CANON 15

A.C. No. 10558, February 23, 2015

MICHAEL RUBY, Complainant, v. ATTY. ERLINDA B. ESPEJO AND ATTY. RUDOLPH DILLA
BAYOT, Respondents.

RESOLUTION

REYES, J.:

This is an administrative complaint1 filed by Michael Ruby (complainant) with the Commission on Bar
Discipline (CBD) of the Integrated Bar of the Philippines (IBP) against Atty. Erlinda B. Espejo (Atty. Espejo)
and Atty. Rudolph Dilla Bayot (Atty. Bayot) (respondents) for violation of the Code of Professional
Responsibility.

The Facts

The complainant alleged that he and his mother, Felicitas Ruby Bihla (Felicitas), engaged the services of the
respondents in connection with a case for cancellation and nullification of deeds of donation. Pursuant to the
retainer agreement2 dated August 29, 2009, the complainant and Felicitas would pay Atty. Espejo the
amount of P100,000.00 as acceptance fee, P70,000.00 of which was actually paid upon the signing of the
agreement and the remaining P30,000.00 to be paid after the hearing on the prayer for the issuance of a
temporary restraining order (TRO). The complainant and Felicitas likewise agreed to pay the amount of
P5,000.00 as appearance fee for every hearing, which was apparently later reduced to P4,000.00.

On September 15, 2009, the complainant gave Atty. Espejo the amount of P50,000.00 as payment for filing
fee.3 On September 16, 2009, Atty. Espejo filed the complaint for nullification and cancellation of deeds of
donation with the Regional Trial Court (RTC) of Quezon City, Branch 219. However, the actual filing fee that
was paid by her only amounted to P7,561.00;4 she failed to account for the excess amount given her despite
several demand letters5 therefor.

On September 23, 2009, Atty. Espejo allegedly asked the complainant to give Atty. Bayot the amount of
P30,000.00 the remaining balance of the acceptance fee agreed upon notwithstanding that the prayer
for the issuance of a TRO has yet to be heard. The complainant asserted that the same was not yet due,
but Atty. Espejo told him that Atty. Bayot was in dire need of money. The complainant gave Atty. Bayot the
amount of P8,000.00 supposedly as partial payment for the balance of the acceptance fee and an additional
P4,000.00 as appearance fee for the September 22, 2009 hearing. 6 cralawla wlibrary

On September 25, 2009, Atty. Espejo called the complainant informing him of the need to file a separate
petition for the issuance of a TRO. She allegedly asked for P50,000.00 to be used as representation fee.
The complainant was able to bargain with Atty. Espejo and gave her P20,000.00 instead. 7 cralawlawlibrary

Meanwhile, on September 24, 2009, the RTC issued an Order 8 denying the complainants prayer for the
issuance of a TRO. The complainant alleged that the respondents failed to apprise him of the denial of his
prayer for the issuance of a TRO; that he only came to know of said denial on November 3, 2009 when he
visited the RTC.9
cralawlawlibrary

On October 23, 2009, the complainant deposited the amount of P4,000.00 to the bank account of Atty.
Bayot as appearance fee for the hearing on the motion to serve summons through publications, which was
set at 2:00 p.m. on even date. However, Atty. Bayot allegedly did not appear in court and instead met with
the complainant at the lobby of the Quezon City Hall of Justice, telling them that he already talked to the
clerk of court who assured him that the court would grant their motion. 10 cralawlawlibrary

Thereafter, the complainant alleged, the respondents failed to update him as to the status of his complaint.
He further claimed that Atty. Bayot had suddenly denied that he was their counsel. Atty. Bayot asserted that
it was Atty. Espejo alone who was the counsel of the complainant and that he was merely a collaborating
counsel.

In its Order11 dated January 7, 2010, the IBP-CBD directed the respondents to submit their respective
answers to the complaint.

In his Answer,12 Atty. Bayot claimed that he was not the counsel of the complainant; that he merely assisted
him and Atty. Espejo. He averred that Atty. Espejo, with the complainants consent, sought his help for the
sole purpose of drafting a complaint. He pointed out that it was Atty. Espejo who signed and filed the
complaint in the RTC.13 cralawla wlibrary

Atty. Bayot further pointed out that he had no part in the retainer agreement that was entered into by the
complainant, Felicitas, and Atty. Espejo. He also denied having any knowledge as to the P50,000.00 that
was paid to Atty. Espejo as filing fees. 14 cralawla wlibrary
As to the P12,000.00 that was given him, he claimed that he was entitled to P4,000.00 thereof since the
said amount was his appearance fee. He pointed out that he appeared before the RTCs hearing for the
issuance of a TRO on September 22, 2009. On the other hand, the P8,000.00 was paid to him as part of the
acceptance fee, which was then already due since the RTC had already heard their prayer for the issuance of
a TRO.15 cralawlawlibrary

He also denied any knowledge as to the P20,000.00 that was paid to Atty. Espejo purportedly for
representation fee that would be used to file a new petition for the issuance of a TRO. 16 cralawlawlibrary

Atty. Bayot admitted that he was the one who drafted the motion to serve summons through publication, but
pointed out that it was Atty. Espejo who signed and filed it in the RTC. He also admitted that he was the one
who was supposed to attend the hearing of the said motion, but claimed that he was only requested to do so
by Atty. Espejo since the latter had another commitment. He denied requesting from the complainant the
amount of P4,000.00 as appearance fee, alleging that it was the latter who insisted on depositing the same
in his bank account.17 cralawlawlibrary

During the said hearing, Atty. Bayot claimed that when he checked the courts calendar, he noticed that their
motion was not included. Allegedly, the clerk of court told him that she would just tell the judge to consider
their motion submitted for resolution.18 cralawlawlibrary

On the other hand, Atty. Espejo, in her Answer,19 denied asking for P50,000.00 from the complainant as
filing fees. She insisted that it was the complainant who voluntarily gave her the money to cover the filing
fees. She further alleged that she was not able to account for the excess amount because her files were
destroyed when her office was flooded due to a typhoon. She also denied having asked another P50,000.00
from the complainant as representation fee, asserting that the said amount was for the payment of the
injunction bond once the prayer for the issuance of a TRO is issued.

Findings of the Investigating Commissioner

On May 3, 2011, after due proceedings, the Investigating Commissioner issued a Report and
Recommendation,20 which recommended the penalty of censure against the respondents. The Investigating
Commissioner pointed out that Atty. Bayot and the complainant had a lawyer-client relationship
notwithstanding that the former was not the counsel of record in the case. That his admission that he was a
collaborating counsel was sufficient to constitute a lawyer client relationship. Moreover, considering that
Atty. Bayot initially received the amount of P12,000.00 from the complainant, the Investigating
Commissioner opined that he can no longer deny that he was the lawyer of the complainant. The
Investigating Commissioner further found that: chanRoble svirtualLawlibrary

Parenthetically, Respondents had asked and demanded prompt payment of their attorneys fees or
appearance fees and even asked for amounts for dubious purposes yet they, just the same, performed their
duties to their clients leisurely and lethargically. Worse, when the trusting Complainant had noticed that his
case was headed for disaster and wanted Respondents to explain their obviously slothful and listless
services, they disappeared or became evasive thus fortifying the conclusion that they indeed have
performed and carried out their duties to Complainant way below the standards set by the Code of
[P]rofessional Responsibility.21
ChanRoblesVirtualawlibrary

Nevertheless, the Investigating Commissioner found that the complainant failed to prove that he indeed
suffered injury as a result of the respondents conduct and, accordingly, should only be meted the penalty of
censure.

Findings of the IBP Board of Governors

On March 20, 2013, the IBP Board of Governors issued a Resolution, 22 which adopted and approved the
recommendation of the Investigating Commissioner, albeit with the modification that the penalty imposed
upon Atty. Espejo and Atty. Bayot was increased from censure to suspension from the practice of law for a
period of one year.

Atty. Bayot moved to reconsider the Resolution dated March 20, 2013 issued by the IBP Board of
Governors.23 The complainant likewise filed a motion for reconsideration, asking the IBP Board of Governors
to order the respondents to refund to him the amount he paid to the respondents. 24 In the meantime, Atty.
Espejo passed away.25 cralawla wlibrary

On March 22, 2014, the IBP Board of Governors issued a Resolution, 26 which dismissed the case insofar as
Atty. Espejo in view of her demise. The IBP Board of Governors affirmed Atty. Bayots suspension from the
practice of law for a period of one year.

On December 3, 2014, the Court issued a Resolution,27 which, inter alia, considered the case closed and
terminated as to Atty. Espejo on account of her death. Accordingly, the Courts disquisition in this case
would only be limited to the liability of Atty. Bayot.

The Issue

The issue in this case is whether Atty. Bayot violated the Code of Professional Responsibility, which would
warrant the imposition of disciplinary sanction.

Ruling of the Court

After a thorough perusal of the respective allegations of the parties and the circumstances of this case, the
Court modifies the findings of the Investigating Commissioner and the IBP Board of Governors.

Atty. Bayot claimed that he is not the counsel of record of the complainant in the case before the RTC. He
pointed out that he had no part in the retainer agreement entered into by the complainant and Atty. Espejo.
Thus, Atty. Bayot claimed, the complainant had no cause of action against him.

The Court does not agree.

It is undisputed that Atty. Espejo was the counsel of record in the case that was filed in the RTC. Equally
undisputed is the fact that it was only Atty. Espejo who signed the retainer agreement. However, the
evidence on record, including Atty. Bayots admissions, points to the conclusion that a lawyer-client
relationship existed between him and the complainant.

Atty. Bayot was the one who prepared the complaint that was filed with the RTC. He was likewise the one
who prepared the motion to serve summons through publication. He likewise appeared as counsel for the
complainant in the hearings of the case before the RTC. He likewise advised the complainant on the status
of the case.

More importantly, Atty. Bayot admitted that he received P8,000.00, which is part of the acceptance fee
indicated in the retainer agreement, from the complainant. It is true that it was Atty. Espejo who asked the
complainant to give Atty. Bayot the said amount. However, Atty. Bayot admitted that he accepted from the
complainant the said P8,000.00 without even explaining what the said amount was for.

The foregoing circumstances clearly established that a lawyer-client relationship existed between Atty. Bayot
and the complainant. Documentary formalism is not an essential element in the employment of an
attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice
and assistance of an attorney is sought and received in any matter pertinent to his profession.28 Further,
acceptance of money from a client establishes an attorney-client relationship. 29 Accordingly, as regards the
case before the RTC, the complainant had two counsels Atty. Espejo and Atty. Bayot.

The Code of Professional Responsibility provides that: chanRoble svirtualLawlibrary

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. cralawred

xxxx

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
xxxx

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 clients request for information.

Accordingly, Atty. Bayot owes fidelity to the cause of the complainant and is obliged to keep the latter
informed of the status of his case. He is likewise bound to account for all money or property collected or
received from the complainant. He may be held administratively liable for any inaptitude or negligence he
may have had committed in his dealing with the complainant.

In Del Mundo v. Capistrano,30 the Court emphasized that: chanRoble svirtualLawlibrary

Indeed, when a lawyer takes a clients cause, he covenants that he will exercise due diligence in protecting
the latters rights. Failure to exercise that degree of vigilance and attention expected of a good father of a
family makes the lawyer unworthy of the trust reposed on him by his client and makes him answerable not
just to his client but also to the legal profession, the courts and society. His workload does not justify
neglect in handling ones case because it is settled that a lawyer must only accept cases as much as he can
efficiently handle.

Moreover, a lawyer is obliged to hold in trust money of his client that may come to his possession. As
trustee of such funds, he is bound to keep them separate and apart from his own. Money entrusted to a
lawyer for a specific purpose such as for the filing and processing of a case if not utilized, must be returned
immediately upon demand. Failure to return gives rise to a presumption that he has misappropriated it in
violation of the trust reposed on him. And the conversion of funds entrusted to him constitutes gross
violation of professional ethics and betrayal of public confidence in the legal profession. 31(Citations omitted)

Nevertheless, the administrative liability of a lawyer for any infractions of his duties attaches only to such
circumstances, which he is personally accountable for. It would be plainly unjust if a lawyer would be held
accountable for acts, which he did not commit.

The Investigating Commissioners findings, which was adopted by the IBP Board of Governors, did not make
a distinction as to which specific acts or omissions the respondents are each personally responsible for. This
is inequitable since either of the respondents may not be held personally liable for the infractions committed
by the other.

Atty. Bayot may not be held liable for the failure to account for and return the excess of the P50,000.00
which was paid by the complainant for the filing fees. The evidence on record shows that it was Atty. Espejo
alone who received the said amount and that she was the one who paid the filing fees when the complaint
was filed with the RTC. That Atty. Bayot had no knowledge of the said amount paid by the complainant for
the filing fees is even admitted by the complainant himself during the proceedings before the IBP-
CBD, viz: chanRoble svirtualLawlibrary

ATTY. BAYOT: So, Atty. Espejo ask you for P50,000[.00] as filing fee.

MR. RUBY: Admitted.

ATTY. BAYOT: That when he asked you about that, Atty. Bayot was not present.

MR. RUBY: Admitted. cralawred

xxxx

ATTY. BAYOT: That later on you gave Atty. Espejo the P50,000[.00].

MR. RUBY: Admitted.

ATTY. BAYOT: That Atty. Bayot was not also present at that time.

MR. RUBY: Admitted. cralawred

xxxx

ATTY. BAYOT: That never did Atty. Bayot ask you or followed-up from you the P50,000[.00] that Atty. Espejo
was asking as filing fee?

MR. RUBY: Admitted. cralawred

xxxx

MR. RUBY: You have nothing to do with the P50,000[.00] that was Atty. Espejo.32
ChanRoblesVirtualawlibrary

Further, in her Answer, Atty. Espejo admitted that she was the one who failed to account for the filing fees,
alleging that the files in her office were destroyed by flood. Likewise, the demand letters written by the
complainant, which were seeking the accounting for the ?50,000.00 filing fee, were all solely addressed to
Atty. Espejo. Clearly, Atty. Bayot may not be held administratively liable for the failure to account for the
filing fees.

Atty. Bayot cannot also be held liable for the P20,000.00 which Atty. Espejo asked from the complainant for
representation fee. The complainant failed to adduce any evidence that would establish that Atty. Bayot
knew of and came into possession of the said amount paid by the complainant.

On the other hand, Atty. Bayot is legally entitled to the P8,000.00 he received from the complainant on
September 23, 2009, the same being his share in the acceptance fee agreed to by the complainant in the
retainer agreement. He is likewise legally entitled to the P4,000.00 from the complainant on even date as it
is the payment for his appearance fee in the hearing for the issuance of a TRO on September 22, 2009.

However, Atty. Bayot is not entitled to the P4,000.00 which the complainant deposited to his bank account
on October 23, 2009. Atty. Bayot admitted that there was no hearing scheduled on the said date; their
motion to serve summons through publication was not included in the RTCs calendar that day. Accordingly,
Atty. Bayot is obliged to return the said amount to the complainant.

As regards the complainants charge of gross neglect against Atty. Bayot, the Court finds the same
unsubstantiated. The Court has consistently held that in suspension or disbarment proceedings against
lawyers, the lawyer enjoys the presumption of innocence, and the burden of proof rests upon the
complainant to prove the allegations in his complaint.33 cralawla wlibrary

A lawyer may be disbarred or suspended for gross misconduct or for transgressions defined by the rules as
grounds to strip a lawyer of professional license. Considering, however, the serious consequences of either
penalty, the Court will exercise its power to disbar or suspend only upon a clear, convincing, and satisfactory
proof of misconduct that seriously affects the standing of a lawyer as an officer of the court and as member
of the bar.

The complainant merely alleged that, after the hearing on the motion to serve summons through
publication, the respondents had made themselves scarce and failed to update him on the status of the
case before the RTC. However, other than his bare allegations, the complainant failed to present any
evidence that would show that Atty. Bayot was indeed remiss in his duties to the complainant.

However, the complainants November 4, 2009 letter34 to Atty. Espejo tells a different story. In the said
letter, the complainant asked Atty. Espejo to withdraw as being the counsel of record in the case before the
RTC in favor of Atty. Bayot since he was the one who actually prepared the pleadings and attended the
hearings of their motions. In any case, the charge of neglect against Atty. Bayot was premature, if not
unfair, considering that, at that time, the case before the RTC was still in the early stages; the pre-
trial and trial have not even started yet. That they lost their bid for the issuance of a TRO is not tantamount
to neglect on the part of Atty. Bayot.

However, Atty. Bayot is not entirely without fault. This administrative complaint was brought about by his
intervention when the complainant sought the legal services of Atty. Espejo. Atty. Bayot undertook to
prepare the complaint to be filed with the RTC and the motion to serve summons through publication,
attended the hearings, and advised the complainant as to the status of the case without formally entering
his appearance as counsel of record. He was able to obtain remuneration for his legal services sans any
direct responsibility as to the progress of the case. Atty. Bayot is reminded to be more circumspect in his
dealings with clients.

WHEREFORE, Atty. Rudolph Dilla Bayot is hereby ADMONISHED to exercise more prudence and
judiciousness in dealing with his clients. He is also ordered to return to Michael Ruby within fifteen (15)
days from notice the amount of Four Thousand Pesos (P4,000.00) representing his appearance fee received
from the latter on October 23, 2009 with a warning that failure on his part to do so will result in the
imposition of stiffer disciplinary action.

SO ORDERED.
A.C. No. 9395 November 12, 2014

DARIA O. DAGING, Complainant,

vs.
ATTY. RIZ TINGALON L. DAVIS, Respondent.

RESOLUTION

DEL CASTILLO, J.:

This administrative complaint for disbarment arose from an Affidavit Complaint filed by Daria O.
1

Daging (complainant) before the Integrated Bar of the Philippines (IBP), Benguet Chapter, against
2

Atty. Riz Tingalon L. Davis (respondent).

Antecedents

Complainant was the owner and operator of Nashville Country Music Lounge. She leased from
Benjie Pinlac (Pinlac) a building spaGe located at No. 22 Otek St., Baguio City where she operated
the bar.

Meanwhile, complainant received a Retainer Proposal from Davis & Sabling Law Office signed by
3

respondent and his partner Atty. Amos Saganib Sabling (Atty. Sabling). This eventually resulted in
the signing by the complainant, the respondent and Atty. Sabling of a Retainer Agreement dated
4

March 7, 2005.

Because complainant was delinquent in paying the monthly rentals, Pinlac terminated the lease.
Together with Novie Balageo (Balageo) and respondent, Pinlac went to complainant's music bar,
inventoried all the equipment therein, and informed her that Balageo would take over the operation
of the bar. Complainant averred that subsequently respondent acted as business partner of Balageo
in operating the bar under her business name, which they later renamed Amarillo Music Bar.

Complainant likewise alleged that she filed an ejectment case against Pinlac and Balageo before the
Municipal Trial Court in Cities (MTCC), Branch 1, Baguio City. At that time, Davis & Sabling Law
Office was still her counsel as their Retainer Agreement remained subsisting and in force. However,
respondent appeared as counsel for Balageo in that ejectment case and filed, on behalf of the latter,
an Answer with Opposition to the Prayer for the Issuance of a Writ of Preliminary Injunction. 5

In his Comment, respondent denied participation in the takeover or acting as a business partner of
6

Balageo in the operation of the bar. He asserted that Balageo is the sole proprietress of the
establishment. He insisted that it was Atty. Sabling, his partner, who initiated the proposal and was in
fact the one who was able to convince complainant to accept the law office as her retainer.
Respondent maintained that he never obtained any knowledge or information regarding the business
of complainant who used to consult only Atty. Sabling. Respondent admitted though having
represented Balageo in the ejectment case, but denied that he took advantage of the Retainer
Agreement between complainant and Davis and Sabling Law Office. Thus:

3.a Prior to the engagement of the Complainant of the DAVIS and SABLING LAW OFFICE
as her retainer, Novie Balageo was already one of the Clients of Respondent in several
cases;

3.b Sometime in the last week of the month of May 2005, while Respondent was in his office
doing some legal works, Novie Balageo called up Respondent informing the latter that his
assistance is needed for purposes of conducting an inventory of all items at the former
Nashville Country Music Lounge;
 3.c Respondent [asked] Novie Balageo [the purpose of] the inventory [to which] the latter x
xx responded x xx that she entered into a lease contract with the present administrator of the
building, Benjie Pinlac;

3.d Respondent, to his disbelief requested Novie Balageo to go [to] the LAW OFFICE for
further clarification of the matter. Thereafter, Respondent was later informed that the
business of Complainant was taken over and operated by Mr. Benjie Pinlac for seven days.
Furthermore, Mr. Benjie Pinlac offered the said place to Novie Balageo which the latter
readily accepted;

3.e [Left] with no recourse, Respondent requested one of his staff to assist Novie Balageo in
conducting an inventory. Furthermore, Respondent never acted as partner of Novie Balageo
in operating the former Nashville Country Music Lounge;

3.f When Complainant filed the civil case for Ejectment against Novie Balageo and Benjie
Pinlac, Respondent represented the former thereof without taking advantage of the
retainership contract between the DA VIS and SABLING LAW OFFICE [and] Complainant as
Respondent has no knowledge or information of any matters related by complainant to Atty.
Sabling regarding the former' s business;

3.g While the Complaint was pending, respondent was xx x informed by Novie Balageo and
Benjie Pinlac of the truth of all matters x x x which x x x Respondent [was unaware of];

3.h However, for the interest of justice and fair play, x x x Respondent [deemed it prudent] to
xx x withdraw as Counsel for Novie Balageo. Hence, Respondent filed his Motion to
Withdraw As Counsel. x x x

3.i The civil case was subsequently dismissed for lack of jurisdiction over the [Complaint's]
subject matter. x x x
7

On October 15, 2008, the Investigating Commissioner rendered a Report and

Recommendation finding respondent guilty of betrayal of his client's trust and for misuse of
8

information obtained from his client to the disadvantage of the latter and to the advantage of another
person. He recommended that respondent be suspended from the practice oflaw for a period of one
year.

On December 11, 2008, the IBP Board of Governors adopted and approved the Report and
Recommendation of the Investigating Commissioner. Upon motion of the respondent, it reduced the
9

penalty imposed to six months suspension considering that there is no proof that respondent actually
handled any previous legal matters involving complainant. 10

Our Ruling

It is undisputed that complainant entered into a Retainer Agreement dated March 7, 2005 with
respondent's law firm. This agreement was signed by the respondent and attached to the rollo of this
case. And during the subsistence of said Retainer Agreement, respondent represented and
defended Balageo, who was impleaded as one of the defendants in the ejectment case complainant
filed before the MTCC of Baguio City. In fact, respondent filed on behalf of said Balageo an Answer
with Opposition to the Prayer for the Issuance of a Writ of Preliminary Injunction dated July 11, 2005.
It was only on August 26, 2005 when respondent withdrew his appearance for Balageo.

Based on the established facts, it is indubitable that respondent transgressed Rule 15.03 of Canon
15 of the Code of Professional Responsibility. It provides:
1wphi1

Rule 15.03 -A lawyer shall not represent conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.
"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." The prohibition against
11

representing conflicting interests is absolute and the rule applies even if the lawyer has acted in
good faith and with no intention to represent conflicting interests. In Quiambao v. Atty. Bamba, this
12 13

Court emphasized that lawyers are expected not only to keep inviolate the client's 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.
14

Respondent argues that while complainant is a client of Davis & Sabling Law office, her case is
actually handled only by his partner Atty. Sabling. He was not privy to any transaction between Atty.
Sabling and complainant and has no knowledge of any information or legal matter complainant
entrusted or confided to his law partner. He thus inveigles that he could not have taken advantage of
an information obtained by his law firm by virtue of the Retainer Agreement. We are not impressed.
In Hilado v. David, reiterated in Gonzales v. Atty. Cabucana, Jr., this Court held that a lawyer who
15 16

takes up the cause of the adversary of the party who has engaged the services of his law firm brings
the law profession into public disrepute and suspicion and undermines the integrity of justice. Thus,
respondent's argument that he never took advantage of any information acquired by his law finn in
the course of its professional dealings with the complainant, even assuming it to be true, is of no
moment. Undeniably aware of the fact that complainant is a client of his law firm, respondent should
have immediately informed both the complainant and Balageo that he, as well as the other members
of his law firm, cannot represent any of them in their legal tussle; otherwise, they would be
representing conflicting interests and violate the Code of Professional Responsibility. Indeed,
respondent could have simply advised both complainant and Balageo to instead engage the
services of another lawyer.

The penalty for representing conflicting interests may either be reprimand or suspension from the
practice of law ranging from six months to two years. We thus adopt the recommendation of the IBP
17

Board of Governors.

WHEREFORE, the Court ADOPTS and AFFIRMS the January 15, 2012 Resolution of the Integrated
Bar of the Philippines Board of Governors. Atty. Riz Tingalon L. Davis is found GUILTY of violating
Rule 15.03, Canon 15 of the Code of Professional Responsibility and is hereby SUSPENDED from
the practice of law for a period of six (6) months effective upon receipt of this Resolution. He is
warned that a commission of the same or similar offense in the future will result in the imposition of a
stiffer penalty.

Let a copy of this Resolution be entered into the records of Atty. Riz Tingalon L. Davis and furnished
to the Office of the Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and all courts in the Philippines, for their information and guidance.

Atty. Riz Tingalon L. Davis is DIRECTED to inform the Court of the date of his receipt of this
Resolution.

SO ORDERED.
A.C. No. 6664 July 16, 2013

FERDINAND A. SAMSON, Complainant,

vs.
ATTY. EDGARDO O. ERA, Respondent.

DECISION

BERSAMIN, J.:

An attorney who wittingly represents and serves conflicting interests may be suspended from the
practice of law, or even disbarred when circumstances so warrant.

Antecedents

Ferdinand A. Samson has brought this complaint for disbarment charging respondent Atty. Edgardo
O. Era with violation of his trust and confidence of a client by representing the interest of Emilia C.
Sison, his present client, in a manner that blatantly conflicted with his interest.

Samson and his relatives were among the investors who fell prey to the pyramiding scam
perpetrated by ICS Exports, Inc. Exporter, Importer, and Multi-Level Marketing Business (ICS
Corporation), a corporation whose corporate officers were led by Sison. The other officers were
Ireneo C. Sison, William C. Sison, Mimosa H. Zamudio, Mirasol H. Aguilar and Jhun Sison.

Samson engaged Atty. Era to represent and assist him and his relatives in the criminal prosecution
of Sison and her group. Pursuant to the engagement, Atty. Era prepared the demand letter dated
July 19, 2002 demanding the return or refund of the money subject of their complaints. He also
prepared the complaint-affidavit that Samson signed and swore to on July 26, 2002. Subsequently,
the complaint-affidavit charging Sison and the other corporate officials of ICS Corporation with
several counts of estafa1was presented to the Office of the City Prosecutor of Quezon City
(OCPQC). After the preliminary investigation, the OCPQC formally charged Sison and the others
with several counts of estafa in the Regional Trial Court, Branch 96 (RTC), in Quezon City.2

In April 2003, Atty. Era called a meeting with Samson and his relatives to discuss the possibility of an
amicable settlement with Sison and her cohorts. He told Samson and the others that undergoing a
trial of the cases would just be a waste of time, money and effort for them, and that they could settle
the cases with Sison and her group, with him guaranteeing the turnover to them of a certain property
located in Antipolo City belonging to ICS Corporation in exchange for their desistance. They acceded
and executed the affidavit of desistance he prepared, and in turn they received a deed of
assignment covering land registered under Transfer Certificate of Title No. R-4475 executed by
Sison in behalf of ICS Corporation.3

Samson and his relatives later demanded from Atty. Era that they be given instead a deed of
absolute sale to enable them to liquidate the property among themselves. It took some period of
negotiations between them and Atty. Era before the latter delivered to them on November 27, 2003
five copies of a deed of absolute sale involving the property. However, Atty. Era told them that
whether or not the title of the property had been encumbered or free from lien or defect would no
longer be his responsibility. He further told them that as far as he was concerned he had already
accomplished his professional responsibility towards them upon the amicable settlement of the
cases between them and ICS Corporation.4

When Samson and his co-complainants verified the title of the property at the Registry of Deeds and
the Assessors Office of Antipolo City, they were dismayed to learn that they could not liquidate the
property because it was no longer registered under the name of ICS Corporation but was already
under the name of Bank Wise Inc.5 Upon their urging, Atty. Era negotiated as their counsel with ICS
Corporation.
Due to the silence of Atty. Era for sometime thereafter, Samson and his group wrote to him on
September 8, 2004 to remind him about his guarantee and the promise to settle the issues with
Sison and her cohorts. But they did not hear from Atty. Era at all.6

During the hearings in the RTC, Atty. Era did not anymore appear for Samson and his group. This
forced them to engage another lawyer. They were shocked to find out later on, however, that Atty.
Era had already been entering his appearance as the counsel for Sison in her other criminal cases in
the other branches of the RTC in Quezon City involving the same pyramiding scam that she and her
ICS Corporation had perpetrated.7 In this regard, they established Atty. Eras legal representation of
Sison by submitting several certified copies of the minutes of the proceedings in the criminal cases
involving Sison and her group issued by Branch 102 and Branch 220 of the RTC in Quezon City
showing that Atty. Era had appeared as the counsel of Sison in the cases for estafa pending and
being tried in said courts.8 They also submitted a certification issued on November 3, 2004 indicating
that Atty. Era had visited Sison, an inmate in the Female Dormitory in Camp Karingal, Sikatuna
Village, Quezon City as borne out by the blotter logbook of that unit.9

On January 20, 2005, Samson executed an affidavit alleging the foregoing antecedents, and praying
for Atty. Eras disbarment on the ground of his violation of the trust, confidence and respect reposed
in him as their counsel.10

Upon being required by the Court to comment on the complaint against him within 10 days from
notice, Atty. Era several times sought the extension of his period to file the comment to supposedly
enable him to collate documents relevant to his comment.11 The Court granted his request and
allowed him an extension totaling 40 days. But despite the lapse of the extended period, he did not
file his comment.

On September 27, 2005, Samson reiterated his complaint for disbarment against Atty. Era. 12

By its resolution dated March 1, 2006,13 the Court required Atty. Era to show cause why he should
not be disciplinarily dealt with or held in contempt for such failure to submit his comment.

In the comment that he subsequently filed on April 11, 2006 in the Office of the Bar Confidant, 14 Atty.
Era alleged that the conclusion on April 23, 2002 of the compromise settlement between Samson
and his group, on one hand, and Sison and her ICS Corporation, on the other, had terminated the
lawyer-client relationship between him and Samson and his group; and that on September 1, 2003,
he had been appointed as counsel de officio for Sison by Branch 102 of the RTC in Quezon City only
for purposes of her arraignment.

On July 17, 2006, the Court referred the case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.15

In his report and recommendation dated October 1, 2007,16 the Investigating Commissioner of the
IBP Commission on Bar Discipline (IBPCBD) found Atty. Era guilty of misconduct for representing
conflicting interests, for failing to serve his clients with competence and diligence, and for failing to
champion his clients cause with wholehearted fidelity, care and devotion.

The Investigating Commissioner observed that the evidence did not sustain Atty. Eras claim that his
legal services as counsel for Samson and his group had terminated on April 23, 2003 upon the
execution of the compromise settlement of the criminal cases; that he even admitted during the
mandatory conference that there was no formal termination of his legal services; 17 that his
professional obligation towards Samson and his group as his clients did not end upon execution of
the settlement agreement, because he remained duty-bound to see to it that the settlement was duly
implemented; that he also had the obligation to appear in the criminal cases until their termination;
and that his acceptance of the engagement to appear in behalf of Sison invited suspicion of his
double-dealing and unfaithfulness.
The Investigating Commissioner recommended that Atty. Era be suspended from the practice of law
for six months, viz:

From the foregoing, it is clear that respondent is guilty of misconduct for representing conflicting
interests, failing to serve his client, complainant herein, with competence and diligence and
champion the latters cause with wholehearted fidelity, care and devotion. It is respectfully
recommended that respondent be SUSPENDED from the practice of law for a period of six (6)
months and WARNED that a repetition of the same or similar act would merit a more severe
penalty.18

In Resolution No. XVIII-2007-195 passed on October 19, 2007,19 the IBP Board of Governors
adopted and approved the report and recommendation of the Investigating Commissioner of the
IBP-CBD, with the modification that Atty. Era be suspended from the practice of law for two years.

On June 9, 2012, the IBP Board of Governors passed Resolution No. XX-2012-180, 20 denying Atty.
Eras motion for reconsideration and affirming Resolution No. XVIII-2007-195.

The IBP Board of Governors then forwarded the case to the Court pursuant to Section 12(b), Rule
139-B of the Rules of Court.21

On October 17, 2012, Atty. Era filed a Manifestation and Motion (With Leave of Court). 22 However, on
November 26, 2012, the Court merely noted the manifestation, and denied the motion for its lack of
merit.23

Ruling

We affirm the findings of the IBP.

In his petition for disbarment, Samson charged Atty. Era with violating Canon 15 of the Code of
Professional Responsibility for representing conflicting interests by accepting the responsibility of
representing Sison in the cases similar to those in which he had undertaken to represent Samson
and his group, notwithstanding that Sison was the very same person whom Samson and his group
had accused with Atty. Eras legal assistance. He had drafted the demand letters and the complaint-
affidavit that became the bases for the filing of the estafa charges against Sison and the others in
the RTC in Quezon City.

Atty. Eras contention that the lawyer-client relationship ended when Samson and his group entered
into the compromise settlement with Sison on April 23, 2002 was unwarranted. The lawyer-client
relationship did not terminate as of then, for the fact remained that he still needed to oversee the
implementation of the settlement as well as to proceed with the criminal cases until they were
dismissed or otherwise concluded by the trial court. It is also relevant to indicate that the execution
of a compromise settlement in the criminal cases did not ipso facto cause the termination of the
cases not only because the approval of the compromise by the trial court was still required, but also
because the compromise would have applied only to the civil aspect, and excluded the criminal
aspect pursuant to Article 2034 of the Civil Code.24

Rule 15.03, Canon 15 of the Code of Professional Responsibility provides that: "A lawyer shall not
represent conflicting interests except by written consent of all concerned given after a full disclosure
of the facts." Atty. Era thus owed to Samson and his group entire devotion to their genuine interest,
and warm zeal in the maintenance and defense of their rights.25 He was expected to exert his best
efforts and ability to preserve the clients cause, for the unwavering loyalty displayed to his clients
likewise served the ends of justice.26

In Hornilla v. Atty. Salunat,27 the Court discussed the concept of conflict of interest in this wise:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing
parties. The test is "whether or not in behalf of one client, it is the lawyers duty to fight for an issue
or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this
argument will be opposed by him when he argues for the other client." This 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. Also, there is conflict of interests if the acceptance of
the new retainer will require the attorney to perform an act which will injuriously affect his first client
in any matter in which he represents him and also whether he will be called upon in his new relation
to use against his first client any knowledge acquired through their connection. Another test of the
inconsistency of interests is whether the acceptance of a new relation will prevent an attorney from
the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof. 28

The prohibition against conflict of interest rests on five rationales, rendered as follows:

x x x. First, the law seeks to assure clients that their lawyers will represent them with undivided
loyalty. A client is entitled to be represented by a lawyer whom the client can trust. Instilling such
confidence is an objective important in itself. x x x.

Second, the prohibition against conflicts of interest seeks to enhance the effectiveness of legal
representation. To the extent that a conflict of interest undermines the independence of the lawyers
professional judgment or inhibits a lawyer from working with appropriate vigor in the clients behalf,
the clients expectation of effective representation x x x could be compromised.

Third, a client has a legal right to have the lawyer safeguard the clients confidential information
xxx. Preventing use of confidential client information against the interests of the client, either to
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benefit the lawyers personal interest, in aid of some other client, or to foster an assumed public
purpose is facilitated through conflicts rules that reduce the opportunity for such abuse.

Fourth, conflicts rules help ensure that lawyers will not exploit clients, such as by inducing a client to
make a gift to the lawyer xxx.

Finally, some conflict-of-interest rules protect interests of the legal system in obtaining adequate
presentations to tribunals. In the absence of such rules, for example, a lawyer might appear on both
sides of the litigation, complicating the process of taking proof and compromise adversary
argumentation x x x.29

The rule prohibiting conflict of interest was fashioned to prevent situations wherein a lawyer would
be representing a client whose interest is 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.30 The rule is grounded in the fiduciary obligation of
loyalty.31 Throughout 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. Knowledge and
information gathered in the course of the relationship must be treated as sacred and guarded with
care. It behooves lawyers not only to keep inviolate the clients confidence, but also to avoid the
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appearance of treachery and double-dealing, for only then can litigants be encouraged to entrust
their secrets to their lawyers, which is paramount in the administration of justice. 32 The nature of that
relationship is, therefore, one of trust and confidence of the highest degree. 33

Contrary to Atty. Eras ill-conceived attempt to explain his disloyalty to Samson and his group, the
termination of the attorney-client relationship does not justify a lawyer to represent an interest
adverse to or in conflict with that of the former client. The spirit behind this rule is that the clients
confidence once given should not be stripped by the mere expiration of the professional
employment. Even after the severance of the relation, a lawyer should not do anything that will
injuriously affect his former client in any matter in which the lawyer previously represented the client.
Nor should the lawyer disclose or use any of the clients confidences acquired in the previous
relation.34 In this regard, Canon 17 of the Code of Professional Responsibility expressly declares
that: "A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and
confidence reposed in him."

The lawyers highest and most unquestioned duty is to protect the client at all hazards and costs
even to himself.35The protection given to the client is perpetual and does not cease with the
termination of the litigation, nor is it affected by the clients 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.36

In the absence of the express consent from Samson and his group after full disclosure to them of the
conflict of interest, therefore, the most ethical thing for Atty. Era to have done was either to outrightly
decline representing and entering his appearance as counsel for Sison, or to advice Sison to engage
another lawyer for herself. Unfortunately, he did neither, and should now suffer the proper sanction.

WHEREFORE, the Court FINDS and PRONOUNCES Atty. EDGARDO O. ERA guilty of violating
Rule 15.03 of Canon 15, and Canon 17 of the Code of Professional Responsibility; and SUSPENDS
him from the practice of law for two years effective upon his receipt of this decision, with a warning
that his commission of a similar offense will be dealt with more severely.

Let copies of this decision be included in the personal record of Atty. EDGARDO 0. ERA and entered
m his file in the Office of the Bar Confidant.

Let copies of this decision be disseminated to all lower courts by the Office of the Court
Administrator, as well as to the Integrated Bar of the Philippines for its guidance.

SO ORDERED.

A.C. No. 9537 June 10, 2013

(Formerly CBD Case No. 09-2489)

DR. TERESITA LEE, Complainant,

vs.
ATTY. AMADOR L. SIMANDO, Respondent.

DECISION

PERALTA, J.:

Before us is a Petition for Disbarment1 dated July 21, 2009 filed by Dr. Teresita Lee (Dr. Lee) against
respondent Atty. Amador L. Simando (Atty. Simando) before the Integrated Bar of the Philippines-
Commission on Bar Discipline (IBP-CBD), docketed as CBD Case No. 09-2489, now A.C. No. 9537,
for violation of the Code of Judicial Ethics of Lawyers.

The facts of the case, as culled from the records, are as follows:

Atty. Simando was the retained counsel of complainant Dr. Lee from November 2004 until January 8,
2008, with a monthly retainer fee of Three Thousand Pesos (Php3,000.00). 2

Sometime during the above-mentioned period, Atty. Simando went to see Dr. Lee and asked if the
latter could help a certain Felicito M. Mejorado (Mejorado) for his needed funds. He claimed that
Mejorado was then awaiting the release of his claim for informer's reward from the Bureau of
Customs. Because Dr. Lee did not know Mejorado personally and she claimed to be not in the
business of lending money, the former initially refused to lend money. But Atty. Simando allegedly
persisted and assured her that Mejorado will pay his obligation and will issue postdated checks and
sign promissory notes. He allegedly even offered to be the co-maker of Mejorado and assured her
that Mejorado's obligation will be paid when due. Atty. Simando was quoted saying: "Ipapahamak ba
kita, kliyente kita"; "Sigurado ito, kung gusto mo, gagarantiyahan ko pa ito, at pipirma din ako";
"Isang buwan lang, at hindi hihigit sa dalawang buwan ito, bayad ka na." 3
Due to Atty. Simando's persistence, his daily calls and frequent visits to convince Dr. Lee, the latter
gave in to her lawyer's demands, and finally agreed to give Mejorado sizeable amounts of money.
Respondent acted as co-maker with Mejorado in various cash loans, to wit: 4

Date: Amount
November 11, 2006 Php 400,000.00
November 24, 2006 200,000.00
November 27, 2006 400,000.00
December 7, 2006 200,000.00
December 13, 2006 200,000.00
Total: Php1,400,000.00

When the said obligation became due, despite Dr. Lee's repeated demands, Mejorado failed and
refused to comply with his obligation. Since Atty. Simando was still her lawyer then, Dr. Lee
instructed him to initiate legal action against Mejorado. Atty. Simando said he would get in touch with
Mejorado and ask him to pay his obligation without having to resort to legal action. However, even
after several months, Mejorado still failed to pay Dr. Lee, so she again asked Atty. Simando why no
payment has been made yet. Dr. Lee then reminded Atty. Simando that he was supposed to be the
co-maker of the obligation of Mejorado, to which he replied: "Di kasuhan din ninyo ako!" 5

Despite complainant's repeated requests, respondent ignored her and failed to bring legal actions
against Mejorado. Thus, in January 2008, complainant was forced to terminate her contract with Atty.
Simando.

Subsequently, complainant's new lawyer, Atty. Gilbert Morandarte, sent a demand letter dated June
13, 2008 to Atty. Simando in his capacity as the co-maker of some of the loans of Mejorado.

In his Letter dated June 30, 2008, respondent denied his liability as a co-maker and claimed that
novation had occurred because complainant had allegedly given additional loans to Mejorado
without his knowledge.6

Dr. Lee then accused Atty. Simando of violating the trust and confidence which she gave upon him
as her lawyer, and even took advantage of their professional relationship in order to get a loan for his
client. Worse, when the said obligation became due, respondent was unwilling to help her to favor
Mejorado. Thus, the instant petition for disbarment against Atty. Simando.

On August 12, 2009, the IBP-CBD ordered respondent to submit his Answer on the complaint
against him.7

In his Answer8 dated September 17, 2009, Atty. Simando claimed that complainant, who is engaged
in lending money at a high interest rate, was the one who initiated the financial transaction between
her and Mejorado. He narrated that complainant asked him if it is true that Mejorado is his client as
she found out that Mejorado has a pending claim for informer's reward with the Bureau of Customs.
When he affirmed that Mejorado is his client, complainant signified that she is willing to give money
for Mejorado's financial needs while awaiting for the release of the informer's reward. Eventually,
parties agreed that Mejorado will pay double the amount and that payment shall be made upon
receipt by Mejorado of the payment of his claim for informer's reward. 9

Meanwhile, Atty. Simando stressed that Dr. Lee gave Mejorado a total of Php700,000.00 as an
investment but he signed as co-maker in all the receipts showing double the amount or
Php1,400,000.00.10

Respondent claimed that complainant is a money-lender exacting high interest rates from
borrowers.11 He narrated several instances and civil cases where complainant was engaged in
money-lending where he divulged that even after defendants had already paid their loan,
complainant still persists in collecting from them.12 Respondent asserted that he knew of these
transactions, because he was among the four lawyers who handled complainant's case. 13
Respondent averred that from the time that Mejorado and Dr. Lee had become close to each other,
the latter had given Mejorado additional investments and one (1) Silverado Pick-up at the price
of P500,000.00 and fifty (50) sacks of old clothings. He claimed that the additional investments made
by Dr. Lee to Mejorado were given without his knowledge.

Atty. Simando further alleged that with Dr. Lee's investment of around P2 Million which included the
Silverado Pick-up and the fifty (50) sacks of old clothings, the latter required Mejorado to issue five
(5) checks with a total value of P7,033,500.00, an amount more than the actual value which
Mejorado received.14

Atty. Simando added that while Dr. Lee and Mejorado agreed that the issued checks shall be
presented to the bank only upon payment of his informer's reward, Dr. Lee presented the checks to
the bank despite being aware that Mejorado's account had no funds for said checks. Atty. Simando
further denied that he refused to take legal action against Mejorado. He claimed that complainant
never instructed him to file legal action, since the latter knew that Mejorado is obligated to pay only
upon receipt of his informer's reward.

Finally, Atty. Simando insisted that he did not violate their lawyerclient relationship, since Dr. Lee
voluntarily made the financial investment with Mejorado and that he merely introduced complainant
to Mejorado. He further claimed that there is no conflict of interest because he is Mejorado's lawyer
relative to the latter's claim for informer's reward, and not Mejorado's lawyer against Dr. Lee. He
reiterated that there is no conflicting interest as there was no case between Mejorado and Dr. Lee
that he is handling for both of them.15

In her Reply dated October 30, 2009, Dr. Lee denied that what she entered into was a mere
investment. She insisted that she lent the money to Mejorado and respondent, in his capacity as co-
maker and the transaction was actually a loan.16 To prove her claim, Dr. Lee submitted the written
loan agreements/receipts which categorically stated that the money received was a loan with due
dates, signed by Mejorado and respondent as co-maker.17 She further claimed that she did not know
Mejorado and it was respondent who brought him to her and requested her to assist Mejorado by
lending him money as, in fact, respondent even vouched for Mejorado and agreed to sign as co-
maker.

Complainant further emphasized that what she was collecting is the payment only of the loan
amounting to One Million Four Hundred Thousand Pesos (Php1,400,000.00) which respondent had
signed as co-maker. Thus, respondent's claim that his obligation was already extinguished by
novation holds no water, since what was being collected is merely his obligation pertaining to the
loan amounting to Php1,400,000.00 only, and nothing more.

Finally, complainant lamented that respondent, in his comments, even divulged confidential
informations he had acquired while he was still her lawyer and even used it against her in the
present case, thus, committing another unethical conduct. She, therefore, maintained that
respondent is guilty of violating the lawyer-client confidentiality rule.

Both parties failed to appear during the mandatory conference on January 15, 2010. Both parties
requested for resetting of the mandatory conference, however, both failed to agree on a certain date.
Hence, the IBP, so as not to delay the disposition of the complaint, terminated the mandatory
conference and instead required the parties to submit their respective position papers. 18

On March 18, 2010, the IBP-CBD found Atty. Simando guilty of violating the Code of Professional
Responsibility. It recommended that respondent be suspended from the practice of law for six (6)
months.

On December 29, 2010, the IBP Board of Governors adopted and approved the Report and
Recommendation of the IBP-CBD to suspend Atty. Simando from the practice of law for a period of
six (6) months.

Respondent moved for reconsideration.

On March 10, 2012, the IBP Board of Governors granted respondent's motion for reconsideration for
lack of sufficient evidence to warrant the penalty of suspension. The Resolution dated December 29,
2010 was reversed and the case against respondent was dismissed.
 RULING

We reverse the ruling of the IBP Board of Governors.

Jurisprudence has provided three tests in determining whether a lawyer is guilty of representing
conflicting interest:

One test is whether a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at
the same time, to oppose that claim for the other client. Thus, if a lawyers argument for one client
has to be opposed by that same lawyer in arguing for the other client, there is a violation of the rule.

Another test of inconsistency of interests is whether the acceptance of a new relation would prevent
the full discharge of the lawyers duty of undivided fidelity and loyalty to the client or invite suspicion
of unfaithfulness or double-dealing in the performance of that duty. Still another test is whether the
lawyer would be called upon in the new relation to use against a former client any confidential
information acquired through their connection or previous employment. 19

In the instant case, we find substantial evidence to support respondent's violation of the above
parameters, as established by the following circumstances on record:

First, it is undisputed that there was a lawyer-client relationship between complainant and Atty.
Simando as evidenced by the retainer fees received by respondent and the latter's representation in
certain legal matters pertaining to complainant's business;

Second, Atty. Simando admitted that Mejorado is another client of him albeit in a case claiming
rewards against the Bureau of Customs;

Third, Atty. Simando admitted that he was the one who introduced complainant and Mejorado to
each other for the purpose of entering into a financial transaction while having knowledge that
complainant's interests could possibly run in conflict with Mejorado's interests which ironically such
client's interests, he is duty-bound to protect;

Fourth, despite the knowledge of the conflicting interests between his two clients, respondent
consented in the parties' agreement and even signed as co-maker to the loan agreement;

Fifth, respondent's knowledge of the conflicting interests between his two clients was demonstrated
further by his own actions, when he:

(a) failed to act on Mejorado's failure to pay his obligation to complainant despite the latter's
instruction to do so;

(b) denied liability despite signing as co-maker in the receipts/promissory notes arising from
the loan agreement between his two clients;

(c) rebutted complainant's allegations against Mejorado and him, and even divulged
informations he acquired while he was still complainant's lawyer.

Clearly, it is improper for respondent to appear as counsel for one party (complainant as creditor)
against the adverse party (Mejorado as debtor) who is also his client, since a lawyer is prohibited
from representing conflicting interests. He may not, without being guilty of professional misconduct,
act as counsel for a person whose interest conflict with that of his present or former client.

Respondent's assertion that there is no conflict of interest because complainant and respondent are
his clients in unrelated cases fails to convince. His representation of opposing clients in both cases,
though unrelated, obviously constitutes conflict of interest or, at the least, invites suspicion of double-
dealing.20 Moreover, with the subject loan agreement entered into by the complainant and Mejorado,
who are both his clients, readily shows an apparent conflict of interest, moreso when he signed as
co-maker.

Likewise, respondent's argument that the money received was an investment and not a loan is
difficult to accept, considering that he signed as co-maker. Respondent is a lawyer and it is
objectionable that he would sign as co-maker if he knew all along that the intention of the parties
was to engage in a mere investment. Also, as a lawyer, signing as a co-maker, it can be
presupposed that he is aware of the nature of suretyship and the consequences of signing as co-
maker. Therefore, he cannot escape liability without exposing himself from administrative liability, if
not civil liability. Moreover, we noted that while complainant was able to show proof of receipts of
various amounts of money loaned and received by Mejorado, and signed by the respondent as co-
maker, the latter, however, other than his bare denials, failed to show proof that the money given
was an investment and not a loan.

It must be stressed that the proscription against representation of conflicting interests finds
application where the conflicting interests arise with respect to the same general matter however
slight the adverse interest may be. It applies even if the conflict pertains to the lawyers private
activity or in the performance of a function in a non-professional capacity. In the process of
determining whether there is a conflict of interest, an important criterion is probability, not certainty, of
conflict.21

We likewise note that respondent offered several excuses in order to avoid payment of his
liability. First, in his Answer to complainant's demand letter, he claimed there was novation which
1wphi1

extinguished his liability; Secondly, he claimed that the amount received by Mejorado for which he
signed as co-maker was merely an investment and not a loan. Finally, he alleged that it was agreed
that the investment with profits will be paid only after Mejorado receives the payment for his claim for
reward which complainant violated when she presented the checks for payment prematurely. These
actuations of Atty. Simando do not speak well of his reputation as a lawyer.22

Finally, we likewise find respondent guilty of violating Rule 21.01 of the Code of Professional
Responsibility.23 In his last-ditch effort to impeach the credibility of complainant, he divulged
informations24 which he acquired in confidence during the existence of their lawyer-client
relationship.

We held in Nombrado v. Hernandez25 that the termination of the relation of attorney and client
provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the
former client. The reason for the rule is that the clients confidence once reposed cannot be divested
by the expiration of the professional employment. Consequently, a lawyer should not, even after the
severance of the relation with his client, 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.

Accordingly, we reiterate that lawyers are 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. 26

WHEREFORE, premises considered, this Court resolves to ADOPT the findings and
recommendation of the IBP in Resolution No. XIX-20 10-733 suspending respondent Atty. Amador L.
Simando for six ( 6) months from the practice of law, with a WARNING that a repetition of the same
or similar offense will warrant a more severe penalty.

Let copies of this Decision be furnished all courts, the Office of the Bar Confidant and the Integrated
Bar of the Philippines for their information and guidance. The Office of the Bar Confidant is
DIRECTED to append a copy of this Decision to respondent's record as member of the Bar.

Atty. Simando is DIRECTED to inform the Court of the date of his receipt of this Decision so that we
can determine the reckoning point when his suspension shall take effect.

This Decision shall be immediately executory.

SO ORDERED.
A.C. No. 10567 February 25, 2015

WILFREDO ANGLO, Complainant,

vs.
ATTY. JOSE MA. V. VALENCIA, ATTY. JOSE MA. J. CIOCON, ATTY. PHILIP Z. DABAO, ATTY.
LILY UYV ALENCIA, ATTY. JOEY P. DE LA PAZ, ATTY. CRIS G. DIONELA, ATTY. RAYMUNDO T.
PANDAN, JR.,* ATTY. RODNEY K. RUBICA,** and ATTY. WILFRED RAMON M.
PENALOSA, Respondents.

DECISION

PERLAS-BERNABE, J.:

This is an administrative case stemming from a complaint-affidavit dated December 4, 2009 filed by
1

complainant Wilfredo Anglo (complainant) charging respondents Attys. Jose Ma. V. Valencia (Atty.
Valencia), Jose Ma. J. Ciocon (Atty. Ciocon ), Philip Z. Dabao (Atty. Dabao ), Lily Uy-Valencia (Atty.
Uy-Valencia), Joey P. De La Paz (Atty. De La Paz), Cris G. Dionela (Atty. Dionela), Raymundo T.
Pandan, Jr. (Atty. Pandan, Jr.), Rodney K. Rubica (Atty. Rubica), and Wilfred Ramon M. Penalosa
(Atty. Penalosa; collectively, respondents) of violating the Code of Professional Responsibility (CPR),
specifica1ly the rule against conflict of interest.

The Facts

In his complaint-affidavit, complainant alleged that he availed the services of the law firm Valencia
Ciocon Dabao Valencia De La Paz Dionela Pandan Rubica Law Office(law firm), of which Attys.
Valencia, Ciocon, Dabao, Uy-Valencia, De La Paz, Dionela, Pandan, Jr., and Rubica were partners,
for two (2) consolidated labor cases where he was impleaded as respondent. Atty. Dionela, a
2

partner of the law firm, was assigned to represent complainant. The labor cases were terminated on
June 5, 2008 upon the agreement of both parties. 3

On September 18, 2009, a criminal case for qualified theft was filed against complainant and his
4

wife by FEVE Farms Agricultural Corporation (FEVE Farms) acting through a certain Michael
Villacorta (Villacorta). Villacorta, however, was represented by the law firm, the same law office
which handled complainants labor cases. Aggrieved, complainant filed this disbarment case against
respondents, alleging that they violated Rule 15.03, Canon 15 and Canon 21 of the CPR, to wit:
5

CANON 15 A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS
DEALINGS AND TRANSACTIONS WITH HIS CLIENTS.

xxxx

RULE 15.03 A lawyer shall not represent conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.

xxxx

CANON 21 A LAWYER SHALL PRESERVE THE CONFIDENCES AND SECRETS OF HIS

CLIENT EVEN AFTER THE ATTORNEY-CLIENT RELATION IS TERMINATED.

In their defense, respondents admitted that they indeed operated under the name Valencia Ciocon
6

Dabao Valencia De La Paz Dionela Pandan Rubica Law Office, but explained that their association
is not a formal partnership, but one that is subject to certain "arrangements." According to them,
each lawyer contributes a fixed amount every month for the maintenance of the entire office; and
expenses for cases, such as transportation, copying, printing, mailing, and the like are shouldered by
each lawyer separately, allowing each lawyer to fix and receive his own professional fees
exclusively. As such, the lawyers do not discuss their clientele with the other lawyers and
7

associates, unless they agree that a case be handled collaboratively. Respondents claim that this
has been the practice of the law firm since its inception. They averred that complainants labor cases
were solely and exclusively handled by Atty. Dionela and not by the entire law firm. Moreover,
respondents asserted that the qualified theft case filed by FEVE Farms was handled by Atty.
Pealosa, a new associate who had no knowledge of complainants labor cases, as he started
working for the firm after the termination thereof. Meanwhile, Atty. Dionela confirmed that he indeed
8

handled complainants labor cases but averred that it was terminated on June 13, 2008, and that
9

complainant did not have any monthly retainer contract. He likewise explained that he did not see
10

the need to discuss complainants labor cases with the other lawyers as the issue involved was very
simple, and that the latter did not confide any secret during the time the labor cases were pending
11

that would have been used in the criminal case with FEVE Farms. He also claimed that the other
lawyers were not aware of the details of complainants labor cases nor did they know that he was the
handling counsel for complainant even after the said cases were closed and terminated. The IBPs
12

Report and Recommendation

In a Report and Recommendation dated September 26, 2011, the IBP Commissioner found
13

respondents to have violated the rule on conflict of interest and recommended that they be
reprimandedtherefor, with the exception of Atty. Dabao, who had died on January 17, 2010. The IBP
14

found that complainant was indeed represented in the labor cases by the respondents acting
together as a law firm and not solely by Atty. Dionela. Consequently, there was a conflict of interest
in this case, as respondents, through Atty. Pealosa, having been retained by FEVE Farms, created
a connection that would injure complainant in the qualified theft case. Moreover, 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.15

In a Resolution dated February 12, 2013, the IBP Board of Governors adopted and approved the
16

IBP Commissioners Report and Recommendation with modification. Instead of the penalty of
reprimand, the IBP Board of Governors dismissed the case with warning that a repetition of the
same or similar act shall be dealt with more severely.

Complainant filed a motion for reconsideration thereof, which the IBP Board of Governors granted
17

in its Resolution dated March 23, 2014 and thereby (a) set aside its February 12, 2013 Resolution
18

and (b) adopted and approved the IBP Commissioners Report and Recommendation, with
modification, (1) reprimanding the respondents for violation of the rule on conflict of interest; (2)
dismissing the case against Atty. Dabao in view of his death; and (3) suspending Atty. Dionela from
the practice of law for one year, being the handling counsel of complainants labor cases.

The Issue Before the Court

The essential issue in this case is whether or not respondents are guilty of representing conflicting
interests in violation of the pertinent provisions of the CPR.

The Courts Ruling

Rule 15.03, Canon 15 and Canon 21 of the CPR provide:

CANON 15 A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS
DEALINGS AND TRANSACTIONS WITH HIS CLIENTS.

xxxx

RULE 15.03 A lawyer shall not represent conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.

xxxx

CANON 21 A LAWYER SHALL PRESERVE THE CONFIDENCES AND SECRETS OF HIS

CLIENT EVEN AFTER THE ATTORNEY-CLIENT RELATIONSHIP IS TERMINATED.
In Hornilla v. Atty. Salunat, the Court explained the concept of conflict of interest in this wise:
19

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing
parties. The test is "whether or not in behalf of one client, it is the lawyers duty to fight for an issue
1wphi1

or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this
argument will be opposed by him when he argues for the other client." This 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. Also, there is conflict of interests if the acceptance of
the new retainer will require the attorney to perform an act which will injuriously affect his first client
in any matter in which he represents him and also whether he will be called upon in his new relation
to use against his first client any knowledge acquired through their connection. Another test of the
inconsistency of interests is whether the acceptance of a new relation will prevent an attorney from
the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof. 20

As such, a lawyer is prohibited from representing new clients whose interests oppose those of a
former client in any manner, whether or not they are parties in the same action or on totally unrelated
cases. The prohibition is founded on the principles of public policy and good taste. In this case, the
21

Court concurs with the IBPs conclusions that respondents represented conflicting interests and must
therefore be held liable. As the records bear out, respondents law firm was engaged and, thus,
represented complainant in the labor cases instituted against him. However, after the termination
thereof, the law firm agreed to represent a new client, FEVE Farms, in the filing of a criminal case for
qualified theft against complainant, its former client, and his wife. As the Court observes, the law
firms unethical acceptance of the criminal case arose from its failure to organize and implement a
system by which it would have been able to keep track of all cases assigned to its handling lawyers
to the end of, among others, ensuring that every engagement it accepts stands clear of any potential
conflict of interest. As an organization of individual lawyers which, albeit engaged as a collective,
assigns legal work to a corresponding handling lawyer, it behooves the law firm to value coordination
in deference to the conflict of interest rule. This lack of coordination, as respondents law firm
exhibited in this case, intolerably renders its clients secrets vulnerable to undue and even adverse
exposure, eroding in the balance the lawyer-client relationships primordial ideal of unimpaired trust
and confidence. Had such system been institutionalized, all of its members, Atty. Dionela included,
would have been wary of the above-mentioned conflict, thereby impelling the firm to decline FEVE
Farms subsequent engagement. Thus, for this shortcoming, herein respondents, as the charged
members of the law firm, ought to be administratively sanctioned. Note that the Court finds no
sufficient reason as to why Atty. Dionela should suffer the greater penalty of suspension. As the
Court sees it, all respondents stand in equal fault for the law firms deficient organization for which
Rule 15.03, Canon 15 and Canon 21 of the CPR had been violated. As such, all of them are meted
with the same penalty of reprimand, with a stern warning that a repetition of the same or similar
infraction would be dealt with more severely.

As a final point, the Court clarifies that respondents' pronounced liability is not altered by the fact that
the labor cases against complainant had long been terminated. Verily, 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. 22

WHEREFORE, respondents Attys. Jose Ma. V. Valencia, Jose Ma. J. Ciocon, Lily Uy-Valencia, Joey
P. De La Paz, Cris G. Dionela, Raymundo T. Pandan, Jr., Rodney K. Rubica, and Wilfred Ramon M.
Penalosa are found GUILTY of representing conflicting interests in violation of Rule 15.03, Canon 15
and Canon 21 of the Code of Professional Responsibility and are therefore REPRIMANDED for said
violations, with a STERN WARNING that a repetition of the same or similar infraction would be dealt
with more severely. Meanwhile, the case against Atty. Philip Dabao is DISMISSED in view of his
death.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, to be appended to
respondents' personal records as attorneys. Further, let copies of this Resolution be furnished the
Integrated Bar of the Philippines and the Office of the Court Administrator, which is directed to
circulate them to all courts in the country for their information and guidance.

SO ORDERED.
 ROLANDO B. PACANA, JR., A.C. No. 8243
Complainant,
Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
CORONA,
CARPIO MORALES,
CHICO-NAZARIO,
- versus - VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,*
PERALTA, and
BERSAMIN, JJ.

Promulgated:

ATTY. MARICEL PASCUAL-LOPEZ, July 24, 2009

Respondent.
x-----------------------------------------------------------------------------------------x

DECISION

PER CURIAM:

This case stems from an administrative complaint [1] filed by Rolando

Pacana, Jr. against Atty. Maricel Pascual-Lopez charging the latter with flagrant
violation of the provisions of the Code of Professional Responsibility.
[2]
Complainant alleges that respondent committed acts constituting conflict of
interest, dishonesty, influence peddling, and failure to render an accounting of all
the money and properties received by her from complainant.

On January 2, 2002, complainant was the Operations Director for Multitel

Communications Corporation (MCC). MCC is an affiliate company of Multitel
International Holdings Corporation (Multitel). Sometime in July 2002, MCC
changed its name to Precedent Communications Corporation (Precedent).[3]

According to complainant, in mid-2002, Multitel was besieged by demand

letters from its members and investors because of the failure of its investment
schemes. He alleges that he earned the ire of Multitel investors after becoming the
assignee of majority of the shares of stock of Precedent and after being appointed
as trustee of a fund amounting to Thirty Million Pesos (P30,000,000.00) deposited
at Real Bank.
 Distraught, complainant sought the advice of respondent who also happened
to be a member of the Couples for Christ, a religious organization where
complainant and his wife were also active members. From then on, complainant
and respondent constantly communicated, with the former disclosing all his
involvement and interests in Precedent and Precedents relation with Multitel.
Respondent gave legal advice to complainant and even helped him prepare
standard quitclaims for creditors. In sum, complainant avers that a lawyer-client
relationship was established between him and respondent although no formal
document was executed by them at that time. A Retainer Agreement [4] dated
January 15, 2003 was proposed by respondent. Complainant, however, did not sign
the said agreement because respondent verbally asked for One Hundred Thousand
Pesos (P100,000.00) as acceptance fee and a 15% contingency fee upon collection
of the overpayment made by Multitel to Benefon,[5] a telecommunications company
based in Finland. Complainant found the proposed fees to be prohibitive and not
within his means.[6] Hence, the retainer agreement remained unsigned.[7]

After a few weeks, complainant was surprised to receive a demand letter

from respondent[8] asking for the return and immediate settlement of the funds
invested by respondents clients in Multitel. When complainant confronted
respondent about the demand letter, the latter explained that she had to send it so
that her clients defrauded investors of Multitel would know that she was doing
something for them and assured complainant that there was nothing to worry
about.[9]

Both parties continued to communicate and exchange information regarding

the persistent demands made by Multitel investors against complainant. On these
occasions, respondent impressed upon complainant that she can closely work with
officials of the Anti-Money Laundering Council (AMLC), the Department of
Justice (DOJ), the National Bureau of Investigation (NBI), the Bureau of
Immigration and Deportations (BID),[10]and the Securities and Exchange
Commission (SEC)[11] to resolve complainants problems. Respondent also
convinced complainant that in order to be absolved from any liability with respect
to the investment scam, he must be able to show to the DOJ that he was willing to
divest any and all of his interests in Precedent including the funds assigned to him
by Multitel.[12]
Respondent also asked money from complainant allegedly for safekeeping
to be used only for his case whenever necessary. Complainant agreed and gave her
an initial amount of P900,000.00 which was received by respondent herself.
[13]
Sometime thereafter, complainant again gave respondent P1,000,000.00.[14] Said
amounts were all part of Precedents collections and sales proceeds which
complainant held as assignee of the companys properties.[15]

When complainant went to the United States (US), he received several

messages from respondent sent through electronic mail (e-mail) and short
messaging system (SMS, or text messages) warning him not to return to the
Philippines because Rosario Baladjay, president of Multitel, was arrested and that
complainant may later on be implicated in Multitels failed investment system.
Respondent even said that ten (10) arrest warrants and a hold departure order had
been issued against him. Complainant, thereafter, received several e-mail messages
from respondent updating him of the status of the case against Multitel and
promised that she will settle the matter discreetly with government officials she can
closely work with in order to clear complainants name. [16] In two separate e-mail
messages,[17]respondent again asked money from complainant, P200,000 of which
was handed by complainants wife while respondent was confined in Saint Lukes
Hospital after giving birth,[18] and another P700,000 allegedly to be given to the
NBI.[19]

Through respondents persistent promises to settle all complainants legal

problems, respondent was able to convince complainant who was still in the US to
execute a deed of assignment in favor of respondent allowing the latter to retrieve
178 boxes containing cellular phones and accessories stored in complainants house
and inside a warehouse.[20] He also signed a blank deed of sale authorizing
respondent to sell his 2002 Isuzu Trooper.[21]

Sometime in April 2003, wary that respondent may not be able to handle his
legal problems, complainant was advised by his family to hire another lawyer.
When respondent knew about this, she wrote to complainant via e-mail, as follows:

Dear Butchie,

Hi! Ok ka lang? Hope you are fine. Sorry if I shocked you but I had to
do it as your friend and lawyer. The charges are all non-bailable but all
the same as the SEC report I told you before. The findings are the same,
i.e. your company was the front for the fraud of Multitel and that funds
were provided you.

I anticipated this, that is why I really pushed for a quitclaim. Rolly is

willing to return the Crosswind, laptap (sic) and [P]alm [P]ilot. Manny
Cancio really helped. Anthony na lang. Then, I will need the accounting
of all the funds you received from the sale of the phones, every
employees and directors[] quitclaim (including yours), the funds
transmitted to the clients through me, the funds you utilized, and
whatelse (sic) is still unremitted, every centavo must be accounted for as
DOJ and NBI can have the account opened.

I will also need the P30 M proof of deposit with Real [B]ank and the
trust given [to] you. So we can inform them [that] it was not touched by
you.

I have been informed by Efie that your family is looking at hiring Coco
Pimentel. I know him very well as his sister Gwen is my best friend. I
 have no problem if you hire him but I will be hands off. I work
differently kasi. In this cases (sic), you cannot be
highprofile (sic)because it is the clients who will be sacrificed at the
expense of the fame of the lawyer. I have to work quietly and
discreetly. No funfare. Just like what I did for your guys in the SEC. I
have to work with people I am comfortable with. Efren Santos will sign
as your lawyer although I will do all the work. He can help with all
his connections. Vals friend in the NBI is the one is (sic) charge of
organized crime who is the entity (sic) who has your warrant. My law
partner was the state prosecutor for financial fraud. Basically we have it
covered in all aspects and all departments. I am just trying to liquidate
the phones I have allotted for you s ana (sic) for your
trooper kasi whether we like it or not, we have to give this
agencies (sic) to make our work easier according to Val. The funds with
Mickey are already accounted in the quit claims (sic) as
attorneys (sic) fees. I hope he will be able to send it so we have funds to
work with.
As for your kids, legally they can stay here but recently, it is the children
who (sic) the irate clients and government officials harass and kidnap to
make the individuals they want to come out from hiding (sic). I do not
want that to happen. Things will be really easier on my side.

Please do not worry. Give me 3 months to make it all disappear. But

if you hire Coco, I will give him the free hand to work with your
case.Please trust me. I have never let you down, have I? I told you this
will happen but we are ready and prepared. The clients who received the
phones will stand by you and make you the hero in this scandal. I will
stand by you always. This is my expertise. TRUST me! That is all. You
have an angel on your side. Always pray though to the best legal mind
up there. You will be ok!

Candy[22]

On July 4, 2003, contrary to respondents advice, complainant returned to the

country. On the eve of his departure from the United States, respondent called up
complainant and conveniently informed him that he has been cleared by the NBI
and the BID.[23]

About a month thereafter, respondent personally met with complainant and

his wife and told them that she has already accumulated P12,500,000.00 as
attorneys fees and was willing to give P2,000,000.00 to complainant in
appreciation for his help. Respondent allegedly told complainant that without his
help, she would not have earned such amount. Overwhelmed and relieved,
complainant accepted respondents offer but respondent, later on, changed her mind
and told complainant that she would instead invest the P2,000,000.00 on his behalf
in a business venture. Complainant declined and explained to respondent that he
and his family needed the money instead to cover their daily expenses as he was no
longer employed. Respondent allegedly agreed, but she failed to fulfill her
promise.[24]

Respondent even publicly announced in their religious organization that she

was able to help settle the ten (10) warrants of arrest and hold departure order
issued against complainant and narrated how she was able to defend complainant
in the said cases.[25]

By April 2004, however, complainant noticed that respondent was evading

him. Respondent would either refuse to return complainants call or would abruptly
terminate their telephone conversation, citing several reasons. This went on for
several months.[26] In one instance, when complainant asked respondent for an
update on the collection of Benefons obligation to Precedent which respondent had
previously taken charge of, respondent arrogantly answered that she was very busy
and that she would read Benefons letter only when she found time to do so.

On November 9, 2004, fed up and dismayed with respondents arrogance and

evasiveness, complainant wrote respondent a letter formally asking for a full
accounting of all the money, documents and properties given to the latter.
[27]
Respondent rendered an accounting through a letter dated December 20, 2004.
[28]
When complainant found respondents explanation to be inadequate, he wrote a
latter expressing his confusion about the accounting.[29] Complainant repeated his
request for an audited financial report of all the properties turned over to her;
otherwise, he will be constrained to file the appropriate case against respondent.
[30]
Respondent replied,[31] explaining that all the properties and cash turned over to
her by complainant had been returned to her clients who had money claims against
Multitel. In exchange for this, she said that she was able to secure quitclaim
documents clearing complainant from any liability.[32] Still unsatisfied, complainant
decided to file an affidavit-complaint[33] against respondent before the Commission
on Bar Discipline of the Integrated Bar of the Philippines (IBP) seeking the
disbarment of respondent.

In her Answer-Affidavit,[34] respondent vehemently denied being the lawyer

for Precedent. She maintained that no formal engagement was executed between
her and complainant. She claimed that she merely helped complainant by
providing him with legal advice and assistance because she personally knew him,
since they both belonged to the same religious organization.[35]

Respondent insisted that she represented the group of investors of Multitel

and that she merely mediated in the settlement of the claims her clients had against
the complainant. She also averred that the results of the settlement between both
parties were fully documented and accounted for.[36] Respondent believes that her
act in helping complainant resolve his legal problem did not violate any ethical
standard and was, in fact, in accord with Rule 2.02 of the Code of Professional
Responsibility.[37]

To bolster her claim that the complaint was without basis, respondent noted
that a complaint for estafa was also filed against her by complainant before the
Office of the City Prosecutor in Quezon City citing the same grounds. The
complaint was, however, dismissed by Assistant City Prosecutor Josephus Joannes
H. Asis for insufficiency of evidence.[38]Respondent argued that on this basis alone,
the administrative case must also be dismissed.

In her Position Paper,[39] respondent also questioned the admissibility of the

electronic evidence submitted by complainant to the IBPs Commission on Bar
Discipline. Respondent maintained that the e-mail and the text messages allegedly
sent by respondent to complainant were of doubtful authenticity and should be
excluded as evidence for failure to conform to the Rules on Electronic Evidence
(A.M. No. 01-7-01-SC).

After due hearing, IBP Investigating Commissioner Patrick M. Velez issued

a Report and Recommendation[40] finding that a lawyer-client relationship was
established between respondent and complainant despite the absence of a written
contract. The Investigating Commissioner also declared that respondent violated
her duty to be candid, fair and loyal to her client when she allowed herself to
represent conflicting interests and failed to render a full accounting of all the cash
and properties entrusted to her. Based on these grounds, the Investigating
Commissioner recommended her disbarment.

Respondent moved for reconsideration,[41] but the IBP Board of Governors

issued a Recommendation[42] denying the motion and adopting the findings of the
Investigating Commissioner.

The case now comes before this Court for final action.

We affirm the findings of the IBP.

Rule 15.03, Canon 15 of the Code of Professional responsibility provides:

Rule 15.03 A lawyer shall not represent conflicting interests except by

written consent of all concerned given after full disclosure of the facts.

This prohibition is founded on principles of public policy, good taste [43] and,
more importantly, upon necessity. In the course of a lawyer-client relationship, the
lawyer learns all the facts connected with the clients case, including its weak and
strong points. Such knowledge must be considered sacred and guarded with care.
No opportunity must be given to him to take advantage of his client; for if the
confidence is abused, the profession will suffer by the loss thereof. [44] It behooves
lawyers 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 paramount in the
administration of justice.[45] It is for these reasons that we have described the
attorney-client relationship as one of trust and confidence of the highest degree.[46]

Respondent must have known that her act of constantly and actively
communicating with complainant, who, at that time, was beleaguered with
demands from investors of Multitel, eventually led to the establishment of a
lawyer-client relationship. Respondent cannot shield herself from the inevitable
consequences of her actions by simply saying that the assistance she rendered to
complainant was only in the form of friendly accommodations, [47] precisely
because at the time she was giving assistance to complainant, she was already
privy to the cause of the opposing parties who had been referred to her by the SEC.
[48]

Respondent also tries to disprove the existence of such relationship by

arguing that no written contract for the engagement of her services was ever forged
between her and complainant.[49] This argument all the more reveals respondents
patent ignorance of fundamental laws on contracts and of basic ethical standards
expected from an advocate of justice. The IBP was correct when it said:

The absence of a written contract will not preclude the finding

that there was a professional relationship between the
parties. Documentary formalism is not an essential element in the
employment of an attorney; the contract may be express or
implied. To establish the relation, it is sufficient that the advice and
assistance of an attorney is sought and received in any matter pertinent to
his profession.[50](Emphasis supplied.)

Given the situation, the most decent and ethical thing which respondent
should have done was either to advise complainant to engage the services of
another lawyer since she was already representing the opposing parties, or to desist
from acting as representative of Multitel investors and stand as counsel for
complainant. She cannot be permitted to do both because that would amount to
double-dealing and violate our ethical rules on conflict of interest.

In Hornilla v. Atty. Salunat,[51] we explained the concept of conflict of

interest, thus:

There is conflict of interest when a lawyer represents inconsistent

interests of two or more opposing parties. The test is whether or not in
 behalf of one client, it is the lawyers duty to fight for an issue or claim,
but it is his duty to oppose it for the other client. In brief, if he argues for
one client, this argument will be opposed by him when he argues for the
other client. This 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. Also, there is conflict of
interests if the acceptance of the new retainer will require the attorney to
perform an act which will injuriously affect his first client in any matter
in which he represents him and also whether he will be called upon in his
new relation to use against his first client any knowledge acquired
through their connection. Another test of the inconsistency of interests is
whether the acceptance of a new relation will prevent an attorney from
the full discharge of his duty of undivided fidelity and loyalty to his
client or invite suspicion of unfaithfulness or double dealing in the
performance thereof.[52]

Indubitably, respondent took advantage of complainants hapless situation,

initially, by giving him legal advice and, later on, by soliciting money and
properties from him. Thereafter, respondent impressed upon complainant that she
had acted with utmost sincerity in helping him divest all the properties entrusted to
him in order to absolve him from any liability. But simultaneously, she was also
doing the same thing to impress upon her clients, the party claimants against
Multitel, that she was doing everything to reclaim the money they invested with
Multitel. Respondent herself admitted to complainant that without the latters help,
she would not have been able to earn as much and that, as a token of her
appreciation, she was willing to share some of her earnings with complainant.
[53]
Clearly, respondents act is shocking, as it not only violated Rule 9.02, Canon 9
of the Code of Professional Responsibility,[54] but also toyed with decency and
good taste.
Respondent even had the temerity to boast that no Multitel client had ever
complained of respondents unethical behavior.[55] This remark indubitably displays
respondents gross ignorance of disciplinary procedure in the Bar. As a member of
the Bar, she is expected to know that proceedings for disciplinary actions against
any lawyer may be initiated and prosecuted by the IBP Board of Governors, motu
proprio or upon referral by this Court or by the Board of Officers of an IBP
Chapter[56] even if no private individual files any administrative complaint.

Upon review, we find no cogent reason to disturb the findings and

recommendations of the IBP Investigating Commissioner, as adopted by the IBP
Board of Governors, on the admissibility of the electronic evidence submitted by
complainant. We, accordingly, adopt the same in toto.

Finally, respondent argues that the recommendation of the IBP Board of

Governors to disbar her on the grounds of deceit, malpractice and other gross
misconduct, aside from violation of the Lawyers Oath, has been rendered moot and
academic by voluntary termination of her IBP membership, allegedly after she had
been placed under the Department of Justices Witness Protection Program.
[57]
Convenient as it may be for respondent to sever her membership in the
integrated bar, this Court cannot allow her to do so without resolving first this
administrative case against her.

The resolution of the administrative case filed against respondent is

necessary in order to determine the degree of her culpability and liability to
complainant. The case may not be dismissed or rendered moot and academic by
respondents act of voluntarily terminating her membership in the Bar regardless of
the reason for doing so. This is because membership in the Bar is a privilege
burdened with conditions.[58] The conduct of a lawyer may make him or her civilly,
if not criminally, liable to his client or to third parties, and such liability may be
conveniently avoided if this Court were to allow voluntary termination of
membership. Hence, to terminate ones membership in the Bar voluntarily, it is
imperative that the lawyer first prove that the voluntary withdrawal of membership
is not a ploy to further prejudice the public or to evade liability. No such proof
exists in the present case.

WHEREFORE, respondent Attorney Maricel Pascual-Lopez is

hereby DISBARRED for representing conflicting interests and for engaging in
unlawful, dishonest and deceitful conduct in violation of her Lawyers Oath and the
Code of Professional Responsibility.

Let a copy of this Decision be entered in the respondents record as a member

of the Bar, and notice of the same be served on the Integrated Bar of
the Philippines, and on the Office of the Court Administrator for circulation to all
courts in the country.

SO ORDERED.
 A.C. No. 10687, July 22, 2015

MABINI COLLEGES, INC. REPRESENTED BY MARCEL N. LUKBAN, ALBERTO I. GARCIA, JR., AND
MA. PAMELA ROSSANA A. APUYA, Complainant, v. ATTY. JOSE D. PAJARILLO, Respondent.

DECISION

VILLARAMA, JR., J.:

Before us is a verified complaint1 for disbarment against respondent Atty. Jose D. Pajarillo for allegedly
violating Canon 15, Rule 15.03 of the Code of Professional Responsibility which prohibits a lawyer from
representing conflicting interests and Canon 15 of the same Code which enjoins a lawyer to observe candor,
fairness, and loyalty in all his dealings and transactions with clients.

The salient facts of the case follow: ChanRoblesVirtualawlibrary

In 1995, the complainant, Mabini Colleges, Inc., had a Board of Trustees which was divided into two
opposing factions. The first faction, called the Adeva Group, was composed of Romulo M. Adeva, Lydia E.
Cacawa, Eleodoro D. Bicierro, and Pilar I. Andrade. The other faction, called the Lukban Group, was
composed of Justo B. Lukban, Luz I. Garcia, Alice I. Adeva, and Marcel N. Lukban.

In 1996, the complainant appointed the respondent as its corporate secretary with a total monthly
compensation and honorarium of P6,000.

On March 29, 1999, the Adeva Group issued an unnumbered Board Resolution which authorized Pilar I.
Andrade, the Executive Vice President and Treasurer of the complainant at that time, and Lydia E. Cacawa,
the Vice President for Administration and Finance, to apply for a loan with the Rural Bank of Paracale (RBP),
Daet Branch, Camarines Norte in favor of the complainant.

On May 12, 1999, the Lukban Group sent a letter to RBP to oppose the loan application because the Adeva
Group appointed Librado Guerra and Cesar Echano, who were allegedly not registered as stockholders in the
Stock and Transfer Book of the complainant, as members of the Board of Trustees. The Lukban Group also
alleged that the complainant was having financial difficulties.

On May 14, 1999, respondent sent a letter to RBP to assure the latter of complainant's financial capacity to
pay the loan.

On July 13, 1999, RBP granted the loan application in the amount of P200,000 which was secured by a Real
Estate Mortgage over the properties of the complainant.

On September 27, 1999, the Securities and Exchange Commission (SEC) issued an Order which nullified the
appointment of Librado Guerra and Cesar Echano by the Adeva Group as members of the Board of Trustees
of the complainant. As a result, complainant sent a letter to RBP to inform the latter of the SEC Order.

On October 19, 1999, RBP sent a letter to the complainant acknowledging receipt of the SEC Order and
informing the latter that the SEC Order was referred to RBP's legal counsel, herein respondent. The
complainant alleged that it was only upon receipt of such letter that it became aware that respondent is also
the legal counsel of RBP.

On April 18, 2000, complainant and RBP increased the loan to P400,000.

On April 23, 2002, RBP moved to foreclose the Real Estate Mortgage.

On May 28, 2002, complainant filed a complaint for Annulment of Mortgage with a Prayer for Preliminary
Injunction against RBP. Respondent entered his appearance as counsel for RBP.

On September 2, 2011, complainant filed the present complaint for disbarment against the respondent for
allegedly representing conflicting interests and for failing to exhibit candor, fairness, and loyalty.

Respondent raised three defenses against the complaint for disbarment. First, respondent argued that
Marcel N. Lukban, Alberto I. Garcia Jr., and Ma. Pamela Rossana Apuya cannot represent the complainant in
this disbarment case because they were not duly authorized by the Board of Directors to file the complaint.
Second, respondent claimed that he is not covered by the prohibition on conflict of interest which applies
only to the legal counsel of complainant. Respondent argued that he merely served as the corporate
secretary of complainant and did not serve as its legal counsel. Third, respondent argued that there was no
conflict of interest when he represented RBP in the case for annulment of mortgage because all the
documents and information related to the loan transaction between RBP and the complainant were public
records. Thus, respondent claimed that he could not have taken advantage of his position as the mere
corporate secretary of the complainant.

On February 14, 2013, the Investigating Commissioner issued a Report and Recommendation 2 finding
respondent guilty of representing conflicting interests and recommending that respondent be suspended
from the practice of law for at least one year. The Investigating Commissioner noted that respondent
appeared for RBP in the case for annulment of mortgage filed by his former client, the complainant herein.
The Investigating Commissioner cited cash vouchers3 from 1994 to 2001 showing that respondent was paid
by complainant for his retained legal services. According to the Investigating Commissioner, these vouchers
debunk respondent's claim that the complainant merely appointed him as its corporate secretary. The
Investigating Commissioner also held that the personality of complainant's representatives to file this
administrative case is immaterial since proceedings for disbarment, suspension or discipline of attorneys
may be taken by the Supreme Court motu proprio or by the Integrated Bar of the Philippines (IBP) upon the
verified complaint of any person.

On June 21, 2013, the Board of Governors of the IBP issued Resolution No. XX-2013-770 4 which affirmed
the findings of the Investigating Commissioner and imposed a penalty of suspension from the practice of law
for one year against respondent.

On May 3, 2014, the Board of Governors of the IBP issued Resolution No. XXI-2014-290 5 which denied the
motion for reconsideration filed by respondent.

The issue in this case is whether respondent is guilty of representing conflicting interests when he entered
his appearance as counsel for RBP in the case for annulment of mortgage filed by complainant against RBP.

We rule in the affirmative. We thus affirm the Report and Recommendation of the Investigating
Commissioner, and Resolution Nos. XX-2013-770 and XXI-2014-290 of the IBP Board of Governors. Indeed,
respondent represented conflicting interests in violation of Canon 15, Rule 15.03 of the Code of Professional
Responsibility which provides that "[a] lawyer shall not represent conflicting interests except by written
consent of all concerned given after a full disclosure of the facts."

This rule prohibits a lawyer from representing new clients whose interests oppose those of a former client in
any manner, whether or not they are parties in the same action or on totally unrelated cases. 6Based on the
principles of public policy and good taste, this prohibition on representing conflicting interests enjoins
lawyers not only to keep inviolate the client's 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.7 In Maturan v. Gonzales8 we further explained the
rationale for the prohibition: chanRoblesvirtualLa wlibrary

The reason for the prohibition is found in the relation of attorney and client, which is one of trust and
confidence of the highest degree. A lawyer becomes familiar with all the facts connected with his client's
case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge
must be considered sacred and guarded with care. No opportunity must be given him to take advantage of
the client's secrets. A lawyer must have the fullest confidence of his client. For if the confidence is abused,
the profession will suffer by the loss thereof.
Meanwhile, in Hornilla v. Salunat,9 we explained the test to determine the existence of conflict of
interest:chanRoblesvirtualLa wlibrary

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties.
The test is "whether or not in behalf of one client, it is the lawyer's duty to fight for an issue or claim, but it
is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be
opposed by him when he argues for the other client." This 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. Also, there is conflict of interests if the acceptance of the new retainer will require the attorney to
perform an act which will injuriously affect his first client in any matter in which he represents him and also
whether he will be called upon in his new relation to use against his first client any knowledge acquired
through their connection. Another test of the inconsistency of interests is whether the acceptance of a new
relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his
client or invite suspicion of unfaithfulness or double dealing in the performance thereof.
The rule prohibiting conflict of interest applies to situations wherein a lawyer would be representing a client
whose interest is directly adverse to any of his present or former clients. 10 It also applies when the lawyer
represents a client against a former client in a controversy that is related, directly or indirectly, to the
subject matter of the previous litigation in which he appeared for the former client. 11 This rule applies
regardless of the degree of adverse interests.12 What a lawyer owes his former client is to maintain inviolate
the client's confidence or to refrain from doing anything which will injuriously affect him in any matter in
which he previously represented him.13 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.14 chanroble slaw

Applying the foregoing to the case at bar, we find that respondent represented conflicting interests when he
served as counsel for RBP in the case for annulment of mortgage filed by the complainant, respondent's
former client, against RBP.

The finding of the Investigating Commissioner that respondent was compensated by complainant for his
retained legal services is supported by the evidence on record, the cash vouchers from 1994 to 2001.
Clearly, complainant was respondent's former client. And respondent appeared as counsel of RBP in a case
filed by his former client against RBP. This makes respondent guilty of representing conflicting interests since
respondent failed to show any written consent of all concerned (particularly the complainant) given after a
full disclosure of the facts representing conflicting interests. 15 chanrobleslaw

We also note that the respondent acted for the complainant's interest on the loan transaction between RBP
and the complainant when he sent a letter dated May 14, 1999 to RBP to assure the latter of the financial
capacity of the complainant to pay the loan. But as counsel for RBP in the case for annulment of mortgage,
he clearly acted against the interest of the complainant, his former client.
Contrary to the respondent's claim, it is of no moment that all the documents and information in connection
with the loan transaction between RBP and the complainant were public records. In Hilado v. David,16 we laid
down the following doctrinal pronouncements: chanRoble svirtualLawlibrary

The principle which forbids an attorney who has been engaged to represent a client from thereafter
appearing on behalf of the client's opponent applies equally even though during the continuance of the
employment nothing of a confidential nature was revealed to the attorney by the client. (Christian vs.
Waialua Agricultural Co., 30 Hawaii, 553, Footnote 7, C. J. S., 828.)

Where it appeared that an attorney, representing one party in litigation, had formerly represented the
adverse party with respect to the same matter involved in the litigation, the court need not inquire as to
how much knowledge the attorney acquired from his former client during that relationship, before refusing
to permit the attorney to represent the adverse party. (Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.)

In order that a court may prevent an attorney from appearing against a former client, it is unnecessary that
the court ascertain in detail the extent to which the former client's affairs might have a bearing on the
matters involved in the subsequent litigation on the attorney's knowledge thereof. (Boyd vs. Second Judicial
Dist. Court, 274 P., 7; 51 Nev., 264.)

This rule has been so strictly enforced that it has been held that an attorney, on terminating his
employment, cannot thereafter act as counsel against his client in the same general matter, even though,
while acting for his former client, he acquired no knowledge which could operate to his client's disadvantage
in the subsequent adverse employment. (Pierce vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201, Ann. Cas.,
1912S, 181.)
Thus, the nature and extent of the information received by the lawyer from his client is irrelevant in
determining the existence of conflict of interest.

Finally, we agree with the Investigating Commissioner that a complaint for disbarment is imbued with public
interest which allows for a liberal rule on legal standing. Under Section 1, Rule 139-B of the Rules of Court,
"[proceedings for the disbarment, suspension or discipline of attorneys may be taken by the Supreme
Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint
of any person." Thus, in the present case, we find that Marcel N. Lukban, Alberto I. Garcia Jr., and Ma.
Pamela Rossana A. Apuya can institute the complaint for disbarment even without authority from the Board
of Directors of the complainant.

WHEREFORE, premises considered, Resolution No. XX-2013-770 and Resolution No. XXI-2014-290 of the
IBP Board of Governors imposing a penalty of suspension from the practice of law for one year against
respondent Atty. Jose D. Pajarillo are hereby AFFIRMED.

SO ORDERED. cralawla wlibrary

A.C. No. 1359 October 17, 1991

GENEROSA BUTED and BENITO BOLISAY, petitioners,

vs.
ATTY. HAROLD M. HERNANDO, respondent.

Jorge A. Dolorfino for petitioners.

RESOLUTION

PER CURIAM:p

On 22 August 1974, spouses Generosa Buted and Benito Bolisay filed an administrative complaint
for malpractice against respondent Atty. Harold M. Hernando, charging the latter with having
wantonly abused professional secrets or information obtained by him as their counsel.

After respondent Hernando filed his Answer on 25 June 1974, the Court, in a resolution dated 4
October 1974 referred the complaint to the Solicitor-General for investigation, report and
recommendation.

On 10 February 1975, complainants presented a Joint Affidavit of Desistance. 1

On 24 October 1975, the Solicitor-General conducted a hearing where respondent took the witness
stand on his own behalf.

The record of the case shows the following background facts:

In an action for partition instituted by Generosa as compulsory heir of the deceased Teofilo Buted,
respondent was counsel for Luciana Abadilla and a certain Angela Buted. Involved in said partition
case was a parcel of land Identified as Lot 9439-B. Respondent ultimately succeeded in defending
Luciana Abadilla's claim of exclusive ownership over Lot 9439-B. When Luciana died, respondent
withdrew his appearance from that partition case.

It appears that Luciana Abadilla sold the lot to Benito Bolisay and a new Transfer Certificate of Title
over the lot was issued in the name of complainant spouses.

When an action for specific performance was lodged by a couple named Luis Sy and Elena Sy
against Benito Bolisay as one of the defendants, 2 the latter retained the services of respondent Atty. Hernando however
claims that he rendered his services to Benito Bolisay free of charge. Subject of this case was a contract of lease executed by Benito's co-
defendant therein, Enrique Buted, over a house standing on a portion of Lot No. 9439-B. It appears that the Sy's were claiming that the lease
extended to the aforementioned lot. Benito was then asserting ownership over the realty by virtue of a Deed of Sale executed by Luciana
Abadilla in his favor. Eventually, the Sy's were ordered to vacate the house subject of the lease. Respondent avers that the relationship
between himself and Benito Bolisay as regards this case was terminated on 4 December 1969. 3

On 23 February 1974, respondent Hernando, without the consent of the heirs of Luciana Abadilla
and complainant spouses, filed a petition on behalf of the heirs of Carlos, Dionisia and Francisco all
surnamed Abadilla, seeking the cancellation of the Transfer Certificate of Title (TCT) of complainant
spouses over the lot. Carlos, Dionisia and Francisco were Luciana's registered co-owners in the
original certificate of title covering Lot No. 9439-B. 4 At the hearing, respondent Hernando testified that if the petition for
cancellation of TCT was granted, Lot 9439-B would no longer be owned by complainant spouses but would be owned in common by all the
heirs of Luciana Abadilla. 5

Complainant spouses, upon learning of respondent's appearance against them in the cadastral
proceeding, manifested their disapproval thereof in a letter dated 30 July 1974. 6 Respondent however,
pursued the case until it was eventually dismissed by the trial court on 2 September 1974 on the ground of prescription. 7
At the hearing before the Office of the Solicitor General and in his Answer, respondent Hernando
admitted his involvement in the cadastral case as counsel for the Abadillas but denied having seen
or taken hold of the controversial Transfer Certificate of Title, and having availed himself of any
confidential information relating to Lot 9439-B.

In its Report and Recommendation dated 29 March 1990, the Solicitor General recommends that
respondent be suspended from the practice of law for three (3) months for violation of the Canons of
Professional Ethics by representing clients with conflicting interests, and filed before this Court the
corresponding Complaint 8 dated 30 March 1990.

The issue raised in this proceeding is: whether or not respondent Hernando had a conflict of
interests under the circumstances described above.

The Canons of Professional Ethics, the then prevailing parameters of behavior of members of the
bar, defines a conflict of interests situation in the following manner:

6. Adverse influence and conflicting interests.

xxx xxx xxx

It is unprofessional to represent conflicting interests, except by express consent of all

concerned given after a full disclosure of the facts. Within the meaning of this
canon, a lawyer represents conflicting interests when, in behalf of one client, it is his
duty to contend for that which duty to another client requires him to oppose.

The obligation to represent the client with undivided fidelity and not to divulge his
secrets or confidence forbids also the subsequent acceptance of retainers or
employment from others in matters adversely affecting any interest of the client with
respect to which confidence has been reposed. (Emphasissupplied)

Though as regards the first and second cases handled by respondent, no conflict of interest existed,
the same cannot be said with respect to the action for specific performance and the cadastral
proceeding. By respondent's own admission, he defended the right of ownership over Lot 9439-B of
complainant Benito Bolisay in the action for specific performance. He assailed this same right of
ownership when he subsequently filed a petition for cancellation of complainants' Transfer Certificate
of Title over that same lot. Respondent Hernando was in a conflict of interest situation.

It is clear from the above-quoted portion of the Canons of Professional Ethics that in cases where a
conflict of interests may exist, full disclosure of the facts and express consent of all the parties
concerned are necessary. 9 The present Code of Professional Responsibility is stricter on this matter considering that consent of
the parties is now required to be in written form. 10 In the case at bar, such consent was wanting.

Respondent persistently argues that contrary to the claims of complainant spouses, he had never
seen nor taken hold of the Transfer Certificate of Title covering Lot No. 9439-B nor obtained any
confidential information in handling the action for specific performance. 11 The contention of respondent is, in
effect, that because complainant has not clearly shown that respondent had obtained any confidential information from Benito Bolisay while
representing the latter in the action for specific performance, respondent cannot be penalized for representing conflicting interests. That is
not the rule in this jurisdiction. The rule here is, rather, that the mere fact that respondent had acted as counsel for Benito Bolisay in the
action for specific performance should have precluded respondent from acting or appearing as counsel for the other side in the subsequent
petition for cancellation of the Transfer Certificate of Title of the spouses Generosa and Benito Bolisay. There is no necessity for proving the
actual transmission of confidential information to an attorney in the course of his employment by his first client in order that he may be
precluded from accepting employment by the second or subsequent client where there are conflicting interests between the first and the
subsequent clients. The reason for this rule was set out by the Court in Hilado v. David12 in the following terms:

Communications between attorney and client are, in a great number of litigations, a

complicated affair, consisting of entangled relevant and irrelevant, secret and well
known facts. In the complexity of what is said in the course of the dealings between
an attorney and a client, inquiry of the nature suggested would lead to the revelation,
in advance of the trial, of other matters that might only further prejudice the
 complainant's cause. And the theory would be productive of other unsalutary
results. To make the passing of confidential communication a condition precedent;
i.e., to make the employment conditioned on the scope and character of the
knowledge acquired by an attorney in determining his right to change sides, would
not enhance the freedom of litigants, which is to be sedulously fostered, to consult
with lawyers upon what they believe are their rights in litigation. The condition would
of necessity call for an investigation of what information the attorney has received
and in what way it is or it is not in conflict with his new position. Litigants would be in
consequence be wary in going to an attorney, lest by an unfortunate turn of the
proceeding, if an investigation be held, the court should accept the attorney's
inaccurate version of the facts that came to him.

Hence the necessity of setting down the existence of the bare relationship of
attorney and client as the yardstick for testing incompatibility of interests. This stern
rule is designed not alone to prevent the dishonest practitioner from fraudulent
conduct, but as well to protect the honest lawyer from unfoundedsuspicion of
unprofessional practice. (Strong vs. Int. Bldg., etc.; Ass'n. 183 III., 97; 47 L.R.A., 792)
It is founded on principles of public policy, on good taste. As has been said another
case, the question is not necessarily one of the rights of the parties, but as to
whether the attorney has adhered to proper professional standard. With these
thoughts in mind, it behooves attorneys, like Caesar's wife, not onlyto keep inviolate
the client's confidence, but also to avoid the appearance of treachery and double-
dealing. Only thus can litigants be encouraged to entrust their secrets to their
attorneys which is of paramount importance in the administration of
justice. 13 (Emphasis supplied)

This Court went further in San Jose v. Cruz, 14 where the lawyer was charged with malpractice for having represented a
new client whose interest was opposed to those of his former clients in another case:

The record shows that the respondent offered his services to the Matienzo spouses
knowing that the petitioner had obtained a favorable judgment in the civil case No.
5480 and that his efforts in the subsequent civil case No. 5952 would frustrate said
judgment and render it ineffectual, as has really been the result upon his obtaining
the writ of injunction above-mentioned. Obviously his conduct is unbecoming to an
attorney and cannot be sanctioned by the courts. An attorney owes loyalty to his
client not only in the case in which he has represented him but also after the relation
of attorney and client has terminated and it is not a good practice to permit him
afterwards to defend in another case other persons against his former client under
the pretext that the case is distinct from, and independent of the former
case. 15 (Emphasis supplied)

The appropriate rule has been expressed by Justice Malcolm in the following manner:

An attorney is not permitted, in serving a new client as against a former one, to do

anything which will injuriously affect the former client in any manner in which the
attorney formerly represented him, though the relation of attorney and client has
terminated, and the new employment is in a different case; nor can the attorney use
against his former client any knowledge or information gained through their former
connection. 16 (Emphasis supplied)

The absence of monetary consideration does not exempt the lawyer from complying with the
prohibition against pursuing cases where a conflict of interest exists. The prohibition attaches from
the moment the attorney-client relationship is established and extends beyond the duration of the
professional relationship.
The Court therefore agrees with the Solicitor-General that respondent Hernando is guilty of violation
of the Canons of Professional Ethics by representing clients with conflicting interests. We believe,
however, that a heavier penaltyis appropriate.

ACCORDINGLY, the Court Resolved to SUSPEND Atty. Harold M. Hernando from the practice of
law for a period of five (5) months, with a WARNING that repetition of the same or similar offense
will warrant a more severe penalty. A copy of this Resolution shall be furnished to all courts and to
the Office of the Bar Confidant and spread on the personal record of respondent.

Fernan, C.J., Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.
CANON 16
A.C. No. 10579, December 10, 2014

ERLINDA FOSTER, Complainant, v. ATTY. JAIME V. AGTANG, Respondent.

DECISION

PER CURIAM:

This refers to the Resolution1 of the Board of Governors (BOG), Integrated Bar of the Philippines (IBP), dated
March 23, 2014, affirming with modification the findings of the Investigating Commissioner, who
recommended the suspension of respondent Atty. Jaime V. Agtang (respondent) from the practice of law for
one (1) year for ethical impropriety and ordered the payment of his unpaid obligations to complainant.

From the records, it appears that the IBP, thru its Commission on Bar Discipline (CBD), received a
complaint2, dated May 31, 2011, filed by Erlinda Foster (complainant) against respondent for unlawful,
dishonest, immoral and deceitful3 acts as a lawyer.

In its July 1, 2011 Order,4 the IBP-CBD directed respondent to file his Answer within 15 days from receipt of
the order. Respondent failed to do so and complainant sent a query as to the status of her complaint. On
October 10, 2011, the Investigating Commissioner issued the Order 5 setting the case for mandatory
conference/hearing on November 16, 2011. It was only on November 11, 2011, or five (5) days before the
scheduled conference when respondent filed his verified Answer.6

During the conference, only the complainant together with her husband appeared. She submitted a set of
documents contained in a folder, copies of which were furnished the respondent. The Investigating
Commissioner7 indicated that the said documents would be reviewed and the parties would be informed if
there was a need for clarificatory questioning; otherwise, the case would be submitted for resolution based
on the documents on file. The Minutes8 of the mandatory conference showed that respondent arrived at
11:10 oclock in the morning or after the proceeding was terminated.

On December 12, 2011, the complainant filed her Reply to respondents Answer.

On April 18, 2012, complainant submitted copies of the January 24, 2012 Decisions 9 of the Municipal Trial
Court in Small Claims Case Nos. 2011-0077 and 2011-0079, ordering respondent [defendant therein] to pay
complainant and her husband the sum of P100,000.00 and P22,000.00, respectively, with interest at the
rate of 12% per annum from December 8, 2011 until fully paid, plus cost of suit. 10

Complainants Position

From the records, it appears that complainant was referred to respondent in connection with her legal
problem regarding a deed of absolute sale she entered into with Tierra Realty, which respondent had
notarized. After their discussion, complainant agreed to engage his legal services for the filing of the
appropriate case in court, for which they signed a contract. Complainant paid respondent P20,000.00 as
acceptance fee and P5,000.00 for incidental expenses.11

On September 28, 2009, respondent wrote a letter12 to Tropical Villas Subdivision in relation to the legal
problem referred by complainant. He then visited the latter in her home and asked for a loan of
P100,000.00, payable in sixty (60) days, for the repair of his car. Complainant, having trust and confidence
on respondent being her lawyer, agreed to lend the amount without interest. A promissory note 13 evidenced
the loan.

In November 2009, complainant became aware that Tierra Realty was attempting to transfer to its name a
lot she had previously purchased. She referred the matter to respondent who recommended the immediate
filing of a case for reformation of contract with damages. On November 8, 2009, respondent requested and
thereafter received from complainant the amount of P150,000.00, as filing fee. 14 When asked about the
exorbitant amount, respondent cited the high value of the land and the sheriffs travel expenses and
accommodations in Manila, for the service of the summons to the defendant corporation. Later, complainant
confirmed that the fees paid for the filing of Civil Case No. 14791-65, entitled Erlinda Foster v. Tierra Realty
and Development Corporation, only amounted to P22,410.00 per trial court records.15

During a conversation with the Registrar of Deeds, complainant also discovered that respondent was the one
who notarized the document being questioned in the civil case she filed. When asked about this, respondent
merely replied that he would take a collaborating counsel to handle complainants case. Upon reading a copy
of the complaint filed by respondent with the trial court, complainant noticed that: 1] the major differences
in the documents issued by Tierra Realty were not alleged; 2] the contract to buy and sell and the deed of
conditional sale were not attached thereto; 3] the complaint discussed the method of payment which was
not the point of contention in the case; and 4] the very anomalies she complained of were not mentioned.
Respondent, however, assured her that those matters could be brought up during the hearings.

On April 23, 2010, respondent wrote to complainant, requesting that the latter extend to him the amount of
P70,000.00 or P50,000.00 in the moment of urgency or emergency.16 Complainant obliged the request and
gave respondent the sum of P22,000.00.
On August 31, 2010, respondent came to complainants house and demanded the sum of P50,000.00,
purportedly to be given to the judge in exchange for a favorable ruling. Complainant expressed her
misgivings on this proposition but she eventually gave the amount of P25,000.00 which was covered by a
receipt,17 stating that it is understood that the balance of P25,000.00 shall be paid later after favorable
judgment for plaintiff Erlinda Foster. On November 2, 2010, respondent insisted that the remaining amount
be given by complainant prior to the next hearing of the case, because the judge was allegedly asking for
the balance. Yet again, complainant handed to respondent the amount of P25,000.00. 18

On September 29, 2010, complainants case was dismissed. Not having been notified by respondent,
complainant learned of the dismissal on December 14, 2010, when she personally checked the status of the
case with the court. She went to the office of respondent, but he was not there. Instead, one of the office
staff gave her a copy of the order of dismissal.

On December 15, 2010, respondent visited complainant and gave her a copy of the motion for
reconsideration. On January 15, 2011, complainant went to see respondent and requested him to prepare a
reply to the comment filed by Tierra Realty on the motion for reconsideration; to include additional facts
because the Land Registration Authority would not accept the documents unless these were amended; and
to make the additional averment that the defendant was using false documents.

On January 18, 2011, respondents driver delivered to complainant a copy of the reply with a message from
him that the matters she requested to be included were mentioned therein. Upon reading the same,
however, complainant discovered that these matters were not so included. On the same occasion, the driver
also asked for P2,500.00 on respondents directive for the reimbursement of the value of a bottle of wine
given to the judge as a present. Complainant was also told that oral arguments on the case had been set the
following month.19

On February 2, 2011, complainant decided to terminate the services of respondent as her counsel and wrote
him a letter of termination,20 after her friend gave her copies of documents showing that respondent had
been acquainted with Tierra Realty since December 2007. Subsequently, complainant wrote to respondent,
requesting him to pay her the amounts he received from her less the contract fee and the actual cost of the
filing fees. Respondent never replied.

Respondents Position

In his Answer,21 respondent alleged that he was 72 years old and had been engaged in the practice of law
since March 1972, and was President of the IBP Ilocos Norte Chapter from 1998 to 1999. He admitted the
fact that he notarized the Deed of Absolute Sale subject of complainants case, but he qualified that he was
not paid his notarial fees therefor. He likewise admitted acting as counsel for complainant for which he
claimed to have received P10,000.00 as acceptance fee and P5,000.00 for incidental fees. Anent the loan of
P100,000.00, respondent averred that it was complainant, at the behest of her husband, who willingly
offered the amount to him for his patience in visiting them at home and for his services. The transaction was
declared as no loan and he was told not to worry about its payment. As regards the amount of
P150,000.00 he received for filing fees, respondent claimed that the said amount was suggested by the
complainant herself who was persistent in covering the incidental expenses in the handling of the case. He
denied having said that the sheriffs of the court would need the money for their hotel accommodations.
Complainants husband approved of the amount. In the same vein, respondent denied having asked for a
loan of P50,000.00 and having received P22,000.00 from complainant. He also denied having told her that
the case would be discussed with the judge who would rule in their favor at the very next hearing. Instead,
it was complainant who was bothered by the possibility that the other party would befriend the judge. He
never said that he would personally present a bottle of wine to the judge.

Further, respondent belied the Registrars comment as to his representation of Tierra Realty in the past.
Respondent saw nothing wrong in this situation since complainant was fully aware that another counsel was
assisting him in the handling of cases. Having been fully informed of the nature of her cause of action and
the consequences of the suit, complainant was aware of the applicable law on reformation of contracts.
Finally, by way of counterclaim, respondent demanded just compensation for the services he had rendered
in other cases for the complainant.

Reply of Complainant

In her Reply,22 complainant mainly countered respondents defenses by making reference to the receipts in
her possession, all evidencing that respondent accepted the amounts mentioned in the complaint.
Complainant also emphasized that respondent and Tierra Realty had relations long before she met him.
While respondent was employed as Provincial Legal Officer of the Provincial Government of Ilocos Norte, he
was involved in the preparation of several documents involving Flying V, an oil company owned by Ernest
Villavicencio, who likewise owned Tierra Realty. Complainant insisted that the amount of P100,000.00 she
extended to respondent was never considered as no loan.

On June 26, 2012, complainant furnished the Investigating Commissioner copies of the Resolution, dated
June 20, 2012, issued by the Office of the City Prosecutor of Laoag City, finding probable cause against
respondent for estafa.23

Findings and Recommendation of the IBP

In its July 3, 2012 Report and Recommendation,24 the Investigating Commissioner found respondent guilty
of ethical impropriety and recommended his suspension from the practice of law for one (1) year.

In its September 28, 2013 Resolution, the IBP-BOG adopted and approved with modification the
recommendation of suspension by the Investigating Commissioner and ordered respondent to return to
complainant: 1) his loan of P122,000.00; and 2) the balance of the filing fee amounting to P127,590.00.

Respondent received a copy of the said resolution on January 16, 2014 to which he filed a motion for
reconsideration.25 Complainant filed her opposition thereto, informing the IBP-BOG that an information
charging respondent for estafa had already been filed in court and that a corresponding order for his arrest
had been issued.26

In its March 23, 2014 Resolution, the IBP-BOG denied respondents motion for reconsideration but modified
the penalty of his suspension from the practice of law by reducing it from one (1) year to three (3) months.
Respondent was likewise ordered to return the balance of the filing fee received from complainant
amounting to P127,590.00.

No petition for review was filed with the Court.

The only issue in this case is whether respondent violated the Code of Professional Responsibility (CPR).

The Courts Ruling

The Court sustains the findings and recommendation of the Investigating Commissioner with respect to
respondents violation of Rules 1 and 16 of the CPR. The Court, however, modifies the conclusion on his
alleged violation of Rule 15, on representing conflicting interests. The Court also differs on the penalty.

Rule 1.0, Canon 1 of the CPR, provides that [a] lawyer shall not engage in unlawful, dishonest, immoral or
deceitful conduct. It is well-established that a lawyers conduct is not confined to the performance of his
professional duties. A lawyer may be disciplined for misconduct committed either in his professional or
private capacity. The test is whether his conduct shows him to be wanting in moral character, honesty,
probity, and good demeanor, or whether it renders him unworthy to continue as an officer of the court.27

In this case, respondent is guilty of engaging in dishonest and deceitful conduct, both in his professional and
private capacity. As a lawyer, he clearly misled complainant into believing that the filing fees for her case
were worth more than the prescribed amount in the rules, due to feigned reasons such as the high value of
the land involved and the extra expenses to be incurred by court employees. In other words, he resorted to
overpricing, an act customarily related to depravity and dishonesty. He demanded the amount of
P150,000.00 as filing fee, when in truth, the same amounted only to P22,410.00. His defense that it was
complainant who suggested that amount deserves no iota of credence. For one, it is highly improbable that
complainant, who was then plagued with the rigors of litigation, would propose such amount that would
further burden her financial resources. Assuming that the complainant was more than willing to shell out an
exorbitant amount just to initiate her complaint with the trial court, still, respondent should not have
accepted the excessive amount. As a lawyer, he is not only expected to be knowledgeable in the matter of
filing fees, but he is likewise duty-bound to disclose to his client the actual amount due, consistent with the
values of honesty and good faith expected of all members of the legal profession.

Moreover, the fiduciary nature of the relationship between the counsel and his client imposes on the lawyer
the duty to account for the money or property collected or received for or from his client.28Money entrusted
to a lawyer for a specific purpose but not used for the purpose should be immediately returned. A lawyers
failure to return upon demand the funds held by him on behalf of his client gives rise to the presumption
that he has appropriated the same for his own use in violation of the trust reposed in him by his client. Such
act is a gross violation of general morality as well as of professional ethics. It impairs public confidence in
the legal profession and deserves punishment.29

It is clear that respondent failed to fulfill this duty. As pointed out, he received various amounts from
complainant but he could not account for all of them. Worse, he could not deny the authenticity of the
receipts presented by complainant. Upon demand, he failed to return the excess money from the alleged
filing fees and other expenses. His possession gives rise to the presumption that he has misappropriated it
for his own use to the prejudice of, and in violation of the trust reposed in him by, the client. 30 When a
lawyer receives money from the client for a particular purpose, the lawyer is bound to render an accounting
to the client showing that the money was spent for the intended purpose. Consequently, if the lawyer does
not use the money for the intended purpose, the lawyer must immediately return the money to the client. 31

Somewhat showing a propensity to demand excessive and unwarranted amounts from his client, respondent
displayed a reprehensible conduct when he asked for the amount of P50,000.00 as representation
expenses allegedly for the benefit of the judge handling the case, in exchange for a favorable decision.
Respondent himself signed a receipt showing that he initially took the amount of P 25,000.00 and, worse, he
subsequently demanded and received the other half of the amount at the time the case had already been
dismissed. Undoubtedly, this act is tantamount to gross misconduct that necessarily warrants the supreme
penalty of disbarment. The act of demanding a sum of money from his client, purportedly to be used as a
bribe to ensure a positive outcome of a case, is not only an abuse of his clients trust but an overt act of
undermining the trust and faith of the public in the legal profession and the entire Judiciary. This is the
height of indecency. As officers of the court, lawyers owe their utmost fidelity to public service and the
administration of justice. In no way should a lawyer indulge in any act that would damage the image of
judges, lest the publics perception of the dispensation of justice be overshadowed by iniquitous doubts. The
denial of respondent and his claim that the amount was given gratuitously would not excuse him from any
liability. The absence of proof that the said amount was indeed used as a bribe is of no moment. To tolerate
respondents actuations would seriously erode the publics trust in the courts.

As it turned out, complainants case was dismissed as early as September 29, 2010. At this juncture,
respondent proved himself to be negligent in his duty as he failed to inform his client of the status of the
case, and left the client to personally inquire with the court. Surely, respondent was not only guilty of
misconduct but was also remiss in his duty to his client.

Respondents unbecoming conduct towards complainant did not stop here. Records reveal that he likewise
violated Rule 16.04, Canon 16 of the CPR, which states that [a] lawyer shall not borrow money from his
client unless the clients interests are fully protected by the nature of the case or by independent advice.
Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance
necessary expenses in a legal matter he is handling for the client. In his private capacity, he requested from
his client, not just one, but two loans of considerable amounts. The first time, he visited his client in her
home and borrowed P100,000.00 for the repair of his car; and the next time, he implored her to extend to
him a loan of P70,000.00 or P50,000.00 in the moment of urgency or emergency but was only given
P22,000.00 by complainant. These transactions were evidenced by promissory notes and receipts, the
authenticity of which was never questioned by respondent. These acts were committed by respondent in his
private capacity, seemingly unrelated to his relationship with complainant, but were indubitably acquiesced
to by complainant because of the trust and confidence reposed in him as a lawyer. Nowhere in the records,
particularly in the defenses raised by respondent, was it implied that these loans fell within the exceptions
provided by the rules. The loans of P100,000.00 and P22,000.00 were surely not protected by the nature of
the case or by independent advice. Respondents assertion that the amounts were given to him out of the
liberality of complainant and were, thus, considered as no loan, does not justify his inappropriate behavior.
The acts of requesting and receiving money as loans from his client and thereafter failing to pay the same
are indicative of his lack of integrity and sense of fair dealing. Up to the present, respondent has not yet
paid his obligations to complainant.

Time and again, the Court has consistently held that deliberate failure to pay just debts constitutes gross
misconduct, for which a lawyer may be sanctioned with suspension from the practice of law. Lawyers are
instruments for the administration of justice and vanguards of our legal system. They are expected to
maintain not only legal proficiency, but also a high standard of morality, honesty, integrity and fair dealing so
that the peoples faith and confidence in the judicial system is ensured. They must, at all times, faithfully
perform their duties to society, to the bar, the courts and their clients, which include prompt payment of
financial obligations.32

Verily, when the Code or the Rules speaks of conduct or misconduct, the reference is not confined to
ones behavior exhibited in connection with the performance of the lawyers professional duties, but also
covers any misconduct which, albeit unrelated to the actual practice of his profession, would show him to be
unfit for the office and unworthy of the privileges which his license and the law vest him with. Unfortunately,
respondent must be found guilty of misconduct on both scores.

With respect to respondents alleged representation of conflicting interests, the Court finds it proper to
modify the findings of the Investigating Commissioner who concluded that complainant presented
insufficient evidence of respondents lawyering for the opposing party, Tierra Realty.

Rule 15.03, Canon 15 of the CPR, provides that [a] lawyer shall not represent conflicting interest except by
written consent of all concerned given after a full disclosure of the facts. The relationship between a lawyer
and his/her client should ideally be imbued with the highest level of trust and confidence. This is the
standard of confidentiality that must prevail to promote a full disclosure of the clients most confidential
information to his/her lawyer for an unhampered exchange of information between them. Needless to state,
a client can only entrust confidential information to his/her lawyer based on an expectation from the lawyer
of utmost secrecy and discretion; the lawyer, for his part, is duty-bound to observe candor, fairness and
loyalty in all dealings and transactions with the client. Part of the lawyers duty in this regard is to avoid
representing conflicting interests.33 Thus, even if lucrative fees offered by prospective clients are at stake, a
lawyer must decline professional employment if the same would trigger the violation of the prohibition
against conflict of interest. The only exception provided in the rules is a written consent from all the parties
after full disclosure.

The Court deviates from the findings of the IBP. There is substantial evidence to hold respondent liable for
representing conflicting interests in handling the case of complainant against Tierra Realty, a corporation to
which he had rendered services in the past. The Court cannot ignore the fact that respondent admitted to
having notarized the deed of sale, which was the very document being questioned in complainants case.
While the Investigating Commissioner found that the complaint in Civil Case No. 14791-65 did not question
the validity of the said contract, and that only the intentions of the parties as to some provisions thereof
were challenged, the Court still finds that the purpose for which the proscription was made exists. The Court
cannot brush aside the dissatisfied observations of the complainant as to the allegations lacking in the
complaint against Tierra Realty and the clear admission of respondent that he was the one who notarized
the assailed document. Regardless of whether it was the validity of the entire document or the intention of
the parties as to some of its provisions raised, respondent fell short of prudence in action when he accepted
complainants case, knowing fully that he was involved in the execution of the very transaction under
question. Neither his unpaid notarial fees nor the participation of a collaborating counsel would excuse him
from such indiscretion. It is apparent that respondent was retained by clients who had close dealings with
each other. More significantly, there is no record of any written consent from any of the parties involved.

The representation of conflicting interests is prohibited not only because the relation of attorney and client
is one of trust and confidence of the highest degree, but also because of the principles of public policy and
good taste. An attorney has the duty to deserve the fullest confidence of his client and represent him with
undivided loyalty. Once this confidence is abused or violated the entire profession suffers.34

Penalties and Pecuniary Liabilities

A member of the Bar may be penalized, even disbarred or suspended from his office as an attorney, for
violation of the lawyers oath and/or for breach of the ethics of the legal profession as embodied in the
CPR.35 For the practice of law is a profession, a form of public trust, the performance of which is entrusted
to those who are qualified and who possess good moral character.36 The appropriate penalty for an errant
lawyer depends on the exercise of sound judicial discretion based on the surrounding facts. 37

Under Section 27, Rule 138 of the Revised Rules of Court, a member of the Bar may be disbarred or
suspended on any of the following grounds: (1) deceit; (2) malpractice or other gross misconduct in office;
(3) grossly immoral conduct; (4) conviction of a crime involving moral turpitude; (5) violation of the lawyer's
oath; (6) willful disobedience of any lawful order of a superior court; and (7) willful appearance as an
attorney for a party without authority. A lawyer may be disbarred or suspended for misconduct, whether in
his professional or private capacity, which shows him to be wanting in moral character, honesty, probity and
good demeanor, or unworthy to continue as an officer of the court.

Here, respondent demonstrated not just a negligent disregard of his duties as a lawyer but a wanton
betrayal of the trust of his client and, in general, the public. Accordingly, the Court finds that the suspension
for three (3) months recommended by the IBP-BOG is not sufficient punishment for the unacceptable acts
and omissions of respondent. The acts of the respondent constitute malpractice and gross misconduct in his
office as attorney. His incompetence and appalling indifference to his duty to his client, the courts and
society render him unfit to continue discharging the trust reposed in him as a member of the Bar.

For taking advantage of the unfortunate situation of the complainant, for engaging in dishonest and deceitful
conduct, for maligning the judge and the Judiciary, for undermining the trust and faith of the public in the
legal profession and the entire judiciary, and for representing conflicting interests, respondent deserves no
less than the penalty of disbarment.38

Notably, the Court cannot order respondent to return the money he borrowed from complainant in his
private capacity. In Tria-Samonte v. Obias,39 the Court held that it cannot order the lawyer to return money
to complainant if he or she acted in a private capacity because its findings in administrative cases have no
bearing on liabilities which have no intrinsic link to the lawyers professional engagement. In disciplinary
proceedings against lawyers, the only issue is whether the officer of the court is still fit to be allowed to
continue as a member of the Bar. The only concern of the Court is the determination of respondents
administrative liability. Its findings have no material bearing on other judicial actions which the parties may
choose against each other.

To rule otherwise would in effect deprive respondent of his right to appeal since administrative cases are
filed directly with the Court. Furthermore, the quantum of evidence required in civil cases is different from
the quantum of evidence required in administrative cases. In civil cases, preponderance of evidence is
required. Preponderance of evidence is a phrase which, in the last analysis, means probability of the truth.
It is evidence which is more convincing to the court as worthier of belief than that which is offered in
opposition thereto.40 In administrative cases, only substantial evidence is needed. Substantial evidence,
which is more than a mere scintilla but is such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, would suffice to hold one administratively liable. 41 Furthermore, the Court
has to consider the prescriptive period applicable to civil cases in contrast to administrative cases which are,
as a rule, imprescriptible.42

Thus, the IBP-BOG was correct in ordering respondent to return the amount of P127,590.00 representing
the balance of the filing fees he received from complainant, as this was intimately related to the lawyer-
client relationship between them. Similar to this is the amount of P50,000.00 which respondent received
from complainant, as representation expenses for the handling of the civil case and for the purported
purchase of a bottle of wine for the judge. These were connected to his professional relationship with the
complainant. While respondents deplorable act of requesting the said amount for the benefit of the judge is
stained with mendacity, respondent should be ordered to return the same as it was borne out of their
professional relationship. As to his other obligations, respondent was already adjudged as liable for the
personal loans he contracted with complainant, per the small claims cases filed against him.

All told, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to
account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal
profession.43 The Court likewise aims to ensure the proper and honest administration of justice by purging
the profession of members who, by their misconduct, have proven themselves no longer worthy to be
entrusted with the duties and responsibilities of an attorney.44

WHEREFORE, finding the respondent, Atty. Jaime V. Agtang, GUILTY of gross misconduct in violation of
the Code of Professional Responsibility, the Court hereby DISBARS him from the practice of law
and ORDERS him to pay the complainant, Erlinda Foster, the amounts of P127,590.00, P50,000.00 and
P2,500.00.

Let a copy of this Decision be sent to the Office of the Bar Confidant, the Integrated Bar of the Philippines
and the Office of the Court Administrator to be circulated to all courts.
A.C. No. 5044 December 2, 2013

FELIPE C. DAGALA, Complainant,

vs.
ATTY. JOSE C. QUESADA, JR. and ATTY. AMADO T. ADQUILEN,* Respondents.

RESOLUTION

PERLAS-BERNABE, J.:

For the Courts resolution is an asministrative complaint filed by complainant Felipe C. Dagala
1

(complainant) against respondents Atty. Jose C. Quesada, Jr. (atty. Quesada) and Atty. Amado T.
Adquilen (Atty. Adquilen), charging them for gross negligence in handling his labor complaints.

The facts

On November 8, 1994 complainant, assisted by Atty. Quesada, filed before the National Labor
Relations Commission (NLRC), Regional Arbitration Branch No. 1, San Fernando City, La Union
(NLRC-RAB) Complaint for illegal dismissal, overtime pay, separation pay, damages and attorneys
2

fees against Capitol Allied Trading & Transport (Capitol), and owner and General Manager, Lourdes
Gutierrez, as well as its Personnel Manager, Joseph G. De Jesus, docketed as NLRC Case No.
RAB-I-1??1123-94. The said case was, however, dismissed without prejudice, through an
Order dated December 13, 1994 (December 13, 1994 Order), for failure of complainant and Atty.
3

Quesada to appear during the two (2) scheduled mandatory conference hearings despite due notice.
Thereafter, complainant engaged the services of Atty. Adquilen, a former Labor Arbiter (LA) of the
NLRC-RAB, who re-filed his labor case, re-docketed as NLRC Case No. RAB-I-10-1091-95 (LU). 4

Similarly, the case was dismissed without prejudice on June 28, 1996, this time due to the parties'
failure to submit their respective position papers.
5

Complainant and Atty. Adquilen re-filed the case for a third time on August 27, 1996, docketed as
NLRC Case No. RAB-I-08-1191-96 (LU). 6

During its pendency, the representative of Capitol purportedly offered the amount of P74,000.00 as
settlement of complainant's claim, conditioned on the submission of the latters position paper. 7

Atty. Adquilen, however, failed to submit one, resulting in the dismissal of the complaint "for lack of
interest and failure to prosecute" as stated in an Order dated February 27, 1997 (February 27, 1997
8

Order). Atty. Adquilen and complainant received notice of the said order on March 11, 1997 and
March 24, 1997, respectively. On July 11, 1997, complainant this time assisted by Atty. Imelda L.
9

Picar (Atty. Picar) filed a motion for reconsideration

10

from the February 27, 1997 Order, which was treated as an appeal and transmitted to the NLRC-
National Capital Region (NLRC-NCR). 11

However, the NLRC-NCR dismissed the same in a Resolution dated June 17, 1998 for having been
12

filed out of time, adding that the negligence of counsel binds the client.
13

Due to the foregoing, Atty. Picar sent separate letters dated November 18, 1998 to respondents,
14

informing them that complainant is in the process of pursuing administrative cases against them
before the Court. Nevertheless, as complainant remains open to the possibility of settlement,
respondents were invited to discuss the matter at Atty. Picars office. Only Atty. Quesada responded
to the said letter and subsequently, through a Memorandum of Agreement dated December 5, 1998
15

(December 5, 1998 MoA), undertook to compensate the damages sustained by complainant in

consideration of the non-filing of an administrative complaint against him. Atty. Quesada, however,
reneged on his promise, thus prompting complainant to proceed with the present complaint. 16
In a Resolution dated June 21, 1999, the Court directed respondents to comment on the Complaint
17

within ten (10) days from notice. However, despite notices and the extension granted,
18 19

Atty. Adquilen failed to comply with the directive and the subsequent show-cause
resolutions. Accordingly, a fine in the amount of P500.00 was imposed against him, which he duly
20 21

paid on September 19, 2005. On the other hand, Atty. Quesada, in his Comment, admitted having
22 23

accepted and filed the initial labor case for complainant. He, however, explained that he was unable
to file the required position paper due to complainant's failure to furnish him with the employment
records and other relevant documents. He also claimed that when he was informed of the dismissal
of the case without prejudice, he advised complainant to re-file the case with the assistance of
another lawyer as he had to attend to his duties as Chairman of the Laban ng Demokratikong
Pilipino for the Second District of La Union Province. Anent the December 5, 1998 MoA, Atty.
24

Quesada alleged that he was merely prevailed upon to sign the same for fear of losing his means of
livelihood and license to practice law, and that he had no intention of reneging on his promise to pay.
Nonetheless, despite earnest efforts, he still failed to come up with the agreed-upon amount. 25

In a Resolution dated March 27, 2006, the Court resolved to refer the instant administrative case to
26

the Integrated Bar of the Philippines (IBP) for evaluation, report and recommendation or decision.

The Proceedings Before the IBP

The IBP Commission on Bar Discipline (IBP-CBD) set the case for mandatory conference on August
25, 2006 and required the parties to submit their respective briefs. 27

Complainant was duly represented by his counsel at the hearing, while respondents filed separate
28 29

motions to reset, only to subsequently waive their respective appearances. Atty. Adquilen attributed
the waiver to his medical condition; on the other hand, in a complete turnaround, Atty. Quesada
30

denied the existence of any lawyer-client relationship between him and complainant. 31

On March 25, 2009, Investigating IBP Commissioner Pedro A. Magpayo, Jr. issued a Report and
Recommendation, finding that respondents were grossly negligent in handling complainant's case
32

in violation of Rule 18.03, Canon 18 of the Code of Professional Responsibility (Code). As such, he
recommended that each of them be suspended from the practice of law for a period of one (1) year.
Moreover, Atty. Quesada was directed to comply with his undertaking under the December 5, 1998
MoA to pay the amount of P68,000.00, with legal interest from January 20, 1999 until fully settled;
while Atty. Adquilen was ordered to pay the amount of P6,000.00, representing the difference
between the P74,000.00 settlement offered by Capitol and the above-stated settlement amount, with
legal interest from date of notice of the order of dismissal on March 25, 1997 until fully paid. The
33

IBP Board of Governors adopted and approved the afore-stated report and recommendation in
Resolution No. XX-2011-262 dated November 19, 2011 (November 19, 2011 Resolution), finding the
same to be fully supported by the evidence on record and the applicable laws and rules.
Consequently, it directed respondents to pay complainant the total amount of P74,000.00 within
thirty (30) days from notice.
34

In a Resolution dated September 12, 2012, the Court noted the Notice of the IBPs November 19,
35 36

2011 Resolution, and thereafter sent notices to the parties as well as the IBP-CBD, the Office of the
Bar Confidant and the Public Information Office. However, the notice sent to Atty. Adquilen was
returned unserved with the notation "Return to Sender, Deceased." 37

Thus, in the Resolutions dated February 20, 2013 and June 10, 2013, the IBP was required to
38 39

furnish the Court with the death certificate of Atty. Adquilen.

On August 30, 2013, the IBP filed its compliance, attaching therewith the Certificate of Death of
40 41

Atty. Adquilen which indicates that the latter passed away on June 22, 2008 due to cardiac
arrhythmia. In view of Atty. Adquilen's death prior to the promulgation of this Decision, the Court, 42

bearing in mind the punitive nature of administrative liabilities, hereby dismisses the case against
43

him. Hence, what is left for resolution is the complaint against Atty. Quesada.
The Issue Before the Court

The essential issue in this case is whether or not Atty. Quesada should be held administratively
liable for gross negligence in handling complainants labor case.

The Court's Ruling

The Court concurs with and affirms the findings of the IBP anent Atty. Quesadas administrative
liability, but deems it proper to delete the recommended order for the return of the amount
of P74,000.00. The Court has repeatedly emphasized that the relationship between a lawyer and his
client is one imbued with utmost trust and confidence. In this regard, clients are led to expect that
lawyers would be ever-mindful of their cause and accordingly exercise the required degree of
diligence in handling their affairs. For his part, the lawyer is required to maintain at all times a high
standard of legal proficiency, and to devote his full attention, skill, and competence to the case,
regardless of its importance and whether he accepts it for a fee or for free. 44

He is likewise expected to act with honesty in all his dealings, especially with the courts. 45

These principles are embodied in Rule 1.01 of Canon 1, Rule 10.01 of Canon 10, Canon 17 and
Rule 18.03 of Canon 18 of the Code which respectively read as follows:

CANON 1 A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND
AND PROMOTE RESPECT FOR LAW AND LEGAL PROCEDURES.

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. x x x x
CANON 10 A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT. Rule
10.01 A lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall he
mislead, or allow the Court to be misled by any artifice. x 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 Rule 18.03 A lawyer
shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall
render him liable.

In the present case, the Court finds Atty. Quesada to have violated the foregoing Rules and Canons.
Primarily, Atty, Quesada failed to exercise the required diligence in handling complainants case by
his failure to justify his absence on the two (2) mandatory conference hearings in NLRC Case No.
RAB-I-11-1123-94 despite due notice, which thus resulted in its dismissal. It bears stressing that a
retained counsel is expected to serve the client with competence and diligence and not to sit idly by
and leave the rights of his client in a state of uncertainty. To this end, he is oblige to attend scheduled
hearings or conferences, prepare and file the required pleadings, prosecute the handled cases with
reasonable dispatch, and urge their termination without waiting for the client or the court to prod him
or her to do so. 46

Atty. Quesadas failure to attend the scheduled conference hearings, despite due notice and without
any proper justification, exhibits his inexcusable lack of care and diligence in managing his clients
cause in violation of Canon 17 and Rule 18.03, Canon 18 of the Code. Moreover, Atty. Quesada
acted with less candor and good faith in the proceedings before the IBP-CBD when he denied the
existence of any lawyer-client relationship between him and complainant, and claimed that the labor
case was handled by another lawyer, despite his previous admission before the Court of having
47 48

accepted complainant's case. To add a perusal of the complaint dated November 8, 1994 in NLRC
49

Case No. RAB-I-11-1123-94 reveals that Atty. Quesada signed the same as counsel for
complainant. 50
While the IBP-CBD is not a court, the proceedings therein are nonetheless part of a judicial
proceeding, a disciplinary action being in reality an investigation by the Court into the misconduct of
its officers or an examination into his character.
51

Besides, Atty. Quesada failed to rebut the allegation that complainant's corresponding failure to
appear during the mandatory conference hearings in NLRC Case No. RAB-I-11-1123-94 was upon
his counsels advice. 52

Under the premises, it is therefore reasonable to conclude that Atty. Quesada had indulged in
deliberate falsehood, contrary to the prescriptions under Rule 1.01, Canon 1 and Rule 10.01, Canon
10 of the Code. 53

The appropriate penalty on an errant lawyer depends on the exercise of sound judicial discretion
based on the surrounding facts. 54

In Conlu v. Aredonia, Jr., a lawyer was suspended from the practice of law for a period of one (1)
55

year for inexcusable negligence that resulted in the dismissal of complainants appeal and for
misrepresentations committed before the CA, in violation of Rule 1.01, Canon 1, Rule 10.01, Canon
10 and Rule 18.03, Canon 18 of the Code. In the cases of Cheng v. Atty. Agravante and Perea v.
56

Atty. Almadro, respondent-lawyers were similarly punished for their negligence in the discharge of
57

their duties to their client and for misrepresentation committed before the Court, in violation of Rule
10.01, Canon 10 and Rule 18.03, Canon 18 of the Code. Hence, consistent with existing
jurisprudence, the Court adopts the penalty recommended by the IBP and accordingly suspends
Atty. Quesada for a period of one (1) year. The Court must, however, clarify that the foregoing
resolution should not include a directive to return the amount of P74,000.00 as ordered by the IBP in
its November 19, 2011 Resolution which represents the settlement initially offered by Capitol in the
dismissed labor case. The return of the said amount partakes the nature of a purely civil liability
which should not be dealt with during an administrative-disciplinary proceeding such as this case. In
Tria-Samonte v. Obias, the Court recently illumined that disciplinary proceedings against lawyers
58

are only confined to the issue of whether or not the respondent-lawyer is still fit to be allowed to
continue as a member of the Bar and that the only concern is his administrative liability. Thus,
matters which have no intrinsic link to the lawyer's professional engagement, such as the liabilities of
the parties which are purely civil in nature, should be threshed out in a proper proceeding of such
nature, and not during administrative-disciplinary proceedings, as in this case.

WHEREFORE, respondent Atty. Jose C. Quesada, Jr. is found GUILTY of violating Rule 1.01 of
Canon 1, Rule 10.01 of Canon 10, Canon 17, and Rule 18.03 of Canon 18 of the Code of
Professional Responsibility, and is accordingly SUSPENDED from the practice of law for one (1)
year, effective upon his receipt of this Decision, with a stern warning that a repitition of the same or
similar acts will be dealt with more severely.

On the other hand, the admnistrative complaint respondent Atty. Amado Adquilen is
hereby DIMISSED in view of his supervening death.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all the courts.

SO ORDERED.
A.C. No. 7965 November 13, 2013

AZUCENA SEGOVIA-RIBAYA, Complainant,

vs.
ATTY. BARTOLOME C. LAWSIN, Respondent.

RESOLUTION

PERLAS-BERNABE, J.:

For the Courts resolution is an administrative complaint filed by Azucena Segovia-Ribaya

1

(complainant) against Atty. Bartolome C. Lawsin (respondent), the antecedents of which are detailed
as follows:

The Facts

On November 18, 2005, the parties entered into a retainership agreement (retainer) whereby
2

respondent undertook to, inter alia process the registration and eventually deliver, within a period of
six (6 ) months, the certificate of title over a certain parcel of land (subject land) in favor of
3

complainant acting as the representative of the Heirs of the late Isabel Segovia. In connection
therewith, respondent received from complainant the amounts of P15,000.00 and P39,000.00 to 4

cover for the litigation and land registration expenses, respectively.

Notwithstanding the expenditure of the P39,000.00 given for registration expenses (subject amount)
and the lapse of more than three (3) years from the retainers date, complainant alleged that
respondent, without proper explanation, failed to fulfill his undertaking to register the subject land
and deliver to complainant the certificate of title over the same. As complainant was tired of
respondents excuses, she finally decided to just withdraw the subject amount from respondent. For
such purpose, she confronted the latter at his office and also subsequently sent him two (2) demand
letters, but all to no avail. Hence, complainant was prompted to file the instant administrative
5 6

complaint.

In his Comment, respondent admitted that he indeed received the subject amount from complainant
7

but averred that after receiving the same, the latters brother, Erlindo, asked to be reimbursed the
amount of P7,500.00 which the latter purportedly paid to the land surveyor. Respondent likewise
8

alleged that he later found out that he could not perform his undertaking under the retainer because
the ownership of the subject land was still under litigation. Finally, respondent stated that he wanted
9

to return the balance of the subject amount to complainant after deducting what Erlindo took from
him, but was only prevented to do so because he was maligned by complainant when she went to
his office and there, shouted and called him names in the presence of his staff. 10

In the Courts Resolutions dated December 17, 2008 and March 2, 2009, the case was referred to
11 12

the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. After both
parties failed to appear during the mandatory conference, IBP Investigating Commissioner Atty.
Salvador B. Hababag (Investigating Commissioner) required the parties to submit their respective
position papers. Complainant filed her position paper on October 8, 2009, while respondent failed
13 14

to do so.

The IBPs Report and Recommendation

On November 6, 2009, the Investigating Commissioner issued his Report and

Recommendation, finding respondent to have violated Rules 16.01 and 16.03, Canon 16 of the
15

Code of Professional Responsibility (Code) for his failure to properly account for the money
entrusted to him without any adequate explanation why he could not return the same. The
Investigating Commissioner found that respondents acts demonstrated his "lack of candor, fairness,
and loyalty to his client, who entrusted him with money and documents for the registration of the
subject land." The Investigating Commissioner likewise held that respondents failure to return the
16
subject amount, despite being given "adequate time to return" the same, "not to mention the
17

repeated x x x demands made upon him," constitutes "gross dishonesty, grave misconduct, and
18

even misappropriation of money" in violation of the above-stated rules. In view of the foregoing, the
19

Investigating Commissioner recommended that respondent be suspended from the practice of law
for a period of six (6) months, with a stern warning that a repetition of the same or similar offenses in
the future shall be dealt with more severely. 20

In a Resolution dated December 29, 2012, the IBP Board of Governors adopted and approved the
21

Investigating Commissioners Report and Recommendation with modification, ordering the return of
the amount of P31,500.00, with legal interest and within thirty (30) days from receipt of notice, to
22

complainant.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable
for violating Rules 16.01 and 16.03, Canon 16 of the Code.

The Courts Ruling

The Court concurs with and affirms the findings of the IBP anent respondents administrative liability
but deems it proper to: (a) extend the recommended period of suspension from the practice of law
from six (6) months to one (1) year; and (b) delete the recommended order for the return of the
amount of P31,500.00.

Anent respondents administrative liability, the Court agrees with the IBP that respondents failure to
properly account for and duly return his clients money despite due demand is tantamount to a
violation of Rules 16.01 and 16.03, Canon 16 of the Code which respectively read as follows:

CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS
CLIENT THAT MAY COME INTO HIS POSSESSION.

Rule 16.01 A lawyer shall account for all money or property collected or received for or from the
client.

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
1wphi1

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.

Records disclose that respondent admitted the receipt of the subject amount from complainant to
cover for pertinent registration expenses but posited his failure to return the same due to his clients
act of confronting him at his office wherein she shouted and called him names. With the fact of
receipt being established, it was then respondents obligation to return the money entrusted to him
by complainant. To this end, suffice it to state that complainants purported act of "maligning"
respondent does not justify the latters failure to properly account for and return his clients money
upon due demand. Verily, a lawyers duty to his client is one essentially imbued with trust so much
so that it is incumbent upon the former to exhaust all reasonable efforts towards its faithful
compliance. In this case, despite that singular encounter, respondent had thereafter all the
opportunity to return the subject amount but still failed to do so. Besides, the obligatory force of said
duty should not be diluted by the temperament or occasional frustrations of the lawyers client,
especially so when the latter remains unsatisfied by the lawyers work. Indeed, a lawyer must deal
with his client with professional maturity and commit himself towards the objective fulfillment of his
responsibilities. If the relationship is strained, the correct course of action is for the lawyer to properly
account for his affairs as well as to ensure the smooth turn-over of the case to another lawyer.
Except only for the retaining lien exception under Rule 16.03, Canon 16 of the Code, the lawyer
23

should not withhold the property of his client. Unfortunately, absent the applicability of such
exception or any other justifiable reason therefor, respondent still failed to perform his duties under
Rules 16.01 and 16.03, Canon 16 of the Code which perforce warrants his administrative liability.

The Court, however, deems it proper to increase the IBPs recommended period of suspension from
the practice of law from six (6) months to one (1) year in view of his concomitant failure to exercise
due diligence in handling his clients cause as mandated by Rules 18.03 and 18.04, Canon 18 of the
Code:

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 the client informed of the status of his case and shall respond within
a reasonable time to the client's request for information.

After a judicious scrutiny of the records, the Court observes that respondent did not only accomplish
his undertaking under the retainer, but likewise failed to give an adequate explanation for such non-
performance despite the protracted length of time given for him to do so. As such omissions equally
showcase respondents non-compliance with the standard of proficiency required of a lawyer as
embodied in the above-cited rules, the Court deems it apt to extend the period of his suspension
from the practice of law from six (6) months to one (1) year similar to the penalty imposed in the
case of Del Mundo v. Capistrano. 24

As a final point, the Court must clarify that the foregoing resolution should not include a directive for
the return of the amount of P31,500.00 as recommended by the IBP Board of Governors. The same
amount was given by complainant to respondent to cover for registration expenses; hence, its return
partakes the nature of a purely civil liability which should not be dealt with during an administrative-
disciplinary proceeding. In Tria-Samonte v. Obias, the Court recently held that its "findings during
25

administrative-disciplinary proceedings have no bearing on the liabilities of the parties involved

which are purely civil in nature meaning, those liabilities which have no intrinsic link to the lawyer's
professional engagement as the same should be threshed out in a proper proceeding of such
nature." This pronouncement the Court applies to this case and thus, renders a disposition solely on
respondents administrative liability.

WHEREFORE, respondent Atty. Bartolome C. Lawsin is found guilty of violating Rules 16.01 and
16.03, Canon 16, and Rules 18.03 and 18.04, Canon 18 of the Code of Professional Responsibility.
Accordingly, he is hereby SUSPENDED from the practice of law for a period of one (1) year effective
upon his receipt of this Resolution with a stem warning that a repetition of the same or similar acts
will be dealt with more severely.

Let a copy of this Resolution be furnished the Office of the Bar Confidant the Integrated Bar of the
Philippines and the Office of the Court Administrator for circulation to all the courts.

SO ORDERED.
 A.C. No. 10672, March 18, 2015

EDUARDO A. MAGLENTE,*Complainant, v. ATTY. DELFIN R. AGCAOILI, JR., Respondent.

DECISION

PERLAS-BERNABE, J.:

Before the Court is an administrative complaint1 dated May 9, 2006 filed by complainant Eduardo A.
Maglente (complainant), before the Integrated Bar of the Philippines (IBP), against respondent Atty. Delfin
R. Agcaoili, Jr. (respondent), praying that the latter be directed to return the amount of P48,000.00 that he
received from the former.

The Facts

Complainant, as President of Samahan ng mga Maralitang Taga Ma. Corazon III, Incorporated (Samahan),
alleged that he engaged the services of respondent for the purpose of filing a case in order to determine the
true owner of the land being occupied by the members of Samahan.2 In connection therewith, he gave
respondent the aggregate amount of P48,000.00 intended to cover the filing fees for the action to be
instituted, as evidenced by a written acknowledgment executed by respondent himself.3Despite the
payment, respondent failed to file an action in court. When confronted, respondent explained that the
money given to him was not enough to fully pay for the filing fees in court. 4Thus, complainant asked for the
return of the money, but respondent claimed to have spent the same and even demanded more
money.5 Complainant further alleged that when he persisted in seeking restitution of the aforesaid sum,
respondent told him to shut up because it was not his money in the first place. 6Hence, complainant filed this
administrative complaint seeking the return of the full amount he had paid to respondent.

In his defense,7 respondent denied spending complainants money, explaining that he had already prepared
the initiatory pleading and was poised to file the same, when he discovered through the Clerk of Court of the
Regional Trial Court of Antipolo City that the filing fee was quite costly. This prompted him to immediately
relay such information to complainant who undertook to raise the amount needed. While waiting, however,
the instant administrative case was filed against him.8

The IBPs Report and Recommendation

In a Report and Recommendation9 dated October 3, 2012, the IBP Investigating Commissioner found
respondent guilty of violating Rule 16.01 of the Code of Professional Responsibility (CPR), and accordingly,
recommended that he be: (a) meted with the penalty of Censure, with a warning that a repetition of the
same will be met with a stiffer penalty; and (b) directed to account for or return the amount of P48,000.00
to complainant.10

The Investigating Commissioner found that respondent clearly received the amount of P48,000.00 from
complainant, which was intended to answer for the filing fees of a case he was supposed to file for
the Samahan, but which he failed to do so.11 In this relation, the Investigating Commissioner observed that
had respondent prepared the complaint and performed research works, as he claimed, then he could have
kept a reasonable amount for his effort under the doctrine of quantum meruit, but unfortunately, he could
not present any proof in this respect.12

In a Resolution13 dated May 11, 2013, the IBP Board of Governors adopted and approved the aforesaid
Report and Recommendation, with modification increasing the recommended penalty from Censure to
suspension from the practice of law for a period of three (3) months. Aggrieved, respondent moved for
reconsideration14 which was, however, denied in a Resolution15 dated May 3, 2014.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable for the
acts complained of.

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the findings of the IBP, except as tothe
penalty to be imposed upon respondent.

It must be stressed that once a lawyer takes up the cause of his client, he is duty-bound to serve the latter
with competence, and to attend to such clients cause with diligence, care, and devotion, whether he accepts
it for a fee or for free. He owes fidelity to such cause and must always be mindful of the trust and confidence
reposed upon him.16 Therefore, a lawyers neglect of a legal matter entrusted to him by his client constitutes
inexcusable negligence for which he must be held administratively liable for violating Rule 18.03, Canon 18of
the CPR,17 which reads:

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
xxxx

Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
[therewith] shall render him liable.

In the instant case, it is undisputed that complainant engaged the services of respondent for the purpose of
filing a case in court, and in connection therewith, gave the amount of P48,000.00 to answer for the filing
fees. Despite the foregoing, respondent failed to comply with his undertaking and offered the flimsy excuse
that the money he received from complainant was not enough to fully pay the filing fees.

Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR when he failed to refund
the amount of P48,000.00 that complainant gave him despite repeated demands, viz.:

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.

xxxx

Rule 16.03 A lawyer shall deliver the funds and property of his client when due or upon demand. x x x.

Verily, when a lawyer receives money from the client for a particular purpose, the lawyer is bound to render
an accounting to the client showing that the money was spent for the intended purpose. Consequently, if the
money was not used accordingly, the same must be immediately returned to the client. 18 A lawyers failure
to return the money to his client despite numerous demands is a violation of the trust reposed on him and is
indicative of his lack of integrity,19 as in this case.

Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly
possess and exercise in such matters of professional employment, 20 and hence, must be disciplined
accordingly.

Having established respondents administrative liability, the Court now determines the proper penalty to be
imposed.

Jurisprudence provides that in similar cases where lawyers neglected their clients affairs and, at the same
time, failed to return the latters money and/or property despite demand, the Court meted out the penalty of
suspension from the practice of law. In Segovia-Ribaya v. Lawsin,21 the Court suspended the lawyer for a
period of one (1) year for his failure to perform his undertaking under his retainership agreement with his
client and to return the money given to him by the latter.22 Similarly, in Meneses v. Macalino,23 the same
penalty was imposed on a lawyer who failed to render any legal service to his client as well as to return the
money he received for such purpose.24 In view of the foregoing, the Court finds it appropriate that
respondent be meted with the penalty of suspension from the practice of law for a period of one (1) year.

Finally, the Court sustains the directive for respondent to account for or return the amount of P48,000.00 to
complainant. It is well to note that while the Court has previously held that disciplinary proceedings should
only revolve around the determination of the respondent-lawyers administrative and not his civil liability, it
must be clarified that this rule remains applicable only to claimed liabilities which are purely civil in nature
for instance, when the claim involves moneys received by the lawyer from his client in a transaction
separate and distinct [from] and not intrinsically linked to his professional engagement.25 Since the
aforesaid amount was intended to answer for filing fees which is intimately related to the lawyer-client
relationship between complainant and respondent, the Court finds the return thereof to be in order.26

WHEREFORE, respondent Atty. Delfin R. Agcaoili, Jr. (respondent), is found GUILTY of violating Rules
16.01 and 16.03 of Canon 16, and Rule 18.03 of Canon 18of the Code of Professional Responsibility.
Accordingly, he is hereby SUSPENDED from the practice of law for a period of one (1) year, effective upon
his receipt of this Decision, with a STERN WARNING that a repetition of the same or similar acts will be
dealt with more severely.

Furthermore, respondent is ORDERED to return to complainant Eduardo A. Maglente the amount of

P48,000.00 he received from the latter within ninety (90) days from the finality of this Decision. Failure to
comply with the foregoing directive will warrant the imposition of a more severe penalty.

Let a copy of this Decision be attached to respondents record in this Court as attorney. Further, let copies of
this Decision be furnished the Integrated Bar of the Philippines and the Office of the Court Administrator,
which is directed to circulate them to all the courts in the country for their information and guidance.

SO ORDERED.
A.C. No. 10438 September 23, 2014

CF SHARP CREW MANAGEMENT INCORPORATED, Complainant,

vs.
NICOLAS C. TORRES, Respondent.

DECISION

PER CURIAM:

For the Court's resolution is the Complaint dated October 30, 2008 filed by complainant CF Sharp
1

Crew Management Incorporated (complainant) against respondent Nicolas C. Torres (respondent),

charging him with violating the Code of Professional Responsibility (CPR).

The Facts

Complainant is a corporation duly organized and existing under Philippine laws engaged in overseas
maritime employment. It hired respondent, a medical doctor and a lawyer by profession, as its Legal
2

and Claims Manager who was tasked, inter alia, to serve as its legal counsel and to oversee the
administration and management of legal cases and medicalrelated claims instituted by seafarers
against complainants various principals. Among the cases respondent handled in his capacity as
Legal and Claims Manager were the claims of seafarers Bernardo R. Mangi (Mangi), Rodelio J.
Sampani (Sampani), Joseph C. Delgado (Delgado), and Edmundo M. Chua (Chua). 3

In its administrative complaint, it was alleged that per respondents request, complainant issued
checks in the amounts of P524,000.00, P652,013.20, P145,650.00, P97,100.00, and P296,808.40
as settlement of the respective claims of Mangi, Sampani, Delgado, and Chua. However,4

complainant later discovered that, save for the check in the amount of 145,650.00 issued to
Delgado, respondent never gave the checks to the seafarers and instead, had them deposited at
International Exchange Bank, Banawe, Quezon City Branch, under Account No. 003-10-06902-
1. With respect to Sampani, complainant also discovered that he only received the amounts
5

of P216,936.00 and P8,303.00 or a total of P225,239.00 out of the requested amount

of P652,013.20, through checks not issued by complainant. 6

On October 30, 2008, the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline
directly received the instant complaint and on even date, issued an Order requiring respondent to
7

file an answer, but the latter failed to do so. Neither did respondent appear in the mandatory
conference scheduled on March 20, 2009 nor did he file his position paper. 8

The IBPs Report and Recommendation

In a Report and Recommendation dated August 1, 2009, the IBP Investigating Commissioner found
9

respondent administratively liable for violating the CPR, and accordingly recommended that he be
meted the penalty of suspension from the practice of law for one (1) year. 10

The Investigating Commissioner found that respondent had indeed requested and was issued
checks as settlement of the respective claims of Mangi, Sampani, Delgado, and Chua onthe
pretense that the requested amounts represented what was lawfully due them. However, instead of
11

giving the said checks to the named seafarers, he deposited the same at the International Exchange
Bank, Banawe,Quezon City Branch, under Account No. 003-10-06902-1, except for the check in the
12

amount of 145,650.00 issued to Delgado. 13

Meanwhile, respondent belatedly filed his Verified Answer (With Motion to Re-Open
Investigation) on March 24, 2010. He explained that he was not able to timely file an answer
14

because complainant supplied a wrong address to the IBP and filed non-bailable criminal cases
against him which caused his detention in a regular prison cell and, thus, his inability to comply with
the IBPs directives.
15
On the merits of the complaint,respondent maintained that the seafarers claims had long been
settled and that the release documents signed by the named seafarers were already inactual
custody and possession of the complainant. He further contended that he only signed the dorsal
16

portions of the checks as a form of guaranty of their genuineness and that he could not have
17

encashed them as they wereall payable to a particular payee. Lastly, respondent claimed that when
18

he resigned in August 2008, complainant forced him to sign promissory notes to reimburse certain
amounts which had not been accounted for by the latter in exchange for his clearance
documents. But before he was able to settle the promissory notes, he was already arrested in
19

connection with the criminal cases filed by complainant against him. 20

In a Resolution dated December 29, 2012, the IBP Board of Governors unanimously adopted and
21

approved the aforesaid report and recommendation with modification, increasing the recommended
period of suspension from the practice of law to two (2) years, and ordering respondent to return the
full amount of money he received from complainant which is legally due to the seafarers, with legal
interest, within thirty (30) days from receipt of notice.

Aggrieved, respondent filed a Motion for Reconsideration on April 22, 2013 which was, however,
22

denied in a Resolution dated March 8, 2014.

23

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable
for violating the CPR.

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the findings of the IBP in its report
and recommendation, except as to: (a) the recommended penalty to be imposed upon respondent;
and (b) the monetary award in favor of the complainant.

It is fundamental that the relationship between a lawyer and his client is highly fiduciary and ascribes
to a lawyer a great degree of fidelity and good faith. The highly fiduciary nature of this relationship
24

imposes upon the lawyer the duty to account for the money or property collected or received for or
from his client. This is the standard laid down by Rules 16.01 and 16.03, Canon 16 of the CPR,
25

which read:

CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS
CLIENTTHAT 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 16.03 A lawyer shall deliver the funds and property of his client when due or upon demand. x
x x.

In the foregoing light, it has been heldthat a lawyers failure to return upon demand the funds held by
him on behalf of his client gives rise to the presumption that he has appropriated the same for his
own use in violation of the trust reposed in him by his client. Such act is a gross violation of general
morality as well as of professional ethics.
26

In this case, the IBP Investigating Commissioner correctly found that complainant had duly proven
its charges against respondent. In particular, complainant had exposed respondents modus
operandi of repeatedly requesting the issuance of checks purportedly for the purpose of settling
seafarers claims against the complainants various principals, only to have such checks (except for
the check inthe amount of 145,650.00 issued to Delgado) deposited to an unauthorized bank
account, particularly International Exchange Bank, Banawe,Quezon City Branch, under Account No.
003-10-06902-1. It is well-settled that "when a lawyer receives money from the client for a particular
purpose,the lawyer is bound to render an accounting to the client showing that the money was spent
for a particular purpose. And if he does not use the money for the intended purpose, the lawyer must
immediately return the money to his client." This, respondent failed to do.
27

Clearly, respondents acts of misappropriation constitute dishonesty, abuse of trust and confidence
reposedin him by the complainant, and betrayal of his clients interests which he is duty-bound to
protect. They are contrary to the mandate of Rule 1.01, Canon 1 of the CPR which provides that
28

"[a] lawyer shall not engage in unlawful, dishonest, immoral, or deceitful conduct." Such
malfeasance is not only unacceptable, disgraceful, and dishonorable to the legal profession; it also
reveals a basic moral flaw that makes him unfit to practice law. 29

Anent the proper penalty for respondents acts, the Court deems it proper to modify the penalty
recommended by the IBP. Jurisprudence provides that in similar cases where lawyers
1wphi1

misappropriated their clients money, the Court imposed upon them the ultimate penalty of
disbarment from the practice of law. In Arellano University, Inc. v. Mijares III, the Court disbarred the
30

lawyer for misappropriating his clients money intended for securing a certificate of title on the latters
behalf. Similarly, in Freeman v. Reyes, the same penalty was imposed upon the lawyer who
31

misappropriated the insurance proceeds of her clients deceased husband.

As already discussed, respondent's conduct of misappropriating complainant's money has made him
unfit to remain in the legal profession. He has definitely fallen below the moral bar when he engaged
in deceitful, dishonest, unlawful, and grossly immoral acts. As a member of the Bar, he is expected
32

at all times to uphold the integrity and dignity of the legal profession and refrain from any act or
omission which might lessen the trust and confidence reposed in him by the public in the fidelity,
honesty, and integrity of the legal profession. Membership in the legal profession is a privilege, and
33

whenever it is made to appear that an attorney is no longer worthy of the trust and confidence of his
clients and the public, it becomes not only the right but also the duty of the Court to withdraw the
same, as in this case. In view of the foregoing, respondent deserves the ultimate penalty of
34

disbarment from the practice of law.

Likewise, the Court cannot concur with the IBP's recommendation regarding the return of the
settlement money respondent received from complainant, considering, among others, that it was not
specifically prayed for in the latter's administrative complaint and that the civil liability of respondent
therefor may already be the subject of existing cases involving the same parties. WHEREFORE,
respondent Nicolas C. Torres is found guilty of violating Rule 1.01, Canon 1 and Rules 16.01 and
16.03, Canon 16 of the Code of Professional Responsibility. Accordingly, he is hereby DISBARRED
from the practice of law and his name ordered STRICKEN OFF from the roll of attorneys.

Let a copy of this Decision be attached to respondent's record in this Court as attorney. Further, let
copies of this Decision be furnished the Integrated Bar of the Philippines and the Office of the Court
Administrator, which is directed to circulate them to all the courts in the country for their information
and guidance.

SO ORDERED.
 A.C. No. 10681, February 03, 2015

SPOUSES HENRY A. CONCEPCION AND BLESILDA S. CONCEPCION, Complainants, v. ATTY. ELMER

A. DELA ROSA, Respondent.

DECISION

PERLAS-BERNABE, J.:

This is an administrative case that stemmed from a Verified Complaint 1 filed by complainants Spouses Henry
A. Concepcion (Henry) and Blesilda S. Concepcion (Blesilda; collectively complainants) against respondent
Atty. Elmer A. dela Rosa (respondent), charging him with gross misconduct for violating, among others, Rule
16.04 of the Code of Professional Responsibility (CPR).

The Facts

In their Verified Complaint, complainants alleged that from 1997 2 until August 2008,3 respondent served as
their retained lawyer and counsel. In this capacity, respondent handled many of their cases and was
consulted on various legal matters, among others, the prospect of opening a pawnshop business towards the
end of 2005. Said business, however, failed to materialize. 4 chanRoble svirtualLawlibrary

Aware of the fact that complainants had money intact from their failed business venture, respondent, on
March 23, 2006, called Henry to borrow the amount of P2,500,000.00, which he promised to return, with
interest, five (5) days thereafter. Henry consulted his wife, Blesilda, who, believing that respondent would be
soon returning the money, agreed to lend the aforesaid sum to respondent. She thereby issued three (3)
EastWest Bank checks5 in respondents name:6 chanRoblesvirtualLa wlibrary

Check No. Date Amount Payee

0000561925 03-23-06 P750,000.00 Elmer dela Rosa
0000561926 03-23-06 P850,000.00 Elmer dela Rosa
0000561927 03-23-06 P900,000.00 Elmer dela Rosa
Total: P2,500,000.00

Upon receiving the checks, respondent signed a piece of paper containing: (a) photocopies of the checks;
and (b) an acknowledgment that he received the originals of the checks and that he agreed to return the
P2,500,000.00, plus monthly interest of five percent (5%), within five (5) days. 7 In the afternoon of March
23, 2006, the foregoing checks were personally encashed by respondent. 8 chanRoble svirtualLawlibrary

On March 28, 2006, or the day respondent promised to return the money, he failed to pay complainants.
Thus, in April 2006, complainants began demanding payment but respondent merely made repeated
promises to pay soon. On July 7, 2008, Blesilda sent a demand letter 9 to respondent, which the latter did
not heed.10 On August 4, 2008, complainants, through their new counsel, Atty. Kathryn Jessica dela Serna,
sent another demand letter11 to respondent.12 In his Reply,13 the latter denied borrowing any money from the
complainants. Instead, respondent claimed that a certain Jean Charles Nault (Nault), one of his other
clients, was the real debtor. Complainants brought the matter to the Office of the Lupong Tagapamayapa in
Barangay Balulang, Cagayan de Oro City. The parties, however, failed to reach a settlement. 14 chanRoble svirtualLawlibrary

On January 11, 2010, the IBP-Misamis Oriental Chapter received complainants letter-complaint 15charging
respondent with violation of Rule 16.04 of the CPR. The rule prohibits lawyers from borrowing money from
clients unless the latters interests are fully protected by the nature of the case or by independent
advice.16
chanRoble svirtualLawlibrary

In his Comment,17 respondent denied borrowing P2,500,000.00 from complainants, insisting that Nault was
the real debtor.18 He also claimed that complainants had been attempting to collect from Nault and that he
was engaged for that specific purpose.19 chanRoble svirtualLawlibrary

In their letter-reply,20 complainants maintained that they extended the loan to respondent alone, as
evidenced by the checks issued in the latters name. They categorically denied knowing Nault and pointed
out that it defies common sense for them to extend an unsecured loan in the amount of P2,500,000.00 to a
person they do not even know. Complainants also submitted a copy of the Answer to Third Party
Complaint21 which Nault filed as third-party defendant in a related collection case instituted by the
complainants against respondent.22 In said pleading, Nault explicitly denied knowing complainants and
alleged that it was respondent who incurred the subject loan from them. 23 chanRoblesvirtualLa wlibrary

On November 23, 2010, the IBP-Misamis Oriental Chapter endorsed the letter-complaint to the IBP-
Commission on Bar Discipline (CBD),24 which was later docketed as CBD Case No. 11-2883.25 In the course
of the proceedings, respondent failed to appear during the scheduled mandatory conferences. 26Hence, the
same were terminated and the parties were directed to submit their respective position
papers.27 Respondent, however, did not submit any. cralawre d
 The IBP Report and Recommendation

On April 19, 2013, the IBP Investigating Commissioner, Jose I. de La Rama, Jr. (Investigating
Commissioner), issued his Report28 finding respondent guilty of violating: (a) Rule 16.04 of the CPR which
provides that a lawyer shall not borrow money from his clients unless the clients interests are fully
protected by the nature of the case or by independent advice; (b) Canon 7 which states that a lawyer shall
uphold the integrity and dignity of the legal profession and support the activities of the IBP; and (c) Canon
16 which provides that a lawyer shall hold in trust all monies and properties of his client that may come into
his possession.29
chanRoblesvirtualLa wlibrary

The Investigating Commissioner observed that the checks were issued in respondents name and that he
personally received and encashed them. Annex E 30 of the Verified Complaint shows that respondent
acknowledged receipt of the three (3) EastWest Bank checks and agreed to return the P2,500,000.00, plus a
pro-rated monthly interest of five percent (5%), within five (5) days. 31 chanRoblesvirtualLa wlibrary

On the other hand, respondents claim that Nault was the real debtor was found to be implausible. The
Investigating Commissioner remarked that if it is true that respondent was not the one who obtained the
loan, he would have responded to complainants demand letter; however, he did not. 32 He also observed that
the acknowledgment33 Nault allegedly signed appeared to have been prepared by respondent
himself.34 Finally, the Investigating Commissioner cited Naults Answer to the Third Party Complaint which
categorically states that he does not even know the complainants and that it was respondent alone who
obtained the loan from them.35 chanRoblesvirtualLa wlibrary

In fine, the Investigating Commissioner concluded that respondents actions degraded the integrity of the
legal profession and clearly violated Rule 16.04 and Canons 7 and 16 of the CPR. Respondents failure to
appear during the mandatory conferences further showed his disrespect to the IBP-CBD. 36Accordingly, the
Investigating Commissioner recommended that respondent be disbarred and that he be ordered to return
the P2,500,000.00 to complainants, with stipulated interest. 37 chanRoble svirtualLawlibrary

Finding the recommendation to be fully supported by the evidence on record and by the applicable laws and
rule, the IBP Board of Governors adopted and approved the Investigating Commissioners Report in
Resolution No. XX-2013-617 dated May 11, 2013,38 but reduced the penalty against the respondent to
indefinite suspension from the practice of law and ordered the return of the P2,500,000.00 to the
complainants with legal interest, instead of stipulated interest.

Respondent sought a reconsideration39 of Resolution No. XX-2013-617 which was, however, denied in
Resolution No. XXI-2014-29440 dated May 3, 2014. cralawre d

The Issue Before the Court

The central issue in this case is whether or not respondent should be held administratively liable for violating
the CPR.

The Courts Ruling

The Court concurs with the IBPs findings except as to its recommended penalty and its directive to return
the amount of P2,500,000.00, with legal interest, to complainants. cralawred

I.

Respondents receipt of the P2,500,000.00 loan from complainants is amply supported by substantial
evidence. As the records bear out, Blesilda, on March 23, 2006, issued three (3) EastWest Bank Checks, in
amounts totalling to P2,500,000.00, with respondent as the payee. 41 Also, Annex E42 of the Verified
Complaint shows that respondent acknowledged receipt of the checks and agreed to pay the complainants
the loan plus the pro-rated interest of five percent (5%) per month within five (5) days. 43The dorsal sides of
the checks likewise show that respondent personally encashed the checks on the day they were
issued.44 With respondents direct transactional involvement and the actual benefit he derived therefrom,
absent too any credible indication to the contrary, the Court is thus convinced that respondent was indeed
the one who borrowed the amount of P2,500,000.00 from complainants, which amount he had failed to
return, despite their insistent pleas.

Respondents theory that Nault is the real debtor hardly inspires belief. While respondent submitted a
document purporting to be Naults acknowledgment of his debt to the complainants, Nault, in his Answer to
Third Party Complaint, categorically denied knowing the complainants and incurring the same obligation.

Moreover, as correctly pointed out by complainants, it would be illogical for them to extend a P2,500,000.00
loan without any collateral or security to a person they do not even know. On the other hand, complainants
were able to submit documents showing respondents receipt of the checks and their encashment, as well as
his agreement to return the P2,500,000.00 plus interest. This is bolstered by the fact that the loan
transaction was entered into during the existence of a lawyer-client relationship between him and
complainants,45 allowing the former to wield a greater influence over the latter in view of the trust and
confidence inherently imbued in such relationship.

Under Rule 16.04, Canon 16 of the CPR, a lawyer is prohibited from borrowing money from his client unless
the clients interests are fully protected: chanroble svirtuallawlibrary
CANON 16 A lawyer shall hold in trust all moneys and properties of his clients that may come into his
possession.

Rule 16.04 A lawyer shall not borrow money from his client unless the clients interests are fully protected
by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except,
when in the interest of justice, he has to advance necessary expenses in a legal matter he is handling for
the client.

The Court has repeatedly emphasized that the relationship between a lawyer and his client is one imbued
with trust and confidence. And as true as any natural tendency goes, this trust and confidence is prone to
abuse. The rule against borrowing of money by a lawyer from his client is intended to prevent the lawyer
from taking advantage of his influence over his client.46 The rule presumes that the client is disadvantaged
by the lawyers ability to use all the legal maneuverings to renege on his obligation. 47 In Frias v. Atty.
Lozada48 (Frias) the Court categorically declared that a lawyers act of asking a client for a loan, as what
herein respondent did, is unethical, to wit: chanroble svirtuallawlibrary

Likewise, her act of borrowing money from a client was a violation of [Rule] 16.04 of the Code of
Professional Responsibility: ChanRoblesVirtualawlibrary

A lawyer shall not borrow money from his client unless the clients interests are fully protected by the nature
of the case and by independent advice.
A lawyers act of asking a client for a loan, as what respondent did, is very unethical. It comes
within those acts considered as abuse of clients confidence. The canon presumes that the client is
disadvantaged by the lawyers ability to use all the legal maneuverings to renege on her
obligation.49 (Emphasis supplied)

As above-discussed, respondent borrowed money from complainants who were his clients and whose
interests, by the lack of any security on the loan, were not fully protected. Owing to their trust and
confidence in respondent, complainants relied solely on the formers word that he will return the money plus
interest within five (5) days. However, respondent abused the same and reneged on his obligation, giving his
previous clients the runaround up to this day. Accordingly, there is no quibble that respondent violated Rule
16.04 of the CPR.

In the same vein, the Court finds that respondent also violated Canon 7 of the CPR which reads: chanroblesvirtuallawlibrary

CANON 7 - A LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND DIGNITY OF THE LEGAL
PROFESSION AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR.

In unduly borrowing money from the complainants and by blatantly refusing to pay the same, respondent
abused the trust and confidence reposed in him by his clients, and, in so doing, failed to uphold the integrity
and dignity of the legal profession. Thus, he should be equally held administratively liable on this score.

That being said, the Court turns to the proper penalty to be imposed and the propriety of the IBPs return
directive.
cralawred

II.

The appropriate penalty for an errant lawyer depends on the exercise of sound judicial discretion based on
the surrounding facts.50chanRoblesvirtualLa wlibrary

In Frias, the Court suspended the lawyer from the practice of law for two (2) years after borrowing
P900,000.00 from her client, refusing to pay the same despite court order, and representing conflicting
interests.51 Considering the greater amount involved in this case and respondents continuous refusal to pay
his debt, the Court deems it apt to suspend him from the practice of law for three (3) years, instead of the
IBPs recommendation to suspend him indefinitely.

The Court also deems it appropriate to modify the IBPs Resolution insofar as it orders respondent to return
to complainants the amount of P2,500,000.00 and the legal interest thereon. It is settled that in disciplinary
proceedings against lawyers, the only issue is whether the officer of the court is still fit to be allowed to
continue as a member of the Bar.52 In such cases, the Courts only concern is the determination of
respondents administrative liability; it should not involve his civil liability for money received from his client
in a transaction separate, distinct, and not intrinsically linked to his professional engagement. In this case,
respondent received the P2,500,000.00 as a loan from complainants and not in consideration of his
professional services. Hence, the IBPs recommended return of the aforementioned sum lies beyond the
ambit of this administrative case, and thus cannot be sustained. chanroble slaw

WHEREFORE, respondent Atty. Elmer A. dela Rosa is found guilty of violating Canon 7 and Rule 16.04,
Canon 16 of the Code of Professional Responsibility. Accordingly, he is hereby SUSPENDED from the
practice of law for a period of three (3) years effective upon finality of this Decision, with a stern warning
that a commission of the same or similar acts will be dealt with more severely. This Decision is immediately
executory upon receipt.

Let a copy of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines,
and the Office of the Court Administration for circulation to all the courts.

SO ORDERED.
A.C. No. 7337 September 29, 2014

ROLANDO VIRAY, Complainant,

vs.
ATTY. EUGENIO T. SANICAS, Respondent.

RESOLUTION

DEL CASTILLO, J.:

This is a verified Complaint for Disbarment/Gross Immoral Conduct filed with this Court on
1

September 18, 2006 by complainant Rolando Viray (complainant) against respondent Atty. Eugenio
T. Sanicas (respondent).

Factual Antecedents

Complainant alleges that he engaged the services of respondent relative to a labor case he filed2

against Ester Lopez and Teodoro Lopez III (spouses Lopez). On February 26, 2001, the Labor
Arbiter ruled in favor of complainant and disposed of the case as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondents Ester

Lopez and Teodoro Lopez III to pay complainant Rolando Viray of the following, to wit:

1. Backwages ........................... P146,726.67

2. Separation Pay ......................... 24,000.00

3. Service Incentive Leave Pay ......... .1,538.46

4. Attorney's Fees ........................ .17,226.51

or a total amount of One Hundred Eighty Nine Thousand Fom Hw1dred Ninety One Pesos & 64/100
(Pl89,491.60) [sic] to be deposited with the Cashier of this Office, wjthin ten (10) days from receipt
hereof

All other claims are hereby denied for lack of merit.

SO ORDERED. 3

Subsequently, an Alias Writ of Execution was issued relative to aforesaid decision. During the
4

implementation of said writ, however, complainant discovered that respondent had already collected
the total amount of P95,000.00 from spouses Lopez. Respondent received said amount in the
following manner:

Date Voucher No. Amount Purpose

0210512004 7802 P20,000.00 Attorney's fees
02/13/2004 7833 10,000.00 Partial payment for judgment
0212612004 7848 10,000.00 Partial payment for judgment
03/12/2004 7894 20,000.00 Partial payment for judgment
0410212004 7932 5,000.00 Partial payment for judgment
0410612004 7941 5,000.00 Partial payment for judgment
04/13/2004 7944 5,000.00 Partial payment for judgment
04/16/2004 7954 10,000.00 Partial payment for judgment
0413012004 7977 10,000.00 Partial payment for judgment

Total Amount: P95,000.00

Complainant also discovered that respondent misrepresented to spouses Lopez that he is
authorized to receive payments on his behalf, when in truth and in fact he is not. Consequently,
complainant made several verbal demands to the respondent to remit to him the amount
of P95,000.00, less his attorney's fees of P20,000.00. But respondent did not budge. Thus,
complainant lodged a complaint before the Office of the Punong Barangay of Brgy. Felisa, Bacolod
City. Respondent, however, ignored the summons to attend a conference before the barangay to
resolve the issues.

In his Comment, respondent admits that he received P95,000.00 from spouses Lopez on
5

installments, but denies that he was not authorized to accept it. He explains that complainant agreed
to pay him additional attorney's fees equivalent to 25o/o of the total monetary award, on top of the
attorney's fees that may be awarded by the labor tribunal, and to refund all expenses respondent
incurred relative to the case. Thus, from the total award of P189,491.60, the sum of P17,226.57
representing respondent's professional fees has to be deducted, leaving a balance
of P172,275.13. Then from said amount, complainant proposed that he will get P100,000.00 and the
6

balance of P72,275.13 shall belong to respondent as and for his additional 25o/o attorney's fees and
reimbursement for all expenses he incurred while handling the case. However, after receiving the
amount of P95,000.00 and deducting therefrom the amounts of P20,000.00 attorney's7

fees, P17,000.00 earlier given to complainant, and P2,000.00 paid to the sheriff, what was left to
respondent was only P56,000.00. Respondent whines that this amount is way below the promised
25o/o attorney's fees and refund of expenses in the total amount of P72,275.13.

Respondent asserts that, in any event, complainant will still be receiving a sum greater than what he
expects to receive. He avers that complainant is still entitled to receive from spouses Lopez the sum
of P93,491.60. Adding the Pl 7,000.00 respondent previously remitted to complainant, the latter will
get a total amount of P110,491.60. This amount, according to respondent, exceeds the amount
of P100,000.00 complainant agreed to and expected to receive.

IBP's Report and Recommendation

On February 26, 2007, we referred this case to the Integrated Bar of the Philippines (IBP) for
8

investigation, report and recommendation. On January 31, 2011, the Investigating Commissioner
issued his Report and Recommendation with the following recommendation:
9

In view of the foregoing, it is respectfully recommended that the respondent be meted the penalty of
two (2) years suspension. Respondent is also ordered to return, in restitution all the amounts in his
possession which are due to complainant, less his rightful attorney's fees. On October 28, 2011, the
10

IBP Board of Governors adopted Resolution No. XX-2011-139, which approved the Report and
11

Recommendation of the Investigating Commissioner suspending respondent from the practice of law
for two years, but with the modification that respondent should restitute the sum of P85,500.00 to
12

the complainant.

Issue

The essential issue in this case is whether the respondent is guilty of gross misconduct for his failure
to promptly account to his client the funds received in the course of his professional engagement
and return the same upon demand.

The Court's Ruling

"The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in
dealing with the moneys entrusted to lawyers because of their fiduciary relationship." Specifically,
13

Rule 16.01 of the Code imposes upon the lawyer the duty to "account for all money or property
collected or received for or from the client." Rule 16.03 thereof, on the other hand, mandates that "[a]
lawyer shall deliver the funds xx x of his client when due or upon demand."

In this case, respondent on nine separate occasions from February 5, 2004 to April 30, 2004
received payments for attorney's fees and partial payments for monetary awards on behalf of
complainant from spouses Lopez. But despite the number of times over close to three months he
had been receiving payment, respondent neither informed the complainant of such fact nor rendered
an accounting thereon. It was only when an Alias Writ of Execution was issued and being
implemented when complainant discovered that spouses Lopez had already given respondent the
total amount of P95,000.00 as partial payment for the monetary awards granted to him by the labor
tribunal.

To make matters worse, respondent withheld and refused to deliver to the complainant said amount,
which he merely received on behalf of his client, even after demand. Complainant brought the matter
before the barangay, but respondent simply ignored the same. Such failure and inordinate refusal on
the part of the respondent to render an accounting and return the money after demand raises the
presumption that he converted it to his own use. His unjustified withholding of the funds also
14

warrants the imposition of disciplinary action against him. 15

Respondent justifies his action by asserting that complainant authorized him to receive payment. He
implies that he is also authorized to apply the sum of money he received from spouses Lopez to his
additional 25o/o attorney's fees and reimbursement for all expenses he incurred for the case, in the
total amount of P72,275.13. However, after deducting from the amount of P95,000.00 the amounts
of P20,000.00, P17,000.00, and P2,000.00, what was left to respondent, to his dismay was
only P56,000.00.

The Court is not impressed. As aptly observed by the Investigating Commissioner, other than his
self-serving statements, there is nothing in the records which would support respondent's claim that
he was authorized to receive the payments. Neither is there proof that complainant agreed to pay
him additional 25% attorney's fees and reimburse him for all expenses he allegedly incurred in
connection with the case. Respondent did not present any document, retainer's agreement, or
itemized breakdown of the amount to be reimbursed to support his claim. In any event, even
1wphi1

assuming that respondent was authorized to receive payments, the same does not exempt him from
his duty of promptly informing his client of the amounts he received in the course of his professional
employment. "The fiduciary nature of the relationship between counsel and client imposes on a
lawyer the duty to account for the money or property collected or received for or from the client. He
is obliged to render a prompt accounting of all the property and money he has collected for his
client." "The fact that a lawyer has a lien for his attorney's fees on the money in his hands collected
16

for his client does not relieve him from the obligation to make a prompt accounting." Moreover, a
17

lawyer has no right "to unilaterally appropriate his client's money for himself by the mere fact alone
that the client owes him attorney's fees."18

In sum, "[r]espondent's failure to immediately account for and return the money when due and upon
demand violated the trust reposed in him, demonstrated his lack of integrity and moral soundness,
and warrants the imposition of disciplinary action." 19

The Penalty

"The penalty for gross misconduct consisting in the failure or refusal despite demand of a lawyer to
account for and to return money or property belonging to a client has been suspension from the
practice of law for two years." Thus, the IBP Board of Governors did not err in recommending the
20

imposable penalty. Considering, however, that this is respondent's first offense and he is already a
nonagenarian, the Court, in the exercise of its compassionate judicial discretion, finds that a penalty
21

of one year suspension is sufficient. WHEREFORE, the Court finds respondent Atty. Eugenio T.
Sanicas GUILTY of gross misconduct and accordingly SUSPENDS him from the practice of law for
one (1) year upon the finality of this Resolution, with a warning that a repetition of the same or
similar act or offense shall be dealt with more severly.

Atty. Sanicas is ordered to return to complainant, within 90 days from finality of this Resolution, the
net amount of P85,500.00 with interest at the rate of 6% per annum from finality of this Resolution
until the full amount is returned. Failure to comply with the foregoing directive will warrant the
imposition of a more severe penalty.

Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Atty. Sanicas'
record as a member of the Bar.

SO ORDERED.
 MARITES E. FREEMAN, A.C. No. 6246

Complainant, [Formerly CBD No. 00-730]

Present:

CORONA, C.J.,*

CARPIO,

VELASCO, JR.,*

LEONARDO-DE CASTRO,**

BRION,

PERALTA,

- versus - BERSAMIN,*

DEL CASTILLO,**

ABAD,

VILLARAMA, JR.,

PEREZ,

MENDOZA,

SERENO,

REYES, and

PERLAS-BERNABE, JJ.

Promulgated:

ATTY. ZENAIDA P.
REYES, November 15, 2011
Respondent.
x---------------------------------------------------------------------------------------x
 DECISION

PER CURIAM:

Before this Court is an administrative complaint, filed by

complainant Marites E. Freeman, seeking the disbarment of
respondent Atty. Zenaida P. Reyes, for gross dishonesty in
obtaining money from her, without rendering proper legal
services, and appropriating the proceeds of the insurance policies
of her deceased husband. Complainant also seeks recovery of all
the amounts she had given to respondent and the insurance
proceeds, which was remitted to the latter, with prayer for
payment of moral and exemplary damages.

In her sworn Complaint-Affidavit[1] dated April 7, 2000, filed on

May 10, 2000, complainant alleged that her husband Robert Keith
Freeman, a British national, died in London on October 18,
1998. She and her son, Frank Lawrence applied for visas, to
enable them to attend the wake and funeral, but their visa
applications were denied. Complainant engaged the services of
respondent who, in turn, assured her that she would help her
secure the visas and obtain the death benefits and other
insurance claims due her.Respondent told complainant that she
had to personally go to London to facilitate the processing of the
claims, and demanded that the latter bear all expenses for the
trip. On December 4, 1998, she gave respondent the amount
of P50,000.00. As acknowledgment for the receipt of P47,500.00
for service charge, tax, and one round trip ticket to London,
respondent gave her a Cash/Check Voucher, [2] issued by Broadway
Travel, Inc., but on the right margin thereof, the notations in the
amount of P50,000.00 and the date 12-5-98 were written and duly
initialled. On December 9, 1998, she acceded into giving
respondent the amount of P20,000.00 for legal costs in securing
the visas, as shown by the Temporary Receipt [3] bearing said date,
issued by Z.P. Reyes Law Office (respondent's law firm). On
December 18, 1998, she went to see respondent to follow-up the
visa applications, but the latter asked for the additional amount
of P10,000.00 for travel expenses, per Temporary
Receipt bearing said date, issued by respondents law firm.After
[4]
several phone calls inquiring about the status of the visa
applications, respondent told her, Mahirap gapangin ang pagkuha
ng visa, kasi blacklisted at banned ka sa Embassy. (It is difficult to
railroad the process of securing visa, because you are blacklisted
and banned by the Embassy).Sometime in February 1999,
respondent told her that to lift the travel ban on her, she should
shell out P18,000.00 as panlagay or grease money to bribe some
staff of the British Embassy. After a week, respondent informed
her that the ban was lifted, but the visas would be issued on a
later date, as she had convinced the British Embassy to issue
resident visas instead of tourist visas. Respondent told her that to
expedite the release of the resident visas, she should again
give P20,000.00 and a bottle of wine, worth P5,000.00, as grease
money to bribe the British Embassy personnel. After several
weeks, respondent told her that the period for visa applications
had lapsed, and that another amount of P18,000.00 was needed
to reinstate the same. Later, respondent asked for P30,000.00 as
legal costs, per Temporary Receipt, [5]dated April 19, 1999, to be
used for booking the former's flight to London, and P39,000.00 for
legal costs, per Temporary Receipt [6] dated May 13, 1999, to cover
the expenses for the plane tickets. Both temporary receipts were
issued by respondents law firm.

Complainant said that despite repeated follow-ups with

respondent, nothing came out. Instead, she received a picture of
her husband's burial, sent by one Stanley Grist, a friend of the
deceased. She later learned that respondent left for London alone,
without informing her about it. Respondent explained that she
needed to go to London to follow-up the insurance claims, and
warned her not to communicate with Grist who allegedly pocketed
the proceeds of her husband's insurance policy. She told
respondent that she received a letter[7] dated March 9, 1999 from
one Martin Leigh, an Officer of H.M. Coroner's Court, London,
informing her about the arrangements for the funeral and that her
late husband was covered by three insurance policies, to
wit: Nationwide Building Society (Account Number 0231/471 833
630), Lincoln Assurance Company (British National Life Policy No.
PP/85/00137851), and Scottish Equitable PLC (Policy No.
2779512).[8]Respondent offered to help and assured her that
representations with the insurance companies had earlier been
made, so that the latter would be receiving the insurance
proceeds soon.
According to the complainant, respondent required her to affix her
signature in a Special Power of Attorney (SPA), [9] dated November
6, 1998 [first SPA], which would authorize the respondent to
follow-up the insurance claims. However, she found out that the
SPA [first SPA] she signed was not notarized, but another SPA,
[10]
dated April 6, 1999, was notarized on April 30, 1999 [second
SPA], and that her signature therein was forged. Later, she came
across a similar copy of the SPA, [11] dated April 6, 1999, also
notarized on April 30, 1999 [third SPA], but this time, additionally
bearing the signatures of two witnesses. She said that without her
knowledge and consent, respondent used the third SPA, notarized
on April 30, 1999, in her correspondence with the insurance
companies in London.

Complainant discovered that in an undated letter, [12] addressed to

one Lynn O. Wilson of Scottish Equitable PLC (Policy No. 2779512),
respondent made representations that her husband left no will
and that she had no verified information as to the total value of
her husband's estate and the existence of any property in London
that would be subjected to Grant of Representation. Said letter
requested that complainant be advised on the value for probate in
the amount of 5231.35 and the procedure for its
entitlement. Respondent added therein that As to the matter of
the installments due, as guaranteed by Mr. Freeman's policy, Mrs.
Freeman requests that the remittance be sent directly to Account
No. 0148-27377-7 Far East Bank, Diliman Branch, with business
address at Malakas St. Barangay Central District, Quezon City,
Philippines under the account name: Reyes/Mendiola, which
serves as her temporary account until further notice.

Subsequently, in a letter[13] dated July 29, 1999, addressed to one

Andrea Ransom of Lincoln Financial Group (PP/8500137851),
respondent, declaring that she is the Counsel/Authorized
Representative [of the complainant], per SPA dated April 20, 1999
[should be April 30, 1999], replied that she had appended the
documents required (i.e., marriage certificate and birth
certificate), in her previous letter,[14] dated April 20, 1999, to the
said insurance company; that pursuant to an SPA [15] executed in
her favor, all communications pertaining to complainant should
be forwarded to her law firm; that she sought clarification on
whether complainant is entitled to death benefits under the policy
and, if so, the amount due and the requirements to be complied
with; and that in the absence of a Grant of Probate (i.e., the
deceased having left no will), she enclosed an alternative
document [referring to the Extrajudicial Settlement [16] dated June
1, 1999, notarized by respondent] in support of the claim of the
surviving spouse (Mrs. Freeman) and their sole child (Frank
Lawrence Freeman). In the same letter, respondent reiterated that
complainant requests that any amount of monies due or benefits
accruing, be directly deposited to Account No. 0148-27377-7 at
Far East Bank, Diliman Branch, Malakas St., Quezon City,
Philippines under Reyes/Mendiola, which serves as her temporary
account until further notice.

Complainant declared that in November 1999, she made a

demand upon the respondent to return her passport and the total
amount of P200,000.00 which she gave for the processing of the
visa applications. Not heeding her demand, respondent asked her
to attend a meeting with the Consul of the British Embassy,
purportedly to discuss about the visa applications, but she
purposely did not show up as she got disgusted with the turn of
events. On the supposed rescheduled appointment with the
British Consul, respondent, instead, brought her to Airtech Travel
and Tours, and introduced her to one Dr. Sonny Marquez, the
travel agency's owner, who assured her that he would help her
secure the visas within a week. Marquez made her sign an
application for visa and demanded the amount of P3,000.00. After
a week, she talked to one Marinez Patao, the office secretary of
respondent's law firm, who advised her to ask respondent to
return the total amount of P200,000.00.

In her Counter-Affidavit/Answer[17] dated June 20, 2000,

respondent countered that in 1998, complainant, accompanied by
former Philippine Sports Commission (PSC) Commissioner Josefina
Bauzon and another woman whose identity was not ascertained,
sought legal advice regarding the inheritance of her deceased
husband, a British national. [18] She told complainant to submit
proof of her marriage to the deceased, birth certificate of their
son, and other documents to support her claim for the insurance
proceeds. She averred that before she accepted the case, she
explained to complainant that she would be charging the
following amounts: acceptance fee of P50,000.00, P20,000.00 for
initial expenses, and additional amount of P50,000.00 on a
contingent basis. She said complainant agreed to these rates and,
in fact, readily paid her the said amounts. With an SPA,[19] dated
April 6, 1999 and notarized on April 30, 1999 [second SPA],
having been executed in her favor, she made preliminary
communications with the insurance companies in London
regarding complainant's claims. Having received communications
from said insurance companies, she stated that complainant
offered, which she accepted, to shoulder her plane ticket and the
hotel accommodation, so that she can personally attend to the
matter.She left for London in May 1999 and, upon her return, she
updated the complainant about the status of her claims.

As to the visa arrangements, respondent said that when she met

with complainant, she asked her why she had not left for London,
and the latter replied that her contacts with the embassy had
duped her. She explained to complainant that she could refer her
to a travel consultant who would handle the visa arrangements
for a fee, to which the latter agreed. She stated that when
complainant acceded to such arrangement, she accompanied her,
in December 1999, to a travel consultant of Airtech Travel and
Tours, who found out that complainant's previous visa applications
had been denied four times, on the ground of falsity of
information. Thereafter, complainant was able to secure a visa
through the help of the travel consultant, who charged her a
professional fee of P50,000.00. She added that she had no
participation in the foregoing transactions, other than referring
complainant to the said travel consultant.

With regard to the alleged falsified documents, respondent denied

knowledge about the existence of the same, and declared that
the SPA,[20]dated April 6, 1999, which was notarized on April 30,
1999 [second SPA], was her basis for communications with the
insurance companies in London.She stated that in her absence,
complainant, through wily representations, was able to obtain the
case folder from Leah Buama, her office secretary, and never
returned the same, despite repeated demands. She said that she
was unaware of the loss of the case folder as she then had no
immediate need of it. She also said that her secretary failed to
immediately report about the missing case folder prior to taking a
leave of absence, so as to attend to the financial obligations
brought about by her mother's lingering ailment and consequent
death.[21] Despite repeated requests, complainant failed to return
the case folder and, thus, the law firm was prevented from
pursuing the complainant's insurance claims. She maintained that
through complainant's own criminal acts and machinations, her
law office was prevented from effectively pursuing her
claims. Between January to February 2000, she sent complainant
a billing statement which indicated the expenses incurred [22] by
the law firm, as of July 1999; however, instead of settling the
amount, the latter filed a malicious suit against her to evade
payment of her obligations.

On January 19, 2001, complainant filed a Motion Submitting the

Instant Case for Immediate Resolution with Comments on
Respondent's Answer, alleging, among others, that upon seeing
the letter[23] dated March 9, 1999 of the Coroner's Court,
respondent began to show interest and volunteered to arrange for
the insurance claims; that no acceptance fee was agreed upon
between the parties, as the amounts earlier mentioned
represented the legal fees and expenses to be incurred attendant
to the London trip; that the parties verbally agreed to a 20%
contingent fee out of the total amount to be recovered; that she
obtained the visas with the assistance of a travel consultant
recommended by respondent; that upon return from abroad,
respondent never informed her about the arrangements with the
insurance companies in London that remittances would be made
directly to the respondent's personal account at Far East Bank;
that the reason why respondent went to London was primarily to
attend the International Law Conference, not solely for her
insurance claims, which explained why the receipt for
the P50,000.00, which she gave, bore the letterhead of Broadway
Travel, Inc. (in the amount of P47,500.00) and that she merely
made a handwritten marginal note regarding the receipt of the
amount of P50,000.00; that with the use of an SPA [referring to
the second SPA] in favor of the respondent, bearing her forged
signature, the amount of 10,546.7 [should be 10,960.63],[24] or
approximately equivalent to P700,000.00, was remitted to the
personal bank account of respondent, but the same was never
turned over to her, nor was she ever informed about it; and that
she clarified that she never executed any SPA that would
authorize respondent to receive any money or check due her, but
that the only SPA [first SPA] she executed was for the purpose of
representing her in court proceedings.

Meanwhile, respondent filed a criminal complaint [25] for malicious

mischief, under Article 327 of the Revised Penal Code, against
complainant and one Pacita Mamaril (a former client of
respondent), for allegedly barging into the law office of the former
and, with the use of a pair of scissors, cut-off the cords of two
office computer keyboards and the line connections for the
refrigerator, air conditioning unit, and electric fan, resulting in
damage to office equipment in an estimated amount
of P200,000.00. In the Resolution,[26] dated July 31, 2000, the
Assistant City Prosecutor of Quezon City recommended that the
complaint be dismissed for insufficiency of evidence. The case
was subsequently dismissed due to lack of evidence and for
failure of respondent to appear during the preliminary
investigation of the case.[27]

Thereafter, complainant filed a criminal case for estafa, under

Article 315, paragraph 2 (a) of the Revised Penal Code, against
respondent, docketed as Criminal Case No. Q-02-108181, before
the Regional Trial Court of Quezon City, Branch 83. On Motion for
Reinvestigation by respondent, the City Prosecutor of Quezon
City, in the Resolution[28] dated October 21, 2002, recommended
that the information, dated February 8, 2002, for estafa be
withdrawn, and that the case be dismissed, for insufficiency of
evidence. On November 6, 2002, the Assistant City Prosecutor
filed a Motion to Withdraw Information. [29] Consequently, in the
Order[30] dated November 27, 2002, the trial court granted the
withdrawal of the information, and dismissed the case.

In the Report and Recommendation[31] dated August 28, 2003,

Investigating Commissioner Milagros V. San Juan of the Integrated
Bar of the Philippines (IBP) Commission on Bar Discipline found
respondent to have betrayed the trust of complainant as her
client, for being dishonest in her dealings and appropriating for
herself the insurance proceeds intended for complainant. The
Investigating Commissioner pointed out that despite receipt of the
approximate amount of P200,000.00, respondent failed to secure
the visas for complainant and her son, and that through deceitful
means, she was able to appropriate for herself the proceeds of
the insurance policies of complainant's husband. Accordingly, the
Investigating Commissioner recommended that respondent be
suspended from the practice of law for the maximum period
allowed under the law, and that she be ordered to turn over to
complainant the amounts she received from the London insurance
companies.

On September 27, 2003, the IBP Board of Governors, in Resolution

No. XVI-2003-166,[32] adopted and approved the recommendation
of the Investigating Commissioner, with modification that
respondent be disbarred.

The Court agrees with the observation of the Investigating

Commissioner that complainant had sufficiently substantiated the
charge of gross dishonesty against respondent, for having
appropriated the insurance proceeds of the complainant's
deceased husband, and the recommendation of the IBP Board of
Governors that respondent should be disbarred.
The object of a disbarment proceeding is not so much to punish
the individual attorney himself, as to safeguard the administration
of justice by protecting the court and the public from the
misconduct of officers of the court, and to remove from the
profession of law persons whose disregard for their oath of office
have proved them unfit to continue discharging the trust reposed
in them as members of the bar.[33]

A disciplinary proceeding against a lawyer is sui generis. Neither

purely civil nor purely criminal, it does not involve a trial of an
action or a suit, but rather an investigation by the Court into the
conduct of one of its officers.Not being intended to inflict
punishment, it is in no sense a criminal prosecution. Accordingly,
there is neither a plaintiff nor a prosecutor therein.It may be
initiated by the Court motu proprio. Public interest is its primary
objective, and the real question for determination is whether or
not the attorney is still fit to be allowed the privileges as
such. Hence, in the exercise of its disciplinary powers, the Court
merely calls upon a member of the Bar to account for his
actuations as an officer of the Court, with the end in view of
preserving the purity of the legal profession and the proper and
honest administration of justice, by purging the profession of
members who, by their misconduct, have proved themselves no
longer worthy to be entrusted with the duties and responsibilities
pertaining to the office of an attorney. [34]

Being a sui generis proceeding, the main disposition of this Court

is the determination of the respondent's administrative
liability. This does not include the grant of affirmative reliefs, such
as moral and exemplary damages as prayed for by the
complainant, which may very well be the subject of a separate
civil suit for damages arising from the respondent's wrongful acts,
to be filed in the regular courts.

In the absence of a formal contract, complainant engaged the

legal services of respondent to assist her in securing visa
applications and claiming the insurance proceeds of her deceased
husband. There are conflicting allegations as to the scope of
authority of respondent to represent the complainant. A perusal of
the [first] SPA,[35] dated November 6, 1998, which was not
notarized, showed that complainant merely authorized
respondent to represent her and her son, in order to protect their
rights and interests, in the extrajudicial and/or judicial proceeding
and the possibility of any amicable settlement, relating to the
estate of her deceased husband, both in the Philippines and
United Kingdom. The [second] SPA,[36] dated April 6, 1999 and
notarized on April 30, 1999, allegedly bearing the forged
signature of complainant, in addition to the foregoing
representations, authorized respondent to appear and represent
the complainant, in connection with her insurance claims, and to
receive monies and/or encash treasury warrants, checks arising
from said claims, deposit the same, and dispose of such funds as
may be necessary for the successful pursuit of the claims. The
[third] SPA,[37] also dated April 6, 1999 and notarized on April 30,
1999, allegedly bearing the forged signature of complainant, but
additionally bearing the signatures of two witnesses, was a
faithful reproduction of the second SPA, with exactly the same
stipulations. The three SPAs, attached to the pleadings of the
parties and made integral parts of the records of the case, were
not certified true copies and no proof was adduced to verify their
genuineness and authenticity. Complainant repudiates the
representation of respondent in her behalf with regard to the
insurance claims; however, the admission of respondent herself,
as lawyer, that she received payment from complainant, her
client, constitutes sufficient evidence to establish a lawyer-client
relationship.[38]

Be that as it may, assuming that respondent acted within the

scope of her authority to represent the complainant in pursuing
the insurance claims, she should never deviate from the
benchmarks set by Canon 16 of the Code of Professional
Responsibility which mandates that a lawyer shall hold in trust all
moneys and properties of his client that may come into his
possession.Specifically, Rule 16.01 states that a lawyer shall
account for all money or property collected or received for or from
the client, and Rule 16.03 thereof requires that a lawyer shall
deliver the funds and property of a client when due or upon
demand.

When a lawyer receives money from the client for a particular

purpose, the lawyer is bound to render an accounting to the client
showing that the money was spent for a particular purpose. And if
he does not use the money for the intended purpose, the lawyer
must immediately return the money to his client. [39] In the present
case, the cash/check voucher and the temporary receipts issued
by respondent, with the letterhead of her law firm, Z.P. Reyes Law
Office, indubitably showed that she received the total amount
of P167,000.00[40] from the complainant, in connection with the
handling of the latter's case. Respondent admitted having
received money from the complainant, but claimed that the total
amount of P120,000.00[41] she received was in accordance with
their agreement. Nowhere was it shown that respondent rendered
an accounting or, at least, apprised the complainant of the actual
expenses incurred. This leaves a quandary as to the discrepancy
in the actual amount that respondent should receive, supposedly
pursuant to an agreement of engaging respondent to be her
counsel, as there was absence of a formal contract of legal
services.

Further, on December 4, 1998, complainant gave P50,000.00 to

the respondent for the purpose of assisting her in claiming the
insurance proceeds; however, per Application for United Kingdom
Entry Clearance,[42] dated December 8, 1998, it showed that
respondent's primary purpose in traveling to London was to
attend the International Law Conference in Russell Square,
London. It is appalling that respondent had the gall to take
advantage of the benevolence of the complainant, then grieving
for the loss of her husband, and mislead her into believing that
she needed to go to London to assist in recovering the proceeds
of the insurance policies. Worse, respondent even inculcated in
the mind of the complainant that she had to adhere to the
nefarious culture of giving grease money or lagay, in the total
amount of P43,000.00,[43] to the British Embassy personnel, as if it
was an ordinary occurrence in the normal course of conducting
official business transactions, as a means to expedite the visa
applications. This runs afoul the dictum in Rule 1.01 of Canon 1 of
the Code of Professional Responsibility which states that a lawyer
shall not engage in unlawful, dishonest, immoral or deceitful
conduct.

More importantly, apart from her bare denials that no remittance

was made to her personal bank account, as shown by the monthly
transaction report (covering January to December for the years
2000-2001),[44] respondent never attempted to reconcile the
discrepancy, or give a satisfactory explanation, as to why she
failed to render an accounting, on the proceeds of the insurance
policies that should rightfully belong to the complainant vis--
vis the correspondence by the insurance companies based in
London, pertaining to the remittance of the following amounts to
the respondent's personal bank account, to wit: Per letter[45] dated
November 23, 2000, from one Rupesh Majithia, Administrator,
Customer Services Department of Lincoln Financial Group,
addressed to complainant, stating, among others, that An amount
of 10,489.57 was paid out under the Power of Attorney on
27th September 2000), and per letter, [46] dated April 28, 2000,
from one Jeff Hawkes, Customer Services Claims (CLD), of the
Eagle Star Life Assurance Company Limited, addressed to one
Andrea Ransom of the Lincoln Financial Group, The Quays,
stating, among others, that I can confirm that a death claim was
made on the policy on 13 October 1999 when an amount
of 471.06 was sent by International Moneymover to the client's
legal representative, ZP Reyes Law Office of Quezon City,
Philippines. Clearly, there is no doubt that the amounts
of 10,489.57 and 471.06 were remitted to respondent through
other means of international transactions, such as the
International Moneymover, which explains why no direct
remittance from the insurance companies in London could be
traced to the personal bank account of respondent, per monthly
transaction report, covering January to December for the years
2000-2001.

A criminal case is different from an administrative case, and each

must be disposed of according to the facts and the law applicable
to each case.[47]Section 5, in relation to Sections 1 [48] and 2,[49] Rule
133, Rules of Court states that in administrative cases, only
substantial evidence is required,
not proof beyond reasonable doubt as in criminal cases, or
preponderance of evidence as in civil cases. Substantial evidence
is that amount of relevant evidence which a reasonable mind
might accept as adequate to justify a conclusion. Applying the
rule to the present case, the dismissal of a criminal case does not
preclude the continuance of a separate and independent action
for administrative liability, as the weight of evidence necessary to
establish the culpability is merely substantial
evidence. Respondent's defense that the criminal complaint for
estafa against her was already dismissed is of no
consequence. An administrative case can proceed independently,
even if there was a full-blown trial wherein, based on both
prosecution and defense evidence, the trial court eventually
rendered a judgment of acquittal, on the ground either that the
prosecution failed to prove the respondent's guilt beyond
reasonable doubt, or that no crime was committed. More so, in
the present administrative case, wherein the ground for the
dismissal of the criminal case was because the trial court granted
the prosecution's motion to withdraw the information and, a
fortiori, dismissed the case for insufficiency of evidence.

In Velez v. De Vera,[50] the Court ruled that the relation between

attorney and client is highly fiduciary in nature. Being such, it
requires utmost good faith, loyalty, fidelity, and disinterestedness
on the part of the attorney. Its fiduciary nature is intended for the
protection of the client. The Canon of Professional Ethics provides
that the lawyer should refrain from any action whereby for his
personal benefit or gain, he abuses or takes advantage of the
confidence reposed in him by his client. Money of the client or
collected for the client, or other trust property coming into the
possession of the lawyer, should be reported and accounted for
promptly and should not, under anycircumstances, be
commingled with his own or be used by him.Consequently, a
lawyer's failure to return upon demand the funds or property held
by him on behalf of his client gives rise to the presumption that
he has appropriated the same for his own use to the prejudice of,
and in violation of the trust reposed in him by, his client. It is a
gross violation of general morality as well as of professional
ethics; it impairs the public confidence in the legal profession and
deserves punishment. Lawyers who misappropriate the funds
entrusted to them are in gross violation of professional ethics and
are guilty of betrayal of public confidence in the legal profession.
Those who are guilty of such infraction may be disbarred or
suspended indefinitely from the practice of law. [51] Indeed,
lawyering is not a business. It is a profession in which duty to
public service, not money, is the primary consideration. [52]

In some cases, the Court stripped lawyers of the privilege to

practice their profession for breach of trust and confidence
pertaining to their clients' moneys and properties. In Manzano v.
Soriano,[53] therein respondent, found guilty of grave misconduct
(misappropriating the funds belonging to his client) and
malpractice, represented therein complainant in a collection suit,
but failed to turn over the amount of P50,000.00 as stipulated in
their agreement and, to conceal the misdeed, executed a
simulated deed of sale, with himself as the vendor and, at the
same time, the notary public. In Lemoine v. Balon, Jr.,[54] therein
respondent, found guilty of malpractice, deceit, and gross
misconduct, received the check corresponding to his client's
insurance claim, falsified the check and made it payable to
himself, encashed the same, and appropriated the proceeds.

Law advocacy, it has been stressed, is not capital that yields

profits. The returns it births are simple rewards for a job done or
service rendered. It is a calling that, unlike mercantile pursuits
which enjoy a greater deal of freedom from government
interference, is impressed with public interest, for which it is
subject to State regulation.[55] Respondent's repeated
reprehensible acts of employing chicanery and unbecoming
conduct to conceal her web of lies, to the extent of milking
complainant's finances dry, and deceitfully arrogating upon
herself the insurance proceeds that should rightfully belong to
complainant, in the guise of rendering legitimate legal services,
clearly transgressed the norms of honesty and integrity required
in the practice of law. This being so, respondent should be purged
from the privilege of exercising the noble legal profession.

WHEREFORE, respondent Atty. Zenaida P. Reyes is found guilty of

gross misconduct and DISBARRED from the practice of law. Let
her name be stricken off the Roll of Attorneys. This Decision is
immediately executory.

Let all the courts, through the Office of the Court Administrator,
Integrated Bar of the Philippines, and the Office of the Bar
Confidant, be notified of this Decision and be it duly recorded in
the personal file of the respondent.

Respondent is ORDERED to turn over to complainant Marites E.

Freeman the proceeds of the insurance policies remitted to her by
Lincoln Financial Group, in the amount of 10,489.57, and Eagle
Star Life Assurance Company Limited, 471.06, or in the total
amount of 10,960.63, which is approximately equivalent
to P700,000.00, pursuant to the prevailing exchange rate at the
time of the subject transaction.

SO ORDERED.
 TERESITA T. BAYONLA, A.C. No. 4808
Complainant,
Present:
CORONA, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
-versus- BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
SERENO,
REYES, and
PERLAS-BERNABE, JJ.:
ATTY. PURITA A. REYES,
Respondent. Promulgated:

November 22, 2011

x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

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.
- Code of Professional Responsibility.

This canon of professional responsibility is at the center of this

administrative complaint for disbarment for gross dishonesty, deceit, conversion,
and breach of trust filed against Atty. Purita A. Reyes by Teresita T. Bayonla, her
client.[1]

Antecedents

Petra Durban and Paz Durban were sisters who had jointly owned a parcel of
land situated in Butuan City in their lifetimes. They died without leaving a will.
Their land was thereafter expropriated in connection with the construction of the
Bancasi Airport. An expropriation compensation amounting to P2,453,429.00 was
to be paid to their heirs. Bayonla and her uncle, Alfredo Tabada (Alfredo), were the
compulsory heirs of Paz, being, respectively, Pazs granddaughter and son.[2]

On June 22, 1997, Bayonla charged Atty. Reyes with gross dishonesty,
deceit, conversion, and breach of trust. Bayonla alleged that on October 21, 1993,
she and Alfredo had engaged the legal services of Atty. Reyes to collect their share
in the expropriation compensation from the Air Transportation Office (ATO),
Cagayan De Oro City,[3] agreeing to her attorneys fees of 10% of whatever amount
would be collected; that in November 1993, Atty. Reyes had collected P1 million
from the ATO; that Bayonlas share, after deducting Atty. Reyes attorneys fees,
would be P75,000.00, but Atty. Reyes had delivered to her only P23,000.00, and
had failed to deliver the balance of P52,000.00 despite repeated demands; that on
June 5, 1995, Atty. Reyes had collected the amount of P121,119.11 from the ATO;
that Bayonlas share, after deducting Atty. Reyes attorneys fees, would
be P109,007.20, but Atty. Reyes had handed her only P56,500.00, and had failed to
deliver the balance of P52,507.20; and that Atty. Reyes should be disbarred for
depriving her of her just share.[4]

In her comment dated February 10, 1998,[5] Atty. Reyes admitted that
Bayonla and Alfredo had engaged her legal services for the purpose of collecting
their share in the expropriation compensation; that as consideration for her
services, Bayonla and Alfredo had agreed upon a 40% contingent fee for her; that
she had given to Bayonla more than what had been due to her; that Alfredo had
received from the ATO the check for the second release corresponding to the share
of both Bayonla and Alfredo; that Alfredo had gotten more than Bayonla out of the
second release; that on June 5, 1995 she had received out of the second release by
the ATO only her 40% contingent fee; that Bayonla and Alfredo had agreed to bear
the expenses for the collection of their share; that she had incurred travel and other
expenses in collecting such share; and that she should be absolved from liability
arising from the complaint.

On June 29, 1998, the Court referred the complaint to the Integrated Bar of
the Philippines (IBP) for investigation, report, and recommendation.[6]

On April 20, 1999, IBP Commissioner Lydia A. Navarro (Commissioner

Navarro) rendered a report,[7] whereby she found and recommended against Atty.
Reyes as follows:

In so far as this case of disbarment is concerned, the issue hinges

only on the complainants position; one of the heirs of Paz Durban whose
legal services of the respondent was not revoked.
 The parties were required to submit documents relative to their
respective defenses (sic) specially the actual amounts released by ATO,
actual amount due to the complainant as her share, the remittances made
by the respondent to the complainant of her share and receipts to prove
the same.

Unfortunately, only the respondent filed an answer without the

necessary documents required of them and attached only a xerox copy of
the computation made by Atty. Ismael Laya for the heir of Pedro Durban
which had already been previously attached to the records of this case.

In the said computation it appears that for the release on February

17, 1993, the heirs of Durban received P84,852.00 and for the second
release each of them as well as the complainant was
entitled P121,119.11. It could be inferred from here that complainant was
supposed to received (sic) P205,971.11 as her share.

Inasmuch as the attorneys fees of 40% was (sic) supported by

evidence instead of (sic) complainants allegation of ten [10%] percent;
then respondent was entitled to P82,388.45 as attorneys fees; leaving a
balance of P123,582.66 due to the complainant.

Respondents allegation that she gave more than what was alleged
by the complainant is untenable for she did not submit evidence to prove
the same, therefore, as it is complainants allegation that she received
only P79,000.00 for her share as a whole shall be considered for the
moment until such time that proofs to the contrary shall have been
submitted.

Considering that complainant was supposed to receive the amount

due her which was P123,582.66 and actually received only P79,000.00;
then respondent still has to remit to complainant the amount
of P44,582.66.

From the records of this case respondent alleged that she only
collected the 40% attorneys fees for the second release whereby Alfredo
Tabada the other heir of Paz Durban received the check from ATO and
got a large part of the same. Respondent did not mention how much she
got as attorneys fees against complainants share but on the whole
amounting to P496,895.00 which is unfair to the complainant.

As counsel for the heirs of Paz Durban, complainant herein should

have been advised by the respondent and given a breakdown of whatever
amount was received or came to her knowledge as complainants counsel.
Short of the foregoing, respondent violated Rule 16.01 Canon 16
Chapter III of the Code of Professional Responsibility; to wit:

Rule 16.01 A lawyer shall account for all money or

property collected or received for or from the client.
 Respondent was given a chance to rectify whatever errors or
misgivings (sic) she had done for her client but she unfortunately failed
to do so and did not comply with the Order dated October 29, 1998.

Wherefore, in view of the foregoing, the Undersigned respectfully

recommends that the respondent be required to render an accounting or
inventory duly confirmed by the complainant of all the collected shares
due the complainant and remit to the latter the said amount
of P44.582.66;

Until such time that respondent had complied with the

aforementioned, she is suspended from the practice of her legal
profession.

Respectfully submitted.

On June 19, 1999, the IBP Board of Governors adopted and approved the
report of Commissioner Navarro through Resolution No. XIII-99-165.[8]

Atty. Reyes moved for reconsideration, but on September 27, 1999 the IBP
Board of Governors denied her motion for reconsideration through Resolution No.
XIV-99-117.[9]

Atty. Reyes then filed a motion for reinvestigation. However, through its
Resolution No. XV-2001-111 adopted on July 28, 2001, the IBP Board of
Governors denied the motion for reinvestigation for lack of jurisdiction, stating
that the matter had already been endorsed to the Court.[10]

On July 30, 2002, the Court directed the IBP Board of Governors to report
on whether Atty. Reyes had already accounted for and remitted the amount
of P44,582.66 to Bayonla.[11]

On August 22, 2002, the IBP Board of Governors informed the Court that
per the manifestation of Bayonlas counsel Atty. Reyes had not yet rendered an
accounting and had not yet remitted the amount of P44,582.66 to Bayonla.[12]

Through her manifestation dated September 4, 2002 to the Court, [13]Atty.

Reyes posed some queries, as follows: (a) whether she could be compelled to pay
the amount of P44,582.66 to Bayonla even if the latters claims had been based on
perjured statements; (b) whether the payment of the amount would operate to
dismiss the estafa case previously filed by Bayonla against her for allegedly failing
to deliver the balance of Bayonlas share; and (c) whether she could deposit the
amount of P44,582.66 with either the IBP Board of Governors or the Court.
 Atty. Reyes also stated in the manifestation that the IBP Board of Governors
did not accord to her the right to confront Bayonla during the investigation
conducted by the IBP Board of Governors; that Bayonlas counsel had induced
Bayonla to file the estafa charge against her; and that this had prompted her to
initiate a disbarment complaint against Bayonlas counsel.[14]

On May 24, 2010, the Office of the Bar Confidant (OBC) recommended the
final resolution of this case.[15] The recommendation was noted by the Court on
June 29, 2010.[16]

Issue

Whether or not the findings and recommendations of the IBP Board of

Governors were proper.

Ruling

We affirm the findings of the IBP Board of Governors, which were

supported by the records, but we modify the sanctions to be imposed on Atty.
Reyes.

I
Respondent was guilty of violating the canons
of the Code of Professional Responsibility

Canon 16 of the Code of Professional Responsibility requires that a lawyer

shall hold in trust all moneys and properties of her client that may come into her
possession. Rule 16.01 of Canon 16 imposes on the lawyer the duty to account for
all money or property collected or received for or from the client. Rule 16.03 of
Canon 16 demands that the lawyer shall deliver the funds and property of his client
when due or upon demand, subject to the lawyers lien over the funds, or the
lawyers option to apply so much of the funds as may be necessary to satisfy the
lawful fees and disbursements, giving notice promptly thereafter to the client.

The canons are appropriate considering that the relationship between a

lawyer and her client is highly fiduciary, and prescribes on a lawyer a great degree
of fidelity and good faith. There is no question that the money or property received
by a lawyer for her client properly belongs to the latter.[17]Conformably with these
canons of professional responsibility, we have held that a lawyer is obliged to
render an accounting of all the property and money she has collected for her client.
This obligation includes the prompt reporting and accounting of the money
collected by the lawyer by reason of a favorable judgment to his client.[18]
 Based on the records, Bayonla and her uncle would each receive the amount
of P84,852.00 out of the first release, and the amount of P121,119.11 out of the
second release. Her total share from the two releases was P205,971.11. With Atty.
Reyes being entitled to P82,388.44 as attorneys fees, the equivalent of 40% of
Bayonlas share, the net share of Bayonla was P123,582.67. Yet, Atty. Reyes
actually delivered to her only P79,000.00,[19]which was short
by P44,582.67. Despite demands by Bayonla and despite the orders from the IBP
Board of Governors for her to remit the shortage,[20] Atty. Reyes refused to do so.

By not delivering Bayonlas share despite her demand, Atty. Reyes violated
the aforestated canons. The money collected by Atty. Reyes as the lawyer of
Bayonla was unquestionably money held in trust to be immediately turned over to
the client.[21] The unjustified withholding of money belonging to the client warrants
the imposition of disciplinary sanctions on the lawyer.[22] Without doubt, Atty.
Reyes failure to immediately account for and to deliver the money upon demand
was deceit, for it signified that she had converted the money to her own use, in
violation of the trust Bayonla had reposed in her. It constituted gross misconduct
for which the penalty of suspension from the practice of law became justified
pursuant to Section 27, Rule 138 of the Rules of Court, to wit:

Section 27. Disbarment or suspension of attorneys by Supreme

Court, grounds therefor. A member of the bar may be disbarred
or suspended from his office as attorney by the Supreme Court for
any deceit, malpractice, or other gross misconduct in such office,
grossly immoral conduct, or by reason of his conviction of a crime
involving moral turpitude, or for any violation of the oath which he is
required to take before admission to practice, or for a wilful
disobedience appearing as an attorney for a party to a case without
authority so to do. The practice of soliciting cases at law for the purpose
of gain, either personally or through paid agents or brokers, constitutes
malpractice.

The disbarment or suspension of a member of the Philippine Bar by

a competent court or other disciplinary agency in a foreign jurisdiction
where he has also been admitted as an attorney is a ground for his
disbarment or suspension if the basis of such action includes any of the
acts hereinabove enumerated.

The judgment, resolution or order of the foreign court or

disciplinary agency shall be prima facie evidence of the ground for
disbarment or suspension. (As amended by SC Resolution dated
February 13, 1992.)

II
Pendency of other cases not an obstacle
to administrative proceeding against respondent
 The filing of the perjury charge by Atty. Reyes against Bayonla and of
the estafa charge by Bayonla against Atty. Reyes could not halt or excuse the duty
of Atty. Reyes to render an accounting and to remit the amount due to Bayonla.
Nor did the pendency of such cases inhibit this administrative matter from
proceeding on its due course. It is indisputable that the pendency of any criminal
charges between the lawyer and her client does not negate the administrative
proceedings against the lawyer. We explained why in Suzuki v. Tiamson,[23] to wit:

The settled rule is that criminal and civil cases are different from
administrative matters, such that the disposition in the first two will
not inevitably govern the third and vice versa. In this light, we refer to
this Courts ruling in Berbano vs. Barcelona, citing In re Almacen, where
it was held:
Disciplinary proceedings against lawyers are sui generis.
Neither purely civil nor purely criminal, they do not involve a
trial of an action or a suit, but rather investigations by the Court
into the conduct of one of its officers. Not being intended to
inflict punishment, [they are] in no sense a criminal
prosecution. Accordingly, there is neither a plaintiff nor a
prosecutor therein. [They] may be initiated by the Court motu
proprio. Public interest is [their] primary objective, and the real
question for determination is whether or not the attorney is still a
fit person to be allowed the privileges as such. Hence, in the
exercise of its disciplinary powers, the Court merely calls
upon a member of the Bar to account for his actuations as an
officer of the Court with the end in view of preserving the
purity of the legal profession and the proper and honest
administration of justice by purging the profession of
members who by their misconduct have prove[n] themselves
no longer worthy to be entrusted with the duties and
responsibilities pertaining to the office of an attorney.

Hence, our only concern in the instant case is the determination

of respondents administrative liability and our findings herein
should not in any way be treated as having any material bearing on
any other judicial action which the parties may choose to file against
each other.[emphasis supplied]

Relevantly, we have also emphasized in Gatchalian Promotions Talents

Pool, Inc. v. Naldoza [24] that

xxx a finding of guilt in the criminal case will not necessarily result
in a finding of liability in the administrative case. Conversely,
respondents acquittal does not necessarily exculpate him
administratively. In the same vein, the trial courts finding of civil
liability against the respondent will not inexorably lead to a similar
 finding in the administrative action before this Court. Neither will a
favorable disposition in the civil action absolve the administrative
liability of the lawyer.

It serves well to mention, lastly, that the simultaneous pendency of an

administrative case and a judicial proceeding related to the cause of the
administrative case, even if the charges and the evidence to be adduced in such
cases are similar, does not result into or occasion any unfairness, or prejudice, or
deprivation of due process to the parties in either of the cases.[25]

III
No denial of due process to respondent

Atty. Reyes contends that she was denied her right to due process because
the IBP Board of Governors did not permit her to personally confront the
complainant.

We do not consider Atty. Reyess contention valid. She was accorded full due
process, for she in fact participated in all stages of the proceedings.

It is true that a lawyer shall not be disbarred or suspended from the practice
of law until she has had full opportunity upon reasonable notice to answer the
charges against her, to produce witnesses in her behalf, and to be heard by herself
or counsel.[26] Contrary to Atty. Reyes insistence, however, the IBP Board of
Governors was under no legal obligation to conduct a trial-type proceeding at
which she could have personally confronted Bayonla. In other words, the lack of
such proceeding neither diminished her right to due process nor deprived her of the
right. A formal investigation entailing notice and hearing is required in
administrative proceedings for disbarment, but the imperative need of notice and
hearing does not always mean the holding of an adversarial trial-type proceeding.
Due process is still satisfied when the parties are afforded the reasonable
opportunity to be heard and to submit evidence in support of their respective sides.
[27]
As the Court said in Samalio v. Court of Appeals:[28]

Due process in an administrative context does not require trial-

type proceedings similar to those in courts of justice. Where
opportunity to be heard either through oral arguments or through
pleadings is accorded, there is no denial of procedural due process. A
formal or trial-type hearing is not at all times and in all instances
essential. The requirements are satisfied where the parties are
afforded fair and reasonable opportunity to explain their side of the
controversy at hand. The standard of due process that must be met
in administrative tribunals allows a certain degree of latitude as long
as fairness is not ignored. In other words, it is not legally
objectionable for being violative of due process for an
administrative agency to resolve a case based solely on position
 papers, affidavits or documentary evidence submitted by the parties
as affidavits of witnesses may take the place of their direct
testimony.
In this case, petitioner was heard through the various pleadings
which he filed with the Board of Discipline of the BID when he filed his
answer and two motions to dismiss, as well as other motions and papers.
He was also able to participate in all stages of the administrative
proceeding. He was able to elevate his case to the Secretary of Justice
and, subsequently, to the CSC by way of appeal.
We have consistently held that the essence of due process is
simply the opportunity to be heard or, as applied to administrative
proceedings, the opportunity to explain ones side or the opportunity
to seek a reconsideration of the action or ruling complained of. And
any seeming defect in its observance is cured by the filing of a
motion for reconsideration. Denial of due process cannot be
successfully invoked by a party who has had the opportunity to be
heard on his motion for reconsideration. [bold emphasis supplied]

Nevertheless, the IBP Board of Governors actually conducted a formal

investigation of the complaint against Atty. Reyes upon the directive of the Court.
In her formal investigation of the complaint, Commissioner Navarro allowed both
parties to submit their respective proofs on the actual amounts released by the
ATO, the amounts due to Bayonla as her share, Atty. Reyes corresponding
contingent fees, the remittances by Atty. Reyes to Bayonla, and the receipts
showing such remittances.[29] In due course, Atty. Reyes submitted her written
answer, attaching to the answer the documents supporting her defenses.
[30]
Commissioner Navarro took all of Atty. Reyes submissions into good and proper
account, as borne out by her report.[31]And even after the IBP Board of Governors
had adopted Commissioner Navarros report (and its recommendation), Atty. Reyes
was still afforded the fair opportunity to challenge the adverse findings by filing
her motion for reconsideration, although such motion was ultimately resolved
against her.[32]

IV
Sanction

The penalty for gross misconduct consisting in the failure or refusal despite
demand of a lawyer to account for and to return money or property belonging to a
client has been suspension from the practice of law for two years. In Almendarez,
Jr. v. Langit,[33] the lawyer who withdrew the rentals pertaining to his client
totaling P255,000.00 without the knowledge of the client and who ignored the
demand of the client to account for and to return the amount was suspended from
the practice of law for two years. In Mortera v. Pagatpatan,[34] the lawyer
received P155,000.00 from the adversary of his clients as partial payment of a final
and executory decision in favor of the clients pursuant to a secret arrangement
between the lawyer and the adversary, and deposited the amount to the lawyers
personal bank account without the knowledge of the clients; the lawyer thereafter
refused to surrender the money to his clients. The suspension of the lawyer for two
years from the practice of law was ordered by the Court. In Small v. Banares,[35] a
similar penalty of suspension for a period of two years from the practice of law
was imposed on a lawyer who had failed to file a case for the purpose of which he
had received an amount of P80,000.00, and to return the amount upon
demand. In Barcenas v. Alvero,[36] the Court suspended for a period of two years
from the practice of law a lawyer who had failed to immediately account for and to
return P300,000.00 received from a client for the purpose of depositing it in court,
after the lawyer had been found not to have deposited the money in court.

Considering that the sin of Atty. Reyes had striking resemblance with the
sins thus sanctioned in the aforementioned precedents, the proper penalty for her is
suspension from the practice of law for two years, with warning that a similar
offense by her will be dealt with more severely.

Atty. Reyes is further obliged to pay to Bayonla the amount of P44,582.67,

which the IBP Board of Governors found to be still unpaid, by way of restitution.
Although the Court renders this decision in an administrative proceeding primarily
to exact the ethical responsibility on a member of the Philippine Bar, the Courts
silence about the respondent lawyers legal obligation to restitute the complainant
will be both unfair and inequitable. No victim of gross ethical misconduct
concerning the clients funds or property should be required to still litigate in
another proceeding what the administrative proceeding has already established as
the respondents liability. That has been the reason why the Court has required
restitution of the amount involved as a concomitant relief in the cited cases
of Mortera v. Pagatpatan, supra, Almendarez, Jr. v. Langit, supra, and Small v.
Banares, supra.

In addition, Atty. Reyes is liable for interest of 12% per annumreckoned

from June 22, 1997, the date when she was formally charged with disbarment. This
rate of interest was prescribed by the Court in Almendarez, Jr. v. Langit and Small
v. Banares.

WHEREFORE, the Court FINDS AND PRONOUNCES ATTY. PURITA

A. REYES guilty of violating Rule 16.01 and Rule 16.03 of Canon 16 of the Code
of Professional Responsibility, and SUSPENDS her from the practice of law for a
period of two years effective upon receipt of this Decision, with warning that a
similar offense by her will be dealt with more severely.

The Court ORDERS Atty. Reyes to pay to complainant Teresita T. Bayonla

within 30 days from receipt of this Decision the amount of P44,582.67, with
interest of 12% per annum from June 22, 1997, and to render unto the complainant
a complete written accounting and inventory of: - (a) the amounts she had
collected from the Air Transportation Office as expropriation compensation; (b) the
total amount due to the complainant; (c) the total amount she had actually remitted
to the complainant; and (d) the amount she had deducted as her contingent fee vis--
vis the complainant.

Within the same period of compliance, Atty. Reyes shall submit to the Court,
through the Office of the Bar Confidant, authentic written proof that her
accounting, inventory, and payment were furnished to and received by the
complainant in due course.

This Decision is without prejudice to any pending or contemplated

proceedings against Atty. Reyes.

Let this Decision be disseminated to all lower courts and to the Integrated
Bar of the Philippines, with a copy of it to be included in Atty. Reyes file in the
Office of the Bar Confidant.

SO ORDERED.
A.C. No. 10568 January 13, 2015
[Formerly CBD Case No. 10-2753]

MARILEN G. SOLIMAN, Complainant,

vs.
ATTY. DITAS LERIOS-AMBOY, Respondent.

RESOLUTION

REYES, J.:

This is an administrative complaint filed by Marilen G. Soliman (Soliman) against Atty. Ditas Lerios-
1

Amboy (Atty. Amboy) for violation of the Code of Professional Responsibility.

In her complaint, Soliman claimed that she engaged the services of Atty. Amboy on May 27, 2007 in
connection with a partition case. In accordance with the Retainer Agreement between the parties,
Soliman agreed to pay Atty. Amboy P50,000.00 as acceptance fee. Upon the latters engagement,
Soliman paid her P25,000.00. Later on, Atty. Amboy advised Soliman to no longer institute a partition
case since the other co-owners of the property were amenable to the partition thereof. Instead, Atty.
Amboy just facilitated the issuance of the titles to the said property from the coowners to the
individual owners; the P25,000.00 already paid to her was then treated as payment for her
professional services. 2

In November 2008, Soliman gave Atty. Amboy P16,700.00 as payment for the transfer tax. In the
second quarter of 2009, Atty. Amboy told Soliman that there was a delay in the issuance of the titles
to the property because of the failure of the other co-owners to submit certain documents. Atty.
Amboy then told Soliman that someone from the Register of Deeds (RD) can help expedite the
issuance of the titles for a fee of P80,000.00. On June 17, 2009, Atty. Amboy told Soliman that her
contact in the RD agreed to reduce the amount to P50,000.00. 3

Meanwhile, Soliman deposited the amount of P8,900.00 to Atty. Amboys bank account as payment
for the real property tax for the year 2009. Thereafter, Soliman deposited the amount of P50,000.00
to Atty. Amboys bank account as payment for the latters contact in the RD. 4

On October 16, 2009, Atty. Amboy informed Soliman that the certificates of title to the property
werethen only awaiting the signature of the authorized officer. However, Atty. Amboy failed to deliver
the respective certificates of title of Soliman and her co-owners to the subject property. On January
5

6, 2010, Atty. Amboys secretary informed Soliman that their contact in the RD was asking for an
additional P10,000.00 to facilitate the release of the said certificates of title. Soliman then refused to
further pay the amount being asked by Atty. Amboys secretary. Thereafter, Soliman kept on asking
6

Atty. Amboy for any update on the release of the said titles, but the latter was not responding to her
queries. On July 7, 2010, Soliman and Atty. Amboys secretary went to the office of a certain Atty.
Marasigan, Deputy RD of Manila. Soliman asked Atty. Marasigan if he received the 50,000.00as
payment for the release of the said titles. Atty. Marasigan denied having received any amount to
facilitate the release of the titles and claimed that the reason why the same could not be processed
was that Atty. Amboy failed to file certain documents. 7

Soliman further claimed that Atty. Amboy thereafter refused to release the pertinent documents she
gave to her for the processing of the titles to the property or give back the P50,000.00 that was
already paid to her.8

For her part, Atty. Amboy admitted that she had a retainer agreement with Soliman, but denied
having received any amount from the latter pursuant to the said agreement. She claimed that the
retainer agreement was not implemented since the partition case was not instituted. She claimed
that she merely undertook to research, gather and collate all documents required in the partition and
in the transfer of the titles from the co-owners to the individual owners. She denied having failed to
submit the relevant documents to the RD which caused the delay in the processing of the said titles.
She likewise denied having asked Soliman for P50,000.00 to facilitate the release of the said titles. 9

On May 29, 2012, after due proceedings, the Investigating Commissioner of the Commission on Bar
Discipline of the Integrated Bar of the Philippines (IBP) issued a Report and
Recommendation, which recommended the suspension of Atty. Amboy from the practice of law for
10

six (6) months. The Investigating Commissioner opined that Atty. Amboy violated the Code of
Professional Responsibility by failing to observe due diligence in dealing with Soliman. It also opined
that she failed to inform the latter of the status of the proceedings for the issuance of the said titles.

On March 20, 2013, the IBP Board of Governors issued a Resolution, which adopted and approved
11

the recommendation of the Investigating Commissioner, albeit with the modification that the period of
Atty. Amboys suspension from the practice of law was increased from six (6) months to two (2)
years and that she was ordered to return the entire amount she received from Soliman.

Atty. Amboy sought a reconsideration of the Resolution dated March 20, 2013, but it was denied by
12

the IBP Board of Governors in its Resolution dated March 21, 2014.
13

After a thorough perusal of the respective allegations of the parties and the circumstances of this
case, the Court affirms the penalty imposed by the IBP Board of Governors.

The Code of Professional Responsibility clearly states that a lawyer owes fidelity to the cause of his
clientand that he should be mindful of the trust and confidence reposed in him. A lawyer is
14

mandated to serve his client with competence and diligence;to never neglect a legal matter
entrusted to him; and to keep his client informed of the status of his case and respond within a
reasonable time to the clients request for information. 15

The circumstances of this case clearly show that Atty. Amboy, after receiving P25,000.00 as payment
for her professional services, failed to submit material documents relative to the issuance of
separate certificates of title to the individual owners of the property. It was her negligence which
caused the delay in the issuance of the certificates of title.

To make matters worse, Atty. Amboy abetted the commission of an illegal act when she asked from
Soliman the amount of P50,000.00 to be paid to her "contact" inside the office of the RD in order to
facilitate the release of the said certificates of title. Further, notwithstanding the payment
of P50,000.00, Atty. Amboy still failed to obtain issuance of the said certificates of title. Insteadof
procuring the release of the certificates of title as she promised, Atty. Amboy asked for an
additional P10,000.00 from Soliman.

Clearly, this is not a simple case of negligence and incompetence by a counsel in dealing with a
client. Atty. Amboys acts undermined the legal processes, which she swore to uphold and defend.
1wphi1

In swearing to the oath, Atty. Amboy bound herself to respectthe law and legal processes.

The Court further finds improper the refusal of Atty. Amboy to return the amount of P50,000.00 which
she paid inorder to facilitate the release of the certificates of title. To reiterate, upon inquiry, Atty.
Marasigan, the Deputy RD of Manila, denied having received any amount from Atty. Amboy. In not
returning the money to Soliman after a demand therefor was made following her failure to procure
the issuance of the certificates of title, Atty. Amboy violated Canon 16 of the Code of Professional
Responsibility, particularly Rule 16.03 thereof, which requires that a lawyer shall deliver the funds
and property of his client upon demand. It is settled that the unjustified withholding of money
belonging to a client warrants the imposition of disciplinary action. "A lawyer's failure to return upon
16

demand the funds held by him on behalf of his client gives rise to the presumption that he has
appropriated the same for his own use in violation of the trust reposed in him by his client. Such act
is a gross violation of general morality as well as of professional ethics. It impairs public confidence
in the legal profession and deserves punishment." 17
WHEREFORE, in consideration of the foregoing disquisitions, Atty. Ditas Lerios-Amboy is found
GUILTY of violating Rule 16.03, Canons 17 and 18, and Rules 18.03 and 18.04 of the Code of
Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of two
(2) years, effective upon receipt of this Resolution. Furthermore, she is ORDERED to return to
Marilen G. Soliman the entire amount of Fifty Thousand Pesos (P50,000.00) she received from the
latter, plus legal interest thereon, reckoned from finality of this Resolution until fully paid. The
respondent is further DIRECTED to promptly submit to this Court written proof of her compliance
within thirty (30) days from notice of this Resolution.

Let copies of this Resolution be furnished to the Office of the Bar Confidant, to be appended to Atty.
Ditas Lerios-Amboy's personal record as an attorney; to the Integrated Bar of the Philippines; and to
the Office of the Court Administrator for dissemination to all courts throughout the country for their
information and guidance.

A.C. NO. 10050 December 3, 2013

VICTORIA C. HEENAN, Complainant,

vs.
ATTY. ERLINA ESPEJO, Respondent.

DECISION

VELASCO, JR., J.:

This resolves the administrative complaint filed by Victoria Heenan (Victoria) against Atty. Erlina
Espejo (Atty. Espejo) before the Commission on Bar Discipline (CBD) of the Integrated Bar of the
Philippines (IBP) for violation of lawyers oath, docketed as CBD Case No. 10-2631.

The Facts

Sometime in January 2009, Victoria met Atty. Espejo through her godmother, Corazon Eusebio
(Corazon). Following the introduction, Corazon told Victoria that Atty. Espejo was her lawyer in need
of money and wanted to borrow two hundred fifty thousand pesos (PhP 250,000) from her (Victoria).
Shortly thereafter, Victoria went to the house of Corazon for a meeting with Atty. Espejo where they
discussed the terms of the loan. Since Atty. Espejo was introduced to her as her godmothers lawyer,
Victoria found no reason to distrust the former. Hence, during the same meeting, Victoria agreed to
accomodate Atty. Espejo and there and then handed to the latter the amount of PhP 250,000. To
secure the payment of the loan, Atty. Espejo simultaneously issued and turned over to Victoria a
check dated February 2, 2009 for two hundred seventy-five thousand pesos (PhP 275,000) covering
1

the loan amount and agreed interest. On due date, Atty. Espejo requested Victoria to delay the
deposit of the check for the reason that she was still waiting for the release of the proceeds of a
bank loan to fund the check. However, after a couple of months of waiting, Victoria received no word
from Atty. Espejo as to whether or not the check was already funded enough. In July 2009, Victoria
received an Espejo-issued check dated July 10, 2009 in the amount of fifty thousand pesos (PhP
50,000) representing the interest which accrued due to the late payment of the principal obligation.
2

Victoria deposited the said check but, to her dismay, the check bounced due to insufficiency of
funds. Atty. Espejo failed to pay despite Victorias repeated demands. Worried that she would not be
able to recover the amount thus lent, Victoria decided to deposit to her account the first check in the
amount of PhP 275,000, but without notifying Atty. Espejo of the fact. However, the said check was
also dishonored due to insufficiency of funds. Victoria thereafter became more aggressive in her
efforts to recover her money. She, for instance, personally handed to Atty. Espejo a demand letter
dated August 3, 2009. 3

When Atty. Espejo still refused to pay, Victoria filed a criminal complaint against Atty. Espejo on
August 18, 2009 for violation of Batas Pambansa Blg. 22 and Estafa under Article 315 of the
Revised Penal Code, as amended, before the Quezon City Prosecutors Office. 4
Atty. Espejo disregarded the notices and subpoenas issued by the Quezon City Prosecutors Office
which she personally received and continued to ignore Victorias demands. She attended only one
(1) scheduled preliminary investigation where she promised to pay her loan obligation. 5

In November 2009, Atty. Espejo issued another check dated December 8, 2009 in the amount of two
hundred seventy five thousand pesos (PhP 275,000.). However, to Victorias chagrin, the said check
was again dishonored due to insufficiency of funds. Atty. Espejo did not file any counter-affidavit or
6

pleading to answer the charges against her. On November 17, 2009, the case was submitted for
resolution without Atty. Espejos participation. Victoria thereafter filed the instant administrative case
7

against Atty. Espejo before the CBD. On March 1, 2010, the CBD, through Director for Bar Discipline
Alicia A. Risos-Vidal, issued an Order directing Atty. Espejo to submit her Answer to Victorias
8

administrative complaint failing which would render her in default. The warning, notwithstanding, Atty.
Espejo did not submit any Answer. On May 5, 2010, IBP Commissioner Rebecca Villanueva-Malala
(Commissioner Villanueva-Malala) notified the parties to appear for a mandatory conference set on
June 2, 2010. The notice stated that non-appearance of either of the parties shall be deemed a
waiver of her right to participate in further proceedings. 9

At the mandatory conference, only Victoria appeared. 10

Thus, Commissioner Villanueva-Malala issued an Order noting Atty. Espejos failure to appear
11

during the mandatory conference and her failure to file an Answer. Accordingly, Atty. Espejo was
declared in default. Victoria, on the other hand, was directed to file her verified position paper, which
she filed on June 11, 2010. 12

Findings and Recommendation of the IBP

In its Report and Recommendation dated July 15, 2010, the CBD recommended the suspension of
13

Atty. Espejo from the practice of law and as a member of the Bar for a period of five (5) years.

The CBD reasoned:

The failure of a lawyer to answer the complaint for disbarment despite due notice and to appear on
the scheduled hearings set, shows his flouting resistance to lawful orders of the court and illustrates
his deficiency for his oath of office as a lawyer, which deserves disciplinary sanction.

Moreover, respondent[s] acts of issuing checks with insufficient funds and despite repeated
demands [she] failed to comply with her obligation and her disregard and failure to appear for
preliminary investigation and to submit her counter-affidavit to answer the charges against her for
Estafa and Violation of BP 22, constitute grave misconduct that also warrant disciplinary action
against respondent.

On December 14, 2012, the Board of Governors passed a Resolution adopting the Report and
14

Recommendation of the CBD with the modification lowering Atty. Espejos suspension from five (5)
years to two (2) years. Atty. Espejo was also ordered to return to Victoria the amount of PhP 250,000
within thirty (30) days from receipt of notice with legal interest reckoned from the time the demand
was made. The Resolution reads:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED,

with modification, the Report and Recommendation of the Investigating Commissioner in 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 applicable laws and rules, and considering
respondents grave misconduct, Atty. Erlinda Espejo is hereby SUSPENDED from the practice of law
for two (2) years and Ordered to Return to complainant the amount of Two Hundred Fifty Thousand
(P250,000.00) Pesos within thirty (30) days from receipt of notice with legal interest reckoned from
the time the demand was made.
On August 8, 2013, the CBD transmitted to this Court the Notice of the Resolution pertaining to
Resolution No. XX-2012-419 along with the records of this case. 15

The Courts Ruling

We sustain the findings of the IBP and adopt its recommendation in part. Atty. Espejo did not deny
obtaining a loan from Victoria or traverse allegations that she issued unfunded checks to pay her
obligation. It has already been settled that the deliberate failure to pay just debts and the issuance of
worthless checks constitute gross misconduct, for which a lawyer may be sanctioned. 16

Verily, lawyers must at all times faithfully perform their duties to society, to the bar, to the courts and
to their clients. In Tomlin II v. Moya II, We explained that the prompt payment of financial obligations
is one of the duties of a lawyer, thus:

In the present case, respondent admitted his monetary obligations to the complaint but offered no
justifiable reason for his continued refusal to pay. Complainant made several demands, both verbal
and written, but respondent just ignored them and even made himself scarce. Although he
acknowledged his financial obligations to complainant, respondent never offered nor made
arrangements to pay his debt. On the contrary, he refused to recognize any wrong doing nor shown
remorse for issuing worthless checks, an act constituting gross misconduct. Respondent must be
reminded that it is his duty as a lawyer to faithfully perform at all times his duties to society, to the
bar, to the courts and to his clients. As part of his duties, he must promptly pay his financial
obligations.17

The fact that Atty. Espejo obtained the loan and issued the worthless checks in her private capacity
and not as an attorney of Victoria is of no moment. As We have held in several cases, a lawyer may
be disciplined not only for malpractice and dishonesty in his profession but also for gross misconduct
outside of his professional capacity. While the Court may not ordinarily discipline a lawyer for
misconduct committed in his non- professional or private capacity, the Court may be justified in
suspending or removing him as an attorney where his misconduct outside of the lawyers
professional dealings is so gross in character as to show him morally unfit and unworthy of the
privilege which his licenses and the law confer. 18

In Wilkie v. Limos, We reiterated that the issuance of a series of worthless checks, which is exactly
what Atty. Espejo committed in this case, manifests a lawyers low regard for her commitment to her
oath, for which she may be disciplined. Thus:

We have held that the issuance of checks which were later dishonored for having been drawn
against a closed account indicates a lawyers unfitness for the trust and confidence reposed on her.
It shows a lack of personal honesty and good moral character as to render her unworthy of public
confidence. The issuance of a series of worthless checks also shows the remorseless attitude of
respondent, unmindful to the deleterious effects of such act to the public interest and public order. It
also manifests a lawyers low regard to her commitment to the oath she has taken when she joined
her peers, seriously and irreparably tarnishing the image of the profession she should hold in high
esteem.

xxxx

In Barrios v. Martinez, we disbarred the respondent who issued worthless checks for which he was
convicted in the criminal case filed against him. In Lao v. Medel, we held that the deliberate failure to
pay just debts and the issuance of worthless checks constitute gross misconduct, for which a lawyer
may be sanctioned with one-year suspension from the practice of law. The same sanction was
imposed on the respondent-lawyer in Rangwani v. Dino having been found guilty of gross
misconduct for issuing bad checks in payment of a piece of property the title of which was only
entrusted to him by the complainant. 19
Further, the misconduct of Atty. Espejo is aggravated by her unjustified refusal to obey the orders of
the IBP directing her to file an answer to the complaint of Victoria and to appear at the scheduled
mandatory conference. This constitutes blatant disrespect for the IBP which amounts to conduct
unbecoming a lawyer. In Almendarez, Jr. v. Langit, We held that a lawyer must maintain respect not
only for the courts, but also for judicial officers and other duly constituted authorities, including the
IBP:

The misconduct of respondent is aggravated by his unjustified refusal to heed the orders of the IBP
requiring him to file an answer to the complaint-affidavit and, afterwards, to appear at the mandatory
conference. Although respondent did not appear at the conference, the IBP gave him another
chance to defend himself through a position paper. Still, respondent ignored this directive, exhibiting
a blatant disrespect for authority. Indeed, he is justly charged with conduct unbecoming a lawyer, for
a lawyer is expected to uphold the law and promote respect for legal processes. Further, a lawyer
must observe and maintain respect not only to the courts, but also to judicial officers and other duly
constituted authorities, including the IBP. Under Rule 139-B of the Rules of Court, the Court has
empowered the IBP to conduct proceedings for the disbarment, suspension, or discipline of
attorneys.20

Undoubtedly, Atty. Espejos issuance of worthless checks and her blatant refusal to heed the
directives of the Quezon City Prosecutors Office and the IBP contravene Canon 1, Rule 1.01;
Canon 7, Rule 7.03; and Canon 11 of the Code of Professional Responsibility, which provide:

CANON 1 A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND
AND PROMOTE RESPECT FOR THE LAW AND LEGAL PROCESSES. Rule 1.01. A lawyer shall
not engage in unlawful, dishonest, immoral or deceitful conduct. CANON 7 A LAWYER SHALL AT
ALL TIMES UPHOLD THE INTEGRITY AND DIGNITY OF THE LEGAL PROFESSION AND
SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR. Rule 7.03 A lawyer shall not engage in
conduct that adversely reflects on his fitness to practice law, nor shall he, whether in public or private
life, behave in a scandalous manner to the discredit of the legal profession. CANON 11 A LAWYER
SHALL OBSERVE AND MAINTAIN THE RESPECT DUE TO THE COURTS AND TO JUDICIAL
OFFICES AND SHOULD INSIST ON SIMILAR CONDUCT BY OTHERS.

We find the penalty of suspension from the practice of law for two (2) years, as recommended by the
IBP, commensurate under the circumstances. We, however, cannot sustain the IBPs
recommendation ordering Atty. Espejo to return the money she borrowed from Victoria. In
disciplinary proceedings against lawyers, the only issue is whether the officer of the court is still fit to
be allowed to continue as a member of the Bar. Our only concern is the determination of
respondents administrative liability. Our findings have no material bearing on other judicial action
which the parties may to choose me against each other. Furthermore, disciplinary proceedings
against lawyers do not involve a trial of an action, but rather investigations by the Court into the
conduct of one of its officers. The only question for determination in these proceedings is whether or
not the attorney is still fit to be allowed to continue as a member of the Bar. Thus, this Court cannot
rule on the issue of the amount of money that should be returned to the complainant. 22

WHEREFORE, We find Atty. Erlinda B. Espejo GUILTY of gross misconduct and violating Canons 1,
7 and 11 of the Code of Professional Responsibility. We SUSPEND respondent from the practice of
law for two (2) years affective immediately.

Let copies of this Decision be furnished the Office of the Court Administrator for dissemination to all
courts, the Integrated Bar of the Philippines and the Office of the Bar Confidant and recorded in the
personal files of respondent.

SO ORDERED.
 A.C. No. 8826, March 25, 2015

SHIRLEY OLAYTA-CAMBA, Complainant, v. ATTY. OTILIO SY BONGON, Respondent.

RESOLUTION

PERLAS-BERNABE, J.:

Before the Court is an administrative Complaint1dated September 14, 2010 filed by complainant Shirley
Olayta-Camba (complainant) against respondent Atty. Otilio Sy Bongon (respondent), praying that the latter
be disbarred and be directed to return the amount of P112,449.55 that he received from the former.

The Facts

In her complaint, complainant alleged that on March 1, 2000, she engaged the services of respondent for
the purpose of titling and/or reconstituting the titles to the real estate properties of the late Bernabe Olayta,
situated in the Municipalities of Camalig and Guinobatan, both in the province of Albay. In connection
therewith, she claimed to have given the aggregate amount of P112,499.55 to respondent, broken down as
follows: (a) P20,000.00 as partial payment for legal services; (b) P162.00 as payment for certification fees;
(c) P5,000.00 as advance payment for the reconstitution of titles; (d) P30,000.00 as payment for land taxes
and titling of properties; (e) P10,000.00 as attorneys fees; (f) P19,337.55 as payment for documentary
stamps on the estate of Bernabe Olayta; and (g) P28,000.00 as payment for Bureau of Internal Revenue
(BIR) Taxes. Despite the foregoing, respondent failed to update complainant regarding the status of the
matters referred to him. Thus, complainant terminated her engagement with respondent and demanded for
the return of P112,499.55, but to no avail.2 Hence, she filed the instant complaint before the Court.

In his defense,3 respondent asserts, inter alia, that he only received P55,000.00 and that the rest of the
money was received by a certain Rowena Delos Reyes-Kelly who was not an employee of his law
firm.4Further, respondent averred that he had already offered to return the amount of P30,000.00 to
complainant, claiming that he already earned the fees for legal services in the amount of P20,000.00 for
having studied the matter entrusted to him and drafted the Deed of Extrajudicial Partition (Deed) that
underwent several revisions.5

The Court, in a Resolution6 dated August 15, 2011, referred the case to the Integrated Bar of the Philippines
(IBP) for investigation, report, and recommendation.

The IBPs Report and Recommendation

In a Report and Recommendation7 dated April 17, 2013, the IBP Investigating Commissioner found
respondent guilty of violating Rule 16.01 and Rule 16.03,Canon 16 of the Code of Professional Responsibility
(CPR) and, accordingly, recommended that he be: (a) meted with the penalty of suspension from the
practice of law for a period of six (6) months; and (b) directed to return the amount of P55,000.00 to
complainant.8

The Investigating Commissioner found that complainant indeed engaged respondents services for the
purpose of reconstituting four (4) titles as well as preparing the Deed, and that the latter received legal fees
in connection therewith. Despite this, respondent did not perform his undertaking in accordance with the
engagement and likewise failed to return complainants money despite demands. The foregoing acts were
deemed to be in violation of the lawyers oath, as well as the CPR, thus, rendering respondent
administratively liable for the same. However, in view of respondents old age, his condition of having
undergone a triple heart bypass surgery, and considering that this is his first offense, the Investigating
Commissioner opted to mitigate the administrative penalties imposed upon respondent. 9

In a Resolution10 dated May 11, 2013, the IBP Board of Governors adopted and approved the aforesaid
Report and Recommendation, with modification decreasing the recommended penalty to suspension from
the practice of law for a period of three (3) months. On motion for reconsideration 11 of respondent, his
period of suspension was further decreased to one (1) month in a Resolution 12 dated May 3, 2014. To date,
respondent has not filed a petition for review before the Court.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable for the
acts complained of.

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the findings and recommendations of the IBP.

It must be stressed that once a lawyer takes up the cause of his client, he is duty-bound to serve the latter
with competence, and to attend to such clients cause with diligence, care, and devotion whether he accepts
it for a fee or for free. He owes fidelity to such cause and must always be mindful of the trust and confidence
reposed upon him.13 Therefore, a lawyers neglect of a legal matter entrusted to him by his client constitutes
inexcusable negligence for which he must be held administratively liable for violating Rule 18.03, Canon 18of
the CPR,14 which reads:

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxxx

Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
therewith shall render him liable.

xxxx

As correctly pointed out by the IBP Investigating Commissioner, complainant engaged the services of
respondent for the purpose of titling and/or reconstituting the titles to the real estate properties of the late
Bernabe Olayta, as well as preparing the Deed, and in connection therewith, allegedly gave various amounts
to respondent, of which the latter admitted the receipt of only P55,000.00. Despite the foregoing,
respondent failed to comply with his undertaking and offered the excuse that the reconstitution of the titles
and the preparation of the Deed were delayed due to the Deeds several revisions; and that Bernabe
Olaytas surviving heirs were living in different places, making it difficult to secure their presence, much less
obtain their signatures to the said Deed.15

Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR when he failed to refund
the amount of P55,000.00 that he personally received from complainant despite repeated demands, viz.:

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.

xxxx

Rule 16.03 A lawyer shall deliver the funds and property of his client when due or upon demand. x xx.

xxxx

Verily, when a lawyer receives money from the client for a particular purpose, the lawyer is bound to render
an accounting to the client showing that the money was spent for the intended purpose. Consequently, if not
used accordingly, the money must be returned immediately to the client. 16 As such, a lawyers failure to
return the money to his client despite numerous demands is a violation of the trust reposed on him and is
indicative of his lack of integrity,17 as in this case.

Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly
possess and exercise in such matters of professional employment 18 and, hence, must be disciplined
accordingly.

Having established respondents administrative liability, the Court now determines the proper penalty to be
imposed on him.

Jurisprudence provides that in similar cases where lawyers neglected their clients affairs and, at the same
time, failed to return the latters money and/or property despite demand, the Court imposed upon them the
penalty of suspension from the practice of law. In Segovia-Ribaya v. Lawsin,19 the Court suspended the
lawyer for a period of one (1) year for his failure to perform his undertaking under his retainership
agreement with his client and to return the money given to him by the latter.20 Similarly, in Meneses v.
Macalino,21 the same penalty was imposed on a lawyer who failed to render any legal service to his client as
well as to return the money he received for such purpose. 22 These pronouncements notwithstanding, there
have been instances where the Court tempered the penalty imposed upon a lawyer due to humanitarian and
equitable considerations.23 In view of the foregoing, and taking into consideration respondents advanced
age, medical condition, and the fact that this is his first offense, the Court finds it appropriate to sustain the
recommended penalty of suspension from the practice of law for a period of one (1) month.

WHEREFORE, respondent Atty. Otilio Sy Bongon is found GUILTY of violating Rules 16.01 and 16.03 of
Canon 16, and Rule 18.03 of Canon 18of the Code of Professional Responsibility. Accordingly, he is
hereby SUSPENDED from the practice of law for a period of one (1) month, effective upon his receipt of this
Resolution, with a STERN WARNING that a repetition of the same or similar acts will be dealt with more
severely.

Furthermore, respondent is ORDERED to return to complainant Shirley Olayta-Camba the amount of

P55,000.00 he received from the latter within ninety (90) days from the finality of this Resolution. Failure to
comply with the foregoing directive will warrant the imposition of a more severe penalty.

Let a copy of this Resolution be furnished the Office of the Bar Confidant to be attached to respondents
personal record in this Court as attorney. Further, let copies of this Resolution be furnished the Integrated
Bar of the Philippines and the Office of the Court Administrator, which is directed to circulate them to all the
courts in the country for their information and guidance.

SO ORDERED.
CANONS 17-19

G.R. No. 91298 June 22, 1990

CORAZON PERIQUET, petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and THE PHIL. NATIONAL CONSTRUCTION
CORPORATION (Formerly Construction Development Corp. of the Phils.), respondents.

Tabaquero, Albano & Associates for petitioner.

The Government Corporate Counsel for private respondent.

CRUZ, J.:

It is said that a woman has the privilege of changing her mind but this is usually allowed only in
affairs of the heart where the rules are permissibly inconstant. In the case before us, Corazon
Periquet, the herein petitioner, exercised this privilege in connection with her work, where the rules
are not as fickle.

The petitioner was dismissed as toll collector by the Construction Development Corporation of the
Philippines, private respondent herein, for willful breach of trust and unauthorized possession of
accountable toll tickets allegedly found in her purse during a surprise inspection. Claiming she had
been "framed," she filed a complaint for illegal dismissal and was sustained by the labor arbiter, who
ordered her reinstatement within ten days "without loss of seniority rights and other privileges and
with fun back wages to be computed from the date of her actual dismissal up to date of her actual
reinstatement." 1 On appeal, this order was affirmed in toto by public respondent NLRC on August 29,
1980. 2

On March 11, 1989, almost nine years later, the petitioner filed a motion for the issuance of a writ of
execution of the decision. The motion was granted by the executive labor arbiter in an order dated
June 26, 1989, which required payment to the petitioner of the sum of P205,207.42 "by way of
implementing the balance of the judgment amount" due from the private respondent. 3 Pursuant
thereto, the said amount was garnished by the NLRC sheriff on July 12, 1989. 4 On September 11, 1989,
however, the NLRC sustained the appeal of the CDCP and set aside the order dated June 20, 1989, the
corresponding writ of execution of June 26, 1989, and the notice of garnishment. 5

In its decision, the public respondent held that the motion for execution was time-barred, having
been filed beyond the five-year period prescribed by both the Rules of Court and the Labor Code. It
also rejected the petitioner's claim that she had not been reinstated on time and ruled as valid the
two quitclaims she had signed waiving her right to reinstatement and acknowledging settlement in
full of her back wages and other benefits. The petitioner contends that this decision is tainted with
grave abuse of discretion and asks for its reversal. We shall affirm instead.

Sec. 6, Rule 39 of the Revised Rules of Court, provides:

SEC. 6. Execution by motion or by independent action. A judgment may be

executed on motion within five (5) years from the date of its entry or from the date it
becomes final and executory. After the lapse of such time, and before it is barred by
the statute of limitations, a judgment may be enforced by action.

A similar provision is found in Art. 224 of the Labor Code, as amended by RA 6715, viz.
 ART. 224. Execution of decision, orders, awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter or Med-
Arbiter, or the Voluntary Arbitrator may, motu propio, or on motion of any interested
party, issue a writ of execution on a judgment within five (5) years from the date it
becomes final and executory, requiring a sheriff or a duly deputized officer to execute
or enforce a final decision, order or award. ...

The petitioner argues that the above rules are not absolute and cites the exception snowed
in Lancita v. Magbanua, 6 where the Court held:

Where judgments are for money only and wholly unpaid, and execution has been
previously withheld in the interest of the judgment debtor, which is in financial
difficulties, the court has no discretion to deny motions for leave to issue execution
more than five years after the judgments are entered. (Application of Molnar,
Belinsky, et al. v. Long Is. Amusement Corp., I N.Y.S, 2d 866)

In computing the time limited for suing out of an execution, although there is authority
to the contrary, the general rule is that there should not be included the time when
execution is stayed, either by agreement of the parties for a definite time, by
injunction, by the taking of an appeal or writ of error so as to operate as a
supersedeas, by the death of a party, or otherwise. Any interruption or delay
occasioned by the debtor will extend the time within which the writ may be issued
without scire facias.

xxx xxx xxx

There has been no indication that respondents herein had ever slept on their rights to
have the judgment executed by mere motions, within the reglementary period. The
statute of limitation has not been devised against those who wish to act but cannot
do so, for causes beyond their central.

Periquet insists it was the private respondent that delayed and prevented the execution of the
judgment in her favor, but that is not the way we see it. The record shows it was she who dilly-
dallied.

The original decision called for her reinstatement within ten days from receipt thereof following its
affirmance by the NLRC on August 29, 1980, but there is no evidence that she demanded her
reinstatement or that she complained when her demand was rejected. What appears is that she
entered into a compromise agreement with CDCP where she waived her right to reinstatement and
received from the CDCP the sum of P14,000.00 representing her back wages from the date of her
dismissal to the date of the agreement. 7

Dismissing the compromise agreement, the petitioner now claims she was actually reinstated only
on March 16, 1987, and so should be granted back pay for the period beginning November 28,
1978, date of her dismissal, until the date of her reinstatement. She conveniently omits to mention
several significant developments that transpired during and after this period that seriously cast doubt
on her candor and bona fides.

After accepting the sum of P14,000.00 from the private respondent and waiving her right to
reinstatement in the compromise agreement, the petitioner secured employment as kitchen
dispatcher at the Tito Rey Restaurant, where she worked from October 1982 to March 1987.
According to the certification issued by that business, 8 she received a monthly compensation of
P1,904.00, which was higher than her salary in the CDCP.

For reasons not disclosed by the record, she applied for re-employment with the CDCP and was on
March 16,1987, given the position of xerox machine operator with a basic salary of P1,030.00 plus
P461.33 in allowances, for a total of P1,491.33 monthly. 9
On June 27, 1988; she wrote the new management of the CDCP and asked that the rights granted
her by the decision dated August 29, 1980, be recognized because the waiver she had signed was
invalid. 10

On September 19, 1988, the Corporate Legal Counsel of the private respondent (now Philippine
National Construction Corporation) recommended the payment to the petitioner of the sum of
P9,544.00, representing the balance of her back pay for three years at P654. 00 per month (minus
the P14,000.00 earlier paid). 11

On November 10, 1988, the petitioner accepted this additional amount and signed another Quitclaim
and Release reading as follows:

KNOW ALL MEN BY THESE PRESENTS:

THAT, I CORAZON PERIQUET, of legal age, married and resident of No. 87 Annapolis St., Quezon
City, hereby acknowledged receipt of the sum of PESOS: NINE THOUSAND FIVE HUNDRED
FORTY FOUR PESOS ONLY (P9,544.00) Philippine currency, representing the unpaid balance of
the back wages due me under the judgment award in NLRC Case No. AB-2-864-79 entitled
"Corazon Periquet vs. PNCC- TOLLWAYS" and I further manifest that this payment is in full
satisfaction of all my claims/demands in the aforesaid case. Likewise, I hereby manifest that I had
voluntarily waived reinstatement to my former position as TOLL TELLER and in lieu thereof, I sought
and am satisfied with my present position as XEROX MACHINE OPERATOR in the Central Office.

Finally, I hereby certify that delay in my reinstatement, after finality of the Decision dated 10 May
1979 was due to my own fault and that PNCC is not liable thereto.

I hereby RELEASE AND DISCHARGE the said corporation and its officers from money and all
claims by way of unpaid wages, separation pay, differential pay, company, statutory and other
benefits or otherwise as may be due me in connection with the above-entitled case. I hereby state
further that I have no more claims or right of action of whatever nature, whether past, present, future
or contingent against said corporation and its officers, relative to NLRC Case No. AB-2-864-79.

IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of November 1988 at
Mandaluyong, Metro Manila. (Emphasis supplied.) 12

The petitioner was apparently satisfied with the settlement, for in the memorandum she sent the
PNCC Corporate Legal Counsel on November 24, 1988, 13 she said in part:

Sir, this is indeed my chance to express my gratitude to you and all others who have
helped me and my family enjoy the fruits of my years of stay with PNCC by way of
granting an additional amount of P9,544.00 among others ...

As per your recommendation contained therein in said memo, I am now occupying

the position of xerox machine operator and is (sic) presently receiving a monthly
salary of P2,014.00.

Reacting to her inquiry about her entitlement to longevity pay, yearly company increases and other
statutory benefits, the private respondent adjusted her monthly salary from P2,014.00 to P3,588.00
monthly.

Then the lull. Then the bombshell.

On March 11, 1989, she filed the motion for execution that is now the subject of this petition.

It is difficult to understand the attitude of the petitioner, who has blown hot and cold, as if she does
not know her own mind. First she signed a waiver and then she rejected it; then she signed another
waiver which she also rejected, again on the ground that she had been deceived. In her first waiver,
she acknowledged full settlement of the judgment in her favor, and then in the second waiver, after
accepting additional payment, she again acknowledged fun settlement of the same judgment. But
now she is singing a different tune.

In her petition she is now disowning both acknowledgments and claiming that the earlier payments
both of which she had accepted as sufficient, are insufficient. They were valid before but they are not
valid now. She also claimed she was harassed and cheated by the past management of the CDCP
and sought the help of the new management of the PNCC under its "dynamic leadership." But now
she is denouncing the new management-for also tricking her into signing the second quitclaim.

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily
entered into and represents a reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. It is only where there is clear proof that the waiver
was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable
on its face, that the law will step in to annul the questionable transaction. But where it is shown that
the person making the waiver did so voluntarily, with full understanding of what he was doing, and
the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as
a valid and binding undertaking. As in this case.

The question may be asked: Why did the petitioner sign the compromise agreement of September
16, 1980, and waive all her rights under the judgment in consideration of the cash settlement she
received? It must be remembered that on that date the decision could still have been elevated
on certiorari before this Court and there was still the possibility of its reversal. The petitioner
obviously decided that a bird in hand was worth two on the wing and so opted for the compromise
agreement. The amount she was then waiving, it is worth noting, had not yet come up to the
exorbitant sum of P205,207.42 that she was later to demand after the lapse of eight years.

The back pay due the petitioner need not detain us. We have held in countless cases that this
should be limited to three years from the date of the illegal dismissal, during which period (but not
beyond) the dismissed employee is deemed unemployed without the necessity of proof. 14 Hence, the
petitioner's contention that she should be paid from 1978 to 1987 must be rejected, and even without
regard to the fact (that would otherwise have been counted against her) that she was actually employed
during most of that period.

Finally, the petitioner's invocation of Article 223 of the Labor Code to question the failure of the
private respondent to file a supersedeas bond is not well-taken. As the Solicitor General correctly
points out, the bond is required only when there is an appeal from the decision with a monetary
award, not an order enforcing the decision, as in the case at bar.

As officers of the court, counsel are under obligation to advise their clients against making untenable
and inconsistent claims like the ones raised in this petition that have only needlessly taken up the
valuable time of this Court, the Solicitor General, the Government Corporate Counsel, and the
respondents. Lawyers are not merely hired employees who must unquestioningly do the bidding of
the client, however unreasonable this may be when tested by their own expert appreciation of the
pertinent facts and the applicable law and jurisprudence. Counsel must counsel.

WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered.
A.C. No. 10537 February 3, 2015

REYNALDO G. RAMIREZ, Complainant,

vs.
ATTY. MERCEDES BUHAYANG-MARGALLO, Respondent.

RESOLUTION

LEONEN, J.:

When an action or proceeding is initiated in our courts, lawyers become the eyes and ears of their
clients. Lawyers are expected to prosecute or defend the interests of their clients without need for
reminders. The privilege of the office of attorney grants them the ability to warrant to their client that
they will manage the case as if it were their own. The relationship between an attorney and client is
a sacred agency. It cannot be disregarded on the flimsy excuse that the lawyer accepted the case
only because he or she was asked by an acquaintance. The professional relationship remains the
same regardless of the reasons for the acceptance by counsel and regardless of whether the case is
highly paying or pro bono.

Atty. Mercedes Buhayang-Margallos (Atty. Margallo) inaction resulted in a lost appeal, terminating
the case of her client not on the merits but due to her negligence. She made it appear that the case
was dismissed on the merits when, in truth, she failed to file the Appellants Brief on time. She did
not discharge her duties of candor to her client.

This court resolves the Petition for Review filed by Atty. Margallo under Rule 139-B, Section 12 of
1

the Rules of Court, assailing the Resolution of the Board of Governors of the Integrated Bar of the
Philippines.

In the Resolution dated March 21, 2014, the Board of Governors of the Integrated Bar of the
2

Philippines affirmed with modification its earlier Resolution dated March 20, 2013. In its delegated
3

capacity to conduct fact finding for this court, it found that respondent Atty. Margallo had violated
Canon 17 and Canon 18, Rules 18.03 and 18.04 of the Code of Professional
Responsibility. Consequently, the Board of Governors recommended that Atty. Margallo be
4

suspended from the practice of law for two (2) years. 5

In the Complaint filed on January 20, 2010 before the Commission on Bar Discipline of the
6

Integrated Bar of the Philippines, complainant Reynaldo Ramirez (Ramirez) alleged that he engaged
Atty. Margallos services as legal counsel in a civil case for Quieting of Title entitled "Spouses Roque
v. Ramirez." The case was initiated before the Regional Trial Court of Binangonan, Rizal, Branch
7

68.8

According to Ramirez, Atty. Margallo contacted him on or about March 2004, as per a referral from a
friend of Ramirezs sister. He alleged that Atty. Margallo had offered her legal services on the
9

condition that she be given 30% of the land subject of the controversy instead of attorneys fees. It 10

was also agreed upon that Ramirez would pay Atty. Margallo P1,000.00 per court appearance. 11

On October 19, 2006, the Regional Trial Court promulgated a Decision adverse to Ramirez. Atty. 12

Margallo advised him to appeal the judgment. She committed to file the Appeal before the Court of
Appeals. 13

The Appeal was perfected and the records were sent to the Court of Appeals sometime in 2008. On 14

December 5, 2008, the Court of Appeals directed Ramirez to file his Appellants Brief. Ramirez
notified Atty. Margallo, who replied that she would have one prepared. 15

On January 8, 2009, Ramirez contacted Atty. Margallo to follow up on the Appellants Brief. Atty.
Margallo informed him that he needed to meet her to sign the documents necessary for the brief. 16
On several occasions, Ramirez followed up on the status of the brief, but he was told that there was
still no word from the Court of Appeals. 17

On August 26, 2009, Atty. Margallo informed Ramirez that his Appeal had been denied. She told 18

him that the Court of Appeals denial was due to Ramirezs failure to establish his filiation with his
alleged father, which was the basis of his claim. She also informed him that they could no longer
19

appeal to this court since the Decision of the Court of Appeals had been promulgated and the
reglementary period for filing an Appeal had already lapsed. 20

Ramirez went to the Court of Appeals. There, he discovered that the Appellants Brief was filed on
April 13, 2009 with a Motion for Reconsideration and Apologies for filing beyond the reglementary
period.21

Ramirez alleged that Atty. Margallo had violated Canon 17 and Canon 18, Rules 18.03 and 18.04 of
the Codeof Professional Responsibility. By way of defense, Atty. Margallo argued that she had
22

agreed to take on the case for free, save for travel expense of P1,000.00 per hearing. She also
claimed that she had candidly informed Ramirez and his mother that they only had a 50% chance of
winning the case. She denied ever having entered into an agreement regarding the contingent fee
23

worth 30% of the value of the land subject of the controversy.

Atty. Margallo asserted that she would not have taken on the Appeal except that the mother of
Ramirez had begged her to do so. She claimed that when she instructed Ramirez to see her for
24

document signing on January 8, 2009, he ignored her. When he finally showed up on March 2009,
he merely told her that he had been busy. Her failure to immediately inform Ramirez of the
25

unfavorable Decision of the Court of Appeals was due to losing her clients number because her 8-
year-old daughter played with her phone and accidentally erased all her contacts. 26

Mandatory conference and findings of the Integrated Bar of the Philippines

The dispute was set for mandatory conference on June 3, 2010. Only Ramirez appeared despite
27

Atty. Margallo having received notice. The mandatory conference was reset to July 22, 2010. Both
28

parties then appeared and were directed to submit their position papers. Commissioner Cecilio A.C.
29

Villanueva recommended that Atty. Margallo be reprimanded for her actions and be given a stern
warning that her next infraction of a similar nature shall be dealt with more severely. This was based 30

on his two key findings. First, Atty. Margallo allowed the reglementary period for filing an Appellants
Brief to lapse by assuming that Ramirez no longer wanted to pursue the case instead of exhausting
all means possible to protect the interest of her client. Second, Atty. Margallo had been remiss in
31

her duties as counsel, resulting in the loss of Ramirezs statutory right to seek recourse with the
Court of Appeals. 32

In the Resolution dated March 20, 2013, the Board of Governors of the Integrated Bar of the
33

Philippines adopted and approved the recommendation of the Commission on Bar Discipline. The
Board of Governors resolved to recommend a penalty of reprimand to Atty. Margallo with a stern
warning that repetition of the same or similar act shall be dealt with more severely. Ramirez
seasonably filed a Motion for Reconsideration on July 16, 2013. In the Resolution dated March 21,
34

2014, the Board of Governors granted Ramirezs Motion for Reconsideration and increased the
recommended penalty to suspension from practice of law for two (2) years. 35

On August 20, 2014, Atty. Margallo filed a Petition for Review under Rule 139-B, Section 12 of the
Rules of Court. She alleged that the recommended penalty of suspension was too severe
36

considering that she had been very careful and vigilant in defending the cause of her client. She also
averred that this was the first time a Complaint was filed against her. Ramirez thereafter filed an
37

undated Motion to adopt his Motion for Reconsideration previously filed with the Commission on Bar
Discipline as a Comment on Atty. Margallos Petition for Review. In the Resolution dated October
38 39

14, 2014, this court granted Ramirezs Motion. Atty. Margallo filed her Reply on October 6, 2014.
40

This courts ruling

The Petition is denied for lack of merit.

The relationship between a lawyer and a client is "imbued with utmost trust and
confidence." Lawyers are expected to exercise the necessary diligence and competence in
41

managing cases entrusted to them. They commit not only to review cases or give legal advice, but
also to represent their clients to the best of their ability without need to be reminded by either the
client or the court. The expectation to maintain a high degree of legal proficiency and attention
remains the same whether the represented party is a high-paying client or an indigent litigant. 42

Canon 17 and Canon 18, Rules 18.03and 18.04 of the Code of Professional Responsibility clearly
provide:

CANON 17 - A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE
MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule
18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
there with 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 clients request for information.

In Caranza Vda. De Saldivar v. Cabanes, Jr., a lawyer was suspended after failing to justify his
43

absence in a scheduled preliminary conference, which resulted in the case being submitted for
resolution. This was aggravated by the lawyers failure to inform his client about the adverse ruling of
the Court of Appeals, thereby precluding the litigant from further pursuing an Appeal. This court
found that these actions amounted to gross negligence tantamount to breaching Canons 17 and 18
of the Code of Professional Responsibility:

The relationship between an attorney and his client is one imbued with utmost trust and confidence.
In this light, clients are led to expect that lawyers would be ever-mindful of their cause and
accordingly exercise the required degree of diligence in handling their affairs. Verily, a lawyer is
expected to maintain at all times a high standard of legal proficiency, and to devote his full attention,
skill, and competence to the case, regardless of its importance and whether he accepts it for a fee or
for free.

....

Case law further illumines that a lawyers duty of competence and diligence includes not merely
reviewing the cases entrusted to the counsels care or giving sound legal advice, but also consists of
properly representing the client before any court or tribunal, attending scheduled hearings or
conferences, preparing and filing the required pleadings, prosecuting the handled cases with
reasonable dispatch, and urging their termination without waiting for the client or the court to prod
him or her to do so.

Conversely, a lawyers negligence in fulfilling his duties subjects him to disciplinary action. While
such negligence or carelessness is incapable of exact formulation, the Court has consistently held
that the lawyers mere failure to perform the obligations due his client is per se a
violation. (Emphasis supplied, citations omitted)
44

Respondent Atty. Margallo was unjustifiably remiss in her duties as legal counsel to Ramirez.

The lack of communication and coordination between respondent Atty. Margallo and her client was
palpable but was not due to the lack of diligence of her client. This cost complainant Ramirez his
entire case and left him with no appellate remedies. His legal cause was orphaned not because a
court of law ruled on the merits of his case, but because a person privileged to act as counsel failed
to discharge her duties with the requisite diligence. Her assumption that complainant Ramirez was
no longer interested to pursue the Appeal is a poor excuse. There was no proof that she exerted
efforts to communicate with her client. This is an admission that she abandoned her obligation as
counsel on the basis of an assumption. Respondent Atty. Margallo failed to exhaust all possible
means to protect complainant Ramirezs interest, which is contrary to what she had sworn to do as a
member of the legal profession. For these reasons, she clearly violated Canon 17 and Canon 18,
Rules 18.03 and 18.04 of the Code of Professional Responsibility.

A problem arises whenever agents, entrusted to manage the interests of another, use their authority
or power for their benefit or fail to discharge their duties. In many agencies, there is information
assymetry between the principal and the entrusted agent. That is, there are facts and events that the
agent must attend to that may not be known by the principal.

This information assymetry is even more pronounced in an attorney client relationship. Lawyers are
expected not only to be familiar with the minute facts of their cases but also to see their relevance in
relation to their causes of action or their defenses. The salience of these facts is not usually patent to
the client. It can only be seen through familiarity with the relevant legal provisions that are invoked
with their jurisprudential interpretations. More so with the intricacies of the legal procedure. It is the
lawyer that receives the notices and must decide the mode of appeal to protect the interest of his or
her client.

Thus, the relationship between a lawyer and her client is regarded as highly fiduciary. Between the
lawyer and the client, it is the lawyer that has the better knowledge of facts, events, and remedies.
While it is true that the client chooses which lawyer to engage, he or she usually does so on the
basis of reputation. It is only upon actual engagement that the client discovers the level of diligence,
competence, and accountability of the counsel that he or she chooses. In some cases, such as this
one, the discovery comes too late. Between the lawyer and the client, therefore, it is the lawyer that
should bear the full costs of indifference or negligence. Respondent Atty. Margallos position that a
two-year suspension is too severe considering that it is her first infraction cannot be sustained. In
Caranza Vda. De Saldivar, we observed:

As regards the appropriate penalty, several cases show that lawyers who have been held liable for
gross negligence for infractions similar to those of the respondent were suspended for a period of six
(6) months. In Aranda v. Elayda, a lawyer who failed to appear at the scheduled hearing despite due
notice which resulted in the submission of the case for decision was found guilty of gross negligence
and hence, suspended for six (6) months. In Heirs of Tiburcio F. Ballesteros, Sr. v. Apiag, a lawyer
who did not file a pre-trial brief and was absent during the pre-trial conference was likewise
suspended for six (6) months. In Abiero v. Juanino, a lawyer who neglected a legal matter entrusted
to him by his client in breach of Canons 17 and 18 of the Code was also suspended for six (6)
months. Thus, consistent with existing jurisprudence, the Court finds it proper to impose the same
penalty against respondent and accordingly suspends him for a period of six (6) months. (Emphasis
45

supplied, citations omitted)

Caranza Vda. De Saldivar did not leave the clients without procedural remedies. On the other hand,
respondent Atty. Margallos neglect resulted in her client having no further recourse in court to
protect his legal interests. This lack of diligence, to the utmost prejudice of complainant Ramirez who
relied on her alleged competence as counsel, must not be tolerated. It is time that we communicate
that lawyers must actively manage cases entrusted to them. There should be no more room for an
inertia of mediocrity.

Parenthetically, it is this court that has the constitutionally mandated duty to discipline
lawyers. Under the current rules, the duty to assist fact finding can be delegated to the Integrated
46

Bar of the Philippines. The findings of the Integrated Bar, however, can only be recommendatory,
consistent with the constitutional powers of this court. Its recommended penalties are also, by its
nature, recommendatory. Despite the precedents, it is the Integrated Bar of the Philippines that
recognizes that the severity of the infraction is worth a penalty of two-year suspension. We read this
as a showing of its desire to increase the level of professionalism of our lawyers.
This court is not without jurisdiction to increase the penalties imposed in order to address a current
need in the legal profession. The desire of the Integrated Bar of the Philippines to ensure a higher
ethical standard for its members' conduct is laudable. The negligence of respondent Atty. Margallo
coupled with her lack of candor is reprehensible.

WHEREFORE, the Petition for Review is DENIED. The Recommendations and Resolution of the
Board of Governors of the Integrated Bar of the Philippines dated March 21, 2014 is ACCEPTED,
ADOPTED AND AFFIRMED. Atty. Mercedes Buhayang-Margallo is hereby SUSPENDED from the
practice of law for two (2) years, with a stern warning that a repetition of the same or similar act shall
be dealt with more severely. This decision is immediately executory. SO ORDERED.
 Adm. Case No. 9612 : March 13, 2013

JOHNNY M. PESTO, Complainant, v. MARCELITO M. MILLO, Respondent.

DECISION

BERSAMIN, J.:

An attorney who conceals his inefficiency and lack of diligence by giving wrong information to his client
regarding the matter subject of their professional relationship is guilty of conduct unbecoming an officer of
the Court. He thereby violates his Lawyer's Oath to conduct himself as a lawyer according to the best of his
knowledge and discretion with all good fidelity as well to the courts as to his client. He also thereby violates
Rule 18.03, Canon 18 of the Code of Professional Responsibility, by which he is called upon to serve his
client with competence and diligence.

Antecedents

In this administrative case, Johnny Pesto (Johnny), a Canadian national, charged Atty. Marcelito M. Millo with
conduct unbecoming an officer of the Court, misleading his client, bungling the transfer of title, and
incompetence and negligence in the performance of his duty as a lawyer.

Johnny averred that in May 1990, his wife Abella Pesto (Abella) retained the services of Atty. Millo to handle
the transfer of title over a parcel of land to her name, and the adoption of her niece, Arvi Jane Dizon; 1 that
Johnny and Abella gave to Atty. Millo the amounts of P14,000.00 for the transfer of title2and P10,000.00 for
the adoption case;3 that Atty. Millo thereafter repeatedly gave them false information and numerous excuses
to explain his inability to complete the transfer of title; that Atty. Millo likewise made them believe that the
capital gains tax for the property had been paid way back in 1991, but they found out upon their return to
the country in February 1995 that he had not yet paid the tax; that when they confronted him, Atty. Millo
insisted that he had already paid the same, but he could not produce any receipt for the supposed payment;
that Atty. Millo reluctantly returned to Abella the amount of P14,000.00 only after he stormed out of Atty.
Millo's office in exasperation over his stalling tactics; and that Atty. Millo then further promised in writing to
assume the liability for the accrued penalties.4 chanroble svirtualawlibrary

Likewise, Johnny blamed Atty. Millo for letting the adoption case be considered closed by the Tarlac office of
the Department of Social Welfare and Development (Tarlac DSWD) due to two years of inaction. He stated
that Atty. Millo made him and his wife believe that an interview with the Tarlac DSWD had been scheduled
on February 14, 1995, but when they arrived at the Tarlac DSWD they were dismayed to be told that no
such interview had been scheduled; that adding to their dismay, Atty. Millo could not be reached at all; that
it was only upon reaching home in Quezon City when he received word from Atty. Millo that a hearing had
again been scheduled on February 23, 1995 at 10:00 a.m.; that when they went to the hearing, Atty. Millo
could not be found; and that they learned after an hour of waiting in the courthouse in Tarlac that Atty. Millo
had requested the hearing to be moved to the afternoon without their knowledge. 5 chanroble svirtualawlibrary

Exasperated by Atty. Millo's neglect and ineptitude, Johnny brought this administrative complaint in the
Integrated Bar of the Philippines (IBP) on March 14, 1995, praying for disciplinary action to be taken against
Atty. Millo, and seeking the refund of P15,643.75 representing the penalties for the non-payment of the
capital gains tax, and of the P10,000.00 given for the adoption case. Being a resident of Canada, he
constituted one Tita Lomotan as his attorney-in-fact to represent him during his and his wife's absence from
the country.

On July 10, 1995, the IBP ordered Atty. Millo to file his answer.6 Although an extension of the period to file
was granted at his instance,7 he filed no answer in the end.8 He did not also appear at the hearings despite
due notice.9chanroblesvirtualawlibrary

In the meantime, the IBP required Johnny through Lomotan to engage a counsel. The proceedings were held
in abeyance to await the appropriate motion from Johnny's counsel. 10 chanroble svirtualawlibrary

The administrative matter did not move for several years. The long delay prompted Johnny to write to the
President of the IBP on October 28, 1998.11 It was only on April 2, 2001, however, that the IBP Commission
on Bar Discipline (IBP-CBD) scheduled another hearing on June 29, 2001. 12 At that hearing, Atty. Millo
appeared through a representative, and presented a manifestation/motion, 13whereby he claimed that Johnny
had meanwhile died, and that Abella would be withdrawing the complaint against him.
On October 11, 2001, the IBP-CBD, through Commissioner Victoria Gonzalez-De los Reyes, deemed the case
submitted for resolution.14
chanroblesvirtualawlibrary

On October 4, 2010, Investigating Commissioner Victor C. Fernandez, to whom the case had been
meanwhile transferred, submitted a report and recommendation, whereby he found Atty. Millo liable for
violating Canon 18 of the Code of Professional Responsibility, and recommended his suspension from the
practice of law for six months.15 chanroble svirtualawlibrary

In Resolution No. XX-2011-235 adopted on November 19, 2011,16 the IBP Board of Governors affirmed the
findings of Investigating Commissioner Fernandez, but lowered the suspension to two months; and ordered
Atty. Millo to return the amount of P16,000.00, to wit: chanroble svirtualawlibrary

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner in 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 finding respondent guilty of the charges level(led)
against him, Atty. Marcelito Millo is hereby SUSPENDED from the practice of law for a period of two (2)
months and is ordered to return the amount of P16,000.00 to complainant.

On March 27, 2012, Atty. Millo moved for a reconsideration, stating that he had honestly believed that Abella
had already caused the withdrawal of the complaint prior to her own death; that he had already caused the
preparation of the documents necessary for the transfer of the certificate of title, and had also returned
the P14,000.00 paid by Johnny; that the adoption case had been finally granted by the trial court; that he
had lost contact with Johnny and Abella who resided in Canada; that Juan Daquis, Abella's brother, could
have confirmed that the charge had arisen from a simple misunderstanding, and that Abella would cause the
withdrawal of the complaint, except that Daquis had meanwhile died in November 2011. 17 chanroble svirtualawlibrary

On June 9, 2012, the IBP Board of Governors denied Atty. Millo's motion for reconsideration. 18 chanroblesvirtualawlibrary

Ruling

We affirm Resolution No. XX-2011-235, but modify the penalty.

Every attorney owes fidelity to the causes and concerns of his clients. He must be ever mindful of the trust
and confidence reposed in him by the clients. His duty to safeguard the clients' interests commences from
his engagement as such, and lasts until his effective release by the clients. In that time, he is expected to
take every reasonable step and exercise ordinary care as his clients' interests may require. 19 chanroble svirtualawlibrary

Atty. Millo's acceptance of the sums of money from Johnny and Abella to enable him to attend to the transfer
of title and to complete the adoption case initiated the lawyer-client relationship between them. From that
moment on, Atty. Millo assumed the duty to render competent and efficient professional service to them as
his clients. Yet, he failed to discharge his duty. He was inefficient and negligent in going about what the
professional service he had assumed required him to do. He concealed his inefficiency and neglect by giving
false information to his clients about having already paid the capital gains tax. In reality, he did not pay the
capital gains tax, rendering the clients liable for a substantial financial liability in the form of penalties.

Without doubt, Atty. Millo had the obligation to serve his clients with competence and diligence. Rule 18.03,
Canon 18 of the Code of Professional Responsibility, expressly so demanded of him, to wit: chanroble svirtualawlibrary

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxx

Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
therewith shall render him liable.

A serious administrative complaint like this one should not be taken for granted or lightly by any respondent
attorney. Yet, Atty. Millo did not take the complaint of Johnny seriously enough, and even ignored it for a
long period of time. Despite being given several opportunities to do so, Atty. Millo did not file any written
answer. He thereby forfeited his right and chance to reasonably explain the circumstances behind the
charges against him. Had the complaint been untrue and unfair, it would have been quite easy for him to
refute it quickly and seasonably. Indeed, a refutation was the requisite response from any worthy and
blameless respondent lawyer. His belated and terse characterization of the charge by claiming that the
charge had emanated from a mere "misunderstanding" was not sufficient. He did not thereby refute the
charge against him, which omission indicated that the complaint had substance. It mattered little now that
he had in the meantime returned the amount of P14,000.00 to the clients, and that the application for
adoption had been eventually granted by the trial court. Such events, being not only post facto, but also
inevitable from sheer passage of time, did not obliterate his liability based on the neglect and ineptitude he
had inflicted on his clients. The severe lesson that he must now learn is that he could not ignore without
consequences the liberal opportunity the Court and the IBP allowed him to justify his neglect and ineptitude
in serving his clients' concerns. Towards him the Court now stays its hand of leniency, lest the Court be
unfairly seen as too willing to forego the exaction of responsibility upon a lawyer as neglectful and inept as
he had been towards his clients.

It even seems very likely that Atty. Millo purposely disregarded the opportunity to answer the charges
granted to him out of a desire to delay the investigation of the complaint until both Johnny and Abella, being
residents in Canada, would have already lost interest in prosecuting it, or, as happened here, would have
already departed this world and be no longer able to rebut whatever refutations he would ultimately make,
whether true or not. But the Court is not about to condone such selfish disregard. Let it be emphasized to
him and to others similarly disposed that an attorney who is made a respondent in a disbarment proceeding
should submit an explanation, and should meet the issue and overcome the evidence against him. 20 The
obvious reason for the requirement is that an attorney thus charged must thereby prove that he still
maintained that degree of morality and integrity expected of him at all times.

Atty. Millo made his situation even worse by consistently absenting himself from the scheduled hearings the
IBP had set for his benefit. His disregard of the IBP's orders requiring his attendance in the hearings was not
only irresponsible, but also constituted utter disrespect for the Judiciary and his fellow lawyers. Such
conduct was absolutely unbecoming of a lawyer, because lawyers are particularly called upon to obey Court
orders and processes and are expected to stand foremost in complying with orders from the duly constituted
authorities.21 Moreover, in Espiritu v. Ulep,22 the Court saw the respondent attorney's odious practice of
repeatedly and apparently deliberately not appearing in the scheduled hearings as his means of wiggling out
from the duty to explain his side. A similar treatment of Atty. Millo's disregard is justified. Indeed, he
thereby manifested evasion, a bad trait that no worthy member of the Legal profession should nurture in
himself.

Surprisingly, Atty. Millo claimed that his belated response to the charge was due to the assurances of Abella
that she would be withdrawing the complaint. The Court disbelieves him, however, and treats his claim as
nothing but a belated attempt to save the day for himself. He ought to remember that the withdrawal of an
administrative charge for suspension or disbarment based on an attorney's professional misconduct or
negligence will not furnish a ground to dismiss the charge. Suspension or disbarment proceedings that are
warranted will still proceed regardless of the lack or loss of interest on the part of the complainant. The
Court may even entirely ignore the withdrawal of the complaint, and continue to investigate in order to
finally determine whether the charge of professional negligence or misconduct was borne out by the
record.23 This approach bespeaks the Court's consistent view that the Legal Profession is not only a lofty and
noble calling, but also a rare privilege reserved only for the deserving.

Verily, disciplinary proceedings against attorneys are unlike civil suits where the complainants are the
plaintiffs and the respondent attorneys are the defendants. They neither involve private interests nor afford
redress for private grievances. They are undertaken and prosecuted solely for the public welfare, for the
purpose of preserving the courts of justice from the official ministration of persons unfit to practice law
before them. Every attorney is called to answer for every misconduct he commits as an officer of the Court.
The complainant or any other person who has brought the attorney's misconduct to the attention of the
Court is in no sense a party, and has generally no interest in the outcome except as all good citizens may
have in the proper administration of justice.24
chanroble svirtualawlibrary

The IBP Board of Governors recommended suspension from the practice of law for two months as the
penalty to be imposed. The recommended penalty is not well taken. We modify the penalty, because Atty.
Millo displayed no remorse as to his misconduct, and could not be given a soft treatment. His professional
misconduct warranted a longer suspension from the practice of law because he had caused material
prejudice to the clients' interest.25 He should somehow be taught to be more ethical and professional in
dealing with trusting clients like Johnny and Abella, who were innocently too willing to repose their utmost
trust in his abilities as a lawyer and in his trustworthiness as a legal professional. He should remember that
misconduct has no place in the heart and mind of a lawyer who has taken the solemn oath to delay no man
for money or malice, and to conduct himself as a lawyer according to the best of his knowledge and
discretion. Under the circumstances, suspension from the practice of law for six months is the condign and
commensurate penalty for him.

The Court notes that Atty. Millo already returned the P14,000.00 received for the transfer of title. Although
he ought also to refund the amount of P15,643.75 representing the penalty for the late payment of the
capital gains tax, the Court cannot order him to refund that amount because it is not a collection
agency.26 The Court may only direct the repayment of attorneys fees received on the basis that a respondent
attorney did not render efficient service to the client. Consequently, Atty. Millo should refund the P10,000.00
given in connection with the adoption case, plus interest of 6% per annum, reckoned from the finality of this
decision.

WHEREFORE, the Court FINDS and HOLDS Atty. MARCELITO M. MILLO guilty of violating Canon 18, Rule
18.03 of the Code of Professional Responsibility and the Lawyer's Oath; SUSPENDS him from the practice of
law for a period of six months effective from notice, with the STERN WARNING that any similar infraction in
the future will be dealt with more severely; ORDERS him to return to the heirs of Johnny and Abella Pesto
within ten days from notice the sum of P10,000.00, plus legal interest of 6% per annum reckoned from the
finality of this decision until full payment; and DIRECTS him to promptly submit to this Court written proof of
his compliance within thirty days from notice of this decision.

Let copies of this decision be furnished to the Office of the Bar Confidant, to be appended to Atty. Marcelito
M. Millo's personal record as an attorney; to the Integrated Bar of the Philippines; and to the Office of the
Court Administrator for dissemination to all courts throughout the country for their information and
guidance.

SO ORDERED.
A.C. No. 4945 October 8, 2013

MA. JENNIFER TRIA-SAMONTE, Complainant,

vs.
EPIFANIA "FANNY" OBIAS, Respondent.

RESOLUTION

PER CURIAM:

For the Court's resolution is an administrative Complaint-affidavit 1 filed by Ma. Jennifer Tria-Samonte
(complainant) against Epifania "Fanny"Obias (respondent) charging her for grave misconduct and/or
gross malpractice.

The facts

In 1997, spouses Prudencio and Loreta Jeremias (Sps. Jeremias),through respondent, offered for
sale a parcel of agricultural land covered by Transfer Certificate of Title No. 597 (subject property) to
the late Nestor Tria (Nestor) and Pura S. Tria (Sps. Tria), for a consideration of P2,800,000.00 and
payable in installments.2 Respondent, who was to receive the payment from Sps. Tria and transmit
the same to Sps. Jeremias, undertook to deliver the deed of sale and owners copy of the title to her
clients (Sps. Tria) upon full payment of the purchase price. 3 She further undertook to cause the
conversion of the subject property from agricultural to residential, and the transfer of the title to the
names of Sps. Tria as part of the package agreement. 4 Respondent received all the installment
payments made by Sps. Tria and issued receipts therefor.5 After full payment of the purchase price
on July 11, 1997,6 and after giving an additional P115,000.00for capital gains tax and other
expenses,7 Sps. Tria requested from respondent the delivery of the deed of sale and the owners
copy of the title to them but respondent failed to comply explaining that the Department of Agrarian
Reform clearance for conversion of the subject property from agricultural to residential was taking
time.8 Despite several subsequent demands, respondent still failed to fulfill her undertakings under
the package agreement.9

On May 22, 1998, Nestor was fatally shot and died.10 Thereafter, complainant, daughter of Sps. Tria,
again demanded from respondent and Sps. Jeremias the delivery of the deed of sale and the
certificate of title of the subject property to them, but to no avail. For their part, Sps. Jeremias
informed complainant that they had received the consideration of P2,200,000.00 and they had
executed and turned-over the sale documents to respondent. 11

Complainant later discovered that a deed of sale over the subject property was executed by Sps.
Jeremias and notarized by respondent favor of someone else, a certain Dennis Tan, on May 26,
1998 for a consideration of P200,000.00.12

In defense, respondent, in her Comment,13 claimed that Nestor instructed her in November 1997 not
to proceed with the processing of the deed of sale and, instead, to just look for another buyer.14 She
further averred that Nestor also demanded from her the return of the purchase price, and that she
complied with the said demand and returned the P2,800,000.00 in cash to Nestor sometime during
the latter part of January 1998.15 However, she did not ask for a written receipt therefor. In fact,
Nestor told her not to return the P115,000.00 intended for capital gains taxes and other expenses,
and to just apply the said sum as attorneys fees for the other legal services that she rendered for
him.16

In the Courts Resolution17 dated August 30, 1999, the case was referred to the Integrated Bar of the
Philippines (IBP) for investigation, report, and recommendation. After numerous postponements,
mostly at the instance of respondent,18 only the complainant and her witnesses testified before the
IBP. Eventually, respondents right to present evidence was considered waived. 19

The IBPs Report and Recommendation

On September 25, 2007, the IBP Investigating Commissioner, Wilfredo E.J.E. Reyes (Investigating
Commissioner), issued his Report and Recommendation,20 finding respondent to have violated her
oath as a lawyer due to her participation in the second sale of the subject property despite the lack
of any lawful termination of the prior sale of the same property to Sps.Tria. The Investigating
Commissioner observed that respondent received, and admitted to have received, from Sps. Tria
the P2,800,000.00 purchase price and the amount of P115,000.00 for expenses. He further found
the second sale of the same property to Dennis Tan as a clear indication that respondent: (a)
employed serious deceit or fraud against Sps. Tria and their family; (b) violated their proprietary
rights; and (c) violated the trust and confidence reposed in her.21 On the other hand, the Investigating
Commissioner did not give credence to respondents defense that she returned the P2,800,000.00
purchase price given by Sps. Tria and that the latter caused the cancellation of the sale of the
subject property in their favor, absent any receipt or documentation to prove the same. 22 As counsel
for Sps. Tria, respondent failed in her obligation to observe honesty and diligence in their transaction
and, as such, she was found guilty of grave misconduct and gross malpractice in violation of Canons
17 and 18 of the Code of Professional Responsibility (Code).23 Accordingly, the Investigating
Commissioner recommended that respondent be suspended from the practice of law for a period of
five years.24

Finding the recommendation to be fully supported by the evidence on record and the applicable laws
and rules, and considering respondents violation of Canons 17 and 18 of the Code, the IBP Board of
Governors adopted and approved the Investigating Commissioners Report and Recommendation in
Resolution No. XVIII-2007-18525 dated October 19,2007 but reduced the suspension of respondent
from the practice of law from five years to one year.

Both complainant and respondent filed their respective motions for reconsideration 26 which were,
however, denied in the IBP Board of Governors Resolution No. XX-2012-109 dated March 10,
2012.27

The Issue Before the Court

The essential issue in this case is whether or not respondent should beheld administratively liable for
violating Canons 17 and 18 of the Code.

The Courts Ruling

The Court finds no cogent reason to disturb the findings of the IBP. Indeed, respondent, in her
Comment, already admitted that she rendered legal services to Sps. Tria,28 which necessarily gave
rise to a lawyer-client relationship between them. The complete turnaround made by respondent in
her motion for reconsideration from the IBP Board of Governors Resolution No. XX-2012-109,
where she contended that there was no lawyer-client relationship between her and Sps.
Tria,29 cannot thus be given any credence.

Since respondent publicly held herself out as lawyer, the mere fact that she also donned the hat of a
real estate broker did not divest her of the responsibilities attendant to the legal profession. In this
regard, the legal advice and/or legal documentation that she offered and/or rendered regarding the
real estate transaction subject of this case should not be deemed removed from the category of legal
services.30 Case law instructs that if 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 employment is
established.31 Thus, in view of the fact that Sps. Tria knew respondent to be, and transacted with her
as, a lawyer, her belated and unilateral classification of her own acts as being limited to those of a
real estate broker cannot be upheld. In any case, the lawyer-client relationship between Sps. Tria
and respondent was confirmed by the latters admission that she rendered legal services to the
former. With this relationship having been established, the Court proceeds to apply the ethical
principles pertinent to this case.
It is a core ethical principle that lawyers owe fidelity to their clients cause and must always be
mindful of the trust and confidence reposed in them.32 They are duty-bound to observe candor,
fairness, and loyalty in all their dealings and transactions with their clients. 33 Irrefragably, the legal
profession demands of attorneys an absolute abdication of every personal advantage conflicting in
any way, directly or indirectly, with the interests of their clients.34 As enshrined in Canons 17 and 18
of the Code:

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. 1wphi1

In the present case, respondent clearly transgressed the above-mentioned rules as her actions were
evidently prejudicial to her clients interests. Records disclose that instead of delivering the deed of
sale covering the subject property to her clients, she willfully notarized a deed of sale over the same
property in favor of another person. Accordingly, far removed from protecting the interest of her
clients, Sps. Tria, who had, in fact, already fully paid the purchase price of the subject property,
respondent participated and was even instrumental in bringing about the defeat of their rights over
the said property. Hence, respondent grossly violated the trust and confidence reposed in her by her
clients, in contravention of Canons 17and 18 of the Code. To add, by turning against her own clients,
respondent also violated Rule 1.01, Canon 1 of the Code which provides that a lawyer shall not
engage in unlawful, dishonest and immoral or deceitful conduct. Lest it be forgotten, lawyers are
bound to maintain not only a high standard of legal proficiency, but also of morality, honesty, integrity,
and fair dealing.35 These unyielding standards respondent evidently failed to adhere to.

Anent the proper penalty to be imposed, records bear out that the penalty of suspension from the
practice of law recommended by the Investigating Commissioner was decreased from a period of
five years to just one year by the IBP Board of Governors in Resolution No. XVIII-2007-185.
However, the Court observes that the said resolution is bereft of any explanation showing the bases
for such modification in contravention of Section 12(a), Rule 139-B of the Rules of Court which
mandates that "the decision of the Board upon such review shall be in writing and shall clearly and
distinctly state the facts and the reasons on which it is based." Verily, the Court frowns on the
unexplained change made by the IBP Board of Governors in the recommended penalty. Be that as it
may, the Court proceeds to correct the same.

Jurisprudence reveals that in similar cases where lawyers abused the trust and confidence reposed
in them by their clients as well as committed unlawful, dishonest, and immoral or deceitful conduct,
as in this case, the Court found them guilty of gross misconduct and disbarred them. In Chuav.
Mesina, Jr.,36 the Court disbarred the lawyer who, upon his misrepresentations, breached his
promise to his clients to transfer to them the property subject of that case, but instead, offered the
same for sale to the public. Also, in Tabang v. Gacott,37 the penalty of disbarment was meted out
against the lawyer who, among others, actively sought to sell the properties subject of that case
contrary to the interests of his own clients. As the infractions in the foregoing cases are akin to those
committed by respondent in the case at bar, the Court deems that the same penalty of disbarment
be imposed against her. Clearly, as herein discussed, respondent committed deliberate violations of
the Code as she dishonestly dealt with her own clients and advanced the interests of another
against them resulting to their loss. For such violations, respondent deserves the ultimate
punishment of disbarment consistent with existing jurisprudence.

As a final point, it bears to note that the foregoing resolution does not-as it should not -include an
order for the return of the P2,800,000.00 purchase price and the amount of P115,000.00 for
expenses allegedly received by respondent, albeit the Investigating Commissioner's findings on the
same. In Roa v. Moreno,38 it has been held that disciplinary proceedings against lawyers are only
confined to the issue of whether or not the respondent-lawyer is still fit to be allowed to continue as a
member of the Bar and that the only concern is his administrative liability.39Thus, the Court's findings
during administrative-disciplinary proceedings have no bearing on the liabilities of the parties
involved which are purely civil in nature -meaning, those liabilities which have no intrinsic link to the
lawyer's professional engagement40 as the same should be threshed out in a proper proceeding of
such nature.

WHEREFORE, respondent Epifania "Fanny" Obias is found guilty of gross misconduct and is
accordingly DISBARRED.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all the courts.

SO ORDERED.
A.C. No. 5239 November 18, 2013

SPOUSES GEORGE A. WARRINER and AURORA R. WARRINER, Complainants,

vs.
ATTY. RENI M. DUBLIN, Respondent.

RESOLUTION

DEL CASTILLO, J.:

This resolves the administrative Complaint filed on March 14, 2000 by complainant-spouses George
1

Arthur Warriner (Warriner) and Aurora R. Warriner against respondent Atty. Reni M. Dublin for gross
negligence and dereliction of duty.

In their Complaint filed directly before the Office of the Bar Confidant of this Court, complainants
alleged that they secured the services of respondent in the filing of a Complaint for damages
captioned as Aurora M Del Rio-Warriner and her spouse-husband George Arthur Warriner, plaintiffs,
versus E.B. Villarosa & Partner Co. Ltd. and docketed as Civil Case No. 23,396-95 before the
Regional Trial Court (RTC) of Davao City, Branch 16; that during the proceedings in Civil Case No.
23,396-95, respondent requested the RTC for a period of 10 days within which to submit his Formal
Offer of Documentary Evidence; that despite the lapse of the requested period, respondent did not
submit his Formal Offer of Documentary Evidence; that respondent did not file any comment to E.B.
Villarosa & Partner Co., Ltd. s motion to declare complainants to have waived their right to file
Formal Offer of Documentary Evidence; that respondent belatedly filed a Formal Offer of
Documentary Evidence which the RTC denied; that respondent did not oppose or file any comment
to E.B. Villarosa & Partner Co., Ltd.s move to dismiss the Complaint; and that the RTC eventually
dismissed Civil Case No. 23,396-95 to the prejudice of herein complainants. In a Resolution dated
2

June 26, 2000, we directed respondent to file his Comment to this administrative Complaint. Upon
receipt of the Resolution on August 24, 2000, respondent requested for an extension of 30 days
3

which was granted. 4

However, as of August 5, 2002, or after a lapse of almost two years, respondent had not yet filed his
Comment. Thus, we resolved to require respondent to "show cause why he should not be
disciplinarily dealt with or held in contempt for such failure and to comply with the resolution requiring
said comment, both within ten (10) days from notice." Respondent received our directive but chose
5

to ignore the same. In another Resolution dated August 4, 2003, we imposed a fine of P1,000.00 on
6 7

respondent and reiterated our directives requiring him to file his Comment and to submit an
explanation on his failure to file the same. However, respondent again ignored this Courts directive.
Thus, on February 15, 2006, we increased the fine to P2,000.00 but respondent continued to ignore
our Resolutions. Consequently, on March 10, 2008, we resolved to order respondents arrest and
8

detention until he complies with our Resolutions. 9

This time, respondent heeded our directives by submitting his Compliance and 10

Comment. Respondent claimed that he failed to file his Comment to the instant administrative case
11

because he lost the records of Civil Case No. 23,396-95 and that he tried to get a copy from the
RTC to no avail.

In his Comment belatedly filed eight years after the prescribed period, respondent averred that
complainant Warriner is an Australian national who married his Filipino spouse as a convenient
scheme to stay in the country; that he rendered his services in Civil Case No. 23,396-95 free of
charge; that he accepted the case because he was challenged by Warriners criticism of the
Philippine judicial system; that he doubted the veracity of Warriners claim that the construction being
undertaken by E.B. Villarosa & Partner Co., Ltd. indeed caused the erosion of the soil towards his
property; that Warriner was his only witness during the trial; that the reluctance of other witnesses to
testify for Warriner strengthened his suspicion of the veracity of Warriners claim; that upon inquiries,
he discovered that the bits of evidence presented by Warriner were fabricated; that the barangay
officials do not wish to participate in the fraudulent scheme of Warriner; that he visited Warriners
property and saw that Warriner authored the damage to his property by draining the soil erosion
prevention ditches provided by E.B. Villarosa & Partner Co., Ltd.; that he had a heated argument
with Warriner during which the latter threatened him with a disbarment suit; that based on his
discovery, respondent did not wish to submit his Formal Offer of Documentary Evidence; that
complainants no longer saw him or inquired about the status of the case; that he did not withdraw
from the case because complainants no longer visited him at his law office; that if he withdraws,
Warriner would only hire another lawyer to perpetrate his fraudulent scheme; and that he could not
be held administratively liable for filing a belated Formal Offer of Documentary Evidence as he only
did the same to protect the legal profession and in accordance with his oath not to do any falsehood
or promote unlawful causes.

In a Resolution dated July 16, 2008, we found respondents explanation for failing to comply with
12

our directives not fully satisfactory hence, we admonished him to be more circumspect in his
dealings with the Court. At the same time, we referred the Complaint to the Integrated Bar of the
Philippines (IBP) for investigation, report and recommendation.

The parties submitted their respective Position Papers before the IBP Commission on Bar Discipline.

In their Position Paper, complainants insisted that respondent mishandled their case before the
13

RTC by filing a motion to admit the formal exhibits almost three months after the prescribed period;
that respondent did not present complainants Marriage Contract and General Power of Attorney that
would have allowed Warriner to represent his wife while the latter is out of the country; that
complainants marriage is not for convenience; that complainants have a son out of said marriage;
that respondent was paid for his services; that E.B. Villarosa & Partner Co., Ltd. did not secure an
Environmental Compliance Certificate (ECC) before undertaking the construction; that Warriner was
not the sole witness for the prosecution; that the records of Civil Case No. 23,396-95 would show
that a representative from the Department of Environment and Natural Resources (DENR) and the
Barangay Captain were likewise presented; and that these witnesses proved that Warriners claim
was not a fabrication.

In his Position Paper, respondent contradicted his earlier assertion in his Comment filed before the
14

Court that Warriner was his only witness in Civil Case No. 23,396-95 by claiming this time that aside
from Warriner, he also presented as witnesses a former barangay official and a representative from
DENR. He conceded that E.B. Villarosa & Partner Co., Ltd. indeed failed to secure an ECC but
claimed that this alone would not prove that E.B. Villarosa & Partner Co., Ltd. did not institute
corrective measures to prevent soil erosion and damages to neighboring houses such as Warriners.
He insisted that it is the natural topography of the place which caused the soil erosion which again
contradicted his earlier allegation in his Comment before this Court that it was Warriner who caused
the soil erosion by destroying the ditches constructed by the developer. Moreover, he alleged that
the estimate of damages provided by Benings Garden which he offered as an exhibit in Civil Case
No. 23,396-95 was a fabrication as there is no such entity in Laurel St., Davao City.

In their Supplemental Position Paper, complainants argued, among others, that since more than
15

eight years have lapsed, it is possible that Benings Garden relocated to another address but it does
not mean that it never existed.

In his Report and Recommendation, the Investigating Commissioner found respondent guilty of
16 17

mishandling Civil Case No. 23,396-95 in violation of the Code of Professional Responsibility and
thus recommended respondents suspension from the practice of law for a period of six months.

The IBP Board of Governors, in Resolution No. XIX-2010-442 dated August 28, 2010, approved
18

with modification the findings and recommendation of the Investigating Commissioner. The IBP
Board of Governors noted that aside from mishandling the case of complainants, respondent also
showed his propensity to defy the orders of the court, thus it recommended respondent's suspension
from the practice of law for one year.
Respondent moved for reconsideration insisting that the IBPs Resolution is not supported by facts.
He maintained that his actuations did not amount to a violation of the Code of Professional
Responsibility; and that the filing of the Formal Offer of Documentary Evidence, although belated,
exculpated him from any liability. He asserted that the exhibits were fabricated thus he deliberately
belatedly filed the Formal Offer of Documentary Evidence in the hope that the same would be
refused admission by the RTC. He denied defying lawful orders of the RTC or this Court. He insisted
that defiance of lawful orders connotes total, complete or absolute refusal and not mere belated
filing. He argued that he did not oppose or file comment to the Motion to Dismiss as he deemed the
same proper considering the fabricated allegations of his clients. Respondent argued that the
penalty recommended by the IBP is not commensurate to his infractions. He alleged that the records
of this case would show that he did not utterly disregard the orders or processes of the Court or the
IBP. He claimed that this Court should have deemed his failure to timely file a Comment as a waiver
on his part to file the same, and not as defiance of this Courts orders. Besides, he insisted that the
only issue to be resolved by the IBP was the alleged mishandling of Civil Case No. 23,396-95; the
IBP should not have delved on whether he disregarded or was disrespectful of the Courts orders
because he was not given any opportunity to rebut the same.

Finally, respondent posited that his penalty is oppressive, excessive and disproportionate. He
argued that with his suspension, the other cases he is handling would be affected.

Complainants also filed their Motion for Reconsideration insisting that respondent should be
disbarred or suspended for five years from the practice of law. To this, respondent filed his Comment
asserting that the Investigating Commissioner erred and was inaccurate when he stated in his
Report and Recommendation that respondent had a heated argument with the complainants. He
averred that after the filing of the Formal Offer of Documentary Evidence and until the dismissal of
Civil Case No. 23,396-95, he had no occasion to meet the complainants. He maintained that he had
nothing to be remorseful about and that there is absolutely no evidence that would justify his
suspension. He maintained that "being basic and elementary in any legal procedure, a failure or
refusal to submit comment is but a waiver to so comment and puts the controversy submitted for
resolution based on the evidence available at hand x x x. It is unfortunate that the Supreme Court
did not consider respondents failure or omission as having such effects, but such failure cannot be
considered as a contemptuous act x x x."

The IBP Board of Governors, however, was not persuaded hence it denied respondents Motion for
Reconsideration.

On May 6, 2013, respondent filed before this Court An Ex Parte Manifestation (Not a Motion for
Reconsideration) insisting that his failure to timely file comment on the administrative case does not
19

constitute defiance of the Courts directives but is only "a natural human expression of frustration,
distraught and disappointment" when this Court and the IBP entertained a clearly unmeritorious
Complaint. In any case, he averred that on April 12, 2013, the IBP Davao City Chapter presented
him with a Certificate of Appreciation for his invaluable support to the local chapter. He claims that

x x x Even a feeble minded average person will find it ridiculously hilarious and comical that the [IBP]
National Office condemns undersigned for his acts allegedly inimical to the profession but will be
praised to the heavens, so to speak, by the local chapter of the same organization for his invaluable
support to that same organization whose object, among others, is to discipline its members to be
respectful and [subservient] to the rule of law by serving justice in an orderly and dignified manner.
Weight and credence must be accorded the recognition and appreciation by this local chapter being
logically considered as having the first hand observation and, thus, the personal knowledge of
undersigneds personal character, integrity, uprightness, reputation and sacrifices in the practice of
his legal profession.

As a gesture of meek obedience, respondent will not pray for the reconsideration and setting aside
of that resolution adopted by the Honorable Board of Governors suspending him from the practice of
law for one (1) year, erroneous, disproportionate and harsh as it may be. Undersigned only prays
that, by way of protecting the prestigious image of the [IBP], measures be adopted to prevent it from
becoming a laughing stock of professional organizations in the Philippines worthy for the books of
wonders by its inconsistent, ridiculous and contradictory stance of disciplining its members
exemplified by the predicament of respondent in this instant proceeding on the one hand but on the
other hand is extolled by its local chapter to high heavens for his "invaluable support" of the tenets
and foundation of that very same organization that condemns him. THIS IS HILARIOUSLY
COMICAL AND ABSURDLY ODD.

Our Ruling

Respondent is indeed guilty of mishandling Civil Case No. 23,396-95. Records show that the 10-day
period given to respondent to submit his formal offer of documentary evidence pursuant to the RTC
Order dated November 11, 1997 lapsed without any compliance from the respondent.

Consequently, the RTC, in its January 23, 1998 Order deemed respondent to have waived the
submission of his formal offer of exhibits. Instead of asking the RTC to set aside the above Order,
respondent filed on February 3, 1998 a Motion to Admit the Belated Formal Exhibits in Evidence. As
to be expected, the RTC denied the motion. At the same time, it directed E.B. Villarosa & Partner
Co., Ltd. to file its Motion to Dismiss by way of Demurrer to Evidence. Again, respondent failed to
comment or oppose the Motion to Dismiss despite the opportunity given by the RTC. As a result,
Civil Case No. 23,396-95 was dismissed.

Plainly, respondent violated the Code of Professional Responsibility particularly Canon 18 and Rule
18.03 which provide:

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.

Worse, it appears that respondent deliberately mishandled Civil Case No. 23,396-95 to the prejudice
of herein complainants. Culled from the pleadings respondent submitted before this Court and the
IBP, respondent admitted that he deliberately failed to timely file a formal offer of exhibits because he
believes that the exhibits were fabricated and was hoping that the same would be refused admission
by the RTC. This is improper. If respondent truly believes that the exhibits to be presented in
evidence by his clients were fabricated, then he has the option to withdraw from the case. Canon 22
allows a lawyer to withdraw his services for good cause such as "[w]hen the client pursues an illegal
or immoral course of conduct with the matter he is handling" or "[w]hen the client insists that the
20

lawyer pursue conduct violative of these canons and rules." Respondent adverted to the estimate of
21

damages provided by Benings Garden as a fabrication as there is no such entity in Laurel St.,
Davao City. Unfortunately, respondent anchored his claim that Bening's Garden does not exist
merely on the claim of Rudolph C. Lumibao, a "sympathetic client" and a part-time gardener.
Complainants refuted this allegation by claiming that Bening's Garden must have relocated its
business considering that more than eight years have passed since the estimate was secured.
Complainants also pointed out that since the filing of this case, respondent has thrice relocated his
office but this does not mean that his practice has ceased to exist.

We also agree with the IBP that respondent has a propensity to disobey and disrespect court orders
and processes. Note that we required respondent to submit his Comment to this administrative
1wphi1

Complaint as early as year 2000. However, he was only able to file his Comment eight years later, or
in 2008 and only after we ordered his arrest. "As an officer of the court, respondent is expected to
know that a resolution of this Court is not a mere request but an order which should be complied with
promptly and completely. 22

Finally, it has not escaped our notice that respondent is also prone to resorting to contradictions in
his effort to exculpate himself. In his Comment filed before this Court, respondent claimed that
Warriner was his only witness in Civil Case No. 23,396-95. However, in his Position Paper filed
before the IBP, he admitted that aside from Warriner, he also presented as witnesses a former
barangay official and a representative from DENR. Next, he claimed in his Comment filed before this
Court that he had a heated argument with Warriner during which the latter threatened him with a
disbarment suit. The Investigating Commissioner took this into account when he submitted his
Report and Recommendation. Surprisingly, respondent claimed in his Comment to complainant's
Motion for Reconsideration before the IBP that the Investigating Commissioner erred and was
inaccurate when he stated in his Report and Recommendation that respondent had a heated
argument with the complainants. Moreover, respondent claimed in his Comment before this Court
that Warriner authored the damage to his property by draining the soil erosion prevention ditches
provided by E.B. Villarosa & Partner Co., Ltd. However, he again contradicted himself when he
claimed in his Position Paper that the natural topography of the place was the cause of the erosion.
At this juncture, respondent must be reminded that as a lawyer and an officer of the Court, he "owes
candor, fairness and good faith to the court." He "shall not do any falsehood, nor consent to the
23

doing of any in court; nor shall he mislead, or allow the Court to be misled by any artifice."
24

Under the circumstances, and considering that we had already admonished respondent and had him
arrested for his adamant refusal to obey our directives, we find the penalty of suspension from the
practice of law for six months, as recommended by the Investigating Commissioner, and as we
similarly imposed in Hernandez v. Padilla and Pesto v. Millo, commensurate to respondents
25 26

infractions. Besides, we wish to emphasize that "suspension is not primarily intended as a

punishment but a means to protect the public and the legal profession." 27

IN VIEW WHEREOF, Atty. Reni M. Dublin is SUSPENDED from the practice of law for six months
effective upon receipt of this Resolution with a WARNING that a similar violation will be dealt with
more severely. He is DIRECTED to report to this Court the date of his receipt of this Resolution to
enable this Court to determine when his suspension shall take effect.

Let a copy of this Resolution be entered in the personal records of respondent as a member of the
Bar and copies furnished the Office of the Bar Confidant the Integrated Bar of the Philippines and
the Office of the Court Administrator for circulation to all courts in the country.

SO ORDERED.
 A.C. No. 7766, August 05, 2014

JOSE ALLAN TAN, Complainant, v. PEDRO S. DIAMANTE, Respondent.

DECISION

PER CURIAM:

For the Courts resolution is an administrative Complaint 1 for disbarment dated February 1, 2008 filed by
complainant Jose Allan Tan (complainant) against respondent Pedro S. Diamante (respondent), charging him
of violating the Code of Professional Responsibility (CPR) and the lawyers oath for fabricating and using a
spurious court order, and for failing to keep his client informed of the status of the case.

The Facts

On April 2, 2003, complainant, claiming to be a recognized illegitimate son of the late Luis Tan, secured the
services of respondent in order to pursue a case for partition of property against the heirs of the late
spouses Luis and Natividad Valencia-Tan.2 After accepting the engagement, respondent filed the
corresponding complaint3 before the Regional Trial Court of Bacolod City, Branch 46 (RTC), docketed as Civil
Case No. 03-11947. The complaint was eventually dismissed by the RTC in an Order 4 dated July 25, 2007 for
lack of cause of action and insufficiency of evidence. 5 While respondent was notified of such dismissal as
early as August 14, 2007,6 complainant learned of the same only on August 24, 2007 when he visited the
formers office.7 On such occasion, respondent allegedly asked for the amount of P10,000.00 for the
payment of appeal fees and other costs, but since complainant could not produce the said amount at that
time, respondent, instead, asked and was given the amount of P500.00 purportedly as payment of the
reservation fee for the filing of a notice of appeal before the RTC. 8 On September 12, 2007, Tan handed the
amount of P10,000.00 to respondent, who on even date, filed a notice of appeal 9before the RTC.10 cralawre d

In an Order11 dated September 18, 2007, the RTC dismissed complainants appeal for having been filed
beyond the reglementary period provided for by law. Respondent, however, did not disclose such fact and,
instead, showed complainant an Order12 dated November 9, 2007 purportedly issued by the RTC (November
9, 2007 Order) directing the submission of the results of a DNA testing to prove his filiation to the late Luis
Tan, within 15 days from receipt of the notice. Considering the technical requirements for such kind of
testing, complainant proceeded to the RTC and requested for an extension of the deadline for its submission.
It was then that he discovered that the November 9, 2007 Order was spurious, as certified by the RTCs
Clerk of Court.13 Complainant also found out that, contrary to the representations of respondent, his appeal
had long been dismissed.14 Aggrieved, he filed the instant administrative complaint for disbarment against
respondent.

In his Comments/Compliance15 dated September 4, 2009, respondent alleged that it was complainants
failure to timely produce the amount of P1,400.00 to pay for the appeal fees that resulted in the late filing of
his appeal. According to him, he informed complainant of the lapse of the reglementary period to appeal,
but the latter insisted in pursuing the same. He also claimed to have assisted complainant not for money or
malice but being a desperate litigant, he was blamed for the courts unfavorable decision. 16 cralawre d

The IBPs Report and Recommendation

In a Report and Recommendation17 dated September 21, 2010, the Integrated Bar of the Philippines (IBP)
Investigating Commissioner found respondent administratively liable, and accordingly recommended that the
penalty of suspension for a period of one (1) year be meted out against him. 18 cralawre d

The Investigating Commissioner found complainants imputations against respondent to be well-founded,

observing that instead of meeting complainants allegations squarely, particularly, the issue of the non-
disclosure of the dismissal of the partition case, respondent sidestepped and delved on arguments that
hardly had an effect on the issues at hand.19 cralawre d

Moreover, the Investigating Commissioner did not find credence in respondents accusation that the spurious
November 9, 2007 Order originated from complainant, ratiocinating that it was respondent who was
motivated to fabricate the same to cover up his lapses that brought about the dismissal of complainants
appeal and make it appear that there is still an available relief left for Tan. 20
cralawre d

In a Resolution dated April 16, 2013, the IBP Board of Governors unanimously adopted and approved the
aforesaid report and recommendation.21 cralawred

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable for
violating the CPR.

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the IBPs findings, subject to the modification
of the recommended penalty to be imposed upon respondent.
Under Rule 18.04, Canon 18 of the CPR, it is the lawyers duty to keep his client constantly updated on the
developments of his case as it is crucial in maintaining the latters confidence, to wit: chanRoble svirtualLawlibrary

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to clients request for information.

As an officer of the court, it is the duty of an attorney to inform his client of whatever important information
he may have acquired affecting his clients case. He should notify his client of any adverse decision to enable
his client to decide whether to seek an appellate review thereof. Keeping the client informed of the
developments of the case will minimize misunderstanding and loss of trust and confidence in the attorney.
The lawyer should not leave the client in the dark on how the lawyer is defending the clients interests. 22 In
this connection, the lawyer must constantly keep in mind that his actions, omissions, or nonfeasance would
be binding upon his client. Concomitantly, the lawyer is expected to be acquainted with the rudiments of law
and legal procedure, and a client who deals with him has the right to expect not just a good amount of
professional learning and competence but also a whole-hearted fealty to the clients cause. 23 cralawred

In the case at bar, records reveal that as of August 14, 2007, respondent already knew of the dismissal of
complainants partition case before the RTC. Despite this fact, he never bothered to inform complainant of
such dismissal as the latter only knew of the same on August 24, 2007 when he visited the formers office.
To add insult to injury, respondent was inexcusably negligent in filing complainants appeal only on
September 12, 2007, or way beyond the reglementary period therefor, thus resulting in its outright
dismissal. Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession
commonly possess and exercise in such matters of professional employment. 24 cralawre d

Worse, respondent attempted to conceal the dismissal of complainants appeal by fabricating the November
9, 2007 Order which purportedly required a DNA testing to make it appear that complainants appeal had
been given due course, when in truth, the same had long been denied. In so doing, respondent engaged in
an unlawful, dishonest, and deceitful conduct that caused undue prejudice and unnecessary expenses on the
part of complainant. Accordingly, respondent clearly violated Rule 1.01, Canon 1 of the CPR, which
provides:chanRoble svirtualLawlibrary

CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law
and legal processes.

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

As officers of the court, lawyers are bound to maintain not only a high standard of legal proficiency, but also
of morality, honesty, integrity, and fair dealing,25 failing in which whether in his personal or private capacity,
he becomes unworthy to continue his practice of law.26 A lawyers inexcusable neglect to serve his clients
interests with utmost diligence and competence as well as his engaging in unlawful, dishonest, and deceitful
conduct in order to conceal such neglect should never be countenanced, and thus, administratively
sanctioned.

In view of the foregoing, respondents conduct of employing a crooked and deceitful scheme to keep
complainant in the dark and conceal his cases true status through the use of a falsified court order evidently
constitutes Gross Misconduct.27 His acts should not just be deemed as unacceptable practices that are
disgraceful and dishonorable; they reveal a basic moral flaw that makes him unfit to practice law.28 In this
regard, the Courts pronouncement in Sebastian v. Calis29 is instructive, viz.: chanRoble svirtualLawlibrary

Deception and other fraudulent acts by a lawyer are disgraceful and dishonorable. They reveal
moral flaws in a lawyer. They are unacceptable practices. A lawyers relationship with others should be
characterized by the highest degree of good faith, fairness and candor. This is the essence of the lawyers
oath. The lawyers oath is not mere facile words, drift and hollow, but a sacred trust that must be upheld
and keep inviolable. The nature of the office of an attorney requires that he should be a person of good
moral character. This requisite is not only a condition precedent to the admission to the practice of law, its
continued possession is also essential for remaining in the practice of law. We have sternly warned that any
gross misconduct of a lawyer, whether in his professional or private capacity, puts his moral
character in serious doubt as a member of the Bar, and renders him unfit to continue in the
practice of law.30(Emphases and underscoring supplied)

Jurisprudence reveals that in analogous cases where lawyers failed to inform their clients of the status of
their respective cases, the Court suspended them for a period of six (6) months. In Mejares v.
Romana,31 the Court suspended the lawyer for the same period for his failure to timely and adequately
inform his clients of the dismissal of their petition. In the same vein, in Penilla v. Alcid, Jr.,32 the same
penalty was imposed on the lawyer who consistently failed to update his client of the status of his cases,
notwithstanding several follow-ups.

However, in cases where lawyers engaged in unlawful, dishonest, and deceitful conduct by falsifying
documents, the Court found them guilty of Gross Misconduct and disbarred them. In Brennisen v.
Contawi,33 the Court disbarred the lawyer who falsified a special power of attorney in order to mortgage and
sell his clients property. Also, in Embido v. Pe,34 the penalty of disbarment was meted out against the lawyer
who falsified an inexistent court decision for a fee.
As already discussed, respondent committed acts of falsification in order to misrepresent to his client, i.e.,
complainant, that he still had an available remedy in his case, when in reality, his case had long been
dismissed for failure to timely file an appeal, thus, causing undue prejudice to the latter. To the Court,
respondents acts are so reprehensible, and his violations of the CPR are so flagrant, exhibiting his moral
unfitness and inability to discharge his duties as a member of the bar. His actions erode rather than enhance
the public perception of the legal profession. Therefore, in view of the totality of his violations, as well as the
damage and prejudice caused to his client, respondent deserves the ultimate punishment of disbarment.

WHEREFORE, respondent Pedro S. Diamante is hereby DISBARRED for Gross Misconduct and violations of
Rule 1.01, Canon 1, and Rule 18.04, Canon 18 of the Code of Professional Responsibility, and his name is
ordered STRICKEN OFF from the roll of attorneys.

Let a copy of this Decision be attached to respondent Pedro S. Diamantes record in this Court. Further, let
copies of this Decision be furnished to the Integrated Bar of the Philippines and the Office of the Court
Administrator, which is directed to circulate them to all the courts in the country for their information and
guidance.

SO ORDERED.
 A.C. No. 6484, June 16, 2015

ADELITA B. LLUNAR, Complainant, v. ATTY. ROMULO RICAFORT, Respondent.

DECISION

PER CURIAM:

The present administrative case stemmed from the complaint-affidavit 1 that Adelita B. Llunar (complainant)
filed against Atty. Romulo Ricafort (respondent) for gross and inexcusable negligence and serious
misconduct.

Antecedents

In September 2000, the complainant, as attorney-in-fact of Severina Bafiez, hired the respondent to file a
case against father and son Ricardo and Ard Cervantes (Ard) for the recovery of a parcel of land allegedly
owned by the Banez family but was fraudulently registered under the name of Ricardo and later was
transferred to Ard.

The property, which Ard had mortgaged with the Rural Bank of Malilipot, Albay, was the subject of
foreclosure proceedings at the time the respondent was hired. The respondent received from the
complainant the following amounts: (a) P70,000.00 as partial payment of the redemption price of the
property; (b) P19,000.00 to cover the filing fees; and (c) P6,500.00 as attorney's fees.

Three years later, the complainant learned that no case involving the subject property was ever filed by the
respondent with the Regional Trial Court (RTC) in Legaspi City. Thus, the complainant demanded that the
respondent return to her the amount of P95,000.00.

The respondent refused to return the whole amount of P95,000.00 to the complainant. He argued that a
complaint2 for annulment of title against Ard Cervantes had actually been filed in court, though not by him,
but by another lawyer, Atty. Edgar M. Abitria. Thus, he was willing to return only what was left of the
P95,000.00 after deducting therefrom the P50,000.00 that he paid to Atty. Abitria as acceptance fee for
handling the case.

The complainant refused to recognize the complaint for annulment of title filed by Atty. Abitria and claimed
that she had no knowledge of Atty. Abitria's engagement as counsel. Besides, the complaint was filed three
(3) years late and the property could no longer be redeemed from the bank. Also, the complainant
discovered that the respondent had been suspended indefinitely from the practice of law since May 29,
2002, pursuant to this Court's decision in Administrative Case No. 5054, 3 which the complainant suspected
was the reason another lawyer, and not the respondent, filed the complaint for annulment of title in court.

In a resolution4 dated February 2, 2005, the Court referred the case to the Integrated Bar of the Philippines
(IBP) for investigation, report, and recommendation.

In a report5 dated May 22, 2009, IBP Investigating Commissioner Cecilio C. Villanueva found the respondent
to have been grossly negligent in handling the complainant's case and to have gravely abused the trust and
confidence reposed in him by the complainant, thereby, violating Canons 15 6 and 17,7 and Rules
1.01,8 16.03,9 18.03,10 and 18.0411 of the Code of Professional Responsibility (CPR).

Also, the Investigating Commissioner found the respondent to have erred in not informing his client that he
was under indefinite suspension from the practice of law. Due to these infractions, Commissioner Villanueva
recommended that the respondent remain suspended indefinitely from the practice of law.

In Resolution No. XIX-2011-224 dated May 14, 2011, the IBP Board of Governors agreed with the
Investigating Commissioner's findings on the respondent's liability but modified the recommended penalty
from indefinite suspension to disbarment.12 It also ordered the respondent to return to the complainant the
amount of P95,000.00 within thirty (30) days from notice. The respondent moved for reconsideration.

In his motion for reconsideration,13 the respondent argued that his referral of the complainant's case to Atty.
Abitria was actually with the complainant's knowledge and consent; and that he paid Atty. Abitria
P50,000.00 for accepting the case. These facts were confirmed by Atty. Abitria in an affidavit 14 dated
November 17, 2004, but were alleged to have been overlooked by Commissioner Villanueva in his report.
The IBP Board of Governors, in Resolution No. XX-2013-710 dated June 21, 2013, denied the respondent's
motion for reconsideration.15chanroble slaw

Our Ruling

We find the respondent guilty of Grave Misconduct in his dealings with his client and in engaging
in the practice of law while under indefinite suspension, and thus impose upon him the ultimate
penalty of DISBARMENT.

The respondent in this case committed several infractions making him liable for grave misconduct. First, the
respondent did not exert due diligence in handling the complainant's case. He failed to act promptly in
redeeming the complainant's property within the period of redemption. What is worse is the delay of three
years before a complaint to recover the property was actually filed in court. The respondent clearly dilly-
dallied on the complainant's case and wasted precious time and opportunity that were then readily available
to recover the complainant's property. Under these facts, the respondent violated Rule 18.03 of the Code of
Professional Responsibility (CPR), which states that "a lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him liable."

Second, the respondent failed to return, upon demand, the amounts given to him by the complainant for
handling the latter's case. On three separate occasions, the respondent received from the complainant the
amounts of P19,000.00, P70,000.00, and P6,500.00 for purposes of redeeming the mortgaged property
from the bank and filing the necessary civil case/s against Ard Cervantes. The complainant approached the
respondent several times thereafter to follow up on the case/s to be filed supposedly by the respondent
who, in turn, reassured her that actions on her case had been taken.

After the complainant discovered three years later that the respondent had not filed any case in court, she
demanded that the respondent return the amount of P95,000.00, but her demand was left unheeded. The
respondent later promised to pay her, but until now, no payment of any amount has been made. These facts
confirm that the respondent violated Canon 16 of the CPR, which mandates every lawyer to "hold in trust all
moneys and properties of his client that may come into his possession" 16 and to "account for all money or
property collected or received for or from the client."17 In addition, a lawyer's failure to return upon demand
the funds or property he holds for his client gives rise to the presumption that he has appropriated these
funds or property for his own use to the prejudice of, and in violation of the trust reposed in him by his
client.18
chanrobleslaw

Third, the respondent committed dishonesty by not being forthright with the complainant that he was under
indefinite suspension from the practice of law. The respondent should have disclosed this fact at the time he
was approached by the complainant for his services. Canon 15 of the CPR states that "a lawyer shall
observe candor, fairness and loyalty in all his dealings and transactions with his clients." The respondent
lacked the candor expected of him as a member of the Bar when he accepted the complainant's case despite
knowing that he could not and should not practice law.

Lastly, the respondent was effectively in the practice of law despite the indefinite suspension imposed on
him. This infraction infinitely aggravates the offenses he committed. Based on the above facts alone, the
penalty of suspension for five (5) years from the practice of law would have been justified, but the
respondent is not an ordinary violator of the profession's ethical rules; he is a repeat violator of these rules.
In Nuez v. Atty. Ricafort,19 we had adjudged the respondent liable for grave misconduct in failing to turn
over the proceeds of the sale of a property owned by his client and in issuing bounced checks to satisfy the
alias writ of execution issued by the court in the case for violation of Batas Pambansa Big. 22 filed against
him by his client. We then suspended him indefinitely from the practice of law - a penalty short of
disbarment. Under his current liability - which is no different in character from his previous offense - we
have no other way but to proceed to decree his disbarment. He has become completely unworthy of
membership in our honorable profession.

With respect to the amount to be returned to the complainant, we agree with the IBP that the respondent
should return the whole amount of P95,000.00, without deductions, regardless of whether the
engagement of Atty. Abitria as counsel was with the complainant's knowledge and consent.

In the first place, the hiring of Atty. Abitria would not have been necessary had the respondent been honest
and diligent in handling the complainant's case from the start. The complainant should not be burdened with
the expense of hiring another lawyer to perform the services that the respondent was hired to do, especially
in this case where there was an inexcusable non-delivery of such services.

WHEREFORE, respondent Atty. Romulo Ricafort is hereby DISBARRED from the practice of law and his
name REMOVED from the Roll of Attorneys, effective immediately upon his receipt of this Decision. Also, he
is ORDERED to RETURN the amount of P95,000.00 to complainant Adelita B. Llunar, within thirty (30)
days from notice of this Decision.

Let a copy of this Decision be attached to the respondent's personal record and furnished the Office of the
Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court Administrator for circulation
to all courts in the country. This Decision should likewise be posted on the Supreme Court website for the
information of the general public.

SO ORDERED. cralawla wlibrary

A.C. No. 10138 June 16, 2015
(Formerly CBD Case No. 06-1876)

ROBERTO P. NONATO, Complainant,

vs.
ATTY. EUTIQUIO M. FUDOLIN, JR., Respondent.

DECISION

PER CURIAM:

We resolve the administrative complaint filed by Roberto P. Nonato (complainant) charging Atty.
1

Eutiquio M. Fudolin, Jr. (respondent) with gross neglect of duty.

Factual Background

In a verified complaint dated October 18, 2006, the complainant alleged that his father, the late
Restituto Nonato (Restituto), was the duly registered owner of a 479-sq.m. Real property ( property)
at Hinigaran, Negros Occidental. The property became the subject of ejectment proceedings filed by
Restituto against Anselmo Tubongbanua ( Anselmo), before the Municipal Trial Court (MTC) of
Hinigaran, Province of Negros Occidental, docketed as Civil Case No. MTC-282. When the
complaint was filed, Restituto was represen ted by Atty. Felino Garcia (Atty. Garcia). However, at the
pre-trial stage, Atty. Garcia was replaced by Atty. Fudolin, the respondent in the present case.

The complainant alleged that although his father Restituto paid the respondent his acceptance fees,
no formal retainer agreement was executed. The respondent also did not issue any receipts for the
acceptance fees paid.

The respondent, on the other hand, averred that Restituto, and not the complainant, engaged his
services on Restitutos representation that they were relatives. For this reason, he accepted the case
on a minimal acceptance fee of P20,000.00 and appearance fee of P1,000.00, and did not execute
any formal retainer agreement.

The complainant asserted that during the pendency of the ejectment proceedings before the MTC,
the respondent failed to fully inform his father Restituto of the status and developments in the case.
Restituto could not contact the respondent despite his continued efforts. The respondent also failed
to furnish Restituto copies of the pleadings, motions and other documents filed with the court. Thus,
Restituto and the complainant were completely left in the dark regarding the status of their case.

After an exchange of initial pleadings in the ejectment proceedings, the MTC ordered the parties to
submit their respective position papers. Since neither party complied with the courts directive, the
MTC dismissed the complaint as well as the counterclaim on May 26, 2005.

The respondent filed a motion for reconsideration from the order of dismissal. He justified his failure
to file the position paper by arguing that he misplaced the case records, adding that he was al so
burdened with numerous other cases. The MTC denied the motion.

The respondent filed a second motion for reconsideration, this time alleging that the ejectment case
was a me ritorious one such that its dismissal would cause injustice to Restituto (the plaintiff). He
also filed a supplemental motion, but the court denied both motions.

On September 15, 2005, Restituto died and all his properties passed on to his heirs, the complainant
among them.

The complainant alleges that he and his father Restituto did not know of the ejectment suits
dismissal as the respondent had failed to furnish them a copy of the MTCs dismissal order. The
complainant also asserts that the respondent did not inform them about the filing of the motion for
reconsideration or of its denial by the MTC. The complainant claims that he only found out that the
case had been dismissed when he personally went to the Office of the MTC Clerk of Court and was
informed of the dismissal.

Because of the patent negligence, the complainant informed the respondent that his failure to file the
position paper could be a ground for his disbarment. Furthermore, the complainant, without the
respondents intervention, entered into an oral extrajudicial compromise with the daughter of
defendant Anselmo.

On August 17, 2007, the respondent wrote the complainant and apologized for his repeated failure to
communicate with him. He reasoned out that he failed to file the position paper due to his poor
health. He also claimed that he had suffered a stroke and had become partially blind, which caused
the delay in the preparation of the pleadings in the ejectment case. 2

In his Answer dated December 22, 2006, the respondent asserted that at the time he received the
3

MTCs di rective to submit a position paper, he was already suffering from "Hypertensi ve
Cardiovascular Disease, Atrial Fibrillation, Intermittent, and Diabetes Mellitus Type II." The
respondent also alleged that further consultations confirmed that he had an undetected stroke and
arterial obstruction during the previous months. His health condition led to his loss of concentration
in his cases and the loss of some of the case folders, among them the re cords of the ejectment
case. The respondent also claimed that he focused on his health for self-preservation, and
underwent vascular laboratory examinations; thus, he failed to communicate with the late Restituto
and the complainant.

The respondent further averred that his failure to file the position paper in the ejectment proceedings
was not due to willful negligence but to his undetected stroke. He never revealed the gravity of his
illness to his clients or to the court out of fear that his disclosure would affect his private practice.

Lastly, the respondent alleged that after the ejectment suits dismissal, he exerted all efforts, to the
point of risking his poor health, by filing successive pleadings to convince the court to reconsider its
dismissal order. Because the dismissal was purely based on a technical ground, he maintained that
his failure to file the position paper did not amount to the abandonment of his clients case.

The IBPs Report and Recommendation

IBP Investigating Commissioner Acerey C. Pacheco issued his Report and Recommendation, finding
the respondent guilty of both negligence and betrayal of his clients confidence. The Investigating
Commissioner found that the respondents failure to file the position paper in the ejectment
proceedings and to apprise the client of the status of the case demonstrated his negligence and lack
of prudence in dealing with his clients.

The Investigating Commissioner likewise held that the respondents failure to promptly inform his
client s, including the complainant, of his medical condition deprived them of the opportunity to seek
the services of other lawyers. Had he notified the complainants father of his illness before the case
was dismissed, the latter could have engaged the services of another lawyer, and the case would
not have been dismissed on a mere technical ground.

The Investigating Commissioner recommended the respondents suspension for one (1) month from
the practice of law.

In a Resolution dated May 14, 2011, the IBP Board of Governors

4

adopted and approved the Investigating Commissioners Report and Recommendation after finding
it to be fully supported by the evidence on record and by the applicable laws and rules.

The complainant moved to reconsider the resolution but the IBP Board of Governors denied his
motion in a resolution dated June 21, 2013.
5
 The Issue

The issue in this case is whether or not the respondent could be held administratively liable for
negligence in the performance of duty.

The Court's Ruling

Except for the recommended penalty, we adopt the findings of the IBP.

A lawyer is bound to protect his clients interests to the best of his ability and with utmost
diligence. He should serve his client in a conscientious, diligent, and efficient manner; and provide
6

the quality of service at least equal to that which he, himself, would expect from a competent lawyer
in a similar situation. By consenting to be his clients counsel, a lawyer impliedly represents that he
will exercise ordinary diligence or that reasonable degree of care and skill demanded by his
profession, and his client may reasonably expect him to perform his obligations diligently. The failure
7

to meet these standards warrants the imposition of disciplinary action.

In this case, the record clearly shows that the respondent has been remiss in the performance of his
duties as Restitutos counsel. His inaction on the matters entrusted to his care is plainly obvious. He
1avvphi1

failed to file his position paper despite notice from the MTC requiring him to do so. His omission
greatly prejudiced his client as the Court in fact dismissed the ejectment suit.

In addition, the respondent fa iled to inform Restituto and the complainant of the status of the case.
His failure to file the position paper, and to inform his client of the status of the case, not only
constituted inexcusable negligence; but it also amounted to evasion of duty. All these acts violate
8

the Code of Professional Responsibility warranting the courts imposition of disciplinary action. The
pertinent provisions of the Code of Professional Responsibility provide:

Canon 17 A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and
confidence reposed in him.

Canon 18 A lawyer shall serve his client with competence and diligence.

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 clients request for information.

In Perla Compania de Seguros, Inc. v. Saquilabon, we considered a lawyers failure to file a brief for
9

his client to be inexcusable negligence. We held that the lawyers omission amounted to a serious
lapse in the duty he owed his client and in his professional obligation not to delay litigation and to aid
the courts in the speedy administration of justice.

Similarly in Uy v. Tansinsin, we ruled that a lawyers failure to file the required pleadings and to
10

inform his client about the developments in her case fell below the standard and amounted to a
violation of Rule 18.03 of the Code of Professional Responsibility. We emphasized the importance of
the lawyers duty to keep their clients adequately and fully informed about the developments in their
cases, and held that a client should never be left in the dark, for to do so would be to destroy the
trust, faith, and confidence reposed in the retained lawyer and in the legal profession as a whole.

We also emphasized in Villaflores v. Limos that the trust and confidence reposed by a client in his
1

lawyer impose a high standard that includes the appreciation of the lawyers duty to his clients, to the
profession, to the courts, and to the public. Every case a lawyer accepts deserves his full attention,
diligence, skill and competence, regardless of its importance and whether he accepts it for a fee or
for free.
12
Because a lawyer-client relationship is one of trust and confidence, there is a need for the client to
be adequately and fully informed about the developments in his case. A client should never be left
groping in the dark; to allow this situation is to destroy the trust, faith, and confidence reposed in the
retained lawyer and in the legal profession in general. 13

The respondent has apparently failed to measure up to these required standards. He neglected to
file the required position paper, and did not give his full commitment to maintain and defend his
clients interests. Aside from failing to file the required pleading, the respondent never exerted any
effort to inform his client of the dismissal of the ejectment case.

We also find the respondents excuse that he had an undetected stroke and was suffering from
other illnesses unsatisfactory and merely an afterthought. Even assuming that he was then
suffering from numerous health problems (as evidenced by the medical certificates he attached), his
medical condition cannot serve as a valid reason to excuse the omission to file the necessary court
pleadings. Th e respondent could have requested an extension of time to file the required position
paper, or at the very least, informed his client of his medical condition; all these, the respondent
failed to do.

Furthermore, the respondents subsequent filing of successive pleadings (after the ejectment case
had been dismissed) significantly weakens his health-based excuse. His efforts not only contradict
his explanation that his physical predicament forced him to focus on his illnesses; they also indicate
that his illnesses (allegedly "Hypertensive Cardiovascular Disease, Atrial Fibrillation, Intermittent,
and Diabetes Mellitus Type II") were not at all incapacitating.

All told, we find that the respondent violated Canon 17, Canon 18, and Rules 18.03 and 18.04 of the
Code of Professional Responsibility. We, however, find the IBPs recommended penalty (one
(1)month suspension from the practice of law) to be a mere slap on the wrist considering the gravity
of the infractions committed. Thus, we deem it appropriate to impose the penalty of two (2) years
suspension, taking into account the respondent's acts and omissions, as well as the consequence of
his negligence.

WHEREFORE, premises considered, we hereby SUSPEND Atty. Eutiquio M. Fudolin, Jr. from the
practice of law for a period of two (2) years for violating Rules 18.03 and Rule 18.04, Canon' 18, and
Canon 17 of the Code of Professional Responsibility. We also WARN him that the commission of the
same or similar act or acts shall be dealt with more severely.

Atty. Eutiquio M. Fudolin, Jr. is DIRECTED to formally MANIFEST to this Court, upon receipt of this
Decision, the date of his receipt which shall be the starting point of his suspension. He shall furnish a
copy of this Manifestation to all the courts and quasi-judicial bodies where he has entered his
appearance as counsel.

Let a copy of this decision be attached to Atty. Fudolin's records with the Office of the Bar Confidant
and posted on the Supreme Court website as a notice to the general public.

SO ORDERED.
A.C. No. 7749 July 8, 2013

JOSEFINA CARANZA VDA. DE SALDIVAR, COMPLAINANT,

vs.
ATTY. RAMON SG CABANES, JR., RESPONDENT.

RESOLUTION

PERLAS-BERNABE, J.:

For the Courts resolution is an administrative complaint1 filed by Josefina Caranza vda. de Saldivar
(complainant) against Atty. Ramon SG Cabanes, Jr. (respondent), charging him for gross negligence
in violation of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional
Responsibility (Code).

The Facts

Complainant was the defendant in an unlawful detainer case, docketed as Civil Case No. 1972, 2 filed
by the heirs of one Benjamin Don (heirs) before the Municipal Trial Court of Pili, Camarines Sur
(MTC), wherein she was represented by respondent. While respondent duly filed an answer to the
unlawful detainer complaint, he, however, failed to submit a pre-trial brief as well as to attend the
scheduled preliminary conference. Consequently, the opposing counsel moved that the case be
submitted for decision which motion was granted in an Order3 dated November 27, 2003. When
complainant confronted respondent about the foregoing, the latter just apologized and told her not to
worry, assuring her that she will not lose the case since she had the title to the subject property.

On December 30, 2003, the MTC issued a Decision4 (MTC Decision) against complainant, ordering
her to vacate and turn-over the possession of the subject property to the heirs as well as to pay them
damages. On appeal, the Regional Trial Court of Pili, Camarines Sur, Branch 32 (RTC), reversed the
MTC Decision and dismissed the unlawful detainer complaint. 5 Later however, the Court of Appeals
(CA) reversed the RTCs ruling and reinstated the MTC Decision. 6 Respondent received a copy of
the CAs ruling on January 27, 2006. Yet, he failed to inform complainant about the said ruling,
notwithstanding the fact that the latter frequented his work place. Neither did respondent pursue any
further action.7 As such, complainant decided to engage the services of another counsel for the
purpose of seeking other available remedies. Due to respondents failure to timely turn-over to her
the papers and documents in the case, such other remedies were, however, barred. Thus, based on
these incidents, complainant filed the instant administrative complaint, alleging that respondents
acts amounted to gross negligence which resulted in her loss.8

In a Resolution9 dated March 10, 2008, the Court directed respondent to comment on the
administrative complaint within ten (10) days from notice.

Accordingly, respondent filed a Manifestation with Compliance10 dated May 19, 2008, admitting to
have agreed to represent complainant who claimed to be the tenant and rightful occupant of the
subject property owned by the late Pelagia Lascano (Pelagia). He alleged that upon careful
examination of the heirs' unlawful detainer complaint, he noticed a discrepancy between the
descriptions of the subject property as indicated in the said pleading as opposed to that which
complainant supplied to him. On the belief that the parties may be contesting two (2) sets of
properties which are distinct and separate from one another, respondent, at the preliminary
conference conducted on October 28, 2003, moved for the suspension of further proceedings and
proposed that a commissioner be appointed to conduct a re-survey in order to determine the true
identity of the property in dispute. The MTC allowed the counsels for both parties to decide on the
manner of the proposed re-survey, leading to the assignment of a Department of Agrarian Reform
Survey Engineer (DAR Engineer) for this purpose. In relation, the heirs counsel agreed to turn-over
to respondent in his office11 certain documents which indicated the subject propertys description.
Thus, pending the conduct and results of the re-survey, the preliminary conference was tentatively
reset to November 27, 2003.12
As it turned out, the heirs counsel was unable to furnish respondent copies of the above-stated
documents, notwithstanding their agreement. This led the latter to believe that the preliminary
conference scheduled on November 27, 2003 would not push through. Respondent averred that the
aforesaid setting also happened to coincide with an important provincial conference which he was
required to attend. As such, he inadvertently missed the hearing.13 Nonetheless, he proffered that he
duly appealed the adverse MTC Decision to the RTC,14 resulting to the dismissal of the unlawful
detainer complaint, albeit later reversed by the CA.

Thereafter, pending the heirs' appeal to the CA, respondent came upon the information that the
disputed property was subject of a petition for exemption from the coverage of Presidential Decree
No. (PD) 2715 filed by Pelagia against complainants mother, Placida Caranza (Placida). Based on
several documents furnished to him by certain DAR personnel, respondent was satisfied that Placida
indeed held the subject property for a long time and actually tilled the same in the name of Pelagia,
thereby placing it under PD 27 coverage. Due to such information, respondent was convinced that
Placida and consequently, complainant (who took over the tilling) was indeed entitled to the
subject property. Hence, he advised complainant that it would be best to pursue remedies at the
administrative level, instead of contesting the appeal filed by the heirs before the CA. It was
respondents calculated legal strategy that in the event the CA reverses the decision of the RTC, an
opposition to the issuance of a writ of execution or a motion to quash such writ may be filed based
on the afore-stated reasons, especially if an approved plan and later, an emancipation patent
covering the subject property is issued.16

Meanwhile, the survey conducted by the DAR Engineer revealed that complainant's tillage extended
to about 5,000 square meters of the subject property which was determined to belong to the heirs,
the rest being covered by the title of Pelagia. Dissatisfied, complainant manifested her intention to
secure the services of a private surveyor of her own choice, and promised to furnish respondent a
copy of the survey results, which she, however, failed to do. Later, complainant accused respondent
of manipulating the DAR Survey Results which caused their lawyer-client relationship to turn sour
and eventually be severed. She has since retrieved the entire case folders and retained the services
of another lawyer.17

In a Resolution18 dated July 7, 2008, the Court resolved to refer the instant administrative case to the
Integrated Bar of the Philippines (IBP) for its evaluation, report and recommendation.

The IBP Commission on Bar Discipline set the case for mandatory conference on April 15,
200919 and required the parties to submit their respective position papers. 20

The IBPs Report and Recommendation

On June 18, 2009, the Investigating IBP Commissioner, Rebecca Villanueva-Maala (Investigating
Commissioner), issued a Report and Recommendation (Commissioners Report), 21 finding
respondent to have been negligent in failing to attend the preliminary conference in Civil Case No.
1972 set on November 27, 2003 which resulted in the immediate submission of the said case for
decision and eventual loss of complainants cause.

The Investigating Commissioner observed that respondent could have exercised ordinary diligence
by inquiring from the court as to whether the said preliminary conference would push through,
considering that the November 27, 2003 setting was only tentative and the heirs counsel was not
able to confer with him. Further, the fact that respondent had to attend an important provincial
conference which coincided with the said setting hardly serves as an excuse since he should have
sent a substitute counsel on his behalf. Also, respondent never mentioned any legal remedy that he
undertook when the heirs elevated the decision of the RTC to the CA. In fact, he did not file any
comment or opposition to the heirs appeal. Finally, respondents enumerations of his legal options to
allegedly protect the complainants interests were found to be thought only after the fact. 22
Thus, based on the foregoing, the Investigating Commissioner ruled that respondent failed to
exercise ordinary diligence in handling his client's cause, warranting his suspension from the
practice of law for a period of six (6) months.23

The IBP Board of Governors adopted and approved the Commissioners Report in Resolution No.
XIX-2011-26624dated May 14, 2011, finding the same to be fully supported by the evidence on record
and in accord with applicable laws and rules.

Respondent filed a motion for reconsideration25 which was, however, denied, in Resolution No. XX-
2012-51726dated December 14, 2012.

The Court's Ruling

The Court resolves to adopt the IBP's findings and recommendation.

The relationship between an attorney and his client is one imbued with utmost trust and confidence.
In this light, clients are led to expect that lawyers would be ever-mindful of their cause and
accordingly exercise the required degree of diligence in handling their affairs. Verily, a lawyer is
expected to maintain at all times a high standard of legal proficiency, and to devote his full attention,
skill, and competence to the case, regardless of its importance and whether he accepts it for a fee or
for free.27 Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code embody these
quintessential directives and thus, respectively state:

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.

xxxx

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.

Case law further illumines that a lawyers duty of competence and diligence includes not merely
reviewing the cases entrusted to the counsel's care or giving sound legal advice, but also consists of
properly representing the client before any court or tribunal, attending scheduled hearings or
conferences, preparing and filing the required pleadings, prosecuting the handled cases with
reasonable dispatch, and urging their termination without waiting for the client or the court to prod
him or her to do so.28

Conversely, a lawyer's negligence in fulfilling his duties subjects him to disciplinary action. 29 While
such negligence or carelessness is incapable of exact formulation, the Court has consistently held
that the lawyers mere failure to perform the obligations due his client is per se a violation. 30

Applying these principles to the present case, the Court finds that respondent failed to exercise the
required diligence in handling complainants cause.

Records show that he failed to justify his absence during the scheduled preliminary conference
hearing in Civil Case No. 1972 which led the same to be immediately submitted for decision. As
correctly observed by the Investigating Commissioner, respondent could have exercised ordinary
diligence by inquiring from the court as to whether the said hearing would push through, especially
so since it was only tentatively set and considering further that he was yet to confer with the
opposing counsel. The fact that respondent had an important commitment during that day hardly
exculpates him from his omission since the prudent course of action would have been for him to
send a substitute counsel to appear on his behalf. In fact, he should have been more circumspect to
ensure that the aforesaid hearing would not have been left unattended in view of its adverse
consequences, i.e., that the defendants failure to appear at the preliminary conference already
entitles the plaintiff to a judgment.31 Indeed, second-guessing the conduct of the proceedings, much
less without any contingent measure, exhibits respondents inexcusable lack of care and diligence in
managing his clients cause. 1wphi1

Equally compelling is the fact that respondent purposely failed to assail the heirs appeal before the
CA. Records disclose that he even failed to rebut complainant's allegation that he neglected to
inform her about the CA ruling which he had duly received, thereby precluding her from availing of
any further remedies. As regards respondents suggested legal strategy to pursue the case at the
administrative level, suffice it to state that the same does not excuse him from failing to file a
comment or an opposition to an appeal, or even, inform his client of any adverse resolution, as in
this case. Irrefragably, these are basic courses of action which every diligent lawyer is expected to
make.

All told, it cannot be gainsaid that respondent was guilty of gross negligence, in violation of the
above-cited provisions of the Code.

As regards the appropriate penalty, several cases show that lawyers who have been held liable for
gross negligence for infractions similar to those of the respondent were suspended for a period of six
(6) months. In Aranda v. Elayda,32 a lawyer who failed to appear at the scheduled hearing despite
due notice which resulted in the submission of the case for decision was found guilty of gross
negligence and hence, suspended for six (6) months. In Heirs of Tiburcio F. Ballesteros, Sr. v.
Apiag,33 a lawyer who did not file a pre-trial brief and was absent during the pre-trial conference was
likewise suspended for six (6) months. In Abiero v. Juanino, 34 a lawyer who neglected a legal matter
entrusted to him by his client in breach of Canons 17 and 18 of the Code was also suspended for six
(6) months. Thus, consistent with existing jurisprudence, the Court finds it proper to impose the
same penalty against respondent and accordingly suspends him for a period of six (6) months.

WHEREFORE, respondent Atty. Ramon SG Cabanes, Jr. is found guilty of gross negligence in
violation of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional
Responsibility. He is hereby SUSPENDED from the practice of law for a period of six (6) months,
effective upon his receipt of this Resolution, and is STERNLY WARNED that a repetition of the same
or similar acts will be dealt with more severely.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all the courts.

SO ORDERED.
A.C. No. 10164 March 10, 2014

STEPHAN BRUNET and VIRGINIA ROMANILLOS BRUNET, Complainants,

vs.
ATTY. RONALD L. GUAREN, Respondent.

RESOLUTION

MENDOZA, J.:

On August 9, 2002, complainant spouses Stephan and Virginia Brunet (complainants) filed a
complaint against respondent Atty. Ronald L. Guaren (Atty. Guaren) before the Commission on Bar
Discipline (CED), Integrated Bar of the Philippines (IBP).

Complainants alleged that in February 1997, they engaged the services of Atty. Guaren for the titling
of a residential lot they acquired in Bonbon, Nueva Caseres; that Atty. Guaren asked for a fee of Ten
Thousand Pesos (P10,000.00) including expenses relative to its proceeding; that it was agreed that
full payment of the fee shall be made after the delivery of the title; that Atty. Guaren asked for an
advance fee of One Thousand Pesos (Pl,000.00) which they gave; that Atty. Guaren took all the
pertinent documents relative to the titling of their lot-certified true copy of the tax declaration, original
copy of the deed of exchange, sketch plan, deed of donation, survey plan, and original copy of the
waiver; that on March 10, 1997, Atty. Guaren asked for additional payment of Six Thousand Pesos
(P6,000.00) which they dutifully gave; that from 1997 to 2001, they always reminded Atty. Guaren
about the case and each time he would say that the titling was in progress; that they became
bothered by the slow progress of the case so they demanded the return of the money they paid; and
that respondent agreed to return the same provided that the amount of Five Thousand Pesos
(P5,000.00) be deducted to answer for his professional fees.

Complainants further alleged that despite the existence of an attorney-client relationship between
them, Atty. Guaren made a special appearance against them in a case pending before the
Metropolitan Circuit Trial Court, Oslob, Cebu (MCTC).

Atty. Guaren admitted that he indeed charged complainants an acceptance fee of P10,000.00, but
denied that the amount was inclusive of expenses for the titling of the lot. He claimed, however, that
he received the payment of P1,000.00 and P6,000.00; that their agreement was that the case would
be filed in court after the complainants fully paid his acceptance fee; that he did not take the
documents relative to the titling of the lot except for the photocopy of the tax declaration; and that he
did not commit betrayal of trust and confidence when he participated in a case filed against the
complainants in MCTC explaining that his appearance was for and in behalf of Atty. Ervin
Estandante, the counsel on record, who failed to appear in the said hearing.

In the Report and Recommendation, dated August 24, 2012, the Investigating Commissioner found
1

Atty. Guaren to have violated the Canon of Professional Responsibility when he accepted the titling
of complainants lot and despite the acceptance of P7,000.00, he failed to perform his obligation and
allowed 5 long years to elapse without any progress in the titling of the lot. Atty. Guaren should also
be disciplined for appearing in a case against complainants without a written consent from the latter.
The CBD recommended that he be suspended for six (6) months.

In its May 20, 2013 Resolution, the IBP Board of Governors, adopted and approved with
2

modification the Report and Recommendation of the CBD, suspending Atty. Guaren from the
practice of law for three (3) months only.

The Court adopts the findings of the IBP Board of Governors on the unethical conduct of Atty.
Guaren, except as to the penalty.

The practice of law is not a business. It is a profession in which duty to public service, not money, is
the primary consideration. Lawyering is not primarily meant to be a money-making venture, and law
advocacy is not a capital that necessarily yields profits. The gaining of a livelihood should be a
secondary consideration. The duty to public service and to the administration of justice should be the
primary consideration of lawyers, who must subordinate their personal interests or what they owe to
themselves. 3

Canons 17 and 18 of the Code of Professional Responsibility provides that:

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.

In the present case, Atty. Guaren admitted that he accepted the amount of P7,000.00 as partial
payment of his acceptance fee. He, however, failed to perform his obligation to file the case for the
titling of complainants' lot despite the lapse of 5 years. Atty. Guaren breached his duty to serve his
client with competence and diligence when he neglected a legal matter entrusted to him. 1wphi1

WHEREFORE, respondent Atty. Ronald L. Guaren is found GUILTY of having violated Canons 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 from receipt of this Resolution, with a warning that a
similar infraction in the future shall be dealt with more severely.

Let a copy of this resolution be furnished the Bar Confidant to be included in the records of the
respondent; the Integrated Bar of the Philippines for distribution to all its chapters; and the Office of
the Court Administrator for dissemination to all courts throughout the country.

SO ORDERED.
IPI No. 12-205-CA-J December 10, 2013

RE: VERIFIED COMPLAINT OF THOMAS S. MERDEGIA AGAINST HON. VICENTE S.E.

VELOSO, ASSOCIATE JUSTICE OF THE COURT OF APPEALS, RELATIVE TO CA G.R. SP No.
119461.

x---------------x

A.C. No.: 10300

RE: RESOLUTION DATED OCTOBER 8, 2013 IN OCA IPI No. 12-205-CA-J AGAINST ATTY.
HOMOBONO ADAZA II.

RESOLUTION

BRION, J.:

On October 8, 2013, we issued a Resolution dismissing the administrative complaint of

1

Tomas S. Merdegia against Court of Appeals Associate Justice Vicente S.E. Veloso. In this
same Resolution, we also directed Atty. Homobono Adaza II, Merdegias counsel, to show
cause why he should not be cited for contempt.

After considering Atty. Adazas explanation, we find his account insufficient, and find him
2

guilty of indirect contempt.

According to Atty. Adaza, he should not bepunished for indirect contemptas he was merely
performing his duty as Merdegias counsel when he assisted him in preparing the
administrative complaint against Justice Veloso. Atty. Adaza asserted that both he and his
client observed Justice Velosos partiality during the oral arguments, but instead of
immediately filing an administrative complaint against him, he counseled Merdegia to first file
a Motion to Inhibit Justice Veloso from the case. However, upon finding that Justice Veloso
refused to inhibit himself, Merdegia repeated his request to file an administrative complaint
against Justice Veloso, to which Atty. Adaza acceded. Thus, Atty. Adaza pleaded that he
should not be faulted for assisting his client, especially when heal so believes in the merits of
his clients case.

Atty. Adazas explanation, read together with the totality of the facts of the case, fails to
convince us of his innocence from the contempt charge.

As Atty. Adaza himself admitted, he prepared the administrative complaint after Justice
Veloso refused to inhibit himself from a case he was handling. The complaint and the motion
for inhibition were both based on the same main cause: the alleged partiality of Justice
Veloso during the oral arguments of Merdegias case. The resolution dismissing the motion
for inhibition should have disposed of the issue of Justice Velosos bias. While we do not
discount the fact that it was Justice Veloso who penned the resolution denying the motion for
inhibition, we note that he was allowed to do this under the 2009 Internal Rules of the Court
of Appeals. Had Merdegia and Atty. Adaza doubted the legality of this resolution, the proper
3

remedy would have been to file a petition for certiorari assailing the order denying the motion
for inhibition. The settled rule is that administrative complaints against justices cannot and
should not substitute for appeal and other judicial remedies against an assailed decision or
ruling. While a lawyer has a duty to represent his client with zeal, he must do so within the
4

bounds provided by law. He is also duty-bound to impress upon his client the propriety of
5

the legal action the latter wants to undertake, and to encourage compliance with the law and
legal processes. 6

A reading of Merdegias administrative complaint shows an apparent failure to understand

7

that cases are not always decided in ones favor, and that an allegation of bias must stem
from an extrajudicial source other than those attendant to the merits and the developments in
the case. In this light, we cannot but attribute to Atty. Adaza the failure to impress upon his
8

client the features of our adversarial system, the substance of the law on ethics and respect
for the judicial system, and his own failure to heed what his duties as a professional and as
an officer of the Court demand of him in acting for his client before our courts.

To be sure, deciding administrative cases against erring judges is not an easy task. We have
to strike a balance between the need for accountability and integrity in the Judiciary, on the
one hand, with the need to protect the independence and efficiency of the Judiciary from
vindictive and enterprising litigants, on the other. Courts should not be made to bow down to
the wiles of litigants who bully judges into inhibiting from cases or deciding cases in their
favor, but neither should we shut our doors from litigants brave enough to call out the
corrupt practices of people who decide the outcome of their cases. Indeed, litigants who feel
unjustly injured by malicious and corrupt acts of erring judges and officials should not be
punished for filing administrative cases against them; neither should these litigants be
unjustly deterred from doing sobya wrong signal from this Court that they would be made to
explain why they should not be cited for contempt when the complaints they filed prove to be
without sufficient cause.

What tipped the balance against Atty. Adaza, in this case, is the totality of the facts of
thecasethat,when read together with the administrative complaint heprepared,shows that his
complaint is merelyan attempt to malign the administration of justice. We note Atty. Adazas
penchantfor filingmotions for inhibition throughout the case:first, against Judge Ma. Theresa
Dolores C. Gomez Estoesta of the Regional Trial Court of Manila, who issued an order
unfavorable to his client; and second, against all the justices of the Court of Appeals division
hearing his appeal, for alleged bias during the oral arguments onhiscase. Theseindicators,
taken together with the baseless administrative complaint against Justice Veloso after he
penned an order adverseto Atty. Adazas client, disclosethat there was more to the
administrative complaint than the report of legitimate grievances against members of the
Judiciary.

In Re: Verified Complaint of Engr. Oscar L. Ongjoco, etc., we cited a litigant in indirect
9

contempt of court for his predisposition to indiscriminately file administrative complaints

against members of the Judiciary. We held that this conduct degrades the judicial office,
interferes with the due performance of their work for the Judiciary, and thus constitutes
indirect contempt of court. Applying this principle to the present case, we hold that Atty.
Adazas acts constitute an improper conduct that tends to degrade the administration of
justice, and is thus punishable for indirect contempt under Section 3(d), Rule 71 of the Rules
of Court.

As a final note, Atty. Adazas contemptuous conduct may also be subject to disciplinary
sanction as a member of the bar. If we do not now proceed at all against Atty. Adaza to
10

discipline him, we are prevented from doing so by our concern for his due process rights.
Our Resolution of October 8, 2013 only asked him to show cause why he should not be cited
in contempt, and not why he should not be administratively penalized. To our mind, imposing
a disciplinary sanction against Atty. Adaza through a contempt proceeding violates the basic
tenets of due process as a disciplinary action is independent and separate from a proceeding
for contempt. A person charged of an offense, whether in an administrative or criminal
proceeding, must be informed of the nature of the charge against him, and given ample
opportunity to explain his side.11

While the two proceedings can proceed simultaneously with each other, a contempt
12

proceeding cannot substitute for a disciplinary proceeding for erring lawyers, and vice
13

versa. There can be no substitution between the two proceedings, as contempt proceedings
against lawyers, as officers of the Court, are different in nature and purpose from the
discipline of lawyers as legal professionals. The two proceedings spring from two different
powers of the Court. The Court, in exercising its power of contempt, exercises an implied and
inherent power granted to courts in general. Its existence is essential to the preservation of
14

order in judicial proceedings; to the enforcement of judgments, orders and mandates of

courts; and, consequently, in the administration of justice; thus, it may be instituted against
15

any person guilty of acts that constitute contempt of court. Further, jurisprudence describes
16

a contempt proceeding as penal and summary in nature; hence, legal principles applicable to
criminal proceedings also apply to contempt proceedings. A judgment dismissing the charge
of contempt, for instance, may no longer be appealed in the same manner that the prohibition
against double jeopardy bars the appeal of an accuseds acquittal. 17

In contrast, a disciplinary proceeding against an erring lawyer is sui generis in nature; it is

neither purely civil nor purely criminal. Unlike a criminal prosecution, a disciplinary
proceeding is not intended to inflict punishment, but to determine whether a lawyer is still fit
to be allowed the privilege of practicing law. It involves an investigation by the Court of the
conduct of its officers, and has, for its primary objective, public interest. Thus, unlike a
18

contempt proceeding, the acquittal of the lawyer from a disciplinary proceeding cannot bar
an interested party from seeking reconsideration of the ruling. Neither does the imposition of
a penalty for contempt operate as res judicata to a subsequent charge for unprofessional
conduct. 19

Contempt proceedings and disciplinary actions are also governed by different procedures.
Contempt of court is governed by the procedures under Rule 71 of the Rules of Court,
whereas disciplinary actions in the practice of law are governed by Rules138 and 139
thereof.
20

IN THESE LIGHTS, the Court finds Atty. Homobomo Adaza II GUILTY OF INDIRECT
CONTEMPT for filing a frivolous suit against Court of Appeals Associate Justice Vicente S.E.
Veloso, and hereby sentences him to pay, within the period of fifteen days from the
promulgation of this judgment, a fine of P5,000.00. The respondent is also WARNED that
further similar misbehavior on his part may be a ground for the institution of disciplinary
proceedings against him.

SO ORDERED.
 FIRST DIVISION

A.C. No. 9149, September 04, 2013

JULIAN PENILLA, Complainant, v. ATTY. QUINTIN P. ALCID, JR., Respondent.

DECISION

VILLARAMA, JR., J.:

Before this Court is an administrative complaint 1 filed against respondent Atty. Quintin P. Alcid, Jr. for
violation of the Lawyers Oath and the Code of Professional Responsibility, and for gross misconduct in the
performance of his duty as a lawyer.

The antecedent facts follow: nadcralaw

Complainant Julian Penilla entered into an agreement with Spouses Rey and Evelyn Garin (the spouses) for
the repair of his Volkswagen automobile. Despite full payment, the spouses defaulted in their obligation.
Thus, complainant decided to file a case for breach of contract against the spouses where he engaged the
services of respondent as counsel.

Respondent sent a demand letter to the spouses and asked for the refund of complainants payment. When
the spouses failed to return the payment, respondent advised complainant that he would file a criminal case
for estafa against said spouses. Respondent charged P30,000 as attorneys fees and P10,000 as filing fees.
Complainant turned over the relevant documents to respondent and paid the fees in tranches. Respondent
then filed the complaint for estafa before Asst. City Prosecutor Jose C. Fortuno of the Office of the City
Prosecutor of Quezon City. Respondent attended the hearing with complainant but the spouses did not
appear. After the hearing, complainant paid another P1,000 to respondent as appearance fee. Henceforth,
complainant and respondent have conflicting narrations of the subsequent events and transactions that
transpired.

Complainant alleges that when the case was submitted for resolution, respondent told him that they have to
give a bottle of Carlos Primero I to Asst. City Prosecutor Fortuno to expedite a favorable resolution of the
case. Complainant claims that despite initial reservations, he later acceded to respondents suggestion,
bought a bottle of Carlos Primero I for P950 and delivered it to respondents office.

Asst. City Prosecutor Fortuno later issued a resolution dismissing the estafa case against the spouses.
Respondent allegedly told complainant that a motion for reconsideration was needed to have [the
resolution] reversed.2 Respondent then prepared the motion and promised complainant that he would fix
the problem. On February 18, 2002, the motion was denied for lack of merit. Respondent then told
complainant that he could not do anything about the adverse decision and presented the option of filing a
civil case for specific performance against the spouses for the refund of the money plus damages.
Complainant paid an additional P10,000 to respondent which he asked for the payment of filing fees. After
complainant signed the complaint, he was told by respondent to await further notice as to the status of the
case. Complainant claims that respondent never gave him any update thereafter.

Complainant asserts having made numerous and unsuccessful attempts to follow-up the status of the case
and meet with respondent at his office. He admits, however, that in one instance he was able to talk to
respondent who told him that the case was not progressing because the spouses could not be located. In the
same meeting, respondent asked complainant to determine the whereabouts of the spouses. Complainant
returned to respondents office on January 24, 2005, but because respondent was not around, complainant
left with respondents secretary a letter regarding the possible location of the spouses.

Complainant claims not hearing from respondent again despite his several letters conveying his
disappointment and requesting for the return of the money and the documents in respondents possession.
Complainant then sought the assistance of the radio program Ito ang Batas with Atty. Aga to solve his
predicament. Following the advice he gathered, complainant went to the Office of the Clerk of Court of the
Caloocan City Metropolitan Trial Court and Regional Trial Court (RTC). Complainant learned that a civil case
for Specific Performance and Damages was filed on June 6, 2002 3 but was dismissed on June 13, 2002. He
also found out that the filing fee was only P2,440 and not P10,000 as earlier stated by respondent. Atty. Aga
of the same radio program also sent respondent a letter calling his attention to complainants problem. The
letter, like all of complainants previous letters, was unheeded.

On January 9, 2006, complainant filed before the Integrated Bar of the Philippines-Commission on Bar
Discipline (IBP-CBD) the instant administrative case praying that respondent be found guilty of gross
misconduct for violating the Lawyers Oath and the Code of Professional Responsibility, and for appropriate
administrative sanctions to be imposed.

Respondent harps a different tale.

In an Answer4 filed on January 30, 2006, respondent prayed that the case be dismissed for lack of merit. He
denied charging complainant P10,000 as filing fees for the estafa case and claimed that he charged and
received only P2,000. He also countered that the payment of P30,000 made by the complainant was his
acceptance fee for both the estafa case and civil case. Respondent likewise denied the following other
allegations of complainant: that he assured the success of the case before the prosecutor; that he asked
complainant to give a bottle of Carlos Primero I to the prosecutor; that he promised to fix the case; and that
he charged P10,000, as he only charged P5,000, as filing fee for the civil case.

Respondent explained that it was not a matter of indifference on his part when he failed to inform petitioner
of the status of the case. In fact, he was willing to return the money and the documents of complainant.
What allegedly prevented him from communicating with complainant was the fact that complainant would go
to his office during days and times that he would be attending his daily court hearings.

The IBP-CBD called for a mandatory conference on April 28, 2006. Only complainant and his counsel
attended.5 The conference was reset and terminated on June 9, 2006. The parties were directed to file their
verified position papers within 15 days,6 to which complainant and respondent complied.7 cralawlibrary

On July 18, 2006, respondent filed a Reply8 praying for the dismissal of the case for lack of factual and legal
bases. He stated that he had performed his duties as complainants counsel when he filed the criminal case
before the Office of the City Prosecutor of Quezon City and the civil case before the RTC of Caloocan City. He
averred that he should not be blamed for the dismissal of both cases as his job was to ensure that justice is
served and not to win the case. It was unethical for him to guarantee the success of the case and resort to
unethical means to win such case for the client. He continued to deny that he asked complainant to give the
prosecutor a bottle of Carlos Primero I and that the filing fees he collected totalled P20,000. Respondent
argued that it is incredulous that the total sum of all the fees that he had allegedly collected exceeded
P30,000 the amount being claimed by complainant from the spouses.

In its Report and Recommendation9 dated September 12, 2008, the IBP-CBD recommended the suspension
of respondent from the practice of law for six months for negligence within the meaning of Canon 18 and
transgression of Rule 18.04 of the Code of Professional Responsibility, viz: nadcralaw

In the case under consideration, there are certain matters which keep sticking out like a sore thumb
rendering them difficult to escape notice.

One is the filing of a criminal complaint for estafa arising out of a violation of the contract for repair of the
Volks Wagon (sic) car. It is basic that when an act or omission emanates from a contract, oral or written, the
consequent result is a breach of the contract, hence, properly actionable in a civil suit for damages. As
correctly pointed out by the Investigating Prosecutor, the liability of the respondent is purely civil in nature
because the complaint arose from a contract of services and the respondent (spouses Garin) failed to
perform their contractual obligation under the contract.

xxxx

Another one is the filing of a civil complaint for specific performance and damages (after the dismissal of the
criminal complaint for estafa) in the Regional Trial Court of Caloocan City where the actual damages claimed
is P36,000.00.

It is also basic that the civil complaint for P36,000.00 should have been filed with the MTC [which] has
jurisdiction over the same. One of the firsts that a lawyer ascertains in filing an action is the proper forum
or court with whom the suit or action shall be filed. In June 2002 when the civil complaint was filed in court,
the jurisdiction of the MTC has already expanded such that the jurisdictional amount of the RTC is already
P400,000.00.

xxxx

Another thing is the various follow-ups made by respondents client as evidenced by the letters marked as
Exhibits D, E, F, G and H which were all received by complainants secretary, except for Exhibit H
which was received by Atty. Asong, not to mention Exhibit M which was sent by Atty. Aga. These efforts
of the complainant were not reciprocated by the respondent with good faith. Respondent chose to ignore
them and reasoned out that he is willing to meet with the complainant and return the money and documents
received by reason of the legal engagement, but omitted to communicate with him for the purpose of fixing
the time and place for the meeting. This failure suggests a clear disregard of the clients demand which was
done in bad faith on the part of respondent.10
On December 11, 2008, the IBP Board of Governors issued Resolution No. XVIII-2008-646, adopting and
approving the recommendation of the IBP-CBD. The Resolution 11 reads: nadcralaw

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this
Resolution as Annex A; and, finding the recommendation fully supported by the evidence on record and
the applicable laws and rules, and considering Respondents violation of Canon 18 and Rule 18.04 of the
Code of Professional Responsibility for his negligence, Atty. Quintin P. Alcid, Jr. is hereby SUSPENDED from
the practice of law for six (6) months.
On April 24, 2009, respondent sought reconsideration 12 and asked that the penalty of suspension be reduced
to warning or reprimand. After three days, or on April 27, 2009, respondent filed a Motion to Admit
Amended Motion for Reconsideration Upon Leave of Office.13 Respondent asserted that the failure to inform
complainant of the status of the cases should not be attributed to him alone. He stressed that complainant
had always been informed that he only had time to meet with his clients in the afternoon at his office in
Quezon City. Despite such notice, complainant kept going to his office in Tandang Sora. He admitted that
though he committed lapses which would amount to negligence in violation of Canon 18 and Rule 18.04,
they were done unknowingly and without malice or bad faith. He also stressed that this was his first
infraction.

In its Resolution No. XIX-2011-473 dated June 26, 2011, the IBP Board of Governors denied respondents
Motion for Reconsideration for lack of merit.14 On August 15, 2011, respondent filed a second Motion for
Reconsideration15 which was no longer acted upon due to the transmittal of the records of the case to this
Court by the IBP on August 16, 2011.16 cralawlibrary

On September 14, 2011, the Court issued a Resolution17 and noted the aforementioned Notices of Resolution
dated December 11, 2008 and June 26, 2011. On December 14, 2011, it issued another Resolution 18 noting
the Indorsement dated August 16, 2011 of Director Alicia A. Risos-Vidal and respondents second Motion for
Reconsideration dated August 15, 2011.

We sustain the findings of the IBP that respondent committed professional negligence under Canon 18 and
Rule 18.04 of the Code of Professional Responsibility, with a modification that we also find respondent guilty
of violating Canon 17 and Rule 18.03 of the Code and the Lawyers Oath.

A lawyer may be disbarred or suspended for any violation of his oath, a patent disregard of his duties, or an
odious deportment unbecoming an attorney. A lawyer must at no time be wanting in probity and moral fiber
which are not only conditions precedent to his entrance to the Bar but are likewise essential demands for his
continued membership therein.19 cralawlibrary

The Complaint before the IBP-CBD charged respondent with violation of his oath and the following provisions
under the Code of Professional Responsibility: nadcralaw

a) Canon 15 A lawyer shall observe candor, fairness and

loyalty in all his dealings and transactions with his client;

b) Rule 15.[06, Canon 15] A lawyer shall not state or imply

that he is able to influence any public official, tribunal or
legislative body;

c) Rule 16.01[, Canon 16] A lawyer shall account for all

money or property collected or received for or from his
client;

d) 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;

e) Canon 18 A lawyer shall serve his client with competence

and diligence;

f) Rule 18.03[, Canon 18] A lawyer shall not neglect a legal

matter entrusted to him and his negligence in connection
therewith shall render him liable; and

g) Rule 18.04[, Canon 18] A lawyer shall keep his client

informed of the status of his case and shall respond within
a reasonable time to the clients request for information. 20
A review of the proceedings and the evidence in the case at bar shows that respondent violated Canon 18
and Rules 18.03 and 18.04 of the Code of Professional Responsibility. Complainant correctly alleged that
respondent violated his oath under Canon 18 to serve his client with competence and diligence when
respondent filed a criminal case for estafa when the facts of the case would have warranted the filing of a
civil case for breach of contract. To be sure, after the complaint for estafa was dismissed, respondent
committed another similar blunder by filing a civil case for specific performance and damages before the
RTC. The complaint, having an alternative prayer for the payment of damages, should have been filed with
the Municipal Trial Court which has jurisdiction over complainants claim which amounts to only P36,000. As
correctly stated in the Report and Recommendation of the IBP-CBD: nadcralaw

Batas Pambansa Blg. 129[,] as amended by R.A. No. 7691 which took effect on April 15, 1994[,] vests in
the MTCs of Metro Manila exclusive original jurisdiction of civil cases where the amount of demand does not
exceed P200,000.00 exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses
and costs (Sec. 33), and after five (5) years from the effectivity of the Act, the same shall be adjusted to
P400,000.00 (Sec. 34).21
The errors committed by respondent with respect to the nature of the remedy adopted in the criminal
complaint and the forum selected in the civil complaint were so basic and could have been easily averted
had he been more diligent and circumspect in his role as counsel for complainant. What aggravates
respondents offense is the fact that his previous mistake in filing the estafa case did not motivate him to be
more conscientious, diligent and vigilant in handling the case of complainant. The civil case he subsequently
filed for complainant was dismissed due to what later turned out to be a basic jurisdictional error.

That is not all. After the criminal and civil cases were dismissed, respondent was plainly negligent and did
not apprise complainant of the status and progress of both cases he filed for the latter. He paid no attention
and showed no importance to complainants cause despite repeated follow-ups. Clearly, respondent is not
only guilty of incompetence in handling the cases. His lack of professionalism in dealing with complainant is
also gross and inexcusable. In what may seem to be a helpless attempt to solve his predicament,
complainant even had to resort to consulting a program in a radio station to recover his money from
respondent, or at the very least, get his attention.

Respondents negligence under Rules 18.03 and 18.04 is also beyond contention. A client pays his lawyer
hard-earned money as professional fees. In return, [e]very case a lawyer accepts deserves his full
attention, skill and competence, regardless of its importance and whether he accepts it for a fee or for free.
Rule 18.03 of the Code of Professional Responsibility enjoins a lawyer not to neglect a legal matter
entrusted to him, and his negligence in connection therewith shall render him liable. He must constantly
keep in mind that his actions or omissions or nonfeasance would be binding upon his client. He is expected
to be acquainted with the rudiments of law and legal procedure, and a client who deals with him has the
right to expect not just a good amount of professional learning and competence but also a whole-hearted
fealty to the clients cause.22 Similarly, under Rule 18.04, a lawyer has the duty to apprise his client of the
status and developments of the case and all other information relevant thereto. He must be consistently
mindful of his obligation to respond promptly should there be queries or requests for information from the
client.

In the case at bar, respondent explained that he failed to update complainant of the status of the cases he
filed because their time did not always coincide. The excuse proffered by respondent is too lame and flimsy
to be given credit. Respondent himself admitted that he had notice that complainant had visited his office
many times. Yet, despite the efforts exerted and the vigilance exhibited by complainant, respondent
neglected and failed to fulfill his obligation under Rules 18.03 and 18.04 to keep his client informed of the
status of his case and to respond within a reasonable time to the clients request for information.

Finally, respondent also violated Canon 17 of the Code which states that [a] lawyer owes fidelity to the
cause of his client and he shall be mindful of the trust and confidence reposed in him. The legal profession
dictates that it is not a mere duty, but an obligation, of a lawyer to accord the highest degree of fidelity, zeal
and fervor in the protection of the clients interest. The most thorough groundwork and study must be
undertaken in order to safeguard the interest of the client. The honor bestowed on his person to carry the
title of a lawyer does not end upon taking the Lawyers Oath and signing the Roll of Attorneys. Rather, such
honor attaches to him for the entire duration of his practice of law and carries with it the consequent
responsibility of not only satisfying the basic requirements but also going the extra mile in the protection of
the interests of the client and the pursuit of justice. Respondent has defied and failed to perform such duty
and his omission is tantamount to a desecration of the Lawyers Oath.

All said, in administrative cases for disbarment or suspension against lawyers, it is the complainant who has
the burden to prove by preponderance of evidence 23 the allegations in the complaint. In the instant case,
complainant was only able to prove respondents violation of Canons 17 and 18, and Rules 18.03 and 18.04
of the Code of Professional Responsibility, and the Lawyers Oath. Complainant failed to substantiate his
claim that respondent violated Canon 15 and Rule 15.06 of the Code of Professional Responsibility when
respondent allegedly instructed him to give a bottle of Carlos Primero I to Asst. City Prosecutor Fortuno in
order to get a favorable decision. Similarly, complainant was not able to present evidence that respondent
indeed violated Rule 16.01 of Canon 16 by allegedly collecting money from him in excess of the required
filing fees.

As to respondents proven acts and omissions which violate Canons 17 and 18 and Rules 18.03 and 18.04 of
the Code of Professional Responsibility, and the Lawyers Oath, we find the same to constitute gross
misconduct for which he may be suspended under Section 27, Rule 138 of the Rules of Court, viz: nadcralaw

SEC. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. A member of the
bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit,
malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his
conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take
before admission to practice, or for a willful disobedience appearing as an attorney for a party to a case
without authority to do so. x x x.
WHEREFORE, the Resolution of the IBP Board of Governors adopting and approving the Decision of the
Investigating Commissioner is hereby AFFIRMED with a MODIFICATION that respondent Atty. Quintin P.
Alcid, Jr. is hereby found GUILTY of gross misconduct for violating Canons 17 and 18, and Rules 18.03 and
18.04 of the Code of Professional Responsibility, as well as the Lawyers Oath. This Court hereby imposes
upon respondent the penalty of SUSPENSION from the practice of law for a period of SIX (6) MONTHS to
commence immediately upon receipt of this Decision. Respondent is further ADMONISHED to be more
circumspect and diligent in handling the cases of his clients, and STERNLY WARNED that a commission of
the same or similar acts in the future shall be dealt with more severely.

Let copies of this Decision be furnished to the Office of the Court Administrator to be disseminated to all
courts throughout the country, to the Office of the Bar Confidant to be appended to Atty. Quintin P. Alcid,
Jr.s personal records, and to the Integrated Bar of the Philippines for its information and guidance.

SO ORDERED.
 [Adm. Case No. 2417. February 6, 2002]

ALEX ONG, complainant, vs. ATTY. ELPIDIO D. UNTO, respondent.

DECISION

PUNO, J.:

This is a disbarment case filed by Alex Ong, a businessman

[1]

from Dumaguete City, against Atty. Elpidio D. Unto, for malpractice of law and
conduct unbecoming of a lawyer.

The Commission on Bar Discipline of the Integrated Bar of the Philippines

(IBP-Pasig City) found Atty. Unto guilty of malpractice and recommended the
penalty of one-month suspension from the practice of law or, at the very least,
a severe reprimand against him. [2]

First, we look at the antecedent facts. The records show that the
complainant received a demand-letter from the respondent, in the latters
capacity as legal counsel of one Nemesia Garganian. The full text of
respondents letter reads:
[3]

Dear Mr. Ong:

This is in connection with the claim of support of Miss Nemesia Garganian (my
client) from you for your only child, Anson Garganian, with her (Miss Nemesia
Garganian) and other claims which Miss Garganian is demanding from you. It is now
about two months that you have abandoned your legal and moral obligations to
support your only child with her (Miss Nemesia Garganian) and up to this moment
you have not given said financial support.

I am doing this as a preliminary basis to a possible amicable settlement, if you desire

so, so that you will not be dragged unnecessarily to a court proceeding in connection
with your legal and moral obligations to your son with Miss Garganian.

May I advise you that within three (3) days from your receipt of this letter, you should
return to her house her television and betamax which you got from her house during
her absence and without her knowledge and consent. Your failure to comply with this
demand, this office will be constrained to file the proper action in court against you.

I hope within three (3) days from your receipt of this letter you may come to my Law
Office at the above address or you may send your lawyer and/or representative to
discuss with me about the preliminary matters in connection with all the claims of
Miss Garganian against you.
I hope that you will not fail us, so that we can thresh out this matter smoothly,
otherwise your intentional failure or refusal to discuss these claims amicably with our
office might be construed as your absolute refusal really.

Expecting you then.

Very truly yours,

ATTY. ELPIDIO D. UNTO

Counsel for Miss Nemesia Garganian

Dumaguete City

WITH MY CONSENT:

NEMESIA GARGANIAN

A few days thereafter, the respondent wrote a letter addressed to Dr. Jose
Bueno (Agaw), an emissary of the complainant. In this letter, the respondent
listed down the alleged additional financial demands of Ms. Garganian against
the complainant and discussed the courses of action that he would take
against the complainant should the latter fail to comply with his obligation to
support Ms. Garganian and her son. The relevant portion of the respondents
second letter reads: [4]

These are the demands which my client would want to be complied (with):

1. P1,500.00 monthly For the sustenance of Mr. Ongs son. x x x (Note: That this
amount of P1,500.00 should be up to the completion of Mr. Ongs son in the
elementary course and this is subject to adjustment when the son is already in the
secondary course or up to his college course).

2. P50,000.00 - This amount should be given to Miss Garganian as her starting capital
for her planned business venture to give her a source of her living since she cannot
anymore be a teacher in any government position because of her status, having a child
without being lawfully wedded. x x x.

3. The TV and the Betamax should be returned and delivered to the house of Miss
Garganian, without the presence of Mr. Alex Ong x x x.

4. The amount of P5,000.00 as my attorneys fees should be given or paid to me

tomorrow before noon in my Law Office, through my cousin, Dr. Jose Bueno.

Criminal, civil and administrative actions that I am contemplating to file against

Mr. Alex Ong will be withheld pending the compliance by Mr. Ong of these
compromise agreements.
Gaw, if not of (sic) your representation I believe that one-week time as grace period
for Mr. Ong is too long a time.

Thank you very much.

Very truly yours,

ATTY. ELPIDIO D. UNTO

Counsel for Miss Nemesia Garganian

It was alleged that the real father of Ms. Garganians son was the
complainants brother and that the complainant merely assumed his brothers
obligation to appease Ms. Garganian who was threatening to sue them. The
complainant then did not comply with the demands against him.

Consequently, the respondent filed a complaint with the Office of the City
[5]

Fiscal (now Prosecutors Office) of Dumaguete City against the complainant,

his wife, Bella Lim, and one Albina Ong, for alleged violation of the Retail
Trade Nationalization Law and the Anti-Dummy Law.

The next day, the respondent filed another criminal complaint against the
complainant, Lim, Ong and Adela Peralta for their alleged violation of the Anti-
Dummy Law.

In addition, the respondent commenced administrative cases against the

complainant before the Bureau of Domestic Trade, the Commission on
Immigration and Deportation, and the Office of the Solicitor General.
According to the complainant, these cases were subsequently denied due
[6]

course and dismissed by the aforesaid government agencies.

The foregoing prompted the complainant to file the present case for
disbarment. Essentially, the complainant alleged that the respondent
manufactured the criminal and administrative cases against him to blackmail
him or extort money from him. He claimed that the respondent solicited for
any information that could be used against him in the aforementioned cases
by offering any informer or would-be witness a certain percentage of whatever
amounts they could get from him. The complainant branded the respondents
tactics as highly immoral, unprofessional and unethical,
constitutingmalpractice of law and conduct gravely unbecoming of a lawyer.

In support of his accusations, the complainant submitted the following

documents: (1) the afore-quoted letters of the respondent addressed to the
complainant and Dr. Bueno; (2) Nemesia Garganians affidavit where she
denied any knowledge regarding the demands listed in the letter addressed to
Dr. Bueno; (3) an unsigned affidavit allegedly prepared by the respondent for
the complainant, wherein the latter was acknowledging that he sired Ms.
Ganganians son illegitimate child; (4) the criminal complaints filed against the
complainant for alleged violation of the Retail Trade Nationalization Law and
the Anti-Dummy Law; and (5) an affidavit of Manuel Orbeta, a neighbor of the
complainant who claimed that a representative of the respondent had asked
him to sign an affidavit allegedly prepared by the respondent, with an offer to
give any informer 20% and witness, 10%, of any amount he can get from Mr.
Alex Ong. To further bolster the disbarment case against the respondent, the
complainant also included a Supplemental Affidavit, citing several cases
[7]

previously filed against the respondent by other parties.

[8]

The records show that the respondent was directed to submit his comment
on the complaint lodged against him. He did not file any. Subsequently, the
[9]

case was endorsed to the Office of the Solicitor General for investigation,
report and recommendation. In turn, the OSG forwarded the records of the
case to the Office of the Provincial Fiscal of Negros Oriental, authorizing said
office to conduct the investigation.

It appears that the respondent did not appear before the investigating
officer, then Provincial Fiscal Jacinto Bautista, to answer the charges against
him.Instead, he moved for postponement. After denying the respondents third
request for postponement, Fiscal Bautista proceeded with the reception of the
complainants evidence. The respondent was duly notified of the on-going
investigation but he did not show up. When it was the respondents turn to
present evidence, notices of the preliminary investigation were sent to his
home address in Valenzuela, Negros Oriental, his law office
in Dumaguete City and his last known address in Quezon City. The return
cards showed that he could not be located, although his wife received some of
the notices sent to his home in Dumaguete.

Meanwhile, the case was transferred from one investigating officer to

another, with some of them inhibiting from the investigation. Finally, the case
was assigned to 2 Asst. Provincial Prosecutor Cristino Pinili. Atty. Pinili
nd

deemed the respondents absence as waiver of his right to present his

evidence. Finding merit in the complainants cause, the investigator
recommended that respondent be suspended from the practice of law for one
month, or, at the very least, be severely reprimanded.

The records of the case were endorsed to the Office of the Solicitor
General. Thereafter, the OSG transmitted the records to the Integrated Bar
[10]

of the Philippines in Manila, for proper disposition, conformably with adopted

policies and procedures. The IBPs Commission on Bar Discipline adopted
[11]

Atty. Pinilis report and recommendation in toto.

[12]

We affirm with modification.

 The complainant seeks the disbarment of the respondent. Thus, it is meet
to revisit the importance of the legal profession and the purpose of the
disbarment as aptly discussed in Noriega vs. Sison. We then held:
[13]

In resolving this disbarment case, (w)e must initially emphasize the degree of integrity
and respectability attached to the law profession. There is no denying that the
profession of an attorney is required after a long and laborious study. By years of
patience, zeal and ability, the attorney acquires a fixed means of support for himself
and his family. This is not to say, however, that the emphasis is on the pecuniary value
of this profession but rather on the social prestige and intellectual standing necessarily
arising from and attached to the same by reason of the fact that every attorney is
deemed an officer of the court.

The importance of the dual aspects of the legal profession has been wisely put by
Chief Justice Marshall of the United States Court when he said:

On one hand, the profession of an Atty. is of great importance to an individual and the
prosperity of his life may depend on its exercise. The right to exercise it ought not to
be lightly or capriciously taken from him. On the other hand, it is extremely desirable
that the respectability of the Bar should be maintained and that its harmony with the
bench should be preserved. For these objects, some controlling power, some
discretion ought to be exercised with great moderation and judgment, but it must be
exercised.

The purpose of disbarment, therefore, is not meant as a punishment depriving him of a

source of livelihood but is rather intended to protect the administration of justice by
requiring that those who exercise this function should be competent, honorable and
reliable in order that the courts and clients may rightly repose confidence in them.

The relevant rule to the case at bar is Canon 19 of the Code of

Professional Responsibility. It mandates lawyers to represent their clients
[14]

with zeal but within the bounds of the law. Rule 19.01 further commands that a
lawyer shall employ only fair and honest means to attain the lawful
objectives of his client and shall not present, participate or threaten to
present unfounded criminal charges to obtain an improper advantage in
any case or proceeding.

Considering the facts of this case, we find that respondent has not
exercised the good faith required of a lawyer in handling the legal affairs of his
client. It is evident from the records that he tried to coerce the complainant to
comply with his letter-demand by threatening to file various charges against
the latter. When the complainant did not heed his warning, he made good his
threat and filed a string of criminal and administrative cases against the
complainant. We find the respondents action to be malicious as the cases he
instituted against the complainant did not have any bearing or connection to
the cause of his client, Ms. Garganian. Clearly, the respondent has violated
the proscription in Canon 19, Rule 19.01. His behavior is inexcusable.

The records show that the respondent offered monetary rewards to

anyone who could provide him any information against the complainant just so
he would have a leverage in his actions against the latter. His tactic is
unethical and runs counter to the rules that a lawyer shall not, for corrupt
motive or interest, encourage any suit or proceeding and he shall not do any
[15]

act designed primarily to solicit legal business. In the case of Choa vs.
[16]

Chiongson, we held:
[17]

While a lawyer owes absolute fidelity to the cause of his client, full devotion to his
genuine interest, and warm zeal in the maintenance and defense of his right, as well as
the exercise of his utmost learning and ability, he must do so only within the bounds
of the law. He must give a candid and honest opinion on the merits and probable
results of his clients case with the end view of promoting respect for the law and legal
processes, and counsel or maintain such actions or proceedings only as appear to him
to be just, and such defenses only as he believes to be honestly debatable under the
law. He must always remind himself of the oath he took upon admission to the
Bar that he will not wittingly or willingly promote or sue any groundless, false or
unlawful suit nor give aid nor consent to the same; Needless to state, the lawyers
fidelity to his client must not be pursued at the expense of truth and the administration
of justice, and it must be done within the bounds of reason and common sense. A
lawyers responsibility to protect and advance the interests of his client does not
warrant a course of action propelled by ill motives and malicious intentions
against the other party.

(emphases ours)

The ethics of the legal profession rightly enjoin lawyers to act with the
highest standards of truthfulness, fair play and nobility in the course of his
practice of law. A lawyer may be disciplined or suspended for any misconduct,
whether in his professional or private capacity. Public confidence in law and
[18]

lawyers may be eroded by the irresponsible and improper conduct of a

member of the Bar. Thus, every lawyer should act and comport himself in
such a manner that would promote public confidence in the integrity of the
legal profession. [19]

Finally, we note that during the investigation of the case, despite being
duly notified thereof as evidenced by the motions for postponement he filed on
several occasions, the respondent chose not to participate in the proceedings
against him. His nonchalance does not speak well of him as it reflects his utter
lack of respect towards the public officers who were assigned to investigate
the case. He should be watchful of his conduct. The respondent should keep
[20]

in mind the solemn oath he took before this Court when he sought admission
[21]
to the bar. The lawyers oath should not be reduced to mere recital of empty
words for each word aims to promote the high standard of professional
integrity befitting a true officer of the court.

The recommended penalty for the unprofessional conduct of the

respondent was one (1) month suspension or reprimand. We believe that the
same is too light vis--vis the misconduct of the respondent.

IN VIEW WHEREOF, respondent ATTY. ELPIDIO D. UNTO is hereby

declared guilty of conduct unbecoming of a lawyer. He is SUSPENDED from
the practice of law for a period of five (5) months and sternly warned that a
repetition of the same or similar act will be dealt with more severely.

Let a copy of this Decision be attached to Atty. Untos personal record in

the Office of the Bar Confidant and a copy thereof be furnished to the
Integrated Bar of the Philippines (IBP).

SO ORDERED.
Adm. Case No. 1424 October 15, 1991

ISMAELA DIMAGIBA, complainant,

vs.
ATTY. JOSE MONTALVO, JR., respondent.

PER CURIAM:

This is a complaint filed by Ismaela Dimagiba against Atty. Jose Montalvo for Malpractice, for
stretching to almost a half a century a litigation arising from the probate of a will of the late Benedicta
de Los Reyes which instituted Ismaela Dimagiba as the sole heir of all the properties.

The letter of the private complainant, Ismaela Dimagiba, received on January 15,1975 by the
Supreme Court, states:

xxx xxx xxx

The clients of Atty. Montalvo, namely: Dionisio Fernandez, Eusebio Reyes, Luisa
Reyes, Mariano Reyes, Cesar Reyes, Leonor Reyes, filed a case against me with
the Court of First Instance of Bulacan in 1946 for annulment of sale and was
docketed as Civil Case No. 108 of said Court. This case was terminated annulling
the sale, as per decision in 1954 in G.R. No. L-5618 and L-5620.

On January 19, 1955, 1 filed a case for Probate of Will with the Court of First Instance of Bulacan,
regarding the same property subject of the annulment of sale and was docketed with the Court of
First Instance of Bulacan as Sp. Proc. No. 831-M. Luckily, the said case was terminated on June 20,
1958, probating the said will. The oppositors in this case who are the same persons mentioned
above appealed this case to the Higher Court of the Philippines and was decided by the Hon.
Supreme Court of the Philippines on October 12, 1967 in G.R. No. L-23638 and L-23662, affirming
the decision of the Lower Court;

That after the decision of the above-mentioned case was promulgated, the same parties filed on
June 5, 1968 Civil Case No. 3677-M with the CFI of Bulacan for annulment of will; this case was filed
through their counsel, Atty. Gregorio Centeno.

Said case was dismissed by the Court on February 11, 1970 without pronouncement of costs;

That on August 13,1971, again, the clients of Atty. Montalvo filed Civil Case No. 4078 with the Court
of First Instance of Bulacan for annulment of the said will; this case was again dismissed by the
Court on December 21, 1971;

That on April 22, 1972, again the same parties, through their counsel Atty. Montalvo, filed another
case with the Court of First Instance of Bulacan, allegedly for Partition of the same property
mentioned in the probate of will which was docketed as Civil Case No. 4151. This case was again
dismissed by the Court in its Order dated October 11, 1972;

That on May 25, 1972, still another case was filed by the same parties, through Atty. Montalvo, for
specific performance, with the CFI of Bulacan and was docketed as Civil Case No. 4188-M. This
case was again dismissed by the Court in its Order dated October 24,1973. On August 12, 1974, the
said case was remanded to the Court of Appeals, Manila, by the Court of First Instance of Bulacan;

Still on April 5, 1974, I was again surprised to know that there was another case filed by the same
persons mentioned above through Atty. Montalvo with the Court of First Instance of Bulacan and was
docketed as Civil Case No. 4458. This case is still pending before said court.

In view of the numerous cases filed against me by the same parties, through their counsel, Atty.
Montalvo, I am constrained to report to that [sic] Honorable Court of the actuation of said lawyer who
is a member of the Philippine Bar attending to cases of non suit, which cause harassment on may
part.

The parties in this case are the ones in possession of the property Subject of Sp. Proc. No. 831 of
the CFI, Bulacan. They can not be ejected from the land holdings because they claim that the case
filed by Atty. Montalvo is still pending in Court.

In all the foregoing [sic] I respectfully submit to this Honorable Court for appropriate action.

xxx xxx xxx 1

In the Resolution of the Second Division of the Supreme Court dated January 27, 1975, the
respondent Montalvo was required to file an Answer within ten days from notice. 2

In his Answer dated March 3, 1975, Montalvo, claims that the case filed against the complainant
were done.

xxx xxx xxx

at the instance of different parties; or by reason of different causes of action and all
the pleadings filed by the undersigned were and/or the result of a very painstaking,
diligent, and careful study and evaluation of the facts and law involved therein such
that even before signing the same, the undersigned has always been of the honest
and sincere belief that its filing is for the interest of justice certainly never for
harassment; (2) that the reason why the parties tenant could not be ejected from
their land as stated by complainant in her complaint is because of the passage of
Presidential Decree No. 27 which emancipated the farmers from their bondage and
declared them as owners of the rice and corn land they tilled upon the passage of the
decree coupled with the very acts of the complainant herself; and that (3) the
complainant by filing this instant complaint for disbarment wants to cow and
intimidate the undersigned in order to withdraw as counsel of his clients because she
has been thwarted in her erroneous belief that she owns exclusively all the properties
comprising the estate of the late Benedicta de Los Reyes and could not accept and
take into account the reality that by virtue of the final decision of the Supreme Court
in G.R. No. 5618 and 5620 she is not the sole owner of the present estate of the
deceased but only a co-owner with the clients of the undersigned. 3

In addition, Montalvo stated that it was Dimagiba who refused to be bound by the Supreme Court
Decision in G.R. Nos. 5618 and 5620. 4

As a Rejoinder to the Respondent's Answer, the complainant Dimagiba stated that in Civil Case No.
3677-M, the plaintiffs are the same parties-oppositors who opposed the petition for probate of the
Last Will and Testament of the deceased Benedicta De Los Reyes in Special Proceeding No. 831.
The same case was dismissed by the Court of First Instance of Bulacan on the ground that the issue
raised had been decided by the Court. 5

Likewise Civil Case No. 4078-M was also dismissed by Branch 2 of the Court of First Instance of
Bulacan presided by Judge Ricardo C. Pronove, Jr., in the order of August 24, 1973 on the ground
of res judicata.

xxx xxx xxx

But a closer analysis [sic) it is clear that this action is merely a rehash of the other
cases previously litigated between the plaintiffs and the defendant and already
settled by final judgment. 6

In fact, in that case, Atty. Jose Montalvo, Jr., included himself as one of the defendants.
 xxx xxx xxx

Finally, the fact that plaintiffs counsel, Jose Montalvo, Jr., had decided to join cause
with the other plaintiffs in this case does no mean that there is no Identity of parties
between this case and Civil Case No. 3677-M. Atty. Jose Montalvo, Jr., is not alleged
to be are party in interest in this case so that Ills inclusion herein as a p plaintiff can
not produce any legal significance. 7

This notwithstanding, Montalvo filed another case against Dimagiba which was docketed as Civil
Case No. 4458-M of the CFI Bulacan where the plaintiffs and causes of action were again the same
as 3677-M and 4188-M. Again, the CFI Bulacan dismissed the cases.

On April 16, 1975, the Second Division, following the procedure then obtaining for the resolution of
disciplinary case against lawyers, referred the case to the Solicitor General for investigation, report,
and recommendation. 8

It was only on May 4,1990, or almost fifteen years later, that the entire records of Adm. Case No.
1424 involving Ismaela Dimagiba versus Atty. Jose Montalvo was returned to the Clear of Court of
the Supreme Court by the Office of the Solicitor General through Solicitor Aurora P. Cortes.

In summary, the following are the litigations that ensue from the probate of the Will of De Los Reyes
as found by the Solicitor General involving the same parties and the same cause of action:

1. Special Proceedings No. 831 instituted on January 1 1955. The Will was admitted
to probate but was subsequently appealed.

2. CA-G.R. No. 31221-R. This was an appeal of the decision in Spec. Proc. No. 831.
The decision was affirmed.

3. G.R. Nos. L-23638 and L-23662. This decision dated October 12, 1967, in the
Supreme Court, upheld the decision CA-G.R. No. 31221-R, in effect, affirming the
due execution the Will and the capacity of the Testator as well as the institution of the
complainant.

4. Civil Case No. 3677-M. Filed in the Court of First Instance of Bulacan on June 4,
1968, this was a petition for the nullification of the Will. This was dismissed.

5. Civil Case No. 200 which was redocketed as Civil Case No. 4078-M. This
complaint dated November 3, 1970 was again dismissed.

6. Civil Case No. 4151-M. This case, filed on February l6, 1972, for the partition of
the property left by the deceased Benedicta De los Reyes on the ground of the nullity
of the Will, was again dismissed for failure to prosecute.

7. Civil Case No. 4188-M. Filed on May 25,1972, with the Court of First Instance of
Bulacan, Branch 2, the respondent Atty. Montalvo, Jr., joined the descendants of the
collateral relatives of the deceased De Los Reyes against herein complainant
Dimagiba. This case was dismissed.

8. Civil Case No. 4458-M. Civil Case No. 4188-M was appealed. But without waiting
for the outcome, Atty. Montalvo, Jr., filed Civil Case No. 4458-M on April 5, 1974
which was a complaint for the cancellation of the transfer certificates of title in the
name of Ismaela Dimagiba and the issuance of new certificates of title in the name of
the late Benedicta de los Reyes.
Clearly, the respondent Montalvo, Jr. repetitively filed several complaints in various forms involving
the same parties and the same subject matter, persistently raising issues long laid to rest by final
judgment.

This misbehavior in facie curia consisting of a stubborn refusal to accept this Court's
pronouncements is in fact even summarily punishable under Rule 71, Suction 1 of the Rules of
Court.9

Any lawyer who assumes the responsibility for a client' cause has the duty to know the entire history
of a case, specially if any litigation has commenced. In the case at bar, even Atty. Montalvo does not
deny the fact that the probate of the will o the late Benedicta de los Reyes has been an over-
extended an contentious litigation between the heirs.

A lawyer should never take advantage of the seemingly end less channels left dangling by our legal
system in order wangle the attention of the court. Atty. Montalvo may have thought that lie could get
away with his indiscriminate filing o suits that were clearly intended to harass Ismaela Dimagiba
When court dockets get clogged and the administration of justice is delayed, our judicial system may
not be entirely blame less, yet the greater fault lies in the lawyers who had take their privilege so
lightly, and in such mindless fashion.

The Code of Professional Responsibility states that:

Rule 1.01 A lawyer shall not engage in unlawful, dishonest immoral or deceitful
conduct.

Rule 1.03 A lawyer shall not for any corrupt motive or interest encourage any suit
or proceeding or delay any man's cause.

On the basis of the foregoing, we find him guilty of malpractice as charged. He has violated his oath
not to delay any ma for money or malice, besmirched the name of an honorable profession, and has
proven himself unworthy of the trust repose in him by law as an officer of the Court. We have not
countenanced other less significant infractions among the ranks of our lawyers. He deserves the
severest punishment of DISBARMENT.

WHEREFORE on the basis of the foregoing, and consisted with the urgent need to maintain the high
traditions an standards of the legal profession and to preserve undiminished public faith in attorneys-
at-law, the Court Resolved to DISBAR the respondent Atty. Jose Montalvo, Jr. from the practice law.
His name is hereby ordered stricken from the Roll of Attorneys.

Copies of this Resolution shall be circulated to all courts of the country and entered in the personal
record of respondent Atty. Jose Montalvo, Jr.

SO ORDERED.
CANON 20
A.C. No. 5359 March 10, 2014

ERMELINDA LAD VOA. DE DOMINGUEZ, represented by her Attorney-in-Fact, VICENTE A.

PICHON,Complainant,
vs.
ATTY. ARNULFO M. AGLERON, SR., Respondent.

RESOLUTION

MENDOZA, J.:

Complainant Ermelinda Lad Vda. De Dominguez (complainant) was the widow of the late Felipe
Domiguez who died in a vehicular accident in Caraga, Davao Oriental, on October 18, 1995,
involving a dump truck owned by the Municipality of Caraga. Aggrieved, complainant decided to file
charges against the Municipality of Caraga and engaged the services of respondent Atty. Arnulfo M.
Agleron, Sr. (Atty. Agleron). On three (3) occasions, Atty. Agleron requested and received from
complainant the following amounts for the payment of filing fees and sheriffs fees, to wit: (1) June 3,
1996 -P3,000.00; (2) June 7, 1996 -Pl,800.00; and September 2, 1996 - P5,250.00 or a total
of P10,050.00. After the lapse of four (4) years, however, no complaint was filed by Atty. Agleron
against the Municipality of Caraga. 1

Atty. Agleron admitted that complainant engaged his professional service and received the amount
of P10,050.00. He, however, explained that their agreement was that complainant would pay the
filing fees and other incidental expenses and as soon as the complaint was prepared and ready for
filing, complainant would pay 30% of the agreed attorneys fees of P100,000.00. On June 7, 1996,
after the signing of the complaint, he advised complainant to pay in full the amount of the filing fee
and sheriffs fees and the 30% of the attorneys fee, but complainant failed to do so. Atty. Agleron
averred that since the complaint could not be filed in court, the amount of P10,050.00 was deposited
in a bank while awaiting the payment of the balance of the filing fee and attorneys fee.2

In reply, complainant denied that she did not give the full payment of the filing fee and asserted that
3

the filing fee at that time amounted only to P7,836.60.

In the Report and Recommendation, dated January 12, 2012, the Investigating Commissioner found
4

Atty. Agleron to have violated the Code of Professional Responsibility when he neglected a legal
matter entrusted to him, and recommended that he be suspended from the practice of law for a
period of four (4) months.

In its April 16, 2013 Resolution, the Integrated Bar of the Philippines (IBP) Board of Governors
5

adopted and approved the report and recommendation of the Investigating Commissioner with
modification that Atty. Agleron be suspended from the practice of law for a period of only one (1)
month.

The Court agrees with the recommendation of the IBP Board of Governors except as to the penalty
imposed.

Atty. Agleron violated Rule 18.03 of the Code of Professional Responsibility, which provides that:

Rule 18.03-A lawyer shall not neglect a legal matter entrusted to him, and his negligence in
connection therewith shall render him liable.

Once a lawyer takes up the cause of his client, he is duty bound to serve his client with competence,
and to attend to his clients cause with diligence, care and devotion regardless of whether he
accepts it for a fee or for free. He owes fidelity to such cause and must always be mindful of the
6

trust and confidence reposed on him. 7

In the present case, Atty. Agleron admitted his failure to file the complaint against the Municipality of
Caraga, Davao Oriental, despite the fact that it was already prepared and signed. He attributed his
non-filing of the appropriate charges on the failure of complainant to remit the full payment of the
filing fee and pay the 30% of the attorney's fee. Such justification, however, is not a valid excuse that
would exonerate him from liability. As stated, every case that is entrusted to a lawyer deserves his
full attention whether he accepts this for a fee or free. Even assuming that complainant had not
remitted the full payment of the filing fee, he should have found a way to speak to his client and
inform him about the insufficiency of the filing fee so he could file the complaint. Atty. Agleron
obviously lacked professionalism in dealing with complainant and showed incompetence when he
failed to file the appropriate charges.
1wphi1

In a number of cases, the Court held that a lawyer should never neglect a legal matter entrusted to
8

him, otherwise his negligence renders him liable for disciplinary action such as suspension ranging
from three months to two years. In this case, the Court finds the suspension of Atty. Agleron from the
practice of law for a period of three (3) months sufficient.

WHEREFORE, the resolution of the IBP Board of Governors is hereby AFFIRMED with
MODIFICATION. Accordingly, respondent ATTY. ARNULFO M. AGLERON, SR. is hereby
SUSPENDED from the practice of law for a period of THREE (3) MONTHS, with a stern warning that
a repetition of the same or similar wrongdoing will be dealt with more severely.

Let a copy of this resolution be furnished the Bar Confidant to be included in the records of the
respondent; the Integrated Bar of the Philippines for distribution to all its chapters; and the Office of
the Court Administrator for dissemination to all courts throughout the country.

SO ORDERED.
 FIRST DIVISION

A.C. No. 9091, December 11, 2013

CONCHITA A. BALTAZAR, ROLANDO SAN PEDRO, ALICIA EULALIO-RAMOS, SOLEDAD A. FAJARDO

AND ENCARNACION A. FERNANDEZ, Complainants, v.ATTY. JUAN B. BAEZ, JR., Respondent.

RESOLUTION

SERENO, C.J.:

Complainants are the owners of three parcels of land located in Dinalupihan, Bataan. 1 On 4 September
2002, they entered into an agreement with Gerry R. Fevidal (Fevidal), a subdivision developer. In that
agreement, they stood to be paid P35,000,000 for all the lots that would be sold in the subdivision. 2 For that
purpose, they executed a Special Power of Attorney authorizing Fevidal to enter into all agreements
concerning the parcels of land and to sign those agreements on their behalf.3

Fevidal did not update complainants about the status of the subdivision project and failed to account for the
titles to the subdivided land.4 Complainants also found that he had sold a number of parcels to third parties,
but that he did not turn the proceeds over to them. Neither were complainants invited to the ceremonial
opening of the subdivision project.5 Thus, on 23 August 2005, they revoked the Special Power of Attorney
they had previously executed in his favor.6

Complainants subsequently agreed to settle with Fevidal for the amount of P10,000,000, but the latter again
failed to pay them.7 Complainants engaged the professional services of respondent for the purpose of
assisting them in the preparation of a settlement agreement. 8 Instead of drafting a written settlement,
respondent encouraged them to institute actions against Fevidal in order to recover their properties.

Complainants then signed a contract of legal services, 9 in which it was agreed that they would not pay
acceptance and appearance fees to respondent, but that the docket fees would instead be shared by the
parties. Under the contract, complainants would pay respondent 50% of whatever would be recovered of the
properties.

In preparation for the filing of an action against Fevidal, respondent prepared and notarized an Affidavit of
Adverse Claim, seeking to annotate the claim of complainants to at least 195 titles in the possession of
Fevidal.10 A certain Luzviminda Andrade (Andrade) was tasked to submit the Affidavit of Adverse Claim to
the Register of Deeds of Bataan.11 The costs for the annotation of the adverse claim were paid by
respondent. Unknown to him, the adverse claim was held in abeyance, because Fevidal got wind of it and
convinced complainants to agree to another settlement.12

Meanwhile, on behalf of complainants, and after sending Fevidal a demand letter dated 10 July 2006,
respondent filed a complaint for annulment, cancellation and revalidation of titles, and damages against
Fevidal before the Regional Trial Court (RTC) of Bataan on 13 October 2006. 13

Complainants found it hard to wait for the outcome of the action. Thus, they terminated the services of
respondent on 8 June 2007, withdrew their complaint against Fevidal on 9 June 2007, and finalized their
amicable settlement with him on 5 July 2007.14

Respondent filed a Manifestation and Opposition15 dated 20 July 2007 before the RTC, alleging that the
termination of his services and withdrawal of the complaint had been done with the intent of defrauding
counsel. On the same date, he filed a Motion for Recording of Attorneys Charging Lien in the Records of the
Above-Captioned Cases.16 When the RTC granted the withdrawal of the complaint, 17 he filed a Manifestation
and Motion for Reconsideration.18

After an exchange of pleadings between respondent and Fevidal, with the latter denying the formers
allegation of collusion,19 complainants sought the suspension/disbarment of respondent through a
Complaint20 filed before the Integrated Bar of the Philippines (IBP) on 14 November 2007. Complainants
alleged that they were uneducated and underprivileged, and could not taste the fruits of their properties
because the disposition thereof was now clothed with legal problems brought about by respondent. 21In
their complaint, they alleged that respondent had violated Canons
1.01,22 1.03,23 1.04,24 12.02,2515.05,26 18.04,27 and 20.0428 of the Code of Professional Responsibility.

On 14 August 2008, the IBP Commission on Bar Discipline adopted and approved the Report and
Recommendation29 of the investigating commissioner. It suspended respondent from the practice of law for a
period of one year for entering into a champertous agreement. 30 On 26 June 2011, it denied his motion for
reconsideration.

On 26 November 2012, this Court noted the Indorsement of the IBP Commission on Bar Discipline, as well
as respondents second motion for reconsideration.

We find that respondent did not violate any of the canons cited by complainants. In fact, we have reason to
believe that complainants only filed the instant complaint against him at the prodding of Fevidal.

Respondent cannot be faulted for advising complainants to file an action against Fevidal to recover their
properties, instead of agreeing to a settlement of P10,000,000 a measly amount compared to that in the
original agreement, under which Fevidal undertook to pay complainants the amount of P35,000,000.
Lawyers have a sworn duty and responsibility to protect the interest of any prospective client and pursue the
ends of justice.31 Any lawyer worth his salt would advise complainants against the abuses of Fevidal under
the circumstances, and we cannot countenance an administrative complaint against a lawyer only because
he performed a duty imposed on him by his oath.

The claim of complainants that they were not informed of the status of the case is more appropriately laid at
their door rather than at that of respondent. He was never informed that they had held in abeyance the
filing of the adverse claim. Neither was he informed of the brewing amicable settlement between
complainants and Fevidal. We also find it very hard to believe that while complainants received various
amounts as loans from respondent from August 2006 to June 2007, 32 they could not spare even a few
minutes to ask about the status of the case. We shall discuss this more below.

As regards the claim that respondent refused to patch up with Fevidal despite the pleas of complainants,
we note the latters Sinumpaang Salaysay dated 24 September 2007, in which they admitted that they could
not convince Fevidal to meet with respondent to agree to a settlement. 33

Finally, complainants apparently refer to the motion of respondent for the recording of his attorneys
charging lien as the legal problem preventing them from enjoying the fruits of their property.

Section 26, Rule 138 of the Rules of Court allows an attorney to intervene in a case to protect his rights
concerning the payment of his compensation. According to the discretion of the court, the attorney shall
have a lien upon all judgments for the payment of money rendered in a case in which his services have been
retained by the client.

We recently upheld the right of counsel to intervene in proceedings for the recording of their charging lien.
In Malvar v. KFPI,34 we granted counsels motion to intervene in the case after petitioner therein terminated
his services without justifiable cause. Furthermore, after finding that petitioner and respondent had colluded
in order to deprive counsel of his fees, we ordered the parties to jointly and severally pay counsel the
stipulated contingent fees.

Thus, the determination of whether respondent is entitled to the charging lien is based on the discretion of
the court before which the lien is presented. The compensation of lawyers for professional services rendered
is subject to the supervision of the court, not only to guarantee that the fees they charge remain reasonable
and commensurate with the services they have actually rendered, but to maintain the dignity and integrity
of the legal profession as well.35 In any case, an attorney is entitled to be paid reasonable compensation for
his services.36 That he had pursued its payment in the appropriate venue does not make him liable for
disciplinary action.

Notwithstanding the foregoing, respondent is not without fault. Indeed, we find that the contract for legal
services he has executed with complainants is in the nature of a champertous contract an agreement
whereby an attorney undertakes to pay the expenses of the proceedings to enforce the clients rights in
exchange for some bargain to have a part of the thing in dispute. 37 Such contracts are contrary to public
policy38 and are thus void or inexistent.39 They are also contrary to Canon 16.04 of the Code of Professional
Responsibility, which states that lawyers shall not lend money to a client, except when in the interest of
justice, they have to advance necessary expenses in a legal matter they are handling for the client.

A reading of the contract for legal services40 shows that respondent agreed to pay for at least half of the
expense for the docket fees. He also paid for the whole amount needed for the recording of complainants
adverse claim.

While lawyers may advance the necessary expenses in a legal matter they are handling in order to
safeguard their clients rights, it is imperative that the advances be subject to reimbursement. 41 The purpose
is to avoid a situation in which a lawyer acquires a personal stake in the clients cause. Regrettably, nowhere
in the contract for legal services is it stated that the expenses of litigation advanced by respondent shall be
subject to reimbursement by complainants.

In addition, respondent gave various amounts as cash advances (bali), gasoline and transportation
allowance to them for the duration of their attorney-client relationship. In fact, he admits that the cash
advances were in the nature of personal loans that he extended to complainants. 42

Clearly, respondent lost sight of his responsibility as a lawyer in balancing the clients interests with the
ethical standards of his profession. Considering the surrounding circumstances in this case, an admonition
shall suffice to remind him that however dire the needs of the clients, a lawyer must always avoid any
appearance of impropriety to preserve the integrity of the profession.

WHEREFORE, Attorney Juan B. Baez, Jr. is hereby ADMONISHED for advancing the litigation expenses in
a legal matter he handled for a client without providing for terms of reimbursement and lending money to
his client, in violation of Canon 16.04 of the Code of Professional Responsibility. He is sternly warned that a
repetition of the same or a similar act would be dealt with more severely.

Let a copy of this Resolution be attached to the personal record of Attorney Baez, Jr. chanRoblesvirtualLa wlibrary

G.R. No. 191641, September 02, 2015

EDMUNDO NAVAREZ, Petitioner, v. ATTY. MANUEL ABROGAR III, Respondent.

DECISION

BRION, J.:

This is a petition for certiorari under Rule 651 of the Rules of Court, filed from the October 16, 2009 Decision
and the March 12, 2010 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 108675.2The CA
dismissed the petition for certiorari that the present petitioner filed against the January 21, 2009 Order of
the Regional Trial Court (RTC).

ANTECEDENTS

On July 30, 2007, petitioner Edmundo Navarez engaged the services of Abrogar Valerio Maderazo and
Associates Law Offices (the Firm) through the respondent, Atty. Manuel Abrogar III. The Firm was to
represent Navarez in Sp. Proc. No. Q-05-59112 entitled "Apolonio Quesada, Jr. v. Edmundo Navarez" as
collaborating counsel of Atty. Perfecto Laguio. The case involved the settlement of the estate of Avelina
Quesada-Navarez that was then pending before the Regional Trial Court (RTC), Branch 83, Quezon City. The
pertinent portions of the Retainer Agreement read:
Our services as collaborating counsel will cover investigation, research and representation with local
banks, concerns regarding deposits (current and savings) and investment instruments evidenced by
certificate of deposits. Our office may also initiate appropriate civil and/or criminal actions as well as
administrative remedies needed to adjudicate the Estate of Avelina Quesada-Navarez expeditiously,
peacefully and lawfully.

Effective Date: June 2007

Acceptance Fee: P100,000.00 in an installment basis

Success Fee: 2% of the total money value of your share as co-owner and heir of the Estate (payable
proportionately upon your receipt of any amount)

Appearance Fee: P2,500.00 per Court hearing or administrative meetings and/or other meetings.

Filing of Motions and/or pleadings at our initiative shall be for your account and you will be billed
accordingly.

OUT-OF-POCKET EXPENSES: Ordinary out-of-pocket expenses such as telex, facsimile, word processing,
machine reproduction, and transportation expenses, as well as per diems and accommodations expenses
incurred in undertaking work for you outside Metro Manila area and other special out-of-pocket expenses as
you may authorized [sic] us to incur (which shall always be cleared with you in advance) shall be for your
account. xxxx
On September 2, 2008, Navarez filed a Manifestation with the RTC that he was terminating the services of
Atty. Abrogar. On the same day, Navarez also caused the delivery to Atty. Abrogar of a check in the amount
of P220,107.51 - allegedly equivalent to one half of 7.5% of petitioner's P11,200,000.00 share in the estate
of his deceased wife less Atty. Abrogar's cash advances.

On September 9, 2008, Atty. Abrogar manifested that with respect to the petitioner's one-half (1/2) share in
the conjugal partnership, the RTC had already resolved the matter favorably because it had issued a release
order for the petitioner to withdraw the amount. Atty. Abrogar further declared that the Firm was
withdrawing as counsel - effective upon the appointment of an Administrator of the estate - from the
remaining proceedings for the settlement of the estate of Avelina Quesada-Navarez.

On September 22, 2008, the petitioner wrote to Atty. Abrogar offering to pay his attorney's fees in
accordance with their Retainer Agreement minus the latter's cash advances - an offer that Atty. Abrogar had
previously refused in August 2008.

On October 7, 2008, Atty. Abrogar filed a Motion to Enter into the Records his attorney's lien pursuant to
Rule 138, Section 37 of the Rules of Court.

On November 21, 2008, the motion was submitted for resolution without oral arguments.

On January 21, 2009, the RTC issued an order granting the motion and directed the petitioner to pay Atty.
Abrogar's attorney's fees. The Order reads:
WHEREFORE, premises considered, it is hereby ordered:

1. That the attorney's lien of Manuel Abrogar III conformably with the Retainer Agreement dated July
30, 2007, be entered into the records of this case in consonance with Section 37, Rule 138 of the
Rules of Court; ChanRoblesVirtualawlibrary

2. That oppositor Edmundo Navarez pay the amount of 7.5% of P11,196,675.05 to Manuel Abrogar
III;
ChanRoblesVirtualawlibrary

3. That the oppositor pay the administrative costs/expenses of P103,000.00 to the movant; and

4. That the prayers for P100,000.00 as exemplary damages, P200,000.00 as moral damages and for
writ of preliminary attachment be denied.

SO ORDERED.
On February 18, 2009, the petitioner filed a Motion for Reconsideration.

On March 17, 2009, the RTC denied the motion for reconsideration and issued a Writ of Execution of its
Order dated January 21, 2009.

The petitioner elevated the case to the CA via a petition for certiorari. He argued that the RTC committed
grave abuse of discretion because: (1) the RTC granted Atty. Abrogar's claim for attorney's fees despite non-
payment of docket fees; (2) the RTC denied him the opportunity of a full-blown trial to contradict Atty.
Abrogar's claims and prove advance payments; and (3) the RTC issued a writ of execution even before the
lapse of the reglementary period.

In its decision dated October 16, 2009, the CA dismissed the petition and held that the RTC did not commit
grave abuse of discretion.

The petitioner moved for reconsideration which the CA denied in a Resolution dated March 12, 2010.

On April 6, 2010, and April 26, 2010, the petitioner filed his first and second motions for extension of time to
file his petition for review. This Court granted both motions for extension totaling thirty (30) days (or until
May 5, 2010) in the Resolution dated July 26, 2010.

On May 5, 2010, the petitioner filed the present petition entitled "Petition for Review." However, the contents
of the petition show that it is a petition for certiorari under Rule 65 of the Rules of Court.3

THE PETITION

The petitioner argues that the CA gravely erred in dismissing his petition for certiorari that challenged the
RTC ruling ordering the payment of attorney's fees. He maintains his argument that the RTC committed
grave abuse of discretion because: (1) it granted Atty. Abrogar's claim for attorney's fees despite lack of
jurisdiction due to non-payment of docket fees; (2) it granted the claim for attorney's fees without requiring
a fullblown trial and without considering his advance payments; and (3) it issued the writ of execution
before the lapse of the reglementary period. The petitioner also points out that the CA nullified the RTC's
release order in CA-G.R. SP No. 108734.

In his Comment dated September 8, 2010, Atty. Abrogar adopted the CA's position in its October 16, 2009
Decision.

OUR RULING

We observe that the petitioner used the wrong remedy to challenge the CA's decision and resolution. The
petitioner filed a petition for certiorari under Rule 65, not a petition for review on certiorari under Rule 45. A
special civil action for certiorari is a remedy of last resort, available only to raise jurisdictional issues when
there is no appeal or any other plain, speedy, and adequate remedy under the law.

Nonetheless, in the spirit of liberality that pervades the Rules of Court 4 and in the interest of substantial
justice,5 this Court has, on appropriate occasions, treated a petition for certiorari as a petition for review
on certiorari, particularly when: (1) the petition for certiorari was filed within the reglementary period to file
a petition for review on certiorari;6 (2) the petition avers errors of judgment;7 and (3) when there is
sufficient reason to justify the relaxation of the rules. 8 Considering that the present petition was filed within
the extension period granted by this Court and avers errors of law and judgment, this Court deems it proper
to treat the present petition for certiorari as a petition for review on certiorari in order to serve the higher
ends of justice.

With the procedural issue out of the way, the remaining issue is whether or not the CA erred when it held
that the RTC acted within its jurisdiction and did not commit grave abuse of discretion when it ordered the
payment of attorney's fees.

We find merit in the petition.

An attorney has a right to be paid a fair and reasonable compensation for the services he has rendered to a
client. As a security for his fees, Rule 138, Section 37 of the Rules of Court grants an attorney an equitable
right to a charging lien over money judgments he has secured in litigation for his client. For the lien to be
enforceable, the attorney must have caused: (1) a statement of his claim to be entered in the record of the
case while the court has jurisdiction over the case and before the full satisfaction of the judgment; 9 and (2)
a written notice of his claim to be delivered to his client and to the adverse party.

However, the filing of the statement of the claim does not, by itself, legally determine the amount of the
claim when the client disputes the amount or claims that the amount has been paid. 10 In these cases, both
the attorney and the client have a right to be heard and to present evidence in support of their claims. 11 The
proper procedure for the court is to ascertain the proper amount of the lien in a full dress trial before it
orders the registration of the charging lien.12 The necessity of a hearing is obvious and beyond dispute. 13

In the present case, the RTC ordered the registration of Atty. Abrogar's lien without a hearing even though
the client contested the amount of the lien. The petitioner had the right to be heard and to present evidence
on the true amount of the charging lien. The RTC acted with grave abuse of discretion because it denied the
petitioner his right to be heard, i.e., the right to due process.

The registration of the lien should also be distinguished from the enforcement of the lien. Registration
merely determines the birth of the lien.14 The enforcement of the lien, on the other hand, can only take
place once a final money judgment has been secured in favor of the client. The enforcement of the lien is a
claim for attorney's fees that may be prosecuted in the very action where the attorney rendered his services
or in a separate action.

However, a motion for the enforcement of the lien is in the nature of an action commenced by a lawyer
against his clients for attorney's fees. 15 As in every action for a sum of money, the attorney-movant must
first pay the prescribed docket fees before the trial court can acquire jurisdiction to order the payment of
attorney's fees.

In this case, Atty. Abrogar only moved for the registration of his lien. He did not pay any docket fees
because he had not yet asked the RTC to enforce his lien. However, the RTC enforced the lien and ordered
the petitioner to pay Atty. Abrogar's attorney's fees and administrative expenses.

Under this situation, the RTC had not yet acquired jurisdiction to enforce the charging lien because the
docket fees had not been paid. The payment of docket fees is mandatory in all actions, whether separate or
an offshoot of a pending proceeding. In Lacson v. Reyes,16 this Court granted certiorari and annulled the
decision of the trial court granting a "motion for attorney's fees" because the attorney did not pay the docket
fees. Docket fees must be paid before a court can lawfully act on a case and grant relief. Therefore, the RTC
acted without or in excess of its jurisdiction when it ordered the payment of the attorney's fees.

Lastly, the enforcement of a charging lien can only take place after a final money judgment has been
rendered in favor of the client.17 The lien only attaches to the money judgment due to the client and is
contingent on the final determination of the main case. Until the money judgment has become final and
executory, enforcement of the lien is premature.

The RTC again abused its discretion in this respect because it prematurely enforced the lien and issued a
writ of execution even before the main case became final; no money judgment was as yet due to the client
to which the lien could have attached itself. Execution was improper because the enforceability of the lien is
contingent on a final and executory award of money to the client. This Court notes that in CA-G.R. SP No.
108734, the CA nullified the "award" to which the RTC attached the attorney's lien as there was nothing due
to the petitioner. Thus, enforcement of the lien was premature.

The RTC's issuance of a writ of execution before the lapse of the reglementary period to appeal from its
order is likewise premature. The Order of the RTC dated January 21, 2009, is an order that finally disposes
of the issue on the amount of attorney's fees Atty. Abrogar is entitled to. The execution of a final order
issues as a matter of right upon the expiration of the reglementary period if no appeal has been
perfected.18 Under Rule 39, Section 2 of the Rules of Court, discretionary execution can only be made before
the expiration of the reglementary period upon a motion of the prevailing party with notice to the adverse
party. Discretionary execution may only issue upon good reasons to be stated in a special order after due
hearing.19

The RTC ordered execution without satisfying the requisites that would have justified discretionary
execution. Atty. Abrogar had not moved for execution and there were no good reasons to justify the
immediate execution of the RTC's order. Clearly, the RTC gravely abused its discretion when it ordered the
execution of its order dated January 21, 2009, before the lapse of the reglementary period.

For these reasons, this Court finds that the CA erred when it held that the RTC did not commit grave abuse
of discretion and acted without jurisdiction.

As our last word, this decision should not be construed as imposing unnecessary burden on the lawyer in
collecting his just fees. But, as in the exercise of any other right conferred by law, the lawyer - and the
courts -must avail of the proper legal remedies and observe the procedural rules to prevent the possibility,
or even just the perception, of abuse or prejudice.20
chanroble svirtuallawlibrary

WHEREFORE, premises considered, we hereby GRANT the petition. The decision of the Court of Appeals in
CA-G.R. SP No. 108675 dated October 16, 2009, is hereby REVERSED, and the decision of the Regional
Trial Court, Branch 83, Quezon City in Sp. Proc. No. Q-05-59112 is hereby ANNULLED and SET ASIDE.

SO ORDERED. chanroblesvirtuallawlibrary
 G.R. No. 185544, January 13, 2015

THE LAW FIRM OF LAGUESMA MAGSALIN CONSULTA AND GASTARDO, Petitioner, v. THE
COMMISSION ON AUDIT AND/OR REYNALDO A. VILLAR AND JUANITO G. ESPINO, JR. IN THEIR
CAPACITIES AS CHAIRMAN AND COMMISSIONER, RESPECTIVELY, Respondents.

DECISION

LEONEN, J.:

When a government entity engages the legal services of private counsel, it must do so with the necessary
authorization required by law; otherwise, its officials bind themselves to be personally liable for
compensating private counsels services.

This is a petition1 for certiorari filed pursuant to Rule XI, Section 1 of the 1997 Revised Rules of Procedure of
the Commission on Audit. The petition seeks to annul the decision2 dated September 27, 2007 and
resolution3 dated November 5, 2008 of the Commission on Audit, which disallowed the payment of retainer
fees to the law firm of Laguesma Magsalin Consulta and Gastardo for legal services rendered to Clark
Development Corporation.4 chanRoble svirtualLawlibrary

Sometime in 2001, officers of Clark Development Corporation, 5 a government-owned and controlled

corporation, approached the law firm of Laguesma Magsalin Consulta and Gastardo for its possible
assistance in handling the corporations labor cases. 6 chanRoblesvirtualLa wlibrary

Clark Development Corporation, through its legal officers and after the law firms acquiescence, sought
from the Office of the Government Corporate Counsel [OGCC] its approval for the engagement of
[Laguesma Magsalin Consulta and Gastardo] as external counsel.7 chanRoble svirtualLawlibrary

On December 4, 2001, the Office of the Government Corporate Counsel denied the request. 8 Clark
Development Corporation then filed a request for reconsideration. 9 chanRoblesvirtualLa wlibrary

On May 20, 2002, the Office of the Government Corporate Counsel, through Government Corporate Counsel
Amado D. Valdez (Government Corporate Counsel Valdez), reconsidered the request and approved the
engagement of Laguesma Magsalin Consulta and Gastardo.10 It also furnished Clark Development
Corporation a copy of a pro-forma retainership contract11 containing the suggested terms and conditions of
the retainership.12 It instructed Clark Development Corporation to submit a copy of the contract to the
Office of the Government Corporate Counsel after all the parties concerned have signed it. 13 chanRoble svirtualLawlibrary

In the meantime, Laguesma Magsalin Consulta and Gastardo commenced rendering legal services to Clark
Development Corporation. At this point, Clark Development Corporation had yet to secure the authorization
and clearance from the Office of the Government Corporate Counsel or the concurrence of the Commission
on Audit of the retainership contract. According to the law firm, Clark Development Corporations officers
assured the law firm that it was in the process of securing the approval of the Commission on Audit. 14 chanRoble svirtualLawlibrary

On June 28, 2002, Clark Development Corporation, through its Board of Directors, approved Laguesma
Magsalin Consulta and Gastardos engagement as private counsel. 15 In 2003, it also approved the
assignment of additional labor cases to the law firm. 16 chanRoble svirtualLawlibrary

On July 13, 2005, Clark Development Corporation requested the Commission on Audit for concurrence of the
retainership contract it executed with Laguesma Magsalin Consulta and Gastardo.17 According to the law
firm, it was only at this point when Clark Development Corporation informed them that the Commission on
Audit required the clearance and approval of the Office of the Government Corporate Counsel before it could
approve the release of Clark Development Corporations funds to settle the legal fees due to the law
firm.18
chanRoblesvirtualLa wlibrary

On August 5, 2005, State Auditor IV Elvira G. Punzalan informed Clark Development Corporation that its
request for clearance could not be acted upon until the Office of the Government Corporate Counsel
approves the retainership contract with finality.19 chanRoblesvirtualLa wlibrary

On August 10, 2005, Clark Development Corporation sent a letter-request to the Office of the Government
Corporate Counsel for the final approval of the retainership contract, in compliance with the Commission on
Audits requirements.20 chanRoble svirtualLawlibrary

On December 22, 2005, Government Corporate Counsel Agnes VST Devanadera (Government Corporate
Counsel Devanadera) denied Clark Development Corporations request for approval on the ground that the
pro-forma retainership contract given to them was not based on the premise that the monthly retainers fee
and concomitant charges are reasonable and could pass in audit by COA.21 She found that Clark
Development Corporation adopted instead the law firms proposals concerning the payment of a retainers
fee on a per case basis without informing the Office of the Government Corporate Counsel. She, however,
ruled that the law firm was entitled to payment under the principle of quantum meruit and subject to Clark
Development Corporation Boards approval and the usual government auditing rules and regulations. 22 chanRoble svirtualLawlibrary

On December 27, 2005, Clark Development Corporation relayed Government Corporate Counsel
Devanaderas letter to the Commissions Audit Team Leader, highlighting the portion on the approval of
payment to Laguesma Magsalin Consulta and Gastardo on the basis of quantum meruit.23 chanRoblesvirtualLa wlibrary

On November 9, 2006, the Commission on Audits Office of the General Counsel, Legal and Adjudication
Sector issued a Third Indorsement24 denying Clark Development Corporations request for clearance, citing
its failure to secure a prior written concurrence of the Commission on Audit and the approval with finality of
the Office of the Government Corporate Counsel.25 It also stated that its request for concurrence was made
three (3) years after engaging the legal services of the law firm. 26
chanRoblesvirtualLa wlibrary

On December 4, 2006, Laguesma Magsalin Consulta and Gastardo appealed the Third Indorsement to the
Commission on Audit. On December 12, 2006, Clark Development Corporation also filed a motion for
reconsideration.27chanRoble svirtualLawlibrary

On September 27, 2007, the Commission on Audit rendered the assailed decision denying the appeal and
motion for reconsideration. It ruled that Clark Development Corporation violated Commission on Audit
Circular No. 98-002 dated June 9, 1998 and Office of the President Memorandum Circular No. 9 dated
August 27, 1998 when it engaged the legal services of Laguesma Magsalin Consulta and Gastardo without
the final approval and written concurrence of the Commission on Audit. 28 It also ruled that it was not the
governments responsibility to pay the legal fees already incurred by Clark Development Corporation, but
rather by the government officials who violated the regulations on the matter.29 chanRoblesvirtualLa wlibrary

Clark Development Corporation and Laguesma Magsalin Consulta and Gastardo separately filed motions for
reconsideration,30 which the Commission on Audit denied in the assailed resolution dated November 5,
2008. The resolution also disallowed the payment of legal fees to the law firm on the basis of quantum
meruit since the Commission on Audit Circular No. 86-255 mandates that the engagement of private counsel
without prior approval shall be a personal liability of the officials concerned.31 chanRoble svirtualLawlibrary

Laguesma Magsalin Consulta and Gastardo filed this petition for certiorari on December 19, 2008. 32
Respondents, through the Office of the Solicitor General, filed their comment 33 dated May 7, 2009. The
reply34 was filed on September 1, 2009.

The primordial issue to be resolved by this court is whether the Commission on Audit erred in disallowing the
payment of the legal fees to Laguesma Magsalin Consulta and Gastardo as Clark Development Corporations
private counsel.

To resolve this issue, however, several procedural and substantive issues must first be addressed:

Procedural:

1. Whether the petition was filed on time; and

2. Whether petitioner is the real party-in-interest.

Substantive:

1. Whether the Commission on Audit erred in denying Clark Development Corporations request for
clearance in engaging petitioner as private counsel;

2. Whether the Commission on Audit correctly cited Polloso v. Gangan35 and PHIVIDEC Industrial
Authority v. Capitol Steel Corporation36 in support of its denial; and

3. Whether the Commission on Audit erred in ruling that petitioner should not be paid on the basis
of quantum meruit and that any payment for its legal services should be the personal liability of
Clark Development Corporations officials.

Petitioner argues that Polloso and PHIVIDEC are not applicable to the circumstances at hand because in both
cases, the government agency concerned had failed to secure the approval of both the Office of the
Government Corporate Counsel and the Commission on Audit. 37 Petitioner asserts that it was able to secure
authorization from the Office of the Government Corporate Counsel prior to rendering services to Clark
Development Corporation for all but two (2) of the labor cases assigned to it. 38 It argues that the May 20,
2002 letter from Government Corporate Counsel Valdez was tantamount to a grant of authorization since it
granted Clark Development Corporations request for reconsideration. 39 chanRoblesvirtualLa wlibrary

In their comment,40 respondents argue that petitioner is not a real party-in-interest to the case. 41 They
argue that it is Clark Development Corporation, and not petitioner, who is a real party-in-interest since the
subject of the assailed decision was the denial of the corporations request for clearance. 42 chanRoblesvirtualLa wlibrary

Respondents also allege that it was only on July 13, 2005, or three (3) years after the hiring of petitioner,
when Clark Development Corporation requested the Commission on Audits concurrence of the retainership
contract between Clark Development Corporation and petitioner.43 They argue that the retainership contract
was not approved with finality by the Office of the Government Corporate Counsel. 44
Further, Polloso and PHIVIDEC are applicable to this case since both cases involve the indispensability of
[the] prior written concurrence of both [the Office of the Government Corporate Counsel] and the
[Commission on Audit] before any [government-owned and controlled corporation] can hire an external
counsel.45 chanRoble svirtualLawlibrary

In its reply,46 petitioner argues that it is a real party-in-interest since it rendered its services to [Clark
Development Corporation], which ultimately redounded to the benefit of the Republic 47 and that it deserves
to be paid what is its due as a matter of right.48 Petitioner also reiterates its argument
that Polloso and PHIVIDEC are not applicable to this case since the factual antecedents are not the
same.49chanRoble svirtualLawlibrary

The petition is denied.

The petition was filed out of time

Petitioner states that it filed this petition under Rule XI, Section 1 of the 1997 Revised Rules of Procedure of
the Commission on Audit.50 The rule states: chanroble svirtuallawlibrary

RULE XI
JUDICIAL REVIEW

SECTION 1. Petition for Certiorari. Any decision, order or resolution of the Commission may be brought to
the Supreme Court on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof
in the manner provided by law, the Rules of Court 51 and these Rules.

This rule is based on Article IX-A, Section 7 of the Constitution, which states: chanroblesvirtuallawlibrary

Section 7. Each Commission shall decide by a majority vote of all its Members, any case or matter brought
before it within sixty days from the date of its submission for decision or resolution. A case or matter is
deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum
required by the rules of the Commission or by the Commission itself. Unless otherwise provided by this
Constitution or by law, any decision, order, or ruling of each Commission may be brought to the Supreme
Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof. (Emphasis
supplied)

Ordinarily, a petition for certiorari under Rule 65 of the Rules of Court has a reglementary period of 60 days
from receipt of denial of the motion for reconsideration. The Constitution, however, specifies that the
reglementary period for assailing the decisions, orders, or rulings of the constitutional commissions is thirty
(30) days from receipt of the decision, order, or ruling. For this reason, a separate rule was enacted in the
Rules of Court.

Rule 64 of the Rules of Civil Procedure provides the guidelines for filing a petition for certiorari under this
rule. Section 2 of the rule specifies that [a] judgment or final order or resolution of the Commission on
Elections and the Commission on Audit may be brought by the aggrieved party to the Supreme Court on
certiorari under Rule 65, except as hereinafter provided.

The phrase, except as hereinafter provided, specifies that any petition for certiorari filed under this rule
follows the same requisites as those of Rule 65 except for certain provisions found only in Rule 64. One of
these provisions concerns the time given to file the petition.

Section 3 of Rule 64 of the Rules of Civil Procedure states: chanroblesvirtuallawlibrary

SEC. 3. Time to file petition. The petition shall be filed within thirty (30) days from notice of the
judgment or final order or resolution sought to be reviewed. The filing of a motion for new trial or
reconsideration of said judgment or final order or resolution, if allowed under the procedural rules of the
Commission concerned, shall interrupt the period herein fixed. If the motion is denied, the aggrieved party
may file the petition within the remaining period, but which shall not be less than five (5) days in any
event, reckoned from notice of denial. (Emphasis supplied)

Under this rule, a party may file a petition for review on certiorari within 30 days from notice of the
judgment being assailed. The reglementary period includes the time taken to file the motion for
reconsideration and is only interrupted once the motion is filed. If the motion is denied, the party may file
the petition only within the period remaining from the notice of judgment.

The difference between Rule 64 and Rule 65 has already been exhaustively discussed by this court in Pates
v. Commission on Elections:52 chanRoblesvirtualLa wlibrary

Rule 64, however, cannot simply be equated to Rule 65 even if it expressly refers to the latter rule. They
exist as separate rules for substantive reasons as discussed below. Procedurally, the most patent difference
between the two i.e., the exception that Section 2, Rule 64 refers to is Section 3 which provides for a
special period for the filing of petitions for certiorari from decisions or rulings of the COMELEC en banc. The
period is 30 days from notice of the decision or ruling (instead of the 60 days that Rule 65 provides), with
the intervening period used for the filing of any motion for reconsideration deductible from the originally-
granted 30 days (instead of the fresh period of 60 days that Rule 65 provides).53 (Emphasis supplied)

In this case, petitioner received the decision of the Commission on Audit on October 16, 2007. 54 It filed a
motion for reconsideration on November 6, 2007,55 or after 21 days. It received notice of the denial of its
motion on November 20, 2008.56 The receipt of this notice gave petitioner nine (9) days, or until November
29, 2008, to file a petition for certiorari. Since November 29, 2008 fell on a Saturday, petitioner could still
have filed on the next working day, or on December 1, 2008. It, however, filed the petition on December
19, 2008,57 which was well beyond the reglementary period.

This petition could have been dismissed outright for being filed out of time. This court, however, recognizes
that there are certain exceptions that allow a relaxation of the procedural rules. In Barranco v. Commission
on the Settlement of Land Problems:58 chanRoble svirtualLawlibrary

The Court is fully aware that procedural rules are not to be belittled or simply disregarded for these
prescribed procedures insure an orderly and speedy administration of justice. However, it is equally true
that litigation is not merely a game of technicalities. Law and jurisprudence grant to courts the prerogative
to relax compliance with procedural rules of even the most mandatory character, mindful of the duty to
reconcile both the need to put an end to litigation speedily and the parties right to an opportunity to be
heard.

In Sanchez v. Court of Appeals, the Court restated the reasons which may provide justification for a court to
suspend a strict adherence to procedural rules, such as: (a) matters of life, liberty, honor or property[,] (b)
the existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely
attributable to the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any
showing that the review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly
prejudiced thereby.59 (Emphasis supplied)

Considering that the issues in this case involve the right of petitioner to receive due compensation on the
one hand and respondents duty to prevent the unauthorized disbursement of public funds on the other, a
relaxation of the technical rules is in order.

Petitioner is a real party-in-interest

Respondents argue that it is Clark Development Corporation, and not petitioner, which is the real party-in-
interest since the subject of the assailed decision and resolution was the corporations request for clearance
to pay petitioner its legal fees. Respondents argue that any interest petitioner may have in the case is
merely incidental.60 This is erroneous.

Petitioner is a real party-in-interest, as defined in Rule 3, Section 2 of the 1997 Rules of Civil Procedure: chanroblesvirtuallawlibrary

SEC. 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or
these Rules, every action must be prosecuted or defended in the name of the real party in interest.

Petitioner does not have a mere incidental interest,61 and its interest is not merely consequential.62
Respondents mistakenly narrow down the issue to whether they erred in denying Clark Development
Corporations request for clearance of the retainership contract. 63 In doing so, they argue that the interested
parties are limited only to Clark Development Corporation and respondents. 64 chanRoble svirtualLawlibrary

The issue at hand, however, relates to the assailed decision and resolution of respondents, which disallowed
the disbursement of public funds for the payment of legal fees to petitioner.

Respondents admit that legal services were performed by petitioner for which payment of legal fees are
due. The question that they resolved was which among the parties, the government, or the officials of Clark
Development Corporation were liable.

The net effect of upholding or setting aside the assailed Commission on Audit rulings would be to either
disallow or allow the payment of legal fees to petitioner. Petitioner, therefore, stands to either be benefited
or injured by the suit, or entitled to its avails. It is a real party-in-interest.

Clark Development Corporations Board of Directors, on the other hand, should have been impleaded in this
case as a necessary party.

A necessary party is defined as one who is not indispensable but who ought to be joined as a party if
complete relief is to be accorded as to those already parties, or for a complete determination or settlement
of the claim subject of the action.65chanRoblesvirtualLa wlibrary

The actions of the Board of Directors precipitated the issues in this case. If the petition is granted, then the
officers are relieved of liability to petitioner. If the rulings of respondents are upheld, then it is the Board of
Directors that will be liable to petitioner. Any relief in this case would be incomplete without joining the
members of the Board of Directors.

The Commission on Audit did not

commit grave abuse of discretion in
denying the corporations request for
clearance to engage the services of
petitioner as private counsel

Book IV, Title III, Chapter 3, Section 10 of the Administrative Code of 1987 provides: chanroblesvirtuallawlibrary
Section. 10. Office of the Government Corporate Counsel. - The Office of the Government Corporate Counsel
(OGCC) shall act as the principal law office of all government-owned or controlled corporations, their
subsidiaries, other corporate off-springs and government acquired asset corporations and shall exercise
control and supervision over all legal departments or divisions maintained separately and such powers and
functions as are now or may hereafter be provided by law. In the exercise of such control and supervision,
the Government Corporate Counsel shall promulgate rules and regulations to effectively implement the
objectives of this Office. (Emphasis supplied)

The Office of the Government Corporate Counsel is mandated by law to provide legal services to
government-owned and controlled corporations such as Clark Development Corporation.

As a general rule, government-owned and controlled corporations are not allowed to engage the legal
services of private counsels. However, both respondent and the Office of the President have made issuances
that had the effect of providing certain exceptions to the general rule, thus:chanroble svirtuallawlibrary

Book IV, Title III, Chapter 3, Section 10 of Executive Order No. 292, otherwise known as the Administrative
Code of 1987, provides that the Office of the Government Corporate Counsel (OGCC) shall act as the
principal law office of all GOCCs, their subsidiaries, other corporate off-springs, and government acquired
asset corporations. Administrative Order No. 130, issued by the Office of the President on 19 May 1994,
delineating the functions and responsibilities of the OSG and the OGCC, clarifies that all legal matters
pertaining to GOCCs, their subsidiaries, other corporate off[-]springs, and government acquired asset
corporations shall be exclusively referred to and handled by the OGCC, unless their respective charters
expressly name the OSG as their legal counsel. Nonetheless, the GOCC may hire the services of a private
counsel in exceptional cases with the written conformity and acquiescence of the Government Corporate
Counsel, and with the concurrence of the Commission on Audit (COA).66 (Emphasis supplied)

The rules and regulations concerning the engagement of private counsel by government-owned and
controlled corporations is currently provided for by Commission on Audit Circular No. 86-255 67 dated April 2,
1986, and Office of the President Memorandum Circular No. 9 dated August 27, 1998.

Commission on Audit Circular No. 86-255, dated April 2, 1986, as amended, states: chanroble svirtuallawlibrary

Accordingly and pursuant to this Commission's exclusive authority to promulgate accounting and auditing
rules and regulations, including for the prevention and disallowance of irregular, unnecessary, excessive,
extravagant and/or unconscionable expenditure or uses of public funds and property (Sec. 2-2, Art. IX-D,
Constitutional, public funds shall not be utilized for payment of the services of a private legal counsel or law
firm to represent government agencies and instrumentalities, including government-owned or controlled
corporations and local government units in court or to render legal services for them. In the event that such
legal services cannot be avoided or is justified under extraordinary or exceptional circumstances for
government agencies and instrumentalities, including government-owned or controlled corporations, the
written conformity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the
case maybe, and the written concurrence of the Commission on Audit shall first be secured before the hiring
or employment of a private lawyer or law firm. (Emphasis supplied)

The Office of the President Memorandum Circular No. 9, on the other hand, states: chanroblesvirtuallawlibrary

SECTION 1. All legal matters pertaining to government-owned or controlled corporations, their subsidiaries,
other corporate off-springs and government acquired asset corporations (GOCCs) shall be exclusively
referred to and handled by the Office of the Government Corporate Counsel (OGCC).

GOCCs are thereby enjoined from referring their cases and legal matters to the Office of the Solicitor
General unless their respective charters expressly name the Office of the Solicitor General as their legal
counsel.

However, under exceptional circumstances, the OSG may represent the GOCC concerned, Provided: This is
authorized by the President; or by the head of the office concerned and approved by the President.

SECTION 2. All pending cases of GOCCs being handled by the OSG, and all pending requests for opinions
and contract reviews which have been referred by said GOCCs to the OSG, may be retained and acted upon
by the OSG; but the latter shall inform the OGCC of the said pending cases, requests for opinions and
contract reviews, if any, to ensure proper monitoring and coordination.

SECTION 3. GOCCs are likewise enjoined to refrain from hiring private lawyers or law firms to handle their
cases and legal matters. But in exceptional cases, the written conformity and acquiescence of the Solicitor
General or the Government Corporate Counsel, as the case may be, and the written concurrence of the
Commission on Audit shall first be secured before the hiring or employment of a private lawyer or law
firm. (Emphasis supplied)

According to these rules and regulations, the general rule is that government-owned and controlled
corporations must refer all their legal matters to the Office of the Government Corporate Counsel. It is only
in extraordinary or exceptional circumstances or exceptional cases that it is allowed to engage the
services of private counsels.

Petitioner claims that it was hired by Clark Development Corporation due to numerous labor cases which
need urgent attention[.]68 In its request for reconsideration to the Office of the Government Corporate
Counsel, Clark Development Corporation claims that it was obtaining the services of petitioner acting
through Atty. Ariston Vicente R. Quirolgico, known expert in the field of labor law and relations.69 chanRoblesvirtualLa wlibrary

The labor cases petitioner handled were not of a complicated or peculiar nature that could justify the hiring
of a known expert in the field. On the contrary, these appear to be standard labor cases of illegal dismissal
and collective bargaining agreement negotiations,70 which Clark Development Corporations lawyers or the
Office of the Government Corporate Counsel could have handled.

Commission on Audit Circular No. 86-255 dated April 2, 1986 and Office of the President Memorandum
Circular No. 9 also require that before the hiring or employment of private counsel, the written conformity
and acquiescence of the [Government Corporate Counsel] and the written concurrence of the Commission on
Audit shall first be secured. . . .

In this case, Clark Development Corporation had failed to secure the final approval of the Office of the
Government Corporate Counsel and the written concurrence of respondent before it engaged the services of
petitioner.

When Government Corporate Counsel Valdez granted Clark Development Corporations request for
reconsideration, the approval was merely conditional and subject to its submission of the signed pro-forma
retainership contract provided for by the Office of the Government Corporate Counsel. In the letter dated
May 20, 2002, Government Corporate Counsel Valdez added: chanroble svirtuallawlibrary

For the better protection of the interests of CDC, we hereby furnish you with a Pro-Forma Retainership
Agreement containing the suggested terms and conditions of the retainership, which you may adopt for this
purpose.

After the subject Retainership Agreement shall have been executed between your corporation and the
retained counsel, please submit a copy thereof to our Office for our information and file. 71

Upon Clark Development Corporations failure to submit the retainership contract, the Office of the
Government Corporate Counsel denied Clark Development Corporations request for final approval of its legal
services contracts, including that of petitioner. In the letter72 dated December 22, 2005, Government
Corporate Counsel Devanadera informed Clark Development Corporation that: chanroblesvirtuallawlibrary

[i]t appears, though, that our Pro-Forma Retainership Agreement was not followed and CDC merely adopted
the proposal of aforesaid retainers/consultants. Also, this Office was never informed that CDC agreed on
payment of retainers fee on a per case basis. 73

In view of Clark Development Corporations failure to secure the final conformity and acquiescence of the
Office of the Government Corporate Counsel, its retainership contract with petitioner could not have been
considered as authorized.

The concurrence of respondents was also not secured by Clark Development Corporation prior to hiring
petitioners services. The corporation only wrote a letter-request to respondents three (3) years after it had
engaged the services of petitioner as private legal counsel.

The cases that the private counsel was asked to manage are not beyond the range of reasonable
competence expected from the Office of the Government Corporate Counsel. Certainly, the issues do not
appear to be complex or of substantial national interest to merit additional counsel. Even so, there was no
showing that the delays in the approval also were due to circumstances not attributable to petitioner nor
was there a clear showing that there was unreasonable delay in any action of the approving authorities.
Rather, it appears that the procurement of the proper authorizations was mere afterthought.

Respondents, therefore, correctly denied Clark Development Corporations request for clearance in the
disbursement of funds to pay petitioner its standing legal fees.

Polloso v. Gangan and PHIVIDEC

Industrial Authority v. Capitol Steel
Corporation apply in this case

Petitioner argues that Polloso does not apply since the denial was based on the absence of a written
authority from the OSG or OGCC[.]74 It also argues that the PHIVIDEC case does not apply since the case
[was] represented by a private lawyer whose engagement was secured without the conformity of the
OGCC and the COA.75 Petitioner argues that, unlike these cases, Clark Development Corporation was able
to obtain the written conformity of the Office of the Government Corporate Counsel to engage petitioners
services.

In Polloso, the legal services of Atty. Benemerito A. Satorre were engaged by the National Power Corporation
for its Leyte-Cebu and Leyte-Luzon Interconnection Projects. 76 The Commission on Audit disallowed the
payment of services to Atty. Satore on the basis of quantum meruit, citing Commission on Audit Circular No.
86-255 dated April 2, 1986.77 In upholding the disallowance by the Commission on Audit, this court
ruled:chanroble svirtuallawlibrary

It bears repeating that the purpose of the circular is to curtail the unauthorized and unnecessary
disbursement of public funds to private lawyers for services rendered to the government. This is in line with
the Commission on Audits constitutional mandate to promulgate accounting and auditing rules and
regulations including those for the prevention and disallowance of irregular, unnecessary, excessive,
extravagant or unconscionable expenditures or uses of government funds and properties. Having determined
the intent of the law, this Court has the imperative duty to give it effect even if the policy goes beyond the
letter or words of the statute.

Hence, as the hiring of Atty. Satorre was clearly done without the prior conformity and acquiescence of the
Office of the Solicitor General or the Government Corporate Counsel, as well as the written concurrence of
the Commission on Audit, the payment of fees to Atty. Satorre was correctly disallowed in audit by the
COA.78

In PHIVIDEC, this court found the engagement by PHIVIDEC Industrial Authority, a government-owned and
controlled corporation, of Atty. Cesilo Adazas legal services to be unauthorized for the corporations failure
to secure the written conformity of the Office of the Government Corporate Counsel and the Commission on
Audit.79 Citing the provisions of Office of the President Memorandum Circular No. 9, this court ruled that: chanroblesvirtuallawlibrary

[i]t was only with the enactment of Memorandum Circular No. 9 in 1998 that an exception to the general
prohibition was allowed for the first time since P.D. No. 1415 was enacted in 1978. However, indispensable
conditions precedent were imposed before any hiring of private lawyer could be effected. First, private
counsel can be hired only in exceptional cases. Second, the GOCC must first secure the written conformity
and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be, before
any hiring can be done. And third, the written concurrence of the COA must also be secured prior to the
hiring.80 (Emphasis supplied)

The same ruling was likewise reiterated in Vargas v. Ignes,81 wherein this court stated: chanroble svirtuallawlibrary

Under Section 10, Chapter 3, Title III, Book IV of the Administrative Code of 1987, it is the OGCC which
shall act as the principal law office of all GOCCs. And Section 3 of Memorandum Circular No. 9, issued by
President Estrada on August 27, 1998, enjoins GOCCs to refrain from hiring private lawyers or law firms to
handle their cases and legal matters. But the same Section 3 provides that in exceptional cases, the written
conformity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may
be, and the written concurrence of the COA shall first be secured before the hiring or employment of a
private lawyer or law firm. In Phividec Industrial Authority v. Capitol Steel Corporation, we listed three (3)
indispensable conditions before a GOCC can hire a private lawyer: (1) private counsel can only be hired in
exceptional cases; (2) the GOCC must first secure the written conformity and acquiescence of the Solicitor
General or the Government Corporate Counsel, as the case may be; and (3) the written concurrence of the
COA must also be secured.82 (Emphasis supplied)

On the basis of Polloso and PHIVIDEC, petitioners arguments are unmeritorious.

Petitioner fails to understand that Commission on Audit Circular No. 86-255 requires not only the conformity
and acquiescence of the Office of the Solicitor General or Office of the Government Corporate Counsel but
also the written conformity of the Commission on Audit. The hiring of private counsel becomes
unauthorized if it is only the Office of the Government Corporate Counsel that gives its conformity. The rules
and jurisprudence expressly require that the government-owned and controlled corporation concerned must
also secure the concurrence of respondents.

It is also erroneous for petitioner to assume that it had the conformity and acquiescence of the Office of the
Government Corporate Counsel since Government Corporate Counsel Valdezs approval of Clark
Development Corporations request was merely conditional on its submission of the retainership contract.
Clark Development Corporations failure to submit the retainership contract resulted in its failure to secure a
final approval.

The Commission on Audit did not

commit grave abuse of discretion in
disallowing the payment to petitioner
on the basis of quantum meruit

When Government Corporate Counsel Devanadera denied Clark Development Corporations request for final
approval of its legal services contracts, she, however, allowed the payment to petitioner for legal services
already rendered on a quantum meruit basis.83 chanRoble svirtualLawlibrary

Respondents disallowed Clark Development Corporation from paying petitioner on this basis as the contract
between them was executed in clear violation of the provisions of COA Circular No. 86-255 and OP
Memorandum Circular No. 9[.]84 It then ruled that the retainership contract between them should be
deemed a private contract for which the officials of Clark Development Corporation should be liable, citing
Section 10385 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the
Philippines.86
chanRoble svirtualLawlibrary

In National Power Corporation v. Heirs of Macabangkit Sangkay, quantum meruit:87 chanRoble svirtualLawlibrary

literally meaning as much as he deserves is used as basis for determining an attorneys professional
fees in the absence of an express agreement. The recovery of attorneys fees on the basis of quantum
meruit is a device that prevents an unscrupulous client from running away with the fruits of the legal
services of counsel without paying for it and also avoids unjust enrichment on the part of the attorney
himself. An attorney must show that he is entitled to reasonable compensation for the effort in pursuing the
clients cause, taking into account certain factors in fixing the amount of legal fees. 88
Here, the Board of Directors, acting on behalf of Clark Development Corporation, contracted the services of
petitioner, without the necessary prior approvals required by the rules and regulations for the hiring of
private counsel. Their actions were clearly unauthorized.

It was, thus, erroneous for Government Corporate Counsel Devanadera to bind Clark Development
Corporation, a government entity, to pay petitioner on a quantum meruit basis for legal services, which were
neither approved nor authorized by the government. Even granting that petitioner ought to be paid for
services rendered, it should not be the governments liability, but that of the officials who engaged the
services of petitioner without the required authorization.

The amendment of Commission on Audit

Circular No. 86-255 by Commission on
Audit Circular No. 98-002 created a gap
in the law

Commission on Audit Circular No. 86-255 dated April 2, 1986 previously stated that: chanroble svirtuallawlibrary

[a]ccordingly, it is hereby directed that, henceforth, the payment out of public funds of retainer fees to
private law practitioners who are so hired or employed without the prior written conformity and
acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be, as well as
the written concurrence of the Commission on Audit shall be disallowed in audit and the same shall be a
personal liability of the officials concerned. (Emphasis supplied)

However, when Commission on Audit Circular No. 86-255 was amended by Commission on Audit Circular No.
98-002 on June 9, 1998, it failed to retain the liability of the officials who violated the circular.89 This gap in
the law paves the way for both the erring officials of the government-owned and controlled corporations to
disclaim any responsibility for the liabilities owing to private practitioners.

It cannot be denied that petitioner rendered legal services to Clark Development Corporation. It assisted
the corporation in litigating numerous labor cases 90 during the period of its engagement. It would be an
injustice for petitioner not to be compensated for services rendered even if the engagement was
unauthorized.

The fulfillment of the requirements of the rules and regulations was Clark Development Corporations
responsibility, not petitioners. The Board of Directors, by its irresponsible actions, unjustly procured for
themselves petitioners legal services without compensation.

To fill the gap created by the amendment of Commission on Audit Circular No. 86-255, respondents correctly
held that the officials of Clark Development Corporation who violated the provisions of Circular No. 98-002
and Circular No. 9 should be personally liable to pay the legal fees of petitioner, as previously provided for in
Circular No. 86-255.

This finds support in Section 103 of the Government Auditing Code of the Philippines, 91 which states: chanroblesvirtuallawlibrary

SEC. 103. General liability for unlawful expenditures. Expenditures of government funds or uses of
government property in violation of law or regulations shall be a personal liability of the official or employee
found to be directly responsible therefor.

This court has also previously held in Gumaru v. Quirino State College92 that: chanroble svirtuallawlibrary

the fee of the lawyer who rendered legal service to the government in lieu of the OSG or the OGCC is the
personal liability of the government official who hired his services without the prior written conformity of the
OSG or the OGCC, as the case may be.93

WHEREFORE, the petition is DISMISSED without prejudice to petitioner filing another action against the
proper parties.

SO ORDERED.
 EN BANC

A.C. No. 10573, January 13, 2015

FERNANDO W. CHU, Complainant, v. ATTY. JOSE C. GUICO, JR., Respondents.

DECISION

PER CURIAM:

Fernando W. Chu invokes the Courts disciplinary authority in resolving this disbarment complaint against his
former lawyer, respondent Atty. Jose C. Guico, Jr., whom he has accused of gross misconduct.

Antecedents

Chu retained Atty. Guico as counsel to handle the labor disputes involving his company, CVC San Lorenzo
Ruiz Corporation (CVC).1 Atty. Guicos legal services included handling a complaint for illegal dismissal
brought against CVC (NLRC Case No. RAB-III-08-9261-05 entitled Kilusan ng Manggagawang Makabayan
(KMM) Katipunan CVC San Lorenzo Ruiz Chapter, Ladivico Adriano, et al. v. CVC San Lorenzo Ruiz Corp. and
Fernando Chu).2 On September 7, 2006, Labor Arbiter Herminio V. Suelo rendered a decision adverse to
CVC.3 Atty. Guico filed a timely appeal in behalf of CVC.

According to Chu, during a Christmas party held on December 5, 2006 at Atty. Guicos residence in
Commonwealth, Quezon City, Atty. Guico asked him to prepare a substantial amount of money to be given
to the NLRC Commissioner handling the appeal to insure a favorable decision. 4 On June 10, 2007, Chu called
Atty. Guico to inform him that he had raised P300,000.00 for the purpose. Atty. Guico told him to proceed to
his office at No. 48 Times Street, Quezon City, and to give the money to his assistant, Reynaldo (Nardo)
Manahan. Chu complied, and later on called Atty. Guico to confirm that he had delivered the money to
Nardo. Subsequently, Atty. Guico instructed Chu to meet him on July 5, 2007 at the UCC Coffee Shop on T.
Morato Street, Quezon City. At the UCC Coffee Shop, Atty. Guico handed Chu a copy of an alleged draft
decision of the NLRC in favor of CVC.5 The draft decision6 was printed on the dorsal portion of used paper
apparently emanating from the office of Atty. Guico. On that occasion, the latter told Chu to raise another
P300,000.00 to encourage the NLRC Commissioner to issue the decision. But Chu could only produce
P280,000.00, which he brought to Atty. Guicos office on July 10, 2007 accompanied by his son, Christopher
Chu, and one Bonifacio Elipane. However, it was Nardo who received the amount without issuing any
receipt.7
chanroble svirtuallawlibrary

Chu followed up on the status of the CVC case with Atty. Guico in December 2007. However, Atty. Guico
referred him to Nardo who in turn said that he would only know the status after Christmas. On January 11,
2008, Chu again called Nardo, who invited him to lunch at the Ihaw Balot Plaza in Quezon City. Once there,
Chu asked Nardo if the NLRC Commissioner had accepted the money, but Nardo replied in the negative and
simply told Chu to wait. Nardo assured that the money was still with Atty. Guico who would return it should
the NLRC Commissioner not accept it.8 chanroble svirtuallawlibrary

On January 19, 2009, the NLRC promulgated a decision adverse to CVC. 9 Chu confronted Atty. Guico, who in
turn referred Chu to Nardo for the filing of a motion for reconsideration. After the denial of the motion for
reconsideration, Atty. Guico caused the preparation and filing of an appeal in the Court of Appeals. Finally,
Chu terminated Atty. Guico as legal counsel on May 25, 2009. 10 chanroblesvirtuallawlibrary

In his position paper,11 Atty. Guico described the administrative complaint as replete with lies and
inconsistencies, and insisted that the charge was only meant for harassment. He denied demanding and
receiving money from Chu, a denial that Nardo corroborated with his own affidavit. 12 He further denied
handing to Chu a draft decision printed on used paper emanating from his office, surmising that the used
paper must have been among those freely lying around in his office that had been pilfered by Chus
witnesses in the criminal complaint he had handled for Chu.13 chanroble svirtuallawlibrary

Findings and Recommendation of the

IBP Board of Governors

IBP Commissioner Cecilio A.C. Villanueva found that Atty. Guico had violated Rules 1.01 and 1.02, Canon I
of the Code of Professional Responsibility for demanding and receiving P580,000.00 from Chu; and
recommended the disbarment of Atty. Guico in view of his act of extortion and misrepresentation that
caused dishonor to and contempt for the legal profession. 14 chanroblesvirtuallawlibrary

On February 12, 2013, the IBP Board of Governors adopted the findings of IBP Commissioner Villanueva in
its Resolution No. XX-2013-87,15 but modified the recommended penalty of disbarment to three years
suspension, viz.: chanRoble svirtualLawlibrary

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner in the above-entitled
case, herein made part of this Resolution as Annex A, and finding the recommendation fully supported by
the evidence on record and the applicable laws and rules and considering Respondents violation of Canon 1,
Rules 1.01 and 1.02 of the Code of Professional Responsibility, Atty. Jose C. Guico, Jr. is
hereby SUSPENDED from the practice of law for three (3) years with Warning that a repetition of the
same or similar act shall be dealt with more severely and Ordered to Return the amount of Five Hundred
Eighty Thousand (P580,000.00) Pesos with legal interest within thirty (30) days from receipt of notice. cralawre d

Atty. Guico moved for reconsideration,16 but the IBP Board of Governors denied his motion for
reconsideration on March 23, 2014 in Resolution No. XXI-2014-173.17 chanroblesvirtuallawlibrary

Neither of the parties brought a petition for review vis--vis Resolution No. XX-2013-87 and Resolution No.
XXI-2014-173.

Issue

Did Atty. Guico violate the Lawyers Oath and Rules 1.01 and 1.02, Canon I of the Code of Professional
Responsibility for demanding and receiving P580,000.00 from Chu to guarantee a favorable decision from
the NLRC?

Ruling of the Court

In disbarment proceedings, the burden of proof rests on the complainant to establish respondent attorneys
liability by clear, convincing and satisfactory evidence. Indeed, this Court has consistently required clearly
preponderant evidence to justify the imposition of either disbarment or suspension as penalty.18 chanroblesvirtuallawlibrary

Chu submitted the affidavits of his witnesses,19 and presented the draft decision that Atty. Guico had
represented to him as having come from the NLRC. Chu credibly insisted that the draft decision was printed
on the dorsal portion of used paper emanating from Atty. Guicos office,20 inferring that Atty. Guico
commonly printed documents on used paper in his law office. Despite denying being the source of the draft
decision presented by Chu, Atty. Guicos participation in the generation of the draft decision was undeniable.
For one, Atty. Guico impliedly admitted Chus insistence by conceding that the used paper had originated
from his office, claiming only that used paper was just scattered around his office.21 In that context, Atty.

Guicos attempt to downplay the sourcing of used paper from his office was futile because he did not
expressly belie the forthright statement of Chu. All that Atty. Guico stated by way of deflecting the
imputation was that the used paper containing the draft decision could have been easily taken from his
office by Chus witnesses in a criminal case that he had handled for Chu, 22 pointing out that everything in his
office, except the filing cabinets and his desk, was open to the public xxx and just anybody has access to
everything found therein.23 In our view, therefore, Atty. Guico made the implied admission because he was
fully aware that the used paper had unquestionably come from his office.

The testimony of Chu, and the circumstances narrated by Chu and his witnesses, especially the act of Atty.
Guico of presenting to Chu the supposed draft decision that had been printed on used paper emanating from
Atty. Guicos office, sufficed to confirm that he had committed the imputed gross misconduct by demanding
and receiving P580,000.00 from Chu to obtain a favorable decision. Atty. Guico offered only his general
denial of the allegations in his defense, but such denial did not overcome the affirmative testimony of Chu.
We cannot but conclude that the production of the draft decision by Atty. Guico was intended to motivate
Chu to raise money to ensure the chances of obtaining the favorable result in the labor case. As such, Chu
discharged his burden of proof as the complainant to establish his complaint against Atty. Guico. In this
administrative case, a fact may be deemed established if it is supported by substantial evidence, or that
amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. 24 chanroblesvirtuallawlibrary

What is the condign penalty for Atty. Guico?

In taking the Lawyers Oath, Atty. Guico bound himself to: chanRoble svirtualLawlibrary

x x x maintain allegiance to the Republic of the Philippines; x x x support its Constitution and obey the laws
as well as the legal orders of the duly constituted authorities therein; x x x do no falsehood, nor consent to
the doing of any in court; x x x delay no man for money or malice x x x.

The Code of Professional Responsibility echoes the Lawyers Oath, to wit: chanRoble svirtualLawlibrary

CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law
and for legal processes.

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Rule 1.02 A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening
confidence in the legal system.

The sworn obligation to respect the law and the legal processes under the Lawyers Oath and the Code of
Professional Responsibility is a continuing condition for every lawyer to retain membership in the Legal
Profession. To discharge the obligation, every lawyer should not render any service or give advice to any
client that would involve defiance of the very laws that he was bound to uphold and obey,25 for he or she
was always bound as an attorney to be law abiding, and thus to uphold the integrity and dignity of the Legal
Profession.26 Verily, he or she must act and comport himself or herself in such a manner that would promote
public confidence in the integrity of the Legal Profession.27 Any lawyer found to violate this obligation forfeits
his or her privilege to continue such membership in the legal profession.

Atty. Guico willingly and wittingly violated the law in appearing to counsel Chu to raise the large sums of
money in order to obtain a favorable decision in the labor case. He thus violated the law against bribery and
corruption. He compounded his violation by actually using said illegality as his means of obtaining a huge
sum from the client that he soon appropriated for his own personal interest. His acts constituted gross
dishonesty and deceit, and were a flagrant breach of his ethical commitments under the Lawyers Oath not
to delay any man for money or malice; and under Rule 1.01 of the Code of Professional Responsibility that
forbade him from engaging in unlawful, dishonest, immoral or deceitful conduct. His deviant conduct eroded
the faith of the people in him as an individual lawyer as well as in the Legal Profession as a whole. In doing
so, he ceased to be a servant of the law.

Atty. Guico committed grave misconduct and disgraced the Legal Profession. Grave misconduct is improper
or wrong conduct, the transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies a wrongful intent and not mere error of
judgment.28 There is no question that any gross misconduct by an attorney in his professional or private
capacity renders him unfit to manage the affairs of others, and is a ground for the imposition of the penalty
of suspension or disbarment, because good moral character is an essential qualification for the admission of
an attorney and for the continuance of such privilege. 29
chanroblesvirtuallawlibrary

Accordingly, the recommendation of the IBP Board of Governors to suspend him from the practice of law for
three (3) years would be too soft a penalty. Instead, he should be disbarred, 30 for he exhibited his
unworthiness of retaining his membership in the legal profession. As the Court has reminded in Samonte v.
Abellana:31chanroble svirtuallawlibrary

Disciplinary proceedings against lawyers are designed to ensure that whoever is granted the
privilege to practice law in this country should remain faithful to the Lawyers Oath. Only thereby
can lawyers preserve their fitness to remain as members of the Law Profession. Any resort to
falsehood or deception, including adopting artifices to cover up ones misdeeds committed
against clients and the rest of the trusting public, evinces an unworthiness to continue enjoying
the privilege to practice law and highlights the unfitness to remain a member of the Law
Profession. It deserves for the guilty lawyer stern disciplinary sanctions.

Lastly, the recommendation of the IBP Board of Governors that Atty. Guico be ordered to return the amount
of P580,000.00 to Chu is well-taken. That amount was exacted by Atty. Guico from Chu in the guise of
serving the latters interest as the client. Although the purpose for the amount was unlawful, it would be
unjust not to require Atty. Guico to fully account for and to return the money to Chu. It did not matter that
this proceeding is administrative in character, for, as the Court has pointed out in Bayonla v. Reyes:32
chanroble svirtuallawlibrary

Although the Court renders this decision in an administrative proceeding primarily to exact the ethical
responsibility on a member of the Philippine Bar, the Courts silence about the respondent lawyers legal
obligation to restitute the complainant will be both unfair and inequitable. No victim of gross ethical
misconduct concerning the clients funds or property should be required to still litigate in another proceeding
what the administrative proceeding has already established as the respondents liability. x x x

ACCORDINGLY, the Court FINDS and DECLARES respondent ATTY. JOSE S. GUICO, JR. GUILTY of the
violation of the Lawyers Oath, and Rules 1.01 and 1.02, Canon I of the Code of Professional Responsibility,
and DISBARS him from membership in the Integrated Bar of the Philippines. His name is ORDERED
STRICKEN from the Roll of Attorneys.

Let copies of this Decision be furnished to the Office of the Bar Confidant, to be appended to Atty. Guicos
personal record as an attorney; to the Integrated Bar of the Philippines; and to all courts and quasi-judicial
offices in the country for their information and guidance.

SO ORDERED.
A.C. No. 5067 June 29, 2015

CORAZON M. DALUPAN, Complainant,

vs.
ATTY. GLENN C. GACOTT , Respondent.
1

DECISION

VILLARAMA, JR., J.:

Before us is a petition for review under Rule 139-B, Section 12 (c) of the Rules of Court assailing
Resolution No. XVII-2007 dated March 17, 2007 and Resolution No. XIX-20100544 dated October
2 3

8, 2010 of the Board of Governors of the Integrated Bar of the Philippines (IBP) which adopted and
approved the Report and Recommendation dated December 12, 2006 of the Investigating
4

Commissioner of the Commission on Bar Discipline of the IBP. Although the IBP Board of Governors
dismissed the complaint for disbarment filed against the respondent, it ordered the latter to return the
payment of the attorneys fee to the complainant in the amount of P5,000. This order to return the
attorneys fee is subject of the present petition.

The salient facts of the case follow:

In her affidavit-complaint dated April 20, 1999, the complainant claimed that she was a defendant in
5

a criminal case for grave slander pending before the Municipal Trial Court (MTC) of Puerto Princesa
City, Palawan. Meanwhile, her son, Wilmer Dalupan, was also a defendant in a separate criminal
case for grave slander and malicious mischief pending before the same court. In order to represent
the complainant and her son, the complainant engaged the legal services of the respondent who
then charged an acceptance fee of P10,000.

On August 20, 1996, the complainant paid the respondent P5,000 as initial payment for his
acceptance fee.

On August 27, 1996, the complainant requested the respondent to draft a Motion to Reduce Bail
Bond. However, the respondent allegedly denied the request and claimed that it was beyond the
scope of his retainer services. Thus, the complainant alleged that she caused a certain Rolly
Calbento to draft the same which was however signed by the respondent.

On January 31, 1997, the complainant paid the respondent the remaining balance of P5,000 for his
acceptance fee. When the complainant asked for an Official Receipt from the respondent, the latter
refused saying that there was no need for the issuance of a receipt. On that same day, the
complainant also paid the respondent P500 for his appearance fee in the preliminary conference and
arraignment which occurred on the same day.

Thereafter, the complainant alleged that the respondent neglected his duties as counsel and failed to
attend any of the hearings before the MTC. In view of the respondents repeated absences before
the MTC, Judge Jocelyn S. Dilig issued an Order which appointed a counsel de oficio to represent
the complainant.

Aggrieved, the complainant filed the instant complaint for disbarment against the respondent.

On the other hand, in his comment , the respondent denied all the allegations of the complainant.
6

The respondent allege that the complainant approached him and represented herself as an indigent
party in the following cases for which she sought to engage the legal services of the respondent: (1)
Criminal Case No. 12586, People of the Philippines v. Corazon Dalupan, et al. for Grave Slander, (2)
Criminal Case No. 12585, People of the Philippines v. Wilmer Dalupan for Malicious Mischief, (3) I.S.
No. 96-1104, Custodio Family v. Cesar Dalupan, et al. for Frustrated Murder, (4) I.S. No. 97-54,
Dalupan Family v. Romulo Custodio, et al. for Physical Injuries, and (5) I.S. No. 9760 Dalupan
Family v. Romulo Custodio for Frustrated Murder. The respondent agreed to represent the
complainant in the aforementioned cases subject to the payment of an acceptance fee of P5,000 per
case and an appearance fee of P500 for each court appearance.

On August 20, 1996, the complainant paid the respondent P5,000 for his acceptance fee.
On August 27, 1996, the respondent filed a Motion for Reduction of Bail in favor of the complainant
before the MTC of Puerto Princesa City. On that same day, the complainant proceeded to the law
office of the respondent and demanded that the latter negotiate with the MTC judge to ensure the
grant of the Motion of Bail. When the respondent refused the demand of the complainant, the latter
replied at the top of her voice: "Binabayaran kita, bakit hindi mo ginagawa ang gusto ko?" The
respondent answered her with, "Hindi po lahat ng gusto ninyo ay gagawin ko, sa tama lamang po
tayo, abogado po ninyo ako, hindi ako fixer." This irked the complainant who then made verbal
7

threats that she will replace the respondent with a certain Atty. Roland Pay who held office nearby.
However, when the MTC of Puerto Princesa City eventually ruled in favor of the complainant and
granted the motion, the latter revoked her threat that she will replace the respondent.

On August 19, 1997, the MTC of Puerto Princesa City issued a Notice of Hearing to the complainant
and her son Wilmer Dalupan which ordered them to appear before the court on September 9, 1997
in connection with their criminal cases pending therein. However, the respondent failed to attend the
scheduled hearing as he allegedly failed to receive a copy of the Notice of Hearing. Thus, in his
written explanation dated October 7, 1997, the respondent attributed his failure to appear before the
MTC to the inefficiency of the process server of the said court.

On October 10, 1997, the complainant told the respondent that she was terminating the latters
services on the ground of loss of trust and confidence. Furthermore, the complainant also told the
respondent that she engaged the services of Atty. Roland Pay to replace the respondent. As a result,
on October 30, 1997, the complainant withdrew all her records from the law office of the respondent.

On January 29, 1998, the MTC of Puerto Princesa City issued an Order which relieved the
respondent of any responsibility in Criminal Case Nos. 12585 and 12586:

Acting on what the counsel of record of all the accused in the above-entitled cases call
"Compliance", where obvious on the face of which is his desire to withdraw as Counsel, and it
appearing that said intention to withdraw is not only with the full conformity of all the accused but at
their own initiative, Atty. Glenn Gacott is hereby relieved of any responsibility in the further
prosecution of the above-captioned cases. 8

In view of the above Order, the respondent argued that he was not guilty of abandonment or neglect
of duty because it was the complainant who willfully terminated his services even without fault or
negligence on his part.

We referred this case to the IBP for its investigation, report, and recommendation.

On December 12, 2006, Investigating Commissioner Wilfredo E.J.E Reyes recommended the
dismissal of the complaint for disbarment against the respondent. At the same time, he also
recommended that the respondent return the payment of the attorneys fee to the complainant in the
amount of P5,000. 9

The Investigating Commissioner opined that the respondent cannot be held liable for abandonment
or neglect of duty because it was the complainant who discharged the respondent for loss of trust
and confidence. This was confirmed by the act of the complainant in withdrawing all her records from
the law office of the respondent. Furthermore, the Investigating Commissioner said that absent
evidence showing that the respondent committed abandonment or neglect of duty, the presumption
of regularity should prevail in favor of the respondent.

Although there was no evidence to support the claim of the complainant that she paid the
respondent the remaining balance of P5,000 as acceptance fee and an appearance fee of P500 on
January 31, 1997, the Investigating Commissioner gave credence to an Official Receipt dated
August 20, 1996 which proved that the complainant indeed paid the respondent an amount
of P5,000. However, the Investigating Commissioner found that the respondent did not perform any
substantial legal work on behalf of the complainant. For this reason, and in the interest of justice, the
Investigating Commissioner recommended that the respondent return the amount of P5,000 to the
complainant.

On March 17, 2007, the IBP Board of Governors passed Resolution No. XVII-2007-115 which
adopted and approved in toto the Report and Recommendation of the Investigating Commissioner.
On October 8, 2010, the IBP Board of Governors passed Resolution No. XIX-2010-544 which denied
the Motion for Reconsideration dated July 27, 2007 filed by the respondent.

Hence, the present petition which raises the sole issue of whether the respondent should return the
10

payment of the attorneys fee to the complainant in the amount of P5,000.

Firstly, the respondent argued that when the MTC of Puerto Princesa City issued the Order dated
January 29, 1998 which relieved the respondent of any responsibility in Criminal Case Nos. 12585
and 12586, the trial court did not require the respondent to reimburse the payment of the attorneys
fee to the complainant. Thus, the IBP Board of Governors exceeded its authority in ordering the
respondent to return such fees to the complainant.

Secondly, the respondent argued that a plain reading of the Official Receipt dated August 20, 1996
would reveal that the parties intended the payment of P5,000 to serve as acceptance fee which is
different from attorneys fee. According to the respondent, the acceptance fee corresponds to the
opportunity cost incurred by the lawyer for not representing other potential clients due to a conflict of
interest with the present client. Thus, the payment of acceptance fee to the lawyer does not depend
on the latters performance of legal services.

Since the complainant failed to file any comment on the petition for review, we proceed to resolve
the sole issue raised, and rule in favor of the respondent.

We find that the respondent did not commit any fault or negligence in the performance of his
obligations under the retainer agreement which was wilfully terminated by the complainant on the
ground of loss of trust and confidence. As held by the Investigating Commissioner, the evidence on
record shows that the respondent is not liable for abandonment or neglect of duty.

However, we disagree with the conclusion of the Investigating Commissioner that the respondent
should return the payment of the attorneys fee to the complainant in the amount of P5,000.

Firstly, the Investigating Commissioner seriously erred in referring to the amount to be returned by
the respondent as attorneys fee. Relevantly, we agree with the respondent that there is a distinction
between attorneys fee and acceptance fee.

It is well-settled that attorneys fee is understood both in its ordinary and extraordinary concept. In
11

its ordinary sense, attorneys fee refers to the reasonable compensation paid to a lawyer by his client
for legal services rendered. Meanwhile, in its extraordinary concept, attorneys fee is awarded by the
court to the successful litigant to be paid by the losing party as indemnity for damages. In the
12

present case, the Investigating Commissioner referred to the attorneys fee in its ordinary concept.

On the other hand, acceptance fee refers to the charge imposed by the lawyer for merely accepting
the case. This is because once the lawyer agrees to represent a client, he is precluded from
handling cases of the opposing party based on the prohibition on conflict of interest. Thus, the incurs
an opportunity cost by merely accepting the case of the client which is therefore indemnified by the
payment of acceptance fee. Since the acceptance fee only seeks to compensate the lawyer for the
lost opportunity, it is not measured by the nature and extent of the legal services rendered.

In the present case, based on a simple reading of the Official Receipt dated August 20, 1996, the
parties clearly intended the payment of P5,000 to serve as acceptance fee of the respondent, and
not attorneys fee. Moreover, both parties expressly claimed that they intended such payment as the
acceptance fee of the respondent. Absent any other evidence showing a contrary intention of the
parties, we find that the Investigating Commissioner gravely erred in referring to the amount to be
returned by the respondent as attorneys fee.

Since the Investigating Commissioner made an erroneous reference to attorneys fee, he therefore
mistakenly concluded that the respondent should return the same as he did not perform any
substantial legal work on behalf of the complainant. As previously mentioned, the payment of
acceptance fee does not depend on the nature and extent of the legal services rendered.

Secondly, the respondent did not commit any fault or negligence which would entail the return of the
acceptance fee.
Once a lawyer receives the acceptance fee for his legal services, he is expected to serve his client
with competence, and to attend to his clients cause with diligence, care and devotion. In Carino v.
13

Atty. De Los Reyes, the respondent lawyer who failed to file a complaint-affidavit before the
14

prosecutors office, returned the P10,000 acceptance fee paid to him. Moreover, he was admonished
by the Court to be more careful in the performance of his duty to his clients. Meanwhile, in Voluntad-
Ramirez v. Baustista, we ordered the respondent lawyer to return the P14,000 acceptance fee
15

because he did nothing to advance his clients cause during the six-month period that he was
engaged as counsel.

In the present case, the complainant alleged that she requested the respondent to draft a Motion to
Reduce Bail Bond which was denied by the latter. She also claimed that the respondent failed to
1wphi1

attend any of the hearing before the MTC. Thus, the complainant filed the present complaint for
disbarment on the ground of abandonment or neglect of duty. On the other hand, the respondent
denied the allegation that he failed to draft the Motion to Reduce Bail Bond and submitted a copy of
the MTC Order dated August 28, 1996 granting the motion to reduce bail. He also justified his
16

failure to attend the hearings before the MTC to the failure of the process server to provide him with
a Notice of Hearing.

Other than her bare allegations, the complainant failed to present any evidence to support her claim
that the respondent committed abandonment or neglect of duty. Thus, we are constrained to affirm
the factual findings of the Investigating Commissioner that the presumption of regularity should
prevail in favor of the respondent. Absent any fault or negligence on the part of the respondent, we
see no legal basis for the order of the Investigating Commissioner to return the attorneys fee
(acceptance fee) of P5,000.

WHEREFORE, premises considered, the petition is hereby GRANTED. Resolution No. XVII-2007-
115 and Resolution No. XIX-2010-544 of the IBP Board of Governors insofar as they ordered the
respondent to return the attorneys fee (acceptance fee) to the complainant in the amount of Five
Thousand Pesos (P5,000) are REVERSED and SET ASIDE.

SO ORDERED.
G.R. No. 173188 January 15, 2014

THE CONJUGAL PARTNERSHIP OF THE SPOUSES VICENTE CADAVEDO AND BENITA

ARCOY-CADAVEDO (both deceased), substituted by their heirs, namely: HERMINA,
PASTORA, Heirs of FRUCTUOSA, Heirs of RAQUEL, EVANGELINE, VICENTE, JR., and
ARMANDO, all surnamed CADAVEDO, Petitioners,
vs.
VICTORINO (VIC) T. LACAYA, married to Rosa Legados, Respondents.

DECISION

BRION, J.:

We solve in this Rule 45 petition for review on certiorari the challenge to the October 11, 2005
1

decision and the May 9, 2006 resolution of the Court of Appeals (CA) inPetitioners, CA-G.R. CV No.
2 3

56948. The CA reversed and set aside the September 17, 1996 decision of the Regional Trial Court
4

(RTC), Branch 10, of Dipolog City in Civil Case No. 4038, granting in part the complaint for recovery
of possession of property filed by the petitioners, the Conjugal Partnership of the Spouses Vicente
Cadavedo and Benita Arcoy-Cadavedo against Atty. Victorino (Vic) T. Lacaya, married to Rosa
Legados (collectively, the respondents).

The Factual Antecedents

The Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo (collectively, the spouses Cadavedo)
acquired a homestead grant over a 230,765-square meter parcel of land known as Lot 5415 (subject
lot) located in Gumay, Pian, Zamboanga del Norte. They were issued Homestead Patent No. V-
15414 on March 13, 1953andOriginal Certificate of Title No. P-376 on July 2, 1953.On April30, 1955,
the spouses Cadavedo sold the subject lot to the spouses Vicente Ames and Martha Fernandez (the
spouses Ames) Transfer Certificate of Title (TCT) No. T-4792 was subsequently issued in the name
of the spouses Ames.

The present controversy arose when the spouses Cadavedo filed an action before the RTC(then
5

Court of First Instance) of Zamboanga City against the spouses Ames for sum of money and/or
voiding of contract of sale of homestead after the latter failed to pay the balance of the purchase
price. The spouses Cadavedo initially engaged the services of Atty. Rosendo Bandal who, for health
reasons, later withdrew from the case; he was substituted by Atty. Lacaya.

On February 24, 1969, Atty. Lacaya amended the complaint to assert the nullity of the sale and the
issuance of TCT No. T-4792 in the names of the spouses Ames as gross violation of the public land
law. The amended complaint stated that the spouses Cadavedo hired Atty. Lacaya on a contingency
fee basis. The contingency fee stipulation specifically reads:

10. That due to the above circumstances, the plaintiffs were forced to hire a lawyer on contingent
basis and if they become the prevailing parties in the case at bar, they will pay the sum of P2,000.00
for attorneys fees.
6

In a decision dated February 1, 1972, the RTC upheld the sale of the subject lot to the spouses
Ames. The spouses Cadavedo, thru Atty. Lacaya, appealed the case to the CA.

On September 18, 1975, and while the appeal before the CAin Civil Case No. 1721was pending, the
spouses Ames sold the subject lot to their children. The spouses Ames TCT No. T-4792 was
subsequently cancelled and TCT No. T-25984was issued in their childrens names. On October 11,
1976, the spouses Ames mortgaged the subject lot with the Development Bank of the Philippines
(DBP) in the names of their children.

On August 13, 1980, the CA issued itsdecision in Civil Case No. 1721,reversing the decision of the
RTC and declaring the deed of sale, transfer of rights, claims and interest to the spouses Ames null
and void ab initio. It directed the spouses Cadavedo to return the initial payment and ordered the
Register of Deeds to cancel the spouses Ames TCT No. T-4792 and to reissue another title in the
name of the spouses Cadavedo. The case eventually reached this Court via the spouses Ames
petition for review on certiorari which this Court dismissed for lack of merit.
Meanwhile, the spouses Ames defaulted in their obligation with the DBP. Thus, the DBP caused the
publication of a notice of foreclosure sale of the subject lot as covered by TCT No. T-25984(under
the name of the spouses Ames children). Atty. Lacaya immediately informed the spouses Cadavedo
of the foreclosure sale and filed an Affidavit of Third Party Claim with the Office of the Provincial
Sheriff on September 14, 1981.

With the finality of the judgment in Civil Case No. 1721,Atty. Lacaya filed on September 21, 1981 a
motion for the issuance of a writ of execution.

On September 23, 1981,and pending the RTCs resolution of the motion for the issuance of a writ of
execution, the spouses Ames filed a complaint before the RTC against the spouses Cadavedo for
7

Quieting of Title or Enforcement of Civil Rights due Planters in Good Faith with prayer for Preliminary
Injunction. The spouses Cadavedo, thru Atty. Lacaya, filed a motion to dismiss on the ground of res
judicata and to cancel TCT No. T-25984 (under the name of the spouses Ames children).

On October 16, 1981, the RTC granted the motion for the issuance of a writ of execution in Civil
Case No. 1721,andthe spouses Cadavedo were placed in possession of the subject lot on October
24, 1981. Atty. Lacaya asked for one-half of the subject lot as attorneys fees. He caused the
subdivision of the subject lot into two equal portions, based on area, and selected the more valuable
and productive half for himself; and assigned the other half to the spouses Cadavedo.

Unsatisfied with the division, Vicente and his sons-in-law entered the portion assigned to the
respondents and ejected them. The latter responded by filing a counter-suit for forcible entry before
the Municipal Trial Court (MTC); the ejectment case was docketed as Civil Case No. 215. This
incident occurred while Civil Case No. 3352was pending.

On May 13, 1982, Vicente andAtty. Lacaya entered into an amicable settlement (compromise
agreement) in Civil Case No. 215 (the ejectment case), re-adjusting the area and portion obtained
8

by each. Atty. Lacaya acquired 10.5383 hectares pursuant to the agreement. The MTC approved the
compromise agreementin a decision dated June 10, 1982.

Meanwhile, on May 21, 1982, the spouses Cadavedo filed before the RTC an action against the
DBP for Injunction; it was docketed as Civil Case No. 3443 (Cadavedo v. DBP).The RTC
subsequently denied the petition, prompting the spouses Cadavedo to elevate the case to the CAvia
a petition for certiorari. The CA dismissed the petition in its decision of January 31, 1984.

The records do not clearly disclose the proceedings subsequent to the CA decision in Civil Case No.
3443. However, on August 18, 1988, TCT No. 41051was issued in the name of the spouses
Cadavedo concerning the subject lot.

On August 9, 1988, the spouses Cadavedo filed before the RTC an action against the respondents,
9

assailing the MTC-approved compromise agreement. The case was docketed as Civil Case No.
4038 and is the root of the present case. The spouses Cadavedo prayed, among others, that the
respondents be ejected from their one-half portion of the subject lot; that they be ordered to render
an accounting of the produce of this one-half portion from 1981;and that the RTC fix the attorneys
fees on a quantum meruit basis, with due consideration of the expenses that Atty. Lacaya incurred
while handling the civil cases.

During the pendency of Civil Case No. 4038, the spouses Cadavedo executed a Deed of Partition of
Estate in favor of their eight children. Consequently, TCT No. 41051 was cancelled and TCT No.
41690 was issued in the names of the latter. The records are not clear on the proceedings and
status of Civil Case No. 3352.

The Ruling of the RTC

In the September 17, 1996 decision in Civil Case No. 4038, the RTC declared the contingent fee of
10

10.5383 hectares as excessive and unconscionable. The RTC reduced the land area to 5.2691
hectares and ordered the respondents to vacate and restore the remaining 5.2692hectares to the
spouses Cadavedo.

The RTC noted that, as stated in the amended complaint filed by Atty. Lacaya, the agreed attorneys
fee on contingent basis was P2,000.00. Nevertheless, the RTC also pointed out that the parties
novated this agreement when they executed the compromise agreement in Civil Case No. 215
(ejectment case), thereby giving Atty. Lacaya one-half of the subject lot. The RTC added that
Vicentes decision to give Atty. Lacaya one-half of the subject lot, sans approval of Benita, was a
valid act of administration and binds the conjugal partnership. The RTC reasoned out that the
disposition redounded to the benefit of the conjugal partnership as it was done precisely to
remunerate Atty. Lacaya for his services to recover the property itself.

These considerations notwithstanding, the RTC considered the one-half portion of the subject lot, as
Atty. Lacayas contingent fee,excessive, unreasonable and unconscionable. The RTC was convinced
that the issues involved in Civil Case No. 1721were not sufficiently difficult and complicated to
command such an excessive award; neither did it require Atty. Lacaya to devote much of his time or
skill, or to perform extensive research.

Finally, the RTC deemed the respondents possession, prior to the judgment, of the excess portion of
their share in the subject lot to be in good faith. The respondents were thus entitled to receive its
fruits.

On the spouses Cadavedos motion for reconsideration, the RTC modified the decision in its
resolution dated December 27, 1996. The RTC ordered the respondents to account for and deliver
11

the produce and income, valued at 7,500.00 per annum, of the 5.2692hectares that the RTC
ordered the spouses Amesto restore to the spouses Cadavedo, from October 10, 1988 until final
restoration of the premises.

The respondents appealed the case before the CA.

The Ruling of the CA

In its decision dated October 11, 2005, the CA reversed and set aside the RTCs September 17,
12

1996 decision and maintained the partition and distribution of the subject lot under the compromise
agreement. In so ruling, the CA noted the following facts: (1) Atty. Lacaya served as the spouses
Cadavedos counsel from 1969 until 1988,when the latter filed the present case against Atty. Lacaya;
(2) during the nineteen (19) years of their attorney-client relationship, Atty. Lacaya represented the
spouses Cadavedo in three civil cases Civil Case No. 1721, Civil Case No. 3352, and Civil Case
No. 3443; (3) the first civil case lasted for twelve years and even reached this Court, the second civil
case lasted for seven years, while the third civil case lasted for six years and went all the way to the
CA;(4) the spouses Cadavedo and Atty. Lacaya entered into a compromise agreement concerning
the division of the subject lot where Atty. Lacaya ultimately agreed to acquire a smaller portion; (5)
the MTC approved the compromise agreement; (6) Atty. Lacaya defrayed all of the litigation
expenses in Civil Case No. 1721; and (7) the spouses Cadavedo expressly recognized that Atty.
Lacaya served them in several cases.

Considering these established facts and consistent with Canon 20.01 of the Code of Professional
Responsibility (enumerating the factors that should guide the determination of the lawyers fees), the
CA ruled that the time spent and the extent of the services Atty. Lacaya rendered for the spouses
Cadavedo in the three cases, the probability of him losing other employment resulting from his
engagement, the benefits resulting to the spouses Cadavedo, and the contingency of his fees
justified the compromise agreement and rendered the agreed fee under the compromise agreement
reasonable.

The Petition

In the present petition, the petitioners essentially argue that the CA erred in: (1) granting the
attorneys fee consisting of one-half or 10.5383 hectares of the subject lot to Atty. Lacaya, instead of
confirming the agreed contingent attorneys fees of 2,000.00; (2) not holding the respondents
accountable for the produce, harvests and income of the 10.5383-hectare portion (that they obtained
from the spouses Cadavedo) from 1988 up to the present; and (3) upholding the validity of the
purported oral contract between the spouses Cadavedo and Atty. Lacaya when it was champertous
and dealt with property then still subject of Civil Case No. 1721.
13

The petitioners argue that stipulations on a lawyers compensation for professional services,
especially those contained in the pleadings filed in courts, control the amount of the attorneys fees
to which the lawyer shall be entitled and should prevail over oral agreements. In this case, the
spouses Cadavedo and Atty. Lacaya agreed that the latters contingent attorneys fee was P2,000.00
in cash, not one-half of the subject lot. This agreement was clearly stipulated in the amended
complaint filed in Civil Case No. 1721. Thus, Atty. Lacaya is bound by the expressly stipulated fee
and cannot insist on unilaterally changing its terms without violating their contract.

The petitioners add that the one-half portion of the subject lot as Atty. Lacayas contingent attorneys
fee is excessive and unreasonable. They highlight the RTCs observations and argue that the issues
involved in Civil Case No. 1721, pursuant to which the alleged contingent fee of one-half of the
subject lot was agreed by the parties, were not novel and did not involve difficult questions of law;
neither did the case require much of Atty. Lacayas time, skill and effort in research. They point out
that the two subsequent civil cases should not be considered in determining the reasonable
contingent fee to which Atty. Lacaya should be entitled for his services in Civil Case No. 1721,as
those cases had not yet been instituted at that time. Thus, these cases should not be considered in
fixing the attorneys fees. The petitioners also claim that the spouses Cadavedo concluded separate
agreements on the expenses and costs for each of these subsequent cases, and that Atty. Lacaya
did not even record any attorneys lien in the spouses Cadavedos TCT covering the subject lot.

The petitioners further direct the Courts attention to the fact that Atty. Lacaya,in taking over the case
from Atty. Bandal, agreed to defray all of the litigation expenses in exchange for one-half of the
subject lot should they win the case. They insist that this agreement is a champertous contract that is
contrary to public policy, prohibited by law for violation of the fiduciary relationship between a lawyer
and a client.

Finally, the petitioners maintain that the compromise agreement in Civil Case No. 215 (ejectment
case) did not novate their original stipulated agreement on the attorneys fees. They reason that Civil
Case No. 215 did not decide the issue of attorneys fees between the spouses Cadavedo and Atty.
Lacaya for the latters services in Civil Case No. 1721.

The Case for the Respondents

In their defense, the respondents counter that the attorneys fee stipulated in the amended
14

complaint was not the agreed fee of Atty. Lacaya for his legal services. They argue that the
questioned stipulation for attorneys fees was in the nature of a penalty that, if granted, would inure
to the spouses Cadavedo and not to Atty. Lacaya.

The respondents point out that: (1) both Vicente and Atty. Lacaya caused the survey and subdivision
of the subject lot immediately after the spouses Cadavedo reacquired its possession with the RTCs
approval of their motion for execution of judgment in Civil Case No. 1721; (2) Vicente expressly
ratified and confirmed the agreement on the contingent attorneys fee consisting of one-half of the
subject lot; (3) the MTC in Civil Case No. 215 (ejectment case) approved the compromise
agreement; (4) Vicente is the legally designated administrator of the conjugal partnership, hence the
compromise agreement ratifying the transfer bound the partnership and could not have been
invalidated by the absence of Benitas acquiescence; and (5) the compromise agreement merely
inscribed and ratified the earlier oral agreement between the spouses Cadavedo and Atty. Lacaya
which is not contrary to law, morals, good customs, public order and public policy.

While the case is pending before this Court, Atty. Lacaya died. He was substituted by his wife -Rosa
15

-and their children Victoriano D.L. Lacaya, Jr., Rosevic Lacaya-Ocampo, Reymar L. Lacaya,
Marcelito L. Lacaya, Raymundito L. Lacaya, Laila Lacaya-Matabalan, Marivic Lacaya-Barba, Rosalie
L. Lacaya and Ma. Vic-Vic Lacaya-Camaongay. 16

The Courts Ruling

We resolve to GRANT the petition.

The subject lot was the core of four successive and overlapping cases prior to the present
controversy. In three of these cases, Atty. Lacaya stood as the spouses Cadavedos counsel. For
ease of discussion, we summarize these cases (including the dates and proceedings pertinent to
each) as follows:

Civil Case No. 1721 Cadavedo v. Ames (Sum of money and/or voiding of contract of sale of
homestead), filed on January 10, 1967. The writ of execution was granted on October 16, 1981.

Civil Case No. 3352 Ames v. Cadavedo (Quieting of Title and/or Enforcement of Civil Rights due
Planters in Good Faith with Application for Preliminary injunction), filed on September 23, 1981.
Civil Case No. 3443 Cadavedo v. DBP (Action for Injunction with Preliminary Injunction), filed on
May 21, 1982.

Civil Case No. 215 Atty. Lacaya v. Vicente Cadavedo, et. al. (Ejectment Case), filed between the
latter part of 1981 and early part of 1982. The parties executed the compromise agreement on May
13, 1982.

Civil Case No. 4038 petitioners v. respondents (the present case).

The agreement on attorneys fee

consisting of one-half of the subject
lot is void; the petitioners are entitled
to recover possession

The core issue for our resolution is whether the attorneys fee consisting of one-half of the subject lot
is valid and reasonable, and binds the petitioners. We rule in the NEGATIVE for the reasons
discussed below.

A. The written agreement providing for

a contingent fee of P2,000.00 should prevail
over the oral agreement providing for one-
half of the subject lot

The spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of P2,000.00 and not, as
asserted by the latter, one-half of the subject lot. The stipulation contained in the amended complaint
filed by Atty. Lacaya clearly stated that the spouses Cadavedo hired the former on a contingency
basis; the Spouses Cadavedo undertook to pay their lawyer P2,000.00 as attorneys fees should the
case be decided in their favor.

Contrary to the respondents contention, this stipulation is not in the nature of a penalty that the court
would award the winning party, to be paid by the losing party. The stipulation is a representation to
the court concerning the agreement between the spouses Cadavedo and Atty. Lacaya, on the latters
compensation for his services in the case; it is not the attorneys fees in the nature of damages
which the former prays from the court as an incident to the main action.

At this point, we highlight that as observed by both the RTC and the CA and agreed as well by both
parties, the alleged contingent fee agreement consisting of one-half of the subject lot was not
reduced to writing prior to or, at most, at the start of Atty. Lacayas engagement as the spouses
Cadavedos counsel in Civil Case No. 1721.An agreement between the lawyer and his client,
providing for the formers compensation, is subject to the ordinary rules governing contracts in
general. As the rules stand, controversies involving written and oral agreements on attorneys fees
shall be resolved in favor of the former. Hence, the contingency fee of P2,000.00 stipulated in the
17

amended complaint prevails over the alleged oral contingency fee agreement of one-half of the
subject lot.

B. The contingent fee agreement between

the spouses Cadavedo and Atty. Lacaya,
awarding the latter one-half of the subject
lot, is champertous

Granting arguendo that the spouses Cadavedo and Atty. Lacaya indeed entered into an oral
contingent fee agreement securing to the latter one-half of the subject lot, the agreement is
nevertheless void.

In their account, the respondents insist that Atty. Lacaya agreed to represent the spouses Cadavedo
in Civil Case No. 1721 and assumed the litigation expenses, without providing for reimbursement, in
exchange for a contingency fee consisting of one-half of the subject lot. This agreement is
champertous and is contrary to public policy. 18

Champerty, along with maintenance (of which champerty is an aggravated form), is a common law
doctrine that traces its origin to the medieval period. The doctrine of maintenance was directed
19

"against wanton and in officious intermeddling in the disputes of others in which the intermeddler has
no interest whatever, and where the assistance rendered is without justification or
excuse." Champerty, on the other hand, is characterized by "the receipt of a share of the proceeds
20

of the litigation by the intermeddler." Some common law court decisions, however, add a second
21

factor in determining champertous contracts, namely, that the lawyer must also, "at his own expense
maintain, and take all the risks of, the litigation."22

The doctrines of champerty and maintenance were created in response "to medieval practice of
assigning doubtful or fraudulent claims to persons of wealth and influence in the expectation that
such individuals would enjoy greater success in prosecuting those claims in court, in exchange for
which they would receive an entitlement to the spoils of the litigation." "In order to safeguard the
23

administration of justice, instances of champerty and maintenance were made subject to criminal
and tortuous liability and a common law rule was developed, striking down champertous agreements
and contracts of maintenance as being unenforceable on the grounds of public policy." 24

In this jurisdiction, we maintain the rules on champerty, as adopted from American decisions, for
public policy considerations. As matters currently stand, any agreement by a lawyer to "conduct the
25

litigation in his own account, to pay the expenses thereof or to save his client therefrom and to
receive as his fee a portion of the proceeds of the judgment is obnoxious to the law." The rule of the
26

profession that forbids a lawyer from contracting with his client for part of the thing in litigation in
exchange for conducting the case at the lawyers expense is designed to prevent the lawyer from
acquiring an interest between him and his client. To permit these arrangements is to enable the
lawyer to "acquire additional stake in the outcome of the action which might lead him to consider his
own recovery rather than that of his client or to accept a settlement which might take care of his
interest in the verdict to the sacrifice of that of his client in violation of his duty of undivided fidelity to
his clients cause." 27

In Bautista v. Atty. Gonzales, the Court struck down the contingent fee agreement between therein
28

respondent Atty. Ramon A. Gonzales and his client for being contrary to public policy. There, the
Court held that an reimbursement of litigation expenses paid by the former is against public policy,
especially if the lawyer has agreed to carry on the action at his expense in consideration of some
bargain to have a part of the thing in dispute. It violates the fiduciary relationship between the lawyer
and his client.29

In addition to its champertous character, the contingent fee arrangement in this case expressly
transgresses the Canons of Professional Ethics and, impliedly, the Code of Professional
Responsibility. Under Rule 42 of the Canons of Professional Ethics, a lawyer may not properly
30

agree with a client that the lawyer shall pay or beat the expense of litigation. The same reasons
31

discussed above underlie this rule.

C. The attorneys fee consisting of

one-half of the subject lot is excessive
and unconscionable

We likewise strike down the questioned attorneys fee and declare it void for being excessive and
unconscionable. The contingent fee of one-half of the subject lot was allegedly agreed to secure the
1wphi1

services of Atty. Lacaya in Civil Case No. 1721.Plainly, it was intended for only one action as the two
other civil cases had not yet been instituted at that time. While Civil Case No. 1721 took twelve years
to be finally resolved, that period of time, as matters then stood, was not a sufficient reason to justify
a large fee in the absence of any showing that special skills and additional work had been involved.
The issue involved in that case, as observed by the RTC(and with which we agree), was simple and
did not require of Atty. Lacaya extensive skill, effort and research. The issue simply dealt with the
prohibition against the sale of a homestead lot within five years from its acquisition.

That Atty. Lacaya also served as the spouses Cadavedos counsel in the two subsequent cases did
not and could not otherwise justify an attorneys fee of one-half of the subject lot. As assertedby the
petitioners, the spouses Cadavedo and Atty. Lacaya made separate arrangements for the costs and
expenses foreach of these two cases. Thus, the expenses for the two subsequent cases had been
considered and taken cared of Based on these considerations, we therefore find one-half of the
subject lot as attorneys fee excessive and unreasonable.

D. Atty. Lacayas acquisition of

the one-half portion contravenes
Article 1491 (5) of the Civil Code
Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by purchase or assignment, the
property that has been the subject of litigation in which they have taken part by virtue of their
profession. The same proscription is provided under Rule 10 of the Canons of Professional Ethics.
32 33

A thing is in litigation if there is a contest or litigation over it in court or when it is subject of the
judicial action. Following this definition, we find that the subject lot was still in litigation when Atty.
34

Lacaya acquired the disputed one-half portion. We note in this regard the following established facts:
(1)on September 21, 1981, Atty. Lacaya filed a motion for the issuance of a writ of execution in Civil
Case No. 1721; (2) on September 23, 1981, the spouses Ames filed Civil Case No. 3352 against the
spouses Cadavedo; (3)on October 16, 1981, the RTC granted the motion filed for the issuance of a
writ of execution in Civil Case No. 1721 and the spouses Cadavedo took possession of the subject
lot on October 24, 1981; (4) soon after, the subject lot was surveyed and subdivided into two equal
portions, and Atty. Lacaya took possession of one of the subdivided portions; and (5) on May 13,
1982, Vicente and Atty. Lacaya executed the compromise agreement.

From these timelines, whether by virtue of the alleged oral contingent fee agreement or an
agreement subsequently entered into, Atty. Lacaya acquired the disputed one-half portion (which
was after October 24, 1981) while Civil Case No. 3352 and the motion for the issuance of a writ of
execution in Civil Case No. 1721were already pending before the lower courts. Similarly, the
compromise agreement, including the subsequent judicial approval, was effected during the
pendency of Civil Case No. 3352. In all of these, the relationship of a lawyer and a client still existed
between Atty. Lacaya and the spouses Cadavedo.

Thus, whether we consider these transactions the transfer of the disputed one-half portion and the
compromise agreement independently of each other or resulting from one another, we find them to
be prohibited and void by reason of public policy. Under Article 1409 of the Civil Code, contracts
35 36

which are contrary to public policy and those expressly prohibited or declared void by law are
considered in existent and void from the beginning. 37

What did not escape this Courts attention is the CAs failure to note that the transfer violated the
provisions of Article 1491(5) of the Civil Code, although it recognized the concurrence of the transfer
and the execution of the compromise agreement with the pendency of the two civil cases
subsequent to Civil Case No. 1721. In reversing the RTC ruling, the CA gave weight to the
38

compromise agreement and in so doing, found justification in the unproved oral contingent fee
agreement.

While contingent fee agreements are indeed recognized in this jurisdiction as a valid exception to the
prohibitions under Article 1491(5) of the Civil Code, contrary to the CAs position, however, this
39

recognition does not apply to the present case. A contingent fee contract is an agreement in writing
where the fee, often a fixed percentage of what may be recovered in the action, is made to depend
upon the success of the litigation. The payment of the contingent fee is not made during the
40

pendency of the litigation involving the clients property but only after the judgment has been
rendered in the case handled by the lawyer. 41

In the present case, we reiterate that the transfer or assignment of the disputed one-half portion to
Atty. Lacaya took place while the subject lot was still under litigation and the lawyer-client
relationship still existed between him and the spouses Cadavedo. Thus, the general prohibition
provided under Article 1491 of the Civil Code, rather than the exception provided in jurisprudence,
applies. The CA seriously erred in upholding the compromise agreement on the basis of the
unproved oral contingent fee agreement.

Notably, Atty. Lacaya, in undertaking the spouses Cadavedos cause pursuant to the terms of the
alleged oral contingent fee agreement, in effect, became a co-proprietor having an equal, if not
more, stake as the spouses Cadavedo. Again, this is void by reason of public policy; it undermines
the fiduciary relationship between him and his clients. 42

E.The compromise agreement could not

validate the void oral contingent fee
agreement; neither did it supersede the
written contingent fee agreement

The compromise agreement entered into between Vicente and Atty. Lacaya in Civil Case No. 215
(ejectment case) was intended to ratify and confirm Atty. Lacayas acquisition and possession of the
disputed one-half portion which were made in violation of Article 1491 (5) of the Civil Code. As earlier
discussed, such acquisition is void; the compromise agreement, which had for its object a void
transaction, should be void.

A contract whose cause, object or purpose is contrary to law, morals, good customs, public order or
public policy is in existent and void from the beginning. It can never be ratified nor the action or
43 44

defense for the declaration of the in existence of the contract prescribe; and any contract directly
45

resulting from such illegal contract is likewise void and in existent.

46

Consequently, the compromise agreement did not supersede the written contingent fee agreement
providing for attorneys fee of P2,000.00; neither did it preclude the petitioners from questioning its
validity even though Vicente might have knowingly and voluntarily acquiesced thereto and although
the MTC approved it in its June 10, 1982 decision in the ejectment case. The MTC could not have
acquired jurisdiction over the subject matter of the void compromise agreement; its judgment in the
ejectment case could not have attained finality and can thus be attacked at any time. Moreover, an
ejectment case concerns itself only with the issue of possession de facto; it will not preclude the
filing of a separate action for recovery of possession founded on ownership. Hence, contrary to the
CAs position, the petitionersin filing the present action and praying for, among others, the recovery
of possession of the disputed one-half portion and for judicial determination of the reasonable fees
due Atty. Lacaya for his services were not barred by the compromise agreement.

Atty. Lacaya is entitled to receive attorneys fees on a quantum meruit basis

In view of their respective assertions and defenses, the parties, in effect, impliedly set aside any
express stipulation on the attorneys fees, and the petitioners, by express contention, submit the
reasonableness of such fees to the courts discretion. We thus have to fix the attorneys fees on a
quantum meruit basis.

"Quantum meruitmeaning as much as he deservesis used as basis for determining a lawyers

professional fees in the absence of a contract x x x taking into account certain factors in fixing the
amount of legal fees." "Its essential requisite is the acceptance of the benefits by one sought to be
47

charged for the services rendered under circumstances as reasonably to notify him that the lawyer
performing the task was expecting to be paid compensation" for it. The doctrine of quantum meruit
48

is a device to prevent undue enrichment based on the equitable postulate that it is unjust for a
person to retain benefit without paying for it.
49

Under Section 24, Rule 138 of the Rules of Court and Canon 20 of the Code of Professional
50

Responsibility, factors such as the importance of the subject matter of the controversy, the time
51

spent and the extent of the services rendered, the customary charges for similar services, the
amount involved in the controversy and the benefits resulting to the client from the service, to name
a few, are considered in determining the reasonableness of the fees to which a lawyer is entitled.

In the present case, the following considerations guide this Court in considering and setting Atty.
Lacayas fees based on quantum meruit: (1) the questions involved in these civil cases were not
novel and did not require of Atty. Lacaya considerable effort in terms of time, skill or the performance
of extensive research; (2) Atty. Lacaya rendered legal services for the Spouses Cadavedo in three
civil cases beginning in 1969 until 1988 when the petitioners filed the instant case; (3) the first of
these civil cases (Cadavedo v. Ames) lasted for twelve years and reaching up to this Court; the
second (Ames v. Cadavedo) lasted for seven years; and the third (Cadavedo and Lacaya v. DBP)
lasted for six years, reaching up to the CA; and (4) the property subject of these civil cases is of a
considerable size of 230,765 square meters or 23.0765 hectares.

All things considered, we hold as fair and equitable the RTCs considerations in appreciating the
character of the services that Atty. Lacaya rendered in the three cases, subject to modification on
valuation. We believe and so hold that the respondents are entitled to two (2) hectares (or
approximately one-tenth [1/10] of the subject lot), with the fruits previously received from the
disputed one-half portion, as attorneys fees. They shall return to the petitioners the remainder of the
disputed one-half portion.

The allotted portion of the subject lot properly recognizes that litigation should be for the benefit of
the client, not the lawyer, particularly in a legal situation when the law itself holds clear and express
protection to the rights of the client to the disputed property (a homestead lot). Premium
consideration, in other words, is on the rights of the owner, not on the lawyer who only helped the
owner protect his rights. Matters cannot be the other way around; otherwise, the lawyer does indeed
effectively acquire a property right over the disputed property. If at all, due recognition of parity
between a lawyer and a client should be on the fruits of the disputed property, which in this case, the
Court properly accords.

WHEREFORE, in view of these considerations, we hereby GRANT the petition. We AFFIRM the
decision dated September 17, 1996 and the resolution dated December 27, 1996of the Regional
Trial Court of Dipolog City, Branch 10,in Civil Case No. 4038, with the MODIFICATION that the
respondents, the spouses Victorino (Vic) T. Lacaya and Rosa Legados, are entitled to two (2)
hectares (or approximately one-tenth [1/10] of the subject lot) as attorneys fees. The fruits that the
respondents previously received from the disputed one-half portion shall also form part of the
attorneys fees. We hereby ORDER the respondents to return to the petitioners the remainder of the
10.5383-hectare portion of the subject lot that Atty. Vicente Lacaya acquired pursuant to the
compromise agreement.

SO ORDERED.
G.R. No. 183952 September 9, 2013

CZARINA T. MALVAR, Petitioner,

vs.
KRAFT FOOD PHILS., INC. and/or BIENVENIDO BAUTISTA, KRAFT FOODS
INTERNATIONAL, Respondents.

DECISION

BERSAMIN, J.:

Although the practice of law is not a business, an attorney is entitled to be properly compensated for
the professional services rendered for the client, who is bound by her express agreement to duly
compensate the attorney. The client may not deny her attorney such just compensation.

The Case

The case initially concerned the execution of a final decision of the Court of Appeals (CA) in a labor
litigation, but has mutated into a dispute over attorney's fees between the winning employee and her
attorney after she entered into a compromise agreement with her employer under circumstances
that the attorney has bewailed as designed to prevent the recovery of just professional fees.

Antecedents

On August 1, 1988, Kraft Foods (Phils.), Inc. (KFPI) hired Czarina Malvar (Malvar) as its Corporate
Planning Manager. From then on, she gradually rose from the ranks, becoming in 1996 the Vice
President for Finance in the Southeast Asia Region of Kraft Foods International (KFI),KFPIs mother
company. On November 29, 1999, respondent Bienvenido S. Bautista, as Chairman of the Board of
KFPI and concurrently the Vice President and Area Director for Southeast Asia of KFI, sent Malvar a
memo directing her to explain why no administrative sanctions should be imposed on her for
possible breach of trust and confidence and for willful violation of company rules and regulations.
Following the submission of her written explanation, an investigating body was formed. In due time,
she was placed under preventive suspension with pay. Ultimately, on March 16, 2000, she was
served a notice of termination.

Obviously aggrieved, Malvar filed a complaint for illegal suspension and illegal dismissal against
KFPI and Bautista in the National Labor Relations Commission (NLRC). In a decision dated April 30,
2001,1 the Labor Arbiter found and declared her suspension and dismissal illegal, and ordered her
reinstatement, and the payment of her full backwages, inclusive of allowances and other benefits,
plus attorneys fees.

On October 22, 2001, the NLRC affirmed the decision of the Labor Arbiter but additionally ruled that
Malvar was entitled to "any and all stock options and bonuses she was entitled to or would have
been entitled to had she not been illegally dismissed from her employment," as well as to moral and
exemplary damages.2

KFPI and Bautista sought the reconsideration of the NLRCs decision, but the NLRC denied their
motion to that effect.3

Undaunted, KFPI and Bautista assailed the adverse outcome before the CA on certiorari (CA-G.R.
SP No. 69660), contending that the NLRC thereby committed grave abuse of discretion. However,
the petition for certiorari was dismissed by the CA on December 22, 2004, but with the CA reversing
the order of reinstatement and instead directing the payment of separation pay to Malvar, and also
reducing the amounts awarded as moral and exemplary damages.4

After the judgment in her favor became final and executory on March14, 2006, Malvar moved for the
issuance of a writ of execution.5 The Executive Labor Arbiter then referred the case to the Research
and Computation Unit (RCU) of the NLRC for the computation of the monetary awards under the
judgment. The RCUs computation ultimately arrived at the total sum of P41,627,593.75.6

On November 9, 2006, however, Labor Arbiter Jaime M. Reyno issued an order,7 finding that the
RCUs computation lacked legal basis for including the salary increases that the decision
promulgated in CA-G.R. SP No. 69660 did not include. Hence, Labor Arbiter Reyno reduced
Malvars total monetary award to P27,786,378.11, viz:

WHEREFORE, premises considered, in so far as the computation of complainants other benefits

and allowances are concerned, the same are in order. However, insofar as the computation of her
backwages and other monetary benefits (separation pay, unpaid salary for January 1 to 26,
2005,holiday pay, sick leave pay, vacation leave pay, 13th month pay), the same are hereby
recomputed as follows:

1. Separation Pay
8/1/88-1/26/05 = 16 yrs
P344,575.83 x 16 = 5,513,213.28
2. Unpaid Salary
1/1-26/05 = 87 mos.
P344,575.83 x 87 = 299,780.97
3. Holiday Pay
4/1/00-1/26/05 = 55 holidays
P4,134,910/12 mos/20.83 days x 55 days 909,825.77
4. Unpaid 13th month pay for Dec 2000 344,575.83
5. Sick Leave Pay
Year 1999 to 2004 = 6 yrs
P344,575.88/20.83 x 15 days x 6 = 1,488,805.79
Year 2005
P344,575.83/20.83 x 15/12 x 1 20,677.86 1,509,483.65
6. Vacation Leave Pay
Year 1999 to 2004 = 6 years
P344,575.88/20.83 x 22 days x 6 = 2,183,581.83
Year 2005
P344,575.83/20.83 x 22/12 x 1 30,327.55 2,213,909.36

10,790,788.86
Backwages (from 3/7/00-4/30/01, award in LA Sytians Decision 4,651,773.75
Allowances & Other Benefits:
Management Incentive Plan 7,355,166.58
Cash Dividend on Philip Morris Shares 2,711,646.00
Car Maintenance 381,702.92
Gas Allowance 198,000.00
Entitlement to a Company Driver 438,650.00
Rice Subsidy 58,650.00
Moral Damages 500,000.00
Exemplary Damages 200,000.00
Attorneys Fees 500,000.00
Entitlement to Philip Sch G Subject to
"Share Option Grant" Market Price
 27,786,378.11

SO ORDERED.

Both parties appealed the computation to the NLRC, which, on April19, 2007, rendered its decision
setting aside Labor Arbiter Reynos November 9, 2006 order, and adopting the computation by the
RCU.8

In its resolution dated May 31, 2007,9 the NLRC denied the respondents motion for reconsideration.

Malvar filed a second motion for the issuance of a writ of execution to enforce the decision of the
NLRC rendered on April 19, 2007. After the writ of execution was issued, a partial enforcement as
effected by garnishing the respondents funds deposited with Citibank worth 37,391,696.06. 10

On July 27, 2007, the respondents went to the CA on certiorari (with prayer for the issuance of a
temporary restraining order (TRO) or writ of preliminary injunction), assailing the NLRCs setting
aside of the computation by Labor Arbiter Reyno (CA-G.R. SP No. 99865). The petition mainly
argued that the NLRC had gravely abused its discretion in ruling that: (a) the inclusion of the salary
increases and other monetary benefits in the award to Malvar was final and executory; and (b) the
finality of the ruling in CA-G.R. SP No. 69660 precluded the respondents from challenging the
inclusion of the salary increases and other monetary benefits. The CA issued a TRO, enjoining the
NLRC and Malvar from implementing the NLRCs decision.11

On April 17, 2008, the CA rendered its decision in CA-G.R. SP No. 99865, 12 disposing thusly:

WHEREFORE, premises considered, the herein Petition is GRANTED and the 19 April 2007
Decision of the NLRC and the 31May 2007 Resolution in NLRC NCR 30-07-02316-00 are hereby
REVERSED and SET ASIDE.

The matter of computation of monetary awards for private respondent is hereby REMANDED to the
Labor Arbiter and he is DIRECTED to recompute the monetary award due to private respondent
based on her salary at the time of her termination, without including projected salary increases. In
computing the said benefits, the Labor Arbiter is further directed to DISREGARD monetary awards
arising from: (a) the management incentive plan and (b) the share option grant, including cash
dividends arising therefrom without prejudice to the filing of the appropriate remedy by the private
respondent in the proper forum. Private respondents allowances for car maintenance and gasoline
are likewise DELETED unless private respondent proves, by appropriate receipts, her entitlement
thereto.

With respect to the Motion to Exclude the Undisputed Amount of P14,252,192.12 from the coverage
of the Writ of Preliminary Injunction and to order its immediate release, the same is hereby
GRANTED for reasons stated therefor, which amount shall be deducted from the amount to be given
to private respondent after proper computation.

As regards the Motions for Reconsideration of the Resolution denying the Motion for Voluntary
Inhibition and the Omnibus Motion dated 30 October 2007, both motions are hereby DENIED for
lack of merit.

SO ORDERED.13

Malvar sought reconsideration, but the CA denied her motion on July30, 2008. 14

Aggrieved, Malvar appealed to the Court, assailing the CAs decision.

On December 9, 2010, while her appeal was pending in this Court, Malvar and the respondents
entered into a compromise agreement, the pertinent dispositive portion of which is quoted as follows:

NOW, THEREFORE, for and in consideration of the covenants and understanding between the
parties herein, the parties hereto have entered into this Agreement on the following terms and
conditions:
1. Simultaneously upon execution of this Agreement in the presence of Ms. Malvars attorney, KFPI
shall pay Ms. Malvar the amount of Philippine Pesos Forty Million (Php 40,000,000.00), which is in
addition to the Philippine Pesos Fourteen Million Two Hundred Fifty-Two Thousand One Hundred
Ninety-Two and Twelve Centavos (Php14,252,192.12) already paid to and received by Ms. Malvar
from KFPI in August2008 (both amounts constituting the "Compromise Payment").

The Compromise Payment includes full and complete payment and settlement of Ms. Malvars
salaries and wages up to the last day of her employment, allowances, 13th and 14th month pay,
cash conversion of her accrued vacation, sick and emergency leaves, separation pay, retirement pay
and such other benefits, entitlements, claims for stock, stock options or other forms of equity
compensation whether vested or otherwise and claims of any and all kinds against KFPI and KFI
and Altria Group, Inc., their predecessors-in-interest, their stockholders, officers, directors, agents or
successors-in-interest, affiliates and subsidiaries, up to the last day of the aforesaid cessation of her
employment.

2. In consideration of the Compromise Payment, Ms. Malvar hereby freely and voluntarily releases
and forever discharges KFPI and KFI and Altria Group, Inc., their predecessors or successors-in-
interest, stockholders, officers, including Mr. Bautista who was impleaded in the Labor Case as a
party respondent, directors, agents or successors-in-interest, affiliates and subsidiaries from any and
all manner of action, cause of action, sum of money, damages, claims and demands whatsoever in
law or in equity which Ms. Malvar or her heirs, successors and assigns had, or now have against
KFPI and/or KFI and/or Altria Group, Inc., including but not limited to, unpaid wages, salaries,
separation pay, retirement pay, holiday pay, allowances, 13th and 14th month pay, claims for stock,
stock options or other forms of equity compensation whether vested or otherwise whether arising
from her employment contract, company grant, present and future contractual commitments,
company policies or practices, or otherwise, in connection with Ms. Malvars employment with
KFPI.15

xxxx

Thereafter, Malvar filed an undated Motion to Dismiss/Withdraw Case,16 praying that the appeal be
immediately dismissed/withdrawn in view of the compromise agreement, and that the case be
considered closed and terminated.

Intervention

Before the Court could act on Malvars Motion to Dismiss/Withdraw Case, the Court received on
February 15, 2011 a so-called Motion for Intervention to Protect Attorneys Rights 17 from The Law
Firm of Dasal, Llasos and Associates, through its Of Counsel Retired Supreme Court Associate
Justice Josue N. Bellosillo18 (Intervenor), whereby the Intervenor sought, among others, that both
Malvar and KFPI be held and ordered to pay jointly and severally the Intervenors contingent fees.

The Motion for Intervention relevantly averred:

xxxx

Lawyers, oftentimes, are caricatured as alligators or some other specie of voracious carnivore;
perceived also as leeches sucking dry the blood of their adversaries, and even their own clients they
are sworn to serve and protect! As we lay down the facts in this case, this popular, rather unpopular,
perception will be shown wrong. This case is a reversal of this perception.

xxxx

Here, it is the lawyer who is eaten up alive by the warring but conspiring litigants who finally settled
their differences without the knowledge, much less, participation, of Petitioners counsel that labored
hard and did everything to champion her cause.

xxxx

This Motion for Intervention will illustrate an aberration from the norm where the lawyer ends up
seeking protection from his clients and Respondents indecent and cunning maneuverings. x x x.

xxxx
On 18 March 2008 Petitioner engaged the professional services of Intervenor x x x on a contingency
basis whereby the former agreed in writing to pay the latter contingency fees amounting to
almost P19,600,000.00 (10% of her total claim of almost P196,000,000.00 in connection with her
labor case against Respondents. x x x.

xxxx

According to their agreement (Annex "A"), Petitioner bound herself to pay Intervenor contingency
fees as follows (a) 10% of P14,252, 192.12 upon its collection; (b) 10% of the remaining balance
of P41,627,593.75; and (c)10% of the value of the stock options Petitioner claims to be entitled to, or
roughly P154,000,000.00 as of April 2008.

xxxx

Intervenors efforts resulted in the award and partial release of Petitioners claim amounting
to P14,252,192.12 out of which Petitioner paid Intervenor 10% or P1,425,219.21 as contingency
fees pursuant to their engagement agreement (Annex "A"). Copy of the check payment of Petitioner
payable to Intervenors Of Counsel is attached as Annex "C".

xxxx

On 12 September 2008 Intervenor filed an exhaustive Petition for Review with the Supreme Court
containing 70 pages, including its Annexes "A" to "R", or a total of 419 pages against Respondents
to collect on the balance of Petitioners claims amounting to at least P27,000,000.00
and P154,000,000.00 the latter representing the estimated value of Petitioners stock options as of
April 2008.

xxxx

On 15 January 2009 Respondents filed their Comment to the Petition for Review.

xxxx

On 13 April 2009 Intervenor, in behalf of Petitioner, filed its Reply to the Comment.

xxxx

All the pleadings in this Petition have already been submitted on time with nothing more to be done
except to await the Resolution of this Honorable Court which, should the petition be decided in her
favor, Petitioner would stand to gain P182,000,000.00, more or less, which victory would be largely
through the efforts of Intervenor.19 (Bold emphasis supplied).

xxxx

It appears that in July 2009, to the Intervenors surprise, Malvar unceremoniously and without any
justifiable reason terminated its legal service and required it to withdraw from the case. 20 Hence, on
October 5,2009, the Intervenor reluctantly filed a Manifestation (With Motion to Withdraw as Counsel
for Petitioner),21 in which it spelled out: (a) the terms of and conditions of the Intervenors
engagement as counsel; (b) the type of legal services already rendered by the Intervenor for Malvar;
(c) the absence of any legitimate reason for the termination of their attorney-client relationship; (d)
the reluctance of the Intervenor to withdraw as Malvars counsel; and (e) the desire of the Intervenor
to assert and claim its contingent fee notwithstanding its withdrawal as counsel. The Intervenor
prayed that the Court furnish it with copies of resolutions, decisions and other legal papers issued or
to be issued after its withdrawal as counsel of Malvar in the interest of protecting its interest as her
attorney.

The Intervenor indicated that Malvars precipitate action had baffled, shocked and even
embarrassed the Intervenor, because it had done everything legally possible to serve and protect
her interest. It added that it could not recall any instance of conflict or misunderstanding with her, for,
on the contrary, she had even commended it for its dedication and devotion to her case through her
following letter to Justice Bellosillo, to wit:
 July 16, 2008

Justice Josue Belocillo (sic)

Dear Justice,

It is almost morning of July 17 as I write this letter to you. Let me first thank you for your continued
and unrelenting lead, help and support in the case. You have been our "rock" as far as this case is
concerned. Jun and I are forever grateful to you for all your help. I just thought Id express to you
what is in the innermost of my heart as we proceed in the case. It has been around four months now
since we met mid-March early this year.

The most important and immediate aspect of the case at this time for me is the collection of the
undisputed amount of Pesos 14million which the Court has clearly directed and ordered the NLRC to
execute. The only impending constraint for NLRC to execute and collect this amount from the
already garnished amount of Pesos 41 million at Citibank is the MR of Kraft on the Order of the
Court (CA) to execute collection. We need to get a denial of this motion for NLRC to execute
immediately. We already obtained commitment from NLRC that all it needed to execute collection is
the denial of the MR. Jun and I applaud your initiative and efforts to mediate with Romulo on
potential settlement. However, as I expressed to you in several instances, I have serious
reservations on the willingness of Romulo to settle within reasonable amounts specifically as it
relates to the stock options. Let us continue to pursue this route vigorously while not setting aside
our efforts to influence the CA to DENY their Motion on the Undisputed amount of Pesos 14million.

At this point, I cannot overemphasize to you our need for funds. We have made financial
commitments that require us to raise some amount. But we can barely meet our day to day business
and personal requirements given our current situation right now.

Thank you po for your understanding and support.22

According to the Intervenor, it was certain that the compromise agreement was authored by the
respondents to evade a possible loss of P182,000,000.00 or more as a result of the labor litigation,
but considering the Intervenors interest in the case as well as its resolve in pursuing Malvars
interest, they saw the Intervenor as a major stumbling block to the compromise agreement that it
was then brewing with her. Obviously, the only way to remove the Intervenor was to have her
terminate its services as her legal counsel. This prompted the Intervenor to bring the matter to the
attention of the Court to enable it to recover in full its compensation based on its written agreement
with her, averring thus:

xxxx

28. Upon execution of the Compromise Agreement and pursuant thereto, Petitioner immediately
received (supposedly) from RespondentsP40,000,000.00. But despite the settlement between the
parties, Petitioner did not pay Intervenor its just compensation as set forth in their engagement
agreement; instead, she immediately moved to Dismiss/Withdraw the Present Petition.

29. To parties minds, with the dismissal by Petitioner of Intervenor as her counsel, both Petitioner
and Respondents probably thought they would be able to settle the case without any cost to them,
with Petitioner saving on Intervenors contingent fees while Respondents able to take advantage of
the absence of Intervenor in determining the settlement price.

30. The parties cannot be any more mistaken. Pursuant to the Second Paragraph of Section 26,
Rule 138, of the Revised Rules of Court quoted in paragraph 3 hereof, Intervenor is still entitled to
recover from Petitioner the full compensation it deserves as stipulated in its contract.

31. All the elements for the full recovery of Intervenors compensation are present. First, the contract
between the Intervenor and Petitioner is reduced into writing. Second, Intervenor is dismissed
without justifiable cause and at the stage of proceedings where there is nothing more to be done but
to await the Decision or Resolution of the Present Petition. 23

xxxx
In support of the Motion for Intervention, the Intervenor cites the rulings in Aro v. Naawa 24 and Law
Firm of Raymundo A. Armovit v. Court of Appeals,25 particularly the following passage:

x x x. While We here reaffirm the rule that "the client has an undoubted right to compromise a suit
without the intervention of his lawyer," We hold that when such compromise is entered into in fraud
of the lawyer, with intent to deprive him of the fees justly due him, the compromise must be subject
to the said fees and that when it is evident that the said fraud is committed in confabulation with the
adverse party who had knowledge of the lawyers contingent interest or such interest appears of
record and who would benefit under such compromise, the better practice is to settle the matter of
the attorneys fees in the same proceeding, after hearing all the affected parties and without
prejudice to the finality of the compromise agreement in so far as it does not adversely affect the
right of the lawyer.26 x x x.

The Intervenor prays for the following reliefs:

a) Granting the Motion for Intervention to Protect Attorneys Rights in favor of the Intervenor;

b) Directing both Petitioner and Respondents jointly and severally to pay Intervenor its
contingent fees;

c) Granting a lien upon all judgments for the payment of money and executions issued in
pursuance of such judgments; and

d) Holding in Abeyance in the meantime the Resolution of the Motion to Dismiss/Withdraw

Case filed by Petitioner and granting the Motion only after Intervenor has been fully paid its
just compensation; and

e) Other reliefs just and equitable.27

Opposing the Motion for Intervention,28 Malvar stresses that there was no truth to the Intervenors
claim to defraud it of its professional fees; that the Intervenor lacked the legal capacity to intervene
because it had ceased to exist after Atty. Marwil N. Llasos resigned from the Intervenor and Atty.
Richard B. Dasal became barred from private practice upon his appointment as head of the Legal
Department of the Small Business Guarantee and Finance Corporation, a government subsidiary;
and that Atty. Llasos and Atty. Dasal had personally handled her case.

Malvar adds that even assuming, arguendo, that the Intervenor still existed as a law firm, it was still
not entitled to intervene for the following reasons, namely: firstly, it failed to attend to her multiple
pleas and inquiries regarding the case, as when communications to the Intervenor through text
messages were left unanswered; secondly, maintaining that this was a justifiable cause to dismiss its
services, the Intervenor only heeded her repeated demands to withdraw from the case when Atty.
Dasal was confronted about his appointment to the government subsidiary; thirdly, it was misleading
and grossly erroneous for the Intervenor to claim that it had rendered to her full and satisfactory
services when the truth was that its participation was strictly limited to the preparation, finalization
and submission of the petition for review with the Supreme Court; and finally, while the Intervenor
withdrew its services on October 5, 2009, the compromise agreement was executed with the
respondents on December 9,2010 and notarized on December 14, 2010, after more than a year and
two months, dispelling any badge of bad faith on their end.

On June 21, 2011, the respondents filed their comment to the Intervenors Motion for Intervention.

On November 18, 2011, the Intervenor submitted its position on the respondents comment dated
June 21, 2011,29and thereafter the respondents sent in their reply.30

Issues

The issues for our consideration and determination are two fold, namely: (a) whether or not Malvars
motion to dismiss the petition on the ground of the execution of the compromise agreement was
proper; and (b) whether or not the Motion for Intervention to protect attorneys rights can prosper,
and, if so, how much could it recover as attorneys fees.

Ruling of the Court

We shall decide the issues accordingly.

1.

Clients right to settle litigation

by compromise agreement, and
to terminate counsel; limitations

A compromise agreement is a contract, whereby the parties undertake reciprocal obligations to avoid
litigation, or put an end to one already commenced.31 The client may enter into a compromise
agreement with the adverse party to terminate the litigation before a judgment is rendered
therein.32 If the compromise agreement is found to be in order and not contrary to law, morals, good
customs and public policy, its judicial approval is in order.33 A compromise agreement, once
approved by final order of the court, has the force of res judicata between the parties and will not be
disturbed except for vices of consent or forgery.34

A client has an undoubted right to settle her litigation without the intervention of the attorney, for the
former is generally conceded to have exclusive control over the subject matter of the litigation and
may at anytime, if acting in good faith, settle and adjust the cause of action out of court before
judgment, even without the attorneys intervention.35 It is important for the client to show, however,
that the compromise agreement does not adversely affect third persons who are not parties to the
agreement.36

By the same token, a client has the absolute right to terminate the attorney-client relationship at any
time with or without cause.37 But this right of the client is not unlimited because good faith is required
in terminating the relationship. The limitation is based on Article 19 of the Civil Code, which
mandates that "every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith." The right is also
subject to the right of the attorney to be compensated. This is clear from Section 26, Rule 138 of the
Rules of Court, which provides:

Section 26. Change of attorneys. - An attorney may retire at anytime from any action or special
proceeding, by the written consent of his client filed in court. He may also retire at any time from an
action or special proceeding, without the consent of his client, should the court, on notice to the
client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of
substitution, the name of the attorney newly employed shall be entered on the docket of the court in
place of the former one, and written notice of the change shall be given to the adverse party.

A client may at any time dismiss his attorney or substitute another in his place, but if the contract
between client and attorney has been reduced to writing and the dismissal of the attorney was
without justifiable cause, he shall be entitled to recover from the client the full compensation
stipulated in the contract. However, the attorney may, in the discretion of the court, intervene in the
case to protect his rights. For the payment of his compensation the attorney shall have a lien upon
all judgments for the payment of money, and executions issued in pursuance of such judgment,
rendered in the case wherein his services had been retained by the client. (Bold emphasis supplied)

In fine, it is basic that an attorney is entitled to have and to receive a just and reasonable
compensation for services performed at the special instance and request of his client. The attorney
who has acted in good faith and honesty in representing and serving the interests of the client
should be reasonably compensated for his service. 38

2.

Compromise agreement is to be approved

despite favorable action on the
Intervenors Motion for Intervention

On considerations of equity and fairness, the Court disapproves of the tendencies of clients
compromising their cases behind the backs of their attorneys for the purpose of unreasonably
reducing or completely setting to naught the stipulated contingent fees. 39 Thus, the Court grants the
Intervenors Motion for Intervention to Protect Attorneys Rights as a measure of protecting the
Intervenors right to its stipulated professional fees that would be denied under the compromise
agreement. The Court does so in the interest of protecting the rights of the practicing Bar rendering
professional services on contingent fee basis.

Nonetheless, the claim for attorneys fees does not void or nullify the compromise agreement
between Malvar and the respondents. There being no obstacles to its approval, the Court approves
the compromise agreement. The Court adds, however, that the Intervenor is not left without a
remedy, for the payment of its adequate and reasonable compensation could not be annulled by the
settlement of the litigation without its participation and conformity. It remains entitled to the
compensation, and its right is safeguarded by the Court because its members are officers of the
Court who are as entitled to judicial protection against injustice or imposition of fraud committed by
the client as much as the client is against their abuses as her counsel. In other words, the duty of the
Court is not only to ensure that the attorney acts in a proper and lawful manner, but also to see to it
that the attorney is paid his just fees. Even if the compensation of the attorney is dependent only on
winning the litigation, the subsequent withdrawal of the case upon the clients initiative would not
deprive the attorney of the legitimate compensation for professional services rendered. 40

The basis of the intervention is the written agreement on contingent fees contained in the
engagement executed on March 19, 2008 between Malvar and the Intervenor,41 the pertinent portion
of which stipulated that the Intervenor would "collect ten percent (10%) of the amount of
PhP14,252,192.12 upon its collection and another ten percent (10%) of the remaining balance of
PhP41,627,593.75 upon collection thereof, and also ten percent (10%) of whatever is the value of
the stock option you are entitled to under the Decision." There is no question that such arrangement
was a contingent fee agreement that was valid in this jurisdiction, provided the fees therein fixed
were reasonable.42

We hold that the contingent fee of 10% of P41,627,593.75 and 10% of the value of the stock option
was reasonable. The P41,627,593.75 was already awarded to Malvar by the NLRC but the award
became the subject of the appeal in this Court because the CA reversed the NLRC. Be that as it
may, her subsequent change of mind on the amount sought from the respondents as reflected in the
compromise agreement should not negate or bar the Intervenors recovery of the agreed attorneys
fees.

Considering that in the event of a dispute between the attorney and the client as to the amount of
fees, and the intervention of the courts is sought, the determination requires that there be evidence
to prove the amount of fees and the extent and value of the services rendered, taking into account
the facts determinative thereof,43 the history of the Intervenors legal representation of Malvar can
provide a helpful predicate for resolving the dispute between her and the Intervenor.

The records reveal that on March 18, 2008, Malvar engaged the professional services of the
Intervenor to represent her in the case of illegal dismissal. At that time, the case was pending in the
CA at the respondents instance after the NLRC had set aside the RCUs computation of Malvars
backwages and monetary benefits, and had upheld the computation arrived at by the NLRC
Computation Unit. On April 17, 2008, the CA set aside the assailed resolution of the NLRC, and
remanded the case to the Labor Arbiter for the computation of her monetary awards. It was at this
juncture that the Intervenor commenced its legal service, which included the following incidents,
namely:

a) Upon the assumption of its professional duties as Malvars counsel, a Motion for
Reconsideration of the Decision of the Court of Appeals dated April 17, 2008 consisting of
thirty-eight pages was filed before the Court of Appeals on May 6, 2008.

b) On June 2, 2009, Intervenors filed a Comment to Respondents Motion for Partial

Reconsideration, said Comment consisted 8 pages.

c) In the execution proceedings before Labor Arbiter Jaime Reyno, Intervenor prepared and
filed on Malvars behalf an "Ex-Parte Motion to Release to Complainant the Undisputed
amount of P14,252,192.12" in NLRC NCR Case No. 30-07-02716-00.

d) On July 29, 2000, Intervenor prepared and filed before theLabor Arbiter a Comment to
Respondents Opposition to the "Ex-Parte Motion to Release" and a "Motion Reiterating
Immediate Implementation of the Writ of Execution"
 e) On August 6, 2008, Intervenor prepared and filed before the Labor Arbiter Malvars Motion
Reiterating Motion to Release the Amount of P14,252,192.12.44

The decision promulgated on April 17, 200845 and the resolution promulgated on July 30, 200846 by
the CA prompted Malvar to appeal on August 15, 2008 to this Court with the assistance of the
Intervenor. All the subsequent pleadings, including the reply of April 13, 2009, 47 were prepared and
filed in Malvars behalf by the Intervenor.

Malvar should accept that the practice of law was not limited to the conduct of cases or litigations in
court but embraced also the preparation of pleadings and other papers incidental to the cases or
litigations as well as the management of such actions and proceedings on behalf of the
clients.48 Consequently, fairness and justice demand that the Intervenor be accorded full recognition
as her counsel who discharged its responsibility for Malvars cause to its successful end.

But, as earlier pointed out, although a client may dismiss her lawyer at any time, the dismissal must
be for a justifiable cause if a written contract between the lawyer and the client exists. 49

Considering the undisputed existence of the written agreement on contingent fees, the question
begging to be answered is: Was the Intervenor dismissed for a justifiable cause?

We do not think so.

In the absence of the lawyers fault, consent or waiver, a client cannot deprive the lawyer of his just
fees already earned in the guise of a justifiable reason. Here, Malvar not only downplayed the worth
of the Intervenors legal service to her but also attempted to camouflage her intent to defraud her
lawyer by offering excuses that were not only inconsistent with her actions but, most importantly, fell
short of being justifiable.

The letter Malvar addressed to Retired Justice Bellosillo, who represented the Intervenor, debunked
her allegations of unsatisfactory legal service because she thereby lavishly lauded the Intervenor for
its dedication and devotion to the prosecution of her case and to the protection of her interests. Also
significant was that the attorney-client relationship between her and the Intervenor was not severed
upon Atty. Dasals appointment to public office and Atty. Llasos resignation from the law firm. In
other words, the Intervenor remained as her counsel of record, for, as we held in Rilloraza, Africa, De
Ocampo and Africa v. Eastern Telecommunication Philippines, Inc., 50 a client who employs a law firm
engages the entire law firm; hence, the resignation, retirement or separation from the law firm of the
handling lawyer does not terminate the relationship, because the law firm is bound to provide a
replacement.

The stipulations of the written agreement between Malvar and the Intervenors, not being contrary to
law, morals, public policy, public order or good customs, were valid and binding on her. They
expressly gave rise to the right of the Intervenor to demand compensation. In a word, she could not
simply walk away from her contractual obligations towards the Intervenor, for Article 1159 of the Civil
Code provides that obligations arising from contracts have the force of law between the parties and
should be complied with in good faith.

To be sure, the Intervenors withdrawal from the case neither cancelled nor terminated the written
agreement on the contingent attorneys fees. Nor did the withdrawal constitute a waiver of the
agreement. On the contrary, the agreement continued between them because the Intervenors
Manifestation (with Motion to Withdraw as Counsel for Petitioner)explicitly called upon the Court to
safeguard its rights under the written agreement, to wit:

WHEREFORE, premises considered, undersigned counsel respectfully pray that instant Motion to
Withdraw as Counsel for Petitioner be granted and their attorneys lien pursuant to the written
agreement be reflected in the judgment or decision that may be rendered hereafter conformably with
par. 2, Sec. 26, Rule 138 of the Rules of Court.

Undersigned counsel further requests that they be furnished copy of the decision, resolutions and
other legal processes of this Honorable Court to enable them to protect their interests. 51

Were the respondents also liable?

The respondents would be liable if they were shown to have connived with Malvar in the execution of
the compromise agreement, with the intention of depriving the Intervenor of its attorneys fees.
Thereby, they would be solidarily liable with her for the attorneys fees as stipulated in the written
agreement under the theory that they unfairly and unjustly interfered with the Intervenors
professional relationship with Malvar.

The respondents insist that they were not bound by the written agreement, and should not be held
liable under it.
1wphi1

We disagree with the respondents insistence. The respondents were complicit in Malvars move to
deprive the Intervenor of its duly earned contingent fees.

First of all, the unusual timing of Malvars letter terminating the Intervenors legal representation of
her, of her Motion to Dismiss/Withdraw Case, and of the execution of compromise agreement
manifested her desire to evade her legal obligation to pay to the Intervenor its attorneys fees for the
legal services rendered. The objective of her withdrawal of the case was to release the respondents
from all her claims and causes of action in consideration of the settlement in the stated amount
of P40,000.000.00, a sum that was measly compared to what she was legally entitled to, which, to
begin with, already included the P41,627,593.75 and the value of the stock option already awarded
to her. In other words, she thereby waived more than what she was lawfully expected to receive from
the respondents.

Secondly, the respondents suddenly turned around from their strong stance of berating her demand
as offensive to all precepts of justice and fair play and as a form of unjust enrichment for her to a
surprisingly generous surrender to her demand, allowing to her through their compromise agreement
the additional amount of P40,000,000.00 on top of theP14,252,192.12 already received by her in
August 2008. The softening unavoidably gives the impression that they were now categorically
conceding that Malvar deserved much more. Under those circumstances, it is plausible to conclude
that her termination of the Intervenors services was instigated by their prodding in order to remove
the Intervenor from the picture for being a solid obstruction to the settlement for a much lower
liability, and thereby save for themselves and for her some more amount.

Thirdly, the compromise agreement was silent on the Intervenors contingent fee, indicating that the
objective of the compromise agreement was to secure a huge discount from its liability towards
Malvar.

Finally, contrary to the stipulation in the compromise agreement, only Malvar, minus the
respondents, filed the Motion to Dismiss/Withdraw Case.

At this juncture, the Court notes that the compromise agreement would have Malvar waive even the
substantial stock options already awarded by the NLRCs decision,52 which ordered the respondents
to pay to her, among others, the value of the stock options and all other bonuses she was entitled to
or would have been entitled to had she not been illegally dismissed from her employment. This ruling
was affirmed by the CA.53 But the waiver could not negate the Intervenors right to 10% of the value
of the stock options she was legally entitled to under the decisions of the NLRC and the CA, for that
right was expressly stated in the written agreement between her and the Intervenor. Thus, the
Intervenor should be declared entitled to recover full compensation in accordance with the written
agreement because it did not assent to the waiver of the stock options, and did not waive its right to
that part of its compensation.

These circumstances show that Malvar and the respondents needed an escape from greater liability
towards the Intervenor, and from the possible obstacle to their plan to settle to pay. It cannot be
simply assumed that only Malvar would be liable towards the Intervenor at that point, considering
that the Intervenor, had it joined the negotiations as her lawyer, would have tenaciously fought all the
way for her to receive literally everything that she was entitled to, especially the benefits from the
stock option. Her rush to settle because of her financial concerns could have led her to accept the
respondents offer, which offer could be further reduced by the Intervenors expected demand for
compensation. Thereby, she and the respondents became joint tort-feasors who acted adversely
against the interests of the Intervenor. Joint tort-feasors are those who command, instigate, promote,
encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve
of it after it is done, if done for their benefit.54

They are also referred to as those who act together in committing wrong or whose acts, if
independent of each other, unite in causing a single injury.55 Under Article 2194 of the Civil Code,
joint tort-feasors are solidarily liable for the resulting damage. As regards the extent of their
respective liabilities, the Court said in Far Eastern Shipping Company v. Court of Appeals: 56

x x x. Where several causes producing an injury are concurrent and each is an efficient cause
without which the injury would not have happened, the injury may be attributed to all or any of the
causes and recovery may be had against any or all of the responsible persons although under the
circumstances of the case, it may appear that one of them was more culpable, and that the duty
owed by them to the injured person was not same. No actors negligence ceases to be a proximate
cause merely because it does not exceed the negligence of other acts. Each wrongdoer is
responsible for the entire result and is liable as though his acts were the sole cause of the injury.

There is no contribution between joint tort-feasors whose liability is solidary since both of them are
liable for the total damage. Where the concurrent or successive negligent acts or omissions of two or
more persons, although acting independently, are in combination the direct and proximate cause of a
single injury to a third person, it is impossible to determine in what proportion each contributed to the
injury and either of them is responsible for the whole injury. x x x

Joint tort-feasors are each liable as principals, to the same extent and in the same manner as if they
had performed the wrongful act themselves. It is likewise not an excuse for any of the joint tort-
feasors that individual participation in the tort was insignificant as compared to that of the other.57 To
stress, joint tort-feasors are not liable pro rata. The damages cannot be apportioned among them,
except by themselves. They cannot insist upon an apportionment, for the purpose of each paying an
aliquot part. They are jointly and severally liable for the whole amount. 58 Thus, as joint tort-feasors,
Malvar and the respondents should be held solidarily liable to the Intervenor. There is no way of
appreciating these circumstances except in this light.

That the value of the stock options that Malvar waived under the compromise agreement has not
been fixed as yet is no hindrance to the implementation of this decision in favor of the Intervenor.
The valuation could be reliably made at a subsequent time from the finality of this adjudication. It is
enough for the Court to hold the respondents and Malvar solidarily liable for the 10% of that value of
the stock options.

As a final word, it is necessary to state that no court can shirk from enforcing the contractual
stipulations in the manner they have agreed upon and written. As a rule, the courts, whether trial or
appellate, have no power to make or modify contracts between the parties. Nor can the courts save
the parties from disadvantageous provisions.59The same precepts hold sway when it comes to
enforcing fee arrangements entered into in writing between clients and attorneys. In the exercise of
their supervisory authority over attorneys as officers of the Court, the courts are bound to respect
and protect the attorneys lien as a necessary means to preserve the decorum and respectability of
the Law Profession.60 Hence, the Court must thwart any and every effort of clients already served by
their attorneys worthy services to deprive them of their hard-earned compensation. Truly, the duty of
the courts is not only to see to it that attorneys act in a proper and lawful manner, but also to see to it
that attorneys are paid their just and lawful fees.61

WHEREFORE, the Court APPROVES the compromise agreement; GRANTS the Motion for
Intervention to Protect Attorney's Rights; and ORDERS Czarina T. Malvar and respondents Kraft
Food Philippines Inc. and Kraft Foods International to jointly and severally pay to Intervenor Law
Firm, represented by Retired Associate Justice Josue N. Bellosillo, its stipulated contingent fees of
10% of P41,627,593.75, and the further sum equivalent to 10% of the value of the stock option. No
pronouncement on costs of suit.

SO ORDERED.
CANON 21

REBECCA J. PALM, A.C. No. 8242

Complainant,
Present:

PUNO, C.J., Chairperson,

CARPIO,
- versus - CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.

ATTY. FELIPE ILEDAN, JR., Promulgated:

Respondent. October 2, 2009
x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO, J.:

The Case

The case before the Court is a disbarment proceeding filed by Rebecca J. Palm
(complainant) against Atty. Felipe Iledan, Jr. (respondent) for revealing information
obtained in the course of an attorney-client relationship and for representing an
interest which conflicted with that of his former client, Comtech Worldwide
Solutions Philippines, Inc. (Comtech).

The Antecedent Facts

Complainant is the President of Comtech, a corporation engaged in the business of

computer software development. From February 2003 to November 2003,
respondent served as Comtechs retained corporate counsel for the amount
of P6,000 per month as retainer fee. From September to October 2003,
complainant personally met with respondent to review corporate matters, including
potential amendments to the corporate by-laws.In a meeting held on 1 October
2003, respondent suggested that Comtech amend its corporate by-laws to allow
participation during board meetings, through teleconference, of members of the
Board of Directors who were outside the Philippines.

Prior to the completion of the amendments of the corporate by-laws, complainant

became uncomfortable with the close relationship between respondent and Elda
Soledad (Soledad), a former officer and director of Comtech, who resigned and
who was suspected of releasing unauthorized disbursements of corporate
funds. Thus, Comtech decided to terminate its retainer agreement with respondent
effective November 2003.

In a stockholders meeting held on 10 January 2004, respondent attended as proxy

for Gary Harrison (Harrison). Steven C. Palm (Steven) and Deanna L. Palm,
members of the Board of Directors, were present through teleconference. When the
meeting was called to order, respondent objected to the meeting for lack of
quorum. Respondent asserted that Steven and Deanna Palm could not participate in
the meeting because the corporate by-laws had not yet been amended to allow
teleconferencing.

On 24 March 2004, Comtechs new counsel sent a demand letter to Soledad to

return or account for the amount of P90,466.10 representing her unauthorized
disbursements when she was the Corporate Treasurer of Comtech. On 22 April
2004, Comtech received Soledads reply, signed by respondent. In July 2004, due to
Soledads failure to comply with Comtech's written demands, Comtech filed a
complaint for Estafa against Soledad before the Makati Prosecutors Office. In the
proceedings before the City Prosecution Office of Makati, respondent appeared as
Soledads counsel.

On 26 January 2005, complainant filed a Complaint[1] for disbarment against

respondent before the Integrated Bar of the Philippines (IBP).

In his Answer,[2] respondent alleged that in January 2002, Soledad consulted him
on process and procedure in acquiring property. In April 2002, Soledad again
consulted him about the legal requirements of putting up a domestic corporation. In
February 2003, Soledad engaged his services as consultant for
Comtech. Respondent alleged that from February to October 2003, neither Soledad
nor Palm consulted him on confidential or privileged matter concerning the
operations of the corporation. Respondent further alleged that he had no access to
any record of Comtech.

Respondent admitted that during the months of September and October 2003,
complainant met with him regarding the procedure in amending the corporate by-
laws to allow board members outside the Philippines to participate in board
meetings.

Respondent further alleged that Harrison, then Comtech President, appointed him
as proxy during the 10 January 2004 meeting. Respondent alleged that Harrison
instructed him to observe the conduct of the meeting.Respondent admitted that he
objected to the participation of Steven and Deanna Palm because the corporate by-
laws had not yet been properly amended to allow the participation of board
members by teleconferencing.
Respondent alleged that there was no conflict of interest when he represented
Soledad in the case for Estafa filed by Comtech. He alleged that Soledad was
already a client before he became a consultant for Comtech. He alleged that the
criminal case was not related to or connected with the limited procedural queries
he handled with Comtech.
The IBPs Report and Recommendation

In a Report and Recommendation dated 28 March 2006, [3] the IBP Commission on
Bar Discipline (IBP-CBD) found respondent guilty of violation of Canon 21 of the
Code of Professional Responsibility and of representing interest in conflict with
that of Comtech as his former client.

The IBP-CBD ruled that there was no doubt that respondent was Comtechs
retained counsel from February 2003 to November 2003. The IBP-CBD found that
in the course of the meetings for the intended amendments of Comtechs corporate
by-laws, respondent obtained knowledge about the intended amendment to allow
members of the Board of Directors who were outside the Philippines to participate
in board meetings through teleconferencing. The IBP-CBD noted that respondent
knew that the corporate by-laws have not yet been amended to allow the
teleconferencing.Hence, when respondent, as representative of Harrison, objected
to the participation of Steven and Deanna Palm through teleconferencing on the
ground that the corporate by-laws did not allow the participation, he made use of a
privileged information he obtained while he was Comtechs retained counsel.

The IBP-CBD likewise found that in representing Soledad in a case filed by

Comtech, respondent represented an interest in conflict with that of a former
client. The IBP-CBD ruled that the fact that respondent represented Soledad after
the termination of his professional relationship with Comtech was not an excuse.

The IBP-CBD recommended that respondent be suspended from the practice of

law for one year, thus:

WHEREFORE, premises considered, it is most respectfully

recommended that herein respondent be found guilty of the charges
preferred against him and be suspended from the practice of law for one
(1) year.[4]

In Resolution No. XVII-2006-583[5] passed on 15 December 2006, the IBP Board

of Governors adopted and approved the recommendation of the Investigating
Commissioner with modification by suspending respondent from the practice of
law for two years.
Respondent filed a motion for reconsideration.[6]

In an undated Recommendation, the IBP Board of Governors First Division found

that respondents motion for reconsideration did not raise any new issue and was
just a rehash of his previous arguments. However, the IBP Board of Governors
First Division recommended that respondent be suspended from the practice of law
for only one year.

In Resolution No. XVIII-2008-703 passed on 11 December 2008, the IBP Board of

Governors adopted and approved the recommendation of the IBP Board of
Governors First Division. The IBP Board of Governors denied respondents motion
for reconsideration but reduced his suspension from two years to one year.
The IBP Board of Governors forwarded the present case to this Court as provided
under Section 12(b), Rule 139-B[7] of the Rules of Court.

The Ruling of this Court

We cannot sustain the findings and recommendation of the IBP.

Violation of the Confidentiality

of Lawyer-Client Relationship

Canon 21 of the Code of Professional Responsibility provides:

Canon 21. A lawyer shall preserve the confidence and secrets of his
client even after the attorney-client relationship is terminated. (Emphasis
supplied)

We agree with the IBP that in the course of complainants consultations, respondent
obtained the information about the need to amend the corporate by-laws to allow
board members outside the Philippines to participate in board meetings through
teleconferencing. Respondent himself admitted this in his Answer.

However, what transpired on 10 January 2004 was not a board meeting but a
stockholders meeting. Respondent attended the meeting as proxy for Harrison. The
physical presence of a stockholder is not necessary in a stockholders meeting
because a member may vote by proxy unless otherwise provided in the articles of
incorporation or by-laws.[8] Hence, there was no need for Steven and Deanna Palm
to participate through teleconferencing as they could just have sent their proxies to
the meeting.
In addition, although the information about the necessity to amend the corporate
by-laws may have been given to respondent, it could not be considered a
confidential information. The amendment, repeal or adoption of new by-laws may
be effected by the board of directors or trustees, by a majority vote thereof, and the
owners of at least a majority of the outstanding capital stock, or at least a majority
of members of a non-stock corporation.[9] It means the stockholders are aware of
the proposed amendments to the by-laws. While the power may be delegated to the
board of directors or trustees, there is nothing in the records to show that a
delegation was made in the present case. Further, whenever any amendment or
adoption of new by-laws is made, copies of the amendments or the new by-laws
are filed with the Securities and Exchange Commission (SEC) and attached to the
original articles of incorporation and by-laws. [10] The documents are public
records and could not be considered confidential.

It is settled that the mere relation of attorney and client does not raise a
presumption of confidentiality.[11] The client must intend the communication to be
confidential.[12] Since the proposed amendments must be approved by at least a
majority of the stockholders, and copies of the amended by-laws must be filed
with the SEC, the information could not have been intended to be
confidential. Thus, the disclosure made by respondent during the stockholders
meeting could not be considered a violation of his clients secrets and confidence
within the contemplation of Canon 21 of the Code of Professional Responsibility.

Representing Interest in Conflict

With the Interest of a Former Client

The IBP found respondent guilty of representing an interest in conflict with that of
a former client, in violation of Rule 15.03, Canon 15 of the Code of Professional
Responsibility which provides:

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.

We do not agree with the IBP.

In Quiambao v. Bamba,[13] the Court enumerated various tests to determine conflict

of interests. One test of inconsistency of interests is whether the lawyer will be
asked to use against his former client any confidential information acquired
through their connection or previous employment. [14]The Court has ruled that what
a lawyer owes his former client is to maintain inviolate the clients confidence or to
refrain from doing anything which will injuriously affect him in any matter in
which he previously represented him.[15]
We find no conflict of interest when respondent represented Soledad in a case filed
by Comtech. The case where respondent represents Soledad is an Estafa case filed
by Comtech against its former officer. There was nothing in the records that
would show that respondent used against Comtech any confidential
information acquired while he was still Comtechs retained counsel. Further,
respondent made the representation after the termination of his retainer agreement
with Comtech. A lawyers immutable duty to a former client does not cover
transactions that occurred beyond the lawyers employment with the client. [16] The
intent of the law is to impose upon the lawyer the duty to protect the clients
interests only on matters that he previously handled for the former client and not
for matters that arose after the lawyer-client relationship has terminated.[17]

WHEREFORE, we DISMISS the complaint against Atty. Felipe Iledan, Jr. for
lack of merit.

SO ORDERED.
 JESSIE R. DE LEON, A.C. No. 8620
Complainant,
Present:

CARPIO MORALES, Chairperson,

BRION,
-versus - BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.

ATTY. EDUARDO G. Promulgated:

CASTELO,
Respondent. January 12, 2011
x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

This administrative case, which Jessie R. De Leon initiated on April 29,

2010, concerns respondent attorneys alleged dishonesty and falsification
committed in the pleadings he filed in behalf of the defendants in the civil action in
which De Leon intervened.

Antecedents

On January 2, 2006, the Government brought suit for the purpose of

correcting the transfer certificates of title (TCTs) covering two parcels of land
located in Malabon City then registered in the names of defendants Spouses Lim
Hio and Dolores Chu due to their encroaching on a publiccallejon and on a portion
of the Malabon-Navotas River shoreline to the extent, respectively, of an area of 45
square meters and of about 600 square meters. The suit, entitled Republic of
the Philippines, represented by the Regional Executive Director, Department of
Environment and Natural Resources v. Spouses Lim Hio and Dolores Chu,
Gorgonia Flores, and the Registrar of Deeds of Malabon City, was docketed as
Civil Case No. 4674MN of the Regional Trial Court (RTC), Branch 74,
in Malabon City.[1]

De Leon, having joined Civil Case No. 4674MN as a voluntary intervenor

two years later (April 21, 2008), now accuses the respondent, the counsel of record
of the defendants in Civil Case No. 4674MN, with the serious administrative
offenses of dishonesty and falsification warranting his disbarment or suspension as
an attorney. The respondents sin was allegedly committed by his filing for
defendants Spouses Lim Hio and Dolores Chu of various pleadings (that is, answer
with counterclaim and cross-claim in relation to the main complaint; and answer
to the complaint in intervention with counterclaim and cross-claim) despite said
spouses being already deceased at the time of filing.[2]

De Leon avers that the respondent committed dishonesty and falsification as

follows:

xxx in causing it (to) appear that persons (spouses Lim Hio and
Dolores Chu) have participated in an act or proceeding (the making and
filing of the Answers) when they did not in fact so participate; in fact,
they could not have so participated because they were already dead as of
that time, which is punishable under Article 172, in relation to Article
171, paragraph 2, of the Revised Penal Code.

Respondent also committed the crime of Use of Falsified

Documents, by submitting the said falsified Answers in the judicial
proceedings, Civil Case No. 4674MN;

Respondent also made a mockery of the aforesaid judicial

proceedings by representing dead persons therein who, he falsely made
to appear, as contesting the complaints, counter-suing and cross-suing
the adverse parties.

12. That, as a consequence of the above criminal acts, complainant

respectfully submits that respondent likewise violated:

(a) His Lawyers Oath:

xxx
(b) The Code of Professional Responsibility: [3]
xxx

On June 23, 2010, the Court directed the respondent to comment on

De Leons administrative complaint.[4]

In due course, or on August 2, 2010,[5] the respondent rendered the following

explanations in his comment, to wit:

1. The persons who had engaged him as attorney to represent the Lim
family in Civil Case No. 4674MN were William and Leonardo
Lim, the children of Spouses Lim Hio and Dolores Chu;

2. Upon his (Atty. Castelo) initial queries relevant to the material

allegations of the Governments complaint in Civil Case No.
4674MN, William Lim, the representative of the Lim Family,
informed him:
 a. That the Lim family had acquired the properties from
Georgina Flores;

b. That William and Leonardo Lim were already actively

managing the family business, and now co-owned the
properties by virtue of the deed of absolute sale their
parents, Spouses Lim Hio and Dolores Chu, had executed in
their favor; and

c. That because of the execution of the deed of absolute sale,

William and Leonardo Lim had since honestly assumed that
their parents had already caused the transfer of the TCTs to
their names.

3. Considering that William and Leonardo Lim themselves were the

ones who had engaged his services, he (Atty. Castelo)
consequently truthfully stated in the motion seeking an extension
to file responsive pleading dated February 3, 2006 the fact that it
was the family of the defendants that had engaged him, and that he
had then advised the children of the defendants to seek the
assistance as well of a licensed geodetic surveyor and engineer;

4. He (Atty. Castelo) prepared the initial pleadings based on his

honest belief that Spouses Lim Hio and Dolores Chu were then
still living. Had he known that they were already deceased, he
would have most welcomed the information and would have
moved to substitute Leonardo and William Lim as defendants for
that reason;

5. He (Atty. Castelo) had no intention to commit either a falsehood or

a falsification, for he in fact submitted the death certificates of
Spouses Lim Hio and Dolores Chu in order to apprise the trial
court of that fact; and

6. The Office of the Prosecutor for Malabon City even dismissed the
criminal complaint for falsification brought against him (Atty.
Castelo) through the resolution dated February 11, 2010. The same
office denied the complainants motion for reconsideration on May
17, 2010.

On September 3, 2010, the complainant submitted a reply,[6] whereby he

asserted that the respondents claim in his comment that he had represented the Lim
family was a deception, because the subject of the complaint against the
respondent was his filing of the answers in behalf of Spouses Lim Hio and Dolores
Chu despite their being already deceased at the time of the filing. The complainant
regarded as baseless the justifications of the Office of the City Prosecutor
for Malabon City in dismissing the criminal complaint against the respondent and
in denying his motion for reconsideration.
 The Court usually first refers administrative complaints against members of
the Philippine Bar to the Integrated Bar of the Philippines (IBP) for investigation
and appropriate recommendations. For the present case, however, we forego the
prior referral of the complaint to the IBP, in view of the facts being uncomplicated
and based on the pleadings in Civil Case No. 4674MN. Thus, we decide the
complaint on its merits.
Ruling

We find that the respondent, as attorney, did not commit any falsehood or
falsification in his pleadings in Civil Case No. 4674MN. Accordingly, we dismiss
the patently frivolous complaint.

I
Attorneys Obligation to tell the truth

All attorneys in the Philippines, including the respondent, have sworn to the
vows embodied in following Lawyers Oath,[7] viz:

I, ___________________, do solemnly swear that I will maintain

allegiance to the Republic of the Philippines; I will support its
Constitution and obey the laws as well as the legal orders of the duly
constituted authorities therein; I will do no falsehood, nor consent to the
doing of any in court; I will not wittingly or willingly promote or sue any
groundless, false or unlawful suit, nor give aid nor consent to the same. I
will delay no man for money or malice, and will conduct myself as a
lawyer according to the best of my knowledge and discretion with all
good fidelity as well to the courts as to my clients; and I impose upon
myself this voluntary obligation without any mental reservation or
purpose of evasion. So help me God.

The Code of Professional Responsibility echoes the Lawyers Oath,

providing:[8]

CANON 1 - A LAWYER SHALL UPHOLD THE CONSTITUTION,

OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR
LAW AND LEGAL PROCESSES.

Rule 1.01 - A lawyer shall not engage in unlawful, dishonest,

immoral or deceitful conduct.

CANON 10 - A LAWYER OWES CANDOR, FAIRNESS AND

GOOD FAITH TO THE COURT.
 Rule 10.01 - A lawyer shall not do any falsehood, nor consent to the
doing of any in Court; nor shall he mislead, or allow the Court to be
misled by any artifice.

The foregoing ordain ethical norms that bind all attorneys, as officers of the
Court, to act with the highest standards of honesty, integrity, and
trustworthiness. All attorneys are thereby enjoined to obey the laws of the land, to
refrain from doing any falsehood in or out of court or from consenting to the doing
of any in court, and to conduct themselves according to the best of their knowledge
and discretion with all good fidelity as well to the courts as to their clients. Being
also servants of the Law, attorneys are expected to observe and maintain the rule of
law and to make themselves exemplars worthy of emulation by others. [9] The least
they can do in that regard is to refrain from engaging in any form or manner of
unlawful conduct (which broadly includes any act or omission contrary to law, but
does not necessarily imply the element of criminality even if it is broad enough to
include such element).[10]

To all attorneys, truthfulness and honesty have the highest value, for, as the
Court has said in Young v. Batuegas:[11]

A lawyer must be a disciple of truth. He swore upon his admission

to the Bar that he will do no falsehood nor consent to the doing of any in
court and he shall conduct himself as a lawyer according to the best of
his knowledge and discretion with all good fidelity as well to the courts
as to his clients. He should bear in mind that as an officer of the court his
high vocation is to correctly inform the court upon the law and the facts
of the case and to aid it in doing justice and arriving at correct
conclusion. The courts, on the other hand, are entitled to expect only
complete honesty from lawyers appearing and pleading before them.
While a lawyer has the solemn duty to defend his clients rights and is
expected to display the utmost zeal in defense of his clients cause, his
conduct must never be at the expense of truth.

Their being officers of the Court extends to attorneys not only the
presumption of regularity in the discharge of their duties, but also the immunity
from liability to others for as long as the performance of their obligations to their
clients does not depart from their character as servants of the Law and as officers
of the Court. In particular, the statements they make in behalf of their clients that
are relevant, pertinent, or material to the subject of inquiry are absolutely
privileged regardless of their defamatory tenor. Such cloak of privilege is
necessary and essential in ensuring the unhindered service to their clients causes
and in protecting the clients confidences. With the cloak of privilege, they can
freely and courageously speak for their clients, verbally or in writing, in the course
of judicial and quasi-judicial proceedings, without running the risk of incurring
criminal prosecution or actions for damages.[12]
 Nonetheless, even if they enjoy a number of privileges by reason of their
office and in recognition of the vital role they play in the administration of justice,
attorneys hold the privilege and right to practice law before judicial, quasi-judicial,
or administrative tribunals or offices only during good behavior.[13]

II
Respondent did not violate the Lawyers Oath
and the Code of Professional Responsibility

On April 17, 2006, the respondent filed an answer with counterclaim and
cross-claim in behalf of Spouses Lim Hio and Dolores Chu, the persons whom the
Government as plaintiff named as defendants in Civil Case No. 4674MN. [14] He
alleged therein that:

2. The allegations in paragraph 2 of the complaint are

ADMITTED.Moreover, it is hereby made known that defendants
spouses Lim Hio and Dolores Chu had already sold the two (2)
parcels of land, together with the building and improvements
thereon, covered by Transfer Certificate of Title No. (148805) 139876
issued by the Register of Deeds of Rizal, to Leonardo C. Lim and
William C. Lim, of Rms. 501 502 Dolores Bldg., Plaza del Conde,
Binondo, Manila. Hence, Leonardo Lim and William Lim are their
successors-in-interest and are the present lawful owners thereof.

In order to properly and fully protect their rights, ownership and

interests, Leonardo C. Lim and William C. Lim shall hereby
represent the defendants-spouses Lim Hio and Dolores Chu as
substitute/representative parties in this action. In this manner, a
complete and expeditious resolution of the issues raised in this case
can be reached without undue delay. A photo copy of the Deed of
Absolute Sale over the subject property, executed by herein defendants-
spouses Lim Hio and Dolores Chu in favor of said Leonardo C. Lim and
William C. Lim, is hereto attached as Annex 1 hereof.
xxx
21. There is improper joinder of parties in the complaint. Consequently,
answering defendants are thus unduly compelled to litigate in a suit
regarding matters and facts as to which they have no knowledge of nor
any involvement or participation in.

22. Plaintiff is barred by the principle of estoppel in bringing this suit, as

it was the one who, by its governmental authority, issued the titles to the
subject property.
This action is barred by the principles of prescription and laches for
plaintiffs unreasonable delay in brining this suit, particularly against
defendant Flores, from whom herein answering defendants acquired the
subject property in good faith and for value. If truly plaintiff has a clear
 and valid cause of action on the subject property, it should not have
waited thirty (30) years to bring suit.

Two years later, or on April 21, 2008, De Leon filed his complaint in
intervention in Civil Case No. 4674MN.[15] He expressly named therein as
defendants vis--vis his intervention not only the Spouses Lim Hio and Dolores
Chu, the original defendants, but also their sons Leonardo Lim, married to Sally
Khoo, and William Lim, married to Sally Lee, the same persons whom the
respondent had already alleged in the answer, supra, to be the transferees
and current owners of the parcels of land.[16]

The following portions of De Leons complaint in intervention in Civil Case

No. 4674MN are relevant, viz:

2. Defendant spouses Lim Hio and Dolores Chu, are Filipino citizens
with addresses at 504 Plaza del Conde, Manila and at 46 C. Arellano
St., San Agustin, Malabon City, where they may be served with
summons and other court processes;

3. Defendant spouses Leonardo Lim and Sally Khoo and defendant

spouses William Lim and Sally Lee are all of legal age and with
postal address at Rms. 501-502 Dolores Bldg., Plaza del Conde,
Binondo, Manila, alleged purchasers of the property in question
from defendant spouses Lim Hio and Dolores Chu;

4. Defendants Registrar of Deeds of Malabon City holds office

in Malabon City, where he may be served with summons and other court
processes. He is charged with the duty, among others, of registering
decrees of Land Registration in Malabon City under the Land
Registration Act;
xxx
7. That intervenor Jessie de Leon, is the owner of a parcel of land located
in Malabon City described in TCT no. M-15183 of the Register of Deeds
of Malabon City, photocopy of which is attached to this Complaint as
Annex G, and copy of the location plan of the aforementioned property
is attached to this complaint as Annex H and is made an integral part
hereof;

8. That there are now more or less at least 40 squatters on intervenors

property, most of them employees of defendant spouses Lim Hio and
Dolores Chu and defendant spouses Leonardo Lim and Sally Khoo and
defendant spouses William Lim and Sally Lee who had gained access to
intervenors property and built their houses without benefit of any
building permits from the government who had made their access to
intervenors property thru a two panel metal gate more or less 10 meters
wide and with an armed guard by the gate and with permission from
defendant spouses Lim Hio and Dolores Chu and/or and defendant
 spouses Leonardo Lim and Sally Khoo and defendant spouses William
Lim and Sally Lee illegally entered intervenors property thru a wooden
ladder to go over a 12 foot wall now separating intervenors property
from the former esquinita which is now part of defendant spouses Lim
Hio and Dolores Chus and defendant spouses Leonardo Lim and Sally
Khoos and defendant spouses William Lim and Sally Lees property and
this illegally allowed his employees as well as their relatives and friends
thereof to illegally enter intervenors property through the ladders
defendant spouses Lim Hio and Dolores Chu installed in their wall and
also allowed said employees and relatives as well as friends to build
houses and shacks without the benefit of any building permit as well as
permit to occupy said illegal buildings;

9. That the enlargement of the properties of spouses Lim Hio and

Dolores Chu had resulted in the closure of street lot no. 3 as described in
TCT no. 143828, spouses Lim Hio and Dolores Chu having titled the
street lot no. 3 and placed a wall at its opening on C. Arellano street, thus
closing any exit or egress or entrance to intervenors property as could be
seen from Annex H hereof and thus preventing intervenor from entering
into his property resulted in preventing intervenor from fully enjoying all
the beneficial benefits from his property;

10. That defendant spouses Lim Hio and Dolores Chu and later on
defendant spouses Leonardo Lim and Sally Khoo and defendant
spouses William Lim and Sally Lee are the only people who could
give permission to allow third parties to enter intervenors property
and their control over intervenors property is enforced through his
armed guard thus exercising illegal beneficial rights over
intervenors property at intervenors loss and expense, thus depriving
intervenor of legitimate income from rents as well as legitimate
access to intervenors property and the worst is preventing the
Filipino people from enjoying the Malabon Navotas River
and enjoying the right of access to the natural fruits and products of
the Malabon Navotas River and instead it is defendant spouses Lim
Hio and Dolores Chu and defendant spouses Leonardo Lim and
Sally Khoo and defendant spouses William Lim and Sally Lee using
the public property exclusively to enrich their pockets;
xxx
13. That defendant spouses Lim Hio and Dolores Chu and defendant
spouses Leonardo Lim and Sally Khoo and defendant spouses
William Lim and Sally Lee were confederating, working and helping
one another in their actions to inhibit intervenor Jessie de Leon to
gain access and beneficial benefit from his property;

On July 10, 2008, the respondent, representing all the defendants named in
De Leons complaint in intervention, responded in an answer to the complaint in
intervention with counterclaim and cross-claim,[17] stating that spouses Lim Hio
and Dolores Chu xxx are now both deceased, to wit:
 xxx
2. The allegations in paragraphs 2 and 3 of the Complaint are
ADMITTED, with the qualification that defendants-spouses Leonardo
Lim and Sally Khoo Lim, William Lim and Sally Lee Lim are the
registered and lawful owners of the subject property covered by
Transfer Certificate of Title No. M-35929, issued by the Register of
Deeds for Malabon City, having long ago acquired the same from the
defendants-spouses Lim Hio and Dolores Chu, who are now both
deceased. Copy of the TCT No. M-35929 is attached hereto as Annexes
1 and 1-A. The same title has already been previously submitted to this
Honorable Court on December 13, 2006.
xxx

The respondent subsequently submitted to the RTC a so-called clarification

and submission,[18] in which he again adverted to the deaths of Spouses Lim Hio
and Dolores Chu, as follows:

1. On March 19, 2009, herein movants-defendants Lim filed before

this Honorable Court a Motion for Substitution of Defendants in the
Principal Complaint of the plaintiff Republic of the Philippines,
represented by the DENR;

2. The Motion for Substitution is grounded on the fact that the

two (2) parcels of land, with the improvements thereon, which are
the subject matter of the instant case, had long been sold and
transferred by the principal defendants-spouses Lim Hio and
Dolores Chu to herein complaint-in-intervention defendants
Leonardo C. Lim and William C. Lim, by way of a Deed of Absolute
Sale, a copy of which is attached to said Motion as Annex 1 thereof.

3. Quite plainly, the original principal defendants Lim Hio and

Dolores Chu, having sold and conveyed the subject property, have
totally lost any title, claim or legal interest on the property. It is on
this factual ground that this Motion for Substitution is based and
certainly not on the wrong position of Intervenor de Leon that the
same is based on the death of defendants Lim Hio and Dolores Chu.

4. Under the foregoing circumstances and facts, the demise of

defendants Lim Hio and Dolores Chu no longer has any significant
relevance to the instant Motion. To, however, show the fact of their
death, photo copy of their respective death certificates are attached
hereto as Annexes 1 and 2 hereof.

5. The Motion for substitution of Defendants in the Principal

Complaint dated March 18, 2009 shows in detail why there is the clear,
legal and imperative need to now substitute herein movants-defendants
Lim for defendants Lim Hio and Dolores Chu in the said principal
complaint.
 6. Simply put, movants-defendants Lim have become the
indispensable defendants in the principal complaint of plaintiff DENR,
being now the registered and lawful owners of the subject property and
the real parties-in-interest in this case. Without them, no final
determination can be had in the Principal complaint.

7. Significantly, the property of intervenor Jessie de Leon, which is

the subject of his complaint-in-intervention, is identically, if not
similarly, situated as that of herein movants-defendants Lim, and
likewise, may as well be a proper subject of the Principal Complaint of
plaintiff DENR.

8. Even the plaintiff DENR, itself, concedes the fact that herein
movants-defendants Lim should be substituted as defendants in the
principal complaint as contained in their Manifestation dated June 3,
2009, which has been filed in this case.

WHEREFORE, herein movants-defendants Lim most respectfully

submit their Motion for substitution of Defendants in the Principal
Complaint and pray that the same be granted.
xxx

Did the respondent violate the letter and spirit of the Lawyers Oathand
the Code of Professional Responsibility in making the averments in the
aforequoted pleadings of the defendants?

A plain reading indicates that the respondent did not misrepresent that
Spouses Lim Hio and Dolores Chu were still living. On the contrary, the
respondent directly stated in the answer to the complaint in intervention with
counterclaim and cross-claim, supra, and in the clarification and submission,
supra, that the Spouses Lim Hio and Dolores Chu were alreadydeceased.

Even granting, for the sake of argument, that any of the respondents
pleadings might have created any impression that the Spouses Lim Hio and
Dolores Chu were still living, we still cannot hold the respondent guilty of any
dishonesty or falsification. For one, the respondent was acting in the interest of the
actual owners of the properties when he filed the answer with counterclaim and
cross-claim on April 17, 2006. As such, his pleadings were privileged and would
not occasion any action against him as an attorney. Secondly, having made clear at
the start that the Spouses Lim Hio and Dolores Chu were no longer the actual
owners of the affected properties due to the transfer of ownership even prior to the
institution of the action, and that the actual owners (i.e., Leonardo and William
Lim) needed to be substituted in lieu of said spouses, whether the Spouses Lim Hio
and Dolores Chu were still living or already deceased as of the filing of the
pleadings became immaterial. And, lastly, De Leon could not disclaim knowledge
that the Spouses Lim Hio and Dolores Chu were no longer living. His joining in
the action as a voluntary intervenor charged him with notice
of all the other persons interested in the litigation. He also had an actual awareness
of such other persons, as his own complaint in intervention, supra, bear out in its
specific allegations against Leonardo Lim and William Lim, and their respective
spouses. Thus, he could not validly insist that the respondent committed any
dishonesty or falsification in relation to him or to any other party.

III
Good faith must always motivate any complaint
against a Member of the Bar

According to Justice Cardozo,[19] xxx the fair fame of a lawyer, however

innocent of wrong, is at the mercy of the tongue of ignorance or malice. Reputation
in such a calling is a plant of tender growth, and its bloom, once lost, is not easily
restored.

A lawyers reputation is, indeed, a very fragile object. The Court, whose
officer every lawyer is, must shield such fragility from mindless assault by the
unscrupulous and the malicious. It can do so, firstly, by quickly cutting down any
patently frivolous complaint against a lawyer; and, secondly, by demanding good
faith from whoever brings any accusation of unethical conduct. A Bar that is
insulated from intimidation and harassment is encouraged to be courageous and
fearless, which can then best contribute to the efficient delivery and proper
administration of justice.

The complainant initiated his complaint possibly for the sake of harassing
the respondent, either to vex him for taking the cudgels for his clients in
connection with Civil Case No. 4674MN, or to get even for an imagined wrong in
relation to the subject matter of the pending action, or to accomplish some other
dark purpose. The worthlessness of the accusation apparent from the beginning has
impelled us into resolving the complaint sooner than later.

WHEREFORE, we dismiss the complaint for disbarment or suspension

filed against Atty. Eduardo G. Castelo for utter lack of merit.

SO ORDERED.