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Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No.

179999 March 17, 2009

ANSON TRADE CENTER, INC., ANSON EMPORIUM CORPORATION and TEDDY KENG SE CHEN, Petitioners, vs. PACIFIC BANKING CORPORATION, Represented by Its Liquidator, the President of the Philippine Deposit Insurance Corporation, Respondent. DECISION CHICO-NAZARIO, J.: Before Us is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules of Court filed by petitioners Anson Trade Center, Inc., (ATCI), Anson Emporium Corporation (AEC), and Teddy Keng Se Chen (Chen), seeking the reversal and the setting aside of the Decision2 dated 31 May 2007 and Resolution3 dated 16 October 2007 of the Court of Appeals in CA-G.R. SP No. 93734. In its assailed Decision, the Court of Appeals annulled the Order4 dated 10 October 2005 of the Regional Trial Court (RTC) of Manila, Branch 52, dismissing Civil Case No. 01-102198 for failure of respondent Pacific Banking Corporation (PBC)5 to appear during the pre-trial. In its assailed Resolution, the Court of Appeals refused to reconsider its earlier Decision. The following are the undisputed facts: Petitioners ATCI and AEC are corporations engaged in retail and/or wholesale general merchandising.6 Petitioner Chen is the Vice Head of said commercial entities. Respondent is a closed banking institution undergoing liquidation by the Philippine Deposit Insurance Corporation (PDIC). On different dates, petitioner ATCI obtained several loans7 from respondent, amounting to P4,350,000.00. On 26 October 1984, petitioner AEC also received the amount of P1,000,000.00 as a loan from respondent. As security for the said loan obligations, petitioner Chen, with the late Keng Giok,8 executed, on behalf of petitioners ATCI and AEC, two Continuing Suretyship Agreements on 16 September 1981 and 1 March 1982. The Continuing Suretyship Agreements provided that, as security for any and all the indebtedness or obligation of petitioners ATCI and AEC, the respondent had the right to retain a lien upon any and all moneys or other properties and/or the proceeds thereof in the name or for the account or credit of petitioners ATCI and AEC deposited or left with respondent. Subsequently, petitioners defaulted in the payment of their loans. Respondent made several demands for payment upon petitioners, to no avail. This prompted respondent to file before the RTC a collection case against petitioners, docketed as Civil Case No. 01-102198. On 14 January 2002, petitioner Chen, instead of filing an Answer to the Complaint of respondent in Civil Case No. 01-102198, filed a Motion to Dismiss. Petitioners ATCI and AEC, together with the Estate of Keng Giok, also jointly filed a Motion to Dismiss. Respondent filed its Comment/Opposition to the Motions to Dismiss Civil Case No. 01-102198, to which petitioners Chen, ATCI, and AEC, with the Estate of Keng Giok, filed their Replies. Due to the inaction of the RTC on the Motions to Dismiss, respondent filed Motions to Resolve on 14 January 2003 and on 29 October 2003. In an Order dated 4 November 2004, the RTC denied the Motions to Dismiss but granted the prayer to drop Keng Giok as defendant since he was long dead prior to the institution of Civil Case No. 01-102198. After petitioners filed their joint Answer to the Complaint, a pre-trial conference was set by the RTC on 4 April 2005. All the parties were present at the scheduled pre-trial where the RTC first explored the possibility of an amicable settlement among the parties by referring the case to the Philippine Mediation

Center for arbitration. The arbitration proceedings were, however, unsuccessful. Thus, the case was referred back to the RTC for a full-blown trial. In order to simplify the issues to be threshed out in the trial, another pre-trial conference was scheduled by the RTC on 10 October 2005, which respondent failed to attend. Petitioners moved for the dismissal of Civil Case No. 01-102198 on the ground of the non-appearance of respondent at the pre-trial of 10 October 2005, which was granted, without prejudice, by the RTC in an Order issued on even date. Respondent filed with the RTC a Motion for Reconsideration of the courts order of dismissal, in which respondent prayed for the relaxation of the rule on non-appearance in the pre-trial, citing excusable negligence on its part and in the interest of justice and equity. The RTC denied the Motion for Reconsideration of respondent in another Order dated 17 January 2006. The above precipitated respondent to file with the Court of Appeals a Petition for Certiorari under Rule 65 of the Revised Rules of Court, which was docketed as CA-G.R. SP No. 93734. Respondent prayed for the reversal of the RTC Orders dated 10 October 2005 and 17 January 2006, arguing that the RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction when it dismissed Civil Case No. 01-102198 due to the non-appearance of respondent at the pre-trial held on 10 October 2005. Respondent asserted that its absence was not deliberate or intentional. Its liquidator, PDIC, was undergoing a reorganization resulting in, among other things, the trimming down of the departments handling litigation work from four to one; and the lack of manpower to handle more than 400 banks ordered closed by the Monetary Board. Respondent pleaded for the relaxation of the rules to avert irreparable damage to it. The Court of Appeals rendered a Decision on 31 May 2007, granting the Petition of respondent and reversing the assailed RTC Orders which dismissed Civil Case No. 01-102198. According to the appellate court, the RTC lost sight of the fact that even the Rules of Court mandate a liberal construction of the rules and the pleadings in order to effect substantial justice; and that overriding all the foregoing technical considerations is the trend in the rulings of the court to afford every party-litigant the amplest opportunity for the proper and just determination of his cause, freed from the constraints of technicalities.9 In a Resolution dated 16 October 2007, the Court of Appeals refused to reconsider its earlier Decision. Petitioners now come before us via this instant Petition for Review on Certiorari raising the following issues: I WHETHER OR NOT THE REVERSAL OF THE TRIAL COURTS ORDER DATED OCTOBER 10, 2005 DISMISSING [herein respondent]S COMPLAINT FOR ITS FAILURE TO APPEAR AT THE PRE-TRIAL WAS IN ACCORDANCE WITH THE 1997 RULES ON CIVIL PROCEDURE AND APPLICABLE JURISPRUDENCE. II WHETHER OR NOT THE TRIAL COURT ABUSED ITS DISCRETION IN DISMISSING RESPONDENTS COMPLAINT BECAUSE OF ITS NON-APPEARANCE AT PRE-TRIAL. 10 At the core of this controversy is a question of procedure. The petitioners, on one hand, argue that the appearance of the parties during pre-trial is mandatory, and the absence of respondent therefrom constitutes a serious procedural blunder that merits the dismissal of its case. On the other hand, respondent claims that the Rules must be relaxed if it will cause irreparable damage to a party-litigant and to promote the ends of justice. Respondent urges us to brush aside technicalities and to excuse its non-appearance during the pre-trial conference. We find the Petition unmeritorious.

Pre-trial, by definition, is a procedural device intended to clarify and limit the basic issues raised by the parties11and to take the trial of cases out of the realm of surprise and maneuvering.12 It is an answer to the clarion call for the speedy disposition of cases. Hailed as the most important procedural innovation in Anglo-Saxon justice in the nineteenth century,13 it thus paves the way for a less cluttered trial and resolution of the case.14 Pertinent provisions of Rule 18 of the Revised Rules of Court on Pre-Trial read: SEC. 4. Appearance of parties. It shall be the duty of the parties and their counsel to appear at the pretrial. The non-appearance of a party may be excused only if a valid cause is shown therefor or if a representative shall appear in his behalf fully authorized in writing to enter into an amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of documents. SEC. 5. Effect of failure to appear. The failure of the plaintiff to appear when so required pursuant to the next preceding section shall be cause for dismissal of the action. The dismissal shall be with prejudice, unless otherwise ordered by the court. A similar failure on the part of the defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis thereof. Pursuant to the afore-quoted provisions, non-appearance by the plaintiff in the pre-trial shall be cause for dismissal of the action. However, every rule is not without an exception. In fact, Section 4, Rule 18 of the Revised Rules of Court explicitly provides that the non-appearance of a party may be excused if a valid cause is shown therefor. We find such a valid cause extant in the case at bar. There is no question that herein respondent received notice of the pre-trial conference scheduled on 10 October 2005, but it failed to attend the same. Such non-appearance notwithstanding, the Court Of Appeals annulled the 10 October 2005 Order of the RTC dismissing Civil Case No. 01-102198 after finding that respondent did not intentionally snub the pre-trial conference. There is no reason for us to disturb such finding. The Monetary Board ordered the closure of respondent by reason of insolvency on 5 July 1985, and it has since been represented by its liquidator PDIC in all its undertakings. Still in the course of the liquidation of respondent, its liquidator PDIC was reorganized in the late 2004 to early 2005. The four departments in the PDIC handling litigation were reduced to one, with the new Litigation Department having only four in-house counsels who assumed thousands of cases arising from the closure by the Monetary Board of more than 400 banks. It is understandable how the notice for the pre-trial conference in Civil Case No. 01-102198 scheduled on 10 October 2005 could be lost or overlooked, as the PDIC was still coping and adjusting with the changes resulting from its reorganization. It is important to note that the respondent was not remiss in its duties to prosecute its case. Except for the lone instance of the pre-trial conference on 10 October 2005, respondent promptly and religiously attended the hearings set by the RTC. In fact, it appears on the records that a pre-trial conference in Civil Case No. 01-102198 was first held on 4 April 2005, during which respondent was present. When the RTC did not immediately act on the Motions to Dismiss of petitioners, it was respondent which filed two Motions to Resolve. The actuations of respondent reveal its interest in prosecuting the case, instead of any intention to delay the proceedings. In Bank of the Philippine Islands v. Court of Appeals,15 we ruled that in the absence of a pattern or scheme to delay the disposition of the case or a wanton failure to observe the mandatory requirement of the rules, courts should decide to dispense rather than wield their authority to dismiss. If Civil Case No. 01-102198 is allowed to proceed to trial, it will not clog the dockets of the RTC or run counter to the purposes for holding a pre- trial. Inconsiderate dismissals, even without prejudice, do not constitute a panacea or a solution to the congestion of court dockets; while they lend a deceptive aura of efficiency to records of individual judges, they merely postpone the ultimate reckoning between the parties. In the absence of clear lack of merit or intention to delay, justice is better served by a brief continuance, trial on the merits, and final disposition of cases before the court.16

Moreover, respondent is already insolvent and undergoing liquidation. It instituted Civil Case No. 01102198 precisely to recover from petitioners the unpaid loans. Even if the dismissal of Civil Case No. 01-102198 by the RTC was without prejudice, the re-filing of the case would be injurious to respondent. Respondent already paidP344,878.23 as docket fees for Civil Case No. 01-102198 and with the dismissal of said case, the amount would be forfeited. Respondent would have to pay docket fees once more when it re-files its Complaint, a substantial amount considering that respondent is already financially shaped. As the Court of Appeals noted, for respondent to again pay docket fees for the refiling of its Complaint against petitioners would truly be detrimental to the creditors of respondent. Given the foregoing, the Court of Appeals did not err in pronouncing that the RTC committed grave abuse of discretion when it dismissed Civil Case No. 01-102198 for the failure of respondent to attend the pre-trial conference on 10 October 2005. As the appellate court so astutely stated: In refusing to resuscitate Civil Case No. 01-102 198 despite a showing that there was an excusable ground for the [herein respondent]s absence during the pre-trial, the respondent judge manifested a dire fixation towards procedural perfection. Indeed, the extraordinary writ of certiorari would lie when a triers obsession with the stringent tenets of technicality would occasion an injustice against a party litigant. Litigation is not a game of technicality, in which one more deeply schooled and skilled in the subtle art of movement and position entraps and destroys the other. It is rather a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfection of forms and technicalities of procedure, asks that justice be done upon the merits. Lawsuits, unlike duels, are not to be won by a rapiers thrust. Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts.17 As we have stressed emphatically on previous occasions, the rules of procedure may not be misused and abused as instruments for the denial of substantial justice. Here is another demonstrative instance of how some members of the bar, availing themselves of their proficiency in invoking the letter of the rules without regard to their real spirit and intent, succeed in inducing courts to act contrary to the dictates of justice and equity, and, in some instances, to wittingly or unwittingly abet unfair advantage by ironically camouflaging their actuations as earnest efforts to satisfy the public clamor for speedy disposition of litigations, forgetting all the while that the plain injunction of Section 2 of Rule 1 is that the "rules shall be liberally construed in order to promote their object and to assist the parties in obtaining" not only "speedy" but more imperatively, "just ... and inexpensive determination of every action and proceeding."18 WHEREFORE, premises considered, the instant Petition for Review on Certiorari is hereby DENIED. The Decision dated 31 May 2007 and Resolution dated 16 October 2007 of the Court of Appeals are AFFIRMED. Costs against the petitioners. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION A.C. No. 7732 March 30, 2009

RODANTE D. MARCOLETA, Complainant vs. RESURRECCION Z. BORRA AND ROMEO A. BRAWNER, Respondents. DECISION CARPIO MORALES, J.: A Complaint1 for disbarment was filed by Atty. Rodante D. Marcoleta (complainant) against respondents Commissioners Resurreccion Z. Borra (Borra) and Romeo A. Brawner (Brawner) of the Commission on Elections (Comelec) charging them with violating Canons 1 (1.01, 1.02 and 1.03) and 3 (3.01, 3.02, 3.05 and 3.06) of the Code of Judicial Conduct2 and Canons 4, 5, 6 and 17 of the Canons of Judicial Ethics.3 Additionally, complainant charges respondents of violating Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees.4 During the 2007 National and Local Elections, the warring factions of complainant and Diogenes S. Osabel (Osabel) each filed a separate list5 of nominees for the party-list group Alagad.1avvphi1 With Alagad winning a seat in the House of Representatives, the two protagonists contested the right to represent the party. By Omnibus Resolution6 of July 18, 2007, the dispute was resolved by the Comelecs First Division in favor of Osabel. Commissioner Borra wrote the ponencia while Commissioner Brawner concurred. The dispute was elevated to the Comelec En Banc which, by Resolution7 of November 6, 2007, reversed the First Division Resolution and reinstated the certificate of nomination of complainants group. For failing to muster the required majority voting,8 however, the Comelec ordered the re-hearing of the controversy. Notwithstanding the conduct of a re-hearing, the necessary majority vote could not still be obtained.9 The Comelecs First Divisions Omnibus Resolution was eventually affirmed.10 Hence, arose the present complaint for disbarment, complainant alleging as follows: 8. x x x x respondents [Borra and Brawner] promulgated a highly questionable and irregular Omnibus Resolution [Annexes "F" and "F-1"], that was characterized by manifest partiality, evident bad faith, and gross inexcusable negligence as evidenced in the TIMING and MANNER by which the case was eventually disposed by herein respondents in their Division. 9. Respondents deliberately delayed the resolution of the case (from 5 days as mandated under Sec. 8, Rule 18 of the Comelec Rules of Procedure) to nearly 4 months after the same was deemed submitted for decision on March 20, 2007. The delay was intentional because if the case was resolved before May 14, 2007, [Osabel] will be left alone to campaign for the Party and considering that he is relatively unknown and without resources, certainly he cannot make the Party win. x x x x. Hence, in first making sure that ALAGAD wins a seat and, thereafter, resolved the case in favor of one who neither campaigned nor spent for it, both respondents subverted and/or frustrated the will of the 423,090 voters who supported ALAGAD and who have always believed that it was complainant who will represent them in the 14th Congress. This is an extortionate act to say the least! 10. Even the manner with which the case was disposed is fraught with gross deception and evident manipulation. First of all, the respondents changed the sole and common issue stipulated by the parties: from one that is central to the complete and final resolution of the controversy, into one that was beyond the Comelecs jurisdiction.

xxxx 11. Respondents were evidently in bad faith in muddling the issue (which resulted in an erroneous ruling) x x x. xxxx 13. The assailed 20-page Omnibus Resolution never cited a single law (in violation of Sec. 14, Art. VIII of the Philippine Constitution as well as Rule 18, Sec. 2, last par. of their own Rules) in erroneously ruling that petitioners resignation cannot be considered because it was not in written form x x x x. 14. Both respondents lied in actually delving into the root of the parties conflict despite their avowal to the contrary and in giving "more credence to the Minutes submitted by [Osabel]" (Annex "F-13.b") despite their declaration that said "minutes partisan from the start x x x in a power struggle within the organization, cannot be upheld as faithful depiction of prevailing facts." They also lied in not relying on the Partys Constitution and By-Laws (CBL), contrary to what they declared to do, when compared to the En Banc ponencia [Annex "J"] that reversed their Omnibus Resolution x x x x. xxxx 16. Respondent Borras "dissenting opinion" (if it can be qualified as such) was a mere marginal note, written above his signature that reads: "In conscience and judiciousness, I vote to affirm the 1st Div. Omnibus Resolution." x x x. 17. Respondent Borra knows only too well that all cases are decided and affirmed on the basis of evidence, not on conscience. For conscience is that instantaneous perception of right or wrong that can only be summoned by the spirit being a part of the Divine Wisdom. x x x. 18. It was clearly evasive for respondent Borra to use the absurd excuse "in conscience and judiciousness" to free himself from the mandatory submission of a separate dissenting opinion x x x. xxxx 20. Respondent Brawners Dissenting Opinion [Ref. Annex "I"], on the other hand, only confirmed his leaning and partiality towards [Osabel] as clearly shown by his shallow disquisition, if not twisted, dissent. x x x. 21. Respondent Brawners irresponsible claim (on page 4) that "all official records of ALAGADs proceedings point out to Osabels continuing as ALAGADs President" and "the recent decision in SPA No. 04-153 dated June 12, 2007 prove the continuing stature of Osabel as ALAGAD President" is not supported by facts. x x x x. Thus, it was reckless, if not unthinkable, for Brawner to have ascribed "continuing stature" upon petitioner based on a "position" appearing in the title [Annex "O-1"] of a different and old case that was disposed only recently. This ruse is gobbledygook, plain and simple! [Padua v. Robles, 66 SCRA 488]. x x x x (Emphasis, underscoring and italics in the original) Complainant filed a Supplemental Complaint11 on February 12, 2008, this time charging respondent Brawner of "tamper[ing] the record of the proceedings in [SPA No. 07-020]" by falsely alleging in an Order dated February 5, 2008 that there had been a re-hearing; that both parties had agreed to simultaneously file their memoranda during the re-hearing; and that the parties filed their respective memoranda. Respondent Brawner, in his Answer12 dated April 2, 2008, asserted in the main that "the remedy of complainant is not to file a complaint for disbarment, but to file an appeal before [the Supreme Court] via [p]etition for [c]ertiorari," and that being members of a constitutional body enjoying presumption of

regularity in the performance of their functions, he and co-respondent Borra "are supposed to be insulated from a disbarment complaint for being impeachable officers." In his Comment,13 respondent Borra contends that the Code of Judicial Conduct and Canons of Judicial Ethics cannot be made to apply to him and his co-respondent, they not being members of the judiciary; and that since they perform quasi-judicial functions as well as administrative duties, they are bound by the Comelecs own set of internal rules and procedure over and above a Code of Conduct that prescribes the norms and standards of behavior to be observed by the officials and employees of the Comelec, a constitutional body. Respondent Borra further contends that the present complaint is premature as "the validity and legality of the resolutions are still subject to review;" and that the complaint is meant to "harass [him] and punish him for exercising his judgment on the case filed before him." To respondents Answer and Comment, complainant filed Replies,14 alleging that respondents cannot take refuge in their being impeachable public officers to insulate them from any disbarment complaint. To complainant, "the insulation from disbarment complaint of impeachable public officers when referring particularly to the members of the [Comelec] applies only to the majority of its members who should all be members of the Philippine bar," citing Section 1 (1) of Article IX-C of the Constitution.15 Complainant goes on to charge respondent Borra of violating Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act for collecting his retirement benefits "hurriedly despite knowledge of the existence of criminal and administrative charges against him." Additionally, he charges respondents of culpable violation of the Constitution when they, together with the other members of the Comelec, adjusted their compensation scheme under Resolution No. 7685.16 The Court takes notice that respondent Borra retired from the Comelec on February 2, 2008 while respondent Brawner passed away on May 29, 2008. As regards respondent Brawner then, the present case is already moot. At the outset, the Court, guided by its pronouncements in Jarque v. Ombudsman,17 In Re: Raul M. Gonzales18 and Cuenco v. Fernan,19 has laid down the rule that an impeachable officer20 who is a member of the Bar cannot be disbarred without first being impeached. Complainants availment of Section 1 (1) of Article IX-C of the Constitution to skirt this rule is specious. It bears emphasis that the provision that majority of Comelec members should be lawyers pertains to the desired composition of the Comelec. While the appointing authority may follow such constitutional mandate, the appointment of a full complement of lawyers in the Comelec membership is not precluded. At the time the present complaint was filed, respondents and three other commissioners21 were all lawyers. As an impeachable officer who is at the same time a member of the Bar, respondent Borra must first be removed from office via the constitutional route of impeachment before he may be held to answer administratively for his supposed errant resolutions and actions. Respondent Borra having retired from the Comelec does not, of course, necessarily call for the dismissal of the complaint. At the heart, however, of the disbarment complaint is the issuance of Omnibus Resolution of July 18, 2007 penned by respondent Borra when he was still a member of the Comelecs First Division. The supposed failure of respondent Borra to resolve the controversy between complainants faction and the other faction of Alagad within the prescribed period does not render the Omnibus Resolution null and void. Prescribed periods partake of a directory requirement, given the Comelecs numerous cases and logistical limitations.22 The Court thus finds respondent Borras contention that the grounds-bases of the disbarment complaint, fastened on supposed errors of judgment or grave abuse of discretion in the appreciation of facts, are

proper for an appeal, hence, complainants remedy is judicial, not administrative.lawphil.net As for complainants invocation of Section 58 of Article VII of the Omnibus Election Code23 reading: The chairman and members of the Commission shall be subject to the canons of judicial ethics in the discharge of their functions. x x x x (Emphasis and underscoring supplied), the same relates to the quasi-judicial function of the Comelec, which function rests on judgment or discretion, so that while it is of judicial nature or character, it does not involve the exercise of functions of a judge.24 The same provision thus directs that in the exercise of the Comelecs quasi-judicial power, the chairman and members should be guided by the canons of judicial ethics. It bears emphasis that the New Code of Judicial Conduct for the Philippine Judiciary25 applies only to courts of law, of which the Comelec is not, hence, sanctions pertaining to violations thereof are made exclusively applicable to judges and justices in the judiciary, not to quasi-judicial officers like the Comelec chairman and members, who have their own codes of conduct to steer them. Even if the Court were to gauge the assailed actions of respondent Borra under the Code of Professional Responsibility, no specific incidents and sufficient evidence can be gathered to show that respondent did engage in dishonest, immoral or deceitful conduct in his capacity as a lawyer. It bears reiteration that the acts particularized in the complaint pertain to respondent Borras duties as a Comelec commissioner. As for the release of retirement benefits to respondent Borra, there is nothing irregular therewith, the same being in line with Memorandum Circular No. 10 (series of 1995) of the Office of the Ombudsman reading: x x x a person retiring from the government service, whether optional or compulsory, needs only to present a certification from this Office whether or not he has a pending criminal or administrative case with it. In the event the certification presented states that the prospective retiree has a pending case, the responsibility of determining whether to release his retirement benefits, as well as the imposition of necessary safeguards to ensure restitution thereof in the event the retiree is found guilty, rests upon and shall be left to the sound discretion of the head of the department, office or agency concerned. (Emphasis and underscoring in the original) Interestingly, while complainant singled out the participation of respondents Borra and Brawner in the promulgation of the questioned resolutions, he spared the other commissioners who were also signatories to the resolutions. WHEREFORE, the complaint for disbarment against now deceased Comelec Commissioner Romeo Brawner is DISMISSED for being moot. That against Commissioner Resurreccion Borra is likewise DISMISSED for lack of merit. SO ORDERED.

Republic of the Philippines Supreme Court Manila THIRD DIVISION A.C. No. 5955 JOHN CHRISTEN S. HEGNA, Complainant, Present: YNARES-SANTIAGO, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: September 8, 2009 x-----------------------------------------------------x DECISION PERALTA, J.: Before this Court is a letter-complaint[1] dated June 3, 2002, filed by complainant John Christen S. Hegna with the Office of the Bar Confidant (OBC) against respondent Atty. Goering G.C. Paderanga for deliberately falsifying documents, which caused delay in the execution of the decision rendered by the Municipal Trial Courts in Cities (MTCC), Branch 8, Cebu City, in Civil Case No. R-45146, entitled John Hegna v. Mr. & Mrs. Eliseo Panaguinip. Herein complainant was the lessee of a portion of Lot No. 5529, situated at Barangay Quiot Pardo, Cebu City, which was owned by the heirs of Sabina Baclayon. The heirs of Baclayon, through their representative Gema Sabandija, entered into a contract of lease with complainant for a period of ten (10) years, commencing from June 26, 1994, with a rental of P3,000.00 per year, or P250.00 per month. On September 26, 2001, complainant filed a complaint for forcible entry against therein defendants docketed as Civil Case No. R-45146, entitled John Hegna v. Mr. & Mrs. Eliseo Panaguinip , with the Municipal Trial Court in Cities (MTCC), Branch 8 of Cebu City. In said complaint, he alleged that in about the second week of March 1996, therein defendants entered the vacant portion of the leased premises by means of force, intimidation, threat, strategy or stealth; destroyed the barbed wire enclosing the leased premises of complainant, then built a shop on the said premises without complainants consent. He averred that despite his demands upon therein defendants to vacate the premises and demolish the structure built thereon, the latter failed and refused to comply.[2]

- versus -

ATTY. GOERING G.C. PADERANGA, Respondent.

When therein defendants failed to file their Answer, complainant filed a motion that judgment be rendered in default. On December 21, 2001, the MTCC rendered a Decision in favor of complainant, ordering therein defendants to vacate the leased premises and to pay complainant compensatory damages for illegal occupation and use of the subject property, as well as attorneys fees and costs of suit. The dispositive portion of the decision reads as follows: WHEREFORE, this Court directs judgment against Defendants MR. & MRS. ELISEO PANAGUINIP and directs them to vacate Lot No. 5529 over the portion in an area of 1,596 square meters thereof, as leased to herein Plaintiff, situated at Barangay Quiot Pardo, Cebu City, and to pay Plaintiff the sum of PESOS: ONE THOUSAND (P1,000) per month from the second week of March 1996 until the present date by way of compensatory damages for the illegal occupation and use of the contested property, subject to 12% annual legal interest until fully paid, and thereafter pay the same amount per month until they vacate the subject property hereof, and to further pay Plaintiff the sum of P5,000.00 by way of Attorneys Fees, and the costs of this suit. SO ORDERED.[3]

On February 8, 2002, the MTCC granted the Motion for Execution of Judgment filed by complainant, and issued a Writ of Execution on February 18, 2002. On February 21, 2002, Sheriff Edilberto Suarin of the MTCC, Branch 8 of Cebu City levied on certain personal properties of therein defendants.[4] On March 1, 2002, therein defendants requested the complainant to move for the dismissal of the complaint against them so as to prevent the issuance of the writ of execution thereon. While therein defendants wanted to amicably settle the case, however, they failed to mention the proposed settlement amount stated in the decision dated December 21, 2001. Subsequently, respondent Atty. Goering G.C. Paderanga filed an Affidavit of Third-Party Claim dated March 5, 2002 before Sheriff Suarin, the sheriff executing the judgment in the said civil case. In the said affidavit, respondent claimed that he was the owner of Lot No. 3653-D-1 and a FUSO (Canter series) vehicle, which he bought from therein defendants on November 27, 2001, [6] and December 12, 2001,[7] respectively, both of which could be erroneously levied by a writ of execution issued in the civil case.
[5]

On April 3, 2002, Sheriff Suarin tried to levy therein defendants parcel of land and motor vehicle, but failed to do so because of the third- party claim filed by respondent. [8] Subsequently, on April 24, 2002, respondent filed a Complaint[9] for Annulment of Judgment with prayer for the issuance of an injunction and temporary restraining order (TRO) with damages against complainant before the Regional Trial Court (RTC), Branch 13 of Cebu City, docketed as Case No. CEB-27614, entitled Mr. Eliseo Panaguinip, Mrs. Ma. Teresa Panaguinip and Goering G.C. Paderanga v. John Hegna, Mila Hegna, Judge Edgemelo C. Rosales and Edilberto R. Suarin. In an Order[10] dated May 13, 2002, the RTC issued a writ of preliminary injunction enjoining the MTCC to desist from further proceeding with the civil case, and the Sheriff to desist from conducting a

public auction of the levied properties of therein defendants. The RTC subsequently dismissed respondents complaint for annulment of judgment in its Decision[11] dated June 29, 2006. In a letter dated June 3, 2002, filed with the OBC, complainant alleged that he was filing a complaint against respondent for deliberately falsifying documents, causing delay and a possible denial of justice to be served in Civil Case No. R-45146. He alleged that after the decision in the said civil case was rendered, therein defendants called him on the telephone, requesting the stay of the execution of judgment, as the latter would be settling their accounts within ten days, but they failed to comply. On March 14, 2003, complainant filed a criminal complaint [12] for falsification of public documents against respondent; false testimony and perjury against therein defendants; and falsification under paragraph 6, Article 171 of the Revised Penal Code against Atty. Elena Marie Madarang, notary public, before the Office of the City Prosecutor of Cebu City. Anent the complaint against respondent, complainant averred that the third-party claim was full of irregularities, to wit: (a) the Deed of Absolute Sale involving Lot No. 3653-D-1, covered by TCT No. T-11127, dated November 27, 2001, had no record of transfer in the Register of Deeds of Cebu City; (b) the registration of the motor vehicle allegedly owned by respondent by virtue of the Deed of Absolute Sale dated December 21, 2001 did not reflect any change of ownership from May 4, 2001; (c) the two Deeds of Absolute Sale dated November 27, 2001 and December 21, 2001 showed that both were notarized under Series of 2000 of the notary public; (d) Notarial Register No. 177 on page 37, Book II showed erasures and tampering done by substituting the intended entry of Joint Affidavit of Two Disinterested Person to a Deed of Absolute Sale under the names of the spouses Eliseo and Ma. Teresa Panaguinip, therein defendants, representing the sale of Lot No. 3653-D-1 under TCT No. 11127; and Notarial Register No. 188 on Page 39, Book II of Atty. Madarang also had tampering and erasures, as the entry of Affidavit of Loss was substituted with a Deed of Absolute Sale under the name of Ma. Teresa Panaguinip representing the sale of the FUSO (Canter series); and (e) the Community Tax Certificate number appearing in both Deeds of Absolute Sale was actually issued to another person, not to therein defendant Ma. Teresa Panaguinip. On April 28, 2003, the Office of the City Prosecutor of Cebu City dismissed the criminal complaint for falsification of public documents against respondent for lack of prima facie evidence of guilt, as the allegations therein were similar to the instant administrative complaint.[13] In his Comment[14] dated April 29, 2003 on the administrative complaint filed against him, respondent argued that he did not falsify any document and maintained that he had already satisfactorily explained the irregularities before the Office of the City Prosecutor. He added that the genuineness and due execution of the deeds of sale had not been affected by the fact that he failed to register the same. Also, he alleged that the MTCC Decision datedDecember 21, 2001 was unjust and void due to lack of jurisdiction, and for being based on spurious claims. In a Resolution[15] dated July 9, 2003, the Court referred the administrative complaint to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation/decision within ninety (90) days from receipt of the record. On November 21, 2003, the parties appeared in a mandatory preliminary conference and, upon termination thereof, were ordered to submit their respective verified position papers within ten (10) days, after which the case would be deemed submitted for resolution. [16] Complainant and respondent submitted their position papers on December 11, 2003,[17] and December 2, 2003,[18] respectively.

On June 1, 2005, the Investigating Commissioner of the IBP submitted his Report and Recommendation, which contained the following observations: III. FINDINGS: Based on the resolution of the City Prosecutors office in Cebu City, the complaint against the Panaguinip spouses and Attys. Paderanga and Madarang (the notary public) was dismissed for lack of prima facie of guilt. Such resolution is accorded great weight but certainly not conclusive considering the administrative nature of this instant complaint. In criminal prosecutions, a prima facie evidence is necessary but in this instant case, substantial evidence is all that [is] necessary to support a guilty verdict. According to the Respondent, it was perfectly normal for him to obtain properties without registering the same under his own name. In his Position Paper, he even cited several other transactions where he merely possessed Deeds of Sale but not Certification of Registration or Transfer Certificates of Title. He alleged that for ESTATE PLANNING purposes, he intentionally left these properties in the name of the previous owner. The alleged discrepancies in the notarization were fully explained as well. The notary public explained that the erasures in her Notarial Register were made to correct mistakes so that entries will speak the truth. These corrections include the entries under entry number 177 to indicate the correct entry which was the Deed of Sale executed [by] the spouses Panaguinip. The original entry, Affidavit of Two Disinterested Persons, was actually notarized but was later cancelled at the request of the same affiants. The full explanation of these affiants, very doubtful and highly suspect, was nevertheless taken into consideration by the Prosecutor for reasons known only to him. The Respondents also managed to convince the Cebu Prosecutor that the discrepancy in the Residence Certificates was due to human error! Not necessarily disagreeing with the findings of the City Prosecutor of Cebu City, the Resolution dismissing the case for falsification is not entirely convincing. There were certainly evidentiary matters which could have been better addressed by a judge, namely, the affidavit of the secretary of the notary public, the explanation in the incorrect entries in notarial register, the affidavit of the two (2) witnesses who sought the cancellation of their original affidavit, and the explanation of Paderanga himself regarding the difference in the dates. Complainant is a layman who filed his own Position Paper unaided by counsel while Respondent is a lawyer. Nevertheless, Complainant managed to present one (1) piece of evidence not squarely addressed by Respondent Paderanga: the letter handwritten by Respondents clients, written in Cebuano, asking the Complainant for mercy and forgiveness in relation to the forcible entry case. Such letter was no longer necessary if indeed there was a GENUINE transfer of ownership of properties owned by the Panaguinip spouses to their lawyer, Respondent Paderanga. This letter, attached to the Complaint, was never refuted in any way by Respondent Paderanga who may have skirted the issue by inadvertence or by design. The letter dated March 1, 2002 indicates that the Panaguinip spouses still believe and assert ownership over these properties despite the existence of a Deed of Sale allegedly dated March 5, 2002. Complainant also went further by attaching an Affidavit by a Third Person who stated that the Panaguinip spouses still assert ownership over the parcel of land and vehicle. Moreover, Complainant alleged that Respondent invited him consecutive times after the issuance of the writ of execution in the lower court; the first was at the Majestic Restaurant, the second was at Club Cebu at Waterfront Hotel. There was an offer to settle the judgment award of P100,000. During the first meeting, the offer wasP3,000, on the second meeting, this time with the Panaguinip spouses, the offer was P10,000. When

Complainant refused to settle with Respondent, he received a copy of the Affidavit of Third-Party Claim a few days later. The parties did not stipulate this particular issue; however, this Commissioner feels that for the final disposition of this case, it is worthy to mention Article 1491 of the Civil Code. It specifically states that: Art. 1491. The following persons cannot acquire by purchase, even at public or judicial auction, either in person or through the mediation of another: x x x (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigations or levied upon execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. x x x This is a classic case where a lawyer acquired the interests of his client in certain properties subject for execution. Regardless of the courts apparent lack of jurisdiction, Respondent Paderanga acquired the two (2) matters subject for execution in the forcible entry case in violation of [the] Canon of Legal Ethics. A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also the moment that becomes subject to the judicial action of the judge. x x x In all likelihood, although Complainant failed to get a favorable resolution from the City Prosecutors office in Cebu City, the Affidavit of Third Party Claim was simulated to defeat the rights of Complainant herein. It is immaterial that the decision of the lower court granting a judgment award was subsequently reversed or nullified. It is immaterial that the City Prosecutor did not find a prima facie case of falsification. The fact remains that there was a MULTITUDE of irregularities surrounding the execution of the Affidavit and, coupled with the letter sent by the Panaguinip spouses left unrebutted by Respondent Paderanga, there is substantial evidence that the Affidavit of Third Party Claim was purposely filed to thwart the enforcement of the decision in the forcible entry case. It is worthy to note that the proceedings before the prosecutors office did not take into consideration the handwritten letter from the Panaguinip spouses. For whatever reason, Complainant did not present such letter, which if he did, the prosecutor may come up with a different resolution. IV. RECOMMENDATION While Complainant cannot fully prove the existence of falsity in the execution of the Affidavit of Third Party Claim, this Commissioner is convinced that there was indeed an anomaly which constitutes a violation of the Canons of Professional Responsibility. A lawyer ought to have known that he cannot acquire the property of his client which is in litigation. x x x Respondent necessitates a heavy penalty since the circumstances surrounding the transfer of ownership of properties tend to indicate an anomalous transfer aimed to subvert the proper administration of justice. The numerous discrepancies in the transfer document, some dismissed as clerical errors and other explained by incredulous stories by way of affidavits, compounded by the letter left

uncontested by Respondent Paderanga, inevitably lead a rational person to conclude that Paderanga may not have acquired the properties prior to the judicial action of execution. Even if the City Prosecutor found no prima facie case of falsification, this Commissioner finds substantial evidence to support a conclusion that Respondent Paderanga committed an ethical violation and should be meted the penalty of suspension of five (5) years from the practice of law.[19] In a Resolution dated December 17, 2005, the IBP Board of Governors adopted and approved, with modification, the Report and Recommendation of the Investigating Commissioner, viz: x x x finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that a lawyer ought to know that he cannot acquire the property of his client which is in litigation, Atty. Goering Paderanga is hereby SUSPENDED from the practice of law for one (1) year.[20] On March 23, 2006, respondent filed with the Court a Motion for Reconsideration of the Resolution of the IBP Board of Governors and, onAugust 18, 2006, a Supplemental Motion for Reconsideration. In a Resolution dated August 23, 2006, the Court referred the motion for reconsideration to the IBP. On December 11, 2008, the IBP issued a Resolution denying the motion for reconsideration, and affirmed its Resolution dated December 17, 2005. Under Section 27 of Rule 138[21] of the 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 lawyers oath; (6) willful disobedience of any lawful order of a superior court; and (7) willfully appearing as an attorney for a party without authority. In the present case, the Court finds respondent administratively liable for engaging in dishonest and deceitful conduct. Although respondent denied having acted as counsel for therein defendants, the Spouses Panaguinip, in the forcible entry case filed by complainant, his involvement in the said case was still highly suspect. After the writ of execution had been issued on February 18, 2002, he went with defendants-spouses to amicably settle with complainant on two separate occasions, ostensibly to protect his own interests. Complainant claimed that during those two meetings, respondent did not disclose his ownership over the properties in question, leading the former to believe that respondent was, in fact, the counsel for defendants-spouses. He averred that respondent and defendant spouses initially offered a settlement of P3,000.00, which he refused as he had already spent P10,000.00 on court expenses. On their second meeting, the offer had been raised to P25,000.00, which again complainant declined, as the latter had, at that time, spent P25,000.00. Complainant maintained that it was only after said meetings had transpired that he received the affidavit of a third-party claim executed by respondent, stating that the latter was the owner of the property and motor vehicle. On the other hand, respondent claimed that the meetings took place in April 2002, after he had filed a third-party claim. Had respondent been the rightful owner of a parcel of land and motor vehicle that were still registered in the name of defendants-spouses, he should have immediately disclosed such fact immediately and filed a third- party claim, as time was of the essence. Moreover, in their letter

dated March 1, 2002, defendants-spouses did not mention any transfer of ownership of the said properties to respondent, as the former still believed that they owned the same. The continued possession and ownership by defendants-spouses was also attested to by a certain Brigida Lines, who executed an Affidavit[22]in favor of complainant. Based on the foregoing, the Court is more inclined to believe that when complainant and defendants-spouses failed to reach an agreement, respondent came forward as a third-party claimant to prevent the levy and execution of said properties. He, therefore, violated Rule 1.01 of the Code of Professional Responsibility,[23] which provides that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. Under this rule, conduct has been construed not to pertain exclusively to the performance of a lawyers professional duties. [24] In previous cases,[25] the Court has held that 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. Notably, in the falsification case earlier filed, complainant was able to cite several irregularities in the documents evidencing the deeds of sale in question: the non-registration by respondent of the sale transactions; a Community Tax Certificate number appearing on said deeds which was different from that issued to defendant Ma. Teresa Panaguinip; and the erasures of the entries pertaining to said deeds from the Notarial Register. Of these irregularities, only one can directly be attributable to respondent his non-registration of the sale transaction. He argues that the sales were valid despite non-registration, and maintained that it was perfectly normal and regular for a lawyer like him to choose not to register and cause the transfer of title of the land and the FUSO jeepney after the execution of the Deeds of Sale, so the transactions would not appear in the records of the Bureau of Internal Revenue, the City Assessor or the Register of Deeds, on the Land Registration Office. He added that he had also bought four lots, which had not yet been transferred to his name, for estate planning or speculation purposes. He claimed that he found it legally wise not to immediately register after buying so that he would not pay for the expenses of the sale and transfer twice, once he decided to sell; or place them in his childrens name, and avoid paying estate and inheritance taxes upon his death.[26] While the act of registration of a document is not necessary in order to give it legal effect as between the parties, requirements for the recording of the instruments are designed to prevent frauds and to permit and require the public to act with the presumption that a recorded instrument exists and is genuine.[27] However, while the RTC was correct in holding that said omission on respondents part may not be considered falsification, he had shown an intent to defraud the government, which had the right to collect revenue from him, as well as from other persons who may have an interest in said properties. Respondent violated the Lawyers Oath, which mandates that he should support the Constitution, obey the laws as well as the legal orders of the duly constituted authorities therein, and do no falsehood or not consent to the doing of any in court. Further, he has also failed to live up to the standard set by law that he should refrain from counseling or abetting activities aimed at defiance of the law or at lessening confidence in the legal system.[28]Respondents act of non-registration of the deeds of sale to avoid paying tax may not be illegal per se; but, as a servant of the law, a lawyer should make himself an exemplar for others to emulate. The responsibilities of a lawyer are greater than those of a private citizen. He is looked up to in the community. [29] Respondent must have forgotten that a lawyer must refrain from committing acts which give even a semblance of impropriety to the profession.

In cases wherein lawyers have similarly engaged in deceitful and dishonest conduct, the Court has imposed the penalty of suspension from the practice of law ranging from six (6) months to one (1) year. In Spouses Donato v. Asuncion, Sr.,[30] where therein respondent lawyer filed a complaint for reformation of instrument to obtain financial gain, and prepared a contract which did not express the true intention of the parties, he was found guilty of gross misconduct and suspended from the practice of law for six (6) months. In Yap-Paras v. Paras,[31] where therein respondent lawyer applied for free patents over lands owned by another person and not in the formers physical possession, he was found guilty of committing a falsehood in violation of the Lawyers Oath and the Code of Professional Responsibility and suspended from the practice of law for one (1) year, with a warning that the commission of the same or similar offense in the future would result in the imposition of a more severe penalty. In the present case, the Investigating Commissioner and the IBP Board of Governors recommended a penalty of suspension to be imposed upon respondent for five (5) years and one (1) year, respectively. The Court, however, believes that a penalty of one (1) year is more commensurate to respondents deceitful and dishonest conduct. WHEREFORE, respondent Atty. Goering G.C. Paderanga is found guilty of engaging in dishonest and deceitful conduct, and is SUSPENDEDfrom the practice of law for one (1) year, with a stern warning that a repetition of the same or similar offense in the future would result in the imposition of a more severe penalty. Let a copy of this Decision be entered into 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. This Decision shall be immediately executory. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC A.C. No. 7902 March 31, 2009

TORBEN B. OVERGAARD, Complainant, vs. ATTY. GODWIN R. VALDEZ, Respondent. RESOLUTION PER CURIAM: At bar is a Motion for Reconsideration,1 dated, October 21, 2008 filed by respondent Godwin R. Valdez (Valdez), praying that the September 30, 2008 decision of this Court disbarring him from the practice of law be reconsidered by remanding the records of the case to the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline. He further prays that the IBP Commission on Bar Discipline be directed to receive his Answer, evidence and Position Paper and thereafter, that he be absolved of the charges against him and that his name be reinstated in the Roll of Attorneys.2 We have previously decided in Torben B. Overgaard v. Atty. Godwin R. Valdez,3 that respondent Valdez committed malpractice and gross misconduct in his office as attorney and is thus unfit to continue discharging the trust reposed in him as a member of the bar. The complainant, Torben Overgaard (Overgaard) engaged the services of respondent Valdez as his legal counsel in two cases filed by him and two cases filed against him. Despite the receipt of the full amount of legal fees ofP900,000.00 as stipulated in a Retainer Agreement, the respondent refused to perform any of his obligations under their contract for legal services, ignored the complainants request for a report of the status of the cases entrusted to his care, and rejected the complainants demands for the return of the money paid to him. Complainant Overgaard filed a complaint for disbarment against Valdez before the IBP. During the investigation, respondent Valdez did not participate despite due notice. He was declared in default for failure to submit an answer and attend the mandatory conference. He did not submit a position paper or attend the hearing. On September 30, 2008, this Court held that respondent Valdez committed multiple violations of the canons of the Code of Professional Responsibility. The dispositive portion of this Decision states: IN VIEW WHEREOF, respondent Atty. Godwin R. Valdez is hereby DISBARRED and his name is ordered STRICKEN from the Roll of Attorneys. He is ORDERED to immediately return to Torben B. Overgaard the amount of $16,854.00 or its equivalent in Philippine Currency at the time of actual payment, with legal interest of six percent (6%) per annum from November 27, 2006, the date of extrajudicial demand. A twelve percent (12%) interest per annum, in lieu of six percent (6%), shall be imposed on such amount from the date of promulgation of this decision until the payment thereof. He is further ORDERED to immediately return all papers and documents received from the complainant.4 xxxx Hence, this Motion for Reconsideration filed on October 21, 2008, by respondent Valdez, based on the following grounds: I. RESPONDENT HAD ABSOLUTELY NO KNOWLEDGE THAT COMPLAINANT HAD FILED CHARGES AGAINST HIM AND THAT THERE WERE DISBARMENT PROCEEDINGS AND AN INVESTIGATION CONDUCTED BY THE INTEGRATED BAR OF THE PHILIPPINES. II. HAD HE BEEN GIVEN AN OPPORTUNITY TO BE HEARD, HE WOULD HAVE PRESENTED STRONG, VALID AND MERITORIOUS DEFENSES TO THE CHARGES LEVELLED AGAINST

HIM WHICH DEFENSES, EXONERATED HIM. 5

CORRECTLY

APPRECIATED,

WOULD

HAVE

TOTALLY

We deny the Motion for Reconsideration. On the first issue, the respondent argues that the IBP has no jurisdiction over him since proof of service of the initiatory pleading to the defendant is a jurisidictional requirement. 6 He states in his Motion for Reconsideration that "he had no inkling whatsoever of the existence of the disbarment case filed by the complainant."7 He asserts that, in September 2006, he "abruptly abandoned his office at Suite 402 Pacific Irvine Bldg., 2746 Zenaida St., at Makati City following persistent and serious threats to his physical safety and security x x x." 8 On the advice of his close friends and clients to "lie low" and "make himself scarce,"9 he stayed for a few days in his residence at Imus, Cavite then relocated to Malaybalay City, Bukidnon.10 He has been holding office and residing in Bukidnon since then, and he only found out about the decision from a colleague in Bukidnon who read the decision from the Courts website. He claims that because he "abruptly abandoned" 11 his Makati office on September 2006, he was not able to receive the demand letter12 sent by the complainant.13 He was also not able to receive any of the notices, orders and other papers pertaining to the disbarment proceedings because at the time these were sent to his Makati office address, he was already holding office in Bukidnon. Complainant Overgaard filed an "Opposition/Comment to the Motion for Reconsideration" 14 on December 9, 2008. He counters that respondent Valdez was duly notified of the charge against him and of all the proceedings at the IBP,15 since all notices were sent to "Suite 402 Pacific Irvine Bldg., No. 2746 Zenaida St., Makati City, Metro Manila, Philippines," 16 which is the respondents office address indicated in his letterhead and made known to the complainant and to the public. He sent the respondent a letter dated November 27, 2006, demanding that the latter return the documents and the P900,000.00 paid to him in relation to the case. The demand letter was sent to the same address and was received by one whose signature was "RRJ," as noted in the Registry Return Receipt.17 Complainant Overgaard argues that respondent cannot claim ignorance of the disbarment case against him, since this is a natural offshoot of a wrongful act. 18 Complainant Overgaard points out that when respondent Valdez left for Bukidnon, he already knew that the complainant was looking for him and demanding the return of the money and documents he received from the complainant. 19 The November 27, 2006 demand letter further contained a warning that "[i]f [the respondent] will not return the documents and the money within ten (10) days from receipt hereof, [the complainant] will bring the matter to the proper authorities/forum for the redress of [his] grievances." 20The complainant denies that he or his business partners know of respondents whereabouts, and he argues that it is the respondents duty as his counsel to adopt and strictly maintain a system that efficiently takes into account all notices sent to him.211avvphi1 We hold that respondent was given reasonable notice of the complaint for disbarment against him. A copy of the Complaint as well as the Order22 to answer the Complaint was sent by the IBP Commission on Bar Discipline to the respondents Makati office address, and it was duly received by the respondent. The Registry Return Receipt23 shows that it was also received by one "RRJ," whose signature appears on the space for the signature of the addressees agent. The respondent cannot claim lack of knowledge of the complaint for disbarment against him when the Complaint and the Order for him to submit an Answer were duly received by his agent at his Makati law office. Succeeding notices in connection with the disbarment proceedings were also sent to the respondents Makati law office. He cannot escape liability for his misdeeds by feigning ignorance of the disbarment case, since the notices in connection with the proceedings were sent to his office address made known to the public and properly received by his agent. Respondent Valdez was given full opportunity, upon reasonable notice, to answer the charges against him and to present evidence on his behalf. The IBP Commission on Bar Discipline was correct in proceeding with the investigation ex parte, because it was due to the respondents own fault and negligence that he was not able to submit an answer to the Complaint and participate in the investigation. Rule 138, Section 30 provides that an attorney should be heard before he is removed or

suspended; but if, upon reasonable notice, an attorney fails to appear and answer the accusations against him, the matter may be dealt with ex parte. Rule 138, Section 30 states: SECTION 30. Attorney to be heard before removal or suspension. No attorney shall be removed or suspended from the practice of his profession, until he has had full opportunity upon reasonable notice to answer the charges against him, to produce witnesses in his own behalf, and to be heard by himself or counsel. But if upon reasonable notice he fails to appear and answer the accusation, the court may proceed to determine the matter ex parte. (Emphasis supplied.) The respondents feeble excuse that he was no longer holding office at his Makati office address at the time the Order of the IBP Commission on Bar Discipline was sent to him is unacceptable. Ordinary prudence would have guarded against his alleged failure to receive the notices. All notices to the respondent were sent to his Makati office address, which was the address made known to the public and to the complainant. This is even the address printed on the letterhead of the Retainer Agreement between the complainant and the respondent. And although the respondent claims that he had to "make himself scarce"24 due to threats to his life and safety, this does not mean that he avoids the responsibility of taking account of his mail. The respondent owes it to himself and to his clients to adopt a system whereby he would be able to receive mail sent to his law office during his absence. Assuming that circumstances would justify the respondents abrupt abandonment25 of his Makati office, it absolutely does not give him the license to abandon his clients as well. This brings us to the second issue: whether or not respondent committed multiple violations of the Code of Professional Responsibility and thus his disbarment should be sustained. The respondent argues that he did not abandon his client. He denies that he refused to perform any of his obligations under the contract for legal services between himself and the complainant. He claims that he gave the complainant legal advice, and that he searched for and interviewed witnesses in relation to the cases he was handling for the complainant.26 He also denies that he ignored the complainants requests for a report of the cases entrusted to his care. He claims that he gave periodic status reports on the result of his work, that he returned the documents in connection with the case, and that he rendered an accounting of the money that he actually received. We find that respondents disbarment should be upheld. From the facts of the case, and based on his own admissions, it is evident that he has committed multiple violations of the Code of Professional Responsibility. In abruptly abandoning his law office without advising his client and without making sure that the cases he was handling for his client were properly attended to during his absence, and without making arrangements whereby he would receive important mail, the respondent is clearly guilty of gross negligence. A lawyer cannot simply disappear and abandon his clients and then rely on the convenient excuse that there were threats to his safety. Even assuming that there were serious threats to his person, this did not give him the permission to desert his client and leave the cases entrusted to his care hanging. He should have at least exercised reasonable and ordinary care and diligence by taking steps to ensure that the cases he was handling were attended to and that his clients interest was safeguarded. If it was not possible for him to handle the cases entrusted to his care, he should have informed the complainant of his predicament and asked that he be allowed to withdraw from the case to enable the client to engage the services of another counsel who could properly represent him.27 Deplorably, the respondent just disappeared, deserted his client and forgot about the cases entrusted to his care, to the complainants damage and prejudice. The respondent denies that he did not do anything in connection with the cases included in the Retainer Agreement. He asserts that he reviewed the documents in relation to the case and gave the complainant important advice. He claims that he travelled to Bato, Camarines Norte to negotiate for an amicable settlement with the members of the family of the adverse party in one of the cases filed against the complainant.28 He also went to San Carlos City (Negros Oriental), Antipolo City, and other parts of Metro Manila to interview and search for witnesses for the cases that he was handling for the complainant.29

The respondents disbarment is not anchored on his failure to do anything in relation the cases entrusted to his care, but on his abandonment of his client. He will not be absolved from liability on the basis alone of these inconsequential acts which he claims to have accomplished because the glaring fact remains that he has failed to perform his essential obligations to his client, to the courts and to society. As the complainants lawyer, the respondent is expected to serve his client with competence and diligence.30 This includes not merely reviewing the cases entrusted to his care and giving the complainant sound legal advice, but also properly representing his client in court, attending scheduled hearings, preparing and filing required pleadings, prosecuting the cases entrusted to his care with reasonable dispatch, and urging their termination without waiting for his client or the court to prod him to do so. He should not idly sit by and leave the rights of his client in a state of uncertainty. The respondents acts and omissions were not just a case of inaction, but they amount to deceitful conduct and are contrary to good morals. After assuring the complainant that he would protect the latters interest and attend to the cases included in the Retainer Agreement, he abandoned his client. It was only after the complainants own inquiry that he discovered that the respondent never appeared in court to represent the complainant in the cases filed against him, so much so that he had no knowledge that warrants of arrest were already issued against him. The respondent also failed to enter his appearance in the civil case for Mandamus, Injunction and Damages that the complainant filed. After receiving the complete amount of legal fees, giving the complainant initial legal advice, and interviewing some witnesses, the respondent just disappeared and the complainant never heard from him despite his continued efforts to contact the respondent.1avvphi1 The complainant put his trust in the respondent with full faith that the latter would exert his best effort and ability in the prosecution and defense of his clients cause. But instead of devotion to his clients cause, the respondent grossly neglected his duties to his client. After all the representations he made to the complainant and after receipt of the full amount of the legal fees, he absconded from his responsibilities and betrayed his clients trust. There is no excuse for this, and his gross negligence and appalling indifference is unforgiveable. On the Courts finding that the respondent refused to return the money he received from the complainant despite written and verbal demands and was not able to give a single report regarding the status of the cases, the respondent claims that he returned the documents to the complainants representative in the middle of July 2006,31 and that he also gave an accounting of the money he received sometime immediately after it was demanded from him on July 25 or 26, 2006. The respondent counters that although he initially received the amount of P900,000.00, he gave P300,000.00 to two intelligence operatives for locating witnesses in favor of the complainant in Antipolo City and other parts of Metro Manila.32 He claims that only P600,000.00 was actually received by him, and from this amount he drew all expenses in connection with the complainants cases. The respondent further avers that he made an accounting of the P600,000.00 received by him and offered to returnP250,000.00, but it was the complainants business partner who refused to accept the P250,000.00 and insisted on the payment of the whole amount.33 The complainant declared that he did not receive the documents being demanded from the respondent, nor did he receive an accounting of the money he paid to the respondent. He stated in his "Opposition/Comment to the Motion for Reconsideration" that the respondents empty claims -- that he already returned the documents sometime in the middle of July 2006 and that he rendered an accounting of the money paid to him immediately after July 25 or 26, 2006 -- are refuted by the demand letter sent by the complainant on November 27, 2006, four months after the alleged time of return. We agree with the complainant. If the respondent had indeed returned the documents sometime in the middle of July 2006, he would have presented a receipt to prove such turnover of documents. And if the respondent had indeed rendered an accounting of the money that was paid to him, he would have attached a received copy of the accounting to his Motion for Reconsideration. But he failed to do both. There was no proof presented. We cannot rely on his bare allegation, especially when the complainant demanded the return of the documents months after they were allegedly returned.

Neither are we persuaded by the respondents explanation as to how and where the P900,000.00 was spent. He claims that out of the P900,000.00, he only received P600,000.00 because he paid P300,000.00 to two intelligence operatives. In paying the intelligence operatives, he stated in his Motion for Reconsideration that he deposited P100,000.00 to the Land Bank account of one Investigator Operative Collado (Collado) sometime in the second week of January 2006, and that the rest of the P200,000.00 was personally handed by him to Collado in the last week of January 2006 at McDonalds restaurant at the corner of Pasong Tamo and J.P. Rizal Streets at Makati City.34 Such an account offered by the respondent is insufficient to free him from liability. If the respondent indeed paidP300,000.00 to two intelligence operatives with the knowledge of the complainant, he would have presented a receipt issued by Collado, and he would have also presented a validated deposit slip or certification as proof that he deposited the amount he claims to have deposited to Collados account. His failure to attach proof of payment of the P300,000.00 to the intelligence operatives does not only make his defense flawed, it also highlights his incompetence in handling the money he received from the client. It is a lawyers duty to properly account for the money he received from the client. 35 If indeed the respondent told the client that he would pay P300,000.00 to two intelligence operatives, as he claims in his Motion for Reconsideration, he should have held this money in trust, and he was under an obligation to make an accounting. It was his duty to secure a receipt for the payment of this amount on behalf of his client. But he failed to present any receipt or certification from Collado that the payment was received. Since the respondent was not able either to present an accounting of the P900,000.00 paid to him upon the complainants demand, or to provide a sufficient and plausible explanation for where such amount was spent, he must immediately return the same. For these reasons, and those previously stated in the September 30, 2008 Decision of this Court, we find that respondent Valdez has committed multiple violations of the canons of the Code of Professional Responsibility. He has failed to observe the fundamental duties of honesty and good faith and, thus, we sustain his disbarment. We must emphasize that the right to practice law is not a natural or constitutional right but is in the nature of a privilege or franchise,36 and it may be extended or withheld by this Court in the exercise of its sound discretion. As guardian of the legal profession, this Court has ultimate disciplinary power over members of the Bar in order to ensure that the highest standards of competence and of honesty and fair dealing are maintained. We find that the respondent has fallen below such exacting standard and is unworthy of the privilege to practice law. IN VIEW WHEREOF, the Motion for Reconsideration is DENIED. This Courts en banc decision in Administrative Case No. 7902 dated September 30, 2008, entitled Torben B. Overgaard v. Atty. Godwin R. Valdez, is AFFIRMED. SO ORDERED.