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LAWYER AND THE CLIENT CANONS 14-22

CANON 14

CONSTITUTION-Article 3, Section 11. Free access to the courts and quasi-judicial bodies and adequate
legal assistance shall not be denied to any person by reason of poverty.

ROC138-Section 20. Duties of attorneys. It is the duty of an attorney:

(a) To maintain allegiance to the Republic of the Philippines and to support the Constitution and
obey the laws of the Philippines.
(b) To observe and maintain the respect due to the courts of justice and judicial officers;
(c) To counsel or maintain such actions or proceedings only as appear to him to be just, and such
defenses only as he believes to be honestly debatable under the law.
(d) To employ, for the purpose of maintaining the causes confided to him, such means only as are
consistent with truth and honor, and never seek to mislead the judge or any judicial officer by an
artifice or false statement of fact or law;
(e) To maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of
his client, and to accept no compensation in connection with his client's business except from him
or with his knowledge and approval;
(f) To abstain from all offensive personality and to advance no fact prejudicial to the honor or
reputation of a party or witness, unless required by the justice of the cause with which he is
charged;
(g) Not to encourage either the commencement or the continuance of an action or proceeding, or
delay any man's cause, from any corrupt motive or interest;
(h) Never to reject, for any consideration personal to himself, the cause of the defenseless or
oppressed;
(i) In the defense of a person accused of crime, by all fair and honorable means, regardless of his
personal opinion as to the guilt of the accused, to present every defense that the law permits, to
the end that no person may be deprived of life or liberty, but by due process of law.

ROC138-Section 31. Attorneys for destitute litigants. A court may assign an attorney to render
professional aid free of charge to any party in a case, if upon investigation it appears that the party is
destitute and unable to employ an attorney, and that the services of counsel are necessary to secure the
ends of justice and to protect the rights of the party. It shall be the duty of the attorney so assigned to
render the required service, unless he is excused therefrom by the court for sufficient cause shown.

ROC116-Section 6. Duty of court to inform accused of his right to counsel. Before arraignment, the
court shall inform the accused of his right to counsel and ask him if he desires to have one. Unless the
accused is allowed to defend himself in person or has employed a counsel of his choice, the court must
assign a counsel de oficio to defend him. (6a)

ROC116-Section 7. Appointment of counsel de oficio. The court, considering the gravity of the offense
and the difficulty of the questions that may arise, shall appoint as counsel de oficio only such members of
the bar in good standing who, by reason of their experience and ability, can competently defend the
accused. But in localities where such members of the bar are not available, the court may appoint any
person, resident of the province and of good repute for probity and ability, to defend the accused. (7a)

ROC116-Section 8. Time for counsel de oficio to prepare for arraignment. Whenever a counsel de
oficio is appointed by the court to defend the accused at the arraignment, he shall be given a reasonable
time to consult with the accused as to his plea before proceeding with the arraignment. (8)

ROC124-Section 2. Conditions of the bail; requirements. All kinds of bail are subject to the following
conditions:

(a) The undertaking shall be effective upon approval, and unless cancelled, shall remain in force at
all stages of the case until promulgation of the judgment of the Regional Trial Court, irrespective of
whether the case was originally filed in or appealed to it;
(b) The accused shall appear before the proper court whenever required by the court of these
Rules;
(c) The failure of the accused to appear at the trial without justification and despite due notice shall
be deemed a waiver of his right to be present thereat. In such case, the trial may proceed
in absentia; and
(d) The bondsman shall surrender the accused to the court for execution of the final judgment.

CANON 15

A.C. No. 10558, February 23, 2015 MICHAEL RUBY, Complainant, v. ATTY. ERLINDA B. ESPEJO
AND ATTY. RUDOLPH DILLA BAYOT, Respondents.

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

The Facts

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

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

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

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

Meanwhile, on September 24, 2009, the RTC issued an Order8 denying the complainants prayer for the
issuance of a TRO. The complainant alleged that the respondents failed to apprise him of the denial of his
prayer for the issuance of a TRO; that he only came to know of said denial on November 3, 2009 when he
visited the RTC.9cralawlawlibrary

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

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

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

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

Atty. Bayot further pointed out that he had no part in the retainer agreement that was entered into by the
complainant, Felicitas, and Atty. Espejo. He also denied having any knowledge as to the P50,000.00 that
was paid to Atty. Espejo as filing fees.14cralawlawlibrary

As to the P12,000.00 that was given him, he claimed that he was entitled to P4,000.00 thereof since the
said amount was his appearance fee. He pointed out that he appeared before the RTCs hearing for the
issuance of a TRO on September 22, 2009. On the other hand, the P8,000.00 was paid to him as part of
the acceptance fee, which was then already due since the RTC had already heard their prayer for the
issuance of a TRO.15cralawlawlibrary

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

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

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

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

Findings of the Investigating Commissioner

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

Parenthetically, Respondents had asked and demanded prompt payment of their attorneys fees or
appearance fees and even asked for amounts for dubious purposes yet they, just the same, performed
their duties to their clients leisurely and lethargically. Worse, when the trusting Complainant had noticed
that his case was headed for disaster and wanted Respondents to explain their obviously slothful and
listless services, they disappeared or became evasive thus fortifying the conclusion that they indeed have
performed and carried out their duties to Complainant way below the standards set by the Code of
[P]rofessional Responsibility.21
ChanRoblesVirtualawlibrary
Nevertheless, the Investigating Commissioner found that the complainant failed to prove that he indeed
suffered injury as a result of the respondents conduct and, accordingly, should only be meted the penalty
of censure.

Findings of the IBP Board of Governors

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

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

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

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

The Issue

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

Ruling of the Court

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

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

The Court does not agree.

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

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

More importantly, Atty. Bayot admitted that he received P8,000.00, which is part of the acceptance fee
indicated in the retainer agreement, from the complainant. It is true that it was Atty. Espejo who asked
the complainant to give Atty. Bayot the said amount. However, Atty. Bayot admitted that he accepted
from the complainant the said P8,000.00 without even explaining what the said amount was for.
The foregoing circumstances clearly established that a lawyer-client relationship existed between Atty.
Bayot and the complainant. Documentary formalism is not an essential element in the employment of an
attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice
and assistance of an attorney is sought and received in any matter pertinent to his profession.28 Further,
acceptance of money from a client establishes an attorney-client relationship.29 Accordingly, as regards
the case before the RTC, the complainant had two counsels Atty. Espejo and Atty. Bayot.

The Code of Professional Responsibility provides that:chanRoblesvirtualLawlibrary

CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS
POSSESSION.
Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.cralawred

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

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

Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the
clients request for information.

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

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

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

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

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

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

Atty. Bayot may not be held liable for the failure to account for and return the excess of the P50,000.00
which was paid by the complainant for the filing fees. The evidence on record shows that it was Atty.
Espejo alone who received the said amount and that she was the one who paid the filing fees when the
complaint was filed with the RTC. That Atty. Bayot had no knowledge of the said amount paid by the
complainant for the filing fees is even admitted by the complainant himself during the proceedings before
the IBP-CBD,
ATTY. BAYOT: So, Atty. Espejo ask you for P50,000[.00] as filing fee.

MR. RUBY: Admitted.

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

MR. RUBY: Admitted.cralawred

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

MR. RUBY: Admitted.

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

MR. RUBY: Admitted.cralawred

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

MR. RUBY: Admitted.cralawred

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

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

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

On the other hand, Atty. Bayot is legally entitled to the P8,000.00 he received from the complainant on
September 23, 2009, the same being his share in the acceptance fee agreed to by the complainant in the
retainer agreement. He is likewise legally entitled to the P4,000.00 from the complainant on even date as
it is the payment for his appearance fee in the hearing for the issuance of a TRO on September 22, 2009.
However, Atty. Bayot is not entitled to the P4,000.00 which the complainant deposited to his bank account
on October 23, 2009. Atty. Bayot admitted that there was no hearing scheduled on the said date; their
motion to serve summons through publication was not included in the RTCs calendar that
day. Accordingly, Atty. Bayot is obliged to return the said amount to the complainant.

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

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

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

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

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

WHEREFORE, Atty. Rudolph Dilla Bayot is hereby ADMONISHED to exercise more prudence and
judiciousness in dealing with his clients. He is also ordered to return to Michael Ruby within fifteen (15)
days from notice the amount of Four Thousand Pesos (P4,000.00) representing his appearance fee
received from the latter on October 23, 2009 with a warning that failure on his part to do so will result in
the imposition of stiffer disciplinary action.SO ORDERED.
A.C. No. 9395 November 12, 2014 DARIA O. DAGING, Complainant, vs.
ATTY. RIZ TINGALON L. DAVIS, Respondent.

This administrative complaint for disbarment arose from an Affidavit Complaint1 filed by Daria O. Daging
(complainant) before the Integrated Bar of the Philippines (IBP), Benguet Chapter,2 against Atty. Riz
Tingalon L. Davis (respondent).

Antecedents

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

Meanwhile, complainant received a Retainer Proposal3 from Davis & Sabling Law Office signed by
respondent and his partner Atty. Amos Saganib Sabling (Atty. Sabling). This eventually resulted in the
signing by the complainant, the respondent and Atty. Sabling of a Retainer Agreement4 dated March 7,
2005.

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

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

In his Comment,6 respondent denied participation in the takeover or acting as a business partner of
Balageo in the operation of the bar. He asserted that Balageo is the sole proprietress of the establishment.
He insisted that it was Atty. Sabling, his partner, who initiated the proposal and was in fact the one who
was able to convince complainant to accept the law office as her retainer. Respondent maintained that he
never obtained any knowledge or information regarding the business of complainant who used to consult
only Atty. Sabling. Respondent admitted though having represented Balageo in the ejectment case, but
denied that he took advantage of the Retainer Agreement between complainant and Davis and Sabling
Law Office. Thus:

3.a Prior to the engagement of the Complainant of the DAVIS and SABLING LAW OFFICE as her
retainer, Novie Balageo was already one of the Clients of Respondent in several cases;
3.b Sometime in the last week of the month of May 2005, while Respondent was in his office doing
some legal works, Novie Balageo called up Respondent informing the latter that his assistance is
needed for purposes of conducting an inventory of all items at the former Nashville Country Music
Lounge;
3.c Respondent [asked] Novie Balageo [the purpose of] the inventory [to which] the latter x xx
responded x xx that she entered into a lease contract with the present administrator of the
building, Benjie Pinlac;
3.d Respondent, to his disbelief requested Novie Balageo to go [to] the LAW OFFICE for further
clarification of the matter. Thereafter, Respondent was later informed that the business of
Complainant was taken over and operated by Mr. Benjie Pinlac for seven days. Furthermore, Mr.
Benjie Pinlac offered the said place to Novie Balageo which the latter readily accepted;
3.e [Left] with no recourse, Respondent requested one of his staff to assist Novie Balageo in
conducting an inventory. Furthermore, Respondent never acted as partner of Novie Balageo in
operating the former Nashville Country Music Lounge;
3.f When Complainant filed the civil case for Ejectment against Novie Balageo and Benjie Pinlac,
Respondent represented the former thereof without taking advantage of the retainership contract
between the DA VIS and SABLING LAW OFFICE [and] Complainant as Respondent has no
knowledge or information of any matters related by complainant to Atty. Sabling regarding the
former' s business;
3.g While the Complaint was pending, respondent was xx x informed by Novie Balageo and Benjie
Pinlac of the truth of all matters x x x which x x x Respondent [was unaware of];
3.h However, for the interest of justice and fair play, x x x Respondent [deemed it prudent] to xx x
withdraw as Counsel for Novie Balageo. Hence, Respondent filed his Motion to Withdraw As
Counsel. x x x
3.i The civil case was subsequently dismissed for lack of jurisdiction over the [Complaint's] subject
matter. x x x7

On October 15, 2008, the Investigating Commissioner rendered a Report and Recommendation8 finding
respondent guilty of betrayal of his client's trust and for misuse of information obtained from his client to
the disadvantage of the latter and to the advantage of another person. He recommended that respondent
be suspended from the practice oflaw for a period of one year.

On December 11, 2008, the IBP Board of Governors adopted and approved the Report and
Recommendation of the Investigating Commissioner.9 Upon motion of the respondent, it reduced the
penalty imposed to six months suspension considering that there is no proof that respondent actually
handled any previous legal matters involving complainant.10

Our Ruling

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

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

"A lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose
interest conflicts with that of his present or former client."11 The prohibition against representing
conflicting interests is absolute and the rule applies even if the lawyer has acted in good faith and with no
intention to represent conflicting interests.12 In Quiambao v. Atty. Bamba,13 this Court emphasized that
lawyers are expected not only to keep inviolate the client's confidence, but also to avoid the appearance of
treachery and double-dealing for only then can litigants be encouraged to entrust their secrets to their
lawyers, which is of paramount importance in the administration of justice.14

Respondent argues that while complainant is a client of Davis & Sabling Law office, her case is actually
handled only by his partner Atty. Sabling. He was not privy to any transaction between Atty. Sabling and
complainant and has no knowledge of any information or legal matter complainant entrusted or confided
to his law partner. He thus inveigles that he could not have taken advantage of an information obtained by
his law firm by virtue of the Retainer Agreement. We are not impressed. In Hilado v. David,15 reiterated in
Gonzales v. Atty. Cabucana, Jr.,16this Court held that a lawyer who takes up the cause of the adversary of
the party who has engaged the services of his law firm brings the law profession into public disrepute and
suspicion and undermines the integrity of justice. Thus, respondent's argument that he never took
advantage of any information acquired by his law finn in the course of its professional dealings with the
complainant, even assuming it to be true, is of no moment. Undeniably aware of the fact that complainant
is a client of his law firm, respondent should have immediately informed both the complainant and
Balageo that he, as well as the other members of his law firm, cannot represent any of them in their legal
tussle; otherwise, they would be representing conflicting interests and violate the Code of Professional
Responsibility. Indeed, respondent could have simply advised both complainant and Balageo to instead
engage the services of another lawyer.

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

WHEREFORE, the Court ADOPTS and AFFIRMS the January 15, 2012 Resolution of the Integrated Bar of
the Philippines Board of Governors. Atty. Riz Tingalon L. Davis is found GUILTY of violating Rule 15.03,
Canon 15 of the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law for
a period of six (6) months effective upon receipt of this Resolution. He is warned that a commission of the
same or similar offense in the future will result in the imposition of a stiffer penalty.Let a copy of this
Resolution be entered into the records of Atty. Riz Tingalon L. Davis and furnished to the Office of the
Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the
Philippines, for their information and guidance. Atty. Riz Tingalon L. Davis is DIRECTED to inform the
Court of the date of his receipt of this Resolution.SO ORDERED.

A.C. No. 6664 July 16, 2013 FERDINAND A. SAMSON, Complainant, vs.ATTY. EDGARDO O.
ERA, Respondent.

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

Antecedents

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

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

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

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

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

When Samson and his co-complainants verified the title of the property at the Registry of Deeds and the
Assessors Office of Antipolo City, they were dismayed to learn that they could not liquidate the property
because it was no longer registered under the name of ICS Corporation but was already under the name
of Bank Wise Inc.5 Upon their urging, Atty. Era negotiated as their counsel with ICS Corporation.

Due to the silence of Atty. Era for sometime thereafter, Samson and his group wrote to him on September
8, 2004 to remind him about his guarantee and the promise to settle the issues with Sison and her
cohorts. But they did not hear from Atty. Era at all.6

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

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

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

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

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

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

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

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

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

The Investigating Commissioner recommended that Atty. Era be suspended from the practice of law for
six months, viz:

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

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

On June 9, 2012, the IBP Board of Governors passed Resolution No. XX-2012-180,20 denying Atty. Eras
motion for reconsideration and affirming Resolution No. XVIII-2007-195.The IBP Board of Governors then
forwarded the case to the Court pursuant to Section 12(b), Rule 139-B of the Rules of Court.21

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

Ruling

We affirm the findings of the IBP.

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

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

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

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

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing
parties. The test is "whether or not in behalf of one client, it is the lawyers duty to fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument
will be opposed by him when he argues for the other client." This rule covers not only cases in which
confidential communications have been confided, but also those in which no confidence has been
bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer will
require the attorney to perform an act which will injuriously affect his first client in any matter in which he
represents him and also whether he will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the inconsistency of interests is whether
the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided
fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance
thereof.28

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

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

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

Third, a client has a legal right to have the lawyer safeguard the clients confidential information
xxx.1wphi1 Preventing use of confidential client information against the interests of the client, either to
benefit the lawyers personal interest, in aid of some other client, or to foster an assumed public purpose
is facilitated through conflicts rules that reduce the opportunity for such abuse.

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

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

The rule prohibiting conflict of interest was fashioned to prevent situations wherein a lawyer would be
representing a client whose interest is directly adverse to any of his present or former clients. In the same
way, a lawyer may only be allowed to represent a client involving the same or a substantially related
matter that is materially adverse to the former client only if the former client consents to it after
consultation.30 The rule is grounded in the fiduciary obligation of loyalty.31 Throughout the course of a
lawyer-client relationship, the lawyer learns all the facts connected with the client's case, including the
weak and strong points of the case. Knowledge and information gathered in the course of the relationship
must be treated as sacred and guarded with care.1wphi1 It behooves lawyers not only to keep inviolate
the clients confidence, but also to avoid the appearance of treachery and double-dealing, for only then
can litigants be encouraged to entrust their secrets to their lawyers, which is paramount in the
administration of justice.32 The nature of that relationship is, therefore, one of trust and confidence of the
highest degree.33

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

The lawyers highest and most unquestioned duty is to protect the client at all hazards and costs even to
himself.35 The protection given to the client is perpetual and does not cease with the termination of the
litigation, nor is it affected by the clients ceasing to employ the attorney and retaining another, or by any
other change of relation between them. It even survives the death of the client.36

In the absence of the express consent from Samson and his group after full disclosure to them of the
conflict of interest, therefore, the most ethical thing for Atty. Era to have done was either to outrightly
decline representing and entering his appearance as counsel for Sison, or to advice Sison to engage
another lawyer for herself. Unfortunately, he did neither, and should now suffer the proper
sanction.WHEREFORE, the Court FINDS and PRONOUNCES Atty. EDGARDO O. ERA guilty of violating Rule
15.03 of Canon 15, and Canon 17 of the Code of Professional Responsibility; and SUSPENDS him from the
practice of law for two years effective upon his receipt of this decision, with a warning that his commission
of a similar offense will be dealt with more severely.Let copies of this decision be included in the personal
record of Atty. EDGARDO 0. ERA and entered m his file in the Office of the Bar Confidant.Let copies of this
decision be disseminated to all lower courts by the Office of the Court Administrator, as well as to the
Integrated Bar of the Philippines for its guidance.SO ORDERED.

A.C. No. 9537 June 10, 2013(Formerly CBD Case No. 09-2489)DR. TERESITA
LEE, Complainant, vs.ATTY. AMADOR L. SIMANDO, Respondent.

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

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

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

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

Date: Amount

November 11, 2006 Php 400,000.00

November 24, 2006 200,000.00

November 27, 2006 400,000.00

December 7, 2006 200,000.00

December 13, 2006 200,000.00

Total: Php1,400,000.00

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

Despite complainant's repeated requests, respondent ignored her and failed to bring legal actions against
Mejorado. Thus, in January 2008, complainant was forced to terminate her contract with Atty.
Simando.Subsequently, complainant's new lawyer, Atty. Gilbert Morandarte, sent a demand letter dated
June 13, 2008 to Atty. Simando in his capacity as the co-maker of some of the loans of Mejorado.In his
Letter dated June 30, 2008, respondent denied his liability as a co-maker and claimed that novation had
occurred because complainant had allegedly given additional loans to Mejorado without his knowledge.6

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

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

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

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

Respondent claimed that complainant is a money-lender exacting high interest rates from borrowers.11 He
narrated several instances and civil cases where complainant was engaged in money-lending where he
divulged that even after defendants had already paid their loan, complainant still persists in collecting
from them.12Respondent asserted that he knew of these transactions, because he was among the four
lawyers who handled complainant's case.13

Respondent averred that from the time that Mejorado and Dr. Lee had become close to each other, the
latter had given Mejorado additional investments and one (1) Silverado Pick-up at the price
of P500,000.00 and fifty (50) sacks of old clothings. He claimed that the additional investments made by
Dr. Lee to Mejorado were given without his knowledge.

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

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

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

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

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

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

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

On March 18, 2010, the IBP-CBD found Atty. Simando guilty of violating the Code of Professional
Responsibility. It recommended that respondent be suspended from the practice of law for six (6)
months.On December 29, 2010, the IBP Board of Governors adopted and approved the Report and
Recommendation of the IBP-CBD to suspend Atty. Simando from the practice of law for a period of six (6)
months.Respondent moved for reconsideration.On March 10, 2012, the IBP Board of Governors granted
respondent's motion for reconsideration for lack of sufficient evidence to warrant the penalty of
suspension. The Resolution dated December 29, 2010 was reversed and the case against respondent was
dismissed.

RULING
We reverse the ruling of the IBP Board of Governors.Jurisprudence has provided three tests in determining
whether a lawyer is guilty of representing conflicting interest:One test is whether a lawyer is duty-bound
to fight for an issue or claim in behalf of one client and, at the same time, to oppose that claim for the
other client. Thus, if a lawyers argument for one client has to be opposed by that same lawyer in arguing
for the other client, there is a violation of the rule.

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

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

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

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

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

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

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

(a) failed to act on Mejorado's failure to pay his obligation to complainant despite the latter's
instruction to do so;
(b) denied liability despite signing as co-maker in the receipts/promissory notes arising from the
loan agreement between his two clients;
(c) rebutted complainant's allegations against Mejorado and him, and even divulged informations
he acquired while he was still complainant's lawyer.

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

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

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

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

We likewise note that respondent offered several excuses in order to avoid payment of his
liability.1wphi1 First, in his Answer to complainant's demand letter, he claimed there was novation which
extinguished his liability; Secondly, he claimed that the amount received by Mejorado for which he signed
as co-maker was merely an investment and not a loan. Finally, he alleged that it was agreed that the
investment with profits will be paid only after Mejorado receives the payment for his claim for reward
which complainant violated when she presented the checks for payment prematurely. These actuations of
Atty. Simando do not speak well of his reputation as a lawyer.22

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

We held in Nombrado v. Hernandez25 that the termination of the relation of attorney and client provides
no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client.
The reason for the rule is that the clients confidence once reposed cannot be divested by the expiration of
the professional employment. Consequently, a lawyer should not, even after the severance of the relation
with his client, do anything which will injuriously affect his former client in any matter in which he
previously represented him nor should he disclose or use any of the client's confidences acquired in the
previous relation.

Accordingly, we reiterate that lawyers are enjoined to look at any representation situation from "the point
of view that there are possible conflicts," and further, "to think in terms of impaired loyalty" that is to
evaluate if his representation in any way will impair loyalty to a client.26

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

Let copies of this Decision be furnished all courts, the Office of the Bar Confidant and the Integrated Bar of
the Philippines for their information and guidance. The Office of the Bar Confidant is DIRECTED to append
a copy of this Decision to respondent's record as member of the Bar. Atty. Simando is DIRECTED to inform
the Court of the date of his receipt of this Decision so that we can determine the reckoning point when his
suspension shall take effect.This Decision shall be immediately executory.SO ORDERED.

A.C. No. 10567 February 25, 2015 WILFREDO ANGLO, Complainant, vs.ATTY. JOSE MA. V.
VALENCIA, ATTY. JOSE MA. J. CIOCON, ATTY. PHILIP Z. DABAO, ATTY. LILY UYV ALENCIA,
ATTY. JOEY P. DE LA PAZ, ATTY. CRIS G. DIONELA, ATTY. RAYMUNDO T. PANDAN, JR.,* ATTY.
RODNEY K. RUBICA,** and ATTY. WILFRED RAMON M. PENALOSA, Respondents.

This is an administrative case stemming from a complaint-affidavit1 dated December 4, 2009 filed by
complainant Wilfredo Anglo (complainant) charging respondents Attys. Jose Ma. V. Valencia (Atty.
Valencia), Jose Ma. J. Ciocon (Atty. Ciocon ), Philip Z. Dabao (Atty. Dabao ), Lily Uy-Valencia (Atty. Uy-
Valencia), Joey P. De La Paz (Atty. De La Paz), Cris G. Dionela (Atty. Dionela), Raymundo T. Pandan, Jr.
(Atty. Pandan, Jr.), Rodney K. Rubica (Atty. Rubica), and Wilfred Ramon M. Penalosa (Atty. Penalosa;
collectively, respondents) of violating the Code of Professional Responsibility (CPR), specifica1ly the rule
against conflict of interest.
The Facts

In his complaint-affidavit, complainant alleged that he availed the services of the law firm Valencia Ciocon
Dabao Valencia De La Paz Dionela Pandan Rubica Law Office(law firm), of which Attys. Valencia, Ciocon,
Dabao, Uy-Valencia, De La Paz, Dionela, Pandan, Jr., and Rubica were partners, for two (2) consolidated
labor cases2 where he was impleaded as respondent. Atty. Dionela, a partner of the law firm, was
assigned to represent complainant. The labor cases were terminated on June 5, 2008 upon the agreement
of both parties.3

On September 18, 2009, a criminal case4 for qualified theft was filed against complainant and his wife by
FEVE Farms Agricultural Corporation (FEVE Farms) acting through a certain Michael Villacorta (Villacorta).
Villacorta, however, was represented by the law firm, the same law office which handled complainants
labor cases. Aggrieved, complainant filed this disbarment case against respondents, alleging that they
violated Rule 15.03, Canon 15 and Canon 21 of the CPR,5 to wit:

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

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.

CANON 21 A LAWYER SHALL PRESERVE THE CONFIDENCES AND SECRETS OF HIS CLIENT EVEN AFTER
THE ATTORNEY-CLIENT RELATION IS TERMINATED.

In their defense,6 respondents admitted that they indeed operated under the name Valencia Ciocon Dabao
Valencia De La Paz Dionela Pandan Rubica Law Office, but explained that their association is not a formal
partnership, but one that is subject to certain "arrangements." According to them, each lawyer contributes
a fixed amount every month for the maintenance of the entire office; and expenses for cases, such as
transportation, copying, printing, mailing, and the like are shouldered by each lawyer separately, allowing
each lawyer to fix and receive his own professional fees exclusively.7 As such, the lawyers do not discuss
their clientele with the other lawyers and associates, unless they agree that a case be handled
collaboratively. Respondents claim that this has been the practice of the law firm since its inception. They
averred that complainants labor cases were solely and exclusively handled by Atty. Dionela and not by
the entire law firm. Moreover, respondents asserted that the qualified theft case filed by FEVE Farms was
handled by Atty. Pealosa, a new associate who had no knowledge of complainants labor cases, as he
started working for the firm after the termination thereof.8 Meanwhile, Atty. Dionela confirmed that he
indeed handled complainants labor cases but averred that it was terminated on June 13, 2008,9 and that
complainant did not have any monthly retainer contract.10 He likewise explained that he did not see the
need to discuss complainants labor cases with the other lawyers as the issue involved was very
simple,11 and that the latter did not confide any secret during the time the labor cases were pending that
would have been used in the criminal case with FEVE Farms. He also claimed that the other lawyers were
not aware of the details of complainants labor cases nor did they know that he was the handling counsel
for complainant even after the said cases were closed and terminated.12 The IBPs Report and
Recommendation

In a Report and Recommendation13 dated September 26, 2011, the IBP Commissioner found respondents
to have violated the rule on conflict of interest and recommended that they be reprimandedtherefor, with
the exception of Atty. Dabao, who had died on January 17, 2010.14 The IBP found that complainant was
indeed represented in the labor cases by the respondents acting together as a law firm and not solely by
Atty. Dionela. Consequently, there was a conflict of interest in this case, as respondents, through Atty.
Pealosa, having been retained by FEVE Farms, created a connection that would injure complainant in the
qualified theft case. Moreover, the termination of attorney-client relation provides no justification for a
lawyer to represent an interest adverse to or in conflict with that of the former client.15

In a Resolution16 dated February 12, 2013, the IBP Board of Governors adopted and approved the IBP
Commissioners Report and Recommendation with modification. Instead of the penalty of reprimand, the
IBP Board of Governors dismissed the case with warning that a repetition of the same or similar act shall
be dealt with more severely.
Complainant filed a motion for reconsideration17 thereof, which the IBP Board of Governors granted in its
Resolution18 dated March 23, 2014 and thereby (a) set aside its February 12, 2013 Resolution and (b)
adopted and approved the IBP Commissioners Report and Recommendation, with modification, (1)
reprimanding the respondents for violation of the rule on conflict of interest; (2) dismissing the case
against Atty. Dabao in view of his death; and (3) suspending Atty. Dionela from the practice of law for one
year, being the handling counsel of complainants labor cases.

The Issue Before the Court

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

The Courts Ruling

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


CANON 15 A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS.
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.
CANON 21 A LAWYER SHALL PRESERVE THE CONFIDENCES AND SECRETS OF HIS CLIENT EVEN AFTER
THE ATTORNEY-CLIENT RELATIONSHIP IS TERMINATED.

In Hornilla v. Atty. Salunat,19 the Court explained the concept of conflict of interest in this wise:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing
parties.1wphi1 The test is "whether or not in behalf of one client, it is the lawyers duty to fight for an
issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this
argument will be opposed by him when he argues for the other client." This rule covers not only cases in
which confidential communications have been confided, but also those in which no confidence has been
bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer will
require the attorney to perform an act which will injuriously affect his first client in any matter in which he
represents him and also whether he will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the inconsistency of interests is whether
the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided
fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance
thereof.20

As such, a lawyer is prohibited from representing new clients whose interests oppose those of a former
client in any manner, whether or not they are parties in the same action or on totally unrelated cases. The
prohibition is founded on the principles of public policy and good taste.21 In this case, the Court concurs
with the IBPs conclusions that respondents represented conflicting interests and must therefore be held
liable. As the records bear out, respondents law firm was engaged and, thus, represented complainant in
the labor cases instituted against him. However, after the termination thereof, the law firm agreed to
represent a new client, FEVE Farms, in the filing of a criminal case for qualified theft against complainant,
its former client, and his wife. As the Court observes, the law firms unethical acceptance of the criminal
case arose from its failure to organize and implement a system by which it would have been able to keep
track of all cases assigned to its handling lawyers to the end of, among others, ensuring that every
engagement it accepts stands clear of any potential conflict of interest. As an organization of individual
lawyers which, albeit engaged as a collective, assigns legal work to a corresponding handling lawyer, it
behooves the law firm to value coordination in deference to the conflict of interest rule. This lack of
coordination, as respondents law firm exhibited in this case, intolerably renders its clients secrets
vulnerable to undue and even adverse exposure, eroding in the balance the lawyer-client relationships
primordial ideal of unimpaired trust and confidence. Had such system been institutionalized, all of its
members, Atty. Dionela included, would have been wary of the above-mentioned conflict, thereby
impelling the firm to decline FEVE Farms subsequent engagement. Thus, for this shortcoming, herein
respondents, as the charged members of the law firm, ought to be administratively sanctioned. Note that
the Court finds no sufficient reason as to why Atty. Dionela should suffer the greater penalty of
suspension. As the Court sees it, all respondents stand in equal fault for the law firms deficient
organization for which Rule 15.03, Canon 15 and Canon 21 of the CPR had been violated. As such, all of
them are meted with the same penalty of reprimand, with a stern warning that a repetition of the same or
similar infraction would be dealt with more severely.

As a final point, the Court clarifies that respondents' pronounced liability is not altered by the fact that the
labor cases against complainant had long been terminated. Verily, the termination of attorney-client
relation provides no justification for a lawyer to represent an interest adverse to or in conflict with that of
the former client. The client's confidence once reposed should not be divested by mere expiration of
professional employment.WHEREFORE, respondents Attys. Jose Ma. V. Valencia, Jose Ma. J. Ciocon, Lily
Uy-Valencia, Joey P. De La Paz, Cris G. Dionela, Raymundo T. Pandan, Jr., Rodney K. Rubica, and Wilfred
Ramon M. Penalosa are found GUILTY of representing conflicting interests in violation of Rule 15.03,
Canon 15 and Canon 21 of the Code of Professional Responsibility and are therefore REPRIMANDED for
said violations, with a STERN WARNING that a repetition of the same or similar infraction would be dealt
with more severely. Meanwhile, the case against Atty. Philip Dabao is DISMISSED in view of his death.Let
a copy of this Resolution be furnished the Office of the Bar Confidant, to be appended to respondents'
personal records as attorneys. Further, let copies of this Resolution be furnished the Integrated Bar of the
Philippines and the Office of the Court Administrator, which is directed to circulate them to all courts in the
country for their information and guidance. SO ORDERED.

A.C. No. 8243 July 24, 2009


ROLANDO B. PACANA, JR., Complainant, vs.
ATTY. MARICEL PASCUAL-LOPEZ, Respondent.

This case stems from an administrative complaint1 filed by Rolando Pacana, Jr. against Atty. Maricel
Pascual-Lopez charging the latter with flagrant violation of the provisions of the Code of Professional
Responsibility.2Complainant alleges that respondent committed acts constituting conflict of interest,
dishonesty, influence peddling, and failure to render an accounting of all the money and properties
received by her from complainant.

On January 2, 2002, complainant was the Operations Director for Multitel Communications Corporation
(MCC). MCC is an affiliate company of Multitel International Holdings Corporation (Multitel). Sometime in
July 2002, MCC changed its name to Precedent Communications Corporation (Precedent).3

According to complainant, in mid-2002, Multitel was besieged by demand letters from its members and
investors because of the failure of its investment schemes. He alleges that he earned the ire of Multitel
investors after becoming the assignee of majority of the shares of stock of Precedent and after being
appointed as trustee of a fund amounting to Thirty Million Pesos (P30,000,000.00) deposited at Real Bank.

Distraught, complainant sought the advice of respondent who also happened to be a member of the
Couples for Christ, a religious organization where complainant and his wife were also active members.
From then on, complainant and respondent constantly communicated, with the former disclosing all his
involvement and interests in Precedent and Precedents relation with Multitel. Respondent gave legal
advice to complainant and even helped him prepare standard quitclaims for creditors. In sum, complainant
avers that a lawyer-client relationship was established between him and respondent although no formal
document was executed by them at that time. A Retainer Agreement4 dated January 15, 2003 was
proposed by respondent. Complainant, however, did not sign the said agreement because respondent
verbally asked for One Hundred Thousand Pesos (P100,000.00) as acceptance fee and a 15% contingency
fee upon collection of the overpayment made by Multitel to Benefon,5 a telecommunications company
based in Finland. Complainant found the proposed fees to be prohibitive and not within his means.6 Hence,
the retainer agreement remained unsigned.7

After a few weeks, complainant was surprised to receive a demand letter from respondent8 asking for the
return and immediate settlement of the funds invested by respondents clients in Multitel. When
complainant confronted respondent about the demand letter, the latter explained that she had to send it
so that her clients defrauded investors of Multitel would know that she was doing something for them
and assured complainant that there was nothing to worry about.9
Both parties continued to communicate and exchange information regarding the persistent demands made
by Multitel investors against complainant. On these occasions, respondent impressed upon complainant
that she can closely work with officials of the Anti-Money Laundering Council (AMLC), the Department of
Justice (DOJ), the National Bureau of Investigation (NBI), the Bureau of Immigration and Deportations
(BID),10 and the Securities and Exchange Commission (SEC)11 to resolve complainants problems.
Respondent also convinced complainant that in order to be absolved from any liability with respect to the
investment scam, he must be able to show to the DOJ that he was willing to divest any and all of his
interests in Precedent including the funds assigned to him by Multitel.12

Respondent also asked money from complainant allegedly for safekeeping to be used only for his case
whenever necessary. Complainant agreed and gave her an initial amount of P900,000.00 which was
received by respondent herself.13 Sometime thereafter, complainant again gave
respondent P1,000,000.00.14 Said amounts were all part of Precedents collections and sales proceeds
which complainant held as assignee of the companys properties.15

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

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

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

Dear Butchie,

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

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

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

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

As for your kids, legally they can stay here but recently, it is the children who (sic) the irate clients and
government officials harass and kidnap to make the individuals they want to come out from hiding (sic). I
do not want that to happen. Things will be really easier on my side.

Please do not worry. Give me 3 months to make it all disappear. But if you hire Coco, I will give him the
free hand to work with your case. Please trust me. I have never let you down, have I? I told you this will
happen but we are ready and prepared. The clients who received the phones will stand by you and make
you the hero in this scandal. I will stand by you always. This is my expertise. TRUST me! That is all. You
have an angel on your side. Always pray though to the best legal mind up there. You will be ok!

Candy22

On July 4, 2003, contrary to respondents advice, complainant returned to the country. On the eve of his
departure from the United States, respondent called up complainant and conveniently informed him that
he has been cleared by the NBI and the BID.23

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

Respondent even publicly announced in their religious organization that she was able to help settle the ten
(10) warrants of arrest and hold departure order issued against complainant and narrated how she was
able to defend complainant in the said cases.25

By April 2004, however, complainant noticed that respondent was evading him. Respondent would either
refuse to return complainants call or would abruptly terminate their telephone conversation, citing several
reasons. This went on for several months.26 In one instance, when complainant asked respondent for an
update on the collection of Benefons obligation to Precedent which respondent had previously taken
charge of, respondent arrogantly answered that she was very busy and that she would read Benefons
letter only when she found time to do so.

On November 9, 2004, fed up and dismayed with respondents arrogance and evasiveness, complainant
wrote respondent a letter formally asking for a full accounting of all the money, documents and properties
given to the latter.27 Respondent rendered an accounting through a letter dated December 20,
2004.28 When complainant found respondents explanation to be inadequate, he wrote a latter expressing
his confusion about the accounting.29 Complainant repeated his request for an audited financial report of
all the properties turned over to her; otherwise, he will be constrained to file the appropriate case against
respondent.30 Respondent replied,31explaining that all the properties and cash turned over to her by
complainant had been returned to her clients who had money claims against Multitel. In exchange for this,
she said that she was able to secure quitclaim documents clearing complainant from any liability.32 Still
unsatisfied, complainant decided to file an affidavit-complaint33against respondent before the Commission
on Bar Discipline of the Integrated Bar of the Philippines (IBP) seeking the disbarment of respondent.
In her Answer-Affidavit,34 respondent vehemently denied being the lawyer for Precedent. She maintained
that no formal engagement was executed between her and complainant. She claimed that she merely
helped complainant by providing him with legal advice and assistance because she personally knew him,
since they both belonged to the same religious organization.35lavvph!1

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

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

In her Position Paper,39 respondent also questioned the admissibility of the electronic evidence submitted
by complainant to the IBPs Commission on Bar Discipline. Respondent maintained that the e-mail and the
text messages allegedly sent by respondent to complainant were of doubtful authenticity and should be
excluded as evidence for failure to conform to the Rules on Electronic Evidence (A.M. No. 01-7-01-SC).

After due hearing, IBP Investigating Commissioner Patrick M. Velez issued a Report and
Recommendation40finding that a lawyer-client relationship was established between respondent and
complainant despite the absence of a written contract. The Investigating Commissioner also declared that
respondent violated her duty to be candid, fair and loyal to her client when she allowed herself to
represent conflicting interests and failed to render a full accounting of all the cash and properties
entrusted to her. Based on these grounds, the Investigating Commissioner recommended her disbarment.

Respondent moved for reconsideration,41 but the IBP Board of Governors issued a
Recommendation42 denying the motion and adopting the findings of the Investigating Commissioner.

The case now comes before this Court for final action.

We affirm the findings of the IBP.

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

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

This prohibition is founded on principles of public policy, good taste43 and, more importantly, upon
necessity. In the course of a lawyer-client relationship, the lawyer learns all the facts connected with the
clients case, including its weak and strong points. Such knowledge must be considered sacred and
guarded with care. No opportunity must be given to him to take advantage of his client; for if the
confidence is abused, the profession will suffer by the loss thereof.44 It behooves lawyers not only to keep
inviolate the clients confidence, but also to avoid the appearance of treachery and double dealing for
only then can litigants be encouraged to entrust their secrets to their lawyers, which is paramount in the
administration of justice.45 It is for these reasons that we have described the attorney-client relationship
as one of trust and confidence of the highest degree.46

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

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

The absence of a written contract will not preclude the finding that there was a professional relationship
between the parties. Documentary formalism is not an essential element in the employment of an
attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice
and assistance of an attorney is sought and received in any matter pertinent to his
profession.50 (Emphasis supplied.)1awphi1

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

In Hornilla v. Atty. Salunat,51 we explained the concept of conflict of interest, thus:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing
parties. The test is "whether or not in behalf of one client, it is the lawyers duty to fight for an issue or
claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument
will be opposed by him when he argues for the other client." This rule covers not only cases in which
confidential communications have been confided, but also those in which no confidence has been
bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer will
require the attorney to perform an act which will injuriously affect his first client in any matter in which he
represents him and also whether he will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the inconsistency of interests is whether
the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided
fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance
thereof.52

Indubitably, respondent took advantage of complainants hapless situation, initially, by giving him legal
advice and, later on, by soliciting money and properties from him. Thereafter, respondent impressed upon
complainant that she had acted with utmost sincerity in helping him divest all the properties entrusted to
him in order to absolve him from any liability. But simultaneously, she was also doing the same thing to
impress upon her clients, the party claimants against Multitel, that she was doing everything to reclaim
the money they invested with Multitel. Respondent herself admitted to complainant that without the
latters help, she would not have been able to earn as much and that, as a token of her appreciation, she
was willing to share some of her earnings with complainant.53 Clearly, respondents act is shocking, as it
not only violated Rule 9.02, Canon 9 of the Code of Professional Responsibility,54 but also toyed with
decency and good taste.

Respondent even had the temerity to boast that no Multitel client had ever complained of respondents
unethical behavior.55 This remark indubitably displays respondents gross ignorance of disciplinary
procedure in the Bar. As a member of the Bar, she is expected to know that proceedings for disciplinary
actions against any lawyer may be initiated and prosecuted by the IBP Board of Governors, motu proprio
or upon referral by this Court or by the Board of Officers of an IBP Chapter56 even if no private individual
files any administrative complaint.

Upon review, we find no cogent reason to disturb the findings and recommendations of the IBP
Investigating Commissioner, as adopted by the IBP Board of Governors, on the admissibility of the
electronic evidence submitted by complainant. We, accordingly, adopt the same in toto.
Finally, respondent argues that the recommendation of the IBP Board of Governors to disbar her on the
grounds of deceit, malpractice and other gross misconduct, aside from violation of the Lawyers Oath, has
been rendered moot and academic by voluntary termination of her IBP membership, allegedly after she
had been placed under the Department of Justices Witness Protection Program.57 Convenient as it may be
for respondent to sever her membership in the integrated bar, this Court cannot allow her to do so
without resolving first this administrative case against her.

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

WHEREFORE, respondent Attorney Maricel Pascual-Lopez is hereby DISBARRED for representing


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

Let a copy of this Decision be entered in the respondents record as a member of the Bar, and notice of
the same be served on the Integrated Bar of the Philippines, and on the Office of the Court Administrator
for circulation to all courts in the country.SO ORDERED.

A.C. No. 10687 July 22, 2015 MABINI COLLEGES, INC. represented by MARCEL N. LUKBAN,
ALBERTO I. GARCIA, JR., and MA. PAMELA ROSSANA A. APUYA, Complainant, vs.ATTY. JOSE D.
PAJARILLO, Respondent.

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

The salient facts of the case follow:

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

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

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

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

On May 14, 1999, respondent sent a letter to RBP to assure the latter of complainants financial capacity
to pay the loan.
On July 13, 1999, RBP granted the loan application in the amount of P200,000 which was secured by a
Real Estate Mortgage over the properties of the complainant.

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

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

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

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

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

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

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

On February 14, 2013, the Investigating Commissioner issued a Report and Recommendation2 finding
respondent guilty of representing conflicting interests and recommending that respondent be suspended
from the practice of law for at least one year. The Investigating Commissioner noted that respondent
appeared for RBP in the case for annulment of mortgage filed by his former client, the complainant herein.
The Investigating Commissioner cited cast vouchers3 from 1994 to 2001 showing that respondent was
paid by complainant for his retained legal services. According to the Investigating Commissioner, these
vouchers debunk respondents claim that the complainant merely appointed him as its corporate
secretary. The Investigating Commissioner also held that the personality of complainants representative
to file this administrative case is immaterial since proceedings for disbarment, suspension or discipline of
attorneys may be taken by the Supreme Court motu prprio or by the Integrated Bar of the Philippines
(IBP) upon the verified complaint of any person.

On June 21, 2013, the Board of Governors of the IBP issued Resolution No. XX-2013-7704 which affirmed
the findings of the Investigating Commissioner and imposed a penalty of suspension from the practice of
law for one year against respondent.

On May 3, 2014, the Board of Governors of the IBP issued Resolution No. XXI-2014-2905 which denied the
motion for reconsideration filed by respondent.

The issue in this case is whether respondent is guilty of representing conflicting interests when he entered
his appearance as counsel for RBP in the case for annulment of mortgage filed by complainant against
RBP.
We rule in the affirmative. We thus affirm the Report and Recommendation of the Investigating
Commissioner, and Resolution Nos. XX-2013-770 and XXI-2014-290 of the IBP Board of Governors.
Indeed, respondent represented conflicting interest in violation of Canon 15, Rule 15.03 of the Code of
Professional Responsibility which provides that [a] lawyer shall not represent conflicting interests except
by written consent of all concerned given after a full disclosure of the facts.

This rule prohibits a lawyer from representing new clients whose interests oppose those of a former client
in any manner, whether or not they are parties in the same action or on totally unrelated cases.6 based on
the principles o public policy and good taste, this prohibition on representing conflicting interests enjoins
lawyers not only to keep inviolate the clients confidence, but also to avoid the appearance of treachery
and double-dealing for only then can litigants be encouraged to entrust their secrets to their lawyer, which
is of paramount importance in the administration of justice.7 in Maturan v. Gonzales,8 we further explained
the rationale for the prohibition:

The reason for the prohibition is found in the relation of attorney and client, which is one of trust and
confidence of the highest degree.1wphi1 A lawyer becomes familiar with all the facts connected with his
clients case. He learns from his client the weak points of the action as well as the strong ones. Such
knowledge must be considered sacred and guarded with care. No opportunity must be given him to take
advantage of the clients secrets. A lawyer must have the fullest confidence of his client. For if the
confidence is abused the profession will suffer by the loss thereof.

Meanwhile, Hornilla v. Salunat,9 we explained the test to determine the existence of conflict of interest:

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 is his duty to oppose it for the other client. In brief, if he argues for one client this argument
will be opposed by him when he argues for the other client. This rule covers not only cases in which
confidential communications have been confided, but also those in which no confidence has been
bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer will
require the attorney to perform an act which will injuriously affect his first client in any matter in which he
represents him and also whether he will be called upon in his new relation to use against his first client
any knowledge acquired through their connection. Another test of the inconsistency of interests is whether
the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided
fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance
thereof.

The rule prohibiting conflict of interest applies to situations where in a lawyer would be representing a
client whose interest is directly adverse to any of his present or former clients.10 it also applies when the
lawyer represents a client against a former client in a controversy that is related, directly or indirectly, to
the subject matter of the previous litigations in which he appeared for the former client.[11] this rule
applies regardless of the degree of adverse interests.12 what a lawyer owes his former client is to maintain
inviolate the clients confidence or to refrain from doing anything which will injuriously affect him in any
matter in which he previously represented him.13 a lawyer may only be allowed to represent a client
involving the same or a substantially related matter that is materially adverse to the former client only if
the former client consents to it after consultation.14

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

The finding of the Investigating Commissioner that respondent was compensated by complainant for his
retained legal services is supported by the evidence on record, the cash vouchers from 1994 to 2001.
Clearly, complainant was respondents former client. And respondent appeared as counsel of RBP in a case
filed by his former client against RBP. This makes respondent guilty of representing conflicting interests
since respondent failed to show any written consent of all concerned (particularly the complainant) given
after a full disclosure of the facts representing conflicting interests.15
We also note that the respondent acted for the complainants interest on the loan transaction between
RBP and the complainant when he sent a letter dated May 14, 1999 to RBP to assure the latter of the
financial capacity of the complainant to pay the loan. But as counsel for RBP in the case for annulment of
mortgage, he clearly acted against the interest of the complainant, his former client.

Contrary to the respondents claim, it is of no moment that all the documents and information in
connection with loan transaction between RBO and the complainant were public records. In Hilado v.
David,16 we laid down the following doctrinal pronouncements:

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

Where it appeared that an attorney representing one party in litigation had formerly represented the
adverse party with respect to the same matter involved in the litigation, the court need not inquire as to
how much knowledge the attorney acquired from his former client during that relationship, before refusing
to permit the attorney to represent the adverse party. (Brown vs. Miller, 52 App. D. C. 330;286, F994)

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

This rule has been so strictly enforced that is has been held that an attorney, on terminating his
employment, cannot thereafter act as counsel against his client in the same general matter, even though,
while acting for his former client, he acquired no knowledge which could operate to his clients
disadvantage in the subsequent adverse employment. (Pierce vs. Palmer [1910], 31 R. 1., 432; 77 Atl.,
201, Ann. Cas., 1912S, 181.)

Thus, the nature and extent of the information received by the lawyer from his client is irrelevant in
determining the existence of conflict of interest.

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

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

A.C. No. 1359 October 17, 1991 GENEROSA BUTED and BENITO BOLISAY, petitioners, vs.ATTY.
HAROLD M. HERNANDO, respondent.

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

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

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


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

The record of the case shows the following background facts:

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

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

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

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

Complainant spouses, upon learning of respondent's appearance against them in the cadastral proceeding,
manifested their disapproval thereof in a letter dated 30 July 1974. 6 Respondent however, pursued the
case until it was eventually dismissed by the trial court on 2 September 1974 on the ground of
prescription. 7

At the hearing before the Office of the Solicitor General and in his Answer, respondent Hernando admitted
his involvement in the cadastral case as counsel for the Abadillas but denied having seen or taken hold of
the controversial Transfer Certificate of Title, and having availed himself of any confidential information
relating to Lot 9439-B.

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

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

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

6. Adverse influence and conflicting interests.

xxx xxx xxx


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

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

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

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

Respondent persistently argues that contrary to the claims of complainant spouses, he had never seen nor
taken hold of the Transfer Certificate of Title covering Lot No. 9439-B nor obtained any confidential
information in handling the action for specific performance. 11 The contention of respondent is, in effect,
that because complainant has not clearly shown that respondent had obtained any confidential information
from Benito Bolisay while representing the latter in the action for specific performance, respondent cannot
be penalized for representing conflicting interests. That is not the rule in this jurisdiction. The rule here is,
rather, that the mere fact that respondent had acted as counsel for Benito Bolisay in the action for specific
performance should have precluded respondent from acting or appearing as counsel for the other side in
the subsequent petition for cancellation of the Transfer Certificate of Title of the spouses Generosa and
Benito Bolisay. There is no necessity for proving the actual transmission of confidential information to an
attorney in the course of his employment by his first client in order that he may be precluded from
accepting employment by the second or subsequent client where there are conflicting interests between
the first and the subsequent clients. The reason for this rule was set out by the Court in Hilado v.
David 12 in the following terms:

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


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

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

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

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

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

An attorney is not permitted, in serving a new client as against a former one, to do anything
which will injuriously affect the former client in any manner in which the attorney formerly
represented him, though the relation of attorney and client has terminated, and the new
employment is in a different case; nor can the attorney use against his former client any
knowledge or information gained through their former connection. 16 (Emphasis supplied)

The absence of monetary consideration does not exempt the lawyer from complying with the prohibition
against pursuing cases where a conflict of interest exists. The prohibition attaches from the moment the
attorney-client relationship is established and extends beyond the duration of the professional
relationship.

The Court therefore agrees with the Solicitor-General that respondent Hernando is guilty of violation of the
Canons of Professional Ethics by representing clients with conflicting interests. We believe, however, that
a heavier penalty is appropriate.

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

CANON 16

A.C. No. 10579 December 10, 2014 ERLINDA FOSTER, Complainant, vs.
ATTY. JAIME V. AGTANG, Respondent.

This refers to the Resolution1 of the Board or Governors (BOG). Integrated Bar of the Philippines (!BP),
dated March 23, 2014, affirming with modification the findings of the Investigating Commissioner, who
recommended the suspension of respondent Atty. Jaime V. Agtang (respondent)from the practice of law
for one (1) year for ethical impropriety and ordered the payment of his unpaid obligations to complainant.
From the records, it appears that the IBP, thru its Commission on Bar Discipline (CBD),received a
complaint2, dated May 31, 2011, filed by Erlinda Foster (complainant) against respondent for "unlawful,
dishonest, immoral and deceitful"3 acts as a lawyer.

In its July 1, 2011 Order,4 the IBP-CBD directed respondent to file his Answer within 15 days from receipt
of the order. Respondent failed to do so and complainant sent a query as to the status of her complaint.
On October 10, 2011, the Investigating Commissioner issued the Order5 setting the case for mandatory
conference/hearing on November 16, 2011. It was only on November 11, 2011, or five (5) days before the
scheduled conference when respondent filed his verified Answer.6

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

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

On April 18, 2012, complainant submitted copies of the January 24, 2012 Decisions9 of the Municipal Trial
Court in Small Claims Case Nos. 2011-0077 and 2011-0079, ordering respondent [defendant therein] to
pay complainant and her husband the sum of P100,000.00 and P22,000.00, respectively, with interest at
the rate of 12% per annum from December 8, 2011 until fully paid, plus cost of suit.10

Complainants Position

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

On September 28, 2009, respondent wrote a letter12 to Tropical Villas Subdivision in relation to the legal
problem referred by complainant. He then visited the latter in her home and asked for a loan
of P100,000.00, payable in sixty (60) days, for the repair of his car. Complainant, having trust and
confidence on respondent being her lawyer, agreed to lend the amount without interest. A promissory
note13 evidenced the loan.

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

During a conversation with the Registrar of Deeds, complainant also discovered that respondent was the
one who notarized the document being questioned in the civil case she filed. When asked about this,
respondent merely replied that he would takea collaborating counsel to handle complainants case. Upon
reading a copy of the complaint filed by respondent with the trial court, complainant noticed that: 1] the
major differences in the documents issued by Tierra Realty were not alleged; 2] the contract to buy and
sell and the deed of conditional sale were not attached thereto; 3] the complaint discussed the method of
payment which was not the point of contention in the case;and 4] the veryanomalies she complained of
were not mentioned. Respondent, however, assured her that those matters could be brought up during
the hearings.
On April 23, 2010, respondent wrote to complainant, requesting that the latter extend to him the amount
of P70,000.00 or P50,000.00 "in the moment of urgency or emergency."16 Complainant obliged the
request and gave respondent the sum of P22,000.00.

On August 31, 2010, respondent came to complainants house and demanded the sum of P50,000.00,
purportedly to be given to the judge in exchange for a favorable ruling. Complainant expressed her
misgivings on this proposition but she eventually gave the amount of P25,000.00 which was covered by a
receipt,17 stating that "it is understood that the balance of P25,000.00 shall be paid later after favorable
judgment for plaintiff Erlinda Foster." On November 2, 2010, respondent insisted that the remaining
amount be given by complainant prior to the next hearing of the case, because the judge was allegedly
asking for the balance. Yet again, complainant handed to respondent the amount of P25,000.00.18

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

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

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

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

Respondents Position

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

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

Reply of Complainant

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

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

Findings and Recommendation

of the IBP

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

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

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

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

No petition for review was filed with the Court.

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

The Courts Ruling

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

Rule 1.0, Canon 1 of the CPR, provides that "[a] lawyer shall not engage in unlawful, dishonest, immoral
or deceitful conduct." It is well established that a lawyers conduct is "not confined to the performance of
his professional duties. A lawyer may be disciplined for misconduct committed either in his professional or
private capacity. The test is whether his conduct shows him to be wanting in moral character, honesty,
probity, and good demeanor, or whether it renders him unworthy to continue as an officer of the court."27
In this case, respondent is guilty of engaging in dishonest and deceitful conduct, both in his professional
and private capacity. As a lawyer, he clearly misled complainant into believing that the filing fees for her
case were worth more than the prescribed amount in the rules, due to feigned reasons such as the high
value of the land involved and the extra expenses to be incurred by court employees. In other words, he
resorted to overpricing, an act customarily related to depravity and dishonesty. He demanded the amount
of P150,000.00 as filing fee, when in truth, the same amounted only to P22,410.00. His defense that it
was complainant who suggested that amount deserves no iota of credence. For one, it is highly
improbable that complainant, who was then plagued with the rigors of litigation, would propose such
amount that would further burden her financial resources. Assuming that the complainant was more than
willing to shell out an exorbitant amount just to initiate her complaint withthe trial court, still, respondent
should not have accepted the excessive amount. As a lawyer, he is not only expected to be knowledgeable
in the matter of filing fees, but he is likewise duty-bound to disclose to his client the actual amount due,
consistent with the values of honesty and good faith expected of all members of the legal profession.

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

It is clear that respondent failed to fulfill this duty. As pointed out, he received various amounts from
complainant but he could not account for all of them. Worse, he could not deny the authenticity of the
receipts presented by complainant. Upon demand, he failed to return the excess money from the alleged
filing fees and other expenses. His possession gives rise to the presumption that he has misappropriated it
for his own use to the prejudice of, and in violation of the trust reposed in him by, the client.30 When a
lawyer receives money from the client for a particular purpose, the lawyer is bound to render an
accounting to the client showing that the money was spent for the intended purpose. Consequently, if the
lawyer does not use the money for the intended purpose, the lawyer must immediately return the money
to the client.31 Somewhat showing a propensity to demand excessive and unwarranted amounts from his
client, respondent displayed a reprehensible conduct when he asked for the amount of P50,000.00 as
"representation expenses" allegedly for the benefit of the judge handling the case, in exchange for a
favorable decision. Respondent himself signed a receipt showing that he initially took the amount of P
25,000.00 and, worse, he subsequently demanded and received the other half of the amount at the time
the case had already been dismissed. Undoubtedly, this act is tantamount to gross misconduct that
necessarily warrants the supreme penalty of disbarment. The act of demanding a sum of money from his
client, purportedly to be used as a bribe to ensure a positive outcome of a case, is not only an abuse of his
clientstrust but an overt act of undermining the trust and faith of the public inthe legal profession and the
entire Judiciary. This is the height of indecency. As officers of the court, lawyers owe their utmost fidelity
to public service and the administration of justice. In no way should a lawyer indulge in any act that would
damage the image of judges, lest the publics perception of the dispensation of justice be overshadowed
by iniquitous doubts. The denial of respondent and his claim that the amount was given gratuitously would
not excuse him from any liability. The absence of proof that the said amount was indeed used as a bribe is
of no moment. To tolerate respondents actuations would seriously erode the publics trust in the courts.

As it turned out, complainants case was dismissed as early as September 29, 2010.1wphi1 At this
juncture, respondent proved himself to be negligent in his duty as he failed to inform his client of the
status of the case, and left the client to personally inquire with the court. Surely, respondent was not only
guilty of misconduct but was also remiss in his duty to his client.

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

Time and again, the Court has consistently held that deliberate failure to pay just debts constitutes gross
misconduct, for which a lawyer may be sanctioned with suspension from the practice of law. Lawyers are
instruments for the administration of justice and vanguards of our legal system. They are expected to
maintain not only legal proficiency, but also a high standard of morality, honesty, integrity and fair dealing
so that the peoples faith and confidence in the judicial system is ensured. They must, at all times,
faithfully perform their duties tosociety, to the bar, the courts and their clients, which include prompt
payment of financial obligations.32 Verily, when the Code or the Rules speaks of "conduct" or
"misconduct," the reference is not confined to ones behavior exhibited in connection with the performance
of the lawyers professional duties, but also covers any misconduct which, albeit unrelated to the actual
practice of his profession, would show him to be unfit for the office and unworthy of the privileges which
his license and the law vest him with. Unfortunately, respondent must be found guilty of misconduct on
both scores.

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

The Court deviates from the findings of the IBP. There is substantial evidence to hold respondent liable for
representing conflicting interests in handling the case of complainant against Tierra Realty, a corporation
to which he had rendered services in the past. The Court cannot ignore the fact that respondent admitted
to having notarized the deed of sale, which was the very document being questioned in complainants
case. While the Investigating Commissioner found that the complaint inCivil Case No. 14791-65 did not
question the validity of the said contract, and that only the intentions of the parties as to some provisions
thereof were challenged, the Court still finds that the purpose for which the proscription was made exists.
The Court cannot brush aside the dissatisfied observations of the complainant as to the allegations lacking
in the complaint against Tierra Realty and the clear admission of respondent that he was the one who
notarized the assailed document. Regardless of whether it was the validity of the entire document or the
intention of the parties as to some of its provisions raised, respondent fell short of prudence in action
when he accepted complainants case, knowing fully that he was involved in the execution of the very
transaction under question. Neither his unpaid notarial fees nor the participation of a collaborating counsel
would excuse him from such indiscretion. It is apparent that respondent was retained by clients who had
close dealings with each other. More significantly, there is no record of any written consent from any of
the parties involved.
The representation of conflicting interests is prohibited "not only because the relation of attorney and
client is one of trust and confidence of the highest degree, but also because of the principles of public
policy and good taste. An attorney has the duty to deserve the fullest confidence of his client and
represent him with undivided loyalty. Once this confidence is abused or violated the entire profession
suffers."34

Penalties and Pecuniary Liabilities

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

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

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

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

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

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

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

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

WHEREFORE, finding the respondent, Atty. Jaime V. Agtang, GUILTY of gross misconduct in violation of
the Code of Professional Responsibility, the Court hereby DISBARS him from the practice of law and
ORDERS him to pay the complainant, Erlinda Foster, the amounts of P127,590.00, P50,000.00
and P2,500.00. Let a copy of this Decision be sent to the Office of the Bar Con fidanl, the Integrated Bar
of the Philippines and the Office of the Court Administrator to be circulated to ail courts.SO ORDERED.

A.C. No. 5044 December 2, 2013FELIPE C. DAGALA, Complainant,vs.


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

For the Courts resolution is an asministrative complaint1 filed by complainant Felipe C. Dagala
(complainant) against respondents Atty. Jose C. Quesada, Jr. (atty. Quesada) and Atty. Amado T.
Adquilen (Atty. Adquilen), charging them for gross negligence in handling his labor complaints.

The facts

On November 8, 1994 complainant, assisted by Atty. Quesada, filed before the National Labor Relations
Commission (NLRC), Regional Arbitration Branch No. 1, San Fernando City, La Union (NLRC-RAB)
Complaint2 for illegal dismissal, overtime pay, separation pay, damages and attorneys fees against
Capitol Allied Trading & Transport (Capitol), and owner and General Manager, Lourdes Gutierrez, as well
as its Personnel Manager, Joseph G. De Jesus, docketed as NLRC Case No. RAB-I-1??1123-94. The said
case was, however, dismissed without prejudice, through an Order3 dated December 13, 1994 (December
13, 1994 Order), for failure of complainant and Atty. Quesada to appear during the two (2) scheduled
mandatory conference hearings despite due notice. Thereafter, complainant engaged the services of Atty.
Adquilen, a former Labor Arbiter (LA) of the NLRC-RAB, who re-filed his labor case, re-docketed as NLRC
Case No. RAB-I-10-1091-95 (LU).4

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

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

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

Atty. Adquilen, however, failed to submit one, resulting in the dismissal of the complaint "for lack of
interest and failure to prosecute" as stated in an Order8 dated February 27, 1997 (February 27, 1997
Order). Atty. Adquilen and complainant received notice of the said order on March 11, 1997 and March 24,
1997,9 respectively. On July 11, 1997, complainant this time assisted by Atty. Imelda L. Picar (Atty.
Picar) filed a motion for reconsideration10

from the February 27, 1997 Order, which was treated as an appeal and transmitted to the NLRC-National
Capital Region (NLRC-NCR).11
However, the NLRC-NCR dismissed the same in a Resolution12 dated June 17, 1998 for having been filed
out of time, adding that the negligence of counsel binds the client.13

Due to the foregoing, Atty. Picar sent separate letters14 dated November 18, 1998 to respondents,
informing them that complainant is in the process of pursuing administrative cases against them before
the Court. Nevertheless, as complainant remains open to the possibility of settlement, respondents were
invited to discuss the matter at Atty. Picars office. Only Atty. Quesada responded to the said letter and
subsequently, through a Memorandum of Agreement15 dated December 5, 1998 (December 5, 1998 MoA),
undertook to compensate the damages sustained by complainant in consideration of the non-filing of an
administrative complaint against him. Atty. Quesada, however, reneged on his promise, thus prompting
complainant to proceed with the present complaint.16

In a Resolution17 dated June 21, 1999, the Court directed respondents to comment on the Complaint
within ten (10) days from notice. However, despite notices18 and the extension granted,19

Atty. Adquilen failed to comply with the directive and the subsequent show-cause
resolutions.20 Accordingly, a fine in the amount of P500.00 was imposed21 against him, which he duly paid
on September 19, 2005.22 On the other hand, Atty. Quesada, in his Comment,23 admitted having accepted
and filed the initial labor case for complainant. He, however, explained that he was unable to file the
required position paper due to complainant's failure to furnish him with the employment records and other
relevant documents. He also claimed that when he was informed of the dismissal of the case without
prejudice, he advised complainant to re-file the case with the assistance of another lawyer as he had to
attend to his duties as Chairman of the Laban ng Demokratikong Pilipino for the Second District of La
Union Province.24 Anent the December 5, 1998 MoA, Atty. Quesada alleged that he was merely prevailed
upon to sign the same for fear of losing his means of livelihood and license to practice law, and that he
had no intention of reneging on his promise to pay. Nonetheless, despite earnest efforts, he still failed to
come up with the agreed-upon amount.25

In a Resolution26 dated March 27, 2006, the Court resolved to refer the instant administrative case to the
Integrated Bar of the Philippines (IBP) for evaluation, report and recommendation or decision.

The Proceedings Before the IBP

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

Complainant was duly represented28 by his counsel at the hearing,29 while respondents filed separate
motions to reset, only to subsequently waive their respective appearances. Atty. Adquilen attributed the
waiver to his medical condition;30 on the other hand, in a complete turnaround, Atty. Quesada denied the
existence of any lawyer-client relationship between him and complainant.31

On March 25, 2009, Investigating IBP Commissioner Pedro A. Magpayo, Jr. issued a Report and
Recommendation,32 finding that respondents were grossly negligent in handling complainant's case in
violation of Rule 18.03, Canon 18 of the Code of Professional Responsibility (Code). As such, he
recommended that each of them be suspended from the practice of law for a period of one (1) year.
Moreover, Atty. Quesada was directed to comply with his undertaking under the December 5, 1998 MoA to
pay the amount of P68,000.00, with legal interest from January 20, 1999 until fully settled; while Atty.
Adquilen was ordered to pay the amount of P6,000.00, representing the difference between
the P74,000.00 settlement offered by Capitol and the above-stated settlement amount, with legal interest
from date of notice of the order of dismissal on March 25, 199733until fully paid. The IBP Board of
Governors adopted and approved the afore-stated report and recommendation in Resolution No. XX-2011-
262 dated November 19, 2011 (November 19, 2011 Resolution), finding the same to be fully supported by
the evidence on record and the applicable laws and rules. Consequently, it directed respondents to pay
complainant the total amount of P74,000.00 within thirty (30) days from notice.34

In a Resolution35 dated September 12, 2012, the Court noted the Notice36 of the IBPs November 19, 2011
Resolution, and thereafter sent notices to the parties as well as the IBP-CBD, the Office of the Bar
Confidant and the Public Information Office. However, the notice sent to Atty. Adquilen was returned
unserved with the notation "Return to Sender, Deceased."37

Thus, in the Resolutions dated February 20, 201338 and June 10, 2013,39 the IBP was required to furnish
the Court with the death certificate of Atty. Adquilen.

On August 30, 2013, the IBP filed its compliance,40 attaching therewith the Certificate of Death41 of Atty.
Adquilen which indicates that the latter passed away on June 22, 2008 due to cardiac arrhythmia. In view
of Atty. Adquilen's death prior to the promulgation of this Decision,42 the Court, bearing in mind the
punitive nature of administrative liabilities,43 hereby dismisses the case against him. Hence, what is left
for resolution is the complaint against Atty. Quesada.

The Issue Before the Court

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

The Court's Ruling

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

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

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

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

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. x x x x CANON
10 A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT. Rule 10.01 A lawyer shall
not do any falsehood, nor consent to the doing of any in court; nor shall he mislead, or allow the Court to
be misled by any artifice. x x x x

CANON 17 A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF
THE TRUST AND CONFIDENCE REPOSED IN HIM. CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH
COMPETENCE AND DILIGENCE. x x x x Rule 18.03 A lawyer shall not neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him liable.

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

Atty. Quesadas failure to attend the scheduled conference hearings, despite due notice and without any
proper justification, exhibits his inexcusable lack of care and diligence in managing his clients cause in
violation of Canon 17 and Rule 18.03, Canon 18 of the Code. Moreover, Atty. Quesada acted with less
candor and good faith in the proceedings before the IBP-CBD when he denied the existence of any lawyer-
client relationship between him and complainant, and claimed that the labor case was handled by another
lawyer,47 despite his previous admission48before the Court of having accepted complainant's case. To add
a perusal of the complaint49 dated November 8, 1994 in NLRC Case No. RAB-I-11-1123-94 reveals that
Atty. Quesada signed the same as counsel for complainant.50

While the IBP-CBD is not a court, the proceedings therein are nonetheless part of a judicial proceeding, a
disciplinary action being in reality an investigation by the Court into the misconduct of its officers or an
examination into his character.51

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

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

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

In Conlu v. Aredonia, Jr.,55 a lawyer was suspended from the practice of law for a period of one (1) year
for inexcusable negligence that resulted in the dismissal of complainants appeal and for
misrepresentations committed before the CA, in violation of Rule 1.01, Canon 1, Rule 10.01, Canon 10
and Rule 18.03, Canon 18 of the Code. In the cases of Cheng v. Atty. Agravante56 and Perea v. Atty.
Almadro,57 respondent-lawyers were similarly punished for their negligence in the discharge of their duties
to their client and for misrepresentation committed before the Court, in violation of Rule 10.01, Canon 10
and Rule 18.03, Canon 18 of the Code. Hence, consistent with existing jurisprudence, the Court adopts
the penalty recommended by the IBP and accordingly suspends Atty. Quesada for a period of one (1)
year. The Court must, however, clarify that the foregoing resolution should not include a directive to
return the amount of P74,000.00 as ordered by the IBP in its November 19, 2011 Resolution which
represents the settlement initially offered by Capitol in the dismissed labor case. The return of the said
amount partakes the nature of a purely civil liability which should not be dealt with during an
administrative-disciplinary proceeding such as this case. In Tria-Samonte v. Obias,58 the Court recently
illumined that disciplinary proceedings against lawyers are only confined to the issue of whether or not the
respondent-lawyer is still fit to be allowed to continue as a member of the Bar and that the only concern is
his administrative liability. Thus, matters which have no intrinsic link to the lawyer's professional
engagement, such as the liabilities of the parties which are purely civil in nature, should be threshed out
in a proper proceeding of such nature, and not during administrative-disciplinary proceedings, as in this
case.WHEREFORE, respondent Atty. Jose C. Quesada, Jr. is found GUILTY of violating Rule 1.01 of
Canon 1, Rule 10.01 of Canon 10, Canon 17, and Rule 18.03 of Canon 18 of the Code of Professional
Responsibility, and is accordingly SUSPENDED from the practice of law for one (1) year, effective upon
his receipt of this Decision, with a stern warning that a repitition of the same or similar acts will be dealt
with more severely.On the other hand, the admnistrative complaint respondent Atty. Amado Adquilen is
hereby DIMISSED in view of his supervening death.Let a copy of this Resolution be furnished the Office
of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court Administrator for
circulation to all the courts.SO ORDERED.

A.C. No. 7965 November 13, 2013 AZUCENA SEGOVIA-RIBAYA, Complainant,


vs.ATTY. BARTOLOME C. LAWSIN, Respondent.

For the Courts resolution is an administrative complaint1 filed by Azucena Segovia-Ribaya (complainant)
against Atty. Bartolome C. Lawsin (respondent), the antecedents of which are detailed as follows:

The Facts
On November 18, 2005, the parties entered into a retainership agreement2 (retainer) whereby respondent
undertook to, inter alia process the registration and eventually deliver, within a period of six (6 )
months,3 the certificate of title over a certain parcel of land (subject land) in favor of complainant acting
as the representative of the Heirs of the late Isabel Segovia. In connection therewith, respondent received
from complainant the amounts of P15,000.00 and P39,000.004 to cover for the litigation and land
registration expenses, respectively.

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

In his Comment,7 respondent admitted that he indeed received the subject amount from complainant but
averred that after receiving the same, the latters brother, Erlindo, asked to be reimbursed the amount
of P7,500.00 which the latter purportedly paid to the land surveyor.8 Respondent likewise alleged that he
later found out that he could not perform his undertaking under the retainer because the ownership of the
subject land was still under litigation.9 Finally, respondent stated that he wanted to return the balance of
the subject amount to complainant after deducting what Erlindo took from him, but was only prevented to
do so because he was maligned by complainant when she went to his office and there, shouted and called
him names in the presence of his staff.10

In the Courts Resolutions dated December 17, 200811 and March 2, 2009,12 the case was referred to the
Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. After both parties
failed to appear during the mandatory conference, IBP Investigating Commissioner Atty. Salvador B.
Hababag (Investigating Commissioner) required the parties to submit their respective position
papers.13 Complainant filed her position paper14 on October 8, 2009, while respondent failed to do so.

The IBPs Report and Recommendation

On November 6, 2009, the Investigating Commissioner issued his Report and Recommendation,15 finding
respondent to have violated Rules 16.01 and 16.03, Canon 16 of the Code of Professional Responsibility
(Code) for his failure to properly account for the money entrusted to him without any adequate
explanation why he could not return the same. The Investigating Commissioner found that respondents
acts demonstrated his "lack of candor, fairness, and loyalty to his client, who entrusted him with money
and documents for the registration of the subject land."16 The Investigating Commissioner likewise held
that respondents failure to return the subject amount, despite being given "adequate time to return"17 the
same, "not to mention the repeated x x x demands made upon him,"18 constitutes "gross dishonesty,
grave misconduct, and even misappropriation of money"19 in violation of the above-stated rules. In view
of the foregoing, the Investigating Commissioner recommended that respondent be suspended from the
practice of law for a period of six (6) months, with a stern warning that a repetition of the same or similar
offenses in the future shall be dealt with more severely.20

In a Resolution21 dated December 29, 2012, the IBP Board of Governors adopted and approved the
Investigating Commissioners Report and Recommendation with modification, ordering the return of the
amount of P31,500.00,22 with legal interest and within thirty (30) days from receipt of notice, to
complainant.

The Issue Before the Court

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

The Courts Ruling


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

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

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

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

Rule 16.03 A lawyer shall deliver the funds and property of his client when due or upon
demand.1wphi1 However, he shall have a lien over the funds and may apply so much thereof as may be
necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He
shall also have a lien to the same extent on all judgments and executions he has secured for his client as
provided for in the Rules of Court.

Records disclose that respondent admitted the receipt of the subject amount from complainant to cover
for pertinent registration expenses but posited his failure to return the same due to his clients act of
confronting him at his office wherein she shouted and called him names. With the fact of receipt being
established, it was then respondents obligation to return the money entrusted to him by complainant. To
this end, suffice it to state that complainants purported act of "maligning" respondent does not justify the
latters failure to properly account for and return his clients money upon due demand. Verily, a lawyers
duty to his client is one essentially imbued with trust so much so that it is incumbent upon the former to
exhaust all reasonable efforts towards its faithful compliance. In this case, despite that singular encounter,
respondent had thereafter all the opportunity to return the subject amount but still failed to do so.
Besides, the obligatory force of said duty should not be diluted by the temperament or occasional
frustrations of the lawyers client, especially so when the latter remains unsatisfied by the lawyers work.
Indeed, a lawyer must deal with his client with professional maturity and commit himself towards the
objective fulfillment of his responsibilities. If the relationship is strained, the correct course of action is for
the lawyer to properly account for his affairs as well as to ensure the smooth turn-over of the case to
another lawyer. Except only for the retaining lien exception23 under Rule 16.03, Canon 16 of the Code, the
lawyer should not withhold the property of his client. Unfortunately, absent the applicability of such
exception or any other justifiable reason therefor, respondent still failed to perform his duties under Rules
16.01 and 16.03, Canon 16 of the Code which perforce warrants his administrative liability.

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

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule 18.03 - A
lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall
render him liable.

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to the client's request for information.

After a judicious scrutiny of the records, the Court observes that respondent did not only accomplish his
undertaking under the retainer, but likewise failed to give an adequate explanation for such non-
performance despite the protracted length of time given for him to do so. As such omissions equally
showcase respondents non-compliance with the standard of proficiency required of a lawyer as embodied
in the above-cited rules, the Court deems it apt to extend the period of his suspension from the practice of
law from six (6) months to one (1) year similar to the penalty imposed in the case of Del Mundo v.
Capistrano.24
As a final point, the Court must clarify that the foregoing resolution should not include a directive for the
return of the amount of P31,500.00 as recommended by the IBP Board of Governors. The same amount
was given by complainant to respondent to cover for registration expenses; hence, its return partakes the
nature of a purely civil liability which should not be dealt with during an administrative-disciplinary
proceeding. In Tria-Samonte v. Obias,25 the Court recently held that its "findings during administrative-
disciplinary proceedings have no bearing on the liabilities of the parties involved which are purely civil in
nature meaning, those liabilities which have no intrinsic link to the lawyer's professional engagement
as the same should be threshed out in a proper proceeding of such nature." This pronouncement the Court
applies to this case and thus, renders a disposition solely on respondents administrative liability.

WHEREFORE, respondent Atty. Bartolome C. Lawsin is found guilty of violating Rules 16.01 and 16.03,
Canon 16, and Rules 18.03 and 18.04, Canon 18 of the Code of Professional Responsibility. Accordingly,
he is hereby SUSPENDED from the practice of law for a period of one (1) year effective upon his receipt of
this Resolution with a stem warning that a repetition of the same or similar acts will be dealt with more
severely.Let a copy of this Resolution be furnished the Office of the Bar Confidant the Integrated Bar of
the Philippines and the Office of the Court Administrator for circulation to all the courts.SO ORDERED.

March 18, 2015 A.C. No. 10672 EDUARDO A. MAGLENTE, Complainant, vs. ATTY. DELFIN R.
AGCAOILI, Respondent.

Before the Court is an administrative complaint1 dated May 9, 2006 filed by complainant Eduardo A.
Maglente (complainant), before the Integrated Bar of the Philippines (IBP), against respondent Atty. Delfin
R. Agcaoili, Jr. (respondent), praying that the latter be directed to return the amount of P48,000he.00
that received from the former.

The Facts

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

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

The IBPs Report and Recommendation

In a Report and Recommendation9 dated October 3, 2012, the IBP Investigating Commissioner found
respondent guilty of violating Rule 16.01 of the Code of Professional Responsibility (CPR), and accordingly,
recommended that he be: (a) meted with the penalty of Censure, with a warning that a repetition of the
same will be met with a stiffer penalty; and (b) directed to account for or return the amount of 48,000.00
to complainant.10

The Investigating Commissioner found that respondent clearly received the amount of 48,000.00 from
complainant, which was intended to answer for the filing fees of a case he was supposed to file for
the Samahan, but which he failed to do so.11 In this relation, the Investigating Commissioner observed
that had respondent prepared the complaint and performed research works, as he claimed, then he could
have kept a reasonable amount for his effort under the doctrine of quantum meruit, but unfortunately, he
could not present any proof in this respect.12

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

The Issue Before the Court

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

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the findings of the IBP, except as to the
penalty to be imposed upon respondent.1wphi1

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

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

Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
[therewith] shall render him liable.1wphi1

In the instant case, it is undisputed that complainant engaged the services of respondent for the purpose
of filing a case in court, and in connection therewith, gave the amount of 48,000.00 to answer for the
filing fees. Despite the foregoing, respondent failed to comply with his undertaking and offered the flimsy
excuse that the money he received from complainant was not enough to fully pay the filing fees.

Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR when he failed to
refund the amount of 48,000.00 that complainant gave him despite repeated demands, viz.:

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

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

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

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

Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession
commonly possess and exercise in such matters of professional employment,20 and hence, must be
disciplined accordingly.
Having established respondents administrative liability, the Court now determines the proper penalty to
be imposed.

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

Finally, the Court sustains the directive for respondent to account for or return the amount of 48,000.00
to complainant. It is well to note that "while the Court has previously held that disciplinary proceedings
should only revolve around the determination of the respondent-lawyers administrative and not his civil
liability, it must be clarified that this rule remains applicable only to claimed liabilities which are purely
civil in nature for instance, when the claim involves moneys received by the lawyer from his client in a
transaction separate and distinct [from] and not intrinsically linked to his professional
engagement."25 Since the aforesaid amount was intended to answer for filing fees which is intimately
related to the lawyer- client relationship between complainant and respondent, the Court finds the return
thereof to be in order.26

WHEREFORE, respondent Atty. Delfin R. Agcaoili, Jr. (respondent), is found GUILTY of violating Rules
16.01 and 16.03 of Canon 16, and Rule 18.03 of Canon 18 of the Code of Professional Responsibility.
Accordingly, he is hereby SUSPENDED from the practice of law for a period of one (1) year, effective
upon his receipt of this Decision, with a STERN WARNING that a repetition of the same or similar acts
will be dealt with more severely.Furthermore, respondent is ORDERED to return to complainant Eduardo
A. Maglente the amount of 48,000.00 he received from the latter within ninety (90) days from the finality
of this Decision. Failure to comply with the foregoing directive will warrant the imposition of a more severe
penalty.Let a copy of this Decision be attached to respondents record in this Court as attorney. Further,
let copies of this Decision be furnished the Integrated Bar of the Philippines and the Office of the Court
Administrator, which is directed to circulate them to all the courts in the country for their information and
guidance.SO ORDERED.

A.C. No. 10438 September 23, 2014 CF SHARP CREW MANAGEMENT


INCORPORATED, Complainant, vs.NICOLAS C. TORRES, Respondent.

For the Court's resolution is the Complaint1 dated October 30, 2008 filed by complainant CF Sharp Crew
Management Incorporated (complainant) against respondent Nicolas C. Torres (respondent), charging him
with violating the Code of Professional Responsibility (CPR).

The Facts

Complainant is a corporation duly organized and existing under Philippine laws engaged in overseas
maritime employment.2 It hired respondent, a medical doctor and a lawyer by profession, as its Legal and
Claims Manager who was tasked, inter alia, to serve as its legal counsel and to oversee the administration
and management of legal cases and medicalrelated claims instituted by seafarers against complainants
various principals. Among the cases respondent handled in his capacity as Legal and Claims Manager were
the claims of seafarers Bernardo R. Mangi (Mangi), Rodelio J. Sampani (Sampani), Joseph C. Delgado
(Delgado), and Edmundo M. Chua (Chua).3

In its administrative complaint, it was alleged that per respondents request, complainant issued checks in
the amounts of P524,000.00, P652,013.20, P145,650.00, P97,100.00, and P296,808.40 as settlement of
the respective claims of Mangi, Sampani, Delgado, and Chua.4 However, complainant later discovered
that, save for the check in the amount of 145,650.00 issued to Delgado, respondent never gave the
checks to the seafarers and instead, had them deposited at International Exchange Bank, Banawe,
Quezon City Branch, under Account No. 003-10-06902-1.5 With respect to Sampani, complainant also
discovered that he only received the amounts of P216,936.00 and P8,303.00 or a total of P225,239.00 out
of the requested amount of P652,013.20, through checks not issued by complainant.6

On October 30, 2008, the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline directly
received the instant complaint and on even date, issued an Order7 requiring respondent to file an answer,
but the latter failed to do so. Neither did respondent appear in the mandatory conference scheduled on
March 20, 2009 nor did he file his position paper.8

The IBPs Report and Recommendation

In a Report and Recommendation9 dated August 1, 2009, the IBP Investigating Commissioner found
respondent administratively liable for violating the CPR, and accordingly recommended that he be meted
the penalty of suspension from the practice of law for one (1) year.10

The Investigating Commissioner found that respondent had indeed requested and was issued checks as
settlement of the respective claims of Mangi, Sampani, Delgado, and Chua onthe pretense that the
requested amounts represented what was lawfully due them.11 However, instead of giving the said checks
to the named seafarers, he deposited the same at the International Exchange Bank, Banawe,Quezon City
Branch, under Account No. 003-10-06902-1,12 except for the check in the amount of 145,650.00 issued to
Delgado.13

Meanwhile, respondent belatedly filed his Verified Answer (With Motion to Re-Open Investigation)14 on
March 24, 2010. He explained that he was not able to timely file an answer because complainant supplied
a wrong address to the IBP and filed non-bailable criminal cases against him which caused his detention in
a regular prison cell and, thus, his inability to comply with the IBPs directives.15

On the merits of the complaint,respondent maintained that the seafarers claims had long been settled
and that the release documents signed by the named seafarers were already inactual custody and
possession of the complainant.16 He further contended that he only signed the dorsal portions of the
checks as a form of guaranty of their genuineness17 and that he could not have encashed them as they
wereall payable to a particular payee.18Lastly, respondent claimed that when he resigned in August 2008,
complainant forced him to sign promissory notes to reimburse certain amounts which had not been
accounted for by the latter in exchange for his clearance documents.19 But before he was able to settle the
promissory notes, he was already arrested in connection with the criminal cases filed by complainant
against him.20

In a Resolution21 dated December 29, 2012, the IBP Board of Governors unanimously adopted and
approved the aforesaid report and recommendation with modification, increasing the recommended period
of suspension from the practice of law to two (2) years, and ordering respondent to return the full amount
of money he received from complainant which is legally due to the seafarers, with legal interest, within
thirty (30) days from receipt of notice.

Aggrieved, respondent filed a Motion for Reconsideration22 on April 22, 2013 which was, however, denied
in a Resolution23 dated March 8, 2014.

The Issue Before the Court

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

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the findings of the IBP in its report and
recommendation, except as to: (a) the recommended penalty to be imposed upon respondent; and (b)
the monetary award in favor of the complainant.
It is fundamental that the relationship between a lawyer and his client is highly fiduciary and ascribes to a
lawyer a great degree of fidelity and good faith.24 The highly fiduciary nature of this relationship imposes
upon the lawyer the duty to account for the money or property collected or received for or from his
client.25 This is the standard laid down by Rules 16.01 and 16.03, Canon 16 of the CPR, which read:

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

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

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

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

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

Clearly, respondents acts of misappropriation constitute dishonesty, abuse of trust and confidence
reposedin him by the complainant, and betrayal of his clients interests which he is duty-bound to
protect.28 They are contrary to the mandate of Rule 1.01, Canon 1 of the CPR which provides that "[a]
lawyer shall not engage in unlawful, dishonest, immoral, or deceitful conduct." Such malfeasance is not
only unacceptable, disgraceful, and dishonorable to the legal profession; it also reveals a basic moral flaw
that makes him unfit to practice law.29

Anent the proper penalty for respondents acts, the Court deems it proper to modify the penalty
recommended by the IBP.1wphi1 Jurisprudence provides that in similar cases where lawyers
misappropriated their clients money, the Court imposed upon them the ultimate penalty of disbarment
from the practice of law. In Arellano University, Inc. v. Mijares III,30 the Court disbarred the lawyer for
misappropriating his clients money intended for securing a certificate of title on the latters behalf.
Similarly, in Freeman v. Reyes,31 the same penalty was imposed upon the lawyer who misappropriated the
insurance proceeds of her clients deceased husband.

As already discussed, respondent's conduct of misappropriating complainant's money has made him unfit
to remain in the legal profession. He has definitely fallen below the moral bar when he engaged in
deceitful, dishonest, unlawful, and grossly immoral acts.32 As a member of the Bar, he is expected at all
times to uphold the integrity and dignity of the legal profession and refrain from any act or omission which
might lessen the trust and confidence reposed in him by the public in the fidelity, honesty, and integrity of
the legal profession.33 Membership in the legal profession is a privilege, and whenever it is made to appear
that an attorney is no longer worthy of the trust and confidence of his clients and the public, it becomes
not only the right but also the duty of the Court to withdraw the same,34 as in this case. In view of the
foregoing, respondent deserves the ultimate penalty of disbarment from the practice of law.

Likewise, the Court cannot concur with the IBP's recommendation regarding the return of the settlement
money respondent received from complainant, considering, among others, that it was not specifically
prayed for in the latter's administrative complaint and that the civil liability of respondent therefor may
already be the subject of existing cases involving the same parties. WHEREFORE, respondent Nicolas C.
Torres is found guilty of violating Rule 1.01, Canon 1 and Rules 16.01 and 16.03, Canon 16 of the Code of
Professional Responsibility. Accordingly, he is hereby DISBARRED from the practice of law and his name
ordered STRICKEN OFF from the roll of attorneys.Let a copy of this Decision be attached to respondent's
record in this Court as attorney. Further, let copies of this Decision be furnished the Integrated Bar of the
Philippines and the Office of the Court Administrator, which is directed to circulate them to all the courts in
the country for their information and guidance.SO ORDERED.

A.C. No. 10681 February 3, 2015SPOUSES HENRY A. CONCEPCION and BLESILDA S.


CONCEPCION, Complainants, vs.ATTY. ELMER A. DELA ROSA, Respondent.

This is an administrative case that stemmed from a Verified Complaint1 filed by complainants Spouses
Henry A. Concepcion (Henry) and Blesilda S. Concepcion (Blesilda; collectively complainants) against
respondent Atty. Elmer A. dela Rosa (respondent), charging him with gross misconduct for violating,
among others, Rule 16.04 of the Code of Professional Responsibility (CPR).

The Facts

In their Verified Complaint, complainants alleged that from 19972 until August 2008,3 respondent served
as their retained lawyer and counsel. In this capacity, respondent handled many of their cases and was
consulted on various legal matters, among others, the prospect of opening a pawnshop business towards
the end of 2005. Said business, however, failed to materialize.4

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

Check No. Date Amount Payee


0000561925 03-23-06 P750,000.00 Elmer dela Rosa
0000561926 03-23-06 P850,000.00 Elmer dela Rosa

0000561927 03-23-06 P900,000.00 Elmer dela Rosa

Total: P2,500,000.00

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

On March 28, 2006, or the day respondent promised to return the money, he failed to pay complainants.
Thus, in April 2006, complainants began demanding payment but respondent merely made repeated
promises to pay soon. On July 7, 2008,Blesilda sent a demand letter9 to respondent, which the latter did
not heed.10 On August 4, 2008, complainants, through their new counsel, Atty. Kathryn Jessica dela
Serna, sent another demand letter11 to respondent.12 In his Reply,13 the latter denied borrowing any
money from the complainants. Instead, respondent claimed that a certain Jean Charles Nault (Nault), one
of his other clients, was the real debtor. Complainants brought the matter to the Office of the Lupong
Tagapamayapa in Barangay Balulang, Cagayan de Oro City. The parties, however, failed to reach a
settlement.14

On January 11, 2010, the IBP-Misamis Oriental Chapter received complainants letter-complaint15 charging
respondent with violation of Rule 16.04 of the CPR. The rule prohibits lawyers from borrowing money from
clients unless the latters interests are fully protected by the nature of the case or by independent
advice.16
In his Comment,17 respondent denied borrowing P2,500,000.00 from complainants, insisting that Nault
was the real debtor.18 He also claimed that complainants had been attempting to collect from Nault and
that he was engaged for that specific purpose.19

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

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

The IBP Report and Recommendation

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

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

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

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

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

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

The Issue Before the Court


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

The Courts Ruling

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

I.

Respondents receipt of the P2,500,000.00 loan from complainants is amply supported by substantial
evidence. As the records bear out, Blesilda, on March 23, 2006, issued three (3) EastWest Bank Checks, in
amounts totalling to P2,500,000.00, with respondent as the payee.41 Also, Annex "E"42 of the Verified
Complaint shows that respondent acknowledged receipt of the checks and agreed to pay the complainants
the loan plus the pro-rated interest of five percent (5%) per month within five (5) days.43 The dorsal sides
of the checks likewise show that respondent personally encashed the checks on the day they were
issued.44 With respondents direct transactional involvement and the actual benefit he derived therefrom,
absent too any credible indication tothe contrary, the Court is thus convinced that respondent was
indeedthe one who borrowed the amount of P2,500,000.00 from complainants, which amount he had
failed to return, despite their insistent pleas.

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

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

Under Rule 16.04, Canon 16 of the CPR, a lawyer is prohibited from borrowing money from his client
unless the clients interests are fully protected:

CANON 16 A lawyer shall hold in trust all moneys and properties of his clients that may come into his
possession.

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

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

Likewise, her act of borrowing money from a client was a violation of [Rule] 16.04 of the Code of
Professional Responsibility:
A lawyer shall not borrow money from his client unless the clients interests are fully protected by the
nature of the case and by independent advice.

A lawyers act of asking a client for a loan, as what respondent did, is very unethical.1wphi1 It comes
within those acts considered as abuse of clients confidence. The canon presumes that the client is
disadvantaged by the lawyers ability to use all the legal maneuverings to renege on her
obligation.49 (Emphasis supplied)

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

In the same vein, the Court finds that respondent also violated Canon 7 of the CPR which reads: CANON 7
- A LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND DIGNITY OF THE LEGAL PROFESSION
AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR.

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

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

II.

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

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

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

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

Let a copy of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administration for circulation to all the courts.SO ORDERED.
A.C. No. 7337 September 29, 2014ROLANDO VIRAY, Complainant, vs.
ATTY. EUGENIO T. SANICAS, Respondent.

This is a verified Complaint for Disbarment/Gross Immoral Conduct1 filed with this Court on September
18, 2006 by complainant Rolando Viray (complainant) against respondent Atty. Eugenio T. Sanicas
(respondent).

Factual Antecedents

Complainant alleges that he engaged the services of respondent relative to a labor case2 he filed against
Ester Lopez and Teodoro Lopez III (spouses Lopez). On February 26, 2001, the Labor Arbiter ruled in
favor of complainant and disposed of the case as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondents Ester Lopez and
Teodoro Lopez III to pay complainant Rolando Viray of the following, to wit:

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

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

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

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

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

All other claims are hereby denied for lack of merit.

SO ORDERED.3

Subsequently, an Alias Writ of Execution4 was issued relative to aforesaid decision. During the
implementation of said writ, however, complainant discovered that respondent had already collected the
total amount of P95,000.00 from spouses Lopez. Respondent received said amount in the following
manner:

Date Voucher No. Amount Purpose


0210512004 7802 P20,000.00 Attorney's fees
02/13/2004 7833 10,000.00 Partial payment for judgment

0212612004 7848 10,000.00 Partial payment for judgment


03/12/2004 7894 20,000.00 Partial payment for judgment

0410212004 7932 5,000.00 Partial payment for judgment


0410612004 7941 5,000.00 Partial payment for judgment

04/13/2004 7944 5,000.00 Partial payment for judgment


04/16/2004 7954 10,000.00 Partial payment for judgment
0413012004 7977 10,000.00 Partial payment for judgment

Total Amount: P95,000.00


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

In his Comment,5 respondent admits that he received P95,000.00 from spouses Lopez on installments, but
denies that he was not authorized to accept it. He explains that complainant agreed to pay him additional
attorney's fees equivalent to 25o/o of the total monetary award, on top of the attorney's fees that may be
awarded by the labor tribunal, and to refund all expenses respondent incurred relative to the case. Thus,
from the total award of P189,491.60, the sum of P17,226.57 representing respondent's professional fees
has to be deducted, leaving a balance of P172,275.13.6 Then from said amount, complainant proposed
that he will get P100,000.00 and the balance of P72,275.13 shall belong to respondent as and for his
additional 25o/o attorney's fees and reimbursement for all expenses he incurred while handling the case.
However, after receiving the amount of P95,000.00 and deducting therefrom the amounts
of P20,000.007 attorney's fees, P17,000.00 earlier given to complainant, and P2,000.00 paid to the sheriff,
what was left to respondent was only P56,000.00. Respondent whines that this amount is way below the
promised 25o/o attorney's fees and refund of expenses in the total amount of P72,275.13.

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

IBP's Report and Recommendation

On February 26, 2007,8 we referred this case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation. On January 31, 2011, the Investigating Commissioner issued
his Report and Recommendation9 with the following recommendation:

In view of the foregoing, it is respectfully recommended that the respondent be meted the penalty of two
(2) years suspension. Respondent is also ordered to return, in restitution all the amounts in his possession
which are due to complainant, less his rightful attorney's fees.10 On October 28, 2011, the IBP Board of
Governors adopted Resolution No. XX-2011-139,11 which approved the Report and Recommendation of
the Investigating Commissioner suspending respondent from the practice of law for two years, but with
the modification that respondent should restitute the sum of P85,500.0012 to the complainant.

Issue

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

The Court's Ruling

"The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in dealing
with the moneys entrusted to lawyers because of their fiduciary relationship."13 Specifically, Rule 16.01 of
the Code imposes upon the lawyer the duty to "account for all money or property collected or received for
or from the client." Rule 16.03 thereof, on the other hand, mandates that "[a] lawyer shall deliver the
funds xx x of his client when due or upon demand."

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

To make matters worse, respondent withheld and refused to deliver to the complainant said amount,
which he merely received on behalf of his client, even after demand. Complainant brought the matter
before the barangay, but respondent simply ignored the same. Such failure and inordinate refusal on the
part of the respondent to render an accounting and return the money after demand raises the
presumption that he converted it to his own use.14 His unjustified withholding of the funds also warrants
the imposition of disciplinary action against him.15

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

The Court is not impressed. As aptly observed by the Investigating Commissioner, other than his self-
serving statements, there is nothing in the records which would support respondent's claim that he was
authorized to receive the payments. Neither is there proof that complainant agreed to pay him additional
25% attorney's fees and reimburse him for all expenses he allegedly incurred in connection with the case.
Respondent did not present any document, retainer's agreement, or itemized breakdown of the amount to
be reimbursed to support his claim.1wphi1 In any event, even assuming that respondent was authorized
to receive payments, the same does not exempt him from his duty of promptly informing his client of the
amounts he received in the course of his professional employment. "The fiduciary nature of the
relationship between counsel and client imposes on a lawyer the duty to account for the money or
property collected or received for or from the client. He is obliged to render a prompt accounting of all the
property and money he has collected for his client."16 "The fact that a lawyer has a lien for his attorney's
fees on the money in his hands collected for his client does not relieve him from the obligation to make a
prompt accounting."17 Moreover, a lawyer has no right "to unilaterally appropriate his client's money for
himself by the mere fact alone that the client owes him attorney's fees."18

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

The Penalty

"The penalty for gross misconduct consisting in the failure or refusal despite demand of a lawyer to
account for and to return money or property belonging to a client has been suspension from the practice
of law for two years."20 Thus, the IBP Board of Governors did not err in recommending the imposable
penalty. Considering, however, that this is respondent's first offense and he is already a
nonagenarian,21 the Court, in the exercise of its compassionate judicial discretion, finds that a penalty of
one year suspension is sufficient. WHEREFORE, the Court finds respondent Atty. Eugenio T. Sanicas
GUILTY of gross misconduct and accordingly SUSPENDS him from the practice of law for one (1) year
upon the finality of this Resolution, with a warning that a repetition of the same or similar act or offense
shall be dealt with more severly.

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

Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in Atty. Sanicas' record
as a member of the Bar.SO ORDERED.
A.C. No. 6246 November 15, 2011(Formerly CBD No. 00-730) MARITES E.
FREEMAN, Complainant, vs.ATTY. ZENAIDA P. REYES, Respondent.

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

In her sworn Complaint-Affidavit1 dated April 7, 2000, filed on May 10, 2000, complainant alleged that her
husband Robert Keith Freeman, a British national, died in London on October 18, 1998. She and her son,
Frank Lawrence applied for visas, to enable them to attend the wake and funeral, but their visa
applications were denied. Complainant engaged the services of respondent who, in turn, assured her that
she would help her secure the visas and obtain the death benefits and other insurance claims due her.
Respondent told complainant that she had to personally go to London to facilitate the processing of the
claims, and demanded that the latter bear all expenses for the trip. On December 4, 1998, she gave
respondent the amount of P50,000.00. As acknowledgment for the receipt of P47,500.00 for service
charge, tax, and one round trip ticket to London, respondent gave her a Cash/Check Voucher,2 issued by
Broadway Travel, Inc., but on the right margin thereof, the notations in the amount of "P50,000.00" and
the date "12-5-98" were written and duly initialled. On December 9, 1998, she acceded into giving
respondent the amount of P20,000.00 for legal costs in securing the visas, as shown by the Temporary
Receipt3 bearing said date, issued by Z.P. Reyes Law Office (respondent's law firm). On December 18,
1998, she went to see respondent to follow-up the visa applications, but the latter asked for the additional
amount of P10,000.00 for travel expenses, per Temporary Receipt4 bearing said date, issued by
respondents law firm. After several phone calls inquiring about the status of the visa applications,
respondent told her, "Mahirap gapangin ang pagkuha ng visa, kasi blacklisted at banned ka sa Embassy."
(It is difficult to railroad the process of securing visa, because you are blacklisted and banned by the
Embassy). Sometime in February 1999, respondent told her that to lift the travel ban on her, she should
shell out P18,000.00 as "panlagay" or "grease money" to bribe some staff of the British Embassy. After a
week, respondent informed her that the ban was lifted, but the visas would be issued on a later date, as
she had convinced the British Embassy to issue resident visas instead of tourist visas. Respondent told her
that to expedite the release of the resident visas, she should again give P20,000.00 and a bottle of wine,
worth P5,000.00, as "grease money" to bribe the British Embassy personnel. After several weeks,
respondent told her that the period for visa applications had lapsed, and that another amount
of P18,000.00 was needed to reinstate the same. Later, respondent asked for P30,000.00 as legal costs,
per Temporary Receipt,5 dated April 19, 1999, to be used for booking the former's flight to London,
and P39,000.00 for legal costs, per Temporary Receipt6 dated May 13, 1999, to cover the expenses for the
plane tickets. Both temporary receipts were issued by respondents law firm.

Complainant said that despite repeated follow-ups with respondent, nothing came out. Instead, she
received a picture of her husband's burial, sent by one Stanley Grist, a friend of the deceased. She later
learned that respondent left for London alone, without informing her about it. Respondent explained that
she needed to go to London to follow-up the insurance claims, and warned her not to communicate with
Grist who allegedly pocketed the proceeds of her husband's insurance policy. She told respondent that she
received a letter7 dated March 9, 1999 from one Martin Leigh, an Officer of H.M. Coroner's Court, London,
informing her about the arrangements for the funeral and that her late husband was covered by three
insurance policies, to wit: Nationwide Building Society (Account Number 0231/471 833 630), Lincoln
Assurance Company (British National Life Policy No. PP/85/00137851), and Scottish Equitable PLC (Policy
No. 2779512).8 Respondent offered to help and assured her that representations with the insurance
companies had earlier been made, so that the latter would be receiving the insurance proceeds soon.

According to the complainant, respondent required her to affix her signature in a Special Power of
Attorney (SPA),9 dated November 6, 1998 [first SPA], which would authorize the respondent to follow-up
the insurance claims. However, she found out that the SPA [first SPA] she signed was not notarized, but
another SPA,10 dated April 6, 1999, was notarized on April 30, 1999 [second SPA], and that her signature
therein was forged. Later, she came across a similar copy of the SPA,11 dated April 6, 1999, also notarized
on April 30, 1999 [third SPA], but this time, additionally bearing the signatures of two witnesses. She said
that without her knowledge and consent, respondent used the third SPA, notarized on April 30, 1999, in
her correspondence with the insurance companies in London.

Complainant discovered that in an undated letter,12 addressed to one Lynn O. Wilson of Scottish Equitable
PLC (Policy No. 2779512), respondent made representations that her husband left no will and that she
had no verified information as to the total value of her husband's estate and the existence of any property
in London that would be subjected to Grant of Representation. Said letter requested that complainant be
advised on the value for probate in the amount of 5231.35 and the procedure for its entitlement.
Respondent added therein that "As to the matter of the installments due, as guaranteed by Mr. Freeman's
policy, Mrs. Freeman requests that the remittance be sent directly to Account No. 0148-27377-7 Far East
Bank, Diliman Branch, with business address at Malakas St. Barangay Central District, Quezon City,
Philippines under the account name: Reyes/Mendiola, which serves as her temporary account until further
notice."

Subsequently, in a letter13 dated July 29, 1999, addressed to one Andrea Ransom of Lincoln Financial
Group (PP/8500137851), respondent, declaring that she is the "Counsel/Authorized Representative [of the
complainant], per SPA dated April 20, 1999 [should be April 30, 1999]," replied that she had appended
the documents required (i.e., marriage certificate and birth certificate), in her previous letter,14 dated April
20, 1999, to the said insurance company; that pursuant to an SPA15 executed in her favor, all
communications pertaining to complainant should be forwarded to her law firm; that she sought
clarification on whether complainant is entitled to death benefits under the policy and, if so, the amount
due and the requirements to be complied with; and that in the absence of a Grant of Probate (i.e., the
deceased having left no will), she "enclosed an alternative document [referring to the Extrajudicial
Settlement16 dated June 1, 1999, notarized by respondent] in support of the claim of the surviving spouse
(Mrs. Freeman) and their sole child (Frank Lawrence Freeman)." In the same letter, respondent reiterated
that complainant "requests that any amount of monies due or benefits accruing, be directly deposited to
Account No. 0148-27377-7 at Far East Bank, Diliman Branch, Malakas St., Quezon City, Philippines under
Reyes/Mendiola, which serves as her temporary account until further notice."

Complainant declared that in November 1999, she made a demand upon the respondent to return her
passport and the total amount of P200,000.00 which she gave for the processing of the visa applications.
Not heeding her demand, respondent asked her to attend a meeting with the Consul of the British
Embassy, purportedly to discuss about the visa applications, but she purposely did not show up as she got
disgusted with the turn of events. On the supposed rescheduled appointment with the British Consul,
respondent, instead, brought her to Airtech Travel and Tours, and introduced her to one Dr. Sonny
Marquez, the travel agency's owner, who assured her that he would help her secure the visas within a
week. Marquez made her sign an application for visa and demanded the amount of P3,000.00. After a
week, she talked to one Marinez Patao, the office secretary of respondent's law firm, who advised her to
ask respondent to return the total amount of P200,000.00.

In her Counter-Affidavit/Answer17 dated June 20, 2000, respondent countered that in 1998, complainant,
accompanied by former Philippine Sports Commission (PSC) Commissioner Josefina Bauzon and another
woman whose identity was not ascertained, sought legal advice regarding the inheritance of her deceased
husband, a British national.18 She told complainant to submit proof of her marriage to the deceased, birth
certificate of their son, and other documents to support her claim for the insurance proceeds. She averred
that before she accepted the case, she explained to complainant that she would be charging the following
amounts: acceptance fee of P50,000.00, P20,000.00 for initial expenses, and additional amount
of P50,000.00 on a contingent basis. She said complainant agreed to these rates and, in fact, readily paid
her the said amounts. With an SPA,19 dated April 6, 1999 and notarized on April 30, 1999 [second SPA],
having been executed in her favor, she made preliminary communications with the insurance companies
in London regarding complainant's claims. Having received communications from said insurance
companies, she stated that complainant offered, which she accepted, to shoulder her plane ticket and the
hotel accommodation, so that she can personally attend to the matter. She left for London in May 1999
and, upon her return, she updated the complainant about the status of her claims.

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

With regard to the alleged falsified documents, respondent denied knowledge about the existence of the
same, and declared that the SPA,20 dated April 6, 1999, which was notarized on April 30, 1999 [second
SPA], was her basis for communications with the insurance companies in London. She stated that in her
absence, complainant, through wily representations, was able to obtain the case folder from Leah Buama,
her office secretary, and never returned the same, despite repeated demands. She said that she was
unaware of the loss of the case folder as she then had no immediate need of it. She also said that her
secretary failed to immediately report about the missing case folder prior to taking a leave of absence, so
as to attend to the financial obligations brought about by her mother's lingering ailment and consequent
death.21 Despite repeated requests, complainant failed to return the case folder and, thus, the law firm
was prevented from pursuing the complainant's insurance claims. She maintained that through
complainant's own criminal acts and machinations, her law office was prevented from effectively pursuing
her claims. Between January to February 2000, she sent complainant a billing statement which indicated
the expenses incurred22 by the law firm, as of July 1999; however, instead of settling the amount, the
latter filed a malicious suit against her to evade payment of her obligations.

On January 19, 2001, complainant filed a Motion Submitting the Instant Case for Immediate Resolution
with Comments on Respondent's Answer, alleging, among others, that upon seeing the letter23 dated
March 9, 1999 of the Coroner's Court, respondent began to show interest and volunteered to arrange for
the insurance claims; that no acceptance fee was agreed upon between the parties, as the amounts earlier
mentioned represented the legal fees and expenses to be incurred attendant to the London trip; that the
parties verbally agreed to a 20% contingent fee out of the total amount to be recovered; that she
obtained the visas with the assistance of a travel consultant recommended by respondent; that upon
return from abroad, respondent never informed her about the arrangements with the insurance companies
in London that remittances would be made directly to the respondent's personal account at Far East Bank;
that the reason why respondent went to London was primarily to attend the International Law Conference,
not solely for her insurance claims, which explained why the receipt for the P50,000.00, which she gave,
bore the letterhead of Broadway Travel, Inc. (in the amount of P47,500.00) and that she merely made a
handwritten marginal note regarding the receipt of the amount of P50,000.00; that with the use of an SPA
[referring to the second SPA] in favor of the respondent, bearing her forged signature, the amount of
10,546.7 [should be 10,960.63],24 or approximately equivalent to P700,000.00, was remitted to the
personal bank account of respondent, but the same was never turned over to her, nor was she ever
informed about it; and that she clarified that she never executed any SPA that would authorize respondent
to receive any money or check due her, but that the only SPA [first SPA] she executed was for the
purpose of representing her in court proceedings.

Meanwhile, respondent filed a criminal complaint25 for malicious mischief, under Article 327 of the Revised
Penal Code, against complainant and one Pacita Mamaril (a former client of respondent), for allegedly
barging into the law office of the former and, with the use of a pair of scissors, cut-off the cords of two
office computer keyboards and the line connections for the refrigerator, air conditioning unit, and electric
fan, resulting in damage to office equipment in an estimated amount of P200,000.00. In the
Resolution,26 dated July 31, 2000, the Assistant City Prosecutor of Quezon City recommended that the
complaint be dismissed for insufficiency of evidence. The case was subsequently dismissed due to lack of
evidence and for failure of respondent to appear during the preliminary investigation of the case.27

Thereafter, complainant filed a criminal case for estafa, under Article 315, paragraph 2 (a) of the Revised
Penal Code, against respondent, docketed as Criminal Case No. Q-02-108181, before the Regional Trial
Court of Quezon City, Branch 83. On Motion for Reinvestigation by respondent, the City Prosecutor of
Quezon City, in the Resolution28 dated October 21, 2002, recommended that the information, dated
February 8, 2002, for estafa be withdrawn, and that the case be dismissed, for insufficiency of evidence.
On November 6, 2002, the Assistant City Prosecutor filed a Motion to Withdraw
Information.29 Consequently, in the Order30 dated November 27, 2002, the trial court granted the
withdrawal of the information, and dismissed the case.

In the Report and Recommendation31 dated August 28, 2003, Investigating Commissioner Milagros V. San
Juan of the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline found respondent to have
betrayed the trust of complainant as her client, for being dishonest in her dealings and appropriating for
herself the insurance proceeds intended for complainant. The Investigating Commissioner pointed out that
despite receipt of the approximate amount of P200,000.00, respondent failed to secure the visas for
complainant and her son, and that through deceitful means, she was able to appropriate for herself the
proceeds of the insurance policies of complainant's husband. Accordingly, the Investigating Commissioner
recommended that respondent be suspended from the practice of law for the maximum period allowed
under the law, and that she be ordered to turn over to complainant the amounts she received from the
London insurance companies.

On September 27, 2003, the IBP Board of Governors, in Resolution No. XVI-2003-166,32 adopted and
approved the recommendation of the Investigating Commissioner, with modification that respondent be
disbarred.

The Court agrees with the observation of the Investigating Commissioner that complainant had sufficiently
substantiated the charge of gross dishonesty against respondent, for having appropriated the insurance
proceeds of the complainant's deceased husband, and the recommendation of the IBP Board of Governors
that respondent should be disbarred.

The object of a disbarment proceeding is not so much to punish the individual attorney himself, as to
safeguard the administration of justice by protecting the court and the public from the misconduct of
officers of the court, and to remove from the profession of law persons whose disregard for their oath of
office have proved them unfit to continue discharging the trust reposed in them as members of the bar.33

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

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

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

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

When a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an
accounting to the client showing that the money was spent for a particular purpose. And if he does not use
the money for the intended purpose, the lawyer must immediately return the money to his client.39 In the
present case, the cash/check voucher and the temporary receipts issued by respondent, with the
letterhead of her law firm, Z.P. Reyes Law Office, indubitably showed that she received the total amount
of P167,000.0040 from the complainant, in connection with the handling of the latter's case. Respondent
admitted having received money from the complainant, but claimed that the total amount
of P120,000.0041 she received was in accordance with their agreement. Nowhere was it shown that
respondent rendered an accounting or, at least, apprised the complainant of the actual expenses incurred.
This leaves a quandary as to the discrepancy in the actual amount that respondent should receive,
supposedly pursuant to an agreement of engaging respondent to be her counsel, as there was absence of
a formal contract of legal services.

Further, on December 4, 1998, complainant gave P50,000.00 to the respondent for the purpose of
assisting her in claiming the insurance proceeds; however, per Application for United Kingdom Entry
Clearance,42 dated December 8, 1998, it showed that respondent's primary purpose in traveling to London
was to attend the International Law Conference in Russell Square, London. It is appalling that respondent
had the gall to take advantage of the benevolence of the complainant, then grieving for the loss of her
husband, and mislead her into believing that she needed to go to London to assist in recovering the
proceeds of the insurance policies. Worse, respondent even inculcated in the mind of the complainant that
she had to adhere to the nefarious culture of giving "grease money" or lagay, in the total amount
of P43,000.00,43 to the British Embassy personnel, as if it was an ordinary occurrence in the normal
course of conducting official business transactions, as a means to expedite the visa applications. This runs
afoul the dictum in Rule 1.01 of Canon 1 of the Code of Professional Responsibility which states that a
lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

More importantly, apart from her bare denials that no remittance was made to her personal bank account,
as shown by the monthly transaction report (covering January to December for the years 2000-
2001),44 respondent never attempted to reconcile the discrepancy, or give a satisfactory explanation, as
to why she failed to render an accounting, on the proceeds of the insurance policies that should rightfully
belong to the complainant vis--vis the correspondence by the insurance companies based in London,
pertaining to the remittance of the following amounts to the respondent's personal bank account, to wit:
Per letter45 dated November 23, 2000, from one Rupesh Majithia, Administrator, Customer Services
Department of Lincoln Financial Group, addressed to complainant, stating, among others, that "An amount
of 10,489.57 was paid out under the Power of Attorney on 27th September 2000)," and per
letter,46 dated April 28, 2000, from one Jeff Hawkes, Customer Services Claims (CLD), of the Eagle Star
Life Assurance Company Limited, addressed to one Andrea Ransom of the Lincoln Financial Group, The
Quays, stating, among others, that "I can confirm that a death claim was made on the policy on 13
October 1999 when an amount of 471.06 was sent by International Moneymover to the client's legal
representative, ZP Reyes Law Office of Quezon City, Philippines." Clearly, there is no doubt that the
amounts of 10,489.57 and 471.06 were remitted to respondent through other means of international
transactions, such as the International Moneymover, which explains why no direct remittance from the
insurance companies in London could be traced to the personal bank account of respondent, per monthly
transaction report, covering January to December for the years 2000-2001.
A criminal case is different from an administrative case, and each must be disposed of according to the
facts and the law applicable to each case.47 Section 5, in relation to Sections 148 and 2,49 Rule 133, Rules
of Court states that in administrative cases, only substantial evidence is required, not proof beyond
reasonable doubt as in criminal cases, or preponderance of evidence as in civil cases. Substantial evidence
is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion. Applying the rule to the present case, the dismissal of a criminal case does not preclude the
continuance of a separate and independent action for administrative liability, as the weight of evidence
necessary to establish the culpability is merely substantial evidence. Respondent's defense that the
criminal complaint for estafa against her was already dismissed is of no consequence. An administrative
case can proceed independently, even if there was a full-blown trial wherein, based on both prosecution
and defense evidence, the trial court eventually rendered a judgment of acquittal, on the ground either
that the prosecution failed to prove the respondent's guilt beyond reasonable doubt, or that no crime was
committed. More so, in the present administrative case, wherein the ground for the dismissal of the
criminal case was because the trial court granted the prosecution's motion to withdraw the information
and, a fortiori, dismissed the case for insufficiency of evidence.

In Velez v. De Vera,50 the Court ruled that the relation between attorney and client is highly fiduciary in
nature. Being such, it requires utmost good faith, loyalty, fidelity, and disinterestedness on the part of the
attorney. Its fiduciary nature is intended for the protection of the client. The Canon of Professional Ethics
provides that the lawyer should refrain from any action whereby for his personal benefit or gain, he
abuses or takes advantage of the confidence reposed in him by his client. Money of the client or collected
for the client, or other trust property coming into the possession of the lawyer, should be reported and
accounted for promptly and should not, under any circumstances, be commingled with his own or be used
by him. Consequently, a lawyer's failure to return upon demand the funds or property held by him on
behalf of his client gives rise to the presumption that he has appropriated the same for his own use to the
prejudice of, and in violation of the trust reposed in him by, his client. It is a gross violation of general
morality as well as of professional ethics; it impairs the public confidence in the legal profession and
deserves punishment. Lawyers who misappropriate the funds entrusted to them are in gross violation of
professional ethics and are guilty of betrayal of public confidence in the legal profession. Those who are
guilty of such infraction may be disbarred or suspended indefinitely from the practice of law.51 Indeed,
lawyering is not a business. It is a profession in which duty to public service, not money, is the primary
consideration.52

In some cases, the Court stripped lawyers of the privilege to practice their profession for breach of trust
and confidence pertaining to their clients' moneys and properties. In Manzano v. Soriano,53 therein
respondent, found guilty of grave misconduct (misappropriating the funds belonging to his client) and
malpractice, represented therein complainant in a collection suit, but failed to turn over the amount
of P50,000.00 as stipulated in their agreement and, to conceal the misdeed, executed a simulated deed of
sale, with himself as the vendor and, at the same time, the notary public. In Lemoine v. Balon,
Jr.,54 therein respondent, found guilty of malpractice, deceit, and gross misconduct, received the check
corresponding to his client's insurance claim, falsified the check and made it payable to himself, encashed
the same, and appropriated the proceeds.1wphi1

Law advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple
rewards for a job done or service rendered. It is a calling that, unlike mercantile pursuits which enjoy a
greater deal of freedom from government interference, is impressed with public interest, for which it is
subject to State regulation.55Respondent's repeated reprehensible acts of employing chicanery and
unbecoming conduct to conceal her web of lies, to the extent of milking complainant's finances dry, and
deceitfully arrogating upon herself the insurance proceeds that should rightfully belong to complainant, in
the guise of rendering legitimate legal services, clearly transgressed the norms of honesty and integrity
required in the practice of law. This being so, respondent should be purged from the privilege of exercising
the noble legal profession.

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


and DISBARRED from the practice of law. Let her name be stricken off the Roll of Attorneys. This
Decision is immediately executory.
Let all the courts, through the Office of the Court Administrator, Integrated Bar of the Philippines, and the
Office of the Bar Confidant, be notified of this Decision and be it duly recorded in the personal file of the
respondent.

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

A.C. No. 4808 November 22, 2011 TERESITA T. BAYONLA, Complainant, vs.
ATTY. PURITA A. REYES, Respondent.

Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand.
However, he shall have a lien over the funds and may apply so much thereof as may be necessary to
satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also
have a lien to the same extent on all judgments and executions he has secured for his client as provided
for in the Rules of Court.

- Code of Professional Responsibility.

This canon of professional responsibility is at the center of this administrative complaint for disbarment for
gross dishonesty, deceit, conversion, and breach of trust filed against Atty. Purita A. Reyes by Teresita T.
Bayonla, her client.1

Antecedents

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

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

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

On June 29, 1998, the Court referred the complaint to the Integrated Bar of the Philippines (IBP) for
investigation, report, and recommendation.6
On April 20, 1999, IBP Commissioner Lydia A. Navarro (Commissioner Navarro) rendered a
report,7 whereby she found and recommended against Atty. Reyes as follows:

In so far as this case of disbarment is concerned, the issue hinges only on the complainants position; one
of the heirs of Paz Durban whose legal services of the respondent was not revoked.

The parties were required to submit documents relative to their respective defenses (sic) specially the
actual amounts released by ATO, actual amount due to the complainant as her share, the remittances
made by the respondent to the complainant of her share and receipts to prove the same.

Unfortunately, only the respondent filed an answer without the necessary documents required of them and
attached only a xerox copy of the computation made by Atty. Ismael Laya for the heir of Pedro Durban
which had already been previously attached to the records of this case.

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

Inasmuch as the attorneys fees of 40% was (sic) supported by evidence instead of (sic) complainants
allegation of ten [10%] percent; then respondent was entitled to P82,388.45 as attorneys fees; leaving a
balance of P123,582.66 due to the complainant.

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

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

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

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

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

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

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

Until such time that respondent had complied with the aforementioned, she is suspended from the
practice of her legal profession.

Respectfully submitted.
On June 19, 1999, the IBP Board of Governors adopted and approved the report of Commissioner Navarro
through Resolution No. XIII-99-165.8

Atty. Reyes moved for reconsideration, but on September 27, 1999 the IBP Board of Governors denied her
motion for reconsideration through Resolution No. XIV-99-117.9

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

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

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

Through her manifestation dated September 4, 2002 to the Court,13 Atty. Reyes posed some queries, as
follows: (a) whether she could be compelled to pay the amount of P44,582.66 to Bayonla even if the
latters claims had been based on perjured statements; (b) whether the payment of the amount would
operate to dismiss the estafa case previously filed by Bayonla against her for allegedly failing to deliver
the balance of Bayonlas share; and (c) whether she could deposit the amount of P44,582.66 with either
the IBP Board of Governors or the Court.

Atty. Reyes also stated in the manifestation that the IBP Board of Governors did not accord to her the
right to confront Bayonla during the investigation conducted by the IBP Board of Governors; that
Bayonlas counsel had induced Bayonla to file the estafa charge against her; and that this had prompted
her to initiate a disbarment complaint against Bayonlas counsel.14

On May 24, 2010, the Office of the Bar Confidant (OBC) recommended the final resolution of this
case.15 The recommendation was noted by the Court on June 29, 2010.16

Issue

Whether or not the findings and recommendations of the IBP Board of Governors were proper.

Ruling

We affirm the findings of the IBP Board of Governors, which were supported by the records, but we modify
the sanctions to be imposed on Atty. Reyes.

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

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

The canons are appropriate considering that the relationship between a lawyer and her client is highly
fiduciary, and prescribes on a lawyer a great degree of fidelity and good faith. There is no question that
the money or property received by a lawyer for her client properly belongs to the latter.17 Conformably
with these canons of professional responsibility, we have held that a lawyer is obliged to render an
accounting of all the property and money she has collected for her client. This obligation includes the
prompt reporting and accounting of the money collected by the lawyer by reason of a favorable judgment
to his client.18

Based on the records, Bayonla and her uncle would each receive the amount of P84,852.00 out of the first
release, and the amount of P121,119.11 out of the second release. Her total share from the two releases
was P205,971.11. With Atty. Reyes being entitled to P82,388.44 as attorneys fees, the equivalent of 40%
of Bayonlas share, the net share of Bayonla was P123,582.67. Yet, Atty. Reyes actually delivered to her
only P79,000.00,19which was short by P44,582.67. Despite demands by Bayonla and despite the orders
from the IBP Board of Governors for her to remit the shortage,20 Atty. Reyes refused to do so.

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

Section 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. A member of
the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit,
malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his
conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to
take before admission to practice, or for a wilful disobedience appearing as an attorney for a party to a
case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either
personally or through paid agents or brokers, constitutes malpractice.

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

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

II
Pendency of other cases not an obstacle
to administrative proceeding against respondent

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

The settled rule is that criminal and civil cases are different from administrative matters, such that the
disposition in the first two will not inevitably govern the third and vice versa. In this light, we refer to this
Courts ruling in Berbano vs. Barcelona, citing In re Almacen, where it was held:

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

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

Relevantly, we have also emphasized in Gatchalian Promotions Talents Pool, Inc. v. Naldoza 24 that

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

It serves well to mention, lastly, that the simultaneous pendency of an administrative case and a judicial
proceeding related to the cause of the administrative case, even if the charges and the evidence to be
adduced in such cases are similar, does not result into or occasion any unfairness, or prejudice, or
deprivation of due process to the parties in either of the cases.25

III
No denial of due process to respondent

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

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

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

Due process in an administrative context does not require trial-type proceedings similar to those in courts
of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded,
there is no denial of procedural due process. A formal or trial-type hearing is not at all times and in all
instances essential. The requirements are satisfied where the parties are afforded fair and reasonable
opportunity to explain their side of the controversy at hand. The standard of due process that must be
met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. In
other words, it is not legally objectionable for being violative of due process for an administrative agency
to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the
parties as affidavits of witnesses may take the place of their direct testimony.

In this case, petitioner was heard through the various pleadings which he filed with the Board of Discipline
of the BID when he filed his answer and two motions to dismiss, as well as other motions and papers. He
was also able to participate in all stages of the administrative proceeding. He was able to elevate his case
to the Secretary of Justice and, subsequently, to the CSC by way of appeal.
We have consistently held that the essence of due process is simply the opportunity to be heard or, as
applied to administrative proceedings, the opportunity to explain ones side or the opportunity to seek a
reconsideration of the action or ruling complained of. And any seeming defect in its observance is cured by
the filing of a motion for reconsideration. Denial of due process cannot be successfully invoked by a party
who has had the opportunity to be heard on his motion for reconsideration. [bold emphasis supplied]

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

IV
Sanction

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

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

Atty. Reyes is further obliged to pay to Bayonla the amount of P44,582.67, which the IBP Board of
Governors found to be still unpaid, by way of restitution. Although the Court renders this decision in an
administrative proceeding primarily to exact the ethical responsibility on a member of the Philippine Bar,
the Courts silence about the respondent lawyers legal obligation to restitute the complainant will be both
unfair and inequitable. No victim of gross ethical misconduct concerning the clients funds or property
should be required to still litigate in another proceeding what the administrative proceeding has already
established as the respondents liability. That has been the reason why the Court has required restitution
of the amount involved as a concomitant relief in the cited cases of Mortera v. Pagatpatan, supra,
Almendarez, Jr. v. Langit, supra, and Small v. Banares, supra.

In addition, Atty. Reyes is liable for interest of 12% per annum reckoned from June 22, 1997, the date
when she was formally charged with disbarment. This rate of interest was prescribed by the Court in
Almendarez, Jr. v. Langit and Small v. Banares.

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

The Court ORDERS Atty. Reyes to pay to complainant Teresita T. Bayonla within 30 days from receipt of
this Decision the amount of P44,582.67, with interest of 12% per annum from June 22, 1997, and to
render unto the complainant a complete written accounting and inventory of: - (a) the amounts she had
collected from the Air Transportation Office as expropriation compensation; (b) the total amount due to
the complainant; (c) the total amount she had actually remitted to the complainant; and (d) the amount
she had deducted as her contingent fee vis--vis the complainant.1wphi1

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

This Decision is without prejudice to any pending or contemplated proceedings against Atty. Reyes.Let this
Decision be disseminated to all lower courts and to the Integrated Bar of the Philippines, with a copy of it
to be included in Atty. Reyes file in the Office of the Bar Confidant.SO ORDERED.

A.C. No. 10568 January 13, 2015[Formerly CBD Case No. 10-2753]MARILEN G.
SOLIMAN, Complainant, vs.ATTY. DITAS LERIOS-AMBOY, Respondent.

This is an administrative complaint1 filed by Marilen G. Soliman (Soliman) against Atty. Ditas Lerios-
Amboy (Atty. Amboy) for violation of the Code of Professional Responsibility.

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

In November 2008, Soliman gave Atty. Amboy P16,700.00 as payment for the transfer tax. In the second
quarter of 2009, Atty. Amboy told Soliman that there was a delay in the issuance of the titles to the
property because of the failure of the other co-owners to submit certain documents. Atty. Amboy then told
Soliman that someone from the Register of Deeds (RD) can help expedite the issuance of the titles for a
fee of P80,000.00. On June 17, 2009, Atty. Amboy told Soliman that her contact in the RD agreed to
reduce the amount to P50,000.00.3

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

On October 16, 2009, Atty. Amboy informed Soliman that the certificates of title to the property werethen
only awaiting the signature of the authorized officer. However, Atty. Amboy failed to deliver the respective
certificates of title of Soliman and her co-owners to the subject property.5 On January 6, 2010, Atty.
Amboys secretary informed Soliman that their contact in the RD was asking for an additional P10,000.00
to facilitate the release of the said certificates of title. Soliman then refused to further pay the amount
being asked by Atty. Amboys secretary.6Thereafter, Soliman kept on asking Atty. Amboy for any update
on the release of the said titles, but the latter was not responding to her queries. On July 7, 2010,
Soliman and Atty. Amboys secretary went to the office of a certain Atty. Marasigan, Deputy RD of Manila.
Soliman asked Atty. Marasigan if he received the 50,000.00as payment for the release of the said titles.
Atty. Marasigan denied having received any amount to facilitate the release of the titles and claimed that
the reason why the same could not be processed was that Atty. Amboy failed to file certain documents.7
Soliman further claimed that Atty. Amboy thereafter refused to release the pertinent documents she gave
to her for the processing of the titles to the property or give back the P50,000.00 that was already paid to
her.8

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

On May 29, 2012, after due proceedings, the Investigating Commissioner of the Commission on Bar
Discipline of the Integrated Bar of the Philippines (IBP) issued a Report and Recommendation,10 which
recommended the suspension of Atty. Amboy from the practice of law for six (6) months. The
Investigating Commissioner opined that Atty. Amboy violated the Code of Professional Responsibility by
failing to observe due diligence in dealing with Soliman. It also opined that she failed to inform the latter
of the status of the proceedings for the issuance of the said titles.

On March 20, 2013, the IBP Board of Governors issued a Resolution,11 which adopted and approved the
recommendation of the Investigating Commissioner, albeit with the modification that the period of Atty.
Amboys suspension from the practice of law was increased from six (6) months to two (2) years and that
she was ordered to return the entire amount she received from Soliman.

Atty. Amboy sought a reconsideration12 of the Resolution dated March 20, 2013, but it was denied by the
IBP Board of Governors in its Resolution13 dated March 21, 2014.

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

The Code of Professional Responsibility clearly states that a lawyer owes fidelity to the cause of his
clientand that he should be mindful of the trust and confidence reposed in him.14 A lawyer is mandated to
serve his client with competence and diligence;to never neglect a legal matter entrusted to him; and to
keep his client informed of the status of his case and respond within a reasonable time to the clients
request for information.15

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

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

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

The Court further finds improper the refusal of Atty. Amboy to return the amount of P50,000.00 which she
paid inorder to facilitate the release of the certificates of title. To reiterate, upon inquiry, Atty. Marasigan,
the Deputy RD of Manila, denied having received any amount from Atty. Amboy. In not returning the
money to Soliman after a demand therefor was made following her failure to procure the issuance of the
certificates of title, Atty. Amboy violated Canon 16 of the Code of Professional Responsibility, particularly
Rule 16.03 thereof, which requires that a lawyer shall deliver the funds and property of his client upon
demand. It is settled that the unjustified withholding of money belonging to a client warrants the
imposition of disciplinary action.16 "A lawyer's failure to return upon demand the funds held by him on
behalf of his client gives rise to the presumption that he has appropriated the same for his own use in
violation of the trust reposed in him by his client. Such act is a gross violation of general morality as well
as of professional ethics. It impairs public confidence in the legal profession and deserves punishment."17

WHEREFORE, in consideration of the foregoing disquisitions, Atty. Ditas Lerios-Amboy is found GUILTY of
violating Rule 16.03, Canons 17 and 18, and Rules 18.03 and 18.04 of the Code of Professional
Responsibility and is hereby SUSPENDED from the practice of law for a period of two (2) years, effective
upon receipt of this Resolution. Furthermore, she is ORDERED to return to Marilen G. Soliman the entire
amount of Fifty Thousand Pesos (P50,000.00) she received from the latter, plus legal interest thereon,
reckoned from finality of this Resolution until fully paid. The respondent is further DIRECTED to promptly
submit to this Court written proof of her compliance within thirty (30) days from notice of this Resolution.

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

SO ORDERED.

A.C. NO. 10050 December 3, 2013 VICTORIA C. HEENAN, Complainant,


vs.ATTY. ERLINA ESPEJO, Respondent.

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

The Facts

Sometime in January 2009, Victoria met Atty. Espejo through her godmother, Corazon Eusebio (Corazon).
Following the introduction, Corazon told Victoria that Atty. Espejo was her lawyer in need of money and
wanted to borrow two hundred fifty thousand pesos (PhP 250,000) from her (Victoria). Shortly thereafter,
Victoria went to the house of Corazon for a meeting with Atty. Espejo where they discussed the terms of
the loan. Since Atty. Espejo was introduced to her as her godmothers lawyer, Victoria found no reason to
distrust the former. Hence, during the same meeting, Victoria agreed to accomodate Atty. Espejo and
there and then handed to the latter the amount of PhP 250,000. To secure the payment of the loan, Atty.
Espejo simultaneously issued and turned over to Victoria a check1 dated February 2, 2009 for two hundred
seventy-five thousand pesos (PhP 275,000) covering the loan amount and agreed interest. On due date,
Atty. Espejo requested Victoria to delay the deposit of the check for the reason that she was still waiting
for the release of the proceeds of a bank loan to fund the check. However, after a couple of months of
waiting, Victoria received no word from Atty. Espejo as to whether or not the check was already funded
enough. In July 2009, Victoria received an Espejo-issued check dated July 10, 2009 in the amount of fifty
thousand pesos (PhP 50,000)2 representing the interest which accrued due to the late payment of the
principal obligation. Victoria deposited the said check but, to her dismay, the check bounced due to
insufficiency of funds. Atty. Espejo failed to pay despite Victorias repeated demands. Worried that she
would not be able to recover the amount thus lent, Victoria decided to deposit to her account the first
check in the amount of PhP 275,000, but without notifying Atty. Espejo of the fact. However, the said
check was also dishonored due to insufficiency of funds. Victoria thereafter became more aggressive in her
efforts to recover her money. She, for instance, personally handed to Atty. Espejo a demand letter dated
August 3, 2009.3

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

In November 2009, Atty. Espejo issued another check dated December 8, 2009 in the amount of two
hundred seventy five thousand pesos (PhP 275,000.). However, to Victorias chagrin, the said check was
again dishonored due to insufficiency of funds.6 Atty. Espejo did not file any counter-affidavit or pleading
to answer the charges against her. On November 17, 2009, the case was submitted for resolution without
Atty. Espejos participation.7Victoria thereafter filed the instant administrative case against Atty. Espejo
before the CBD. On March 1, 2010, the CBD, through Director for Bar Discipline Alicia A. Risos-Vidal,
issued an Order8 directing Atty. Espejo to submit her Answer to Victorias administrative complaint failing
which would render her in default. The warning, notwithstanding, Atty. Espejo did not submit any Answer.
On May 5, 2010, IBP Commissioner Rebecca Villanueva-Malala (Commissioner Villanueva-Malala) notified
the parties to appear for a mandatory conference set on June 2, 2010. The notice stated that non-
appearance of either of the parties shall be deemed a waiver of her right to participate in further
proceedings.9

At the mandatory conference, only Victoria appeared.10

Thus, Commissioner Villanueva-Malala issued an Order11 noting Atty. Espejos failure to appear during the
mandatory conference and her failure to file an Answer. Accordingly, Atty. Espejo was declared in default.
Victoria, on the other hand, was directed to file her verified position paper, which she filed on June 11,
2010.12

Findings and Recommendation of the IBP

In its Report and Recommendation13 dated July 15, 2010, the CBD recommended the suspension of Atty.
Espejo from the practice of law and as a member of the Bar for a period of five (5) years.

The CBD reasoned:

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

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

On December 14, 2012, the Board of Governors passed a Resolution14 adopting the Report and
Recommendation of the CBD with the modification lowering Atty. Espejos suspension from five (5) years
to two (2) years. Atty. Espejo was also ordered to return to Victoria the amount of PhP 250,000 within
thirty (30) days from receipt of notice with legal interest reckoned from the time the demand was made.
The Resolution reads:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner in the above-entitled
case, herein made part of this Resolution as Annex "A", and finding the recommendation fully supported
by the evidence on record and applicable laws and rules, and considering respondents grave misconduct,
Atty. Erlinda Espejo is hereby SUSPENDED from the practice of law for two (2) years and Ordered to
Return to complainant the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos within thirty (30)
days from receipt of notice with legal interest reckoned from the time the demand was made.

On August 8, 2013, the CBD transmitted to this Court the Notice of the Resolution pertaining to Resolution
No. XX-2012-419 along with the records of this case.15
The Courts Ruling

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

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

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

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

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

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

xxxx

In Barrios v. Martinez, we disbarred the respondent who issued worthless checks for which he was
convicted in the criminal case filed against him. In Lao v. Medel, we held that the deliberate failure to pay
just debts and the issuance of worthless checks constitute gross misconduct, for which a lawyer may be
sanctioned with one-year suspension from the practice of law. The same sanction was imposed on the
respondent-lawyer in Rangwani v. Dino having been found guilty of gross misconduct for issuing bad
checks in payment of a piece of property the title of which was only entrusted to him by the
complainant.19

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

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

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

We find the penalty of suspension from the practice of law for two (2) years, as recommended by the IBP,
commensurate under the circumstances. We, however, cannot sustain the IBPs recommendation ordering
Atty. Espejo to return the money she borrowed from Victoria. In disciplinary proceedings against lawyers,
the only issue is whether the officer of the court is still fit to be allowed to continue as a member of the
Bar. Our only concern is the determination of respondents administrative liability. Our findings have no
material bearing on other judicial action which the parties may to choose me against each other.
Furthermore, disciplinary proceedings against lawyers do not involve a trial of an action, but rather
investigations by the Court into the conduct of one of its officers. The only question for determination in
these proceedings is whether or not the attorney is still fit to be allowed to continue as a member of the
Bar. Thus, this Court cannot rule on the issue of the amount of money that should be returned to the
complainant.22WHEREFORE, We find Atty. Erlinda B. Espejo GUILTY of gross misconduct and violating
Canons 1, 7 and 11 of the Code of Professional Responsibility. We SUSPEND respondent from the practice
of law for two (2) years affective immediately.Let copies of this Decision be furnished the Office of the
Court Administrator for dissemination to all courts, the Integrated Bar of the Philippines and the Office of
the Bar Confidant and recorded in the personal files of respondent.SO ORDERED.

March 25, 2015 A.C. No. 8826 SHIRLEY OLAYTA-CAMBA, Complainant,


vs.ATTY. OTILIO SY BONGON, Respondent.

Before the Court is an administrative Complaint1 dated September 14, 2010 filed by complainant Shirley
Olayta-Camba (complainant) against respondent Atty. Otilio Sy Bongon (respondent), praying that the
latter be disbarred and be directed to return the amount of Pl12,449.55 that he received from the former.

The Facts

In her complaint, complainant alleged that on March 1, 2000, she engaged the services of respondent for
the purpose of titling and/or reconstituting the titles to the real estate properties of the late Bernabe
Olayta, situated in the Municipalities of Camalig and Guinobatan, both in the province of Albay. In
connection therewith, she claimed to have given the aggregate amount of Pl 12,499.55 to respondent,
broken down as follows: (a) P20,000.00 as partial payment for legal services; (b) P162.00 as payment for
certification fees; (c) PS,000.00 as advance payment for the reconstitution of titles; (d) 30,000.00 as
payment for land taxes and titling of properties; (e) 10,000.00 as attorneys fees; (f) 19,337.55 as
payment for documentary stamps on the estate of Bernabe Olayta; and (g) 28,000.00 as payment for
Bureau of Internal Revenue (BIR) Taxes. Despite the foregoing, respondent failed to update complainant
regarding the status of the matters referred to him. Thus, complainant terminated her engagement with
respondent and demanded for the return of 112,499.55, but to no avail.2 Hence, she filed the instant
complaint before the Court.

In his defense,3 respondent asserts, inter alia, that he only received 55,000.00 and that the rest of the
money was received by a certain Rowena Delos Reyes-Kelly who was not an employee of his law
firm.4 Further, respondent averred that he had already offered to return the amount of 30,000.00 to
complainant, claiming that he already earned the fees for legal services in the amount of 20,000.00 for
having studied the matter entrusted to him and drafted the Deed of Extrajudicial Partition (Deed) that
underwent several revisions.5

The Court, in a Resolution6 dated August 15, 2011, referred the case to the Integrated Bar of the
Philippines (IBP) for investigation, report, and recommendation.

The IBPs Report and Recommendation

In a Report and Recommendation7 dated April 17, 2013, the IBP Investigating Commissioner found
respondent guilty of violating Rule 16.01 and Rule 16.03, Canon 16 of the Code of Professional
Responsibility (CPR) and, accordingly, recommended that he be: (a) meted with the penalty of suspension
from the practice of law for a period of six (6) months; and (b) directed to return the amount of
55,000.00 to complainant.8

The Investigating Commissioner found that complainant indeed engaged respondents services for the
purpose of reconstituting four (4) titles as well as preparing the Deed, and that the latter received legal
fees in connection therewith. Despite this, respondent did not perform his undertaking in accordance with
the engagement and likewise failed to return complainants money despite demands. The foregoing acts
were deemed to be in violation of the lawyers oath, as well as the CPR, thus, rendering respondent
administratively liable for the same. However, in view of respondents old age, his condition of having
undergone a triple heart bypass surgery, and considering that this is his first offense, the Investigating
Commissioner opted to mitigate the administrative penalties imposed upon respondent.9

In a Resolution10 dated May 11, 2013, the IBP Board of Governors adopted and approved the aforesaid
Report and Recommendation, with modification decreasing the recommended penalty to suspension from
the practice of law for a period of three (3) months. On motion for reconsideration11 of respondent, his
period of suspension was further decreased to one (1) month in a Resolution12 dated May 3, 2014. To
date, respondent has not filed a petition for review before the Court.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable for the
acts complained of.1wphi1

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the findings and recommendations of the
IBP.

It must be stressed that once a lawyer takes up the cause of his client, he is duty-bound to serve the
latter with competence, and to attend to such clients cause with diligence, care, and devotion whether he
accepts it for a fee or for free. He owes fidelity to such cause and must always be mindful of the trust and
confidence reposed upon him.13 Therefore, a lawyers neglect of a legal matter entrusted to him by his
client constitutes inexcusable negligence for which he must be held administratively liable for violating
Rule 18.03, Canon 18 of the CPR,14which reads:

CANON 18 A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.
Rule 18.03 A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
therewith shall render him liable.

As correctly pointed out by the IBP Investigating Commissioner, complainant engaged the services of
respondent for the purpose of titling and/or reconstituting the titles to the real estate properties of the late
Bernabe Olayta, as well as preparing the Deed, and in connection therewith, allegedly gave various
amounts to respondent, of which the latter admitted the receipt of only 55,000.00. Despite the foregoing,
respondent failed to comply with his undertaking and offered the excuse that the reconstitution of the
titles and the preparation of the Deed were delayed due to the Deeds several revisions; and that Bernabe
Olaytas surviving heirs were living in different places, making it difficult to secure their presence, much
less obtain their signatures to the said Deed.15

Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR when he failed to
refund the amount of 55,000.00 that he personally received from complainant despite repeated demands,
viz.:

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

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

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

Verily, when a lawyer receives money from the client for a particular purpose, the lawyer is bound to
render an accounting to the client showing that the money was spent for the intended purpose.
Consequently, if not used accordingly, the money must be returned immediately to the client.16 As such, a
lawyers failure to return the money to his client despite numerous demands is a violation of the trust
reposed on him and is indicative of his lack of integrity,17 as in this case.

Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession
commonly possess and exercise in such matters of professional employment18 and, hence, must be
disciplined accordingly.

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

Jurisprudence provides that in similar cases where lawyers neglected their clients affairs and, at the same
time, failed to return the latters money and/or property despite demand, the Court imposed upon them
the penalty of suspension from the practice of law. In Segovia-Ribaya v. Lawsin,19 the Court suspended
the lawyer for a period of one (1) year for his failure to perform his undertaking under his retainership
agreement with his client and to return the money given to him by the latter.20 Similarly, in Meneses v.
Macalino,21 the same penalty was imposed on a lawyer who failed to render any legal service to his client
as well as to return the money he received for such purpose.22 These pronouncements notwithstanding,
there have been instances where the Court tempered the penalty imposed upon a lawyer due to
humanitarian and equitable considerations.23 In view of the foregoing, and taking into consideration
respondents advanced age, medical condition, and the fact that this is his first offense, the Court finds it
appropriate to sustain the recommended penalty of suspension from the practice of law for a period of one
(1) month.

WHEREFORE, respondent Atty. Otilio Sy Bongon is found GUILTY of violating Rules 16.01 and 16.03 of
Canon 16, and Rule 18.03 of Canon 18 of the Code of Professional Responsibility. Accordingly, he is
hereby SUSPENDED from the practice of law for a period of one (1) month, effective upon his receipt of
this Resolution, with a STERN WARNING that a repetition of the same or similar acts will be dealt with
more severely.
Furthermore, respondent is ORDERED to return to complainant Shirley Olayta-Camba the amount of
55,000.00 he received from the latter within ninety (90) days from the finality of this Resolution. Failure
to comply with the foregoing directive will warrant the imposition of a more severe penalty.

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

SO ORDERED.

CANON 17-19

G.R. No. 91298 June 22, 1990CORAZON PERIQUET, petitioner, vs.NATIONAL LABOR
RELATIONS COMMISSION and THE PHIL. NATIONAL CONSTRUCTION CORPORATION
(Formerly Construction Development Corp. of the Phils.), respondents.

It is said that a woman has the privilege of changing her mind but this is usually allowed only in affairs of the
heart where the rules are permissibly inconstant. In the case before us, Corazon Periquet, the herein petitioner,
exercised this privilege in connection with her work, where the rules are not as fickle.

The petitioner was dismissed as toll collector by the Construction Development Corporation of the Philippines,
private respondent herein, for willful breach of trust and unauthorized possession of accountable toll tickets
allegedly found in her purse during a surprise inspection. Claiming she had been "framed," she filed a complaint
for illegal dismissal and was sustained by the labor arbiter, who ordered her reinstatement within ten days
"without loss of seniority rights and other privileges and with fun back wages to be computed from the date of
her actual dismissal up to date of her actual reinstatement." 1 On appeal, this order was affirmed in toto by
public respondent NLRC on August 29, 1980. 2

On March 11, 1989, almost nine years later, the petitioner filed a motion for the issuance of a writ of execution
of the decision. The motion was granted by the executive labor arbiter in an order dated June 26, 1989, which
required payment to the petitioner of the sum of P205,207.42 "by way of implementing the balance of the
judgment amount" due from the private respondent. 3 Pursuant thereto, the said amount was garnished by the
NLRC sheriff on July 12, 1989. 4 On September 11, 1989, however, the NLRC sustained the appeal of the
CDCP and set aside the order dated June 20, 1989, the corresponding writ of execution of June 26, 1989, and
the notice of garnishment. 5

In its decision, the public respondent held that the motion for execution was time-barred, having been filed
beyond the five-year period prescribed by both the Rules of Court and the Labor Code. It also rejected the
petitioner's claim that she had not been reinstated on time and ruled as valid the two quitclaims she had signed
waiving her right to reinstatement and acknowledging settlement in full of her back wages and other benefits.
The petitioner contends that this decision is tainted with grave abuse of discretion and asks for its reversal. We
shall affirm instead.

Sec. 6, Rule 39 of the Revised Rules of Court, provides:

SEC. 6. Execution by motion or by independent action. A judgment may be executed on


motion within five (5) years from the date of its entry or from the date it becomes final and
executory. After the lapse of such time, and before it is barred by the statute of limitations, a
judgment may be enforced by action.
A similar provision is found in Art. 224 of the Labor Code, as amended by RA 6715, viz.

ART. 224. Execution of decision, orders, awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter or Med-Arbiter,
or the Voluntary Arbitrator may, motu propio, or on motion of any interested party, issue a
writ of execution on a judgment within five (5) years from the date it becomes final and
executory, requiring a sheriff or a duly deputized officer to execute or enforce a final decision,
order or award. ...

The petitioner argues that the above rules are not absolute and cites the exception snowed in Lancita v.
Magbanua, 6 where the Court held:

Where judgments are for money only and wholly unpaid, and execution has been previously
withheld in the interest of the judgment debtor, which is in financial difficulties, the court has no
discretion to deny motions for leave to issue execution more than five years after the judgments
are entered. (Application of Molnar, Belinsky, et al. v. Long Is. Amusement Corp., I N.Y.S, 2d
866)

In computing the time limited for suing out of an execution, although there is authority to the
contrary, the general rule is that there should not be included the time when execution is stayed,
either by agreement of the parties for a definite time, by injunction, by the taking of an appeal or
writ of error so as to operate as a supersedeas, by the death of a party, or otherwise. Any
interruption or delay occasioned by the debtor will extend the time within which the writ may be
issued without scire facias.

xxx xxx xxx

There has been no indication that respondents herein had ever slept on their rights to have the
judgment executed by mere motions, within the reglementary period. The statute of limitation
has not been devised against those who wish to act but cannot do so, for causes beyond their
central.

Periquet insists it was the private respondent that delayed and prevented the execution of the judgment in her
favor, but that is not the way we see it. The record shows it was she who dilly-dallied.

The original decision called for her reinstatement within ten days from receipt thereof following its affirmance
by the NLRC on August 29, 1980, but there is no evidence that she demanded her reinstatement or that she
complained when her demand was rejected. What appears is that she entered into a compromise agreement
with CDCP where she waived her right to reinstatement and received from the CDCP the sum of P14,000.00
representing her back wages from the date of her dismissal to the date of the agreement. 7

Dismissing the compromise agreement, the petitioner now claims she was actually reinstated only on March 16,
1987, and so should be granted back pay for the period beginning November 28, 1978, date of her dismissal,
until the date of her reinstatement. She conveniently omits to mention several significant developments that
transpired during and after this period that seriously cast doubt on her candor and bona fides.

After accepting the sum of P14,000.00 from the private respondent and waiving her right to reinstatement in the
compromise agreement, the petitioner secured employment as kitchen dispatcher at the Tito Rey Restaurant,
where she worked from October 1982 to March 1987. According to the certification issued by that
business, 8 she received a monthly compensation of P1,904.00, which was higher than her salary in the CDCP.
For reasons not disclosed by the record, she applied for re-employment with the CDCP and was on March
16,1987, given the position of xerox machine operator with a basic salary of P1,030.00 plus P461.33 in
allowances, for a total of P1,491.33 monthly. 9

On June 27, 1988; she wrote the new management of the CDCP and asked that the rights granted her by the
decision dated August 29, 1980, be recognized because the waiver she had signed was invalid. 10

On September 19, 1988, the Corporate Legal Counsel of the private respondent (now Philippine National
Construction Corporation) recommended the payment to the petitioner of the sum of P9,544.00, representing
the balance of her back pay for three years at P654. 00 per month (minus the P14,000.00 earlier paid). 11

On November 10, 1988, the petitioner accepted this additional amount and signed another Quitclaim and
Release reading as follows:

KNOW ALL MEN BY THESE PRESENTS:

THAT, I CORAZON PERIQUET, of legal age, married and resident of No. 87 Annapolis St., Quezon City,
hereby acknowledged receipt of the sum of PESOS: NINE THOUSAND FIVE HUNDRED FORTY FOUR
PESOS ONLY (P9,544.00) Philippine currency, representing the unpaid balance of the back wages due me
under the judgment award in NLRC Case No. AB-2-864-79 entitled "Corazon Periquet vs. PNCC-
TOLLWAYS" and I further manifest that this payment is in full satisfaction of all my claims/demands in the
aforesaid case. Likewise, I hereby manifest that I had voluntarily waived reinstatement to my former position as
TOLL TELLER and in lieu thereof, I sought and am satisfied with my present position as XEROX
MACHINE OPERATOR in the Central Office.

Finally, I hereby certify that delay in my reinstatement, after finality of the Decision dated 10 May
1979 was due to my own fault and that PNCC is not liable thereto.

I hereby RELEASE AND DISCHARGE the said corporation and its officers from money and all claims by way
of unpaid wages, separation pay, differential pay, company, statutory and other benefits or otherwise as may be
due me in connection with the above-entitled case. I hereby state further that I have no more claims or right of
action of whatever nature, whether past, present, future or contingent against said corporation and its officers,
relative to NLRC Case No. AB-2-864-79.

IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of November 1988 at Mandaluyong,
Metro Manila. (Emphasis supplied.) 12

The petitioner was apparently satisfied with the settlement, for in the memorandum she sent the PNCC
Corporate Legal Counsel on November 24, 1988, 13 she said in part:

Sir, this is indeed my chance to express my gratitude to you and all others who have helped me
and my family enjoy the fruits of my years of stay with PNCC by way of granting an additional
amount of P9,544.00 among others ...

As per your recommendation contained therein in said memo, I am now occupying the position
of xerox machine operator and is (sic) presently receiving a monthly salary of P2,014.00.

Reacting to her inquiry about her entitlement to longevity pay, yearly company increases and other statutory
benefits, the private respondent adjusted her monthly salary from P2,014.00 to P3,588.00 monthly.

Then the lull. Then the bombshell.


On March 11, 1989, she filed the motion for execution that is now the subject of this petition.

It is difficult to understand the attitude of the petitioner, who has blown hot and cold, as if she does not know
her own mind. First she signed a waiver and then she rejected it; then she signed another waiver which she also
rejected, again on the ground that she had been deceived. In her first waiver, she acknowledged full settlement
of the judgment in her favor, and then in the second waiver, after accepting additional payment, she again
acknowledged fun settlement of the same judgment. But now she is singing a different tune.

In her petition she is now disowning both acknowledgments and claiming that the earlier payments both of
which she had accepted as sufficient, are insufficient. They were valid before but they are not valid now. She
also claimed she was harassed and cheated by the past management of the CDCP and sought the help of the
new management of the PNCC under its "dynamic leadership." But now she is denouncing the new
management-for also tricking her into signing the second quitclaim.

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into
and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply
because of a change of mind. It is only where there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step
in to annul the questionable transaction. But where it is shown that the person making the waiver did so
voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and binding undertaking. As in this case.

The question may be asked: Why did the petitioner sign the compromise agreement of September 16, 1980, and
waive all her rights under the judgment in consideration of the cash settlement she received? It must be
remembered that on that date the decision could still have been elevated on certiorari before this Court and
there was still the possibility of its reversal. The petitioner obviously decided that a bird in hand was worth two
on the wing and so opted for the compromise agreement. The amount she was then waiving, it is worth noting,
had not yet come up to the exorbitant sum of P205,207.42 that she was later to demand after the lapse of eight
years.

The back pay due the petitioner need not detain us. We have held in countless cases that this should be limited
to three years from the date of the illegal dismissal, during which period (but not beyond) the dismissed
employee is deemed unemployed without the necessity of proof. 14 Hence, the petitioner's contention that she
should be paid from 1978 to 1987 must be rejected, and even without regard to the fact (that would otherwise
have been counted against her) that she was actually employed during most of that period.

Finally, the petitioner's invocation of Article 223 of the Labor Code to question the failure of the private
respondent to file a supersedeas bond is not well-taken. As the Solicitor General correctly points out, the bond is
required only when there is an appeal from the decision with a monetary award, not an order enforcing the
decision, as in the case at bar.

As officers of the court, counsel are under obligation to advise their clients against making untenable and
inconsistent claims like the ones raised in this petition that have only needlessly taken up the valuable time of
this Court, the Solicitor General, the Government Corporate Counsel, and the respondents. Lawyers are not
merely hired employees who must unquestioningly do the bidding of the client, however unreasonable this may
be when tested by their own expert appreciation of the pertinent facts and the applicable law and jurisprudence.
Counsel must counsel.WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so
ordered.

A.C. No. 10537 February 3, 2015 REYNALDO G. RAMIREZ, Complainant, vs.


ATTY. MERCEDES BUHAYANG-MARGALLO, Respondent.
When an action or proceeding is initiated in our courts, lawyers become the eyes and ears of their clients.
Lawyers are expected to prosecute or defend the interests of their clients without need for reminders. The
privilege of the office of attorney grants them the ability to warrant to their client that they will manage the case
as if it were their own. The relationship between an attorney and client is a sacred agency. It cannot be
disregarded on the flimsy excuse that the lawyer accepted the case only because he or she was asked by an
acquaintance. The professional relationship remains the same regardless of the reasons for the acceptance by
counsel and regardless of whether the case is highly paying or pro bono.

Atty. Mercedes Buhayang-Margallos (Atty. Margallo) inaction resulted in a lost appeal, terminating the case of
her client not on the merits but due to her negligence. She made it appear that the case was dismissed on the
merits when, in truth, she failed to file the Appellants Brief on time. She did not discharge her duties of candor
to her client.

This court resolves the Petition for Review1 filed by Atty. Margallo under Rule 139-B, Section 12 of the Rules of
Court, assailing the Resolution of the Board of Governors of the Integrated Bar of the Philippines.

In the Resolution2 dated March 21, 2014, the Board of Governors of the Integrated Bar of the Philippines
affirmed with modification its earlier Resolution3 dated March 20, 2013. In its delegated capacity to conduct
fact finding for this court, it found that respondent Atty. Margallo had violated Canon 17 and Canon 18, Rules
18.03 and 18.04 of the Code of Professional Responsibility.4 Consequently, the Board of Governors
recommended that Atty. Margallo be suspended from the practice of law for two (2) years.5

In the Complaint6 filed on January 20, 2010 before the Commission on Bar Discipline of the Integrated Bar of
the Philippines, complainant Reynaldo Ramirez (Ramirez) alleged that he engaged Atty. Margallos services as
legal counsel in a civil case for Quieting of Title entitled "Spouses Roque v. Ramirez."7 The case was initiated
before the Regional Trial Court of Binangonan, Rizal, Branch 68.8

According to Ramirez, Atty. Margallo contacted him on or about March 2004, as per a referral from a friend of
Ramirezs sister.9 He alleged that Atty. Margallo had offered her legal services on the condition that she be
given 30% of the land subject of the controversy instead of attorneys fees.10 It was also agreed upon that
Ramirez would pay Atty. Margallo P1,000.00 per court appearance.11

On October 19, 2006, the Regional Trial Court promulgated a Decision adverse to Ramirez.12 Atty. Margallo
advised him to appeal the judgment. She committed to file the Appeal before the Court of Appeals.13

The Appeal was perfected and the records were sent to the Court of Appeals sometime in 2008.14 On December
5, 2008, the Court of Appeals directed Ramirez to file his Appellants Brief. Ramirez notified Atty. Margallo,
who replied that she would have one prepared.15

On January 8, 2009, Ramirez contacted Atty. Margallo to follow up on the Appellants Brief. Atty. Margallo
informed him that he needed to meet her to sign the documents necessary for the brief.16

On several occasions, Ramirez followed up on the status of the brief, but he was told that there was still no word
from the Court of Appeals.17

On August 26, 2009, Atty. Margallo informed Ramirez that his Appeal had been denied.18 She told him that
the Court of Appeals denial was due to Ramirezs failure to establish his filiation with his alleged father, which
was the basis of his claim.19 She also informed him that they could no longer appeal to this court since the
Decision of the Court of Appeals had been promulgated and the reglementary period for filing an Appeal had
already lapsed.20
Ramirez went to the Court of Appeals. There, he discovered that the Appellants Brief was filed on April 13,
2009 with a Motion for Reconsideration and Apologies for filing beyond the reglementary period.21

Ramirez alleged that Atty. Margallo had violated Canon 17 and Canon 18, Rules 18.03 and 18.04 of the
Codeof Professional Responsibility.22 By way of defense, Atty. Margallo argued that she had agreed to take on
the case for free, save for travel expense of P1,000.00 per hearing. She also claimed that she had candidly
informed Ramirez and his mother that they only had a 50% chance of winning the case.23 She denied ever
having entered into an agreement regarding the contingent fee worth 30% of the value of the land subject of the
controversy.

Atty. Margallo asserted that she would not have taken on the Appeal except that the mother of Ramirez had
begged her to do so.24 She claimed that when she instructed Ramirez to see her for document signing on
January 8, 2009, he ignored her. When he finally showed up on March 2009, he merely told her that he had
been busy.25Her failure to immediately inform Ramirez of the unfavorable Decision of the Court of Appeals was
due to losing her clients number because her 8-year-old daughter played with her phone and accidentally
erased all her contacts.26

Mandatory conference and findings of the Integrated Bar of the Philippines

The dispute was set for mandatory conference on June 3, 2010.27 Only Ramirez appeared despite Atty.
Margallo having received notice.28 The mandatory conference was reset to July 22, 2010. Both parties then
appeared and were directed to submit their position papers.29 Commissioner Cecilio A.C. Villanueva
recommended that Atty. Margallo be reprimanded for her actions and be given a stern warning that her next
infraction of a similar nature shall be dealt with more severely.30 This was based on his two key findings. First,
Atty. Margallo allowed the reglementary period for filing an Appellants Brief to lapse by assuming that
Ramirez no longer wanted to pursue the case instead of exhausting all means possible to protect the interest of
her client.31 Second, Atty. Margallo had been remiss in her duties as counsel, resulting in the loss of Ramirezs
statutory right to seek recourse with the Court of Appeals.32

In the Resolution33 dated March 20, 2013, the Board of Governors of the Integrated Bar of the Philippines
adopted and approved the recommendation of the Commission on Bar Discipline. The Board of Governors
resolved to recommend a penalty of reprimand to Atty. Margallo with a stern warning that repetition of the
same or similar act shall be dealt with more severely. Ramirez seasonably filed a Motion for Reconsideration on
July 16, 2013.34 In the Resolution dated March 21, 2014, the Board of Governors granted Ramirezs Motion for
Reconsideration and increased the recommended penalty to suspension from practice of law for two (2) years.35

On August 20, 2014, Atty. Margallo filed a Petition for Review under Rule 139-B, Section 12 of the Rules of
Court.36 She alleged that the recommended penalty of suspension was too severe considering that she had been
very careful and vigilant in defending the cause of her client. She also averred that this was the first time a
Complaint was filed against her.37 Ramirez thereafter filed an undated Motion to adopt his Motion for
Reconsideration previously filed with the Commission on Bar Discipline as a Comment on Atty. Margallos
Petition for Review.38 In the Resolution39 dated October 14, 2014, this court granted Ramirezs Motion. Atty.
Margallo filed her Reply40 on October 6, 2014.

This courts ruling

The Petition is denied for lack of merit.

The relationship between a lawyer and a client is "imbued with utmost trust and confidence."41 Lawyers are
expected to exercise the necessary diligence and competence in managing cases entrusted to them. They
commit not only to review cases or give legal advice, but also to represent their clients to the best of their ability
without need to be reminded by either the client or the court. The expectation to maintain a high degree of
legal proficiency and attention remains the same whether the represented party is a high-paying client or an
indigent litigant.42

Canon 17 and Canon 18, Rules 18.03and 18.04 of the Code of Professional Responsibility clearly provide:

CANON 17 - A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE
MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule
18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection there with
shall render him liable.

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to clients request for information.

In Caranza Vda. De Saldivar v. Cabanes, Jr.,43 a lawyer was suspended after failing to justify his absence in a
scheduled preliminary conference, which resulted in the case being submitted for resolution. This was
aggravated by the lawyers failure to inform his client about the adverse ruling of the Court of Appeals, thereby
precluding the litigant from further pursuing an Appeal. This court found that these actions amounted to gross
negligence tantamount to breaching Canons 17 and 18 of the Code of Professional Responsibility:

The relationship between an attorney and his client is one imbued with utmost trust and confidence. In this
light, clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the
required degree of diligence in handling their affairs. Verily, a lawyer is expected to maintain at all times a high
standard of legal proficiency, and to devote his full attention, skill, and competence to the case, regardless of its
importance and whether he accepts it for a fee or for free.

....

Case law further illumines that a lawyers duty of competence and diligence includes not merely reviewing the
cases entrusted to the counsels care or giving sound legal advice, but also consists of properly representing the
client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the
required pleadings, prosecuting the handled cases with reasonable dispatch, and urging their termination
without waiting for the client or the court to prod him or her to do so.

Conversely, a lawyers negligence in fulfilling his duties subjects him to disciplinary action. While such
negligence or carelessness is incapable of exact formulation, the Court has consistently held that the lawyers
mere failure to perform the obligations due his client is per se a violation.44 (Emphasis supplied, citations
omitted)

Respondent Atty. Margallo was unjustifiably remiss in her duties as legal counsel to Ramirez.

The lack of communication and coordination between respondent Atty. Margallo and her client was palpable
but was not due to the lack of diligence of her client. This cost complainant Ramirez his entire case and left him
with no appellate remedies. His legal cause was orphaned not because a court of law ruled on the merits of his
case, but because a person privileged to act as counsel failed to discharge her duties with the requisite diligence.
Her assumption that complainant Ramirez was no longer interested to pursue the Appeal is a poor excuse.
There was no proof that she exerted efforts to communicate with her client. This is an admission that she
abandoned her obligation as counsel on the basis of an assumption. Respondent Atty. Margallo failed to exhaust
all possible means to protect complainant Ramirezs interest, which is contrary to what she had sworn to do as a
member of the legal profession. For these reasons, she clearly violated Canon 17 and Canon 18, Rules 18.03
and 18.04 of the Code of Professional Responsibility.
A problem arises whenever agents, entrusted to manage the interests of another, use their authority or power for
their benefit or fail to discharge their duties. In many agencies, there is information assymetry between the
principal and the entrusted agent. That is, there are facts and events that the agent must attend to that may not
be known by the principal.

This information assymetry is even more pronounced in an attorney client relationship. Lawyers are expected
not only to be familiar with the minute facts of their cases but also to see their relevance in relation to their
causes of action or their defenses. The salience of these facts is not usually patent to the client. It can only be
seen through familiarity with the relevant legal provisions that are invoked with their jurisprudential
interpretations. More so with the intricacies of the legal procedure. It is the lawyer that receives the notices and
must decide the mode of appeal to protect the interest of his or her client.

Thus, the relationship between a lawyer and her client is regarded as highly fiduciary. Between the lawyer and
the client, it is the lawyer that has the better knowledge of facts, events, and remedies. While it is true that the
client chooses which lawyer to engage, he or she usually does so on the basis of reputation. It is only upon actual
engagement that the client discovers the level of diligence, competence, and accountability of the counsel that he
or she chooses. In some cases, such as this one, the discovery comes too late. Between the lawyer and the client,
therefore, it is the lawyer that should bear the full costs of indifference or negligence. Respondent Atty.
Margallos position that a two-year suspension is too severe considering that it is her first infraction cannot be
sustained. In Caranza Vda. De Saldivar, we observed:

As regards the appropriate penalty, several cases show that lawyers who have been held liable for gross
negligence for infractions similar to those of the respondent were suspended for a period of six (6) months. In
Aranda v. Elayda, a lawyer who failed to appear at the scheduled hearing despite due notice which resulted in
the submission of the case for decision was found guilty of gross negligence and hence, suspended for six (6)
months. In Heirs of Tiburcio F. Ballesteros, Sr. v. Apiag, a lawyer who did not file a pre-trial brief and was
absent during the pre-trial conference was likewise suspended for six (6) months. In Abiero v. Juanino, a lawyer
who neglected a legal matter entrusted to him by his client in breach of Canons 17 and 18 of the Code was also
suspended for six (6) months. Thus, consistent with existing jurisprudence, the Court finds it proper to impose
the same penalty against respondent and accordingly suspends him for a period of six (6) months.45 (Emphasis
supplied, citations omitted)

Caranza Vda. De Saldivar did not leave the clients without procedural remedies. On the other hand,
respondent Atty. Margallos neglect resulted in her client having no further recourse in court to protect his legal
interests. This lack of diligence, to the utmost prejudice of complainant Ramirez who relied on her alleged
competence as counsel, must not be tolerated. It is time that we communicate that lawyers must actively
manage cases entrusted to them. There should be no more room for an inertia of mediocrity.

Parenthetically, it is this court that has the constitutionally mandated duty to discipline lawyers.46 Under the
current rules, the duty to assist fact finding can be delegated to the Integrated Bar of the Philippines. The
findings of the Integrated Bar, however, can only be recommendatory, consistent with the constitutional powers
of this court. Its recommended penalties are also, by its nature, recommendatory. Despite the precedents, it is
the Integrated Bar of the Philippines that recognizes that the severity of the infraction is worth a penalty of two-
year suspension. We read this as a showing of its desire to increase the level of professionalism of our lawyers.

This court is not without jurisdiction to increase the penalties imposed in order to address a current need in the
legal profession. The desire of the Integrated Bar of the Philippines to ensure a higher ethical standard for its
members' conduct is laudable. The negligence of respondent Atty. Margallo coupled with her lack of candor is
reprehensible.

WHEREFORE, the Petition for Review is DENIED. The Recommendations and Resolution of the Board of
Governors of the Integrated Bar of the Philippines dated March 21, 2014 is ACCEPTED, ADOPTED AND
AFFIRMED. Atty. Mercedes Buhayang-Margallo is hereby SUSPENDED from the practice of law for two (2)
years, with a stern warning that a repetition of the same or similar act shall be dealt with more severely. This
decision is immediately executory. SO ORDERED.

A.C. No. 10537 February 3, 2015REYNALDO G. RAMIREZ, Complainant,


vs.ATTY. MERCEDES BUHAYANG-MARGALLO, Respondent.

When an action or proceeding is initiated in our courts, lawyers become the eyes and ears of their clients.
Lawyers are expected to prosecute or defend the interests of their clients without need for reminders. The
privilege of the office of attorney grants them the ability to warrant to their client that they will manage the case
as if it were their own. The relationship between an attorney and client is a sacred agency. It cannot be
disregarded on the flimsy excuse that the lawyer accepted the case only because he or she was asked by an
acquaintance. The professional relationship remains the same regardless of the reasons for the acceptance by
counsel and regardless of whether the case is highly paying or pro bono.

Atty. Mercedes Buhayang-Margallos (Atty. Margallo) inaction resulted in a lost appeal, terminating the case of
her client not on the merits but due to her negligence. She made it appear that the case was dismissed on the
merits when, in truth, she failed to file the Appellants Brief on time. She did not discharge her duties of candor
to her client.

This court resolves the Petition for Review1 filed by Atty. Margallo under Rule 139-B, Section 12 of the Rules of
Court, assailing the Resolution of the Board of Governors of the Integrated Bar of the Philippines.

In the Resolution2 dated March 21, 2014, the Board of Governors of the Integrated Bar of the Philippines
affirmed with modification its earlier Resolution3 dated March 20, 2013. In its delegated capacity to conduct
fact finding for this court, it found that respondent Atty. Margallo had violated Canon 17 and Canon 18, Rules
18.03 and 18.04 of the Code of Professional Responsibility.4 Consequently, the Board of Governors
recommended that Atty. Margallo be suspended from the practice of law for two (2) years.5

In the Complaint6 filed on January 20, 2010 before the Commission on Bar Discipline of the Integrated Bar of
the Philippines, complainant Reynaldo Ramirez (Ramirez) alleged that he engaged Atty. Margallos services as
legal counsel in a civil case for Quieting of Title entitled "Spouses Roque v. Ramirez."7 The case was initiated
before the Regional Trial Court of Binangonan, Rizal, Branch 68.8

According to Ramirez, Atty. Margallo contacted him on or about March 2004, as per a referral from a friend of
Ramirezs sister.9 He alleged that Atty. Margallo had offered her legal services on the condition that she be
given 30% of the land subject of the controversy instead of attorneys fees.10 It was also agreed upon that
Ramirez would pay Atty. Margallo P1,000.00 per court appearance.11

On October 19, 2006, the Regional Trial Court promulgated a Decision adverse to Ramirez.12 Atty. Margallo
advised him to appeal the judgment. She committed to file the Appeal before the Court of Appeals.13

The Appeal was perfected and the records were sent to the Court of Appeals sometime in 2008.14 On December
5, 2008, the Court of Appeals directed Ramirez to file his Appellants Brief. Ramirez notified Atty. Margallo,
who replied that she would have one prepared.15

On January 8, 2009, Ramirez contacted Atty. Margallo to follow up on the Appellants Brief. Atty. Margallo
informed him that he needed to meet her to sign the documents necessary for the brief.16

On several occasions, Ramirez followed up on the status of the brief, but he was told that there was still no word
from the Court of Appeals.17
On August 26, 2009, Atty. Margallo informed Ramirez that his Appeal had been denied.18 She told him that
the Court of Appeals denial was due to Ramirezs failure to establish his filiation with his alleged father, which
was the basis of his claim.19 She also informed him that they could no longer appeal to this court since the
Decision of the Court of Appeals had been promulgated and the reglementary period for filing an Appeal had
already lapsed.20

Ramirez went to the Court of Appeals. There, he discovered that the Appellants Brief was filed on April 13,
2009 with a Motion for Reconsideration and Apologies for filing beyond the reglementary period.21

Ramirez alleged that Atty. Margallo had violated Canon 17 and Canon 18, Rules 18.03 and 18.04 of the
Codeof Professional Responsibility.22 By way of defense, Atty. Margallo argued that she had agreed to take on
the case for free, save for travel expense of P1,000.00 per hearing. She also claimed that she had candidly
informed Ramirez and his mother that they only had a 50% chance of winning the case.23 She denied ever
having entered into an agreement regarding the contingent fee worth 30% of the value of the land subject of the
controversy.

Atty. Margallo asserted that she would not have taken on the Appeal except that the mother of Ramirez had
begged her to do so.24 She claimed that when she instructed Ramirez to see her for document signing on
January 8, 2009, he ignored her. When he finally showed up on March 2009, he merely told her that he had
been busy.25Her failure to immediately inform Ramirez of the unfavorable Decision of the Court of Appeals was
due to losing her clients number because her 8-year-old daughter played with her phone and accidentally
erased all her contacts.26

Mandatory conference and findings of the Integrated Bar of the Philippines

The dispute was set for mandatory conference on June 3, 2010.27 Only Ramirez appeared despite Atty.
Margallo having received notice.28 The mandatory conference was reset to July 22, 2010. Both parties then
appeared and were directed to submit their position papers.29 Commissioner Cecilio A.C. Villanueva
recommended that Atty. Margallo be reprimanded for her actions and be given a stern warning that her next
infraction of a similar nature shall be dealt with more severely.30 This was based on his two key findings. First,
Atty. Margallo allowed the reglementary period for filing an Appellants Brief to lapse by assuming that
Ramirez no longer wanted to pursue the case instead of exhausting all means possible to protect the interest of
her client.31 Second, Atty. Margallo had been remiss in her duties as counsel, resulting in the loss of Ramirezs
statutory right to seek recourse with the Court of Appeals.32

In the Resolution33 dated March 20, 2013, the Board of Governors of the Integrated Bar of the Philippines
adopted and approved the recommendation of the Commission on Bar Discipline. The Board of Governors
resolved to recommend a penalty of reprimand to Atty. Margallo with a stern warning that repetition of the
same or similar act shall be dealt with more severely. Ramirez seasonably filed a Motion for Reconsideration on
July 16, 2013.34 In the Resolution dated March 21, 2014, the Board of Governors granted Ramirezs Motion for
Reconsideration and increased the recommended penalty to suspension from practice of law for two (2) years.35

On August 20, 2014, Atty. Margallo filed a Petition for Review under Rule 139-B, Section 12 of the Rules of
Court.36 She alleged that the recommended penalty of suspension was too severe considering that she had been
very careful and vigilant in defending the cause of her client. She also averred that this was the first time a
Complaint was filed against her.37 Ramirez thereafter filed an undated Motion to adopt his Motion for
Reconsideration previously filed with the Commission on Bar Discipline as a Comment on Atty. Margallos
Petition for Review.38 In the Resolution39 dated October 14, 2014, this court granted Ramirezs Motion. Atty.
Margallo filed her Reply40 on October 6, 2014.

This courts ruling


The Petition is denied for lack of merit.

The relationship between a lawyer and a client is "imbued with utmost trust and confidence."41 Lawyers are
expected to exercise the necessary diligence and competence in managing cases entrusted to them. They
commit not only to review cases or give legal advice, but also to represent their clients to the best of their ability
without need to be reminded by either the client or the court. The expectation to maintain a high degree of
legal proficiency and attention remains the same whether the represented party is a high-paying client or an
indigent litigant.42

Canon 17 and Canon 18, Rules 18.03and 18.04 of the Code of Professional Responsibility clearly provide:

CANON 17 - A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE
MINDFUL OF THE TRUST AND CONFIDENCE REPOSED IN HIM.

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule
18.03 - A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection there with
shall render him liable.

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to clients request for information.

In Caranza Vda. De Saldivar v. Cabanes, Jr.,43 a lawyer was suspended after failing to justify his absence in a
scheduled preliminary conference, which resulted in the case being submitted for resolution. This was
aggravated by the lawyers failure to inform his client about the adverse ruling of the Court of Appeals, thereby
precluding the litigant from further pursuing an Appeal. This court found that these actions amounted to gross
negligence tantamount to breaching Canons 17 and 18 of the Code of Professional Responsibility:

The relationship between an attorney and his client is one imbued with utmost trust and confidence. In this
light, clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the
required degree of diligence in handling their affairs. Verily, a lawyer is expected to maintain at all times a high
standard of legal proficiency, and to devote his full attention, skill, and competence to the case, regardless of its
importance and whether he accepts it for a fee or for free.

....

Case law further illumines that a lawyers duty of competence and diligence includes not merely reviewing the
cases entrusted to the counsels care or giving sound legal advice, but also consists of properly representing the
client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the
required pleadings, prosecuting the handled cases with reasonable dispatch, and urging their termination
without waiting for the client or the court to prod him or her to do so.

Conversely, a lawyers negligence in fulfilling his duties subjects him to disciplinary action. While such
negligence or carelessness is incapable of exact formulation, the Court has consistently held that the lawyers
mere failure to perform the obligations due his client is per se a violation.44 (Emphasis supplied, citations
omitted)

Respondent Atty. Margallo was unjustifiably remiss in her duties as legal counsel to Ramirez.

The lack of communication and coordination between respondent Atty. Margallo and her client was palpable
but was not due to the lack of diligence of her client. This cost complainant Ramirez his entire case and left him
with no appellate remedies. His legal cause was orphaned not because a court of law ruled on the merits of his
case, but because a person privileged to act as counsel failed to discharge her duties with the requisite diligence.
Her assumption that complainant Ramirez was no longer interested to pursue the Appeal is a poor excuse.
There was no proof that she exerted efforts to communicate with her client. This is an admission that she
abandoned her obligation as counsel on the basis of an assumption. Respondent Atty. Margallo failed to exhaust
all possible means to protect complainant Ramirezs interest, which is contrary to what she had sworn to do as a
member of the legal profession. For these reasons, she clearly violated Canon 17 and Canon 18, Rules 18.03
and 18.04 of the Code of Professional Responsibility.

A problem arises whenever agents, entrusted to manage the interests of another, use their authority or power for
their benefit or fail to discharge their duties. In many agencies, there is information assymetry between the
principal and the entrusted agent. That is, there are facts and events that the agent must attend to that may not
be known by the principal.

This information assymetry is even more pronounced in an attorney client relationship. Lawyers are expected
not only to be familiar with the minute facts of their cases but also to see their relevance in relation to their
causes of action or their defenses. The salience of these facts is not usually patent to the client. It can only be
seen through familiarity with the relevant legal provisions that are invoked with their jurisprudential
interpretations. More so with the intricacies of the legal procedure. It is the lawyer that receives the notices and
must decide the mode of appeal to protect the interest of his or her client.

Thus, the relationship between a lawyer and her client is regarded as highly fiduciary. Between the lawyer and
the client, it is the lawyer that has the better knowledge of facts, events, and remedies. While it is true that the
client chooses which lawyer to engage, he or she usually does so on the basis of reputation. It is only upon actual
engagement that the client discovers the level of diligence, competence, and accountability of the counsel that he
or she chooses. In some cases, such as this one, the discovery comes too late. Between the lawyer and the client,
therefore, it is the lawyer that should bear the full costs of indifference or negligence. Respondent Atty.
Margallos position that a two-year suspension is too severe considering that it is her first infraction cannot be
sustained. In Caranza Vda. De Saldivar, we observed:

As regards the appropriate penalty, several cases show that lawyers who have been held liable for gross
negligence for infractions similar to those of the respondent were suspended for a period of six (6) months. In
Aranda v. Elayda, a lawyer who failed to appear at the scheduled hearing despite due notice which resulted in
the submission of the case for decision was found guilty of gross negligence and hence, suspended for six (6)
months. In Heirs of Tiburcio F. Ballesteros, Sr. v. Apiag, a lawyer who did not file a pre-trial brief and was
absent during the pre-trial conference was likewise suspended for six (6) months. In Abiero v. Juanino, a lawyer
who neglected a legal matter entrusted to him by his client in breach of Canons 17 and 18 of the Code was also
suspended for six (6) months. Thus, consistent with existing jurisprudence, the Court finds it proper to impose
the same penalty against respondent and accordingly suspends him for a period of six (6) months.45 (Emphasis
supplied, citations omitted)

Caranza Vda. De Saldivar did not leave the clients without procedural remedies. On the other hand,
respondent Atty. Margallos neglect resulted in her client having no further recourse in court to protect his legal
interests. This lack of diligence, to the utmost prejudice of complainant Ramirez who relied on her alleged
competence as counsel, must not be tolerated. It is time that we communicate that lawyers must actively
manage cases entrusted to them. There should be no more room for an inertia of mediocrity.

Parenthetically, it is this court that has the constitutionally mandated duty to discipline lawyers.46 Under the
current rules, the duty to assist fact finding can be delegated to the Integrated Bar of the Philippines. The
findings of the Integrated Bar, however, can only be recommendatory, consistent with the constitutional powers
of this court. Its recommended penalties are also, by its nature, recommendatory. Despite the precedents, it is
the Integrated Bar of the Philippines that recognizes that the severity of the infraction is worth a penalty of two-
year suspension. We read this as a showing of its desire to increase the level of professionalism of our lawyers.
This court is not without jurisdiction to increase the penalties imposed in order to address a current need in the
legal profession. The desire of the Integrated Bar of the Philippines to ensure a higher ethical standard for its
members' conduct is laudable. The negligence of respondent Atty. Margallo coupled with her lack of candor is
reprehensible.

WHEREFORE, the Petition for Review is DENIED. The Recommendations and Resolution of the Board of
Governors of the Integrated Bar of the Philippines dated March 21, 2014 is ACCEPTED, ADOPTED AND
AFFIRMED. Atty. Mercedes Buhayang-Margallo is hereby SUSPENDED from the practice of law for two (2)
years, with a stern warning that a repetition of the same or similar act shall be dealt with more severely. This
decision is immediately executory. SO ORDERED.

Adm. Case No. 9612 March 13, 2013JOHNNY M. PESTO, Complainant,


vs.MARCELITO M. MILLO, Respondent.

An attorney who conceals his inefficiency and lack of diligence by giving wrong information to his client
regarding the matter subject of their professional relationship is guilty of conduct unbecoming an officer of the
Court. He thereby violates his Lawyer's Oath to conduct himself as a lawyer according to the best of his
knowledge and discretion with all good fidelity as well to the courts as to his client. He also thereby violates Rule
18.03, Canon 18 of the Code of Professional Responsibility, by which he is called upon to serve his client with
competence and diligence.

Antecedents

In this administrative case, Johnny Pesto (Johnny), a Canadian national, charged Atty. Marcelito M. Millo with
conduct unbecoming an officer of the Court, misleading his client, bungling the transfer of title, and
incompetence and negligence in the performance of his duty as a lawyer.

Johnny averred that in May 1990, his wife Abella Pesto (Abella) retained the services of Atty. Millo to handle the
transfer of title over a parcel of land to her name, and the adoption of her niece, Arvi Jane Dizon;1 that Johnny
and Abella gave to Atty. Millo the amounts of P14,000.00 for the transfer of title2 and P10,000.00 for the
adoption case;3 that Atty. Millo thereafter repeatedly gave them false information and numerous excuses to
explain his inability to complete the transfer of title; that Atty. Millo likewise made them believe that the capital
gains tax for the property had been paid way back in 1991, but they found out upon their return to the country
in February 1995 that he had not yet paid the tax; that when they confronted him, Atty. Millo insisted that he
had already paid the same, but he could not produce any receipt for the supposed payment; that Atty. Millo
reluctantly returned to Abella the amount of P14,000.00 only after he stormed out of Atty. Millos office in
exasperation over his stalling tactics; and that Atty. Millo then further promised in writing to assume the liability
for the accrued penalties.4

Likewise, Johnny blamed Atty. Millo for letting the adoption case be considered closed by the Tarlac office of
the Department of Social Welfare and Development (Tarlac DSWD) due to two years of inaction. He stated
that Atty. Millo made him and his wife believe that an interview with the Tarlac DSWD had been scheduled on
February 14, 1995, but when they arrived at the Tarlac DSWD they were dismayed to be told that no such
interview had been scheduled; that adding to their dismay, Atty. Millo could not be reached at all; that it was
only upon reaching home in Quezon City when he received word from Atty. Millo that a hearing had again
been scheduled on February 23, 1995 at 10:00 a.m.; that when they went to the hearing, Atty. Millo could not
be found; and that they learned after an hour of waiting in the courthouse in Tarlac that Atty. Millo had
requested the hearing to be moved to the afternoon without their knowledge.5
Exasperated by Atty. Millos neglect and ineptitude, Johnny brought this administrative complaint in the
Integrated Bar of the Philippines (IBP) on March 14, 1995, praying for disciplinary action to be taken against
Atty. Millo, and seeking the refund of P15,643.75 representing the penalties for the non-payment of the capital
gains tax, and of the P10,000.00 given for the adoption case. Being a resident of Canada, he constituted one
Tita Lomotan as his attorney-in-fact to represent him during his and his wifes absence from the country.

On July 10, 1995, the IBP ordered Atty. Millo to file his answer.6 Although an extension of the period to file was
granted at his instance,7 he filed no answer in the end.8 He did not also appear at the hearings despite due
notice.9

In the meantime, the IBP required Johnny through Lomotan to engage a counsel. The proceedings were held in
abeyance to await the appropriate motion from Johnnys counsel.10

The administrative matter did not move for several years. The long delay prompted Johnny to write to the
President of the IBP on October 28, 1998.11 It was only on April 2, 2001, however, that the IBP Commission on
Bar Discipline (IBP-CBD) scheduled another hearing on June 29, 2001.12 At that hearing, Atty. Millo appeared
through a representative, and presented a manifestation/motion,13 whereby he claimed that Johnny had
meanwhile died, and that Abella would be withdrawing the complaint against him.

On October 11, 2001, the IBP-CBD, through Commissioner Victoria Gonzalez-De los Reyes, deemed the case
submitted for resolution.14

On October 4, 2010, Investigating Commissioner Victor C. Fernandez, to whom the case had been meanwhile
transferred, submitted a report and recommendation, whereby he found Atty. Millo liable for violating Canon
18 of the Code of Professional Responsibility, and recommended his suspension from the practice of law for six
months.15

In Resolution No. XX-2011-235 adopted on November 19, 2011,16 the IBP Board of Governors affirmed the
findings of Investigating Commissioner Fernandez, but lowered the suspension to two months; and ordered
Atty. Millo to return the amount of P16,000.00, to wit:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner in the above-entitled case,
herein made part of this Resolution as Annex "A" and finding the recommendation fully supported by the
evidence on record and the applicable laws and rules, and finding respondent guilty of the charges level(led)
against him, Atty. Marcelito Millo is hereby SUSPENDED from the practice of law for a period of two (2)
months and is ordered to return the amount of P16,000.00 to complainant.

On March 27, 2012, Atty. Millo moved for a reconsideration, stating that he had honestly believed that Abella
had already caused the withdrawal of the complaint prior to her own death; that he had already caused the
preparation of the documents necessary for the transfer of the certificate of title, and had also returned
the P14,000.00 paid by Johnny; that the adoption case had been finally granted by the trial court; that he had
lost contact with Johnny and Abella who resided in Canada; that Juan Daquis, Abellas brother, could have
confirmed that the charge had arisen from a simple misunderstanding, and that Abella would cause the
withdrawal of the complaint, except that Daquis had meanwhile died in November 2011.17

On June 9, 2012, the IBP Board of Governors denied Atty. Millos motion for reconsideration.18

Ruling

We affirm Resolution No. XX-2011-235, but modify the penalty.


Every attorney owes fidelity to the causes and concerns of his clients.1wphi1 He must be ever mindful of the
trust and confidence reposed in him by the clients. His duty to safeguard the clients interests commences from
his engagement as such, and lasts until his effective release by the clients. In that time, he is expected to take
every reasonable step and exercise ordinary care as his clients interests may require.19

Atty. Millos acceptance of the sums of money from Johnny and Abella to enable him to attend to the transfer of
title and to complete the adoption case initiated the lawyer-client relationship between them. From that moment
on, Atty. Millo assumed the duty to render competent and efficient professional service to them as his clients.
Yet, he failed to discharge his duty. He was inefficient and negligent in going about what the professional service
he had assumed required him to do. He concealed his inefficiency and neglect by giving false information to his
clients about having already paid the capital gains tax. In reality, he did not pay the capital gains tax, rendering
the clients liable for a substantial financial liability in the form of penalties.

Without doubt, Atty. Millo had the obligation to serve his clients with competence and diligence. Rule 18.03,
Canon 18 of the Code of Professional Responsibility, expressly so demanded of him, to wit:

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

xxxx

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

A serious administrative complaint like this one should not be taken for granted or lightly by any respondent
attorney. Yet, Atty. Millo did not take the complaint of Johnny seriously enough, and even ignored it for a long
period of time. Despite being given several opportunities to do so, Atty. Millo did not file any written answer.
He thereby forfeited his right and chance to reasonably explain the circumstances behind the charges against
him. Had the complaint been untrue and unfair, it would have been quite easy for him to refute it quickly and
seasonably. Indeed, a refutation was the requisite response from any worthy and blameless respondent lawyer.
His belated and terse characterization of the charge by claiming that the charge had emanated from a mere
"misunderstanding" was not sufficient. He did not thereby refute the charge against him, which omission
indicated that the complaint had substance. It mattered little now that he had in the meantime returned the
amount of P14,000.00 to the clients, and that the application for adoption had been eventually granted by the
trial court. Such events, being not only post facto, but also inevitable from sheer passage of time, did not
obliterate his liability based on the neglect and ineptitude he had inflicted on his clients. The severe lesson that
he must now learn is that he could not ignore without consequences the liberal opportunity the Court and the
IBP allowed him to justify his neglect and ineptitude in serving his clients concerns. Towards him the Court
now stays its hand of leniency, lest the Court be unfairly seen as too willing to forego the exaction of
responsibility upon a lawyer as neglectful and inept as he had been towards his clients.

It even seems very likely that Atty. Millo purposely disregarded the opportunity to answer the charges granted to
him out of a desire to delay the investigation of the complaint until both Johnny and Abella, being residents in
Canada, would have already lost interest in prosecuting it, or, as happened here, would have already departed
this world and be no longer able to rebut whatever refutations he would ultimately make, whether true or not.
But the Court is not about to condone such selfish disregard. Let it be emphasized to him and to others similarly
disposed that an attorney who is made a respondent in a disbarment proceeding should submit an explanation,
and should meet the issue and overcome the evidence against him.20 The obvious reason for the requirement is
that an attorney thus charged must thereby prove that he still maintained that degree of morality and integrity
expected of him at all times.

Atty. Millo made his situation even worse by consistently absenting himself from the scheduled hearings the IBP
had set for his benefit. His disregard of the IBPs orders requiring his attendance in the hearings was not only
irresponsible, but also constituted utter disrespect for the Judiciary and his fellow lawyers. Such conduct was
absolutely unbecoming of a lawyer, because lawyers are particularly called upon to obey Court orders and
processes and are expected to stand foremost in complying with orders from the duly constituted
authorities.21Moreover, in Espiritu v. Ulep,22 the Court saw the respondent attorneys odious practice of
repeatedly and apparently deliberately not appearing in the scheduled hearings as his means of wiggling out
from the duty to explain his side. A similar treatment of Atty. Millos disregard is justified. Indeed, he thereby
manifested evasion, a bad trait that no worthy member of the Legal profession should nurture in himself.

Surprisingly, Atty. Millo claimed that his belated response to the charge was due to the assurances of Abella that
she would be withdrawing the complaint. The Court disbelieves him, however, and treats his claim as nothing
but a belated attempt to save the day for himself. He ought to remember that the withdrawal of an
administrative charge for suspension or disbarment based on an attorneys professional misconduct or
negligence will not furnish a ground to dismiss the charge. Suspension or disbarment proceedings that are
warranted will still proceed regardless of the lack or loss of interest on the part of the complainant. The Court
may even entirely ignore the withdrawal of the complaint, and continue to investigate in order to finally
determine whether the charge of professional negligence or misconduct was borne out by the record.23 This
approach bespeaks the Courts consistent view that the Legal Profession is not only a lofty and noble calling, but
also a rare privilege reserved only for the deserving.

Verily, disciplinary proceedings against attorneys are unlike civil suits where the complainants are the plaintiffs
and the respondent attorneys are the defendants. They neither involve private interests nor afford redress for
private grievances. They are undertaken and prosecuted solely for the public welfare, for the purpose of
preserving the courts of justice from the official ministration of persons unfit to practice law before them. Every
attorney is called to answer for every misconduct he commits as an officer of the Court. The complainant or any
other person who has brought the attorneys misconduct to the attention of the Court is in no sense a party, and
has generally no interest in the outcome except as all good citizens may have in the proper administration of
justice.24

The IBP Board of Governors recommended suspension from the practice of law for two months as the penalty
to be imposed. The recommended penalty is not well taken. We modify the penalty, because Atty. Millo
displayed no remorse as to his misconduct, and could not be given a soft treatment. His professional misconduct
warranted a longer suspension from the practice of law because he had caused material prejudice to the clients
interest.25 He should somehow be taught to be more ethical and professional in dealing with trusting clients like
Johnny and Abella, who were innocently too willing to repose their utmost trust in his abilities as a lawyer and in
his trustworthiness as a legal professional. He should remember that misconduct has no place in the heart and
mind of a lawyer who has taken the solemn oath to delay no man for money or malice, and to conduct himself
as a lawyer according to the best of his knowledge and discretion. Under the circumstances, suspension from the
practice of law for six months is the condign and commensurate penalty for him.

The Court notes that Atty. Millo already returned the P14,000.00 received for the transfer of title. Although he
ought also to refund the amount of P15,643.75 representing the penalty for the late payment of the capital gains
tax, the Court cannot order him to refund that amount because it is not a collection agency.26 The Court may
only direct the repayment of attorneys fees received on the basis that a respondent attorney did not render
efficient service to the client. Consequently, Atty. Millo should refund the P10,000.00 given in connection with
the adoption case, plus interest of 6% per annum, reckoned from the finality of this decision.

WHEREFORE, the Court FINDS and HOLDS Atty. MARCELITO M. MILLO guilty of violating Canon 18,
Rule 18.03 of the Code of Professional Responsibility and the Lawyers Oath; SUSPENDS him from the
practice of law for a period of six months effective from notice, with the STERN WARNING that any similar
infraction in the future will be dealt with more severely; ORDERS him to return to the heirs of Johnny and
Abella Pesto within ten days from notice the sum of P10,000.00, plus legal interest of 6% per annum reckoned
from the finality of this decision until full payment; and DIRECTS him to promptly submit to this Court written
proof of his compliance within thirty days from notice of this decision.Let copies of this decision be furnished to
the Office of the Bar Confidant, to be appended to Atty. Marcelito M. Millo's personal record as an attorney; to
the Integrated Bar of the Philippines; and to the Office of the Court Administrator for dissemination to all
courts throughout the country for their information and guidance.SO ORDERED.

A.C. No. 4945 October 8, 2013 MA. JENNIFER TRIA-SAMONTE, Complainant,


vs.EPIFANIA "FANNY" OBIAS, Respondent.

For the Court's resolution is an administrative Complaint-affidavit1 filed by Ma. Jennifer Tria-Samonte
(complainant) against Epifania "Fanny"Obias (respondent) charging her for grave misconduct and/or gross
malpractice.

The facts

In 1997, spouses Prudencio and Loreta Jeremias (Sps. Jeremias),through respondent, offered for sale a parcel of
agricultural land covered by Transfer Certificate of Title No. 597 (subject property) to the late Nestor Tria
(Nestor) and Pura S. Tria (Sps. Tria), for a consideration of P2,800,000.00 and payable in
installments.2 Respondent, who was to receive the payment from Sps. Tria and transmit the same to Sps.
Jeremias, undertook to deliver the deed of sale and owners copy of the title to her clients (Sps. Tria) upon full
payment of the purchase price.3 She further undertook to cause the conversion of the subject property from
agricultural to residential, and the transfer of the title to the names of Sps. Tria as part of the package
agreement.4 Respondent received all the installment payments made by Sps. Tria and issued receipts
therefor.5 After full payment of the purchase price on July 11, 1997,6 and after giving an
additional P115,000.00for capital gains tax and other expenses,7 Sps. Tria requested from respondent the
delivery of the deed of sale and the owners copy of the title to them but respondent failed to comply explaining
that the Department of Agrarian Reform clearance for conversion of the subject property from agricultural to
residential was taking time.8 Despite several subsequent demands, respondent still failed to fulfill her
undertakings under the package agreement.9

On May 22, 1998, Nestor was fatally shot and died.10 Thereafter, complainant, daughter of Sps. Tria, again
demanded from respondent and Sps. Jeremias the delivery of the deed of sale and the certificate of title of the
subject property to them, but to no avail. For their part, Sps. Jeremias informed complainant that they had
received the consideration of P2,200,000.00 and they had executed and turned-over the sale documents to
respondent.11

Complainant later discovered that a deed of sale over the subject property was executed by Sps. Jeremias and
notarized by respondent favor of someone else, a certain Dennis Tan, on May 26, 1998 for a consideration
of P200,000.00.12

In defense, respondent, in her Comment,13 claimed that Nestor instructed her in November 1997 not to
proceed with the processing of the deed of sale and, instead, to just look for another buyer.14 She further averred
that Nestor also demanded from her the return of the purchase price, and that she complied with the said
demand and returned the P2,800,000.00 in cash to Nestor sometime during the latter part of January
1998.15 However, she did not ask for a written receipt therefor. In fact, Nestor told her not to return
the P115,000.00 intended for capital gains taxes and other expenses, and to just apply the said sum as attorneys
fees for the other legal services that she rendered for him.16

In the Courts Resolution17 dated August 30, 1999, the case was referred to the Integrated Bar of the Philippines
(IBP) for investigation, report, and recommendation. After numerous postponements, mostly at the instance of
respondent,18 only the complainant and her witnesses testified before the IBP. Eventually, respondents right to
present evidence was considered waived.19
The IBPs Report and Recommendation

On September 25, 2007, the IBP Investigating Commissioner, Wilfredo E.J.E. Reyes (Investigating
Commissioner), issued his Report and Recommendation,20 finding respondent to have violated her oath as a
lawyer due to her participation in the second sale of the subject property despite the lack of any lawful
termination of the prior sale of the same property to Sps.Tria. The Investigating Commissioner observed that
respondent received, and admitted to have received, from Sps. Tria the P2,800,000.00 purchase price and the
amount of P115,000.00 for expenses. He further found the second sale of the same property to Dennis Tan as a
clear indication that respondent: (a) employed serious deceit or fraud against Sps. Tria and their family; (b)
violated their proprietary rights; and (c) violated the trust and confidence reposed in her.21 On the other hand,
the Investigating Commissioner did not give credence to respondents defense that she returned
the P2,800,000.00 purchase price given by Sps. Tria and that the latter caused the cancellation of the sale of the
subject property in their favor, absent any receipt or documentation to prove the same.22 As counsel for Sps.
Tria, respondent failed in her obligation to observe honesty and diligence in their transaction and, as such, she
was found guilty of grave misconduct and gross malpractice in violation of Canons 17 and 18 of the Code of
Professional Responsibility (Code).23 Accordingly, the Investigating Commissioner recommended that
respondent be suspended from the practice of law for a period of five years.24

Finding the recommendation to be fully supported by the evidence on record and the applicable laws and rules,
and considering respondents violation of Canons 17 and 18 of the Code, the IBP Board of Governors adopted
and approved the Investigating Commissioners Report and Recommendation in Resolution No. XVIII-2007-
18525dated October 19,2007 but reduced the suspension of respondent from the practice of law from five years
to one year.

Both complainant and respondent filed their respective motions for reconsideration26 which were, however,
denied in the IBP Board of Governors Resolution No. XX-2012-109 dated March 10, 2012.27

The Issue Before the Court

The essential issue in this case is whether or not respondent should beheld administratively liable for violating
Canons 17 and 18 of the Code.

The Courts Ruling

The Court finds no cogent reason to disturb the findings of the IBP. Indeed, respondent, in her Comment,
already admitted that she rendered legal services to Sps. Tria,28 which necessarily gave rise to a lawyer-client
relationship between them. The complete turnaround made by respondent in her motion for reconsideration
from the IBP Board of Governors Resolution No. XX-2012-109, where she contended that there was no
lawyer-client relationship between her and Sps. Tria,29 cannot thus be given any credence.

Since respondent publicly held herself out as lawyer, the mere fact that she also donned the hat of a real estate
broker did not divest her of the responsibilities attendant to the legal profession. In this regard, the legal advice
and/or legal documentation that she offered and/or rendered regarding the real estate transaction subject of
this case should not be deemed removed from the category of legal services.30 Case law instructs that if a person,
in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional
advice or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the
professional employment is established.31 Thus, in view of the fact that Sps. Tria knew respondent to be, and
transacted with her as, a lawyer, her belated and unilateral classification of her own acts as being limited to
those of a real estate broker cannot be upheld. In any case, the lawyer-client relationship between Sps. Tria and
respondent was confirmed by the latters admission that she rendered legal services to the former. With this
relationship having been established, the Court proceeds to apply the ethical principles pertinent to this case.
It is a core ethical principle that lawyers owe fidelity to their clients cause and must always be mindful of the
trust and confidence reposed in them.32 They are duty-bound to observe candor, fairness, and loyalty in all their
dealings and transactions with their clients.33 Irrefragably, the legal profession demands of attorneys an absolute
abdication of every personal advantage conflicting in any way, directly or indirectly, with the interests of their
clients.34 As enshrined in Canons 17 and 18 of the Code:

Canon 17 - A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence
reposed in him.

Canon 18 - A lawyer shall serve his client with competence and diligence.1wphi1

In the present case, respondent clearly transgressed the above-mentioned rules as her actions were evidently
prejudicial to her clients interests. Records disclose that instead of delivering the deed of sale covering the
subject property to her clients, she willfully notarized a deed of sale over the same property in favor of another
person. Accordingly, far removed from protecting the interest of her clients, Sps. Tria, who had, in fact, already
fully paid the purchase price of the subject property, respondent participated and was even instrumental in
bringing about the defeat of their rights over the said property. Hence, respondent grossly violated the trust and
confidence reposed in her by her clients, in contravention of Canons 17and 18 of the Code. To add, by turning
against her own clients, respondent also violated Rule 1.01, Canon 1 of the Code which provides that a lawyer
shall not engage in unlawful, dishonest and immoral or deceitful conduct. Lest it be forgotten, lawyers are
bound to maintain not only a high standard of legal proficiency, but also of morality, honesty, integrity, and fair
dealing.35These unyielding standards respondent evidently failed to adhere to.

Anent the proper penalty to be imposed, records bear out that the penalty of suspension from the practice of law
recommended by the Investigating Commissioner was decreased from a period of five years to just one year by
the IBP Board of Governors in Resolution No. XVIII-2007-185. However, the Court observes that the said
resolution is bereft of any explanation showing the bases for such modification in contravention of Section 12(a),
Rule 139-B of the Rules of Court which mandates that "the decision of the Board upon such review shall be in
writing and shall clearly and distinctly state the facts and the reasons on which it is based." Verily, the Court
frowns on the unexplained change made by the IBP Board of Governors in the recommended penalty. Be that
as it may, the Court proceeds to correct the same.

Jurisprudence reveals that in similar cases where lawyers abused the trust and confidence reposed in them by
their clients as well as committed unlawful, dishonest, and immoral or deceitful conduct, as in this case, the
Court found them guilty of gross misconduct and disbarred them. In Chuav. Mesina, Jr.,36 the Court disbarred
the lawyer who, upon his misrepresentations, breached his promise to his clients to transfer to them the property
subject of that case, but instead, offered the same for sale to the public. Also, in Tabang v. Gacott,37 the penalty
of disbarment was meted out against the lawyer who, among others, actively sought to sell the properties subject
of that case contrary to the interests of his own clients. As the infractions in the foregoing cases are akin to those
committed by respondent in the case at bar, the Court deems that the same penalty of disbarment be imposed
against her. Clearly, as herein discussed, respondent committed deliberate violations of the Code as she
dishonestly dealt with her own clients and advanced the interests of another against them resulting to their loss.
For such violations, respondent deserves the ultimate punishment of disbarment consistent with existing
jurisprudence.

As a final point, it bears to note that the foregoing resolution does not-as it should not -include an order for the
return of the P2,800,000.00 purchase price and the amount of P115,000.00 for expenses allegedly received by
respondent, albeit the Investigating Commissioner's findings on the same. In Roa v. Moreno,38 it has been held
that disciplinary proceedings against lawyers are only confined to the issue of whether or not the respondent-
lawyer is still fit to be allowed to continue as a member of the Bar and that the only concern is his administrative
liability.39 Thus, the Court's findings during administrative-disciplinary proceedings have no bearing on the
liabilities of the parties involved which are purely civil in nature -meaning, those liabilities which have no
intrinsic link to the lawyer's professional engagement40 as the same should be threshed out in a proper
proceeding of such nature.WHEREFORE, respondent Epifania "Fanny" Obias is found guilty of gross
misconduct and is accordingly DISBARRED.Let a copy of this Resolution be furnished the Office of the Bar
Confidant, the Integrated Bar of the Philippines, and the Office of the Court Administrator for circulation to all
the courts.SO ORDERED.

A.C. No. 5239 November 18, 2013SPOUSES GEORGE A. WARRINER and AURORA R.
WARRINER, Complainants, vs.ATTY. RENI M. DUBLIN, Respondent.

This resolves the administrative Complaint1 filed on March 14, 2000 by complainant-spouses George Arthur
Warriner (Warriner) and Aurora R. Warriner against respondent Atty. Reni M. Dublin for gross negligence and
dereliction of duty.

In their Complaint filed directly before the Office of the Bar Confidant of this Court, complainants alleged that
they secured the services of respondent in the filing of a Complaint for damages captioned as Aurora M Del
Rio-Warriner and her spouse-husband George Arthur Warriner, plaintiffs, versus E.B. Villarosa & Partner Co.
Ltd. and docketed as Civil Case No. 23,396-95 before the Regional Trial Court (RTC) of Davao City, Branch
16; that during the proceedings in Civil Case No. 23,396-95, respondent requested the RTC for a period of 10
days within which to submit his Formal Offer of Documentary Evidence; that despite the lapse of the requested
period, respondent did not submit his Formal Offer of Documentary Evidence; that respondent did not file any
comment to E.B. Villarosa & Partner Co., Ltd. s motion to declare complainants to have waived their right to
file Formal Offer of Documentary Evidence; that respondent belatedly filed a Formal Offer of Documentary
Evidence which the RTC denied; that respondent did not oppose or file any comment to E.B. Villarosa &
Partner Co., Ltd.s move to dismiss the Complaint; and that the RTC eventually dismissed Civil Case No.
23,396-95 to the prejudice of herein complainants. In a Resolution2 dated June 26, 2000, we directed
respondent to file his Comment to this administrative Complaint. Upon receipt of the Resolution on August 24,
2000,3 respondent requested for an extension of 30 days which was granted.4

However, as of August 5, 2002, or after a lapse of almost two years, respondent had not yet filed his Comment.
Thus, we resolved to require respondent to "show cause why he should not be disciplinarily dealt with or held in
contempt for such failure and to comply with the resolution requiring said comment, both within ten (10) days
from notice."5 Respondent received our directive but chose to ignore the same.6 In another Resolution7 dated
August 4, 2003, we imposed a fine of P1,000.00 on respondent and reiterated our directives requiring him to file
his Comment and to submit an explanation on his failure to file the same. However, respondent again ignored
this Courts directive. Thus, on February 15, 2006, we increased the fine to P2,000.00 but respondent continued
to ignore our Resolutions.8 Consequently, on March 10, 2008, we resolved to order respondents arrest and
detention until he complies with our Resolutions.9

This time, respondent heeded our directives by submitting his Compliance10 and Comment.11 Respondent
claimed that he failed to file his Comment to the instant administrative case because he lost the records of Civil
Case No. 23,396-95 and that he tried to get a copy from the RTC to no avail.

In his Comment belatedly filed eight years after the prescribed period, respondent averred that complainant
Warriner is an Australian national who married his Filipino spouse as a convenient scheme to stay in the
country; that he rendered his services in Civil Case No. 23,396-95 free of charge; that he accepted the case
because he was challenged by Warriners criticism of the Philippine judicial system; that he doubted the veracity
of Warriners claim that the construction being undertaken by E.B. Villarosa & Partner Co., Ltd. indeed caused
the erosion of the soil towards his property; that Warriner was his only witness during the trial; that the
reluctance of other witnesses to testify for Warriner strengthened his suspicion of the veracity of Warriners
claim; that upon inquiries, he discovered that the bits of evidence presented by Warriner were fabricated; that
the barangay officials do not wish to participate in the fraudulent scheme of Warriner; that he visited Warriners
property and saw that Warriner authored the damage to his property by draining the soil erosion prevention
ditches provided by E.B. Villarosa & Partner Co., Ltd.; that he had a heated argument with Warriner during
which the latter threatened him with a disbarment suit; that based on his discovery, respondent did not wish to
submit his Formal Offer of Documentary Evidence; that complainants no longer saw him or inquired about the
status of the case; that he did not withdraw from the case because complainants no longer visited him at his law
office; that if he withdraws, Warriner would only hire another lawyer to perpetrate his fraudulent scheme; and
that he could not be held administratively liable for filing a belated Formal Offer of Documentary Evidence as
he only did the same to protect the legal profession and in accordance with his oath not to do any falsehood or
promote unlawful causes.

In a Resolution12 dated July 16, 2008, we found respondents explanation for failing to comply with our
directives not fully satisfactory hence, we admonished him to be more circumspect in his dealings with the
Court. At the same time, we referred the Complaint to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.

The parties submitted their respective Position Papers before the IBP Commission on Bar Discipline.

In their Position Paper,13 complainants insisted that respondent mishandled their case before the RTC by filing
a motion to admit the formal exhibits almost three months after the prescribed period; that respondent did not
present complainants Marriage Contract and General Power of Attorney that would have allowed Warriner to
represent his wife while the latter is out of the country; that complainants marriage is not for convenience; that
complainants have a son out of said marriage; that respondent was paid for his services; that E.B. Villarosa &
Partner Co., Ltd. did not secure an Environmental Compliance Certificate (ECC) before undertaking the
construction; that Warriner was not the sole witness for the prosecution; that the records of Civil Case No.
23,396-95 would show that a representative from the Department of Environment and Natural Resources
(DENR) and the Barangay Captain were likewise presented; and that these witnesses proved that Warriners
claim was not a fabrication.

In his Position Paper,14 respondent contradicted his earlier assertion in his Comment filed before the Court that
Warriner was his only witness in Civil Case No. 23,396-95 by claiming this time that aside from Warriner, he
also presented as witnesses a former barangay official and a representative from DENR. He conceded that E.B.
Villarosa & Partner Co., Ltd. indeed failed to secure an ECC but claimed that this alone would not prove that
E.B. Villarosa & Partner Co., Ltd. did not institute corrective measures to prevent soil erosion and damages to
neighboring houses such as Warriners. He insisted that it is the natural topography of the place which caused
the soil erosion which again contradicted his earlier allegation in his Comment before this Court that it was
Warriner who caused the soil erosion by destroying the ditches constructed by the developer. Moreover, he
alleged that the estimate of damages provided by Benings Garden which he offered as an exhibit in Civil Case
No. 23,396-95 was a fabrication as there is no such entity in Laurel St., Davao City.

In their Supplemental Position Paper,15 complainants argued, among others, that since more than eight years
have lapsed, it is possible that Benings Garden relocated to another address but it does not mean that it never
existed.

In his Report and Recommendation,16 the Investigating Commissioner17 found respondent guilty of
mishandling Civil Case No. 23,396-95 in violation of the Code of Professional Responsibility and thus
recommended respondents suspension from the practice of law for a period of six months.

The IBP Board of Governors, in Resolution No. XIX-2010-44218 dated August 28, 2010, approved with
modification the findings and recommendation of the Investigating Commissioner. The IBP Board of
Governors noted that aside from mishandling the case of complainants, respondent also showed his propensity
to defy the orders of the court, thus it recommended respondent's suspension from the practice of law for one
year.
Respondent moved for reconsideration insisting that the IBPs Resolution is not supported by facts. He
maintained that his actuations did not amount to a violation of the Code of Professional Responsibility; and that
the filing of the Formal Offer of Documentary Evidence, although belated, exculpated him from any liability.
He asserted that the exhibits were fabricated thus he deliberately belatedly filed the Formal Offer of
Documentary Evidence in the hope that the same would be refused admission by the RTC. He denied defying
lawful orders of the RTC or this Court. He insisted that defiance of lawful orders connotes total, complete or
absolute refusal and not mere belated filing. He argued that he did not oppose or file comment to the Motion to
Dismiss as he deemed the same proper considering the fabricated allegations of his clients. Respondent argued
that the penalty recommended by the IBP is not commensurate to his infractions. He alleged that the records of
this case would show that he did not utterly disregard the orders or processes of the Court or the IBP. He
claimed that this Court should have deemed his failure to timely file a Comment as a waiver on his part to file
the same, and not as defiance of this Courts orders. Besides, he insisted that the only issue to be resolved by the
IBP was the alleged mishandling of Civil Case No. 23,396-95; the IBP should not have delved on whether he
disregarded or was disrespectful of the Courts orders because he was not given any opportunity to rebut the
same.

Finally, respondent posited that his penalty is oppressive, excessive and disproportionate. He argued that with
his suspension, the other cases he is handling would be affected.

Complainants also filed their Motion for Reconsideration insisting that respondent should be disbarred or
suspended for five years from the practice of law. To this, respondent filed his Comment asserting that the
Investigating Commissioner erred and was inaccurate when he stated in his Report and Recommendation that
respondent had a heated argument with the complainants. He averred that after the filing of the Formal Offer
of Documentary Evidence and until the dismissal of Civil Case No. 23,396-95, he had no occasion to meet the
complainants. He maintained that he had nothing to be remorseful about and that there is absolutely no
evidence that would justify his suspension. He maintained that "being basic and elementary in any legal
procedure, a failure or refusal to submit comment is but a waiver to so comment and puts the controversy
submitted for resolution based on the evidence available at hand x x x. It is unfortunate that the Supreme Court
did not consider respondents failure or omission as having such effects, but such failure cannot be considered as
a contemptuous act x x x."

The IBP Board of Governors, however, was not persuaded hence it denied respondents Motion for
Reconsideration.

On May 6, 2013, respondent filed before this Court An Ex Parte Manifestation (Not a Motion for
Reconsideration)19 insisting that his failure to timely file comment on the administrative case does not constitute
defiance of the Courts directives but is only "a natural human expression of frustration, distraught and
disappointment" when this Court and the IBP entertained a clearly unmeritorious Complaint. In any case, he
averred that on April 12, 2013, the IBP Davao City Chapter presented him with a Certificate of Appreciation
for his invaluable support to the local chapter. He claims that

x x x Even a feeble minded average person will find it ridiculously hilarious and comical that the [IBP] National
Office condemns undersigned for his acts allegedly inimical to the profession but will be praised to the heavens,
so to speak, by the local chapter of the same organization for his invaluable support to that same organization
whose object, among others, is to discipline its members to be respectful and [subservient] to the rule of law by
serving justice in an orderly and dignified manner. Weight and credence must be accorded the recognition and
appreciation by this local chapter being logically considered as having the first hand observation and, thus, the
personal knowledge of undersigneds personal character, integrity, uprightness, reputation and sacrifices in the
practice of his legal profession.

As a gesture of meek obedience, respondent will not pray for the reconsideration and setting aside of that
resolution adopted by the Honorable Board of Governors suspending him from the practice of law for one (1)
year, erroneous, disproportionate and harsh as it may be. Undersigned only prays that, by way of protecting the
prestigious image of the [IBP], measures be adopted to prevent it from becoming a laughing stock of
professional organizations in the Philippines worthy for the books of wonders by its inconsistent, ridiculous and
contradictory stance of disciplining its members exemplified by the predicament of respondent in this instant
proceeding on the one hand but on the other hand is extolled by its local chapter to high heavens for his
"invaluable support" of the tenets and foundation of that very same organization that condemns him. THIS IS
HILARIOUSLY COMICAL AND ABSURDLY ODD.

Our Ruling

Respondent is indeed guilty of mishandling Civil Case No. 23,396-95. Records show that the 10-day period
given to respondent to submit his formal offer of documentary evidence pursuant to the RTC Order dated
November 11, 1997 lapsed without any compliance from the respondent.

Consequently, the RTC, in its January 23, 1998 Order deemed respondent to have waived the submission of his
formal offer of exhibits. Instead of asking the RTC to set aside the above Order, respondent filed on February 3,
1998 a Motion to Admit the Belated Formal Exhibits in Evidence. As to be expected, the RTC denied the
motion. At the same time, it directed E.B. Villarosa & Partner Co., Ltd. to file its Motion to Dismiss by way of
Demurrer to Evidence. Again, respondent failed to comment or oppose the Motion to Dismiss despite the
opportunity given by the RTC. As a result, Civil Case No. 23,396-95 was dismissed.

Plainly, respondent violated the Code of Professional Responsibility particularly Canon 18 and Rule 18.03
which provide:

Canon 18 A lawyer shall serve his client with competence and diligence.

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

Worse, it appears that respondent deliberately mishandled Civil Case No. 23,396-95 to the prejudice of herein
complainants. Culled from the pleadings respondent submitted before this Court and the IBP, respondent
admitted that he deliberately failed to timely file a formal offer of exhibits because he believes that the exhibits
were fabricated and was hoping that the same would be refused admission by the RTC. This is improper. If
respondent truly believes that the exhibits to be presented in evidence by his clients were fabricated, then he has
the option to withdraw from the case. Canon 22 allows a lawyer to withdraw his services for good cause such as
"[w]hen the client pursues an illegal or immoral course of conduct with the matter he is handling"20 or "[w]hen
the client insists that the lawyer pursue conduct violative of these canons and rules."21 Respondent adverted to
the estimate of damages provided by Benings Garden as a fabrication as there is no such entity in Laurel St.,
Davao City. Unfortunately, respondent anchored his claim that Bening's Garden does not exist merely on the
claim of Rudolph C. Lumibao, a "sympathetic client" and a part-time gardener. Complainants refuted this
allegation by claiming that Bening's Garden must have relocated its business considering that more than eight
years have passed since the estimate was secured. Complainants also pointed out that since the filing of this case,
respondent has thrice relocated his office but this does not mean that his practice has ceased to exist.

We also agree with the IBP that respondent has a propensity to disobey and disrespect court orders and
processes.1wphi1 Note that we required respondent to submit his Comment to this administrative Complaint
as early as year 2000. However, he was only able to file his Comment eight years later, or in 2008 and only after
we ordered his arrest. "As an officer of the court, respondent is expected to know that a resolution of this Court
is not a mere request but an order which should be complied with promptly and completely.22

Finally, it has not escaped our notice that respondent is also prone to resorting to contradictions in his effort to
exculpate himself. In his Comment filed before this Court, respondent claimed that Warriner was his only
witness in Civil Case No. 23,396-95. However, in his Position Paper filed before the IBP, he admitted that aside
from Warriner, he also presented as witnesses a former barangay official and a representative from DENR.
Next, he claimed in his Comment filed before this Court that he had a heated argument with Warriner during
which the latter threatened him with a disbarment suit. The Investigating Commissioner took this into account
when he submitted his Report and Recommendation. Surprisingly, respondent claimed in his Comment to
complainant's Motion for Reconsideration before the IBP that the Investigating Commissioner erred and was
inaccurate when he stated in his Report and Recommendation that respondent had a heated argument with the
complainants. Moreover, respondent claimed in his Comment before this Court that Warriner authored the
damage to his property by draining the soil erosion prevention ditches provided by E.B. Villarosa & Partner
Co., Ltd. However, he again contradicted himself when he claimed in his Position Paper that the natural
topography of the place was the cause of the erosion. At this juncture, respondent must be reminded that as a
lawyer and an officer of the Court, he "owes candor, fairness and good faith to the court."23 He "shall not do
any falsehood, nor consent to the doing of any in court; nor shall he mislead, or allow the Court to be misled by
any artifice."24

Under the circumstances, and considering that we had already admonished respondent and had him arrested
for his adamant refusal to obey our directives, we find the penalty of suspension from the practice of law for six
months, as recommended by the Investigating Commissioner, and as we similarly imposed in Hernandez v.
Padilla25 and Pesto v. Millo,26 commensurate to respondents infractions. Besides, we wish to emphasize that
"suspension is not primarily intended as a punishment but a means to protect the public and the legal
profession."27

IN VIEW WHEREOF, Atty. Reni M. Dublin is SUSPENDED from the practice of law for six months effective
upon receipt of this Resolution with a WARNING that a similar violation will be dealt with more severely. He is
DIRECTED to report to this Court the date of his receipt of this Resolution to enable this Court to determine
when his suspension shall take effect.Let a copy of this Resolution be entered in the personal records of
respondent as a member of the Bar and copies furnished the Office of the Bar Confidant the Integrated Bar of
the Philippines and the Office of the Court Administrator for circulation to all courts in the country.SO
ORDERED.

A.C. No. 7766 August 5, 2014JOSE ALLAN TAN, Complainant, vs.PEDRO S.


DIAMANTE, Respondent.

For the Court's resolution is an administrative Complaint1 for disbarment dated February 1, 2008 filed by
complainant Jose Allan Tan (complainant) against respondent Pedro S. Diamante (respondent), charging him of
violating the Code of Professional Responsibility (CPR) and the lawyers oath for fabricating and using a
spurious court order, and for failing to keep his client informed of the status of the case.

The Facts

On April 2, 2003, complainant, claiming to be a recognized illegitimate son of the late Luis Tan, secured the
services of respondent in order to pursue a case for partition of property against the heirs of the late spouses Luis
and Natividad Valencia-Tan.2 After accepting the engagement, respondent filed the corresponding
complaint3before the Regional Trial Court of Bacolod City, Branch 46 (RTC), docketed as Civil Case No. 03-
11947. The complaint was eventually dismissed by the RTC in an Order4 dated July 25, 2007 for lack of cause
of action and insufficiency of evidence.5 While respondent was notified of such dismissal as early as August 14,
2007,6complainant learned of the same only on August 24, 2007 when he visited the formers office.7 On such
occasion, respondent allegedly asked for the amount of P10,000.00 for the payment of appeal fees and other
costs, but since complainant could not produce the said amount at that time, respondent, instead, asked and was
given the amount of P500.00 purportedly as payment of the reservation fee for the filing of a notice of appeal
before the RTC.8 On September 12, 2007, Tan handed the amount of P10,000.00 to respondent, who on even
date, filed a notice of appeal9 before the RTC.10
In an Order11 dated September 18, 2007, the RTC dismissed complainants appeal for having been filed
beyond the reglementary period provided for by law. Respondent, however, did not disclose such fact and,
instead, showed complainant an Order12 dated November 9, 2007 purportedly issued by the RTC (November
9, 2007 Order) directing the submission of the results of a DNA testing to prove his filiation to the late Luis Tan,
within 15 days from receipt of the notice. Considering the technical requirements for such kind of testing,
complainant proceeded to the RTC and requested for an extension of the deadline for its submission. It was
then that he discovered that the November 9, 2007 Order was spurious, as certified by the RTCs Clerk of
Court.13Complainant also found out that, contrary to the representations of respondent, his appeal had long
been dismissed.14 Aggrieved, he filed the instant administrative complaint for disbarment against respondent.

In his Comments/Compliance15 dated September 4, 2009, respondent alleged that it was complainants failure
to timely produce the amount of 1,400.00 to pay for the appeal fees that resulted in the late filing of his appeal.
According to him, he informed complainant of the lapse of the reglementary period to appeal, but the latter
insisted in pursuing the same. He also claimed to have assisted complainant "not for money or malice" but being
a desperate litigant, he was blamed for the courts unfavorable decision.16

The IBPs Report and Recommendation

In a Report and Recommendation17 dated September 21, 2010, the Integrated Bar of the Philippines (IBP)
Investigating Commissioner found respondent administratively liable, and accordingly recommended that the
penalty of suspension for a period of one (1) year be meted out against him.18

The Investigating Commissioner found complainants imputations against respondent to be well-founded,


observing that instead of meeting complainants allegations squarely, particularly, the issue of the nondisclosure
of the dismissal of the partition case, respondent sidestepped and delved on arguments that hardly had an effect
on the issues at hand.19

Moreover, the Investigating Commissioner did not find credence in respondents accusation that the spurious
November 9, 2007 Order originated from complainant, ratiocinating that it was respondent who was motivated
to fabricate the same to cover up his lapses that brought about the dismissal of complainants appeal and make it
appear that there is still an available relief left for Tan.20

In a Resolution dated April 16, 2013, the IBP Board of Governors unanimously adopted and approved the
aforesaid report and recommendation.21

The Issue Before the Court

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

The Courts Ruling

After a judicious perusal of the records, the Court concurs with the IBPs findings, subject to the modification of
the recommended penalty to be imposed upon respondent.

Under Rule 18.04, Canon 18 of the CPR, it is the lawyers duty to keep his client constantly updated on the
developments of his case as it is crucial in maintaining the latters confidence, to wit:

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

Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to clients request for information.
As an officer of the court, it is the duty of an attorney to inform his client of whatever important information he
may have acquired affecting his clients case. He should notify his client of any adverse decision to enable his
client to decide whether to seek an appellate review thereof. Keeping the client informed of the developments of
the case will minimize misunderstanding and loss of trust and confidence in the attorney. The lawyer should not
leave the client in the dark on how the lawyer is defending the clients interests.22 In this connection, the lawyer
must constantly keep in mind that his actions, omissions, or nonfeasance would be binding upon his client.
Concomitantly, the lawyer is expected to be acquainted with the rudiments of law and legal procedure, and a
client who deals with him has the right to expect not just a good amount of professional learning and
competence but also a whole-hearted fealty to the clients cause.23

In the case at bar, records reveal that as of August 14, 2007, respondent already knew of the dismissal of
complainants partition case before the RTC. Despite this fact, he never bothered to inform complainant of
such dismissal as the latter only knew of the same on August 24, 2007 when he visited the formers office. To
add insult to injury, respondent was inexcusably negligent in filing complainants appeal only on September 12,
2007, or way beyond the reglementary period therefor, thus resulting in its outright dismissal. Clearly,
respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly possess and
exercise in such matters of professional employment.24

Worse, respondent attempted to conceal the dismissal of complainants appeal by fabricating the November 9,
2007 Order which purportedly required a DNA testing to make it appear that complainants appeal had been
given due course, when in truth, the same had long been denied. In so doing, respondent engaged in an
unlawful, dishonest, and deceitful conduct that caused undue prejudice and unnecessary expenses on the part of
complainant. Accordingly, respondent clearly violated Rule 1.01, Canon 1 of the CPR, which provides:

CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and
legal processes.

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

As officers of the court, lawyers are bound to maintain not only a high standard of legal proficiency, but also of
morality, honesty, integrity, and fair dealing,25 failing in which whether in his personal or private capacity, he
becomes unworthy to continue his practice of law.26 A lawyers inexcusable neglect to serve his clients interests
with utmost diligence and competence as well as his engaging in unlawful, dishonest, and deceitful conduct in
order to conceal such neglect should never be countenanced, and thus, administratively sanctioned.

In view of the foregoing, respondents conduct of employing a crooked and deceitful scheme to keep
complainant in the dark and conceal his cases true status through the use of a falsified court order evidently
constitutes Gross Misconduct.27 His acts should not just be deemed as unacceptable practices that are
disgraceful and dishonorable; they reveal a basic moral flaw that makes him unfit to practice law.28 In this
regard, the Courts pronouncement in Sebastian v. Calis29 is instructive, viz.:

Deception and other fraudulent acts by a lawyer are disgraceful and dishonorable. They reveal moral flaws in a
lawyer.1wphi1 They are unacceptable practices. A lawyers relationship with others should be characterized
by the highest degree of good faith, fairness and candor. This is the essence of the lawyers oath. The lawyers
oath is not mere facile words, drift and hollow, but a sacred trust that must be upheld and keep inviolable. The
nature of the office of an attorney requires that he should be a person of good moral character. This requisite is
not only a condition precedent to the admission to the practice of law, its continued possession is also essential
for remaining in the practice of law. We have sternly warned that any gross misconduct of a lawyer, whether in
his professional or private capacity, puts his moral character in serious doubt as a member of the Bar, and
renders him unfit to continue in the practice of law.30 (Emphases and underscoring supplied)
Jurisprudence reveals that in analogous cases where lawyers failed to inform their clients of the status of their
respective cases, the Court suspended them for a period of six (6) months. In Mejares v. Romana,31 the Court
suspended the lawyer for the same period for his failure to timely and adequately inform his clients of the
dismissal of their petition. In the same vein, in Penilla v. Alcid, Jr.,32 the same penalty was imposed on the
lawyer who consistently failed to update his client of the status of his cases, notwithstanding several follow-ups.

However, in cases where lawyers engaged in unlawful, dishonest, and deceitful conduct by falsifying documents,
the Court found them guilty of Gross Misconduct and disbarred them. In Brennisen v. Contawi,33 the Court
disbarred the lawyer who falsified a special power of attorney in order to mortgage and sell his clients property.
Also, in Embido v. Pe,34 the penalty of disbarment was meted out against the lawyer who falsified an in existent
court decision for a fee.

As already discussed, respondent committed acts of falsification in order to misrepresent to his client, i.e.,
complainant, that he still had an available remedy in his case, when in reality, his case had long been dismissed
for failure to timely file an appeal, thus, causing undue prejudice to the latter. To the Court, respondents acts
are so reprehensible, and his violations of the CPR are so flagrant, exhibiting his moral unfitness and inability to
discharge his duties as a member of the bar. His actions erode rather than enhance the public perception of the
legal profession. Therefore, in view of the totality of his violations, as well as the damage and prejudice caused to
his client, respondent deserves the ultimate punishment of disbarment.

WHEREFORE, respondent Pedro S. Diamante is hereby DISBARRED for Gross Misconduct and violations
of Rule 1.01, Canon 1, and Rule 18.04, Canon 18 of the Code of Professional Responsibility, and his name is
ordered STRICKEN OFF from the roll of attorneys.Let a copy of this Decision be attached to respondent
Pedro S. Diamante's record in this Court. Further, let copies of this Decision be furnished to the Integrated Bar
of the Philippines and the Office of the Court Administrator, which is directed to circulate them to all the courts
in the country for their information and guidance.SO ORDERED.

A.C. No. 6484, June 16, 2015 ADELITA B. LLUNAR, Complainant, v. ATTY. ROMULO
RICAFORT, Respondent.

The present administrative case stemmed from the complaint-affidavit1 that Adelita B. Llunar (complainant)
filed against Atty. Romulo Ricafort (respondent) for gross and inexcusable negligence and serious misconduct.

Antecedents

In September 2000, the complainant, as attorney-in-fact of Severina Bafiez, hired the respondent to file a case
against father and son Ricardo and Ard Cervantes (Ard) for the recovery of a parcel of land allegedly owned by
the Banez family but was fraudulently registered under the name of Ricardo and later was transferred to Ard.

The property, which Ard had mortgaged with the Rural Bank of Malilipot, Albay, was the subject of foreclosure
proceedings at the time the respondent was hired. The respondent received from the complainant the following
amounts: (a) P70,000.00 as partial payment of the redemption price of the property; (b) P19,000.00 to cover the
filing fees; and (c) P6,500.00 as attorney's fees.

Three years later, the complainant learned that no case involving the subject property was ever filed by the
respondent with the Regional Trial Court (RTC) in Legaspi City. Thus, the complainant demanded that the
respondent return to her the amount of P95,000.00.

The respondent refused to return the whole amount of P95,000.00 to the complainant. He argued that a
complaint2 for annulment of title against Ard Cervantes had actually been filed in court, though not by him, but
by another lawyer, Atty. Edgar M. Abitria. Thus, he was willing to return only what was left of the P95,000.00
after deducting therefrom the P50,000.00 that he paid to Atty. Abitria as acceptance fee for handling the case.
The complainant refused to recognize the complaint for annulment of title filed by Atty. Abitria and claimed
that she had no knowledge of Atty. Abitria's engagement as counsel. Besides, the complaint was filed three (3)
years late and the property could no longer be redeemed from the bank. Also, the complainant discovered that
the respondent had been suspended indefinitely from the practice of law since May 29, 2002, pursuant to this
Court's decision in Administrative Case No. 5054,3 which the complainant suspected was the reason another
lawyer, and not the respondent, filed the complaint for annulment of title in court.

In a resolution4 dated February 2, 2005, the Court referred the case to the Integrated Bar of the Philippines
(IBP) for investigation, report, and recommendation.

In a report5 dated May 22, 2009, IBP Investigating Commissioner Cecilio C. Villanueva found the respondent
to have been grossly negligent in handling the complainant's case and to have gravely abused the trust and
confidence reposed in him by the complainant, thereby, violating Canons 156and 17,7 and Rules
1.01,8 16.03,9 18.03,10 and 18.0411 of the Code of Professional Responsibility (CPR).

Also, the Investigating Commissioner found the respondent to have erred in not informing his client that he was
under indefinite suspension from the practice of law. Due to these infractions, Commissioner Villanueva
recommended that the respondent remain suspended indefinitely from the practice of law.

In Resolution No. XIX-2011-224 dated May 14, 2011, the IBP Board of Governors agreed with the
Investigating Commissioner's findings on the respondent's liability but modified the recommended penalty from
indefinite suspension to disbarment.12 It also ordered the respondent to return to the complainant the amount of
P95,000.00 within thirty (30) days from notice. The respondent moved for reconsideration.

In his motion for reconsideration,13 the respondent argued that his referral of the complainant's case to Atty.
Abitria was actually with the complainant's knowledge and consent; and that he paid Atty. Abitria P50,000.00
for accepting the case. These facts were confirmed by Atty. Abitria in an affidavit14 dated November 17, 2004,
but were alleged to have been overlooked by Commissioner Villanueva in his report. The IBP Board of
Governors, in Resolution No. XX-2013-710 dated June 21, 2013, denied the respondent's motion for
reconsideration.15chanrobleslaw

Our Ruling

We find the respondent guilty of Grave Misconduct in his dealings with his client and in
engaging in the practice of law while under indefinite suspension, and thus impose upon him
the ultimate penalty of DISBARMENT.

The respondent in this case committed several infractions making him liable for grave misconduct. First, the
respondent did not exert due diligence in handling the complainant's case. He failed to act promptly in
redeeming the complainant's property within the period of redemption. What is worse is the delay of three years
before a complaint to recover the property was actually filed in court. The respondent clearly dilly-dallied on the
complainant's case and wasted precious time and opportunity that were then readily available to recover the
complainant's property. Under these facts, the respondent violated Rule 18.03 of the Code of Professional
Responsibility (CPR), which states that "a lawyer shall not neglect a legal matter entrusted to him, and his
negligence in connection therewith shall render him liable."

Second, the respondent failed to return, upon demand, the amounts given to him by the complainant for
handling the latter's case. On three separate occasions, the respondent received from the complainant the
amounts of P19,000.00, P70,000.00, and P6,500.00 for purposes of redeeming the mortgaged property from the
bank and filing the necessary civil case/s against Ard Cervantes. The complainant approached the respondent
several times thereafter to follow up on the case/s to be filed supposedly by the respondent who, in turn,
reassured her that actions on her case had been taken.

After the complainant discovered three years later that the respondent had not filed any case in court, she
demanded that the respondent return the amount of P95,000.00, but her demand was left unheeded. The
respondent later promised to pay her, but until now, no payment of any amount has been made. These facts
confirm that the respondent violated Canon 16 of the CPR, which mandates every lawyer to "hold in trust all
moneys and properties of his client that may come into his possession"16 and to "account for all money or
property collected or received for or from the client."17 In addition, a lawyer's failure to return upon demand the
funds or property he holds for his client gives rise to the presumption that he has appropriated these funds or
property for his own use to the prejudice of, and in violation of the trust reposed in him by his
client.18chanrobleslaw

Third, the respondent committed dishonesty by not being forthright with the complainant that he was under
indefinite suspension from the practice of law. The respondent should have disclosed this fact at the time he was
approached by the complainant for his services. Canon 15 of the CPR states that "a lawyer shall
observe candor, fairness and loyalty in all his dealings and transactions with his clients." The respondent lacked
the candor expected of him as a member of the Bar when he accepted the complainant's case despite knowing
that he could not and should not practice law.

Lastly, the respondent was effectively in the practice of law despite the indefinite suspension imposed on him.
This infraction infinitely aggravates the offenses he committed. Based on the above facts alone, the penalty of
suspension for five (5) years from the practice of law would have been justified, but the respondent is not an
ordinary violator of the profession's ethical rules; he is a repeat violator of these rules. In Nuez v. Atty.
Ricafort,19 we had adjudged the respondent liable for grave misconduct in failing to turn over the proceeds of
the sale of a property owned by his client and in issuing bounced checks to satisfy the alias writ of execution
issued by the court in the case for violation of Batas Pambansa Big. 22 filed against him by his client. We then
suspended him indefinitely from the practice of law - a penalty short of disbarment. Under his current liability -
which is no different in character from his previous offense - we have no other way but to proceed to decree his
disbarment. He has become completely unworthy of membership in our honorable profession.

With respect to the amount to be returned to the complainant, we agree with the IBP that the respondent
should return the whole amount of P95,000.00, without deductions, regardless of whether the
engagement of Atty. Abitria as counsel was with the complainant's knowledge and consent.

In the first place, the hiring of Atty. Abitria would not have been necessary had the respondent been honest and
diligent in handling the complainant's case from the start. The complainant should not be burdened with the
expense of hiring another lawyer to perform the services that the respondent was hired to do, especially in this
case where there was an inexcusable non-delivery of such services.

WHEREFORE, respondent Atty. Romulo Ricafort is hereby DISBARRED from the practice of law and his
name REMOVED from the Roll of Attorneys, effective immediately upon his receipt of this Decision. Also, he
is ORDERED to RETURN the amount of P95,000.00 to complainant Adelita B. Llunar, within thirty (30)
days from notice of this Decision.Let a copy of this Decision be attached to the respondent's personal record and
furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines, and the Office of the Court
Administrator for circulation to all courts in the country. This Decision should likewise be posted on the
Supreme Court website for the information of the general public.SO ORDERED.

A.C. No. 10138 June 16, 2015(Formerly CBD Case No. 06-1876)ROBERTO P.
NONATO, Complainant, vs.ATTY. EUTIQUIO M. FUDOLIN, JR., Respondent.
We resolve the administrative complaint1 filed by Roberto P. Nonato (complainant) charging Atty. Eutiquio M.
Fudolin, Jr. (respondent) with gross neglect of duty.

Factual Background

In a verified complaint dated October 18, 2006, the complainant alleged that his father, the late Restituto
Nonato (Restituto), was the duly registered owner of a 479-sq.m. Real property ( property) at Hinigaran, Negros
Occidental. The property became the subject of ejectment proceedings filed by Restituto against Anselmo
Tubongbanua ( Anselmo), before the Municipal Trial Court (MTC) of Hinigaran, Province of Negros
Occidental, docketed as Civil Case No. MTC-282. When the complaint was filed, Restituto was represen ted by
Atty. Felino Garcia (Atty. Garcia). However, at the pre-trial stage, Atty. Garcia was replaced by Atty. Fudolin,
the respondent in the present case.

The complainant alleged that although his father Restituto paid the respondent his acceptance fees, no formal
retainer agreement was executed. The respondent also did not issue any receipts for the acceptance fees paid.

The respondent, on the other hand, averred that Restituto, and not the complainant, engaged his services on
Restitutos representation that they were relatives. For this reason, he accepted the case on a minimal
acceptance fee of P20,000.00 and appearance fee of P1,000.00, and did not execute any formal retainer
agreement.

The complainant asserted that during the pendency of the ejectment proceedings before the MTC, the
respondent failed to fully inform his father Restituto of the status and developments in the case. Restituto could
not contact the respondent despite his continued efforts. The respondent also failed to furnish Restituto copies of
the pleadings, motions and other documents filed with the court. Thus, Restituto and the complainant were
completely left in the dark regarding the status of their case.

After an exchange of initial pleadings in the ejectment proceedings, the MTC ordered the parties to submit their
respective position papers. Since neither party complied with the courts directive, the MTC dismissed the
complaint as well as the counterclaim on May 26, 2005.

The respondent filed a motion for reconsideration from the order of dismissal. He justified his failure to file the
position paper by arguing that he misplaced the case records, adding that he was al so burdened with numerous
other cases. The MTC denied the motion.

The respondent filed a second motion for reconsideration, this time alleging that the ejectment case was a me
ritorious one such that its dismissal would cause injustice to Restituto (the plaintiff). He also filed a supplemental
motion, but the court denied both motions.

On September 15, 2005, Restituto died and all his properties passed on to his heirs, the complainant among
them.

The complainant alleges that he and his father Restituto did not know of the ejectment suits dismissal as the
respondent had failed to furnish them a copy of the MTCs dismissal order. The complainant also asserts that
the respondent did not inform them about the filing of the motion for reconsideration or of its denial by the
MTC. The complainant claims that he only found out that the case had been dismissed when he personally
went to the Office of the MTC Clerk of Court and was informed of the dismissal.

Because of the patent negligence, the complainant informed the respondent that his failure to file the position
paper could be a ground for his disbarment. Furthermore, the complainant, without the respondents
intervention, entered into an oral extrajudicial compromise with the daughter of defendant Anselmo.
On August 17, 2007, the respondent wrote the complainant and apologized for his repeated failure to
communicate with him. He reasoned out that he failed to file the position paper due to his poor health. He also
claimed that he had suffered a stroke and had become partially blind, which caused the delay in the preparation
of the pleadings in the ejectment case.2

In his Answer3 dated December 22, 2006, the respondent asserted that at the time he received the MTCs di
rective to submit a position paper, he was already suffering from "Hypertensi ve Cardiovascular Disease, Atrial
Fibrillation, Intermittent, and Diabetes Mellitus Type II." The respondent also alleged that further consultations
confirmed that he had an undetected stroke and arterial obstruction during the previous months. His health
condition led to his loss of concentration in his cases and the loss of some of the case folders, among them the re
cords of the ejectment case. The respondent also claimed that he focused on his health for self-preservation, and
underwent vascular laboratory examinations; thus, he failed to communicate with the late Restituto and the
complainant.

The respondent further averred that his failure to file the position paper in the ejectment proceedings was not
due to willful negligence but to his undetected stroke. He never revealed the gravity of his illness to his clients or
to the court out of fear that his disclosure would affect his private practice.

Lastly, the respondent alleged that after the ejectment suits dismissal, he exerted all efforts, to the point of
risking his poor health, by filing successive pleadings to convince the court to reconsider its dismissal order.
Because the dismissal was purely based on a technical ground, he maintained that his failure to file the position
paper did not amount to the abandonment of his clients case.

The IBPs Report and Recommendation

IBP Investigating Commissioner Acerey C. Pacheco issued his Report and Recommendation, finding the
respondent guilty of both negligence and betrayal of his clients confidence. The Investigating Commissioner
found that the respondents failure to file the position paper in the ejectment proceedings and to apprise the
client of the status of the case demonstrated his negligence and lack of prudence in dealing with his clients.

The Investigating Commissioner likewise held that the respondents failure to promptly inform his client s,
including the complainant, of his medical condition deprived them of the opportunity to seek the services of
other lawyers. Had he notified the complainants father of his illness before the case was dismissed, the latter
could have engaged the services of another lawyer, and the case would not have been dismissed on a mere
technical ground.

The Investigating Commissioner recommended the respondents suspension for one (1) month from the practice
of law.

In a Resolution4 dated May 14, 2011, the IBP Board of Governors

adopted and approved the Investigating Commissioners Report and Recommendation after finding it to be
fully supported by the evidence on record and by the applicable laws and rules.

The complainant moved to reconsider the resolution but the IBP Board of Governors denied his motion in a
resolution5 dated June 21, 2013.

The Issue

The issue in this case is whether or not the respondent could be held administratively liable for negligence in the
performance of duty.
The Court's Ruling

Except for the recommended penalty, we adopt the findings of the IBP.

A lawyer is bound to protect his clients interests to the best of his ability and with utmost diligence.6 He should
serve his client in a conscientious, diligent, and efficient manner; and provide the quality of service at least equal
to that which he, himself, would expect from a competent lawyer in a similar situation. By consenting to be his
clients counsel, a lawyer impliedly represents that he will exercise ordinary diligence or that reasonable degree
of care and skill demanded by his profession, and his client may reasonably expect him to perform his
obligations diligently.7 The failure to meet these standards warrants the imposition of disciplinary action.

In this case, the record clearly shows that the respondent has been remiss in the performance of his duties as
Restitutos counsel.1avvphi1 His inaction on the matters entrusted to his care is plainly obvious. He failed to
file his position paper despite notice from the MTC requiring him to do so. His omission greatly prejudiced his
client as the Court in fact dismissed the ejectment suit.

In addition, the respondent fa iled to inform Restituto and the complainant of the status of the case. His failure
to file the position paper, and to inform his client of the status of the case, not only constituted inexcusable
negligence; but it also amounted to evasion of duty.8 All these acts violate the Code of Professional
Responsibility warranting the courts imposition of disciplinary action. The pertinent provisions of the Code of
Professional Responsibility provide:

Canon 17 A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence
reposed in him.

Canon 18 A lawyer shall serve his client with competence and diligence.

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

Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to the clients request for information.

In Perla Compania de Seguros, Inc. v. Saquilabon,9 we considered a lawyers failure to file a brief for his client
to be inexcusable negligence. We held that the lawyers omission amounted to a serious lapse in the duty he
owed his client and in his professional obligation not to delay litigation and to aid the courts in the speedy
administration of justice.

Similarly in Uy v. Tansinsin,10 we ruled that a lawyers failure to file the required pleadings and to inform his
client about the developments in her case fell below the standard and amounted to a violation of Rule 18.03 of
the Code of Professional Responsibility. We emphasized the importance of the lawyers duty to keep their clients
adequately and fully informed about the developments in their cases, and held that a client should never be left
in the dark, for to do so would be to destroy the trust, faith, and confidence reposed in the retained lawyer and
in the legal profession as a whole.

We also emphasized in Villaflores v. Limos1 that the trust and confidence reposed by a client in his lawyer
impose a high standard that includes the appreciation of the lawyers duty to his clients, to the profession, to the
courts, and to the public. Every case a lawyer accepts deserves his full attention, diligence, skill and competence,
regardless of its importance and whether he accepts it for a fee or for free.12

Because a lawyer-client relationship is one of trust and confidence, there is a need for the client to be adequately
and fully informed about the developments in his case. A client should never be left groping in the dark; to allow
this situation is to destroy the trust, faith, and confidence reposed in the retained lawyer and in the legal
profession in general.13

The respondent has apparently failed to measure up to these required standards. He neglected to file the
required position paper, and did not give his full commitment to maintain and defend his clients interests. Aside
from failing to file the required pleading, the respondent never exerted any effort to inform his client of the
dismissal of the ejectment case.

We also find the respondents excuse that he had an undetected stroke and was suffering from other illnesses
unsatisfactory and merely an afterthought. Even assuming that he was then suffering from numerous health
problems (as evidenced by the medical certificates he attached), his medical condition cannot serve as a valid
reason to excuse the omission to file the necessary court pleadings. Th e respondent could have requested an
extension of time to file the required position paper, or at the very least, informed his client of his medical
condition; all these, the respondent failed to do.

Furthermore, the respondents subsequent filing of successive pleadings (after the ejectment case had been
dismissed) significantly weakens his health-based excuse. His efforts not only contradict his explanation that his
physical predicament forced him to focus on his illnesses; they also indicate that his illnesses (allegedly
"Hypertensive Cardiovascular Disease, Atrial Fibrillation, Intermittent, and Diabetes Mellitus Type II") were
not at all incapacitating.

All told, we find that the respondent violated Canon 17, Canon 18, and Rules 18.03 and 18.04 of the Code of
Professional Responsibility. We, however, find the IBPs recommended penalty (one (1)month suspension from
the practice of law) to be a mere slap on the wrist considering the gravity of the infractions committed. Thus, we
deem it appropriate to impose the penalty of two (2) years suspension, taking into account the respondent's acts
and omissions, as well as the consequence of his negligence.

WHEREFORE, premises considered, we hereby SUSPEND Atty. Eutiquio M. Fudolin, Jr. from the practice of
law for a period of two (2) years for violating Rules 18.03 and Rule 18.04, Canon' 18, and Canon 17 of the
Code of Professional Responsibility. We also WARN him that the commission of the same or similar act or acts
shall be dealt with more severely.Atty. Eutiquio M. Fudolin, Jr. is DIRECTED to formally MANIFEST to this
Court, upon receipt of this Decision, the date of his receipt which shall be the starting point of his suspension.
He shall furnish a copy of this Manifestation to all the courts and quasi-judicial bodies where he has entered his
appearance as counsel.Let a copy of this decision be attached to Atty. Fudolin's records with the Office of the
Bar Confidant and posted on the Supreme Court website as a notice to the general public.SO ORDERED.

A.C. No. 7749 July 8, 2013 JOSEFINA CARANZA VDA. DE SALDIVAR, COMPLAINANT,
vs.ATTY. RAMON SG CABANES, JR., RESPONDENT.

For the Courts resolution is an administrative complaint1 filed by Josefina Caranza vda. de Saldivar
(complainant) against Atty. Ramon SG Cabanes, Jr. (respondent), charging him for gross negligence in violation
of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional Responsibility (Code).

The Facts

Complainant was the defendant in an unlawful detainer case, docketed as Civil Case No. 1972,2 filed by the
heirs of one Benjamin Don (heirs) before the Municipal Trial Court of Pili, Camarines Sur (MTC), wherein she
was represented by respondent. While respondent duly filed an answer to the unlawful detainer complaint, he,
however, failed to submit a pre-trial brief as well as to attend the scheduled preliminary conference.
Consequently, the opposing counsel moved that the case be submitted for decision which motion was granted in
an Order3 dated November 27, 2003. When complainant confronted respondent about the foregoing, the latter
just apologized and told her not to worry, assuring her that she will not lose the case since she had the title to the
subject property.

On December 30, 2003, the MTC issued a Decision4 (MTC Decision) against complainant, ordering her to
vacate and turn-over the possession of the subject property to the heirs as well as to pay them damages. On
appeal, the Regional Trial Court of Pili, Camarines Sur, Branch 32 (RTC), reversed the MTC Decision and
dismissed the unlawful detainer complaint.5 Later however, the Court of Appeals (CA) reversed the RTCs
ruling and reinstated the MTC Decision.6 Respondent received a copy of the CAs ruling on January 27, 2006.
Yet, he failed to inform complainant about the said ruling, notwithstanding the fact that the latter frequented his
work place. Neither did respondent pursue any further action.7 As such, complainant decided to engage the
services of another counsel for the purpose of seeking other available remedies. Due to respondents failure to
timely turn-over to her the papers and documents in the case, such other remedies were, however, barred. Thus,
based on these incidents, complainant filed the instant administrative complaint, alleging that respondents acts
amounted to gross negligence which resulted in her loss.8

In a Resolution9 dated March 10, 2008, the Court directed respondent to comment on the administrative
complaint within ten (10) days from notice.

Accordingly, respondent filed a Manifestation with Compliance10 dated May 19, 2008, admitting to have agreed
to represent complainant who claimed to be the tenant and rightful occupant of the subject property owned by
the late Pelagia Lascano (Pelagia). He alleged that upon careful examination of the heirs' unlawful detainer
complaint, he noticed a discrepancy between the descriptions of the subject property as indicated in the said
pleading as opposed to that which complainant supplied to him. On the belief that the parties may be contesting
two (2) sets of properties which are distinct and separate from one another, respondent, at the preliminary
conference conducted on October 28, 2003, moved for the suspension of further proceedings and proposed that
a commissioner be appointed to conduct a re-survey in order to determine the true identity of the property in
dispute. The MTC allowed the counsels for both parties to decide on the manner of the proposed re-survey,
leading to the assignment of a Department of Agrarian Reform Survey Engineer (DAR Engineer) for this
purpose. In relation, the heirs counsel agreed to turn-over to respondent in his office11 certain documents which
indicated the subject propertys description. Thus, pending the conduct and results of the re-survey, the
preliminary conference was tentatively reset to November 27, 2003.12

As it turned out, the heirs counsel was unable to furnish respondent copies of the above-stated documents,
notwithstanding their agreement. This led the latter to believe that the preliminary conference scheduled on
November 27, 2003 would not push through. Respondent averred that the aforesaid setting also happened to
coincide with an important provincial conference which he was required to attend. As such, he inadvertently
missed the hearing.13 Nonetheless, he proffered that he duly appealed the adverse MTC Decision to the
RTC,14resulting to the dismissal of the unlawful detainer complaint, albeit later reversed by the CA.

Thereafter, pending the heirs' appeal to the CA, respondent came upon the information that the disputed
property was subject of a petition for exemption from the coverage of Presidential Decree No. (PD) 2715 filed by
Pelagia against complainants mother, Placida Caranza (Placida). Based on several documents furnished to him
by certain DAR personnel, respondent was satisfied that Placida indeed held the subject property for a long time
and actually tilled the same in the name of Pelagia, thereby placing it under PD 27 coverage. Due to such
information, respondent was convinced that Placida and consequently, complainant (who took over the tilling)
was indeed entitled to the subject property. Hence, he advised complainant that it would be best to pursue
remedies at the administrative level, instead of contesting the appeal filed by the heirs before the CA. It was
respondents calculated legal strategy that in the event the CA reverses the decision of the RTC, an opposition
to the issuance of a writ of execution or a motion to quash such writ may be filed based on the afore-stated
reasons, especially if an approved plan and later, an emancipation patent covering the subject property is
issued.16
Meanwhile, the survey conducted by the DAR Engineer revealed that complainant's tillage extended to about
5,000 square meters of the subject property which was determined to belong to the heirs, the rest being covered
by the title of Pelagia. Dissatisfied, complainant manifested her intention to secure the services of a private
surveyor of her own choice, and promised to furnish respondent a copy of the survey results, which she,
however, failed to do. Later, complainant accused respondent of manipulating the DAR Survey Results which
caused their lawyer-client relationship to turn sour and eventually be severed. She has since retrieved the entire
case folders and retained the services of another lawyer.17

In a Resolution18 dated July 7, 2008, the Court resolved to refer the instant administrative case to the Integrated
Bar of the Philippines (IBP) for its evaluation, report and recommendation.

The IBP Commission on Bar Discipline set the case for mandatory conference on April 15, 200919 and required
the parties to submit their respective position papers.20

The IBPs Report and Recommendation

On June 18, 2009, the Investigating IBP Commissioner, Rebecca Villanueva-Maala (Investigating
Commissioner), issued a Report and Recommendation (Commissioners Report),21 finding respondent to have
been negligent in failing to attend the preliminary conference in Civil Case No. 1972 set on November 27, 2003
which resulted in the immediate submission of the said case for decision and eventual loss of complainants
cause.

The Investigating Commissioner observed that respondent could have exercised ordinary diligence by inquiring
from the court as to whether the said preliminary conference would push through, considering that the
November 27, 2003 setting was only tentative and the heirs counsel was not able to confer with him. Further,
the fact that respondent had to attend an important provincial conference which coincided with the said setting
hardly serves as an excuse since he should have sent a substitute counsel on his behalf. Also, respondent never
mentioned any legal remedy that he undertook when the heirs elevated the decision of the RTC to the CA. In
fact, he did not file any comment or opposition to the heirs appeal. Finally, respondents enumerations of his
legal options to allegedly protect the complainants interests were found to be thought only after the fact.22

Thus, based on the foregoing, the Investigating Commissioner ruled that respondent failed to exercise ordinary
diligence in handling his client's cause, warranting his suspension from the practice of law for a period of six (6)
months.23

The IBP Board of Governors adopted and approved the Commissioners Report in Resolution No. XIX-2011-
26624 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-
51726dated December 14, 2012.

The Court's Ruling

The Court resolves to adopt the IBP's findings and recommendation.

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

CANON 18 A lawyer shall serve his client with competence and diligence.

xxxx

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

Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a
reasonable time to the client's request for information.

Case law further illumines that a lawyers duty of competence and diligence includes not merely reviewing the
cases entrusted to the counsel's care or giving sound legal advice, but also consists of properly representing the
client before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the
required pleadings, prosecuting the handled cases with reasonable dispatch, and urging their termination
without waiting for the client or the court to prod him or her to do so.28

Conversely, a lawyer's negligence in fulfilling his duties subjects him to disciplinary action.29 While such
negligence or carelessness is incapable of exact formulation, the Court has consistently held that the lawyers
mere failure to perform the obligations due his client is per se a violation.30

Applying these principles to the present case, the Court finds that respondent failed to exercise the required
diligence in handling complainants cause.

Records show that he failed to justify his absence during the scheduled preliminary conference hearing in Civil
Case No. 1972 which led the same to be immediately submitted for decision. As correctly observed by the
Investigating Commissioner, respondent could have exercised ordinary diligence by inquiring from the court as
to whether the said hearing would push through, especially so since it was only tentatively set and considering
further that he was yet to confer with the opposing counsel. The fact that respondent had an important
commitment during that day hardly exculpates him from his omission since the prudent course of action would
have been for him to send a substitute counsel to appear on his behalf. In fact, he should have been more
circumspect to ensure that the aforesaid hearing would not have been left unattended in view of its adverse
consequences, i.e., that the defendants failure to appear at the preliminary conference already entitles the
plaintiff to a judgment.31 Indeed, second-guessing the conduct of the proceedings, much less without any
contingent measure, exhibits respondents inexcusable lack of care and diligence in managing his clients
cause.1wphi1

Equally compelling is the fact that respondent purposely failed to assail the heirs appeal before the CA. Records
disclose that he even failed to rebut complainant's allegation that he neglected to inform her about the CA
ruling which he had duly received, thereby precluding her from availing of any further remedies. As regards
respondents suggested legal strategy to pursue the case at the administrative level, suffice it to state that the
same does not excuse him from failing to file a comment or an opposition to an appeal, or even, inform his
client of any adverse resolution, as in this case. Irrefragably, these are basic courses of action which every
diligent lawyer is expected to make.

All told, it cannot be gainsaid that respondent was guilty of gross negligence, in violation of the above-cited
provisions of the Code.

As regards the appropriate penalty, several cases show that lawyers who have been held liable for gross
negligence for infractions similar to those of the respondent were suspended for a period of six (6) months. In
Aranda v. Elayda,32 a lawyer who failed to appear at the scheduled hearing despite due notice which resulted in
the submission of the case for decision was found guilty of gross negligence and hence, suspended for six (6)
months. In Heirs of Tiburcio F. Ballesteros, Sr. v. Apiag,33 a lawyer who did not file a pre-trial brief and was
absent during the pre-trial conference was likewise suspended for six (6) months. In Abiero v. Juanino,34 a
lawyer who neglected a legal matter entrusted to him by his client in breach of Canons 17 and 18 of the Code
was also suspended for six (6) months. Thus, consistent with existing jurisprudence, the Court finds it proper to
impose the same penalty against respondent and accordingly suspends him for a period of six (6) months.

WHEREFORE, respondent Atty. Ramon SG Cabanes, Jr. is found guilty of gross negligence in violation of
Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional Responsibility. He is hereby
SUSPENDED from the practice of law for a period of six (6) months, effective upon his receipt of this
Resolution, and is STERNLY WARNED that a repetition of the same or similar acts will be dealt with more
severely.Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all the courts.SO ORDERED.

A.C. No. 10164 March 10, 2014 STEPHAN BRUNET and VIRGINIA ROMANILLOS
BRUNET, Complainants, vs.ATTY. RONALD L. GUAREN, Respondent.

On August 9, 2002, complainant spouses Stephan and Virginia Brunet (complainants) filed a complaint against
respondent Atty. Ronald L. Guaren (Atty. Guaren) before the Commission on Bar Discipline (CED), Integrated
Bar of the Philippines (IBP).

Complainants alleged that in February 1997, they engaged the services of Atty. Guaren for the titling of a
residential lot they acquired in Bonbon, Nueva Caseres; that Atty. Guaren asked for a fee of Ten Thousand
Pesos (P10,000.00) including expenses relative to its proceeding; that it was agreed that full payment of the fee
shall be made after the delivery of the title; that Atty. Guaren asked for an advance fee of One Thousand Pesos
(Pl,000.00) which they gave; that Atty. Guaren took all the pertinent documents relative to the titling of their lot-
certified true copy of the tax declaration, original copy of the deed of exchange, sketch plan, deed of donation,
survey plan, and original copy of the waiver; that on March 10, 1997, Atty. Guaren asked for additional
payment of Six Thousand Pesos (P6,000.00) which they dutifully gave; that from 1997 to 2001, they always
reminded Atty. Guaren about the case and each time he would say that the titling was in progress; that they
became bothered by the slow progress of the case so they demanded the return of the money they paid; and that
respondent agreed to return the same provided that the amount of Five Thousand Pesos (P5,000.00) be
deducted to answer for his professional fees.

Complainants further alleged that despite the existence of an attorney-client relationship between them, Atty.
Guaren made a special appearance against them in a case pending before the Metropolitan Circuit Trial Court,
Oslob, Cebu (MCTC).

Atty. Guaren admitted that he indeed charged complainants an acceptance fee of P10,000.00, but denied that
the amount was inclusive of expenses for the titling of the lot. He claimed, however, that he received the
payment of P1,000.00 and P6,000.00; that their agreement was that the case would be filed in court after the
complainants fully paid his acceptance fee; that he did not take the documents relative to the titling of the lot
except for the photocopy of the tax declaration; and that he did not commit betrayal of trust and confidence
when he participated in a case filed against the complainants in MCTC explaining that his appearance was for
and in behalf of Atty. Ervin Estandante, the counsel on record, who failed to appear in the said hearing.

In the Report and Recommendation,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.

IPI No. 12-205-CA-J December 10, 2013 RE: VERIFIED COMPLAINT OF THOMAS S. MERDEGIA
AGAINST HON. VICENTE S.E. VELOSO, ASSOCIATE JUSTICE OF THE COURT OF APPEALS,
RELATIVE TO CA G.R. SP No. 119461. A.C. No.: 10300 RE: RESOLUTION DATED OCTOBER 8,
2013 IN OCA IPI No. 12-205-CA-J AGAINST ATTY. HOMOBONO ADAZA II.

On October 8, 2013, we issued a Resolution1 dismissing the administrative complaint of Tomas S. Merdegia
against Court of Appeals Associate Justice Vicente S.E. Veloso. In this same Resolution, we also directed Atty.
Homobono Adaza II, Merdegias counsel, to show cause why he should not be cited for contempt.

After considering Atty. Adazas explanation,2 we find his account insufficient, and find him guilty of indirect
contempt.

According to Atty. Adaza, he should not bepunished for indirect contemptas he was merely performing his duty
as Merdegias counsel when he assisted him in preparing the administrative complaint against Justice Veloso.
Atty. Adaza asserted that both he and his client observed Justice Velosos partiality during the oral arguments,
but instead of immediately filing an administrative complaint against him, he counseled Merdegia to first file a
Motion to Inhibit Justice Veloso from the case. However, upon finding that Justice Veloso refused to inhibit
himself, Merdegia repeated his request to file an administrative complaint against Justice Veloso, to which Atty.
Adaza acceded. Thus, Atty. Adaza pleaded that he should not be faulted for assisting his client, especially when
heal so believes in the merits of his clients case.

Atty. Adazas explanation, read together with the totality of the facts of the case, fails to convince us of his
innocence from the contempt charge.

As Atty. Adaza himself admitted, he prepared the administrative complaint after Justice Veloso refused to
inhibit himself from a case he was handling. The complaint and the motion for inhibition were both based on
the same main cause: the alleged partiality of Justice Veloso during the oral arguments of Merdegias case. The
resolution dismissing the motion for inhibition should have disposed of the issue of Justice Velosos
bias. While we do not discount the fact that it was Justice Veloso who penned the resolution denying the
motion for inhibition, we note that he was allowed to do this under the 2009 Internal Rules of the Court of
Appeals.3 Had Merdegia and Atty. Adaza doubted the legality of this resolution, the proper remedy
would have been to file a petition for certiorari assailing the order denying the motion for
inhibition. The settled rule is that administrative complaints against justices cannot and should not substitute
for appeal and other judicial remedies against an assailed decision or ruling.4While a lawyer has a duty to
represent his client with zeal, he must do so within the bounds provided by law.5 He is also duty-bound to
impress upon his client the propriety of the legal action the latter wants to undertake, and to encourage
compliance with the law and legal processes.6

A reading of Merdegias administrative complaint7 shows an apparent failure to understand that cases are not
always decided in ones favor, and that an allegation of bias must stem from an extrajudicial source other than
those attendant to the merits and the developments in the case.8 In this light, we cannot but attribute to Atty.
Adaza the failure to impress upon his client the features of our adversarial system, the substance of the law on
ethics and respect for the judicial system, and his own failure to heed what his duties as a professional and as an
officer of the Court demand of him in acting for his client before our courts.

To be sure, deciding administrative cases against erring judges is not an easy task. We have to strike a balance
between the need for accountability and integrity in the Judiciary, on the one hand, with the need to protect the
independence and efficiency of the Judiciary from vindictive and enterprising litigants, on the other. Courts
should not be made to bow down to the wiles of litigants who bully judges into inhibiting from cases or deciding
cases in their favor, but neither should we shut our doors from litigants brave enough to call out the corrupt
practices of people who decide the outcome of their cases. Indeed, litigants who feel unjustly injured by
malicious and corrupt acts of erring judges and officials should not be punished for filing administrative cases
against them; neither should these litigants be unjustly deterred from doing sobya wrong signal from this Court
that they would be made to explain why they should not be cited for contempt when the complaints they filed
prove to be without sufficient cause.

What tipped the balance against Atty. Adaza, in this case, is the totality of the facts of thecasethat,when read
together with the administrative complaint heprepared,shows that his complaint is merelyan attempt to malign
the administration of justice. We note Atty. Adazas penchantfor filingmotions for inhibition throughout the
case:first, against Judge Ma. Theresa Dolores C. Gomez Estoesta of the Regional Trial Court of Manila, who
issued an order unfavorable to his client; and second, against all the justices of the Court of Appeals division
hearing his appeal, for alleged bias during the oral arguments onhiscase. Theseindicators, taken together with
the baseless administrative complaint against Justice Veloso after he penned an order adverseto Atty. Adazas
client, disclosethat there was more to the administrative complaint than the report of legitimate grievances
against members of the Judiciary.

In Re: Verified Complaint of Engr. Oscar L. Ongjoco, etc.,9 we cited a litigant in indirect contempt of court
for his predisposition to indiscriminately file administrative complaints against members of the Judiciary. We
held that this conduct degrades the judicial office, interferes with the due performance of their work for the
Judiciary, and thus constitutes indirect contempt of court. Applying this principle to the present case, we hold
that Atty. Adazas acts constitute an improper conduct that tends to degrade the administration of justice, and is
thus punishable for indirect contempt under Section 3(d), Rule 71 of the Rules of Court.

As a final note, Atty. Adazas contemptuous conduct may also be subject to disciplinary sanction as a member of
the bar.10 If we do not now proceed at all against Atty. Adaza to discipline him, we are prevented from doing so
by our concern for his due process rights. Our Resolution of October 8, 2013 only asked him to show cause why
he should not be cited in contempt, and not why he should not be administratively penalized. To our mind,
imposing a disciplinary sanction against Atty. Adaza through a contempt proceeding violates the basic tenets of
due process as a disciplinary action is independent and separate from a proceeding for contempt. A person
charged of an offense, whether in an administrative or criminal proceeding, must be informed of the nature of
the charge against him, and given ample opportunity to explain his side.11

While the two proceedings can proceed simultaneously with each other,12 a contempt proceeding cannot
substitute for a disciplinary proceeding for erring lawyers,13 and vice versa. There can be no substitution
between the two proceedings, as contempt proceedings against lawyers, as officers of the Court, are different in
nature and purpose from the discipline of lawyers as legal professionals. The two proceedings spring from two
different powers of the Court. The Court, in exercising its power of contempt, exercises an implied and inherent
power granted to courts in general.14 Its existence is essential to the preservation of order in judicial proceedings;
to the enforcement of judgments, orders and mandates of courts; and, consequently, in the administration of
justice;15 thus, it may be instituted against any person guilty of acts that constitute contempt of court.16 Further,
jurisprudence describes a contempt proceeding as penal and summary in nature; hence, legal principles
applicable to criminal proceedings also apply to contempt proceedings. A judgment dismissing the charge of
contempt, for instance, may no longer be appealed in the same manner that the prohibition against double
jeopardy bars the appeal of an accuseds acquittal.17

In contrast, a disciplinary proceeding against an erring lawyer is sui generis in nature; it is neither purely civil
nor purely criminal. Unlike a criminal prosecution, a disciplinary proceeding is not intended to inflict
punishment, but to determine whether a lawyer is still fit to be allowed the privilege of practicing law. It involves
an investigation by the Court of the conduct of its officers, and has, for its primary objective, public
interest.18 Thus, unlike a contempt proceeding, the acquittal of the lawyer from a disciplinary proceeding
cannot bar an interested party from seeking reconsideration of the ruling. Neither does the imposition of a
penalty for contempt operate as res judicata to a subsequent charge for unprofessional conduct.19

Contempt proceedings and disciplinary actions are also governed by different procedures. Contempt of court is
governed by the procedures under Rule 71 of the Rules of Court, whereas disciplinary actions in the practice of
law are governed by Rules138 and 139 thereof.20

IN THESE LIGHTS, the Court finds Atty. Homobomo Adaza II GUILTY OF INDIRECT CONTEMPT for
filing a frivolous suit against Court of Appeals Associate Justice Vicente S.E. Veloso, and hereby sentences him
to pay, within the period of fifteen days from the promulgation of this judgment, a fine of P5,000.00. The
respondent is also WARNED that further similar misbehavior on his part may be a ground for the institution of
disciplinary proceedings against him. SO ORDERED.

A.C. No. 9149 September 4, 2013 JULIAN PENILLA, COMPLAINANT, vs.ATTY. QUINTIN P.
ALCID, JR., RESPONDENT.

Before this Court is an administrative complaint1 filed against respondent Atty. Quintin P. Alcid, Jr. for
violation of the Lawyers Oath and the Code of Professional Responsibility, and for gross misconduct in the
performance of his duty as a lawyer.
The antecedent facts follow:

Complainant Julian Penilla entered into an agreement with Spouses Rey and Evelyn Garin (the spouses) for the
repair of his Volkswagen automobile. Despite full payment, the spouses defaulted in their obligation. Thus,
complainant decided to file a case for breach of contract against the spouses where he engaged the services of
respondent as counsel.

Respondent sent a demand letter to the spouses and asked for the refund of complainants payment. When the
spouses failed to return the payment, respondent advised complainant that he would file a criminal case for
estafa against said spouses. Respondent charged P30,000 as attorneys fees and P10,000 as filing fees.
Complainant turned over the relevant documents to respondent and paid the fees in tranches. Respondent then
filed the complaint for estafa before Asst. City Prosecutor Jose C. Fortuno of the Office of the City Prosecutor of
Quezon City. Respondent attended the hearing with complainant but the spouses did not appear. After the
hearing, complainant paid another P1,000 to respondent as appearance fee. Henceforth, complainant and
respondent have conflicting narrations of the subsequent events and transactions that transpired.

Complainant alleges that when the case was submitted for resolution, respondent told him that they have to give
a bottle of Carlos Primero I to Asst. City Prosecutor Fortuno to expedite a favorable resolution of the case.
Complainant claims that despite initial reservations, he later acceded to respondents suggestion, bought a bottle
of Carlos Primero I for P950 and delivered it to respondents office.

Asst. City Prosecutor Fortuno later issued a resolution dismissing the estafa case against the spouses. Respondent
allegedly told complainant that a motion for reconsideration was "needed to have [the resolution]
reversed."2 Respondent then prepared the motion and promised complainant that he would fix the problem.
On February 18, 2002, the motion was denied for lack of merit. Respondent then told complainant that he
could not do anything about the adverse decision and presented the option of filing a civil case for specific
performance against the spouses for the refund of the money plus damages. Complainant paid an
additional P10,000 to respondent which he asked for the payment of filing fees. After complainant signed the
complaint, he was told by respondent to await further notice as to the status of the case. Complainant claims
that respondent never gave him any update thereafter.

Complainant asserts having made numerous and unsuccessful attempts to follow-up the status of the case and
meet with respondent at his office. He admits, however, that in one instance he was able to talk to respondent
who told him that the case was not progressing because the spouses could not be located. In the same meeting,
respondent asked complainant to determine the whereabouts of the spouses. Complainant returned to
respondents office on January 24, 2005, but because respondent was not around, complainant left with
respondents secretary a letter regarding the possible location of the spouses.

Complainant claims not hearing from respondent again despite his several letters conveying his disappointment
and requesting for the return of the money and the documents in respondents possession. Complainant then
sought the assistance of the radio program "Ito ang Batas with Atty. Aga" to solve his predicament. Following
the advice he gathered, complainant went to the Office of the Clerk of Court of the Caloocan City Metropolitan
Trial Court and Regional Trial Court (RTC). Complainant learned that a civil case for Specific Performance
and Damages was filed on June 6, 20023 but was dismissed on June 13, 2002. He also found out that the filing
fee was only P2,440 and not P10,000 as earlier stated by respondent. Atty. Aga of the same radio program also
sent respondent a letter calling his attention to complainants problem. The letter, like all of complainants
previous letters, was unheeded.

On January 9, 2006, complainant filed before the Integrated Bar of the Philippines-Commission on Bar
Discipline (IBP-CBD) the instant administrative case praying that respondent be found guilty of gross
misconduct for violating the Lawyers Oath and the Code of Professional Responsibility, and for appropriate
administrative sanctions to be imposed.
Respondent harps a different tale.

In an Answer4 filed on January 30, 2006, respondent prayed that the case be dismissed for lack of merit. He
denied charging complainant P10,000 as filing fees for the estafa case and claimed that he charged and received
only P2,000. He also countered that the payment of P30,000 made by the complainant was his acceptance fee
for both the estafa case and civil case. Respondent likewise denied the following other allegations of
complainant: that he assured the success of the case before the prosecutor; that he asked complainant to give a
bottle of Carlos Primero I to the prosecutor; that he promised to fix the case; and that he charged P10,000, as
he only charged P5,000, as filing fee for the civil case.

Respondent explained that it was not a matter of indifference on his part when he failed to inform petitioner of
the status of the case. In fact, he was willing to return the money and the documents of complainant. What
allegedly prevented him from communicating with complainant was the fact that complainant would go to his
office during days and times that he would be attending his daily court hearings.

The IBP-CBD called for a mandatory conference on April 28, 2006. Only complainant and his counsel
attended.5The conference was reset and terminated on June 9, 2006. The parties were directed to file their
verified position papers within 15 days,6 to which complainant and respondent complied.7

On July 18, 2006, respondent filed a Reply8 praying for the dismissal of the case for lack of factual and legal
bases. He stated that he had performed his duties as complainants counsel when he filed the criminal case
before the Office of the City Prosecutor of Quezon City and the civil case before the RTC of Caloocan City. He
averred that he should not be blamed for the dismissal of both cases as his job was to ensure that justice is served
and not to win the case. It was unethical for him to guarantee the success of the case and resort to unethical
means to win such case for the client. He continued to deny that he asked complainant to give the prosecutor a
bottle of Carlos Primero I and that the filing fees he collected totalled P20,000. Respondent argued that it is
incredulous that the total sum of all the fees that he had allegedly collected exceeded P30,000 the amount
being claimed by complainant from the spouses.

In its Report and Recommendation9 dated September 12, 2008, the IBP-CBD recommended the suspension of
respondent from the practice of law for six months "for negligence within the meaning of Canon 18 and
transgression of Rule 18.04 of the Code of Professional Responsibility," viz:

In the case under consideration, there are certain matters which keep sticking out like a sore thumb rendering
them difficult to escape notice.

One is the filing of a criminal complaint for estafa arising out of a violation of the contract for repair of the
Volks Wagon (sic) car. It is basic that when an act or omission emanates from a contract, oral or written, the
consequent result is a breach of the contract, hence, properly actionable in a civil suit for damages. As correctly
pointed out by the Investigating Prosecutor, the liability of the respondent is purely civil in nature because the
complaint arose from a contract of services and the respondent (spouses Garin) failed to perform their
contractual obligation under the contract.

Another one is the filing of a civil complaint for specific performance and damages (after the dismissal of the
criminal complaint for estafa) in the Regional Trial Court of Caloocan City where the actual damages claimed
is P36,000.00.

It is also basic that the civil complaint for P36,000.00 should have been filed with the MTC [which] has
jurisdiction over the same. One of the "firsts" that a lawyer ascertains in filing an action is the proper forum or
court with whom the suit or action shall be filed. In June 2002 when the civil complaint was filed in court, the
jurisdiction of the MTC has already expanded such that the jurisdictional amount of the RTC is
already P400,000.00.
Another thing is the various follow-ups made by respondents client as evidenced by the letters marked as
Exhibits "D", "E", "F", "G" and "H" which were all received by complainants secretary, except for Exhibit "H"
which was received by Atty. Asong, not to mention Exhibit "M" which was sent by "Atty. Aga". These efforts of
the complainant were not reciprocated by the respondent with good faith. Respondent chose to ignore them
and reasoned out that he is willing to meet with the complainant and return the money and documents received
by reason of the legal engagement, but omitted to communicate with him for the purpose of fixing the time and
place for the meeting. This failure suggests a clear disregard of the clients demand which was done in bad faith
on the part of respondent.10

On December 11, 2008, the IBP Board of Governors issued Resolution No. XVIII-2008-646, adopting and
approving the recommendation of the IBP-CBD. The Resolution11 reads:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the Report and
Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this
Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, and considering Respondents violation of Canon 18 and Rule 18.04 of the Code of
Professional Responsibility for his negligence, Atty. Quintin P. Alcid, Jr. is hereby SUSPENDED from the
practice of law for six (6) months.

On April 24, 2009, respondent sought reconsideration12 and asked that the penalty of suspension be reduced to
warning or reprimand. After three days, or on April 27, 2009, respondent filed a "Motion to Admit Amended
Motion for Reconsideration Upon Leave of Office."13 Respondent asserted that the failure to inform
complainant of the status of the cases should not be attributed to him alone. He stressed that complainant had
always been informed that he only had time to meet with his clients in the afternoon at his office in Quezon
City. Despite such notice, complainant kept going to his office in Tandang Sora. He admitted that though he
committed lapses which would amount to negligence in violation of Canon 18 and Rule 18.04, they were done
unknowingly and without malice or bad faith. He also stressed that this was his first infraction.

In its Resolution No. XIX-2011-473 dated June 26, 2011, the IBP Board of Governors denied respondents
Motion for Reconsideration for lack of merit.14 On August 15, 2011, respondent filed a second Motion for
Reconsideration15 which was no longer acted upon due to the transmittal of the records of the case to this Court
by the IBP on August 16, 2011.16

On September 14, 2011, the Court issued a Resolution17 and noted the aforementioned Notices of Resolution
dated December 11, 2008 and June 26, 2011. On December 14, 2011, it issued another Resolution18 noting the
Indorsement dated August 16, 2011 of Director Alicia A. Risos-Vidal and respondents second Motion for
Reconsideration dated August 15, 2011.

We sustain the findings of the IBP that respondent committed professional negligence under Canon 18 and
Rule 18.04 of the Code of Professional Responsibility, with a modification that we also find respondent guilty of
violating Canon 17 and Rule 18.03 of the Code and the Lawyers Oath.

A lawyer may be disbarred or suspended for any violation of his oath, a patent disregard of his duties, or an
odious deportment unbecoming an attorney. A lawyer must at no time be wanting in probity and moral fiber
which are not only conditions precedent to his entrance to the Bar but are likewise essential demands for his
continued membership therein.19

The Complaint before the IBP-CBD charged respondent with violation of his oath and the following provisions
under the Code of Professional Responsibility:

a)
Canon 15 A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his
client;

b)

Rule 15.[06, Canon 15 A lawyer shall not state or imply that he is able to influence any public official, tribunal
or legislative body;

c)

Rule 16.01[, Canon 16 A lawyer shall account for all money or property collected or received for or from his
client;

d)

Canon 17 A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence
reposed in him;

e)

Canon 18 A lawyer shall serve his client with competence and diligence;

f)

Rule 18.03[, Canon 18 A lawyer shall not neglect a legal matter entrusted to him and his negligence in
connection therewith shall render him liable; and

g)

Rule 18.04[, Canon 18 A lawyer shall keep his client informed of the status of his case and shall respond
within a reasonable time to the clients request for information.20

A review of the proceedings and the evidence in the case at bar shows that respondent violated Canon 18 and
Rules 18.03 and 18.04 of the Code of Professional Responsibility. Complainant correctly alleged that
respondent violated his oath under Canon 18 to "serve his client with competence and diligence" when
respondent filed a criminal case for estafa when the facts of the case would have warranted the filing of a civil
case for breach of contract. To be sure, after the complaint for estafa was dismissed, respondent committed
another similar blunder by filing a civil case for specific performance and damages before the RTC. The
complaint, having an alternative prayer for the payment of damages, should have been filed with the Municipal
Trial Court which has jurisdiction over complainants claim which amounts to only P36,000. As correctly stated
in the Report and Recommendation of the IBP-CBD:

Batas Pambansa Blg. 129[,] as amended by R.A. No. 7691 which took effect on April 15, 1994[,] vests in the
MTCs of Metro Manila exclusive original jurisdiction of civil cases where the amount of demand does not
exceed P200,000.00 exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and costs
(Sec. 33), and after five (5) years from the effectivity of the Act, the same shall be adjusted to P400,000.00 (Sec.
34).21

The errors committed by respondent with respect to the nature of the remedy adopted in the criminal
complaint and the forum selected in the civil complaint were so basic and could have been easily averted had he
been more diligent and circumspect in his role as counsel for complainant. What aggravates respondents
offense is the fact that his previous mistake in filing the estafa case did not motivate him to be more
conscientious, diligent and vigilant in handling the case of complainant. The civil case he subsequently filed for
complainant was dismissed due to what later turned out to be a basic jurisdictional error.

That is not all. After the criminal and civil cases were dismissed, respondent was plainly negligent and did not
apprise complainant of the status and progress of both cases he filed for the latter. He paid no attention and
showed no importance to complainants cause despite repeated follow-ups. Clearly, respondent is not only guilty
of incompetence in handling the cases. His lack of professionalism in dealing with complainant is also gross and
inexcusable. In what may seem to be a helpless attempt to solve his predicament, complainant even had to
resort to consulting a program in a radio station to recover his money from respondent, or at the very least, get
his attention.

Respondents negligence under Rules 18.03 and 18.04 is also beyond contention. A client pays his lawyer hard-
earned money as professional fees. In return, "[e]very case a lawyer accepts deserves his full attention, skill and
competence, regardless of its importance and whether he accepts it for a fee or for free. Rule 18.03 of the Code
of Professional Responsibility enjoins a lawyer not to neglect a legal matter entrusted to him, and his negligence
in connection therewith shall render him liable. He must constantly keep in mind that his actions or omissions
or nonfeasance would be binding upon his client. He is expected to be acquainted with the rudiments of law and
legal procedure, and a client who deals with him has the right to expect not just a good amount of professional
learning and competence but also a whole-hearted fealty to the clients cause."22 Similarly, under Rule 18.04, a
lawyer has the duty to apprise his client of the status and developments of the case and all other information
relevant thereto. He must be consistently mindful of his obligation to respond promptly should there be queries
or requests for information from the client.

In the case at bar, respondent explained that he failed to update complainant of the status of the cases he filed
because their time did not always coincide. The excuse proffered by respondent is too lame and flimsy to be
given credit. Respondent himself admitted that he had notice that complainant had visited his office many
times. Yet, despite the efforts exerted and the vigilance exhibited by complainant, respondent neglected and
failed to fulfill his obligation under Rules 18.03 and 18.04 to keep his client informed of the status of his case
and to respond within a reasonable time to the clients request for information.

Finally, respondent also violated Canon 17 of the Code which states that "[a] lawyer owes fidelity to the cause of
his client and he shall be mindful of the trust and confidence reposed in him." The legal profession dictates that
it is not a mere duty, but an obligation, of a lawyer to accord the highest degree of fidelity, zeal and fervor in the
protection of the clients interest. The most thorough groundwork and study must be undertaken in order to
safeguard the interest of the client. The honor bestowed on his person to carry the title of a lawyer does not end
upon taking the Lawyers Oath and signing the Roll of Attorneys. Rather, such honor attaches to him for the
entire duration of his practice of law and carries with it the consequent responsibility of not only satisfying the
basic requirements but also going the extra mile in the protection of the interests of the client and the pursuit of
justice. Respondent has defied and failed to perform such duty and his omission is tantamount to a desecration
of the Lawyers Oath.

All said, in administrative cases for disbarment or suspension against lawyers, it is the complainant who has the
burden to prove by preponderance of evidence23 the allegations in the complaint. In the instant case,
complainant was only able to prove respondents violation of Canons 17 and 18, and Rules 18.03 and 18.04 of
the Code of Professional Responsibility, and the Lawyers Oath. Complainant failed to substantiate his claim
that respondent violated Canon 15 and Rule 15.06 of the Code of Professional Responsibility when respondent
allegedly instructed him to give a bottle of Carlos Primero I to Asst. City Prosecutor Fortuno in order to get a
favorable decision. Similarly, complainant was not able to present evidence that respondent indeed violated
Rule 16.01 of Canon 16 by allegedly collecting money from him in excess of the required filing fees.
As to respondents proven acts and omissions which violate Canons 17 and 18 and Rules 18.03 and 18.04 of the
Code of Professional Responsibility, and the Lawyers Oath, we find the same to constitute gross misconduct for
which he may be suspended under Section 27, Rule 138 of the Rules of Court, viz:

SEC. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. A member of the bar
may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or
other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime
involving moral turpitude, or for any violation of the oath which he is required to take before admission to
practice, or for a willful disobedience appearing as an attorney for a party to a case without authority to do so. x
x x.

WHEREFORE, the Resolution of the IBP Board of Governors adopting and approving the Decision of the
Investigating Commissioner is hereby AFFIRMED with a MODIFICATION that respondent Atty. Quintin P.
Alcid, Jr. is hereby found GUILTY of gross misconduct for violating Canons 17 and 18, and Rules 18.03 and
18.04 of the Code of Professional Responsibility, as well as the Lawyers Oath. This Court hereby imposes upon
respondent the penalty of SUSPENSION from the practice of law for a period of SIX (6) MONTHS to
commence immediately upon receipt of this Decision. Respondent is further ADMONISHED to be more
circumspect and diligent in handling the cases of his clients, and STERNLY WARNED that a commission of
the same or similar acts in the future shall be dealt with more severely.Let copies of this Decision be furnished to
the Office of the Court Administrator to be disseminated to all courts throughout the country, to the Office of
the Bar Confidant to be appended to Atty. Quintin P. Alcid, Jr.s personal records, and to the Integrated Bar of
the Philippines for its information and guidance.SO ORDERED.

Adm. Case No. 2417 February 6, 2002 ALEX ONG, complainant,


vs.ATTY. ELPIDIO D. UNTO, respondent.

This is a disbarment1 case filed by Alex Ong, a businessman from Dumaguete City, against Atty. Elpidio D.
Unto, for malpractice of law and conduct unbecoming of a lawyer.

The Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP-Pasig City) found Atty. Unto
guilty of malpractice and recommended the penalty of one-month suspension from the practice of law or, at the
very least, a severe reprimand against him.2

First, we look at the antecedent facts. The records show that the complainant received a demand-letter from the
respondent, in the latters capacity as legal counsel of one Nemesia Garganian. The full text of respondents
letter3 reads:

"Dear Mr. Ong:

This is in connection with the claim of support of Miss Nemesia Garganian (my client) from you for your only
child, Anson Garganian, with her (Miss Nemesia Garganian) and other claims which Miss Garganian is
demanding from you. It is now about two months that you have abandoned your legal and moral obligations to
support your only child with her (Miss Nemesia Garganian) and up to this moment you have not given said
financial support.

I am doing this as a preliminary basis to a possible amicable settlement, if you desire so, so that you will not be
dragged unnecessarily to a court proceeding in connection with your legal and moral obligations to your son
with Miss Garganian.

May I advise you that within three (3) days from your receipt of this letter, you should return to her house her
television and betamax which you got from her house during her absence and without her knowledge and
consent. Your failure to comply with this demand, this office will be constrained to file the proper action in court
against you.

I hope within three (3) days from your receipt of this letter you may come to my Law Office at the above address
or you may send your lawyer and/or representative to discuss with me about the preliminary matters in
connection with all the claims of Miss Garganian against you.

I hope that you will not fail us, so that we can thresh out this matter smoothly, otherwise your intentional failure
or refusal to discuss these claims amicably with our office might be construed as your absolute refusal really.

Expecting you then.

Very truly yours,

ATTY. ELPIDIO D. UNTO


Counsel for Miss Nemesia Garganian
Dumaguete City

WITH MY CONSENT:

NEMESIA GARGANIAN"

A few days thereafter, the respondent wrote a letter addressed to Dr. Jose Bueno (Agaw), an emissary of the
complainant. In this letter, the respondent listed down the alleged additional financial demands of Ms.
Garganian against the complainant and discussed the courses of action that he would take against the
complainant should the latter fail to comply with his obligation to support Ms. Garganian and her son. The
relevant portion of the respondents second letter reads: 4

"These are the demands which my client would want to be complied (with):

1. P1,500.00 monthly For the sustenance of Mr. Ongs son. x x x (Note: That this amount of P1,500.00 should
be up to the completion of Mr. Ongs son in the elementary course and this is subject to adjustment when the
son is already in the secondary course or up to his college course).

2. P50,000.00 - This amount should be given to Miss Garganian as her starting capital for her planned business
venture to give her a source of her living since she cannot anymore be a teacher in any government position
because of her status, having a child without being lawfully wedded. x x x.

3. The TV and the Betamax should be returned and delivered to the house of Miss Garganian, without the
presence of Mr. Alex Ong x x x.

4. The amount of P5,000.00 as my attorneys fees should be given or paid to me tomorrow before noon in my
Law Office, through my cousin, Dr. Jose Bueno.

Criminal, civil and administrative actions that I am contemplating to file against Mr. Alex Ong
will be withheld pending the compliance by Mr. Ong of these compromise agreements.

Gaw, if not of (sic) your representation I believe that one-week time as grace period for Mr. Ong is too long a
time.

Thank you very much.


Very truly yours,

ATTY. ELPIDIO D. UNTO


Counsel for Miss Nemesia Garganian"

It was alleged that the real father of Ms. Garganians son was the complainants brother and that the
complainant merely assumed his brothers obligation to appease Ms. Garganian who was threatening to sue
them. The complainant then did not comply with the demands against him.

Consequently, the respondent filed a complaint5 with the Office of the City Fiscal (now Prosecutors Office) of
Dumaguete City against the complainant, his wife, Bella Lim, and one Albina Ong, for alleged violation of the
Retail Trade Nationalization Law and the Anti-Dummy Law.

The next day, the respondent filed another criminal complaint against the complainant, Lim, Ong and Adela
Peralta for their alleged violation of the Anti-Dummy Law.

In addition, the respondent commenced administrative cases against the complainant before the Bureau of
Domestic Trade, the Commission on Immigration and Deportation, and the Office of the Solicitor
General.6According to the complainant, these cases were subsequently denied due course and dismissed by the
aforesaid government agencies.

The foregoing prompted the complainant to file the present case for disbarment. Essentially, the complainant
alleged that the respondent "manufactured" the criminal and administrative cases against him to blackmail him
or extort money from him. He claimed that the respondent solicited for any information that could be used
against him in the aforementioned cases by offering any informer or would-be witness a certain percentage of
whatever amounts they could get from him. The complainant branded the respondents tactics as "highly
immoral, unprofessional and unethical, constitutingmalpractice of law and conduct gravely unbecoming of a
lawyer."

In support of his accusations, the complainant submitted the following documents: (1) the afore-quoted letters of
the respondent addressed to the complainant and Dr. Bueno; (2) Nemesia Garganians affidavit where she
denied any knowledge regarding the demands listed in the letter addressed to Dr. Bueno; (3) an unsigned
affidavit allegedly prepared by the respondent for the complainant, wherein the latter was acknowledging that
he sired Ms. Ganganians son illegitimate child; (4) the criminal complaints filed against the complainant for
alleged violation of the Retail Trade Nationalization Law and the Anti-Dummy Law; and (5) an affidavit of
Manuel Orbeta, a neighbor of the complainant who claimed that a representative of the respondent had asked
him to sign an affidavit allegedly prepared by the respondent, with an offer "to give any informer 20% and
witness, 10%, of any amount he can get from Mr. Alex Ong." To further bolster the disbarment case against the
respondent, the complainant also included a Supplemental Affidavit,7 citing several cases previously filed against
the respondent by other parties.8

The records show that the respondent was directed to submit his comment on the complaint lodged against
him.9He did not file any. Subsequently, the case was endorsed to the Office of the Solicitor General for
investigation, report and recommendation. In turn, the OSG forwarded the records of the case to the Office of
the Provincial Fiscal of Negros Oriental, authorizing said office to conduct the investigation.

It appears that the respondent did not appear before the investigating officer, then Provincial Fiscal Jacinto
Bautista, to answer the charges against him. Instead, he moved for postponement. After denying the
respondents third request for postponement, Fiscal Bautista proceeded with the reception of the complainants
evidence. The respondent was duly notified of the on-going investigation but he did not show
up. When it was the respondents turn to present evidence, notices of the preliminary investigation were sent to
his home address in Valenzuela, Negros Oriental, his law office in Dumaguete City and his last known address
in Quezon City. The return cards showed that he could not be located, although his wife received some of the
notices sent to his home in Dumaguete.

Meanwhile, the case was transferred from one investigating officer to another, with some of them inhibiting
from the investigation. Finally, the case was assigned to 2nd Asst. Provincial Prosecutor Cristino Pinili. Atty.
Pinili deemed the respondents absence as waiver of his right to present his evidence. Finding merit in the
complainants cause, the investigator recommended that respondent be suspended from the practice of law for
one month, or, at the very least, be severely reprimanded.

The records of the case were endorsed to the Office of the Solicitor General.10 Thereafter, the OSG transmitted
the records to the Integrated Bar of the Philippines in Manila, "for proper disposition, conformably with
adopted policies and procedures."11 The IBPs Commission on Bar Discipline adopted Atty. Pinilis report and
recommendation in toto.12

We affirm with modification.

The complainant seeks the disbarment of the respondent. Thus, it is meet to revisit the importance of the legal
profession and the purpose of the disbarment as aptly discussed in Noriega vs. Sison.13 We then held:

"In resolving this disbarment case, (w)e must initially emphasize the degree of integrity and respectability
attached to the law profession. There is no denying that the profession of an attorney is required after a long
and laborious study. By years of patience, zeal and ability, the attorney acquires a fixed means of support for
himself and his family. This is not to say, however, that the emphasis is on the pecuniary value of this profession
but rather on the social prestige and intellectual standing necessarily arising from and attached to the same by
reason of the fact that every attorney is deemed an officer of the court.

The importance of the dual aspects of the legal profession has been wisely put by Chief Justice Marshall of the
United States Court when he said:

On one hand, the profession of an Atty. is of great importance to an individual and the prosperity of his life
may depend on its exercise. The right to exercise it ought not to be lightly or capriciously taken from him. On
the other hand, it is extremely desirable that the respectability of the Bar should be maintained and that its
harmony with the bench should be preserved. For these objects, some controlling power, some discretion ought
to be exercised with great moderation and judgment, but it must be exercised.

The purpose of disbarment, therefore, is not meant as a punishment depriving him of a source of livelihood but
is rather intended to protect the administration of justice by requiring that those who exercise this function
should be competent, honorable and reliable in order that the courts and clients may rightly repose confidence
in them."

The relevant rule to the case at bar is Canon 19 of the Code of Professional Responsibility.14 It mandates
lawyers to represent their clients with zeal but within the bounds of the law. Rule 19.01 further commands that
"a lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not
present, participate or threaten to present unfounded criminal charges to obtain an improper
advantage in any case or proceeding."

Considering the facts of this case, we find that respondent has not exercised the good faith required of a lawyer
in handling the legal affairs of his client. It is evident from the records that he tried to coerce the complainant to
comply with his letter-demand by threatening to file various charges against the latter. When the complainant
did not heed his warning, he made good his threat and filed a string of criminal and administrative cases against
the complainant. We find the respondents action to be malicious as the cases he instituted against the
complainant did not have any bearing or connection to the cause of his client, Ms. Garganian. Clearly, the
respondent has violated the proscription in Canon 19, Rule 19.01. His behavior is inexcusable.

The records show that the respondent offered monetary rewards to anyone who could provide him any
information against the complainant just so he would have a leverage in his actions against the latter. His tactic
is unethical and runs counter to the rules that a lawyer shall not, for corrupt motive or interest, encourage any
suit or proceeding15 and he shall not do any act designed primarily to solicit legal business.16 In the case
of Choa vs. Chiongson,17 we held:

"While a lawyer owes absolute fidelity to the cause of his client, full devotion to his genuine interest, and warm
zeal in the maintenance and defense of his right, as well as the exercise of his utmost learning and ability, he
must do so only within the bounds of the law. He must give a candid and honest opinion on the merits and
probable results of his clients case with the end view of promoting respect for the law and legal processes, and
counsel or maintain such actions or proceedings only as appear to him to be just, and such defenses only as he
believes to be honestly debatable under the law. He must always remind himself of the oath he took
upon admission to the Bar that "he will not wittingly or willingly promote or sue any
groundless, false or unlawful suit nor give aid nor consent to the same"; Needless to state, the
lawyers fidelity to his client must not be pursued at the expense of truth and the administration of justice, and it
must be done within the bounds of reason and common sense. A lawyers responsibility to protect and
advance the interests of his client does not warrant a course of action propelled by ill motives
and malicious intentions against the other party."

(emphases ours)

The ethics of the legal profession rightly enjoin lawyers to act with the highest standards of truthfulness, fair play
and nobility in the course of his practice of law. A lawyer may be disciplined or suspended for any misconduct,
whether in his professional or private capacity.18 Public confidence in law and lawyers may be eroded by the
irresponsible and improper conduct of a member of the Bar. Thus, every lawyer should act and comport himself
in such a manner that would promote public confidence in the integrity of the legal profession.19

Finally, we note that during the investigation of the case, despite being duly notified thereof as evidenced by the
motions for postponement he filed on several occasions, the respondent chose not to participate in the
proceedings against him. His nonchalance does not speak well of him as it reflects his utter lack of respect
towards the public officers who were assigned to investigate the case. He should be watchful of his
conduct.20The respondent should keep in mind the solemn oath21 he took before this Court when he sought
admission to the bar. The lawyers oath should not be reduced to mere recital of empty words for each word
aims to promote the high standard of professional integrity befitting a true officer of the court.1wphi1

The recommended penalty for the unprofessional conduct of the respondent was one (1) month suspension or
reprimand. We believe that the same is too light vis--vis the misconduct of the respondent.IN VIEW
WHEREOF, respondent ATTY. ELPIDIO D. UNTO is hereby declared guilty of conduct unbecoming of a
lawyer. He is SUSPENDED from the practice of law for a period of five (5) months and sternly warned that a
repetition of the same or similar act will be dealt with more severely.Let a copy of this Decision be attached to
Atty. Untos personal record in the Office of the Bar Confidant and a copy thereof be furnished to the
Integrated Bar of the Philippines (IBP).SO ORDERED.

Adm. Case No. 1424 October 15, 1991 ISMAELA DIMAGIBA, complainant,
vs.ATTY. JOSE MONTALVO, JR., respondent.

This is a complaint filed by Ismaela Dimagiba against Atty. Jose Montalvo for Malpractice, for stretching to
almost a half a century a litigation arising from the probate of a will of the late Benedicta de Los Reyes which
instituted Ismaela Dimagiba as the sole heir of all the properties.
The letter of the private complainant, Ismaela Dimagiba, received on January 15,1975 by the Supreme Court,
states:

The clients of Atty. Montalvo, namely: Dionisio Fernandez, Eusebio Reyes, Luisa Reyes,
Mariano Reyes, Cesar Reyes, Leonor Reyes, filed a case against me with the Court of First
Instance of Bulacan in 1946 for annulment of sale and was docketed as Civil Case No. 108 of
said Court. This case was terminated annulling the sale, as per decision in 1954 in G.R. No. L-
5618 and L-5620.

On January 19, 1955, 1 filed a case for Probate of Will with the Court of First Instance of Bulacan, regarding
the same property subject of the annulment of sale and was docketed with the Court of First Instance of Bulacan
as Sp. Proc. No. 831-M. Luckily, the said case was terminated on June 20, 1958, probating the said will. The
oppositors in this case who are the same persons mentioned above appealed this case to the Higher Court of the
Philippines and was decided by the Hon. Supreme Court of the Philippines on October 12, 1967 in G.R. No. L-
23638 and L-23662, affirming the decision of the Lower Court;

That after the decision of the above-mentioned case was promulgated, the same parties filed on June 5, 1968
Civil Case No. 3677-M with the CFI of Bulacan for annulment of will; this case was filed through their counsel,
Atty. Gregorio Centeno.

Said case was dismissed by the Court on February 11, 1970 without pronouncement of costs;

That on August 13,1971, again, the clients of Atty. Montalvo filed Civil Case No. 4078 with the Court of First
Instance of Bulacan for annulment of the said will; this case was again dismissed by the Court on December 21,
1971;

That on April 22, 1972, again the same parties, through their counsel Atty. Montalvo, filed another case with
the Court of First Instance of Bulacan, allegedly for Partition of the same property mentioned in the probate of
will which was docketed as Civil Case No. 4151. This case was again dismissed by the Court in its Order dated
October 11, 1972;

That on May 25, 1972, still another case was filed by the same parties, through Atty. Montalvo, for specific
performance, with the CFI of Bulacan and was docketed as Civil Case No. 4188-M. This case was again
dismissed by the Court in its Order dated October 24,1973. On August 12, 1974, the said case was remanded to
the Court of Appeals, Manila, by the Court of First Instance of Bulacan;

Still on April 5, 1974, I was again surprised to know that there was another case filed by the same persons
mentioned above through Atty. Montalvo with the Court of First Instance of Bulacan and was docketed as Civil
Case No. 4458. This case is still pending before said court.

In view of the numerous cases filed against me by the same parties, through their counsel, Atty. Montalvo, I am
constrained to report to that [sic] Honorable Court of the actuation of said lawyer who is a member of the
Philippine Bar attending to cases of non suit, which cause harassment on may part.

The parties in this case are the ones in possession of the property Subject of Sp. Proc. No. 831 of the CFI,
Bulacan. They can not be ejected from the land holdings because they claim that the case filed by Atty.
Montalvo is still pending in Court.

In all the foregoing [sic] I respectfully submit to this Honorable Court for appropriate action.

In the Resolution of the Second Division of the Supreme Court dated January 27, 1975, the respondent
Montalvo was required to file an Answer within ten days from notice.2
In his Answer dated March 3, 1975, Montalvo, claims that the case filed against the complainant were done.

at the instance of different parties; or by reason of different causes of action and all the pleadings
filed by the undersigned were and/or the result of a very painstaking, diligent, and careful study
and evaluation of the facts and law involved therein such that even before signing the same, the
undersigned has always been of the honest and sincere belief that its filing is for the interest of
justice certainly never for harassment; (2) that the reason why the parties tenant could not be
ejected from their land as stated by complainant in her complaint is because of the passage of
Presidential Decree No. 27 which emancipated the farmers from their bondage and declared
them as owners of the rice and corn land they tilled upon the passage of the decree coupled with
the very acts of the complainant herself; and that (3) the complainant by filing this instant
complaint for disbarment wants to cow and intimidate the undersigned in order to withdraw as
counsel of his clients because she has been thwarted in her erroneous belief that she owns
exclusively all the properties comprising the estate of the late Benedicta de Los Reyes and could
not accept and take into account the reality that by virtue of the final decision of the Supreme
Court in G.R. No. 5618 and 5620 she is not the sole owner of the present estate of the deceased
but only a co-owner with the clients of the undersigned. 3

In addition, Montalvo stated that it was Dimagiba who refused to be bound by the Supreme Court Decision in
G.R. Nos. 5618 and 5620. 4

As a Rejoinder to the Respondent's Answer, the complainant Dimagiba stated that in Civil Case No. 3677-M,
the plaintiffs are the same parties-oppositors who opposed the petition for probate of the Last Will and
Testament of the deceased Benedicta De Los Reyes in Special Proceeding No. 831. The same case was
dismissed by the Court of First Instance of Bulacan on the ground that the issue raised had been decided by the
Court. 5

Likewise Civil Case No. 4078-M was also dismissed by Branch 2 of the Court of First Instance of Bulacan
presided by Judge Ricardo C. Pronove, Jr., in the order of August 24, 1973 on the ground of res judicata.

But a closer analysis [sic) it is clear that this action is merely a rehash of the other cases previously
litigated between the plaintiffs and the defendant and already settled by final judgment. 6

In fact, in that case, Atty. Jose Montalvo, Jr., included himself as one of the defendants.

Finally, the fact that plaintiffs counsel, Jose Montalvo, Jr., had decided to join cause with the
other plaintiffs in this case does no mean that there is no Identity of parties between this case and
Civil Case No. 3677-M. Atty. Jose Montalvo, Jr., is not alleged to be are party in interest in this
case so that Ills inclusion herein as a p plaintiff can not produce any legal significance. 7

This notwithstanding, Montalvo filed another case against Dimagiba which was docketed as Civil Case No.
4458-M of the CFI Bulacan where the plaintiffs and causes of action were again the same as 3677-M and 4188-
M. Again, the CFI Bulacan dismissed the cases.

On April 16, 1975, the Second Division, following the procedure then obtaining for the resolution of
disciplinary case against lawyers, referred the case to the Solicitor General for investigation, report, and
recommendation. 8

It was only on May 4,1990, or almost fifteen years later, that the entire records of Adm. Case No. 1424
involving Ismaela Dimagiba versus Atty. Jose Montalvo was returned to the Clear of Court of the Supreme
Court by the Office of the Solicitor General through Solicitor Aurora P. Cortes.
In summary, the following are the litigations that ensue from the probate of the Will of De Los Reyes as found
by the Solicitor General involving the same parties and the same cause of action:

1. Special Proceedings No. 831 instituted on January 1 1955. The Will was admitted to probate
but was subsequently appealed.

2. CA-G.R. No. 31221-R. This was an appeal of the decision in Spec. Proc. No. 831. The
decision was affirmed.

3. G.R. Nos. L-23638 and L-23662. This decision dated October 12, 1967, in the Supreme
Court, upheld the decision CA-G.R. No. 31221-R, in effect, affirming the due execution the Will
and the capacity of the Testator as well as the institution of the complainant.

4. Civil Case No. 3677-M. Filed in the Court of First Instance of Bulacan on June 4, 1968, this
was a petition for the nullification of the Will. This was dismissed.

5. Civil Case No. 200 which was redocketed as Civil Case No. 4078-M. This complaint
dated November 3, 1970 was again dismissed.

6. Civil Case No. 4151-M. This case, filed on February l6, 1972, for the partition of the
property left by the deceased Benedicta De los Reyes on the ground of the nullity of the Will, was
again dismissed for failure to prosecute.

7. Civil Case No. 4188-M. Filed on May 25,1972, with the Court of First Instance of Bulacan,
Branch 2, the respondent Atty. Montalvo, Jr., joined the descendants of the collateral relatives of
the deceased De Los Reyes against herein complainant Dimagiba. This case was dismissed.

8. Civil Case No. 4458-M. Civil Case No. 4188-M was appealed. But without waiting for the
outcome, Atty. Montalvo, Jr., filed Civil Case No. 4458-M on April 5, 1974 which was a
complaint for the cancellation of the transfer certificates of title in the name of Ismaela Dimagiba
and the issuance of new certificates of title in the name of the late Benedicta de los Reyes.

Clearly, the respondent Montalvo, Jr. repetitively filed several complaints in various forms involving the same
parties and the same subject matter, persistently raising issues long laid to rest by final judgment.

This misbehavior in facie curia consisting of a stubborn refusal to accept this Court's pronouncements is in fact
even summarily punishable under Rule 71, Suction 1 of the Rules of Court.9

Any lawyer who assumes the responsibility for a client' cause has the duty to know the entire history of a case,
specially if any litigation has commenced. In the case at bar, even Atty. Montalvo does not deny the fact that the
probate of the will o the late Benedicta de los Reyes has been an over-extended an contentious litigation
between the heirs.

A lawyer should never take advantage of the seemingly end less channels left dangling by our legal system in
order wangle the attention of the court. Atty. Montalvo may have thought that lie could get away with his
indiscriminate filing o suits that were clearly intended to harass Ismaela Dimagiba When court dockets get
clogged and the administration of justice is delayed, our judicial system may not be entirely blame less, yet the
greater fault lies in the lawyers who had take their privilege so lightly, and in such mindless fashion.

The Code of Professional Responsibility states that:

Rule 1.01 A lawyer shall not engage in unlawful, dishonest immoral or deceitful conduct.
Rule 1.03 A lawyer shall not for any corrupt motive or interest encourage any suit or
proceeding or delay any man's cause.

On the basis of the foregoing, we find him guilty of malpractice as charged. He has violated his oath not to delay
any ma for money or malice, besmirched the name of an honorable profession, and has proven himself
unworthy of the trust repose in him by law as an officer of the Court. We have not countenanced other less
significant infractions among the ranks of our lawyers. He deserves the severest punishment of DISBARMENT.

WHEREFORE on the basis of the foregoing, and consisted with the urgent need to maintain the high
traditions an standards of the legal profession and to preserve undiminished public faith in attorneys-at-law, the
Court Resolved to DISBAR the respondent Atty. Jose Montalvo, Jr. from the practice law. His name is hereby
ordered stricken from the Roll of Attorneys.Copies of this Resolution shall be circulated to all courts of the
country and entered in the personal record of respondent Atty. Jose Montalvo, Jr. SO ORDERED.

CANON 20

Roc138-Section 24. Compensation of attorneys; agreement as to fees. An attorney shall be entitled to


have and recover from his client no more than a reasonable compensation for his services, with a view to the
importance of the subject matter of the controversy, the extent of the services rendered, and the professional
standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the
proper compensation, but may disregard such testimony and base its conclusion on its own professional
knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court
to be unconscionable or unreasonable.

Roc138-Section 37. Attorneys' liens. An attorney shall have a lien upon the funds, documents and
papers of his client which have lawfully come into his possession and may retain the same until his lawful fees
and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a
lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of
such judgments, which he has secured in a litigation of his client, from and after the time when he shall have the
caused a statement of his claim of such lien to be entered upon the records of the court rendering such
judgment, or issuing such execution, and shall have the caused written notice thereof to be delivered to his client
and to the adverse paty; and he shall have the same right and power over such judgments and executions as his
client would have to enforce his lien and secure the payment of his just fees and disbursements.

A.C. No. 5359 March 10, 2014ERMELINDA LAD VOA. DE DOMINGUEZ, represented by her
Attorney-in-Fact, VICENTE A. PICHON,Complainant, vs.ATTY. ARNULFO M. AGLERON,
SR., Respondent.

Complainant Ermelinda Lad Vda. De Dominguez (complainant) was the widow of the late Felipe Domiguez
who died in a vehicular accident in Caraga, Davao Oriental, on October 18, 1995, involving a dump truck
owned by the Municipality of Caraga. Aggrieved, complainant decided to file charges against the Municipality
of Caraga and engaged the services of respondent Atty. Arnulfo M. Agleron, Sr. (Atty. Agleron). On three (3)
occasions, Atty. Agleron requested and received from complainant the following amounts for the payment of
filing fees and sheriffs fees, to wit: (1) June 3, 1996 -P3,000.00; (2) June 7, 1996 -Pl,800.00; and September 2,
1996 - P5,250.00 or a total of P10,050.00. After the lapse of four (4) years, however, no complaint was filed by
Atty. Agleron against the Municipality of Caraga.1
Atty. Agleron admitted that complainant engaged his professional service and received the amount
of P10,050.00. He, however, explained that their agreement was that complainant would pay the filing fees and
other incidental expenses and as soon as the complaint was prepared and ready for filing, complainant would
pay 30% of the agreed attorneys fees of P100,000.00. On June 7, 1996, after the signing of the complaint, he
advised complainant to pay in full the amount of the filing fee and sheriffs fees and the 30% of the attorneys
fee, but complainant failed to do so. Atty. Agleron averred that since the complaint could not be filed in court,
the amount of P10,050.00 was deposited in a bank while awaiting the payment of the balance of the filing fee
and attorneys fee.2

In reply,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:

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.7

In the present case, Atty. Agleron admitted his failure to file the complaint against the Municipality of Caraga,
Davao Oriental, despite the fact that it was already prepared and signed. He attributed his non-filing of the
appropriate charges on the failure of complainant to remit the full payment of the filing fee and pay the 30% of
the attorney's fee. Such justification, however, is not a valid excuse that would exonerate him from liability. As
stated, every case that is entrusted to a lawyer deserves his full attention whether he accepts this for a fee or free.
Even assuming that complainant had not remitted the full payment of the filing fee, he should have found a way
to speak to his client and inform him about the insufficiency of the filing fee so he could file the complaint. Atty.
Agleron obviously lacked professionalism in dealing with complainant and showed incompetence when he failed
to file the appropriate charges.1wphi1

In a number of cases,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 hereby SUSPENDED from the practice
of law for a period of THREE (3) MONTHS, with a stern warning that a repetition of the same or similar
wrongdoing will be dealt with more severely.Let a copy of this resolution be furnished the Bar Confidant to be
included in the records of the respondent; the Integrated Bar of the Philippines for distribution to all its
chapters; and the Office of the Court Administrator for dissemination to all courts throughout the country.SO
ORDERED.

A.C. No. 9091 December 11, 2013CONCHITA A. BALTAZAR, ROLANDO SAN PEDRO, ALICIA
EULALIO-RAMOS, SOLEDAD A. FAJARDO AND ENCARNACION A.
FERNANDEZ, Complainants, vs.ATTY. JUAN B. BAEZ, Respondent.

Complainants are the owners of three parcels of land located in Dinalupihan, Bataan.1 n 4 September 2002,
they entered into an agreement, they stood to be paid P35,000.000 for all the lots that would be sold in the
subdivision.2 For that purpose, they executed a Pecial Power of Attorney authorizing Fevidal to enter into all
agreements concerning the parcels of land and to sign those agreements on their behalf.3

Fevidal did not update complainants about the status of the subdivision project and failed to accout for the titles
to the subdivided land.4 Complainants also found that he had sold a number of parcels to third parties, but that
he did not turn the proceeds over to them. Neither were complainants invited to the ceremonial opening of the
subdivision project.5

Thus, on 23 August 2005, they revoked the Special Power of Attorney they had previously executed in his
favor.6

Complainants subsequently agreed to settle with Fevidal for the amount of P10,000,000, but the latter again
failed to pay them.7

Complainants engaged the professional services of respondent for the purpose of assisting them in the
preparation of a settlement agreement.8

Instead of drafting a written settlement, respondent encouraged them to institute actions against Fevidal in order
to recover their properties. Complainants then signed a contract of legal services,9 in which it was agreed that
they would not pay acceptance and appearance fees to respondent, but that the docket fees would instead be
shared by the parties. Under the contract, complainants would pay respondent 50% of whatever would be
recovered of the properties. In preparation for the filing of an action against Fevidal, respondent prepared and
notarized an Affidavit of Adverse Claim, seeking to annotate the claim of complainants to at least 195 titles in
the possession of Fevidal.10

A certain Luzviminda Andrade (Andrade) was tasked to submit the Affidavit of Adverse Claim to the Register of
Deeds of Bataan.11

The costs for the annotation of the adverse claim were paid by respondent. Unknown to him, the adverse claim
was held in abeyance, because Fevidal got wind of it and convinced complainants to agree to another
settlement.12

Meanwhile, on behalf of complainants, and after sending Fevidal a demand letter dated 10 July 2006,
respondent filed a complaint for annulment, cancellation and revalidation of titles, and damages against Fevidal
before the Regional Trial Court (RTC) of Bataan on 13 October 2006.13

Complainants found it hard to wait for the outcome of the action. Thus, they terminated the services of
respondent on 8 June 2007, withdrew their complaint against Fevidal on 9 June 2007, and finalized their
amicable settlement with him on 5 July 2007.14

Respondent filed a Manifestation and Opposition15 dated 20 July 2007 before the RTC, alleging that the
termination of his services and withdrawal of the complaint had been done with the intent of defrauding
counsel. On the same date, he filed a Motion for Recording of Attorneys Charging Lien in the Records of the
Above-Captioned Cases.16

When the RTC granted the withdrawal of the complaint,17 he filed a Manifestation and Motion for
Reconsideration.18

After an exchange of pleadings between respondent and Fevidal, with the latter denying the formers allegation
of collusion,19 complainants sought the suspension/disbarment of respondent through a Complaint20 filed before
the Integrated Bar of the Philippines (IBP) on 14 November 2007. Complainants alleged that they were
uneducated and underprivileged, and could not taste the fruits of their properties because the disposition thereof
was "now clothed with legal problems" brought about by respondent.21

In their complaint, they alleged that respondent had violated Canons


1.01,22 1.03,23 1.04,24 12.02,25 15.05,2618.04,27 and 20.0428 of the Code of Professional Responsibility. On 14
August 2008, the IBP Commission on Bar Discipline adopted and approved the Report and
Recommendation29 of the investigating commissioner. It suspended respondent from the practice of law for a
period of one year for entering into a champertous agreement.30

On 26 June 2011, it denied his motion for reconsideration. On 26 November 2012, this Court noted the
Indorsement of the IBP Commission on Bar Discipline, as well as respondents second motion for
reconsideration. We find that respondent did not violate any of the canons cited by complainants. In fact, we
have reason to believe that complainants only filed the instant complaint against him at the prodding of Fevidal.

Respondent cannot be faulted for advising complainants to file an action against Fevidal to recover their
properties, instead of agreeing to a settlement of P10,000,000 a measly amount compared to that in the
original agreement, under which Fevidal undertook to pay complainants the amount of P35,000,000. Lawyers
have a sworn duty and responsibility to protect the interest of any prospective client and pursue the ends of
justice.31

Any lawyer worth his salt would advise complainants against the abuses of Fevidal under the circumstances, and
we cannot countenance an administrative complaint against a lawyer only because he performed a duty
imposed on him by his oath. The claim of complainants that they were not informed of the status of the case is
more appropriately laid at their door rather than at that of respondent. He was never informed that they had
held in abeyance the filing of the adverse claim. Neither was he informed of the brewing amicable settlement
between complainants and Fevidal. We also find it very hard to believe that while complainants received various
amounts as loans from respondent from August 2006 to June 2007,32 they could not spare even a few minutes to
ask about the status of the case. We shall discuss this more below. As regards the claim that respondent refused
to "patch up" with Fevidal despite the pleas of complainants, we note the latters Sinumpaang Salaysay dated 24
September 2007, in which they admitted that they could not convince Fevidal to meet with respondent to agree
to a settlement.33

Finally, complainants apparently refer to the motion of respondent for the recording of his attorneys charging
lien as the "legal problem" preventing them from enjoying the fruits of their property. Section 26, Rule 138 of
the Rules of Court allows an attorney to intervene in a case to protect his rights concerning the payment of his
compensation. According to the discretion of the court, the attorney shall have a lien upon all judgments for the
payment of money rendered in a case in which his services have been retained by the client. We recently upheld
the right of counsel to intervene in proceedings for the recording of their charging lien. In Malvar v. KFPI,34 we
granted counsels motion to intervene in the case after petitioner therein terminated his services without
justifiable cause. Furthermore, after finding that petitioner and respondent had colluded in order to deprive
counsel of his fees, we ordered the parties to jointly and severally pay counsel the stipulated contingent fees.
Thus, the determination of whether respondent is entitled to the charging lien is based on the discretion of the
court before which the lien is presented. The compensation of lawyers for professional services rendered is
subject to the supervision of the court, not only to guarantee that the fees they charge remain reasonable and
commensurate with the services they have actually rendered, but to maintain the dignity and integrity of the
legal profession as well.35

In any case, an attorney is entitled to be paid reasonable compensation for his services.36

That he had pursued its payment in the appropriate venue does not make him liable for disciplinary action.
Notwithstanding the foregoing, respondent is not without fault. Indeed, we find that the contract for legal
services he has executed with complainants is in the nature of a champertous contract an agreement whereby
an attorney undertakes to pay the expenses of the proceedings to enforce the clients rights in exchange for some
bargain to have a part of the thing in dispute.37

Such contracts are contrary to public policy38 and are thus void or inexistent.39

They are also contrary to Canon 16.04 of the Code of Professional Responsibility, which states that lawyers
shall not lend money to a client, except when in the interest of justice, they have to advance necessary expenses
in a legal matter they are handling for the client. A reading of the contract for legal services40 shows that
respondent agreed to pay for at least half of the expense for the docket fees. He also paid for the whole amount
needed for the recording of complainants adverse claim. While lawyers may advance the necessary expenses in
a legal matter they are handling in order to safeguard their clients rights, it is imperative that the advances be
subject to reimbrusement.41 The purpose is to avoid a situation in which a lawyer acquires a personal stake in
the clients cause. Regrettably, nowhere in the contract for legal services is it stated that the expenses of litigation
advanced by respondents shall be subject to reimbursement by complainants.

In addition, respondent gave various amounts as cash advances (bali), gasoline and transportation allowance to
them for the duration of their attorney-client relationship. In fact, he admits that the cash advances were in the
nature of personal loans that he extended to complainants.42

Clearly, respondent lost sight of his responsibility as a lawyer in balancing the clients interests with the ethical
standards of his profession. Considering the surrounding circumstances in this case, an admonition shall suffice
to remind him that however dire the needs of the clients, a lawyer must always avoid any appearance of
impropriety to preserve the integrity of the profession.WHEREFORE, Attorney Juan B. Baez, Jr. is hereby
ADMONISHED for advancing the litigation expenses in a legal matter her handled for a client without
providing for terms of reimbursement and lending money to his client, in violation of Canon 16.04 of the Code
of Professional Responsibility. He us sternly warned that a repetition of the same or similar act would be dealt
with more severly.Let a copy of this Resolution be attached to the personal record of Atty. Baez, Jr.SO
ORDERED.

G.R. No. 191641, September 02, 2015 EDMUNDO NAVAREZ, Petitioner, v. ATTY. MANUEL
ABROGAR III, Respondent.

This is a petition for certiorari under Rule 651 of the Rules of Court, filed from the October 16, 2009 Decision
and the March 12, 2010 Resolution of the Court of Appeals (CA) in CA-G.R. SP No. 108675.2The CA
dismissed the petition for certiorari that the present petitioner filed against the January 21, 2009 Order of the
Regional Trial Court (RTC).

ANTECEDENTS

On July 30, 2007, petitioner Edmundo Navarez engaged the services of Abrogar Valerio Maderazo and
Associates Law Offices (the Firm) through the respondent, Atty. Manuel Abrogar III. The Firm was to
represent Navarez in Sp. Proc. No. Q-05-59112 entitled "Apolonio Quesada, Jr. v. Edmundo Navarez" as
collaborating counsel of Atty. Perfecto Laguio. The case involved the settlement of the estate of Avelina
Quesada-Navarez that was then pending before the Regional Trial Court (RTC), Branch 83, Quezon City. The
pertinent portions of the Retainer Agreement read:
Our services as collaborating counsel will cover investigation, research and representation with local banks,
concerns regarding deposits (current and savings) and investment instruments evidenced by certificate of
deposits. Our office may also initiate appropriate civil and/or criminal actions as well as administrative remedies
needed to adjudicate the Estate of Avelina Quesada-Navarez expeditiously, peacefully and lawfully.

Effective Date: June 2007

Acceptance Fee: P100,000.00 in an installment basis

Success Fee: 2% of the total money value of your share as co-owner and heir of the Estate (payable
proportionately upon your receipt of any amount)

Appearance Fee: P2,500.00 per Court hearing or administrative meetings and/or other meetings.

Filing of Motions and/or pleadings at our initiative shall be for your account and you will be billed accordingly.

OUT-OF-POCKET EXPENSES: Ordinary out-of-pocket expenses such as telex, facsimile, word processing,
machine reproduction, and transportation expenses, as well as per diems and accommodations expenses
incurred in undertaking work for you outside Metro Manila area and other special out-of-pocket expenses as
you may authorized [sic] us to incur (which shall always be cleared with you in advance) shall be for your
account. xxxx
On September 2, 2008, Navarez filed a Manifestation with the RTC that he was terminating the services of
Atty. Abrogar. On the same day, Navarez also caused the delivery to Atty. Abrogar of a check in the amount of
P220,107.51 - allegedly equivalent to one half of 7.5% of petitioner's P11,200,000.00 share in the estate of his
deceased wife less Atty. Abrogar's cash advances.

On September 9, 2008, Atty. Abrogar manifested that with respect to the petitioner's one-half (1/2) share in the
conjugal partnership, the RTC had already resolved the matter favorably because it had issued a release order
for the petitioner to withdraw the amount. Atty. Abrogar further declared that the Firm was withdrawing as
counsel - effective upon the appointment of an Administrator of the estate - from the remaining proceedings for
the settlement of the estate of Avelina Quesada-Navarez.

On September 22, 2008, the petitioner wrote to Atty. Abrogar offering to pay his attorney's fees in accordance
with their Retainer Agreement minus the latter's cash advances - an offer that Atty. Abrogar had previously
refused in August 2008.

On October 7, 2008, Atty. Abrogar filed a Motion to Enter into the Records his attorney's lien pursuant to Rule
138, Section 37 of the Rules of Court.

On November 21, 2008, the motion was submitted for resolution without oral arguments.

On January 21, 2009, the RTC issued an order granting the motion and directed the petitioner to pay Atty.
Abrogar's attorney's fees. The Order reads:
WHEREFORE, premises considered, it is hereby ordered:

1. That the attorney's lien of Manuel Abrogar III conformably with the Retainer Agreement dated
July 30, 2007, be entered into the records of this case in consonance with Section 37, Rule 138 of
the Rules of Court;ChanRoblesVirtualawlibrary
2. That oppositor Edmundo Navarez pay the amount of 7.5% of P11,196,675.05 to Manuel
Abrogar III;ChanRoblesVirtualawlibrary

3. That the oppositor pay the administrative costs/expenses of P103,000.00 to the movant; and

4. That the prayers for P100,000.00 as exemplary damages, P200,000.00 as moral damages and for
writ of preliminary attachment be denied.

SO ORDERED.
On February 18, 2009, the petitioner filed a Motion for Reconsideration.

On March 17, 2009, the RTC denied the motion for reconsideration and issued a Writ of Execution of its
Order dated January 21, 2009.

The petitioner elevated the case to the CA via a petition for certiorari. He argued that the RTC committed
grave abuse of discretion because: (1) the RTC granted Atty. Abrogar's claim for attorney's fees despite non-
payment of docket fees; (2) the RTC denied him the opportunity of a full-blown trial to contradict Atty.
Abrogar's claims and prove advance payments; and (3) the RTC issued a writ of execution even before the lapse
of the reglementary period.

In its decision dated October 16, 2009, the CA dismissed the petition and held that the RTC did not commit
grave abuse of discretion.

The petitioner moved for reconsideration which the CA denied in a Resolution dated March 12, 2010.

On April 6, 2010, and April 26, 2010, the petitioner filed his first and second motions for extension of time to
file his petition for review. This Court granted both motions for extension totaling thirty (30) days (or until May
5, 2010) in the Resolution dated July 26, 2010.

On May 5, 2010, the petitioner filed the present petition entitled "Petition for Review." However, the contents
of the petition show that it is a petition for certiorari under Rule 65 of the Rules of Court.3

THE PETITION

The petitioner argues that the CA gravely erred in dismissing his petition for certiorari that challenged the
RTC ruling ordering the payment of attorney's fees. He maintains his argument that the RTC committed grave
abuse of discretion because: (1) it granted Atty. Abrogar's claim for attorney's fees despite lack of jurisdiction due
to non-payment of docket fees; (2) it granted the claim for attorney's fees without requiring a fullblown trial and
without considering his advance payments; and (3) it issued the writ of execution before the lapse of the
reglementary period. The petitioner also points out that the CA nullified the RTC's release order in CA-G.R.
SP No. 108734.

In his Comment dated September 8, 2010, Atty. Abrogar adopted the CA's position in its October 16, 2009
Decision.

OUR RULING

We observe that the petitioner used the wrong remedy to challenge the CA's decision and resolution. The
petitioner filed a petition for certiorari under Rule 65, not a petition for review on certiorari under Rule 45. A
special civil action for certiorari is a remedy of last resort, available only to raise jurisdictional issues when there
is no appeal or any other plain, speedy, and adequate remedy under the law.
Nonetheless, in the spirit of liberality that pervades the Rules of Court4 and in the interest of substantial
justice,5 this Court has, on appropriate occasions, treated a petition for certiorari as a petition for review
on certiorari, particularly when: (1) the petition for certiorari was filed within the reglementary period to file a
petition for review on certiorari;6 (2) the petition avers errors of judgment;7 and (3) when there is sufficient
reason to justify the relaxation of the rules.8 Considering that the present petition was filed within the extension
period granted by this Court and avers errors of law and judgment, this Court deems it proper to treat the
present petition for certiorari as a petition for review on certiorari in order to serve the higher ends of justice.

With the procedural issue out of the way, the remaining issue is whether or not the CA erred when it held that
the RTC acted within its jurisdiction and did not commit grave abuse of discretion when it ordered the payment
of attorney's fees.

We find merit in the petition.

An attorney has a right to be paid a fair and reasonable compensation for the services he has rendered to a
client. As a security for his fees, Rule 138, Section 37 of the Rules of Court grants an attorney an equitable right
to a charging lien over money judgments he has secured in litigation for his client. For the lien to be enforceable,
the attorney must have caused: (1) a statement of his claim to be entered in the record of the case while the court
has jurisdiction over the case and before the full satisfaction of the judgment;9 and (2) a written notice of his
claim to be delivered to his client and to the adverse party.

However, the filing of the statement of the claim does not, by itself, legally determine the amount of the claim
when the client disputes the amount or claims that the amount has been paid.10 In these cases, both the attorney
and the client have a right to be heard and to present evidence in support of their claims.11 The proper
procedure for the court is to ascertain the proper amount of the lien in a full dress trial before it orders the
registration of the charging lien.12 The necessity of a hearing is obvious and beyond dispute.13

In the present case, the RTC ordered the registration of Atty. Abrogar's lien without a hearing even though the
client contested the amount of the lien. The petitioner had the right to be heard and to present evidence on the
true amount of the charging lien. The RTC acted with grave abuse of discretion because it denied the petitioner
his right to be heard, i.e., the right to due process.

The registration of the lien should also be distinguished from the enforcement of the lien. Registration merely
determines the birth of the lien.14 The enforcement of the lien, on the other hand, can only take place once a
final money judgment has been secured in favor of the client. The enforcement of the lien is a claim for
attorney's fees that may be prosecuted in the very action where the attorney rendered his services or in a
separate action.

However, a motion for the enforcement of the lien is in the nature of an action commenced by a lawyer against
his clients for attorney's fees.15 As in every action for a sum of money, the attorney-movant must first pay the
prescribed docket fees before the trial court can acquire jurisdiction to order the payment of attorney's fees.

In this case, Atty. Abrogar only moved for the registration of his lien. He did not pay any docket fees because he
had not yet asked the RTC to enforce his lien. However, the RTC enforced the lien and ordered the petitioner
to pay Atty. Abrogar's attorney's fees and administrative expenses.

Under this situation, the RTC had not yet acquired jurisdiction to enforce the charging lien because the docket
fees had not been paid. The payment of docket fees is mandatory in all actions, whether separate or an offshoot
of a pending proceeding. In Lacson v. Reyes,16 this Court granted certiorari and annulled the decision of the
trial court granting a "motion for attorney's fees" because the attorney did not pay the docket fees. Docket fees
must be paid before a court can lawfully act on a case and grant relief. Therefore, the RTC acted without or in
excess of its jurisdiction when it ordered the payment of the attorney's fees.
Lastly, the enforcement of a charging lien can only take place after a final money judgment has been rendered
in favor of the client.17 The lien only attaches to the money judgment due to the client and is contingent on the
final determination of the main case. Until the money judgment has become final and executory, enforcement
of the lien is premature.

The RTC again abused its discretion in this respect because it prematurely enforced the lien and issued a writ of
execution even before the main case became final; no money judgment was as yet due to the client to which the
lien could have attached itself. Execution was improper because the enforceability of the lien is contingent on a
final and executory award of money to the client. This Court notes that in CA-G.R. SP No. 108734, the CA
nullified the "award" to which the RTC attached the attorney's lien as there was nothing due to the petitioner.
Thus, enforcement of the lien was premature.

The RTC's issuance of a writ of execution before the lapse of the reglementary period to appeal from its order is
likewise premature. The Order of the RTC dated January 21, 2009, is an order that finally disposes of the issue
on the amount of attorney's fees Atty. Abrogar is entitled to. The execution of a final order issues as a matter of
right upon the expiration of the reglementary period if no appeal has been perfected.18 Under Rule 39, Section
2 of the Rules of Court, discretionary execution can only be made before the expiration of the reglementary
period upon a motion of the prevailing party with notice to the adverse party. Discretionary execution may only
issue upon good reasons to be stated in a special order after due hearing.19

The RTC ordered execution without satisfying the requisites that would have justified discretionary execution.
Atty. Abrogar had not moved for execution and there were no good reasons to justify the immediate execution
of the RTC's order. Clearly, the RTC gravely abused its discretion when it ordered the execution of its order
dated January 21, 2009, before the lapse of the reglementary period.

For these reasons, this Court finds that the CA erred when it held that the RTC did not commit grave abuse of
discretion and acted without jurisdiction.
As our last word, this decision should not be construed as imposing unnecessary burden on the lawyer in
collecting his just fees. But, as in the exercise of any other right conferred by law, the lawyer - and the courts -
must avail of the proper legal remedies and observe the procedural rules to prevent the possibility, or even just
the perception, of abuse or prejudice.20chanroblesvirtuallawlibrary
WHEREFORE, premises considered, we hereby GRANT the petition. The decision of the Court of Appeals in
CA-G.R. SP No. 108675 dated October 16, 2009, is hereby REVERSED, and the decision of the Regional
Trial Court, Branch 83, Quezon City in Sp. Proc. No. Q-05-59112 is hereby ANNULLED and SET
ASIDE.SO ORDERED.

G.R. No. 185544 January 13, 2015 THE LAW FIRM OF LAGUESMA MAGSALIN CONSULTA
AND GASTARDO, Petitioner, vs.THE COMMISSION ON AUDIT and/or REYNALDO A. VILLAR
and JUANITO G. ESPINO, JR. in their capacities as Chairman and Commissioner,
respectively, Respondents.

When a government entity engages the legal services of private counsel, it must do so with the necessary
authorization required by law; otherwise, its officials bind themselves to be personally liable for compensating
private counsels services.

This is a petition1 for certiorari filed pursuant to Rule XI, Section 1 of the 1997 Revised Rules of Procedure of
the Commission on Audit. The petition seeks to annul the decision2 dated September 27, 2007 and
resolution3 dated November 5, 2008 of the Commission on Audit, which disallowed the payment of retainer fees
to the law firm of Laguesma Magsalin Consulta and Gastardo for legal services rendered to Clark Development
Corporation.4
Sometime in 2001, officers of Clark Development Corporation,5 a government-owned and controlled
corporation, approached the law firm of Laguesma Magsalin Consulta and Gastardo for its possible assistance
in handling the corporations labor cases.6

Clark Development Corporation, through its legal officers and after the law firms acquiescence, "sought from
the Office of the Government Corporate Counsel [OGCC] its approval for the engagement of [Laguesma
Magsalin Consulta and Gastardo] as external counsel."7

On December 4, 2001, the Office of the Government Corporate Counsel denied the request.8 Clark
Development Corporation then filed a request for reconsideration.9

On May 20, 2002, the Office of the Government Corporate Counsel, through Government Corporate Counsel
Amado D. Valdez (Government Corporate Counsel Valdez), reconsidered the request and approved the
engagement of Laguesma Magsalin Consulta and Gastardo.10 It also furnished Clark Development Corporation
a copy of a pro-forma retainership contract11 containing the suggested terms and conditions of the
retainership.12 It instructed Clark Development Corporation to submit a copy of the contract to the Office of
the Government Corporate Counsel after all the parties concerned have signed it.13

In the meantime, Laguesma Magsalin Consulta and Gastardo commenced rendering legal services to Clark
Development Corporation. At this point, Clark Development Corporation had yet to secure the authorization
and clearance from the Office of the Government Corporate Counsel or the concurrence of the Commission on
Audit of the retainership contract. According to the law firm, Clark Development Corporations officers assured
the law firm that it was in the process of securing the approval of the Commission on Audit.14

On June 28, 2002, Clark Development Corporation, through its Board of Directors, approved Laguesma
Magsalin Consulta and Gastardos engagement as private counsel.15 In 2003, it also approved the assignment of
additional labor cases to the law firm.16

On July 13, 2005, Clark Development Corporation requested the Commission on Audit for concurrence of the
retainership contract it executed with Laguesma Magsalin Consulta and Gastardo.17 According to the law firm,
it was only at this pointwhen Clark Development Corporation informed them that the Commission on Audit
required the clearance and approval of the Office of the Government Corporate Counsel before it could
approve the release of Clark Development Corporations funds to settle the legal fees due to the law firm.18

On August 5, 2005, State Auditor IVElvira G. Punzalan informed Clark Development Corporation that
itsrequest for clearance could not be acted upon until the Office of the Government Corporate Counsel
approves the retainership contract with finality.19

On August 10, 2005, Clark Development Corporation sent a letterrequest to the Office of the Government
Corporate Counsel for the final approval of the retainership contract, in compliance with the Commission on
Audits requirements.20

On December 22, 2005, GovernmentCorporate Counsel Agnes VST Devanadera (Government Corporate
Counsel Devanadera) denied Clark Development Corporations request for approval on the ground that the
proforma retainership contract given to them was not "based on the premise that the monthly retainers fee and
concomitant charges are reasonable and could pass in audit by COA."21 She found that Clark Development
Corporation adopted instead the law firms proposals concerning the payment of a retainers fee on a per case
basis without informing the Office of the Government Corporate Counsel. She, however, ruled that the law firm
was entitled to payment under the principle of quantum meruitand subject to Clark Development Corporation
Boards approval and the usual government auditing rules and regulations.22
On December 27, 2005, Clark Development Corporation relayed Government Corporate Counsel
Devanaderas letter to the Commissions Audit Team Leader, highlighting the portion on the approval of
payment to Laguesma Magsalin Consulta and Gastardo on the basis of quantum meruit.23

On November 9, 2006, the Commission on Audits Office of the General Counsel, Legal and Adjudication
Sector issued a "Third Indorsement"24 denying Clark Development Corporations request for clearance, citing
its failure to secure a prior written concurrence of the Commission on Audit and the approval with finality of the
Office of the Government Corporate Counsel.25 It also stated that its request for concurrence was made three
(3) years after engaging the legal services of the law firm.26

On December 4, 2006, Laguesma Magsalin Consulta and Gastardo appealed the "Third Indorsement"to the
Commission on Audit. On December 12, 2006, Clark Development Corporation also filed a motion for
reconsideration.27

On September 27, 2007, the Commission on Audit rendered the assailed decision denying the appeal and
motion for reconsideration. It ruled that Clark Development Corporation violated Commission on Audit
Circular No. 98-002 dated June 9, 1998 and Office of the President Memorandum Circular No. 9 dated August
27, 1998 whenit engaged the legal services of Laguesma Magsalin Consulta and Gastardo without the final
approval and written concurrence of the Commission on Audit.28 It also ruled that it was not the governments
responsibility to pay the legal fees already incurred by Clark Development Corporation, but rather by the
government officials who violated the regulations on the matter.29

Clark Development Corporation and Laguesma Magsalin Consulta and Gastardo separately filed motions for
reconsideration,30 which the Commission on Audit denied in the assailed resolution dated November 5, 2008.
The resolution also disallowed the payment of legal fees to the law firm on the basis of quantum meruitsince the
Commission on Audit Circular No. 86-255 mandates that the engagementof private counsel without prior
approval "shall be a personal liability of the officials concerned."31

Laguesma Magsalin Consulta and Gastardo filed this petition for certiorari on December 19,
2008.32Respondents, through the Office of the Solicitor General, filed their comment33 dated May 7, 2009. The
reply34was filed on September 1, 2009.

The primordial issue to be resolved by this court is whether the Commission on Audit erred in disallowing the
payment of the legal fees to Laguesma Magsalin Consulta and Gastardo as Clark Development Corporations
private counsel.

To resolve this issue, however, several procedural and substantive issues must first be addressed:

Procedural:

1. Whether the petition was filed on time; and

2. Whether petitioner is the real party-in-interest.

Substantive:

1. Whether the Commission on Audit erred in denying Clark Development Corporations requestfor
clearance in engaging petitioner as private counsel;

2. Whether the Commission on Audit correctly cited Polloso v. Gangan35 and PHIVIDEC Industrial
Authority v. Capitol Steel Corporation36 in support of its denial; and
3. Whether the Commission on Audit erred in ruling that petitioner should not be paid on the basis of
quantum meruitand that any payment for its legal services should be the personal liability of Clark
Development Corporations officials.

Petitioner argues that Pollosoand PHIVIDEC are not applicable to the circumstances at hand because in both
cases, the government agency concerned had failed to secure the approval of both the Office of the Government
Corporate Counsel and the Commission on Audit.37 Petitioner asserts that it was able to secure authorization
from the Office of the Government Corporate Counsel prior to rendering services to Clark Development
Corporation for all but two (2) of the labor cases assigned to it.38 It argues that the May 20, 2002 letter from
Government Corporate Counsel Valdez was tantamount to a grant of authorization since it granted Clark
Development Corporations request for reconsideration.39

In their comment,40 respondents argue that petitioner is not a real party-in-interest to the case.41 They argue
that it is Clark Development Corporation, and not petitioner, who isa real party-in-interest since the subject of
the assailed decision was the denial of the corporations request for clearance.42

Respondents also allege that it was only on July 13, 2005, or three (3) years after the hiring of petitioner, when
Clark Development Corporation requested the Commission on Audits concurrence of the retainership contract
between Clark Development Corporation and petitioner.43 They argue that the retainership contract was not
approved with finality by the Office of the Government Corporate Counsel.44 Further, Polloso and PHIVIDE
Care applicable to this case since both cases involve the "indispensability of [the] prior written concurrence of
both [the Office of the Government Corporate Counsel] and the [Commission on Audit] before any
[government-owned and controlled corporation] can hire an external counsel."45

In its reply,46 petitioner argues that it is a real party-in-interest since "it rendered its services to [Clark
Development Corporation], which ultimately redounded to the benefit of the Republic"47 and that "it deserves
to be paid what is its due as a matter of right."48 Petitioner also reiterates its argument that Polloso and
PHIVIDE Care not applicable to this case since the factual antecedents are not the same.49

The petition is denied.

The petition was filed out of time

Petitioner states that it filed this petition under Rule XI, Section 1 of the 1997 Revised Rules of Procedure of the
Commission on Audit.50 The rule states:

RULE XI

JUDICIAL REVIEW SECTION

1. Petition for Certiorari. Any decision, order or resolution of the Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty (30) days from receipt of a copy thereof in the
manner provided by law, the Rules of Court51 and these Rules.

This rule is based on Article IX-A, Section 7 of the Constitution, which states:

Section 7. Each Commission shall decide by a majority vote of all its Members, any case or matter brought
before it within sixty days from the date of its submission for decision or resolution. A case or matter is deemed
submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum required by the
rules of the Commission or by the Commission itself. Unless otherwise provided by this Constitution or by law,
any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the
aggrieved party within thirty days from receipt of a copy thereof. (Emphasis supplied)
Ordinarily, a petition for certiorari under Rule 65 of the Rules of Court has a reglementary period of 60 days
from receipt of denial of the motion for reconsideration. The Constitution, however, specifies that the
reglementary period for assailing the decisions, orders, or rulings of the constitutional commissions is thirty (30)
days from receipt of the decision, order, or ruling. For this reason, a separate rule was enacted in the Rules of
Court.

Rule 64 of the Rules of Civil Procedure provides the guidelines for filing a petition for certiorari under this rule.
Section 2 of the rule specifies that "[a] judgment or final order or resolution of the Commission on Elections and
the Commission on Audit may be brought by the aggrieved party to the Supreme Court on certiorari under
Rule 65, except as hereinafter provided."

The phrase, "except as hereinafter provided," specifies that any petition for certiorari filed under this rule
follows the same requisites as those of Rule 65 except for certain provisions found only in Rule 64. One of these
provisions concerns the time given to file the petition.

Section 3 of Rule 64 of the Rules of Civil Procedure states:

SEC. 3. Time to file petition. The petition shall be filed within thirty (30) days from notice of the judgment or
final order or resolution sought to be reviewed. The filing of a motion for new trial or reconsideration of said
judgment or final order or resolution, if allowed under the procedural rules of the Commission concerned, shall
interrupt the period herein fixed. If the motion is denied, the aggrieved party may file the petition within the
remaining period, but which shall not be less than five (5) days in any event, reckoned from notice of
denial.(Emphasis supplied)

Under this rule, a party may file a petition for review on certiorari within 30 days from notice of the judgment
being assailed. The reglementary period includes the time taken to file the motion for reconsideration and is
only interrupted once the motion is filed. If the motion is denied, the party may filethe petition only within the
period remaining from the notice of judgment.

The difference between Rule 64 and Rule 65 has already been exhaustively discussed by this court in Pates v.
Commission on Elections:52

Rule 64, however, cannot simply be equated to Rule 65 even if it expressly refers to the latter rule. They exist as
separate rules for substantive reasons as discussed below. Procedurally, the most patent difference between the
two i.e., the exception that Section 2, Rule 64 refers to is Section 3 which provides for a special period for
the filing of petitions for certiorari from decisions or rulings of the COMELEC en banc. The period is 30 days
from notice of the decision or ruling (instead of the 60 days that Rule 65 provides), with the intervening period
used for the filing of any motion for reconsideration deductible from the originally granted 30 days (instead of
the fresh period of 60 days that Rule 65 provides).53 (Emphasis supplied)

In this case, petitioner received the decision of the Commission on Audit on October 16, 2007.54 It filed a
motion for reconsideration on November 6, 2007,55 or after 21 days. It received notice of the denial of its
motion on November 20, 2008.56 The receipt of this notice gave petitioner nine (9) days, or until November 29,
2008, to file a petition for certiorari. Since November 29, 2008 fell on a Saturday, petitioner could still have filed
on the next working day, or on December 1, 2008. It, however, filed the petition on December 19,
2008,57 which was well beyond the reglementary period.

This petition could have been dismissed outright for being filed out of time. This court, however, recognizes that
there are certain exceptions that allow a relaxation of the procedural rules. In Barranco v. Commission on the
Settlement of Land Problems:58
The Court is fully aware that procedural rules are not to be belittled or simply disregarded for these prescribed
procedures insure an orderly and speedy administration of justice. However, it is equally true that litigation is
not merely a game of technicalities. Law and jurisprudence grant to courts the prerogative to relax compliance
with procedural rules of even the most mandatory character, mindful of the duty to reconcile both the need to
put an end to litigation speedily and the parties right to an opportunity to be heard.

In Sanchez v. Court of Appeals, the Court restated the reasons which may provide justification for a court to
suspend a strict adherence to procedural rules, such as: (a) matters of life, liberty, honor or property[,] (b) the
existence of special or compelling circumstances, (c) the merits of the case, (d) a cause not entirely attributable to
the fault or negligence of the party favored by the suspension of the rules, (e) a lack of any showing that the
review sought is merely frivolous and dilatory, and (f) the other party will not be unjustly prejudiced
thereby.59(Emphasis supplied)

Considering that the issues in thiscase involve the right of petitioner to receive due compensation on the one
hand and respondents duty to prevent the unauthorized disbursement of public funds on the other, a relaxation
of the technical rules is in order.

Petitioner is a real party-in-interest

Respondents argue that it is Clark Development Corporation, and not petitioner, which is the real party-in-
interest since the subject of the assailed decision and resolution was the corporations request for clearance to
pay petitioner its legal fees. Respondents argue that any interest petitioner may have in the case is merely
incidental.60 This is erroneous.

Petitioner is a real party-in-interest, as defined in Rule 3, Section 2 of the 1997 Rules of Civil Procedure:

SEC. 2. Parties in interest. A real party in interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in the name of the real party in interest.

Petitioner does not have a "mere incidental interest,"61 and its interest is not "merely
consequential."62Respondents mistakenly narrow down the issue to whether they erred in denying Clark
Development Corporations request for clearance of the retainership contract.63 In doing so, they argue that the
interested parties are limited only to Clark Development Corporation and respondents.64

The issue at hand, however, relates to the assailed decision and resolution of respondents, which disallowed the
disbursement of public funds for the payment of legal fees to petitioner. Respondents admit that legal services
were performed by petitioner for which payment of legal fees are due. The question that they resolved was
which among the parties, the government, or the officials of Clark Development Corporation were liable.

The net effect of upholding or setting aside the assailed Commission on Audit rulings would be to either disallow
or allow the payment of legal fees to petitioner. Petitioner, therefore, stands to either be benefited or injured by
the suit, or entitled to its avails. It is a real party-in-interest. Clark Development Corporations Board of
Directors, on the other hand, should have been impleaded inthis case as a necessary party.

A necessary party is defined as "onewho is not indispensable but who ought to be joined as a party if complete
relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim
subject of the action."65

The actions of the Board of Directors precipitated the issues in this case. If the petition is granted, then the
officers are relieved of liability to petitioner. If the rulings of respondents are upheld, then it is the Board of
Directors that will be liable to petitioner. Any relief in this case would be incomplete without joining the
members of the Board of Directors.

The Commission on Audit did not


commit grave abuse of discretion in
denying the corporations request
for clearance to engage the services
of petitioner as private counsel

Book IV, Title III, Chapter 3, Section 10 of the Administrative Code of 1987 provides:

Section. 10. Office of the Government Corporate Counsel. - The Office of the Government Corporate Counsel
(OGCC) shall act as the principal law office of all government-owned or controlled corporations, their
subsidiaries, other corporate off-springs and government acquired asset corporations and shall exercise control
and supervision over all legal departments or divisions maintained separately and such powers and functions as
are now or may hereafter be provided by law. In the exercise of such control and supervision, the Government
Corporate Counsel shall promulgate rules and regulations toeffectively implement the objectives of this Office.
(Emphasis supplied)

The Office of the Government Corporate Counsel is mandated by law to provide legal services to government-
owned and controlled corporations such as Clark Development Corporation.

As a general rule, government-owned and controlled corporations are not allowed to engage the legal services of
private counsels. However, both respondent and the Office of the President have made issuances that had the
effect of providing certain exceptions to the general rule, thus: Book IV, Title III, Chapter 3, Section 10 of
Executive Order No. 292, otherwise known as the Administrative Code of 1987, provides that the Office of the
Government Corporate Counsel (OGCC) shall act as the principal law office of all GOCCs, their subsidiaries,
other corporate off-springs, and government acquired asset corporations. Administrative Order No. 130, issued
by the Office of the President on 19 May 1994, delineating the functions and responsibilities of the OSG and
the OGCC, clarifies that all legal matters pertaining to GOCCs, their subsidiaries, other corporate off[-]springs,
and government acquired asset corporations shall be exclusively referred to and handled by the OGCC, unless
their respective charters expressly name the OSG as their legal counsel. Nonetheless, the GOCC may hire the
services of a private counsel in exceptional cases with the written conformity and acquiescence of the
Government Corporate Counsel, and with the concurrence of the Commission on Audit (COA).66 (Emphasis
supplied)

The rules and regulations concerning the engagement of private counsel by government-owned and controlled
corporations is currently provided for by Commission on Audit Circular No. 86-25567 dated April 2, 1986, and
Office of the President Memorandum Circular No. 9 dated August 27, 1998.

Commission on Audit Circular No. 86-255, dated April 2, 1986, as amended, states:

Accordingly and pursuant to this Commission's exclusive authority to promulgate accounting and auditing rules
and regulations, including for the prevention and disallowance of irregular, unnecessary, excessive, extravagant
and/or unconscionable expenditure or uses of public funds and property (Sec. 2-2, Art. IX-D, Constitutional,
public funds shall not be utilized for payment of the services of a private legal counsel or law firm to represent
government agencies and instrumentalities, including government-owned or controlled corporations and local
government units in court or to render legal services for them. In the event that such legal services cannot be
avoided or isjustified under extraordinary or exceptional circumstances for government agencies and
instrumentalities, including government-owned or controlled corporations, the written conformity and
acquiescence of the Solicitor General or the Government Corporate Counsel, as the case maybe, and the
written concurrence of the Commission on Audit shall first be secured before the hiring or employment of a
private lawyer or law firm.(Emphasis supplied)

The Office of the President Memorandum Circular No. 9, on the other hand, states:

SECTION 1.All legal matters pertainingto government-owned or controlled corporations, their subsidiaries,
other corporate offsprings and government acquired asset corporations (GOCCs) shall be exclusively referred to
and handled by the Office of the Government Corporate Counsel (OGCC).

GOCCs are thereby enjoined from referring their cases and legal matters to the Office of the Solicitor General
unless their respective charters expressly name the Office of the Solicitor General as their legal counsel.

However, under exceptional circumstances, the OSG may represent the GOCC concerned, Provided: This is
authorized by the President; or by the head of the office concerned and approved by the President.

SECTION 2. All pending cases of GOCCs being handled by the OSG, and all pending requests for opinions
and contract reviews which have been referred by saidGOCCs to the OSG, may be retained and acted upon by
the OSG; but the latter shall inform the OGCC of the said pending cases, requests for opinions and contract
reviews, if any, to ensure proper monitoring and coordination.

SECTION 3. GOCCs are likewise enjoined to refrain from hiring private lawyers or law firms to handle their
cases and legal matters. But in exceptional cases, the written conformity and acquiescence of the Solicitor
General or the Government Corporate Counsel, as the case may be, and the written concurrence of the
Commission on Audit shall first be secured before the hiring or employment of a private lawyer or law firm.
(Emphasis supplied)

According to these rules and regulations, the general rule is that government-owned and controlled corporations
must refer all their legal matters to the Office of the Government Corporate Counsel. It is only in
"extraordinary or exceptional circumstances" or "exceptional cases" that it is allowed to engage the services of
private counsels.

Petitioner claims that it was hired by Clark Development Corporation due to "numerous labor cases which need
urgent attention[.]"68 In its request for reconsideration to the Office of the Government Corporate Counsel,
Clark Development Corporation claims that it was obtaining the services of petitioner "acting through Atty.
Ariston Vicente R. Quirolgico, known expert in the field of labor law and relations."69

The labor cases petitioner handled were not of a complicated or peculiar nature that could justify the hiring of a
known expert in the field. On the contrary, these appear to be standard labor cases of illegal dismissal and
collective bargaining agreement negotiations,70 which Clark Development Corporations lawyers or the Office
of the Government Corporate Counsel could have handled.

Commission on Audit Circular No. 86-255 dated April 2, 1986 and Office of the President Memorandum
Circular No. 9 also require that "before the hiring or employment"of private counsel, the "written conformity
and acquiescence of the [Government Corporate Counsel] and the written concurrence of the Commissionon
Audit shall first be secured. . . ."

In this case, Clark Development Corporation had failed to secure the final approval of the Office of the
Government Corporate Counsel and the written concurrence of respondent before it engaged the services of
petitioner.

When Government Corporate Counsel Valdez granted Clark Development Corporations request for
reconsideration, the approval was merely conditional and subject to its submission of the signed pro-forma
retainership contract provided for by the Office of the Government Corporate Counsel. In the letter dated May
20, 2002, Government Corporate Counsel Valdez added:

For the better protection of the interests of CDC, we hereby furnish you with a Pro-Forma Retainership
Agreement containing the suggested terms and conditions of the retainership, which you may adopt for this
purpose.

After the subject Retainership Agreement shall have been executed between your corporation and the retained
counsel, please submit a copy thereof to our Office for our information and file.71

Upon Clark Development Corporations failure to submit the retainership contract, the Office of the
Government Corporate Counsel denied Clark Development Corporations request for final approval of its legal
services contracts, including that of petitioner. In the letter72 dated December 22, 2005, Government Corporate
Counsel Devanadera informed Clark Development Corporation that:

[i]t appears, though, that our Pro-Forma Retainership Agreement was not followed and CDC merely adopted
the proposal of aforesaid retainers/consultants. Also, this Office was never informed that CDC agreed on
payment of retainers fee on a per case basis.73

In view of Clark Development Corporations failure to secure the final conformity and acquiescence of the
Office of the Government Corporate Counsel, its retainership contract with petitioner could not have been
considered as authorized.

The concurrence of respondents was also not secured by Clark Development Corporation priorto hiring
petitioners services. The corporation only wrote a letter-request to respondents three (3) years after it had
engaged the services of petitioner as private legal counsel.

The cases that the private counsel was asked to manage are not beyond the range of reasonable competence
expected from the Office of the Government Corporate Counsel. Certainly, the issues do not appear to be
complex or of substantial national interest to merit additional counsel. Even so, there was no showing that the
delays in the approval also were due to circumstances not attributable to petitioner nor was there a clear
showing that there was unreasonable delay in any action of the approving authorities. Rather, it appears that
the procurement of the proper authorizations was mere afterthought.

Respondents, therefore, correctly denied Clark Development Corporations request for clearance in the
disbursement of funds to pay petitioner its standing legal fees.

Polloso v. Ganganand PHIVIDEC


Industrial Authority v. Capitol Steel
Corporationapply in this case

Petitioner argues that Polloso does not apply since the denial was based on the "absence of a written authority
from the OSG or OGCC[.]"74 It also argues that the PHIVIDEC case does not apply since "the case [was]
represented by a private lawyer whose engagement was secured without the conformity of the OGCC andthe
COA."75 Petitioner argues that, unlike these cases, Clark Development Corporation was able to obtain the
written conformity of the Office of the Government Corporate Counsel to engage petitioners services.

In Polloso, the legal services of Atty. Benemerito A. Satorre were engaged by the National Power Corporation
for its Leyte-Cebu and Leyte Luzon Interconnection Projects.76 The Commission on Audit disallowed the
payment of services to Atty. Satore on the basis of quantum meruit, citing Commission on Audit Circular No.
86-255 dated April 2, 1986.77 In upholding the disallowance by the Commission on Audit, this court ruled:
It bears repeating that the purpose of the circular is to curtail the unauthorized and unnecessary disbursement of
public funds to private lawyers for services rendered to the government. This is in line with the Commission on
Audits constitutional mandate to promulgate accounting and auditing rules and regulations including those for
the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable
expenditures or uses of government fundsand properties. Having determined the intent of the law, this Court
has the imperative duty to give it effect even if the policy goes beyond the letter or words of the statute.

Hence, as the hiring of Atty. Satorre was clearly done without the prior conformity and acquiescence of the
Office of the Solicitor General or the Government Corporate Counsel, as well as the written concurrence of the
Commission on Audit, the payment of fees to Atty. Satorre was correctly disallowed in audit by the COA.78

In PHIVIDEC, this court found the engagement by PHIVIDEC Industrial Authority, a government-owned and
controlled corporation, of Atty. Cesilo Adazas legal services to be unauthorized for the corporations failure to
secure the written conformity of the Office of the Government Corporate Counsel and the Commission on
Audit.79Citing the provisions of Office of the President Memorandum Circular No. 9, this court ruled that:

[i]t was only with the enactment of Memorandum Circular No. 9 in 1998 that an exception to the general
prohibition was allowed for the first time since P.D. No. 1415 was enacted in 1978. However, indispensable
conditions precedent were imposed before any hiring of private lawyer could be effected. First, private counsel
can be hired only in exceptional cases. Second, the GOCC must first secure the written conformity and
acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be, before any
hiring can be done. And third, the written concurrence of the COA must also be secured prior to the
hiring.80(Emphasis supplied)

The same ruling was likewise reiterated in Vargas v. Ignes,81 wherein this court stated:

Under Section 10, Chapter 3, Title III, Book IV of the Administrative Code of1987, it is the OGCC which shall
act as the principal law office of all GOCCs. And Section 3 of Memorandum Circular No. 9, issued by
President Estrada on August 27, 1998, enjoins GOCCs to refrain from hiring private lawyers or law firms to
handle their cases and legal matters. But the same Section 3 provides that in exceptional cases, the written
conformity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may
be, and the written concurrence of the COA shall first be secured before the hiring or employment of a private
lawyer or law firm. In Phividec Industrial Authority v. Capitol Steel Corporation, we listed three (3)
indispensable conditions before a GOCC can hirea private lawyer: (1) private counsel can only be hired in
exceptional cases; (2) the GOCC must first secure the written conformity and acquiescence of the Solicitor
General or the Government Corporate Counsel, as the case may be; and (3) the written concurrence of the
COA must also be secured.82 (Emphasis supplied) On the basis of Pollosoand PHIVIDEC, petitioners
arguments are unmeritorious.

Petitioner fails to understand that Commission on Audit Circular No. 86-255 requires not only the conformity
and acquiescence of the Office of the Solicitor General or Office of the Government Corporate Counsel but also
the written conformity of the Commission on Audit. The hiring of private counsel becomes unauthorized if it is
only the Office of the Government Corporate Counsel that gives its conformity. The rules and jurisprudence
expressly require that the government-owned and controlled corporation concerned must also secure the
concurrence of respondents.

It is also erroneous for petitioner to assume that it had the conformity and acquiescence of the Office of the
Government Corporate Counsel since Government Corporate Counsel Valdezs approval of Clark
Development Corporations request was merely conditional on its submission of the retainership contract. Clark
Development Corporations failure to submit the retainership contract resulted in itsfailure to securea final
approval.
The Commission on Audit did not
commit grave abuse of discretion in
disallowing the payment to
petitioner on the basis of quantum
meruit

When Government Corporate Counsel Devanadera denied Clark Development Corporations request for final
approval of its legal services contracts, she, however, allowed the payment to petitioner for legal services already
rendered on a quantum meruitbasis.83

Respondents disallowed Clark Development Corporation from paying petitioner on this basis as the contract
between them was executed "in clear violation of the provisions of COA Circular No. 86-255 and OP
Memorandum Circular No. 9[.]"84 It then ruled that the retainership contract between them should be deemed
a private contract for which the officials of Clark Development Corporation should be liable, citing Section
10385 of Presidential Decree No. 1445, otherwise known as the Government Auditing Code of the Philippines.86

In National Power Corporation v. Heirs of Macabangkit Sangkay, quantum meruit:87

literally meaning as much as he deserves is used as basis for determining an attorneys professional fees in
the absence of an express agreement. The recovery ofattorneys fees on the basis of quantum meruitis a device
that prevents an unscrupulous client from running away with the fruits of the legal services of counsel without
paying for it and also avoids unjust enrichment on the part of the attorney himself. An attorney must show that
he is entitled to reasonable compensation for the effort in pursuing the clients cause, taking into account certain
factors in fixing the amount of legal fees.88

Here, the Board of Directors, acting on behalf of Clark Development Corporation, contracted the services of
petitioner, without the necessary prior approvals required by the rules and regulations for the hiring of private
counsel. Their actions were clearly unauthorized.

It was, thus, erroneous for Government Corporate Counsel Devanadera to bind Clark Development
Corporation, a government entity, to pay petitioner on a quantum meruit basis for legal services, which were
neither approved nor authorized by the government. Even granting that petitioner ought to be paid for services
rendered, it should not be the governments liability, but that of the officials who engaged the services of
petitioner without the required authorization. The amendment of Commission on

Audit Circular No. 86-255 by


Commission on Audit Circular No.
98-002 created a gap in the law

Commission on Audit Circular No. 86-255 dated April 2, 1986 previously stated that: [a]ccordingly, it is hereby
directed that, henceforth, the payment out of public funds of retainer fees to private law practitioners who are so
hired or employed without the prior written conformity and acquiescence of the Solicitor General or the
Government Corporate Counsel, as the case may be, as well as the written concurrence of the Commission on
Audit shall be disallowed in audit and the same shall be a personal liability of the officials concerned. (Emphasis
supplied) However, when Commission on Audit Circular No. 86-255 was amended by Commission on Audit
Circular No. 98-002 on June 9, 1998, it failed to retain the liability of the officials who violated the
circular.89 This gap in the law paves the way for both the erring officials of the government owned and
controlled corporations to disclaim any responsibility for the liabilities owing to private practitioners.

It cannot be denied that petitioner rendered legal services to Clark Development Corporation.1wphi1 It
assisted the corporation in litigating numerous labor cases90 during the period of its engagement. It would be an
injustice for petitioner not to be compensated for services rendered even if the engagement was unauthorized.
The fulfillment of the requirements of the rules and regulations was Clark Development Corporations
responsibility, not petitioners. The Board of Directors, by its irresponsible actions, unjustly procured for
themselves petitioners legal services without compensation.

To fill the gap created by the amendment of Commission on Audit Circular No. 86-255, respondents correctly
held that the officials of Clark, Development Corporation who violated the provisions of Circular No. 98-002
and Circular No. 9 should be personally liable to pay the legal fees of petitioner, as previously provided for in
Circular No. 86-255.

This finds support in Section 103 of the Government Auditing Code of the Philippines,91 which states:

SEC. 103. General liability for unlawful expenditures. -Expenditures of government funds or uses of
government property in violation of law or regulations shall be a personal liability of the official or employee
found to be directly responsible therefor.

This court has also previously held in Gumaru v. Quirino State College92 that:

the fee of the lawyer who rendered legal service to the government in lieu of the OSG or the OGCC is the
personal liability of the government official who hired his services without the prior written conformity of the
OSG or the OGCC, as the case may be.93WHEREFORE, the petition is DISMISSED without prejudice to
petitioner filing another action against the proper parties.SO ORDERED.

A.C. No. 10573 January 13, 2015 FERNANDO W. CHU, Complainant,


vs.ATTY. JOSE C. GUICO, JR., Respondent.

Fernando W. Chu invokes the Court's disciplinary authority in resolving this disbarment complaint against his
former lawyer, respondent Atty. Jose C. Guico, Jr., whom he has accused of gross misconduct.

Antecedents

Chu retained Atty. Guico as counsel to handle the labor disputes involving his company, CVC San Lorenzo
Ruiz Corporation (CVC).1 Atty. Guicos legal services included handling a complaint for illegal dismissal
brought against CVC (NLRC Case No. RAB-III-08-9261-05 entitled Kilusan ng Manggagawang Makabayan
(KMM) Katipunan CVC San Lorenzo Ruiz Chapter, Ladivico Adriano, et al. v. CVC San Lorenzo Ruiz Corp.
and Fernando Chu).2 On September 7, 2006, Labor Arbiter Herminio V. Suelo rendered a decision adverse to
CVC.3 Atty. Guico filed a timely appeal in behalf of CVC.

According to Chu, during a Christmas party held on December 5, 2006 at Atty. Guicos residence in
Commonwealth, Quezon City, Atty. Guico asked him to prepare a substantial amount of money to be given to
the NLRC Commissioner handling the appeal to insure a favorable decision.4 On June 10, 2007, Chu called
Atty. Guico to inform him that he had raised P300,000.00 for the purpose. Atty. Guico told him to proceed to
his office at No. 48 Times Street, Quezon City, and togive the money to his assistant, Reynaldo (Nardo)
Manahan. Chu complied, and later on called Atty. Guico to confirm that he had delivered the money to Nardo.
Subsequently, Atty. Guico instructed Chu to meet him on July 5, 2007 at the UCC Coffee Shop on T. Morato
Street, Quezon City. Atthe UCC Coffee Shop, Atty. Guico handed Chu a copy of an alleged draft decision of
the NLRC in favor of CVC.5The draft decision6 was printed on the dorsal portion of used paper apparently
emanating from the office of Atty. Guico. On that occasion, the latter told Chu to raise another P300,000.00 to
encourage the NLRC Commissioner to issue the decision. But Chu could only produce P280,000.00, which he
brought to Atty. Guicos office on July 10, 2007 accompanied by his son, Christopher Chu, and one Bonifacio
Elipane. However, it was Nardo who received the amount without issuing any receipt.7
Chu followed up on the status of the CVC case with Atty. Guico in December 2007. However, Atty. Guico
referred him to Nardo who in turn said that he would only know the status after Christmas. On January 11,
2008, Chu again called Nardo, who invited him to lunch at the Ihaw Balot Plaza in Quezon City. Once there,
Chu asked Nardo if the NLRC Commissioner had accepted the money, but Nardo replied in the negative and
simply told Chu to wait. Nardo assured that the money was still with Atty. Guico who would return it should the
NLRC Commissioner not accept it.8

On January 19, 2009, the NLRC promulgated a decision adverse to CVC.9 Chu confronted Atty. Guico, who
in turn referred Chu to Nardo for the filing of a motion for reconsideration. After the denial of the motion for
reconsideration, Atty. Guico caused the preparation and filing of an appeal in the Court of Appeals. Finally,
Chu terminated Atty. Guico as legal counsel on May 25, 2009.10

In his position paper,11 Atty. Guico described the administrative complaint as replete with lies and
inconsistencies, and insisted that the charge was only meant for harassment. He denied demanding and
receiving money from Chu, a denial that Nardo corroborated with his own affidavit.12 He further denied
handing to Chu a draft decision printed on used paper emanating from his office, surmising that the used paper
must have been among those freely lying around in his office that had been pilfered by Chus witnesses in the
criminal complaint he had handled for Chu.13

Findings and Recommendation of the


IBP Board of Governors

IBP Commissioner Cecilio A.C. Villanueva found that Atty. Guico had violated Rules 1.01 and 1.02, Canon I
of the Code of Professional Responsibility for demanding and receiving P580,000.00 from Chu; and
recommended the disbarment of Atty. Guico in view of his act of extortion and misrepresentation that caused
dishonor to and contempt for the legal profession.14

On February 12, 2013, the IBP Board of Governors adopted the findings of IBP Commissioner Villanueva in its
Resolution No. XX-2013-87,15 but modified the recommended penalty of disbarment to three years suspension,
viz.:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with
modification, the Report and Recommendation of the Investigating Commissioner in the above-entitled case,
herein made part of this Resolution as Annex "A," and finding the recommendation fully supported by the
evidence on record and the applicable laws and rules and considering Respondents violation of Canon 1, Rules
1.01 and 1.02 of the Code of Professional Responsibility, Atty. Jose C. Guico, Jr. is hereby SUSPENDED from
the practice of law for three (3) years with Warning that a repetition of the same or similar act shall be dealt with
more severely and Ordered to Return the amount of Five Hundred Eighty Thousand (P580,000.00) Pesos with
legal interest within thirty (30) days from receipt of notice.

Atty. Guico moved for reconsideration,16 but the IBP Board of Governors denied his motion for reconsideration
on March 23, 2014 in Resolution No. XXI-2014-173.17

Neither of the parties brought a petition for review vis--vis Resolution No. XX-2013-87 and Resolution No.
XXI-2014-173.

Issue

Did Atty. Guico violate the Lawyers Oath and Rules 1.01 and 1.02, Canon I of the Code of Professional
Responsibility for demanding and receiving P580,000.00 from Chu to guarantee a favorable decision from the
NLRC?
Ruling of the Court

In disbarment proceedings, the burden of proof rests on the complainant to establish respondent attorneys
liability by clear, convincing and satisfactory evidence. Indeed, this Court has consistently required clearly
preponderant evidence to justify the imposition of either disbarment or suspension as penalty.18

Chu submitted the affidavits of his witnesses,19 and presented the draft decision that Atty. Guico had
represented to him as having come from the NLRC. Chu credibly insisted that the draft decision was printed on
the dorsal portion of used paper emanating from Atty. Guicos office,20 inferring that Atty. Guico commonly
printed documents on used paper in his law office. Despite denying being the source of the draft decision
presented by Chu, Atty. Guicos participation in the generation of the draft decision was undeniable. For one,
Atty. Guico impliedly admitted Chus insistence by conceding that the used paper had originated from his
office, claiming only that used paper was just "scattered around his office."21 In that context, Atty. Guicos
attempt to downplay the sourcing of used paper from his office was futile because he did not expressly belie the
forthright statement of Chu. All that Atty. Guico stated by way of deflecting the imputation was that the used
paper containing the draft decision could have been easily taken from his office by Chus witnesses in a criminal
case that he had handled for Chu,22 pointing out that everything in his office, except the filing cabinets and his
desk, was "open to the public xxx and just anybody has access to everything found therein."23 In our view,
therefore, Atty. Guico made the implied admission because he was fully aware that the used paper had
unquestionably come from his office.

The testimony of Chu, and the circumstances narrated by Chu and his witnesses, especially the act of Atty.
Guico of presenting to Chu the supposed draft decision that had been printed on used paper emanating from
Atty. Guicos office, sufficed to confirm that he had committed the imputed gross misconduct by demanding
and receiving P580,000.00 from Chu to obtain a favorable decision. Atty. Guico offered only his general denial
of the allegations in his defense, but such denial did not overcome the affirmative testimony of Chu. We cannot
but conclude that the production of the draft decision by Atty. Guico was intended to motivate Chu to raise
money to ensure the chances of obtaining the favorable result in the labor case. As such, Chu discharged his
burden of proof as the complainant to establish his complaint against Atty. Guico. In this administrative case, a
fact may be deemed established if it is supported by substantial evidence, or that amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion.24

What is the condign penalty for Atty. Guico?

In taking the Lawyers Oath, Atty. Guico bound himself to:

x x x maintain allegiance to the Republic of the Philippines; x x x support its Constitution and obey the laws as
well as the legal orders of the duly constituted authorities therein; x x x do no falsehood, nor consent to the
doing of any in court; x x x delay no man for money or malice x x x. The Code of Professional Responsibility
echoes the Lawyers Oath, to wit:

CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and
for legal processes.1wphi1

Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Rule 1.02 A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence
in the legal system.

The sworn obligation to respect the law and the legal processes under the Lawyers Oath and the Code of
Professional Responsibility is a continuing condition for every lawyer to retain membership in the Legal
Profession. To discharge the obligation, every lawyer should not render any service or give advice to any client
that would involve defiance of the very laws that he was bound to uphold and obey,25 for he or she was always
bound as an attorney to be law abiding, and thus to uphold the integrity and dignity of the Legal
Profession.26Verily, he or she must act and comport himself or herself in such a manner that would promote
public confidence in the integrity of the Legal Profession.27 Any lawyer found to violate this obligation forfeits
his or her privilege to continue such membership in the legal profession.

Atty. Guico willingly and wittingly violated the law in appearing to counsel Chu to raise the large sums of
money in order to obtain a favorable decision in the labor case. He thus violated the law against bribery and
corruption. He compounded his violation by actually using said illegality as his means of obtaining a huge sum
from the client that he soon appropriated for his own personal interest. His acts constituted gross dishonesty and
deceit, and were a flagrant breach of his ethical commitments under the Lawyers Oath not to delay any man
for money or malice; and under Rule 1.01 of the Code of Professional Responsibility that forbade him from
engaging in unlawful, dishonest, immoral or deceitful conduct. His deviant conduct eroded the faith of the
people in him as an individual lawyer as well as in the Legal Profession as a whole. In doing so, he ceased to be a
servant of the law.

Atty. Guico committed grave misconduct and disgraced the Legal Profession. Grave misconduct is "improper or
wrong conduct, the transgression of some established and definite rule of action, a forbidden act, a dereliction of
duty, willful in character, and implies a wrongful intent and not mere error of judgment."28 There is no question
that any gross misconduct by an attorney in his professional or private capacity renders him unfit to manage the
affairs of others, and is a ground for the imposition of the penalty of suspension or disbarment, because good
moral character is an essential qualification for the admission of an attorney and for the continuance of such
privilege.29

Accordingly, the recommendation of the IBP Board of Governors to suspend him from the practice of law for
three (3) years would be too soft a penalty. Instead, he should be disbarred,30 for he exhibited his unworthiness
of retaining his membership in the legal profession. As the Court has reminded in Samonte v. Abellana:31

Disciplinary proceedings against lawyers are designed to ensure that whoever is granted the privilege to practice
law in this country should remain faithful to the Lawyers Oath. Only thereby can lawyers preserve their fitness
to remain as members of the Law Profession. Any resort to falsehood or deception, including adopting artifices
to cover up ones misdeeds committed against clients and the rest of the trusting public, evinces an unworthiness
to continue enjoying the privilege to practice law and highlights the unfitness to remain a member of the Law
Profession. It deserves for the guilty lawyer stern disciplinary sanctions.

Lastly, the recommendation of the IBP Board of Governors that Atty. Guico be ordered to return the amount
of P580,000.00 to Chu is well-taken. That amount was exacted by Atty. Guico from Chu in the guise of serving
the latters interest as the client. Although the purpose for the amount was unlawful, it would be unjust not to
require Atty. Guico to fully account for and to return the money to Chu. It did not matter that this proceeding is
administrative in character, for, as the Court has pointed out in Bayonla v. Reyes:32

Although the Court renders this decision in an administrative proceeding primarily to exact the ethical
responsibility on a member of the Philippine Bar, the Courts silence about the respondent lawyers legal
obligation to restitute the complainant will be both unfair and inequitable. No victim of gross ethical misconduct
concerning the clients funds or property should be required to still litigate in another proceeding what the
administrative proceeding has already established as the respondents liability. x x x

ACCORDINGLY, the Court FINDS and DECLARES respondent ATTY. JOSE S. GUICO, JR. GUILTY of
the violation of the Lawyers Oath, and Rules 1.01 and 1.02, Canon I of the Code of Professional
Responsibility, and DISBARS him from membership in the Integrated Bar of the Philippines. His name is
ORDERED STRICKEN from the Roll of Attorneys.Let copies of this Decision be furnished to the Office of
the Bar Confidant, to be appended to Atty. Guicos personal record as an attorney; to the Integrated Bar of the
Philippines; and to all courts and quasi-judicial offices in the country for their information and guidance.SO
ORDERED.

A.C. No. 5067 June 29, 2015 CORAZON M. DALUPAN, Complainant,


vs.ATTY. GLENN C. GACOTT1, Respondent.

Before us is a petition for review under Rule 139-B, Section 12 (c) of the Rules of Court assailing Resolution No.
XVII-20072 dated March 17, 2007 and Resolution No. XIX-201005443 dated October 8, 2010 of the Board of
Governors of the Integrated Bar of the Philippines (IBP) which adopted and approved the Report and
Recommendation4 dated December 12, 2006 of the Investigating Commissioner of the Commission on Bar
Discipline of the IBP. Although the IBP Board of Governors dismissed the complaint for disbarment filed
against the respondent, it ordered the latter to return the payment of the attorneys fee to the complainant in the
amount of P5,000. This order to return the attorneys fee is subject of the present petition.

The salient facts of the case follow:

In her affidavit-complaint5 dated April 20, 1999, the complainant claimed that she was a defendant in a
criminal case for grave slander pending before the Municipal Trial Court (MTC) of Puerto Princesa City,
Palawan. Meanwhile, her son, Wilmer Dalupan, was also a defendant in a separate criminal case for grave
slander and malicious mischief pending before the same court. In order to represent the complainant and her
son, the complainant engaged the legal services of the respondent who then charged an acceptance fee
of P10,000.

On August 20, 1996, the complainant paid the respondent P5,000 as initial payment for his acceptance fee.

On August 27, 1996, the complainant requested the respondent to draft a Motion to Reduce Bail Bond.
However, the respondent allegedly denied the request and claimed that it was beyond the scope of his retainer
services. Thus, the complainant alleged that she caused a certain Rolly Calbento to draft the same which was
however signed by the respondent.

On January 31, 1997, the complainant paid the respondent the remaining balance of P5,000 for his acceptance
fee. When the complainant asked for an Official Receipt from the respondent, the latter refused saying that
there was no need for the issuance of a receipt. On that same day, the complainant also paid the
respondent P500 for his appearance fee in the preliminary conference and arraignment which occurred on the
same day.

Thereafter, the complainant alleged that the respondent neglected his duties as counsel and failed to attend any
of the hearings before the MTC. In view of the respondents repeated absences before the MTC, Judge Jocelyn
S. Dilig issued an Order which appointed a counsel de oficio to represent the complainant.

Aggrieved, the complainant filed the instant complaint for disbarment against the respondent.

On the other hand, in his comment6, the respondent denied all the allegations of the complainant.

The respondent allege that the complainant approached him and represented herself as an indigent party in the
following cases for which she sought to engage the legal services of the respondent: (1) Criminal Case No.
12586, People of the Philippines v. Corazon Dalupan, et al. for Grave Slander, (2) Criminal Case No. 12585,
People of the Philippines v. Wilmer Dalupan for Malicious Mischief, (3) I.S. No. 96-1104, Custodio Family v.
Cesar Dalupan, et al. for Frustrated Murder, (4) I.S. No. 97-54, Dalupan Family v. Romulo Custodio, et al. for
Physical Injuries, and (5) I.S. No. 9760 Dalupan Family v. Romulo Custodio for Frustrated Murder. The
respondent agreed to represent the complainant in the aforementioned cases subject to the payment of an
acceptance fee of P5,000 per case and an appearance fee of P500 for each court appearance.
On August 20, 1996, the complainant paid the respondent P5,000 for his acceptance fee.

On August 27, 1996, the respondent filed a Motion for Reduction of Bail in favor of the complainant before the
MTC of Puerto Princesa City. On that same day, the complainant proceeded to the law office of the respondent
and demanded that the latter negotiate with the MTC judge to ensure the grant of the Motion of Bail. When
the respondent refused the demand of the complainant, the latter replied at the top of her voice: "Binabayaran
kita, bakit hindi mo ginagawa ang gusto ko?" The respondent answered her with, "Hindi po lahat ng gusto
ninyo ay gagawin ko, sa tama lamang po tayo, abogado po ninyo ako, hindi ako fixer."7 This irked the
complainant who then made verbal threats that she will replace the respondent with a certain Atty. Roland Pay
who held office nearby. However, when the MTC of Puerto Princesa City eventually ruled in favor of the
complainant and granted the motion, the latter revoked her threat that she will replace the respondent.

On August 19, 1997, the MTC of Puerto Princesa City issued a Notice of Hearing to the complainant and her
son Wilmer Dalupan which ordered them to appear before the court on September 9, 1997 in connection with
their criminal cases pending therein. However, the respondent failed to attend the scheduled hearing as he
allegedly failed to receive a copy of the Notice of Hearing. Thus, in his written explanation dated October 7,
1997, the respondent attributed his failure to appear before the MTC to the inefficiency of the process server of
the said court.

On October 10, 1997, the complainant told the respondent that she was terminating the latters services on the
ground of loss of trust and confidence. Furthermore, the complainant also told the respondent that she engaged
the services of Atty. Roland Pay to replace the respondent. As a result, on October 30, 1997, the complainant
withdrew all her records from the law office of the respondent.

On January 29, 1998, the MTC of Puerto Princesa City issued an Order which relieved the respondent of any
responsibility in Criminal Case Nos. 12585 and 12586:

Acting on what the counsel of record of all the accused in the above-entitled cases call "Compliance", where
obvious on the face of which is his desire to withdraw as Counsel, and it appearing that said intention to
withdraw is not only with the full conformity of all the accused but at their own initiative, Atty. Glenn Gacott is
hereby relieved of any responsibility in the further prosecution of the above-captioned cases.8

In view of the above Order, the respondent argued that he was not guilty of abandonment or neglect of duty
because it was the complainant who willfully terminated his services even without fault or negligence on his part.

We referred this case to the IBP for its investigation, report, and recommendation.

On December 12, 2006, Investigating Commissioner Wilfredo E.J.E Reyes recommended the dismissal of the
complaint for disbarment against the respondent. At the same time, he also recommended that the respondent
return the payment of the attorneys fee to the complainant in the amount of P5,000.9

The Investigating Commissioner opined that the respondent cannot be held liable for abandonment or neglect
of duty because it was the complainant who discharged the respondent for loss of trust and confidence. This was
confirmed by the act of the complainant in withdrawing all her records from the law office of the respondent.
Furthermore, the Investigating Commissioner said that absent evidence showing that the respondent committed
abandonment or neglect of duty, the presumption of regularity should prevail in favor of the respondent.

Although there was no evidence to support the claim of the complainant that she paid the respondent the
remaining balance of P5,000 as acceptance fee and an appearance fee of P500 on January 31, 1997, the
Investigating Commissioner gave credence to an Official Receipt dated August 20, 1996 which proved that the
complainant indeed paid the respondent an amount of P5,000. However, the Investigating Commissioner found
that the respondent did not perform any substantial legal work on behalf of the complainant. For this reason,
and in the interest of justice, the Investigating Commissioner recommended that the respondent return the
amount of P5,000 to the complainant.

On March 17, 2007, the IBP Board of Governors passed Resolution No. XVII-2007-115 which adopted and
approved in toto the Report and Recommendation of the Investigating Commissioner.

On October 8, 2010, the IBP Board of Governors passed Resolution No. XIX-2010-544 which denied the
Motion for Reconsideration dated July 27, 2007 filed by the respondent.

Hence, the present petition10 which raises the sole issue of whether the respondent should return the payment of
the attorneys fee to the complainant in the amount of P5,000.

Firstly, the respondent argued that when the MTC of Puerto Princesa City issued the Order dated January 29,
1998 which relieved the respondent of any responsibility in Criminal Case Nos. 12585 and 12586, the trial
court did not require the respondent to reimburse the payment of the attorneys fee to the complainant. Thus,
the IBP Board of Governors exceeded its authority in ordering the respondent to return such fees to the
complainant.

Secondly, the respondent argued that a plain reading of the Official Receipt dated August 20, 1996 would
reveal that the parties intended the payment of P5,000 to serve as acceptance fee which is different from
attorneys fee. According to the respondent, the acceptance fee corresponds to the opportunity cost incurred by
the lawyer for not representing other potential clients due to a conflict of interest with the present client. Thus,
the payment of acceptance fee to the lawyer does not depend on the latters performance of legal services.

Since the complainant failed to file any comment on the petition for review, we proceed to resolve the sole issue
raised, and rule in favor of the respondent.

We find that the respondent did not commit any fault or negligence in the performance of his obligations under
the retainer agreement which was wilfully terminated by the complainant on the ground of loss of trust and
confidence. As held by the Investigating Commissioner, the evidence on record shows that the respondent is not
liable for abandonment or neglect of duty.

However, we disagree with the conclusion of the Investigating Commissioner that the respondent should return
the payment of the attorneys fee to the complainant in the amount of P5,000.

Firstly, the Investigating Commissioner seriously erred in referring to the amount to be returned by the
respondent as attorneys fee. Relevantly, we agree with the respondent that there is a distinction between
attorneys fee and acceptance fee.

It is well-settled that attorneys fee is understood both in its ordinary and extraordinary concept.11 In its ordinary
sense, attorneys fee refers to the reasonable compensation paid to a lawyer by his client for legal services
rendered. Meanwhile, in its extraordinary concept, attorneys fee is awarded by the court to the successful
litigant to be paid by the losing party as indemnity for damages.12 In the present case, the Investigating
Commissioner referred to the attorneys fee in its ordinary concept.

On the other hand, acceptance fee refers to the charge imposed by the lawyer for merely accepting the case.
This is because once the lawyer agrees to represent a client, he is precluded from handling cases of the opposing
party based on the prohibition on conflict of interest. Thus, the incurs an opportunity cost by merely accepting
the case of the client which is therefore indemnified by the payment of acceptance fee. Since the acceptance fee
only seeks to compensate the lawyer for the lost opportunity, it is not measured by the nature and extent of the
legal services rendered.
In the present case, based on a simple reading of the Official Receipt dated August 20, 1996, the parties clearly
intended the payment of P5,000 to serve as acceptance fee of the respondent, and not attorneys fee. Moreover,
both parties expressly claimed that they intended such payment as the acceptance fee of the respondent. Absent
any other evidence showing a contrary intention of the parties, we find that the Investigating Commissioner
gravely erred in referring to the amount to be returned by the respondent as attorneys fee.

Since the Investigating Commissioner made an erroneous reference to attorneys fee, he therefore mistakenly
concluded that the respondent should return the same as he did not perform any substantial legal work on
behalf of the complainant. As previously mentioned, the payment of acceptance fee does not depend on the
nature and extent of the legal services rendered.

Secondly, the respondent did not commit any fault or negligence which would entail the return of the
acceptance fee.

Once a lawyer receives the acceptance fee for his legal services, he is expected to serve his client with
competence, and to attend to his clients cause with diligence, care and devotion.13 In Carino v. Atty. De Los
Reyes,14 the respondent lawyer who failed to file a complaint-affidavit before the prosecutors office, returned
the P10,000 acceptance fee paid to him. Moreover, he was admonished by the Court to be more careful in the
performance of his duty to his clients. Meanwhile, in Voluntad-Ramirez v. Baustista,15 we ordered the
respondent lawyer to return the P14,000 acceptance fee because he did nothing to advance his clients cause
during the six-month period that he was engaged as counsel.

In the present case, the complainant alleged that she requested the respondent to draft a Motion to Reduce Bail
Bond which was denied by the latter.1wphi1 She also claimed that the respondent failed to attend any of the
hearing before the MTC. Thus, the complainant filed the present complaint for disbarment on the ground of
abandonment or neglect of duty. On the other hand, the respondent denied the allegation that he failed to draft
the Motion to Reduce Bail Bond and submitted a copy of the MTC Order16 dated August 28, 1996 granting the
motion to reduce bail. He also justified his failure to attend the hearings before the MTC to the failure of the
process server to provide him with a Notice of Hearing.

Other than her bare allegations, the complainant failed to present any evidence to support her claim that the
respondent committed abandonment or neglect of duty. Thus, we are constrained to affirm the factual findings
of the Investigating Commissioner that the presumption of regularity should prevail in favor of the respondent.
Absent any fault or negligence on the part of the respondent, we see no legal basis for the order of the
Investigating Commissioner to return the attorneys fee (acceptance fee) of P5,000. WHEREFORE, premises
considered, the petition is hereby GRANTED. Resolution No. XVII-2007-115 and Resolution No. XIX-2010-
544 of the IBP Board of Governors insofar as they ordered the respondent to return the attorneys fee
(acceptance fee) to the complainant in the amount of Five Thousand Pesos (P5,000) are REVERSED and SET
ASIDE.SO ORDERED.

G.R. No. 173188 January 15, 2014THE 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.

We solve in this Rule 45 petition for review on certiorari1 the challenge to the October 11, 2005 decision2 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 decision4 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 action5 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 complaint7 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 action9 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 resolution11 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 agreement on attorneys fee


consisting of one-half of the subject
lot is void; the petitioners are entitled
to recover possession

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

A. The written agreement providing for


a contingent fee of P2,000.00 should prevail
over the oral agreement providing for one-
half of the subject lot

The spouses Cadavedo and Atty. Lacaya agreed on a contingent fee of P2,000.00 and not, as asserted by the
latter, one-half of the subject lot. The stipulation contained in the amended complaint filed by Atty. Lacaya
clearly stated that the spouses Cadavedo hired the former on a contingency basis; the Spouses Cadavedo
undertook to pay their lawyer P2,000.00 as attorneys fees should the case be decided in their favor.

Contrary to the respondents contention, this stipulation is not in the nature of a penalty that the court would
award the winning party, to be paid by the losing party. The stipulation is a representation to the court
concerning the agreement between the spouses Cadavedo and Atty. Lacaya, on the latters compensation for his
services in the case; it is not the attorneys fees in the nature of damages which the former prays from the court
as an incident to the main action.

At this point, we highlight that as observed by both the RTC and the CA and agreed as well by both parties, the
alleged contingent fee agreement consisting of one-half of the subject lot was not reduced to writing prior to or,
at most, at the start of Atty. Lacayas engagement as the spouses Cadavedos counsel in Civil Case No. 1721.An
agreement between the lawyer and his client, providing for the formers compensation, is subject to the ordinary
rules governing contracts in general. As the rules stand, controversies involving written and oral agreements on
attorneys fees shall be resolved in favor of the former.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 contingent fee agreement between


the spouses Cadavedo and Atty. Lacaya,
awarding the latter one-half of the subject
lot, is champertous

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

Champerty, along with maintenance (of which champerty is an aggravated form), is a common law doctrine
that traces its origin to the medieval period.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. The attorneys fee consisting of


one-half of the subject lot is excessive
and unconscionable

We likewise strike down the questioned attorneys fee and declare it void for being excessive and
unconscionable.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. Atty. Lacayas acquisition of


the one-half portion contravenes
Article 1491 (5) of the Civil Code

Article 1491 (5) of the Civil Code forbids lawyers from acquiring, by purchase or assignment, the property that
has been the subject of litigation in which they have taken part by virtue of their profession.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 compromise agreement could not


validate the void oral contingent fee
agreement; neither did it supersede the
written contingent fee agreement

The compromise agreement entered into between Vicente and Atty. Lacaya in Civil Case No. 215 (ejectment
case) was intended to ratify and confirm Atty. Lacayas acquisition and possession of the disputed one-half
portion which were made in violation of Article 1491 (5) of the Civil Code. As earlier discussed, such acquisition
is void; the compromise agreement, which had for its object a void transaction, should be void.

A contract whose cause, object or purpose is contrary to law, morals, good customs, public order or public
policy is in existent and void from the beginning.43 It can never be ratified44 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 Court50 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 one-half portion, as attorneys fees. They shall return
to the petitioners the remainder of the disputed one-half portion.

The allotted portion of the subject lot properly recognizes that litigation should be for the benefit of the client,
not the lawyer, particularly in a legal situation when the law itself holds clear and express protection to the rights
of the client to the disputed property (a homestead lot). Premium consideration, in other words, is on the rights
of the owner, not on the lawyer who only helped the owner protect his rights. Matters cannot be the other way
around; otherwise, the lawyer does indeed effectively acquire a property right over the disputed property. If at
all, due recognition of parity between a lawyer and a client should be on the fruits of the disputed property,
which in this case, the Court properly accords.

WHEREFORE, in view of these considerations, we hereby GRANT the petition. We AFFIRM the decision
dated September 17, 1996 and the resolution dated December 27, 1996of the Regional Trial Court of Dipolog
City, Branch 10,in Civil Case No. 4038, with the MODIFICATION that the respondents, the spouses
Victorino (Vic) T. Lacaya and Rosa Legados, are entitled to two (2) hectares (or approximately one-tenth [1/10]
of the subject lot) as attorneys fees. The fruits that the respondents previously received from the disputed one-
half portion shall also form part of the attorneys fees. We hereby ORDER the respondents to return to the
petitioners the remainder of the 10.5383-hectare portion of the subject lot that Atty. Vicente Lacaya acquired
pursuant to the compromise agreement.SO ORDERED.

G.R. No. 183952 September 9, 2013 CZARINA T. MALVAR, Petitioner,


vs.KRAFT FOOD PHILS., INC. and/or BIENVENIDO BAUTISTA, KRAFT FOODS
INTERNATIONAL, Respondents.

Although the practice of law is not a business, an attorney is entitled to be properly compensated for the
professional services rendered for the client, who is bound by her express agreement to duly compensate the
attorney. The client may not deny her attorney such just compensation.

The Case

The case initially concerned the execution of a final decision of the Court of Appeals (CA) in a labor litigation,
but has mutated into a dispute over attorney's fees between the winning employee and her attorney after she
entered into a compromise agreement with her employer under circumstances that the attorney has bewailed as
designed to prevent the recovery of just professional fees.
Antecedents

On August 1, 1988, Kraft Foods (Phils.), Inc. (KFPI) hired Czarina Malvar (Malvar) as its Corporate Planning
Manager. From then on, she gradually rose from the ranks, becoming in 1996 the Vice President for Finance in
the Southeast Asia Region of Kraft Foods International (KFI),KFPIs mother company. On November 29,
1999, respondent Bienvenido S. Bautista, as Chairman of the Board of KFPI and concurrently the Vice
President and Area Director for Southeast Asia of KFI, sent Malvar a memo directing her to explain why no
administrative sanctions should be imposed on her for possible breach of trust and confidence and for willful
violation of company rules and regulations. Following the submission of her written explanation, an
investigating body was formed. In due time, she was placed under preventive suspension with pay. Ultimately,
on March 16, 2000, she was served a notice of termination.

Obviously aggrieved, Malvar filed a complaint for illegal suspension and illegal dismissal against KFPI and
Bautista in the National Labor Relations Commission (NLRC). In a decision dated April 30, 2001,1 the Labor
Arbiter found and declared her suspension and dismissal illegal, and ordered her reinstatement, and the
payment of her full backwages, inclusive of allowances and other benefits, plus attorneys fees.

On October 22, 2001, the NLRC affirmed the decision of the Labor Arbiter but additionally ruled that Malvar
was entitled to "any and all stock options and bonuses she was entitled to or would have been entitled to had she
not been illegally dismissed from her employment," as well as to moral and exemplary damages.2

KFPI and Bautista sought the reconsideration of the NLRCs decision, but the NLRC denied their motion to
that effect.3

Undaunted, KFPI and Bautista assailed the adverse outcome before the CA on certiorari (CA-G.R. SP No.
69660), contending that the NLRC thereby committed grave abuse of discretion. However, the petition for
certiorari was dismissed by the CA on December 22, 2004, but with the CA reversing the order of reinstatement
and instead directing the payment of separation pay to Malvar, and also reducing the amounts awarded as
moral and exemplary damages.4

After the judgment in her favor became final and executory on March14, 2006, Malvar moved for the issuance
of a writ of execution.5 The Executive Labor Arbiter then referred the case to the Research and Computation
Unit (RCU) of the NLRC for the computation of the monetary awards under the judgment. The RCUs
computation ultimately arrived at the total sum of P41,627,593.75.6

On November 9, 2006, however, Labor Arbiter Jaime M. Reyno issued an order,7 finding that the RCUs
computation lacked legal basis for including the salary increases that the decision promulgated in CA-G.R. SP
No. 69660 did not include. Hence, Labor Arbiter Reyno reduced Malvars total monetary award
to P27,786,378.11, viz:

WHEREFORE, premises considered, in so far as the computation of complainants other benefits and
allowances are concerned, the same are in order. However, insofar as the computation of her backwages and
other monetary benefits (separation pay, unpaid salary for January 1 to 26, 2005,holiday pay, sick leave pay,
vacation leave pay, 13th month pay), the same are hereby recomputed as follows:

1. Separation Pay
8/1/88-1/26/05 = 16 yrs
P344,575.83 x 16 = 5,513,213.28
2. Unpaid Salary
1/1-26/05 = 87 mos.
P344,575.83 x 87 = 299,780.97
3. Holiday Pay
4/1/00-1/26/05 = 55 holidays
P4,134,910/12 mos/20.83 days x 55 days 909,825.77
4. Unpaid 13th month pay for Dec 2000 344,575.83
5. Sick Leave Pay
Year 1999 to 2004 = 6 yrs
P344,575.88/20.83 x 15 days x 6 = 1,488,805.79
Year 2005
P344,575.83/20.83 x 15/12 x 1 20,677.86 1,509,483.65
6. Vacation Leave Pay
Year 1999 to 2004 = 6 years
P344,575.88/20.83 x 22 days x 6 = 2,183,581.83
Year 2005
P344,575.83/20.83 x 22/12 x 1 30,327.55 2,213,909.36

10,790,788.86
Backwages (from 3/7/00-4/30/01, award in LA Sytians Decision 4,651,773.75
Allowances & Other Benefits:
Management Incentive Plan 7,355,166.58
Cash Dividend on Philip Morris Shares 2,711,646.00
Car Maintenance 381,702.92
Gas Allowance 198,000.00
Entitlement to a Company Driver 438,650.00
Rice Subsidy 58,650.00
Moral Damages 500,000.00
Exemplary Damages 200,000.00
Attorneys Fees 500,000.00
Entitlement to Philip Sch G Subject to
"Share Option Grant" Market Price
27,786,378.11

SO ORDERED.

Both parties appealed the computation to the NLRC, which, on April19, 2007, rendered its decision setting
aside Labor Arbiter Reynos November 9, 2006 order, and adopting the computation by the RCU.8

In its resolution dated May 31, 2007,9 the NLRC denied the respondents motion for reconsideration.

Malvar filed a second motion for the issuance of a writ of execution to enforce the decision of the NLRC
rendered on April 19, 2007. After the writ of execution was issued, a partial enforcement as effected by
garnishing the respondents funds deposited with Citibank worth 37,391,696.06.10

On July 27, 2007, the respondents went to the CA on certiorari (with prayer for the issuance of a temporary
restraining order (TRO) or writ of preliminary injunction), assailing the NLRCs setting aside of the
computation by Labor Arbiter Reyno (CA-G.R. SP No. 99865). The petition mainly argued that the NLRC
had gravely abused its discretion in ruling that: (a) the inclusion of the salary increases and other monetary
benefits in the award to Malvar was final and executory; and (b) the finality of the ruling in CA-G.R. SP No.
69660 precluded the respondents from challenging the inclusion of the salary increases and other monetary
benefits. The CA issued a TRO, enjoining the NLRC and Malvar from implementing the NLRCs decision.11

On April 17, 2008, the CA rendered its decision in CA-G.R. SP No. 99865,12 disposing thusly:

WHEREFORE, premises considered, the herein Petition is GRANTED and the 19 April 2007 Decision of the
NLRC and the 31May 2007 Resolution in NLRC NCR 30-07-02316-00 are hereby REVERSED and SET
ASIDE.

The matter of computation of monetary awards for private respondent is hereby REMANDED to the Labor
Arbiter and he is DIRECTED to recompute the monetary award due to private respondent based on her salary
at the time of her termination, without including projected salary increases. In computing the said benefits, the
Labor Arbiter is further directed to DISREGARD monetary awards arising from: (a) the management incentive
plan and (b) the share option grant, including cash dividends arising therefrom without prejudice to the filing of
the appropriate remedy by the private respondent in the proper forum. Private respondents allowances for car
maintenance and gasoline are likewise DELETED unless private respondent proves, by appropriate receipts,
her entitlement thereto.

With respect to the Motion to Exclude the Undisputed Amount of P14,252,192.12 from the coverage of the
Writ of Preliminary Injunction and to order its immediate release, the same is hereby GRANTED for reasons
stated therefor, which amount shall be deducted from the amount to be given to private respondent after proper
computation.

As regards the Motions for Reconsideration of the Resolution denying the Motion for Voluntary Inhibition and
the Omnibus Motion dated 30 October 2007, both motions are hereby DENIED for lack of merit.

SO ORDERED.13

Malvar sought reconsideration, but the CA denied her motion on July30, 2008.14

Aggrieved, Malvar appealed to the Court, assailing the CAs decision.


On December 9, 2010, while her appeal was pending in this Court, Malvar and the respondents entered into a
compromise agreement, the pertinent dispositive portion of which is quoted as follows:

NOW, THEREFORE, for and in consideration of the covenants and understanding between the parties herein,
the parties hereto have entered into this Agreement on the following terms and conditions:

1. Simultaneously upon execution of this Agreement in the presence of Ms. Malvars attorney, KFPI shall pay
Ms. Malvar the amount of Philippine Pesos Forty Million (Php 40,000,000.00), which is in addition to the
Philippine Pesos Fourteen Million Two Hundred Fifty-Two Thousand One Hundred Ninety-Two and Twelve
Centavos (Php14,252,192.12) already paid to and received by Ms. Malvar from KFPI in August2008 (both
amounts constituting the "Compromise Payment").

The Compromise Payment includes full and complete payment and settlement of Ms. Malvars salaries and
wages up to the last day of her employment, allowances, 13th and 14th month pay, cash conversion of her
accrued vacation, sick and emergency leaves, separation pay, retirement pay and such other benefits,
entitlements, claims for stock, stock options or other forms of equity compensation whether vested or otherwise
and claims of any and all kinds against KFPI and KFI and Altria Group, Inc., their predecessors-in-interest,
their stockholders, officers, directors, agents or successors-in-interest, affiliates and subsidiaries, up to the last day
of the aforesaid cessation of her employment.

2. In consideration of the Compromise Payment, Ms. Malvar hereby freely and voluntarily releases and forever
discharges KFPI and KFI and Altria Group, Inc., their predecessors or successors-in-interest, stockholders,
officers, including Mr. Bautista who was impleaded in the Labor Case as a party respondent, directors, agents or
successors-in-interest, affiliates and subsidiaries from any and all manner of action, cause of action, sum of
money, damages, claims and demands whatsoever in law or in equity which Ms. Malvar or her heirs, successors
and assigns had, or now have against KFPI and/or KFI and/or Altria Group, Inc., including but not limited to,
unpaid wages, salaries, separation pay, retirement pay, holiday pay, allowances, 13th and 14th month pay,
claims for stock, stock options or other forms of equity compensation whether vested or otherwise whether
arising from her employment contract, company grant, present and future contractual commitments, company
policies or practices, or otherwise, in connection with Ms. Malvars employment with KFPI.15

Thereafter, Malvar filed an undated Motion to Dismiss/Withdraw Case,16 praying that the appeal be
immediately dismissed/withdrawn in view of the compromise agreement, and that the case be considered closed
and terminated.

Intervention

Before the Court could act on Malvars Motion to Dismiss/Withdraw Case, the Court received on February 15,
2011 a so-called Motion for Intervention to Protect Attorneys Rights17 from The Law Firm of Dasal, Llasos
and Associates, through its Of Counsel Retired Supreme Court Associate Justice Josue N.
Bellosillo18 (Intervenor), whereby the Intervenor sought, among others, that both Malvar and KFPI be held and
ordered to pay jointly and severally the Intervenors contingent fees.

The Motion for Intervention relevantly averred:

Lawyers, oftentimes, are caricatured as alligators or some other specie of voracious carnivore; perceived also as
leeches sucking dry the blood of their adversaries, and even their own clients they are sworn to serve and
protect! As we lay down the facts in this case, this popular, rather unpopular, perception will be shown wrong.
This case is a reversal of this perception.
Here, it is the lawyer who is eaten up alive by the warring but conspiring litigants who finally settled their
differences without the knowledge, much less, participation, of Petitioners counsel that labored hard and did
everything to champion her cause.

This Motion for Intervention will illustrate an aberration from the norm where the lawyer ends up seeking
protection from his clients and Respondents indecent and cunning maneuverings. x x x.

On 18 March 2008 Petitioner engaged the professional services of Intervenor x x x on a contingency basis
whereby the former agreed in writing to pay the latter contingency fees amounting to almost P19,600,000.00
(10% of her total claim of almost P196,000,000.00 in connection with her labor case against Respondents. x x x.

According to their agreement (Annex "A"), Petitioner bound herself to pay Intervenor contingency fees as
follows (a) 10% of P14,252, 192.12 upon its collection; (b) 10% of the remaining balance of P41,627,593.75; and
(c)10% of the value of the stock options Petitioner claims to be entitled to, or roughly P154,000,000.00 as of
April 2008.

Intervenors efforts resulted in the award and partial release of Petitioners claim amounting to P14,252,192.12
out of which Petitioner paid Intervenor 10% or P1,425,219.21 as contingency fees pursuant to their engagement
agreement (Annex "A"). Copy of the check payment of Petitioner payable to Intervenors Of Counsel is attached
as Annex "C".

On 12 September 2008 Intervenor filed an exhaustive Petition for Review with the Supreme Court containing
70 pages, including its Annexes "A" to "R", or a total of 419 pages against Respondents to collect on the balance
of Petitioners claims amounting to at least P27,000,000.00 and P154,000,000.00 the latter representing the
estimated value of Petitioners stock options as of April 2008.

On 15 January 2009 Respondents filed their Comment to the Petition for Review.

On 13 April 2009 Intervenor, in behalf of Petitioner, filed its Reply to the Comment.

All the pleadings in this Petition have already been submitted on time with nothing more to be done except to
await the Resolution of this Honorable Court which, should the petition be decided in her favor, Petitioner
would stand to gain P182,000,000.00, more or less, which victory would be largely through the efforts of
Intervenor.19 (Bold emphasis supplied).

It appears that in July 2009, to the Intervenors surprise, Malvar unceremoniously and without any justifiable
reason terminated its legal service and required it to withdraw from the case.20 Hence, on October 5,2009, the
Intervenor reluctantly filed a Manifestation (With Motion to Withdraw as Counsel for Petitioner),21 in which it
spelled out: (a) the terms of and conditions of the Intervenors engagement as counsel; (b) the type of legal
services already rendered by the Intervenor for Malvar; (c) the absence of any legitimate reason for the
termination of their attorney-client relationship; (d) the reluctance of the Intervenor to withdraw as Malvars
counsel; and (e) the desire of the Intervenor to assert and claim its contingent fee notwithstanding its withdrawal
as counsel. The Intervenor prayed that the Court furnish it with copies of resolutions, decisions and other legal
papers issued or to be issued after its withdrawal as counsel of Malvar in the interest of protecting its interest as
her attorney.

The Intervenor indicated that Malvars precipitate action had baffled, shocked and even embarrassed the
Intervenor, because it had done everything legally possible to serve and protect her interest. It added that it
could not recall any instance of conflict or misunderstanding with her, for, on the contrary, she had even
commended it for its dedication and devotion to her case through her following letter to Justice Bellosillo, to wit:

July 16, 2008


Justice Josue Belocillo (sic)

Dear Justice,

It is almost morning of July 17 as I write this letter to you. Let me first thank you for your continued and
unrelenting lead, help and support in the case. You have been our "rock" as far as this case is concerned. Jun
and I are forever grateful to you for all your help. I just thought Id express to you what is in the innermost of
my heart as we proceed in the case. It has been around four months now since we met mid-March early this
year.

The most important and immediate aspect of the case at this time for me is the collection of the undisputed
amount of Pesos 14million which the Court has clearly directed and ordered the NLRC to execute. The only
impending constraint for NLRC to execute and collect this amount from the already garnished amount of Pesos
41 million at Citibank is the MR of Kraft on the Order of the Court (CA) to execute collection. We need to get
a denial of this motion for NLRC to execute immediately. We already obtained commitment from NLRC that
all it needed to execute collection is the denial of the MR. Jun and I applaud your initiative and efforts to
mediate with Romulo on potential settlement. However, as I expressed to you in several instances, I have serious
reservations on the willingness of Romulo to settle within reasonable amounts specifically as it relates to the
stock options. Let us continue to pursue this route vigorously while not setting aside our efforts to influence the
CA to DENY their Motion on the Undisputed amount of Pesos 14million.

At this point, I cannot overemphasize to you our need for funds. We have made financial commitments that
require us to raise some amount. But we can barely meet our day to day business and personal requirements
given our current situation right now.

Thank you po for your understanding and support.22

According to the Intervenor, it was certain that the compromise agreement was authored by the respondents to
evade a possible loss of P182,000,000.00 or more as a result of the labor litigation, but considering the
Intervenors interest in the case as well as its resolve in pursuing Malvars interest, they saw the Intervenor as a
major stumbling block to the compromise agreement that it was then brewing with her. Obviously, the only way
to remove the Intervenor was to have her terminate its services as her legal counsel. This prompted the
Intervenor to bring the matter to the attention of the Court to enable it to recover in full its compensation based
on its written agreement with her, averring thus:

xxxx

28. Upon execution of the Compromise Agreement and pursuant thereto, Petitioner immediately received
(supposedly) from RespondentsP40,000,000.00. But despite the settlement between the parties, Petitioner did
not pay Intervenor its just compensation as set forth in their engagement agreement; instead, she immediately
moved to Dismiss/Withdraw the Present Petition.

29. To parties minds, with the dismissal by Petitioner of Intervenor as her counsel, both Petitioner and
Respondents probably thought they would be able to settle the case without any cost to them, with Petitioner
saving on Intervenors contingent fees while Respondents able to take advantage of the absence of Intervenor in
determining the settlement price.

30. The parties cannot be any more mistaken. Pursuant to the Second Paragraph of Section 26, Rule 138, of the
Revised Rules of Court quoted in paragraph 3 hereof, Intervenor is still entitled to recover from Petitioner the
full compensation it deserves as stipulated in its contract.
31. All the elements for the full recovery of Intervenors compensation are present. First, the contract between
the Intervenor and Petitioner is reduced into writing. Second, Intervenor is dismissed without justifiable cause
and at the stage of proceedings where there is nothing more to be done but to await the Decision or Resolution
of the Present Petition.23

In support of the Motion for Intervention, the Intervenor cites the rulings in Aro v. Naawa24 and Law Firm of
Raymundo A. Armovit v. Court of Appeals,25 particularly the following passage:

x x x. While We here reaffirm the rule that "the client has an undoubted right to compromise a suit without the
intervention of his lawyer," We hold that when such compromise is entered into in fraud of the lawyer, with
intent to deprive him of the fees justly due him, the compromise must be subject to the said fees and that when it
is evident that the said fraud is committed in confabulation with the adverse party who had knowledge of the
lawyers contingent interest or such interest appears of record and who would benefit under such compromise,
the better practice is to settle the matter of the attorneys fees in the same proceeding, after hearing all the
affected parties and without prejudice to the finality of the compromise agreement in so far as it does not
adversely affect the right of the lawyer.26 x x x.

The Intervenor prays for the following reliefs:

a) Granting the Motion for Intervention to Protect Attorneys Rights in favor of the Intervenor;
b) Directing both Petitioner and Respondents jointly and severally to pay Intervenor its contingent fees;
c) Granting a lien upon all judgments for the payment of money and executions issued in pursuance of
such judgments; and
d) Holding in Abeyance in the meantime the Resolution of the Motion to Dismiss/Withdraw Case filed
by Petitioner and granting the Motion only after Intervenor has been fully paid its just compensation;
and
e) Other reliefs just and equitable.27

Opposing the Motion for Intervention,28 Malvar stresses that there was no truth to the Intervenors claim to
defraud it of its professional fees; that the Intervenor lacked the legal capacity to intervene because it had ceased
to exist after Atty. Marwil N. Llasos resigned from the Intervenor and Atty. Richard B. Dasal became barred
from private practice upon his appointment as head of the Legal Department of the Small Business Guarantee
and Finance Corporation, a government subsidiary; and that Atty. Llasos and Atty. Dasal had personally
handled her case.

Malvar adds that even assuming, arguendo, that the Intervenor still existed as a law firm, it was still not entitled
to intervene for the following reasons, namely: firstly, it failed to attend to her multiple pleas and inquiries
regarding the case, as when communications to the Intervenor through text messages were left unanswered;
secondly, maintaining that this was a justifiable cause to dismiss its services, the Intervenor only heeded her
repeated demands to withdraw from the case when Atty. Dasal was confronted about his appointment to the
government subsidiary; thirdly, it was misleading and grossly erroneous for the Intervenor to claim that it had
rendered to her full and satisfactory services when the truth was that its participation was strictly limited to the
preparation, finalization and submission of the petition for review with the Supreme Court; and finally, while
the Intervenor withdrew its services on October 5, 2009, the compromise agreement was executed with the
respondents on December 9,2010 and notarized on December 14, 2010, after more than a year and two
months, dispelling any badge of bad faith on their end.

On June 21, 2011, the respondents filed their comment to the Intervenors Motion for Intervention.

On November 18, 2011, the Intervenor submitted its position on the respondents comment dated June 21,
2011,29 and thereafter the respondents sent in their reply.30
Issues

The issues for our consideration and determination are two fold, namely: (a) whether or not Malvars motion to
dismiss the petition on the ground of the execution of the compromise agreement was proper; and (b) whether
or not the Motion for Intervention to protect attorneys rights can prosper, and, if so, how much could it recover
as attorneys fees.

Ruling of the Court

We shall decide the issues accordingly.

1.Clients right to settle litigation


by compromise agreement, and
to terminate counsel; limitations

A compromise agreement is a contract, whereby the parties undertake reciprocal obligations to avoid litigation,
or put an end to one already commenced.31 The client may enter into a compromise agreement with the
adverse party to terminate the litigation before a judgment is rendered therein.32 If the compromise agreement
is found to be in order and not contrary to law, morals, good customs and public policy, its judicial approval is
in order.33 A compromise agreement, once approved by final order of the court, has the force of res judicata
between the parties and will not be disturbed except for vices of consent or forgery.34

A client has an undoubted right to settle her litigation without the intervention of the attorney, for the former is
generally conceded to have exclusive control over the subject matter of the litigation and may at anytime, if
acting in good faith, settle and adjust the cause of action out of court before judgment, even without the
attorneys intervention.35 It is important for the client to show, however, that the compromise agreement does
not adversely affect third persons who are not parties to the agreement.36

By the same token, a client has the absolute right to terminate the attorney-client relationship at any time with
or without cause.37 But this right of the client is not unlimited because good faith is required in terminating the
relationship. The limitation is based on Article 19 of the Civil Code, which mandates that "every person must,
in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith." The right is also subject to the right of the attorney to be compensated. This is
clear from Section 26, Rule 138 of the Rules of Court, which provides:

Section 26. Change of attorneys. - An attorney may retire at anytime from any action or special proceeding, by
the written consent of his client filed in court. He may also retire at any time from an action or special
proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on
hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly
employed shall be entered on the docket of the court in place of the former one, and written notice of the
change shall be given to the adverse party.

A client may at any time dismiss his attorney or substitute another in his place, but if the contract between client
and attorney has been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall
be entitled to recover from the client the full compensation stipulated in the contract. However, the attorney
may, in the discretion of the court, intervene in the case to protect his rights. For the payment of his
compensation the attorney shall have a lien upon all judgments for the payment of money, and executions
issued in pursuance of such judgment, rendered in the case wherein his services had been retained by the client.
(Bold emphasis supplied)

In fine, it is basic that an attorney is entitled to have and to receive a just and reasonable compensation for
services performed at the special instance and request of his client. The attorney who has acted in good faith
and honesty in representing and serving the interests of the client should be reasonably compensated for his
service.38

2.Compromise agreement is to be approved


despite favorable action on the
Intervenors Motion for Intervention

On considerations of equity and fairness, the Court disapproves of the tendencies of clients compromising their
cases behind the backs of their attorneys for the purpose of unreasonably reducing or completely setting to
naught the stipulated contingent fees.39 Thus, the Court grants the Intervenors Motion for Intervention to
Protect Attorneys Rights as a measure of protecting the Intervenors right to its stipulated professional fees that
would be denied under the compromise agreement. The Court does so in the interest of protecting the rights of
the practicing Bar rendering professional services on contingent fee basis.

Nonetheless, the claim for attorneys fees does not void or nullify the compromise agreement between Malvar
and the respondents. There being no obstacles to its approval, the Court approves the compromise agreement.
The Court adds, however, that the Intervenor is not left without a remedy, for the payment of its adequate and
reasonable compensation could not be annulled by the settlement of the litigation without its participation and
conformity. It remains entitled to the compensation, and its right is safeguarded by the Court because its
members are officers of the Court who are as entitled to judicial protection against injustice or imposition of
fraud committed by the client as much as the client is against their abuses as her counsel. In other words, the
duty of the Court is not only to ensure that the attorney acts in a proper and lawful manner, but also to see to it
that the attorney is paid his just fees. Even if the compensation of the attorney is dependent only on winning the
litigation, the subsequent withdrawal of the case upon the clients initiative would not deprive the attorney of the
legitimate compensation for professional services rendered.40

The basis of the intervention is the written agreement on contingent fees contained in the engagement executed
on March 19, 2008 between Malvar and the Intervenor,41 the pertinent portion of which stipulated that the
Intervenor would "collect ten percent (10%) of the amount of PhP14,252,192.12 upon its collection and another
ten percent (10%) of the remaining balance of PhP41,627,593.75 upon collection thereof, and also ten percent
(10%) of whatever is the value of the stock option you are entitled to under the Decision." There is no question
that such arrangement was a contingent fee agreement that was valid in this jurisdiction, provided the fees
therein fixed were reasonable.42

We hold that the contingent fee of 10% of P41,627,593.75 and 10% of the value of the stock option was
reasonable. The P41,627,593.75 was already awarded to Malvar by the NLRC but the award became the
subject of the appeal in this Court because the CA reversed the NLRC. Be that as it may, her subsequent
change of mind on the amount sought from the respondents as reflected in the compromise agreement should
not negate or bar the Intervenors recovery of the agreed attorneys fees.

Considering that in the event of a dispute between the attorney and the client as to the amount of fees, and the
intervention of the courts is sought, the determination requires that there be evidence to prove the amount of
fees and the extent and value of the services rendered, taking into account the facts determinative thereof,43 the
history of the Intervenors legal representation of Malvar can provide a helpful predicate for resolving the
dispute between her and the Intervenor.

The records reveal that on March 18, 2008, Malvar engaged the professional services of the Intervenor to
represent her in the case of illegal dismissal. At that time, the case was pending in the CA at the respondents
instance after the NLRC had set aside the RCUs computation of Malvars backwages and monetary benefits,
and had upheld the computation arrived at by the NLRC Computation Unit. On April 17, 2008, the CA set
aside the assailed resolution of the NLRC, and remanded the case to the Labor Arbiter for the computation of
her monetary awards. It was at this juncture that the Intervenor commenced its legal service, which included the
following incidents, namely:

a) Upon the assumption of its professional duties as Malvars counsel, a Motion for Reconsideration of
the Decision of the Court of Appeals dated April 17, 2008 consisting of thirty-eight pages was filed
before the Court of Appeals on May 6, 2008.

b) On June 2, 2009, Intervenors filed a Comment to Respondents Motion for Partial Reconsideration,
said Comment consisted 8 pages.

c) In the execution proceedings before Labor Arbiter Jaime Reyno, Intervenor prepared and filed on
Malvars behalf an "Ex-Parte Motion to Release to Complainant the Undisputed amount
of P14,252,192.12" in NLRC NCR Case No. 30-07-02716-00.

d) On July 29, 2000, Intervenor prepared and filed before theLabor Arbiter a Comment to
Respondents Opposition to the "Ex-Parte Motion to Release" and a "Motion Reiterating Immediate
Implementation of the Writ of Execution"

e) On August 6, 2008, Intervenor prepared and filed before the Labor Arbiter Malvars Motion
Reiterating Motion to Release the Amount of P14,252,192.12.44

The decision promulgated on April 17, 200845 and the resolution promulgated on July 30, 200846 by the CA
prompted Malvar to appeal on August 15, 2008 to this Court with the assistance of the Intervenor. All the
subsequent pleadings, including the reply of April 13, 2009,47 were prepared and filed in Malvars behalf by the
Intervenor.

Malvar should accept that the practice of law was not limited to the conduct of cases or litigations in court but
embraced also the preparation of pleadings and other papers incidental to the cases or litigations as well as the
management of such actions and proceedings on behalf of the clients.48 Consequently, fairness and justice
demand that the Intervenor be accorded full recognition as her counsel who discharged its responsibility for
Malvars cause to its successful end.

But, as earlier pointed out, although a client may dismiss her lawyer at any time, the dismissal must be for a
justifiable cause if a written contract between the lawyer and the client exists.49

Considering the undisputed existence of the written agreement on contingent fees, the question begging to be
answered is: Was the Intervenor dismissed for a justifiable cause?

We do not think so.

In the absence of the lawyers fault, consent or waiver, a client cannot deprive the lawyer of his just fees already
earned in the guise of a justifiable reason. Here, Malvar not only downplayed the worth of the Intervenors legal
service to her but also attempted to camouflage her intent to defraud her lawyer by offering excuses that were
not only inconsistent with her actions but, most importantly, fell short of being justifiable.

The letter Malvar addressed to Retired Justice Bellosillo, who represented the Intervenor, debunked her
allegations of unsatisfactory legal service because she thereby lavishly lauded the Intervenor for its dedication
and devotion to the prosecution of her case and to the protection of her interests. Also significant was that the
attorney-client relationship between her and the Intervenor was not severed upon Atty. Dasals appointment to
public office and Atty. Llasos resignation from the law firm. In other words, the Intervenor remained as her
counsel of record, for, as we held in Rilloraza, Africa, De Ocampo and Africa v. Eastern Telecommunication
Philippines, Inc.,50 a client who employs a law firm engages the entire law firm; hence, the resignation,
retirement or separation from the law firm of the handling lawyer does not terminate the relationship, because
the law firm is bound to provide a replacement.

The stipulations of the written agreement between Malvar and the Intervenors, not being contrary to law,
morals, public policy, public order or good customs, were valid and binding on her. They expressly gave rise to
the right of the Intervenor to demand compensation. In a word, she could not simply walk away from her
contractual obligations towards the Intervenor, for Article 1159 of the Civil Code provides that obligations
arising from contracts have the force of law between the parties and should be complied with in good faith.

To be sure, the Intervenors withdrawal from the case neither cancelled nor terminated the written agreement
on the contingent attorneys fees. Nor did the withdrawal constitute a waiver of the agreement. On the contrary,
the agreement continued between them because the Intervenors Manifestation (with Motion to Withdraw as
Counsel for Petitioner)explicitly called upon the Court to safeguard its rights under the written agreement, to
wit:

WHEREFORE, premises considered, undersigned counsel respectfully pray that instant Motion to Withdraw as
Counsel for Petitioner be granted and their attorneys lien pursuant to the written agreement be reflected in the
judgment or decision that may be rendered hereafter conformably with par. 2, Sec. 26, Rule 138 of the Rules of
Court.

Undersigned counsel further requests that they be furnished copy of the decision, resolutions and other legal
processes of this Honorable Court to enable them to protect their interests.51

Were the respondents also liable?

The respondents would be liable if they were shown to have connived with Malvar in the execution of the
compromise agreement, with the intention of depriving the Intervenor of its attorneys fees. Thereby, they
would be solidarily liable with her for the attorneys fees as stipulated in the written agreement under the theory
that they unfairly and unjustly interfered with the Intervenors professional relationship with Malvar.

The respondents insist that they were not bound by the written agreement, and should not be held liable under
it.1wphi1

We disagree with the respondents insistence. The respondents were complicit in Malvars move to deprive the
Intervenor of its duly earned contingent fees.

First of all, the unusual timing of Malvars letter terminating the Intervenors legal representation of her, of her
Motion to Dismiss/Withdraw Case, and of the execution of compromise agreement manifested her desire to
evade her legal obligation to pay to the Intervenor its attorneys fees for the legal services rendered. The
objective of her withdrawal of the case was to release the respondents from all her claims and causes of action in
consideration of the settlement in the stated amount of P40,000.000.00, a sum that was measly compared to
what she was legally entitled to, which, to begin with, already included the P41,627,593.75 and the value of the
stock option already awarded to her. In other words, she thereby waived more than what she was lawfully
expected to receive from the respondents.

Secondly, the respondents suddenly turned around from their strong stance of berating her demand as offensive
to all precepts of justice and fair play and as a form of unjust enrichment for her to a surprisingly generous
surrender to her demand, allowing to her through their compromise agreement the additional amount
of P40,000,000.00 on top of theP14,252,192.12 already received by her in August 2008. The softening
unavoidably gives the impression that they were now categorically conceding that Malvar deserved much more.
Under those circumstances, it is plausible to conclude that her termination of the Intervenors services was
instigated by their prodding in order to remove the Intervenor from the picture for being a solid obstruction to
the settlement for a much lower liability, and thereby save for themselves and for her some more amount.

Thirdly, the compromise agreement was silent on the Intervenors contingent fee, indicating that the objective
of the compromise agreement was to secure a huge discount from its liability towards Malvar.

Finally, contrary to the stipulation in the compromise agreement, only Malvar, minus the respondents, filed the
Motion to Dismiss/Withdraw Case.

At this juncture, the Court notes that the compromise agreement would have Malvar waive even the substantial
stock options already awarded by the NLRCs decision,52 which ordered the respondents to pay to her, among
others, the value of the stock options and all other bonuses she was entitled to or would have been entitled to
had she not been illegally dismissed from her employment. This ruling was affirmed by the CA.53 But the waiver
could not negate the Intervenors right to 10% of the value of the stock options she was legally entitled to under
the decisions of the NLRC and the CA, for that right was expressly stated in the written agreement between her
and the Intervenor. Thus, the Intervenor should be declared entitled to recover full compensation in accordance
with the written agreement because it did not assent to the waiver of the stock options, and did not waive its
right to that part of its compensation.

These circumstances show that Malvar and the respondents needed an escape from greater liability towards the
Intervenor, and from the possible obstacle to their plan to settle to pay. It cannot be simply assumed that only
Malvar would be liable towards the Intervenor at that point, considering that the Intervenor, had it joined the
negotiations as her lawyer, would have tenaciously fought all the way for her to receive literally everything that
she was entitled to, especially the benefits from the stock option. Her rush to settle because of her financial
concerns could have led her to accept the respondents offer, which offer could be further reduced by the
Intervenors expected demand for compensation. Thereby, she and the respondents became joint tort-feasors
who acted adversely against the interests of the Intervenor. Joint tort-feasors are those who command, instigate,
promote, encourage, advise, countenance, cooperate in, aid or abet the commission of a tort, or who approve of
it after it is done, if done for their benefit.54

They are also referred to as those who act together in committing wrong or whose acts, if independent of each
other, unite in causing a single injury.55 Under Article 2194 of the Civil Code, joint tort-feasors are solidarily
liable for the resulting damage. As regards the extent of their respective liabilities, the Court said in Far Eastern
Shipping Company v. Court of Appeals:56

x x x. Where several causes producing an injury are concurrent and each is an efficient cause without which the
injury would not have happened, the injury may be attributed to all or any of the causes and recovery may be
had against any or all of the responsible persons although under the circumstances of the case, it may appear
that one of them was more culpable, and that the duty owed by them to the injured person was not same. No
actors negligence ceases to be a proximate cause merely because it does not exceed the negligence of other acts.
Each wrongdoer is responsible for the entire result and is liable as though his acts were the sole cause of the
injury.

There is no contribution between joint tort-feasors whose liability is solidary since both of them are liable for the
total damage. Where the concurrent or successive negligent acts or omissions of two or more persons, although
acting independently, are in combination the direct and proximate cause of a single injury to a third person, it is
impossible to determine in what proportion each contributed to the injury and either of them is responsible for
the whole injury. x x x

Joint tort-feasors are each liable as principals, to the same extent and in the same manner as if they had
performed the wrongful act themselves. It is likewise not an excuse for any of the joint tort-feasors that
individual participation in the tort was insignificant as compared to that of the other.57 To stress, joint tort-
feasors are not liable pro rata. The damages cannot be apportioned among them, except by themselves. They
cannot insist upon an apportionment, for the purpose of each paying an aliquot part. They are jointly and
severally liable for the whole amount.58 Thus, as joint tort-feasors, Malvar and the respondents should be held
solidarily liable to the Intervenor. There is no way of appreciating these circumstances except in this light.

That the value of the stock options that Malvar waived under the compromise agreement has not been fixed as
yet is no hindrance to the implementation of this decision in favor of the Intervenor. The valuation could be
reliably made at a subsequent time from the finality of this adjudication. It is enough for the Court to hold the
respondents and Malvar solidarily liable for the 10% of that value of the stock options.

As a final word, it is necessary to state that no court can shirk from enforcing the contractual stipulations in the
manner they have agreed upon and written. As a rule, the courts, whether trial or appellate, have no power to
make or modify contracts between the parties. Nor can the courts save the parties from disadvantageous
provisions.59 The same precepts hold sway when it comes to enforcing fee arrangements entered into in writing
between clients and attorneys. In the exercise of their supervisory authority over attorneys as officers of the
Court, the courts are bound to respect and protect the attorneys lien as a necessary means to preserve the
decorum and respectability of the Law Profession.60 Hence, the Court must thwart any and every effort of
clients already served by their attorneys worthy services to deprive them of their hard-earned compensation.
Truly, the duty of the courts is not only to see to it that attorneys act in a proper and lawful manner, but also to
see to it that attorneys are paid their just and lawful fees.61WHEREFORE, the Court APPROVES the
compromise agreement; GRANTS the Motion for Intervention to Protect Attorney's Rights; and ORDERS
Czarina T. Malvar and respondents Kraft Food Philippines Inc. and Kraft Foods International to jointly and
severally pay to Intervenor Law Firm, represented by Retired Associate Justice Josue N. Bellosillo, its stipulated
contingent fees of 10% of P41,627,593.75, and the further sum equivalent to 10% of the value of the stock
option. No pronouncement on costs of suit.

CANON 21

A.C. No. 8243 July 24, 2009ROLANDO B. PACANA, JR., Complainant,


vs.ATTY. MARICEL PASCUAL-LOPEZ, Respondent.

This case stems from an administrative complaint1 filed by Rolando Pacana, Jr. against Atty. Maricel Pascual-
Lopez charging the latter with flagrant violation of the provisions of the Code of Professional
Responsibility.2Complainant alleges that respondent committed acts constituting conflict of interest, dishonesty,
influence peddling, and failure to render an accounting of all the money and properties received by her from
complainant.

On January 2, 2002, complainant was the Operations Director for Multitel Communications Corporation
(MCC). MCC is an affiliate company of Multitel International Holdings Corporation (Multitel). Sometime in
July 2002, MCC changed its name to Precedent Communications Corporation (Precedent).3

According to complainant, in mid-2002, Multitel was besieged by demand letters from its members and
investors because of the failure of its investment schemes. He alleges that he earned the ire of Multitel investors
after becoming the assignee of majority of the shares of stock of Precedent and after being appointed as trustee
of a fund amounting to Thirty Million Pesos (P30,000,000.00) deposited at Real Bank.

Distraught, complainant sought the advice of respondent who also happened to be a member of the Couples for
Christ, a religious organization where complainant and his wife were also active members. From then on,
complainant and respondent constantly communicated, with the former disclosing all his involvement and
interests in Precedent and Precedents relation with Multitel. Respondent gave legal advice to complainant and
even helped him prepare standard quitclaims for creditors. In sum, complainant avers that a lawyer-client
relationship was established between him and respondent although no formal document was executed by them
at that time. A Retainer Agreement4 dated January 15, 2003 was proposed by respondent. Complainant,
however, did not sign the said agreement because respondent verbally asked for One Hundred Thousand Pesos
(P100,000.00) as acceptance fee and a 15% contingency fee upon collection of the overpayment made by
Multitel to Benefon,5 a telecommunications company based in Finland. Complainant found the proposed fees to
be prohibitive and not within his means.6 Hence, the retainer agreement remained unsigned.7

After a few weeks, complainant was surprised to receive a demand letter from respondent8 asking for the return
and immediate settlement of the funds invested by respondents clients in Multitel. When complainant
confronted respondent about the demand letter, the latter explained that she had to send it so that her clients
defrauded investors of Multitel would know that she was doing something for them and assured complainant
that there was nothing to worry about.9

Both parties continued to communicate and exchange information regarding the persistent demands made by
Multitel investors against complainant. On these occasions, respondent impressed upon complainant that she
can closely work with officials of the Anti-Money Laundering Council (AMLC), the Department of Justice
(DOJ), the National Bureau of Investigation (NBI), the Bureau of Immigration and Deportations (BID),10 and
the Securities and Exchange Commission (SEC)11 to resolve complainants problems. Respondent also
convinced complainant that in order to be absolved from any liability with respect to the investment scam, he
must be able to show to the DOJ that he was willing to divest any and all of his interests in Precedent including
the funds assigned to him by Multitel.12

Respondent also asked money from complainant allegedly for safekeeping to be used only for his case whenever
necessary. Complainant agreed and gave her an initial amount of P900,000.00 which was received by
respondent herself.13 Sometime thereafter, complainant again gave respondent P1,000,000.00.14 Said amounts
were all part of Precedents collections and sales proceeds which complainant held as assignee of the companys
properties.15

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

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

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

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

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

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

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

As for your kids, legally they can stay here but recently, it is the children who (sic) the irate clients and
government officials harass and kidnap to make the individuals they want to come out from hiding (sic). I do not
want that to happen. Things will be really easier on my side.

Please do not worry. Give me 3 months to make it all disappear. But if you hire Coco, I will give him the free
hand to work with your case. Please trust me. I have never let you down, have I? I told you this will happen but
we are ready and prepared. The clients who received the phones will stand by you and make you the hero in
this scandal. I will stand by you always. This is my expertise. TRUST me! That is all. You have an angel on
your side. Always pray though to the best legal mind up there. You will be ok!

Candy22

On July 4, 2003, contrary to respondents advice, complainant returned to the country. On the eve of his
departure from the United States, respondent called up complainant and conveniently informed him that he has
been cleared by the NBI and the BID.23

About a month thereafter, respondent personally met with complainant and his wife and told them that she has
already accumulated P12,500,000.00 as attorneys fees and was willing to give P2,000,000.00 to complainant in
appreciation for his help. Respondent allegedly told complainant that without his help, she would not have
earned such amount. Overwhelmed and relieved, complainant accepted respondents offer but respondent, later
on, changed her mind and told complainant that she would instead invest the P2,000,000.00 on his behalf in a
business venture. Complainant declined and explained to respondent that he and his family needed the money
instead to cover their daily expenses as he was no longer employed. Respondent allegedly agreed, but she failed
to fulfill her promise.24
Respondent even publicly announced in their religious organization that she was able to help settle the ten (10)
warrants of arrest and hold departure order issued against complainant and narrated how she was able to
defend complainant in the said cases.25

By April 2004, however, complainant noticed that respondent was evading him. Respondent would either refuse
to return complainants call or would abruptly terminate their telephone conversation, citing several reasons.
This went on for several months.26 In one instance, when complainant asked respondent for an update on the
collection of Benefons obligation to Precedent which respondent had previously taken charge of, respondent
arrogantly answered that she was very busy and that she would read Benefons letter only when she found time
to do so.

On November 9, 2004, fed up and dismayed with respondents arrogance and evasiveness, complainant wrote
respondent a letter formally asking for a full accounting of all the money, documents and properties given to the
latter.27 Respondent rendered an accounting through a letter dated December 20, 2004.28 When complainant
found respondents explanation to be inadequate, he wrote a latter expressing his confusion about the
accounting.29 Complainant repeated his request for an audited financial report of all the properties turned over
to her; otherwise, he will be constrained to file the appropriate case against respondent.30 Respondent
replied,31explaining that all the properties and cash turned over to her by complainant had been returned to her
clients who had money claims against Multitel. In exchange for this, she said that she was able to secure
quitclaim documents clearing complainant from any liability.32 Still unsatisfied, complainant decided to file an
affidavit-complaint33against respondent before the Commission on Bar Discipline of the Integrated Bar of the
Philippines (IBP) seeking the disbarment of respondent.

In her Answer-Affidavit,34 respondent vehemently denied being the lawyer for Precedent. She maintained that
no formal engagement was executed between her and complainant. She claimed that she merely helped
complainant by providing him with legal advice and assistance because she personally knew him, since they
both belonged to the same religious organization.35lavvph!1

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

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

In her Position Paper,39 respondent also questioned the admissibility of the electronic evidence submitted by
complainant to the IBPs Commission on Bar Discipline. Respondent maintained that the e-mail and the text
messages allegedly sent by respondent to complainant were of doubtful authenticity and should be excluded as
evidence for failure to conform to the Rules on Electronic Evidence (A.M. No. 01-7-01-SC).

After due hearing, IBP Investigating Commissioner Patrick M. Velez issued a Report and
Recommendation40finding that a lawyer-client relationship was established between respondent and
complainant despite the absence of a written contract. The Investigating Commissioner also declared that
respondent violated her duty to be candid, fair and loyal to her client when she allowed herself to represent
conflicting interests and failed to render a full accounting of all the cash and properties entrusted to her. Based
on these grounds, the Investigating Commissioner recommended her disbarment.
Respondent moved for reconsideration,41 but the IBP Board of Governors issued a Recommendation42 denying
the motion and adopting the findings of the Investigating Commissioner.

The case now comes before this Court for final action.

We affirm the findings of the IBP.

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

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

This prohibition is founded on principles of public policy, good taste43 and, more importantly, upon necessity.
In the course of a lawyer-client relationship, the lawyer learns all the facts connected with the clients case,
including its weak and strong points. Such knowledge must be considered sacred and guarded with care. No
opportunity must be given to him to take advantage of his client; for if the confidence is abused, the profession
will suffer by the loss thereof.44 It behooves lawyers not only to keep inviolate the clients confidence, but also to
avoid the appearance of treachery and double dealing for only then can litigants be encouraged to entrust
their secrets to their lawyers, which is paramount in the administration of justice.45 It is for these reasons that we
have described the attorney-client relationship as one of trust and confidence of the highest degree.46

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

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

The absence of a written contract will not preclude the finding that there was a professional relationship
between the parties. Documentary formalism is not an essential element in the employment of an attorney; the
contract may be express or implied. To establish the relation, it is sufficient that the advice and assistance of an
attorney is sought and received in any matter pertinent to his profession.50 (Emphasis supplied.)1awphi1

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

In Hornilla v. Atty. Salunat,51 we explained the concept of conflict of interest, thus:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The
test is "whether or not in behalf of one client, it is the lawyers duty to fight for an issue or claim, but it is his duty
to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when
he argues for the other client." This rule covers not only cases in which confidential communications have been
confided, but also those in which no confidence has been bestowed or will be used. Also, there is conflict of
interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously
affect his first client in any matter in which he represents him and also whether he will be called upon in his new
relation to use against his first client any knowledge acquired through their connection. Another test of the
inconsistency of interests is whether the acceptance of a new relation will prevent an attorney from the full
discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double
dealing in the performance thereof.52

Indubitably, respondent took advantage of complainants hapless situation, initially, by giving him legal advice
and, later on, by soliciting money and properties from him. Thereafter, respondent impressed upon
complainant that she had acted with utmost sincerity in helping him divest all the properties entrusted to him in
order to absolve him from any liability. But simultaneously, she was also doing the same thing to impress upon
her clients, the party claimants against Multitel, that she was doing everything to reclaim the money they
invested with Multitel. Respondent herself admitted to complainant that without the latters help, she would not
have been able to earn as much and that, as a token of her appreciation, she was willing to share some of her
earnings with complainant.53 Clearly, respondents act is shocking, as it not only violated Rule 9.02, Canon 9 of
the Code of Professional Responsibility,54 but also toyed with decency and good taste.

Respondent even had the temerity to boast that no Multitel client had ever complained of respondents
unethical behavior.55 This remark indubitably displays respondents gross ignorance of disciplinary procedure in
the Bar. As a member of the Bar, she is expected to know that proceedings for disciplinary actions against any
lawyer may be initiated and prosecuted by the IBP Board of Governors, motu proprio or upon referral by this
Court or by the Board of Officers of an IBP Chapter56 even if no private individual files any administrative
complaint.

Upon review, we find no cogent reason to disturb the findings and recommendations of the IBP Investigating
Commissioner, as adopted by the IBP Board of Governors, on the admissibility of the electronic evidence
submitted by complainant. We, accordingly, adopt the same in toto.

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

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

WHEREFORE, respondent Attorney Maricel Pascual-Lopez is hereby DISBARRED for representing


conflicting interests and for engaging in unlawful, dishonest and deceitful conduct in violation of her Lawyers
Oath and the Code of Professional Responsibility.Let a copy of this Decision be entered in the respondents
record as a member of the Bar, and notice of the same be served on the Integrated Bar of the Philippines, and
on the Office of the Court Administrator for circulation to all courts in the country.SO ORDERED.

A.C. No. 8620 January 12, 2011 JESSIE R. DE LEON, Complainant,


vs.ATTY. EDUARDO G. CASTELO, Respondent.
This administrative case, which Jessie R. De Leon initiated on April 29, 2010, concerns respondent attorneys
alleged dishonesty and falsification committed in the pleadings he filed in behalf of the defendants in the civil
action in which De Leon intervened.

Antecedents

On January 2, 2006, the Government brought suit for the purpose of correcting the transfer certificates of title
(TCTs) covering two parcels of land located in Malabon City then registered in the names of defendants
Spouses Lim Hio and Dolores Chu due to their encroaching on a public callejon and on a portion of the
Malabon-Navotas River shoreline to the extent, respectively, of an area of 45 square meters and of about 600
square meters. The suit, entitled Republic of the Philippines, represented by the Regional Executive Director,
Department of Environment and Natural Resources v. Spouses Lim Hio and Dolores Chu, Gorgonia Flores,
and the Registrar of Deeds of Malabon City, was docketed as Civil Case No. 4674MN of the Regional Trial
Court (RTC), Branch 74, in Malabon City.1

De Leon, having joined Civil Case No. 4674MN as a voluntary intervenor two years later (April 21, 2008), now
accuses the respondent, the counsel of record of the defendants in Civil Case No. 4674MN, with the serious
administrative offenses of dishonesty and falsification warranting his disbarment or suspension as an attorney.
The respondents sin was allegedly committed by his filing for defendants Spouses Lim Hio and Dolores Chu of
various pleadings (that is, answer with counterclaim and cross-claim in relation to the main complaint; and
answer to the complaint in intervention with counterclaim and cross-claim) despite said spouses being already
deceased at the time of filing.2

De Leon avers that the respondent committed dishonesty and falsification as follows:

xxx in causing it (to) appear that persons (spouses Lim Hio and Dolores Chu) have participated in an act or
proceeding (the making and filing of the Answers) when they did not in fact so participate; in fact, they could not
have so participated because they were already dead as of that time, which is punishable under Article 172, in
relation to Article 171, paragraph 2, of the Revised Penal Code.

Respondent also committed the crime of Use of Falsified Documents, by submitting the said falsified Answers in
the judicial proceedings, Civil Case No. 4674MN;

Respondent also made a mockery of the aforesaid judicial proceedings by representing dead persons therein
who, he falsely made to appear, as contesting the complaints, counter-suing and cross-suing the adverse parties.

12. That, as a consequence of the above criminal acts, complainant respectfully submits that respondent likewise
violated:

(a) His Lawyers Oath:

xxx

(b) The Code of Professional Responsibility:3

xxx

On June 23, 2010, the Court directed the respondent to comment on De Leons administrative complaint.4

In due course, or on August 2, 2010,5 the respondent rendered the following explanations in his comment, to
wit:
1. The persons who had engaged him as attorney to represent the Lim family in Civil Case No. 4674MN
were William and Leonardo Lim, the children of Spouses Lim Hio and Dolores Chu;

2. Upon his (Atty. Castelo) initial queries relevant to the material allegations of the Governments
complaint in Civil Case No. 4674MN, William Lim, the representative of the Lim Family, informed
him:

a. That the Lim family had acquired the properties from Georgina Flores;

b. That William and Leonardo Lim were already actively managing the family business, and now
co-owned the properties by virtue of the deed of absolute sale their parents, Spouses Lim Hio and
Dolores Chu, had executed in their favor; and

c. That because of the execution of the deed of absolute sale, William and Leonardo Lim had
since honestly assumed that their parents had already caused the transfer of the TCTs to their
names.

3. Considering that William and Leonardo Lim themselves were the ones who had engaged his services,
he (Atty. Castelo) consequently truthfully stated in the motion seeking an extension to file responsive
pleading dated February 3, 2006 the fact that it was "the family of the defendants" that had engaged
him, and that he had then advised "the children of the defendants" to seek the assistance as well of a
licensed geodetic surveyor and engineer;

4. He (Atty. Castelo) prepared the initial pleadings based on his honest belief that Spouses Lim Hio and
Dolores Chu were then still living. Had he known that they were already deceased, he would have most
welcomed the information and would have moved to substitute Leonardo and William Lim as
defendants for that reason;

5. He (Atty. Castelo) had no intention to commit either a falsehood or a falsification, for he in fact
submitted the death certificates of Spouses Lim Hio and Dolores Chu in order to apprise the trial court
of that fact; and

6. The Office of the Prosecutor for Malabon City even dismissed the criminal complaint for falsification
brought against him (Atty. Castelo) through the resolution dated February 11, 2010. The same office
denied the complainants motion for reconsideration on May 17, 2010.

On September 3, 2010, the complainant submitted a reply,6 whereby he asserted that the respondents claim in
his comment that he had represented the Lim family was a deception, because the subject of the complaint
against the respondent was his filing of the answers in behalf of Spouses Lim Hio and Dolores Chu despite their
being already deceased at the time of the filing. The complainant regarded as baseless the justifications of the
Office of the City Prosecutor for Malabon City in dismissing the criminal complaint against the respondent and
in denying his motion for reconsideration.

The Court usually first refers administrative complaints against members of the Philippine Bar to the Integrated
Bar of the Philippines (IBP) for investigation and appropriate recommendations. For the present case, however,
we forego the prior referral of the complaint to the IBP, in view of the facts being uncomplicated and based on
the pleadings in Civil Case No. 4674MN. Thus, we decide the complaint on its merits.

Ruling

We find that the respondent, as attorney, did not commit any falsehood or falsification in his pleadings in Civil
Case No. 4674MN. Accordingly, we dismiss the patently frivolous complaint.
I

Attorneys Obligation to tell the truth

All attorneys in the Philippines, including the respondent, have sworn to the vows embodied in following
Lawyers Oath,7 viz:

I, ___________________, do solemnly swear that I will maintain allegiance to the Republic of the Philippines; I
will support its Constitution and obey the laws as well as the legal orders of the duly constituted authorities
therein; I will do no falsehood, nor consent to the doing of any in court; I will not wittingly or willingly promote
or sue any groundless, false or unlawful suit, nor give aid nor consent to the same. I will delay no man for money
or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion with all
good fidelity as well to the courts as to my clients; and I impose upon myself this voluntary obligation without
any mental reservation or purpose of evasion. So help me God.

The Code of Professional Responsibility echoes the Lawyers Oath, providing:8

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

Rule 1.01 - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

CANON 10 - A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT.

Rule 10.01 - A lawyer shall not do any falsehood, nor consent to the doing of any in Court; nor shall he mislead,
or allow the Court to be misled by any artifice.

The foregoing ordain ethical norms that bind all attorneys, as officers of the Court, to act with the highest
standards of honesty, integrity, and trustworthiness. All attorneys are thereby enjoined to obey the laws of the
land, to refrain from doing any falsehood in or out of court or from consenting to the doing of any in court, and
to conduct themselves according to the best of their knowledge and discretion with all good fidelity as well to the
courts as to their clients. Being also servants of the Law, attorneys are expected to observe and maintain the rule
of law and to make themselves exemplars worthy of emulation by others.9 The least they can do in that regard is
to refrain from engaging in any form or manner of unlawful conduct (which broadly includes any act or
omission contrary to law, but does not necessarily imply the element of criminality even if it is broad enough to
include such element).10

To all attorneys, truthfulness and honesty have the highest value, for, as the Court has said in Young v.
Batuegas:11

A lawyer must be a disciple of truth. He swore upon his admission to the Bar that he will "do no falsehood nor
consent to the doing of any in court" and he shall "conduct himself as a lawyer according to the best of his
knowledge and discretion with all good fidelity as well to the courts as to his clients." He should bear in mind
that as an officer of the court his high vocation is to correctly inform the court upon the law and the facts of the
case and to aid it in doing justice and arriving at correct conclusion. The courts, on the other hand, are entitled
to expect only complete honesty from lawyers appearing and pleading before them. While a lawyer has the
solemn duty to defend his clients rights and is expected to display the utmost zeal in defense of his clients cause,
his conduct must never be at the expense of truth.

Their being officers of the Court extends to attorneys not only the presumption of regularity in the discharge of
their duties, but also the immunity from liability to others for as long as the performance of their obligations to
their clients does not depart from their character as servants of the Law and as officers of the Court. In
particular, the statements they make in behalf of their clients that are relevant, pertinent, or material to the
subject of inquiry are absolutely privileged regardless of their defamatory tenor. Such cloak of privilege is
necessary and essential in ensuring the unhindered service to their clients causes and in protecting the clients
confidences. With the cloak of privilege, they can freely and courageously speak for their clients, verbally or in
writing, in the course of judicial and quasi-judicial proceedings, without running the risk of incurring criminal
prosecution or actions for damages.12

Nonetheless, even if they enjoy a number of privileges by reason of their office and in recognition of the vital
role they play in the administration of justice, attorneys hold the privilege and right to practice law before
judicial, quasi-judicial, or administrative tribunals or offices only during good behavior.13

II

Respondent did not violate the Lawyers Oath

and the Code of Professional Responsibility

On April 17, 2006, the respondent filed an answer with counterclaim and cross-claim in behalf of Spouses Lim
Hio and Dolores Chu, the persons whom the Government as plaintiff named as defendants in Civil Case No.
4674MN.14 He alleged therein that:

2. The allegations in paragraph 2 of the complaint are ADMITTED. Moreover, it is hereby made
known that defendants spouses Lim Hio and Dolores Chu had already sold the two (2) parcels of land,
together with the building and improvements thereon, covered by Transfer Certificate of Title No.
(148805) 139876 issued by the Register of Deeds of Rizal, to Leonardo C. Lim and William C. Lim, of
Rms. 501 502 Dolores Bldg., Plaza del Conde, Binondo, Manila. Hence, Leonardo Lim and William
Lim are their successors-in-interest and are the present lawful owners thereof.

In order to properly and fully protect their rights, ownership and interests, Leonardo C. Lim and
William C. Lim shall hereby represent the defendants-spouses Lim Hio and Dolores Chu as
substitute/representative parties in this action. In this manner, a complete and expeditious resolution of
the issues raised in this case can be reached without undue delay. A photo copy of the Deed of Absolute
Sale over the subject property, executed by herein defendants-spouses Lim Hio and Dolores Chu in
favor of said Leonardo C. Lim and William C. Lim, is hereto attached as Annex "1" hereof.

xxx

21. There is improper joinder of parties in the complaint. Consequently, answering defendants are thus
unduly compelled to litigate in a suit regarding matters and facts as to which they have no knowledge of
nor any involvement or participation in.

22. Plaintiff is barred by the principle of estoppel in bringing this suit, as it was the one who, by its
governmental authority, issued the titles to the subject property.

This action is barred by the principles of prescription and laches for plaintiffs unreasonable delay in brining this
suit, particularly against defendant Flores, from whom herein answering defendants acquired the subject
property in good faith and for value. If truly plaintiff has a clear and valid cause of action on the subject
property, it should not have waited thirty (30) years to bring suit.

Two years later, or on April 21, 2008, De Leon filed his complaint in intervention in Civil Case No.
4674MN.15 He expressly named therein as defendants vis--vis his intervention not only the Spouses Lim Hio
and Dolores Chu, the original defendants, but also their sons Leonardo Lim, married to Sally Khoo, and
William Lim, married to Sally Lee, the same persons whom the respondent had already alleged in the answer,
supra, to be the transferees and current owners of the parcels of land.16

The following portions of De Leons complaint in intervention in Civil Case No. 4674MN are relevant, viz:

2. Defendant spouses Lim Hio and Dolores Chu, are Filipino citizens with addresses at 504 Plaza del
Conde, Manila and at 46 C. Arellano St., San Agustin, Malabon City, where they may be served with
summons and other court processes;

3. Defendant spouses Leonardo Lim and Sally Khoo and defendant spouses William Lim and Sally Lee
are all of legal age and with postal address at Rms. 501-502 Dolores Bldg., Plaza del Conde, Binondo,
Manila, alleged purchasers of the property in question from defendant spouses Lim Hio and Dolores
Chu;

4. Defendants Registrar of Deeds of Malabon City holds office in Malabon City, where he may be
served with summons and other court processes. He is charged with the duty, among others, of
registering decrees of Land Registration in Malabon City under the Land Registration Act;

xxx

7. That intervenor Jessie de Leon, is the owner of a parcel of land located in Malabon City described in
TCT no. M-15183 of the Register of Deeds of Malabon City, photocopy of which is attached to this
Complaint as Annex "G", and copy of the location plan of the aforementioned property is attached to
this complaint as Annex "H" and is made an integral part hereof;

8. That there are now more or less at least 40 squatters on intervenors property, most of them
employees of defendant spouses Lim Hio and Dolores Chu and defendant spouses Leonardo Lim and
Sally Khoo and defendant spouses William Lim and Sally Lee who had gained access to intervenors
property and built their houses without benefit of any building permits from the government who had
made their access to intervenors property thru a two panel metal gate more or less 10 meters wide and
with an armed guard by the gate and with permission from defendant spouses Lim Hio and Dolores
Chu and/or and defendant spouses Leonardo Lim and Sally Khoo and defendant spouses William Lim
and Sally Lee illegally entered intervenors property thru a wooden ladder to go over a 12 foot wall now
separating intervenors property from the former esquinita which is now part of defendant spouses Lim
Hio and Dolores Chus and defendant spouses Leonardo Lim and Sally Khoos and defendant spouses
William Lim and Sally Lees property and this illegally allowed his employees as well as their relatives
and friends thereof to illegally enter intervenors property through the ladders defendant spouses Lim
Hio and Dolores Chu installed in their wall and also allowed said employees and relatives as well as
friends to build houses and shacks without the benefit of any building permit as well as permit to occupy
said illegal buildings;

9. That the enlargement of the properties of spouses Lim Hio and Dolores Chu had resulted in the
closure of street lot no. 3 as described in TCT no. 143828, spouses Lim Hio and Dolores Chu having
titled the street lot no. 3 and placed a wall at its opening on C. Arellano street, thus closing any exit or
egress or entrance to intervenors property as could be seen from Annex "H" hereof and thus preventing
intervenor from entering into his property resulted in preventing intervenor from fully enjoying all the
beneficial benefits from his property;

10. That defendant spouses Lim Hio and Dolores Chu and later on defendant spouses Leonardo Lim
and Sally Khoo and defendant spouses William Lim and Sally Lee are the only people who could give
permission to allow third parties to enter intervenors property and their control over intervenors
property is enforced through his armed guard thus exercising illegal beneficial rights over intervenors
property at intervenors loss and expense, thus depriving intervenor of legitimate income from rents as
well as legitimate access to intervenors property and the worst is preventing the Filipino people from
enjoying the Malabon Navotas River and enjoying the right of access to the natural fruits and products
of the Malabon Navotas River and instead it is defendant spouses Lim Hio and Dolores Chu and
defendant spouses Leonardo Lim and Sally Khoo and defendant spouses William Lim and Sally Lee
using the public property exclusively to enrich their pockets;

xxx

13. That defendant spouses Lim Hio and Dolores Chu and defendant spouses Leonardo Lim and Sally
Khoo and defendant spouses William Lim and Sally Lee were confederating, working and helping one
another in their actions to inhibit intervenor Jessie de Leon to gain access and beneficial benefit from his
property;

On July 10, 2008, the respondent, representing all the defendants named in De Leons complaint in
intervention, responded in an answer to the complaint in intervention with counterclaim and cross-
claim,17 stating that "spouses Lim Hio and Dolores Chu xxx are now both deceased," to wit:

xxx

2. The allegations in paragraphs 2 and 3 of the Complaint are ADMITTED, with the qualification that
defendants-spouses Leonardo Lim and Sally Khoo Lim, William Lim and Sally Lee Lim are the registered and
lawful owners of the subject property covered by Transfer Certificate of Title No. M-35929, issued by the
Register of Deeds for Malabon City, having long ago acquired the same from the defendants-spouses Lim Hio
and Dolores Chu, who are now both deceased. Copy of the TCT No. M-35929 is attached hereto as Annexes
"1" and "1-A". The same title has already been previously submitted to this Honorable Court on December 13,
2006.

xxx

The respondent subsequently submitted to the RTC a so-called clarification and submission,18 in which he
again adverted to the deaths of Spouses Lim Hio and Dolores Chu, as follows:

1. On March 19, 2009, herein movants-defendants Lim filed before this Honorable Court a Motion for
Substitution of Defendants in the Principal Complaint of the plaintiff Republic of the Philippines,
represented by the DENR;

2. The Motion for Substitution is grounded on the fact that the two (2) parcels of land, with the
improvements thereon, which are the subject matter of the instant case, had long been sold and
transferred by the principal defendants-spouses Lim Hio and Dolores Chu to herein complaint-in-
intervention defendants Leonardo C. Lim and William C. Lim, by way of a Deed of Absolute Sale, a
copy of which is attached to said Motion as Annex "1" thereof.

3. Quite plainly, the original principal defendants Lim Hio and Dolores Chu, having sold and conveyed
the subject property, have totally lost any title, claim or legal interest on the property. It is on this factual
ground that this Motion for Substitution is based and certainly not on the wrong position of Intervenor
de Leon that the same is based on the death of defendants Lim Hio and Dolores Chu.

4. Under the foregoing circumstances and facts, the demise of defendants Lim Hio and Dolores Chu no
longer has any significant relevance to the instant Motion. To, however, show the fact of their death,
photo copy of their respective death certificates are attached hereto as Annexes "1" and "2" hereof.
5. The Motion for substitution of Defendants in the Principal Complaint dated March 18, 2009 shows in
detail why there is the clear, legal and imperative need to now substitute herein movants-defendants Lim
for defendants Lim Hio and Dolores Chu in the said principal complaint.

6. Simply put, movants-defendants Lim have become the indispensable defendants in the principal
complaint of plaintiff DENR, being now the registered and lawful owners of the subject property and the
real parties-in-interest in this case. Without them, no final determination can be had in the Principal
complaint.

7. Significantly, the property of intervenor Jessie de Leon, which is the subject of his complaint-in-
intervention, is identically, if not similarly, situated as that of herein movants-defendants Lim, and
likewise, may as well be a proper subject of the Principal Complaint of plaintiff DENR.

8. Even the plaintiff DENR, itself, concedes the fact that herein movants-defendants Lim should be
substituted as defendants in the principal complaint as contained in their Manifestation dated June 3,
2009, which has been filed in this case.

WHEREFORE, herein movants-defendants Lim most respectfully submit their Motion for substitution of
Defendants in the Principal Complaint and pray that the same be granted.

xxx

Did the respondent violate the letter and spirit of the Lawyers Oath and the Code of Professional Responsibility
in making the averments in the aforequoted pleadings of the defendants?

A plain reading indicates that the respondent did not misrepresent that Spouses Lim Hio and Dolores Chu were
still living. On the contrary, the respondent directly stated in the answer to the complaint in intervention with
counterclaim and cross-claim, supra, and in the clarification and submission, supra, that the Spouses Lim Hio
and Dolores Chu were already deceased.

Even granting, for the sake of argument, that any of the respondents pleadings might have created any
impression that the Spouses Lim Hio and Dolores Chu were still living, we still cannot hold the respondent
guilty of any dishonesty or falsification. For one, the respondent was acting in the interest of the actual owners of
the properties when he filed the answer with counterclaim and cross-claim on April 17, 2006. As such, his
pleadings were privileged and would not occasion any action against him as an attorney. Secondly, having made
clear at the start that the Spouses Lim Hio and Dolores Chu were no longer the actual owners of the affected
properties due to the transfer of ownership even prior to the institution of the action, and that the actual owners
(i.e., Leonardo and William Lim) needed to be substituted in lieu of said spouses, whether the Spouses Lim Hio
and Dolores Chu were still living or already deceased as of the filing of the pleadings became immaterial. And,
lastly, De Leon could not disclaim knowledge that the Spouses Lim Hio and Dolores Chu were no longer living.
His joining in the action as a voluntary intervenor charged him with notice of all the other persons interested in
the litigation. He also had an actual awareness of such other persons, as his own complaint in intervention,
supra, bear out in its specific allegations against Leonardo Lim and William Lim, and their respective spouses.
Thus, he could not validly insist that the respondent committed any dishonesty or falsification in relation to him
or to any other party.

III

Good faith must always motivate any complaint against a Member of the Bar
According to Justice Cardozo,19 "xxx the fair fame of a lawyer, however innocent of wrong, is at the mercy of
the tongue of ignorance or malice. Reputation in such a calling is a plant of tender growth, and its bloom, once
lost, is not easily restored."

A lawyers reputation is, indeed, a very fragile object. The Court, whose officer every lawyer is, must shield such
fragility from mindless assault by the unscrupulous and the malicious. It can do so, firstly, by quickly cutting
down any patently frivolous complaint against a lawyer; and, secondly, by demanding good faith from whoever
brings any accusation of unethical conduct. A Bar that is insulated from intimidation and harassment is
encouraged to be courageous and fearless, which can then best contribute to the efficient delivery and proper
administration of justice.1avvphil

The complainant initiated his complaint possibly for the sake of harassing the respondent, either to vex him for
taking the cudgels for his clients in connection with Civil Case No. 4674MN, or to get even for an imagined
wrong in relation to the subject matter of the pending action, or to accomplish some other dark purpose. The
worthlessness of the accusation apparent from the beginning has impelled us into resolving the complaint
sooner than later.

WHEREFORE, we dismiss the complaint for disbarment or suspension filed against Atty. Eduardo G. Castelo
for utter lack of merit.

SO ORDERED.