 03 August 1998, in which he indicated his address as 14th-10th Streets, Macasandig, City of Cagayan de Oro. He signed alone as counsel for the defendants an URGENT MOTION TO CANCEL SCHEDULED HEARING ON 31 July 1998 dated 28 July 1998 in which he indicated his address as 72 corners 14th-10th Streets, Macasandig, City of Cagayan de Oro. (Annex F, Petition, pp. 196-197, rollo). Given the foregoing circumstances and the court a quos further observation that Atty. Bagabuyo had been the one actively handling the case for the defendants since the pre-trial stage, x x x it is simply absurd for petitioners to even suggest that service upon Atty. Bagabuyo of a copy of the Order dated September 3, 1998 which denied their Motion for Reconsideration of the judgment was ineffective or did not bind them. To be sure, Section 2, Rule 13 of the 1997 Rules of Civil Procedure explicitly provides that (i)f any party has appeared by counsel, service upon him shall be made upon his counsel or one of them x x x. The obvious meaning of said rule is that if a party is represented by more than one lawyer, service of pleadings, judgments and other papers may be made on any one of them. Obviously, Atty. Bagabuyo was negligent which prevented petitioners from filing a timely notice of appeal. Atty. Bagabuyo knew that his clerk has no work experience in a law firm. He should have supervised her office performance very closely considering the importance of his legal calling. Time and again this Court has admonished law offices to adopt a system of distributing and receiving pleadings and notices, so that the lawyers will be promptly informed of the status of their cases. Thus, the negligence of clerks which adversely affect the cases handled by lawyers is binding upon the latter. [17] Nothing is more settled than the rule that the negligence of counsel binds the client. However, the application of the general rule to a given case should be looked into and adopted according to the surrounding circumstances.[18] Thus, exceptions to the said rule have been recognized by this Court: (1) where reckless or gross negligence of counsel deprives the client of due process of law; (2) when its application will result in outright deprivation of the clients liberty or property; or (3) where the interests of justice so require.[19] In such cases, courts must step in and accord relief to a client who suffered thereby. Here, we find that the negligence of Atty. Bagabuyo falls under the said exceptions. Indeed, he committed gross negligence. Petitioners were deprived of their right to appeal when he failed to inform them immediately of the denial of their motion for reconsideration of the trial courts decision. Ultimately, this will result in the deprivation of their property, specifically Lot 416-B. In Apex Mining, Inc. vs. Court of Appeals,[20] this Court ruled:

If the incompetence, ignorance or inexperience of counsel is so great and the error comm itted as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case. Similarly, when an unsuccessful party has been prevented from fully and fairly presenting his case as a result of his lawyers professional delinquency or infidelity the litigation may be reopened to allow the party to present his side. Where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the clients being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground. In view of the foregoing circumstances, higher interests of justice and equity demand that petitioners be allowed to present evidence on their defense. Petitioners may not be made suffer for the lawyers mistakes and should be afforded another opportunity, at least, to introduce evidence on their behalf. To cling to the general rule in this case is only to condone rather than rectify a serious injustice to a party whose only fault was to repose his faith and entrust his innocence to his previous lawyers. Petitioners cannot be faulted for failing to verify the status of their case with the trial court since a client has the right to expect that his lawyer will protect his interest during the hearing of his case. A client may reasonably expect that his counsel will make good his representations and has the right to expect that his lawyer will protect his interests during the trial of his case. For the general employment of an attorney to prosecute or defend a case or proceeding ordinarily vests in a plaintiffs attorney the implied authority to take all steps or do all acts necessary or incidental to the regular and orderly prosecution and management of the suit, and in a defendants attorney, the power to take such steps as he deems necessary to defend the suit and protect the interests of the defendant.[21] Undoubtedly, the trial court gravely abused its discretion when it denied the petition for relief. Considering the circumstances obtaining here, petitioners should not be made to suffer the consequences of their counsels negligence. Hence, the period within which to file their petition for relief should be reckoned from their actual receipt of the order denying their motion for reconsideration, which is December 7, 1998. Accordingly, the petition for relief filed on December 16, 1998 was well within the sixty-day period prescribed in Section 3, Rule 38, of the 1997 Rules of Civil Procedure, as amended. Both lower courts actually sacrificed justice for technicality. This Court has consistently ruled that it is a far better and more prudent course of action for a court to excuse a technical lapse and afford the parties a review of the case on the merits to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice. [22] Hence, it would be more in accord with justice and equity to allow the appeal by petitioners to enable the Court of Appeals to review the trial courts decision. The fundamental purpose of procedural rules is to afford each litigant every opportunity to present evidence in their behalf in order that substantial justice is achieved. Court litigations are primarily for the search of truth, and a liberal interpretation of the rules by which both parties are given the fullest opportunity to adduce proofs is the best way to ferret out such truth. The dispensation of justice and vindication of legitimate grievances should not be barred by technicalities.[23] Hence, in cases where a party was denied this right, we have relaxed the stringent application of procedural rules in order to allow a party the chance to be heard. This policy applies with equal force in

case of appeals. It has been consistently held that the dismissal of appeal on purely technical grounds is frowned upon.[24] x x x, dismissal of appeals purely on technical grounds is frowned upon and the rules o f procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice, and thereby defeat their very aims. Verily, this Court, in the exercise of its equity jurisdiction, may even stay the dismissal of appeals grounded merely on technicalities, especially in this case where petitioners appeal appears prima facie worthy of the CAs full consideration on the merits. [25] WHEREFORE, the petition is GRANTED. The challenged Decision of the Court of Appeals dated June 20, 2000 in CA-GR SP No. 53765 is SET ASIDE. The Regional Trial Court, Branch 38, Cagayan de Oro City is DIRECTED to grant the petition for relief filed by petitioners and to GIVE DUE COURSE to their notice of appeal in Civil Case No. 93-186. SO ORDERED. Puno, (Chairman), Corona, and Carpio- Morales, JJ., concur. Panganiban, J., no part. Former counsel of a party.

FIRST DIVISION

Consequently, on July 29, 2002, respondent was required to show cause why he should not be disciplinarily dealt with or held in contempt for failure to comply with our directives. [9] On September 2, 2002, respondent filed his Compliance with Motion for Final Twelve (12) Day Extension With No Further Extension.[10] [A.C. No. 5302. February 18, 2005] Finally, on September 17, 2002, respondent filed his comment [11] together with a Motion to Admit Comment Filed One Day Late. In a Resolution dated October 21, 2002, respondents Motion to Admit Comment Filed One Day Late was referred to the Integrated Bar of the Philippines for investigation, report and recommendation.[12] As summarized, respondent alleged by way of defense, the following: DECISION YNARES-SANTIAGO, J.: (1) that complainant became respondents client after respondent handled these cases for complainants uncle Aniceto Encio and his family namely Criminal Case No. F-10088, POEA Case No. M-91-06-602, I.S. No. 93 E-17909 and POEA Case No. L-93-04-610; that respondent successfully handled these cases which led to the dismissal of the criminal case against Aniceto Encio and recovery of monetary awards in the other cases; (2) that NLRC NCR OCW Case No. 00-12-00904-95 was referred by Aniceto Encio to respondent for handling; that herein complainant and Aniceto Encio requested respondent not to charge them an acceptance fee for said case and instead offered to pay respondent 30% of any monetary award recovered in said case; that on appeal to the National Labor Relations Commission, the Decision of Labor Arbiter Carpio was reversed and NLRC OCW Case No. 00-12-00904-95 was dismissed by the NLRC for lack of merit; (4) that at the time respondent advanced the docket fees, complainant and respondent did not have any agreement that a Petition for Certiorari would be filed with the Court of Appeals; (5) that weeks later, when complainant reimbursed respondent for the docket fees he had advanced, respondent advised complainant and his uncle that respondent intended to appeal the Decision of the NLRC to the Court of Appeals and so he filed a Petition for Extension of Time to File Petition ; (7) that there was an error in judgment on respondents part when instead of filing a Petition for Certiorari as originally intended, respondent chose to pursue another course of action, that of entertaining the idea of filing a Motion for Execution to enforce the Labor Arbiters Decision against the other respondents who did not appeal said Decision; (8) that respondent pleads good faith in the subsequent course of action taken; that respondent entertained the idea that he could enforce the original Decision through a Motion for Execution; (9) that respondent tried his best to win complainants labor case and in fact, he won it at the Labor Arbiters level; (10) that respondent appeals to the sense of fairness of complainant; that in the 4 cases respondent handled for complainant and his uncle, respondent won 3 cases for them especially the criminal complaint for Homicide against complainants uncle; that in said criminal case, respondent did not charge a single centavo for attorneys fees.[13] In his letter-reply filed on February 7, 2003, complainant averred the following statements originally in the vernacular: it is not true that there was no acceptance fee because complainant paid respondent the am ount of P1,500 plus the amount of P500 per hearing but no receipts were issued for these payments; that there is no truth to respondents allegation that complainant was in the province because complainants uncle called respondent 3 times a week to follow-up the Petition for Review; that it was actually complainant who paid for the docket fees but respondent who physically paid the same to the Court of Appeals; and that respondent made several promises to complainants uncle regarding the status of the Pet ition for Review but nothing came out of said promises.[14]

MARCIAL L. ABIERO, complainant, vs. ATTY. BERNARDO G. JUANINO,respondent.

A lawyer owes fidelity to the cause of his client at all times, mindful of the trust and confidence reposed in him. He must always serve with competence and diligence, and never neglect a legal matter entrusted to him. An attorney should endeavor to keep his client informed of the status of his case and respond within a reasonable time to the latters request for information. Failure to comply with these abiding precepts of ethical conduct renders counsel liable for violating the canons of his profession. On July 20, 2000, an administrative complaint[1] was filed by Marcial L. Abiero charging respondent Atty. Bernardo G. Juanino with negligence in connection with a legal matter entrusted to him. It appears that complainant engaged the services of respondent of the law firm P.C. Nolasco and Associates as counsel de parte in NLRC NCR OCW Case No. 00-12-00904-95.[2] On January 29, 1998, Labor Arbiter Eduardo J. Carpio ruled in favor of complainant by ordering the respondents to pay complainant his unpaid wages and unpaid vacation leave pay, to refund his plane fare and to pay moral damages and attorneys fees.[3] On appeal, the National Labor Relations Commission reversed the arbiters decision and dismissed the case for lack of basis.[4] For several times, complainant, either personally or through his designated agents, tried to follow up the status of the case. Each time, respondent would advise him to call on a later date at which time he may have some news of any development with the case.[5] Respondent filed with the Court of Appeals a motion for extension of time to file a petition for review and paid the corresponding docket fee. When complainant verified with the Court of Appeals the status of the case, he found out that respondent never filed a Petition for Review of his labor case. Consequently, the NLRC decision became final and executory. Thus, complainant filed this administrative complaint against respondent. On August 30, 2000, respondent was required to file his comment within 10 days from notice. [6]On September 25, 2000, respondent requested for additional time to file comment. [7] Subsequently, respondent filed a series of motions for extension to file comment. On February 28, 2001, respondent was warned that no further extension shall be granted. [8] Notwithstanding, and despite 11 extensions, respondent still failed to file his comment.

The lone issue for resolution is whether respondent violated Canons 17 and 18 of the Code of Professional Responsibility. In its Report and Recommendation, the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP),[15] held that there was no sufficient justification for respondents failure to file the petition for review with the Court of Appeals. It found that respondent was aware of the period for filing said petition because he himself paid the docket fees and filed the Motion for Extension of Time to File the Petition for Review. His claim that he was pursuing another legal remedy in the labor case did not justify his failure to file the petition for review within the prescribed period. Complainant had placed his trust in respondent to handle his claims against his previous employer. Failure to comply with his legal duty as counsel of complainant in NLRC NCR OCW Case No. 00-12-00904-95 has caused damage and prejudice to the latter. Thus, in failing to file the petition for review, respondent was held to have breached Canons 17 and 18 of the Code of Professional Responsibility. The Commission on Bar Discipline of IBP recommended that respondent be suspended from the practice of law for a period of six (6) months. [16] The Board of Governors of the Integrated Bar of the Philippines, adopted the Report and Recommendation of the Investigating Commissioner, 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/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering respondents violation of Canons 17 & 18 of the Code of Professional Responsibility by failing to file the Petition for Certiorari, Atty. Bernardo G. Juanino is hereby SUSPENDED from the practice of law for six (6) months.[17] We agree with the findings of the IBP Investigating Commissioner. The lawyer has the duty to exert his best judgment in the prosecution or defense of the case entrusted to him and to exercise reasonable and ordinary care and diligence in the pursuit or defense of the case.[18] By his own admission, respondent entertained the idea of filing a motion for execution, thus: I honestly believed then that since the other respondents did not appeal the Decision to the Commission of the NLRC, I could enforce the Decision (See THIRD REASON) against these other respondents who did not appeal. So undersigned went to Honorable Labor Arbiter Eduardo J. Carpio and explained to him about my plan to file a Motion for Execution against the other respondents who did not appeal the Decision to the Commission of the NLRC. I was not able to see him the first two times that I went as I was informed he was assigned to certain task force and when I saw him the third time, Honorable Labor Arbiter Eduardo J. Carpio informed me that since decision was reversed on appeal and the complaint dismissed, there would be no basis for filing a Motion for Execution to enforce Decision. I was dumbfounded as the period to file a Petition for Certiorari already expired.[19] As a lawyer, respondent should know that he is not required to seek prior approval from the labor arbiter before he could file a motion for execution. Notwithstanding, he presented himself, not once, but thrice, before the office of the arbiter to discuss his plan to file a motion for execution, only to discover that such recourse was not feasible. Worse, while respondent was waiting for the arbiters opinion, the period to file the petition before the Court of Appeals continued to run, as in fact, it eventually expired. Failure to appeal to the Court of Appeals despite instructions by the client to do so constitutes inexcusable negligence on the part of counsel. Once a lawyer consents to defend the cause of his client,

he owes fidelity to such cause and must at all times be mindful of the trust and confidence reposed in him. He is bound to protect his clients interest to the best of his ability and perform his duties to his client with utmost diligence. Nothing less can be expected from a member of the Philippine Bar. For having neglected a legal matter entrusted to him by his client, respondent did not serve his client with diligence and competence. His inexcusable negligence on such matter renders him liable for violation of Canons 17 and 18 of the Code of Professional Responsibility.[20] As we held in the recent case of Barbuco v. Atty. Beltran,[21] an attorney is bound to protect his clients interest to the best of his ability and with utmost diligence. Thus, failure to file brief for his client certainly constitutes inexcusable negligence on his part, especially if such failure took the form of filing a pleading after the deadline for filing the same has passed. Respondent has indeed committed a serious lapse in judgment in failing to perform his professional duty to his client under the canons of his profession. The failure to timely file a pleading is by itself a sin of omission on the part of the respondent. However, complainants travails were further compounded by the failure of the respondent to maintain an open line of communication with his client in direct contravention of Canon 18, Rule 18.04 of the Code of Professional Responsibility which requires a lawyer to keep his client informed of the status of his case and respond within a reasonable time to the clients request for information.[22] In Legarda v. Court of Appeals,[23] counsels failure to exercise due diligence in protecting the interest of his client caused the latter material prejudice. The moment counsel takes a clients cause, he covenants that he will exert all effort for its prosecution until its final resolution. A lawyer who fails to exercise due diligence or abandons his clients cause makes him unworthy of the trust reposed on him by the latter; he
owes fealty, not only to his client, but also to the Court of which he is an officer.[24] We observed in Parias v. Atty. Paguinto[25] that a lawyer should give adequate attention, care and time to his clients case. Once he agrees to handle a case, he should undertake the task with dedication and care. If he fails in this duty, he is not true to his oath as a lawyer. Thus, a lawyer should accept only as much cases as he can efficiently handle in order to sufficiently protect his clients interests. It is not enough that a lawyer possesses the qualification to handle the legal matter; he must also give adequate attention to his legal work. Utmost fidelity is demanded once counsel agrees to take the
cudgels for his clients cause. In Barbuco v. Atty. Beltran, Guiang v. Atty. Antonio ,[26] and Sps. Villaluz v. Judge Armenta,[27]the Court suspended counsel for six months upon a finding that their failure to perfect an appeal was inexcusable and persuasively demonstrative of negligence and malpractice, a violation of Rule 18.03 of the Code of Professional Responsibility which declares that a lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. We cannot overstate the duty of a lawyer to uphold the integrity and dignity of the legal profession at all times. He can do this by faithfully performing his duties to society, to the bar, to the courts and to his clients. [28] Incidentally, we note that respondent delayed the filing of the comment for more than two (2) years. Despite numerous extensions, which were all granted, still, he filed the comment one (1) day late. By neglecting his duties to his client and to this Court, respondent transgressed the canons of legal ethics enshrined in the Code of Professional Responsibility. Such misconduct should not be countenanced. WHEREFORE, in view of the foregoing, respondent Atty. Bernardo G. Juanino is found guilty of negligence and is SUSPENDED from the practice of law for six (6) months effective upon receipt of this Decision, with a WARNING that a repetition of the same or similar acts will be dealt with more severely. Let a copy of this Decision be furnished to the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the Philippines, for their information and guidance. SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.

Republic SUPREME Manila FIRST DIVISION G.R. No. 152072

of

the

Philippines COURT

On 25 May 1983, said case was ordered archived6 by Branch 141. About a month before the aforecited case was ordered archived, the Zuzuarreguis engaged the legal services of Attys. Romeo G. Roxas and Santiago N. Pastor, to represent them in Civil Case No. 26804. This was sealed by a Letter-Agreement dated 22 April 1983, which is partly reproduced hereunder:

January 31, 2006

April 22, 1983 Mr. Antonio de Zuzuarregui, Mrs. Pacita Javier (as heir to the late Jose de Mr. Antonio de Zuzuarregui ( as heir to the late Pilar Y. vda. De Zuzuarregui) Dear Sir and Madam: This is to confirm in writing our verbal negotiations for us to represent you in the expropriation proceedings filed by the National Housing Authority against your goodselves before the Court of First Instance of Rizal (now the Regional Trial Court) and docketed as Civil Case No. 26804. Our representation shall also include the areas taken over by the Ministry of Public Works and Highways which now formed part of the Marcos Highway at Antipolo, Rizal. The areas affected are the following: xxxx We shall endeavor to secure the just compensation with the National Housing Authority and other governmental agencies at a price of ELEVEN PESOS (P11.00) or more per square meter. Any lower amount shall not entitle us to any attorneys fees. At such price of P11.00 per square meter or more our contingent fee[s] is THIRTY PERCENT (30%) of the just compensation. The other terms and conditions of our proposal are: xxxx 5. You are willing to accept NHA 5-year bonds as part payment up to 75% of the total compensation. In the event of your desire to discount the bonds, we shall assist to have them discounted at 75% of its face value. 6. Our lawyers fees shall be in the proportion of the cash/bonds ratio of the just compensation. Likewise our fees are subject to 10% withholding tax. xxxx Should the above proposal be acceptable to your goodselves, kindly signify your formal Jr. Zuzuarregui)

ROMEO G. ROXAS and SANTIAGO N. PASTOR, Petitioners, vs. ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI, PACITA JAVIER, ELIZABETH R. GONZALES, JOSEFINA R. DAZA, ELIAS REYES, NATIVIDAD REYES, TERESITA REYES, JOSE REYES and ANTONIO REYES, Respondents. x----------------------------------x G.R. No. 152104 January 31, 2006

ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI, PACITA JAVIER, ELIZABETH R. GONZALES, JOSEFINA R. DAZA, ELIAS REYES, NATIVIDAD REYES, TERESITA REYES, JOSE REYES and ANTONIO REYES, Petitioners, vs. THE NATIONAL HOUSING AUTHORITY, JOSE B. H. PEDROSA, ROMEO G. ROXAS and SANTIAGO N. PASTOR, Respondents. DECISION CHICO-NAZARIO, J.: Before Us are two petitions for review on certiorari 1 which were consolidated per Resolution2 of this Court dated 27 November 2002. The petitioners in G.R. No. 152072, Attys. Romeo G. Roxas and Santiago N. Pastor, seek the reversal and annulment of the Decision3 and Resolution4 of the Court of Appeals dated 25 June 2001 and 06 February 2002, respectively. The petitioners in G.R. No. 152104, the Zuzuarreguis, on the other hand, pray that the said Decision and Resolution of the Court of Appeals be modified. Said Decision and Resolution reversed and set aside the decision of the Regional Trial Court (RTC), Branch 98, Quezon City, dated 03 January 1994. THE ANTECEDENTS The instant cases had their beginnings in 1977 when the National Housing Authority (NHA) filed expropriation proceedings against the Zuzuarreguis, petitioners in G.R. No. 152104, for parcels of land belonging to the latter situated in Antipolo, Rizal, with a total land area of 1,790,570.36 square meters, more or less. This case was lodged before the RTC, Branch 141, Municipality of Makati, 5 docketed therein as Civil Case No. 26804 entitled, "National Housing Authority v. Pilar Ibaez Vda. De Zuzuarregui, et al."

acceptance as (sic) the space hereunder provided. Very truly yours, (Sgd.) SANTIAGO Lawyer CONFORME: (Sgd.) ANTONIO DE ZUZUARREGUI, JR. In my behalf and as heir to the late Pilar Y. vda. De Zuzuarregui as heir to the late Jose De Zuzuarregui7 (Sgd.) PACITA JAVIER N. (Sgd.) PASTOR ROMEO Lawyer G. ROXAS (3) To negotiate for and in our behalves for the settlement of the just compensation of our properties payable in cash or in bonds; (4) To sign and prepare all papers relative to the preparation of a Compromise Agreement or any papers and communications which shall eventually bear our signatures; and (5) That this Special Power of Attorney is enforce (sic) as long as ATTYS. ROMEO G. ROXAS AND SANTIAGO PASTOR are our lawyers in Civil Case No. 26804 before the Regional Trial Court, Makati, Branch CXLI. HEREBY GIVING AND GRANTING unto our said attorneys full power and authority whatsoever requisite or necessary or proper to be done in or about the premises, as fully to all intents and purposes as we might or could lawfully do if personally present, and hereby ratifying and confirming all that our said attorneys shall do or cause to be done under and by virtue of these presents. IN WITNESS WHEREOF, We have hereunto set our hands this 26th day of August, 1985, in Makati, M. M., Philippines. (Sgd.) ANTONIO DE ZUZUARREGUI, JR.1avvph!l.ne+ JOINT SPECIAL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS: That We, ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI and PACITA JAVIER, all of legal age, , do hereby appoint, name and constitute ATTYS. ROMEO G. ROXAS and SANTIAGO PASTOR, to be our true and lawful attorneys to act in our names and on our behalves to do and execute all or any of the following acts and deeds subject to our approval: xxxx (Sgd.) PACITA JAVIER10 (Sgd.) ENRIQUE DE ZUZUARREGUI (2) To represent us in the negotiations for a compromise with the National Housing Authority for our properties subject of the above case;

A Motion to Set Case for Hearing,8 dated 14 February 1984, was filed by Attys. Roxas and Pastor in Civil Case No. 26804, praying that the case be revived and be set for hearing by the court at the earliest date available in its calendar. The appropriate proceedings thereafter ensued. On 29 October 1984, a Partial Decision was rendered by Branch 141 in Civil Case No. 26804 fixing the just compensation to be paid to the Zuzuarreguis at P30.00 per square meter. The NHA filed a Motion for Reconsideration9 dated 23 November 1984 praying that the Partial Decision be reconsidered and set aside, and a new one rendered lowering the amount of just compensation in accordance with applicable laws. Pending resolution thereof, a Joint Special Power of Attorney was executed by Antonio De Zuzuarregui, Jr., Enrique De Zuzuarregui and Pacita Javier, in favor of Attys. Roxas and Pastor, viz:

On 22 November 1985, a Special Power of Attorney was executed by Beatriz Zuzuarregui vda. De Reyes in favor of Attys. Romeo G. Roxas, Santiago Pastor and Basilio H. Toquero, quoted as follows:

On 10 December 1985, a Letter-Agreement was executed by and between Antonio Zuzuarregui, Jr., Pacita Javier and Enrique De Zuzuarregui, on the one hand, and Attys. Romeo G. Roxas and Santiago Pastor, on the other. The said Letter-Agreement reads: SPECIAL POWER OF ATTORNEY December 10, 1985 KNOW ALL MEN BY THESE PRESENTS: That I, BEATRIZ ZUZUARREGUI VDA. DE REYES, Filipino, of legal age, widow, and a resident of E. Rodriguez Ave., Quezon City, Philippines do hereby appoint, name and constitute ATTYS. ROMEO G. ROXAS, SANTIAGO PASTOR and BASILIO H. TOQUERO, to be my true and lawful attorneys : 1. To represent me in the negotiation for a Compromise with the National Housing Authority for my properties subject to my approval in CIVIL CASE No. 26804, entitled "National Housing Authority vs. Pilar Ibaez de Zuzuarregui, et al., before the Regional Trial Court, Makati, Branch CXLI; 2. To negotiate for and in my behalf for the settlement of the just compensation of my properties payable in cash or in bond, subject to my approval; 3. To sign and prepare all papers relative to the preparation of a Compromise Agreement or any papers and communications which shall eventually bear my signature; 4. To accept for and in my behalf payments for my properties after the Compromise Agreement is duly approved by the Court, the actual receipts of which payments shall be signed by me. HEREBY GIVING AND GRANTING unto my said attorneys full power and authority whatsoever requisite, necessary or proper to be done under and by virtue of these presents. IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of November 1985, in the City of Manila, Philippines. (Sgd.) BEATRIZ ZUZUARREGUI VDA. DE REYES11 Atty. Atty. Makati Salcedo Village, Makati Dear Atty. Roxas & Atty. Pastor: This will confirm an amendment to our agreement regarding your attorneys fees as our lawyers and counsels for the Zuzuarreguis properties expropriated by National Housing Authority covering ONE HUNDRED SEVENTY-NINE (179) HECTARES, more or less, covered by TCT Nos. 138340, 85633 and 85634 and filed as Civil Case No. 26804. We hereby confirm and agree that we are willing to accept as final and complete settlement for our 179 hectares expropriated by NHA a price of SEVENTEEN PESOS (P17.00) per square meter, or for a total of THIRTY MILLION FOUR HUNDRED THOUSAND PESOS (P30.4 Million), all payable in NHA Bonds. We also agree and confirm that for and in consideration of your services as our lawyers and counsels in the said expropriation case, we commit and bind ourselves to pay to you, your heirs or assignees-ininterest, as your contingent attorneys fees any and all amount in excess of the SEVENTEEN PESOS (P17.00) per square meter payable in NHA bonds as mentioned above. This Letter Agreement serves also as your authority to collect directly from NHA the amount pertaining to you as your contingent attorneys fees. This Letter Agreement hereby amends and supersedes our previous agreement regarding y our attorneys fees as our lawyers and counsels in the above-mentioned expropriation case. Very truly yours, (Sgd.) ANTONIO DE In my behalf as heir to the late Pilar I. vda. de Zuzuarregui (Sgd.)PACITA As heir to the late Jose De Zuzuarregui (Sgd.) ENRIQUE DE ZUZUARREGUI ZUZUARREGUI, JR. Romeo Santiago Executive G. Roxas Pastor Center

JAVIER

CONFORME: (Sgd.)ATTY. ROMEO G. ROXAS (Sgd.)ATTY. SANTIAGO PASTOR

12

Zuzuarreguis (except Betty) in the expropriation proceedings filed by the NHA, docketed as Civil Case No. 26804, was being formally terminated. Apparently unsatisfied with the explanation of Attys. Roxas and Pastor, the Zuzuarreguis filed a civil action for Sum of Money and Damages on 14 November 1989 before the RTC, Quezon City, Branch 98, docketed as Civil Case No. Q-89-4013, against the NHA, Jose B. H. Pedrosa, Atty. Romeo G. Roxas and Atty. Santiago N. Pastor. The Zuzuarreguis demanded that the yield on the NHA bonds be turned over to them. After due hearing, a Decision22 in Civil Case No. Q-89-4013 was rendered on 03 January 1994, dismissing the Complaint. The dispositive portion reads: WHEREFORE, in view of the foregoing consideration[s], judgment is hereby rendered ordering the dismissal of the complaint against all the defendants; and, further ordering plaintiffs, jointly and solidarily, to: 1. Pay each of the defendants Romeo G. Roxas, Santiago Pastor and Jose B. H. Perdosa, the amount of P200,000.00, P200,000.00 and P100,000.00, respectively, as moral damages; 2. Pay each of the defendants Roxas, Pastor and Pedrosa, the amount of P50,000.00, P50,000.00, and P25,000.00, respectively as exemplary damages; 3. Pay attorneys fees to defendants Roxas and Pastor in the amount of P20,000.00; and 4. Pay the costs of this suit. A Notice of Appeal23 dated 10 February 1994 was filed by the Zuzuarreguis. Subsequently, on 26 April 1995, the Zuzuarreguis filed their appeal brief with the Court of Appeals. The case was docketed as CAG.R. CV No. 45732. A Decision24 was eventually promulgated by the Fifteenth Division of the Court of Appeals on 25 June 2001, reversing and setting aside the ruling of Branch 98, viz: Therefore, We find that the amount of P4,476,426.275 is, in the opinion of this Court, commensurate to the services rendered by defendants-appellees. This amount has been arrived at by giving to defendantsappellees P2.50 per square meter of the 1,790,570.51 square meter expropriated properties of herein plaintiffs-appellants. WHEREFORE, IN VIEW OF THE FOREGOING, the decision dated January 3, 1994 of the Regional Trial Court, National Capital Judicial Region, Branch 98, Quezon City in Civil Case No. 89-4013 entitled "Antonio Zuzuarregui, Jr., et al. versus National Housing Authority, et al." for "Sum of Money and Damages," is hereby REVERSED and SET ASIDE. Defendants-Appellees Roxas and Pastor are hereby ordered to return to plaintiffs-appellants the amount of P12,596,696.425, the balance from the P17,073,122.70, received as yield from NHA bonds after deducting the reasonable attorneys fees in the amount of P4,476,426.275.25

Resolution No. 117413 dated 16 December 1985 was issued by the NHA stating that the Zuzuarregui property would be acquired at a cost of P19.50 per square meter; that the Zuzuarreguis would be paid in NHA Bonds, subject to the availability of funds; and that the yield on the bonds to be paid to the Zuzuarreguis shall be based on the Central Bank rate at the time of payment. As a result of the aforesaid NHA Resolution, a Compromise Agreement was executed between the Zuzuarreguis and the NHA in Civil Case No. 26804. The Compromise Agreement, stipulated among other things, that the just compensation of the Zuzuarregui properties would be at P19.50 per square meter payable in NHA Bonds. In a Decision dated 20 December 1985, the RTC, Branch 141, Makati, approved the Compromise Agreement submitted by the parties. On 27 December 1985, the NHA Legal Department, through Atty. Jose B. H. Pedrosa, released to Atty. Romeo G. Roxas, in behalf of the Zuzuarreguis, the amount of P20,000,000.00 in NHA Bearer Bonds as "partial payment for several parcels of land with a total area of 1,790,570.36 square meters located in Antipolo, Rizal."14 On even date, Atty. Romeo G. Roxas delivered NHA Bonds to Antonio De Zuzuarregui in the amount of P15,000,000.00.15On 04 February 1986, the amount of P34,500,000.00 in Bearer Bonds was again released by the NHA to Atty. Romeo G. Roxas in behalf of the Zuzuarreguis. 16 On 14 February 1986, the Zuzuarreguis issued a receipt17 for receiving the amount of P30,070,000.00. This receipt included the P15,000,000.00 given to them last 27 December 1985. Again on 17 February 1986, the Zuzuarreguis, through Beatriz Zuzuarregui vda. De Reyes, issued another receipt for the amount of P450,000.00 in NHA bonds.18 The total amount in NHA bonds released to Atty. Romeo G. Roxas in behalf of the Zuzuarreguis amounted to P54,500,000.00. Out of this amount, the records show that the amount turned over to the Zuzuarreguis by Atty. Roxas amounted to P30,520,000.00 in NHA bonds. Computed at P19.50 per square meter, the 1,790,570.36 square meters property of the Zuzuarreguis was expropriated at a total price of P34,916,122.00. The total amount released by the NHA was P54,500,000.00. The difference of P19,583,878.00 is, undoubtedly, the yield on the bonds. On 25 August 1987, a letter19 was sent by the Zuzuarreguis new counsel, Jose F. Gonzalez, to Attys. Roxas and Pastor, demanding that the latter deliver to the Zuzuarreguis the yield corresponding to bonds paid by the NHA within a period of 10 days from receipt, under pain of administrative, civil and/or criminal action. Attys. Roxas and Pastor answered via a letter dated 21 September 1987 explaining their side of the story. They stated therein, among other things, that the amount that they got seems huge from the surface, but it just actually passed their hands, as it did not really go to them. 20 On 29 September 1987, a letter21 was sent by the Zuzuarreguis through Antonio De Zuzuarregui, Jr., to Attys. Romeo G. Roxas and Santiago N. Pastor, informing the latter that their services as counsels of the

Attys. Roxas and Pastor filed a Motion for Reconsideration26 on 25 July 2001. The Zuzuarreguis also filed a Motion for Reconsideration27 on 30 July 2001, not having been satisfied with the award, while the NHA and Pedrosa filed their Motions for Reconsideration28 on 03 August 2001. In a Resolution dated 06 February 2002, the Court of Appeals denied for lack of merit all the Motions for Reconsideration. On 05 March 2002, Attys. Roxas and Pastor filed a Petition for Review on Certiorari 29 assailing the Decision of the Court of Appeals, docketed as G.R. No. 152072. Likewise, on 21 March 2002, the Zuzuarreguis filed their own Petition for Review on Certiorari30 assailing the same Decision, docketed as G.R. No. 152104.1avvph!l.ne+ ASSIGNMENT OF ERRORS Attys. Roxas and Pastor, petitioners in G.R. No. 152072, assign as errors the following: I

THE RESPONDENTS SHOULD BE HELD LIABE FOR MORAL AND EXEMPLARY DAMAGES AND ATTORNEYS FEES IV THE RESPONDENTS NHA AND JOSE B.H. PEDROSA ARE JOINTLY AND SEVERALLY LIABLE WITH RESPONDENTS ROXAS AND PASTOR32 ISSUE FOR RESOLUTION Drawn from the above assignment of errors, it is patent that the principal issue that must be addressed by this Court is: WHETHER OR NOT THE LETTER-AGREEMENT DATED 10 DECEMBER 1985, EXECUTED BY THE ZUZUARREGUIS, AND ATTYS. ROXAS AND PASTOR, FIXING THE EXACT AMOUNT THAT MUST GO TO THE FORMER, SHOULD STAND AS LAW BETWEEN THE PARTIES. THE COURTS RULING

THE HONORABLE COURT OF APPEALS GRAVELY ERRED ON A QUESTION OF LAW IN HOLDING THAT THE LETTER-AGREEMENT DATED DECEMBER 10, 1985 CANNOT BE ALLOWED TO STAND AS THE LAW BETWEEN THE PARTIES; and II THE HONORABLE COURT OF APPEALS GRAVELY ERRED ON A QUESTION OF LAW IN HOLDING THAT DEFENDANTS-APPELLANTS, HEREIN PETITIONERS, CONCEALED TO THE PLAINTIFFSAPPELLEES, HEREIN RESPONDENTS, THE YIELD OF THE NHA BONDS31 The Zuzuarreguis, petitioners in G.R. No. 152101, on the other hand, assign as errors the following: I THE COURT OF APPEALS ERRED IN AWARDING TO PETITIONERS THE PRINCIPAL AMOUNT OF ONLY P12,596,696.425 AND NOT P17,073,122.70 MAKING A DIFFERENCE OF P4,476,426.28 II THE RESPONDENTS SHOULD BE HELD LIABLE FOR INTEREST FROM THE DATE OF THE FILING OF THE COMPLAINT UNTIL FULLY PAID III

Attys. Roxas and Pastor, petitioners in G.R. No. 152072, contend in the main that the Zuzuarreguis are only entitled to the amount of P17.00 per square meter for the 1,790,570.36 square meters expropriated by the government. This was, according to them, embodied in the Letter-Agreement dated 10 December 1985, wherein the Zuzuarreguis agreed to accept the price of P17.00 per square meter. Besides, Attys. Roxas and Pastor contend that the price of P17.00 was even way above the P11.00 that the Zuzuarreguis were willing to accept for their properties under the Letter of Engagement executed by the parties earlier on 22 April 1983. Computed atP17.00 per square meter, they stress that the amount that should go to the Zuzuarreguis for their 1,790,570.36 square meters property should be P30,439,696.10, and that in fact the Zuzuarreguis have receivedP30,520,000.00. The Letter-Agreement dated 10 December 1985 should thus stand as law between the parties. Since this Letter-Agreement, which was "as plain and simple as can be such that there is no need for any further construction," already fixed the amount that would go to the Zuzuarreguis (P17.00 per square meter), then it should be so. Attys. Roxas and Pastor further assert that the receipts issued by the Zuzuarreguis dated 14 February 1986 and 17 February 1986 indicated that the amounts received by the latter were in "full and final payment" for the subject properties. The NHA, for its part, insists that there was no conspiracy between Attys. Roxas and Pastor on the one hand, and the NHA and Atty. Pedrosa on the other, on the application of yields from NHA bonds.33 The Zuzuarreguis, according to the NHA, "miserably failed to substantiate and establish conspiracy" between them. The Zuzuarreguis, for their part, though they were triumphant in the Court of Appeals, insist that the amounts awarded them were not enough. According to them, the P12,596,696.425 awarded by the Court of Appeals was not correct. They should have been awarded the amount of P17,073,122.70. Quoting the Zuzuarreguis:

Respondents Roxas and Pastor retained for themselves the amount of P3,980,000.00 which represented the agreed attorneys fees of Roxas and Pastor at P2.50 per square meter. The amount of P20,000,000.00 representing the yield of all the bearer bonds was, in the words of the Court of Appeals, "deliberately hidden" by respondents Roxas and Pastor from petitioners. By mathematical computation, the P20,000,000.00 yield should be proportionately divided at the ratio of P17.00 (petitioners) and P2.50 (share of respondents Roxas and Pastor). Following this ratio of division, of the P20,000,000.00 yield, P17,073,122.70 should pertain to petitioners and the balance of P2,926,877.30 to respondents Roxas and Pastor. Add this amount to the total of P3,980,000.00 at the agreed rate of P2.50 per square meter, the total attorneys fees of respondents Roxas and Pastor should be P6,906,877.30, not bad, again in the words of the Court of Appeals, for handling "a simple expropriation case which ended up in a compromise agreement." It was, therefore, in error to still deduct the amount of P4,476,426.28 from petitioners share in the yield in the amount of P17,073,122.70 leaving then only P12,596,696.42. What was done, however, is that the product of 1,790,570.36 sq m. (area of the expropriated land of petitioners) and P2.50 which is 4,476,426.28 was again deducted from the P17,073,122.70 which is the corresponding share of the petitioners out of the total yield of P20,000,000.00. If this were a criminal case, petitioners were being sentenced twice for the same offense. 34 The Zuzuarreguis further insist that legal interest on the amount of P17,073,122.70 be imposed from the date of the filing of the complaint, including moral and exemplary damages, and attorneys fees. We sustain the Court of Appeals, but with modification in the computation. A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. 35 Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential requisites for their validity are present. 36 Under Article 1318 of the Civil Code, there are three essential requisites which must concur in order to give rise to a binding contract: (1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which is established. 37 All these requisites were present in the execution of the Letter-Agreement. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract.38 The Zuzuarreguis, in entering into the Letter-Agreement, fully gave their consent thereto. In fact, it was them (the Zuzuarreguis) who sent the said letter to Attys. Roxas and Pastor, for the purpose of confirming all the matters which they had agreed upon previously. There is absolutely no evidence to show that anybody was forced into entering into the Letter-Agreement. Verily, its existence, due execution and contents were admitted by the Zuzuarreguis themselves. 39 The second requisite is the object certain. The objects in this case are twofold. One is the money that will go to the Zuzuarreguis (P17.00 per square meter), and two, the money that will go to Attys. Roxas and Pastor (any and all amount in excess of P17.00 per square meter). There was certainty as to the amount that will go to the Zuzuarreguis, and there was likewise certainty as to what amount will go to Attys. Roxas and Pastor.

The cause is the legal service that was provided by Attys. Roxas and Pastor. In general, cause is the why of the contract or the essential reason which moves the contracting parties to enter into the contract. 40 It is basic that a contract is the law between the parties. 41 Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good customs, public order or public policy, the same are binding as between the parties.42 In Licudan v. Court of Appeals,43 we did not allow the Contract for Professional Services between the counsel and his client to stand as the law between them as the stipulation for the lawyers compensation was unconscionable and unreasonable. We said: Although the Contract for Professional Services dated August 30, 1979 was apparently voluntarily signed by the late Aurelio Licudan for himself and on behalf of his daughter, petitioner Cristina Licudan-Campos and by the petitioner Wilfredo Licudan who both manifested in open court that they gave their free and willing consent to the said contract, we cannot allow the said contract to stand as the law between the parties involved considering that the rule that in the presence of a contract for professional services duly executed by the parties thereto, the same becomes the law between the said parties is not absolute but admits an exception that the stipulations therein are not contrary to law, good morals, good customs, public policy or public order.44 Under the contract in question, Attys. Roxas and Pastor are to receive contingent fees 45 for their professional services. It is a deeply-rooted rule that contingent fees are not per se prohibited by law. They are sanctioned by Canon 13 of the Canons of Professional Ethics, viz: 13. Contingent Fees. A contract for contingent fee, where sanctioned by law, should be reasonable under all the circumstances of the case including the risk and uncertainty of the compensation, but should always be subject to the supervision of a court, as to its reasonableness. and Canon 20, Rule 20.01 of the Code of Professional Responsibility,46 viz: CANON 20 A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES. Rule 20.01. A lawyer shall be guided by the following factors in determining his fees: (a) The time spent and the extent of the services rendered or required; (b) The novelty and difficulty of the question involved; (c) The importance of the subject matter; (d) The skill demanded;

(e) The probability of losing other employment as a result of acceptance of the proffered case; (f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) The contingency or certainty of compensation; (i) The character of the employment, whether occasional or established; and (j) The professional standing of the lawyer. However, in cases where contingent fees are sanctioned by law, the same should be reasonable under all the circumstances of the case, and should always be subject to the supervision of a court, as to its reasonableness,47such that under Canon 20 of the Code of Professional Responsibility, a lawyer is tasked to charge only fair and reasonable fees. Indubitably entwined with the lawyers duty to charge only reasonable fees is the power of this Court to reduce the amount of attorneys fees if the same is excessive and unconscionable. 48 Thus, Section 24, Rule 138 of the Rules of Court partly states: SEC. 24. Compensation of attorneys; agreement as to fees. An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. x x x. A written contract for services shall control the amount to be paid therefore unless found by the court to be unconscionable or unreasonable. Attorneys fees are unconscionable if they affront ones sense of justice, decency or reasonableness. 49 It becomes axiomatic therefore, that power to determine the reasonableness or the, unconscionable character of attorney's fees stipulated by the parties is a matter falling within the regulatory prerogative of the courts.50 In the instant case, Attys. Roxas and Pastor received an amount which was equal to forty-four percent (44%) of the just compensation paid (including the yield on the bonds) by the NHA to the Zuzuarreguis, or an amount equivalent to P23,980,000.00 of the P54,500,000.00. Considering that there was no full blown hearing in the expropriation case, ending as it did in a Compromise Agreement, the 44% is, undeniably, unconscionable and excessive under the circumstances. Its reduction is, therefore, in order. This is in accordance with our ruling in the earlier case of Tanhueco v. De Dumo 51, where we reduced the amount of attorneys fees from sixty percent (60%) to fifteen percent (15%), for being excessive and unreasonable. It is imperative that the contingent fees received by Attys. Roxas and Pastor must be equitably reduced. In the opinion of this Court, the yield that corresponds to the percentage share of the Zuzuarreguis in the

P19.50 per square meter just compensation paid by the NHA must be returned by Attys. Roxas and Pastor.1avvph!l.ne+ The yield on the NHA bonds amounted to P19,583,878.00. This amount must therefore be divided between the Zuzuarreguis, on the one hand, and Attys. Roxas and Pastor, on the other. The division must be pro rata. The amount of P17.00 that should go to the Zuzuarreguis represents 87.18% of the P19.50 per square meter just compensation, The P2.50 per square meter that was to go to Attys. Roxas and Pastor, on the other hand, represents 12.82%. The Zuzuarreguis are entitled to the yield equal to 87.18% of the P19,583,878.00, while Attys. Roxas and Pastor are entitled to 12.82% of said amount. The amount corresponding to 87.17% of P19,583,878.00 is P17,073,224.84. This is the yield that the Zuzuarreguis are entitled to. Attys. Roxas and Pastor, on the other hand, are entitled to P2,510,653.16. Attys. Roxas and Pastor, in the opinion of this Court, were not shortchanged for their efforts for they would still be earning or actually earned attorneys fees in the amount of P6,987,078.75 (P4,476,425.59 + P2,510,653.16). The amount of P17,073,224.84 must therefore be returned by Attys. Roxas and Pastor to the Zuzuarreguis. They can take this out from the yield in the amount of P19,583,878.00 which they have appropriated for themselves. On the issue of moral and exemplary damages, we cannot award the same for there was no direct showing of bad faith on the part of Attys. Roxas and Pastor, for as we said earlier, contingency fees are not per se prohibited by law. It is only necessary that it be reduced when excessive and unconscionable, which we have already done. We likewise cannot hold the NHA and Atty. Pedrosa jointly and severally liable to the Zuzuarreguis for there is no evidence to show conspiracy between them. WHEREFORE, in view of all the foregoing considerations, the Decision and Resolution of the Court of Appeals dated 25 June 2001 and 06 February 2002, respectively, are AFFIRMED but with the MODIFICATION that Attys. Romeo G. Roxas and Santiago N. Pastor are hereby ordered to return to the Zuzuarreguis the amount of P17,073,224.84. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC A.M. No. 2144 April 10, 1989 CELEDONIO QUILBAN, ROMUALDO DALAGAN, FORTUNATO RAMIREZ AMADOR ALARCON and LUIS AGAWAN, complainant, vs. ATTY. SANTIAGO R. ROBINOL, respondent. A.M. No. 2180 April 10, 1989 ATTY. SANTIAGO R. ROBINOL, complainant, vs. ATTY. A. R. MONTEMAYOR, respondent. RESOLUTION

Idea of donating or selling the land cheap to the squatters. Congressman Taruc then advised the squatters to form an organization and choose a leader authorized to negotiate with Father Escaler. Following that advice, the squatters formed the "Samahang Pagkakaisa ng Barrio Bathala" (Samahan, for brevity), with Bernabe Martin as President (Exhibit "24", Robinol), who was entrusted with the task of negotiating on their behalf for the sale of the land to them. But instead of working for the welfare of the Samahan, Martin went to one Maximo Rivera, a realtor, with whom he connived to obtain the sale to the exclusion of the other Samahan members. On 28 March 1971, the land was ultimately sold to Rivera at P 15 per square meter or a total consideration of P 41,961.65. The prevailing price of the land in the vicinity then was P 100 to P 120 per square meter. It was evident that Father Escaler had been made to believe that Rivera represented the squatters on the property. On the same date, 28 March 1971, Rivera obtained TCT No. 175662 to the property in his name alone. In 1972, thirty-two heads of families of the Samahan filed Civil Case No. Q-16433, Branch IV, Quezon City, entitled "Celedonio Quilban, et al., Plaintiffs, vs. Maximo Rivera, et al., Defendants." with the principal prayer that said defendants be ordered to execute a deed of conveyance in favor of said plaintiffs after reimbursement by the latter of the corresponding amount paid by Rivera to the Colegio. The Court of First Instance of Quezon City, however, dismissed the case. To prosecute the appeal before the Court of Appeals, the Samahan members hired as their counsel Atty. Santiago R. Robinol for which the latter was paid P 2,000.00 as attorney's fees on 8 October 1975 (Exhibit "I"). Atty. Robinol was also to be given by the members a part of the land, subject matter of the case, equal to the portion that would pertain to each of them. What was initially a verbal commitment on the land sharing was confirmed in writing on 10 March 1979 (Exhibit "2"). On 14 November 1978, the Court of Appeals reversed the CFI Decision by:

PER CURIAM: Subjected to frustrations were the dreams of thirty-two (32) squatter families to own the land of approximately 50 square meters each on which their respective homes were built. To vindicate their rights they have aired their plight before this Court. Thwarted, too, was the benevolence shown by the original owner of the land which parted with its property at a giveaway price thinking that it was accommodating the landless squatters. The antecedent facts follow: The Colegio de San Jose, a Jesuit corporation, (Colegio, for short) used to own a parcel of land at the Seminary Road, Barrio Bathala, Quezon City. Through its administrator, Father Federico Escaler, it sold said land to the Quezon City Government as the site for the Quezon City General Hospital but reserved an area of 2,743 square meters as a possible development site. Squatters, however, settled in the area since 1965 or 1966. Sometime in 1970, the Colegio, through Father Escaler gave permission to Congressman Luis R. Taruc to build on the reserved site a house for his residence and a training center for the Christian Social Movement. Seeing the crowded shanties of squatters, Congressman Taruc broached to Father Escaler the

(1) ordering defendant Maximo Rivera and all his co-defendants to execute a deed of conveyance of the land in question in favor of herein plaintiffs after the payment of the corresponding amount paid by the defendants to the Colegio de San Jose, Inc., and in case of refusal or failure on their part to do so, ordering the Clerk of Court to execute the same in favor of plaintiffs and declaring TCT No. 175662 (Annex E) null and void and ordering the Register of Deeds of Quezon City to cancel said certificate and issue a new one in lieu thereof in the name of plaintiffs-appellants, upon presentation of the deed of conveyance to be executed in favor of appellants and (2) ordering appellees jointly and severally to pay appellants the sum of P 2,000.00 as attomey's fees, plus costs." (p. 30, Report and Recommendation) To raise the amount of P 41,961.65 ordered paid by the Court of Appeals, plus expenses for ejectment of the non-plaintiffs occupying the property, conveyance, documentation, transfer of title etc., the five officers of the Samahan collected, little by little, P 2,500.00 from each head of family. The Treasurer, Luis Agawan, issued the proper receipts prepared by Atty. Robinol. On 18 May 1979, the sum of P 68,970.00 was turned over to Atty. Robinol by the officers; on 31 May 1979 the amounts of P l,030.00 and P 2,500.00 respectively; and on 2 June 1979, the sum of P 2,500.00, or a total of P 75,000.00.

After almost a year, the five officers discovered that no payment had been made to Rivera. When queried, Atty. Robinol replied that there was an intervention filed in the civil case and that a Writ of Execution had not yet been issued by the Court of First Instance of Quezon City. However, it turned out that the motion for intervention had already been dismissed. After confronting Atty. Robinol with that fact, the latter gave other excuses, which the officers discovered to have no basis at all. On 6 March 1980, 21 out of 32 plaintiffs arrived at a "first consensus" to change their counsel, Atty. Robinol (Exhibit "3"). The officers of the Samahan thereafter approached Atty. Anacleto R. Montemayor, who agreed to be their counsel, after he was shown the document of 6 March 1980 containing the consensus of the Samahan members to change Atty. Robinol as their lawyer. Upon Atty. Montemayor's advice, the officers sent Atty. Robinol a letter dated 17 March 1980 informing the latter of their decision to terminate his services and demanding the return of the P 75,000.00 deposited with him (Exhibit "5"). Atty. Robinol turned deaf ears to the demand. A subsequent letter of the same tenor, dated 31 March 1980 (Exhibit "6"), was similarly disregarded by Atty. Robinol. On 20 March 1980, Atty. Montemayor formally entered his appearance in Civil Case No. Q-16433 as counsel for the plaintiffs (Exhibit "8"), vice Atty. Robinol, on the strength of the authority dated 18 March 1980 given him by plaintiffs in said civil case through the five officers (Exhibit "9"). Atty. Montemayor then filed on 20 March 1980 a Motion for Execution praying that the defendants and/or the Clerk of Court be directed to execute a deed of conveyance in favor of the plaintiffs (Exhibit "10"). At the hearing of the Motion for Execution on 5 June 1980, Atty. Robinol manifested that he had no objection to the appearance of and his substitution by Atty. Montemayor (Exhibits "11" & "11-A"). Because Atty. Robinol, however, still questioned the first consensus dated 6 March 1980, another document labelled the "second consensus" (Exhibit "E") was signed by 21 plaintiffs during a meeting held for the purpose on 24 November 1980 to the effect that they had decided to change Atty. Robinol as their counsel because he had delayed paying for their land notwithstanding the Decision of the Court of Appeals in their favor. Administrative Case No. 2144 On 15 April 1980 the Samahan officers filed this Administrative Complaint before this Court requesting the invention of Atty. Robinol for refusal to return the P 75,000.00 and praying that the Court exercise its power of discipline over members of the Bar unworthy to practice law. The details of their Complaint were embodied in their Joint Affidavit executed on 14 April 1980 describing what had transpired between them and Atty. Robinol. In his defense, Atty. Robinol maintains that he was hired by Complainants to appeal their case to the Court of appeals after they had lost in the lower Court; that their agreement as to attomey's fees was on a contingent basis if he obtains a reversal of the lower Court Decision, they wig give him a portion of the property subject matter of the litigation equal to the portion that will pertain to each of the 32 plaintiffs in Civil Case No. Q-16433; that he did not receive P 70,000.00 from Complainants on 18 May 1979 but only P 56,470.00; that he prepared and signed the receipt dated 18 May 1979 showing that he received P 70,000.00 only to save complainants from embarrassment and shame should their co-plaintiff ask for proof that they (Complainants) have paid their shares, which they have not; that the correct amount in his possession is only P 62,470.00-it would really be P 75,000.00 had the five Complainants paid their shares in the amount of P 12,500.00 at P 2,500.00 each and one Fortunate Ramirez paid his balance of P 30.00;

that he had the right to hold the money in his possession as guarantee for the payment of his attomey's fees of get a portion of the property that win pertain to each of the plaintiffs, he wants his portion converted to cash, and the cash equivalent of his portion is P 50,000.00 (2,743 square meters divided by 32 plaintiffs equals 85 square meters for each plaintiff, multiplied by P 500.00 up per square meter); that considering that P 50,000.00 is even less than one-half (1/ 2) per cent of the total value of the property, which is more than a million pesos, such amount is not unreasonable; that he is ready to give back the amount of P 12,470.00, representing the difference between P 50,000.00 and the amount of P 62,470.00 in his possession; that complainants cannot make this Court a collection agency and that while this Court has the exclusive disciplinary power over members of the Bar, it is equally true that the Court cannot pass judgment on Complainants' plea that the amount deposited by respondent be returned to them as this prayer should be ventilated in an ordinary action; that he does not have the slightest intention to appropriate the money in his possession (P 62,470.00) for himself, but he is holding it until his attomey's fees are satisfied there being no guarantee for its satisfaction because of Complainants' adamant refusal to pay him; that there was no previous notice to him of his discharge; and that Atty. Montemayor accepted the case without his Robinols formal withdrawal and conformity. Administrative Case No. 2180 Pursuing that tack on 29 July 1980, Atty. Robinol filed a complaint for Disbarment against Atty. Anacleto R. Montemayor for alleged gross unethical conduct unbecoming of a lawyer in that Atty. Montemayor readily accepted the case without his Robinols formal withdrawal and conformity and knowing fully well that there was no consensus of all the plaintiffs to discharge him as their counsel. For his part, Atty. Montemayor denied that the attomey's fees agreed upon by plaintiffs and Atty. Robinol were purely on a contingent basis, the truth being that the attomey's fees were payable on a cash basis of P 2,000.00 retainer fee, as evidenced by the receipt signed by Atty. Robinol (Annex "I"), plus whatever amount is adjudicated as attomey's fees by the Court of Appeals; that the contingent fee referred to by Atty. Robinol was the result of his insistent demand after the Court of Appeals Decision in Civil Case No. Q-16433 was already final, as shown by the date of the agreement (Annex "2"); that twenty [20] out of thirty-two [32] members of the Samahan signed the agreement to discharge Atty. Robinol and hire a substitute counsel as shown by Annex "3", which is a majority of the membership and, therefore, a valid consensus; that he agreed to act as counsel if only to arrest the growing belief of the Samahan that most members of the Philippine Bar are unprincipled; that although there was no formal Motion for substitution, there was substantial compliance with Sec. 26, Rule 138 of the Rules of Court, as shown by the formal entry of appearance in Civil Case No. Q-1 6433 (Annex "8"), the written consent of the clients (Annex "9"), notice to Atty. Robinol of his discharge and substitution (Annexes "10' and "11"), non-objection by Robinol of his appearance as counsel (Annex "l 2"), and implied consent of the Court to the substitution as shown by its Order of 29 May 1980 (Annex "l 3"); that his professional and personal actuations as counsel for the plaintiffs in Civil Case No. Q-16433, CFI-Quezon City, do not cause dishonor either to himself or to the Philippine Bar; and that the Complaint against him should be dismissed. On 1 September 1980 and on 17 December 1980, the Court referred Adm. Case No. 2144 and Adm. Case No. 2180, respectively, to the Office of the Solicitor General for investigation, report and recommendation. On 15 December 1988, the Solicitor General submitted his compliance and recommended: 1. That Atty. Santiago R. Robinol be suspended for three months for refusing to deliver the funds of the plaintiffs in his possession, with the warning that a more severe penalty will be imposed for a

repetition of the same or similar act, and that he be ordered to return to the plaintiffs, through the complainants in Adm. Case No. 2134, the sum of P 75,000.00. 2. That the case against Atty. Anacleto R. Montemayor, Adm. Case No. 2180, be dismissed, since he has not committed any misconduct imputed to him by Atty. Robinol. (pp. 59-60, Rollo) Except for the disciplinary sanction suggested for Atty. Robinol, we concur with the recommendations. Re: Atty. Santiago R. Robinol Atty. Robinol has, in fact, been guilty of ethical infractions and grave misconduct that make him unworthy to continue in the practice of the profession. After the Court of Appeals had rendered a Decision favorable to his clients and he had received the latter's funds, suddenly, he had a change of mind and decided to convert the payment of his fees from a portion of land equivalent to that of each of the plaintiffs to P 50,000.00, which he alleges to be the monetary value of that area. Certainly, Atty. Robinol had no right to unilaterally appropriate his clients' money not only because he is bound by a written agreement but also because, under the circumstances, it was highly unjust for him to have done so. His clients were mere squatters who could barely eke out an existence They had painstakingly raised their respective quotas of P 2,500.00 per family with which to pay for the land only to be deprived of the same by one who, after having seen the color of money, heart lessly took advantage of them. Atty. Robinol has no basis to claim that since he was unjustly dismissed by his clients he had the legal right to retain the money in his possession. Firstly, there was justifiable ground for his discharge as counsel. His clients had lost confidence in him for he had obviously engaged in dilatory tactics to the detriment of their interests, which he was duty-bound to protect. Secondly, even if there were no valid ground, he is bereft of any legal right to retain his clients' funds intended for a specific purpose the purchase of land. He stands obliged to return the money immediately to their rightful owners. The principle of quantum meruit applies if a lawyer is employed without a price agreed upon for his services in which case he would be entitled to receive what he merits for his services, as much as he has earned. In this case, however, there was an express contract and a stipulated mode of compensation. The implied assumpsit onquantum meruit therefore, is inapplicable. But Atty. Robinol seeks to impress upon the Court that he had received only the sum of P 62,470.00 and not P 75,000.00 claiming that five (5) officers of the Samahan had not yet paid their shares to P 12,500.00. We agree with the Solicitor General that complainants' evidence on this score is the more credible and that he had, in fact, received the total sum of P 75,000.00 inclusive of the share of P 12,500.00 of the five (5) officers of the Somalian For, in the pleadings filed by Atty. Robinol himself in the civil case below, namely, the Motion for Execution on 5 June 1979; the Motion for Postponement on 31 August 1979; and the Motion to Set Hearing of Motion for Execution on 10 March 1980, he made mention of seven (7) persons, who, as of that time, had not yet submitted their corresponding shares which list, however, did not include any of the five (5) officers of the Samahan.

Inevitable, therefore, is the conclusion that Atty. Robinol has rendered himself unfit to continue in the practice of law. He has not only violated his oath not to delay any man for money and to conduct himself with all good fidelity to his clients. He has also brought the profession into disrepute with people who had reposed in it full faith and reliance for the fulfillment of a life-time ambition to acquire a homelot they could call their own. Re: Atty. Anacleto R. Montemayor In so far as Atty. Montemayor is concerned, we agree with the findings of the Solicitor General that he has not exposed himself to any plausible charge of unethical conduct in the exercise of his profession when he agreed to serve as counsel for the plaintiffs in Civil Case No. Q-16433. Of the thirty-two (32) plaintiffs in said civil case, twenty-one (21) had signed the first consensus of 6 March 1980 expressing their resolve to change their lawyer. In as much as Atty. Robinol sought to exclude seven (7) of the plaintiffs (out of 32) for non-payment of their shares, only twenty five (25) of them should be considered in determining the majority. Consequently, twenty-one (21) out of twenty-five (25) is sufficient to make the said consensus binding. It is more than a simple majority. Moreover, the following developments estop Atty. Robinol from questioning his discharge as counsel: On 17 March 1980 he was informed in writing by plaintiffs of the termination of his services (Exhibit "5"). That was followed by another letter of 31 March 1980 of the same tenor (Exhibit "6"). In his Memorandum of 12 December 1985 and during the proceedings before the lower Court on 5 June 1980 he had stated that he had no objection to Atty. Montemayor's appearance in Civil Case Q-16433. When the latter did enter his appearance, therefore, on 20 March 1980 it was only after assuring himself that Atty. Robinol's services had been formally terminated. He had in no way encroached upon the professional employment of a colleague. There is no gainsaying that clients are free to change their counsel in a pending case at any time (Section 26, Rule 138, Rules of Court) and thereafter employ another lawyer who may then enter his appearance. In this case, the plaintiffs in the civil suit below decided to change their lawyer, Atty. Robinol, for loss of trust and confidence. That act was well within their prerogative. In so far as the complaint for disbarment filed by Atty. Robinol against Atty. Montemayor is concerned, therefore, we find the same absolutely without merit. ACCORDINGLY, 1) In Administrative Case No. 2144, Atty. Santiago R. Robinol is hereby DISBARRED for having violated his lawyer's oath to delay no man for money, broken the fiduciary relation between lawyer and client, and proven himself unworthy to continue in the practice of law. By reason of his unethical actuations, he is hereby declared to have forfeited his rights to attomey's fees and is ordered to return the amount of P 75,000.00 to the plaintiffs in Civil Case No. Q-16433 through the complainant in the aforementioned Administrative Case. 2) Administrative Case No. 2180 against Atty. Anacleto R. Montemayor for disbarment is hereby DISMISSED for lack of merit. Let copies of this

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 127520 February 9, 2007

That for and in consideration of this undertaking, I bind myself to pay Atty. Angelino M. Banzon FIVE THOUSAND SQUARE METERS (5000) of the said lot, for which in no case I shall not be responsible for payment of income taxes in relation hereto, this area located also at market site. That I, Angelino M. Banzon, is willing to undertake the above-enumerated undertaking. WITNESS our hands this 14 of July, 1968, in Balanga, Bataan. (Signed) ANGELINO M. BANZON (Signed) AURORA B. CAMACHO

AURORA FE B. CAMACHO, Petitioner, vs. COURT OF APPEALS and ANGELINO BANZON, Respondents. DECISION CALLEJO, SR., J.: This is a Petition for Review on Certiorari of the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 41268 affirming with modification the Decision2 of the Regional Trial Court (RTC) of Balanga, Bataan, Branch 1. The Antecedents Camacho was the owner of Lot 261, a 7.5-hectare parcel of land situated in Balanga, Bataan and covered by Transfer Certificate of Title No. T-10,185. On July 14, 1968, Camacho and respondent Atty. Angelino Banzon entered into a contract for legal services denominated as a "Contract of Attorneys Fee."3 The agreement is worded as follows: KNOW ALL MEN BY THESE PRESENTS: That we, Aurora B. Camacho, widow, of legal age and resident of Balanga, Bataan, and Angelino M. Banzon, have agreed on the following: That I, Aurora B. Camacho is the registered owner of Lot No. 261 Balanga Cadastre, has secured the legal services of Atty. Angelino M. Banzon to perform the following: 1. To negotiate with the Municipal Government of Balanga so that the abovementioned lot shall be the site of the proposed Balanga Public Market; 2. To sell 1200 sq. m. for the sum of TWENTY- FOUR THOUSAND PESOS (P24,000.00) right at the Market Site; 3. And to perform all the legal phase incidental to this work.

Pursuant to the agreement, Atty. Banzon, on even date, sent a letter-proposal4 to the municipal council offering three sites for the proposed public market which included Lot 261. Still on the same date, Camacho executed a Special Power of Attorney5 giving Atty. Banzon the authority to execute and sign for her behalf a Deed of Donation transferring a 17,000-sq-m portion of Lot 261 to the municipal government of Balanga, Bataan. The Deed of Donation was executed, which was later accepted by the local government unit in Municipal Resolution No. 127.6 Silvestre Tuazon had been an agricultural tenant in Lot 261 since World War II. On August 22, 1968, Tuazon and Camacho entered into an "Agreement with Voluntary Surrender" 7 where Tuazon voluntarily surrendered his right as a tenant of the landholding. Despite the agreement, however, Tuazon plowed a portion of the lot and planted palay without Camachos consent. Since Tuazon refused to vacate the premises, Camacho and the Municipality of Balanga, through then Acting Mayor Victor Y. Baluyot, filed a complaint8 for forcible entry on November 18, 1969 before the Municipal Trial Court (MTC) of Balanga, Bataan. The complaint was docketed as Civil Case No. 424. The case was eventually decided in favor of the plaintiffs and Tuazon was ordered to vacate the lot. On appeal to the RTC, trial de novo ensued, in view of the absence of the transcript of stenographic notes of the proceedings before the MTC. The RTC issued a preliminary mandatory injunction ordering Tuazon to "discontinue entering the subject premises until further orders of the court."9 On September 1, 1973, the plaintiffs, through Atty. Banzon, and Tuazon entered into an "Agreement to Stay Court Order."10 Under the agreement, Tuazon was allowed to cultivate specific portions of the property as indicated in a sketch plan which the parties prepared, and to use the markets water supply to irrigate his plants within the lot subject to the markets preferential rights. The parties also contracted that "the agreement shall in no way affect the merits of Civil Case No. 3512 and CAR Case No. 520-B73; and that no part shall be construed as impliedly creating new tenancy relationship." On December 6, 1973, Camacho filed a Manifestation11 in Civil Case No. 3512 declaring that she had terminated the services of Atty. Banzon and had retained the services of new counsel, Atty. Victor De La Serna. On December 17, 1973, Atty. Banzon filed a Complaint-in-Intervention12 in Civil Case No. 3512. He alleged that Camacho had engaged his services as counsel in CAR Case No. 59 B65 (where a favorable decision was rendered) and in Civil Case No. 3512. Under the Contract of Attorneys Fee which they h ad both signed, Camacho would compensate him with a 5,000-sq-m portion of Lot 261 in case he succeeds in negotiating with the Municipality of Balanga in transferring the projected new public market which had been

set for construction at the Doa Francisca Subdivision, all legal requirements having been approved by a municipal resolution, the Development Bank of the Philippines, and the National Urban Planning Commission. Atty. Banzon further claimed that as a consequence of the seven cases filed by/against Camacho, she further bound herself orally to give him a 1,000-sq-m portion of Lot 261 as attorneys fee. He had also acquired from Camacho by purchase an 80-sq-m portion of the subject lot as evidenced by a Provisional Deed of Sale13 and from third parties an 800-sq-m portion. He further declared that his requests for Camacho to deliver the portions of the subject lot remained unheeded, and that of the seven cases14 he had handled for Camacho, four had been decided in her favor while three are pending. Atty. Banzon thus prayed for the following relief: 1. Ordering the ejectment of Defendant Silvestre Tuazon, in so far as (6880) square meters is concerned, INTERVENORS claim over Lot 261; 2. The First Cause of Action, ordering the Plaintiff Aurora B. Camacho to deliver (5000) square meters as per Annex "A"; EIGHTY square meters as per Annex "C"; EIGHT HUNDRED (800) square meters which the INTERVENOR purchased from third parties; 3. On the Second Cause of Action, ordering the Plaintiff Aurora B. Camacho to pay the sum of P8,820.00, corresponding to the lease rental of (5880) square meters a month, counted from July, 1973, until the same is delivered to the INTERVENOR; 4. On the Third Cause of Action, ordering the Plaintiff Aurora B. Camacho to deliver (1000) square meters, as attorneys fee in handling seven (7) cases; 5. Ordering the Plaintiff Aurora B. Camacho and Defendant Silvestre Tuazon to pay jointly and severally, the sum of P5,000.00 for attorneys fee for legal services to the INTERVENOR; cost and litigation expenses of P1,000. until the case is terminated. 6. To grant such relief, just and equitable in the premises. 15 Camacho opposed16 Atty. Banzons motion on the ground that the admission of the complaint -inintervention would merely serve to delay the case. She also claimed that his interest could be fully ventilated in a separate case for recovery of property or for damages. On April 5, 1974, the RTC granted17 the motion and subsequently admitted the complaint-in-intervention. On December 31, 1973, Atty. Banzon and Tuazon entered into the following amicable settlement: 1. That for and in consideration of the sum of TWO THOUSAND PESOS (P2,000.00), Philippine currency, which have been received from the INTERVENOR and acknowledged to have been received by the Defendant Silvestre Tuazon, the latter hereby acknowledges, waives his defenses against the claim of the INTERVENOR ANGELINO M. BANZON over a portion of Lot No. 261, portion of the lot in question, to the extent of SIX THOUSAND EIGHT HUNDRED EIGHTY (6880) SQUARE METERS as claimed and contained in the COMPLAINT IN INTERVENTION and to give effect to this AMICABLE SETTLEMENT hereby surrenders the

actual possession of the said portion, subject to the approval of this Hon. Court, in favor of the INTERVENOR; 2. That the herein parties to this AMICABLE SETTLEMENT waive and renounce whatever rights or claims, including future claims that each may have against each other; 3. That the parties herein bind themselves to comply with the conditions of the foregoing settlement; 4. That the foregoing AMICABLE SETTLEMENT was realized and achieved between the herein parties, thru the prior intercession of the Defendants counsel Atty. Narciso V. Cruz, Jr. WHEREFORE, it is respectfully prayed that the foregoing AMICABLE SETTLEMENT be approved and made as the basis of this Hon. Courts decision between the herein INTERVENOR and DEFENDANT Silvestre Tuazon.18 In Answer19 to the complaint-in-intervention, Camacho denied that she solicited the services of Atty. Banzon to facilitate the transfer of the site of the proposed public market; in fact, it was Atty. Banzon who approached and convinced her to donate a portion of the lot to the municipality of Balanga. He assured her that the municipality of Balanga planned to relocate the public market and was scouting for a new location. He also told her that her lot appeared to be the most ideal location, and that he would take care of all the legal problems. Camacho admitted, however, that she signed the Contract of Attorneys Fee but only u pon the request of Atty. Banzon. He told her that the document would be shown to the municipal councilors "for formalitys sake" to prove his authority to act for and in behalf of Camacho. It was never intended to bind her to pay attorneys fees.20 She further denied that she agreed to give to Atty. Banzon 1,000 sq m for handling the seven cases; they never discussed attorneys fees. The cases stemmed from his as surance that he would take care of any legal problem resulting from the donation of her property. She was not even a party in some of the cases cited by Atty. Banzon. 21 Lastly, she denied that he had made demands to deliver the mentioned portions of the property.22 In his Reply,23 Atty. Banzon countered that the Balanga Municipal Council Resolution No. 128 transferring the market site to Camachos property was enacted precisely because of his letter -proposal24 to the municipal council. On August 14, 1977, Camacho and Tuazon entered into a Compromise Agreement, 25 whereby Camacho agreed to transfer a 1,000-sq-m portion of Lot 261-B in favor of Tuazon; for his part, Tuazon moved to dismiss Civil Case No. 3805 and to remove all the improvements outside the portion of the property which Camacho had agreed to convey to him. Thus, the RTC rendered a partial decision 26 approving the compromise agreement. On September 12, 1978, Camacho filed a Motion to Dismiss27 the Complaint-in-Intervention filed by Atty. Banzon on the ground that the jurisdiction of the court to try the case ceased to exist because the principal action had been terminated. The RTC denied the motion in its Order28 dated March 16, 1979. It held that Atty. Banzon had an interest over the subject property which he had to protect and that the compromise

agreement between Camacho and Tuazon did not include him. Moreover, the dismissal of the intervention would not achieve its purpose of avoiding multiplicity of suits. The propriety of the denial of C amachos motion to dismiss was finally settled by this Court in Camacho v. Court of Appeals29 where this Court affirmed the denial of the motion. After trial on the merits, the RTC rendered a Decision30 on September 1, 1992 in favor of Atty. Banzon. The fallo reads: ACCORDINGLY, judgment is hereby rendered: 1. Ordering plaintiff Aurora B. Camacho under the Contract of Attorneys Fees, [to deliver] 5000 square meters of the subject landholding, Lot 261-B-1, covered by Transfer Certificate of Title No. T-76357, or any other derivative sublots of the original Lot 261-B; 2. Declaring the dismissal of said intervenor from the case at bar as unjustified; 3. Ordering said plaintiff to pay and deliver to said intervenor 1000 square meters of the property in question, Lot 261-B-1 or any other derivative sublots of the original Lot 261-B in case of deficiency, for legal services rendered in seven (7) cases; 4. Directing said plaintiff to deliver to said intervenor, under a Provisional Deed of Sale, 80 square meters of the subject property, Lot 261-B-1 or any other derivative sublots of the original Lot 261 in case of deficiency, after payment of the balance of the purchase price; 5. Ordering said plaintiff to execute the corresponding Deed of Sale in favor of said intervenor for the aforesaid 80 square meters; 6. Condemning said plaintiff to pay moral damages to said intervenor in the amount of P100,000.00; attorneys fees in the sum of P30,000.00; and the costs of the suit. SO ORDERED.31 According to the RTC, Camacho had indeed read the contract and freely affixed her signature thereon. Applying the provisions of Section 7 (now section 9), Rule 13032 of the Rules of Court, it concluded that the terms of the contract were embodied in the document itself. Moreover, Camacho did not bother to pay for all the other cases being handled by Atty. Banzon because she knew that she had agreed already to pay attorneys fees. The court likewise found that applying the provisions of Sections 24 33 and 26,34 Rule 138 of the Rules of Court, the area of the lot agreed upon as attorneys fees appears to be a reasonable compensation for his services. Since Atty. Banzon handled other cases subsequent to the execution of the contract of attorneys fees, the additional 1,000-sq-m lot which the parties had orally agreed upon is proper. The RTC declared that Atty. Banzon was entitled to be compensated based on quantum meruit since his dismissal from the present case was unjustified. It also held that Camacho was obliged to execute the necessary public instrument covering the 80-sq-m portion of the lot which she had sold to Atty. Banzon. It went further and awarded moral damages to Atty. Banzon on account of the mental anguish and besmirched reputation he had suffered.

On October 8, 1992, Atty. Banzon filed a Motion for Execution Pending Appeal. 35 Camacho, on the other hand, filed a Notice of Appeal. Atty. Banzon filed a motion to dismiss on the ground that since the case originated from the municipal court, it should be assailed via petition for review. On November 20, 1992, the court issued an Order36 denying the motion for execution pending appeal for failure to state good reasons therefor. It likewise granted the notice of appeal on the ground that the complaint-in-intervention originated from the RTC and not from the MTC; under the factual backdrop of the case, ordinary appeal is proper. On appeal to the CA, Camacho raised the following errors: I. THE LOWER COURT ERRED IN ALLOWING JUDGE ABRAHAM VERA TO SIGN THE DECISION IN THE INSTANT CASE, CONSIDERING THAT JUDGE VERA HAD LONG CEASED TO BE THE JUDGE OF THAT COURT AND WAS THE PRESIDING JUDGE OF BRANCH 90 OF THE REGIONAL TRIAL COURT OF QUEZON CITY WHEN THE INSTANT DECISION WAS SIGNED ON SEPTEMBER 1, 1992. II. THE LOWER COURT ERRED IN UPHOLDING THE VALIDITY AND DUE EXECUTION OF CONTRACT EXH. "C" AND IN ORDERING PLAINTIFF TO DELIVER TO INTERVENOR 5,000 SQUARE METERS OF LOT 261-B-1, T.C.T. T-76357, CONSIDERING THAT THIS LOT IS NOT SPECIFIED IN EXH. "C". III. THE LOWER COURT ERRED IN DECLARING THAT INTERVENORS DISCHARGE AS PLAINTIFFS COUNSEL IN THE CASE AT BAR WAS UNJUSTIFIED, IN AWARDING INTERVENOR MORAL DAMAGES, AND IN DISMISSING PLAINTIFFS COUNTERCLAIMS. IV. THE LOWER COURT ERRED IN AWARDING INTERVENOR 1,000 SQUARE METERS OF PLAINTIFFS LAND FOR HIS HANDLING OF ALLEGED SEVEN CASES. V. THE LOWER COURT ERRED IN ORDERING PLAINTIFF TO EXECUTE A FINAL DEED OF SALE FOR 80 SQUARE METERS OUT OF LOT 261-B-1, CONSIDERING THAT LOT 261-B-1 IS NOT SPECIFIED IN THE PROVISIONAL DEED OF SALE.37 On October 29, 1996, the CA rendered a decision38 affirming with modification the RTC ruling. The fallo reads:

WHEREFORE, foregoing considered, the appealed decision is hereby AFFIRMED with modification requiring plaintiff Camacho to DELIVER 5,000 sq.m. and 1,000 sq. m. of Lot 261-B-1 to Intervenor as his attorneys fee and 80 sq. m. also from Lot 261 subject to the conditions embodied under no. 4 of the dispositive portion of the assailed decision all within thirty (30) days from the finality of this decision. SO ORDERED.39 The CA held that all the elements of a valid contract were present: Camacho (a dentistry graduate and an experienced businesswoman conversant in English) cannot plead that she did not understand the undertaking she had entered into; the object of the contract is certain since the genus of the object was expressed although there was no determination of the individual specie; and the cause of the obligation to negotiate and offer a site where the public market will be constructed is not unlawful and cannot be considered as influence peddling. As to the alleged violation of the terms of the special power of attorney, the court held that Camacho was estopped from claiming damages by reason thereof. The CA likewise found the award of moral damages to be in order; that the discharge of Atty. Banzon as counsel for Camacho was not justified and his discharge does not in any way deprive him of his right to attorneys fees. Lastly, the CA held that the RTC erred in requiring Camacho to deliver Lot 261-B-1, since Atty. Banzon cannot demand a portion of superior quality in the same way that appellant cannot transfer an inferior quality. On December 3, 1996, the CA issued a Resolution40 instituting petitioner Aurora Fe Camacho as substitute for the deceased Aurora B. Camacho. Atty. Banzon filed a Motion for Partial Reconsideration of the CA Decision, as well as a Motion to Declare Decision Final insofar as Camacho was concerned. On the other hand, Camacho moved to cancel the notice of lis pendens. In the meantime, petitioner had filed the petition before this Court. Thus, the CA no longer acted on the motions on the ground that it had already lost jurisdiction over the case.41 In the present petition, petitioner raises the following issues: 1. WHETHER OR NOT INTERVENOR CAN BE AWARDED A FAVORABLE JUDGMENT DESPITE ABSENCE OF ANY FINDINGS OF FACT IN THE DECISION WHICH SHOW THAT HE WAS ABLE TO PROVE THE (SIC) HIS MATERIAL ALLEGATIONS UPON WHICH HE BASIS (SIC) HIS CLAIM UNDER CONTRACT OF ATTORNEYS FEE, EXH. "C," ESPECIALLY PAR. 7 OF THE COMPLAINT-IN-INTERVENTION. CAN THE BURDEN OF PROVING THE AND (SIC) DUE EXECUTION OF CONTRACT EXH. "C" BE SHIFTED TO PLAINTIFF CAMACHO WITHOUT VIOLATING SECT. 1, RULE 131, OF THE RULES OF COURT? 2. DID THE COURT OF APPEALS CORRECTLY APPLY THE PROVISION OF ART. 1246 OF THE CIVIL CODE TO THE INSTANT CASE IN RULING THAT CONTRACT EXH. "C" IS VALID AS TO OBJECT?

WILL THE DECISION REQUIRING THE DELIVERY OF 5,000 SQUARE METERS OF LOT 261 BASED ON THE SAID ART. 1246, IN WHICH INTERVENOR CANNOT DEMAND A THING OF SUPERIOR QUALITY AND NEITHER CAN PLAINTIFF CAMACHO DELIVER A THING OF INFERIOR QUALITY, BE SUSCEPTIBLE OF IMPLEMENTATION WITHOUT NEED OF A NEW CONTRACT OR AGREEMENT BETWEEN THE PARTIES? IF SO, WILL THAT NOT ALL THE MORE PROVE THAT TE OBJECT OF CONTRACT EXH. "C" IS INDETERMINATE PURSUANT [TO] ART. 1349 OF THE CIVIL CODE? 3. WHETHER OR NOT THE COURT OF APPEALS WAS IN A POSITION TO PROCLAIM THE LEGALITY OR ILLEGALITY OF THE ALLEGED CONTRACT WITHOUT FIRST REVEALING OR SETTING FORTH THE REAL NATURE OF THIS OR THESE UNDERTAKINGS BASED ON THE ALLEGATIONS AND TESTIMONIES OF INTERVENOR. HENCE, WHETHER OR NOT THE TWO UNDERTAKINGS IN CONTRACT EXH. "C" ARE LAWFUL. 4. WHETHER OR NOT THE COURT OF APPEALS COMMIT A GRAVE ABUSE OF DISCRETION BY TREATING LIKE A MATTER OUT OF RECORD THE ALLEGED REASONS OF PLAINTIFF CAMACHO FOR DISMISSING INTERVENOR AS HER COUNSEL IN THE CASE AT BAR, WHICH WERE ENUMERATED AND DISCUSSED ON PAGES 42-60 OF HER APPELLANTS BRIEF, ANNEX "B," AND WHICH WERE PRINCIPALLY AND SPECIFICALLY COVERED IN HER THIRD ASSIGNMENT OF ERRORS AND CONSIDERING THAT ONE OF THESE ALLEGED REASONS ALSO CONSTITUTE PLAINTIFF CAMACHOS COUNTERCLAIM FOR WHICH SHE IS SEEKING MORAL DAMAGES OF P100,000. DID NOT THE COURT OF APPEALS COMMIT GRAVE ABUSE OF DISCRETION IN REPRESENTING PLAINTIFF CAMACHOS THIRD ASSIGNED ERROR AS REFERRING MERELY TO THE ISSUE OF WHETHER OR NOT THE AWARD OF MORAL DAMAGES TO INTERVENOR IS JUSTIFIED. WAS NOT PLAINTIFF CAMACHO THEREBY DEPRIVED OF HER CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW? 5. WHETHER OR NOT THE AWARD OF 1,000 SQ. M. OF LOT 261 ATTORNEYS FEE FOR ALLEGED HANDLING OF SEVEN CASES HAS ANY LEGAL BASIS CONSIDERING THAT THERE IS NO SHOWING IN THE DECISION THAT THE ORAL CONTRACT ALLEGED BY INTERVENOR TO BE THE BASIS OF THE SAID ATTORNEYS FEE WAS DULY POROVEN (SIC).42 Petitioner argues that the findings of facts in the assailed decision are mere conclusions, without citation of evidence to support them. She likewise avers that consent was not clearly proven; the conclusion of the CA was based on the presumption that the document was read prior to being signed. Petitioner insists that there is no "object certain" to speak of since the exact location of the subject property cannot be determined; in short, the issue is not the quality of the property but its identity. Petitioner further asserts that the cause of the contract pirating of the municipalitys market project and ejecting the tenant to convert the property into a commercial establishment is illegal. She further insists that respondent failed to accomplish the twin objective of ejecting Silvestre Tuazon and converting the remaining land into a commercial area; thus, he is not entitled to the 5,000-sq-m lot. She further contends that the CA erred in

awarding moral damages because respondent did not ask for it in his complaint-in-intervention. Lastly, she asserts that the CA erred in affirming the award of the 1,000-sq-m lot pursuant to a verbal contract between Camacho and respondent, especially considering the p revailing jurisprudence against a lawyers acquisition of a clients lot in litigation without the latters consent. In his Comment,43 respondent counters that the elements of a valid contract are present: Camachos consent to the contract is evidenced by her signature which was in fact admitted by the latter; that while it is true that the identity of the 5,000-sq-m portion of Lot 261 has not been specified due to the absence of the necessary technical descriptions, it is capable of being made determinate without the need of a new agreement between the parties; as to the validity of the cause of the contract, the general principle of estoppel applies. The Ruling of the Court Article 1305 of the New Civil Code defines a contract as a "meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service." Contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present.44 In general, there are three (3) essential requisites for a valid contract: (1) consent of the contracting parties; (2) an object certain which is the subject of the contract; and (3) the cause of the obligation which is established.45 The first element Consent of the contracting parties Is shown by their signatures on the Contract Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the agreement.46 In this case, Camacho admitted the existence of the contract as well as the genuineness of her signature. However, she claimed that she signed only upon the request of Atty. Banzon, who told her that the document would only be shown to the municipal councilors ("for formalitys sake") to prove his authority in her behalf. It was never intended to bind her to pay him attorneys fees; 47 in short, petitioner insists that Camacho had not given her consent to the contract. We, however, do not agree. The contract between Camacho and respondent is evidenced by a written document signed by both parties denominated as Contract of Attorneys Fee. It is an established rule that written evidence is so much more certain and accurate than that which rests in fleeting memory only; that it would be unsafe, when parties have expressed the terms of their contract in writing, to admit weaker evidence to control and vary the stronger, and to show that the parties intended a different contract from that expressed in the writing signed by them. 48 Moreover, the moment a party affixes her signature thereon, he or she is bound by all the terms stipulated therein and is open to all the legal obligations that may arise from their breach.49

In the instant case, Camacho voluntarily signed the document evidencing the contract. Camachos claim that the document was intended only to show respondents au thority to represent her with respect to the transaction is flimsy, since a special power of attorney could just as easily have accomplished that purpose. In fact, Camacho did execute a Special Power of Attorney50 after the Contract of Attorneys Fee was executed, and if Camacho were to be believed, the Contract of Attorneys Fee should have been immediately canceled thereafter since it was no longer needed. As correctly held by the CA, Camacho was an experienced businesswoman, a dentistry graduate and is conversant in the English language. We note that the words and phrases used in the Contract of Attorneys Fee are very simple and clear; thus, she cannot plead that she did not understand the undertaking she had entered into. 51 Considering that her undertaking was to part with a 5,000-sq-m portion of her property, she should have been more vigilant in protecting her rights. Even assuming that the contract did not reflect the true intention of the parties as to their respective obligations, it is nevertheless binding. The existence of the written contract, coupled with Ca machos admission that the signature appearing thereon was hers, constitute ineluctable evidence of her consent to the agreement. It cannot be overcome by mere denial and allegations that they did not intend to be bound thereby. We also note that Camacho did not avail of the remedy of reformation of the instrument in order to reflect what, according to her, was the true agreement. Camachos consent to the contract was further manifested in the following events that transpired after the contract was executed: the execution of the agreement with voluntary surrender signed by Tuazon; the execution of the Deed of Donation where Atty. Banzon was authorized to sign the same on behalf of Camacho; and the sale of 1200 sq. m. portion of the property right at the market site. In all these transactions, Atty. Banzon represented Camacho pursuant to the Contract of Attorneys Fee. The object of the contract is still certain despite the parties failure to indicate the specific portion of the property to be given as compensation for services Articles 1349 and 1460 of the Civil Code provide the guidelines in determining whether or not the object of the contract is certain: Article 1349. The object of every contract must be determinate as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties. xxxx Article 1460. A thing is determinate when it is particularly designated and/or physically segregated from all others of the same class. The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is capable of being made determinate without the necessity of a new or further agreement between the parties. In this case, the object of the contract is the 5,000-sq-m portion of Lot 261, Balanga Cadastre. The failure of the parties to state its exact location in the contract is of no moment; this is a mere error occasioned by

the parties failure to describe with particularity the subject property, which does not indicate the absence of the principal object as to render the contract void.52 Since Camacho bound herself to deliver a portion of Lot 261 to Atty. Banzon, the description of the property subject of the contract is sufficient to validate the same. The Cause or Consideration of the contract is not illegal In general, the cause is the why of the contract or the essential reason which moves the contracting parties to enter into the contract.53 For the cause to be valid, it must be lawful such that it is not contrary to law, morals, good customs, public order or public policy. 54 Petitioner insists that the cause of the subject contract is illegal. However, under the terms of the contract, Atty. Banzon was obliged to negotiate with the municipal government of Balanga for the transfer of the proposed new public market to Camachos property (Lot 261); to sell 1,200 square meters right at the market site; and to take charge of the legal phases incidental to the transaction which include the ejectment of persons unlawfully occupying the property (whether through amicable settlement or court action), and the execution of the Deed of Donation and other papers necessary to consummate the transaction. There was thus nothing wrong with the services which respondent undertook to perform under the contract. They are not contrary to law, morals, good customs, public order or public policy. Petitioner argues that the cause of the contract is the "pirating" of the municipalitys market project and ejecting the tenant to convert the property into a commercial establishment. This is premised on the fact that the construction of the new public market at Doa Francisca Subdivision had originally been approved by the municipal council of Balanga, the Development Bank of the Philippines, and the National Urban Planning Commission; and at the time the contract was executed, Tuazon occupied the property. The records show, however, that the municipal council was scouting for a new location because it had reservations regarding the site of the proposed project. And while Lot 261 was considered to be the most ideal (because it stands on higher ground and is not susceptible to flooding) it does not follow that respondent no longer negotiated for and in Camachos behalf. There were other terms to be negotiated, such as the mode of transfer (whether sale or donation); the titling of the property in the name of the municipality; the terms of payment, if any; and such other legalities necessary to consummate the transaction. It must be stressed that Camacho was not deprived of any property right. The portions of her property which she parted with (the 17,000-sq-m portion donated to the municipality; the 5,000-sq-m portion given to respondent as attorneys fees; and the 1,200-sq-m portion which was sold) were either in exchange for services rendered or for monetary consideration. In fact, all these transactions resulted in the increase in the economic value of her remaining properties. Thus, the defense of the illegality of respondents undertaking is baseless. The municipal council had the authority to choose the best site for its project. We also note that the market site was transferred with the active participation of Camacho, who agreed to donate the 17,000-sq-m portion of her property; the new public market was constructed and became operational; and the sale of the 1,200-sq-m lot was consummated when Camacho executed the deeds herself. Thus, petitioner cannot be allowed to evade the payment of Camachos liabilities under the contract with respondent; a contrary conclusion would negate the rule of estoppel and unjust enrichment.

As to the additional 1,000-sq-m-portion of Lot 261, however, we find and so hold that respondent is not entitled thereto. Indeed, it was sufficiently established that an attorney-client relationship existed between Camacho and respondent and that the latter handled several other cases for his client. The records show that the parties had agreed upon specific sums of money as attorneys fees for the other cases: Civil Case No. C-1773 P10,000.0055 Civil Case No. 424 P1,000.0056 CAR Case No. 278-B70 P2,000.0057 CAR Case No. 520-B73 P5,000.0058 Civil Case No. 3281 P5,000.0059 This clearly negates respondents claim of an additional 1,000-sq-m share as compensation for services rendered. Likewise, there being no evidence on respondents right over the 800-sq-m allegedly purchased from third persons, he is likewise not entitled to this portion of the property. On the other hand, Camacho admitted in her Answer60 to the Complaint-in-Intervention that respondent had purchased from her an 80-sq-m portion of the property. Since she had merely executed a Provisional Deed of Sale,61 we agree with the RTC that respondent has the right to require the execution of a public instrument evidencing the sale. It must be understood that a retainer contract is the law that governs the relationship between a client and a lawyer.62 Unless expressly stipulated, rendition of professional services by a lawyer is for a fee or compensation and is not gratuitous.63 Whether the lawyers services were solicited or they were offered to the client for his assistance, inasmuch as these services were accepted and made use of by the latter, we must consider that there was a tacit and mutual consent as to the rendition of the services, and thus gives rise to the obligation upon the person benefited by the services to make compensation therefor.64 Lawyers are thus as much entitled to judicial protection against injustice on the part of their clients as the clients are against abuses on the part of the counsel. The duty of the court is not only to see that lawyers act in a proper and lawful manner, but also to see that lawyers are paid their just and lawful fees. 65 If lawyers are entitled to fees even if there is no written contract, with more reason that they are entitled thereto if their relationship is governed by a written contract of attorneys fee. In her fourth assigned error, petitioner claims that the CA failed to rule on the propriety of the dismissal of respondent as Camachos counsel. We do not agree. We uphold the following pronouncement of the CA on the matter:

In this case, the grounds relied upon by plaintiff Camacho as justifications for the discharge of Intervenor are not sufficient to deprive the latter of his attorneys fees. Intervenor may see the case in an angle different from that seen by plaintiff Camacho. The procedures adopted by Intervenor may not be what plaintiff Camacho believes to be the best. But these do not in any way prove that Intervenor was working to the prejudice of plaintiff Camacho. Failure of plaintiff Camacho to prove that Intervenor intended to damage her, We consider the charges of plaintiff Camacho as mere honest difference of opinions. As to the charge that Intervenor failed to account the money he collected in behalf of plaintiff Camacho, the same is not supported by any evidence. Suffice it to say that mere allegations cannot prove a claim. 66 The ruling of the CA on the award of moral damages is likewise in accordance with the facts and established jurisprudence: The act of plaintiff Camacho is a clear case of breach of contract.1avvphi1.net Worst, when Intervenor demanded payment, plaintiff Camacho adopted all sorts of strategies to delay payment. This case dragged on for twenty (20) years. And until this time, plaintiff Camacho continues to unjustifiably refuse the payment of the attorneys fees due to intervenor. For these, one can readily imagine the worries and anxiety gone through by Intervenor. Award of moral damages is but proper. Moral damages may be granted if the party had proven that he suffered mental anguish, serious anxiety and moral shock as a consequence of the act of the other party. Moral damages can be awarded when a party acted in bad faith as in this case by Camacho.67 IN LIGHT OF ALL THE FOREGOING, the appealed decision is AFFIRMED with the MODIFICATION that the award of a 1,000-square-meter portion of Lot 261 to respondent Atty. Angelito Banzon as attorneys fees is DELETED. SO ORDERED.

SECOND DIVISION

On October 23, 1991, the court issued an order directing respondent to secure complainant's consent to the motion "and his appearance as private prosecutor shall continue until he has secured this consent."[11] Complainant refused to sign her conformity to respondent's withdrawal. [12] Meanwhile, the hearings in the criminal case continued. Respondent did not appear at the hearings nor did he contact complainant. Complainant was thus compelled to engage the services of another lawyer. Hence, the letter-complaint. We referred the letter-complaint to the Integrated Bar of the Philippines, Commission on Bar Discipline, for investigation, report and recommendation. The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at any time with or without cause.[13] The right of an attorney to withdraw or terminate the relation other than for sufficient cause is, however, considerably restricted. [14] Among the fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion.[15] He is not at liberty to abandon it without reasonable cause. [16] A lawyer's right to withdraw from a case before its final adjudication arises only from the client's written consent or from a good cause.[17] Section 26 of Rule 138 of the Revised Rules of Court provides: "Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party. x x x."

[A.C. No. 3773. September 24, 1997]

ANGELITA C. ORCINO, complainant, vs. ATTY. JOSUE GASPAR, respondent. RESOLUTION PUNO, J.: On June 14, 1992, complainant Angelita C. Orcino filed with this Court a letter-complaint dated December 10, 1991 against respondent Atty. Josue Gaspar, her former counsel. Complainant prayed that this Court impose disciplinary sanctions on respondent for abandoning his duties and for failing to return the legal fees she fully paid for his services. The complaint arose from the following facts: Complainant engaged the services of respondent to prosecute a criminal case she intended to file against several suspects in the slaying of her husband. In consideration thereof, complainant bound herself to pay respondent legal fees of P20,000.00 -P10,000.00 to be paid upon signing of the contract and the balance to be paid on or before the conclusion of the case. Complainant was also to pay P500.00 per appearance of respondent before the court and fiscal. This agreement was embodied in a contract executed on February 22, 1991.[1] In accordance with the contract, complainant paid respondent the sum of P5,000.00 on February 25, 1991,[2] another P5,000.00 on March 31, 1991,[3] and P10,000.00 on May 21, 1991,[4] for a total of P20,000.00. Forthwith, respondent entered into his duties. He interviewed witnesses and gathered evidence to build a case against the suspects. He drew up the necessary sworn statements and dutifully attended the preliminary investigation. The case was thereafter filed with the Regional Trial Court, Branch 37, Baloc, Sto. Domingo, Nueva Ecija.[5] As private prosecutor, respondent religiously attended the bail hearings for the accused although these hearings were postponed on motion of the accused's counsel. Respondent however failed to attend the hearing scheduled in August 1991. It was at this hearing that the court, over complainant's objections, granted bail to all the accused. After the hearing, complainant immediately went to respondent's residence and confronted him with his absence.[6] Respondent explained that he did not receive formal notice of the hearing.[7] Complainant became belligerent and started accusing him of jeopardizing the case by his absence. Respondent said that her suspicions were based on rumors and intrigues fed to her by her relatives.[8] Complainant, however, continued accusing him belligerently. She asked for the records of the case saying that she could refer them to another lawyer. Stung by her words, respondent gave her the records.[9] Complainant never returned the records nor did she see respondent. On September 18, 1991, respondent filed before the trial court a "Motion to Withdraw as Counsel."[10] The motion did not bear the consent of complainant.

A lawyer may retire at any time from any action or special proceeding with the written consent of his client filed in court and copy thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court. The court, on notice to the client and adverse party, shall determine whether he ought to be allowed to retire. The application for withdrawal must be based on a good cause.[18] In the instant case, complainant did not give her written consent to respondent's withdrawal. The court thus ordered respondent to secure this consent. Respondent allegedly informed the court that complainant had become hostile and refused to sign his motion. [19] He, however, did not file an application with the court for it to determine whether he should be allowed to withdraw. Granting that respondent's motion without complainant's consent was an application for withdrawal with the court, we find that this reason is insufficient to justify his withdrawal from the case. Respondent's withdrawal was made on the ground that "there no longer exist[ed] the xxx confidence" between them and that there had been "serious diffferences between them relating to the manner of private prosecution."[20] Rule 22.01 of Canon 22 of the Code of Professional Responsibility provides: "CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE CIRCUMSTANCES.

Rule 22.01-- A lawyer may withdraw his services in any of the following cases: a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling; b) When the client insists that the lawyer pursue conduct violative of these canons and rules; c) When his inability to work with co-counsel will not promote the best interest of the client; d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively; e) When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement; f) When the lawyer is elected or appointed to public office; and g) Other similar cases." A lawyer may withdraw his services from his client only in the following instances: (a) when a client insists upon an unjust or immoral conduct of his case; (b) when the client insists that the lawyer pursue conduct violative of the Code of Professional Responsibility; (c) when the client has two or more retained lawyers and the lawyers could not get along to the detriment of the case; (d) when the mental or physical condition of the lawyer makes him incapable of handling the case effectively; (e) when the client deliberately fails to pay the attorney's fees agreed upon; (f) when the lawyer is elected or appointed to public office; (g) other similar cases. The instant case does not fall under any of the grounds mentioned. Neither can this be considered analogous to the grounds enumerated. As found by the Commission on Bar Discipline, this case arose from a simple misunderstanding between complainant and respondent. Complainant was upset by respondent's absence at the hearing where bail was granted to the suspected killers of her husband. She vehemently opposed the grant of bail. It was thus a spontaneous and natural reaction for her to confront respondent with his absence. Her belligerence arose from her overzealousness, nothing more. Complainant's words and actions may have hurt respondent's feelings considering the work he had put into the case. But her words were uttered in a burst of passion. And even at that moment, complainant did not expressly terminate respondent's services. She made this clear when she refused to sign his "Motion to Withdraw as Counsel." Assuming, nevertheless, that respondent was justified in terminating his services, he, however, cannot just do so and leave complainant in the cold unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the court.[21] Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his client as well as by the court to do what the interests of his client require.[22] He must still appear on the date of hearing[23] for the attorney-client relation does not terminate formally until there is a withdrawal of record. [24] Respondent expressly bound himself under the contract to bring the criminal case to its termination. He was in fact paid in full for his services. Respondent failed to comply with his undertaking,

hence, it is but fair that he return to complainant half of the amount paid him. The peculiar circumstances of the case have rendered it impossible for respondent and complainant to continue their relation under the contract. IN VIEW WHEREOF, respondent is admonished to exercise more prudence and judiciousness in dealing with his clients. He is also ordered to return to complainant within fifteen (15) days from notice the amount of ten thousand pesos (P10,000.00) representing a portion of his legal fees received from the latter with a warning that failure on his part to do so will result in the imposition of stiffer disciplinary action. SO ORDERED. Regalado, (Chairman) and Torres, Jr., JJ., concur. Mendoza, J., on official leave.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. L-35356 May 18, 1973 ONG CHING, petitioner, vs. HON. JOSE R. RAMOLETE, Judge of the Court of First Instance of Cebu, the PROVINCIAL SHERIFF OF CEBU, JOSE JAYME, ROSARIO J. SOCO, ADRIANO SOCO, CARMEN J. PEREZ, FULGENCIO M. PEREZ, TRINIDAD J. LUMAPAS, LUPECINC LUMAPAS, CORAZON J. TRUZ, MATILDE J. YBAEZ, and DOMINGO YBAEZ, respondents. Higinio C. Hermosisima for petitioner. Esperanza F Garcia for respondents. Ramon Duterte for private respondents.

Candido Vasquez, counsel of record of petitioner, but by one Atty. Higinio Hermosisima. This motion was predicated on two grounds: (1) Under the contract of lease and the supplemental contract of lease, the lease was renewable at the option of the plaintiff under exactly the same terms and conditions as the original contract of lease, and (2) the court had no jurisdiction over defendants' counterclaim for ejectment. This motion for reconsideration, was opposed by the private respondents as defendants in the case, principally on the following grounds: (a) the "motion for reconsideration" having been filed by a new counsel, with no formal appearance in the case and without complying with the requirements of Section 26, Rule 138 of the Revised Rules of Court for substitution of attorneys has no legal effect whatsoever and therefore the filing of such pleading did not suspend the running of the 30 day period to appeal, (b) the contention of plaintiff is without merit as the court has sufficiently shown in its judgment that while the contract of lease may be renewed, it was not under the same terms and conditions of the original lease, and (c) the ejectment of plaintiff from the premises being a necessary and compulsory counterclaim of defendants to plaintiff's action, was properly within the jurisdiction of the court to decide. In its order of July 24, 1972, the trial court after reiterating its previous findings and construction of the renewal system clause of the lease agreement, denied the motion for reconsideration and ruled that there being no proper substitutions of counsel, the motion filed by Atty. Hermosisima, was without any legal effect and could not have suspended the running of the period for appeal and consequently considered the judgment final and granted the issuance of a writ of execution. On July 31, 1972 when the Provincial Sheriff of Cebu proceeded to levy on execution plaintiffs properties pursue to the writ of execution, petitioner (plaintiff) filed the present petition for certiorari to annul the aforesaid order of the court. On August 17, 1972, We required respondents to file the answer and issued a temporary restraining order to enjoin the enforcement of the challenged order.. The main issues which this Court is called upon to resolve are: (1) whether the filing of the motion for reconsideration with the court below suspended the running of the period within which to appeal; and (2) whether said court has jurisdiction to order petitioner to vacate the premises and surrender the possession thereof to the private respondents. 1. The settled rule is that in order that there may be a valid substitution of attorneys in a given case, there must be (a) written application for substitution; (b) a written consent the client; and (c) a written consent of the attorney to b substituted. In case the consent of the attorney to be substituted cannot be obtained, there must at least be proof that notice of the motion for substitution has been served upon him in the manner prescribed by the rules. 1 The present case, however, does not involve a substitution of attorneys, but merely the employment by petitioner of a additional counsel. True it is, as claimed by respondents, that the motion for reconsideration filed by Atty. Hermosisima gives no indication that he was presenting his motion in collaboration with Atty. Vasquez; but neither would it indicate that by his filing of the pleading in the case, Atty. Hermosisima was replacing Atty. Vasquez as counsel for petitioner. In law it is assumed prima facie that every attorney who appears in court does so with sufficient authority. 2 The fact that a second attorney enters an appearance on behalf of litigant does not authorize a presumption that the authority of the first attorney has been withdrawn. 3 There is no question that a party may have two or more lawyers working in collaboration as his counsel in a given litigation. Thus in the case at bar the certificate dated May 16, 1972, executed by

ANTONIO, J.: Petition for certiorari, with prayer for preliminary injunction, to set aside the order dated July 24, 1972, of respondent Court of First Instance of Cebu, in Civil Case No. R-10866, denying petitioner's motion for reconsideration of the judgment therein and granting the writ of execution. In a judgment rendered by the respondent court on April 14, 1972, the complaint of petitioner as lessee against private respondents, owners of the leased property as defendants for (a) damages "for the refusal of the defendants to comply with their obligation to grant a renewal of the contract of lease for another fifteen (15) years, according to the terms and conditions of the original agreement ..." and (b) for injunction "to enjoin the defendants from selling the land subject-matter of the lease agreement, without first annotating on the certificate of title the lease agreement between the plaintiff and the defendant," was dismissed, and said party was ordered to vacate the leased premises, surrender the possession thereof to defendants, remove the improvements he constructed thereon, and pay defendants the rentals from October 24, 1968, until the date of the judgment, at P1,680.00 per month, and the sum of P2,000.00 as attorney's fees plus the costs of the suit. After petitioner (plaintiff) received a copy of the judgment on April 18, 1972, a motion for reconsideration of the said decision on behalf of petitioner was filed with respondent court on May 18, 1972, not by Atty.

Atty. Vasquez, is to the effect that he, with the consent and authority of petitioner (who signified his confirmity in writing) was authorizing Atty. Hermosisima to collaborate with him in the case due to his ill health. While the said certificate was not attached to the motion for reconsideration on May 17, 1972, but was presented in court rather belatedly on June 16, 1972 as an annex to petitioner's "Rejoinder to Opposition to Motion for Reconsideration," respondents have not shown that the recitals of fact contained therein did not reflect the truth. At any rate, this case is different from U.S. v. Borromeo, 4 Fojas, et al. v. Navarro, 5 Ramos v. Potenciano, 6 Baquiran v. Court of Appeals.' 7 Here petitioner's counsel, Atty. Vasquez, not only affirmed his continued connection with the case, but also explained Atty. Hermosisima's appearance as collaborating counsel. While it may be desirable in the interest of an orderly conduct of judicial proceedings, that a counsel for a party should file with the court his formal written appearance in the case, before filing a pleading therein, or mention in said pleading that he is submitting the same in collaboration with the counsel of record, the mere circumstance that such acts were not done does not warrant the conclusion that the pleading filed by such counsel has no legal effect whatsoever. Respondents also claim that petitioner's motion for reconsideration is pro forma and, therefore, did not toll the period for appeal. A cursory reading of the motion for reconsideration reveals that except for his contention assailing the jurisdiction of the Court on respondents' counterclaim, petitioner merely amplified his arguments in support of his theory that the contract of lease was renewableat the option of the lessee "under exactly, the same terms and conditions" as the original contract of lease. Such argument appears to have been already considered, weighed and resolved adversely to petitioner, by the trial court in its decision. Considering that the motion for reconsideration was filed on the 30th day of the period within which petitioner could appeal from the questioned judgment, it might be useful to ascertain, if the appeal, if allowed, would be meritorious and not a futile exertion of judicial authority. There are certain facts found by the trial court which militate against the contention of petitioner. 8 The lease contract of October 23, 1953 was drafted and prepared by the lawyer of the petitioner, and although the same was revised on February 15, 1965 for the purpose of clarifying the terms of the original agreement, no explanation has been given why the stipulation in the original lease that the "lessor shall have the option to renew said lease for a like period", was not clarified by adding the phrase "under the same terms and conditions", if it was true that such was the intention of the parties. A distinction between a stipulation to renew a lease and one to extend it for an additional period beyond the original term is usually made. The former usually requires the execution of new lease, while the latter does not. 9 In any event since the contract was drafted upon the direction of the petitioner, an ambiguity in the option clause should therefore be construed against said party. 10 Apart from this on October 20, 1968, a day immediately prior to his sending of his telegram to Jose Jayme, one of the lessors, advising them of his intention to "exercise the option to renew the lease ... for a like period of fifteen years" and two days before the expiry date of the lease on October 22, 1963, petitioner had prepared the complaint which he filed in the case at bar. Certainly if he believed in good faith that he had the right to an extension of the lease, why did he prepare the complaint even before knowing the action of the lessors, on the renewal of the lease? Moreover, considering that the area leased was in a commercial zone where it was shown that the real estate assessments had been progressively increasing to such an extent that in 1963 the assessment of said property had risen by 321% (P4,531.50 to P19,080.00), it was certainly improbable that the private respondents would have agreed for an extension of the lease for another period of 15 years at the same measly rental of only P91.60 monthly. Finally, it was shown that Jose Jayme, who signed the 1953 lease agreement as attorney in-fact of all of the owners, had no express authority to grant an extension of the lease another period of 15 years.

Under such circumstances it will not serve any useful purpose to allow the appeal since it can not be reasonable expected that "the legal conclusions of the trial court, which a apparently in accordance with law, will be modified substantially to warrant a different result." 11 Petitioner having raised before the court the issue of the validity of his renewal of the lease and consequently of his right to retain possession of the premises, it is rather late in the day for him now to question the authority of the Court to order him to vacate the premises after declaring that the lease had already expired as it was not lawfully renewed by the parties and therefore his continued possession of the land is an act of unlawful usurpation. The aforesaid order is but the logical and necessary consequence of such judicial declaration. Having invoked the jurisdiction of the trial court to secure an affirmative relief against his opponents, petitioner may not now be allowed to repudiate or question the same jurisdiction after failing to obtain such relief. 12 While jurisdiction of tribunal may be challenged at any time, sound public policy bars petitioner from so doing after having procured that jurisdiction himself, speculating on the fortunes of litigation. 13 PREMISES CONSIDERED, the petition for certiorari is hereby dismissed, with costs against petitioner. Makalintal, Zaldivar, Castro, Fernando, Makasiar and Esguerra, JJ., concur. Teehankee, J., concurs in the result. Barredo, J., took no part.