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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

pre!ises b# private respondent. It $as also pra#ed that after due hearin the petitioner be ordered to e%ecute the lease contract7 to pa# actual co!pensator#, e%e!plar# and other da!a es in such a!ount as !a# be proved durin the trial includin P)8,888.88 attorne#<s fees plus P)88.88 per appearance of counsel, and to pa# the e%penses of liti ation. 1 Petitioner en a ed the services of counsel to handle her case. Said counsel filed his appearance $ith an ur ent !otion for e%tension of ti!e to file the ans$er $ithin ten 5'86 da#s fro! Februar# (=, '012. & 3o$ever, said counsel failed to file the ans$er $ithin the e%tended period pra#ed for. .ounsel for private respondent filed an ex-parte !otion to declare petitioner in default. This $as ranted b# the trial court on March (2, '012 and private respondent $as allo$ed to present evidence ex-parte. Thereafter, on March (2, '012, the trial court rendered its decision, the dispositive part of $hich reads as follo$s> *3?R?FOR?, 4ud !ent is hereb# rendered orderin defendant Victoria @. &e arda to e%ecute and si n ?%hibit ADA>, the lease contract for the pre!ises at '() *est +venue, ,ue-on .it#. +ccordin l#, the preli!inar# in4unction earlier issued on /anuar# )', '012 is hereb# !ade per!anent. /ud !ent is li"e$ise rendered orderin defendant to pa# e%e!plar# da!a es in the su! of P'88,888.88 to serve as e%a!ple and deterrent for others, and actual and co!pensator# da!a es as follo$s>

G.R. No. 94457 March 18, 1991 VICTORIA LEGARDA, petitioner, vs. THE HONORA LE COURT O! APPEALS, NE" CATHA# HOUSE, INC., THE HONORA LE REGIONAL TRIAL COURT O! $UE%ON CIT#, RANCH 94, respondents. Singson, Valdez & Associates for petitioner. Lenito T. Serrano for private respondent.

GANCA#CO, J.:p Nothin is !ore settled than the rule that the !ista"e of a counsel binds the client. It is onl# in case of ross or palpable ne li ence of counsel $hen the courts !ust step in and accord relief to a client $ho suffered thereb#. The present case is a t#pical e%a!ple of such rare e%ception. Petitioner Victoria &e arda $as the o$ner of a parcel of land and the i!prove!ents thereon located at '() *est +venue, ,ue-on .it#. On /anuar# '', '012 respondent Ne$ .atha# 3ouse, Inc. filed a co!plaint a ainst the petitioner for specific perfor!ance $ith preli!inar# in4unction and da!a es in the Re ional Trial .ourt 5RT.6 for ,ue-on .it# alle in , a!on others, that petitioner entered into a lease a ree!ent $ith the private respondent throu h its representative, Roberto V. .abrera, /r., of the aforestated propert# of petitioner effective /anuar# ', '012 until Dece!ber )', '010 or for a period of five 526 #ears7 that the rental is P(2,888.88 per !onth $ith 29 escalation per #ear7 that on Nove!ber (), '01:, private respondent deposited the a!ount of P;(,888.88 $ith petitioner as do$n pa#!ent of rentals7 that respondent dre$ up the $ritten contract and sent it to petitioner, that petitioner failed and refused to e%ecute and si n the sa!e despite de!ands of respondent7 and that the respondent suffered da!a es due to the dela# in the renovation and openin of its restaurant business. The private respondent pra#ed that pendin the resolution of the case a restrainin order be issued a ainst petitioner or her a ents en4oinin the! fro! stoppin the renovation and use of the

'. For loss and destro#ed P'88,888.887

ood$ill and reputation in the a!ount of

(. The su! of P=',;8:.:8 as ad4ust!ents in the costs of labor and !aterials for the renovation of the pre!ises7 ). The su! of P28,888.88 as unearned inco!e for the dela# of plaintiff <s operations fro! /anuar# ', '012 up to Februar# (2, '012 or a period of al!ost t$o 5(6 !onths7 :. The su! of P'=,=)2.2; and P28,:(:.:8 as additional co!pensator# da!a es incurred b# plaintiff for the e%tension of the lease of its pre!ises at Ma"ati and salaries of idle e!plo#ees, respectivel#7 2. The su! of P'8,888.88 as and b# $a# of attorne#<s fees7 and =. The costs of suit.
'

.op# of said decision $as dul# served on counsel for the petitioner but he did not ta"e an# action. Thus, the 4ud !ent beca!e final and e%ecutor#. On Ma# 1, '012, upon !otion of private respondent, a $rit of e%ecution of the 4ud !ent $as issued b# the trial court. 4

+t public auction, the sheriff sold the aforestated propert# of petitioner to Roberto V. .abrera, /r. for the su! of P);=,288.88 to satisf# the 4ud !ent. The sheriff issued a certificate of sale dated /une 1, '012 coverin the said propert#. 5 +fter the one #ear rede!ption period e%pired $ithout the petitioner redee!in the propert#, o$nership $as consolidated in the na!e of Roberto V. .abrera, /r. The sheriff issued a final deed of sale on /ul# 1, '01= in his favor. .abrera re istered the sa!e in the office of the Re ister of Deeds on /ul# '', '01=. Bpon learnin of this unfortunate turn of events, petitioner prevailed upon her counsel, to see" the appropriate relief. On Nove!ber =, '01= said counsel filed in the .ourt of +ppeals a petition for annul!ent of 4ud !ent callin attention to the un4ust enrich!ent of private respondent in securin the transfer in its na!e of the propert# valued at P (.2 !illion $ithout 4ustification7 that $hen the co!plaint $as filed in court b# private respondent a ainst the petitioner, the parties ca!e to an a ree!ent to settle their differences, the private respondent assurin petitioner that the co!plaint it filed shall be $ithdra$n so petitioner advised her la$#er that there $as no lon er an# need to file an ans$er to the co!plaint7 that on Februar# ((, '012, private respondent nevertheless filed an ex-parte!otion to declare the petitioner in default7 that petitioner $as deprived of the ri ht to present her defense throu h false pretenses, !isrepresentation and fraud practiced upon her b# private respondent $arrantin the annul!ent of the 4ud !ent7 that the docu!entar# evidence presented b# private respondent, $hich served as the basis of the decision, is falsified and ta!pered $ith7 that as an e%a!ple, the voucher filed b# petitioner, contains t#pe$ritten entries to the effect that the ter! of the lease is for five 526 #ears to $hich petitioner never a reed, and that the option to bu# the propert# $as iven to the private respondent7 that the fact that the propert# $orth P( !illion $as sold at public auction at a shoc"in l# and Cuestionabl# lo$ price of P);=,288.88 is b# itself a sufficient basis for annullin the sale for bein rossl# inadeCuate to shoc" the conscience and understandin of !en, ivin rise to a presu!ption of fraud. ( Thus, it $as pra#ed that a preli!inar# !andator# in4unction issue orderin the private respondent to surrender the propert# to petitioner and to en4oin the for!er fro! further harassin and threatenin the peaceful possession of petitioner7 and that after hearin , the decision of the trial court in .ivil .ase No. ,D:)1'' and the sheriffs certificate of sale 7 be li"e$ise annulled7 that private respondent be ad4ud ed to pa# petitioner no less than P288,888.88 actual and !oral da!a es, as $ell as e%e!plar# da!a es and attorne#<s fees in the a!ount of P28,888.88, plus the costs of the suit. 8 On Februar# (, '01; an a!ended petition $as filed b# counsel for petitioner in the .ourt of +ppeals raisin the additional issue that the decision is not supported b# the alle ations in the pleadin s or b# the evidence sub!itted. 9 In due course, a decision $as rendered b# the .ourt of +ppeals on Nove!ber (0, '010. 1) The appellate court !ade the follo$in observations> On the other hand, petitioner<s above alle ation of fraud supposedl# practiced upon her b# Roberto V. .abrera, /r. is so i!probable as to inspire belief. For the .oronel &a$ Office had alread# entered its appearance as

petitioner<s counsel b# then, so that if it $ere true that .abrera had alread# a reed to the conditions i!posed b# petitioner, said la$ office $ould have as"ed plaintiff to file the proper !otion to dis!iss or $ithdra$ co!plaint $ith the .ourt, and if plaintiff had refused to do so, it $ould have filed defendant<s ans$er an#$a# so that she $ould not be declared in default. Or said la$ office $ould have prepared a co!pro!ise a ree!ent e!bod#in the conditions i!posed b# their client in the lease contract in Cuestion $hich plaintiff had alle edl# alread# accepted, so that the sa!e could have been sub!itted to the .ourt and 4ud !ent on a co!pro!ise could be entered. +ll these, an# conscientious la$#er of lesser stature than the .oronel &a$ Office, headed b# no less than a for!er la$ dean, Dean +ntonio .oronel, or even a ne$ !e!ber of the bar, $ould nor!all# have done under the circu!stances to protect the interests of their client, instead of leavin it to the initiative of plaintiff to $ithdra$ its co!plaint a ainst defendant, as it had alle edl# pro!ised the latter. Thus, it is our belief that this case is one of-pure and simple negligence on the part of defendant s counsel !ho simpl" failed to file the ans!er in behalf of defendant, #ut counsel s negligence does not stop here. $or after it had been furnished !ith cop" of the decision b" default against defendant, it should then have appealed therefrom or file a petition from relief from the order declaring their client in default or from the %udgment b" default. &sic' Again, counsel negligentl" failed to do either. 3ence, defendant is bound b# the acts of her counsel in this case and cannot be heard to co!plain that the result !i ht have been different if it had proceeded differentl# 5Pulido vs. ..+., '(( S.R+ =)7 +#llon vs. Sevilla, '2= S.R+ (2;, a!on other cases6. +nd the rationale of this rule is obvious and clear. For Aif such rounds $ere to be ad!itted as reasons for openin cases, there $ould never be an end to a suit so lon as ne$ counsel could be e!plo#ed $ho could alle e and sho$ that the prior counsel had not been sufficientl# dili ent, or e%perienced, or learnedA 5Fernande- vs. Tan Tion Tic", ' S.R+ '')16. 11 Despite these findin s, the appellate court nevertheless dis!issed the petition for annul!ent of 4ud !ent $ith costs a ainst the petitioner. + cop# of the said 4ud !ent appears to have been served on counsel for the petitioner. 3o$ever, said counsel did not file a !otion for reconsideration or appeal therefro!, so it beca!e final. It $as onl# in March '008 $hen the secretar# of counsel for petitioner infor!ed the latter of the adverse decision a ainst her onl# after persistent telephone inCuiries of the petitioner. 3ence, petitioner secured the services of another la$#er $ho filed this petition for certiorari under Rule =2 of the Rules of .ourt $herein it is pra#ed that the 4ud !ent of the Re ional Trial .ourt of ,ue-on .it# in .ivil .ase No. ,D:)1'', the decision of the .ourt of +ppeals in .+D@.R. No. '8:1; and the sheriff<s sale at public auction of the propert# in Cuestion be annulled, as the sa!e are attributable to the ross ne li ence and inefficienc# of petitioner<s counsel, $hose blunder cannot bind the petitioner $ho $as

deprived of due process thereb#. It is further pra#ed that private respondent .atha# 3ouse, Inc. be ordered to reconve# to petitioner the propert# covered b# T.T No. (;81':, $hich $as sold at public auction to Roberto V. .abrera, /r. and in $hose favor its o$nership $as consolidated, and thereafter o$nership appears to have been transferred to private respondent. The petition is i!pressed $ith !erit. Petitioner<s counsel is a $ellD"no$n practicin la$#er and dean of a la$ school. It is to be e%pected that he $ould e%tend the hi hest Cualit# of service as a la$#er to the petitioner. Bnfortunatel#, counsel appears to have abandoned the cause of petitioner. +fter a reein to defend the petitioner in the civil case filed a ainst her b# private respondent, said counsel did nothin !ore than enter his appearance and see" for an e%tension of ti!e to file the ans$er. Nevertheless, he failed to file the ans$er. 3ence, petitioner $as declared in default on !otion of private respondent<s counsel. +fter the evidence of private respondent $as received ex-parte, a 4ud !ent $as rendered b# the trial court. Said counsel for petitioner received a cop# of the 4ud !ent but too" no steps to have the sa!e set aside or to appeal therefro!. Thus, the 4ud !ent beca!e final and e%ecutor#. The propert# of petitioner $as sold at public auction to satisf# the 4ud !ent in favor of private respondent. The propert# $as sold to Roberto V. .abrera, /r., representative of private respondent, and a certificate of sale $as issued in his favor. The rede!ption period e%pired after one #ear so a final deed of sale $as issued b# the sheriff in favor of .abrera, $ho in turn appears to have transferred the sa!e to private respondent. Durin all the ti!e, the petitioner $as abroad. *hen, upon her return, she learned, to her reat shoc", $hat happened to her case and propert#, she nevertheless did not lose faith in her counsel. She still as"ed +tt#. .oronel to ta"e such appropriate action possible under the circu!stances. +s above related, said counsel filed a petition for annul!ent of 4ud !ent and its a!end!ent in the .ourt of +ppeals. Eut that $as all he did. +fter an adverse 4ud !ent $as rendered a ainst petitioner, of $hich counsel $as dul# notified, said counsel did not infor! the petitioner about it. 3e did not even as" for a reconsideration thereof, or file a petition for revie$ before this .ourt. Thus, the 4ud !ent beca!e final. It $as onl# upon repeated telephone inCuiries of petitioner that she learned fro! the secretar# of her counsel of the 4ud !ent that had unfortunatel# beco!e final. + la$#er o$es entire devotion to the interest of his client, $ar!th and -eal in the !aintenance and defense of his ri hts and the e%ertion of his ut!ost learnin and abilit#, to the end that nothin can be ta"en or $ithheld fro! his client e%cept in accordance $ith the la$. 3e should present ever# re!ed# or defense authori-ed b# the la$ in support of his client<s cause, re ardless of his o$n personal vie$s. In the full dischar e of his duties to his client, the la$#er should not be afraid of the possibilit# that he !a# displease the 4ud e or the eneral public. 1&

/ud ed b# the actuations of said counsel in this case, he has !iserabl# failed in his dut# to e%ercise his ut!ost learnin and abilit# in !aintainin his client<s cause. 1' It is not onl# a case of si!ple ne li ence as found b# the appellate court, but of rec"less and ross ne li ence, so !uch so that his client $as deprived of her propert# $ithout due process of la$. In (eople s )omesite & )ousing *orp . vs. Tiongco and +scasa, follo$s>
14

this .ourt ruled as

Procedural technicalit# should not be !ade a bar to the vindication of a le iti!ate rievance. *hen such technicalit# deserts fro! bein an aid to 4ustice, the courts are 4ustified in e%ceptin fro! its operation a particular case. *here there $as so!ethin fish# and suspicious about the actuations of the for!er counsel of petitioner in the case at bar, in that he did not iven an# si nificance at all to the processes of the court, $hich has proven pre4udicial to the ri hts of said clients, under a la!e and fli!s# e%planation that the court<s processes 4ust escaped his attention, it is held that said la$#er deprived his clients of their da# in court, thus entitlin said clients to petition for relief fro! 4ud !ent despite the lapse of the re le!entar# period for filin said period for filin said petition. In +scudero vs. ,udge -ula", 15 this .ourt, in holdin that the counsel<s blunder in procedure is an e%ception to the rule that the client is bound b# the !ista"es of counsel, !ade the follo$in disCuisition> Petitioners contend, throu h their ne$ counsel, that the 4ud !ents rendered a ainst the! b# the respondent court are null and void, because the# $ere therein deprived of their da# in court and divested of their propert# $ithout due process of la$, throu h the ross i norance, !ista"e and ne li ence of their previous counsel. The# ac"no$led e that, $hile as a rule, clients are bound b# the !ista"e of their counsel, the rule should not be applied auto!aticall# to their case, as their trial counsel<s blunder in procedure and ross i norance of e%istin 4urisprudence chan ed their cause of action and violated their substantial ri hts. *e are i!pressed $ith petitioner<s contentions. Ordinaril#, a special civil action under Rule =2 of the Rules of .ourt $ill not be a substitute or cure for failure to file a ti!el# petition for revie$ on certiorari 5appeal6 under Rule :2 of the Rules. *here, ho$ever, the application of the rule $ill result in a !anifest failure or !iscarria e of 4ustice, the rule !a# be rela%ed. %%% %%% %%%

*hile this .ourt is co ni-ant of the rule that, enerall#, a client $ill suffer the conseCuences of the ne li ence, !ista"e or lac" of co!petence of his counsel, in the interest of 4ustice and eCuit#, e%ceptions !a# be !ade to such rule, in accordance $ith the facts and circu!stances of each case. +dherence to the eneral rule $ould, in the instant case, result in the outri ht deprivation of their propert# throu h a technicalit#. In its Cuestioned decision dated Nove!ber '0, '010 the .ourt of +ppeals found, in no uncertain ter!s, the ne li ence of the then counsel for petitioner $hen he failed to file the proper !otion to dis!iss or to dra$ a co!pro!ise a ree!ent if it $as true that the# a reed on a settle!ent of the case7 or in si!pl# filin an ans$er7 and that after havin been furnished a cop# of the decision b# the court he failed to appeal therefro! or to file a petition for relief fro! the order declarin petitioner in default. In all these instances the appellate court found said counsel ne li ent but his acts $ere held to bind his client, petitioner herein, nevertheless. The .ourt disa rees and finds that the ne li ence of counsel in this case appears to be so ross and ine%cusable. This $as co!pounded b# the fact, that after petitioner ave said counsel another chance to !a"e up for his o!issions b# as"in hi! to file a petition for annul!ent of the 4ud !ent in the appellate court, a ain counsel abandoned the case of petitioner in that after he received a cop# of the adverse 4ud !ent of the appellate court, he did not do an#thin to save the situation or infor! his client of the 4ud !ent. 3e allo$ed the 4ud !ent to lapse and beco!e final. Such rec"less and ross ne li ence should not be allo$ed to bind the petitioner. Petitioner $as thereb# effectivel# deprived of her da# in court. Thus, *e have before Bs a case $here to enforce an alle ed lease a ree!ent of the propert# of petitioner, private respondent $ent to court, and that because of the ross ne li ence of the counsel for the petitioner, she lost the case as $ell as the title and o$nership of the propert#, $hich is $orth !illions. The !ere lessee then no$ beca!e the o$ner of the propert#. Its true o$ner then, the petitioner, no$ is consi ned to penur# all because her la$#er appear to have abandoned her case not once but repeatedl#. The .ourt cannot allo$ such a rave in4ustice to prevail. It cannot tolerate such un4ust enrich!ent of the private respondent at the e%pense of the petitioner. The situation is a ravated b# the fact that said counsel is a $ellD"no$n practicin la$#er and the dean of a la$ school as the .ourt at the be innin of this discourse observed. 3is co!petence should be be#ond cavil. Thus, there appears to be no co ent e%cuse for his repeated ne li ence and inaction. 3is lac" of devotion to dut# is so ross and palpable that this .ourt !ust co!e to the aid of his distrau ht client, the petitioner herein. +s !e!ber of the Philippine Ear he o$es co!plete fidelit# to the cause of his client. 3e should ive adeCuate attention, care and ti!e to his cases. This is the reason $h# a practicin la$#er should accept onl# so !an# cases he can afford to handle. +nd once he a rees to handle a case, he should underta"e the tas" $ith dedication and care. If he should do an# less, then he is not true to his oath as a la$#er.

*3?R?FOR?, the petition is @R+NT?D and the Cuestioned decision of the Re ional Trial .ourt of ,ue-on .it# dated March (2, '012 in .ivil .ase No. ,D:)1''7 the decision of the .ourt of +ppeals dated Nove!ber (0, '010 in .+D@.R. No. SPD'8:1;7 the Sheriff <s .ertificate of Sale dated /une (;, '012 of the propert# in Cuestion7 and the subseCuent final deed of sale coverin the sa!e propert#, are all hereb# declared null and void. Private respondent Ne$ .atha# 3ouse, Inc. is directed to reconve# said propert# to the petitioner, and the Re ister of Deeds is ordered to cancel the re istration of said propert# in the na!e of private respondent and to issue a ne$ one in the na!e of petitioner. .osts a ainst private respondent. Said counsel for petitioner is hereb# reCuired to sho$ cause $ithin ten 5'86 da#s fro! notice $h# he should not be held ad!inistrativel# liable for his acts and o!issions hereinabove described in this decision. SO ORD?R?D. .arvasa, *ruz, /ri0o-A1uino and 2edialdea, ,,., concur.

to ta"e an# action for the case. So the propert# $as sold b# the sheriff thru public auction. +fter one #ear rede!ption period e%pired $Gout the petitioner redee!in the propert# and the sheriff issued a final deed of sale. Bpon learnin of this unfortunate turn of events, petitioner prevailed upon her counsel to see" the appropriate relief. ISSUE, *ON the petitioner can recover his propert# *ON the counsel is ne li ent in handlin the case of her client HELD, The .ourt finds that the ne li ence of the counsel in this case appears to be so ross and ine%cusable. This $as co!pounded b# the fact , that after petitioner ave said counsel another chance to !a"e up for his o!issions b# as"in hi! to file a petition for annul!ent of the 4ud !ent in the appellate court, a ain counsel abandoned the case of petitioner in that after he received a cop# of adverse 4ud !ent of appellate court, he did not do an#thin to save the situation or infor! his client of the 4ud !ent. 3e allo$ed the 4ud !ent to lapse and beco!e final. Such rec"less and ross ne li ence should not be allo$ed to bind the petitioner. Petitioner $as thereb# effectivel# deprived of her da# in court. Eecause of the ross ne li ence of the counsel for the petitioner, she lost the case as $ell as the title and o$nership of the propert#, $hich is $orth !illions. The !ere lessee then no$ beca!e the o$ner of the propert#. The .ourt cannot allo$ such a rave in4ustice to prevail. It cannot tolerate such un4ust enrich!ent of the respondent at the e%pense of the petitioner. +s !e!ber of the Phil Ear he o$es co!plete fidelit# to the cause of his client. 3e should ive adeCuate attention, care and ti!e to his cases. This is the reason $h# a practicin la$#er should accept onl# so !an# cases he can afford to handle. +nd once he a rees to handle a case, he should underta"e the tas" $ith dedication and care. If he should do an# less, then he is not true to his oath as a la$#er. In this case, the SheriffHs .ert of Sale and the subseCuent final deed of sale coverin the sa!e propert# are null and void. Respondent is directed to reconve# said propert# to the petitioner and the re ister of Deeds is ordered to cancel the re istration of the said propert# in the na!e of respondent and issue a ne$ one in the na!e of the petitioner. The said counsel for petitioner is reCuired to sho$ cause $Gin ten da#s fro! notice $h# he should not be held ad!inistrativel# liable for his acts and o!issions.

VICTORIA LEGARDA *+. CA, NE" CATHA# HOUSE, INC. Petitioner $as the o$ner of a parcel of land and the i!prove!ents thereon. Petitioner entered into a leased a ree!ent $ith the respondent thru its representative, Roberto .abrera, /r. of the propert# for a period of five #ears that the rental is (2F per !onth $ith 29 escalation per #ear. Respondent deposited the do$n pa#!ent but petitioner failed and refused to e%ecute and si n the sa!e despite de!ands of the respondent. Respondent suffered da!a es due to the dela# in the renovation and openin of its restaurant business. Respondent filed a co!plaint a ainst petitioner for specific perfor!ance. Petitioner en a ed the services of the counsel to handle her case. Eut her counsel failed