MA.

LUISA HADJULA,

A.C. No. 6711

Complainant,
Present:
PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
AZCUNA, and
GARCIA, JJ.

- versus -

Promulgated:
ATTY. ROCELES F. MADIANDA,
Respondent.

July 3, 2007

x------------------------------------------------------------------------------------x
DECISION
GARCIA, J.:

Under consideration is Resolution No. XVI-2004-472 of the Board of Governors, Integrated Bar of the Philippines (IBP), relative to the complaint for disbarment filed by herein complainant
Ma. Luisa Hadjula against respondent Atty. Roceles F. Madianda.
The case started when, in an AFFIDAVIT-COMPLAINT[1] bearing date September 7, 2002 and filed with the IBP Commission on Bar Discipline, complainant charged Atty. Roceles F. Madianda
with violation of Article 209[2] of the Revised Penal Code and Canon Nos. 15.02 and 21.02 of the Code of Professional Responsibility.
In said affidavit-complaint, complainant alleged that she and respondent used to be friends as they both worked at the Bureau of Fire Protection (BFP) whereat respondent was the Chief Legal
Officer while she was the Chief Nurse of the Medical, Dental and Nursing Services. Complainant claimed that, sometime in 1998, she approached respondent for some legal advice. Complainant
further alleged that, in the course of their conversation which was supposed to be kept confidential, she disclosed personal secrets and produced copies of a marriage contract, a birth certificate and a
baptismal certificate, only to be informed later by the respondent that she (respondent) would refer the matter to a lawyer friend. It was malicious, so complainant states, of respondent to have
refused handling her case only after she had already heard her secrets.
Continuing, complainant averred that her friendship with respondent soured after her filing, in the later part of 2000, of criminal and disciplinary actions against the latter. What, per
complainants account, precipitated the filing was when respondent, then a member of the BFP promotion board, demanded a cellular phone in exchange for the complainants promotion.
According to complainant, respondent, in retaliation to the filing of the aforesaid actions, filed a COUNTER COMPLAINT [3] with the Ombudsman charging her (complainant) with violation of
Section 3(a) of Republic Act No. 3019,[4] falsification of public documents and immorality, the last two charges being based on the disclosures complainant earlier made to respondent. And also on
the basis of the same disclosures, complainant further stated, a disciplinary case was also instituted against her before the Professional Regulation Commission.
Complainant seeks the suspension and/or disbarment of respondent for the latters act of disclosing personal secrets and confidential information she revealed in the course of seeking
respondents legal advice.
In an order dated October 2, 2002, the IBP Commission on Bar Discipline required respondent to file her answer to the complaint.
In her answer, styled as COUNTER-AFFIDAVIT,[5] respondent denied giving legal advice to the complainant and dismissed any suggestion about the existence of a lawyer-client relationship
between them. Respondent also stated the observation that the supposed confidential data and sensitive documents adverted to are in fact matters of common knowledge in the BFP. The relevant
portions of the answer read:

5.
I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for reason that she never WAS MY
CLIENT nor we ever had any LAWYER-CLIENT RELATIONSHIP that ever existed ever since and that never obtained any legal advice from me regarding her PERSONAL
PROBLEMS or PERSONAL SECRETS. She likewise never delivered to me legal documents much more told me some confidential information or secrets. That is because I
never entertain LEGAL QUERIES or CONSULTATION regarding PERSONAL MATTERS since I know as a LAWYER of the Bureau of Fire Protection that I am not allowed to
privately practice law and it might also result to CONFLICT OF INTEREST. As a matter of fact, whenever there will be PERSONAL MATTERS referred to me, I just referred
them to private law practitioners and never entertain the same, NOR listen to their stories or examine or accept any document.
9.
I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the truth of the matter is that her
ILLICIT RELATIONSHIP and her illegal and unlawful activities are known in the Bureau of Fire Protection since she also filed CHILD SUPPORT case against her lover where
she has a child .
Moreover, the alleged DOCUMENTS she purportedly have shown to me sometime in 1998, are all part of public records .
Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant case just to get even with me or to force me to settle and withdraw the CASES I FILED
AGAINST HER since she knows that she will certainly be DISMISSED FROM SERVICE, REMOVED FROM THE PRC ROLL and CRIMINALLY CONVICTED of her
ILLICIT, IMMORAL, ILLEGAL and UNLAWFUL ACTS.

On October 7, 2004, the Investigating Commissioner of the IBP Commission on Bar Discipline came out with a Report and Recommendation, stating that the information related by complainant
to the respondent is protected under the attorney-client privilege communication. Prescinding from this postulate, the Investigating Commissioner found the respondent to have violated legal ethics
when she [revealed] information given to her during a legal consultation, and accordingly recommended that respondent be reprimanded therefor, thus:
WHEREFORE, premises considered, it is respectfully recommended that respondent Atty. Roceles Madianda be reprimanded for revealing the secrets of the complainant.
On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-2004-472 reading as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the aboveentitled case, herein made part of this Resolution as Annex A; and , finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and
considering the actuation of revealing information given to respondent during a legal consultation, Atty. Roceles Madianda is hereby REPRIMANDED.
We AGREE with the recommendation and the premises holding it together.
As it were, complainant went to respondent, a lawyer who incidentally was also then a friend, to bare what she considered personal secrets and sensitive documents for the purpose of
obtaining legal advice and assistance. The moment complainant approached the then receptive respondent to seek legal advice, a veritable lawyer-client relationship evolved between the two. Such
relationship imposes upon the lawyer certain restrictions circumscribed by the ethics of the profession. Among the burdens of the relationship is that which enjoins the lawyer, respondent in this
instance, to keep inviolate confidential information acquired or revealed during legal consultations. The fact that one is, at the end of the day, not inclined to handle the clients case is hardly of
consequence. Of little moment, too, is the fact that no formal professional engagement follows the consultation. Nor will it make any difference that no contract whatsoever was executed by the
parties to memorialize the relationship. As we said in Burbe v. Magulta,[6] A lawyer-client relationship was established from the very first moment complainant asked respondent for legal advise regarding the formers business. To constitute
professional employment, it is not essential that the client employed the attorney professionally on any previous occasion.
It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney consulted did not afterward handle the case for which his service
had been sought.

It a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional advice or assistance, and the attorney voluntarily
permits or acquiesces with the consultation, then the professional employments is established.
Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship between the lawyer and the complainant or the non-payment of the formers
fees.

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

G.R. No. 77439 August 24, 1989

DONALD
vs.
COURT OF APPEALS and AMELITO MUTUC, respondents.
Tanjuatco, Oreta & Tanjuatco for petitioner.
Amelito R. Mutuc for and in his own behalf

DEE petitioner,

REGALADO, J.:
Petitioner assails the resolution of respondent court, dated February 12,1987, reinstating its decision promulgated on May 9, 1986 in AC-G.R. CV No. 04242 wherein it affirmed the decision of the
that court holding that the services rendered by private respondent was on a professional, and not on a gratis et amore basis and ordering petitioner to pay private respondent the sum of P50,000.00 as
the balance of the latter's legal fee therefor.
The records show that sometime in January, 1981, petitioner and his father went to the residence of private respondent, accompanied by the latter's cousin, to seek his advice regarding the problem of
the alleged indebtedness of petitioner's brother, Dewey Dee, to Caesar's Palace, a well-known gambling casino at Las Vegas, Nevada, U.S.A. Petitioner's father was apprehensive over the safety of his
son, Dewey, having heard of a link between the mafia and Caesar's Palace and the possibility that his son may be harmed at the instance of the latter. 1
Private respondent assured petitioner and his father that he would inquire into the matter, after which his services were reportedly contracted for P100,000. 00. From his residence, private respondent
called up Caesar's Palace and, thereafter, several long distance telephone calls and two trips to Las Vegas by him elicited the information that Dewey Dee's outstanding account was around
$1,000,000.00. Further investigations, however, revealed that said account had actually been incurred by Ramon Sy, with Dewey Dee merely signing for the chits. Private respondent communicated
said information to petitioner's a father and also assured him that Caesar's Palace was not in any way linked to the mafia. 2
In June, 1981, private respondent personally talked with the president of Caesar's Palace at Las Vegas, Nevada. He advised the president that for the sake and in the interest of the casino it would be
better to make Ramon Sy answer for the indebtedness. The president told him that if he could convince Ramon Sy to acknowledge the obligation, Dewey Dee would be exculpated from liability for
the account. Upon private respondent's return to Manila, he conferred with Ramon Sy and the latter was convinced to acknowledge the indebtedness. In August, 1981, private respondent brought to
Caesar's Palace the letter of Ramon Sy owning the debt and asking for a discount. Thereafter, the account of Dewey Dee was cleared and the casino never bothered him. 3
Having thus settled the account of petitioner's brother, private respondent sent several demand letters to petitioner demanding the balance of P50,000.00 as attorney's fees. Petitioner, however, ignored
said letters. On October 4, 1982, private respondent filed a complaint against petitioner in the Regional Trial Court of Makati, Branch CXXXVI, for the collection of attorney's fees and refund of
transport fare and other expenses. 4
Private respondent claimed that petitioner formally engaged his services for a fee of P100,000.00 and that the services he rendered were professional services which a lawyer renders to a client.
Petitioner, however, denied the existence of any professional relationship of attorney and client between him and private respondent. He admits that he and his father visited private respondent for
advice on the matter of Dewey Dee's gambling account. However, he insists that such visit was merely an informal one and that private respondent had not been specifically contracted to handle the
problem. On the contrary, respondent Mutuc had allegedly volunteered his services "as a friend of defendant's family" to see what he could do about the situation. As for the P50,000.00 inceptively
given to private respondent, petitioner claims that it was not in the nature of attomey's fees but merely "pocket money" solicited by the former for his trips to Las Vegas and the said amount of
P50,000.00 was already sufficient remuneration for his strictly voluntary services.
After trial, the court a quo rendered judgment ordering herein petitioner to pay private respondent the sum of P50,000.00 with interest thereon at the legal rate from the filing of the complaint on
October 4, 1982 and to pay the costs. All other claims therein of private respondent and the counterclaim of petitioner were dismissed. 5 On appeal, said judgment was affirmed by the then
Intermediate Appellate Court on May 9, 1986. 6
Petitioner, in due time, filed a motion for reconsideration contending that the Appellate Court overlooked two important and decisive factors, to wit: (1) At the time private respondent was ostensibly
rendering services to petitioner and his father, he was actually working "in the interest" and "to the advantage" of Caesar's Palace of which he was an agent and a consultant, hence the interests of the
casino and private respondent were united in their objective to collect from the debtor; and (2) Private respondent is not justified in claiming that he rendered legal services to petitioner and his father
in view of the conflicting interests involved.
In its resolution of July 31, 1986, respondent court reconsidered its decision and held that the sum of P50,000.00 already paid by petitioner to private respondent was commensurate to the services he
rendered, considering that at the time he was acting as counsel for petitioner he was also acting as the collecting agent and consultant of, and receiving compensation from, Caesar's Palace. 7 However,

upon a motion for reconsideration thereafter filed by private respondent, the present respondent Court of Appeals issued another resolution, dated February 12, 1987, reinstating the aforesaid decision
of May 9, 1986. 8
Petitioner is now before us seeking a writ of certiorari to overturn the latter resolution.
It is necessary, however, to first clear the air of the questions arising from the change of stand of the First Civil Cases Division of the former Intermediate Appellate Court when, acting on the
representations in petitioner's undated motion for reconsideration supposedly filed on May 28,1986, it promulgated its July 31, 1986 resolution reconsidering the decision it had rendered in AC-G.R.
CV No. 04242. Said resolution was, as earlier noted, set aside by the Twelfth Division of the reorganized Court of Appeals which, at the same time, reinstated the aforesaid decision.
Because of its clarificatory relevance to some issues belatedly raised by petitioner, which issues should have been disregarded 9 but were nevertheless auspiciously discussed therein, at the risk of
seeming prolixity we quote hereunder the salient portions of the assailed resolution which demonstrate that it was not conceived in error.
The reason for then IAC's action is that it deemed the P50,000.00 plaintiff-appellee had previously received from defendant-appellant as adequate compensation for the services
rendered by am for defendant-appellant, considering that at the time plaintiff-appellee was acting as counsel for defendant-appellant, he was also acting as the collecting agent and
consultant of, and receiving compensation from Caesar's Palace in Las Vegas, Nevada, the entity with whom defendant-appellant was having a problem and for which he had
engaged the services of plaintiff-appellee. The crux of the matter, therefore, is whether or not the evidence on record justifies this finding of the IAC.
Plaintiff-appellee maintains that his professional services to defendant-appellant were rendered between the months of July and September of 1981, while his employment as
collection agent and consultant of Caesar's Palace covered the period from December 1981 to October 1982. This positive testimony of plaintiff-appellee, however, was
disregarded by the IAC for the following reasons:
1. In August l983, plaintiff-appellee testified that he was a representative of Caesar's Palace in the Philippines 'about two or three years ago.' From this the IAC concluded that the
period covers the time plaintiff-appellee rendered professional services to defendant-appellant.
We do not think that IAC's conclusion is necessarily correct. When plaintiff-appellee gave the period 'about two or three years ago,' he was merely stating an approximation.
Considering that plaintiff-appellee was testifying in August 1983, and his employment with Caesar's Palace began in December 1981, the stated difference of two years is relatively
correct. . . .
2. The plaintiff appellee had testified that he was working for the sake,' 'in the interest,' and 'to the advantage' of Caesar's Palace. x x x "We detect nothing from the above which
would support IAC's conclusion that plaintiff-appellee was then in the employ of Caesar's Palace. What is gathered is that plaintiff-appellee was simply fulfilling a condition which
plaintiff-appellee had proposed to, and was accepted by, Caesar's Palace, for the release of Dewey Dee from his obligation to Caesar's Palace.
3. Caesar's Palace would not have listened to, and acted upon, the advice of plaintiff-appellee if he were no longer its consultant and alter ego.
Why not? We are witnesses to many successful negotiations between contending parties whose representing lawyers were not and were never in the employ of the opposite party.
The art of negotiation is precisely one of the essential tools of a good practitioner, and mastery of the art takes into account the circumstance that one may be negotiating, among
others, with a person who may not only be a complete stranger but antagonistic as well. The fact that plaintiff-appellee was able to secure a favorable concession from Caesar's
Palace for defendant-appellant does not justify the conclusion that it could have been secured only because of plaintiff-appellee's professional relationship with Caesar's Palace. It
could have been attributable more to plaintiff-appellee's stature as a former ambassador of the Philippines to the United States, his personality, and his negotiating technique.
Assuming, however, that plaintiff-appellee was employed by Caesar's Palace during the time that he was rendering professional services for defendant-appellant, this would not
automatically mean the denial of additional attorney's fees to plaintiff appellee. The main reason why the IAC denied plaintiff-appellee additional compensation was because the
latter was allegedly receiving compensation from Caesar's Palace, and, therefore, the amount of P50,000.00 plaintiff-appellee had previously received from defendant-appellant is
'reasonable and commensurate. This conclusion, however, can only be justified if the fact and amount of remuneration had been established. These were not proven at all. No proof
was presented as to the nature of plaintiff-appellee's remuneration, and the mode or manner in which it was paid.. . . 10

Both the lower court and the appellate court concur in their findings that there was a lawyer-client relationship between petitioner and private respondent Mutuc. We find no reason to interfere with
this factual finding. There may be instances when there is doubt as to whether an attorney-client relationship has been created. The issue may be raised in the trial court, but once the trial court and the
Court of Appeals have found that there was such a relationship the Supreme Court cannot disturb such finding of fact, 11 absent cogent reasons therefor.
The puerile claim is advanced that there was no attorney-client relationship between petitioner and private respondent for lack of a written contract to that effect. The absence of a written contract will
not preclude the finding that there was a professional relationship which merits attorney's fees for professional services rendered. Documentary formalism is not an essential element in the
employment of an attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice and assistance of an attorney is sought and received in any matter pertinent
to his profession. An acceptance of the relation is implied on the part of the attorney from his acting on behalf of his client in pursuance of a request from the latter. 12
There is no question that professional services were actually rendered by private respondent to petitioner and his family. Through his efforts, the account of petitioner's brother, Dewey Dee, with
Caesar's Palace was assumed by Ramon Sy and petitioner and his family were further freed from the apprehension that Dewey might be harmed or even killed by the so-called mafia. For such
services, respondent Mutuc is indubitably entitled to receive a reasonable compensation and this right cannot be concluded by petitioner's pretension that at the time private respondent rendered such
services to petitioner and his family, the former was also the Philippine consultant of Caesar's Palace.
On the first aspect, the evidence of record shows that the services of respondent Mutuc were engaged by the petitioner for the purposes hereinbefore discussed. The previous partial payments totalling
P50,000.00 made by petitioner to respondent Mutuc and the tenor of the demand letters sent by said private respondent to petitioner, the receipt thereof being acknowledged by petitioner, ineluctably
prove three facts, viz: that petitioner hired the services of private respondent Mutuc; that there was a prior agreement as to the amount of attorney's fees to be given to the latter; and there was still a
balance due and payable on said fees. The duplicate original copy of the initial receipt issued and signed in this connection by private respondent reads:
RECEIVED from Mr. Donald Dee, for professional services rendered, the sum of THIRTY THOUSAND PESOS (P30,000.00) as partial payment, leaving a balance of SEVENTY
THOUSAND PESOS (P70,000.00), payable on demand.
Makati, Metro Manila, July 25,1981. 13
Thereafter, several demand letters for payment of his fees, dated August 6, 1981, December 2, 1981, January 29, 1982, March 7, 1982, and September 7, 1982 were sent by private respondent to
petitioner, 14 all to no avail.
On the second objection, aside from the facts stated in the aforequoted resolution of respondent Court of Appeals, it is also not completely accurate to judge private respondent's position by petitioner's
assumption that the interests of Caesar's Palace were adverse to those of Dewey Dee. True, the casino was a creditor but that fact was not contested or opposed by Dewey Dee, since the latter, as
verifications revealed, was not the debtor. Hence, private respondent's representations in behalf of petitioner were not in resistance to the casino's claim but were actually geared toward proving that
fact by establishing the liability of the true debtor, Ramon Sy, from whom payment was ultimately and correctly exacted. 15
Even assuming that the imputed conflict of interests obtained, private respondent's role therein was not ethically or legally indefensible. Generally, an attorney is prohibited from representing parties
with contending positions. However, at a certain stage of the controversy before it reaches the court, a lawyer may represent conflicting interests with the consent of the parties. 16 A common
representation may work to the advantage of said parties since a mutual lawyer, with honest motivations and impartially cognizant of the parties' disparate positions, may well be better situated to
work out an acceptable settlement of their differences, being free of partisan inclinations and acting with the cooperation and confidence of said parties.
Here, even indulging petitioner in his theory that private respondent was during the period in question an agent of Caesar's Palace, petitioner was not unaware thereof, hence he actually consented to
and cannot now decry the dual representation that he postulates. This knowledge he admits, thus:
It is a fair question to ask why, of all the lawyers in the land, it was the private respondent who was singled out by the petitioner's father for consultation in regard to an apparent
problem, then pending in Caesar's Palace. The testimony of Arthur Alejandrino, cousin to private respondent, and the admission of the private respondent himself supply the
answer. Alejandrino testified that private respondent was the representative of Caesar's Palace in the Philippines (p. 23, t.s.n., Nov. 29, 1983). lwph1.t Private respondent
testified that he was such representative tasked by the casino to collect the gambling losses incurred by Filipinos in Las Vegas. (p. 5, t.s.n., Sept. 21, 1983). 17

A lawyer is entitled to have and receive the just and reasonable compensation for services rendered at the special instance and request of his client and as long as he is honestly and in good faith trying
to serve and represent the interests of his client, the latter is bound to pay his just fees. 18
WHEREFORE, the resolution of respondent Court of Appeals, dated February 12,1987, reinstating its original decision of May 9, 1986 is hereby AFFIRMED, with costs against l petitioner.

VALERIANA U. DALISAY,
Complainant,

A.C. No. 5655

Present:

- versus

PANGANIBAN, J.,
Chairman,
SANDOVAL-GUTIERREZ,
CORONA,
CARPIO MORALES, and
GARCIA, JJ.

ATTY. MELANIO MAURICIO, JR.,

Respondent.

Promulgated:
April 22, 2005

x
-----------------------------------------------------------------------------------------------------------x
DECISION

SANDOVAL-GUTIERREZ, J.:
The instant case stemmed from a verified letter-complaint dated February 21, 2002 filed with this Court by Valeriana U. Dalisay against Atty. Melanio Batas Mauricio, Jr. for demanding
and receiving exorbitant attorneys fees but did not take any action on her case.
In her complaint, Dalisay alleged that she was impressed by the pro-poor and pro-justice advocacy of respondent, a media personality. So she engaged his services as her counsel in Civil
Case No. 00-44, wherein she is the defendant, pending before the Municipal Trial Court of Binangonan, Rizal. After consulting with respondent, she handed to him all the pertinent documents. In

turn, respondent demanded P25,000.00 as acceptance fee which she paid. Then respondent asked her to pay P8,000.00 as filing fee. She paid the amount although she knew that Civil Case No. 0044 was already filed with the court.
After a month, complainant approached respondent to followup her case. Respondent demanded additional acceptance fee, or a total of P90,000.00, with the explanation that he can give a
discount should she pay in cash. Respondent also asked her to pay him P3,000.00 as appearance fee.
Complainant raised an additional amount and paid respondent the total sum of P48,000.00. Adding to this amount P8,000.00 filing fee, her total payment wasP56,000.00.
Complainant further alleged that notwithstanding her payments, respondent never rendered any legal service for her in Civil Case No. 00-044. As a result, she terminated their attorneyclient relationship and demanded the return of her money and documents. However, he refused to do so.
In his comment, respondent denied complainants charge. He claimed that Atty. Oliver Lozano referred her to him to defend her in Civil Case No. 00-044. He explained to her that she is
not covered by the free legal services being rendered by his office. Thus, she would be treated as a regular client. Accordingly, his acceptance fee would be One Hundred Thousand (P100,000.00)
Pesos. In addition, she would be charged for any pleading and paper filed with the court, plus an appearance fee of P3,000.00.
A few days later, Atty. Lozano called respondent and asked him to reduce his acceptance fee. He then agreed and asked only P25,000.00 for which complainant was very grateful.
Respondent denied demanding P8,000.00 as filing fee in Civil Case No. 00-044. He clarified that such fee was intended for another case he would file for complainant, aside from Civil
Case No. 00-044.
Respondent also alleged that he asked complainant to bring her son-in-law to his office for a conference and to submit to him the necessary documents to enable him to prepare the filing of
the complaints in order to protect her rights over the subject property. But complainant did not heed his advice. Instead, she returned to his office and told him that she was no longer interested in
retaining his services. She then demanded a refund of the amounts she paid.
According to respondent, he rendered legal services to complainant by way of legal advice and opinions on all her problems and those of her family. Consequently, he had every right to
collect attorneys fees from her. He prayed that the instant complaint be dismissed.
On September 18, 2002, we resolved to refer this case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.
In her Report and Recommendation dated January 13, 2004, Commissioner Lydia A. Navarro of the IBP Commission on Bar Discipline made the following findings It is evident that for the amount of P56,000.00 paid by the complainant as reflected in the duly signed official receipts of respondents law office, no action had been
taken nor any pleadings prepared by the respondent except his alleged conferences and opinions rendered when complainant frequented his law office, as his legal services.
In view thereof, when complainant decided to withdrew respondents services as her counsel due to inaction; it is quite fair and incumbent upon the respondent to return
whatever amount the complainant had already paid in the amount of P56,000.00 and the latter to compensate respondent for reasonable consultation fees due him which was not
included in their retained agreement.
and recommended as follows:
Wherefore, premises considered, it is respectfully recommended that the complaint against Atty. Melanio Batas Mauricio, Jr., be dismissed and the respondent be
required to refund the amount of Fifty Six Thousand Pesos (P56,000.00) to the complainant within two (2) months from receipt hereof, with the advice to be more discreet and
cautious in dealing with clients relative to assessment and receipt of required fees in the future, specially those assisted by him through referral and accommodation; otherwise
severe penalty will be imposed.
Complainant is likewise ordered to pay respondent consultation fee equivalent to twenty percent (20%) of the whole amount of P56,000.00.
RESPECTFULLY SUBMITTED. [1]

On February 27, 2004, the IBP Board of Governors passed Resolution No. XVI-2004-121 adopting and approving in toto the Report and Recommendation of Commissioner Navarro.
We cannot sustain the recommendation of the IBP Board of Governors that this case should be dismissed.
As found by IBP Investigating Commissioner Navarro, respondent agreed to handle Civil Case No. 00-044 on behalf of complainant for an acceptance fee ofP25,000.00 which she paid.
Respondent then demanded additional acceptance fee or a total of P48,000.00, instead of P25,000.00 initially agreed upon. In addition, respondent asked for P8,000.00 which according to him was
intended as filing fee for a new case he was supposed to file.
Hence, respondent received the total amount of P56,000.00 from complainant for his supposed legal services.
When respondent accepted P56,000.00 from complainant, it was understood that he agreed to take up the latters case and that an attorney-client relationship between them was established.
From then on, it was expected of him to serve complainant with competence and attend to her case with fidelity, care and devotion.
However, there is nothing in the records to show that respondent entered his appearance as counsel of record for complainant in Civil Case No. 00-044. He did not even follow-up the case
which remained pending up to the time she terminated his services.
As to the P8,000.00, allegedly as docket fees for other cases, paid to respondent by complainant, the Investigating Commissioner found that there was no evidence nor any pleadings
submitted to show that respondent filed any case considering that the filing fee had to be paid simultaneously with the filing of a case.
Canons 17 and 18 of the Code of Professional Responsibility, the body of rules governing the conduct of every member of the Bar in this jurisdiction, provides:
CANON 17 A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF THE TRUST AND CONFIDENCE REPOSED
IN HIM.
CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
More specifically, Rule 18.03 states:
A LAWYER SHALL NOT NEGLECT A LEGAL MATTER ENTRUSTED TO HIM, AND HIS NEGLIGENCE IN CONNECTION THEREWITH SHALL RENDER
HIM LIABLE.
Also, respondents Attorneys Oath declares that respondent shall impose upon himself the sacred duty, among others, that he will not delay any man for money or malice, and will conduct
himself as a lawyer according to the best of his knowledge and discretion with all good fidelity to courts as well as to his clients.
A member of the legal profession owes his client entire devotion to his genuine interest and warm zeal in the maintenance and defense of his rights.[2] An attorney is expected to exert
his
best efforts and ability to protect his clients case, for his unwavering loyalty to his client likewise serves the ends of justice. Indeed, the entrusted privilege of every lawyer to practice law carries
with it his corresponding duties, not only to his client, but also to the court, to the bar and to the public.
In Santos vs. Lazaro,[3] we held that Rule 18.03 of the Code of Professional Responsibility, above-quoted, is a basic postulate in legal ethics. Verily, when a lawyer takes a clients cause, he
covenants that he will exercise due diligence in protecting his rights. The failure to exercise that degree of vigilance and attention makes such lawyer unworthy of the trust reposed in him by his
client and makes him answerable not just to his client but also to the legal profession, the courts and society. [4]
Respondent insists that he is entitled to attorneys fees since he gave legal advice and opinions to complainant on her problems and those of her family. Just like any other professional, a
lawyer is entitled to collect fees for his services. However, he should charge only a reasonable amount of fees. Canon 20 of the Code
of Professional Responsibility mandates that A lawyer shall charge only fair and reasonable fees. There is, however, no hard and fast rule which will serve as guide in determining what is or what is
not a reasonable fee. That must be determined from the facts of each case. [5] The power to determine the reasonableness or the unconscionable character of a lawyers fee is a matter falling within
the regulatory prerogative of the Court.[6]

It is now clear to us that since respondent did not take any step to assist complainant in her case, charging P56,000.00 is improper. While giving legal advice and opinion on complainants
problems and those of her family constitutes legal service, however, the attorneys fee must be reasonable. Obviously, P56,000.00 is exorbitant.
We cannot understand why respondent initially demanded P8,000.00 as filing fee from complainant when he very well knew that the docket fee for Civil Case No. 00-044 had been paid. If
it was intended as a docket fee for another case, why did he not file the corresponding complaint?
By his inaction in Civil Case No.00-044, respondent violated Canons 17, 18 and 18.03, earlier cited, as well as his Oath as an attorney. Likewise, in collecting from complainant exorbitant
consulting fee, respondent violated Canon 20 of the same Code. For all these violations, respondent should be penalized.
The facts of Sencio vs. Calvadores,[7] bear a striking similarity to the present case. Respondent lawyer Sencio did not return the money to complainant despite demand following his failure
to file the case. We found him guilty of violation of the lawyers oath,
malpractice and gross misconduct and suspended him for six (6) months, and ordered to return to his client the amount of P21,000.00 with interest at 12% per annum from the date of the promulgation
of our Resolution until the return of the amount.
In Garcia vs. Manuel,[8] we suspended respondent lawyer from the practice of law for six (6) months and ordered him to render an accounting of all monies he received from the
complainant. We found him guilty of gross misconduct.
WHEREFORE, respondent Atty. Melanio Mauricio, Jr. is hereby found GUILTY of malpractice and gross misconduct for violating Canons 17, 18, Rule 18.03 and 20 of the Code of
Professional Responsibility and the Lawyers Oath. He is SUSPENDED from the practice of law for a period for six (6) months effective from notice, and STERNLY WARNED that any similar
infraction in the future will be dealt with more severely. He is further ordered to RETURN, within ten (10) days, also from notice, the sum of P56,000.00 to complainant Valeriana U. Dalisay and
submit to this Court proof of his compliance within three (3) days thereform.
Let copies of this Decision be furnished the Court Administrator for his distribution to all courts of the land , the IBP, the Office of the Bar Confidant, and entered into respondents personal
records as a member of the Philippine Bar.
SO ORDERED.

AYNE Y. YU, complainant, vs. RENATO LAZARO BONDAL, respondent.

DECISION
CARPIO MORALES, J.:
Atty. Renato Lazaro Bondal (respondent) stands charged in a complaint [1] filed by Jayne Y. Yu (complainant) for gross negligence and violation of Canon 16 [2] and Rule 16.03[3] of the Code of
Professional Responsibility arising from his alleged failure to attend to the five cases she referred to him and to return, despite demand, the amount of P51,716.54 she has paid him.
By complainants allegation, the following spawned the filing of the present administrative complaint:
On March 30, 2000, she engaged the services of respondent as counsel in the following cases: (1) Jayne Yu. v. Swire Realty and Development Corp, for Rescission with Damages filed before
the Housing and Land Use Regulatory Board, (2) I.S. No. 00-22089-90, Jayne Yu v. Lourdes Fresnoza Boon, for Estafa, (3) I.S. No. 2000-G-22087-88, Jayne Yu v. Julie Teh, for violation of
Batas Pambansa Blg. 22, (4) I.S. No. 2000-D-11826, Jayne Yu v. Mona Lisa San Juan for violation of Batas Pambansa Blg. 22, and (5) I.S. No. 2000-D-11827,Jayne Yu v. Elizabeth Chan
Ong, also for violation of Batas Pambansa Blg. 22.[4]
In the Retainer Agreement[5] dated March 30, 2000, complainant agreed to pay respondent the amount of P200,000.00 as Acceptance Fee for the five cases, with an Appearance Fee of P1,500.00
pesos per hearing; and in the event that damages are recovered, she would pay respondent 10% thereof as success fee.
Complainant later issued two checks, BPI Family Bank No. 94944 and BPI Family Bank No. 94968, dated February 20, 2001 and April 5, 2001 in the amount of P30,000.00 andP21,716.54,
respectively.[6]
Despite receipt of above-said amounts, respondent failed to file a case against Swire Realty and Development Corp; [7] due to respondents negligence, the case for estafa against Lourdes
Fresnoza Boon was dismissed by the Office of the City Prosecutor of Makati City and was not timely appealed to the Department of Justice; [8] respondent negligently failed to inform complainant,
before she left for abroad, to leave the necessary documents for purposes of the preliminary investigation of the case filed against Julie Teh before the Office of the City Prosecutor of Makati City,
which case was eventually dismissed by Resolution dated August 14, 2000; [9] and respondent compelled her to settle the two cases for violation of B.P. Blg. 22 against Mona Lisa San Juan and
Elizabeth Chan Ong under unfair and unreasonable terms. [10]
Respondent thus demanded from respondent, by letter[11] of June 14, 2001, for the return of all the records she had entrusted him bearing on the subject cases.
Through complainants counsel (Chavez Laureta and Associates Law Office) which sent a letter [12] to respondent, she reiterated her demand for the return of the records of the cases.
Respondent did return but only the records bearing on the estafa case against Lourdes Fresnoza Boon and the B.P. Blg. 22 case against Mona Lisa San Juan.
Complainant through counsel thus demanded, by letter [13] of August 8, 2001, the return of the rest of the files, particularly that dealing with Swire Realty and Development Corporation and Julie
Teh. In the same letter, complainant also demanded the refund of the amounts covered by the above-said two BPI Family Bank Checks amounting to P51,716.54, they being intended to represent
payment of filing fees for the case against Swire Realty and Development Corporation which respondent failed to file.
As respondent failed and continues to refuse to comply with complainants valid demands in evident bad faith and to her prejudice, she filed the present complaint charging him with flagrant
violation of Canon 16 and Canon 16.03 of the Code of Professional Responsibility.

By Resolution[14] of February 4, 2002, this Court directed respondent to file his Comment. Respondent, through his counsel, the Escobido and Pulgar Law Offices, filed a motion for extension
for thirty days or up to April 9, 2002, which was granted by Resolution of May 27, 2002. No copy was, however, furnished respondents counsel.[15]
As respondent failed to file his Comment on the present complaint, this Court, by Resolution of July 21, 2003, considered the filing of respondents comment deemed waived and allowed
complainant to present her evidence before the Office of the Bar Confidant. [16]
At the hearing before the Officer of the Bar Confidant, complainant echoed her allegations in the complaint.
As to the other cases referred by complainant to respondent, complainant testified that the case against Julie Enriquez-Teh was dismissed because respondent failed to present the original checks
subject of the case;[17] that the estafa case against Ms. Lourdes Boon was dismissed and was never appealed; [18] and that she was prodded by respondent to settle the two cases for B.P. Blg. 22 even if
she was not satisfied with the terms thereof, respondent having assured her that he would waive his 10% success fee in the case against Swire Development. [19]
And complainant submitted the following documentary evidence: (1) Retainer Agreement between her and Atty. Renato Lazaro Bondal; [20] (2) BPI Family Bank Check No. 94944 dated
February 20, 2001 for P30,000.00 payable to cash;[21] (3) BPI Family Bank Check No. 94968 dated April 5, 2001 for P21,716.54 payable to cash;[22] (4) Resolution of the City Prosecutor of Makati
dated August 18, 2000 on a case between Jayne Yu and Lourdes Fresnoza Boon; [23] (5) Resolution of the City Prosecutor of Makati on a case between her and Julie Enriquez-Teh; [24] (5) her letter to
respondent dated June 14, 2001 requesting the return of pertinent records of the cases referred to him; [25] (6) letter of Francisco I. Chavez to respondent dated July 18, 2001 reiterating the request for
the return of the records and an accounting of the amount of P51,716.54;[26] (7) letter of Francisco I. Chavez to respondent dated August 8, 2001 confirming the receipt of two folders relative to the
cases she filed against Lourdes Fresnoza Boon and Mona Lisa San Juan, requesting Atty. Bondal to return the files bearing on Swire Realty and Development Corporation and Julie Teh, and
demanding the refund of the amount of P51,716.54.[27]
The Office of the Bar Confidant, by Report and Recommendation, [28] recommends the dismissal of the complaint for failure of complainant to substantiate it.
From the records of the case, it is culled that except for the case against Swire Development Corporation, the other 4 cases referred by complainant to respondent were filed in court but were
dismissed or terminated for causes not attributable to respondent.
The case for estafa against Lourdes Fresnoza Boon in I.S. No. 00-22089-90 was dismissed by the Makati Prosecutors Office by Resolution dated August 18, 2000 due to lack of probable cause
and, in any event, the issues raised therein were in the nature of intra-corporate disputes which are properly cognizable by another forum, viz:
After careful examination and evaluation of the evidence adduced both by complainant and respondent, undersigned Investigating Prosecutor finds no probable cause to hold respondent for the
offense charged of Estafa. Apparently, there was no deceit and/or unfaithfulness or abuse of confidence employed by respondent when complainant agreed to invest her money in the restaurant
business under the name and style of La Gondola, Inc. which is owned by respondent. xxx In the present case, though, complainant alleged that respondent immediately upon receipt of the
P4,800,000.00 representing her investment in the restaurant business, executed earlier in favor of Philippine Commercial and International Bank whereby La Gondola assumed the loans and credit
accommodations obtained by Lucre Export/Import Inc., using the funds of La Gondola, Inc.; respondent being the President and majority owner of the latter corporation. However, outside of the mere
allegation of complainant that respondent allegedly assumed the loans and credit accommodations extended to the other company using the funds of La Gondola, Inc., no concrete and real evidence
were presented and/or proven to this effect by complainant. xxx
Moreover, it is apparent that the issues being raised by complainant appears to be intra-corporate disputes which could be very well settled in another forum. [29] (Underscoring supplied)
Notably, a similar complaint for the same offense, docketed as I.S. No. 99-H-2780, had been previously filed by complainant against Ms. Boon which case was dismissed for insufficiency of
evidence.[30] As thus observed by the Office of the Bar Confidant, the filing of an appeal from the prosecutors resolution would have been inutile since the facts and issues raised in the estafa case had
already been twice passed upon by the Office of the City Prosecutor, hence, it would likely be dismissed. [31]
No fault or negligence can also be attributed to respondent in the dismissal of I.S. No. 2000-G-22087-88 against Julie Teh. By Resolution of August 14, 2000 of the Makati Prosecutors Office,
it is clear that it was dismissed, in the main, on the ground that the offense charged did not actually exist and complainant failed to appear and present the original checks, viz:

After a careful evaluation of the evidence on record, the undersigned recommends for the dismissal of the present complaints on the following grounds:
1. Despite reasonable opportunity given to her, complainant failed to appear and present the original copies of the subject checks and other documents attached to the complaint.
2. The subject checks were presented after the 90-day period hence there is no more presumption of knowledge of the insufficiency of funds. Accordingly, the burden is shifted upon the
complainant to prove that at the time the checks were issued, the drawer knew that he had insufficient funds. There is no allegation much less proof to that effect. The result is that the
element of knowledge of insufficiency of funds or credit is not present, therefore the crime does not exist. [32]
On the alleged failure of respondent to appear during the hearing of I.S. No. 2000-G-22087-88 and his failure to present the original of the checks subject thereof, they being then in the
possession of complainant who was abroad at that time: [33] Such failure to present the original of the checks cannot solely be attributed to respondent, for she herself was guilty of neglect. [34]
As for the alleged compulsion in the settlement of her two complaints for violation of B.P. Blg. 22 in accordance with the terms dictated by the therein respondents Mona Lisa San Juan and
Elizabeth Chan Ong, upon the promise of respondent that he would waive the 10% success fee in the complaint to be filed against Swire Development: Assuming the truthfulness of her allegation
that respondent compelled her to settle, what the terms were as alleged to have been dictated by Ms. San Juan and Ms. Chan Ong, and the manner and/or extent of prejudice she suffered, complainant
did not establish. Moreover, she failed to show that the promise by respondent that he would waive the 10% success fee was for the purpose of defrauding her or of such nature as to constitute undue
influence, thereby depriving her of reasonable freedom of choice.
Subsequent to the amicable settlement, it appears that complainant never raised any objection to the terms of the compromise. As an accepted rule, when a client, upon becoming aware of the
compromise and the judgment thereon, fails to promptly repudiate the action of his attorney, he will not afterwards be heard to complain about it. [35]
As for complainants claim that the amount of P51,716.54, which was the only amount on record that complainant paid for respondents legal services , was intended for the filing fees in the
complaint against Swire Development Corporation, the same was not substantiated as in fact the retainer agreement does not so confirm.
We
would
like
to
thank
you
for
retaining
our
law
firm
in
the
handling
and
representation
of
your
case. In regard to the five cases you referred to us, our aggregate Acceptance fee is P200,000 Pesos with anAppearance fee of P1,500.00 Pesos per hearing. As regards the damages to be recovered,
we will get 10% thereof by way of Success Fee.[36] (Underscoring supplied)
If, admittedly, the only payment given to complainant by respondent is the amount of P51,716.54, then complainant still owes respondent more, as respondent rendered his legal services in 4 out
of the 5 cases. An acceptance fee is not a contingent fee, but is an absolute fee arrangement which entitles a lawyer to get paid for his efforts regardless of the outcome of the litigation. That
complainant was dissatisfied with the outcome of the four cases does not render void the above retainer agreement for respondent appears to have represented the interest of complainant. Litigants
need to be reminded that lawyers are not demi-gods or magicians who can always win their cases for their clients no matter the utter lack of merit of the same or how passionate the litigants may
feel about their cause.[37]
In sum, this Court finds well taken the finding of the Office of the Bar Confidant that complainant failed to establish the guilt of respondent by clear, convincing and satisfactory proof. The
charges against him must thus be dismissed.[38]
However, since respondent had been advised by complainant through counsel Chavez Laureta and Associates, by letter of July 18, 2001, that she intended to terminate his services, as of said
date, he was obliged, under Rule 22.02 of the Code of Professional Responsibility, viz:
Rule 22.02 A lawyer who withdraws or is discharged shall, subject to a retainer lien, immediately turn over all papers and property to which the client is entitled, and shall cooperate with his
successor in the orderly transfer of the matter, including all information necessary for the proper handling of the matter,
to immediately turn over all papers and property which complainant entrusted to his successor.
WHEREFORE, the complaint is hereby DISMISSED. Respondent is, however, hereby directed to RETURN all the records in his possession relative to the cases he handled for complainant.

FERNANDO MARTIN O. PENA,

Complainant,

A.C. No. 7298

[Formerly CBD Case No. 05-1565]
Present:

- versus -

QUISUMBING, J.,
Chairperson,

ATTY. LOLITO G. APARICIO,

Respondent.

CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
Promulgated:
June 25, 2007

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

RESOLUTION
TINGA, J.:
In this administrative complaint, a lawyer is charged with violation of Rule 19.01 of Canon 19 of the Code of Professional Responsibility for writing a demand letter the contents of which
threatened complainant with the filing of criminal cases for tax evasion and falsification of documents.
Atty. Lolito G. Aparicio (respondent) appeared as legal counsel for Grace C. Hufana in an illegal dismissal case before the National Labor Relations Commission (NLRC). Sometime in
August 2005, complainant Fernando Martin O. Pena, as President of MOF Company, Inc. (Subic), received a notice from the Conciliation and Mediation Center of the NLRC for a
mediation/conciliation conference. In the conference, respondent, in behalf of his client, submitted a claim for separation pay arising from her alleged illegal dismissal. Complainant rejected the claim
as being baseless. Complainant thereafter sent notices to Hufana for the latter to explain her absences and to return to work. In reply to this return to work notice, respondent wrote a letter to
complainant reiterating his clients claim for separation pay. The letter also contained the following threat to the company:
BUT if these are not paid on August 10, 2005, we will be constrained to file and claim bigger amounts including moral damages to the tune of millions under established
precedence of cases and laws. In addition to other multiple charges like:
1.
2.
3.
4.

Tax evasion by the millions of pesos of income not reported to the government.
Criminal Charges for Tax Evasion
Criminal Charges for Falsification of Documents
Cancellation of business license to operate due to violations of laws.

These are reserved for future actions in case of failure to pay the above amounts as settlements in the National Labor Relations Commission (NLRC). [1]

Believing that the contents of the letter deviated from accepted ethical standards, complainant filed an administrative complaint [2] with the Commission on Bar Discipline of the Integrated
Bar of the Philippines (IBP). Respondent filed an Answer with Impleader (Motion to Dismiss and Counterclaims) [3] claiming that Atty. Emmanuel A. Jocson, complainants legal counsel, also played
an important part in imputing the malicious, defamatory, and fabricated charges against him. Respondent also pointed out that the complaint had no certification against forum shopping and was
motivated only to confuse the issues then pending before the Labor Arbiter. By way of counterclaim, respondent asked for damages and for the disbarment of Atty. Jocson. Respondent also asked the
IBP to endorse the prosecution of Atty. Jocson for Usurpation of Public Functions [4] and for violation of the Notarial Law.[5]
A mandatory conference was held on 6 December 2005 but respondent failed to appear.[6] Both parties were thereafter required to submit their position papers.
The Report and Recommendation[7] of Investigating Commissioner Milagros V. San Juan found that complainant, failed to file his position paper and to comply with Administrative Circular
No. 04-94 requiring a certificate against forum shopping and, accordingly, recommended the dismissal of the complaint against respondent. On 26 May 2006, the IBP Board of Governors adopted and
approved the Report and Recommendation of the Investigating Commissioner.[8] On 10 July 2006, the IBP Commission on Bar Discipline transmitted to the Supreme Court the notice of said
Resolution and the records of the case. [9] Thereafter, on 18 August 2006, respondent filed with the IBP a Motion for Reconsideration (for Modification of Decision) [10] reiterating his claim of damages
against complainant in the amount of four hundred million pesos (P400,000,000.00), or its equivalent in dollars, for filing the false, malicious, defamers [sic], fraudulent, illegal fabricators [sic],
malevolent[,] oppressive, evasive filing [of] a groundless and false suit. [11]
Complainant thereafter filed this Petition for Review (of the Resolution of the IBP Commission on Bar Discipline) [12] alleging that he personally submitted and filed with the IBP his position
paper, after serving a copy thereof on respondent by registered mail. He further alleges that he was deprived of his right to due process when the IBP dismissed his complaint without considering his
position paper and without ruling on the merits thereof.
Complainant accordingly prays for the reversal and setting aside of the 26 May 2006 Resolution [13] of the IBP Board of Governors and the remand of the case to the IBP Commission on Bar
Discipline for proper adjudication and disposition on the merits.

Based on the records, there is truth to complainants assertion that he filed his position paper on 21 December 2005, after serving a copy of the same to respondent. The IBP stamp on the
front page of said document shows that it was received by the IBP on 21 December 2005. The registry receipt attached to the same document also shows that it was sent by registered mail to
respondent on the same date. [14]
Complainant, however, omitted to offer any explanation in his petition before this Court for his failure to attach a certification against forum shopping in his complaint against respondent.
The requirement of a certification against forum shopping was originally required by Circular No. 28-91, dated 8 February 1994, issued by this Court for every petition filed with the Court
or the Court of Appeals. Administrative Circular No. 04-94, made effective on 1 April 1994, expanded the certification requirement to include cases filed in courts and quasi-judicial agencies below
this Court and the Court of Appeals. Ultimately, the Court adopted paragraphs (1) and (2) of Administrative Circular No. 04-94 to become Section 5, Rule 7 of the 1997 Rules of Civil Procedure.
[15]
Said rule states that a violation thereof would constitute contempt of court and be cause for the summary dismissal of both petitions without prejudice to the taking of appropriate action against the
counsel of the party concerned.[16]
The Investigating Commissioner and the IBP Board of Governors took against complainant his failure to attach the certification against forum shopping to his complaint and consequently
dismissed his complaint. This Court, however, disagrees and, accordingly, grants the petition. However, a remand of the case to the IBP would unduly prolong its adjudication.
The Courts determination is anchored on the sui generis nature of disbarment proceedings, the reasons for the certification against forum shopping requirement, complainants subsequent
compliance with the requirement, and the merit of complainants complaint against respondent.
The Court, in the case of In re Almacen,[17] dwelt on the sui generis character of disciplinary proceedings against lawyers, thus:
Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but is rather an investigation
by the Court into the conduct of one of its officers. Not being intended to inflict punishment, it is in no sense a criminal prosecution. Accordingly, there is neither a plaintiff
nor a prosecutor therein. It may be initiated by the Court motu proprio. Public interest is its primary objective, and the real question for determination is whether or not
the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to
account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of
justice by purging the profession of members who by their misconduct have proved themselves no longer worthy to be entrusted with the duties and responsibilities
pertaining to the office of an attorney. In such posture, there can thus be no occasion to speak of a complainant or a prosecutor.[18] [Emphasis supplied]
In view of the nature of disbarment proceedings, the certification against forum shopping to be attached to the complaint, if one is required at all in such proceedings, must refer to another
administrative case for disciplinary proceedings against the same respondent, because such other proceedings or action is one that necessarily involves the same issues as the one posed in the
disbarment complaint to which the certification is supposedly to be attached.
Further, the rationale for the requirement of a certification against forum shopping is to apprise the Court of the pendency of another action or claim involving the same issues in another
court, tribunal or quasi-judicial agency, and thereby precisely avoid the forum shopping situation. Filing multiple petitions or complaints constitutes abuse of court processes, [19] which tends to degrade
the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of the courts. [20] Furthermore, the rule proscribing forum
shopping seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue
inconvenience upon the other party, and save the precious time of the courts. It also aims to prevent the embarrassing situation of two or more courts or agencies rendering conflicting resolutions or
decisions upon the same issue.[21]
It is in this light that we take a further look at the necessity of attaching a certification against forum shopping to a disbarment complaint. It would seem that the scenario sought to be
avoided, i.e., the filing of multiple suits and the possibility of conflicting decisions, rarely happens in disbarment complaints considering that said proceedings are either taken by the Supreme
Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person. [22] Thus, if the complainant in a disbarment case fails to attach a certification against
forum shopping, the pendency of another disciplinary action against the same respondent may still be ascertained with ease. We have previously held that the rule requiring a certification of forum
shopping to accompany every initiatory pleading, should not be interpreted with such absolute literalness as to subvert its
own ultimate and legitimate objective or the goal of all rules of
procedurewhich is to achieve substantial justice as expeditiously as possible. [23]
At any rate, complainants subsequent compliance with the requirement cured the supposed defect in the original complaint. The records show that complainant submitted the required
certification against forum shopping on 6 December 2006 when he filed his Comment/Opposition to respondents Motion to Dismiss the present petition.

Finally, the intrinsic merit of complainants case against respondent justifies the grant of the present petition. Respondent does not deny authorship of the threatening letter to complainant,
even spiritedly contesting the charge that the letter is unethical.
Canon 19 of the Code of Professional Responsibility states that a lawyer shall represent his client with zeal within the bounds of the law, reminding legal practitioners that a lawyers duty
is not to his client but to the administration of justice; to that end, his clients success is wholly subordinate; and his conduct ought to and must always be scrupulously observant of law and ethics.
[24]
In particular, Rule 19.01 commands that a lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting or threaten to
present unfounded criminal charges to obtain an improper advantage in any case or proceeding. Under this Rule, a lawyer should not file or threaten to file any unfounded or baseless criminal case or
cases against the adversaries of his client designed to secure a leverage to compel the adversaries to yield or withdraw their own cases against the lawyers client. [25]
In the case at bar, respondent did exactly what Canon 19 and its Rule proscribe. Through his letter, he threatened complainant that should the latter fail to pay the amounts they propose as
settlement, he would file and claim bigger amounts including moral damages, as well as multiple charges such as tax evasion, falsification of documents, and cancellation of business license to operate
due to violations of laws. The threats are not only unethical for violating Canon 19, but they also amount to blackmail.
Blackmail is the extortion of money from a person by threats of accusation or exposure or opposition in the public prints,obtaining of value from a person as a condition of refraining
from making an accusation against him, or disclosing some secret calculated to operate to his prejudice. In common parlance and in general acceptation, it is equivalent to and synonymous with
extortion, the exaction of money either for the performance of a duty, the prevention of an injury, or the exercise of an influence. Not infrequently, it is extorted by threats, or by operating on the fears
or the credulity, or by promises to conceal or offers to expose the weaknesses, the follies, or the crime of the victim. [26]
In Sps. Boyboy v. Atty. Yabut, Jr.,[27] we held that [a]n accusation for blackmail and extortion is a very serious one which, if properly substantiated, would entail not only respondents
disbarment from the practice of law, but also a possible criminal prosecution. [28] While the respondent in Boyboy was exonerated for lack of evidence, the same may not be said of respondent in the
present case for he admits to writing the offensive letter.
In fact, respondent does not find anything wrong with what he wrote, dismissing the same as merely an act of pointing out massive violations of the law by the other party, and, with boldness,
asserting that a lawyer is under obligation to tell the truth, to report to the government commission of offenses punishable by the State. [29] He further asserts that the writing of demand letters is a
standard practice and tradition and that our laws allow and encourage the settlement of disputes.
Respondents assertions, however, are misleading, for it is quite obvious that respondents threat to file the cases against complainant was designed to secure some leverage to compel the
latter to give in to his clients demands. It was not respondents intention to point out complainants violations of the law as he so gallantly claims. Far from it, the letter even contains an implied
promise to keep silent about the said violations if payment of the claim is made on the date indicated.
Indeed, the writing of demand letters is a standard practice and tradition in this jurisdiction. It is usually done by a lawyer pursuant to the principal-agent relationship that he has with his
client, the principal. Thus, in the performance of his role as agent, the lawyer may be tasked to enforce his clients claim and to take all the steps necessary to collect it, such as writing a letter of
demand requiring payment within a specified period. However, the letter in this case contains more than just a simple demand to pay. It even contains a threat to file retaliatory charges against
complainant which have nothing to do with his clients claim for separation pay. The letter was obviously designed to secure leverage to compel complainant to yield to their claims. Indeed, letters of
this nature are definitely proscribed by the Code of Professional Responsibility.
Respondent cannot claim the sanctuary provided by the privileged communication rule under which a private communication executed in the performance of a legal duty is not actionable.
The privileged nature of the letter was removed when respondent used it to blackmail complainant and extort from the latter compliance with the demands of his client.
However, while the writing of the letter went beyond ethical standards, we hold that disbarment is too severe a penalty to be imposed on respondent, considering that he wrote the same out
of his overzealousness to protect his clients interests. Accordingly, the more appropriate penalty is reprimand.
WHEREFORE, premises considered, the petition is granted. The 26 May 2006 Resolution of the IBP Board of Governors is hereby REVERSED and SET ASIDE. Respondent
Atty. Lolito G. Aparicio is hereby found liable for violation of Rule 19.01 of Canon 19 of the Code of Professional Responsibility, and is accordingly meted out the penalty of REPRIMAND, with the
STERN WARNING that a repetition of the same or similar act will be dealt with more severely.
SO ORDERED.

BENEDICTO HORNILLA and ATTY. FEDERICO D. RICAFORT, complainants, vs. ATTY. ERNESTO S. SALUNAT, respondent.
RESOLUTION
YNARES-SANTIAGO, J.:
On November 21, 1997, Benedicto Hornilla and Federico D. Ricafort filed an administrative complaint [1] with the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline, against
respondent Atty. Ernesto S. Salunat for illegal and unethical practice and conflict of interest. They alleged that respondent is a member of the ASSA Law and Associates, which was the retained

counsel of the Philippine Public School Teachers Association (PPSTA). Respondents brother, Aurelio S. Salunat, was a member of the PPSTA Board which approved respondents engagement as
retained counsel of PPSTA.
Complainants, who are members of the PPSTA, filed an intra-corporate case against its members of the Board of Directors for the terms 1992-1995 and 1995-1997 before the Securities and
Exchange Commission, which was docketed as SEC Case No. 05-97-5657, and a complaint before the Office of the Ombudsman, docketed as OMB Case No. 0-97-0695, for unlawful spending and
the undervalued sale of real property of the PPSTA. Respondent entered his appearance as counsel for the PPSTA Board members in the said cases. Complainants contend that respondent was guilty
of conflict of interest because he was engaged by the PPSTA, of which complainants were members, and was being paid out of its corporate funds where complainants have contributed. Despite
being told by PPSTA members of the said conflict of interest, respondent refused to withdraw his appearance in the said cases.
Moreover, complainants aver that respondent violated Rule 15.06 [2] of the Code of Professional Responsibility when he appeared at the meeting of the PPSTA Board and assured its members
that he will win the PPSTA cases.
In his Answer,[3] respondent stressed that he entered his appearance as counsel for the PPSTA Board Members for and in behalf of the ASSA Law and Associates. As a partner in the said law
firm, he only filed a Manifestation of Extreme Urgency in OMB Case No. 0-97-0695. [4] On the other hand, SEC Case No. 05-97-5657 was handled by another partner of the firm, Atty. Agustin V.
Agustin. Respondent claims that it was complainant Atty. Ricafort who instigated, orchestrated and indiscriminately filed the said cases against members of the PPSTA and its Board.
Respondent pointed out that his relationship to Aurelio S. Salunat was immaterial; and that when he entered into the retainer contract with the PPSTA Board, he did so, not in his individual
capacity, but in representation of the ASSA Law Firm. He denied that he ensured the victory of the PPSTA Board in the case he was handling. He merely assured the Board that the truth will come
out and that the case before the Ombudsman will be dismissed for lack of jurisdiction, considering that respondents therein are not public officials, but private employees. Anent the SEC case,
respondent alleged that the same was being handled by the law firm of Atty. Eduardo de Mesa, and not ASSA.
By way of Special and Affirmative Defenses, respondent averred that complainant Atty. Ricafort was himself guilty of gross violation of his oath of office amounting to gross misconduct,
malpractice and unethical conduct for filing trumped-up charges against him and Atty. De Mesa. Thus, he prayed that the complaint against him be dismissed and, instead, complainant Ricafort be
disciplined or disbarred.
The complainant was docketed as CBD Case No. 97-531 and referred to the IBP Commission on Bar Discipline. After investigation, Commissioner Lydia A. Navarro recommended that
respondent be suspended from the practice of law for six (6) months. The Board of Governors thereafter adopted Resolution No. XV-3003-230 dated June 29, 2002, approving the report and
recommendation of the Investigating Commissioner.
Respondent filed with this Court a Motion for Reconsideration of the above Resolution of the IBP Board of Governors.
The pertinent rule of the Code of Professional Responsibility provides:
RULE 15.03. A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.
There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is whether or not in behalf of one client, it is the lawyers duty to fight for
an issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other client. [5]This rule covers not
only cases in which confidential communications have been confided, but also those in which no confidence has been bestowed or will be used. [6] Also, there is conflict of interests if the acceptance of
the new retainer will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new
relation to use against his first client any knowledge acquired through their connection. [7] Another test of the inconsistency of interests is whether the acceptance of a new relation will prevent an
attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof. [8]
In this jurisdiction, a corporations board of directors is understood to be that body which (1) exercises all powers provided for under the Corporation Code; (2) conducts all business of the
corporation; and (3) controls and holds all property of the corporation. [9] Its members have been characterized as trustees or directors clothed with a fiduciary character. [10] It is clearly separate and
distinct from the corporate entity itself.

Where corporate directors have committed a breach of trust either by their frauds, ultra vires acts, or negligence, and the corporation is unable or unwilling to institute suit to remedy the wrong,
a stockholder may sue on behalf of himself and other stockholders and for the benefit of the corporation, to bring about a redress of the wrong done directly to the corporation and indirectly to the
stockholders.[11] This is what is known as a derivative suit, and settled is the doctrine that in a derivative suit, the corporation is the real party in interest while the stockholder filing suit for the
corporations behalf is only nominal party. The corporation should be included as a party in the suit. [12]
Having thus laid a suitable foundation of the basic legal principles pertaining to derivative suits, we come now to the threshold question: can a lawyer engaged by a corporation defend members
of the board of the same corporation in a derivative suit? On this issue, the following disquisition is enlightening:
The possibility for conflict of interest here is universally recognized. Although early cases found joint representation permissible where no conflict of interest was obvious, the emerging rule is
against dual representation in all derivative actions. Outside counsel must thus be retained to represent one of the defendants. The cases and ethics opinions differ on whether there must be separate
representation from the outset or merely from the time the corporation seeks to take an active role. Furthermore, this restriction on dual representation should not be waivable by consent in the usual
way; the corporation should be presumptively incapable of giving valid consent.[13] (underscoring ours)
In other jurisdictions, the prevailing rule is that a situation wherein a lawyer represents both the corporation and its assailed directors unavoidably gives rise to a conflict of interest. The interest
of the corporate client is paramount and should not be influenced by any interest of the individual corporate officials. [14] The rulings in these cases have persuasive effect upon us. After due
deliberation on the wisdom of this doctrine, we are sufficiently convinced that a lawyer engaged as counsel for a corporation cannot represent members of the same corporations board of directors in
a derivative suit brought against them. To do so would be tantamount to representing conflicting interests, which is prohibited by the Code of Professional Responsibility.
In the case at bar, the records show that SEC Case No. 05-97-5657, entitled Philippine Public School Teachers Assn., Inc., et al. v. 1992-1995 Board of Directors of the Philippine Public
School Teachers Assn. (PPSTA), et al., was filed by the PPSTA against its own Board of Directors. Respondent admits that the ASSA Law Firm, of which he is the Managing Partner, was the
retained counsel of PPSTA. Yet, he appeared as counsel of record for the respondent Board of Directors in the said case. Clearly, respondent was guilty of conflict of interest when he represented the
parties against whom his other client, the PPSTA, filed suit.
In his Answer, respondent argues that he only represented the Board of Directors in OMB Case No. 0-97-0695. In the said case, he filed a Manifestation of Extreme Urgency wherein he prayed
for the dismissal of the complaint against his clients, the individual Board Members. By filing the said pleading, he necessarily entered his appearance therein. [15] Again, this constituted conflict of
interests, considering that the complaint in the Ombudsman, albeit in the name of the individual members of the PPSTA, was brought in behalf of and to protect the interest of the corporation.
Therefore, respondent is guilty of representing conflicting interests. Considering however, that this is his first offense, we find the penalty of suspension, recommended in IBP Resolution No.
XV-2002-230 dated June 29, 2002, to be too harsh. Instead, we resolve to admonish respondent to observe a higher degree of fidelity in the practice of his profession.
ACCORDINGLY, respondent Atty. Ernesto Salunat is found GUILTY of representing conflicting interests and is ADMONISHED to observe a higher degree of fidelity in the practice of his
profession. He is further WARNED that a repetition of the same or similar acts will be dealt with more severely.
SO ORDERED.

ATTY. HECTOR TEODOSIO, petitioner, vs. MERCEDES NAVA, respondent.

DECISION
MENDOZA, J.:
This is a complaint filed against petitioner Atty. Hector Teodosio for having allegedly represented clients with conflicting interests in violation of Rule 15.01 of the Code of Professional
Responsibility.
Respondent Mercedes Nava alleged that petitioner acted as counsel for Melanie Batislaong in several cases [1] in various branches of the Iloilo City Regional Trial Court while acting as counsel
for Letecia Espinosa and Ma. Gilda Palma in cases[2] filed by them against Melanie Batislaong and herself, respondent Mercedes Nava.
In his comment, petitioner admits that Melanie Batislaong, Letecia Espinosa, and Ma. Gilda Palma are indeed his clients with respect to the cases mentioned by respondent. He denies, however,
that his clients interests are conflicting and contends that his clients in fact have a common interest against respondent Nava. According to him, Nava used to be the manager of Batislaongs lending
business and, in that capacity, dealt with several borrowers, including Espinosa and Palma. Due to acts of mismanagement allegedly committed by Nava, Batislaong, then represented by Atty.
Eugenio O. Original, sued Nava for accounting and damages (Civil Case No. 21417). In turn, Nava charged Batislaong (Criminal Case Nos. 79688 and 44181) and Espinosa and Palma (I.S. Nos.
2200-93 and 2068-93) with estafa.

While the complaints against them were pending preliminary investigation, Espinosa and Palma hired petitioners services in seeking the annulment of certain trust receipt agreements allegedly
falsified by Nava, on the basis of which the criminal complaints against them were filed. As a result, petitioner filed on behalf of Espinosa and Palma Civil Case Nos. 21511 and 21493 against Nava
and Batislaong for annulment of contract and damages. Petitioner claims that he impleaded Batislaong as Navas co-defendant because Espinosa and Palma wanted to settle the balance of the
amount they had borrowed from Batislaong through Nava but they were unsure whether the payment should be made to Nava or Batislaong as the two had parted ways. Both were, therefore,
impleaded so that they could interplead who between them should receive the payment. Petitioner claims that it was only after he had filed these cases that Batislaong offered to hire him as her
counsel not only in the civil case she had filed against Nava (Civil Case No. 21417) but also in the two estafa cases, Criminal Case Nos. 79688 and 44181, filed against her by Nava. Petitioner claims
that he agreed to represent Batislaong in these cases only after he had explained to her the nature of the complaints filed by Espinosa and Palma against her and Nava in Civil Case Nos. 21511 and
21493.[3]
Petitioner submitted affidavits executed by Batislaong, Espinosa, and Palma stating that they have no complaints in the way petitioner handled their cases and that each of them was aware that
the other was represented by petitioner. Petitioner further submitted another set of affidavits executed by Espinosa and Palma stating in detail the extent of their knowledge of petitioners involvement
in Batislaongs cases as well as the basis of their consent for him to act as their common counsel. [4]
Respondent assails the affidavits of Batislaong, Espinosa, and Palma on the ground that they were notarized by a lawyer from petitioners law firm and that they do not bear the data as to the
residence certificates of the affiants. In addition, respondent claims that petitioner failed to ask the court to declare Batislaong in default despite the latters failure to answer the complaints filed by
Espinosa and Palma, and contends that this is proof of petitioners bias for her (Batislaong). [5]
In response, petitioner claims that there was no need to declare Batislaong in default in Civil Case Nos. 21511 and 21493 because Nava, in her Answer, had disclaimed any interest in the offer of
payment of Palma and Espinosa, making the necessity for the defendants to interplead moot and academic as the money would logically be paid to Batislaong. [6]
The Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. In a report, dated June 23, 1998, IBP Commissioner Milagros V. San
Juan recommended the dismissal of the complaint for lack of merit. [7] However, the IBP Board of Governors, in Resolution XIII-99-23 of February 23, 1999, found petitioner guilty of violation of
Rule 15.03 of the Code of Professional Responsibility and ordered him suspended from the practice of law for one year. The Boards resolution reads:
RESOLUTION NO. XIII-99-23
Adm. Case No. 4673
Mercedes Nava vs.
Atty. Hector Teodosio
RESOLVED to SUSPEND Atty. Hector Teodosio for ONE (1) YEAR from the practice of law for representing litigants with CONFLICTING INTERESTS.[8]
IBP Governor for Eastern Visayas, Kenny A.H. Tantuico, dissenting, adopted the report and recommendation of Commissioner San Juan in view of the consent given by respondents clients.
On April 13, 1999, petitioner filed a motion to set aside IBP Resolution XIII-99-23. The Court referred the motion to the IBP which, on December 11, 1999, issued Resolution XIV-99-286,
affirming the Boards original Resolution XIII-99-23.
After receipt of IBP Resolution XIV-99-286, the Court resolved to treat petitioners motion to set aside the questioned IBP resolution as his petition for review thereof and required respondent to
file comment. In lieu of comment, respondent filed a manifestation stating that the points raised in petitioners motion were mere reiterations of what he had already stated in his prior pleadings.
[9]
Petitioner filed a Reply to respondents manifestation. [10]
We now deal with the issues raised in the petition for review.

First. Petitioner points out that the IBP Board ordered him suspended from the practice of law without stating the facts and the law on which its decision is based. On the other hand, although
the report of the investigating commissioner contains findings, her recommendation was for the dismissal of the complaint against petitioner for lack of merit. Petitioner contends that even the
commissioners report is of doubtful validity since she failed to schedule any hearing on the case before she submitted her report to the Board of Governors. [11]
The pertinent provisions of Rule 139-B of the Rules of Court on the IBPs investigation of disbarment complaints, the report of its investigator, and the review of the latters findings by the
Board of Governors, state:
SEC. 8. Investigation. Upon joinder of issues or upon failure of the respondent to answer, the Investigator shall, with deliberate speed, proceed with the investigation of the case. He shall have the
power to issue subpoenas and administer oaths. The respondent shall be given full opportunity to defend himself, to present witnesses on his behalf and be heard by himself and counsel . However, if
upon reasonable notice, the respondent fails to appear, the investigation shall proceed ex parte.
....
SEC. 10. Report of Investigator. Not later than thirty (30) days from termination of the investigation, the Investigator shall submit a report containing his findings of fact and recommendations to
the IBP Board of Governors, together with the stenographic notes and the transcript thereof, and all the evidence presented during the investigation. The submission of the report need not await the
transcription of the stenographic notes, it being sufficient that the report reproduce substantially from the Investigators personal notes any relevant and pertinent testimonies.
....
SEC. 12. Review and decision by the Board of Governors. (a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors upon the record and evidence transmitted to it
by the Investigator with his report. The decision of the Board upon such review shall be in writing and shall clearly and distinctly state the facts and the reasons on which it is based . It shall be
promulgated within a period not exceeding thirty (30) days from the next meeting of the Board following the submittal of the Investigators report.
(b) If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its
findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action. (Emphasis added)
The requirement that the IBP investigator afford the respondent in a disbarment complaint full opportunity to present his case cannot be taken lightly for it is meant to ensure that baseless
accusations against members of the Bar do not prosper.[12] Similarly, the requirement that the decision of the Board of Governors state the facts and the reasons on which it is based, which is akin to
what is required of the decisions of courts of record, serves an important function. For aside from informing the parties the reason for the decision to enable them to point out to the appellate court the
findings with which they are not in agreement, in case any of them decides to appeal the decision, it is also an assurance that the judge, or the Board of Governors in this case, reached his judgment
through the process of legal reasoning.[13]
In the case at bar, the IBP failed to observe these procedural requirements. Commissioner San Juan appear not to have scheduled a hearing on the case nor required the parties to submit their
evidence. Similarly, the Board of Governors resolution suspending petitioner from the practice of law does not contain any findings of fact or law upon which it based its ruling.
Non-compliance with the foregoing procedural rules would normally result in the remand of the case. [14] Nevertheless, in instances where the controversy has been pending resolution for quite
sometime and the issues involved could be resolved on the basis of the records on appeal, the Court has opted to resolve the case in the interest of justice and speedy disposition of cases. [15] In view of
the presence of such circumstances in this case, the Court deems it advisable to do so.
Second. We now resolve the question whether petitioner is guilty of violation of the Code of Professional Responsibility which in pertinent part provides:
Rule 15.03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.

Under Canon 6 of the previous Canons of Professional Ethics, a lawyer is deemed to represent conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to
another client requires him to oppose.[16] The rule is designed to remove from attorneys the opportunity to take advantage of the secrets of clients obtained during the existence of the client-attorney
relation.[17]
Based on the facts of this case, we hold that petitioners conduct does not amount to a violation of the rule. The records bear out petitioners contention that based on the causes of action of the
cases involving Melanie Batislaong on one hand and Letecia Espinosa and Ma. Gilda Palma on the other, he could simultaneously represent them without any possible violation of the client-attorney
confidentiality. In the cases filed by him for Espinosa and Palma (Civil Case Nos. 21511 and 21493), it is only Nava against whom the former have an adverse interest as it was the latter who
allegedly falsified the trust receipt agreements to the prejudice of Palma and Espinosa. Indeed, were it not for the offer of Palma and Espinosa to settle their obligation, there would have been no need
to implead Batislaong as a defendant. On the other hand, in the other cases in which Batislaong is a party, either as plaintiff in Civil Case No. 21417 or as an accused in Criminal Case Nos.
78200, 79688, and 44181, neither Palma nor Espinosa are parties. Indeed, it is Nava who is the respondent in the first case and the private complainant in the last two criminal cases. Under the
foregoing circumstances, the danger that petitioner may abuse his clients confidences to the detriment of the other is absent.
Respondent contends that petitioners failure to ask the court to have Batislaong declared in default in Civil Case Nos. 21511 and 21493 despite the fact that she failed to file her answer is proof
that he was favoring Batislaong over Espinosa and Palma. This contention is untenable. As petitioner explains, with Nava disclaiming any interest in the offer of payment of Espinosa and Palma,
petitioner found no need to have Batislaong declared in default as Navas contention meant that it was Batislaong alone who would be entitled to receive payment. In any case, Batislaongs failure to
file her answer, coupled with Navas disavowal of interest, could only mean that the money offered in payment will be kept in the custody of the court subject to future claims.
Third. Even granting that the interests of Espinosa, Palma, and Batislaong are conflicting, petitioner cannot be held liable for acting as their common counsel in view of the fact that, as stated in
their affidavits, petitioner explained to them the consequences of his representation and that they gave their consent to the same. Indeed, Espinosa and Palma stated that it was they themselves who
brought Batislaong to petitioners office so that the latter could engage his services. [18] The fact that the first set of affidavits were uniformly notarized by an associate in petitioners law firm and that
they did not state certain data relating to the residence certificates of the affiants do not adversely affect their validity absent any proof that the affiants did not execute them of their own volition or
that their signature therein are not authentic.
WHEREFORE, Resolutions XIII-99-23 and XIV-99-286 of the Integrated Bar of the Philippines are SET ASIDE and the complaint against respondent Atty. Hector Teodosio is DISMISSED
for lack of merit.
SO ORDERED.

F E L I C I TAS S . Q U I A M B A O ,
Complainant,

A d m. C a s e N o. 6 7 0 8
( C B D C a s e N o . 0 1 -8 7 4 )
Present:

- versus -

ATT Y. N E S T O R A. B AM B A ,
Respondent.

DAVIDE, JR., C.J.,

(Chairman),
QUISUMBING,
SANTIAGO,
CARPIO, and
AZCUNA, JJ.
Promulgated:
August 25, 2005

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X

R E S O LU T I O N

DAVIDE, JR., C.J.:

We a r e a wa r e o f t h e h a p l e s s f a c t t h a t t h e r e a re n o t e n o u gh l a w ye r s t o s e r ve a n e xp l o d i n g p o p u l a t i o n. Th i s u n fo r t u n a t e s t a t e o f a ffa i r s , h o we v e r, wi l l
n o t s e i z e t h i s C o u r t f r o m e xe r c i s i n g i t s d i s c i p l i n a r y p o we r o ve r l a w ye r s c u l p a b l e o f s e r i o u s i n d i s c r e t i o n s . Th e i n c i d e n c e o f p u b l i c f o r c e mu s t b e de p l o ye d
t o b e a r u p o n t h e c o m m u n i t y t o e ve n t u a l l y f o rge a l e ga l p r o fe s s i o n t h a t p r o vi d e s q u a l i t y, e t h ic a l , a c c e s s i b le , a n d c o s t - e ffe c t i ve l e ga l s e r vi c e t o o u r pe o p l e
a n d wh o s e m e m b e r s a re wi l l i n g a n d a b l e t o a n s we r t h e c a l l t o p u b l i c s e r vi c e .
In t h i s a d m i n i s t r a t i v e c a s e fo r d i s b a r m e n t , c o mp l a i n a n t F e l i c i t a s S . Q u i a mb a o ch a r ge s r e s p o n de n t At t y. N e s t o r A. B a mb a wi t h vi o l a t i o n o f t he C o d e
o f P ro fe s s i o n a l R e s p o n s i b i l i t y f o r r e p r e s e n t i n g c o n fl i c t i n g i n t e r e s t s wh e n t h e l a t t e r fi l e d a ca s e a ga i n s t h e r wh i l e h e wa s a t t h a t t i me r e p re s e n t i n g h e r i n
a n o t h e r c a s e , a n d fo r c o m m i t t i n g o t h e r a c t s o f d i s l o ya l t y a n d d o u b l e -d e a l i n g.

F r o m J u n e 2 0 0 0 t o J a n u a r y 2 0 0 1 , t h e c o mp l a i n a n t wa s t h e p r e s i d e n t a n d m a n a g i n g d i r e c t o r o f Al l i e d In ve s t i ga t i o n B u r e a u, In c . ( A IB ) , a fa mi l yo wn e d c o r p o r a t i o n e n ga ge d i n p r o vi d i n g s e c u r i t y a n d i n ve s t i ga t i o n s e r vi c e s . S h e a ve r s t h a t s h e p r o c u r e d t h e l e ga l se r vi c e s o f t h e r e s p o n d e n t n o t o n l y f o r
t h e c o r p o r a t e a ffa i r s o f AIB b u t a l s o f o r h e r p e r s o n a l c a s e. P a r t i c u l a r l y, t h e r e s p o n d e n t a c t e d a s h e r c o u n s e l o f r ec o r d i n a n e j e c t me n t c a s e a ga i n s t S p o u s e s
S a n t i a go a n d F l o r i t a Tor r o b a fi l e d b y h e r o n 2 9 D e c e mb e r 2 0 0 0 b e fo r e t h e M e t r o p o l i t a n Tri a l C o u r t ( M e TC ) o f P ar a a q u e C i t y, wh i c h wa s d o c ke t e d a s C i vi l
C a s e N o . 119 2 8 . S h e p a i d a t t o r n e ys fe e s fo r r e s p o n de n t s l e ga l s e r vi c e s i n t h a t c a s e. [ 1 ] A b o u t s i x m o n t h s a ft e r s h e r e s i gn e d a s AIB p r e s i d e n t, o r o n 1 4
J u n e 2 0 0 1 , t h e r e s p o n de n t f i l e d o n b e h a l f o f AIB a c o mp l a i n t f o r r e p l e vi n a n d d a ma ge s a ga i n s t h e r b e fo r e t h e Me TC o f Q u e z o n C i t y f o r t h e p u r p o s e o f
r e c o ve r i n g f r o m h e r t h e c a r o f AIB a s s i gn e d t o h e r a s a se r vi c e v e h i c l e . Th i s he d i d wi t h o u t wi t h d r a wi n g a s c o u n s e l o f r e c o r d i n t h e e j e c t me n t c a s e, wh i c h
wa s t h e n s t i l l p e n d i n g. [ 2 ]
A p a r t f r o m t h e f o r e g o i n g l i t i ga t i o n m a t t e r, t h e c o mp l a i n a n t , i n h e r P os i t i o n P ap e r, c h a rge s t h e r e s p o n d e n t wi t h a c t s o f d i s l o ya l t y a n d d o u b l e d e a l i n g. S h e a ve r s t h a t t h e r e s p o n d e n t p r o p o s e d t o h e r t h a t s he o rga n i z e he r o wn s e c u r i t y a ge n c y a n d t h a t h e wo u l d a s s i s t h e r i n i t s o rga n i z a t i o n, c a u s i n g
h e r t o r e s i gn a s p r e s i d e n t o f AIB . T h e r e s p o n d e n t i n d e e d a s s i s t e d h e r i n D e c e mb e r 2 0 0 0 i n t h e fo r ma t i o n o f a n o t h e r se c u r i t y a ge n c y, Q u i a mb a o R i s k
M a n a ge m e n t S p e c i a l i s t s, In c . , ( Q R M S I) , wh i c h wa s l a t e r re gi s t e r e d u n d e r c o mp l a i n a n t s n a me , wi t h t h e r e s p o n d e n t a s a s i l e n t p a r t n e r r e p r e se n t e d b y h i s
a s s o c i a t e At t y. G e r a r d o P. H e r n a n d e z . T h e r e s p o n d e n t wa s p a i d a t t o r n e ys f e e s fo r h i s l e ga l s e r vi c e s i n o rga n i z i n g a n d i n c o r p o r a t i n g Q R M S I. H e a l s o
p l a n n e d t o s t e a l o r p i r a t e s o m e o f t h e m o r e i mp o r t a n t c l ie n t s o f AIB . Wh i l e se r vi n g a s l e ga l c o u n s e l f o r AIB a n d a s i l e n t p a r t n e r o f Q R M S I, h e
c o n vi n c e d c o m p l a i n a n t s b r o t h e r L e o d e ga r i o Q u ia mb a o t o o r ga n i z e an o t h e r s e c u r i t y a ge n c y, S a n E s t e b a n S e c u r i t y S e r vi c e s , In c . ( S E S S I) wh e r e h e ( t h e
r e s p o n d e n t ) s e r ve d a s i t s i n c o r p o r a t o r, d i re c t o r, a n d p r e s i d e n t. Th e r e s p o n d e n t a n d Le o d e ga r i o t h e n i l l e ga l l y d i ve r t e d t h e f u n d s o f AIB t o f u n d t h e
i n c o r p o r a t i o n o f S E S S I, a n d l i ke wi s e p l a n n e d t o e ve n t u a l l y c l o s e d o wn t h e o p e ra t i o n s o f AIB a n d t r a n s fe r t h e b u s i n e s s t o S E S S I. [ 3 ]
F o r h i s p a r t , t h e r e s p o n d e n t a d m i t s t ha t h e r e p r e s e n t e d t he c o mp l a i n a n t i n t h e a fo r e m e n t i o n e d e je c t me n t c a s e a n d la t e r r e p r e s e n t e d AIB i n t h e
r e p l e vi n c a s e a ga i n s t h e r. H e , h o we v e r, d e n i e s t h a t h e wa s t h e p e r s o n a l l a w ye r o f t h e c o m p l a i n a n t, a n d a ve r s t h a t h e wa s ma d e t o b e l i e ve t ha t i t wa s p a r t
o f h i s f u n c t i o n a s c o u n s e l fo r AIB t o h a n d l e e ve n t h e p e r s o n a l ca s e s o f i t s o ffi c e r s . E ve n a s s u mi n g t h a t t h e c o m p l a i n a n t c o n fi d e d t o h i m p r i vi l e ge d
i n fo r m a t i o n a b o u t h e r l e ga l i n t e r e s t s, t h e e j e c t me n t ca s e a n d t h e r e p l e vi n c a s e a r e u n r e la t e d c a s e s i n vo l v i n g d i ffe r e n t i s s u e s a n d p a r t i e s a n d, t he r e fo r e , t h e
p r i vi l e g e d i n fo r m a t i o n wh i c h m i gh t h a ve be e n ga t h e r e d f r o m o n e c a s e wo u l d h a ve n o u s e i n t h e o t h e r. At a n y r a t e , i t wa s t h e c o mp l a i n a n t h e r s e l f wh o
i n s i s t e d t h a t h e s t a y a s h e r c o u n s e l d e s p i t e t he p e r c e i ve d d i ffe r e n c e s a mo n g h e r, h e r b r o t h e r, a n d AIB o ve r t he m o t o r ve h i c l e s u b j e c t o f t h e r e p l e vi n c a s e.
Th e c o m p l a i n a n t e ve n a s ke d h i m t o a s s i s t h e r i n h e r m o n e t a r y c l a i ms a ga i n s t AIB . [ 4 ]
T h e r e s p o n de n t a l s o d e n i e s t h e c h a rge r a i s e d b y t h e c o m p l a i n a n t i n h e r p o s i t i o n p a p e r t h a t he a gr e e d t o b e a s i l e n t p a r t n e r o f Q R M S I t h r o u gh h i s
n o mi n e e , At t y. G e r a r d o P. H e r n a n d e z , wh o wa s h i s fo r m e r la w p a r t n e r. H e d e c l i n e d c o mp l a i n a n t s o ffe r t o a s s u me t h a t r o l e a n d s u g ge s t e d At t y. H e r n a n d e z
i n h i s p l a c e ; t h u s, 3 7 5 s h a r e s o f s t o c k we r e r e gi s t e r e d i n At t y. H e r n a n de z s n a me a s c o n s i d e ra t i o n o f h i s ( A t t y. H e r n a n d e z s) l e ga l s e r vi c e s a s c o r p o r a t e
s e c r e t a r y a n d l e ga l c o u n s e l o f Q R M S I. Th e r e s p o n d e n t a l s o d e n i e s t ha t h e c o n vi n c e d c o mp l a i n a n t s b r o t h e r Le o d e ga r i o t o o rga n i z e a n o t h e r se c u r i t y a ge n c y
a n d t h a t t h e fu n d s o f AIB we r e u n l a wf u l l y d i ve r t e d t o S E S S I. It wa s t o c o mp l e m e n t t h e b u s i n e s s o f AIB , wh i c h wa s t h e n i n d a n ge r o f c o l l a p se , t h a t S E S S I
wa s e s t a b l i s he d . L e o d e ga r i o s wi f e a n d h e r s o n h a ve t h e e ffe c t i ve c o n t r o l o ve r S E S S I. R e s p o n d e n t s s u b s c r i be d s h a r e h o l d i n gs i n S E S S I co mp r i s e o n l y 8 0 0
s h a r e s o u t o f 1 2, 5 0 0 s u b s c r i b e d s h a r e s. H e s e r ve s AIB an d S E S S I i n d i ffe r e n t c a p a c i t i e s : a s le ga l c o u n s e l o f t h e f o r m e r a n d a s p r e s i de n t o f t he l a t t e r. [ 5 ]
In h i s R e p o r t a n d R e c o m m e n d a t i o n [ 6 ] d a t e d 3 1 Au gu s t 2 0 0 4, t h e i n ve s t i ga t i n g c o m mi s s i o n e r o f t h e IB P fo u n d t h e r e s p o n de n t g u i l t y o f r e p re s e n t i n g
c o n fl i c t i n g i n t e r e s t s b a s e d o n t h e fo l l o wi n g u n d i s p u t e d fa c t s : fi r s t , t h e r e s p o n d e n t wa s s t i l l c o mp l a i n a n t s c o u n s e l o f r e c o r d i n t he e j e c t me n t c a s e wh e n h e
f i l e d , a s l e ga l c o u n s e l o f AIB , t h e r e p l e vi n c a se a ga i n s t h e r ; a n d s e c o n d, t h e r e s p o n d e n t wa s s t i l l t h e l e ga l c o u n s e l o f AIB wh e n h e a d vi s e d t h e c o mp l a i n a n t
o n t h e i n c o r p o r a t i o n o f a n o t h e r s e c u r i t y a ge n c y, Q R M S I, a n d r e c o m me n d e d h i s fo r me r l a w p a r t n e r, At t y. G e r a r d o H e r n a n d e z, t o b e i t s c o r p o r a t e s e c r e ta r y
a n d l e ga l c o u n s e l a n d a l s o wh e n h e c o n fe r r e d wi t h Le o d e ga r i o t o o rga n i z e a n o t h e r se c u r i t y a ge n c y, S E S S I, wh e r e t he r e s p o n d e n t b e c a me an i n c o r p o r a t o r,
s t o c kh o l d e r, a n d p r e s i d e n t . T h u s , t he i n ve s t i ga t i n g c o mm i s s i o n e r r e c o m me n d e d t h a t t he r e s p o n d e n t b e s u s p e n d e d f r o m t h e p r a c t i c e o f l a w f o r o n e ye a r.
T h e IB P B o a r d o f G o ve r n o r s a d o p t e d a n d ap p r o ve d t h e i n ve s t i g a t i n g c o mm i s s i o n e r s r e p o r t a n d r e c o mm e n d a t i o n , b u t r e d uc e d t h e p e n a l t y f r o m o n e
ye a r t o a s t e r n r e p r i m a n d . [ 7 ]
T h e i s s u e i n t h i s c a s e i s wh e t h e r t h e re s p o n d e n t i s g u i l t y o f mi s c o n d u c t fo r re p r e s e n t i n g c o n fl i c t i n g i n t e r e s t s i n c o n t r a ve n t i o n o f t h e b a s i c t e ne t s o f
t h e l e ga l p r o fe s s i o n .
R u l e 1 5. 0 3 , C a n o n 5 o f t h e C o d e o f P r o fe s s i o n a l R e s p o n s i b i l i t y p r o vi d e s : A la w ye r s h a l l n o t r e p r e s e n t c o n fl i c t i n g i n t e r e s t s e xc e p t b y wr i t t e n
c o n s e n t o f a l l c o n c e r n e d gi ve n a ft e r a fu l l d i s c l o s u re o f t he f a c t s . Th i s p r o h i b i t i o n i s f o u n d e d o n p r i n c i p l e s o f p u b l i c p o l i c y a n d go o d t a s t e. [ 8 ] In t h e
c o u r s e o f a l a w ye r-c l i e n t r e l a t i o n s h i p, t h e l a w ye r l e a r n s a l l t h e fa c t s c o n n e c te d wi t h t h e c l i e n t s c a s e, i n c l u d i n g t h e we a k a n d s t r o n g p o i n t s o f t h e c a s e.

T h e n a t u r e o f t h a t r e l a t i o n s h i p i s, t h e r e fo r e , o n e o f t r u s t a n d co n fi d e n c e o f t h e h i gh e s t d e gr e e. [ 9 ] It b e h o o ve s l a w ye r s n o t o n l y t o k e e p i n vi o l a t e t h e c l i e n t s
c o n fi d e n c e , b u t a l s o t o a vo i d t h e a p p e a r a n c e o f t r e a c h e r y a n d d o u b le -d e a l i n g f o r o n l y t h e n c a n l i t i ga n t s b e e n c o u r a ge d t o e n t r u s t t h e i r se c r e t s t o t h e i r
l a w ye r s , wh i c h i s o f p a r a m o u n t i m p o r t a n c e i n t h e a d mi n i s t r a t i o n o f j u s t i c e . [ 1 0 ]
In b r o a d t e r m s , l a w ye r s a re d e e m e d t o r e p r e s e n t c o n f l i c t i n g i n t e r e s t s wh e n , i n b e h a l f o f o n e c l i e n t, i t i s t h e i r d u t y t o c o n t e n d f o r t h a t wh i c h d u t y t o
a n o t h e r c l i e n t r e q u i r e s t h e m t o o p p o s e . [ 1 1 ] D e ve l o p m e n t s i n j u r i s p r u d e n c e h a ve p a r t i c u l a r iz e d va r i o u s t e s t s t o d e t e r mi n e wh e t h e r a l a w ye r s c o n d u c t l i e s
wi t h i n t h i s p r o s c r i p t i o n . O n e t e s t i s wh e t h e r a l a w ye r i s d u t y- b o u n d t o f i g h t fo r an i s s u e o r c l a i m i n b e h a l f o f o n e c l i e n t an d , a t t h e s a me t i me , t o o p p o s e
t h a t c l a i m f o r t h e o t h e r c l i e n t . [ 1 2 ] T h u s , i f a l a w ye r s a r gu me n t f o r o n e c l i e n t h a s t o b e o p p o s e d b y t h a t s a me la w ye r i n a r gu i n g f o r t h e o t h e r c l ie n t , t h e r e i s
a vi o l a t i o n o f t h e r u l e .
A n o t h e r t e s t o f i n c o n s i s t e nc y o f i n t e re s t s i s wh e t h e r t h e a c c e p t a n c e o f a n e w re l a t i o n wo u l d p r e ve n t t h e f u l l d i s c h a rge o f t h e l a w ye r s d u t y o f
u n d i vi d e d f i d e l i t y a n d l o ya l t y t o t h e c l i e n t o r i n vi t e s u s p i c i o n o f u n fa i t h f u l n e s s o r d o u b l e - d e a l i n g i n t h e p e r fo r ma n c e o f t ha t d u t y. [ 1 3 ] S t i l l a n o t h e r t e s t i s
wh e t h e r t h e l a w ye r wo u l d b e c a l l e d u p o n i n t h e ne w r e l a t i o n t o u s e a ga i n s t a fo r m e r c l i e n t a n y c o n fi d e n t i a l i n fo r ma t i o n a c q u i r e d t h r o u gh t he i r c o n n e c t i o n o r
p r e vi o u s e m p l o ym e n t . [ 1 4 ]
T h e p r o s c r i p t i o n a ga i n s t r e p r e s e n t a t i o n o f c o n fl i c t i n g i n te r e s t s a p p l i e s t o a s i t u a t i o n wh e r e t h e o p p o s i n g p a r t i e s a re p r e s e n t c l i e n t s i n t h e s a me
a c t i o n o r i n a n u n r e l a t e d a c t i o n . It i s o f n o m o me n t t h a t t h e l a w ye r wo u l d n o t b e c a l l e d u p o n t o c o n t e n d fo r o n e c l i e n t t h a t wh i c h t h e l a w ye r h a s t o o p p o s e
f o r t h e o t h e r c l i e n t , o r t h a t t h e r e wo u l d b e n o o c c a s i o n t o u s e t h e c o n fi d e n t i a l i n fo r m a t i o n a c q u i re d fr o m o n e t o t he d i s a d va n t a ge o f t h e o t h e r as t h e t wo
a c t i o n s a re wh o l l y u n re l a t e d . It i s e n o u gh t h a t t h e o p p o s i n g pa r t i e s i n o n e c a s e, o ne o f wh o m wo u l d l o s e t h e s u i t , a r e p r e s e n t c l i e n t s a n d t h e n a t u r e o r
c o n d i t i o n s o f t h e l a w ye r s r e s p e c t i ve r e t a i n e r s wi t h e a c h o f t h e m wo u l d a ffe c t t h e p e r fo r m a n c e o f t h e d u t y o f u n d i vi d e d f i d e l i t y t o b o t h c l i e n t s. [ 1 5 ]
In t h i s c a s e , i t i s u n d i s p u t e d t h a t a t t h e t i me t h e r e s p o n d e n t fi l e d t h e r e p l e vi n c a se o n b e h a l f o f AIB h e wa s s t i l l t h e c o u n s e l o f r e c o r d o f t h e
c o mp l a i n a n t i n t h e pe n d i n g e j e c t m e n t c a s e . We d o n o t s u s t a i n r e s p o n d e n t s t h e o r y t h a t s i n c e t h e e j e c t me n t c a s e a n d t h e r e p l e vi n c a s e a r e u n r e l a t e d ca s e s
f r a u g h t wi t h d i ffe r e n t i s s u e s , p a r t i e s, a n d s u b j e c t ma t t e r s , t h e p r o h i b i t i o n i s i n a p p l i c a b l e. H i s r e p r e s e n t a t i o n o f o p p o s i n g cl i e n t s i n b o t h c a s e s, t h o u gh
u n r e l a t e d , o b vi o u s l y c o n s t i t u t e s c o n fl i c t o f i n t e r e s t o r, a t t h e l e a s t , i n vi t e s s u s p i c i o n o f d o u b l e - d ea l i n g. Wh i l e t he r e s p o n d e n t m a y a s s e r t t h a t t h e
c o mp l a i n a n t e xp r e s s l y c o n s e n t e d t o h i s c o n t i n u e d r e p re s e n t a t i o n i n t h e e j e c t me n t c a s e, t h e r e s p o n d e n t f a i l e d t o s h o w t h a t h e fu l l y d i s c l o s e d t h e fa c t s t o b o t h
h i s c l i e n t s a n d he fa i l e d t o p r e s e n t a n y wr i t t e n c o n s e n t o f t h e c o mp l a i n a n t a n d AIB a s r e q u i r e d u n d e r R u l e 1 5 . 0 3, C a n o n 1 5 o f t h e C o d e o f P r o fe s s i o n a l
R e s p o n s i b i l i t y.
N e i t h e r c a n we a c c e p t re s p o n d e n t s p l e a t h a t h e wa s d u t y- b o u n d t o ha n d l e a l l t h e c a se s r e fe r r e d t o h i m b y AIB , i n c l u d i n g t h e p e r s o n a l c a s e s o f i t s
o ffi c e r s wh i c h ha d n o c o n n e c t i o n t o i t s c o r p o r a te a ffa i r s . Th a t t h e r e p r e s e n t a t i o n o f c o n fl i c t i n g i n t e r e s t i s i n g o o d fa i t h a n d wi t h h o n e s t i n t e n t i o n o n t h e
p a r t o f t h e l a w ye r d o e s n o t m a ke t h e p r o h i b i t i o n i n o p e r a t i ve . [ 1 6 ] M o r e o ve r, l a w ye r s a r e n o t o b l i ge d t o a c t e i t h e r a s a n a d vi s e r o r a d vo c a t e f o r e ve r y p e r s o n
wh o m a y wi s h t o b e c o m e t h e i r c l i e n t . T h e y h a ve t h e r i gh t t o d e c l i n e s u c h e mp l o ym e n t , s u b j ec t , h o we v e r, t o C a n o n 1 4 o f t h e C o d e o f P ro fe s s i o n a l
R e s p o n s i b i l i t y. [ 1 7 ] Al t h o u gh t h e r e a re i n s t a n c e s wh e r e la w ye r s c a n n o t d e c l i n e re p r e s e n t a t i o n , [ 1 8 ] t h e y c a n n o t b e ma d e t o l a b o r u n d e r c o n fl i c t o f i n t e r e s t
b e t we e n a p r e s e n t c l i e n t a n d a p r o s p e c t i ve o n e . [ 1 9 ]
A d d i t i o n a l l y, i n h i s p o s i t i o n p a p e r, t h e re s p o n d e n t a l l e ge s t h a t wh e n t h e c o mp l a i n a n t i n vi t e d t h e re s p o n d e n t t o j o i n Q R M S I, h e ve h e me n t l y r e fu s e d t o
j o i n t h e m d u e t o h i s p e r c e p t i o n o f c o n f l i c t i n g i n t e res t a s h e wa s t h e n ( a n d s t i l l i s a t p r e s e n t ) t h e Le ga l C o u n s e l o f AIB , wh i c h i s a l s o a s e c u r i t y a ge n c y.
[20]
To b o l s t e r h i s a l l e ga t i o n , he i n vo k e d t h e a ffi d a vi t s o f c o mp l a i n a n t s wi t n e s s e s wh i c h c o n t a i n e d s t a t e me n t s o f h i s a p p r e h e n s i o n o f c o n fl i c t o f i n t e r e s t
s h o u l d h e j o i n Q R M S I. [ 2 1 ]
S u r p r i s i n gl y, d e s p i t e h i s a p p r e h e n s i o n o r a wa r e n e s s o f a p o s s i b l e c o n fl i c t o f i n t e r e s t s h o u l d h e j o i n Q R M S I, t h e r e s p o n d e n t l a t e r a l l o we d h i ms e l f t o
b e c o m e a n i n c o r p o r a t o r, s t o c kh o l d e r, a n d p r e s i d e n t o f S E S S I, wh i c h i s a l s o a s e c u r i t y a ge n c y. H e j u s t i fi e d h i s a c t b y c l a i mi n g t h a t t h a t wh i l e b o t h AIB a n d
S E S S I a r e e n ga g e d i n s e c u r i t y a ge n c y b u s i n e s s, h e i s s e r vi n g i n d i ffe r e n t c a p a c i t i e s . As t h e i n -h o u s e l e ga l c o u n s e l o f AIB , h e s e r v e s i t s l e ga l i n t e r e s t t h e
p a r a me t e r o f wh i c h e vo l v e s a r o u n d l e ga l m a t t e r s s u c h a s p r o t e c t i n g t h e le ga l r i gh t s a n d i n t e r e s t o f t h e c o r p o r a t i o n ; c o n d u c t i n g a n i n ve s t i g a t i o n o r a h e a r i n g
o n vi o l a t i o n s o f c o m p a n y r u l e s a n d r e gu l a t i o n s o f t h e i r o ffi c e e mp l o ye e s a n d s e c u r i t y gu a r d s ; s e n d i n g d e ma n d l e t t e r s i n c o l le c t i o n c a s e s ; a n d re p r e s e n t i n g
t h e c o r p o r a t i o n i n a n y l i t i ga t i o n f o r o r a ga i n s t i t. An d a s p r e s i d e n t o f S E S S I, h e s e r ve s t h e o p e r a t i o n a l a s p e c t s o f t h e b u s i ne s s s u c h a s h o w d o e s i t
o p e r a t e [ ], h o w m u c h d o t h e y p r i c e t h e i r s e r vi c e s , wh a t k i n d o r h o w d o t h e y t ra i n [ ] t h e i r s e c u r i t y gu a r d s , h o w t h e y s o l i c i t c l i e n t s . Th u s , co n fl i c t o f i n te r e s t
i s f a r-f e t c h e d . M o r e o ve r, t h e r e s p o n d e n t a rgu e s t h a t t h e c o mp l a i n a n t , n o t b e i n g a s t o c kh o l d e r o f AIB a n d S E S S I, h a s n o r i gh t t o q u e s t i o n h i s a l l e ge d c o n f l i c t
o f i n t e r e s t i n s e r vi n g t h e t wo s e c u r i t y a ge n c i e s . [ 2 2 ]

W h i l e t h e c o m p l a i n a n t l a c ks p e r s o na l i t y t o q ue s t i o n t h e a l l e ge d c o n fl i c t o f i n t e r e s t s o n t h e p a r t o f t h e r e s p o n d e n t i n s e r vi n g b o t h se c u r i t y a ge n c i e s ,
we c a n n o t j u s t t u r n a b l i n d e ye t o r e s p o n d e n t s a c t . It m u s t b e n o t e d t h a t t h e p r o sc r i p t i o n a ga i n s t r e p r e s e n t a t i o n o f c o n f l i c t i n g i n t e r e s t s fi n d s a p p l i c a t i o n
wh e r e t h e c o n f l i c t i n g i n t e r e s t s a r i s e wi t h r e s pe c t t o t h e s a me g e n e r a l ma t t e r h o we ve r s l i gh t t h e a d ve r s e i n t e r e s t m a y b e . It a p p l i e s e ve n i f t h e c o n fl i c t
p e r t a i n s t o t h e l a w ye r s p r i va t e a c t i vi t y o r i n t h e p e r fo r ma n c e o f a fu n c t i o n i n a n o n - p r o fe s s i o n a l ca p a c i t y. [ 2 3 ] In t h e p r o c e s s o f d e t e r m i n i n g wh e t h e r t h e r e i s
a c o n fl i c t o f i n t e r e s t , a n i m p o r t a n t c r i t e r i o n i s p r o b a b i l i t y, n o t c e r t a i n t y, o f co n fl i c t .
S i n c e t h e r e s p o n de n t h a s f i n a n c i a l o r p e c u n i a r y i n t e r e s t i n S E S S I, wh i c h i s en ga g e d i n a b u s i n e s s c o mp e t i n g wi t h h i s c l i e n t s, a n d , mo r e i mp o r t a n t l y,
h e o c c u p i e s t h e h i gh e s t p o s i t i o n i n S E S S I, o ne c a n n o t h e l p e n t e r t a i n i n g a d o u b t o n h i s l o ya l t y t o h i s c l i e n t AIB . Th i s ki n d o f s i t u a t i o n pa s s e s t h e s e c o n d
t e s t o f c o n fl i c t o f i n t e r e s t , wh i c h i s wh e t h e r t h e a c ce p t a n c e o f a n e w r e l a t i o n s h i p wo u l d p r e ve n t t h e fu l l d i s c h a r ge o f t h e l a w ye r s d u t y o f u n d i vi d e d f i d e l i t y
a n d l o ya l t y t o t h e c l i e n t o r i n vi t e s u s p i c i o n o f u n fa i t h f u l n e s s o r d o u b l e - d e a l i n g i n t h e p e r fo r ma n c e o f t ha t d u t y. Th e c l o s e r e l a t i o n s h i p o f t h e m a j o r i t y
s t o c kh o l d e r s o f b o t h c o m p a n i e s d o e s n o t n e ga t e t h e c o n fl i c t o f i n t e re s t . N e i t h e r d o e s h i s p r o te s t a t i o n t h a t h i s s h a r e h o l d i n g i n S E S S I i s a m e r e p e b b l e
a mo n g t h e s a n d s .
In vi e w o f a l l o f t h e f o r e g o i n g, we fi n d t h e r e s p o n de n t gu i l t y o f s e r i o u s mi s c o n d u c t fo r re p r e s e n t i n g c o n fl i c t i n g i n t e r e s t s .
F u r t h e r m o r e , i t m u s t b e n o t e d t h a t R e p u b l ic Ac t N o . 5 4 8 7, o t h e r wi s e k n o wn a s t h e P r i v a t e S e c u r i t y Ag e n c y L a w , p r o h i b i t s a p e r s o n fr o m o rga n i z i n g
o r h a vi n g a n i n t e r e s t i n m o r e t h a n o n e s e c u r i t y a ge n c y. F r o m r e s p o n d e n t s p o s i t i o n p a p e r, i t c a n b e c u l l e d t h a t Le o d e ga r i o Q u i a mb a o i s t h e p re s i d e n t a n d
m a n a g i n g d i r e c t o r o f AIB , h o l d i n g 6 0 % o f t h e o u t s t a n d i n g s h a r e s ; wh i l e h i s f o u r o t h e r s i b l i n gs wh o a r e p e r ma n e n t r e s i d e n t s i n t h e U n i t e d S t a t e s o wn t he
r e ma i n i n g 4 0 %. [ 2 4 ] T h i s p r o h i b i t i o n n o t wi t h s t a n d i n g, t h e r e s p o n d e n t o r ga n i z e d S E S S I, wi t h Le o d e ga r i o s wi fe a n d s o n a s ma j o r i t y s t o c kh o l d e r s h o l d i n g
a b o u t 7 0 % o f t h e o u t s t a n d i n g s h a re s a n d wi t h h i m ( t h e r e s p o n d e n t ), a s we l l as t h e r e s t o f t h e s t o c kh o l d e r s , h o l d i n g m i n i m a l s h a r e s. [ 2 5 ] In d o i n g s o, t h e
r e s p o n d e n t vi r t u a l l y a l l o we d L e o d e g a r i o a n d t h e la t t e r s wi f e t o v i o l a t e o r c i r c u m ve n t t h e l a w b y h a vi n g a n i n t e re s t i n m o r e t h a n o n e s e c u r i t y a ge n c y. It
m u s t b e n o t e d t h a t i n t h e a ffi d a v i t [ 2 6 ] o f L e o d e ga r i o s wi fe , s h e m e n t i o n e d o f t h e i r c o n j u ga l p r o p e r t y. In t h e a b s e n c e o f e vi d e n c e t o t h e co n t r a r y, t h e
p r o p e r t y r e l a t i o n o f L e o d e ga r i o a n d h i s wi fe c a n b e p r e s u me d t o b e t h a t o f c o n j u ga l p a r t n e r s h i p o f ga i n s ; h e n c e, t h e m a j o r i t y s h a r e s i n AIB a n d S E S S I ar e
t h e c o n j u ga l p r o p e r t y o f L e o d e ga r i o a n d h i s wi f e , t h e r e b y p l a c i n g t h e ms e l ve s i n p o s s e s s i o n o f a n i n t e r e s t i n m o r e t h a n o n e se c u r i t y a ge n c y i n c o n t r a ve n t i o n
o f R . A. N o. 5 4 8 7. Th u s , i n o rga n i z i n g S E S S I, t h e r e s p o n d e n t v i o l a t e d R u le 1. 0 2 , C a n o n 1 o f t h e C o d e o f P ro fe s s i o n a l R e s p o n s i b i l i t y, wh i c h m a n d a t e s
l a w ye r s t o p r o m o t e r e s p e c t fo r t he l a w a n d r e fr a i n f r o m c o u n s e l i n g o r a b e t t i n g a c t i vi t i e s a i me d a t d e fi a n c e o f t h e l a w.
A s t o t h e r e c o m m e n d a t i o n t h a t t h e p e n a l t y b e r e d u ce d f r o m a s u s pe n s i o n o f o ne ye a r t o a s t e r n wa r n i n g, we fi n d t h e sa me t o b e wi t h o u t b a s i s . We
a r e d i s t u r b e d b y t h e r e d u c t i o n m a d e b y t h e IB P B oa r d o f G o ve r n o r s o f t he p e n a l t y r e c o mm e n d e d b y t h e i n ve s t i g a t i n g c o m m i s s i o n e r wi t h o u t c l e a r l y a n d
d i s t i n c t l y s t a t i n g t h e fa c t s a n d r e a s o n s o n wh i c h t h a t r e d u c t i o n i s b a s e d.
S e c t i o n 1 2 ( a ), R u l e 1 3 9 -B o f t h e R u l e s o f C o u r t r e a d s i n p a r t a s fo l l o ws :
S E C . 1 2 . R e v i e w a n d d e c i s i o n b y t h e B o a rd o f G o v e r n o r s .
( a ) E ve r y c a s e h e a r d b y a n i n ve s t i ga t o r s h a l l be r e vi e we d b y t h e IB P B o a r d o f G o ve r n o r s u p o n t h e r e c o r d a n d e vi d e n c e t r a n s mi t t e d t o i t
b y t h e In v e s t i g a t o r wi t h h i s r e p o r t . Th e d e c i s i o n o f t h e B oa r d u p o n s u c h r e vi e w s h a l l b e i n wr i t i n g a n d s h a l l c l e a r l y a n d d i s t i n c t l y s ta t e t h e
f a c t s a n d t h e re a s o n s o n wh i c h i t i s b a s e d.
We m a y c o n s i d e r t h e r e s o l u t i o n o f t h e IB P B oa r d o f G o ve r n o r s a s a me mo r a n d u m d e c i s i o n a d o p t i n g b y r e fe r e n c e t h e r e p o r t o f t h e i n ve s t i ga t i n g
c o mm i s s i o n e r. H o we v e r, we l o o k wi t h d i s fa vo r t h e c h a n ge i n t he r e c o mm e n d e d p e n a l t y wi t h o u t a n y e xp l a n a t i o n t h e r e fo r. Ag a i n , we r e mi n d t h e IB P B o a r d
o f G o ve r n o r s o f t h e i m p o r t a n c e o f t h e r e q u i re me n t t o a n n o u n c e i n p l a i n t e r ms i t s l e ga l r e a s o n i n g, s i n c e t h e re q u i r e me n t t h a t i t s d e c i s i o n i n d i s c i p l i na r y
p r o c e e d i n gs m u s t s t a t e t h e fa c t s a n d t h e r e a s o n s o n wh i c h i t s d e c i s i o n i s b a s e d i s a ki n t o wh a t i s r e q u i r e d o f t h e d e c i s i o n s o f c o u r t s o f r ec o r d . [ 2 7 ] Th e
r e a s o n s fo r h a n d i n g d o wn a pe n a l t y o c c u p y n o l e s s e r s t a t i o n t h a n a n y o t he r p o r t i o n o f t h e r a t i o .
In s i m i l a r c a s e s wh e r e t h e r e s p o n d e n t wa s fo u n d gu i l t y o f r e p r e s e n t i n g co n fl i c t i n g i n t e r e s t s a p e n a l t y r a n gi n g f r o m o n e t o t h r e e ye a r s s u s p e n s i o n
wa s i m p o s e d . [ 2 8 ] In t h i s c a s e , we f i n d t h a t a s u s p e n s i o n f r o m t h e p r a c t i c e o f l a w fo r o n e ye a r i s wa r r a n t e d .

W H E R E F O R E , r e s p o n d e n t At t y. N e s t o r A. B a mb a i s h e r e b y h e l d G U I LTY o f v i o l a t i o n o f R u l e 1 5. 0 3 o f C a n o n 1 5 a n d R u l e 1 . 0 2 o f C a n o n 1 o f t h e
C o d e o f P ro fe s s i o n a l R e s p o n s i b i l i t y. H e i s S U S P E N D E D fr o m t h e p r a c t i c e o f l a w fo r a pe r i o d o f O N E ( 1 ) YE A R e ffe c t i ve fr o m r e c e i p t o f t h i s R e s o l u t i o n,
wi t h a wa r n i n g t h a t a s i m i l a r i n f r a c t i o n i n t h e f u t u r e s h a l l b e d ea l t wi t h m o r e s e ve r e l y.

L e t c o p i e s o f t h i s R e s o l u t i o n be fu r n i s h e d t o t h e O ffi c e o f t h e B a r C o n fi d a n t a n d t he In t e gr a t e d B a r o f t h e P h i l i p p i n e s.

SO ORDERED.

LETICIA GONZALES,
Complainant,

A.C. No. 6836

Present:

- versus -

PANGANIBAN, C.J., Chairman,

YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, and
CHICO-NAZARIO, JJ.
Promulgated:

ATTY. MARCELINO CABUCANA,

Respondent.

January 23, 2006

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

RESOLUTION

AUSTRIA-MARTINEZ, J.:
Before this Court is a complaint filed by Leticia Gonzales (Gonzales) praying that Atty. Marcelino Cabucana, (respondent) be disbarred for representing conflicting interests.
On January 8, 2004, Gonzales filed a petition before the Integrated Bar of the Philippines (IBP) alleging that: she was the complainant in a case for sum of money and damages filed before the
Municipal Trial Court in Cities (MTCC) of Santiago City, docketed as Civil Case No. 1-567 where she was represented by the law firm CABUCANA, CABUCANA, DE GUZMAN AND
CABUCANA LAW OFFICE, with Atty. Edmar Cabucana handling the case and herein respondent as an associate/partner; on February 26, 2001, a decision was rendered in the civil case ordering the
losing party to pay Gonzales the amount of P17,310.00 with interest and P6,000.00 as attorneys fees; Sheriff Romeo Gatcheco, failed to fully implement the writ of execution issued in connection
with the judgment which prompted Gonzales to file a complaint against the said sheriff with this Court; in September 2003, Sheriff Gatcheco and his wife went to the house of Gonzales; they harassed
Gonzales and asked her to execute an affidavit of desistance regarding her complaint before this Court; Gonzales thereafter filed against the Gatchecos criminal cases for trespass, grave threats, grave
oral defamation, simple coercion and unjust vexation; notwithstanding the pendency of Civil Case No. 1-567, where respondents law firm was still representing Gonzales, herein respondent
represented the Gatchecos in the cases filed by Gonzales against the said spouses; respondent should be disbarred from the practice of law since respondents acceptance of the cases of the Gatchecos
violates the lawyer-client relationship between complainant and respondents law firm and renders respondent liable under the Code of Professional Responsibility (CPR) particularly Rules 10.01,
[1]
13.01,[2] 15.02,[3] 15.03,[4] 21.01[5] and 21.02.[6]
On January 9, 2004, the IBP-Commission on Bar Discipline ordered Atty. Marcelino Cabucana, Jr. to submit his Answer to the complaint. [7]
In his Answer, respondent averred: He never appeared and represented complainant in Civil Case No. 1-567 since it was his brother, Atty. Edmar Cabucana who appeared and represented
Gonzales in said case. He admitted that he is representing Sheriff Gatcheco and his wife in the cases filed against them but claimed that his appearance is pro bono and that the spouses pleaded with
him as no other counsel was willing to take their case. He entered his appearance in good faith and opted to represent the spouses rather than leave them defenseless. When the Gatchecos asked for
his assistance, the spouses said that the cases filed against them by Gonzales were merely instigated by a high ranking official who wanted to get even with them for their refusal to testify in favor of
the said official in another case. At first, respondent declined to serve as counsel of the spouses as he too did not want to incur the ire of the high-ranking official, but after realizing that he would be
abdicating a sworn duty to delay no man for money or malice, respondent entered his appearance as defense counsel of the spouses free of any charge. Not long after, the present complaint was
crafted against respondent which shows that respondent is now the subject of a demolition job. The civil case filed by Gonzales where respondents brother served as counsel is different and distinct
from the criminal cases filed by complainant against the Gatcheco spouses, thus, he did not violate any canon on legal ethics. [8]
Gonzales filed a Reply contending that the civil case handled by respondents brother is closely connected with the cases of the Gatchecos which the respondent is handling; that the claim of
respondent that he is handling the cases of the spouses pro bono is not true since he has his own agenda in offering his services to the spouses; and that the allegation that she is filing the cases against
the spouses because she is being used by a powerful person is not true since she filed the said cases out of her own free will. [9]

The Commission on Bar Discipline of the IBP sent to the parties a Notice of Mandatory Conference dated March 1, 2004. [10] On the scheduled conference, only a representative of complainant
appeared.[11] Commissioner Demaree Raval of the IBP-CBD then directed both parties to file their respective verified position papers. [12]
Complainant filed a Memorandum reiterating her earlier assertions and added that respondent prepared and notarized counter-affidavits of the Gatcheco spouses; that the high-ranking official
referred to by respondent is Judge Ruben Plata and the accusations of respondent against the said judge is an attack against a brother in the profession which is a violation of the CPR; and that
respondent continues to use the name of De Guzman in their law firm despite the fact that said partner has already been appointed as Assistant Prosecutor of Santiago City, again in violation of the
CPR.[13]
Respondent filed his Position Paper restating his allegations in his Answer.[14]
[15]

On August 23, 2004, Commissioner Wilfredo E.J.E. Reyes issued an Order notifying both parties to appear before his office on October 28, 2004 for a clarificatory question regarding said case.
On the said date, only respondent appeared[16] presenting a sworn affidavit executed by Gonzales withdrawing her complaint against respondent. It reads:
SINUMPAANG SALAYSAY
TUNGKOL SA PAG-UURONG NG DEMANDA
Ako, si LETICIA GONZALES, nasa tamang edad, Pilipino, may asawa, at nakatira sa Barangay Dubinan East, Santiago City, makaraang manumpa ayon sa batas ay
nagsasabing:
Ako ang nagdedemanda o petitioner sa CBD Case No. 04-1186 na may pamagat na Leticia Gonzales versus Atty. Marcelino C. Cabucana, Jr. na kasalukuyang
nahaharap saCommission on Bar Discipline ng Integrated Bar of the Philippines
Ang pagkakahain ng naturang demanda ay nag-ugat sa di-pagkakaintindihan na namamagitan sa akin at nina Mr. and Mrs. Romeo and Anita Gatcheco.
Dahil sa aking galit sa naturang mag-asawa, idinawit ko si Atty. Marcelino C. Cabucana, Jr. sa sigalot na namamagitan sa akin at sa mag-asawang Gatcheco, gayong
nalalaman ko na si Atty. Marcelino C. Cabucana ay walang nalalaman sa naturang di pagkakaintindihan.
Makaraang pag-isipang mabuti ang paghain ko ng demanda kontra kay Atty. Marcelino C. Cabucana, Jr., nakumbinsi ako na ang pagdedemanda ko kay Atty. Marcelino C.
Cabucana, Jr. ay isang malaking pagkakamali dahil siya ay walang kinalalaman (sic) sa di pagkakaintindihan naming(sic) ng mag-asawang Gatcheco.
Si Atty. Marcelino C. Cabucana, Jr. ay di ko rin naging abogado sa Civil Case No. 1-567 (MTCC Br. I Santiago City) na inihain ko kontra kay Eduardo Mangano.

Nais kong ituwid ang lahat kung kayat aking iniuurong ang naturang kasong inihain ko kontra kay Atty. Marcelino C. Cabucana, Jr. at dahil dito ay hindi na ako
interesado pang ituloy and naturang kaso, at aking hinihiling sa kinauukulan na dismisin na ang naturang kaso.

Ginawa ko ang sinumpaang salaysay na ito upang patotohanan sa lahat ng nakasaad dito.[17]
Commissioner Reyes issued an Order dated October 28, 2004 requiring Gonzales to appear before him on November 25, 2004, to affirm her statements and to be subject to clarificatory
questioning.[18] However, none of the parties appeared.[19] On February 17, 2005, only respondent was present. Commissioner Reyes then considered the case as submitted for resolution. [20]
On February 24, 2005, Commissioner Reyes submitted his Report and Recommendation, portions of which are quoted hereunder:
The Undersigned Commissioner believes that the respondent made a mistake in the acceptance of the administrative case of Romeo Gatcheco, however, the Commission
(sic) believes that there was no malice and bad faith in the said acceptance and this can be shown by the move of the complainant to unilaterally withdraw the case which she filed
against Atty. Marcelino C. Cabucana, Jr. However, Atty. Cabucana is reminded to be more careful in the acceptance of cases as conflict of interests might arise.

It is respectfully recommended that Atty. Marcelino C. Cabucana, Jr. (be) sternly warned and reprimanded andadvised to be more circumspect and careful in accepting
cases which might result in conflict of interests. [21]
On June 25, 2005, a Resolution was passed by the Board of Governors of the IBP, to wit:
RESOLUTION NO. XVI-2005-153
CBD CASE NO. 03-1186
Leticia Gonzales vs.
Atty. Marcelino Cabucana, Jr.
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled
case, herein made part of this Resolution as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and
considering that respondent made (a) mistake in the acceptance of the administrative case of Romeo Gatcheco, Atty. Marcelino Cabucana, Jr. is hereby WARNED and
REPRIMANDED and advised to be more circumspect and careful in accepting cases which might result in conflict of interests. [22]
Before going to the merits, let it be clarified that contrary to the report of Commissioner Reyes, respondent did not only represent the Gatcheco spouses in the administrative case
filed by Gonzales against them. As respondent himself narrated in his Position Paper, he likewise acted as their counsel in the criminal cases filed by Gonzales against them. [23]

With that settled, we find respondent guilty of violating Rule 15.03 of Canon 15 of the Code of Professional Responsibility, to wit:
Rule 15.03 A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of the facts.
It is well-settled that a lawyer is barred from representing conflicting interests except by written consent of all concerned given after a full disclosure of the facts. [24] Such prohibition is
founded on principles of public policy and good taste as the nature of the lawyer-client relations is one of trust and confidence of the highest degree. [25] Lawyers are expected not only to keep inviolate
the clients confidence, but also to avoid the appearance of treachery and double-dealing for only then can litigants be encouraged to entrust their secrets to their lawyers, which is of paramount
importance in the administration of justice.[26]
One of the tests of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyers duty of undivided fidelity and loyalty to the
client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty.[27]

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

The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated
action. It is of no moment that the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no
occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. It is enough that the opposing parties in
one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyers respective retainers with each of them would affect the performance of
the duty of undivided fidelity to both clients.[29]
The claim of respondent that there is no conflict of interests in this case, as the civil case handled by their law firm where Gonzales is the complainant and the criminal cases filed by
Gonzales against the Gatcheco spouses are not related, has no merit. The representation of opposing clients in said cases, though unrelated, constitutes conflict of interests or, at the very
least, invites suspicion of double-dealing which this Court cannot allow.[30]
Respondent further argued that it was his brother who represented Gonzales in the civil case and not him, thus, there could be no conflict of interests. We do not agree. As
respondent admitted, it was their law firm which represented Gonzales in the civil case. Such being the case, the rule against representing conflicting interests applies.

As we explained in the case of Hilado vs. David:[31]

[W]e can not sanction his taking up the cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not necessarily to prevent
any injustice to the plaintiff but to keep above reproach the honor and integrity of the courts and of the bar. Without condemning the respondents conduct as dishonest, corrupt, or
fraudulent, we do believe that upon the admitted facts it is highly inexpedient. It had the tendency to bring the profession, of which he is a distinguished member, into public
disrepute and suspicion and undermine the integrity of justice. [32]
The claim of respondent that he acted in good faith and with honest intention will also not exculpate him as such claim does not render the prohibition inoperative. [33]

In the same manner, his claim that he could not turn down the spouses as no other lawyer is willing to take their case cannot prosper as it is settled that while there may be instances
where lawyers cannot decline representation they cannot be made to labor under conflict of interest between a present client and a prospective one. [34] Granting also that there really was
no other lawyer who could handle the spouses case other than him, still he should have observed the requirements laid down by the rules by conferring with the prospective client to
ascertain as soon as practicable whether the matter would involve a conflict with another client then seek the written consent of all concerned after a full disclosure of the facts. [35] These
respondent failed to do thus exposing himself to the charge of double-dealing.

We note the affidavit of desistance filed by Gonzales. However, we are not bound by such desistance as the present case involves public interest. [36] Indeed, the Courts exercise of its
power to take cognizance of administrative cases against lawyers is not for the purpose of enforcing civil remedies between parties, but to protect the court and the public against an
attorney guilty of unworthy practices in his profession.[37]
In similar cases where the respondent was found guilty of representing conflicting interests a penalty ranging from one to three years suspension was imposed. [38]

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

SO ORDERED.

JOSEFINA M. ANION,

A.C. No. 5098

Complainant,
Present:

- versus -

BRION, J.,
Acting Chairperson,
PERALTA,*
PEREZ,
SERENO, and
REYES, JJ.
Promulgated:
April 11, 2012

ATTY. CLEMENCIO SABITSANA, JR.,

Respondent.
x------------------------------------------------------------------------------------x
DECISION
BRION, J.:
We resolve this disbarment complaint against Atty. Clemencio Sabitsana, Jr. who is charged of: (1) violating the lawyers duty to preserve confidential information received from his client; [1] and
(2) violating the prohibition on representing conflicting interests. [2]

In her complaint, Josefina M. Anion (complainant) related that she previously engaged the legal services of Atty. Sabitsana in the preparation and execution in her favor of a Deed of Sale
over a parcel of land owned by her late common-law husband, Brigido Caneja, Jr. Atty. Sabitsana allegedly violated her confidence when he subsequently filed a civil case against her for the
annulment of the Deed of Sale in behalf of Zenaida L. Caete, the legal wife of Brigido Caneja, Jr. The complainant accused Atty. Sabitsana of using the confidential information he obtained from her
in filing the civil case.
Atty. Sabitsana admitted having advised the complainant in the preparation and execution of the Deed of Sale. However, he denied having received any confidential information. Atty. Sabitsana
asserted that the present disbarment complaint was instigated by one Atty. Gabino Velasquez, Jr., the notary of the disbarment complaint who lost a court case against him (Atty. Sabitsana) and had
instigated the complaint for this reason.
The Findings of the IBP Investigating Commissioner
In our Resolution dated November 22, 1999, we referred the disbarment complaint to the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation. In his Report and Recommendation dated November 28, 2003, IBP Commissioner Pedro A. Magpayo Jr. found Atty. Sabitsana administratively liable for representing
conflicting interests. The IBP Commissioner opined:
In Bautista vs. Barrios, it was held that a lawyer may not handle a case to nullify a contract which he prepared and thereby take up inconsistent positions. Granting that Zenaida L.
Caete, respondents present client in Civil Case No. B-1060 did not initially learn about the sale executed by Bontes in favor of complainant thru the confidences and information
divulged by complainant to respondent in the course of the preparation of the said deed of sale, respondent nonetheless has a duty to decline his current employment as counsel of
Zenaida Caete in view of the rule prohibiting representation of conflicting interests.
In re De la Rosa clearly suggests that a lawyer may not represent conflicting interests in the absence of the written consent of all parties concerned given after a full
disclosure of the facts. In the present case, no such written consent was secured by respondent before accepting employment as Mrs. Caetes counsel-of-record. x x x
x

Complainant and respondents present client, being contending claimants to the same property, the conflict of interest is obviously present. There is said to be inconsistency
of interest when on behalf of one client, it is the attorneys duty to contend for that which his duty to another client requires him to oppose. In brief, if he argues for one client this
argument will be opposed by him when he argues for the other client. Such is the case with which we are now confronted, respondent being asked by one client to nullify what he
had formerly notarized as a true and valid sale between Bontes and the complainant. (footnotes omitted) [3]
The IBP Commissioner recommended that Atty. Sabitsana be suspended from the practice of law for a period of one (1) year. [4]
The Findings of the IBP Board of Governors
In a resolution dated February 27, 2004, the IBP Board of Governors resolved to adopt and approve the Report and Recommendation of the IBP Commissioner after finding it to be fully
supported by the evidence on record, the applicable laws and rules. [5] The IBP Board of Governors agreed with the IBP Commissioners recommended penalty.
Atty. Sabitsana moved to reconsider the above resolution, but the IBP Board of Governors denied his motion in a resolution dated July 30, 2004.
The Issue
The issue in this case is whether Atty. Sabitsana is guilty of misconduct for representing conflicting interests.
The Courts Ruling
After a careful study of the records, we agree with the findings and recommendations of the IBP Commissioner and the IBP Board of Governors.
The relationship between a lawyer and his/her client should ideally be imbued with the highest level of trust and confidence. This is the standard of confidentiality that must prevail to
promote a full disclosure of the clients most confidential information to his/her lawyer for an unhampered exchange of information between them. Needless to state, a client can only entrust
confidential information to his/her lawyer based on an expectation from the lawyer of utmost secrecy and discretion; the lawyer, for his part, is duty-bound to observe candor, fairness and loyalty in all

dealings and transactions with the client. [6] Part of the lawyers duty in this regard is to avoid representing conflicting interests, a matter covered by Rule 15.03, Canon 15 of the Code of Professional
Responsibility quoted below:
Rule 15.03. -A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.
The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. [7] The
prohibition also applies even if the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the
confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. [8] To be held accountable under this rule, it is enough that the opposing parties in
one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyers respective retainers with each of them would affect the performance of the duty of undivided
fidelity to both clients.[9]
Jurisprudence has provided three tests in determining whether a violation of the above rule is present in a given case.
One test is whether a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at the same time, to oppose that claim for the other client. Thus, if a
lawyers argument for one client has to be opposed by that same lawyer in arguing for the other client, there is a violation of the rule.
Another test of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyers duty of undivided fidelity
and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty. Still another test is whether the lawyer would be called upon
in the new relation to use against a former client any confidential information acquired through their connection or previous employment. [10] [emphasis ours]
On the basis of the attendant facts of the case, we find substantial evidence to support Atty. Sabitsanas violation of the above rule, as established by the following circumstances on record:
One, his legal services were initially engaged by the complainant to protect her interest over a certain property. The records show that upon the legal advice of Atty. Sabitsana, the Deed of
Sale over the property was prepared and executed in the complainants favor.
Two, Atty. Sabitsana met with Zenaida Caete to discuss the latters legal interest over the property subject of the Deed of Sale. At that point, Atty. Sabitsana already had knowledge that
Zenaida Caetes interest clashed with the complainants interests.
Three, despite the knowledge of the clashing interests between his two clients, Atty. Sabitsana accepted the engagement from Zenaida Caete.
Four, Atty. Sabitsanas actual knowledge of the conflicting interests between his two clients was demonstrated by his own actions: first, he filed a case against the complainant in behalf of
Zenaida Caete; second, he impleaded the complainant as the defendant in the case; and third, the case he filed was for the annulment of the Deed of Sale that he had previously prepared and executed
for the complainant.
By his acts, not only did Atty. Sabitsana agree to represent one client against another client in the same action; he also accepted a new engagement that entailed him to contend and oppose
the interest of his other client in a property in which his legal services had been previously retained.
To be sure, Rule 15.03, Canon 15 of the Code of Professional Responsibility provides an exception to the above prohibition. However, we find no reason to apply the exception due to Atty.
Sabitsanas failure to comply with the requirements set forth under the rule. Atty. Sabitsana did not make a full disclosure of facts to the complainant and to Zenaida Caete before he accepted the new
engagement with Zenaida Caete. The records likewise show that although Atty. Sabitsana wrote a letter to the complainant informing her of Zenaida Caetes adverse claim to the property covered
by the Deed of Sale and, urging her to settle the adverse claim; Atty. Sabitsana however did not disclose to the complainant that he was also being engaged as counsel by Zenaida Caete. [11] Moreover,
the records show that Atty. Sabitsana failed to obtain the written consent of his two clients, as required by Rule 15.03, Canon 15 of the Code of Professional Responsibility.
Accordingly, we find as the IBP Board of Governors did Atty. Sabitsana guilty of misconduct for representing conflicting interests. We likewise agree with the penalty of suspension
for one (1) year from the practice of law recommended by the IBP Board of Governors. This penalty is consistent with existing jurisprudence on the administrative offense of representing conflicting
interests.[12]
We note that Atty. Sabitsana takes exception to the IBP recommendation on the ground that the charge in the complaint was only for his alleged disclosure of confidential information, not
for representation of conflicting interests. To Atty. Sabitsana, finding him liable for the latter offense is a violation of his due process rights since he only answered the designated charge.

We find no violation of Atty. Sabitsanas due process rights. Although there was indeed a specific charge in the complaint, we are not unmindful that the complaint itself contained
allegations of acts sufficient to constitute a violation of the rule on the prohibition against representing conflicting interests. As stated in paragraph 8 of the complaint:
Atty. Sabitsana, Jr. accepted the commission as a Lawyer of ZENAIDA CANEJA, now Zenaida Caete, to recover lands from Complainant, including this land where lawyer Atty.
Sabitsana, Jr. has advised his client [complainant] to execute the second sale[.]
Interestingly, Atty. Sabitsana even admitted these allegations in his answer.[13] He also averred in his Answer that:
6b. Because the defendant-to-be in the complaint (Civil Case No. B-1060) that he would file on behalf of Zenaida Caneja-Caete was his former client (herein
complainant), respondent asked [the] permission of Mrs. Caete (which she granted) that he would first write a letter (Annex 4) to the complainant proposing to settle the case
amicably between them but complainant ignored it. Neither did she object to respondents handling the case in behalf of Mrs. Caete on the ground she is now invoking in her
instant complaint. So respondent felt free to file the complaint against her.[14]
We have consistently held that the essence of due process is simply the opportunity to be informed of the charge against oneself and to be heard or, as applied toadministrative proceedings,
the opportunity to explain ones side or the opportunity to seek a reconsideration of the action or ruling complained of. [15] These opportunities were all afforded to Atty. Sabitsana, as shown by the
above circumstances.
All told, disciplinary proceedings against lawyers are sui generis.[16] In the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations
as an officer of the Court with the end in view of preserving the purity of the legal profession. We likewise aim to ensure the proper and honest administration of justice by purging the profession of
members who, by their misconduct, have proven themselves no longer worthy to be entrusted with the duties and responsibilities of an attorney. [17] This is all that we did in this case. Significantly, we
did this to a degree very much lesser than what the powers of this Court allows it to do in terms of the imposable penalty. In this sense, we have already been lenient towards respondent lawyer.
WHEREFORE, premises considered, the Court resolves to ADOPT the findings and recommendations of the Commission on Bar Discipline of the Integrated Bar of thePhilippines. Atty.
Clemencio C. Sabitsana, Jr. is found GUILTY of misconduct for representing conflicting interests in violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility. He is
hereby SUSPENDED for one (1) year from the practice of law.
Atty. Sabitsana is DIRECTED to inform the Court of the date of his receipt of this Decision so that we can determine the reckoning point when his suspension shall take effect.
SO ORDERED.

A.M. No. 2144 April 10, 1989

CELEDONIO
QUILBAN,
ROMUALDO
vs.
ATTY. SANTIAGO R. ROBINOL, respondent.

DALAGAN,

FORTUNATO

RAMIREZ

AMADOR

ALARCON

and

LUIS

AGAWAN, complainant,

A.M. No. 2180 April 10, 1989

ATTY.
vs.
ATTY. A. R. MONTEMAYOR, respondent.
RESOLUTION

SANTIAGO

R.

ROBINOL, complainant,

PER CURIAM:
Subjected to frustrations were the dreams of thirty-two (32) squatter families to own the land of approximately 50 square meters each on which their respective homes were built. To vindicate their
rights they have aired their plight before this Court. Thwarted, too, was the benevolence shown by the original owner of the land which parted with its property at a giveaway price thinking that it was
accommodating the landless squatters.
The antecedent facts follow:
The Colegio de San Jose, a Jesuit corporation, (Colegio, for short) used to own a parcel of land at the Seminary Road, Barrio Bathala, Quezon City. Through its administrator, Father Federico Escaler,
it sold said land to the Quezon City Government as the site for the Quezon City General Hospital but reserved an area of 2,743 square meters as a possible development site. Squatters, however,
settled in the area since 1965 or 1966.
Sometime in 1970, the Colegio, through Father Escaler gave permission to Congressman Luis R. Taruc to build on the reserved site a house for his residence and a training center for the Christian
Social Movement. Seeing the crowded shanties of squatters, Congressman Taruc broached to Father Escaler the Idea of donating or selling the land cheap to the squatters. Congressman Taruc then
advised the squatters to form an organization and choose a leader authorized to negotiate with Father Escaler. Following that advice, the squatters formed the "Samahang Pagkakaisa ng Barrio
Bathala" (Samahan, for brevity), with Bernabe Martin as President (Exhibit "24", Robinol), who was entrusted with the task of negotiating on their behalf for the sale of the land to them.
But instead of working for the welfare of the Samahan, Martin went to one Maximo Rivera, a realtor, with whom he connived to obtain the sale to the exclusion of the other Samahan members. On 28
March 1971, the land was ultimately sold to Rivera at P 15 per square meter or a total consideration of P 41,961.65. The prevailing price of the land in the vicinity then was P 100 to P 120 per square
meter. It was evident that Father Escaler had been made to believe that Rivera represented the squatters on the property. On the same date, 28 March 1971, Rivera obtained TCT No. 175662 to the
property in his name alone.
In 1972, thirty-two heads of families of the Samahan filed Civil Case No. Q-16433, Branch IV, Quezon City, entitled "Celedonio Quilban, et al., Plaintiffs, vs. Maximo Rivera, et al., Defendants." with
the principal prayer that said defendants be ordered to execute a deed of conveyance in favor of said plaintiffs after reimbursement by the latter of the corresponding amount paid by Rivera to the
Colegio. The Court of First Instance of Quezon City, however, dismissed the case.
To prosecute the appeal before the Court of Appeals, the Samahan members hired as their counsel Atty. Santiago R. Robinol for which the latter was paid P 2,000.00 as attorney's fees on 8 October
1975 (Exhibit "I"). Atty. Robinol was also to be given by the members a part of the land, subject matter of the case, equal to the portion that would pertain to each of them. What was initially a verbal
commitment on the land sharing was confirmed in writing on 10 March 1979 (Exhibit "2").
On 14 November 1978, the Court of Appeals reversed the CFI Decision by:
(1) ordering defendant Maximo Rivera and all his co-defendants to execute a deed of conveyance of the land in question in favor of herein plaintiffs after the
payment of the corresponding amount paid by the defendants to the Colegio de San Jose, Inc., and in case of refusal or failure on their part to do so, ordering
the Clerk of Court to execute the same in favor of plaintiffs and declaring TCT No. 175662 (Annex E) null and void and ordering the Register of Deeds of
Quezon City to cancel said certificate and issue a new one in lieu thereof in the name of plaintiffs-appellants, upon presentation of the deed of conveyance to be
executed in favor of appellants and (2) ordering appellees jointly and severally to pay appellants the sum of P 2,000.00 as attomey's fees, plus costs." (p. 30,
Report and Recommendation)
To raise the amount of P 41,961.65 ordered paid by the Court of Appeals, plus expenses for ejectment of the non-plaintiffs occupying the property, conveyance, documentation, transfer of title etc., the
five officers of the Samahan collected, little by little, P 2,500.00 from each head of family. The Treasurer, Luis Agawan, issued the proper receipts prepared by Atty. Robinol. On 18 May 1979, the sum
of P 68,970.00 was turned over to Atty. Robinol by the officers; on 31 May 1979 the amounts of P l,030.00 and P 2,500.00 respectively; and on 2 June 1979, the sum of P 2,500.00, or a total of P
75,000.00.

After almost a year, the five officers discovered that no payment had been made to Rivera. When queried, Atty. Robinol replied that there was an intervention filed in the civil case and that a Writ of
Execution had not yet been issued by the Court of First Instance of Quezon City. However, it turned out that the motion for intervention had already been dismissed. After confronting Atty. Robinol
with that fact, the latter gave other excuses, which the officers discovered to have no basis at all.
On 6 March 1980, 21 out of 32 plaintiffs arrived at a "first consensus" to change their counsel, Atty. Robinol (Exhibit "3"). The officers of the Samahan thereafter approached Atty. Anacleto R.
Montemayor, who agreed to be their counsel, after he was shown the document of 6 March 1980 containing the consensus of the Samahan members to change Atty. Robinol as their lawyer. Upon
Atty. Montemayor's advice, the officers sent Atty. Robinol a letter dated 17 March 1980 informing the latter of their decision to terminate his services and demanding the return of the P 75,000.00
deposited with him (Exhibit "5"). Atty. Robinol turned deaf ears to the demand. A subsequent letter of the same tenor, dated 31 March 1980 (Exhibit "6"), was similarly disregarded by Atty. Robinol.
On 20 March 1980, Atty. Montemayor formally entered his appearance in Civil Case No. Q-16433 as counsel for the plaintiffs (Exhibit "8"), vice Atty. Robinol, on the strength of the authority dated
18 March 1980 given him by plaintiffs in said civil case through the five officers (Exhibit "9"). Atty. Montemayor then filed on 20 March 1980 a Motion for Execution praying that the defendants
and/or the Clerk of Court be directed to execute a deed of conveyance in favor of the plaintiffs (Exhibit "10"). At the hearing of the Motion for Execution on 5 June 1980, Atty. Robinol manifested that
he had no objection to the appearance of and his substitution by Atty. Montemayor (Exhibits "11" & "11-A").
Because Atty. Robinol, however, still questioned the first consensus dated 6 March 1980, another document labelled the "second consensus" (Exhibit "E") was signed by 21 plaintiffs during a meeting
held for the purpose on 24 November 1980 to the effect that they had decided to change Atty. Robinol as their counsel because he had delayed paying for their land notwithstanding the Decision of the
Court of Appeals in their favor.
Administrative Case No. 2144
On 15 April 1980 the Samahan officers filed this Administrative Complaint before this Court requesting the invention of Atty. Robinol for refusal to return the P 75,000.00 and praying that the Court
exercise its power of discipline over members of the Bar unworthy to practice law. The details of their Complaint were embodied in their Joint Affidavit executed on 14 April 1980 describing what
had transpired between them and Atty. Robinol.
In his defense, Atty. Robinol maintains that he was hired by Complainants to appeal their case to the Court of appeals after they had lost in the lower Court; that their agreement as to attomey's fees
was on a contingent basis if he obtains a reversal of the lower Court Decision, they wig give him a portion of the property subject matter of the litigation equal to the portion that will pertain to each of
the 32 plaintiffs in Civil Case No. Q-16433; that he did not receive P 70,000.00 from Complainants on 18 May 1979 but only P 56,470.00; that he prepared and signed the receipt dated 18 May 1979
showing that he received P 70,000.00 only to save complainants from embarrassment and shame should their co-plaintiff ask for proof that they (Complainants) have paid their shares, which they have
not; that the correct amount in his possession is only P 62,470.00-it would really be P 75,000.00 had the five Complainants paid their shares in the amount of P 12,500.00 at P 2,500.00 each and one
Fortunate Ramirez paid his balance of P 30.00; that he had the right to hold the money in his possession as guarantee for the payment of his attomey's fees of get a portion of the property that win
pertain to each of the plaintiffs, he wants his portion converted to cash, and the cash equivalent of his portion is P 50,000.00 (2,743 square meters divided by 32 plaintiffs equals 85 square meters for
each plaintiff, multiplied by P 500.00 up per square meter); that considering that P 50,000.00 is even less than one-half (1/ 2) per cent of the total value of the property, which is more than a million
pesos, such amount is not unreasonable; that he is ready to give back the amount of P 12,470.00, representing the difference between P 50,000.00 and the amount of P 62,470.00 in his possession; that
complainants cannot make this Court a collection agency and that while this Court has the exclusive disciplinary power over members of the Bar, it is equally true that the Court cannot pass judgment
on Complainants' plea that the amount deposited by respondent be returned to them as this prayer should be ventilated in an ordinary action; that he does not have the slightest intention to appropriate
the money in his possession (P 62,470.00) for himself, but he is holding it until his attomey's fees are satisfied there being no guarantee for its satisfaction because of Complainants' adamant refusal to
pay him; that there was no previous notice to him of his discharge; and that Atty. Montemayor accepted the case without his Robinols formal withdrawal and conformity.
Administrative Case No. 2180
Pursuing that tack on 29 July 1980, Atty. Robinol filed a complaint for Disbarment against Atty. Anacleto R. Montemayor for alleged gross unethical conduct unbecoming of a lawyer in that Atty.
Montemayor readily accepted the case without his Robinols formal withdrawal and conformity and knowing fully well that there was no consensus of all the plaintiffs to discharge him as their
counsel.
For his part, Atty. Montemayor denied that the attomey's fees agreed upon by plaintiffs and Atty. Robinol were purely on a contingent basis, the truth being that the attomey's fees were payable on a
cash basis of P 2,000.00 retainer fee, as evidenced by the receipt signed by Atty. Robinol (Annex "I"), plus whatever amount is adjudicated as attomey's fees by the Court of Appeals; that the

contingent fee referred to by Atty. Robinol was the result of his insistent demand after the Court of Appeals Decision in Civil Case No. Q-16433 was already final, as shown by the date of the
agreement (Annex "2"); that twenty [20] out of thirty-two [32] members of the Samahan signed the agreement to discharge Atty. Robinol and hire a substitute counsel as shown by Annex "3", which is
a majority of the membership and, therefore, a valid consensus; that he agreed to act as counsel if only to arrest the growing belief of the Samahan that most members of the Philippine Bar are
unprincipled; that although there was no formal Motion for substitution, there was substantial compliance with Sec. 26, Rule 138 of the Rules of Court, as shown by the formal entry of appearance in
Civil Case No. Q-1 6433 (Annex "8"), the written consent of the clients (Annex "9"), notice to Atty. Robinol of his discharge and substitution (Annexes "10' and "11"), non-objection by Robinol of his
appearance as counsel (Annex "l 2"), and implied consent of the Court to the substitution as shown by its Order of 29 May 1980 (Annex "l 3"); that his professional and personal actuations as counsel
for the plaintiffs in Civil Case No. Q-16433, CFI-Quezon City, do not cause dishonor either to himself or to the Philippine Bar; and that the Complaint against him should be dismissed.
On 1 September 1980 and on 17 December 1980, the Court referred Adm. Case No. 2144 and Adm. Case No. 2180, respectively, to the Office of the Solicitor General for investigation, report and
recommendation. On 15 December 1988, the Solicitor General submitted his compliance and recommended:
1. That Atty. Santiago R. Robinol be suspended for three months for refusing to deliver the funds of the plaintiffs in his possession, with the warning that a
more severe penalty will be imposed for a repetition of the same or similar act, and that he be ordered to return to the plaintiffs, through the complainants in
Adm. Case No. 2134, the sum of P 75,000.00.
2. That the case against Atty. Anacleto R. Montemayor, Adm. Case No. 2180, be dismissed, since he has not committed any misconduct imputed to him by
Atty. Robinol. (pp. 59-60, Rollo)
Except for the disciplinary sanction suggested for Atty. Robinol, we concur with the recommendations.
Re: Atty. Santiago R. Robinol
Atty. Robinol has, in fact, been guilty of ethical infractions and grave misconduct that make him unworthy to continue in the practice of the profession. After the Court of Appeals had rendered a
Decision favorable to his clients and he had received the latter's funds, suddenly, he had a change of mind and decided to convert the payment of his fees from a portion of land equivalent to that of
each of the plaintiffs to P 50,000.00, which he alleges to be the monetary value of that area. Certainly, Atty. Robinol had no right to unilaterally appropriate his clients' money not only because he is
bound by a written agreement but also because, under the circumstances, it was highly unjust for him to have done so. His clients were mere squatters who could barely eke out an existence They had
painstakingly raised their respective quotas of P 2,500.00 per family with which to pay for the land only to be deprived of the same by one who, after having seen the color of money, heart lessly took
advantage of them.
Atty. Robinol has no basis to claim that since he was unjustly dismissed by his clients he had the legal right to retain the money in his possession. Firstly, there was justifiable ground for his discharge
as counsel. His clients had lost confidence in him for he had obviously engaged in dilatory tactics to the detriment of their interests, which he was duty-bound to protect. Secondly, even if there were
no valid ground, he is bereft of any legal right to retain his clients' funds intended for a specific purpose the purchase of land. He stands obliged to return the money immediately to their rightful
owners.
The principle of quantum meruit applies if a lawyer is employed without a price agreed upon for his services in which case he would be entitled to receive what he merits for his services, as much as
he has earned. In this case, however, there was an express contract and a stipulated mode of compensation. The implied assumpsit onquantum meruit therefore, is inapplicable.
But Atty. Robinol seeks to impress upon the Court that he had received only the sum of P 62,470.00 and not P 75,000.00 claiming that five (5) officers of the Samahan had not yet paid their shares to P
12,500.00.
We agree with the Solicitor General that complainants' evidence on this score is the more credible and that he had, in fact, received the total sum of P 75,000.00 inclusive of the share of P 12,500.00 of
the five (5) officers of the Somalian For, in the pleadings filed by Atty. Robinol himself in the civil case below, namely, the Motion for Execution on 5 June 1979; the Motion for Postponement on 31
August 1979; and the Motion to Set Hearing of Motion for Execution on 10 March 1980, he made mention of seven (7) persons, who, as of that time, had not yet submitted their corresponding shares
which list, however, did not include any of the five (5) officers of the Samahan.

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

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

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

Assigned to his family corporation the Moran property (Pulong Maulap) which belonged to the estate he was settling as its lawyer and auditor.

II.

Excluded the Moran property from the inventory of real estate properties he prepared for a client-estate and, at the same time, charged the loan secured to purchase the said
excluded property as a liability of the estate, all for the purpose of transferring the title to the said property to his family corporation.

III.

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

On the first charge, complainant alleged that she accepted respondents offer to serve as lawyer and auditor to settle her husbands estate. Respondents law firm then filed a petition for
settlement of the estate of the deceased Nakpil but did not include the Moran property in the estates inventory. Instead, respondent transferred the property to his corporation, Caval Realty
Corporation, and title was issued in its name. Complainant accused respondent of maliciously appropriating the property in trust knowing that it did not belong to him. She claimed that respondent has
expressly acknowledged that the said property belonged to the late Nakpil in his correspondences [3] with the Baguio City Treasurer and the complainant.
On the second charge, complainant alleged that respondents auditing firm (C. J. Valdes and Co., CPAs) excluded the Moran property from the inventory of her husbands estate, yet included in
the claims against the estate the amounts of P65,000.00 and P75,000.00, which respondent represented as her husbands loans applied probably for the purchase of a house and lot in Moran Street,
Baguio City.
As to the third charge, complainant alleged that respondents law firm (Carlos J. Valdes and Associates) filed the petition for the settlement of her husbands estate in court, while respondents
auditing firm (C. J. Valdes & Co., CPAs) acted as accountant of both the estate and two of its creditors. She claimed that respondent represented conflicting interests when his accounting firm prepared
the list of claims of creditors Angel Nakpil and ENORN, Inc. against her husbands estate which was represented by respondents law firm. Complainant averred that there is no distinction between
respondents law and auditing firms as respondent is the senior and controlling partner of both firms which are housed in the same building.
We required respondent to answer the charges against him. In hisANSWER, [4] respondent initially asserted that the resolution of the first and second charges against him depended on the result
of the pending action in the CFI for reconveyance which involved the issue of ownership of the Moran property.
On the merit of the first charge, respondent reiterated his defense in the reconveyance case that he did not hold the Moran property in trust for the Nakpils as he is its absolute owner. Respondent
explained that the Nakpils never bought back the Moran property from him, hence, the property remained to be his and was rightly excluded from the inventory of Nakpils estate.
As to the second charge, respondent denied preparing the list of claims against the estate which included his loans of P65,000.00 and P75,000.00 for the purchase and renovation of the Moran
property. In charging his loans against the estate, he stressed that the list drawn up by his accounting firm merely stated that the loans in respondents name were applied probably for the purchase of
the house and lot in Moran Street, Baguio City. Respondent insisted that this was not an admission that the Nakpils owned the property as the phrase probably for the purchase did not imply a
consummated transaction but a projected acquisition.
Respondent also disclaimed knowledge or privity in the preparation of a letter (Exhibit H) of his accounting firm to the Baguio City treasurer remitting the real estate taxes for the Moran
property on behalf of the Nakpils. He contended that the letter could be a mere error or oversight.
Respondent averred that it was complainant who acknowledged that they did not own the Moran property for: (1) complainants February 1979 Statement of Assets and Liabilities did not
include the said property, and; (2) complainant, as administratrix, signed the Balance Sheet of the Estate where the Moran property was not mentioned.
Respondent admitted that complainant retained the services of his law and accounting firms in the settlement of her husbands estate. [5] However, he pointed out that he has resigned from his law
and accounting firms as early as 1974. He alleged that it was Atty. Percival Cendaa (from the law firm Carlos Valdes & Associates) who filed the inestate proceedings in court in 1976.
As to the third charge, respondent denied there was a conflict of interest when his law firm represented the estate in the inestate proceedings while his accounting firm (C. J. Valdes & Co., CPAs)
served as accountant of the estate and prepared the claims of creditors Angel Nakpil and ENORN, Inc. against the estate. He proffered the following reasons for his thesis: First, the two claimants
were closely related to the late Nakpil. Claimant ENORN, Inc. is a family corporation of the Nakpils of which the late Nakpil was the President. Claimant Angel Nakpil is a brother of the late Nakpil
who, upon the latters death, became the President of ENORN, Inc. These two claimants had been clients of his law and accounting firms even during the lifetime of Jose Nakpil. Second, his alleged
representation of conflicting interests was with the knowledge and consent of complainant as administratrix. Third, there was no conflict of interests between the estate and the claimants for they had
forged a modus vivendi, i.e., that the subject claims would be satisfied only after full payment of the principal bank creditors. Complainant, as administratrix, did not controvert the claims of Angel

Nakpil and ENORN, Inc. Complainant has started paying off the claims of Angel Nakpil and ENORN, Inc. after satisfying the banks claims. Complainant did not assert that their claims caused
prejudice to the estate. Fourth, the work of Carlos J. Valdes and Co. as common auditor redounded to the benefit of the estate for the firm prepared a true and accurate amount of the claim. Fifth,
respondent resigned from his law and accounting firms as early as August 15, 1974. [6] He rejoined his accounting firm several years later. He submitted as proof the SECs certification of the filing of
his accounting firm of an Amended Articles of Partnership. Thus, it was not he but Atty. Percival Cendaa, from the firm Carlos J. Valdes and Associates, who filed the intestate proceedings in court.
On the other hand, the claimants were represented by their own counsel Atty. Enrique O. Chan. Sixth, respondent alleged that in the remote possibility that he committed a breach of professional
ethics, he committed such misconduct not as a lawyer but as an accountant who acted as common auditor of the estate and its creditors. Hence, he should be held accountable in another forum.
On November 12, 1979, complainant submitted her REPLY.[7] She maintained that the pendency of the reconveyance case is not prejudicial to the investigation of her disbarment complaint
against respondent for the issue in the latter is not the ownership of the Moran property but the ethics and morality of respondents conduct as a CPA-lawyer.
Complainant alleged that respondents Annexes to his Reply (such as the Statement of Assets & Liability of the Nakpils and the Balance Sheet of the Estate) which showed that complainant did
not claim ownership of the Moran property were all prepared by C. J. Valdes and Co. as accountant of the estate of Jose Nakpil and filed with the intestate court by C. J. Valdes and Associates as
counsel for the estate. She averred that these Annexes were not proofs that respondent owned the Moran property but were part of respondents scheme to remove the property from the estate and
transfer it to his family corporation. Complainant alleged that she signed the documents because of the professional counsel of respondent and his firm that her signature thereon was required.
Complainant charged respondent with greed for coveting the Moran property on the basis of defects in the documents he himself prepared.
Complainant urged that respondent cannot disown unfavorable documents (the list of claims against the estate and the letter regarding Nakpils payments of realty tax on the Moran property)
which were prepared by his law and accounting firms and invoke other documents prepared by the same firms which are favorable to him. She averred that respondent must accept responsibility not
just for some, but for all the representations and communications of his firms.
Complainant refuted respondents claim that he resigned from his firms from March 9, 1976 to several years later. She alleged that none of the documents submitted as evidence referred to his
resignation from his law firm. The documents merely substantiated his resignation from his accounting firm.
In his REJOINDER,[8] respondent insisted that complainant cannot hold him liable for representing the interests of both the estate and the claimants without showing that his action prejudiced
the estate. He urged that it is not per se anomalous for respondents accounting firm to act as accountant for the estate and its creditors. He reiterated that he is not subject to the jurisdiction of this
Court for he acted not as lawyer, but as accountant for both the estate and its claimants.
He alleged that his accounting firm merely prepared the list of claims of the creditors Angel Nakpil and ENORN, Inc. Their claims were not defended by his accounting or law firm but by Atty.
Enrique Chan. He averred that his law firm did not oppose these claims as they were legitimate and not because they were prepared by his accounting firm. He emphasized that there was no allegation
that the claims were fraudulent or excessive and that the failure of respondents law firm to object to these claims damaged the estate.
In our January 21, 1980 Resolution,[9] we deferred further action on the disbarment case until after resolution of the action for reconveyance between the parties involving the issue of ownership
by the then CFI of Baguio. Complainant moved for reconsideration on the ground that the issue of ownership pending with the CFI was not prejudicial to her complaint which involved an entirely
different issue, i.e., the unethical acts of respondent as a CPA-lawyer. We granted her motion and referred the administrative case to the Office of the Solicitor General (OSG) for investigation, report
and recommendation.[10]
In 1983, the CFI of Baguio dismissed the action for reconveyance. The trial court ruled that respondent held the Moran property in trust for the Nakpils but found that complainant waived her
right over it.
On appeal, the Court of Appeals reversed the trial court. The appellate court held that respondent was the absolute owner of the Moran property. The Decision was elevated to this Court.
On February 18, 1986, during the pendency of complainants appeal to this Court, the OSG submitted its Report [11] on the disbarment complaint. The OSG relied heavily on the decision of the
Court of Appeals then pending review by this Court. The OSG found that respondent was not put on notice of complainants claim over the property. It opined that there was no trust agreement created
over the property and that respondent was the absolute owner thereof. Thus, it upheld respondents right to transfer title to his family corporation. It also found no conflict of interests as the claimants
were related to the late Jose Nakpil. The OSG recommended the dismissal of the administrative case.

Prefatorily, we note that the case at bar presents a novel situation as it involves the disbarment of a CPA-lawyer for his demeanor in his accounting profession and law practice in connection with
the property of his client.
As a rule, a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith. [12] The measure of good faith which an
attorney is required to exercise in his dealings with his client is a much higher standard than is required in business dealings where the parties trade at arms length. [13] Business transactions between
an attorney and his client are disfavored and discouraged by the policy of the law. Hence, courts carefully watch these transactions to assure that no advantage is taken by a lawyer over his client. This
rule is founded on public policy for, by virtue of his office, an attorney is in an easy position to take advantage of the credulity and ignorance of his client. Thus, no presumption of innocence or
improbability of wrongdoing is considered in an attorneys favor. [14]
In the case at bar, we cannot subscribe to the findings of the OSG in its Report. These findings were based mainly on the decision of the Court of Appeals in the action for reconveyance which
was reversed by this Court in 1993.[15]
As to the first two charges, we are bound by the factual findings of this Court in the aforementioned reconveyance case. [16] It is well-established that respondent offered to the complainant the
services of his law and accounting firms by reason of their close relationship dating as far back as the 50s. She reposed her complete trust in respondent who was the lawyer, accountant and business
consultant of her late husband. Respondent and the late Nakpil agreed that the former would purchase the Moran property and keep it in trust for the latter. In violation of the trust agreement,
respondent claimed absolute ownership over the property and refused to sell the property to complainant after the death of Jose Nakpil. To place the property beyond the reach of complainant and the
intestate court, respondent later transferred it to his corporation.
Contrary to the findings of the OSG, respondent initially acknowledged and respected the trust nature of the Moran property. Respondents bad faith in transferring the property to his family
corporation is well discussed in this Courts Decision,[17] thus:
x x x Valdes (herein respondent) never repudiated the trust during the lifetime of the late Jose Nakpil. On the contrary, he expressly recognized it. x x x (H)e repudiated the trust
when (he) excluded Pulong Maulap from the list of properties of the late Jose Nakpil submitted to the intestate court in 1973. x x x
xxx
The fact that there was no transfer of ownership intended by the parties x x x can be bolstered by Exh. I-2, an annex to the claim filed against the estate proceedings of the late Jose
Nakpil by his brother, Angel Nakpil, which was prepared by Carlos J. Valdes & Co., the accounting firm of herein respondent. Exhibit I-2, which is a list of the application of the
proceeds of various FUB loans contracted as of 31 December 1973 by the late Jose Nakpil, x x x contains the two (2) loans contracted in the name of respondent. If ownership
of Pulong Maulap was already transferred or ceded to Valdes, these loans should not have been included in the list.
Indeed, as we view it, what the parties merely agreed to under the arrangement outlined in Exh. J was that respondent Valdes would x x x take over the total loan ofP140,000.00
and pay all of the interests due on the notes while the heirs of the late Jose Nakpil would continue to live in the disputed property for five (5) years without remuneration save
for regular maintenance expenses. This does not mean, however, that if at the end of the five-year period petitioner (Nakpil) failed to reimburse Valdes for his advances, x x x
Valdes could already automatically assume ownership of Pulong Maulap. Instead, the remedy of respondents Carlos J. Valdes and Caval Realty Corporation was to proceed
against the estate of the late Jose M. Nakpil and/or the property itself. (emphasis supplied)
In the said reconveyance case, we further ruled that complainants documentary evidence (Exhibits H, J and L), which she also adduced in this administrative case, should estop
respondent from claiming that he bought the Moran property for himself, and not merely in trust for Jose Nakpil. [18]
It ought to follow that respondents act of excluding Moran property from the estate which his law firm was representing evinces a lack of fidelity to the cause of his client. If respondent truly
believed that the said property belonged to him, he should have at least informed complainant of his adverse claim. If they could not agree on its ownership, respondent should have formally presented
his claim in the intestate proceedings instead of transferring the property to his own corporation and concealing it from complainant and the judge in the estate proceedings. Respondents misuse of his
legal expertise to deprive his client of the Moran property is clearly unethical.

To make matters worse, respondent, through his accounting firm, charged the two loans of P65,000.00 and P75,000.00 as liability of the estate, after said loans were obtained by respondent for
the purchase and renovation of the property which he claimed for himself. Respondent seeks to exculpate himself from this charge by disclaiming knowledge or privity in the preparation of the list of
the estates liabilities. He theorizes that the inclusion of the loans must have been a mere error or oversight of his accounting firm. It is clear that the information as to how these two loans should be
treated could have only come from respondent himself as the said loans were in his name. Hence, the supposed error of the accounting firm in charging respondents loans against the estate could not
have been committed without respondents participation. Respondent wanted to have his cake and eat it too and subordinated the interest of his client to his own pecuniary gain. Respondent violated
Canon 17 of the Code of Professional Responsibility which provides that a lawyer owes fidelity to his clients cause and enjoins him to be mindful of the trust and confidence reposed on him.
As regards the third charge, we hold that respondent is guilty of representing conflicting interests. It is generally the rule, based on sound public policy, that an attorney cannot represent adverse
interests. It is highly improper to represent both sides of an issue. [19] The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to
the same general matter[20] and is applicable however slight such adverse interest may be. It applies although the attorneys intentions and motives were honest and he acted in good faith. [21] However,
representation of conflicting interests may be allowed where the parties consent to the representation, after full disclosure of facts. Disclosure alone is not enough for the clients must give their
informed consent to such representation. The lawyer must explain to his clients the nature and extent of conflict and the possible adverse effect must be thoroughly understood by his clients. [22]
In the case at bar, there is no question that the interests of the estate and that of it creditors are adverse to each other. Respondents accounting firm prepared the list of assets and liabilities of the
estate and, at the same time, computed the claims of two creditors of the estate. There is clearly a conflict between the interest of the estate which stands as the debtor, and that of the two claimants
who are creditors of the estate. In fact, at one instance, respondents law firm questioned the claims of creditor Angel Nakpil against the estate.
To exculpate himself, respondent denies that he represented complainant in the intestate proceedings. He points out that it was one Atty. Percival Cendaa, from his law firm Carlos J. Valdes &
Associates, who filed the intestate case in court. However, the fact that he did not personally file the case and appear in court is beside the point. As established in the records of this case and in the
reconveyance case, [23] respondent acted as counsel and accountant of complainant after the death of Jose Nakpil. Respondents defense that he resigned from his law and accounting firms as early as
1974 (or two years before the filing of the intestate case) is unworthy of merit. Respondents claim of resignation from his law firm is not supported by any documentary proof. The documents on
record [24] only show respondents resignation from his accounting firm in 1972 and 1974. Even these documents reveal that respondent returned to his accounting firm on July 1, 1976 and as of 1978,
the intestate proceedings for the settlement of Joses estate had not yet been terminated. It does not escape us that when respondent transferred the Moran property to his corporation on February 13,
1978, the intestate proceedings was still pending in court. Thus, the succession of events shows that respondent could not have been totally ignorant of the proceedings in the intestate case.
Respondent claims that complainant knew that his law firm Carlos J. Valdes & Associates was the legal counsel of the estate [25] and his accounting firm, C.J. Valdes & Co., CPAs, was the auditor
of both the estate and the two claimants against it. [26] The fact, however, that complainant, as administratrix, did not object to the set-up cannot be taken against her as there is nothing in the records to
show that respondent or his law firm explained the legal situation and its consequences to complainant. Thus, her silence regarding the arrangement does not amount to an acquiescence based on an
informed consent.
We also hold that the relationship of the claimants to the late Nakpil does not negate the conflict of interest. When a creditor files a claim against an estate, his interest is per se adverse to the
estate. As correctly pointed out by complainant, if she had a claim against her husbands estate, her claim is still adverse and must be filed in the intestate proceedings.
Prescinding from these premises, respondent undoubtedly placed his law firm in a position where his loyalty to his client could be doubted. In the estate proceedings, the duty of respondents
law firm was to contest the claims of these two creditors but which claims were prepared by respondents accounting firm. Even if the claims were valid and did not prejudice the estate, the set-up is
still undesirable. The test to determine whether there is a conflict of interest in the representation is probability, not certainty of conflict. It was respondents duty to inhibit either of his firms from said
proceedings to avoid the probability of conflict of interest.
Respondent advances the defense that assuming there was conflict of interest, he could not be charged before this Court as his alleged misconduct pertains to his accounting practice.
We do not agree. Respondent is a CPA-lawyer who is actively practicing both professions. He is the senior partner of his law and accounting firms which carry his name. In the case at bar,
complainant is not charging respondent with breach of ethics for being the common accountant of the estate and the two creditors. He is charged for allowing his accounting firm to represent two
creditors of the estate and, at the same time, allowing his law firm to represent the estate in the proceedings where these claims were presented. The act is a breach of professional ethics and
undesirable as it placed respondents and his law firms loyalty under a cloud of doubt. Even granting that respondents misconduct refers to his accountancy practice, it would not prevent this Court
from disciplining him as a member of the Bar. The rule is settled that a lawyer may be suspended or disbarred for ANY misconduct, even if it pertains to his private activities, as long as it shows him

to be wanting in moral character, honesty, probity or good demeanor. [27] Possession of good moral character is not only a prerequisite to admission to the bar but also a continuing requirement to the
practice of law.
Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct of a member of the bar. Thus, a lawyer should determine his conduct by acting in a manner that
would promote public confidence in the integrity of the legal profession. Members of the bar are expected to always live up to the standards embodied in the Code of Professional Responsibility as the
relationship between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good faith. [28] In the case at bar, respondent exhibited less than full fidelity to his duty to
observe candor, fairness and loyalty in his dealings and transactions with his clients. [29]
IN VIEW WHEREOF, the Court finds respondent ATTY. CARLOS J. VALDES guilty of misconduct. He is suspended from the practice of law for a period of one (1) year effective from
receipt of this Decision, with a warning that a similar infraction shall be dealt with more severely in the future.
Let copies of this Decision be furnished all courts, as well as the Integrated Bar of the Philippines and the Office of the Bar Confidant.
SO ORDERED.

[A.C. No. 5235. March 22, 2000]

FERNANDO C. CRUZ AND AMELIA CRUZ, complainants, vs. ATTY. ERNESTO C. JACINTO, respondents. Juris
RESOLUTION
MELO, J.:
In their sworn complaint, spouses Fernando C. Cruz and Amelia Manimbo Cruz seek the disbarment of Atty. Ernesto C. Jacinto. The Integrated Bar of the Philippines, through Commissioner Jesulito
A. Manalo of the Commissioner on Bar discipline, conducted an investigation. Thereafter, he submitted his Findings and Recommendation, thusly:
This is a disbarment case filed by the spouses Fernando and Amelia Cruz against Atty. Ernesto C. Jacinto. This case was filed with the Commission on Bar Discipline last 30
January 1991.
The evidence of the complainants show that sometime in June 1990, Atty. Ernesto Jacinto, lawyer of the couple in an unrelated case, requested the Cruz spouses for a loan in behalf
of a certain Concepcion G. Padilla, who he claimed to be an old friend as she was allegedly in need of money. The loan requested was for PhP 285,000.00 payable after 100 days
for PhP 360,000 to be secured by a real estate mortgage on a parcel of land located at Quezon City. Sc juris
The spouses, believing and trusting the representations of their lawyer that Padilla was a good risk, authorized him to start preparing all the necessary documents relative to the
registration of the Real Estate Mortgage to secure the payment of the loan in favor of the Cruz spouses.
On 4 July 1990, the complainants agreed to the request of Atty. Jacinto and were presented by the latter with a Real Estate Mortgage Contract and a Transfer Certificate of Title No.
127275 in the name of Concepcion G. Padilla. The amount of PhP 285,000.00 was given by the spouses to the respondent in cash (PhP 270,000.00) and a PBCom check no.
713929 for PhP 15,000.00.
Upon maturity of the loan on 15 October 1990, the spouses demanded payment from Concepcion G. Padilla by going to the address given by the respondent but there proved to be
no person by that name living therein. When the complainants verified the genuineness of TCT No. 127275 with Register of Deeds of Quezon City, it was certified by the said
office to be a fake and spurious title. Further efforts to locate the debtor-mortgagor likewise proved futile. Juris sc
In their sworn affidavits given before the National Bureau of Investigation (NBI), the spouses claim that they relied much on the reassurances made by Atty. Jacinto as to
Concepcion G. Padillas credit, considering that he was their lawyer. It was also their trust and confidence in Atty. Jacinto that made them decide to forego meeting the debtormortgagor.
The complainants evidence also included the sworn statements of Estrella Ermino-Palipada, the secretary of the respondent at the Neri Law Office, and Avegail Payos, a
housemaid of Atty. Jacinto. Ms. Palipada stated that:
1. she was the one who prepared the Real Estate Mortgage Contract and the Receipt of the loan upon the instruction of the respondents;
2. she was a witness to the transaction and never once saw the person of Concepcion G. Padilla, the alleged mortgagor; and that
3. she was instructed by Atty. Jacinto to notarize the said contract by signing the name of one Atty. Ricardo Neri.

Avegail Payos, the housemaid of the respondent, in turn stated that she was the one who simulated the signature of one Emmanuel Gimarino, the Deputy Register of Deeds of
Quezon City upon the instruction of Atty. Jacinto. This was done to make it appear that the real estate mortgage was registered and the annotation to appear at the back of the TCT
as an encumbrance.
On 14 November 1997, a case for Estafa thru Falsification of Public documents under Art. 315 was filed against Atty. Jacinto. He was arrested and detained by the NBI.
The defense of the respondent, on the other hand, was embodied in his Answer with Motion to Dismiss filed with the Commission on Bar Discipline. Therein, he alleged that the
criminal information for estafa thru falsification filed against him had already been dismissed because of the voluntary desistance of the complainants. Misj uris
In his version of the facts, Atty. Jacinto averred that while he indeed facilitated the loan agreement between the Cruz spouses and Concepcion G. Padilla, he had no idea that the
latter would give a falsified Certificate of Title and use it to obtain a loan. He claimed that he himself was a victim under the circumstances.
Respondent further alleged that he had not been remiss nor negligent in collecting the proceeds of the loan; that in fact, he had even advanced the full payment of the loan due to
the complainants from his own savings, even if Concepcion G. Padilla had not yet paid, much less found.
RECOMMENDATIONS
It is every lawyers sworn duty to obey the laws of the land to promote respect for law and legal processes. The Code of Professional Responsibility command that he shall not
engage in unlawful, dishonest, immoral or deceitful conduct. (Rule 1.01, Code of Professional Responsibility) Jj lex
In the instant case, there was a clear yet unrebutted allegation in the complaint that the Respondent had ordered his secretary and housemaid to falsify the signatures of the notary
public and the Deputy Register of Deeds respectively to make it appear that the real estate mortgage contract was duly registered and thus binding.
While it may be true that the complaint for Estafa thru Falsification filed against the Respondent had been dismissed, the dismissal was because of the complainants voluntary
desistance and not a finding of innocence. It neither confirms nor denies Respondents non-culpability. Furthermore, it is well-settled that disciplinary proceedings are "sui
generis", the primary object of which is not so much to punish the individual attorney himself, as to safeguard the administration of justice by protecting the court and the public
from the misconduct of lawyers, and to remove from the professions persons whose disregard of their oath have proven them unfit to continue discharging the trust reposed in them
as members of the bar. Thus, disciplinary cases may still proceed despite the dismissal of civil and/or criminal cases against a lawyer.
A lawyer who does any unlawful fraudulent or dishonest act may and should be held administratively liable therefor. In the case at bar, the Respondent should not be made an
exception. While it may be shown that he indeed advanced the payment due to his erstwhile clients, such will not exempt him from administrative liability. At best it can only
mitigate. Respondent is recommended to be suspended for six (6) months from the practice of law.
(Findings and Recommendation, pp. 1-4) New miso
On February 28, 1998, the Board of Governors of the IBP passed Resolution XIII-97-199 adopting and approving the Findings and Recommendation of the Investigating Commissioner, which reads:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner in the above-entitled
case, herein made part of this Resolution/Decision as Annex "A" and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules,
respondent Atty. Ernesto C. Jacinto is SUSPENDED from the practice of law for six (6) months for his unlawful, fraudulent or dishonest act.
(Notice of resolution [dated Feb. 28, 1998]).

In his Comment and Answer with Motion to Dismiss, respondent averred that complainants have no cause of action against him as the same has been waived, settled, and extinguished on account of
the affidavits of voluntary desistance and quitclaim executed by them in the criminal case filed against him. Ncmmis
The assertion must necessarily fail. The practice of law is so intimately affected with public interest that it is both a right and a duty of the State to control and regulate it in order to promote the public
welfare. The Constitution vests this power of control and regulation in this Court. Since the practice of law is inseparably connected with the exercise of its judicial power in administration of justice,
the Court cannot be divested of its constitutionally ordained prerogative which includes the authority to discipline, suspend or disbar any unfit and unworthy member of the Bar by a mere execution of
affidavits of voluntary desistance and quitclaim (par. [5], Sec. 5, 1987 Constitution).
A lawyer may be disciplined or suspended for any misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, in honesty, in probity and good
demeanor, thus rendering unworthy to continue as an officer of the court (Maligsa vs. Cabanting, 272 SCRA 408 [1997]), and the complainants who called the attention of the Court to the attorneys
alleged misconduct are in no sense a party, and have generally no interest in the outcome except as all good citizens may have in the proper administration of justice (Rayos-Ombac vs. Rayos, 285
SCRA 93 [1998]).
Undeniably, respondent represented complainants in the loan transaction. By his own admission, he was the one who negotiated with the borrower, his long-time friend and a former client. He acted
not merely as an agent but as a lawyer of complaints, thus, the execution of the real estate mortgage contract, as well as its registration and annotation on the title were entrusted to him. In fact,
respondent even received his share in the interest earnings which complainants realized from the transaction. His refusal to recognize any wrongdoing or carelessness by claiming that he is likewise a
victim when it was shown that the title to the property, the registration of the real estate mortgage contract, and the annotation thereon were all feigned, will not at all exonerate him. Scncm
As a rule, a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith. However, the measure of good faith which an
attorney is required to exercise in his dealings with this client is a much higher standard than is required in business dealings where the parties trade at arms length. Business transactions between an
attorney and his client are disfavored and discouraged by the policy of the law. Hence, courts carefully watch these transactions to be sure that no advantage is taken by a lawyer over his client. This
rule is founded on public policy for, by virtue of his office, an attorney is in an easy position to take advantage of the credulity and ignorance of his client. Thus, no presumption of innocence or
improbability of wrongdoing is considered in an attorneys favor (Nakpit vs. Valdes, 286 SCRA 758 [1998]). Further, his fidelity to the cause of his client requires him to be evermindful of the
responsibilities that should be expected of him.
Verily, a lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his former client. The reason for the prohibition is found in
the relation of attorney and client, which is one of trust and confidence at the highest degree (Maturan vs. Gonzales, 287 SCRA 943 [1998]). Sdaamiso
Respondent utterly failed to perform his duties and responsibilities faithfully and well as to protect the rights and interests of his clients and by his deceitful actuations constituting violations of the
Code of Professional Responsibilities must be subjected to disciplinary measures for his own good, as well as for the good of the entire membership of the Bar as a whole.
WHEREFORE, the Court hereby adopts the resolution of the Board of Governors of the Integrated Bar of the Philippines and orders respondent Atty. Ernesto C. Jacinto suspended from the practice
of law for six (6) months with the warning that a repetition of the same or similar offense will be dealt with more severely. Sdaad
SO ORDERED.

ROSAURA P. CORDON, complainant, vs. JESUS BALICANTA, respondent.

RESOLUTION
PER CURIAM:
On August 21, 1985, herein complainant Rosaura Cordon filed with this Court a complaint for disbarment, docketed as Administrative Case No. 2797, against Atty. Jesus Balicanta. After
respondents comment to the complaint and complainants reply thereto, this Court, on March 29, 1995 referred the matter to the Integrated Bar of the Philippines (IBP, for brevity) for investigation,
report and recommendation within 90 days from notice. Commissioner George Briones of the IBP Commission on Bar Discipline was initially tasked to investigate the case. Commissioner Briones
was later on replaced by Commissioner Renato Cunanan. Complainant filed a supplemental complaint which was duly admitted and, as agreed upon, the parties filed their respective position papers.
Based on her complaint, supplemental complaint, reply and position paper, the complainant alleged the following facts:
When her husband Felixberto C. Jaldon died, herein complainant Rosaura Cordon and her daughter Rosemarie inherited the properties left by the said decedent. All in all, complainant and her
daughter inherited 21 parcels of land located in Zamboanga City. The lawyer who helped her settle the estate of her late husband was respondent Jesus Balicanta.

Sometime in the early part of 1981, respondent enticed complainant and her daughter to organize a corporation that would develop the said real properties into a high-scale commercial complex
with a beautiful penthouse for complainant. Relying on these apparently sincere proposals, complainant and her daughter assigned 19 parcels of land to Rosaura Enterprises, Incorporated, a newlyformed and duly registered corporation in which they assumed majority ownership. The subject parcels of land were then registered in the name of the corporation.
Thereafter, respondent single-handedly ran the affairs of the corporation in his capacity as Chairman of the Board, President, General Manager and Treasurer. The respondent also made
complainant sign a document which turned out to be a voting trust agreement. Respondent likewise succeeded in making complainant sign a special power of attorney to sell and mortgage some of
the parcels of land she inherited from her deceased husband. She later discovered that respondent transferred the titles of the properties to a certain Tion Suy Ong who became the new registered
owner thereof. Respondent never accounted for the proceeds of said transfers.
In 1981, respondent, using a spurious board resolution, contracted a loan from the Land Bank of the Philippines (LBP, for brevity) in the amount of Two Million Two Hundred Twenty Pesos
(P2,220,000) using as collateral 9 of the real properties that the complainant and her daughter contributed to the corporation. The respondent ostensibly intended to use the money to construct the
Baliwasan Commercial Center (BCC, for brevity). Complainant later on found out that the structure was made of poor materials such as sawali, coco lumber and bamboo which could not have cost
the corporation anything close to the amount of the loan secured.
For four years from the time the debt was contracted, respondent failed to pay even a single installment. As a result, the LBP, in a letter dated May 22, 1985, informed respondent that the past
due amortizations and interest had already accumulated to Seven Hundred Twenty-nine Thousand Five Hundred Three Pesos and Twenty-five Centavos (P729,503.25). The LBP made a demand on
respondent for payment for the tenth time. Meanwhile, when the BCC commenced its operations, respondent started to earn revenues from the rentals of BCCs tenants. On October 28, 1987, the LBP
foreclosed on the 9 mortgaged properties due to non-payment of the loan.
Respondent did not exert any effort to redeem the foreclosed properties. Worse, he sold the corporations right to redeem the mortgaged properties to a certain Hadji Mahmud Jammang through
a fake board resolution dated January 14, 1989 which clothed himself with the authority to do so. Complainant and her daughter, the majority stockholders, were never informed of the alleged
meeting held on that date. Again, respondent never accounted for the proceeds of the sale of the right to redeem. Respondent also sold to Jammang a parcel of land belonging to complainant and her
daughter which was contiguous to the foreclosed properties and evidenced by Transfer Certificate of Title No. 62807. He never accounted for the proceeds of the sale.
Sometime in 1983, complainants daughter, Rosemarie, discovered that their ancestral home had been demolished and that her mother, herein complainant, was being detained in a small nipa
shack in a place called Culianan. Through the help of Atty. Linda Lim, Rosemarie was able to locate her mother. Rosemarie later learned that respondent took complainant away from her house on
the pretext that said ancestral home was going to be remodeled and painted. But respondent demolished the ancestral home and sold the lot to Tion Suy Ong, using another spurious board resolution
designated as Board Resolution No. 1, series of 1992. The resolution contained the minutes of an alleged organizational meeting of the directors of the corporation and was signed by Alexander Wee,
Angel Fernando, Erwin Fernando and Gabriel Solivar. Complainant and her daughter did not know how these persons became stockholders and directors of the corporation. Respondent again did not
account for the proceeds of the sale.
Complainant and her daughter made several demands on respondent for the delivery of the real properties they allegedly assigned to the corporation, for an accounting of the proceeds of the
LBP loan and as well as the properties sold, and for the rentals earned by BCC. But the demands remained unheeded. Hence, complainant and her daughter, in a letter dated June 4, 1985, terminated
the services of respondent as their lawyer and repeated their demands for accounting and turn-over of the corporate funds, and the return of the 19 titles that respondent transferred to the
corporation. They also threatened him with legal action in a letter dated August 3, 1985.
Soon after, complainant found out from the Securities and Exchange Commission (SEC, for brevity) that Rosaura Enterprises, Inc., due to respondents refusal and neglect, failed to submit the
corporations annual financial statements for 1981, 1982 and 1983; SEC General Information Sheets for 1982, 1983 and 1984; Minutes of Annual Meetings for 1982, 1983 and 1984; and Minutes of
Annual Meetings of Directors for 1982, 1983 and 1984.
Complainant also discovered that respondent collected rental payments from the tenants of BCC and issued handwritten receipts which he signed, not as an officer of the corporation but as the
attorney-at-law of complainant. Respondent also used the tennis court of BCC to dry his palay and did not keep the buildings in a satisfactory state, so much so that the divisions were losing plywood
and other materials to thieves.
Complainant likewise accused respondent of circulating rumors among her friends and relatives that she had become insane to prevent them from believing whatever complainant
said. According to complainant, respondent proposed that she legally separate from her present husband so that the latter would not inherit from her and that respondent be adopted as her son.

For his defense, respondent, in his comment and position paper, denied employing deceit and machination in convincing complainant and her daughter to assign their real properties to the
corporation; that they freely and voluntary executed the deeds of assignment and the voting trust agreement that they signed; that he did not single-handedly manage the corporation as evidenced by
certifications of the officers and directors of the corporation; that he did not use spurious board resolutions authorizing him to contract a loan or sell the properties assigned by the complainant and her
daughter; that complainant and her daughter should be the ones who should render an accounting of the records and revenues inasmuch as, since 1984 up to the present, the part-time corporate bookkeeper, with the connivance of the complainant and her daughter, had custody of the corporate records; that complainant and her daughter sabotaged the operation of BCC when they illegally took
control of it in 1986; that he never pocketed any of the proceeds of the properties contributed by the complainant and her daughter; that the demolition of the ancestral home followed legal procedures;
that complainant was never detained in Culianan but she freely and voluntarily lived with the family of P03 Joel Constantino as evidenced by complainants own letter denying she was kidnapped; and
that the instant disbarment case should be dismissed for being premature, considering the pendency of cases before the SEC and the Regional Trial Court of Zamboanga involving him and
complainant.
Based on the pleadings and position papers submitted by the parties, Commissioner Renato Cunanan, in his report [1] dated July 1, 1999, recommended respondents disbarment based on the
following findings:
A. The complainant, Rosaura Jaldon-Cordon and her daughter, Rosemarie were stockholders of a corporation, together with respondent, named Rosaura Enterprises, Inc.
Per the Articles of Incorporation marked as Annex A of Complainants Position Paper, complainants subscription consists of 55% of the outstanding capital stock while her daughters consists of
18%, giving them a total of 73%. Respondents holdings consist of 24% while three other incorporators, Rosauro L. Alvarez, Vicente T. Maalac and Darhan S. Graciano each held 1% of the capital
stock of the corporation.
B. On April 5, 1981, complainant and her daughter Rosemarie Jaldon executed two Deeds of Transfer and Assignment conveying and transferring to the corporation 19 parcels of land in exchange
for shares of stock in the corporation.
xxx

xxx

xxx

C. Both Deeds of Assignment particularly page 3 thereof indicate that respondent accepted said assignment of properties and titles in behalf of the corporation as Treasurer. The deeds were signed on
April 5, 1981.
xxx

xxx

xxx

Together, therefore, complainant and her daughter owned 1,711 shares of the 1,750 shares comprising the authorized capital stock of the corporation of 97% thereof.
No increase in capitalization was applied for by the corporation.
F. Respondent claims in his Comment, his Answer and his Position Paper that on April 4, 1981 he was elected as Chairman and Director and on April 5, 1981 he was elected President of the
corporation. Respondents own Annexes marked as G and G-1 of his Comment show that on April 4, 1981 he was not only elected as Chairman and Director as he claims but as Director, Board
Chairman and President. The purported minutes was only signed by respondent and an acting Secretary by the name of Vicente Maalac.
Said Annex does not show who was elected Treasurer.
Respondents Annex H and H-1 shows that in the alleged organizational meeting of the directors on April 5, 1981 a certain Farnacio Bucoy was elected Treasurer. Bucoys name does not appear
as an incorporator nor a stockholder anywhere in the documents submitted.
The purported minutes of the organizational meeting of the directors was signed only by respondent Balicanta and a Secretary named Verisimo Martin.

G. Since respondent was elected as Director, Chairman and President on April 4, 1981 as respondents own Annexes G to G-1 would show, then complainants claim that respondent was likewise
acting as Treasurer of two corporations bear truth and credence as respondent signed and accepted the titles to 19 parcels of land ceded by the complainant and her daughter, as Treasurer on April 5,
1981 after he was already purportedly elected as Chairman, President and Director.
H. Respondent misleads the Commission into believing that all the directors signed the minutes marked as Exhibit H to H-1 by stating that the same was duly signed by all the Board of Directors
when the document itself shows that only he and one Verisimo Martin signed the same.
He also claims that all the stockholders signed the minutes of organizational meeting marked as Annexes G and G-1 of his Comment yet the same shows that only the acting Chairman and acting
Secretary signed.
I. Respondent claims that the Board or its representative was authorized by the stockholders comprising 2/3 of the outstanding capital stock, as required by law, to mortgage the parcels of land
belonging to the corporation, which were all assigned to the corporation by complainant and her daughter, by virtue of Annex I and I-1: attached to his Comment.
The subject attachment however reveals that only the following persons signed their conformity to the said resolution: respondent Balicanta who owned 109 shares, Vicente Maalac (1 share),
Daihan Graciano (1 share).
Complainants who collectively held a total of 1,711 shares out of the 1,750 outstanding capital stock of the corporation were not represented in the purported stockholders meeting authorizing the
mortgage of the subject properties.
The 2/3 vote required by law was therefore not complied with yet respondent proceeded to mortgage the subject 9 parcels of land by the corporation.
J. Respondent further relies on Annex J of his Comment, purportedly the minutes of a special meeting of the Board of Directors authorizing him to obtain a loan and mortgage the properties of the
corporation dated August 29, 1981. This claim is baseless. The required ratification of 2/3 by the stockholders of records was not met. Again, respondent attempts to mislead the Commission and
Court.
K. Further, the constitution of the Board is dubious. The alleged minutes of the organizational meeting of the stockholders electing the members of the Board, have not been duly signed by the
stockholders as shown in respondents annex G which was purportedly the organizational meeting of the stockholders.
L. Also, Annex J of respondents Comment which purportedly authorized him to obtain a loan and to mortgage the 9 parcels of land was only signed by himself and a secretary.
M. In said Annex 'J' of respondents Comment he stated that complainant Rosaura Cordon was on leave by virtue of a voting trust agreement allegedly executed by complainant in his favor covering
all her shares of stock. The claim is baseless. The voting trust referred to by respondent (annex D of his Comment), even if it were assumed to be valid, covered only 266 shares of complainants yet
she owned a total of 1,039 shares after she and her daughter ceded in favor of the corporation 19 parcels of land.
Being a former lawyer to complainant, respondent should have ensured that her interest was safeguarded. Yet, complainant was apparently and deliberately left our (sic) on the pretext that, she had
executed a voting trust agreement in favor of respondent.
It is suspicious that complainant was made to sign a voting trust agreement on 21 August 1981 and immediately thereafter, the resolutions authorizing respondent to obtain a loan and to mortgage the
9 parcels of land were passed and approved.
N. It is also highly irregular for respondent who is a lawyer, to allow a situation to happen where, with the exclusion of complainant as director the result was that there remained only 4 members of
the Board,.
O. Respondents own pleadings submitted to the Commission contradict each other.

1. For instance, while in his Comment respondent DENIES that he employed deceit and machination in convincing the complainant and her daughter to sign the articles of incorporation of Rosaura
Enterprises and in ceding to the corporation 19 parcels of land in Zamboanga City, because they freely, intelligently and voluntarily signed the same, yet, in his Position Paper, respondent took
another stance.
In paragraphs 1.1 and 1.2 of his Position Paper which was submitted 12 years later, respondent claimed that it was actually the idea of Atty. Rosaura L. Alvarez that a corporation be put up to
incorporate the estate of the late Felixberto D. Jaldon.
2. Likewise, respondent claimed that complainant and her daughter were not directors, hence they were not notified of meetings, in paragraph 2-6 (c) of his Comment he blamed the other
stockholders and directors for the corporations inability to comply with the Land Banks demands saying that they have consistently failed since 1982 to convene (1.) for the annual stockholders
meetings and (i.i) for the monthly board meeting.
His own pleadings claim that he had been the Chairman/President since 1981 to the present. If (sic) so, it was his duty to convene the stockholders and the directors for meetings.
Respondent appeared able to convene the stockholders and directors when he needed to make a loan of p2.2 million; when he sold the corporations right of redemption over the foreclosed properties
of the corporation to Jammang, when he sold one parcel of land covered by TCT 62,807 to Jammang in addition to the 9 parcels of land which were foreclosed, and when he sold the complainants
ancestral home covered by TCT No. 72,004.
It is thus strange why respondent claims that the corporation could not do anything to save the corporations properties from being foreclosed because the stockholders and directors did not convene.
This assertion of respondent is clearly evident of dishonest, deceitful and immoral conduct especially because, in all his acts constituting conveyances of corporate property, respondent used minutes
of stockholders and directors meetings signed only by him and a secretary or signed by him and persons who were not incorporators much less stockholders.
It is worthy of note that in respondents Exhibits 15, 16, 17 and 18 of his position paper, there were 7 new stockholders and complainant appeared to have only 266 shares to her name while her
daughter Rosemarie had no shares at all. Respondent did not present any proof of conveyance of shares by complainant and her daughter.
It is further worth noting that complainants voting trust (annex D of respondents Comment) where she allegedly entrusted 266 shares to respondent on August 21, 1981 had only a validity of 5
years. Thus, she should have had her entire holdings of 1,283 shares back in her name in August 1986.
Respondents purported minutes of stockholders meeting (Exhs. 15 and 17) do not reflect this.
There was no explanation whatsoever from respondent on how complainant and her daughter lost their 97% control holding in the corporation.
3. As a further contradiction in respondents pleadings, we note that in paragraph 2.7.C of his Comment he said that only recently, this year, 1985, the complainant and her aforenamed daughter
examined said voluminous supporting receipts/documents which had previously been examined by the Land Bank for loan releases, during which occasion respondent suggested to them that the
corporation will have to hire a full-time book-keeper to put in order said voluminous supporting receipts/documents, to which they adversely reacted due to lack of corporate money to pay for said
book-keeper. But in respondents Position Paper par. 6.3 he stated that:
Anyway, it is not the respondent but rather the complainant who should render a detailed accounting to the corporation of the corporate records as well as corporate revenues/income
precisely because since 1994 to the present:
(a). The corporate part-time book-keeper Edilberto Benedicto, with the indispensable connivance and instigation of the complainant and her daughter, among others, has custody of the
corporate records, xxx

4. In other contradictory stance, respondent claims in par. 7.3 of his position paper that complainant and her daughter sabotaged the BCC operations of the corporation by illegally taking over actual
control and supervision thereof sometime in 1986, xxx
Yet respondents own exhibits in his position paper particularly Exhibit 15 and 16 where the subject of the foreclosed properties of the corporation comprising the Baliwasan Commercial Center
(BCC) was taken up, complainant and her daughter were not even present nor were they the subject of the discussion, belying respondents claim that the complainant and her daughter illegally took
actual control of BCC.
5. On the matter of the receipts issued by respondent evidencing payment to him of rentals by lessees of the corporation, attached to the complaint as Annexes H to H-17, respondent claims that
the receipts are temporary in nature and that subsequently regular corporate receipts were issued. On their face however the receipts clearly appear to be official receipts, printed and numbered duly
signed by the respondent bearing his printed name.
It is difficult to believe that a lawyer of respondent stature would issue official receipts to lessees if he only meant to issue temporary ones.
6. With regard to respondents claim that the complainant consented to the sale of her ancestral home, covered by TCT No. T-72,004 to one Tion Suy Ong for which he attached as Exhibit 22 to his
Position Paper the minutes of an annual meeting of the stockholders, it behooves this Commission why complainants signature had to be accompanied by her thumb mark. Furthermore,
complainants signature appears unstable and shaky. This Office is thus persuaded to believe complainants allegation in paragraph 3b of her position paper that since September 1992 up to March
1993 she was being detained by one PO# (sic) Joel Constantino and his wife under instructions from respondent Balicanta.
This conclusion is supported by a letter from respondent dated March 1993, Annex H of complainants position paper, where respondent ordered Police Officer Constantino to allow Atty. Linda
Lim and Rosemarie Jaldon to talk to Tita Rosing.
The complainants thumb mark together with her visibly unstable shaky signature lends credence to her claim that she was detained in the far flung barrio of Culianan under instructions of
respondent while her ancestral home was demolished and the lot sold to one Tion Suy Ong.
It appears that respondent felt compelled to over-ensure complainants consent by getting her to affix her thumb mark in addition to her signature.
7. Respondent likewise denies that he also acted as Corporate Secretary in addition to being the Chairman, President and Treasurer of the corporation. Yet, respondent submitted to this commission
documents which are supported to be in the possession of the Corporate Secretary such as the stock and transfer book and minutes of meetings.
The foregoing findings of this Commission are virtual smoking guns that prove on no uncertain terms that respondent, who was the legal counsel of complainant in the latter part of the settlement of
the estate of her deceased husband, committed unlawful, immoral and deceitful conduct proscribed by Rule 1.01 of the code of professional responsibility.
Likewise, respondent clearly committed a violation of Canon 15 of the same code which provides that A lawyer should observe candor fairness and loyalty in all his dealings and transactions with
his client.
Respondents acts gravely diminish the publics respect for the integrity of the profession of law for which this Commission recommends that he be meted the penalty of disbarment.
The pendency of the cases at the SEC and the Regional Trial Court of Zamboanga filed by complainant against respondent does not preclude a determination of respondents culpability as a lawyer.
This Commission cannot further delay the resolution of this complaint filed in 1985 by complainant, and old widow who deserves to find hope and recover her confidence in the judicial system.
The findings of this office, predominantly based on documents adduced by both parties lead to only one rather unpalatable conclusion. That respondent Atty. Jesus F. Balicanta, in his professional
relations with herein complainant did in fact employ unlawful, dishonest, and immoral conduct proscribed in no uncertain terms by Rule 1.01 of the Code of Professional Responsibility. In addition,
respondents actions clearly violated Canon 15 to 16 of the same Code.

It is therefore our unpleasant duty to recommend that respondent, having committed acts in violation of the Canons of Professional Responsibility, thereby causing a great disservice to the profession,
be meted the ultimate sanction of disbarment.[2]
On September 30, 1999, while Commissioner Cunanans recommendation for respondents disbarment was pending review before Executive Vice-President and Northern Luzon Governor
Teofilo Pilando, respondent filed a motion requesting for a full-blown investigation and for invalidation of the entire proceedings and/or remedial action under Section 11, Rule 139-B, Revised Rules
of Court, alleging that he had evidence that Commissioner Cunanans report was drafted by the lawyers of complainant, Attys. Antonio Cope and Rita Linda Jimeno. He presented two unsigned
anonymous letters allegedly coming from a disgruntled employee of Attys. Cope and Jimeno. He claimed to have received these letters in his mailbox. [3]
Respondents motion alleging that Attys. Antonio Cope and Rita Linda Jimeno drafted Commissioner Cunanans report was accompanied by a complaint praying for the disbarment of said
lawyers including Commissioner Cunanan. The complaint was docketed as CBD Case No. 99-658. After Attys. Cope and Jimeno and Commissioner Cunanan filed their answers, a hearing was
conducted by the Investigating Committee of the IBP Board of Governors.
On May 26, 2001, the IBP Board of Governors issued a resolution [4] dismissing for lack of merit the complaint for disbarment against Attys. Cope and Jimeno and Commissioner Cunanan. And
in Adm. Case No. 2797, the Board adopted and approved the report and recommendation of Commissioner Cunanan, and meted against herein respondent Balicanta the penalty of suspension from the
practice of law for 5 years for commission of acts of misconduct and disloyalty by taking undue and unfair advantage of his legal knowledge as a lawyer to gain material benefit for himself at the
expense of complainant Rosaura P. Jaldon-Cordon and caused serious damage to the complainant. [5]
To support its decision, the Board uncovered respondents fraudulent acts in the very same documents he presented to exonerate himself. It also took note of respondents contradictory and
irreconcilable statements in the pleadings and position papers he submitted. However, it regarded the penalty of disbarment as too severe for respondents misdeeds, considering that the same were his
first offense.[6]
Pursuant to Section 12 (b), Rule 139-B of the Rules of Court, [7] the said resolution in Administrative Case No. 2797 imposing the penalty of suspension for 5 years on respondent was
automatically elevated to this Court for final action. On the other hand, the dismissal of the complaint for disbarment against Attys. Cope and Jimeno and Commissioner Cunanan, docketed as CBD
Case No. 99-658, became final in the absence of any petition for review.
This Court confirms the duly supported findings of the IBP Board that respondent committed condemnable acts of deceit against his client. The fraudulent acts he carried out against his client
followed a well thought of plan to misappropriate the corporate properties and funds entrusted to him. At the very outset, he embarked on his devious scheme by making himself the President,
Chairman of the Board, Director and Treasurer of the corporation, although he knew he was prohibited from assuming the position of President and Treasurer at the same time. [8] As Treasurer, he
accepted in behalf of the corporation the 19 titles that complainant and her daughter co-owned. The other treasurer appointed, Farnacio Bucoy, did not appear to be a stockholder or director in the
corporate records. The minutes of the meetings supposedly electing him and Bucoy as officers of the corporation actually bore the signatures of respondent and the secretary only, contrary to his
claim that they were signed by the directors and stockholders.
He likewise misled the IBP investigating commission in claiming that the mortgage of 9 of the properties of the corporation previously belonging to complainant and her daughter was ratified by
the stockholders owning two-thirds or 67% of the outstanding capital stock when in fact only three stockholders owning 111 out of 1,750 outstanding shares or 6.3% assented thereto. The alleged
authorization granting him the power to contract the LBP loan for Two Million Two Hundred Twenty Pesos (P2,220,000) was also not approved by the required minimum of two-thirds of the
outstanding capital stock despite respondents claim to the contrary. In all these transactions, complainant and her daughter who both owned 1,711 out of the 1,750 outstanding shares of the
corporation or 97.7% never had any participation. Neither were they informed thereof.
Clearly, there was no quorum for a valid meeting for the discussion and approval of these transactions.
Respondent cannot take refuge in the contested voting trust agreement supposedly executed by complainant and her daughter for the reason that it authorized respondent to represent
complainant for only 266 shares.
Aside from the dishonest transactions he entered into under the cloak of sham resolutions, he failed to explain several discrepancies in his version of the facts. We hereby reiterate some of these
statements noted by Commissioner Cunanan in his findings.

First, respondent blamed the directors and the stockholders who failed to convene for the required annual meetings since 1982. However, respondent appeared able to convene the stockholders
and directors when he contracted the LBP debt, when he sold to Jammang the corporations right of redemption over the foreclosed properties of the corporation, when he sold one parcel of land
covered by TCT No. 62807 to Jammang, when he mortgaged the 9 parcels of land to LBP which later foreclosed on said mortgage, and when he sold the complainants ancestral home covered by
TCT No. 72004.
Second, the factual findings of the investigating commission, affirmed by the IBP Board, disclosed that complainant and her daughter own 1,711 out of 1,750 shares of the outstanding capital
stock of the corporation, based on the Articles of Incorporation and deeds of transfer of the properties. But respondents evidence showed that complainant had only 266 shares of stock in the
corporation while her daughter had none, notwithstanding the fact that there was nothing to indicate that complainant and her daughter ever conveyed their shares to others.
Respondent likewise did not explain why he did not return the certificates representing the 266 shares after the lapse of 5 years from the time the voting trust certificate was executed in 1981. [9]
The records show that up to now, the complainant and her daughter own 97% of the outstanding shares but respondent never bothered to explain why they were never asked to participate in or
why they were never informed of important corporate decisions.
Third, respondent, in his comment, alleged that due to the objection of complainant and her daughter to his proposal to hire an accountant, the corporation had no formal accounting of its
revenues and income. However, respondents position paper maintained that there was no accounting because the part-time bookkeeper of the corporation connived with complainant and her daughter
in keeping the corporate records.
Fourth, respondents claim that complainant and her daughter took control of the operations of the corporation in 1986 is belied by the fact that complainant and her daughter were not even
present in the alleged meeting of the board (which took place after 1986) to discuss the foreclosure of the mortgaged properties. The truth is that he never informed them of such meeting and he never
gave control of the corporation to them.
Fifth, Commissioner Cunanan found that:
5. on the matter of the receipts issued by respondent evidencing payment to him of rentals by lessees of the corporation, attached to the complaint as Annexes H to H-17, respondent claims that
the receipts are temporary in nature and that subsequently regular corporate receipts were issued. On their face however the receipts clearly appear to be official receipts, printed and numbered duly
signed by the respondent bearing his printed name.
It is difficult to believe that a lawyer of respondents stature would issue official receipts to lessees if he only meant to issue temporary ones. [10]
Sixth, respondent denies that he acted as Corporate Secretary aside from being the Chairman, President and Treasurer of the corporation. Yet respondent submitted to the investigating
commission documents which were supposed to be in the official possession of the Corporate Secretary alone such as the stock and transfer book and minutes of meetings.
Seventh, he alleged in his comment that he was the one who proposed the establishment of the corporation that would invest the properties of the complainant but, in his position paper, he said
that it was a certain Atty. Rosauro Alvarez who made the proposal to put up the corporation.
After a thorough review of the records, we find that respondent committed grave and serious misconduct that casts dishonor on the legal profession. His misdemeanors reveal a deceitful scheme
to use the corporation as a means to convert for his own personal benefit properties left to him in trust by complainant and her daughter.
Not even his deviousness could cover up the wrongdoings he committed. The documents he thought could exculpate him were the very same documents that revealed his immoral and
shameless ways. These documents were extremely revealing in that they unmasked a man who knew the law and abused it for his personal gain without any qualms of conscience. They painted an
intricate web of lies, deceit and opportunism beneath a carefully crafted smokescreen of corporate maneuvers.
The Code of Professional Responsibility mandates upon each lawyer, as his duty to society, the obligation to obey the laws of the land and promote respect for law and legal processes.
Specifically, he is forbidden to engage in unlawful, dishonest, immoral or deceitful conduct. [11] If the practice of law is to remain an honorable profession and attain its basic ideal, those enrolled in its

ranks should not only master its tenets and principles but should also, in their lives, accord continuing fidelity to them. [12] Thus, the requirement of good moral character is of much greater import, as
far as the general public is concerned, than the possession of legal learning. [13] Lawyers are expected to abide by the tenets of morality, not only upon admission to the Bar but also throughout their
legal career, in order to maintain ones good standing in that exclusive and honored fraternity. [14] Good moral character is more than just the absence of bad character. Such character expresses itself in
the will to do the unpleasant thing if it is right and the resolve not to do the pleasant thing if it is wrong. [15] This must be so because vast interests are committed to his care; he is the recipient of
unbounded trust and confidence; he deals with his clients property, reputation, his life, his all. [16]
Indeed, the words of former Presiding Justice of the Court of Appeals Pompeyo Diaz cannot find a more relevant application than in this case:
There are men in any society who are so self-serving that they try to make law serve their selfish ends. In this group of men, the most dangerous is the man of the law who has no conscience. He has,
in the arsenal of his knowledge, the very tools by which he can poison and disrupt society and bring it to an ignoble end. [17]
Good moral standing is manifested in the duty of the lawyer to hold in trust all moneys and properties of his client that may come into his possession. [18] He is bound to account for all money
or property collected or received for or from the client. [19] The relation between an attorney and his client is highly fiduciary in nature. Thus, lawyers are bound to promptly account for money or
property received by them on behalf of their clients and failure to do so constitutes professional misconduct. [20]
This Court holds that respondent cannot invoke the separate personality of the corporation to absolve him from exercising these duties over the properties turned over to him by complainant. He
blatantly used the corporate veil to defeat his fiduciary obligation to his client, the complainant. Toleration of such fraudulent conduct was never the reason for the creation of said corporate fiction.
The massive fraud perpetrated by respondent on the complainant leaves us no choice but to set aside the veil of corporate entity. For purposes of this action therefore, the properties registered in
the name of the corporation should still be considered as properties of complainant and her daughter. The respondent merely held them in trust for complainant (now an ailing 83-year-old) and her
daughter. The properties conveyed fraudulently and/or without the requisite authority should be deemed as never to have been transferred, sold or mortgaged at all. Respondent shall be liable, in his
personal capacity, to third parties who may have contracted with him in good faith.
Based on the aforementioned findings, this Court believes that the gravity of respondents offenses cannot be adequately matched by mere suspension as recommended by the IBP. Instead, his
wrongdoings deserve the severe penalty of disbarment, without prejudice to his criminal and civil liabilities for his dishonest acts.
WHEREFORE, respondent Attorney Jesus T. Balicanta is hereby DISBARRED. The Clerk of Court is directed to strike out his name from the Roll of Attorneys.
SO ORDERED.

Adm. Case No. 6475

January 30, 2013

FE
vs.
ATTY. GLENN CARLOS GACOTT, Respondent.

A.

YLAYA, Complainant,

DECISION
BRION, J.:
For the Court's consideration is the disbarment complaint 1 tiled by Fe A. Ylaya (complainant) against Atty. Glenn Carlos Gacott (respondent) who allegedly deceived the complainant and her late
husband, Laurentino L. Ylaya, into signing a "preparatory" Deed of Sale that the respondent converted into a Deed of Absolute Sale in favor of his relatives.
After the submission of the respondent's comment to the complaint, the Court referred the complaint to the Commission on Bar Discipline ofthe Integrated Bar of the Philippines (IBP) for
investigation, evaluation and recommendation.
The complainant alleged that she and her late husband are the registered owners of two (2) parcels of land covered by Transfer Certificate of Title ( TCT) Nos. 162632 and 162633 located at Barangay
Sta. Lourdes, Puerto Princesa City. Prior to the acquisition of these properties, TCT No. 162632 (property) was already the subject of expropriation proceedings filed by the City Government of Puerto
Princesa (City Government) on May 23, 1996 against its former registered owner, Cirilo Arellano. The expropriation case was filed with the Regional Trial Court (RTC) of Palawan and Puerto
Princesa, Branch 95, and was docketed as Civil Case No. 2902. The RTC already fixed the price and issued an order for the City Government to deposit P6,000,000.00 as just compensation for the
property.2
The respondent briefly represented the complainant and her late husband in the expropriation case as intervenors for being the new registered owners of the property. The complainant alleged that the
respondent convinced them to sign a "preparatory deed of sale" for the sale of the property, but he left blank the space for the name of the buyer and for the amount of consideration. The respondent
further alleged that the deed would be used in the sale to the City Government when the RTC issues the order to transfer the titles. 3 The respondent then fraudulently without their knowledge and
consent, and contrary to their understanding converted the "preparatory deed of sale" into a Deed of Absolute Sale dated June 4, 2001, 4 selling the subject property to Reynold So and Sylvia Carlos
So for P200,000.00.5
The complainant denied that she and Laurentino were paid the P200,000.00 purchase price or that they would sell the property "for such a measly sum" when they stood to get at least P6,000,000.00
as just compensation.6
The complainant also claimed that the respondent notarized the Deed of Absolute Sale dated June 4, 2001 even though Reynold and Sylvia (his mothers sister) are his uncle and his aunt,
respectively.7
The respondent denied all the allegations in the complaint. 8
The respondent argued that the complainants greed to get the just Compensation 9 caused her to file this "baseless, unfounded and malicious" disbarment case. 10 He claimed that the sale was their
voluntary transaction and that he "simply ratified the document." 11 He also claimed that Reynold and Laurentino had originally jointly purchased the properties from Cirilo Arellano on July 10, 2000;
that they were co-owners for some time; and that Laurentino subsequently sold his share to Reynold under a Deed of Absolute Sale dated June 4, 2001. 12
The respondent specifically denied asking the complainant and her late husband to execute any "preparatory deed of sale" in favor of the City Government. 13 He also denied that the Deed of Absolute
Sale contained blanks when they signed it. 14 That he filed for the spouses Ylaya and Reynold an opposition to the just compensation the RTC fixed proved that there was no agreement to use the
document for the expropriation case. 15 He also argued that it was clear from the document that the intended buyer was a natural person, not a juridical person, because there were spaces for the buyers
legal age, marital status, and citizenship, 16 and he was even constrained to file a subsequent Motion to Intervene on behalf of Reynold because the complainant "maliciously retained" the TCTs to the
subject properties after borrowing them from his office. 17 Lastly, he denied violating the Rules on Notarial Practice. 18

On September 4, 2006, the respondent filed a Motion to Resolve or Decide the Case dated August 24, 2006 praying for the early resolution of the complaint. 19
On December 5, 2006, the complainant filed an Ex Parte Motion to Withdraw the Verified Complaint and To Dismiss the Case dated November 14, 2006. 20
On February 28, 2008, the complainant executed an Affidavit 21 affirming and confirming the existence, genuineness and due execution of the Deed of Absolute Sale notarized on March 6, 2000; 22 the
Memorandum of Agreement (MOA) dated April 19, 2000;23 and the Deed of Absolute Sale notarized in 2001. 24 The respondent submitted this Affidavit to the IBP as an attachment to his Motion for
Reconsideration of April 21, 2008.25
The IBPs Findings
In her Report and Recommendation dated November 19, 2007, IBP Commissioner Anna Caridad Sazon-Dupaya found the respondent administratively liable for violating Canon 1, Rule 1.01 (A
lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct) and Canon 16 ("A lawyer shall hold in trust all moneys and properties of his client that may come into his possession) of
the Code of Professional Responsibility, and Section 3(c), Rule IV of A.M. No. 02-8-13-SC (2004 Rules on Notarial Practice). 26 She recommended his suspension from the practice of law for a period
of six (6) months.27
In its Resolution No. XVIII-2007-30228 dated December 14, 2007, the IBP Board of Governors adopted the IBP Commissioners finding, but increased the penalty imposed to two (2) years suspension
and a warning:
RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner [in] the
above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering
respondents violations of Canon 1, [Rule] 1.01 and Canon 16 of the Code of Professional Responsibility and Rule IV, Sec. 39(c) of A.M. No. 02-8-13-SC (2004 Rules on Notarial Practice), Atty.
Glenn Carlos Gacott is hereby SUSPENDED from practice of law for two (2) years with a Warning that commission of a similar offense will be dealt with more severely. [emphases supplied]
On May 8, 2008, the respondent filed a Motion for Reconsideration dated April 21, 2008, attaching, among others, a copy of the complainants Affidavit dated February 27, 2008, admitting the
existence, genuineness and due execution of the Deed of Absolute Sale between Cirilo and Laurentino; the MOA between Laurentino and Reynold; the Deed of Absolute Sale between Laurentino and
Reynold; and the Compromise Agreement between Reynold and the complainant dated November 14, 2006 for the expropriation case. 29
On September 4, 2008, the respondent filed a Manifestation with the Supreme Court, requesting that the IBP be directed to resolve his Motion for Reconsideration. 30
By Resolution No. XIX-2010-545 dated October 8, 2010, 31 the IBP Board of Governors denied the respondents Motion for Reconsideration for failing to raise any new substantial matter or any
cogent reason to warrant a reversal or even a modification of its Resolution No. XVIII-2007-302. 32
On March 14, 2012, the respondent filed a Petition for Review (on appeal) assailing the IBPs findings, as follows: 33
a) In conveniently concluding that the Deed of Absolute Sale was pre-signed and fraudulently notarized without requiring Fe Ylaya to adduce evidence in a formal hearing thus, violated the
respondents right to due process as he was not able to cross-examine her. This is not to mention that the complainant failed to offer corroborative proof to prove her bare allegations;
b) In sweepingly and arbitrarily disregarded/skirted (sic) the public documents (MOA and 2 other DOAS) duly executed by the parties therein and notarized by the respondent;
c) In totally ignoring the complainants Affidavit admitting the genuineness and due execution of the Deed of Absolute Sale in issue;
d) In arbitrarily concluding the absence of co-ownership by Reynold So and Fe Ylaya of the subject lots despite the existence of a notarized MOA clearly showing the co-ownership of Ylaya
and So; and

e) In finding the respondent/appellants act of notarizing the DOAS as contrary to the notarial rules.
The Issues
From the assigned errors, the complainant poses the following issues:
(1) whether the IBP violated the respondents right to due process; and
(2) whether the evidence presented supports a finding that the respondent is administratively liable for violating Canon 1, Rule 1.01 and Canon 16 of the Code of Professional Responsibility,
and Section 3(c), Rule IV of A.M. No. 02-8-13-SC.
The Courts Ruling
We set aside the findings and recommendations of the IBP Commissioner and those of the IBP Board of Governors finding the respondent liable for violating Canon 1, Rules 1.01 and Section 3(c),
Rule IV of A.M. No. 02-8-13-SC.34
We however hold the respondent liable for violating Canon 16 of the Code of Professional Responsibility for being remiss in his obligation to hold in trust his clients properties. We likewise find him
liable for violation of (1) Canon 15, Rule 15.03 for representing conflicting interests without the written consent of the represented parties, thus, violating the rule on conflict of interests; and (2)
Canon 18, Rule 18.03 for neglecting a legal matter entrusted to him.
a. Due process violation
The most basic tenet of due process is the right to be heard. Denial of due process means the total lack of opportunity to be heard or to have ones day in court. As a rule, no denial of due process takes
place where a party has been given an opportunity to be heard and to present his case; 35 what is prohibited is the absolute lack of opportunity to be heard.
The respondent claims that the IBP violated his right to due process because he was not given the "amplest opportunity to defend himself, to cross examine the witness complainant, to object to the
admissibility of documents or present controverting evidence"36 when the IBP rendered its conclusion without requiring the complainant to adduce evidence in a formal hearing and despite the absence
of corroborative proof. He insists that these defects rendered the complainants allegations as hearsay, and the IBPs report, recommendation or resolution null and void.
Although the respondent failed to have a face-to-face confrontation with the complainant when she failed to appear at the required mandatory conference on October 6, 2005, 37 the records reveal that
the respondent fully participated during the entire proceedings and submitted numerous pleadings, including evidence, before the IBP. He was even allowed to file a motion for reconsideration
supported by his submitted evidence, which motion the IBP considered and ruled upon in its Resolution No. XIX-2010-545 dated October 8, 2010. 38
In Alliance of Democratic Free Labor Organization v. Laguesma, 39 we held that due process, as applied to administrative proceedings, is the opportunity to explain ones side. In Samalio v. Court of
Appeals,40 due process in an administrative context does not require trial-type proceedings similar to those in courts of justice. Where the opportunity to be heard, either through oral arguments or
through pleadings, is accorded, no denial of procedural due process takes place. The requirements of due process are satisfied where the parties are afforded a fair and reasonable opportunity to
explain their side of the controversy at hand.
Similarly, in A.Z. Arnaiz Realty, Inc. v. Office of the President, 41 we held that "due process, as a constitutional precept, does not always, and in all situations, require a trial-type proceeding. Litigants
may be heard through pleadings, written explanations, position papers, memoranda or oral arguments. The standard of due process that must be met in administrative tribunals allows a certain degree
of latitude[, provided that] fairness is not ignored. It is, therefore, not legally objectionable for being violative of due process, for an administrative agency to resolve a case based solely on position
papers, affidavits or documentary evidence submitted by the parties."42

In this case, the respondents failure to cross-examine the complainant is not a sufficient ground to support the claim that he had not been afforded due process. The respondent was heard through his
pleadings, his submission of alleged controverting evidence, and his oral testimony during the October 6, 2005 mandatory conference. These pleadings, evidence and testimony were received and
considered by the IBP Commissioner when she arrived at her findings and recommendation, and were the bases for the IBP Boards Resolution.
Moreover, "any seeming defect in the observance of due process is cured by the filing of a motion for reconsideration. A denia of due process cannot be successfully invoked by a party who has had
the opportunity to be heard on his motion for reconsideration. Undoubtedly in this case, the requirement of the law was afforded to the respondent." 43
We also note that the respondent, on a Motion to Resolve or Decide the Case dated August 24, 2006, submitted his case to the IBP for its resolution without any further hearings. The motion, filed
almost one year after the mandatory conference on October 6, 2005, significantly did not contain any statement regarding a denial of due process. In effect, the respondent himself waived his crossexamination of the complainant when he asked the IBP Board of Governors to resolve the case based on the pleadings and the evidence on record. To quote his own submission:
1. On June 30, 2004, a complaint was filed in this case;
2. On October 19, 2004, the respondent filed his comment with all its attachments denying all the allegations in the complaint;
3. On June 23, 2005, the respondent filed his position paper. On April 28, 2006, the respondent also filed his supplemental position paper. By contrast, up to this date, the
complainant/petitioner has not filed her verified position paper thus, waived her right to file the same;
4. There being no other genuine issues to be heard in this case as all the defenses and counter-arguments are supported by documentary evidence, it is most respectfully prayed that the
instant case be resolved on its merits or be ordered dismissed for lack of merit without further hearing;
5. Further, considering that there is an on-going case in Branch 52 of the Regional Trial Court of Palawan in Civil Case No. 2902 for Expropriation involving the same property, and such
fact was deliberately omitted by the complainant in her Verified Complaint as shown in the certification of non-forum shopping, the outright dismissal of this case is warranted, hence, this
motion; and
6. This is meant to expedite the termination of this case. 44 (underscore ours; italics supplied)
Finally, we note Section 11, Rule 139-B of the Rules of Court which provides that:
No defect in a complaint, notice, answer, or in the proceeding or the Investigators Report shall be considered as substantial unless the Board of Governors, upon considering the whole record, finds
that such defect has resulted or may result in a miscarriage of justice, in which event the
Board shall take such remedial action as the circumstances may warrant, including invalidation of the entire proceedings.
In this case, the IBP Commissioners findings were twice reviewed by the IBP Board of Governors the first review resulted in Resolution No. XVIII-2007-302 45 dated December 14, 2007, affirming
the IBP Commissioners findings, but modifying the penalty; the second review resulted in Resolution No. XIX-2010-545 dated October 8, 2010, 46 denying the respondents motion for
reconsideration. In both instances, the IBP Board of Governors found no defect or miscarriage of justice warranting a remedial action or the invalidation of the proceedings.
We emphasize that disciplinary proceedings against lawyers are sui generis in that they are neither purely civil nor purely criminal; they involve investigations by the Court into the conduct of one of
its officers,47 not the trial of an action or a suit.
Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but is rather an investigation by the Court into the
conduct of one of its officers. Not being intended to inflict punishment, it is in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor therein. It may be initiated by
the Court motu proprio. Public interest is its primary objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in

the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal
profession and the proper and honest administration of justice by purging the profession of members who by their misconduct have proved themselves no longer worthy to be entrusted with the duties
and responsibilities pertaining to the office of an attorney. In such posture, there can thus be no occasion to speak of a complainant or a prosecutor. [emphases deleted]
The complainant in disbarment cases is not a direct party to the case but a witness who brought the matter to the attention of the Court. 48 Flowing from its sui generis character, it is not mandatory to
have a formal hearing in which the complainant must adduce evidence.
From all these, we find it clear that the complainant is not indispensable to the disciplinary proceedings and her failure to appear for cross-examination or to provide corroborative evidence of her
allegations is of no merit. What is important is whether, upon due investigation, the IBP
Board of Governors finds sufficient evidence of the respondents misconduct to warrant the exercise of its disciplinary powers.
b. Merits of the Complaint
"In administrative cases against lawyers, the quantum of proof required is preponderance of evidence which the complainant has the burden to discharge." 49 Preponderance of evidence means that the
evidence adduced by one side is, as a whole, superior to or has a greater weight than that of the other. It means evidence which is more convincing to the court as worthy of belief compared to the
presented contrary evidence.
Under Section 1, Rule 133 of the Rules of Court, in determining whether preponderance of evidence exists, the court may consider the following: (a) all the facts and circumstances of the case; (b) the
witnesses manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts to which they testify, and the probability or
improbability of their testimony; (c) the witnesses interest or want of interest, and also their personal credibility so far as the same may ultimately appear in the trial; and (d) the number of witnesses,
although it does not mean that preponderance is necessarily with the greater number. 50 By law, a lawyer enjoys the legal presumption that he is innocent of the charges against him until the contrary is
proven, and that as an officer of the court, he is presumed to have performed his duties in accordance with his oath. 51
The IBP Commissioner set out her findings as follows:
The undersigned, after a careful evaluation of the evidence presented by both parties, finds that the charges of the complainant against the respondent are worthy of belief based on the following:
First, the allegation of the respondent that Reynold So was actually co-owner of spouses Ylanas (sic) in the properties subject of the Deed of Sale between Felix Arellano and Spouses Ylanas (sic) is
hard to believe despite the presentation of the Memorandum of Agreement.
It is elementary in Rules of Evidence that when the contents of a written document are put in issue, the best evidence would be the document itself. In the Deed of Sale between Felix Arellano and
Spouses Ylanas (sic), the buyer of the subject properties is only Laurentino L. Ylaya married to Fe A. Ylaya. The document does not state that Reynold So was likewise a buyer together with
Laurentino Ylaya, or that the former paid half of the purchase price.
Also, it is hard for this Commission to believe that Reynold So, assisted by a lawyer at that and who allegedly paid half of the purchase price, would not insist for the inclusion of his name in the Deed
of Sale as well as the Transfer Certificate of Title subsequently issued.
The Memorandum of Agreement between the spouses Ylaya and Reynold So produced by the respondent cannot overturn the belief of this Commission considering that the Memorandum of
Agreement was executed more than a month AFTER the Deed of Sale between Felix Arellano and the Ylayas was notarized. This is not to mention the fact that the complainant denied ever having
executed the Memorandum of Agreement. A close examination of the signatories in the said Memorandum of Agreement would reveal that indeed, the alleged signatures of the complainant and her
husband are not the same with their signatures in other documents.
Assuming, for the sake of argument, that the Memorandum of Agreement is valid, thereby making Laurentino Ylaya and co-owner Reynold So co-owners of the subject properties (Please see Annex
"B" of respondents Comment), this Commission finds it hard to believe Laurentino Ylaya would sell it to Reynold So for P200,000 x x x when his minimum expenses for the purchase thereof is

already P225,000.00 and he was expecting to receiveP7,000,000.00, more or less. That would mean that if Reynold So and the complainant were co-owners, the P7,000,000.00 would then be equally
divided among them at P3,500,000.00 each, far above the P200,000.00 selling price reflected in the pre-signed Deed of Sale.
As to the second issue, this Commission believes that the respondent committed serious error in notarizing the Deed of Sale and the Memorandum of Agreement between his uncle Reynold So and
Laurentino Ylaya based on Rule IV, Section 3 (c) of A.M. No. 02-8-13-SC which provides as follows:
"Sec. 3. Disqualifications a notary public is disqualified from performing a notarial act if he:
(a) x x x.
(b) x x x.
(c) is a spouse, common-law partner, ancestor, descendant, or relative by affinity or consanguinity of the principal within the fourth civil degree."
The defense therefore of the respondent that he did not violate the aforementioned Rule becausehis uncle Reynold So, the buyer is not the principal in the Subject Deed of Sale but the seller
Laurentino Ylaya (please see page 3 of the respondents Supplemental Position Paper) is misplaced. Clearly, both the buyer and the seller in the instant case are considered principals in the contract
entered into.
Furthermore, if we are to consider the argument of the respondent that his uncle was not a principal so as to apply the afore-quoted provision of the Rules, the respondent still violated the Rules when
he notarized the subject Memorandum of Agreement between Laurentino Ylaya and his uncle Reynold So. Clearly, both complainant and Reynold So were principal parties in the said Memorandum
of Agreement.52
The respondent argues that the IBP Commissioners findings are contrary to the presented evidence, specifically to the MOA executed by Laurentino and Reynold acknowledging the existence of a
co-ownership;53 to the complainants Ex Parte Motion to Withdraw the Verified Complaint and To Dismiss the Case dated November 14, 2006 where she stated that the parties have entered into a
compromise agreement in Civil Case No. 2902, and that the disbarment complaint arose from a misunderstanding, miscommunication and improper appreciation of facts; 54 to her Affidavit dated
February 27, 200855 affirming and confirming the existence, genuineness and due execution of the Deed of Absolute Sale notarized on March 6, 2000; 56 and to the Deed of Absolute Sale notarized in
2001.57
In all, the respondent claims that these cited pieces of evidence prove that this administrative complaint against him is fabricated, false and untrue. He also points to Atty. Robert Peneyra, the
complainants counsel in this administrative case, as the hand behind the complaint. 58 According to the respondent, Atty. Peneyra harbors ill-will against him and his family after his father filed several
administrative cases against Atty. Peneyra, one of which resulted in the imposition of a warning and a reprimand on Atty. Peneyra. 59
Reynold, in his Affidavit dated October 11, 2004, confirms that there was a co-ownership between him and Laurentino; that Laurentino decided to sell his half of the property to Reynold because he
(Laurentino) had been sickly and in dire need of money to pay for his medical bills; that Laurentino agreed to the price of P200,000.00 as this was almost the same value of his investment when he
and Reynold jointly acquired the property; and that the sale to Reynold was with the agreement and consent of the complainant who voluntarily signed the Deed of Sale. 60
After examining the whole record of the case, we agree with the respondent and find the evidence insufficient to prove the charge that he violated Canon 1, Rule 1.01 of the Code of Professional
Responsibility and Section 3(c), Rule IV of A.M. No. 02-8-13-SC. Specifically, (1) the evidence against the respondent fails to show the alleged fraudulent and deceitful acts he has taken to mislead
the complainant and her husband into signing a "preparatory deed of sale" and the conversion into a Deed of Absolute Sale dated June 4, 2001 in favor of Reynold; and (2) no prohibition exists against
the notarization of a document in which any of the parties interested is the notarys relative within the 4th civil degree, by affinity or consanguinity, at that time the respondent notarized the
documents.
In her Report and Recommendation, 61 the IBP Commissioner concluded that the respondent is liable for deceit and fraud because he failed to prove the existence of a co-ownership between
Laurentino and Reynold; in her opinion, the signatures of the complainant and of her husband on the MOA "are not the same with their signatures in other documents." 62

We do not agree with this finding. While the facts of this case may raise some questions regarding the respondents legal practice, we nevertheless found nothing constituting clear evidence of the
respondents specific acts of fraud and deceit. His failure to prove the existence of a co-ownership does not lead us to the conclusion that the MOA and the Deed of Absolute Sale dated June 4, 2001
are spurious and that the respondent was responsible for creating these spurious documents. We are further persuaded, after noting that in disregarding the MOA, the IBP Commissioner failed to
specify what differences she observed in the spouses Ylayas signatures in the MOA and what documents were used in comparison.
Apart from her allegations, the complainants pieces of evidence consist of TCT Nos. 162632 and 162633; 63 her Motion for Leave to Intervene in Civil Case No. 2902 dated May 17, 2000; 64 the RTC
order in Civil Case No. 2902 dated November 6, 2000 fixing the price of just compensation; 65 the Deed of Absolute Sale dated June 4, 2001;66 the spouses Ylayas Verified Manifestation dated
September 2, 2002, filed with the RTC in Civil Case No. 2902, assailing the Motion to Deposit Just Compensation filed by the respondent on behalf of Reynold and manifesting the sale between
Laurentino and Reynold;67 the Provincial Prosecutors Subpoena to the complainant in connection with the respondents complaint for libel; 68 the respondents complaint for libel against the
complainant dated August 27, 2003;69 the complainants Counter Affidavit dated March 26, 2004 against the charge of libel; 70 and the respondents letter to the Provincial Attorney of Palawan dated
April 5, 2004, requesting for "official information regarding the actual attendance of Atty. ROBERT Y. PENEYRA" at an MCLE seminar. 71
We do not see these documentary pieces of evidence as proof of specific acts constituting deceit or fraud on the respondents part. The documents by themselves are neutral and, at the most, show the
breakdown of the attorney-client relationship between the respondent and the complainant. It is one thing to allege deceit and misconduct, and it is another to demonstrate by evidence the specific acts
constituting these allegations.72
We reiterate that in disbarment proceedings, the burden of proof is on the complainant; the Court exercises its disciplinary power only if the complainant establishes her case by clear, convincing, and
satisfactory evidence.73Preponderance of evidence means that the evidence adduced by one side is, as a whole, superior to or has a greater weight than that of the other party. When the pieces of
evidence of the parties are evenly balanced or when doubt exists on the preponderance of evidence, the equipoise rule dictates that the decision be against the party carrying the burden of proof. 74
In this case, we find that the complainants evidence and the records of the case do not show the respondents deliberate fraudulent and deceitful acts. In the absence of such proof, the complaint for
fraud and deceit under Canon 1, Rule 1.01 of the Code of Professional Responsibility must perforce be dismissed.
We note that the respondent has not squarely addressed the issue of his relationship with Reynold, whom the complainant alleges to be the respondents uncle because Reynold is married to the
respondents maternal aunt.75 However, this is of no moment as the respondent cannot be held liable for violating Section 3(c), Rule IV of A.M. No. 02-8-13-SC because the Deed of Absolute Sale
dated June 4, 200176 and the MOA dated April 19, 200077 were notarized by the respondent prior to the effectivity of A.M. No. 02-8-13-SC on July 6, 2004. The notarial law in force in the years 2000 2001 was Chapter 11 of Act No. 2711 (the Revised Administrative Code of 1917) which did not contain the present prohibition against notarizing documents where the parties are related to the notary
public within the 4th civil degree, by affinity or consanguinity. Thus, we must likewise dismiss the charge for violation of A.M. No. 02-8-13-SC.
c. Liability under Canons 15, 16 and 18 We find the respondent liable under Canon 15, Rule 15.03 for representing conflicting interests without the written consent of all concerned, particularly the
complainant; under Canon 16 for being remiss in his obligation to hold in trust his clients properties; and under Canon 18, Rule 18.03 for neglecting a legal matter entrusted to him.
Canon 15, Rule 15.03 states:
A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. [emphasis ours]
The relationship between a lawyer and his client should ideally be imbued with the highest level of trust and confidence. Necessity and public interest require that this be so. Part of the lawyers duty
to his client is to avoid representing conflicting interests. He is duty bound to decline professional employment, no matter how attractive the fee offered may be, if its acceptance involves a violation of
the proscription against conflict of interest, or any of the rules of professional conduct. Thus, a lawyer may not accept a retainer from a defendant after he has given professional advice to the plaintiff
concerning his claim; nor can he accept employment from another in a matter adversely affecting any interest of his former client. It is his duty to decline employment in any of these and similar
circumstances in view of the rule prohibiting representation of conflicting interests. 78
The proscription against representation of conflicting interest applies "even if the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other, or that
there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated." 79 The sole exception is provided in Canon
15, Rule 15.03 of the Code of Professional Responsibility if there is a written consent from all the parties after full disclosure.

Based on the records, we find substantial evidence to hold the respondent liable for violating Canon 15, Rule 15.03 of the Code of Professional Responsibility. The facts of this case show that the
respondent retained clients who had close dealings with each other. The respondent admits to acting as legal counsel for Cirilo Arellano, the spouses Ylaya and Reynold at one point during the
proceedings in Civil Case No. 2902. 80 Subsequently, he represented only Reynold in the same proceedings, 81 asserting Reynolds ownership over the property against all other claims, including that of
the spouses Ylaya.82
We find no record of any written consent from any of the parties involved and we cannot give the respondent the benefit of the doubt in this regard. We find it clear from the facts of this case that the
respondent retained Reynold as his client and actively opposed the interests of his former client, the complainant. He thus violated Canon 15, Rule 15.03 of the Code of Professional Responsibility.
We affirm the IBP Commissioners finding that the respondent violated Canon 16. The respondent admits to losing certificates of land titles that were entrusted to his care by Reynold. 83 According to
the respondent, the complainant "maliciously retained" the TCTs over the properties sold by Laurentino to Reynold after she borrowed them from his office. 84 Reynold confirms that the TCTs were
taken by the complainant from the respondents law office. 85
The respondent is reminded that his duty under Canon 16 is to "hold in trust all moneys and properties of his client that may come into his possession." Allowing a party to take the original TCTs of
properties owned by another an act that could result in damage should merit a finding of legal malpractice. While we note that it was his legal staff who allowed the complainant to borrow the
TCTs and it does not appear that the respondent was aware or present when the complainant borrowed the TCTs, 86 we nevertheless hold the respondent liable, as the TCTs were entrusted to his care
and custody; he failed to exercise due diligence in caring for his clients properties that were in his custody.
We likewise find the respondent liable for violating Canon 18, Rule 18.03 for neglecting a legal matter entrusted to him. Despite the respondents admission that he represented the complainant and
her late husband in Civil Case No. 2902 and that he purportedly filed a Motion for Leave to Intervene in their behalf, the records show that he never filed such a motion for the spouses Ylaya. The
complainant herself states that she and her late husband were forced to file the Motion for Leave to Intervene on their own behalf. The records of the case, which include the Motion for Leave to
Intervene filed by the spouses Ylaya, support this conclusion. 87
Canon 18, Rule 18.03 requires that a lawyer "shall not neglect a legal matter entrusted to him, and his negligence in connection [therewith] shall render him liable." What amounts to carelessness or
negligence in a lawyers discharge of his duty to his client is incapable of an exact formulation, but the Court has consistently held that the mere failure of a lawyer to perform the obligations due his
client is per se a violation.88
In Canoy v. Ortiz,89 we held that a lawyers failure to file a position paper was per se a violation of Rule 18.03 of the Code of Professional Responsibility. Similar to Canoy, the respondent clearly
failed in this case in his duty to his client when, without any explanation, he failed to file the Motion for Leave to Intervene on behalf of the spouses Ylaya. Under the circumstances, we find that there
was want of diligence; without sufficient justification, this is sufficient to hold the respondent liable for violating Canon 18, Rule 18.03 of the Code of Professional Responsibility.
d. The Complainants Ex Parte Motion to Withdraw the Verified Complaint and to Dismiss the Case and her Affidavit
We are aware of the complainants Ex Parte Motion to Withdraw the Verified Complaint and To Dismiss the Case dated November 14, 2006 90 and her Affidavit91 affirming and confirming the
existence, genuineness and due execution of the Deed of Absolute Sale notarized on March 6, 2000. 92 The complainant explains that the parties have entered into a compromise agreement in Civil
Case No. 2902, and that this disbarment complaint was filed because of a "misunderstanding, miscommunication and improper appreciation of facts"; 93 she erroneously accused the respondent of ill
motives and bad intentions, but after being enlightened, she is convinced that he has no personal or pecuniary interests over the properties in Civil Case No. 2902; that such misunderstanding was due
to her unfamiliarity with the transactions of her late husband during his lifetime. 94 The complainant now pleads for the respondents forgiveness, stating that he has been her and her late husbands
lawyer for over a decade and affirms her trust and confidence in him. 95 We take note that under their Compromise Agreement dated November 14, 2006 for the expropriation case, 96 the complainant
and Reynold equally share the just compensation, which have since increased to P10,000,000.00.
While the submitted Ex Parte Motion to Withdraw the Verified Complaint and to Dismiss the Case and the Affidavit appear to exonerate the respondent, complete exoneration is not the necessary
legal effect as the submitted motion and affidavit are immaterial for purposes of the present proceedings. Section 5, Rule 139-B of the Rules of Court states that, "No investigation shall be interrupted
or terminated by reason of the desistance, settlement, compromise, restitution, withdrawal of charges, or failure of the complainant to prosecute the same."

In Angalan v. Delante,97 despite the Affidavit of Desistance, we disbarred the respondent therein for taking advantage of his clients and for transferring the title of their property to his name. In
Bautista v. Bernabe,98 we revoked the lawyers notarial commission, disqualified him from reappointment as a notary public for two years, and suspended him from the practice of law for one year for
notarizing a document without requiring the affiant to personally appear before him. In this cited case, we said:
Complainants desistance or withdrawal of the complaint does not exonerate respondent or put an end to the administrative proceedings. A case of suspension or disbarment may proceed regardless of
interest or lack of interest of the complainant. What matters is whether, on the basis of the facts borne out by the record, the charge of deceit and grossly immoral conduct has been proven. This rule is
premised on the nature of disciplinary proceedings. A proceeding for suspension or disbarment is not a civil action where the complainant is a plaintiff and the respondent lawyer is a defendant.
Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken and prosecuted solely for the public welfare. They are undertaken for the purpose
of preserving courts of justice from the official ministration of persons unfit to practice in them. The attorney is called to answer to the court for his conduct as an officer of the court. The complainant
or the person who called the attention of the court to the attorneys alleged misconduct is in no sense a party, and has generally no interest in the outcome except as all good citizens may have in the
proper administration of justice.99
In sum, in administrative proceedings against lawyers, the complainants desistance or withdrawal does not terminate the proceedings. This is particularly true in the present case where pecuniary
consideration has been given to the complainant as a consideration for her desistance. We note in this regard that she would receiveP5,000,000.00, or half of the just compensation under the
Compromise Agreement,100 and thus agreed to withdraw all charges against the respondent. 101 From this perspective, we consider the complainants desistance to be suspect; it is not grounded on the
fact that the respondent did not commit any actual misconduct; rather, because of the consideration, the complainant is now amenable to the position of the respondent and/or Reynold.
e. Procedural aspect
We remind all parties that resolutions from the IBP Board of Governors are merely recommendatory and do not attain finality without a final action from this Court. Section 12, Rule 139-B is clear on
this point that:
Section 12. Review and decision by the Board of Governors.
xxxx
(b) If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its
findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action.1wphi1
The Supreme Court exercises exclusive jurisdiction to regulate the practice of law. 102 It exercises such disciplinary functions through the IBP, but it does not relinquish its duty to form its own
judgment. Disbarment proceedings are exercised under the sole jurisdiction of the Supreme Court, and the IBPs recommendations imposing the penalty of suspension from the practice of law or
disbarment are always subject to this Courts review and approval.
The Penalty
In Solidon v. Macalalad,103 we imposed the penalty of suspension of six ( 6) months from the practice of law on the respondent therein for his violation of Canon 18, Rule 18.03 and Canon 16, Rule
16.01 of the Code of Professional Responsibility. In Josefina M. Anion v. Atty. Clemencio Sabitsana, Jr., 104 we suspended the respondent therein from the practice of law for one (1) year, for violating
Canon 15, Rule 15.03 of the Code of Professional Responsibility. Under the circumstances, we find a one (1) year suspension to be a sufficient and appropriate sanction against the respondent.
WHEREFORE, premises considered, we set aside Resolution No. XVIII-.2007-302 dated December 14, 2007 and Resolution No. XIX-2010-545 dated October 8, 2010 of the IBP Board of
Governors, and find respondent Atty. Glenn Carlos Gacott GUILTY of violating Rule 15.03 of Canon 15, Canon 16, and Rule 18.03 of Canon 18 of the Code of Professional Responsibility. As a
penalty, he is SUSPENDED from the practice of law for one (1) year, with a WARNING that a repetition of the same or similar act will be dealt with more severely.
SO ORDERED.

G.R. No. 173188

January 15, 2014

THE CONJUGAL PARTNERSHIP OF THE SPOUSES VICENTE CADAVEDO AND BENITA ARCOY-CADAVEDO (both deceased), substituted by their heirs, namely: HERMINA,
PASTORA, Heirs of FRUCTUOSA,
Heirs of RAQUEL,
EVANGELINE, VICENTE, JR.,
and ARMANDO,
all surnamed CADAVEDO, Petitioners,
vs.
VICTORINO (VIC) T. LACAYA, married to Rosa Legados, Respondents.
DECISION
BRION, J.:
We solve in this Rule 45 petition for review on certiorari 1 the challenge to the October 11, 2005 decision 2 and the May 9, 2006 resolution3 of the Court of Appeals (CA) inPetitioners, CA-G.R. CV No.
56948. The CA reversed and set aside the September 17, 1996 decision 4 of the Regional Trial Court (RTC), Branch 10, of Dipolog City in Civil Case No. 4038, granting in part the complaint for
recovery of possession of property filed by the petitioners, the Conjugal Partnership of the Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo against Atty. Victorino (Vic) T. Lacaya, married to
Rosa Legados (collectively, the respondents).
The Factual Antecedents
The Spouses Vicente Cadavedo and Benita Arcoy-Cadavedo (collectively, the spouses Cadavedo) acquired a homestead grant over a 230,765-square meter parcel of land known as Lot 5415 (subject
lot) located in Gumay, Pian, Zamboanga del Norte. They were issued Homestead Patent No. V-15414 on March 13, 1953andOriginal Certificate of Title No. P-376 on July 2, 1953.On April30, 1955,
the spouses Cadavedo sold the subject lot to the spouses Vicente Ames and Martha Fernandez (the spouses Ames) Transfer Certificate of Title (TCT) No. T-4792 was subsequently issued in the name
of the spouses Ames.
The present controversy arose when the spouses Cadavedo filed an action 5 before the RTC(then Court of First Instance) of Zamboanga City against the spouses Ames for sum of money and/or voiding
of contract of sale of homestead after the latter failed to pay the balance of the purchase price. The spouses Cadavedo initially engaged the services of Atty. Rosendo Bandal who, for health reasons,
later withdrew from the case; he was substituted by Atty. Lacaya.
On February 24, 1969, Atty. Lacaya amended the complaint to assert the nullity of the sale and the issuance of TCT No. T-4792 in the names of the spouses Ames as gross violation of the public land
law. The amended complaint stated that the spouses Cadavedo hired Atty. Lacaya on a contingency fee basis. The contingency fee stipulation specifically reads:

10. That due to the above circumstances, the plaintiffs were forced to hire a lawyer on contingent basis and if they become the prevailing parties in the case at bar, they will pay the sum of P2,000.00
for attorneys fees.6
In a decision dated February 1, 1972, the RTC upheld the sale of the subject lot to the spouses Ames. The spouses Cadavedo, thru Atty. Lacaya, appealed the case to the CA.
On September 18, 1975, and while the appeal before the CAin Civil Case No. 1721was pending, the spouses Ames sold the subject lot to their children. The spouses Ames TCT No. T-4792 was
subsequently cancelled and TCT No. T-25984was issued in their childrens names. On October 11, 1976, the spouses Ames mortgaged the subject lot with the Development Bank of the Philippines
(DBP) in the names of their children.
On August 13, 1980, the CA issued itsdecision in Civil Case No. 1721,reversing the decision of the RTC and declaring the deed of sale, transfer of rights, claims and interest to the spouses Ames null
and void ab initio. It directed the spouses Cadavedo to return the initial payment and ordered the Register of Deeds to cancel the spouses Ames TCT No. T-4792 and to reissue another title in the
name of the spouses Cadavedo. The case eventually reached this Court via the spouses Ames petition for review on certiorari which this Court dismissed for lack of merit.
Meanwhile, the spouses Ames defaulted in their obligation with the DBP. Thus, the DBP caused the publication of a notice of foreclosure sale of the subject lot as covered by TCT No. T-25984(under
the name of the spouses Ames children). Atty. Lacaya immediately informed the spouses Cadavedo of the foreclosure sale and filed an Affidavit of Third Party Claim with the Office of the Provincial
Sheriff on September 14, 1981.
With the finality of the judgment in Civil Case No. 1721,Atty. Lacaya filed on September 21, 1981 a motion for the issuance of a writ of execution.
On September 23, 1981,and pending the RTCs resolution of the motion for the issuance of a writ of execution, the spouses Ames filed a complaint 7 before the RTC against the spouses Cadavedo for
Quieting of Title or Enforcement of Civil Rights due Planters in Good Faith with prayer for Preliminary Injunction. The spouses Cadavedo, thru Atty. Lacaya, filed a motion to dismiss on the ground
of res judicata and to cancel TCT No. T-25984 (under the name of the spouses Ames children).
On October 16, 1981, the RTC granted the motion for the issuance of a writ of execution in Civil Case No. 1721,andthe spouses Cadavedo were placed in possession of the subject lot on October 24,
1981. Atty. Lacaya asked for one-half of the subject lot as attorneys fees. He caused the subdivision of the subject lot into two equal portions, based on area, and selected the more valuable and
productive half for himself; and assigned the other half to the spouses Cadavedo.
Unsatisfied with the division, Vicente and his sons-in-law entered the portion assigned to the respondents and ejected them. The latter responded by filing a counter-suit for forcible entry before the
Municipal Trial Court (MTC); the ejectment case was docketed as Civil Case No. 215. This incident occurred while Civil Case No. 3352was pending.
On May 13, 1982, Vicente andAtty. Lacaya entered into an amicable settlement (compromise agreement) 8 in Civil Case No. 215 (the ejectment case), re-adjusting the area and portion obtained by
each. Atty. Lacaya acquired 10.5383 hectares pursuant to the agreement. The MTC approved the compromise agreementin a decision dated June 10, 1982.
Meanwhile, on May 21, 1982, the spouses Cadavedo filed before the RTC an action against the DBP for Injunction; it was docketed as Civil Case No. 3443 (Cadavedo v. DBP).The RTC subsequently
denied the petition, prompting the spouses Cadavedo to elevate the case to the CAvia a petition for certiorari. The CA dismissed the petition in its decision of January 31, 1984.
The records do not clearly disclose the proceedings subsequent to the CA decision in Civil Case No. 3443. However, on August 18, 1988, TCT No. 41051was issued in the name of the spouses
Cadavedo concerning the subject lot.
On August 9, 1988, the spouses Cadavedo filed before the RTC an action 9 against the respondents, assailing the MTC-approved compromise agreement. The case was docketed as Civil Case No. 4038
and is the root of the present case. The spouses Cadavedo prayed, among others, that the respondents be ejected from their one-half portion of the subject lot; that they be ordered to render an
accounting of the produce of this one-half portion from 1981;and that the RTC fix the attorneys fees on a quantum meruit basis, with due consideration of the expenses that Atty. Lacaya incurred
while handling the civil cases.

During the pendency of Civil Case No. 4038, the spouses Cadavedo executed a Deed of Partition of Estate in favor of their eight children. Consequently, TCT No. 41051 was cancelled and TCT No.
41690 was issued in the names of the latter. The records are not clear on the proceedings and status of Civil Case No. 3352.
The Ruling of the RTC
In the September 17, 1996 decision10 in Civil Case No. 4038, the RTC declared the contingent fee of 10.5383 hectares as excessive and unconscionable. The RTC reduced the land area to 5.2691
hectares and ordered the respondents to vacate and restore the remaining 5.2692hectares to the spouses Cadavedo.
The RTC noted that, as stated in the amended complaint filed by Atty. Lacaya, the agreed attorneys fee on contingent basis was P2,000.00. Nevertheless, the RTC also pointed out that the parties
novated this agreement when they executed the compromise agreement in Civil Case No. 215 (ejectment case), thereby giving Atty. Lacaya one-half of the subject lot. The RTC added that Vicentes
decision to give Atty. Lacaya one-half of the subject lot, sans approval of Benita, was a valid act of administration and binds the conjugal partnership. The RTC reasoned out that the disposition
redounded to the benefit of the conjugal partnership as it was done precisely to remunerate Atty. Lacaya for his services to recover the property itself.
These considerations notwithstanding, the RTC considered the one-half portion of the subject lot, as Atty. Lacayas contingent fee,excessive, unreasonable and unconscionable. The RTC was
convinced that the issues involved in Civil Case No. 1721were not sufficiently difficult and complicated to command such an excessive award; neither did it require Atty. Lacaya to devote much of his
time or skill, or to perform extensive research.
Finally, the RTC deemed the respondents possession, prior to the judgment, of the excess portion of their share in the subject lot to be in good faith. The respondents were thus entitled to receive its
fruits.
On the spouses Cadavedos motion for reconsideration, the RTC modified the decision in its resolution 11 dated December 27, 1996. The RTC ordered the respondents to account for and deliver the
produce and income, valued at 7,500.00 per annum, of the 5.2692hectares that the RTC ordered the spouses Amesto restore to the spouses Cadavedo, from October 10, 1988 until final restoration of
the premises.
The respondents appealed the case before the CA.
The Ruling of the CA
In its decision12 dated October 11, 2005, the CA reversed and set aside the RTCs September 17, 1996 decision and maintained the partition and distribution of the subject lot under the compromise
agreement. In so ruling, the CA noted the following facts: (1) Atty. Lacaya served as the spouses Cadavedos counsel from 1969 until 1988,when the latter filed the present case against Atty. Lacaya;
(2) during the nineteen (19) years of their attorney-client relationship, Atty. Lacaya represented the spouses Cadavedo in three civil cases Civil Case No. 1721, Civil Case No. 3352, and Civil Case
No. 3443; (3) the first civil case lasted for twelve years and even reached this Court, the second civil case lasted for seven years, while the third civil case lasted for six years and went all the way to
the CA;(4) the spouses Cadavedo and Atty. Lacaya entered into a compromise agreement concerning the division of the subject lot where Atty. Lacaya ultimately agreed to acquire a smaller portion;
(5) the MTC approved the compromise agreement; (6) Atty. Lacaya defrayed all of the litigation expenses in Civil Case No. 1721; and (7) the spouses Cadavedo expressly recognized that Atty. Lacaya
served them in several cases.
Considering these established facts and consistent with Canon 20.01 of the Code of Professional Responsibility (enumerating the factors that should guide the determination of the lawyers fees), the
CA ruled that the time spent and the extent of the services Atty. Lacaya rendered for the spouses Cadavedo in the three cases, the probability of him losing other employment resulting from his
engagement, the benefits resulting to the spouses Cadavedo, and the contingency of his fees justified the compromise agreement and rendered the agreed fee under the compromise agreement
reasonable.
The Petition
In the present petition, the petitioners essentially argue that the CA erred in: (1) granting the attorneys fee consisting of one-half or 10.5383 hectares of the subject lot to Atty. Lacaya, instead of
confirming the agreed contingent attorneys fees of 2,000.00; (2) not holding the respondents accountable for the produce, harvests and income of the 10.5383-hectare portion (that they obtained

from the spouses Cadavedo) from 1988 up to the present; and (3) upholding the validity of the purported oral contract between the spouses Cadavedo and Atty. Lacaya when it was champertous and
dealt with property then still subject of Civil Case No. 1721. 13
The petitioners argue that stipulations on a lawyers compensation for professional services, especially those contained in the pleadings filed in courts, control the amount of the attorneys fees to
which the lawyer shall be entitled and should prevail over oral agreements. In this case, the spouses Cadavedo and Atty. Lacaya agreed that the latters contingent attorneys fee was P2,000.00 in cash,
not one-half of the subject lot. This agreement was clearly stipulated in the amended complaint filed in Civil Case No. 1721. Thus, Atty. Lacaya is bound by the expressly stipulated fee and cannot
insist on unilaterally changing its terms without violating their contract.
The petitioners add that the one-half portion of the subject lot as Atty. Lacayas contingent attorneys fee is excessive and unreasonable. They highlight the RTCs observations and argue that the issues
involved in Civil Case No. 1721, pursuant to which the alleged contingent fee of one-half of the subject lot was agreed by the parties, were not novel and did not involve difficult questions of law;
neither did the case require much of Atty. Lacayas time, skill and effort in research. They point out that the two subsequent civil cases should not be considered in determining the reasonable
contingent fee to which Atty. Lacaya should be entitled for his services in Civil Case No. 1721,as those cases had not yet been instituted at that time. Thus, these cases should not be considered in
fixing the attorneys fees. The petitioners also claim that the spouses Cadavedo concluded separate agreements on the expenses and costs for each of these subsequent cases, and that Atty. Lacaya did
not even record any attorneys lien in the spouses Cadavedos TCT covering the subject lot.
The petitioners further direct the Courts attention to the fact that Atty. Lacaya,in taking over the case from Atty. Bandal, agreed to defray all of the litigation expenses in exchange for one-half of the
subject lot should they win the case. They insist that this agreement is a champertous contract that is contrary to public policy, prohibited by law for violation of the fiduciary relationship between a
lawyer and a client.
Finally, the petitioners maintain that the compromise agreement in Civil Case No. 215 (ejectment case) did not novate their original stipulated agreement on the attorneys fees. They reason that Civil
Case No. 215 did not decide the issue of attorneys fees between the spouses Cadavedo and Atty. Lacaya for the latters services in Civil Case No. 1721.
The Case for the Respondents
In their defense,14 the respondents counter that the attorneys fee stipulated in the amended complaint was not the agreed fee of Atty. Lacaya for his legal services. They argue that the questioned
stipulation for attorneys fees was in the nature of a penalty that, if granted, would inure to the spouses Cadavedo and not to Atty. Lacaya.
The respondents point out that: (1) both Vicente and Atty. Lacaya caused the survey and subdivision of the subject lot immediately after the spouses Cadavedo reacquired its possession with the RTCs
approval of their motion for execution of judgment in Civil Case No. 1721; (2) Vicente expressly ratified and confirmed the agreement on the contingent attorneys fee consisting of one-half of the
subject lot; (3) the MTC in Civil Case No. 215 (ejectment case) approved the compromise agreement; (4) Vicente is the legally designated administrator of the conjugal partnership, hence the
compromise agreement ratifying the transfer bound the partnership and could not have been invalidated by the absence of Benitas acquiescence; and (5) the compromise agreement merely inscribed
and ratified the earlier oral agreement between the spouses Cadavedo and Atty. Lacaya which is not contrary to law, morals, good customs, public order and public policy.
While the case is pending before this Court, Atty. Lacaya died. 15 He was substituted by his wife -Rosa -and their children Victoriano D.L. Lacaya, Jr., Rosevic Lacaya-Ocampo, Reymar L. Lacaya,
Marcelito L. Lacaya, Raymundito L. Lacaya, Laila Lacaya-Matabalan, Marivic Lacaya-Barba, Rosalie L. Lacaya and Ma. Vic-Vic Lacaya-Camaongay. 16
The Courts Ruling
We resolve to GRANT the petition.
The subject lot was the core of four successive and overlapping cases prior to the present controversy. In three of these cases, Atty. Lacaya stood as the spouses Cadavedos counsel. For ease of
discussion, we summarize these cases (including the dates and proceedings pertinent to each) as follows:
Civil Case No. 1721 Cadavedo v. Ames (Sum of money and/or voiding of contract of sale of homestead), filed on January 10, 1967. The writ of execution was granted on October 16, 1981.

Civil Case No. 3352 Ames v. Cadavedo (Quieting of Title and/or Enforcement of Civil Rights due Planters in Good Faith with Application for Preliminary injunction), filed on September 23, 1981.
Civil Case No. 3443 Cadavedo v. DBP (Action for Injunction with Preliminary Injunction), filed on May 21, 1982.
Civil Case No. 215 Atty. Lacaya v. Vicente Cadavedo, et. al. (Ejectment Case), filed between the latter part of 1981 and early part of 1982. The parties executed the compromise agreement on May
13, 1982.
Civil Case No. 4038 petitioners v. respondents (the present case).
The
consisting
lot
to recover possession

agreement

on

of
is

attorneys

one-half
void;

of
the

fee
subject
entitled

the
petitioners

are

The core issue for our resolution is whether the attorneys fee consisting of one-half of the subject lot is valid and reasonable, and binds the petitioners. We rule in the NEGATIVE for the reasons
discussed below.
A.
a
over
half of the subject lot

The
contingent
the

written
fee
oral

agreement
of P2,000.00
agreement

providing
should
providing

for

for
prevail
one-

The spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of P2,000.00 and not, as asserted by the latter, one-half of the subject lot. The stipulation contained in the amended complaint filed
by Atty. Lacaya clearly stated that the spouses Cadavedo hired the former on a contingency basis; the Spouses Cadavedo undertook to pay their lawyer P2,000.00 as attorneys fees should the case be
decided in their favor.
Contrary to the respondents contention, this stipulation is not in the nature of a penalty that the court would award the winning party, to be paid by the losing party. The stipulation is a representation
to the court concerning the agreement between the spouses Cadavedo and Atty. Lacaya, on the latters compensation for his services in the case; it is not the attorneys fees in the nature of damages
which the former prays from the court as an incident to the main action.
At this point, we highlight that as observed by both the RTC and the CA and agreed as well by both parties, the alleged contingent fee agreement consisting of one-half of the subject lot was not
reduced to writing prior to or, at most, at the start of Atty. Lacayas engagement as the spouses Cadavedos counsel in Civil Case No. 1721.An agreement between the lawyer and his client, providing
for the formers compensation, is subject to the ordinary rules governing contracts in general. As the rules stand, controversies involving written and oral agreements on attorneys fees shall be
resolved in favor of the former.17 Hence, the contingency fee of P2,000.00 stipulated in the amended complaint prevails over the alleged oral contingency fee agreement of one-half of the subject lot.
B.
the
awarding
lot, is champertous

The
spouses
the

contingent
Cadavedo
latter

fee

agreement
Atty.

and
one-half

of

the

between
Lacaya,
subject

Granting arguendo that the spouses Cadavedo and Atty. Lacaya indeed entered into an oral contingent fee agreement securing to the latter one-half of the subject lot, the agreement is nevertheless
void.
In their account, the respondents insist that Atty. Lacaya agreed to represent the spouses Cadavedo in Civil Case No. 1721 and assumed the litigation expenses, without providing for reimbursement,
in exchange for a contingency fee consisting of one-half of the subject lot. This agreement is champertous and is contrary to public policy. 18

Champerty, along with maintenance (of which champerty is an aggravated form), is a common law doctrine that traces its origin to the medieval period. 19 The doctrine of maintenance was directed
"against wanton and in officious intermeddling in the disputes of others in which the intermeddler has no interest whatever, and where the assistance rendered is without justification or
excuse."20 Champerty, on the other hand, is characterized by "the receipt of a share of the proceeds of the litigation by the intermeddler." 21 Some common law court decisions, however, add a second
factor in determining champertous contracts, namely, that the lawyer must also, "at his own expense maintain, and take all the risks of, the litigation." 22
The doctrines of champerty and maintenance were created in response "to medieval practice of assigning doubtful or fraudulent claims to persons of wealth and influence in the expectation that such
individuals would enjoy greater success in prosecuting those claims in court, in exchange for which they would receive an entitlement to the spoils of the litigation." 23 "In order to safeguard the
administration of justice, instances of champerty and maintenance were made subject to criminal and tortuous liability and a common law rule was developed, striking down champertous agreements
and contracts of maintenance as being unenforceable on the grounds of public policy." 24
In this jurisdiction, we maintain the rules on champerty, as adopted from American decisions, for public policy considerations. 25 As matters currently stand, any agreement by a lawyer to "conduct the
litigation in his own account, to pay the expenses thereof or to save his client therefrom and to receive as his fee a portion of the proceeds of the judgment is obnoxious to the law." 26 The rule of the
profession that forbids a lawyer from contracting with his client for part of the thing in litigation in exchange for conducting the case at the lawyers expense is designed to prevent the lawyer from
acquiring an interest between him and his client. To permit these arrangements is to enable the lawyer to "acquire additional stake in the outcome of the action which might lead him to consider his
own recovery rather than that of his client or to accept a settlement which might take care of his interest in the verdict to the sacrifice of that of his client in violation of his duty of undivided fidelity to
his clients cause."27
In Bautista v. Atty. Gonzales,28 the Court struck down the contingent fee agreement between therein respondent Atty. Ramon A. Gonzales and his client for being contrary to public policy. There, the
Court held that an reimbursement of litigation expenses paid by the former is against public policy, especially if the lawyer has agreed to carry on the action at his expense in consideration of some
bargain to have a part of the thing in dispute. It violates the fiduciary relationship between the lawyer and his client. 29
In addition to its champertous character, the contingent fee arrangement in this case expressly transgresses the Canons of Professional Ethics and, impliedly, the Code of Professional
Responsibility.30 Under Rule 42 of the Canons of Professional Ethics, a lawyer may not properly agree with a client that the lawyer shall pay or beat the expense of litigation. 31 The same reasons
discussed above underlie this rule.
C.
one-half
and unconscionable

The
of

attorneys
the

fee
subject

lot

consisting
is

of
excessive

We likewise strike down the questioned attorneys fee and declare it void for being excessive and unconscionable. 1wphi1 The contingent fee of one-half of the subject lot was allegedly agreed to
secure the services of Atty. Lacaya in Civil Case No. 1721.Plainly, it was intended for only one action as the two other civil cases had not yet been instituted at that time. While Civil Case No. 1721
took twelve years to be finally resolved, that period of time, as matters then stood, was not a sufficient reason to justify a large fee in the absence of any showing that special skills and additional work
had been involved. The issue involved in that case, as observed by the RTC(and with which we agree), was simple and did not require of Atty. Lacaya extensive skill, effort and research. The issue
simply dealt with the prohibition against the sale of a homestead lot within five years from its acquisition.
That Atty. Lacaya also served as the spouses Cadavedos counsel in the two subsequent cases did not and could not otherwise justify an attorneys fee of one-half of the subject lot. As assertedby the
petitioners, the spouses Cadavedo and Atty. Lacaya made separate arrangements for the costs and expenses foreach of these two cases. Thus, the expenses for the two subsequent cases had been
considered and taken cared of Based on these considerations, we therefore find one-half of the subject lot as attorneys fee excessive and unreasonable.
D.
the
Article 1491 (5) of the Civil Code

Atty.

Lacayas
one-half

acquisition
portion

of
contravenes

Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by purchase or assignment, the property that has been the subject of litigation in which they have taken part by virtue of their
profession.32 The same proscription is provided under Rule 10 of the Canons of Professional Ethics. 33

A thing is in litigation if there is a contest or litigation over it in court or when it is subject of the judicial action. 34Following this definition, we find that the subject lot was still in litigation when Atty.
Lacaya acquired the disputed one-half portion. We note in this regard the following established facts:(1)on September 21, 1981, Atty. Lacaya filed a motion for the issuance of a writ of execution in
Civil Case No. 1721; (2) on September 23, 1981, the spouses Ames filed Civil Case No. 3352 against the spouses Cadavedo; (3)on October 16, 1981, the RTC granted the motion filed for the issuance
of a writ of execution in Civil Case No. 1721 and the spouses Cadavedo took possession of the subject lot on October 24, 1981; (4) soon after, the subject lot was surveyed and subdivided into two
equal portions, and Atty. Lacaya took possession of one of the subdivided portions; and (5) on May 13, 1982, Vicente and Atty. Lacaya executed the compromise agreement.
From these timelines, whether by virtue of the alleged oral contingent fee agreement or an agreement subsequently entered into, Atty. Lacaya acquired the disputed one-half portion (which was after
October 24, 1981) while Civil Case No. 3352 and the motion for the issuance of a writ of execution in Civil Case No. 1721were already pending before the lower courts. Similarly, the compromise
agreement, including the subsequent judicial approval, was effected during the pendency of Civil Case No. 3352. In all of these, the relationship of a lawyer and a client still existed between Atty.
Lacaya and the spouses Cadavedo.
Thus, whether we consider these transactions the transfer of the disputed one-half portion and the compromise agreement independently of each other or resulting from one another, we find them to
be prohibited and void35by reason of public policy.36 Under Article 1409 of the Civil Code, contracts which are contrary to public policy and those expressly prohibited or declared void by law are
considered in existent and void from the beginning. 37
What did not escape this Courts attention is the CAs failure to note that the transfer violated the provisions of Article 1491(5) of the Civil Code, although it recognized the concurrence of the transfer
and the execution of the compromise agreement with the pendency of the two civil cases subsequent to Civil Case No. 1721. 38 In reversing the RTC ruling, the CA gave weight to the compromise
agreement and in so doing, found justification in the unproved oral contingent fee agreement.
While contingent fee agreements are indeed recognized in this jurisdiction as a valid exception to the prohibitions under Article 1491(5) of the Civil Code, 39 contrary to the CAs position, however, this
recognition does not apply to the present case. A contingent fee contract is an agreement in writing where the fee, often a fixed percentage of what may be recovered in the action, is made to depend
upon the success of the litigation.40 The payment of the contingent fee is not made during the pendency of the litigation involving the clients property but only after the judgment has been rendered in
the case handled by the lawyer.41
In the present case, we reiterate that the transfer or assignment of the disputed one-half portion to Atty. Lacaya took place while the subject lot was still under litigation and the lawyer-client
relationship still existed between him and the spouses Cadavedo. Thus, the general prohibition provided under Article 1491 of the Civil Code, rather than the exception provided in jurisprudence,
applies. The CA seriously erred in upholding the compromise agreement on the basis of the unproved oral contingent fee agreement.
Notably, Atty. Lacaya, in undertaking the spouses Cadavedos cause pursuant to the terms of the alleged oral contingent fee agreement, in effect, became a co-proprietor having an equal, if not more,
stake as the spouses Cadavedo. Again, this is void by reason of public policy; it undermines the fiduciary relationship between him and his clients. 42
E.The
validate
agreement;
written contingent fee agreement

compromise
the
neither

agreement
void

oral
did

it

could
contingent
supersede

not
fee
the

The compromise agreement entered into between Vicente and Atty. Lacaya in Civil Case No. 215 (ejectment case) was intended to ratify and confirm Atty. Lacayas acquisition and possession of the
disputed one-half portion which were made in violation of Article 1491 (5) of the Civil Code. As earlier discussed, such acquisition is void; the compromise agreement, which had for its object a void
transaction, should be void.
A contract whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy is in existent and void from the beginning. 43 It can never be ratified 44 nor the action or
defense for the declaration of the in existence of the contract prescribe; 45 and any contract directly resulting from such illegal contract is likewise void and in existent. 46
Consequently, the compromise agreement did not supersede the written contingent fee agreement providing for attorneys fee of P2,000.00; neither did it preclude the petitioners from questioning its
validity even though Vicente might have knowingly and voluntarily acquiesced thereto and although the MTC approved it in its June 10, 1982 decision in the ejectment case. The MTC could not have

acquired jurisdiction over the subject matter of the void compromise agreement; its judgment in the ejectment case could not have attained finality and can thus be attacked at any time. Moreover, an
ejectment case concerns itself only with the issue of possession de facto; it will not preclude the filing of a separate action for recovery of possession founded on ownership. Hence, contrary to the
CAs position, the petitionersin filing the present action and praying for, among others, the recovery of possession of the disputed one-half portion and for judicial determination of the reasonable fees
due Atty. Lacaya for his services were not barred by the compromise agreement.
Atty. Lacaya is entitled to receive attorneys fees on a quantum meruit basis
In view of their respective assertions and defenses, the parties, in effect, impliedly set aside any express stipulation on the attorneys fees, and the petitioners, by express contention, submit the
reasonableness of such fees to the courts discretion. We thus have to fix the attorneys fees on a quantum meruit basis.
"Quantum meruitmeaning as much as he deservesis used as basis for determining a lawyers professional fees in the absence of a contract x x x taking into account certain factors in fixing the
amount of legal fees."47 "Its essential requisite is the acceptance of the benefits by one sought to be charged for the services rendered under circumstances as reasonably to notify him that the lawyer
performing the task was expecting to be paid compensation" 48 for it. The doctrine of quantum meruit is a device to prevent undue enrichment based on the equitable postulate that it is unjust for a
person to retain benefit without paying for it.49
Under Section 24, Rule 138 of the Rules of Court 50 and Canon 20 of the Code of Professional Responsibility, 51factors such as the importance of the subject matter of the controversy, the time spent
and the extent of the services rendered, the customary charges for similar services, the amount involved in the controversy and the benefits resulting to the client from the service, to name a few, are
considered in determining the reasonableness of the fees to which a lawyer is entitled.
In the present case, the following considerations guide this Court in considering and setting Atty. Lacayas fees based on quantum meruit: (1) the questions involved in these civil cases were not novel
and did not require of Atty. Lacaya considerable effort in terms of time, skill or the performance of extensive research; (2) Atty. Lacaya rendered legal services for the Spouses Cadavedo in three civil
cases beginning in 1969 until 1988 when the petitioners filed the instant case; (3) the first of these civil cases (Cadavedo v. Ames) lasted for twelve years and reaching up to this Court; the second
(Ames v. Cadavedo) lasted for seven years; and the third (Cadavedo and Lacaya v. DBP) lasted for six years, reaching up to the CA; and (4) the property subject of these civil cases is of a considerable
size of 230,765 square meters or 23.0765 hectares.
All things considered, we hold as fair and equitable the RTCs considerations in appreciating the character of the services that Atty. Lacaya rendered in the three cases, subject to modification on
valuation. We believe and so hold that the respondents are entitled to two (2) hectares (or approximately one-tenth [1/10] of the subject lot), with the fruits previously received from the disputed onehalf portion, as attorneys fees. They shall return to the petitioners the remainder of the disputed one-half portion.
The allotted portion of the subject lot properly recognizes that litigation should be for the benefit of the client, not the lawyer, particularly in a legal situation when the law itself holds clear and express
protection to the rights of the client to the disputed property (a homestead lot). Premium consideration, in other words, is on the rights of the owner, not on the lawyer who only helped the owner
protect his rights. Matters cannot be the other way around; otherwise, the lawyer does indeed effectively acquire a property right over the disputed property. If at all, due recognition of parity between
a lawyer and a client should be on the fruits of the disputed property, which in this case, the Court properly accords.
WHEREFORE, in view of these considerations, we hereby GRANT the petition. We AFFIRM the decision dated September 17, 1996 and the resolution dated December 27, 1996of the Regional Trial
Court of Dipolog City, Branch 10,in Civil Case No. 4038, with the MODIFICATION that the respondents, the spouses Victorino (Vic) T. Lacaya and Rosa Legados, are entitled to two (2) hectares (or
approximately one-tenth [1/10] of the subject lot) as attorneys fees. The fruits that the respondents previously received from the disputed one-half portion shall also form part of the attorneys fees.
We hereby ORDER the respondents to return to the petitioners the remainder of the 10.5383-hectare portion of the subject lot that Atty. Vicente Lacaya acquired pursuant to the compromise
agreement.
SO ORDERED.

[A.M.
MARIO

No.
S.

MARIVELES, Complainant,

3294.

February
v.

ATTY.

17,
ODILON

C.

1993.]
MALLARI, Respondents.

Rodolfo B. Ta-asan for complainant.

SYLLABUS

1. LEGAL ETHICS; LAWYERS; CODE OF PROFESSIONAL RESPONSIBILITY; VIOLATION THEREOF FOR OBTAINING EXTENSIONS TO FILE BRIEF AND LETTING PERIOD TO
LAPSE WITHOUT SUFFICIENT EXPLANATION; DISBARMENT, PROPER PENALTY. On January 11, 1989, Mario S. Mariveles of Davao City filed an administrative complaint against his
former counsel, Attorney Odilon C. Mallari, whose legal services he had engaged in 1984 to handle his defense in Criminal Case No. 6608 of the Regional Trial Court of Davao City where he was
charged with violation of B.P. Blg. 22, otherwise known as the Bouncing Checks Law. After an adverse decision was rendered on December 26, 1986, Mariveles instructed Attorney Mallari to appeal
the trial courts decision to the Court of Appeals, which the respondent did. However, in the Court of Appeals, despite numerous extensions of time, totalling 245 days, which he obtained from the
Court, Attorney Mallari failed to file the appellants brief, resulting in the dismissal of the appeal. Complainant discovered his lawyers desertion only when he was subpoenaed by the trial court to
appear before it for the execution of the decision which had become final. On February 15, 1989, the administrative complaint was referred to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation, thus: "In sum, what was committed by the respondent is a blatant violation of our Code of Professional Responsibility. . . . "Rule 12.03 A lawyer shall
not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so." Rule 18.03 A
lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. "Suffice it to state that a lawyer has no business practicing his profession if
in the course of that practice, he will eventually wreck and destroy the future and reputation of his client and thus disgrace the law profession. The last thing that his peers in the law profession and the
Integrated Bar of the Philippines would do is to disrobe a member of the profession, for he has worked for the attainment of his career burning the midnight oil throughout school and passing the bar.
The undersigned, however, could not find any mitigating circumstances to recommend a lighter penalty. Disbarment is the only recourse to remove a rotten apple if only to instill and maintain the
respect and confidence of all and sundry to the noble profession." The Court concurs with the above observations. The respondent demonstrated not only appalling indifference and lack of
responsibility to the courts and his client but also a shameless disregard for his duties as a lawyer. He is unfit for membership in this noble profession.

DECISION

PER CURIAM, J.:

On January 11, 1989, Mario S. Mariveles of Davao City filed an administrative complaint against his former counsel, Attorney Odilon C. Mallari, whose legal services he had engaged in 1984 to
handle his defense in Criminal Case No. 6608 of the Regional Trial Court of Davao City where he was charged with violation of B.P. Blg. 22, otherwise known as the Bouncing Checks Law.
After an adverse decision was rendered on December 26, 1986, Mariveles instructed Attorney Mallari to appeal the trial courts decision to the Court of Appeals, which the respondent did.
However, in the Court of Appeals, despite numerous extensions of time, totalling 245 days, which he obtained from the Court, Attorney Mallari failed to file the appellants brief, resulting in the
dismissal
of
the
appeal.
Complainant discovered his lawyers desertion only when he was subpoenaed by the trial court to appear before it for the execution of the decision which had become final.chanrobles law library
Through new counsel, complainant filed a Petition for Reinstatement of Appeal, Cancellation of Entry of Judgment and Admission of Appellants Brief in CA-G.R. CR No. 04482, but it was denied
by
the
appellate
court.
He sought relief in this Court (G.R. No. 85964, "Mario S. Mariveles v. Court of Appeals, Et. Al.") which, on March 13, 1989, granted his petition, ordered the Court of Appeals to cancel the entry of
judgment in CA-G.R. CR No. 04482, reinstate the appeal, and admit the appellants brief filed by his new counsel. The Court said:jgc:chanrobles.com.ph
"It is true that the failure of counsel to file brief for the appellant which led to the dismissal of the appeal does not necessarily warrant the reinstatement thereof. However, where the negligence of
counsel is so great that the rights of the accused are prejudiced and he is prevented from presenting his defense, especially where the appellant raises issues which place in serious doubt the correctness
of the trial courts judgment of conviction, the aforesaid rule must not be rigidly applied to avoid a miscarriage of justice. These teachings of jurisprudence are present in the case at bar.
"On the first aspect, the failure of petitioners former counsel to file the brief, for reasons unknown and without any cause imputable to petitioner, amounted to deliberate abandonment of his clients
interest
and
justifies
reinstatement
with
consequent
due
consideration
of
petitioners
appeal
through
a
new
counsel."
(pp.
106-107,
Rollo.)
On

February

15,

1989,

the

administrative

complaint

was

referred

to

the

Integrated

Bar

of

the

Philippines

(IBP)

for

investigation,

report

and

recommendation.

The IBPs Committee on Bar Discipline investigated the complaint and held hearings. On March 3, 1992, it submitted to this Court a report/resolution finding:chanrob1es virtual 1aw library
In
"x

sum,
x

what

was

committed

by

the

respondent

is

blatant

violation

of

our

Code

of

Professional

Responsibility.

"Rule 12.03 A lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure
to
do
so.
"Rule

18.03

lawyer

shall

not

neglect

legal

matter

entrusted

to

him

and

his

negligence

in

connection

therewith

shall

render

him

liable.

"Suffice it to state that a lawyer has no business practicing his profession if in the course of that practice, he will eventually wreck and destroy the future and reputation of his client and thus disgrace
the law profession. The last thing that his peers in the law profession and the Integrated Bar of the Philippines would do is to disrobe a member of the profession, for he has worked for the attainment
of his career burning the midnight oil throughout school and passing the bar. The undersigned, however, could not find any mitigating circumstances to recommend a lighter penalty. Disbarment is the
only recourse to remove a rotten apple if only to instill and maintain the respect and confidence of all and sundry to the noble profession." (pp. 249-250, Rollo.)chanrobles lawlibrary : rednad
The Court concurs with the above observations. The respondent demonstrated not only appalling indifference and lack of responsibility to the courts and his client but also a shameless disregard for
his
duties
as
a
lawyer.
He
is
unfit
for
membership
in
this
noble
profession.
WHEREFORE, the Court finds respondent Attorney Odilon C. Mallari guilty of abandonment and dereliction of duty toward his client and hereby orders him DISBARRED from the legal profession
and to immediately cease and desist from the practice of law. Let the Office of the Court Administrator and the executive Judges of the Ninth, Tenth, Eleventh and Twelfth Judicial Regions, be
furnished
with
copies
of
this
resolution
for
dissemination
to
all
the
courts
in
those
regions.chanrobles
law
library
:
red

SO ORDERED.

A.C. No. 5108

May 26, 2005

ROSA
vs.
ATTY. JULITO D. VITRIOLO, respondent.

F.

MERCADO, complainant,

DECISION
PUNO, J.:
Rosa F. Mercado filed the instant administrative complaint against Atty. Julito D. Vitriolo, seeking his disbarment from the practice of law. The complainant alleged that respondent maliciously
instituted a criminal case for falsification of public document against her, a former client, based on confidential information gained from their attorney-client relationship.
Let us first hearken to the facts.

Complainant is a Senior Education Program Specialist of the Standards Development Division, Office of Programs and Standards while respondent is a Deputy Executive Director IV of the
Commission on Higher Education (CHED).1
Complainant's husband filed Civil Case No. 40537 entitled "Ruben G. Mercado v. Rosa C. Francisco," for annulment of their marriage with the Regional Trial Court (RTC) of Pasig City. This
annulment case had been dismissed by the trial court, and the dismissal became final and executory on July 15, 1992. 2
In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died. On February 7, 1994, respondent entered his appearance before the trial court as collaborating counsel for complainant. 3
On March 16, 1994, respondent filed his Notice of Substitution of Counsel, 4 informing the RTC of Pasig City that he has been appointed as counsel for the complainant, in substitution of Atty. de
Leon.
It also appears that on April 13, 1999, respondent filed a criminal action against complainant before the Office of the City Prosecutor, Pasig City, entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz
F. Mercado," and docketed as I.S. No. PSG 99-9823, for violation of Articles 171 and 172 (falsification of public document) of the Revised Penal Code. 5 Respondent alleged that complainant made
false entries in the Certificates of Live Birth of her children, Angelica and Katelyn Anne. More specifically, complainant allegedly indicated in said Certificates of Live Birth that she is married to a
certain Ferdinand Fernandez, and that their marriage was solemnized on April 11, 1979, when in truth, she is legally married to Ruben G. Mercado and their marriage took place on April 11, 1978.
Complainant denied the accusations of respondent against her. She denied using any other name than "Rosa F. Mercado." She also insisted that she has gotten married only once, on April 11, 1978, to
Ruben G. Mercado.
In addition, complainant Mercado cited other charges against respondent that are pending before or decided upon by other tribunals (1) libel suit before the Office of the City Prosecutor, Pasig
City;6 (2) administrative case for dishonesty, grave misconduct, conduct prejudicial to the best interest of the service, pursuit of private business, vocation or profession without the permission required
by Civil Service rules and regulations, and violations of the "Anti-Graft and Corrupt Practices Act," before the then Presidential Commission Against Graft and Corruption; 7 (3) complaint for
dishonesty, grave misconduct, and conduct prejudicial to the best interest of the service before the Office of the Ombudsman, where he was found guilty of misconduct and meted out the penalty of
one month suspension without pay; 8 and, (4) the Information for violation of Section 7(b)(2) of Republic Act No. 6713, as amended, otherwise known as the Code of Conduct and Ethical Standards
for Public Officials and Employees before the Sandiganbayan. 9
Complainant Mercado alleged that said criminal complaint for falsification of public document (I.S. No. PSG 99-9823) disclosed confidential facts and information relating to the civil case for
annulment, then handled by respondent Vitriolo as her counsel. This prompted complainant Mercado to bring this action against respondent. She claims that, in filing the criminal case for falsification,
respondent is guilty of breaching their privileged and confidential lawyer-client relationship, and should be disbarred.
Respondent filed his Comment/Motion to Dismiss on November 3, 1999 where he alleged that the complaint for disbarment was all hearsay, misleading and irrelevant because all the allegations
leveled against him are subject of separate fact-finding bodies. Respondent claimed that the pending cases against him are not grounds for disbarment, and that he is presumed to be innocent until
proven otherwise.10 He also states that the decision of the Ombudsman finding him guilty of misconduct and imposing upon him the penalty of suspension for one month without pay is on appeal with
the Court of Appeals. He adds that he was found guilty, only of simple misconduct, which he committed in good faith. 11
In addition, respondent maintains that his filing of the criminal complaint for falsification of public documents against complainant does not violate the rule on privileged communication between
attorney and client because the bases of the falsification case are two certificates of live birth which are public documents and in no way connected with the confidence taken during the engagement of
respondent as counsel. According to respondent, the complainant confided to him as then counsel only matters of facts relating to the annulment case. Nothing was said about the alleged falsification
of the entries in the birth certificates of her two daughters. The birth certificates are filed in the Records Division of CHED and are accessible to anyone. 12
In a Resolution dated February 9, 2000, this Court referred the administrative case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. 13
The IBP Commission on Bar Discipline set two dates for hearing but complainant failed to appear in both. Investigating Commissioner Rosalina R. Datiles thus granted respondent's motion to file his
memorandum, and the case was submitted for resolution based on the pleadings submitted by the parties. 14

On June 21, 2003, the IBP Board of Governors approved the report of investigating commissioner Datiles, finding the respondent guilty of violating the rule on privileged communication between
attorney and client, and recommending his suspension from the practice of law for one (1) year.
On August 6, 2003, complainant, upon receiving a copy of the IBP report and recommendation, wrote Chief Justice Hilario Davide, Jr., a letter of desistance. She stated that after the passage of so
many years, she has now found forgiveness for those who have wronged her.
At the outset, we stress that we shall not inquire into the merits of the various criminal and administrative cases filed against respondent. It is the duty of the tribunals where these cases are pending to
determine the guilt or innocence of the respondent.
We also emphasize that the Court is not bound by any withdrawal of the complaint or desistance by the complainant. The letter of complainant to the Chief Justice imparting forgiveness upon
respondent is inconsequential in disbarment proceedings.
We now resolve whether respondent violated the rule on privileged communication between attorney and client when he filed a criminal case for falsification of public document against his former
client.
A brief discussion of the nature of the relationship between attorney and client and the rule on attorney-client privilege that is designed to protect such relation is in order.
In engaging the services of an attorney, the client reposes on him special powers of trust and confidence. Their relationship is strictly personal and highly confidential and fiduciary. The relation is of
such delicate, exacting and confidential nature that is required by necessity and public interest. 15 Only by such confidentiality and protection will a person be encouraged to repose his confidence in an
attorney. The hypothesis is that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice. 16 Thus, the preservation and protection of that relation will
encourage a client to entrust his legal problems to an attorney, which is of paramount importance to the administration of justice. 17 One rule adopted to serve this purpose is the attorney-client
privilege: an attorney is to keep inviolate his client's secrets or confidence and not to abuse them. 18 Thus, the duty of a lawyer to preserve his client's secrets and confidence outlasts the termination of
the attorney-client relationship, 19 and continues even after the client's death. 20 It is the glory of the legal profession that its fidelity to its client can be depended on, and that a man may safely go to a
lawyer and converse with him upon his rights or supposed rights in any litigation with absolute assurance that the lawyer's tongue is tied from ever disclosing it. 21 With full disclosure of the facts of
the case by the client to his attorney, adequate legal representation will result in the ascertainment and enforcement of rights or the prosecution or defense of the client's cause.
Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the factors essential to establish the existence of the privilege, viz:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the
client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be waived. 22
In fine, the factors are as follows:
(1) There exists an attorney-client relationship, or a prospective attorney-client relationship, and it is by reason of this relationship that the client made the communication.
Matters disclosed by a prospective client to a lawyer are protected by the rule on privileged communication even if the prospective client does not thereafter retain the lawyer or the latter declines the
employment.23 The reason for this is to make the prospective client free to discuss whatever he wishes with the lawyer without fear that what he tells the lawyer will be divulged or used against him,
and for the lawyer to be equally free to obtain information from the prospective client. 24
On the other hand, a communication from a (prospective) client to a lawyer for some purpose other than on account of the (prospective) attorney-client relation is not privileged. Instructive is the case
of Pfleider v. Palanca,25 where the client and his wife leased to their attorney a 1,328-hectare agricultural land for a period of ten years. In their contract, the parties agreed, among others, that a
specified portion of the lease rentals would be paid to the client-lessors, and the remainder would be delivered by counsel-lessee to client's listed creditors. The client alleged that the list of creditors
which he had "confidentially" supplied counsel for the purpose of carrying out the terms of payment contained in the lease contract was disclosed by counsel, in violation of their lawyer-client
relation, to parties whose interests are adverse to those of the client. As the client himself, however, states, in the execution of the terms of the aforesaid lease contract between the parties, he furnished
counsel with the "confidential" list of his creditors. We ruled that this indicates that client delivered the list of his creditors to counsel not because of the professional relation then existing between

them, but on account of the lease agreement. We then held that a violation of the confidence that accompanied the delivery of that list would partake more of a private and civil wrong than of a breach
of the fidelity owing from a lawyer to his client.
(2) The client made the communication in confidence.
The mere relation of attorney and client does not raise a presumption of confidentiality. 26 The client must intend the communication to be confidential. 27
A confidential communication refers to information transmitted by voluntary act of disclosure between attorney and client in confidence and by means which, so far as the client is aware, discloses the
information to no third person other than one reasonably necessary for the transmission of the information or the accomplishment of the purpose for which it was given. 28
Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise agreement prepared by a lawyer pursuant to the instruction of his client and delivered to the opposing party, 29 an offer
and counter-offer for settlement,30 or a document given by a client to his counsel not in his professional capacity, 31 are not privileged communications, the element of confidentiality not being
present.32
(3) The legal advice must be sought from the attorney in his professional capacity.33
The communication made by a client to his attorney must not be intended for mere information, but for the purpose of seeking legal advice from his attorney as to his rights or obligations. The
communication must have been transmitted by a client to his attorney for the purpose of seeking legal advice. 34
If the client seeks an accounting service, 35 or business or personal assistance,36 and not legal advice, the privilege does not attach to a communication disclosed for such purpose.
Applying all these rules to the case at bar, we hold that the evidence on record fails to substantiate complainant's allegations. We note that complainant did not even specify the alleged communication
in confidence disclosed by respondent. All her claims were couched in general terms and lacked specificity. She contends that respondent violated the rule on privileged communication when he
instituted a criminal action against her for falsification of public documents because the criminal complaint disclosed facts relating to the civil case for annulment then handled by respondent. She did
not, however, spell out these facts which will determine the merit of her complaint. The Court cannot be involved in a guessing game as to the existence of facts which the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP. Without any testimony from the complainant as to the specific confidential information allegedly divulged by respondent without her
consent, it is difficult, if not impossible to determine if there was any violation of the rule on privileged communication. Such confidential information is a crucial link in establishing a breach of the
rule on privileged communication between attorney and client. It is not enough to merely assert the attorney-client privilege. 37 The burden of proving that the privilege applies is placed upon the party
asserting the privilege.38
IN VIEW WHEREOF, the complaint against respondent Atty. Julito D. Vitriolo is hereby DISMISSED for lack of merit.
SO ORDERED.

CRESENCIO C. MILLA,
Petitioner,

G.R. No. 188726

Present:

- versus -

PEOPLE OF THE PHILIPPINES and MARKET

PURSUITS, INC. represented by CARLO V. LOPEZ,
Respondents.

CARPIO, J.,
Chairperson,
PEREZ,
SERENO,
REYES, and
PERLAS-BERNABE,* JJ.
Promulgated:
January 25, 2012

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
SERENO, J.:
This is a Petition for Certiorari assailing the 22 April 2009 Decision [1] and 8 July 2009 Resolution[2] of the Court of Appeals, affirming the Decision of the trial court finding petitioner
Cresencio C. Milla (Milla) guilty of two counts of estafa through falsification of public documents.
Respondent Carlo Lopez (Lopez) was the Financial Officer of private respondent, Market Pursuits, Inc. (MPI). In March 2003, Milla represented himself as a real estate developer from Ines
Anderson Development Corporation, which was engaged in selling business properties in Makati, and offered to sell MPI a property therein located. For this purpose, he
showed Lopez a photocopy of Transfer Certificate of Title (TCT) No. 216445 registered in the name of spouses Farley and Jocelyn Handog (Sps. Handog), as well as a Special Power of Attorney
purportedly executed by the spouses in favor of Milla. [3] Lopez verified with the Registry of Deeds of Makati and confirmed that the property was indeed registered under the names of Sps. Handog.
Since Lopez was convinced by Millas authority, MPI purchased the property for P2 million, issuing Security Bank and Trust Co. (SBTC) Check No. 154670 in the amount of P1.6 million. After
receiving the check, Milla gave Lopez (1) a notarized Deed of Absolute Sale dated 25 March 2003 executed by Sps. Handog in favor of MPI and (2) an original Owners Duplicate Copy of TCT No.
216445.[4]
Milla then gave Regino Acosta (Acosta), Lopezs partner, a copy of the new Certificate of Title to the property, TCT No. 218777, registered in the name of MPI. Thereafter, it tendered in
favor of Milla SBTC Check No. 15467111 in the amount of P400,000 as payment for the balance.[5]
Milla turned over TCT No. 218777 to Acosta, but did not furnish the latter with the receipts for the transfer taxes and other costs incurred in the transfer of the property. This failure to turn
over the receipts prompted Lopez to check with the Register of Deeds, where he discovered that (1) the Certificate of Title given to them by Milla could not be found therein; (2) there was no transfer
of the property from Sps. Handog to MPI; and (3) TCT No. 218777 was registered in the name of a certain Matilde M. Tolentino. [6]
Consequently, Lopez demanded the return of the amount of P2 million from Milla, who then issued Equitable PCI Check Nos. 188954 and 188955 dated 20 and 23 May 2003, respectively,
in the amount of P1 million each. However, these checks were dishonored for having been drawn against insufficient funds. When Milla ignored the demand letter sent by Lopez, the latter, by virtue

of the authority vested in him by the MPI Board of Directors, filed a Complaint against the former on 4 August 2003. On 27 and 29 October 2003, two Informations for Estafa Thru Falsification of
Public Documents were filed against Milla and were raffled to the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 146 (RTC Br. 146). [7] Milla was accused of having
committed estafa through the falsification of the notarized Deed of Absolute Sale and TCT No. 218777 purportedly issued by the Register of Deeds of Makati, viz:
CRIMINAL CASE NO. 034167
That on or about the 25 th day of March 2003, in the City of Makati, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, a private
individual, did then and there, wilfully, unlawfully and feloniously falsify a document denomindated as Deed of Absolute Sale, duly notarized by Atty. Lope M. Velasco, a
Notary Public for and in the City of Makati, denominated as Doc. No. 297, Page No. 61, Book No. 69, Series of 2003 in his Notarial Register, hence, a public document, by
causing it to appear that the registered owners of the property covered by TCT No. 216445 have sold their land to complainant Market Pursuits, Inc. when in truth and in fact the
said Deed of Absolute Sale was not executed by the owners thereof and after the document was falsified, accused, with intent to defraud complainant Market Pursuits, Inc.
presented the falsified Deed of Sale to complainant, herein represented by Carlo V. Lopez, and complainant believing in the genuineness of the Deed of Absolute Sale paid accused
the amount of P1,600,000.00 as partial payment for the property, to the damage and prejudice of complainant in the aforementioned amount of P1,600,000.00
CONTRARY TO LAW.
CRIMINAL CASE NO. 034168
That on or about the 3rd day of April 2003, in the City of Makati, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, a private
individual, did then and there wilfully, unlawfully and feloniously falsify a document denominated as Transfer Certificate of Title No. 218777 purportedly issued by the Register of
Deeds of Makati City, hence, a public document, by causing it to appear that the lot covered by TCT No. 218777 was already registered in the name of complainant Market
Pursuits, Inc., herein represented by Carlo V. Lopez, when in truth and in fact, as said accused well knew that the Register of Deeds of Makati did not issue TCT No. 218777 in the
name
of
Market
Pursuits
Inc.,
and
after
the
document
was
falsified,
accused
with
intent to defraud complainant and complainant believing in the genuineness of Transfer Certificate of Title No. 218777 paid accused the amount of P400,000.00, to the damage and
prejudice of complainant in the aforementioned amount of P4000,000.00 (sic).
CONTRARY TO LAW.[8]
After the prosecution rested its case, Milla filed, with leave of court, his Demurrer to Evidence. [9] In its Order dated 26 January 2006, RTC Br. 146 denied the demurrer and ordered him to
present evidence, but he failed to do so despite having been granted ample opportunity. [10] Though the court considered his right to present evidence to have been consequently waived, it nevertheless
allowed him to file a memorandum.[11]
In its Joint Decision dated 28 November 2006,[12] RTC Br. 146 found Milla guilty beyond reasonable doubt of two counts of estafa through falsification of public documents, thus:
WHEREFORE, judgment is rendered finding the accused Cresencio Milla guilty beyond reasonable doubt of two (2) counts of estafa through falsification of public
documents. Applying the indeterminate sentence law and considering that the amount involved is more than P22,000,00 this Court should apply the provision that an additional one
(1) year should be imposed for every ten thousand (P10,000.00) pesos in excess of P22,000.00, thus, this Court is constrained to impose the Indeterminate (sic) penalty of four (4)
years, two (2) months one (1) day of prision correccional as minimum to twenty (20) years of reclusion temporal as maximum for each count.
Accused is adjudged to be civilly liable to the private complainant and is ordered pay (sic) complainant the total amount of TWO MILLION (P2,000,000.00) PESOS
with legal rate of interest from the filing of the Information until the same is fully paid and to pay the costs. He is further ordered to pay attorneys fees equivalent to ten (10%) of
the total amount due as and for attorneys fees. A lien on the monetary award is constituted in favor of the government, the private complainant not having paid the required docket
fee prior to the filing of the Information.
SO ORDERED.[13]
On appeal, the Court of Appeals, in the assailed Decision dated 22 April 2009, affirmed the findings of the trial court. [14] In its assailed Resolution dated 8 July 2009, it also denied Millas
subsequent Motion for Reconsideration.[15]
In the instant Petition, Milla alleges that the Decision and the Resolution of the Court of Appeals were not in accordance with law and jurisprudence. He raises the following issues:
I.
Whether the case should be reopened on the ground of negligence of counsel;
II.
Whether the principle of novation is applicable;
III.
Whether the principle of simple loan is applicable;
IV.
Whether the Secretarys Certificate presented by the prosecution is admissible in evidence;

V.
Whether the supposed inconsistent statements of prosecution witnesses cast a doubt on the guilt of petitioner.[16]
In its Comment, MPI argues that (1) Milla was not deprived of due process on the ground of gross negligence of counsel; (2) under the Revised Penal Code, novation is not one of the grounds
for the extinction of criminal liability for estafa; and (3) factual findings of the trial court, when affirmed by the Court of Appeals, are final and conclusive. [17]
On the other hand, in its Comment, the Office of the Solicitor General contends that (1) Milla was accorded due process of law; (2) the elements of the crime charged against him were
established during trial; (3) novation is not a ground for extinction of criminal liability for estafa; (4) the money received by Milla from Lopez was not in the nature of a simple loan or cash advance;
and (5) Lopez was duly authorized by MPI to institute the action. [18]
In his Consolidated Reply, Milla reiterates that the negligence of his former counsel warrants a reopening of the case, wherein he can present evidence to prove that his transaction with MPI was
in the nature of a simple loan.[19]
In the disposition of this case, the following issues must be resolved:
I.
Whether the negligence of counsel deprived Milla of due process of law
II.
Whether the principle of novation can exculpate Milla from criminal liability
III.
Whether the factual findings of the trial court, as affirmed by the appellate court, should be reviewed on appeal
We resolve to deny the Petition.
Milla was not deprived of due process.
Milla argues that the negligence of his former counsel, Atty. Manuel V. Mendoza (Atty. Mendoza), deprived him of due process. Specifically, he states that after the prosecution had rested its
case, Atty. Mendoza filed a Demurrer to Evidence, and that the former was never advised by the latter of the demurrer. Thus, Milla was purportedly surprised to discover that RTC Br. 146 had already
rendered judgment finding him guilty, and that it had issued a warrant for his arrest. Atty. Mendoza filed an Omnibus Motion for Leave to File Motion for New Trial, which Milla claims to have been
denied by the trial court for being an inappropriate remedy, thus, demonstrating his counsels negligence. These contentions cannot be given any merit.
The general rule is that the mistake of a counsel binds the client, and it is only in instances wherein the negligence is so gross or palpable that courts must step in to grant relief to the aggrieved
client.[20] In this case, Milla was able to file a Demurrer to Evidence, and upon the trial courts denial thereof, was allowed to present evidence. [21]Because of his failure to do so, RTC Br. 146 was
justified in considering that he had waived his right thereto. Nevertheless, the trial court still allowed him to submit a memorandum in the interest of justice. Further, contrary to his assertion that RTC
Br. 146 denied the Motion to Recall Warrant of Arrest thereafter filed by his former counsel, a reading of the 2 August 2007 Order of RTC Br. 146 reveals that it partially denied the Omnibus Motion
for New Trial and Recall of Warrant of Arrest, but granted the Motion for Leave of Court to Avail of Remedies under the Rules of Court, allowing him to file an appeal and lifting his warrant of arrest.
[22]

It can be gleaned from the foregoing circumstances that Milla was given opportunities to defend his case and was granted concomitant reliefs. Thus, it cannot be said that the mistake and
negligence of his former counsel were so gross and palpable to have deprived him of due process.
The principle of novation cannot be applied to the case at bar.
Milla contends that his issuance of Equitable PCI Check Nos. 188954 and 188955 before the institution of the criminal complaint against him novated his obligation to MPI, thereby enabling
him to avoid any incipient criminal liability and converting his obligation into a purely civil one. This argument does not persuade.
The principles of novation cannot apply to the present case as to extinguish his criminal liability. Milla cites People v. Nery[23] to support his

contention that his issuance of the Equitable PCI checks prior to the filing of the criminal complaint averted his incipient criminal liability. However, it must be clarified that mere payment of an
obligation before the institution of a criminal complaint does not, on its own, constitute novation that may prevent criminal liability. This Courts ruling in Nery in fact warned:
It may be observed in this regard that novation is not one of the means recognized by the Penal Code whereby criminal liability can be extinguished; hence, the role of
novation may only be to either prevent the rise of criminal liability or to cast doubt on the true nature of the original petition, whether or not it was such that its breach would not
give rise to penal responsibility, as when money loaned is made to appear as a deposit, or other similar disguise is resorted to (cf. Abeto vs. People, 90 Phil. 581; Villareal, 27 Phil.
481).
Even in Civil Law the acceptance of partial payments, without further change in the original relation between the complainant and the accused, can not
produce novation. For the latter to exist, there must be proof of intent to extinguish the original relationship, and such intent can not be inferred from the mere
acceptance of payments on account of what is totally due. Much less can it be said that the acceptance of partial satisfaction can effect the nullification of a criminal liability that
is fully matured, and already in the process of enforcement. Thus, this Court has ruled that the offended partys acceptance of a promissory note for all or part of the amount
misapplied does not obliterate the criminal offense(Camus vs. Court of Appeals, 48 Off. Gaz. 3898).[24] (Emphasis supplied.)
Further, in Quinto v. People,[25] this Court exhaustively explained the concept of novation in relation to incipient criminal liability, viz:

Novation is never presumed, and the animus novandi, whether totally or partially, must appear by express agreement of the parties, or by their acts that are too clear and
unequivocal to be mistaken.
The extinguishment of the old obligation by the new one is a necessary element of novation which may be effected either expressly or impliedly. The term expressly
means that the contracting parties incontrovertibly disclose that their object in executing the new contract is to extinguish the old one. Upon the other hand, no specific form is
required for an implied novation, and all that is prescribed by law would be an incompatibility between the two contracts. While there is really no hard and fast rule to
determine what might constitute to be a sufficient change that can bring about novation, the touchstone for contrariety, however, would be an irreconcilable
incompatibility between the old and the new obligations.
There are two ways which could indicate, in fine, the presence of novation and thereby produce the effect of extinguishing an obligation by another which substitutes the
same. The first is when novation has been explicitly stated and declared in unequivocal terms. The second is when the old and the new obligations are incompatible on every
point. The test of incompatibility is whether or not the two obligations can stand together, each one having its independent existence. If they cannot, they are
incompatible and the latter obligation novates the first. Corollarily, changes that breed incompatibility must be essential in nature and not merely accidental. The
incompatibility must take place in any of the essential elements of the obligation, such as its object, cause or principal conditions thereof; otherwise, the change would be
merely modificatory in nature and insufficient to extinguish the original obligation.
The changes alluded to by petitioner consists only in the manner of payment. There was really no substitution of debtors since private complainant merely
acquiesced to the payment but did not give her consent to enter into a new contract. The appellate court observed:
xxx
xxx
xxx
The acceptance by complainant of partial payment tendered by the buyer, Leonor Camacho, does not evince the intention of the complainant
to have their agreement novated. It was simply necessitated by the fact that, at that time, Camacho had substantial accounts payable to complainant,
and because of the fact that appellant made herself scarce to complainant. (TSN, April 15, 1981, 31-32) Thus, to obviate the situation where
complainant would end up with nothing, she was forced to receive the tender of Camacho. Moreover, it is to be noted that the aforesaid payment was for
the purchase, not of the jewelry subject of this case, but of some other jewelry subject of a previous transaction. (Ibid. June 8, 1981, 10-11)
xxx

xxx

xxx

Art. 315 of the Revised Penal Code defines estafa and penalizes any person who shall defraud another by misappropriating or converting, to the prejudice of another,
money, goods, or any other personal property received by the offender in trust or on commission, or for administration, or under any other obligation involving the duty to make
delivery of or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property. It is
axiomatic that the gravamen of the offense is the appropriation or conversion of money or property received to the prejudice of the owner. The terms convert and
misappropriate have been held to connote an act of using or disposing of anothers property as if it were ones own or devoting it to a purpose or use different from that agreed
upon. The phrase, to misappropriate to ones own use has been said to include not only conversion to ones personal advantage, but also every attempt to dispose of the
property of another without right. Verily, the sale of the pieces of jewelry on installments (sic) in contravention of the explicit terms of the authority granted to her in Exhibit A
(supra) is deemed to be one of conversion. Thus, neither the theory of delay in the fulfillment of commission nor that of novation posed by petitioner, can avoid the incipient
criminal liability. In People vs. Nery, this Court held:
xxx

xxx

xxx

The criminal liability for estafa already committed is then not affected by the subsequent novation of contract, for it is a public offense which must be
prosecuted and punished by the State in its own conation. (Emphasis supplied.)[26]
In the case at bar, the acceptance by MPI of the Equitable PCI checks tendered by Milla could not have novated the original transaction, as the checks were only intended to secure the return of
the P2 million the former had already given him. Even then, these checks bounced and were thus unable to satisfy his liability. Moreover, the estafa involved here was not for simple misappropriation
or conversion, but was committed through Millas falsification of public documents, the liability for which cannot be extinguished by mere novation.
The Court of Appeals was correct in affirming the trial courts finding of guilt.
Finally, Milla assails the factual findings of the trial court. Suffice it to say that factual findings of the trial court, especially when affirmed by the appellate court, are binding on and accorded great
respect by this Court.[27]

There was no reversible error on the part of the Court of Appeals when it affirmed the finding of the trial court that Milla was guilty beyond reasonable doubt of the offense of estafa through
falsification of public documents. The prosecution was able to prove the existence of all the elements of the crime charged. The relevant provisions of the Revised Penal Code read:
Art. 172. Falsification by private individual and use of falsified documents. The penalty of prision correccional in its medium and maximum periods and a fine of not more
than 5,000 shall be imposed upon:
1.
Any private individual who shall commit any of the falsification enumerated in the next preceding article in any public or official document or letter of exchange
or any other kind of commercial document
xxx

xxx

xxx

Art. 315. Swindling (estafa). Any person who shall defraud another by any of the means mentioned hereinbelow shall be punished by:
xxx

xxx

xxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneously with the commission of the fraud:
(a) By using a fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit, agency, business or imaginary transactions; or by means of
other similar deceits.
xxx

xxx

xxx

It was proven during trial that Milla misrepresented himself to have the authority to sell the subject property, and it was precisely this misrepresentation that prompted MPI to purchase it. Because of
its reliance on his authority and on the falsified Deed of Absolute Sale and TCT No. 218777, MPI parted with its money in the amount of P2 million, which has not been returned until now despite Millas
allegation of novation. Clearly, he is guilty beyond reasonable doubt of estafa through falsification of public documents.
WHEREFORE, we resolve to DENY the Petition. The assailed Decision and Resolution of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.

SUZETTE DEL MUNDO,

Complainant,

-versus-

A.C. No. 6903

Present:
VELASCO, JR.,
PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE, JJ.

ATTY. ARNEL C. CAPISTRANO,

Respondent.

Promulgated:
April 16, 2012
x---------------------------------------------------------------------------------------- x

DECISION
PERLAS-BERNABE, J.:
Before the Court is an administrative complaint 1 for disbarment filed by complainant Suzette Del Mundo (Suzette) charging respondent Atty. Arnel C. Capistrano (Atty. Capistrano) of
violating the Code of Professional Responsibility.

The Facts
On January 8, 2005, Suzette and her friend Ricky S. Tuparan (Tuparan) engaged the legal services of Atty. Capistrano to handle the judicial declaration of nullity of their respective marriages allegedly
for a fee of PhP140,000.00 each. On the same date, a Special Retainer Agreement 2 was entered into by and between Suzette and Atty. Capistrano which required an acceptance fee of PhP30,000.00,
appearance fee of PhP2,500.00 per hearing and another PhP2,500.00 per pleading. In addition, Atty. Capistrano allegedly advised her to prepare amounts for the following expenses:
PhP11,000.00

Filing fee

PhP5,000.00

Summons

PhP15,000.00

Fiscal

PhP30,000.00

Psychiatrist

PhP15,000.00

Commissioner

In accordance with their agreement, Suzette gave Atty. Capistrano the total amount of PhP78,500.00, to wit:
January 8, 2005

PhP30,000.00

Acceptance fee

January 15, 2005

PhP11,000.00

Filing fee

February 3, 2005

PhP5,000.00

Filing fee

May 4, 2005

PhP2,500.00

Filing fee

June 8, 2005

PhP30,000.00

Filing fee

For every payment that Suzette made, she would inquire from Atty. Capistrano on the status of her case. In response, the latter made her believe that the two cases were already filed before the
Regional Trial Court of Malabon City and awaiting notice of hearing. Sometime in July 2005, when she could hardly reach Atty. Capistrano, she verified her case from the Clerk of Court of Malabon
and discovered that while the case of Tuparan had been filed on January 27, 2005, no petition has yet been filed for her.

Hence, Suzette called for a conference, which was set on July 28, 2005, where she demanded the refund of the total amount of PhP78,500.00, but Atty. Capistrano instead offered to return
the amount of PhP63,000.00 on staggered basis claiming to have incurred expenses in the filing of Tuparans case, to which she agreed. On the same occasion, Atty. Capistrano handed to her copies of
her unfiled petition,3 Tuparans petition4 and his Withdrawal of Appearance 5 in Tuparans case with instructions to file them in court, as well as a list 6containing the expenses he incurred and the
schedule of payment of the amount of PhP63,000.00, as follows:
PhP20,000.00

August 15, 2005

PhP20,000.00

August 29, 2005

PhP23,000.00

September 15, 2005

However, Atty. Capistrano only returned the amount of PhP5,000.00 on August 15, 2005 and thereafter, refused to communicate with her, prompting the institution of this administrative
complaint on September 7, 2005.
In his Comment/Answer7 dated November 14, 2005, Atty. Capistrano acknowledged receipt of the amount of PhP78,500.00 from Suzette and his undertaking to return the agreed sum of
PhP63,000.00. He also admitted responsibility for his failure to file Suzettes petition and cited as justification his heavy workload and busy schedule as then City Legal Officer of Manila and lack of
available funds to immediately refund the money received.
In the Resolution8 dated January 18, 2006, the Court resolved to refer the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.
The Action and Recommendation of the IBP
For failure of respondent Atty. Capistrano to appear at the mandatory conference set by Commissioner Lolita A. Quisumbing of the IBP Commission on Bar Discipline (IBP-CBD), the
conference was terminated without any admissions and stipulations of facts and the parties were ordered to file their respective position papers to which only Atty. Capistrano complied.
In the Report and Recommendation 9 dated April 11, 2007, the IBP-CBD, through Commissioner Quisumbing, found that Atty. Capistrano had neglected his clients interest by his failure to
inform Suzette of the status of her case and to file the agreed petition for declaration of nullity of marriage. It also concluded that his inability to refund the amount he had promised Suzette showed
deficiency in his moral character, honesty, probity and good demeanor. Hence, he was held guilty of violating Rule 18.03, and Rule 18.04, Canon 18 of the Code of Professional Responsibility and
recommended the penalty of suspension for two years from the practice of law.
On September 19, 2007, the IBP Board of Governors adopted and approved the report and recommendation of Commissioner Quisumbing through Resolution No. XVIII-2007-98 10 with
modification ordering the return of the sum of PhP140,000.00 attorneys fees to Suzette.
However, upon Atty. Capistranos timely motion for reconsideration, the IBP Board of Governors passed Resolution No. XIX-2011-263 11 on May 14, 2011 reducing the penalty of
suspension from two years to one year, to wit:
RESOLVED to PARTIALLY GRANT Respondents Motion for Reconsideration, and unanimously MODIFY as it is hereby MODIFIED Resolution No. XVIII2007-98 dated 19 September 2007 and REDUCED the penalty against Atty. Arnel C. Capistrano to SUSPENSION from the practice of law for one (1) year
and Ordered to Return the amount of One Hundred Forty Thousand Pesos (P140,000.00) to complainant with thirty (30) days from receipt of notice.
The Issue

The sole issue before the Court is whether Atty. Arnel C. Capistrano violated the Code of Professional Responsibility.
The Ruling of the Court

After a careful perusal of the records, the Court concurs with the findings and recommendation of the IBP-CBD but takes exception to the amount of PhP140,000.00recommended to be
returned to Suzette.
Indisputably, Atty. Capistrano committed acts in violation of his sworn duty as a member of the bar. In his Manifestation and Petition for Review, 12 he himself admitted liability for his failure to act on
Suzettes case as well as to account and return the funds she entrusted to him. He only pleaded for the mitigation of his penalty citing the lack of intention to breach his lawyers oath; that this is his
first offense; and that his profession is the only means of his and his familys livelihood. He also prayed that the adjudged amount of PhP140,000.00 be reduced to PhP73,500.00 representing the
amount of PhP78,500.00 he received less his payment of the sum of PhP5,000.00. Consequently, Commissioner Quisumbing and the IBP-CBD Board of Governors correctly recommended the
appropriate penalty of one year suspension from the practice of law for violating the pertinent provisions of the Canons of Professional Responsibility, thus:
CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
RULE 16.01 A lawyer shall account for all money or property collected or received for or from the client.
RULE 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.
xxx
CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
xxx
RULE 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.
RULE 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the clients request for
information.
Indeed, when a lawyer takes a clients cause, he covenants that he will exercise due diligence in protecting the latters rights. Failure to exercise that degree of vigilance and attention
expected of a good father of a family makes the lawyer unworthy of the trust reposed on him by his client and makes him answerable not just to his client but also to the legal profession, the courts
and society.13 His workload does not justify neglect in handling ones case because it is settled that a lawyer must only accept cases as much as he can efficiently handle. 14
Moreover, a lawyer is obliged to hold in trust money of his client that may come to his possession. As trustee of such funds, he is bound to keep them separate and apart from his own.
Money entrusted to a lawyer for a specific purpose such as for the filing and processing of a case if not utilized, must be returned immediately upon demand. Failure to return gives rise to a
presumption that he has misappropriated it in violation of the trust reposed on him. And the conversion of funds entrusted to him constitutes gross violation of professional ethics and betrayal of public
confidence in the legal profession.15
To stress, the practice of law is a privilege given to lawyers who meet the high standards of legal proficiency and morality, including honesty, integrity and fair dealing. They must perform
their fourfold duty to society, the legal profession, the courts and their clients, in accordance with the values and norms of the legal profession as embodied in the Code of Professional
Responsibility.16 Falling short of this standard, the Court will not hesitate to discipline an erring lawyer by imposing an appropriate penalty based on the exercise of sound judicial discretion in
consideration of the surrounding facts.17

With the foregoing disquisition and Atty. Capistranos admission of his fault and negligence, the Court finds the penalty of one year suspension from the practice of law, as recommended by
the IBP-CBD, sufficient sanction for his violation. However, the Court finds proper to modify the amount to be returned to Suzette from PhP140,000.00 to PhP73,500.00.
WHEREFORE, respondent Atty. Arnel C. Capistrano, having clearly violated Canons 16 and 18 of the Code of Professional Responsibility, is SUSPENDED from the practice of law for one year
with a stern warning that a repetition of the same or similar acts shall be dealt with more severely. He is ORDERED to return to Suzette Del Mundo the full amount of PhP73,500.00 within 30 days
from notice hereof and DIRECTED to submit to the Court proof of such payment.
Let copies of this Decision be entered in the personal record of respondent as a member of the Philippine Bar and furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines and
the Court Administrator for circulation to all courts in the country.
SO ORDERED.

EMILIA R. HERNANDEZ,
Complainant,

- versus -

ATTY. VENANCIO B. PADILLA,

Respondent.

A.C.
No.
9387
(Formerly CBD Case No. 05-1562)
Present:
CARPIO, J., Chairperson,
BRION,
PEREZ,
SERENO, and
REYES, JJ.
Promulgated:
June 20, 2012

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
RESOLUTION
SERENO, J.:
This is a disbarment case filed by Emilia Hernandez (complainant) against her lawyer, Atty. Venancio B. Padilla (respondent) of Padilla Padilla Bautista Law Offices, for his alleged negligence
in the handling of her case.
The records disclose that complainant and her husband were the respondents in an ejectment case filed against them with the Regional Trial Court of Manila (RTC).
In a Decision[1] dated 28 June 2002, penned by Judge Rosmari D. Carandang (Judge Carandang), the RTC ordered that the Deed of Sale executed in favor of complainant be cancelled; and that
the latter pay the complainant therein, Elisa Duigan (Duigan), attorneys fees and moral damages.

Complainant and her husband filed their Notice of Appeal with the RTC. Thereafter, the Court of Appeals (CA) ordered them to file their Appellants Brief. They chose respondent to represent
them in the case. On their behalf, he filed a Memorandum on Appeal instead of an Appellants Brief. Thus, Duigan filed a Motion to Dismiss the Appeal. The CA granted the Motion in a
Resolution[2] dated 16 December 2003.
No Motion for Reconsideration (MR) of the Resolution dismissing the appeal was filed by the couple. Complainant claims that because respondent ignored the Resolution, he acted with deceit,
unfaithfulness amounting to malpractice of law. [3] Complainant and her husband failed to file an appeal, because respondent never informed them of the adverse decision. Complainant further claims
that she asked respondent several times about the status of the appeal, but despite inquiries he deliberately withheld response [sic], to the damage and prejudice of the spouses. [4]
The Resolution became final and executory on 8 January 2004. Complainant was informed of the Resolution sometime in July 2005, when the Sheriff of the RTC came to her house and
informed her of the Resolution.
On 9 September 2005, complainant filed an Affidavit of Complaint [5] with the Committee on Bar Discipline of the Integrated Bar of the Philippines (IBP), seeking the disbarment of respondent
on the following grounds: deceit, malpractice, and grave misconduct. Complainant prays for moral damages in the amount of 350,000.
Through an Order[6] dated 12 September 2005, Director of Bar Discipline Rogelio A. Vinluan ordered respondent to submit an answer to the Complaint. In his Counter-Affidavit/Answer,
[7]
respondent prayed for the outright dismissal of the Complaint.
Respondent explained that he was not the lawyer of complainant. He averred that prior to the mandatory conference set by the IBP on 13 December 2005, he had never met complainant,
because it was her husband who had personally transacted with him. According to respondent, the husband despondently pleaded to me to prepare a Memorandum on Appeal because according to
him the period given by the CA was to lapse within two or three days. [8] Thus, respondent claims that he filed a Memorandum on Appeal because he honestly believed that it is this pleading which
was required.[9]
Before filing the Memorandum, respondent advised complainants husband to settle the case. The latter allegedly gestured approval of the advice. [10]
After the husband of complainant picked up the Memorandum for filing, respondent never saw or heard from him again and thus assumed that the husband heeded his advice and settled the
case. When respondent received an Order from the CA requiring him to file a comment on the Motion to Dismiss filed by Duigan, he instructed his office staff to contact Mr. Hernandez thru
available means of communication, but to no avail. [11] Thus, when complainants husband went to the office of respondent to tell the latter that the Sheriff of the RTC had informed complainant of the
CAs Resolution dismissing the case, respondent was just as surprised. The lawyer exclaimed, KALA KO BA NAKIPAG AREGLO NA KAYO. [12]
In his 5 January 2009 Report,[13] IBP Investigating Commissioner Leland R. Villadolid, Jr. found that respondent violated Canons 5, 17, and 18 of the Code of Professional Responsibility (the
Code). He recommended that respondent be suspended from practicing law from 3 to 6 months.
The board of governors of the IBP issued Resolution No. XIX-2010-452 on 28 August 2010. Therein, they resolved to adopt and approve the Report and Recommendation of the Investigating
Commissioner. Respondent was suspended from the practice of law for six months.
Respondent filed a Motion for Reconsideration. [14] He prayed for the relaxation of the application of the Canons of the Code. On 14 January 2012, the IBP board of governors passed Resolution
No. XX-2012-17[15] partly granting his Motion and reducing the penalty imposed to one-month suspension from the practice of law.
Pursuant to Rule 139-B of the Rules of Court, acting Director for Bar Discipline Dennis A.B. Funa, through a letter [16] addressed to then Chief Justice Renato C. Corona, transmitted the
documents pertaining to the disbarment Complaint against respondent.
We adopt the factual findings of the board of governors of the IBP. This Court, however, disagrees with its Decision to reduce the penalty to one-month suspension. We thus affirm the six-month
suspension the Board originally imposed in its 28 August 2010 Resolution.
Respondent insists that he had never met complainant prior to the mandatory conference set for the disbarment Complaint she filed against him. However, a perusal of the Memorandum of
Appeal filed in the appellate court revealed that he had signed as counsel for the defendant-appellants therein, including complainant and her husband. [17] The pleading starts with the following
sentence: DEFENDANT[S]-APPELLANTS, by counsel, unto this Honorable Court submit the Memorandum and further allege that: x x x. [18] Nowhere does the document say that it was filed only
on behalf of complainants husband.
It is further claimed by respondent that the relation created between him and complainants husband cannot be treated as a client-lawyer relationship, viz:
It is no more than a client needing a legal document and had it prepared by a lawyer for a fee. Under the factual milieu and circumstances, it could not be said that a client entrusted
to a lawyer handling and prosecution of his case that calls for the strict application of the Code; x x x [19]
As proof that none of them ever intended to enter into a lawyer-client relationship, he also alleges that complainants husband never contacted him after the filing of the Memorandum of Appeal.
According to respondent, this behavior was very unusual if he really believed that he engaged the formers services. [20]
Complainant pointed out in her Reply[21] that respondent was her lawyer, because he accepted her case and an acceptance fee in the amount of 7,000.
According to respondent, however, [C]ontrary to the complainants claim that he charged 7,000 as acceptance fee, the fee was only for the preparation of the pleading which is even low for
a Memorandum of Appeal: x x x.[22]
Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the clients cause. [23] Once a lawyer agrees to handle a case, it is that
lawyers duty to serve the client with competence and diligence. [24] Respondent has failed to fulfill this duty.
According to respondent, he merely drafted the pleading that complainants husband asked from him. Respondent also claims that he filed a Memorandum of Appeal, because he honestly
believed that this was the pleading required, based on what complainants husband said.
The IBP Investigating Commissioners observation on this matter, in the 5 January 2009 Report, is correct. Regardless of the particular pleading his client may have believed to be necessary, it
was respondents duty to know the proper pleading to be filed in appeals from RTC decisions, viz:
Having seen the Decision dated 18 June 2002 of the trial court, respondent should have known that the mode of appeal to the Court of Appeals for said Decision is by ordinary
appeal under Section 2(a) Rule 41 of the1997 Revised Rules of Civil Procedure. In all such cases, Rule 44 of the said Rules applies. [25]

When the RTC ruled against complainant and her husband, they filed a Notice of Appeal. Consequently, what should apply is the rule on ordinary appealed cases or Rule 44 of the Rules on
Civil Procedure. Rule 44 requires that the appellants brief be filed after the records of the case have been elevated to the CA. Respondent, as a litigator, was expected to know this procedure. Canon 5
of the Code reads:
CANON 5 A lawyer shall keep abreast of legal developments, participate in continuing legal education programs, support efforts to achieve high standards in law schools as
well as in the practical training of law students and assist in disseminating information regarding the law and jurisprudence.
The obligations of lawyers as a consequence of their Canon 5 duty have been expounded in Dulalia, Jr. v. Cruz,[26] to wit:
It must be emphasized that the primary duty of lawyers is to obey the laws of the land and promote respect for the law and legal processes. They are expected to be in the forefront
in the observance and maintenance of the rule of law. This duty carries with it the obligation to be well-informed of the existing laws and to keep abreast with legal developments,
recent enactments and jurisprudence. It is imperative that they be conversant with basic legal principles. Unless they faithfully comply with such duty, they may not be able to
discharge competently and diligently their obligations as members of the bar. Worse, they may become susceptible to committing mistakes.
In his MR, respondent begged for the consideration of the IBP, claiming that the reason for his failure to file the proper pleading was that he did not have enough time to acquaint himself
thoroughly with the factual milieu of the case. The IBP reconsidered and thereafter significantly reduced the penalty originally imposed.
Respondents plea for leniency should not have been granted.
The supposed lack of time given to respondent to acquaint himself with the facts of the case does not excuse his negligence.
Rule 18.02 of the Code provides that a lawyer shall not handle any legal matter without adequate preparation. While it is true that respondent was not complainants lawyer from the trial to the
appellate court stage, this fact did not excuse him from his duty to diligently study a case he had agreed to handle. If he felt he did not have enough time to study the pertinent matters involved, as he
was approached by complainants husband only two days before the expiration of the period for filing the Appellants Brief, respondent should have filed a motion for extension of time to file the
proper pleading instead of whatever pleading he could come up with, just to beat the deadline set by the Court of Appeals. [27]
Moreover, respondent does not deny that he was given notice of the fact that he filed the wrong pleading. However, instead of explaining his side by filing a comment, as ordered by the
appellate court, he chose to ignore the CAs Order. He claims that he was under the presumption that complainant and her husband had already settled the case, because he had not heard from the
husband since the filing of the latters Memorandum of Appeal.
This explanation does not excuse respondents actions.
First of all, there were several remedies that respondent could have availed himself of, from the moment he received the Notice from the CA to the moment he received the disbarment
Complaint filed against him. But because of his negligence, he chose to sit on the case and do nothing.
Second, respondent, as counsel, had the duty to inform his clients of the status of their case. His failure to do so amounted to a violation of Rule 18.04 of the Code, which reads:
18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the clients request for information.
If it were true that all attempts to contact his client proved futile, the least respondent could have done was to inform the CA by filing a Notice of Withdrawal of Appearance as counsel. He could
have thus explained why he was no longer the counsel of complainant and her husband in the case and informed the court that he could no longer contact them. [28] His failure to take this measure
proves his negligence.
Lastly, the failure of respondent to file the proper pleading and a comment on Duigans Motion to Dismiss is negligence on his part. Under 18.03 of the Code, a lawyer is liable for negligence in
handling the clients case, viz:
Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.
Lawyers should not neglect legal matters entrusted to them, otherwise their negligence in fulfilling their duty would render them liable for disciplinary action. [29]Respondent has failed to live up to his
duties as a lawyer. When a lawyer violates his duties to his client, he engages in unethical and unprofessional conduct for which he should be held accountable. [30] WHEREFORE, respondent Atty.
Venancio Padilla is found guilty of violating Rules 18.02, 18.03, 18.04, as well as Canon 5 of the Code of Professional Responsibility. Hence, he is SUSPENDED from the practice of law for SIX (6)
MONTHS and STERNLY WARNED that a repetition of the same or a similar offense will be dealt with more severely.
Let copies of this Resolution be entered into the personal records of respondent as a member of the bar and furnished to the Bar Confidant, the Integrated Bar of the Philippines, and the Court
Administrator for circulation to all courts of the country for their information and guidance.
No costs.
SO ORDERED.
A.C. No. 7749, July 08, 2013
JOSEFINA
CARANZA
VDA.
DE
SALDIVAR, Complainant, v. ATTY.
RAMON
SG
CABANES,
JR.,Respondent.
RESOLUTION
PERLAS-BERNABE, J.:
For the Courts resolution is an administrative complaint 1 filed by Josefina Caranza vda. de Saldivar (complainant) against Atty. Ramon SG Cabanes, Jr. (respondent), charging him for gross
negligence in violation of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional Responsibility (Code).
The Facts
Complainant was the defendant in an unlawful detainer case, docketed as Civil Case No. 1972, 2 filed by the heirs of one Benjamin Don (heirs) before the Municipal Trial Court of Pili, Camarines Sur
(MTC), wherein she was represented by respondent. While respondent duly filed an answer to the unlawful detainer complaint, he, however, failed to submit a pre-trial brief as well as to attend the

scheduled preliminary conference. Consequently, the opposing counsel moved that the case be submitted for decision which motion was granted in an Order 3 dated November 27, 2003. When
complainant confronted respondent about the foregoing, the latter just apologized and told her not to worry, assuring her that she will not lose the case since she had the title to the subject property.
On December 30, 2003, the MTC issued a Decision4 (MTC Decision) against complainant, ordering her to vacate and turn-over the possession of the subject property to the heirs as well as to pay
them damages. On appeal, the Regional Trial Court of Pili, Camarines Sur, Branch 32 (RTC), reversed the MTC Decision and dismissed the unlawful detainer complaint. 5 Later however, the Court of
Appeals (CA) reversed the RTCs ruling and reinstated the MTC Decision. 6 Respondent received a copy of the CAs ruling on January 27, 2006. Yet, he failed to inform complainant about the said
ruling, notwithstanding the fact that the latter frequented his work place. Neither did respondent pursue any further action. 7 As such, complainant decided to engage the services of another counsel for
the purpose of seeking other available remedies. Due to respondents failure to timely turn-over to her the papers and documents in the case, such other remedies were, however, barred. Thus, based on
these incidents, complainant filed the instant administrative complaint, alleging that respondents acts amounted to gross negligence which resulted in her loss. 8
In

Resolution9 dated

March

10,

2008,

the

Court

directed

respondent

to

comment

on

the

administrative

complaint

within

ten

(10)

days

from

notice.

Accordingly, respondent filed a Manifestation with Compliance 10 dated May 19, 2008, admitting to have agreed to represent complainant who claimed to be the tenant and rightful occupant of the
subject property owned by the late Pelagia Lascano (Pelagia). He alleged that upon careful examination of the heirs' unlawful detainer complaint, he noticed a discrepancy between the descriptions of
the subject property as indicated in the said pleading as opposed to that which complainant supplied to him. On the belief that the parties may be contesting two (2) sets of properties which are distinct
and separate from one another, respondent, at the preliminary conference conducted on October 28, 2003, moved for the suspension of further proceedings and proposed that a commissioner be
appointed to conduct a re-survey in order to determine the true identity of the property in dispute. The MTC allowed the counsels for both parties to decide on the manner of the proposed re-survey,
leading to the assignment of a Department of Agrarian Reform Survey Engineer (DAR Engineer) for this purpose. In relation, the heirs counsel agreed to turn-over to respondent in his office 11 certain
documents which indicated the subject propertys description. Thus, pending the conduct and results of the re-survey, the preliminary conference was tentatively reset to November 27, 2003. 12
As it turned out, the heirs counsel was unable to furnish respondent copies of the above-stated documents, notwithstanding their agreement. This led the latter to believe that the preliminary
conference scheduled on November 27, 2003 would not push through. Respondent averred that the aforesaid setting also happened to coincide with an important provincial conference which he was
required to attend. As such, he inadvertently missed the hearing. 13 Nonetheless, he proffered that he duly appealed the adverse MTC Decision to the RTC, 14 resulting to the dismissal of the unlawful
detainer
complaint,
albeit
later
reversed
by
the
CA.
Thereafter, pending the heirs' appeal to the CA, respondent came upon the information that the disputed property was subject of a petition for exemption from the coverage of Presidential Decree No.
(PD) 2715 filed by Pelagia against complainants mother, Placida Caranza (Placida). Based on several documents furnished to him by certain DAR personnel, respondent was satisfied that Placida
indeed held the subject property for a long time and actually tilled the same in the name of Pelagia, thereby placing it under PD 27 coverage. Due to such information, respondent was convinced that
Placida and consequently, complainant (who took over the tilling) was indeed entitled to the subject property. Hence, he advised complainant that it would be best to pursue remedies at the
administrative level, instead of contesting the appeal filed by the heirs before the CA. It was respondents calculated legal strategy that in the event the CA reverses the decision of the RTC, an
opposition to the issuance of a writ of execution or a motion to quash such writ may be filed based on the afore-stated reasons, especially if an approved plan and later, an emancipation patent
covering
the
subject
property
is
issued. 16
Meanwhile, the survey conducted by the DAR Engineer revealed that complainant's tillage extended to about 5,000 square meters of the subject property which was determined to belong to the heirs,
the rest being covered by the title of Pelagia. Dissatisfied, complainant manifested her intention to secure the services of a private surveyor of her own choice, and promised to furnish respondent a
copy of the survey results, which she, however, failed to do. Later, complainant accused respondent of manipulating the DAR Survey Results which caused their lawyer-client relationship to turn sour
and
eventually
be
severed.
She
has
since
retrieved
the
entire
case
folders
and
retained
the
services
of
another
lawyer. 17
In a Resolution18 dated July 7, 2008, the Court resolved to refer the instant administrative case to the Integrated Bar of the Philippines (IBP) for its evaluation, report and recommendation.
The IBP Commission on Bar Discipline set the case for mandatory conference on April 15, 2009 19 and required the parties to submit their respective position papers. 20
The IBPs Report and Recommendation
On June 18, 2009, the Investigating IBP Commissioner, Rebecca Villanueva-Maala (Investigating Commissioner), issued a Report and Recommendation (Commissioners Report), 21 finding
respondent to have been negligent in failing to attend the preliminary conference in Civil Case No. 1972 set on November 27, 2003 which resulted in the immediate submission of the said case for
decision
and
eventual
loss
of
complainants
cause.
The Investigating Commissioner observed that respondent could have exercised ordinary diligence by inquiring from the court as to whether the said preliminary conference would push through,
considering that the November 27, 2003 setting was only tentative and the heirs counsel was not able to confer with him. Further, the fact that respondent had to attend an important provincial
conference which coincided with the said setting hardly serves as an excuse since he should have sent a substitute counsel on his behalf. Also, respondent never mentioned any legal remedy that he
undertook when the heirs elevated the decision of the RTC to the CA. In fact, he did not file any comment or opposition to the heirs appeal. Finally, respondents enumerations of his legal options to

allegedly

protect

the

complainants

interests

were

found

to

be

thought

only

after

fact. 22

the

Thus, based on the foregoing, the Investigating Commissioner ruled that respondent failed to exercise ordinary diligence in handling his client's cause, warranting his suspension from the practice of
law
for
a
period
of
six
(6)
months. 23
The IBP Board of Governors adopted and approved the Commissioners Report in Resolution No. XIX-2011-266 24 dated May 14, 2011, finding the same to be fully supported by the evidence on
record
and
in
accord
with
applicable
laws
and
rules.
Respondent filed a motion for reconsideration25 which was, however, denied, in Resolution No. XX-2012-51726 dated December 14, 2012.
The Court's Ruling
The

Court

resolves

to

adopt

the

IBP's

findings

and

recommendation.

The relationship between an attorney and his client is one imbued with utmost trust and confidence. In this light, clients are led to expect that lawyers would be ever-mindful of their cause and
accordingly exercise the required degree of diligence in handling their affairs. Verily, a lawyer is expected to maintain at all times a high standard of legal proficiency, and to devote his full attention,
skill, and competence to the case, regardless of its importance and whether he accepts it for a fee or for free. 27 Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code embody these
quintessential directives and thus, respectively state:cralavvonlinelawlibrary
CANON 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.
CANON

18

lawyer

x
Rule

shall

serve

his

client

x
18.03

lawyer

shall

not

neglect

with

competence

and

diligence.

legal

matter

entrusted

to

him,

and

his

negligence

x
in

connection

therewith

shall

render

him

liable.

Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the client's request for information.
Case law further illumines that a lawyers duty of competence and diligence includes not merely reviewing the cases entrusted to the counsel's care or giving sound legal advice, but also consists of
properly representing the client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the required pleadings, prosecuting the handled cases with reasonable
dispatch,
and
urging
their
termination
without
waiting
for
the
client
or
the
court
to
prod
him
or
her
to
do
so. 28
Conversely, a lawyer's negligence in fulfilling his duties subjects him to disciplinary action. 29 While such negligence or carelessness is incapable of exact formulation, the Court has consistently held
that
the
lawyers
mere
failure
to
perform
the
obligations
due
his
client
is per
se a
violation.30
Applying

these

principles

to

the

present

case,

the

Court

finds

that

respondent

failed

to

exercise

the

required

diligence

in

handling

complainants

cause.

Records show that he failed to justify his absence during the scheduled preliminary conference hearing in Civil Case No. 1972 which led the same to be immediately submitted for decision. As
correctly observed by the Investigating Commissioner, respondent could have exercised ordinary diligence by inquiring from the court as to whether the said hearing would push through, especially so
since it was only tentatively set and considering further that he was yet to confer with the opposing counsel. The fact that respondent had an important commitment during that day hardly exculpates
him from his omission since the prudent course of action would have been for him to send a substitute counsel to appear on his behalf. In fact, he should have been more circumspect to ensure that the
aforesaid hearing would not have been left unattended in view of its adverse consequences, i.e., that the defendants failure to appear at the preliminary conference already entitles the plaintiff to a
judgment.31 Indeed, second-guessing the conduct of the proceedings, much less without any contingent measure, exhibits respondents inexcusable lack of care and diligence in managing his clients
cause.
Equally compelling is the fact that respondent purposely failed to assail the heirs appeal before the CA. Records disclose that he even failed to rebut complainant's allegation that he neglected to
inform her about the CA ruling which he had duly received, thereby precluding her from availing of any further remedies. As regards respondents suggested legal strategy to pursue the case at the
administrative level, suffice it to state that the same does not excuse him from failing to file a comment or an opposition to an appeal, or even, inform his client of any adverse resolution, as in this
case.
Irrefragably,
these
are
basic
courses
of
action
which
every
diligent
lawyer
is
expected
to
make.
All

told,

it

cannot

be

gainsaid

that

respondent

was

guilty

of

gross

negligence,

in

violation

of

the

above-cited

provisions

of

the

Code.

As regards the appropriate penalty, several cases show that lawyers who have been held liable for gross negligence for infractions similar to those of the respondent were suspended for a period of six
(6) months. In Aranda v. Elayda,32 a lawyer who failed to appear at the scheduled hearing despite due notice which resulted in the submission of the case for decision was found guilty of gross
negligence and hence, suspended for six (6) months. In Heirs of Tiburcio F. Ballesteros, Sr. v. Apiag, 33 a lawyer who did not file a pre-trial brief and was absent during the pre-trial conference was
likewise suspended for six (6) months. In Abiero v. Juanino,34 a lawyer who neglected a legal matter entrusted to him by his client in breach of Canons 17 and 18 of the Code was also suspended for
six (6) months. Thus, consistent with existing jurisprudence, the Court finds it proper to impose the same penalty against respondent and accordingly suspends him for a period of six (6) months.
WHEREFORE, respondent Atty. Ramon SG Cabanes, Jr. is found guilty of gross negligence in violation of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional
Responsibility. He is hereby SUSPENDED from the practice of law for a period of six (6) months, effective upon his receipt of this Resolution, and is STERNLY WARNED that a repetition of the
same
or
similar
acts
will
be
dealt
with
more
severely.
Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court Administrator for circulation to all the courts.
SO ORDERED.

A.C. No. 10164

March 10, 2014

STEPHAN
BRUNET
vs.
ATTY. RONALD L. GUAREN, Respondent.

and

VIRGINIA

ROMANILLOS

BRUNET, Complainants,

RESOLUTION
MENDOZA, J.:
On August 9, 2002, complainant spouses Stephan and Virginia Brunet (complainants) filed a complaint against respondent Atty. Ronald L. Guaren (Atty. Guaren) before the Commission on Bar
Discipline (CED), Integrated Bar of the Philippines (IBP).
Complainants alleged that in February 1997, they engaged the services of Atty. Guaren for the titling of a residential lot they acquired in Bonbon, Nueva Caseres; that Atty. Guaren asked for a fee of
Ten Thousand Pesos (P10,000.00) including expenses relative to its proceeding; that it was agreed that full payment of the fee shall be made after the delivery of the title; that Atty. Guaren asked for
an advance fee of One Thousand Pesos (Pl,000.00) which they gave; that Atty. Guaren took all the pertinent documents relative to the titling of their lot-certified true copy of the tax declaration,
original copy of the deed of exchange, sketch plan, deed of donation, survey plan, and original copy of the waiver; that on March 10, 1997, Atty. Guaren asked for additional payment of Six Thousand
Pesos (P6,000.00) which they dutifully gave; that from 1997 to 2001, they always reminded Atty. Guaren about the case and each time he would say that the titling was in progress; that they became
bothered by the slow progress of the case so they demanded the return of the money they paid; and that respondent agreed to return the same provided that the amount of Five Thousand Pesos
(P5,000.00) be deducted to answer for his professional fees.
Complainants further alleged that despite the existence of an attorney-client relationship between them, Atty. Guaren made a special appearance against them in a case pending before the Metropolitan
Circuit Trial Court, Oslob, Cebu (MCTC).
Atty. Guaren admitted that he indeed charged complainants an acceptance fee of P10,000.00, but denied that the amount was inclusive of expenses for the titling of the lot. He claimed, however, that
he received the payment ofP1,000.00 and P6,000.00; that their agreement was that the case would be filed in court after the complainants fully paid his acceptance fee; that he did not take the
documents relative to the titling of the lot except for the photocopy of the tax declaration; and that he did not commit betrayal of trust and confidence when he participated in a case filed against the
complainants in MCTC explaining that his appearance was for and in behalf of Atty. Ervin Estandante, the counsel on record, who failed to appear in the said hearing.
In the Report and Recommendation, 1 dated August 24, 2012, the Investigating Commissioner found Atty. Guaren to have violated the Canon of Professional Responsibility when he accepted the
titling of complainants lot and despite the acceptance of P7,000.00, he failed to perform his obligation and allowed 5 long years to elapse without any progress in the titling of the lot. Atty. Guaren
should also be disciplined for appearing in a case against complainants without a written consent from the latter. The CBD recommended that he be suspended for six (6) months.

In its May 20, 2013 Resolution, 2 the IBP Board of Governors, adopted and approved with modification the Report and Recommendation of the CBD, suspending Atty. Guaren from the practice of law
for three (3) months only.
The Court adopts the findings of the IBP Board of Governors on the unethical conduct of Atty. Guaren, except as to the penalty.
The practice of law is not a business. It is a profession in which duty to public service, not money, is the primary consideration. Lawyering is not primarily meant to be a money-making venture, and
law advocacy is not a capital that necessarily yields profits. The gaining of a livelihood should be a secondary consideration. The duty to public service and to the administration of justice should be
the primary consideration of lawyers, who must subordinate their personal interests or what they owe to themselves. 3
Canons 17 and 18 of the Code of Professional Responsibility provides that:
CANON 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.
CANON 18 - A lawyer shall serve his client with competence and diligence.
In the present case, Atty. Guaren admitted that he accepted the amount of P7,000.00 as partial payment of his acceptance fee. He, however, failed to perform his obligation to file the case for the titling
of complainants' lot despite the lapse of 5 years. Atty. Guaren breached his duty to serve his client with competence and diligence when he neglected a legal matter entrusted to him. 1wphi1
WHEREFORE, respondent Atty. Ronald L. Guaren is found GUILTY of having violated Canons 17 and 18 of the Code of Professional Responsibility and is hereby SUSPENDED from the practice of
law for a period of SIX (6) MONTHS effective from receipt of this Resolution, with a warning that a similar infraction in the future shall be dealt with more severely.
Let a copy of this resolution be furnished the Bar Confidant to be included in the records of the respondent; the Integrated Bar of the Philippines for distribution to all its chapters; and the Office of the
Court Administrator for dissemination to all courts throughout the country.
SO ORDERED.

A.C. No. 5359, March 10, 2014

ERMELINDA LAD VDA. DE DOMINGUEZ, REPRESENTED BY HER ATTORNEY-IN-FACT, VICENTE A. PICHON, Complainant, v. ATTY. ARNULFO M. AGLERON,
SR., Respondent.
RESOLUTION
MENDOZA, J.:
Complainant Ermelinda Lad Vda. De Dominguez (complainant) was the widow of the late Felipe Domiguez who died in a vehicular accident in Caraga, Davao Oriental, on October 18, 1995,
involving a dump truck owned by the Municipality of Caraga. Aggrieved, complainant decided to file charges against the Municipality of Caraga and engaged the services of respondent Atty. Arnulfo
M. Agleron, Sr. (Atty. Agleron). On three (3) occasions, Atty. Agleron requested and received from complainant the following amounts for the payment of filing fees and sheriffs fees, to wit: (1) June
3, 1996 - P3,000.00; (2) June 7, 1996 - P1,800.00; and September 2, 1996 - P5,250.00 or a total of P10,050.00. After the lapse of four (4) years, however, no complaint was filed by Atty. Agleron
against
the
Municipality
of
Caraga. 1crallawlibrary
Atty. Agleron admitted that complainant engaged his professional service and received the amount of P10,050.00. He, however, explained that their agreement was that complainant would pay the
filing fees and other incidental expenses and as soon as the complaint was prepared and ready for filing, complainant would pay 30% of the agreed attorneys fees of P100,000.00. On June 7, 1996,
after the signing of the complaint, he advised complainant to pay in full the amount of the filing fee and sheriffs fees and the 30% of the attorneys fee, but complainant failed to do so. Atty. Agleron
averred that since the complaint could not be filed in court, the amount of P10,050.00 was deposited in a bank while awaiting the payment of the balance of the filing fee and attorneys
fee.2crallawlibrary
In reply,3 complainant denied that she did not give the full payment of the filing fee and asserted that the filing fee at that time amounted only to P7,836.60.
In the Report and Recommendation, 4 dated January 12, 2012, the Investigating Commissioner found Atty. Agleron to have violated the Code of Professional Responsibility when he neglected a legal
matter
entrusted
to
him,
and
recommended
that
he
be
suspended
from
the
practice
of
law
for
a
period
of
four
(4)
months.
In its April 16, 2013 Resolution, 5 the Integrated Bar of the Philippines (IBP) Board of Governors adopted and approved the report and recommendation of the Investigating Commissioner with
modification
that
Atty.
Agleron
be
suspended
from
the
practice
of
law
for
a
period
of
only
one
(1)
month.
The

Court

agrees

with

the

recommendation

of

the

IBP

Board

of

Governors

except

as

to

the

penalty

imposed.

Atty. Agleron violated Rule 18.03 of the Code of Professional Responsibility, which provides that:chanRoblesVirtualawlibrary
Rule 18.03-A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable.
Once a lawyer takes up the cause of his client, he is duty bound to serve his client with competence, and to attend to his clients cause with diligence, care and devotion regardless of whether he
accepts it for a fee or for free. 6 He owes fidelity to such cause and must always be mindful of the trust and confidence reposed on him. 7crallawlibrary
In the present case, Atty. Agleron admitted his failure to file the complaint against the Municipality of Caraga, Davao Oriental, despite the fact that it was already prepared and signed. He attributed his
non-filing of the appropriate charges on the failure of complainant to remit the full payment of the filing fee and pay the 30% of the attorneys fee. Such justification, however, is not a valid excuse
that would exonerate him from liability. As stated, every case that is entrusted to a lawyer deserves his full attention whether he accepts this for a fee or free. Even assuming that complainant had not

remitted the full payment of the filing fee, he should have found a way to speak to his client and inform him about the insufficiency of the filing fee so he could file the complaint. Atty. Agleron
obviously
lacked
professionalism
in
dealing
with
complainant
and
showed
incompetence
when
he
failed
to
file
the
appropriate
charges.
In a number of cases, 8 the Court held that a lawyer should never neglect a legal matter entrusted to him, otherwise his negligence renders him liable for disciplinary action such as suspension ranging
from three months to two years. In this case, the Court finds the suspension of Atty. Agleron from the practice of law for a period of three (3) months sufficient.
WHEREFORE, the resolution of the IBP Board of Governors is hereby AFFIRMED with MODIFICATION. Accordingly, respondent ATTY. ARNULFO M. AGLERON, SR. is
herebySUSPENDED from the practice of law for a period of THREE (3) MONTHS, with a stern warning that a repetition of the same or similar wrongdoing will be dealt with more severely.
Let a copy of this resolution be furnished the Bar Confidant to be included in the records of the respondent; the Integrated Bar of the Philippines for distribution to all its chapters; and the Office of the
Court
Administrator
for
dissemination
to
all
courts
throughout
the
country.
SO ORDERED.