Canon 15 - Illustrative Cases

Compiled by: | TINA SIUAGAN
1
LEGAL ETHICS ASSIGNED CASE READINGS
CANON 15
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
A.C. No. 6711 July 3, 2007
MA. LUISA HADJULA, complainant,
vs.
ATTY. ROCELES F. MADIANDA, respondent.

D E C I S I O N
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-COMPLAINT
1
bearing
date September 7, 2002 and filed with the IBP Commission on Bar
Discipline, complainant charged Atty. Roceles F. Madianda
with violation of Article 209
2
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 COMPLAINT
3
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, complainant further stated,
a disciplinary case was also instituted against her before the
Professional Regulation Commission.


2
Complainant seeks the suspension and/or disbarment of
respondent for the latter's act of disclosing personalsecrets 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] information given to her
during a legal consultation," and accordingly recommended that
respondent be reprimanded therefor, thus:


3
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


4
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), Corona, Azcuna, Garcia, JJ., concur.
Sandoval-Gutierrez,J., on leave.


5
SUPREME COURT
Manila
THIRD DIVISION
A.C. No. 6591 May 4, 2005
MARISSA L. MACARILAY, complainant,
vs.
FELIX B. SERIA, respondent.

D E C I S I O N
PANGANIBAN, J.:
Failure to render the legal services agreed upon, despite the
undisputed receipt of an acceptance fee, is a clear violation of the
Code of Professional Responsibility. Negligence in attending to the
needs of a client and a deceitful cover-up of such carelessness
likewise constitute major breaches of the lawyer's oath.
The Case
Before us is a verified Complaint
1
for "malpractice and/or gross
misconduct" against Atty. Felix B. Seria, filed by Marissa L.
Macarilay with the Integrated Bar of the Philippines Commission
on Bar Discipline (IBP-CBD) on September 22, 2003.
The IBP-CBD, through Director Rogelio A. Vinluan, required
respondent to answer the charges.
2
It thereafter held a
mandatory conference/hearing on January 13, 2004, during which
the parties were able to enter into a stipulation of facts as well as
to present and mark their documentary evidence.
3
After they
submitted their respective Position Papers,
4
the case was deemed
submitted for resolution.
The investigator of the case, Commissioner Leland R. Villadolid Jr.,
summarized the antecedents thus:
"Complainant's version of the facts pertinent to this case is as
follows:
"Sometime in year 2000, Complainant and one Jenelyn Balaoro
('Balaoro') bought a lot from one Albaria Mohammad
('Mohammad'). Complainant and Balaoro, however, could not
register the sale with the Register of Deeds and cause the transfer
of the title in their names because Mohammad failed
to surrender the owner's duplicate certificate of title for said lot.
Subsequently, Complainant learned from one Reina Ong ('Ong')
that Mohammad had mortgaged the said lot to a third party. Ong
advised Complainant to get a copy of the mortgage contract and
to do this the latter needs to have a contact in the Register of
Deeds. Sometime in January or February 2002, Ong introduced
Complainant to one Vic Paule ('Paule'), an employee of the
Register of Deeds of Quezon City, who advised Complainant to get
a lawyer to handle the case. Complainant allegedly gave
Paule P8,000.00 for the help the latter will give her in securing a
copy of the mortgage contract concerned. On March 18, 2002,
Complainant, Balaoro and Ong met with Paule at theStar Mall in
Mandaluyong and proceeded to the office of Respondent, the


6
lawyer recommended by Paule. During said meeting, Complainant
consulted Respondent about the problem concerning the transfer
of the subject lot title in her and Balaoro's names and the latter
advised that the first thing [they have to do], is to file an adverse
claim with the Register of Deeds. Respondent, however, required
an acceptance fee ofP20,000.00 before he could act on the
matter. Thus, on the same day, Complainant issued a check to
Respondent for P20,000.00 as payment of the acceptance fee.
Subsequently, Respondent asked Complainant for P3,000.00 as
notarization fee and P5,000.00 as filing fee for the adverse claim.
On April 5, 2002, Complainant and Balaoro went to Respondent's
office and paid said amounts. On the same day, Respondent
himself typed the affidavit of adverse claim in the presence of
Complainant and Balaoro and the latter subsequently signed the
same. On May 16, 2002, upon Respondent's advice, Complainant
gave Respondent another P20,000.00 in check as filing fee for the
suits to be filed against Mohammad.
"Towards the middle part of the year, Complainant inquired from
Respondent about the status of the case(s) against Mohammad
but the latter could not give any further developments other than
that the affidavit of adverse claim had already been filed with the
Register of Deeds. It appears that Respondent was having
problems about the fact that Mohammad's whereabouts are
unknown and Respondent was not sure what to do about it.
Subsequently, Complainant received assurance from Respondent
that the case against Mohammad was already filed in court
although Respondent could not identify the particular court except
that it was pending in the sala of one Judge Regala. Upon
verification with the courts and the fiscal'soffice [at] Quezon City,
Complainant learned that no case, whether criminal or civil, was
ever filed by Respondent against Mohammad. Complainant then
called Respondent regarding her findings and even suggested
service of summons by publication upon Mohammad, having
receiv[ed] advice from one Atty. Noel Sorreda ('Atty. Sorreda')
that such manner of service is appropriate in view of the lack of
information regarding Mohammad's whereabouts. Respondent,
however, immediately got angry so Complainant did not insist on
her inquiries and suggestions.
"On March 24, 2003, upon Complainant's request, Atty. Sorreda
called Respondent to inquire about the specific branch where the
case against Mohammad was supposedly pending. Respondent
got angry and hung up the phone. Upon learning this,
Complainant authorized Atty. Sorreda to terminate the services of
Respondent on her behalf. Atty. Sorreda called Respondent a
second time but was able to talk only with presumably
Respondent's lady-receptionist or secretary whom Atty. Sorreda
requested to just relay to Respondent his message regarding the
termination of Respondent's services. On March 26, 2003, Atty.
Sorreda, upon Complainant's request, sent a letter to Respondent
confirming the verbal termination of services, and also asking for
the turnover of the pertinent documents that were with
Respondent. Subsequently, Complainant herself wrote
Respondent a letter affirming the contents of the earlier letter of
Atty. Sorreda. In a letter dated April 4, 2003, Respondent denied
the fact of his termination by Atty. Sorreda and invited
Complainant to his office to talk things over. Complainant
responded through Atty. Sorreda in a letter dated May 16, 2003
by reiterating the termination of Respondent's services and the


7
request for the turnover of documents. In a letter dated May 23,
2003, Respondent enclosed the documents requested. Since it
appears from the documents turned over that Respondent never
filed a suit against Mohammad, Complainant wrote Respondent
demanding the return of the money she paid for the anticipated
legal services Respondent was supposed to render but which were
not actually rendered. Respondent's failure to respond to said
letter prompted Complainant [to] send a follow-up letter dated
July 16, 2003. Instead of returning the money, Respondent wrote
Complainant a letter dated July 14, 2003 denying receipt of any
amount from Complainant other than the P20,000.00 acceptance
fee and demanding payment of alleged unpaid attorney's fee
of P40,000 and fees for notarial services of P3,000.00 which
Respondent allegedly advanced for Complainant. Thus,
Complainant filed the present administrative case for disciplinary
action, likewise praying for the return of the money she paid for
the anticipated legal services Respondent was supposed to render
but which were not actually rendered.
"On the other hand, Respondent's version of the facts pertinent to
this case is as follows:
"On March 16, 2002, Complainant, Balaoro and Ong went to
Respondent's office during which Complainant related to
Respondent her various problems and cases. Respondent advised
Complainant that the solutions to her problem regarding
Mohammad consist of two (2) phases. The first phase consists of:
(1) having the notary public of the deed covering the sale of the
subject property sign the acknowledgment page (since although
the said deed contained the notarial seal of said notary, the latter
did not sign the same); (2) preparing a complaint in court to
compel Mohammad to surrender the owner's certificate of title;
and (3) executing an affidavit of adverse claim to cause its
inscription on the copy of the said title in the Registry of Deeds to
protect their interest. The second [phase] consists of: (1) filing
the complaint in court to compel Mohammad to surrender the
owner's duplicate certificate of title, to cause the cancellation of
said title and the issuance of another title in the names of
Complainant and Balaoro, and to cause the removal from said title
of the mortgage lien thereon in favor of Hernando and Nenita
Rosario; and (2) filing of a criminal complaint for estafa against
Mohammad. On the same day, Complainant engaged Respondent
to provide the legal services to pursue the foregoing remedies.
The parties' verbal agreement with respect to Respondent's fees is
as follows: (1) payment of acceptance fee of P20,000.00; (2)
payment of attorney's fees of P15,000 after Respondent has
accomplished the first [phase] of the remedies; (3) payment of
attorney's fees of P15,000 after Respondent has accomplished the
second [phase] of the remedies; and (4) for hearings/follow-ups,
payment of per appearance fee of P3,000.00. Complainant paid
the acceptance fee by issuing Respondent a check dated March
18, 2002 covering P20,000.00.
"Thereafter, Respondent caused the notary public whose seal
appeared on the deed covering the sale of the subject property to
sign the acknowledgment page thereof, advancing the notarial fee
of P3,000.00 which Complainant failed to pay for which reason
said notary did not sign said deed. On April 5, 2002, Complainant
and Balaoro went to his office and signed the affidavit of adverse
claim, which Respondent prepared. On the same date,


8
Respondent requested Complainant and Balaoro to sign the civil
complaint and criminal complaint against Mohammad which
Respondent prepared but Complainant and Balaoro refused to
sign because according to the latter two the residence of
Mohammad in said complaints is already wrong since
Mohammad's whereabouts are already unknown. Complainant and
Balaoro promised to locate Mohammad's whereabouts and asked
Respondent to wait for such data. Thereafter, Respondent even
advised Complainant and Balaoro to locate Mohammad because
resorting to the remedy of complaint and summons by publication
is very expensive and should be resorted to only as a last
recourse. Respondent adds that even as late as January 8, 2003,
the civil and criminal complaints could not be filed because
Complainant herself wanted Respondent to amend the pleadings
by including an additional defendant or respondent and increasing
the claim, for damages.
"Respondent further claims that he also extensively gave legal
advise to Complainant with respect to the following matters: (1)
Complainant's litigation against spouses Casido to recover her
10% retention in architect's fee; (2) collection of P800,000.00
indebtedness of one Mrs. Dizon; and (3) recovery of
Complainant's investments in her 2001 and 2002 car transactions.
"Claiming that Complainant did not pay him any amount other
than the P20,000.00 acceptance fee, Respondent argues that
Complainant still owes him the following amounts: (1)
the P3,000.00 he paid to the notary public to sign the
acknowledgment page of the deed covering the sale of the
subject property; (2) theP200 he spent in the notarization,
registration and inscription of the affidavit of adverse claim; (3)
theP15,000.00 attorney's fees agreed upon for accomplishing the
first [phase] of Complainant's remedies relative to her problem
with Mohammad; and (4) an additional P40,000.00 for the legal
services he rendered with respect to Complainant's other
problems. Respondent further claims that Complainant should pay
him the costs relative to the filing of this administrative case."
5

Report of the Investigating Commissioner
In the investigating commissioner's opinion, respondent had been
remiss in attending to the cause of his client, inviolation of Rules
18.03 and 18.04 of the Code of Professional Responsibility.
Regarded as a mere afterthought was his defense that his failure
to file the civil and the criminal complaints was the fault of
complainant. It was noted that if she was indeed responsible for
the non-filing of the complaints, he should have pointed out this
fault at the earliest opportunity, which was in his April 4, 2003
letter. The commissioner further opined that this defense had
been invoked only in respondent's letter dated July 14, 2003, after
complainant demanded the return of the amounts she had paid.
While likewise rejecting respondent's claim for unpaid legal fees
amounting to P15,000, the commissioner upheld Balaoro's sworn
testimony. It corroborated that of complainant, who had said that
the only agreement between her and respondent was the
acceptance fee of P20,000. His claim of P40,000 as consultation
fee for the advice he had allegedly given her concerning other
legal problems was also rejected for lack of evidence.


9
Commissioner Villadolid then wrote the following
recommendation:
"x x x [T]his Commissioner finds that Respondent violated Canons
17 and 18 of the CPR and recommends a penalty of reprimand or
suspension subject to the discretion of the Commission.
Further, considering that it is established from the records that
Respondent received a total of P48,000.00 from Complainant and
that the only legal service rendered by Respondent consists of the
notarization of the deed of sale covering the subject property and
the filing of the adverse claim, this Commissioner believes
that P8,000.00 is sufficient compensation for the services actually
rendered and thus recommends that Respondent be ordered to
pay Complainant P40,000.00 by way of restitution to
Complainant."
6

Acting on the above recommendation, the IBP board of governors
approved on July 30, 2004, the following Resolution:
"RESOLUTION NO. XVI-2004-386
CBD Case No. 03-1141
Marissa L. Macarilay vs.
Atty. Felix B. Seria
APPROVED, with modification, 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 for respondent's
violation of Canons 17 and 18 of the Code of Professional
Responsibility by his failure to exercise due diligence in protecting
and attending to the interest of complainant after receiving
payment for the legal services he was supposed to render, Atty.
Felix B. Seria is hereby SUSPENDED from the practice of law
for six (6) months and Ordered to Pay complainant P40,000.00 by
way of Restitution."
7

The Court's Ruling
We agree with the foregoing Resolution of the IBP board of
governors.
Administrative Liability
A lawyer-client relationship is highly fiduciary in nature;
8
it is
delicate, exacting and confidential.
9
It requires a high standard of
conduct and demands utmost fidelity, candor, fairness, and good
faith.
10
The legal profession demands vigilance and attention
expected of a "good father of a family."
11
Lawyers should adopt
the norm expected of people of good intentions. In brief, they
must always be protective of the interests of their clients as good
parents would be protective of their own families.
12

Indeed, under their sacred oath, lawyers pledge not to delay any
person for money or malice. They are bound to conduct
themselves according to the best of their knowledge and
discretion, with all good fidelity to their clients.
13

These duties are further stressed in the Code of Professional
Responsibility, specifically in the following pertinent provisions:


10
"CANON 15 A lawyer shall observe candor, fairness and loyalty
in all his dealings and transactions with his clients.
"CANON 16 A lawyer shall hold in trust all moneys and
properties of his client that may come into his possession.
x x x x x x x x x
"Rule 16.03 A lawyer shall deliver the funds and property of his
client when due or upon demand. x x x.
"CANON 17 A lawyer owes fidelity to the cause of his client and
he shall be mindful of the trust and confidence reposed in him.
"CANON 18 A lawyer shall serve his client with competence and
diligence.
x x x x x x x x x
"Rule 18.03 A lawyer shall not neglect a legal matter entrusted
to him and his negligence in connection therewith shall render him
liable.
"Rule 18.04 A lawyer shall keep the client informed of the status
of his case and shall respond within a reasonable time to the
client's request for information."
Admittedly, respondent received the amount of P20,000 as
acceptance fee for the cases he had agreed to file on behalf of
complainant. Plainly, he was less than candid in his dealings with
his client; he displayed lack of honesty and fidelity to her cause.
Sufficiently established were the following acts: (1) despite his
receipt on May 16, 2002, of P20,000 for filing fees, he did not file
the cases he had agreed to handle; (2) he deceived complainant
when he lied by saying that a civil complaint had been filed in the
sala of one "Judge Regala" of the Regional Trial Court of Quezon
City; (3) respondent refused to return the money he had received
for the filing fees. These misrepresentations, lies and lapses
constituted a breach of his sworn duty as a lawyer and of the
ethical standards he was required to honor and observe.
Lawyers owe full devotion to the protection of the interests of
their clients, as well as warmth and zeal in the defense of the
latter's rights.
14
Once they agree to handle a case, lawyers are
bound to give to it their utmost attention, skill and competence,
regardless of its significance.
15
Public interest requires that they
exert their best efforts and use all their learning and ability in the
speedy prosecution or defense of the client's cause.
16
Those who
perform that duty with diligence and candor not only safeguard
the interests of the client, but also serve the ends of
justice.
17
They do honor to the bar and help maintain the
community's respect for the legal profession.
18

Moreover, the lawyer-client relationship, being one of confidence,
requires lawyers to give the client timely, adequate and truthful
updates on the developments of the case.
19
In this manner, the
trust and faith of clients in their counsel would remain unimpaired.
Indeed, respondent neglected a legal matter entrusted to him by
failing to file the complaints as he was supposed to. Unbelievable
is his claim that the complaints were ready as early as April 5,
2002, but that these were not filed anyway because complainant


11
had refused to sign them, absent the correct address of the
defendant (Albaria Mohammad).
First, evidence abound that it was complainant who was insistent
that the cases be filed. She repeatedly inquired about the case,
but respondent would not give her any clear answer. Later on, he
lied to her by saying that the complaint was pending in the sala of
one Judge Regala. His deception on top of his failure to file the
cases were raised in the letter dated March 26, 2003,
20
written by
Atty. Noel Sorreda, her new counsel. In his April 4, 2003
reply,
21
respondent did not mention anything about the complaints
that had allegedly been prepared as early as April 5, 2002.
Commissioner Villadolid aptly observed in his Report:
"x x x The fact that respondent's 4 April 2003 letter-response to
said letter, as well as respondent's subsequent letter dated 23
May 2003, did not contain either gives further credence to
complainant's version of the facts. Notably, it was only in
respondent's letter dated 14 July 2003 that respondent raised
such defenses for the first time. Considering that said 14 July
2003 letter was in response to complainant's 28 June 2003 letter
demanding the return of certain amounts for legal services which
complainant believed respondent did not render, this
Commissioner is inclined to believe that such defenses are mere
afterthought to defeat complainant's claim for the return of said
amounts."
Were it not for the vigilance of complainant in inquiring about the
status of her cases, she would not have known that the
complaints had not been filed at all. Respondent deliberately
withheld informing her of his inaction, notwithstanding her
repeated follow-ups. Thus, he is deemed to have wronged her
and effectively betrayed the trust she had placed in him.
Second, his alleged lack of knowledge of the correct address of
the defendant is not a hindrance to the filing of a complaint.
Indeed, such address is material to the service of
summons
22
which, however, presupposes that a complaint has
been properly filed in court. Furthermore, Section 14 of Rule 14 of
the Rules of Court
23
provides for remedies when the defendant's
address is unknown. Thus, respondent should have nevertheless
filed the complaint, especially because complainant had already
given him payment for the filing fees. His attempt to cover up his
negligence by wrongfully shifting the blame to her cannot be
countenanced by this Court.
Finally, respondent should have returned the money to
complainant following his failure to file the cases.
24
Where the
client gives money to the lawyer for a specific purpose -- such as
to file an action or to appeal an adverse judgment -- the latter
should, upon failure to do so, immediately return it to the
former.
25
The unjustified withholding of funds belonging to the
client warrants the imposition of disciplinary action against the
lawyer.
26

It was sufficiently proven that, all in all, complainant had paid
respondent P48,000:
"Similarly, a review of the records reveals that contrary to
Respondent's claim, in addition to the P20,000.00 covered by the
check dated 18 March 2002 which complainant paid during


12
the parties' initial meeting, complainant made subsequent
payments to respondent. Balaoro confirms that when she and
complainant went back to respondent's office on 5 April 2002,
complainant paid respondent P3,000.00 and P5,000.00 in cash.
Another P20,000.00 was likewise paid to respondent as evidenced
by the RCBC check dated 16 May 2002 issued by complainant to
respondent."
27

Likewise established was the obvious fact that the only legal
service rendered by respondent consisted of the notarization of
the Deed of Sale covering the property purchased by complainant
and the filing of the adverse claim. We agree with Commissioner
Villadolid that P8,000 was sufficient compensation for the services
actually rendered. Hence, respondent must return to complainant
the balance of P40,000 plus legal interest.
The failure of respondent to discharge his duty properly
constitutes an infringement of ethical standards and of his oath.
Such failure makes him answerable not just to his client, but also
to this Court, to the legal profession, and to the general
public.
28
The recommended penalty of suspension from the
practice of law for six months is in accordance with
jurisprudence.
29

WHEREFORE, Atty. Felix B. Seria is found GUILTY of violating
Canons 15, 16, 17 and 18 of the Code of Professional
Responsibility and is hereby SUSPENDED from the practice of law
for a period of six (6) months, effective upon his receipt of this
Decision. He is further ORDERED to return to Marissa L. Macarilay,
within thirty (30) days from notice, the amount of P40,000, with
interest at 6 percent per annum from May 16, 2002, until full
payment. Let copies of this Decision be furnished all courts as well
as the Office of the Bar Confidant, which is instructed to include a
copy in respondent's personal file.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia,
JJ., concur.


13
RULE 15.02
EN BANC
[G.R. No. 105938. September 20, 1996]
TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V.
CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN,
VICTOR P. LAZATIN, and EDUARDO U.
ESCUETA, petitioners, vs. THE HONORABLE
SANDIGANBAYAN, First Division, REPUBLIC OF THE
PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
ROCO, respondents.
[G.R. No. 108113. September 20, 1996]
PARAJA G. HAYUDINI, petitioner, vs. THE
SANDIGANBAYAN and THE REPUBLIC OF THE
PHILIPPINES, respondents.
D E C I S I O N
KAPUNAN, J.:
These cases touch the very cornerstone of every State's judicial
system, upon which the workings of the contentious and
adversarial system in the Philippine legal process are based - the
sanctity of fiduciary duty in the client-lawyer relationship. The
fiduciary duty of a counsel and advocate is also what makes the
law profession a unique position of trust and confidence, which
distinguishes it from any other calling. In this instance, we have
no recourse but to uphold and strengthen the mantle of protection
accorded to the confidentiality that proceeds from the
performance of the lawyer's duty to his client.
The facts of the case are undisputed.
The matters raised herein are an offshoot of the institution of the
Complaint on July 31, 1987 before the Sandiganbayan by the
Republic of the Philippines, through the Presidential Commission
on Good Government against Eduardo M. Cojuangco, Jr., as one
of the principal defendants, for the recovery of alleged ill-gotten
wealth, which includes shares of stocks in the named corporations
in PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of
the Philippines versus Eduardo Cojuangco, et al."
[1]

Among the defendants named in the case are herein petitioners
Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C.
Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U.
Escueta and Paraja G. Hayudini, and herein private respondent
Raul S. Roco, who all were then partners of the law firm Angara,
Abello, Concepcion, Regala and Cruz Law Offices (hereinafter
referred to as the ACCRA Law Firm). ACCRA Law Firm
performed legal services for its clients, which included, among
others, the organization and acquisition of business associations
and/or organizations, with the correlative and incidental services
where its members acted as incorporators, or simply, as
stockholders. More specifically, in the performance of these
services, the members of the law firm delivered to its client
documents which substantiate the client's equity holdings, i.e.,
stock certificates endorsed in blank representing the shares


14
registered in the client's name, and a blank deed of trust or
assignment covering said shares. In the course of their dealings
with their clients, the members of the law firm acquire information
relative to the assets of clients as well as their personal and
business circumstances. As members of the ACCRA Law Firm,
petitioners and private respondent Raul Roco admit that they
assisted in the organization and acquisition of the companies
included in Civil Case No. 0033, and in keeping with the office
practice,ACCRA lawyers acted as nominees-stockholders of the
said corporations involved in sequestration proceedings.
[2]

On August 20, 1991, respondent Presidential Commission on Good
Government (hereinafter referred to as respondent PCGG) filed a
"Motion to Admit Third Amended Complaint" and "Third Amended
Complaint" which excluded private respondent Raul S.
Roco from the complaint in PCGG Case No. 33 as party-
defendant.
[3]
Respondent PCGG based its exclusion of private
respondent Roco as party-defendant on his undertaking that he
will reveal the identity of the principal/s for whom he acted as
nominee/stockholder in the companies involved in PCGG Case No.
33.
[4]

Petitioners were included in the Third Amended Complaint on the
strength of the following allegations:
14. Defendants Eduardo Cojuangco, Jr., Edgardo J.
Angara, Jose C. Concepcion, Teodoro Regala, Avelino V. Cruz,
Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and
Raul Roco of the Angara Concepcion Cruz Regala and Abello law
offices (ACCRA) plotted, devised, schemed. conspired and
confederated with each other in setting up, through the use of the
coconut levy funds, the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM,
COCOLIFE, COCOMARK, CIC, and more than twenty other coconut
levy funded corporations, including the acquisition of San Miguel
Corporation shares and its institutionalization through presidential
directives of the coconut monopoly. Through insidious means and
machinations, ACCRA, being the wholly-owned investment arm,
ACCRA Investments Corporation, became the holder of
approximately fifteen million shares representing roughly 3.3% of
the total outstanding capital stock of UCPB as of 31 March
1987. This ranks ACCRA Investments Corporation number 44
among the top 100 biggest stockholders of UCPB which has
approximately 1,400,000 shareholders. On the other hand,
corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of February, 1984.
[5]

In their answer to the Expanded Amended Complaint,
petitioners ACCRA lawyers alleged that:
4.4. Defendants-ACCRA lawyers participation in the acts with
which their co-defendants are charged, was in furtherance of
legitimate lawyering.
4.4.1. In the course of rendering professional and legal services
to clients, defendants-ACCRA lawyers, Jose C. Concepcion,
Teodoro D. Regala, Rogelio A. Vinluan and Eduardo U. Escueta,
became holders of shares of stock in the corporations listed under
their respective names in Annex A of the expanded Amended
Complaint as incorporating or acquiring stockholders only and, as


15
such, they do not claim any proprietary interest in the said shares
of stock.
4.5. Defendant ACCRA-lawyer Avelino V. Cruz was one of the
incorporators in 1976 of Mermaid Marketing Corporation, which
was organized for legitimate business purposes not related to the
allegations of the expanded Amended Complaint. However, he
has long ago transferred any material interest therein and
therefore denies that the shares appearing in his name in Annex
A of the expanded Amended Complaint are his assets.
[6]

Petitioner Paraja Hayudini, who had separated from ACCRA law
firm, filed a separate answer denying the allegations in the
complaint implicating him in the alleged ill-gotten wealth.
[7]

Petitioners ACCRA lawyers subsequently filed their "COMMENT
AND/OR OPPOSITION" dated October 8, 1991 with Counter-
Motion that respondent PCGG similarly grant the same treatment
to them (exclusion as parties-defendants) as accorded private
respondent Roco.
[8]
The Counter-Motion for dropping petitioners
from the complaint was duly set for hearing on October 18,
1991 in accordance with the requirements of Rule 15 of the Rules
of Court.
In its "Comment," respondent PCGG set the following conditions
precedent for the exclusion of petitioners, namely: (a) the
disclosure of the identity of its clients; (b) submission of
documents substantiating the lawyer-client relationship; and (c)
the submission of the deeds of assignments petitioners executed
in favor of its clients covering their respective shareholdings.
[9]

Consequently, respondent PCGG presented supposed proof to
substantiate compliance by private respondent Roco of the
conditions precedent to warrant the latter's exclusion as party-
defendant in PCGG Case No. 33, to wit: (a) Letter to respondent
PCGG of the counsel of respondent Roco dated May 24, 1989
reiterating a previous request for reinvestigation by the PCGG in
PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by
private respondent Roco as Attachment to the letter aforestated in
(a); and (c) Letter of the Roco, Bunag, and Kapunan Law Offices
dated September 21, 1988 to the respondent PCGG in behalf of
private respondent Roco originally requesting the reinvestigation
and/or re-examination of the evidence of the PCGG against Roco
in its Complaint in PCGG Case No. 33.
[10]

It is noteworthy that during said proceedings, private respondent
Roco did not refute petitioners' contention that he did actually not
reveal the identity of the client involved in PCGG Case No. 33, nor
had he undertaken to reveal the identity of the client for whom he
acted as nominee-stockholder.
[11]

On March 18, 1992, respondent Sandiganbayan promulgated the
Resolution, herein questioned, denying the exclusion of petitioners
in PCGG Case No. 33, for their refusal to comply with the
conditions required by respondent PCGG. It held:
x x x.
ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e. their principal,
and that will be their choice. But until they do identify their
clients, considerations of whether or not the


16
privilege claimed by the ACCRA lawyers exists cannot even
begin to be debated. The ACCRA lawyers cannot excuse
themselves from the consequences of their acts until they have
begun to establish the basis for recognizing the privilege; the
existence and identity of the client.
This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein.
5. The PCGG is satisfied that defendant Roco has demonstrated
his agency and that Roco has apparently identified his principal,
which revelation could show the lack of cause against him. This
in turn has allowed the PCGG to exercise its power both under the
rules of Agency and under Section 5 of E.O. No. 14-A in relation to
the Supreme Court's ruling in Republic v. Sandiganbayan (173
SCRA 72).
The PCGG has apparently offered to the ACCRA lawyers the same
conditions availed of by Roco; full disclosure in exchange for
exclusion from these proceedings (par. 7, PCGG's COMMENT
dated November 4, 1991). The ACCRA lawyers have preferred
not to make the disclosures required by the PCGG.
The ACCRA lawyers cannot, therefore, begrudge the PCGG for
keeping them as party defendants. In the same vein, they cannot
compel the PCGG to be accorded the same treatment accorded to
Roco.
Neither can this Court.
WHEREFORE, the Counter Motion dated October 8, 1991 filed by
the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for
the same treatment by the PCGG as accorded to Raul S. Roco is
DENIED for lack of merit.
[12]

ACCRA lawyers moved for a reconsideration of the above
resolution but the same was denied by the respondent
Sandiganbayan. Hence, the ACCRA lawyers filed the petition
forcertiorari, docketed as G.R. No. 105938, invoking the following
grounds:
I
The Honorable Sandiganbayan gravely abused its discretion in
subjecting petitioners ACCRA lawyers who undisputably acted as
lawyers in serving as nominee-stockholders, to the strict
application of the law of agency.
II
The Honorable Sandiganbayan committed grave abuse of
discretion in not considering petitioners ACCRA lawyers and Mr.
Roco as similarly situated and, therefore, deserving of equal
treatment.
1. There is absolutely no evidence that Mr. Roco had revealed, or
had undertaken to reveal, the identities of the client(s) for whom
he acted as nominee-stockholder.
2. Even assuming that Mr. Roco had revealed, or had undertaken
to reveal, the identities of the client(s), the disclosure does not


17
constitute a substantial distinction as would make the
classification reasonable under the equal protection clause.
3. Respondent Sandiganbayan sanctioned favoritism and undue
preference in favor of Mr. Roco in violation of the equal protection
clause.
III
discretion in not holding that, under the facts of this case, the
attorney-client privilege prohibits petitioners ACCRA lawyers from
revealing the identity of their client(s) and the other information
requested by the PCGG.
1. Under the peculiar facts of this case, the attorney-client
privilege includes the identity of the client(s).
2. The factual disclosures required by the PCGG are not limited to
the identity of petitioners ACCRA lawyers' alleged client(s) but
extend to other privileged matters.
IV
discretion in not requiring that the dropping of party-defendants
by the PCGG must be based on reasonable and just grounds and
with due consideration to the constitutional right of petitioners
ACCRA lawyers to the equal protection of the law.
Petitioner Paraja G. Hayudini, likewise, filed his own motion for
reconsideration of the March 18, 1991 resolution which was
denied by respondent Sandiganbayan. Thus, he filed a separate
petition for certiorari, docketed as G.R. No. 108113, assailing
respondent Sandiganbayan's resolution on essentially the same
grounds averred by petitioners in G.R. No. 105938.
Petitioners contend that the exclusion of respondent Roco as
party-defendant in PCGG Case No. 33 grants him a favorable
treatment, on the pretext of his alleged undertaking to divulge the
identity of his client, giving him an advantage over them who are
in the same footing as partners in the ACCRA law firm. Petitioners
further argue that even granting that such an undertaking has
been assumed by private respondent Roco, they are prohibited
from revealing the identity of their principal under their sworn
mandate and fiduciary duty as lawyers to uphold at all times the
confidentiality of information obtained during such lawyer-client
relationship.
Respondent PCGG, through its counsel, refutes petitioners'
contention, alleging that the revelation of the identity of the client
is not within the ambit of the lawyer-client confidentiality
privilege, nor are the documents it required (deeds of assignment)
protected, because they are evidence of nominee status.
[13]

In his comment, respondent Roco asseverates that respondent
PCGG acted correctly in excluding him as party-defendant because
he "(Roco) has not filed an Answer. PCGG had therefore the right
to dismiss Civil Case No. 0033 as to Roco `without an order of
court by filing a notice of dismissal,'"
[14]
and he has undertaken to
identify his principal.
[15]

Petitioners' contentions are impressed with merit.


18
I
It is quite apparent that petitioners were impleaded by the PCGG
as co-defendants to force them to disclose the identity of their
clients. Clearly, respondent PCGG is not after petitioners but the
bigger fish as they say in street parlance. This ploy is quite
clear from the PCGGs willingness to cut a deal with petitioners --
the names of their clients in exchange for exclusion from the
complaint. The statement of the Sandiganbayan in its questioned
resolution dated March 18, 1992 is explicit:
ACCRA lawyers may take the heroic stance of not revealing the
identity of the client for whom they have acted, i.e., their
principal, and that will be their choice. But until they do identify
their clients, considerations of whether or not the privilege
claimed by the ACCRA lawyers exists cannot even begin to be
debated. The ACCRA lawyers cannot excuse themselves from the
consequences of their acts until they have begun to establish the
basis for recognizing the privilege; the existence and identity of
the client.
This is what appears to be the cause for which they have been
impleaded by the PCGG as defendants herein. (Underscoring
ours)
In a closely related case, Civil Case No. 0110 of the
Sandiganbayan, Third Division, entitled Primavera Farms, Inc., et
al. vs. Presidential Commission on Good Government respondent
PCGG, through counsel Mario Ongkiko, manifested at the hearing
on December 5, 1991 that the PCGG wanted to establish through
the ACCRA that their so called client is Mr. Eduardo Cojuangco;
that it was Mr. Eduardo Cojuangco who furnished all the monies
to those subscription payments in corporations included in Annex
A of the Third Amended Complaint; that the ACCRA lawyers
executed deeds of trust and deeds of assignment, some in the
name of particular persons, some in blank.
We quote Atty. Ongkiko:
ATTY. ONGKIKO:
With the permission of this Hon. Court. I propose to establish
through these ACCRA lawyers that, one, their so-called client is
Mr. Eduardo Cojuangco. Second, it was Mr. Eduardo Cojuangco
who furnished all the monies to these subscription payments of
these corporations who are now the petitioners in this
case. Third, that these lawyers executed deeds of trust, some in
the name of a particular person, some in blank. Now, these blank
deeds are important to our claim that some of the shares are
actually being held by the nominees for the late President
Marcos. Fourth, they also executed deeds of assignment and
some of these assignments have also blank assignees. Again, this
is important to our claim that some of the shares are for Mr.
Cojuangco and some are for Mr. Marcos. Fifth, that most of these
corporations are really just paper corporations. Why do we say
that? One: There are no really fixed sets of officers, no fixed sets
of directors at the time of incorporation and even up to 1986,
which is the crucial year. And not only that, they have no permits
from the municipal authorities in Makati. Next, actually all their
addresses now are care of Villareal Law Office. They really have
no address on records. These are some of the principal things


19
that we would ask of these nominees stockholders, as they called
themselves.
[16]

It would seem that petitioners are merely standing in for their
clients as defendants in the complaint. Petitioners are being
prosecuted solely on the basis of activities and services performed
in the course of their duties as lawyers. Quite obviously,
petitioners inclusion as co-defendants in the complaint is merely
being used as leverage to compel them to name their clients and
consequently to enable the PCGG to nail these clients. Such being
the case, respondent PCGG has no valid cause of action as against
petitioners and should exclude them from the Third Amended
Complaint.
II
The nature of lawyer-client relationship is premised on the Roman
Law concepts of locatio conductio operarum (contract of lease of
services) where one person lets his services and another hires
them without reference to the object of which the services are to
be performed, wherein lawyers' services may be compensated
by honorarium or for hire,
[17]
andmandato (contract of agency)
wherein a friend on whom reliance could be placed makes a
contract in his name, but gives up all that he gained by the
contract to the person who requested him.
[18]
But the lawyer-
client relationship is more than that of the principal-agent and
lessor-lessee.
In modern day perception of the lawyer-client relationship, an
attorney is more than a mere agent or servant, because he
possesses special powers of trust and confidence reposed on him
by his client.
[19]
A lawyer is also as independent as the judge of
the court, thus his powers are entirely different from and superior
to those of an ordinary agent.
[20]
Moreover, an attorney also
occupies what may be considered as a "quasi-judicial office" since
he is in fact an officer of the Court
[21]
and exercises his judgment
in the choice of courses of action to be taken favorable to his
client.
Thus, in the creation of lawyer-client relationship, there are rules,
ethical conduct and duties that breathe life into it, among those,
the fiduciary duty to his client which is of a very delicate, exacting
and confidential character, requiring a very high degree of fidelity
and good faith,
[22]
that is required by reason of necessity and
public interest
[23]
based on the hypothesis that abstinence from
seeking legal advice in a good cause is an evil which is fatal to the
administration of justice.
[24]

It is also the strict sense of fidelity of a lawyer to his client that
distinguishes him from any other professional in society. This
conception is entrenched and embodies centuries of established
and stable tradition.
[25]
In Stockton v. Ford,
[26]
the U.S. Supreme
Court held:
There are few of the business relations of life involving a higher
trust and confidence than that of attorney and client, or generally
speaking, one more honorably and faithfully discharged; few more
anxiously guarded by the law, or governed by the sterner
principles of morality and justice; and it is the duty of the court to
administer them in a corresponding spirit, and to be watchful and
industrious, to see that confidence thus reposed shall not be used


20
to the detriment or prejudice of the rights of the party bestowing
it.
[27]

In our jurisdiction, this privilege takes off from the old Code of
Civil Procedure enacted by the Philippine Commission on August
7, 1901. Section 383 of the Code specifically forbids counsel,
without authority of his client to reveal any communication made
by the client to him or his advice given thereon in the course of
professional employment.
[28]
Passed on into various provisions of
the Rules of Court, the attorney-client privilege, as currently
worded provides:
Sec. 24. Disqualification by reason of privileged communication. -
The following persons cannot testify as to matters learned in
confidence in the following cases:
x x x
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, or with a view to, professional
employment, can an attorneys secretary, stenographer, or clerk
be examined, without the consent of the client and his employer,
concerning any fact the knowledge of which has been acquired in
such capacity.
[29]

Further, Rule 138 of the Rules of Court states:
Sec. 20. It is the duty of an attorney:
(e) to maintain inviolate the confidence, and at every peril to
himself, to preserve the secrets of his client, and to accept no
compensation in connection with his clients business except from
him or with his knowledge and approval.
This duty is explicitly mandated in Canon 17 of the Code of
Professional Responsibility which provides that:
Canon 17. A lawyer owes fidelity to the cause of his client and
Canon 15 of the Canons of Professional Ethics also demands a
lawyer's fidelity to client:
The lawyer owes "entire devotion to the interest of the client,
warm zeal in the maintenance and defense of his rights and the
exertion of his utmost learning and ability," to the end that
nothing be taken or be withheld from him, save by the rules of
law, legally applied. No fear of judicial disfavor or public
popularity should restrain him from the full discharge of his
duty. In the judicial forum the client is entitled to the benefit of
any and every remedy and defense that is authorized by the law
of the land, and he may expect his lawyer to assert every such
remedy or defense. But it is steadfastly to be borne in mind that
the great trust of the lawyer is to be performed within and not
without the bounds of the law. The office of attorney does not
permit, much less does it demand of him for any client, violation
of law or any manner of fraud or chicanery. He must obey his
own conscience and not that of his client.
Considerations favoring confidentiality in lawyer-client
relationships are many and serve several constitutional and policy
concerns. In the constitutional sphere, the privilege gives flesh to


21
one of the most sacrosanct rights available to the accused, the
right to counsel. If a client were made to choose between legal
representation without effective communication and disclosure
and legal representation with all his secrets revealed then he
might be compelled, in some instances, to either opt to stay away
from the judicial system or to lose the right to counsel. If the
price of disclosure is too high, or if it amounts to self
incrimination, then the flow of information would be curtailed
thereby rendering the right practically nugatory. The threat this
represents against another sacrosanct individual right, the right to
be presumed innocent is at once self-evident.
Encouraging full disclosure to a lawyer by one seeking legal
services opens the door to a whole spectrum of legal options
which would otherwise be circumscribed by limited information
engendered by a fear of disclosure. An effective lawyer-client
relationship is largely dependent upon the degree of confidence
which exists between lawyer and client which in turn requires a
situation which encourages a dynamic and fruitful exchange and
flow of information. It necessarily follows that in order to attain
effective representation, the lawyer must invoke the privilege not
as a matter of option but as a matter of duty and professional
responsibility.
The question now arises whether or not this duty may be asserted
in refusing to disclose the name of petitioners' client(s) in the case
at bar. Under the facts and circumstances obtaining in the instant
case, the answer must be in the affirmative.
As a matter of public policy, a clients identity should not be
shrouded in mystery.
[30]
Under this premise, the general rule in
our jurisdiction as well as in the United States is that a lawyer may
not invoke the privilege and refuse to divulge the name or identity
of his client.
[31]

The reasons advanced for the general rule are well established.
First, the court has a right to know that the client whose
privileged information is sought to be protected is flesh and blood.
Second, the privilege begins to exist only after the attorney-client
relationship has been established. The attorney-client privilege
does not attach until there is a client.
Third, the privilege generally pertains to the subject matter of the
relationship.
Finally, due process considerations require that the opposing party
should, as a general rule, know his adversary. A party suing or
sued is entitled to know who his opponent is.
[32]
He cannot be
obliged to grope in the dark against unknown forces.
[33]

Notwithstanding these considerations, the general rule is however
qualified by some important exceptions.
1) Client identity is privileged where a strong probability exists
that revealing the clients name would implicate that client in the
very activity for which he sought the lawyers advice.
In Ex-Parte Enzor,
[34]
a state supreme court reversed a lower
court order requiring a lawyer to divulge the name of her client on


22
the ground that the subject matter of the relationship was so
closely related to the issue of the clients identity that the privilege
actually attached to both. In Enzor, the unidentified client, an
election official, informed his attorney in confidence that he had
been offered a bribe to violate election laws or that he had
accepted a bribe to that end. In her testimony, the attorney
revealed that she had advised her client to count the votes
correctly, but averred that she could not remember whether her
client had been, in fact, bribed. The lawyer was cited for
contempt for her refusal to reveal his clients identity before a
grand jury. Reversing the lower courts contempt orders, the
state supreme court held that under the circumstances of the
case, and under the exceptions described above, even the name
of the client was privileged.
U.S. v. Hodge and Zweig,
[35]
involved the same exception, i.e. that
client identity is privileged in those instances where a strong
probability exists that the disclosure of the client's identity would
implicate the client in the very criminal activity for which the
lawyers legal advice was obtained.
The Hodge case involved federal grand jury proceedings inquiring
into the activities of the Sandino Gang, a gang involved in the
illegal importation of drugs in the United States. The respondents,
law partners, represented key witnesses and suspects including
the leader of the gang, Joe Sandino.
In connection with a tax investigation in November of 1973, the
IRS issued summons to Hodge and Zweig, requiring them to
produce documents and information regarding payment received
by Sandino on behalf of any other person, and vice versa. The
lawyers refused to divulge the names. The Ninth Circuit of the
United States Court of Appeals, upholding non-disclosure under
the facts and circumstances of the case, held:
A clients identity and the nature of that clients fee arrangements
may be privileged where the person invoking the privilege can
show that a strong probability exists that disclosure of such
information would implicate that client in the very criminal activity
for which legal advice was sought Baird v. Koerner, 279 F.2d at
680. While in Baird Owe enunciated this rule as a matter of
California law, the rule also reflects federal law. Appellants
contend that the Baird exception applies to this case.
The Baird exception is entirely consonant with the principal policy
behind the attorney-client privilege. In order to promote
freedom of consultation of legal advisors by clients, the
apprehension of compelled disclosure from the legal advisors must
be removed; hence, the law must prohibit such disclosure except
on the clients consent. 8 J. Wigmore, supra sec. 2291, at
545. In furtherance of this policy, the clients identity and the
nature of his fee arrangements are, in exceptional cases,
protected as confidential communications.
[36]

2) Where disclosure would open the client to civil liability, his
identity is privileged. For instance, the peculiar facts and
circumstances of Neugass v. Terminal Cab
Corporation,
[37]
prompted the New York Supreme Court to allow
a lawyers claim to the effect that he could not reveal the


23
name of his client because this would expose the latter to civil
litigation.
In the said case, Neugass, the plaintiff, suffered injury when the
taxicab she was riding, owned by respondent corporation, collided
with a second taxicab, whose owner was unknown. Plaintiff
brought action both against defendant corporation and the owner
of the second cab, identified in the information only as John
Doe. It turned out that when the attorney of defendant
corporation appeared on preliminary examination, the fact was
somehow revealed that the lawyer came to know the name of the
owner of the second cab when a man, a client of the insurance
company, prior to the institution of legal action, came to him and
reported that he was involved in a car accident. It was apparent
under the circumstances that the man was the owner of the
second cab. The state supreme court held that the reports were
clearly made to the lawyer in his professional capacity. The court
said:
That his employment came about through the fact that the
insurance company had hired him to defend its policyholders
seems immaterial. The attorney in such cases is clearly the
attorney for the policyholder when the policyholder goes to him to
report an occurrence contemplating that it would be used in an
action or claim against him.
[38]

x x x xxx xxx.
All communications made by a client to his counsel, for the
purpose of professional advice or assistance, are privileged,
whether they relate to a suit pending or contemplated, or to any
other matter proper for such advice or aid; x x x And whenever
the communication made, relates to a matter so connected with
the employment as attorney or counsel as to afford presumption
that it was the ground of the address by the client, then it is
privileged from disclosure. xxx.
It appears... that the name and address of the owner of the
second cab came to the attorney in this case as a confidential
communication. His client is not seeking to use the courts, and
his address cannot be disclosed on that theory, nor is the present
action pending against him as service of the summons on him has
not been effected. The objections on which the court reserved
decision are sustained.
[39]

In the case of Matter of Shawmut Mining Company,
[40]
the lawyer
involved was required by a lower court to disclose whether he
represented certain clients in a certain transaction. The purpose of
the courts request was to determine whether the unnamed
persons as interested parties were connected with the purchase of
properties involved in the action. The lawyer refused and brought
the question to the State Supreme Court. Upholding the lawyers
refusal to divulge the names of his clients the court held:
If it can compel the witness to state, as directed by the order
appealed from, that he represented certain persons in the
purchase or sale of these mines, it has made progress in
establishing by such evidence their version of the litigation. As
already suggested, such testimony by the witness would compel
him to disclose not only that he was attorney for certain people,
but that, as the result of communications made to him in the


24
course of such employment as such attorney, he knew that they
were interested in certain transactions. We feel sure that under
such conditions no case has ever gone to the length of compelling
an attorney, at the instance of a hostile litigant, to disclose not
only his retainer, but the nature of the transactions to which it
related, when such information could be made the basis of a suit
against his client.
[41]

3) Where the governments lawyers have no case against an
attorneys client unless, by revealing the clients name, the said
name would furnish the only link that would form the chain of
testimony necessary to convict an individual of a crime, the
clients name is privileged.
In Baird vs Korner,
[42]
a lawyer was consulted by the accountants
and the lawyer of certain undisclosed taxpayers regarding steps to
be taken to place the undisclosed taxpayers in a favorable position
in case criminal charges were brought against them by the U.S.
Internal Revenue Service (IRS).
It appeared that the taxpayers returns of previous years were
probably incorrect and the taxes understated. The clients
themselves were unsure about whether or not they violated tax
laws and sought advice from Baird on the hypothetical possibility
that they had. No investigation was then being undertaken by the
IRS of the taxpayers. Subsequently, the attorney of the taxpayers
delivered to Baird the sum of $12,706.85, which had been
previously assessed as the tax due, and another amount of money
representing his fee for the advice given. Baird then sent a check
for $12,706.85 to the IRS in Baltimore, Maryland, with a note
explaining the payment, but without naming his clients. The IRS
demanded that Baird identify the lawyers, accountants, and other
clients involved. Baird refused on the ground that he did not
know their names, and declined to name the attorney and
accountants because this constituted privileged communication. A
petition was filed for the enforcement of the IRS summons. For
Bairds repeated refusal to name his clients he was found guilty of
civil contempt. The Ninth Circuit Court of Appeals held that, a
lawyer could not be forced to reveal the names of clients who
employed him to pay sums of money to the government
voluntarily in settlement of undetermined income taxes, unsued
on, and with no government audit or investigation into that
clients income tax liability pending. The court emphasized the
exception that a clients name is privileged when so much has
been revealed concerning the legal services rendered that the
disclosure of the clients identity exposes him to possible
investigation and sanction by government agencies. The Court
held:
The facts of the instant case bring it squarely within that
exception to the general rule. Here money was received by the
government, paid by persons who thereby admitted they had not
paid a sufficient amount in income taxes some one or more years
in the past. The names of the clients are useful to the
government for but one purpose - to ascertain which taxpayers
think they were delinquent, so that it may check the records for
that one year or several years. The voluntary nature of the
payment indicates a belief by the taxpayers that more taxes or
interest or penalties are due than the sum previously paid, if
any. It indicates a feeling of guilt for nonpayment of taxes,


25
though whether it is criminal guilt is undisclosed. But it may well
be the link that could form the chain of testimony necessary to
convict an individual of a federal crime. Certainly the payment
and the feeling of guilt are the reasons the attorney here involved
was employed - to advise his clients what, under the
circumstances, should be done.
[43]

Apart from these principal exceptions, there exist other situations
which could qualify as exceptions to the general rule.
For example, the content of any client communication to a lawyer
lies within the privilege if it is relevant to the subject matter of the
legal problem on which the client seeks legal
assistance.
[44]
Moreover, where the nature of the attorney-client
relationship has been previously disclosed and it is
the identity which is intended to be confidential, the identity of
the client has been held to be privileged, since such revelation
would otherwise result in disclosure of the entire transaction.
[45]

Summarizing these exceptions, information relating to the identity
of a client may fall within the ambit of the privilege when the
clients name itself has an independent significance, such that
disclosure would then reveal client confidences.
[46]

The circumstances involving the engagement of lawyers in the
case at bench, therefore, clearly reveal that the instant case falls
under at least two exceptions to the general rule. First, disclosure
of the alleged client's name would lead to establish said client's
connection with the very fact in issue of the case, which is
privileged information, because the privilege, as stated earlier,
protects the subject matter or the substance (without which there
would be no attorney-client relationship).
The link between the alleged criminal offense and the legal advice
or legal service sought was duly established in the case at bar, by
no less than the PCGG itself. The key lies in the three specific
conditions laid down by the PCGG which constitutes petitioners
ticket to non-prosecution should they accede thereto:
(a) the disclosure of the identity of its clients;
(b) submission of documents substantiating the lawyer-client
relationship; and
(c) the submission of the deeds of assignment petitioners
executed in favor of their clients covering their respective
shareholdings.
From these conditions, particularly the third, we can readily
deduce that the clients indeed consulted the petitioners, in their
capacity as lawyers, regarding the financial and corporate
structure, framework and set-up of the corporations in
question. In turn, petitioners gave their professional advice in the
form of, among others, the aforementioned deeds of assignment
covering their clients shareholdings.
There is no question that the preparation of the aforestated
documents was part and parcel of petitioners legal service to their
clients. More important, it constituted an integral part of their
duties as lawyers. Petitioners, therefore, have a legitimate fear
that identifying their clients would implicate them in the very


26
activity for which legal advice had been sought, i.e., the alleged
accumulation of ill-gotten wealth in the aforementioned
corporations.
Furthermore, under the third main exception, revelation of the
client's name would obviously provide the necessary link for the
prosecution to build its case, where none otherwise exists. It is
the link, in the words of Baird, that would inevitably form the
chain of testimony necessary to convict the (client) of a...
crime."
[47]

An important distinction must be made between a case where a
client takes on the services of an attorney for illicit purposes,
seeking advice about how to go around the law for the purpose of
committing illegal activities and a case where a client thinks he
might have previously committed something illegal and consults
his attorney about it. The first case clearly does not fall within the
privilege because the same cannot be invoked for purposes
illegal. The second case falls within the exception because
whether or not the act for which the advice turns out to be illegal,
his name cannot be used or disclosed if the disclosure leads to
evidence, not yet in the hands of the prosecution, which might
lead to possible action against him.
These cases may be readily distinguished, because the privilege
cannot be invoked or used as a shield for an illegal act, as in the
first example; while the prosecution may not have a case against
the client in the second example and cannot use the attorney
client relationship to build up a case against the latter. The
reason for the first rule is that it is not within the professional
character of a lawyer to give advice on the commission of a
crime.
[48]
The reason for the second has been stated in the cases
above discussed and are founded on the same policy grounds for
which the attorney-client privilege, in general, exists.
In Matter of Shawmut Mining Co., supra, the appellate court
therein stated that "under such conditions no case has ever yet
gone to the length of compelling an attorney, at the instance of a
hostile litigant, to disclose not only his retainer, but the nature of
the transactions to which it related, when such information could
be made the basis of a suit against his
client.
[49]
"Communications made to an attorney in the course
of any personal employment, relating to the subject
thereof, and which may be supposed to be drawn out in
consequence of the relation in which the parties stand to each
other, are under the seal of confidence and entitled to protection
as privileged communications."
[50]
Where the communicated
information, which clearly falls within the privilege, would suggest
possible criminal activity but there would be not much in the
information known to the prosecution which would sustain a
charge except that revealing the name of the client would open
up other privileged information which would substantiate the
prosecutions suspicions, then the clients identity is so inextricably
linked to the subject matter itself that it falls within the
protection. The Baird exception, applicable to the instant case, is
consonant with the principal policy behind the privilege, i.e., that
for the purpose of promoting freedom of consultation of legal
advisors by clients, apprehension of compelled disclosure from
attorneys must be eliminated. This exception has likewise been
sustained in In re Grand Jury Proceedings
[51]
and Tillotson v.


27
Boughner.
[52]
What these cases unanimously seek to avoid is the
exploitation of the general rule in what may amount to a fishing
expedition by the prosecution.
There are, after all, alternative sources of information available to
the prosecutor which do not depend on utilizing a defendant's
counsel as a convenient and readily available source of
information in the building of a case against the
latter. Compelling disclosure of the client's name in circumstances
such as the one which exists in the case at bench amounts to
sanctioning fishing expeditions by lazy prosecutors and litigants
which we cannot and will not countenance. When the nature of
the transaction would be revealed by disclosure of an attorney's
retainer, such retainer is obviously protected by the privilege.
[53]
It
follows that petitioner attorneys in the instant case owe their
client(s) a duty and an obligation not to disclose the latter's
identity which in turn requires them to invoke the privilege.
In fine, the crux of petitioners' objections ultimately hinges on
their expectation that if the prosecution has a case against their
clients, the latter's case should be built upon evidence
painstakingly gathered by them from their own sources and not
from compelled testimony requiring them to reveal the name of
their clients, information which unavoidably reveals much about
the nature of the transaction which may or may not be
illegal. The logical nexus between name and nature of transaction
is so intimate in this case that it would be difficult to simply
dissociate one from the other. In this sense, the name is as much
"communication" as information revealed directly about the
transaction in question itself, a communication which is clearly
and distinctly privileged. A lawyer cannot reveal such
communication without exposing himself to charges of violating a
principle which forms the bulwark of the entire attorney-client
relationship.
The uberrimei fidei relationship between a lawyer and his client
therefore imposes a strict liability for negligence on the
former. The ethical duties owing to the client, including
confidentiality, loyalty, competence, diligence as well as the
responsibility to keep clients informed and protect their rights to
make decisions have been zealously sustained. InMilbank, Tweed,
Hadley and McCloy v. Boon,
[54]
the US Second District Court
rejected the plea of the petitioner law firm that it breached its
fiduciary duty to its client by helping the latter's former agent in
closing a deal for the agent's benefit only after its client hesitated
in proceeding with the transaction, thus causing no harm to its
client. The Court instead ruled that breaches of a fiduciary
relationship in any context comprise a special breed of cases that
often loosen normally stringent requirements of causation and
damages, and found in favor of the client.
To the same effect is the ruling in Searcy, Denney, Scarola,
Barnhart, and Shipley P.A. v. Scheller
[55]
requiring strict obligation
of lawyers vis-a-vis clients. In this case, a contingent fee lawyer
was fired shortly before the end of completion of his work, and
sought payment quantum meruit of work done. The court,
however, found that the lawyer was fired for cause after he
sought to pressure his client into signing a new fee agreement
while settlement negotiations were at a critical stage. While the
client found a new lawyer during theinterregnum, events forced


28
the client to settle for less than what was originally
offered. Reiterating the principle of fiduciary duty of lawyers to
clients in Meinhard v. Salmon
[56]
famously attributed to Justice
Benjamin Cardozo that "Not honesty alone, but the punctilio of an
honor the most sensitive, is then the standard of behavior," the
US Court found that the lawyer involved was fired for cause, thus
deserved no attorney's fees at all.
The utmost zeal given by Courts to the protection of the lawyer-
client confidentiality privilege and lawyer's loyalty to his client is
evident in the duration of the protection, which exists not only
during the relationship, but extends even after the termination of
the relationship.
[57]

Such are the unrelenting duties required of lawyers vis-a-vis their
clients because the law, which the lawyers are sworn to uphold, in
the words of Oliver Wendell Holmes,
[58]
"xxx is an exacting
goddess, demanding of her votaries in intellectual and moral
discipline." The Court, no less, is not prepared to accept
respondents position without denigrating the noble profession
that is lawyering, so extolled by Justice Holmes in this wise:
Every calling is great when greatly pursued. But what other gives
such scope to realize the spontaneous energy of one's soul? In
what other does one plunge so deep in the stream of life - so
share its passions its battles, its despair, its triumphs, both as
witness and actor? x x x But that is not all. What a subject is
this in which we are united - this abstraction called the Law,
wherein as in a magic mirror, we see reflected, not only in our
lives, but the lives of all men that have been. When I think on
this majestic theme my eyes dazzle. If we are to speak of the law
as our mistress, we who are here know that she is a mistress only
to be won with sustained and lonely passion - only to be won by
straining all the faculties by which man is likened to God.
We have no choice but to uphold petitioners' right not to reveal
the identity of their clients under pain of the breach of fiduciary
duty owing to their clients, because the facts of the instant case
clearly fall within recognized exceptions to the rule that the
clients name is not privileged information.
If we were to sustain respondent PCGG that the lawyer-client
confidential privilege under the circumstances obtaining here does
not cover the identity of the client, then it would expose the
lawyers themselves to possible litigation by their clients in view of
the strict fiduciary responsibility imposed on them in the exercise
of their duties.
The complaint in Civil Case No. 0033 alleged that the defendants
therein, including herein petitioners and Eduardo Cojuangco, Jr.
conspired with each other in setting up through the use of
coconut levy funds the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM and
others and that through insidious means and machinations,
ACCRA, using its wholly-owned investment arm, ACCRA
Investments Corporation, became the holder of approximately
fifteen million shares representing roughly 3.3% of the total
capital stock of UCPB as of 31 March 1987. The PCGG wanted to
establish through the ACCRA lawyers that Mr. Cojuangco is their
client and it was Cojuangco who furnished all the monies to the


29
subscription payment; hence, petitioners acted as dummies,
nominees and/or agents by allowing themselves, among others, to
be used as instrument in accumulating ill-gotten wealth through
government concessions, etc., which acts constitute gross abuse
of official position and authority, flagrant breach of public trust,
unjust enrichment, violation of the Constitution and laws of the
Republic of the Philippines.
By compelling petitioners, not only to reveal the identity of their
clients, but worse, to submit to the PCGG documents
substantiating the client-lawyer relationship, as well as deeds of
assignment petitioners executed in favor of its clients covering
their respective shareholdings, the PCGG would exact from
petitioners a link that would inevitably form the chain of
testimony necessary to convict the (client) of a crime.
III
In response to petitioners' last assignment of error, respondents
allege that the private respondent was dropped as party
defendant not only because of his admission that he acted merely
as a nominee but also because of his undertaking to testify to
such facts and circumstances "as the interest of truth may
require, which includes... the identity of the principal."
[59]

First, as to the bare statement that private respondent merely
acted as a lawyer and nominee, a statement made in his out-of-
court settlement with the PCGG, it is sufficient to state that
petitioners have likewise made the same claim not merely out-of-
court but also in their Answer to plaintiff's Expanded Amended
Complaint, signed by counsel, claiming that their acts were made
in furtherance of "legitimate lawyering.
[60]
Being "similarly
situated" in this regard, public respondents must show that there
exist other conditions and circumstances which would warrant
their treating the private respondent differently from petitioners in
the case at bench in order to evade a violation of the equal
protection clause of the Constitution.
To this end, public respondents contend that the primary
consideration behind their decision to sustain the PCGG's dropping
of private respondent as a defendant was his promise to disclose
the identities of the clients in question. However, respondents
failed to show - and absolutely nothing exists in the records
of the case at bar - that private respondent actually revealed
the identity of his client(s) to the PCGG. Since the undertaking
happens to be the leitmotif of the entire arrangement between
Mr. Roco and the PCGG, an undertaking which is so material as to
have justified PCGG's special treatment exempting the private
respondent from prosecution, respondent Sandiganbayan should
have required proof of the undertaking more substantial than a
"bare assertion" that private respondent did indeed comply with
the undertaking. Instead, as manifested by the PCGG, only three
documents were submitted for the purpose, two of which were
mere requests for re-investigation and one simply disclosed
certain clients which petitioners (ACCRA lawyers) were themselves
willing to reveal. These were clients to whom both petitioners and
private respondent rendered legal services while all of them were
partners at ACCRA, and were not the clients which the PCGG
wanted disclosed for the alleged questioned transactions.
[61]


30
To justify the dropping of the private respondent from the case or
the filing of the suit in the respondent court without him,
therefore, the PCGG should conclusively show that Mr. Roco was
treated as a species apart from the rest of the ACCRA lawyers on
the basis of a classification which made substantial distinctions
based on real differences. No such substantial distinctions exist
from the records of the case at bench, in violation of the equal
protection clause.
The equal protection clause is a guarantee which provides a wall
of protection against uneven application of statutes and
regulations. In the broader sense, the guarantee operates against
uneven application of legal norms so that all persons under similar
circumstances would be accorded the same treatment.
[62]
Those
who fall within a particular class ought to be treated alike not only
as to privileges granted but also as to the liabilities imposed.
x x x. What is required under this constitutional guarantee is the
uniform operation of legal norms so that all persons under similar
circumstances would be accorded the same treatment both in the
privileges conferred and the liabilities imposed. As was noted in a
recent decision: Favoritism and undue preference cannot be
allowed. For the principle is that equal protection and security
shall be given to every person under circumstances, which if not
identical are analogous. If law be looked upon in terms of burden
or charges, those that fall within a class should be treated in the
same fashion, whatever restrictions cast on some in the group
equally binding the rest.
[63]

We find that the condition precedent required by the respondent
PCGG of the petitioners for their exclusion as parties-defendants
in PCGG Case No. 33 violates the lawyer-client confidentiality
privilege. The condition also constitutes a transgression by
respondents Sandiganbayan and PCGG of the equal protection
clause of the Constitution.
[64]
It is grossly unfair to exempt one
similarly situated litigant from prosecution without allowing the
same exemption to the others. Moreover, the PCGGs demand not
only touches upon the question of the identity of their clients but
also on documents related to the suspected transactions, not only
in violation of the attorney-client privilege but also of the
constitutional right against self-incrimination. Whichever way one
looks at it, this is a fishing expedition, a free ride at the expense
of such rights.
An argument is advanced that the invocation by petitioners of the
privilege of attorney-client confidentiality at this stage of the
proceedings is premature and that they should wait until they are
called to testify and examine as witnesses as to matters learned in
confidence before they can raise their objections. But petitioners
are not mere witnesses. They are co-principals in the case for
recovery of alleged ill-gotten wealth. They have made their
position clear from the very beginning that they are not willing to
testify and they cannot be compelled to testify in view of their
constitutional right against self-incrimination and of their
fundamental legal right to maintain inviolate the privilege of
attorney-client confidentiality.
It is clear then that the case against petitioners should never be
allowed to take its full course in the Sandiganbayan. Petitioners


31
should not be made to suffer the effects of further litigation when
it is obvious that their inclusion in the complaint arose from a
privileged attorney-client relationship and as a means of coercing
them to disclose the identities of their clients. To allow the case
to continue with respect to them when this Court could nip the
problem in the bud at this early opportunity would be to sanction
an unjust situation which we should not here countenance. The
case hangs as a real and palpable threat, a proverbial Sword of
Damocles over petitioners' heads. It should not be allowed to
continue a day longer.
While we are aware of respondent PCGGs legal mandate to
recover ill-gotten wealth, we will not sanction acts which violate
the equal protection guarantee and the right against self-
incrimination and subvert the lawyer-client confidentiality
privilege.
WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions
of respondent Sandiganbayan (First Division) promulgated on
March 18, 1992 and May 21, 1992 are hereby ANNULLED and SET
ASIDE. Respondent Sandiganbayan is further ordered to exclude
petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V.
Cruz, Jose C. Concepcion,
*
Rogelio A. Vinluan, Victor P. Lazatin,
Eduardo U. Escueta and Paraja G. Hayuduni as parties-defendants
in SB Civil Case No. 0033 entitled "Republic of the Philippines v.
Eduardo Cojuangco, Jr., et al.".
SO ORDERED.
Bellosillo, Melo, and Francisco, JJ., concur.
Vitug, J., see separate opinion.
Padilla, Panganiban, and Torres, Jr., JJ., concur in the result.
Davide, Jr. and Puno, JJ., see dissenting opinion.
Narvasa, C.J., and Regalado, J., joins Justice Davide in his dissent.
Romero, J., no part. Related to PCGG Commissioner when Civil
Case No. 0033 was filed.
Hermosisima, Jr., J., no part. Participated in Sandiganbayan
deliberations thereon.
Mendoza, J., on leave.


32
SUPREME COURT
Manila
SECOND DIVISION
A.C. No. 5108 May 26, 2005
ROSA F. MERCADO, complainant,
vs.
ATTY. JULITO D. VITRIOLO, respondent.

D E C I S I O N
PUNO, J.:
Rosa F. Mercado filed the instant administrative complaint against
Atty. Julito D. Vitriolo, seeking his disbarment from the practice of
law. The complainant alleged that respondent maliciously
instituted a criminal case for falsification of public document
against her, a former client, based on confidential
information gained from their attorney-client relationship.
Let us first hearken to the facts.
Complainant is a Senior Education Program Specialist of the
Standards Development Division, Office of Programs and
Standards while respondent is a Deputy Executive Director IV of
the Commission on Higher Education (CHED).
1

Complainant's husband filed Civil Case No. 40537 entitled "Ruben
G. Mercado v. Rosa C. Francisco," forannulment of their marriage
with the Regional Trial Court (RTC) of Pasig City. This annulment
case had been dismissed by the trial court, and the dismissal
became final and executory on July 15, 1992.
2

In August 1992, Atty. Anastacio P. de Leon, counsel of
complainant, died. On February 7, 1994, respondent entered his
appearance before the trial court as collaborating counsel for
complainant.
3

On March 16, 1994, respondent filed his Notice of Substitution of
Counsel,
4
informing the RTC of Pasig City that he has
been appointed as counsel for the complainant, in substitution of
Atty. de Leon.
It also appears that on April 13, 1999, respondent filed a criminal
action against complainant before the Office of the City
Prosecutor, Pasig City, entitled "Atty. Julito Vitriolo, et al. v.
Rose Dela Cruz F. Mercado," and docketed as I.S. No. PSG 99-
9823, for violation of Articles 171 and 172 (falsification of public
document) of the Revised Penal Code.
5
Respondent alleged that
complainant made false entries in the Certificates of Live Birth of
her children, Angelica and Katelyn Anne. More specifically,
complainant allegedly indicated in said Certificates of Live Birth
that she is married to a certain Ferdinand Fernandez, and that
their marriage was solemnized on April 11, 1979, when in truth,
she is legally married to Ruben G. Mercado and their marriage
took place on April 11, 1978.


33
Complainant denied the accusations of respondent against her.
She denied using any other name than "Rosa F. Mercado." She
also insisted that she has gotten married only once, on April 11,
1978, to Ruben G. Mercado.
In addition, complainant Mercado cited other charges against
respondent that are pending before or decided upon by
other tribunals (1) libel suit before the Office of the City
Prosecutor, Pasig City;
6
(2) administrative case for dishonesty,
grave misconduct, conduct prejudicial to the best interest of the
service, pursuit of private business, vocation or profession without
the permission required by Civil Service rules and regulations, and
violations of the "Anti-Graft and Corrupt Practices Act," before the
then Presidential Commission Against Graft and Corruption;
7
(3)
complaint for dishonesty, grave misconduct, and conduct
prejudicial to the best interest of the service before the Office of
the Ombudsman, where he was found guilty of misconduct and
meted out the penalty of one month suspension without
pay;
8
and, (4) the Information for violation of Section 7(b)(2) of
Republic Act No. 6713, as amended, otherwise known as the Code
of Conduct and Ethical Standards for Public Officials and
Employees before the Sandiganbayan.
9

Complainant Mercado alleged that said criminal complaint for
falsification of public document (I.S. No. PSG 99-9823) disclosed
confidential facts and information relating to the civil case for
annulment, then handled by respondent Vitriolo as her counsel.
This prompted complainant Mercado to bring this action against
respondent. She claims that, in filing the criminal case for
falsification, respondent is guilty of breaching their privileged and
confidential lawyer-client relationship, and should be disbarred.
Respondent filed his Comment/Motion to Dismiss on November 3,
1999 where he alleged that the complaint for disbarment was all
hearsay, misleading and irrelevant because all the allegations
leveled against him are subject of separate fact-finding bodies.
Respondent claimed that the pending cases against him are not
grounds for disbarment, and that he is presumed to be innocent
until proven otherwise.
10
He also states that the decision of the
Ombudsman finding him guilty of misconduct and imposing upon
him the penalty of suspension for one month without pay is on
appeal with the Court of Appeals. He adds that he was found
guilty, only of simple misconduct, which he committed in good
faith.
11

In addition, respondent maintains that his filing of the criminal
complaint for falsification of public documents against complainant
does not violate the rule on privileged communication
between attorney and client because the bases of the falsification
case are two certificates of live birth which are public documents
and in no way connected with the confidence taken during the
engagement of respondent as counsel. According to respondent,
the complainant confided to him as then counsel only matters of
facts relating to the annulment case. Nothing was said about the
alleged falsification of the entries in the birth certificates of her
two daughters. The birth certificates are filed in the Records
Division of CHED and are accessible to anyone.
12


34
In a Resolution dated February 9, 2000, this Court referred the
administrative case to the Integrated Bar of the Philippines (IBP)
for investigation, report and recommendation.
13

The IBP Commission on Bar Discipline set two dates for hearing
but complainant failed to appear in both. Investigating
Commissioner Rosalina R. Datiles thus granted respondent's
motion to file his memorandum, and the case was submitted for
resolution based on the pleadings submitted by the parties.
14

On June 21, 2003, the IBP Board of Governors approved the
report of investigating commissioner Datiles, finding the
respondent guilty of violating the rule on privileged
communication between attorney and client, and recommending
his suspension from the practice of law for one (1) year.
On August 6, 2003, complainant, upon receiving a copy of the IBP
report and recommendation, wrote Chief Justice Hilario Davide,
Jr., a letter of desistance. She stated that after the passage of so
many years, she has now found forgiveness for those who have
wronged her.
At the outset, we stress that we shall not inquire into the merits of
the various criminal and administrative cases filed against
respondent. It is the duty of the tribunals where these cases are
pending to determine the guilt or innocence of the respondent.
We also emphasize that the Court is not bound by any withdrawal
of the complaint or desistance by the complainant. The letter of
complainant to the Chief Justice imparting forgiveness upon
respondent is inconsequential in disbarment proceedings.
We now resolve whether respondent violated the rule on
privileged communication between attorney and client when he
filed a criminal case for falsification of public document against
his former client.
A brief discussion of the nature of the relationship between
attorney and client and the rule on attorney-client privilege that is
designed to protect such relation is in order.
In engaging the services of an attorney, the client reposes on him
special powers of trust and confidence. Their relationship is strictly
personal and highly confidential and fiduciary. The relation is of
such delicate, exacting and confidential nature that is required by
necessity and public interest.
15
Only by such confidentiality and
protection will a person be encouraged to repose his confidence in
an attorney. The hypothesis is that abstinence from seeking legal
advice in a good cause is an evil which is fatal to the
16
Thus, the preservation and protection
of that relation will encourage a client to entrust his legal
problems to an attorney, which is of paramount importance to the
17
One rule adopted to serve this purpose
is the attorney-client privilege: an attorney is to keep inviolate his
client's secrets or confidence and not to abuse them.
18
Thus, the
duty of a lawyer to preserve his client's secrets and confidence
outlasts the termination of the attorney-client relationship,
19
and
continues even after the client's death.
20
It is the glory of the legal
profession that its fidelity to its client can be depended on, and
that a man may safely go to a lawyer and converse with him upon
his rights or supposed rights in any litigation with absolute
assurance that the lawyer's tongue is tied from ever disclosing


35
it.
21
With full disclosure of the facts of the case by the client to his
attorney, adequate legal representation will result in the
ascertainment and enforcement of rights or the prosecution or
defense of the client's cause.
Now, we go to the rule on attorney-client privilege. Dean Wigmore
cites the factors essential to establish the existence of the
privilege, 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.
22

In fine, the factors are as follows:
(1) There exists an attorney-client relationship, or a prospective
attorney-client relationship, and it is by reason of this relationship
that the client made the communication.
Matters disclosed by a prospective client to a lawyer are protected
by the rule on privileged communication even if the prospective
client does not thereafter retain the lawyer or the latter declines
the employment.
23
The reason for this is to make the prospective
client free to discuss whatever he wishes with the lawyer without
fear that what he tells the lawyer will be divulged or used against
him, and for the lawyer to be equally free to obtain information
from the prospective client.
24

On the other hand, a communication from a (prospective) client to
a lawyer for some purpose other than on account of the
(prospective) attorney-client relation is not privileged. Instructive
is the case of Pfleider v. Palanca,
25
where the client and his
wife leased to their attorney a 1,328-hectare agricultural land for
a period of ten years. In their contract, the parties agreed, among
others, that a specified portion of the lease rentals would be paid
to the client-lessors, and the remainder would be delivered by
counsel-lessee to client's listed creditors. The client alleged that
the list of creditors which he had "confidentially" supplied counsel
for the purpose of carrying out the terms of payment contained in
the lease contract was disclosed by counsel, in violation of their
lawyer-client relation, to parties whose interests are adverse to
those of the client. As the client himself, however, states, in the
execution of the terms of the aforesaid lease contract between
the parties, he furnished counsel with the "confidential" list of his
creditors. We ruled that this indicates that client delivered the list
of his creditors to counsel not because of the professional relation
then existing between them, but on account of the lease
agreement. We then held that a violation of the confidence that
accompanied the delivery of that list would partake more of a
private and civil wrong than of a breach of the fidelity owing from
a lawyer to his client.
(2) The client made the communication in confidence.
The mere relation of attorney and client does not raise a
presumption of confidentiality.
26
The client must intend the
communication to be confidential.
27


36
A confidential communication refers to information transmitted by
voluntary act of disclosure between attorney and client in
confidence and by means which, so far as the client is aware,
discloses the information to no third person other than one
reasonably necessary for the transmission of the information or
the accomplishment of the purpose for which it was given.
28

Our jurisprudence on the matter rests on quiescent ground. Thus,
a compromise agreement prepared by a lawyer pursuant to the
instruction of his client and delivered to the opposing party,
29
an
offer and counter-offer for settlement,
30
or a document given by a
client to his counsel not in his professional capacity,
31
are not
privileged communications, the element of confidentiality not
being present.
32

(3) The legal advice must be sought from the attorney in his
professional capacity.
33

The communication made by a client to his attorney must not be
intended for mere information, but for the purpose of seeking
legal advice from his attorney as to his rights or obligations. The
communication must have been transmitted by a client to his
attorney for the purpose of seeking legal advice.
34

If the client seeks an accounting service,
35
or business or personal
assistance,
36
and not legal advice, the privilege does not attach to
a communication disclosed for such purpose.
Applying all these rules to the case at bar, we hold that the
evidence on record fails to substantiate complainant's allegations.
We note that complainant did not even specify the alleged
communication in confidence disclosed by respondent. All her
claims were couched in general terms and lacked specificity. She
contends that respondent violated the rule on privileged
communication when he instituted a criminal action against her
for falsification of public documents because the criminal
complaint disclosed facts relating to the civil case for annulment
then handled by respondent. She did not, however, spell out
these facts which will determine the merit of her complaint. The
Court cannot be involved in a guessing game as to the existence
of facts which the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP.
Without any testimony from the complainant as to the specific
confidential information allegedly divulged by respondent without
her consent, it is difficult, if not impossible to determine if there
was any violation of the rule on privileged communication. Such
confidential information is a crucial link in establishing a breach of
the rule on privileged communication between attorney and client.
It is not enough to merely assert the attorney-client
privilege.
37
The burden of proving that the privilege applies is
placed upon the party asserting the privilege.
38

IN VIEW WHEREOF, the complaint against respondent Atty.
Julito D. Vitriolo is hereby DISMISSED for lack of merit.
SO ORDERED.
Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Tinga, J., out of the country.


37
SUPREME COURT
Manila
EN BANC

A.C. No. 927 September 28, 1970
IN THE MATTER OF THE COMPLAINT FOR DISBARMENT
OF ATTORNEY POTENCIANO A. PALANCA. WILLIAM C.
PFLEIDER, complainant,
vs.
POTENCIANO A. PALANCA, respondent.

R E S O L U T I O N

CASTRO, J.:
The respondent Atty. Potenciano A. Palanca was for sometime the
legal counsel of the complainant William C. Pfleider. According to
the complainant, he retained the legal services of Palanca from
January 1966, whereas the latter insists that the attorney-client
relationship between them began as early as in 1960.
At all events, the relations between the two must have attained
such a high level of mutual trust that on October 10, 1969,
Pfleider and his wife leased to Palanca a 1,328 hectare agricultural
land in Hinobaan, Negros Occidental, known as the Hacienda Asia,
for a period of ten years. In their contract, the parties agreed,
among others, that a specified portion of the lease rentals would
be paid to Pfleider, and the remainder would be delivered by
Palanca to Pfleider's listed creditors.
The arrangement worked smoothly until October 14, 1969 when
the rupture came with the filing by Pfleider of acivil suit (civil case
9187 of the CFI of Negros Occidental) against Palanca for
rescission of the contract of lease on the ground of alleged default
in the payment of rentals. In his answer to the complaint, Palanca
averred full satisfaction of his rental liabilities, and therefore
contended that the lease should continue. He also charged that he
had already been dispossessed of the hacienda by Pfleider and
the latter's goons at gunpoint and consequently had suffered
tremendous financial losses.
With this history in, perspective, we shall now consider the
administrative charges of gross misconduct in office brought by
Pfleider against Palanca. The indictment consists of four counts.
First count. In regard to a criminal case for estafa filed in
December 1965 by one Gregorio Uy Matiao against Pfleider, the
latter instructed Palanca to offer in settlement the sum of
P10,000, payable in installments, to Uy Matiao for the dismissal of
the case. After sometime, Palanca reported to Pfleider that the
offer has been rejected. Finally in October 1969, Palanca
supposedly informed Pfleider that he had succeeded in negotiating
the dismissal of the estafa case by leaving the sum of P5,000 with
the Dumaguete City Court where the action was then pending.


38
Sometime in December 1969, however, Pfleider was the object of
a warrant of arrest in connection with the same estafa case. It
turned out, charged the complainant Pfleider, that Palanca had
not deposited the sum of P5,000 with the Dumaguete City Court,
let alone communicated to Uy Matiao his earlier offer of
settlement.
We have closely examined all the pleadings filed by the parties in
this case and the annexes thereto, and it is our view that the first
charge is devoid of merit. In support of his claim of alleged
assurance made by Palanca that theestafa case had already
been terminated, Pfleinder relies on certain letters written to him
by Palanca. Our own reading of these letters, however, belies his
claim. They contain nothing which might reasonably induce the
complainant to believe that the criminal action against him had
been finally settled by his attorney. On the contrary, the letters
merely report a continuing attempt on the part of Palanca to
secure a fair bargain for Pfleider. The letter-report of October 10,
1969, invoke by the complainant, states in no uncertain terms
that "I am bargaining this (referring to the estafa case) even for
P8,000.00 and I think they will agree. I'll finalize this and pay
Tingyan on Tuesday. I have already left in Dumaguete P5,000.00
to show them the color of our money and I will bring the balance
when I go there Tuesday."
Nothing in the above letter indicates that Palanca
had deposited the sum of P5,000 with the Dumaguete CityCourt.
What he did state is that he had left that sum in that City to
enable their adversaries to see "the color of our money." In this
connection, the veracity of the certification by Felicisimo T. Hilay,
Dumaguete branch manager of RCPI, that he (Hilay) had been
holding the sum of P5,000 during the early part of October in trust
for Pfleider and his lawyer, has not been assailed by Pfleider.
If Pfleider was the object of a warrant of arrest in December
1969, no substantial blame can be laid at the door of the
respondent Palanca inasmuch as the latter's services were
implicitly terminated by Pfleider when the latter sued his lawyer in
October of the same year. While the object of the suit is the
rescission of the contract of lease between the parties, the conflict
of interest which pits one against the other became incompatible
with that mutual confidence and trust essential to every lawyer-
client relation. Moreover, Pfleider fails to dispute Palanca's claim
that on October 26, 1968, Pfleider refused to acknowledge receipt
of a certain letter and several motions for withdrawal, including
Palanca's withdrawal as counsel in the estafa case.
Second count. Palanca had fraudulently charged the sum of
P5,000 (which he supposedly had left with the CityCourt in
Dumaguete) to his rental account with Pfleider as part payment of
the lease rentals of the Hacienda Asia.Third count. In the same
statement of account, Palanca falsely represented having paid, for
the account of Pfleider, one Samuel Guintos the sum of P866.50
when the latter would swear that he had received only the sum of
P86.50.
These two charges are anchored upon the same "Statement of
Disbursements" submitted by Palanca to Pfleider. It is our view
that this statement is but a memorandum or report of the
expenses which Palanca considered as chargeable to the account


39
of Pfleider. By its very tentative nature, it is subject to the
examination and subsequent approval or disapproval of Pfleider,
and any and every error which it contains may be brought to the
attention of Palanca for rectification or adjustment. Viewed in
relation to the contract of lease between Pfleinder and Palanca,
this "statement" is but one aspect of the prestation required of
Palanca by the contract. Whatever breach he might have
committed in regard to this prestation would be but a civil or
contractual wrong which does not affect hisoffice as a member of
the Bar.
Final count. It is charged that the list of creditors which Pfleider
had "confidentially" supplied Palanca for the purpose of carrying
out the terms of payment contained in the lease contract was
disclosed by Palanca, in violation of their lawyer-client relation, to
parties whose interests are adverse to those of Pfleider.
As Pfleider himself, however, in the execution of the terms of the
aforesaid lease contract between the parties, complainant
furnished respondent with a confidential list of his creditors." This
should indicate that Pfleider delivered the list of his creditors to
Palanca not because of the professional relation then existing
between them, but on account of the lease agreement. A violation
therefore of the confidence that accompanied the delivery of that
list would partake more of a private and civil wrong than of a
breach of the fidelity owing from a lawyer to his client. Moreover,
Pfleider fails to controvert Palanca's claim that there is no such
thing as a "confidential" list of creditors and that the list of
creditors referred to by Pfleider is the same list which forms part
of the pleadings in civil case 9187 (the action for rescission of the
lease contract) now, pending between the complainant and the
respondent lawyer, and therefore is embraced within the category
of public records open to the perusal of persons properly
interested therein.
In sum, we are satisfied, and we so hold, that nothing in written
complaint for disbarment against Palanca and in his reply to
Palanca's answer supports a prima facie finding of
such misconduct in office by Palanca as would warrant further
proceedings in this case.
ACCORDINGLY, the complaint is hereby dismissed.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Fernando, Teehankee,
Barredo, Villamor and Makasiar, JJ., concur.
Zaldivar, J., took no part.
Concepcion, C.J., is on leave.


40
RULE 15.03
SUPREME COURT
EN BANC
A.C. No. 6632. August 2, 2005
NORTHWESTERN UNIVERSITY, INC., and BEN A.
NICOLAS, Complainant,
vs.
Atty. MACARIO D. ARQUILLO, Respondent.

D E C I S I O N
PANGANIBAN, J.:
Representing conflicting interests is prohibited by the Code of
Professional Responsibility. Unless all the affected clients written
consent is given after a full disclosure of all relevant facts,
attorneys guilty of representing conflicting interests shall as a rule
be sanctioned with suspension from the practice of law.
The Case and the Facts
This administrative case stems from a sworn Letter-
Complaint
1
filed with the Integrated Bar of the Philippines-
Commission on Bar Discipline (IBP-CBD) by Ben A.
Nicolas, acting for himself and on behalf of Northwestern
University, Inc. In that Letter-Complaint, Atty. Macario D. Arquillo
was charged with deceit, malpractice, gross misconduct and/or
violation of his oath as attorney by representing conflicting
interests. The material averments of the Complaint are
summarized by the IBP-CBD as follows:
"Herein [c]omplainants, Northwestern University, Inc. and Mr. Ben
A. Nicolas, accuses (sic) herein [r]espondent, Atty. Macario D.
Arquillo, of engaging in conflicting interest in a case before
the National Labor RelationsCommission, Regional Arbitration
Branch No. 1, San Fernando, La Union.
"Complainant alleges that in a consolidated case, herein
[r]espondent appeared and acted as counsels for both
complainants (eight out of the eighteen complainants therein) and
respondent (one out of the ten respondents therein).
"In a consolidation of NLRC Cases [Nos.] 1-05-1086-97, 1-05-
1087-97, 1-05-1088-97, 1-05-1091-97, 1-05-1092-97, 1-05-1097-
97, 1-05-1109-97, 1-05-1096-97 ("consolidated cases"), herein
[r]espondent appeared as counselfor complainants therein,
Teresita A. Velasco, Gervacio A. Velasco, Mariel S. Hernando,
Virginio C. Rasos, Bonifacio S. Blas, Ronald A. Daoang, Luzviminda
T. Urcio and Araceli Quimoyog. In the very same consolidated
case, [r]espondent was also the counsel of one of the
respondents therein, Jose G. Castro.
"Complainants, as their evidence, submitted the Motion to
Dismiss dated August 12, 1997 filed by Jose G. Castro,
represented by his counsel, herein [r]espondent filed before the
NLRC of San Fernando, La Union. Sixteen (16) days later or on
August 28, 1997, [r]espondent filed a Complainants


41
Consolidated Position Paper, this time representing some of the
complainants in the very same consolidated case."
2
(Citations
omitted)
Respondent failed to file his Answer to the Complaint despite a
June 24 1998 Order
3
of the IBP-CBD directing him to do so. Even
after receiving five notices, he failed to appear in any of the
scheduled hearings. Consequently, he was deemed to have
waived his right to participate in the proceedings. Thereafter, the
complainants were ordered to submit their verified position paper
with supporting documents, after which the case was to be
deemed submitted for decision.
4
In their Manifestation
5
dated
August 30, 2004, they said that they would no longer file a
position paper. They agreed to submit the case for decision on the
basis of their Letter-Affidavit dated March 16, 1998, together with
all the accompanying documents.
Report and Recommendation of the IBP
In his Report,
6
Commissioner Dennis B. Funa found respondent
guilty of violating the conflict-of-interests rule under the Code of
Professional Responsibility. Thus, the former recommended the
latters suspension from the practice of law for a period of six (6)
months.
In Resolution No. XVI-2004-415 dated October 7, 2004, the Board
of Governors of the IBP adopted the Report and Recommendation
of Commissioner Funa, with the modification that the period of
suspension was increased to two (2) years.
On December 12, 2004, the Resolution and the records of the
case were transmitted to this Court for final action, pursuant to
Section 12(b) of Rule 139-B of the Rules of Court. On January 20,
2005, respondent filed a Motion for Reconsideration to set aside
Resolution No. XVI-2004-415. The IBP denied the Motion.
The Courts Ruling
We agree with the findings of the IBP Board of Governors, but
reduce the recommended period of suspension to one year.
Administrative Liability of Respondent
The Code of Professional Responsibility requires lawyers to
observe candor, fairness and loyalty in all their dealings and
transactions with their clients.
7
Corollary to this duty, lawyers shall
not represent conflicting interests, except with all the concerned
clients written consent, given after a full disclosure of the facts.
8

When a lawyer represents two or more opposing parties, there is
a conflict of interests, the existence of which is determined by
three separate tests: (1) when, in representation of one client, a
lawyer is required to fight for an issue or claim, but is also duty-
bound to oppose it for another client; (2) when the acceptance of
the new retainer will require an attorney to perform an act that
may injuriously affect the first client or, when called upon in a
new relation, to use against the first one any knowledge acquired
through their professional connection; or (3) when the acceptance
of a new relation would prevent the full discharge of an attorneys
duty to give undivided fidelity and loyalty to the client or would


42
invite suspicion of unfaithfulness or double dealing in the
performance of that duty.
9

In the present case, Atty. Macario D. Arquillo, as counsel for
Respondent Jose C. Castro in NLRC Case Nos. I-05-1083-97 to I-
05-1109-97, filed a Motion to Dismiss those cases. Shortly
thereafter, a position paper was filed by Atty. Arquillo as counsel
for several complainants in consolidated NLRC Case Nos. I-05-
1087-97, I-05-1088-97, I-05-1091-97, I-05-1092-97, I-05-1096-
97, I-05-1097-97, and I-05-1109-97. All the cases in the second
set were included in the first one, for which he had filed the
subject Motion to Dismiss. Furthermore, in his position paper for
the complainants, Atty. Arquillo protected his other client,
Respondent Jose C. Castro, in these words:
"3. More than lack of valid cause for the dismissal of
complainants, respondents, except Atty. Jose C. Castroand
Atty. Ernesto B. Asuncion, should be made accountable for not
according complainants their right to due process."
10

In his two-page Motion for Reconsideration, Atty. Arquillo claims
that there was no conflict of interest in his representation of both
the respondent and the complainants in the same consolidated
cases, because all of them were allegedly on the same side.
Attaching to the Motion the Decision of Labor Arbiter Norma C.
Olegario on the consolidated NLRC cases, Atty. Arquillo theorizes
that her judgment absolved Castro of personal liability for the
illegal dismissal of the complainants; this fact allegedly showed
that there was no conflict in the interests of all the parties
concerned.
This Court does not agree. Atty. Arquillos acts cannot be justified
by the fact that, in the end, Castro was proven to be not
personally liable for the claims of the dismissed employees.
Having agreed to represent one of the opposing parties first, the
lawyer should have known that there was an obvious conflict of
interests, regardless of his alleged belief that they were all on the
same side. It cannot be denied that the dismissed employees
were the complainants in the same cases in which Castro was one
of the respondents. Indeed, Commissioner Funa correctly
enounced:
"As counsel for complainants, [r]espondent had the duty to
oppose the Motion to Dismiss filed by Jose G. Castro. But under
the circumstance, it would be impossible since [r]espondent is
also the counsel of Jose G. Castro. And it appears that it was
[r]espondent who prepared the Motion to Dismiss, which he
should be opposing [a]s counsel of Jose G. Castro, Respondent
had the duty to prove the Complaint wrong. But Respondent
cannot do this because he is the counsel for the
complainants. Here lies the inconsistency. The
inconsistency of interests is very clear.
"Thus it has been noted
The attorney in that situation will not be able to pursue, with
vigor and zeal, the clients claim against the other and to properly
represent the latter in the unrelated action, or, if he can do so, he
cannot avoid being suspected by the defeated client of disloyalty
or partiality in favor of the successful client. The foregoing
considerations will strongly tend to deprive the relation of attorney


43
and client of those special elements which make it one of trust
and confidence[.] (Legal Ethics, Agpalo, p. 230, 4th ed.; In re De
la Rosa, 21 Phil. 258)"
11

An attorney cannot represent adverse interests. It is a hornbook
doctrine grounded on public policy that a lawyers representation
of both sides of an issue is highly improper. The proscription
applies when the conflicting interests arise with respect to the
same general matter, however slight such conflict may be. It
applies even when the attorney acts from honest intentions or in
good faith.
12

The IBP Board of Governors recommended that respondent be
suspended from the practice of law for two years. Considering,
however, prior rulings in cases also
involving attorneys representing conflicting interests, we reduce
the suspension to one (1) year.
13

WHEREFORE, Atty. Macario D. Arquillo is
found GUILTY of misconduct and is hereby SUSPENDED from the
practice of law for a period of one (1) year effective upon his
receipt of this Decision, with a warning that a similar infraction
shall be dealt with more severely in the future.
SO ORDERED.
Davide, Jr., C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-
Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr.,
Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concur.
Corona, J., on official leave.


44
SUPREME COURT
Manila
FIRST DIVISION
A.C. No. 6836 January 23, 2006
LETICIA GONZALES, Complainant,
vs.
ATTY. MARCELINO CABUCANA, Respondent.

R E S O L U T I O N
AUSTRIA-MARTINEZ, J.:
Before this Court is a complaint filed by
Leticia Gonzales (Gonzales) praying that Atty. Marcelino
Cabucana, (respondent) be disbarred for representing conflicting
interests.
On January 8, 2004, Gonzales filed a petition before
the Integrated Bar of the Philippines (IBP) alleging that: she was
the complainant in a case for sum of money and damages filed
before the Municipal Trial Court in Cities (MTCC) of Santiago City,
docketed as Civil Case No. 1-567 where she was represented by
the law firmCABUCANA, CABUCANA, DE GUZMAN AND CABUCANA
LAW OFFICE, with Atty. Edmar Cabucana handling the case and
herein respondent as an associate/partner; on February 26, 2001,
a decision was rendered in the civil case ordering the losing party
to pay Gonzales the amount of P17,310.00 with interest
and P6,000.00 asattorneys fees; Sheriff Romeo Gatcheco, failed
to fully implement the writ of execution issued in connection with
the judgment which prompted Gonzales to file a complaint against
the said sheriff with this Court; in September 2003, Sheriff
Gatcheco and his wife went to the house of Gonzales; they
harassed Gonzales and asked her to execute an affidavit of
desistance regarding her complaint before this Court; Gonzales
thereafter filed against the Gatchecos criminal cases for trespass,
grave threats, grave oral defamation, simple coercion and unjust
vexation; notwithstanding the pendency of Civil Case No. 1-567,
where respondents law firm was still representing Gonzales,
herein respondent represented the Gatchecos in the cases filed by
Gonzales against the said spouses; respondent should be
disbarred from the practice of law since respondents acceptance
of the cases of the Gatchecos violates the lawyer-client
relationship between complainant and respondents law firm and
renders respondent liable under the Code of Professional
Responsibility (CPR) particularly Rules
10.01,
1
13.01,
2
15.02,
3
15.03,
4
21.01
5
and 21.02.
6

On January 9, 2004, the IBP-Commission on Bar
Discipline ordered Atty. Marcelino Cabucana, Jr. to submit his
Answer to the complaint.
7

In his Answer, respondent averred: He never appeared and
represented complainant in Civil Case No. 1-567 since it was his
brother, Atty. Edmar Cabucana who appeared and represented
Gonzales in said case. He admitted that he is representing Sheriff
Gatcheco and his wife in the cases filed against them


45
but claimed that his appearance ispro bono and that
the spouses pleaded with him as no other counsel was willing to
take their case. He entered his appearance in good faith and
opted to represent the spouses rather than leave them
defenseless. When the Gatchecos asked for his assistance, the
spouses said that the cases filed against them by Gonzales were
merely instigated by a high ranking official who wanted to get
even with them for their refusal to testify in favor of the said
official in another case. At first, respondent declined to serve as
counsel of the spouses as he too did not want to incur the ire of
the high-ranking official, but after realizing that he would be
abdicating a sworn duty to delay no man for money or malice,
respondent entered his appearance as defense counsel of the
spouses free of any charge. Not long after, the present complaint
was crafted against respondent which shows that respondent is
now the subject of a demolition job. The civil case filed by
Gonzales where respondents brother served as counsel is
different and distinct from the criminal cases filed by complainant
against the Gatcheco spouses, thus, he did not violate any canon
on legal ethics.
8

Gonzales filed a Reply contending that the civil case handled by
respondents brother is closely connected with the cases of the
Gatchecos which the respondent is handling; that the claim of
respondent that he is handling the cases of the spouses pro
bono is not true since he has his own agenda in offering his
services to the spouses; and that the allegation that she is filing
the cases against the spouses because she is being used by a
powerful person is not true since she filed the said cases out of
her own free will.
9

The Commission on Bar Discipline of the IBP sent to the parties a
Notice of Mandatory Conference dated March 1, 2004.
10
On the
scheduled conference, only a representative of complainant
appeared.
11
Commissioner Demaree Raval of the IBP-CBD then
directed both parties to file their respective verified position
papers.
12

Complainant filed a Memorandum reiterating her earlier assertions
and added that respondent prepared and notarized counter-
affidavits of the Gatcheco spouses; that the high-ranking official
referred to by respondent is Judge Ruben Plata and the
accusations of respondent against the said judge is an attack
against a brother in the profession which is a violation of the CPR;
and that respondent continues to use the name of De Guzman in
their law firm despite the fact that said partner has already been
appointed as Assistant Prosecutor of Santiago City, again in
violation of the CPR.
13

Respondent filed his Position Paper restating his allegations in his
Answer.
14

On August 23, 2004, Commissioner Wilfredo E.J.E. Reyes issued
an Order notifying both parties to appear before his office on
October 28, 2004 for a clarificatory question regarding said
case.
15
On the said date, only respondent appeared
16
presenting a
sworn affidavit executed by Gonzales withdrawing her complaint
against respondent. It reads:
SINUMPAANG SALAYSAY


46
TUNGKOL SA PAG-UURONG NG DEMANDA
Ako, si LETICIA GONZALES, nasa tamang edad, Pilipino,
may asawa, at nakatira sa BarangayDubinan East, Santiago
City, makaraang manumpa ayon sa batas ay nagsasabing:
Ako ang nagdedemanda o petitioner sa CBD Case No. 04-
1186 na may pamagat na "Leticia Gonzales versus Atty.
Marcelino C. Cabucana, Jr." na kasalukuyang nahaharap
sa Commission on Bar Discipline ng Integrated Bar of the
Philippines
Ang pagkakahain ng naturang demanda ay nag-ugat sa di-
pagkakaintindihan na namamagitan sa akin at nina Mr. and
Mrs. Romeo and Anita Gatcheco.
Dahil sa aking galit sa naturang mag-asawa, idinawit ko
si Atty. Marcelino C. Cabucana, Jr. sa sigalot na
namamagitan sa akin at sa mag-
asawang Gatcheco, gayong nalalaman ko na si Atty.
Marcelino C. Cabucana ay walang nalalaman sa naturang di
pagkakaintindihan.
Makaraang pag-isipang mabuti ang paghain ko ng
demanda kontra kay Atty. Marcelino C. Cabucana,
Jr., nakumbinsi ako na ang pagdedemanda ko kay Atty.
Marcelino C. Cabucana, Jr. ay isang malaking pagkakamali
dahil siya ay walang kinalalaman (sic) sa di
pagkakaintindihan naming(sic) ng mag-asawang Gatcheco.
Si Atty. Marcelino C. Cabucana, Jr. ay di ko rin naging
abogado sa Civil Case No. 1-567 (MTCC Br. I Santiago
City) na inihain ko kontra kay Eduardo Mangano.
Nais kong ituwid ang lahat kung kayat aking iniuurong ang
naturang kasong inihain ko kontra kayAtty. Marcelino C.
Cabucana, Jr. at dahil dito ay hindi na ako interesado pang
ituloy and naturang kaso, at aking hinihiling sa kinauukulan
na dismisin na ang naturang kaso.
Ginawa ko ang sinumpaang salaysay na ito upang
patotohanan sa lahat ng nakasaad dito.
17

Commissioner Reyes issued an Order dated October 28, 2004
requiring Gonzales to appear before him on November 25, 2004,
to affirm her statements and to be subject to clarificatory
questioning.
18
However, none of the parties appeared.
19
On
February 17, 2005, only respondent was present. Commissioner
Reyes then considered the case as submitted for resolution.
20

On February 24, 2005, Commissioner Reyes submitted his Report
and Recommendation, portions of which are quoted hereunder:
The Undersigned Commissioner believes that the respondent
made a mistake in the acceptance of the administrative case of
Romeo Gatcheco, however, the Commission (sic) believes that
there was no malice and bad faith in the said acceptance and this
can be shown by the move of the complainant to unilaterally
withdraw the case which she filed against Atty. Marcelino C.
Cabucana, Jr. However, Atty. Cabucana is reminded to be more
careful in the acceptance of cases as conflict of interests might
arise.


47
It is respectfully recommended that Atty. Marcelino C. Cabucana,
Jr. (be) sternly warned and reprimanded andadvised to be more
circumspect and careful in accepting cases which might result in
conflict of interests.
21

On June 25, 2005, a Resolution was passed by the Board of
Governors of the IBP, to wit:
RESOLUTION NO. XVI-2005-153
CBD CASE NO. 03-1186
Leticia Gonzales vs.
Atty. Marcelino Cabucana, Jr.
Resolution as Annex "A"; and, finding the recommendation fully
supported by the evidence on record and the applicable laws and
rules, and considering that respondent made (a) mistake in the
acceptance of the administrative case of Romeo Gatcheco, Atty.
Marcelino Cabucana, Jr. is hereby WARNED and REPRIMANDED
and advised to be more circumspect and careful in accepting
cases which might result in conflict of interests.
22

Before going to the merits, let it be clarified that contrary to the
report of Commissioner Reyes, respondent did not only represent
the Gatcheco spouses in the administrative case filed by Gonzales
against them. As respondent himself narrated in his Position
Paper, he likewise acted as their counsel in the criminal cases filed
by Gonzales against them.
23

With that settled, we find respondent guilty of violating Rule 15.03
of Canon 15 of the Code of Professional Responsibility, to wit:
Rule 15.03 A lawyer shall not represent conflicting interest
except by written consent of all concerned given after a full
disclosure of the facts.
It is well-settled that a lawyer is barred from representing
conflicting interests except by written consent of all concerned
given after a full disclosure of the facts.
24
Such prohibition is
founded on principles of public policy and good taste as the
nature of the lawyer-client relations is one of trust and confidence
of the highest degree.
25
Lawyers are expected not only to keep
inviolate the clients confidence, but also to avoid the appearance
of treachery and double-dealing for only then can litigants be
encouraged to entrust their secrets to their lawyers, which is of
paramount importance in the administration of justice.
26

One of the tests 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 double-dealing in the
performance of that duty.
27

As we expounded in the recent case of Quiambao vs. Bamba,
28

The proscription against representation of conflicting interests
applies to a situation where the opposing parties are present


48
clients in the same action or in an unrelated action. It is of no
moment that 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. 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 them would affect the
performance of the duty of undivided fidelity to both clients.
29

The claim of respondent that there is no conflict of interests in
this case, as the civil case handled by their law firm where
Gonzales is the complainant and the criminal cases filed by
Gonzales against the Gatcheco spouses are not related, has no
merit. The representation of opposing clients in said cases, though
unrelated, constitutes conflict of interests or, at the very least,
invites suspicion of double-dealing which this Court cannot allow.
30

Respondent further argued that it was his brother who
represented Gonzales in the civil case and not him, thus, there
could be no conflict of interests. We do not agree. As respondent
admitted, it was their law firm which represented Gonzales in the
civil case. Such being the case, the rule against representing
conflicting interests applies.
As we explained in the case of Hilado vs. David:
31

[W]e 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 inexpedient. 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."
32

The claim of respondent that he acted in good faith and with
honest intention will also not exculpate him as such claim does
not render the prohibition inoperative.
33

In the same manner, his claim that he could not turn down the
spouses as no other lawyer is willing to take their case cannot
prosper as it is settled that while there may be instances where
lawyers cannot decline representation they cannot be made to
labor under conflict of interest between a present client and a
prospective one.
34
Granting also that there really was no other
lawyer who could handle the spouses case other than him, still he
should have observed the requirements laid down by the rules by
conferring with the prospective client to ascertain as soon as
practicable whether the matter would involve a conflict with
another client then seek the written consent of all concerned after
a full disclosure of the facts.
35
These respondent failed to do thus
exposing himself to the charge of double-dealing.
We note the affidavit of desistance filed by Gonzales. However,
we are not bound by such desistance as the present case involves
public interest.
36
Indeed, the Courts exercise of its power to take
cognizance of administrative cases against lawyers is not for the


49
purpose of enforcing civil remedies between parties, but to protect
the court and the public against an attorney guilty of unworthy
practices in his profession.
37

In similar cases where the respondent was found guilty of
representing conflicting interests a penalty ranging from one to
three years suspension was imposed.
38

We shall consider however as mitigating circumstances the fact
that he is representing the Gatcheco spouses pro bono and that it
was his firm and not respondent personally, which handled the
civil case of Gonzales. As recounted by complainant herself, Atty.
Edmar Cabucana signed the civil case of complainant by stating
first the name of the law firm CABUCANA, CABUCANA, DE
GUZMAN AND CABUCANA LAW OFFICE, under which, his name
and signature appear; while herein respondent signed the
pleadings for the Gatcheco spouses only with his name,
39
without
any mention of the law firm. We also note the observation of the
IBP Commissioner Reyes that there was no malice and bad faith in
respondents acceptance of the Gatchecos cases as shown by the
move of complainant to withdraw the case.
Thus, for violation of Rule 15.03, Canon 15 of the Code of
Professional Responsibility and taking into consideration the
aforementioned mitigating circumstances, we impose the penalty
of fine of P2,000.00.
WHEREFORE, Resolution No. XVI-2005-153 of the Integrated Bar
of the Philippines is APPROVED with MODIFICATION that
respondent Atty. Marcelino Cabucana, Jr. is FINED the amount of
Two Thousand Pesos (P2,000.00) with a STERN WARNING that a
commission of the same or similar act in the future shall be dealt
with more severely.
SO ORDERED.


50
SUPREME COURT
Manila
SECOND DIVISION
ADM. CASE NO. 6876 March 7, 2008
HEIRS OF LYDIO "JERRY" FALAME, namely: MELBA
FALAME, LEO FALAME and JERRY FALAME,petitioners,
vs.
ATTY. EDGAR J. BAGUIO, respondent.

R E S O L U T I O N
TINGA, J.:
On Petition for Review
1
is the Resolution of the Integrated Bar of
the Philippines (IBP) Board of Governorsdismissing the disbarment
complaint filed by the Heirs of Lydio "Jerry" Falame
(complainants) against Atty. Edgar J. Baguio (respondent),
docketed as CBD Case No. 04-1191.
In their Complaint
2
against respondent, complainants alleged that
on 15 July 1991, their father, the late Lydio "Jerry" Falame
(Lydio), engaged the services of respondent to represent him in
an action for forcible entrydocketed as Civil Case No. A-2694 (the
first civil case) and entitled "Heirs of Emilio T. Sy, represented by
Anastacia Velayo Vda. De Sy and Belen V. Sy vs. Lydio 'Jerry'
Falame, Raleigh Falame and Four (4) John Does," in which Lydio
was one of the defendants.
3

Complainants recounted that respondent, as counsel for the
defendants, filed the answer to the complaint in the first civil case.
Subsequently, when the parties to the first civil case were
required to file their respective position papers, respondent used
and submitted in evidence the following: (1) a special power of
attorney dated 1 July 1988 executed by Lydio in favor of his
brother, Raleigh Falame, appointing the latter to be his attorney-
in-fact; and (2) the affidavit of Raleigh Falame dated 23 July
1988, executed before respondent, in which Raleigh stated that
Lydio owned the property subject of the first civil case.
4

Complainants claimed that even after the Municipal Trial Court of
Dipolog City had ruled in favor of the defendants in the first civil
case, Lydio retained the services of respondent as his legal
adviser and counsel for his businesses until Lydio's death on 8
September 1996.
5

However, on 23 October 2000, in representation
of spouses Raleigh and Noemi Falame, respondent filed a case
against complainants allegedly involving the property subject of
the first civil case, entitled "Spouses Rally F. Falame and Noemi F.
Falame v. Melba A. Falame, Leo A. Falame, Jerry A. Falame, Jr.,
Sugni Realty Holdings andDevelopment Corporations, their
representatives, agents and persons acting in their behalf" and
docketed as Civil Case No. 5568 (the second civil case) before the
Regional Trial Court of Dipolog City, Branch 6. The complaint
sought the declaration of nullity of the deed of sale, its


51
registration in the registry of deeds, Transfer Certificate of Title
No. 20241 issued as a consequence of the registration of the deed
of sale, and the real estate mortgage on the said property.
Alternatively, it prayed for specific performance and reconveyance
or legal redemption and damages with preliminary injunction and
restraining order.
6

Firstly, complainants maintained that by acting as counsel for the
spouses Falame in the second civil case wherein they were
impleaded as defendants, respondent violated his oath of
office and duty as an attorney. Plainly, they contended that the
spouses Falame's interests are adverse to those of his former
client, Lydio.
7

Secondly, complainants claimed that respondent knowingly made
false statements of fact in the complaint in the second civil case to
mislead the trial court. In so doing, respondent violated paragraph
(d), Section 20
8
of Rule 138 of the Rules of Court,
9
complainants
asserted further.
Lastly, complainants alleged that the second civil case is a
baseless and fabricated suit which respondent filed as counsel for
complainants' uncle against the heirs of respondent's deceased
client. Specifically, they averred that respondent filed the case for
the sole purpose of retaining, maintaining and/or withholding the
possession of the subject property from complainants who are its
true owners. Complainants concluded that respondent violated
paragraph (g), Section 20
10
of Rule 138 of the Rules of Court.
11

In his Answer with Motion to Dismiss,
12
respondent controverted
complainants' allegations. He emphasizes that it was only Raleigh
Falame who personally engaged his legal services for him and on
Lydio's behalf and that, in fact, it was Raleigh who paid him
the attorney's fees. He also stated that he signed the jurat in
Raleigh's affidavit, which was submitted as evidence in the first
civil case, believing to the best of his knowledge that there is
good ground to support it. Insisting that he did not betray the
confidence reposed in him by Lydio as the latter's counsel in the
first civil case, respondent maintained that he did not reveal or
use any fact he acquired knowledge of during the existence of the
attorney-client relation in the first civil case as he had never even
conferred with nor talked to Lydio in the first place. Respondent
likewise contended that he did not knowingly make any
misleading or untruthful statement of fact in the complaint in the
second civil case and neither did he employ any means
inconsistent with truth and honor in the hearing of the case.
13

Respondent vigorously averred that Lydio had not retained him as
counsel in any case or transaction. Stressing the long interval of
twelve years separating the termination of the first civil case and
his acceptance of the second civil case, respondent pointed out
that the first civil case was not between Lydio and Raleigh but
rather between the heirs of Emilio T. Sy on one hand and Lydio
and Raleigh on the other where physical possession of property
was at stake. Respondent further averred that in contrast the
second civil case is one involving the spouses Raleigh and Noemi
Falame as plaintiffs, and Melba, Leo and Jerry Jr., all surnamed
Falame, and Sugni Realty Holdings and Development Corporation,
as defendantsa case which arose from the wrongful acts
committed by Melba, Leo and Jerry Jr. after Lydio's death.
14


52
Respondent maintained that since the second civil case was still
pending before the trial court, the IBP had no jurisdiction over the
instant administrative case. He added that complainants filed this
administrative case when Raleigh could no longer testify in his
own favor as he had died a year earlier.
15

In their Position Paper
16
dated 7 September 2004, in addition to
their previous charges against respondent, complainants claimed
that respondent violated Rule 15.03
17
of the Code of Professional
Responsibility when he represented the cause of the spouses
Falame against that of his former client, Lydio.
18

On 25 June 2005, the IBP Board of Governors passed Resolution
No. XVI-2005-167 adopting and approving Investigating
Commissioner Winston D. Abuyuan's report and recommendation
for the dismissal of this administrative case, thus:
19

x x x The charge lacks specification as to what part of the lawyer's
oath was violated by the respondent and what confidence was
disclosed. The complainants may have in mind the prohibition
against disclosure of secret information learned in confidence, but
there is no specification in the complaint what secret or
information learned in confidence under Civil Case No. A-2694
was disclosed or will be disclosed by respondent in Civil Case No.
5568. In administrative complaints for disbarment or suspension
against lawyers, the complainant must specify in the affidavit-
complaint the alleged secrets or confidential information disclosed
or will be disclosed in the professional employment (Uy v.
Gonzalez, 426 SCRA 422; 431). In the absence of such
specification, the complaint must fail.
In the complaint, there is no specific charge against respondent
for violation of Canon 15, Rule 15.03 of the Code of Professional
Responsibility about the prohibition against representation of
conflicting interest. So, the allegation in paragraph 1, page 8 and
9 of complainants' position paper stating: With all due respect, it
is submitted that respondent violated Canon 15, Rule 15.03 of the
Code of Professional Responsibility"cannot be countenanced. The
reason being that it is an elementary principle of due process to
which the respondent is entitled that only those charged in the
complaint can be proved by the complainants. A charge not
specified in the complaint cannot be proved (Uy v. Gonzales, id.)
x x x But still this charge will not proper for lack of sufficient
bases.
x x x
Civil Case No. 5568, which was commenced on 03 October 2000,
or three years since the complainants became owners of Lydio
Falame's properties, is a suit against the complainants, not as
representatives of Lydio Falame, but as owners of their respective
aliquot interests in the property in question (Gayon v. Gayon, 36
SCRA 104; 107-108). The complainants are sued not on the basis
of the acts, rights, obligations and interest of Lydio Falame on the
material possession of the improvements found on Lot 345
litigated in Civil Case No. A-2694 nor even on such land itself, but
rather on the facts alleged in the second amended and
supplemental complaint which give rise to their cause of action
against them.


53
While the complainants could not specify under what
circumstances the respondent committed [the] alleged breach of
confidence, breach of secrecy or revelation of secret or
confidential information[,] the respondent has shown that he did
not commit any violation of such duties or obligations of an
attorney.
It is clear that only Raleigh Falame engaged the legal services of
the respondent for his and Lydio Falame's defense in Civil Case
No. A-2694.
x x x
The other allegations of the complainants that the respondent
violated paragraph (d), Section 20 of Rule 139, Rules of Court,
and his lawyer's oath when he allegedly betrayed the trust and
confidence of his former client by denying knowledge of the fact
that the land was owned by Lydio Falame and when he did not
disclose to the Court that at one time his present clients
categorically declared and unconditionally recognized the full
ownership of the late Lydio Falame and complainant Melba
Falame over subject matter of both cases equally lacks evidentiary
basis.
x x x
It is beyond the competence of the complainants to conclude and
is outside the jurisdiction of this Honorable Commission to rule as
to whether or nor (sic) the complaint in Civil Case No.5568 is
baseless or fabricated. It is only the Honorable Court which has
the exclusive jurisdiction to determine the same and cannot be
the subject of an administrative complaint against the respondent.
x x x
WHEREFORE, premises considered, it is respectfully
recommended that this complaint be dismissed on grounds of
prescription, the same having been filed four (4) years after the
alleged misconduct took place and for lack of merit.
RESPECTFULLY SUBMITTED.
20

Dissatisfied, complainants filed the instant petition for review
under Rule 45 of the Rules of Court reiterating their allegations in
the complaint and their position paper.
21
They likewise assert that
the IBP erred in holding that the instant administrative complaint
had been filed out of time since it was filed on 16 January 2004,
or three (3) years, four (4) months and sixteen (16) days after the
second civil case was filed on 23 October 2000.
22
In addition, in
their Consolidated Comment (should be Consolidated
Reply),
23
complainants invoke the Court's ruling in Frias v.
Bautista-Lozada
24
to support their contention that administrative
complaints against members of the bar do not prescribe.
25

In his Comment,
26
respondent principally maintains that the
charges imputed to him have never been proven by clear,
convincing and satisfactory evidence which is the quantum of
proof required in administrative cases against lawyers, and that
complainants have the burden to prove their accusations as he
enjoys the presumption of innocence.
27
Respondent likewise
asserts that in accusing him of violation of Rule 15.03 of the Code


54
of Professional Responsibility only in their position paper and in
the instant petition, complainants infringed his right to due
process and to be informed of the nature and cause of accusation
against him.
28

There is merit in the petition.
At the outset, the Court holds that the instant administrative
action is not barred by prescription. As early as 1947, the Court
held in Calo, Jr. v. Degamo,
29
to wit:
The ordinary statutes of limitation have no application to
disbarment proceedings, nor does the circumstance that the facts
set up as a ground for disbarment constitute a crime, prosecution
for which in a criminal proceeding is barred by limitation, affect
the disbarment proceeding x x x (5 Am. Jur. 434)
30

This doctrine was reaffirmed in the relatively recent case of Frias
v. Bautista-Lozada
31
where the Court held that Rule VII, Section 1
of the Rules of Procedure of the CBD-IBP, which provides for a
prescriptive period for the filing of administrative complaints
against lawyers, should be struck down as void and of no legal
effect for being ultra vires.
32

Prescinding from the unavailability of the defense of prescription,
the Court concurs with the Investigating Commissioner's opinion
that some of the charges raised by complainants in their
complaint are unsubstantiated.
There is, however, sufficient basis to hold respondent accountable
for violation of Rule 15.03 of the Code of Professional
Responsibility. While this charge was not raised in the initiatory
pleading, it was put forward in complainants' position paper filed
with the IBP and in the petition filed with the Court. In fact,
respondent proffered his defenses to the charge in his position
paper before the IBP and likewise in his comment before the
Court. In his very first pleading before the IBP, the answer with
motion to dismiss, he denied having Lydio as his client. Such
absence of attorney-client relationship is the essential element of
his defense to the charge of conflict of interest, as articulated in
his subsequent submissions.
The Court, therefore, rules and so holds that respondent has been
adequately apprised of and heard on the issue. In administrative
cases, the requirement of notice and hearing does not connote full
adversarial proceedings. Actual adversarial proceedings only
become necessary for clarification when there is a need to
propound searching questions to witnesses who give vague
testimonies. Due process is fulfilled when the partieswere given
reasonable opportunity to be heard and to submit evidence in
support of their arguments.
33

Rule 15.03 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.
A lawyer may not, without being guilty of professional misconduct,
act as counsel for a person whose interest conflicts with that of
his present or former client.
34
The test is whether, on behalf of
one client, it is the lawyer's duty to contest for that which his duty
to another client requires him to oppose or when the possibility of


55
such situation will develop.
35
The rule covers not only cases in
which confidential communications have been confided, but also
those in which no confidence has been bestowed or will be
used.
36
In addition, the rule holds even if the inconsistency is
remote or merely probable or the lawyer has acted in good faith
and with no intention to represent conflicting interests.
37

The rule concerning conflict of interest prohibits a lawyer from
representing a client if that representation will be
directly adverse to any of his present or former clients. In the
same way, a lawyer may only be allowed to represent a client
involving the same or a substantially related matter that is
materially adverse to the former client only if the former client
consents to it after consultation. The rule is grounded in the
fiduciary obligation of loyalty.
38
In the course of a lawyer-client
relationship, the lawyer learns all the facts connected with the
client's case, including the weak and strong points of the case.
The nature of that relationship is, therefore, one of trust and
confidence of the highest degree.
39

The termination of attorney-client relation provides no justification
for a lawyer to represent an interest adverse to or in conflict with
that of the former client. The client's confidence once reposed
should not be divested by mere expiration of professional
employment. Even after the severance of the relation, a lawyer
should not do anything which will injuriously affect his former
client in any matter in which he previously represented him nor
should he disclose or use any of the client's confidences acquired
in the previous relation.
40

In relation to this, Canon 17 of the Code of Professional
Responsibility provides that a lawyer owes fidelity to the cause of
his client and shall be mindful of the trust and confidence reposed
on him. His highest and most unquestioned duty is to protect the
client at all hazards and costs even to himself.
41
The protection
given to the client is perpetual and does not cease with the
termination of the litigation, nor is it affected by the party's
ceasing to employ the attorney and retaining another, or by any
other change of relation between them. It even survives the death
of the client.
42

In the case at bar, respondent admitted having jointly represented
Lydio and Raleigh as defendants in the first civil case. Evidently,
the attorney-client relation between Lydio and respondent was
established despite the fact that it was only Raleigh who paid him.
The case of Hilado v. David
43
tells us that it is immaterial whether
such employment was paid, promised or charged for.
44

As defense counsel in the first civil case, respondent advocated
the stance that Lydio solely owned the property subject of the
case. In the second civil case involving the same property,
respondent, as counsel for Raleigh and his spouse, has pursued
the inconsistent position that Raleigh owned the same property in
common with Lydio, with complainants, who inherited the
property, committing acts which debase respondent's rights as a
co-owner.
The fact that the attorney-client relation had ceased by reason of
Lydio's death or through the completion of the specific task for
which respondent was employed is not reason for respondent to


56
advocate a position opposed to that of Lydio.
45
Precedents tell us
that even after the termination of his employment, an attorney
may not 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.
46
And while
complainants have never been respondent's clients, they derive
their rights to the property from Lydio's ownership of it which
respondent maintained in the first civil case.
For representing Raleigh's cause which is adverse to that of his
former clientRaleigh's supposed co-ownership of the subject
property respondent is guilty of representing conflicting
interests. Having previously undertaken joint representation of
Lydio and Raleigh, respondent should have diligently studied and
anticipated the
potential conflict of interest. Accordingly, disciplinary action is
warranted.
47
Heretofore, respondent is enjoined to look at any
representation situation from "the point of view that there are
possible conflicts"; and further, "to think in terms of impaired
loyalty" that is to evaluate if his representation in any way will
impair loyalty to a client.
48
Considering, however, that this is
respondent's first offense, the Court resolves to reprimand
respondent, with admonition to observe a higher degree of fidelity
in the practice of his profession.
49

WHEREFORE, respondent Atty. Edgar J. Baguio is found GUILTY
of representing conflicting interests and meted out the penalty of
REPRIMAND. He is further admonished to observe a higher
degree of fidelity in the practice of his profession and to bear in
mind that a repetition of the same or similar acts will be dealt with
more severely.
SO ORDERED.
Carpio, Acting Chairperson Carpio-Morales, Azcuna
*
, Velasco, Jr.,
JJ., concur.


57
RULE 15.05
EN BANC
[A.C. No. 6424. March 4, 2005]
CONSORCIA S. ROLLON, complainant, vs. Atty. CAMILO
NARAVAL, respondent.

D E C I S I O N
PANGANIBAN, J.:
Lawyers owe fidelity to their clients. The latters money or other
property coming into the formers possession should be deemed
to be held in trust and should not under any circumstance be
commingled with the lawyers own; much less, used by
them. Failure to observe these ethical principles constitutes
professional misconduct and justifies the imposition of disciplinary
sanctions.
The Case and the Facts
Before us is a letter-complaint against Atty. Camilo Naraval, filed
by Consorcia S. Rollon with the Davao City Chapter of the
Integrated Bar of the Philippines (IBP) on November 29,
2001. The Affidavit
[1]
submitted by complainant alleges the
following:
Sometime in October of 2000, I went to the office of Atty. Camilo
F. Naraval together with my son, Freddie Rollon, to seek his
assistance in a case filed against me before the Municipal Trial
Court in Cities Branch 6, Davao City entitled Rosita Julaton vs.
Consorcia S. Rollon for Collection of Sum of Money with Prayer for
Attachment;
After going over the documents I brought with me pertaining to
the said case, Atty. Naraval agreed to be my lawyer and I was
required to pay the amount of Eight Thousand Pesos (Php
8,000.00) for the filing and partial service fee, which amount was
paid by me on October 18, 2000, a copy of the Official Receipt is
hereto attached as Annex A to form part hereof;
As per the instruction of Atty. Naraval, my son, Freddie, returned
to his office the following week to make follow-up on said
case. However, I was informed later by my son Freddie that Atty.
Naraval was not able to act on my case because the latter was so
busy. Even after several follow-ups were made with Atty.
Naraval, still there was no action done on our case;
Sometime in November 29, 2001, I decided to withdraw the
amount I paid to Atty. Naraval, because of the latters failure to
comply with our mutual agreement that he will assist me in the
above-mentioned case;
My son Freddie Rollon went to Atty. Naravals office that same
day to inform Atty. Naraval of our decision to withdraw the
amount I have paid and to retrieve my documents pertaining to
said case. Unfortunately, despite our several follow-ups, Atty.
Naraval always said that he cannot return the documents because
they were in their house, and that he could not give us back the
amount we paid him (Php 8,000.00) because he has no money;


58
Having failed to obtain any response, I decided to refer the
matter to Atty. Ramon Edison Batacan, IBP President of Davao
City and to Atty. Pedro Castillo, the Commissioner on Bar
D[i]scipline;
x x x x x x x x x.
In an Order dated March 12, 2002,
[2]
the IBP Commission on Bar
Discipline (CBD), through Director Victor C. Fernandez, directed
respondent to submit his answer to the Complaint. The same
directive was reiterated in the CBDs May 31, 2002 Order
[3]
issued
through Commissioner Jovy C. Bernabe. Respondent did not file
any answer despite his receipt of the Orders.
[4]

Not having heard from him despite adequate notice, the CBD
proceeded with the investigation ex parte. Its Order
[5]
dated
November 11, 2002, issued through Commissioner Bernabe,
required complainant to submit her position paper within ten days
from receipt thereof, after which the case was to be deemed
submitted for resolution.
The CBD received complainants Position Paper
[6]
on December
10, 2002.
Report of the Investigating Commissioner
In his Report and Recommendation dated October 16, 2003,
Investigating Commissioner Acerey C. Pacheco recommended that
respondent be suspended from the practice of law for one (1)
year for neglect of duty and/or violation of Canons 15 and 18 of
the Code of Professional Responsibility. The Report reads in part
as follows:
Canon 18 of the Code of Professional Responsibility requires
every lawyer to serve his client with utmost dedication,
competence and diligence. He must not neglect a legal matter
entrusted to him, and his negligence in this regard renders him
administratively liable x x x.
In the case at bar, the deplorable conduct of the respondent in
misrepresenting to the complainant that he will render legal
services to her, and after receiving certain amount from the latter
as payment for filing fee and service fee did nothing in return,
has caused unnecessary dishonor to the bar. By his own conduct
the respect of the community to the legal profession, of which he
swore to protect, has been tarnished.
x x x x x x x x x
In fact, complainant claimed to have been shortchanged by the
respondent when he failed to properly appraised her of the status
of her case which she later on found to have become final and
executory. Apparently, the civil suit between Rosita Julaton and
the complainant have been decided against the latter and which
judgment has long become final and executory. However, despite
full knowledge by the respondent of such finality based on the
documents furnished to him, respondent withheld such vital
information and did not properly appraise the complainant. Thus,
respondent violated the mandate in Canon 15 x x x.
[7]

IBP Board of Governors Resolution


59
On February 27, 2004, the IBP Board of Governors issued
Resolution No. XVI-2004-64 upholding the above-quoted
Report. The Board recommended the suspension of respondent
from the practice of law for two (2) years for violation of Rules 15
and 18 of the Code of Professional Responsibility and the
restitution of complainants P8,000.
The Courts Ruling
We agree with the Resolution of the IBP Board of Governors.
Respondents Administrative Liability
Ordinarily, lawyers are not obliged to act either as advisers or as
advocates of any person who may wish to become their
client.
[8]
They may decline employment and refuse to accept
representation, if they are not in a position to carry it out
effectively or competently.
[9]
But once they agree to handle a
case, attorneys are required by the Canons of Professional
Responsibility to undertake the task with zeal, care and utmost
devotion.
[10]

Acceptance of money from a client establishes an attorney-client
relationship and gives rise to the duty of fidelity to the clients
cause.
[11]
Every case accepted by a lawyer deserves full attention,
diligence, skill and competence, regardless of importance.
[12]
The
Code of Professional Responsibility clearly states:
CANON 17 A lawyer owes fidelity to the cause of his client and
CANON 18 - A lawyer shall serve his client with competence and
diligence.
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to
him and his negligence in connection therewith shall render him
liable.
Rule 18.04 - A lawyer shall keep his client informed of the status
clients request for information.
Hence, practising lawyers may accept only as many cases as they
can efficiently handle.
[13]
Otherwise, their clients would be
prejudiced. Once lawyers agree to handle a case, they should
undertake the task with dedication and care. If they do any less,
then they fail their lawyers oath.
[14]

The circumstances of this case indubitably show that after
receiving the amount of P8,000 as filing and partial service fee,
respondent failed to render any legal service in relation to the
case of complainant. His continuous inaction despite repeated
followups from her reveals his cavalier attitude and appalling
indifference toward his clients cause, in brazen disregard of his
duties as a lawyer. Not only that. Despite her repeated demands,
he also unjustifiably failed to return to her the files of the case
that had been entrusted to him. To top it all, he kept the money
she had likewise entrusted to him.
Furthermore, after going through her papers, respondent should
have given her a candid, honest opinion on the merits and the
status of the case. Apparently, the civil suit between Rosita


60
Julaton and complainant had been decided against the latter. In
fact, the judgment had long become final and executory. But he
withheld such vital information from complainant. Instead, he
demanded P8,000 as filing and service fee and thereby gave her
hope that her case would be acted upon.
Rule 15.05 of the Code of Professional Responsibility requires that
lawyers give their candid and best opinion to their clients on the
merit or lack of merit of the case, neither overstating nor
understating their evaluation thereof. Knowing whether a case
would have some prospect of success is not only a function, but
also an obligation on the part of lawyers.
[15]
If they find that their
clients cause is defenseless, then it is their bounden duty to
advise the latter to acquiesce and submit, rather than to traverse
the incontrovertible.
[16]
The failure of respondent to fulfill this
basic undertaking constitutes a violation of his duty to observe
candor, fairness and loyalty in all his dealings and transactions
with his clients.
[17]

Likewise, as earlier pointed out, respondent persistently refused to
return the money of complainant despite her repeated
demands. His conduct was clearly indicative of lack of integrity
and moral soundness; he was clinging to something that did not
belong to him, and that he absolutely had no right to keep or
use.
[18]

Lawyers are deemed to hold in trust their clients money and
property that may come into their possession.
[19]
As respondent
obviously did nothing on the case of complainant, the amount she
had given -- as evidenced by the receipt issued by his law office --
was never applied to the filing fee. His failure to return her
money upon demand gave rise to the presumption that he had
converted it to his own use and thereby betrayed the trust she
had reposed in him.
[20]
His failure to do so constituted a gross
violation of professional ethics and a betrayal of public confidence
in the legal profession.
[21]

The Code exacts from lawyers not only a firm respect for law,
legal processes and the courts,
[22]
but also mandates the utmost
degree of fidelity and good faith in dealing with the moneys
entrusted to them pursuant to their fiduciary
relationship.
[23]
Respondent clearly fell short of the demands
required of him as a member of the bar. His inability to properly
discharge his duty to his client makes him answerable not just to
her, but also to this Court, to the legal profession, and to the
general public.
[24]
Given the crucial importance of his role in the
administration of justice, his misconduct diminished the
confidence of the public in the integrity and dignity of the
profession.
[25]

WHEREFORE, Atty. Camilo Naraval is found GUILTY of violating
Rule 15.05 and Canons 16, 17 and 18 of the Code of Professional
Responsibility and is hereby SUSPENDED from the practice of law
for a period of two (2) years, effective upon his receipt of this
Decision. Furthermore, he is ORDERED TO RESTITUTE, within
thirty (30) days from notice of this Decision, complainants eight
thousand pesos (P8,000), plus interest thereon, at the rate of six
percent per annum, from October 18, 2000, until fully paid. Let
copies of this Decision be furnished all courts, the Office of the


61
Bar Confidant, as well as the National Office and the Davao City
Chapter of the Integrated Bar of the Philippines.
SO ORDERED.
Davide, Jr., C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-
Gutierrez, Carpio, Austria-Martinez, Corona, Callejo, Sr., Azcuna,
Tinga, Chico-Nazario, and Garcia, JJ., concur.
Carpio-Morales, J., on leave.


62
RULE 15.06
SUPREME COURT
Manila
EN BANC
A.C. No. 5829 October 28, 2003
DANIEL LEMOINE, complainant,
vs.
ATTY. AMADEO E. BALON, JR., respondent.

D E C I S I O N
PER CURIAM:
On December 17, 1999, complainant Daniel Lemoine, a French
national, filed a verified complaint
1
against respondent Atty.
Amadeo E. Balon, Jr., for estafa and misconduct before the
Integrated Bar of the Philippines. The case, docketed as CBD Case
No. 99-679, was referred by the Commission on Bar Discipline to
an Investigator for investigation, report and recommendation.
The facts that spawned the filing of the complaint are as follows:
In early 1998, complainant filed a car insurance claim with the
Metropolitan Insurance Company (Metropolitan Insurance), the
insurer of his vehicle which was lost. As complainant encountered
problems in pursuing his claim which was initially rejected,
2
his
friend, a certain Jesus "Jess" Garcia (Garcia), arranged for the
engagement of respondents services.
By letter
3
of October 21, 1998 addressed to Elde
Management, Inc., "ATTN: Mr. Daniel Lemoine," under whose
care complainant could be reached, respondent advised
complainant, whom he had not before met, that for hislegal
services he was charging "25% of the actual amount being
recovered. . . payable upon successful recovery;" an advance
payment of P50,000.00 "to be charged [to complainant] to be
deducted from whatever amount [would] be successfully
collected;" P1,000.00 "as appearance and conference fee for each
and every court hearings, conferences outside our law office and
meetings before the Office of the Insurance Commission which
will be also charged to our 25% recovery fee;" and legal expenses
"such as but not limited to filing fee, messengerial and postage
expenses . . . and other miscellaneous but related expenses," to
be charged to complainants account which would be reimbursed
upon presentation of statement of account.
The letter-proposal of respondent regarding attorneys fees does
not bear complainants conformity, he not having agreed
therewith.
It appears that Metropolitan Insurance finally offered to settle
complainants claim, for by letter
4
of December 9,1998 addressed
to it, respondent confirmed his acceptance of its offer to settle the
claim of complainant "in an ex-gratia basis of 75% of his policy
coverage which is therefore FIVE HUNDRED TWENTY FIVE
THOUSAND (P525,000.00) PESOS."


63
A day or a few days before December 23, 1998 when complainant
left for France,
5
he, on the advice of respondent, signed an
already prepared undated Special Power of Attorney
6
authorizing
respondent and/or Garcia to bring any action against Metropolitan
Insurance for the satisfaction of complainants claim as well as to
"negotiate, sign, compromise[,] encash and receive payment"
from it. The Special Power of Attorney was later dated December
23, 1998 on which same date Metropolitan Insurance issued a
Chinabank Check No. 841172 payable to complainant in the
amount of P525,000.00 as full settlement of the claim.
7
The check
was received by respondent.
In the meantime, complainant returned to the Philippines in early
January 1999 but left again on the 24th of the same month.
8
On
inquiry about the status of his claim, Garcia echoed to
complainant what respondent had written him (Garcia) in
respondents letter
9
of March 26, 1999 that the claim was still
pending with Metropolitan Insurance and that it was still subject
of negotiations in which Metropolitan Insurance offered to settle it
for P350,000.00representing fifty percent thereof. In the same
letter to Garcia, respondent suggested the acceptance of the offer
of settlement to avoid a protracted litigation.
On December 6, 1999, on complainants personal visit to
the office of Metropolitan Insurance, he was informed that his
claim had long been settled via a December 23, 1998 check given
to respondent the year before.
10
Complainant lost no time in going
to the law office of respondent who was not around, however, but
whom he was able to talk by telephone during which he
demanded that he turn over the proceeds of his claim.
11

Respondent thereupon faxed to complainant a December 7, 1999
letter
12
wherein he acknowledged having in his possession the
proceeds of the encashed check which he retained, however, as
attorneys lien pending complainants payment of his attorneys
fee, equivalent to fifty percent (50%) of entire amount collected.
In the same letter, respondent protested what he branded as the
"uncivilized and unprofessional behavior" complainant "reportedly
demonstrated" at respondents office. Respondent winded up his
letter as follows, quoted verbatim:
We would like to make it clear that we cannot give you the
aforesaid amount until and unless our attorneys fees will be
forthwith agreed and settled. In the same manner, should you be
barbaric and uncivilized with your approached, we will not hesitate
to make a proper representation with the Bureau of Immigration
and Deportation for the authenticity of your visa, Department of
Labor and Employment for your working status, Bureau of
Internal Revenue for your taxation compliance and the National
Bureau of Investigation [with] which we have a good network...
While it [is your] prerogative to file a legal action against us, it is
also our prerogative to file a case against you. We will rather
suggest if you could request your lawyer to just confer with us for
the peaceful settlement of this matter. (Underscoring and
emphasis supplied)
As despite written demands,
13
respondent refused to turn over the
proceeds of the insurance claim and to acknowledge the
unreasonableness of the attorneys fees he was demanding,


64
complainant instituted the administrative action at bar on
December 17, 1999.
In his Complaint-Affidavit, complainant alleged that "[i]t appears
that there was irregularity with the check," it having been
issued payable to him, but "and/or AMADEO BALON" was therein
intercalated after his (complainants) name.
14
1awphi1.nt
Maintaining that respondent was entitled to only P50,000.00 in
attorneys fees,
15
complainant decried respondents continued
possession of the proceeds of his claim
16
and his
misrepresentations that the recoverythereof was fraught with
difficulties.
17

In his Counter-Affidavit
18
of February 18, 2000, respondent
asserted that his continued retention of the proceeds of
complainants claim is in lawful exercise of his lien for unpaid
attorneys fees. He expressed readiness, however, to account for
and turn them over once he got paid fifty percent (50%) thereof,
he citing the so called contingent fee billing method of "no cure,
no pay" adopted by practicing lawyers in the insurance industry as
the basis of the amount of his attorneys fees,
19
which to him was
justified in the absence of an attorney-client contract between him
and complainant, the latter having rejected respondents letter-
proposal of October 21, 1998.
20

Respondent also highlighted the value of the time and efforts he
extended in pursuing complainants claim and theexpenses he
incurred in connection therewith. He went on to assert that his
inability to contact complainant whose whereabouts he did not
know prompted him to encash the check and keep the proceeds
thereof in conformity with the Special Power of Attorney executed
in his favor.
21

During the hearings conducted by the IBP Investigator,
complainant echoed his allegations in his Complaint-Affidavit and
stressed that he turned down as unreasonable respondents
proposal in his October 21, 1998 letter that he be paid 25% of the
actual amount collected for his legal services.
22
And he presented
documentary evidence, including the March 26, 1999 letter of
respondent informing his co-attorney-in-fact Garcia of the
supposedly still unrecovered claim and suggesting acceptance of
the purported offer of Metropolitan Insurance to settle
complainants claim at P350,000.00.
Explaining how his above-mentioned March 26, 1999 letter to
Garcia came about, respondent declared that it was made upon
Garcias request, intended for a certain Joel Ramiscal (Ramiscal)
who was said to be Garcias business partner.
23

Respondent later submitted a June 13, 2001 Supplement
24
to his
Counter-Affidavit reiterating his explanation that it was on Garcias
express request that he wrote the March 26, 1999 letter, which
was directed to the fax number of Ramiscal.1vvphi1.nt
Additionally, respondent declared that in the first week of May
1999, on the representation of Garcia that he had talked to
complainant about respondents retention of fifty percent (50%)
of the insurance proceeds for professional fees less expenses,
25
he
gave Garcia, on a staggered basis, the total amount of
P233,000.00 which, so respondent averred, is the amount of
insurance claim complainant is entitled to receive less attorneys


65
fees and expenses.
26
Thus, respondent claimed that he gave
Garcia the amount of P30,000.00 on May 31, 1999 at Dulcinea
Restaurant in Greenbelt, Makati; the amounts of P50,000.00,
P20,000.00 and P30,000.00 on different occasions at his
(respondents) former address through his executive secretary
Sally I. Leonardo; the amount of P20,000.00 at the office of his
(respondents) former employer Commonwealth
Insurance Company through his subordinate Glen V. Roxas; and
several other payments at Dulcinea, and at Manila
Intercontinental Hotels coffee shop sometime in October
1999.
27
Respondent submitted the separate sworn statements of
Leonardo and Roxas.
28

Explaining why no written memorandum of the turn over of
various payments to Garcia was made, respondent alleged that
there was no need therefor since he very well knew Garcia who is
a co-Rotarian and co-attorney-in-fact and whom he really dealt
with regarding complainants claim.
29

Respondent furthermore declared that he rejected complainants
offer to pay him P50,000.00 for his services, insisting that since
there had been no clear-cut agreement on his professional fees
and it was through him that Metropolitan Insurance favorably
reconsidered its initial rejection of complainants claim, he is
entitled to a contingent fee of 50% of the net proceeds thereof.
30

Finally, respondent declared that he, in connection with his follow-
up of the insurance claim, incurred representation expenses of
P35,000.00, entertainment and other representation expenses on
various occasions of P10,000.00, and transportation and gasoline
expenses and parking fees of P5,000.00;
31
and that his retention
of complainants money was justified in light of his apprehension
that complainant, being an alien without a valid working permit in
the Philippines, might leave the country anytime without settling
his professional fees.
32

The Investigating Commissioner, by Report and
Recommendation
33
of October 26, 2001, found respondent guilty
of misconduct and recommended that he be disbarred and
directed to immediately turn over to complainant the sum of
P475,000.00 representing the amount of the P525,000.00
insurance claim less respondents professional fees of P50,000.00,
as proposed by complainant.
The Board of Govenors of the Integrated Bar of the Philippines,
acting on the Investigators Report, issued Resolution No. XV-
2002-401
34
on August 3,2002, reading:
Resolution/Decision as Annex "A"; and, finding the
recommendation fully supported by the evidence on record and
the applicable laws and rules, with modification, and considering
respondents dishonesty which amounted to grave misconduct and
grossly unethical behavior which caused dishonor, not merely to
respondent but the noble profession to which he belongs,
Respondent is hereby SUSPENDED from the practice of law for six
(6) months with the directive to turn over the amount of Five
Hundred Twenty Five Thousand (P525,000.00) Pesos to the


66
complainant without prejudice to respondents right to claim
attorneys fees which he may collect in the proper forum.
(Underscoring supplied)
The records of the case are before this Court for final action.
Respondent, by a Motion for Reconsideration
35
filed with this
Court, assails the Investigating Commissioners Report and
Recommendation as not supported by clear, convincing and
satisfactory proof. He prays for the reopening of the case and its
remand to the Investigator so that Garcia can personally appear
for his (respondents) confrontation.
There is no need for a reopening of the case. The facts material to
its resolution are either admitted or documented.
This Court is in full accord with the findings of the IBP
Investigator that respondent violated the following provisions of
the Code of Professional Responsibility, to wit:
RULE 1.01 - A lawyer shall not engage in unlawful, dishonest,
immoral or deceitful conduct.
xxx
CANON 15 - A lawyer shall observe candor, fairness and loyalty in
all his dealings and transactions with his clients.
RULE 15.06 - A lawyer shall not state or imply that he is able to
influence any public official, tribunal or legislative body.
xxx
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.
RULE 16.02 - A lawyer shall keep the funds of each client separate
and apart from his own and those of others kept by him.
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.
xxx
CANON 17 - A lawyer owes fidelity to the cause of his client and
he shall be mindful of the trust and confidence in him.
xxx
RULE 18.04 - A lawyer shall keep the client informed of the status
clients request for information.
xxx
RULE 21.02 - A lawyer shall not, to the disadvantage of his client,
use information acquired in the course of employment, nor shall


67
he use the same to his advantage or that of a third person, unless
the client with full knowledge of the circumstances consents
thereto.
Specifically with respect to above-quoted provision of Canon 16 of
the Code of Professional Responsibility, the Filipino lawyers
principal source of ethical rules, which Canon 16 bears on the
principal complaint of complainant, a lawyer must hold in trust all
moneys and properties of his client that he may come to possess.
This commandment entails certain specific acts to be done by a
lawyer such as rendering an accounting of all money or property
received for or from the client
36
as well as delivery of the funds or
property to the client when due or upon demand.
37
Respondent
breached this Canon when after he received the proceeds of
complainants insurance claim, he did not report it to complainant,
who had a given address in Makati, or to his co-attorney-in-fact
Garcia who was his contact with respect to complainant.
In fact, long after respondent received the December 23,
1998 check for P525,000.00 he, by his letter of March 26, 1999 to
Garcia, had even the temerity to state that the claim was still
pending and recommend "acceptance of the 50% offer . . . which
is P350,000.00 pesos." His explanation that he prepared and sent
this letter on Garcias express request is nauseating. A lawyer, like
respondent, would not and should not commit prevarication,
documented at that, on the mere request of a friend.
By respondents failure to promptly account for the funds he
received and held for the benefit of his client, he committed
professional misconduct.
38
Such misconduct is reprehensible at a
greater degree, for it was obviously done on purpose through the
employment of deceit to the prejudice of complainant who was
kept in the dark about the release of the check, until he himself
discovered the same, and has to date been deprived of the use of
the proceeds thereof.
A lawyer who practices or utilizes deceit in his dealings with his
client not only violates his duty of fidelity, loyalty and devotion to
the clients cause but also degrades himself and besmirches the
fair name of an honorable profession.
39

That respondent had a lien on complainants funds for his
attorneys fees did not relieve him of his duty to account for
it.
40
The lawyers continuing exercise of his retaining lien
presupposes that the client agrees with the amount of attorneys
fees to be charged. In case of disagreement or when the client
contests that amount for being unconscionable, however, the
lawyer must not arbitrarily apply the funds in his possession to the
payment of his fees.
41
He can file, if he still deems it desirable, the
necessary action or proper motion with the proper court to fix the
amount of such fees.
42

In respondents case, he never had the slightest attempt to bring
the matter of his compensation for judicial determination so that
his and complainants sharp disagreement thereon could have
been put to an end. Instead, respondent stubbornly and in bad
faith held on to complainants funds with the obvious aim of
forcing complainant to agree to the amount of attorneys fees
sought. This is an appalling abuse by respondent of the exercise
of an attorneys retaining lien which by no means is an absolute


68
right and cannot at all justify inordinate delay in the delivery of
money and property to his client when due or upon demand.
Respondent was, before receiving the check, proposing a 25%
attorneys fees. After he received the check and after complainant
had discovered its release to him, he was already asking for 50%,
objection to which complainant communicated to him. Why
respondent had to doubly increase his fees after the lapse of
about one year when all the while he has been in custody of the
proceeds of the check defies comprehension. At any rate, it
smacks of opportunism, to say the least.
As for respondents claim in his June 2001 Supplement to his
Counter-Affidavit that he had on several occasions from May
1999 to October 1999 already delivered a total of P233,000.00 out
of the insurance proceeds to Garcia in trust for complainant, this
does not persuade, for it is bereft of any written memorandum
thereof. It is difficult to believe that a lawyer like respondent could
have entrusted such total amount of money to Garcia without
documenting it, especially at a time when, as respondent alleged,
he and Garcia were not in good terms.
43
Not only that. As stated
earlier, respondents Counter-Affidavit of February 18, 2000 and
his December 7, 1999 letter to complainant unequivocally
contained his express admission that the total amount of
P525,000.00 was in his custody. Such illogical, futile attempt to
exculpate himself only aggravates his misconduct. Respondents
claim discredited, the affidavits of Leonardo and Roxas who,
acting allegedly for him, purportedly gave Garcia some amounts
forming part of the P233,000.00 are thus highly suspect and merit
no consideration.
The proven ancillary charges against respondent reinforce the
gravity of his professional misconduct.
The intercalation of respondents name to the Chinabank check
that was issued payable solely in favor ofcomplainant as twice
certified by Metropolitan Insurance
44
is clearly a brazen act of
falsification of a commercial document which respondent resorted
to in order to encash the check.
Respondents threat in his December 7, 1999 letter to expose
complainant to possible sanctions from certain government
agencies with which he bragged to have a "good network" reflects
lack of character, self-respect, and justness.
It bears noting that for close to five long years respondent has
been in possession of complainants funds in the amount of over
half a million pesos. The deceptions and lies that he peddled to
conceal, until its discovery by complainant after about a year, his
receipt of the funds and his tenacious custody thereof in a grossly
oppressive manner point to his lack of good moral character.
Worse, by respondents turnaround in his Supplement to his
Counter-Affidavit that he already delivered to complainants friend
Garcia the amount of P233,000.00 which, so respondent claims, is
all that complainant is entitled to, he in effect has declared that he
has nothing more to turn over to complainant. Such incredible
position is tantamount to a refusal to remit complainants funds,
and gives rise to the conclusion that he has misappropriated
them.
45


69
In fine, by respondents questioned acts, he has shown that he is
no longer fit to remain a member of the noble profession that is
the law.
WHEREFORE, respondent Atty. Amadeo E. Balon, Jr., is found
GUILTY of malpractice, deceit and gross misconduct in the
practice of his profession as a lawyer and he is hereby
DISBARRED. The Office of the Clerk of Court is directed to strike
out his name from the Roll of Attorneys and to inform all courts
and the Integrated Bar of the Philippines of this Decision.
Respondent is ordered to turn over to complainant, Daniel
Lemoine, the amount of P525,000.00 within thirty (30) days from
notice, without prejudice to whatever judicial action he may take
to recover his attorneys fees and purported expenses incurred in
securing the release thereof from Metropolitan Insurance.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing,
Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-
Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.
Ynares-Santiago, J., on leave.


70
RULE 15.07
SUPREME COURT
Manila
SECOND DIVISION

A.C. No. 4380 October 13, 1995
NICANOR GONZALES and SALUD B.
PANTANOSAS, complainants,
vs.
ATTY. MIGUEL SABACAJAN, respondent.

REGALADO, J.:
This resolves the administrative case filed by Nicanor Gonzales
and Salud B. Pantanosas against Atty. Miguel Sabacajan on
February 14, 1995,
1
the verified complaint wherefor alleges:
xxx xxx xxx
4. That sometime in October, 1994, complainants were informed
by the Register of Deeds of Cagayan de Oro City that the
complainants' owner's duplicate of title covering their lands,
Transfer Certificate of Title Nos. T-91736 and T-91735 were
entrusted to the office secretary of the respondent who in torn
entrusted the same to respondent;
5. That respondent admitted and confirmed to the complainants
that their titles are in his custody and has even shown the same
(to) the complainant Salud B. Pantanosas but when demanded
(sic) to deliver the said titles to the complainant in a formal
demand letter, marked as ANNEX "A," respondent refused and
continues to refuse without any justification to give their titles
(and) when confronted, respondent challenged the complainants
to file any case in any court even in the Honorable Supreme
Court;
6. That respondent's dare or challeng(e) is a manifestation of his
arrogance taking undue advantage of his legal profession over the
simplicity, innocence and ignorance of the complainants, one of
whom is his blood relative, his aunt, for which complainants
shudder with mental anguish;
7. That due to his challeng(e), the complainants sent a letter to
the Honorable Supreme Court for enlightenment, copy of which is
attached as ANNEX "B", for which the Honorable Supreme Court
required 19 legible copies of a verified complaint;
8. That in spite of repeated demands, request(s) and pleas
towards (sic) respondent, respondent still fail(ed) and stubbornly
refused without justification to surrender the said titles to the
rightful owners, the complainants here(in), which act is
tantamount to willful and malicious defiance of legal and moral
obligations emanating from his professional capacity as a lawyer
who had sworn to uphold law and justice, to the prejudice and
damage of the complainants;
2

xxx xxx xxx


71
On March 22, 1995, the Court required respondent to comment
on the foregoing complaint. In his unverified "Answer" thereto,
respondent admitted having met Salud Pantanosas but claims
that, to his recollection, "Nicanor Gonzales/Serdan" has never
been to his office. Respondent likewise denied that he challenged
anyone to file a case in any court, much less the Supreme Court.
He also claims that he referred complainant Pantanosas to his
client, Mr. Samto M. Uy of Iponan, Cagayan de Oro City, for
whom he worked out the segregation of the titles, two of which
are the subject of the instant case.
3

Respondent likewise denies complainants' allegation that he is
arrogant, in contrast to the innocence, simplicity and ignorance of
said complainants. He contends that the truth of the matter is that
complainants have been charged with a number of criminal and
civil complaints before different courts. He also asserts that he
was holding the certificates of title in behalf of his client, Samto
M. Uy.
4

Atty. Sabacajan stresses, by way of defense, that "the instant
action was chosen precisely to browbeat him into delivering the
Certificates of Title to them without said certificates passing the
hands of Mr. Samto Uy with whom the complainants have some
monetary obligations."
5

In its resolution dated June 26, 1995,
6
for internal administrative
purposes the Court referred this case to the Office of the Bar
Confidant for the corresponding evaluation, report and
recommendation.
From the foregoing proceedings taken on this matter, the Court
finds that respondent admitted having taken possession of the
certificates of title of complainants but refused to surrender the
same despite demands made by the latter. It follows, therefore,
that it was incumbent upon him to show that he was legally
justified in doing so. Instead, all he did was to inform this Court
that "his obligation to deliver the certificates to Mr. Samto Uy
excludes the delivery of said certificates to anyone else."
7

Respondent attached some certifications to his "Answer" to
support his contention that complainants are notorious characters.
However, the certifications indicate that most of the cases stated
therein, especially those involving fraud, have been dismissed.
With respect to those still pending, there is no indication as to the
identity of the party who instituted the same, aside from the
consideration that the remedy thereon is judicial in nature. At any
rate, these aspersions on the character of complainants have no
bearing on the misconduct of respondent charged in the present
case.
Respondent likewise submitted xerox copies of certain certificates
of title in an effort to explain why he kept the certificates of title
of complainants, that is, supposedly for the purpose of subdividing
the property. However, an examination of the same does not
show any connection thereof to respondent's claim. In fact, the
two sets of certificates of title appear to be entirely different from
each other.
As a lawyer, respondent should know that there are lawful
remedies provided by law to protect the interests of his client. The


72
records do not show that he or his client have availed of said
remedies, instead of merely resorting to unexplained, if not curt,
refusals to accommodate the requests of complainants. Also, he
cannot be unaware of the imposable sanctions on a counsel who
resorts to unlawful means that would cause injustice to the
adversaries of his client.
The Court accordingly finds that respondent has not exercised the
good faith and diligence required of lawyers in handling the legal
affairs of their clients. If complainants did have the alleged
monetary obligations to his client, that does not warrant his
summarily confiscating their certificates of title since there is no
showing in the records that the same were given as collaterals to
secure the payment of a debt. Neither is there any intimation that
there is a court order authorizing him to take and retain custody
of said certificates of title.
Apparently, respondent has disregarded Canon 15, Rule 15.07 of
the Code of Professional Responsibility which provides that a
lawyer shall impress upon his client the need for compliance with
the laws and principles of fairness. Instead, he unjustly refused to
give to complainants their certificates of titles supposedly to
enforce payment of their alleged financial obligations to his client
and presumably to impress the latter of his power to do so.
Canon 19, Rule 19.01 ordains that a lawyer shall employ only fair
and honest means to attain the lawful objectives of his client and
shall not present, participate in presenting, or threaten to present
unfounded charges to obtain an improper advantage in any case
or proceeding. Respondent has closely skirted this proscription, if
he has not in fact transgressed the same.
On the foregoing considerations, the Court desires and directs
that respondent should forthwith return the certificates of title of
complainants. To ensure the same, he should be placed under
suspension until he presents to the Court proof of receipt by
complainants of their respective copies of Certificates of Title Nos.
T-91735 and T-91736 or a judicial order or document authorizing
or justifying the retention of possession thereof by respondent or
his aforenamed client.
WHEREFORE, Atty. Miguel Sabacajan is hereby SUSPENDED from
the practice of law until he can duly show to this Court that the
disputed certificates of title have been returned to and the receipt
thereof duly acknowledged by complainants, or can present a
judicial order or appropriate legal authority justifying the
possession by him or his client of said certificates. He is further
WARNED that a repetition of the same or similar or any other
administrative misconduct will be punished more severely.
Let a copy of this resolution be spread on the personal records of
respondent and have copies thereof furnished to the Integrated
Bar of the Philippines and duly circularized to all courts in the
country.
SO ORDERED.
Narvasa, C.J., Puno, Mendoza and Francisco, JJ., concur.


73

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