G.R. No.
105938 September 20, 1996
TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ,
JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN
and EDUARDO U. ESCUETA, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF
THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
ROCO, respondents.
G.R. No. 108113 September 20, 1996
PARAJA G. HAYUDINI, petitioner,
vs.
THE SANDIGANBAYAN and THE REPUBLIC OF THE
PHILIPPINES, respondents.
KAPUNAN, J.:
These case touch the very cornerstone of every State's judicial system,
upon which the workings of the contentious and adversarial system in the
Philippine legal process are based — the sanctity of fiduciary duty in the
client-lawyer relationship. The fiduciary duty of a counsel and advocate is
also what makes the law profession a unique position of trust and
confidence, which distinguishes it from any other calling. In this instance,
we have no recourse but to uphold and strengthen the mantle of
protection accorded to the confidentiality that proceeds from the
performance of the lawyer's duty to his client.
The facts of the case are undisputed.
The matters raised herein are an offshoot of the institution of the
Complaint on July 31, 1987 before the Sandiganbayan by the Republic of
the Philippines, through the Presidential Commission on Good
Government against Eduardo M. Cojuangco, Jr., as one of the principal
defendants, for the recovery of alleged ill-gotten wealth, which includes
shares of stocks in the named corporations in PCGG Case No. 33 (Civil
Case No. 0033), entitled "Republic of the Philippines versus Eduardo
Cojuangco, et al."1
Among the dependants named in the case are herein petitioners Teodoro
Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion,
Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G.
Hayudini, and herein private respondent Raul S. Roco, who all were then
partners of the law firm Angara, Abello, Concepcion, Regala and Cruz
Law Offices (hereinafter referred to as the ACCRA Law Firm). ACCRA
Law Firm performed legal services for its clients, which included, among
others, the organization and acquisition of business associations and/or
organizations, with the correlative and incidental services where its
members acted as incorporators, or simply, as stockholders. More
specifically, in the performance of these services, the members of the law
firm delivered to its client documents which substantiate the client's equity
holdings, i.e., stock certificates endorsed in blank representing the shares
registered in the client's name, and a blank deed of trust or assignment
covering said shares. In the course of their dealings with their clients, the
members of the law firm acquire information relative to the assets of
clients as well as their personal and business circumstances. As
members of the ACCRA Law Firm, petitioners and private respondent
Raul Roco admit that they assisted in the organization and acquisition of
the companies included in Civil Case No. 0033, and in keeping with the
office practice, ACCRA lawyers acted as nominees-stockholders of the
said corporations involved in sequestration proceedings. 2
On August 20, 1991, respondent Presidential Commission on Good
Government (hereinafter referred to as respondent PCGG) filed a "Motion
to Admit Third Amended Complaint" and "Third Amended Complaint"
which excluded private respondent Raul S. Roco from the complaint in
PCGG Case No. 33 as party-defendant.3Respondent PCGG based its
exclusion of private respondent Roco as party-defendant on his
undertaking that he will reveal the identity of the principal/s for whom he
acted as nominee/stockholder in the companies involved in PCGG Case
No. 33.4
Petitioners were included in the Third Amended Complaint on the strength
of the following allegations:
14. Defendants Eduardo Cojuangco, Jr., Edgardo J.
Angara, Jose C. Concepcion, Teodoro Regala,
Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U.
Escueta, Paraja G. Hayudini and Raul Roco of the
Angara Concepcion Cruz Regala and Abello law
offices (ACCRA) plotted, devised, schemed
conspired and confederated with each other in
setting up, through the use of the coconut levy funds,
the financial and corporate framework and structures
that led to the establishment of UCPB, UNICOM,
COCOLIFE, COCOMARK, CIC, and more than
twenty other coconut levy funded corporations,
including the acquisition of San Miguel Corporation
shares and its institutionalization through
presidential directives of the coconut monopoly.
Through insidious means and machinations,
ACCRA, being the wholly-owned investment arm,
ACCRA Investments Corporation, became the
holder of approximately fifteen million shares
representing roughly 3.3% of the total outstanding
capital stock of UCPB as of 31 March 1987. This
ranks ACCRA Investments Corporation number 44
among the top 100 biggest stockholders of UCPB
which has approximately 1,400,000 shareholders.
On the other hand, corporate books show the name
Edgardo J. Angara as holding
approximately 3,744 shares as of February, 1984.5
In their answer to the Expanded Amended Complaint, petitioners ACCRA
lawyers alleged that:
4.4 Defendants-ACCRA lawyers' participation in the
acts with which their codefendants are charged, was
in furtherance of legitimate lawyering.
4.4.1 In the course of rendering
professional and legal services
to clients, defendants-ACCRA
lawyers, Jose C. Concepcion,
Teodoro D. Regala, Rogelio A.
Vinluan and Eduardo U.
Escueta, became holders of
shares of stock in the
corporations listed under their
respective names in Annex "A"
of the expanded Amended
Complaint as incorporating or
acquiring stockholders only
and, as such, they do not claim
any proprietary interest in the
said shares of stock.
4.5 Defendant ACCRA-lawyer Avelino V. Cruz was
one of the incorporators in 1976 of Mermaid
Marketing Corporation, which was organized for
legitimate business purposes not related to the
allegations of the expanded Amended Complaint.
However, he has long ago transferred any material
interest therein and therefore denies that the
"shares" appearing in his name in Annex "A" of the
expanded Amended Complaint are his assets.6
Petitioner Paraja Hayudini, who had separated from ACCRA law firm,
filed a separate answer denying the allegations in the complaint
implicating him in the alleged ill-gotten wealth.7
Petitioners ACCRA lawyers subsequently filed their "COMMENT
AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion that
respondent PCGG similarly grant the same treatment to them (exclusion
as parties-defendants) as accorded private respondent Roco.8 The
Counter-Motion for dropping petitioners from the complaint was duly set
for hearing on October 18, 1991 in accordance with the requirements of
Rule 15 of the Rules of Court.
In its "Comment," respondent PCGG set the following conditions
precedent for the exclusion of petitioners, namely: (a) the disclosure of
the identity of its clients; (b) submission of documents substantiating the
lawyer-client relationship; and (c) the submission of the deeds of
assignments petitioners executed in favor of its client covering their
respective
shareholdings.9
Consequently, respondent PCGG presented supposed proof to
substantiate compliance by private respondent Roco of the conditions
precedent to warrant the latter's exclusion as party-defendant in PCGG
Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of
respondent Roco dated May 24, 1989 reiterating a previous request for
reinvestigation by the PCGG in PCGG Case No. 33; (b) Affidavit dated
March 8, 1989 executed by private respondent Roco as Attachment to
the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and
Kapunan Law Offices dated September 21, 1988 to the respondent
PCGG in behalf of private respondent Roco originally requesting the
reinvestigation and/or re-examination of the evidence of the PCGG
against Roco in its Complaint in PCGG Case No. 33. 10
It is noteworthy that during said proceedings, private respondent Roco did
not refute petitioners' contention that he did actually not reveal the identity
of the client involved in PCGG Case No. 33, nor had he undertaken to undertaken to reveal, the
reveal the identity of the client for whom he acted as nominee- identities of the client(s), the
stockholder. 11 disclosure does not constitute a
substantial distinction as would
make the classification
On March 18, 1992, respondent Sandiganbayan promulgated the
reasonable under the equal
Resolution, herein questioned, denying the exclusion of petitioners in
protection clause.
PCGG Case No. 33, for their refusal to comply with the conditions
required by respondent PCGG. It held:
3. Respondent Sandiganbayan
sanctioned favoritism and
xxx xxx xxx
undue preference in favor of Mr.
Roco in violation of the equal
ACCRA lawyers may take the heroic stance of not protection clause.
revealing the identity of the client for whom they have
acted, i.e. their principal, and that will be their choice.
III
But until they do identify their clients, considerations
of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The The Honorable Sandiganbayan committed grave
ACCRA lawyers cannot excuse themselves from the abuse of discretion in not holding that, under the
consequences of their acts until they have begun to facts of this case, the attorney-client privilege
establish the basis for recognizing the privilege; the prohibits petitioners ACCRA lawyers from revealing
existence and identity of the client. the identity of their client(s) and the other information
requested by the PCGG.
This is what appears to be the cause for which they
have been impleaded by the PCGG as defendants 1. Under the peculiar facts of
herein. this case, the attorney-client
privilege includes the identity of
the client(s).
5. The PCGG is satisfied that defendant Roco has
demonstrated his agency and that Roco has
apparently identified his principal, which revelation 2. The factual disclosures
could show the lack of cause against him. This in turn required by the PCGG are not
has allowed the PCGG to exercise its power both limited to the identity of
under the rules of Agency and under Section 5 of petitioners ACCRA lawyers'
E.O. No. 14-A in relation to the Supreme Court's alleged client(s) but extend to
ruling in Republic v. Sandiganbayan (173 SCRA 72). other privileged matters.

The PCGG has apparently offered to the ACCRA IV

lawyers the same conditions availed of by Roco; full
disclosure in exchange for exclusion from these
The Honorable Sandiganbayan committed grave
proceedings (par. 7, PCGG's COMMENT dated
abuse of discretion in not requiring that the dropping
November 4, 1991). The ACCRA lawyers have
of party-defendants by the PCGG must be based on
preferred not to make the disclosures required by the
reasonable and just grounds and with due
PCGG.
consideration to the constitutional right of petitioners
ACCRA lawyers to the equal protection of the law.
The ACCRA lawyers cannot, therefore, begrudge the
PCGG for keeping them as party defendants. In the
Petitioner Paraja G. Hayudini, likewise, filed his own motion for
same vein, they cannot compel the PCGG to be
reconsideration of the March 18, 1991 resolution which was denied by
accorded the same treatment accorded to Roco.
respondent Sandiganbayan. Thus, he filed a separate petition
for certiorari, docketed as G.R. No. 108113, assailing respondent
Neither can this Court. Sandiganbayan's resolution on essentially the same grounds averred by
petitioners in G.R. No. 105938.
WHEREFORE, the Counter Motion dated October 8,
1991 filed by the ACCRA lawyers and joined in by Petitioners contend that the exclusion of respondent Roco as party-
Atty. Paraja G. Hayudini for the same treatment by defendant in PCGG Case No. 33 grants him a favorable treatment, on the
the PCGG as accorded to Raul S. Roco is DENIED pretext of his alleged undertaking to divulge the identity of his client, giving
for lack of merit. 12 him an advantage over them who are in the same footing as partners in
the ACCRA law firm. Petitioners further argue that even granting that such
an undertaking has been assumed by private respondent Roco, they are
ACCRA lawyers moved for a reconsideration of the above resolution but
prohibited from revealing the identity of their principal under their sworn
the same was denied by the respondent Sandiganbayan. Hence, the
mandate and fiduciary duty as lawyers to uphold at all times the
ACCRA lawyers filed the petition for certiorari, docketed as G.R. No.
confidentiality of information obtained during such lawyer-client
105938, invoking the following grounds:
relationship.

I
Respondent PCGG, through its counsel, refutes petitioners' contention,
alleging that the revelation of the identity of the client is not within the
The Honorable Sandiganbayan gravely abused its ambit of the lawyer-client confidentiality privilege, nor are the documents
discretion in subjecting petitioners ACCRA lawyers it required (deeds of assignment) protected, because they are evidence
who undisputably acted as lawyers in serving as of nominee status. 13
nominee-stockholders, to the strict application of the
law of agency.
In his comment, respondent Roco asseverates that respondent PCGG
acted correctly in excluding him as party-defendant because he
II "(Roco) has not filed an Answer. PCGG had therefore the right to dismiss
Civil Case No.0033 as to Roco 'without an order of court by filing a notice
of dismissal'," 14 and he has undertaken to identify his principal. 15
The Honorable Sandiganbayan committed grave
abuse of discretion in not considering petitioners
ACCRA lawyers and Mr. Roco as similarly situated Petitioners' contentions are impressed with merit.
and, therefore, deserving of equal treatment.
I
1. There is absolutely no
evidence that Mr. Roco had
It is quite apparent that petitioners were impleaded by the PCGG as co-
revealed, or had undertaken to
defendants to force them to disclose the identity of their clients. Clearly,
reveal, the identities of the
respondent PCGG is not after petitioners but the "bigger fish" as they say
client(s) for whom he acted as
in street parlance. This ploy is quite clear from the PCGG's willingness to
nominee-stockholder.
cut a deal with petitioners — the names of their clients in exchange for
exclusion from the complaint. The statement of the Sandiganbayan in its
2. Even assuming that Mr. Roco questioned resolution dated March 18, 1992 is explicit:
had revealed, or had
 ACCRA lawyers may take the heroic stance of not
revealing the identity of the client for whom they have
acted, i.e, their principal, and that will be their choice.
But until they do identify their clients, considerations
of whether or not the privilege claimed by the ACCRA
lawyers exists cannot even begin to be debated. The
ACCRA lawyers cannot excuse themselves from the
consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the
existence and identity of the client.
This is what appears to be the cause for which they
have been impleaded by the PCGG as defendants
herein. (Emphasis ours)
In a closely related case, Civil Case No. 0110 of the Sandiganbayan,
Third Division, entitled "Primavera Farms, Inc., et al. vs. Presidential
Commission on Good Government" respondent PCGG, through counsel
Mario Ongkiko, manifested at the hearing on December 5, 1991 that the
PCGG wanted to establish through the ACCRA that their "so called client
is Mr. Eduardo Cojuangco;" that "it was Mr. Eduardo Cojuangco who
furnished all the monies to those subscription payments in corporations
included in Annex "A" of the Third Amended Complaint; that the ACCRA
lawyers executed deeds of trust and deeds of assignment, some in the
name of particular persons; some in blank.
We quote Atty. Ongkiko:
ATTY. ONGKIKO:
With the permission of this Hon. Court. I propose to
establish through these ACCRA lawyers that, one,
their so-called client is Mr. Eduardo Cojuangco.
Second, it was Mr. Eduardo Cojuangco who
furnished all the monies to these subscription
payments of these corporations who are now the
petitioners in this case. Third, that these lawyers
executed deeds of trust, some in the name of a
particular person, some in blank. Now, these blank
deeds are important to our claim that some of the
shares are actually being held by the nominees for
the late President Marcos. Fourth, they also
executed deeds of assignment and some of these
assignments have also blank assignees. Again, this
is important to our claim that some of the shares are
for Mr. Conjuangco and some are for Mr. Marcos.
Fifth, that most of thes e corporations are really just
paper corporations. Why do we say that? One: There
are no really fixed sets of officers, no fixed sets of
directors at the time of incorporation and even up to
1986, which is the crucial year. And not only that,
they have no permits from the municipal authorities
in Makati. Next, actually all their addresses now are
care of Villareal Law Office. They really have no
address on records. These are some of the principal
things that we would ask of these nominees
stockholders, as they called themselves. 16
It would seem that petitioners are merely standing in for their clients as
defendants in the complaint. Petitioners are being prosecuted solely on
the basis of activities and services performed in the course of their duties
as lawyers. Quite obviously, petitioners' inclusion as co-defendants in the
complaint is merely being used as leverage to compel them to name their
clients and consequently to enable the PCGG to nail these clients. Such
being the case, respondent PCGG has no valid cause of action as against
petitioners and should exclude them from the Third Amended Complaint.
II
The nature of lawyer-client relationship is premised on the Roman Law
concepts of locatio conductio operarum(contract of lease of services)
where one person lets his services and another hires them without
reference to the object of which the services are to be performed, wherein
lawyers' services may be compensated by honorarium or for
hire, 17 and mandato (contract of agency) wherein a friend on whom
reliance could be placed makes a contract in his name, but gives up all
that he gained by the contract to the person who requested him. 18 But
the lawyer-client relationship is more than that of the principal-agent and
lessor-lessee.
In modern day perception of the lawyer-client relationship, an attorney is
more than a mere agent or servant, because he possesses special
powers of trust and confidence reposed on him by his client. 19 A lawyer
is also as independent as the judge of the court, thus his powers are
entirely different from and superior to those of an ordinary
agent.20 Moreover, an attorney also occupies what may be considered as
a "quasi-judicial office" since he is in fact an officer of the Court 21 and
exercises his judgment in the choice of courses of action to be taken
favorable to his client.
Thus, in the creation of lawyer-client relationship, there are rules, ethical
conduct and duties that breathe life into it, among those, the fiduciary duty
to his client which is of a very delicate, exacting and confidential
character, requiring a very high degree of fidelity and good faith, 22 that is
required by reason of necessity and public interest 23 based on the
hypothesis that abstinence from seeking legal advice in a good cause is
an evil which is fatal to the administration of justice. 24
It is also the strict sense of fidelity of a lawyer to his
client that distinguishes him from any other
professional in society. This conception is
entrenched and embodies centuries of established
and stable tradition. 25 In Stockton v. Ford,26 the U.
S. Supreme Court held:
There are few of the business relations of life
involving a higher trust and confidence than that of
attorney and client, or generally speaking, one more
honorably and faithfully discharged; few more
anxiously guarded by the law, or governed by the
sterner principles of morality and justice; and it is the
duty of the court to administer them in a
corresponding spirit, and to be watchful and
industrious, to see that confidence thus reposed
shall not be used to the detriment or prejudice of the
rights of the party bestowing it. 27
In our jurisdiction, this privilege takes off from the old Code of Civil
Procedure enacted by the Philippine Commission on August 7, 1901.
Section 383 of the Code specifically "forbids counsel, without authority of
his client to reveal any communication made by the client to him or his
advice given thereon in the course of professional
employment." 28Passed on into various provisions of the Rules of Court,
the attorney-client privilege, as currently worded provides:
Sec. 24. Disqualification by reason of privileged
communication. — The following persons cannot
testify as to matters learned in confidence in the
following cases:
xxx xxx xxx
An attorney cannot, without the consent of his client,
be examined as to any communication made by the
client to him, or his advice given thereon in the
course of, or with a view to, professional
employment, can an attorney's secretary,
stenographer, or clerk be examined, without the
consent of the client and his employer, concerning
any fact the knowledge of which has been acquired
in such capacity. 29
Further, Rule 138 of the Rules of Court states:
Sec. 20. It is the duty of an attorney: (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.
This duty is explicitly mandated in Canon 17 of the Code of Professional
Responsibility which 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 15 of the Canons of Professional Ethics also demands a lawyer's
fidelity to client:
The lawyers owes "entire devotion to the interest of
the client, warm zeal in the maintenance and
defense of his rights and the exertion of his utmost
learning and ability," to the end that nothing be taken
or be withheld from him, save by the rules of law,
legally applied. No fear of judicial disfavor or public
popularity should restrain him from the full discharge
of his duty. In the judicial forum the client is entitled
to the benefit of any and every remedy and defense
that is authorized by the law of the land, and he may
expect his lawyer to assert every such remedy or
defense. But it is steadfastly to be borne in mind that
the great trust of the lawyer is to be performed within
and not without the bounds of the law. The office of
attorney does not permit, much less does it demand
of him for any client, violation of law or any manner
 of fraud or chicanery. He must obey his own
conscience and not that of his client.
Considerations favoring confidentially in lawyer-client relationships are
many and serve several constitutional and policy concerns. In the
constitutional sphere, the privilege gives flesh to one of the most
sacrosanct rights available to the accused, the right to counsel. If a client
were made to choose between legal representation without effective
communication and disclosure and legal representation with all his
secrets revealed then he might be compelled, in some instances, to either
opt to stay away from the judicial system or to lose the right to counsel. If
the price of disclosure is too high, or if it amounts to self incrimination,
then the flow of information would be curtailed thereby rendering the right
practically nugatory. The threat this represents against another
sacrosanct individual right, the right to be presumed innocent is at once
self-evident.
Encouraging full disclosure to a lawyer by one seeking legal services
opens the door to a whole spectrum of legal options which would
otherwise be circumscribed by limited information engendered by a fear
of disclosure. An effective lawyer-client relationship is largely dependent
upon the degree of confidence which exists between lawyer and client
which in turn requires a situation which encourages a dynamic and fruitful
exchange and flow of information. It necessarily follows that in order to
attain effective representation, the lawyer must invoke the privilege not as
a matter of option but as a matter of duty and professional responsibility.
The question now arises whether or not this duty may be asserted in
refusing to disclose the name of petitioners' client(s) in the case at bar.
Under the facts and circumstances obtaining in the instant case, the
answer must be in the affirmative.
As a matter of public policy, a client's identity should not be shrouded in
mystery 30 Under this premise, the general rule in our jurisdiction as well
as in the United States is that a lawyer may not invoke the privilege and
refuse to divulge the name or identity of this client. 31
The reasons advanced for the general rule are well established.
First, the court has a right to know that the client whose privileged
information is sought to be protected is flesh and blood.
Second, the privilege begins to exist only after the attorney-client
relationship has been established. The attorney-client privilege does not
attach until there is a client.
Third, the privilege generally pertains to the subject matter of the
relationship.
Finally, due process considerations require that the opposing party
should, as a general rule, know his adversary. "A party suing or sued is
entitled to know who his opponent is." 32 He cannot be obliged to grope in
the dark against unknown forces. 33
Notwithstanding these considerations, the general rule is however
qualified by some important exceptions.
1) Client identity is privileged where a strong probability exists that
revealing the client's name would implicate that client in the very activity
for which he sought the lawyer's advice.
In Ex-Parte Enzor, 34 a state supreme court reversed a lower court order
requiring a lawyer to divulge the name of her client on the ground that the
subject matter of the relationship was so closely related to the issue of
the client's identity that the privilege actually attached to both.
In Enzor, the unidentified client, an election official, informed his attorney
in confidence that he had been offered a bribe to violate election laws or
that he had accepted a bribe to that end. In her testimony, the attorney
revealed that she had advised her client to count the votes correctly, but
averred that she could not remember whether her client had been, in fact,
bribed. The lawyer was cited for contempt for her refusal to reveal his
client's identity before a grand jury. Reversing the lower court's contempt
orders, the state supreme court held that under the circumstances of the
case, and under the exceptions described above, even the name of the
client was privileged.
U .S. v. Hodge and Zweig,35 involved the same exception, i.e. that client
identity is privileged in those instances where a strong probability exists
that the disclosure of the client's identity would implicate the client in the
very criminal activity for which the lawyer's legal advice was obtained.
The Hodge case involved federal grand jury proceedings inquiring into
the activities of the "Sandino Gang," a gang involved in the illegal
importation of drugs in the United States. The respondents, law partners,
represented key witnesses and suspects including the leader of the gang,
Joe Sandino.
In connection with a tax investigation in November of 1973, the IRS
issued summons to Hodge and Zweig, requiring them to produce
documents and information regarding payment received by Sandino on
behalf of any other person, and vice versa. The lawyers refused to divulge
the names. The Ninth Circuit of the United States Court of Appeals,
upholding non-disclosure under the facts and circumstances of the case,
held:
A client's identity and the nature of that client's fee
arrangements may be privileged where the person
invoking the privilege can show that a strong
probability exists that disclosure of such information
would implicate that client in the very criminal activity
for which legal advice was sought Baird v. Koerner,
279 F. 2d at 680. While in Baird Owe enunciated this
rule as a matter of California law, the rule also
reflects federal law. Appellants contend that
the Baird exception applies to this case.
The Baird exception is entirely consonant with the
principal policy behind the attorney-client privilege.
"In order to promote freedom of consultation of legal
advisors by clients, the apprehension of compelled
disclosure from the legal advisors must be removed;
hence, the law must prohibit such disclosure except
on the client's consent." 8 J. Wigmore, supra sec.
2291, at 545. In furtherance of this policy, the client's
identity and the nature of his fee arrangements are,
in exceptional cases, protected as confidential
communications. 36
2) Where disclosure would open the client to civil liability; his identity is
privileged. For instance, the peculiar facts and circumstances of Neugass
v. Terminal Cab Corporation,37 prompted the New York Supreme Court
to allow a lawyer's claim to the effect that he could not reveal the name of
his client because this would expose the latter to civil litigation.
In the said case, Neugass, the plaintiff, suffered injury when the taxicab
she was riding, owned by respondent corporation, collided with a second
taxicab, whose owner was unknown. Plaintiff brought action both against
defendant corporation and the owner of the second cab, identified in the
information only as John Doe. It turned out that when the attorney of
defendant corporation appeared on preliminary examination, the fact was
somehow revealed that the lawyer came to know the name of the owner
of the second cab when a man, a client of the insurance company, prior
to the institution of legal action, came to him and reported that he was
involved in a car accident. It was apparent under the circumstances that
the man was the owner of the second cab. The state supreme court held
that the reports were clearly made to the lawyer in his professional
capacity. The court said:
That his employment came about through the fact
that the insurance company had hired him to defend
its policyholders seems immaterial. The attorney is
such cases is clearly the attorney for the policyholder
when the policyholder goes to him to report an
occurrence contemplating that it would be used in an
action or claim against him. 38
xxx xxx xxx
All communications made by a client to his counsel,
for the purpose of professional advice or assistance,
are privileged, whether they relate to a suit pending
or contemplated, or to any other matter proper for
such advice or aid; . . . And whenever the
communication made, relates to a matter so
connected with the employment as attorney or
counsel as to afford presumption that it was the
ground of the address by the client, then it is
privileged from disclosure. . .
It appears . . . that the name and address of the
owner of the second cab came to the attorney in this
case as a confidential communication. His client is
not seeking to use the courts, and his address cannot
be disclosed on that theory, nor is the present action
pending against him as service of the summons on
him has not been effected. The objections on which
the court reserved decision are sustained. 39
In the case of Matter of Shawmut Mining Company,40 the lawyer involved
was required by a lower court to disclose whether he represented certain
clients in a certain transaction. The purpose of the court's request was to
determine whether the unnamed persons as interested parties were
connected with the purchase of properties involved in the action. The
lawyer refused and brought the question to the State Supreme Court.
Upholding the lawyer's refusal to divulge the names of his clients the court
held:
 If it can compel the witness to state, as directed by
the order appealed from, that he represented certain
persons in the purchase or sale of these mines, it has
made progress in establishing by such evidence their
version of the litigation. As already suggested, such
testimony by the witness would compel him to
disclose not only that he was attorney for certain
people, but that, as the result of communications
made to him in the course of such employment as
such attorney, he knew that they were interested in
certain transactions. We feel sure that under such
conditions no case has ever gone to the length of
compelling an attorney, at the instance of a hostile
litigant, to disclose not only his retainer, but the
nature of the transactions to which it related, when
such information could be made the basis of a suit
against his client. 41
3) Where the government's lawyers have no case against an attorney's
client unless, by revealing the client's name, the said name would furnish
the only link that would form the chain of testimony necessary to convict
an individual of a crime, the client's name is privileged.
In Baird vs. Korner,42 a lawyer was consulted by the accountants and the
lawyer of certain undisclosed taxpayers regarding steps to be taken to
place the undisclosed taxpayers in a favorable position in case criminal
charges were brought against them by the U.S. Internal Revenue Service
(IRS).
It appeared that the taxpayers' returns of previous years were probably
incorrect and the taxes understated. The clients themselves were unsure
about whether or not they violated tax laws and sought advice from Baird
on the hypothetical possibility that they had. No investigation was then
being undertaken by the IRS of the taxpayers. Subsequently, the attorney
of the taxpayers delivered to Baird the sum of $12, 706.85, which had
been previously assessed as the tax due, and another amount of money
representing his fee for the advice given. Baird then sent a check for
$12,706.85 to the IRS in Baltimore, Maryland, with a note explaining the
payment, but without naming his clients. The IRS demanded that Baird
identify the lawyers, accountants, and other clients involved. Baird
refused on the ground that he did not know their names, and declined to
name the attorney and accountants because this constituted privileged
communication. A petition was filed for the enforcement of the IRS
summons. For Baird's repeated refusal to name his clients he was found
guilty of civil contempt. The Ninth Circuit Court of Appeals held that, a
lawyer could not be forced to reveal the names of clients who employed
him to pay sums of money to the government voluntarily in settlement of
undetermined income taxes, unsued on, and with no government audit or
investigation into that client's income tax liability pending. The court
emphasized the exception that a client's name is privileged when so much
has been revealed concerning the legal services rendered that the
disclosure of the client's identity exposes him to possible investigation
and sanction by government agencies. The Court held:
The facts of the instant case bring it squarely within
that exception to the general rule. Here money was
received by the government, paid by persons who
thereby admitted they had not paid a sufficient
amount in income taxes some one or more years in
the past. The names of the clients are useful to the
government for but one purpose — to ascertain
which taxpayers think they were delinquent, so that
it may check the records for that one year or several
years. The voluntary nature of the payment indicates
a belief by the taxpayers that more taxes or interest
or penalties are due than the sum previously paid, if
any. It indicates a feeling of guilt for nonpayment of
taxes, though whether it is criminal guilt is
undisclosed. But it may well be the link that could
form the chain of testimony necessary to convict an
individual of a federal crime. Certainly the payment
and the feeling of guilt are the reasons the attorney
here involved was employed — to advise his clients
what, under the circumstances, should be done. 43
Apart from these principal exceptions, there exist other situations which
could qualify as exceptions to the general rule.
For example, the content of any client communication to a lawyer lies
within the privilege if it is relevant to the subject matter of the legal problem
on which the client seeks legal assistance. 44 Moreover, where
the nature of the attorney-client relationship has been previously
disclosed and it is the identity which is intended to be confidential, the
identity of the client has been held to be privileged, since such revelation
would otherwise result in disclosure of the entire transaction. 45
Summarizing these exceptions, information relating to the identity of a
client may fall within the ambit of the privilege when the client's name itself
has an independent significance, such that disclosure would then reveal
client confidences. 46
The circumstances involving the engagement of lawyers in the case at
bench, therefore, clearly reveal that the instant case falls under at least
two exceptions to the general rule. First, disclosure of the alleged client's
name would lead to establish said client's connection with the very fact in
issue of the case, which is privileged information, because the privilege,
as stated earlier, protects the subject matter or the substance (without
which there would be not attorney-client relationship).
The link between the alleged criminal offense and the legal advice or legal
service sought was duly establishes in the case at bar, by no less than
the PCGG itself. The key lies in the three specific conditions laid down by
the PCGG which constitutes petitioners' ticket to non-prosecution should
they accede thereto:
(a) the disclosure of the identity of its clients;
(b) submission of documents substantiating the
lawyer-client relationship; and
(c) the submission of the deeds of assignment
petitioners executed in favor of their clients covering
their respective shareholdings.
From these conditions, particularly the third, we can readily deduce that
the clients indeed consulted the petitioners, in their capacity as lawyers,
regarding the financial and corporate structure, framework and set-up of
the corporations in question. In turn, petitioners gave their professional
advice in the form of, among others, the aforementioned deeds of
assignment covering their client's shareholdings.
There is no question that the preparation of the aforestated documents
was part and parcel of petitioners' legal service to their clients. More
important, it constituted an integral part of their duties as lawyers.
Petitioners, therefore, have a legitimate fear that identifying their clients
would implicate them in the very activity for which legal advice had been
sought, i.e., the alleged accumulation of ill-gotten wealth in the
aforementioned corporations.
Furthermore, under the third main exception, revelation of the client's
name would obviously provide the necessary link for the prosecution to
build its case, where none otherwise exists. It is the link, in the words of
Baird, "that would inevitably form the chain of testimony necessary to
convict the (client) of a . . . crime." 47
An important distinction must be made between a case where a client
takes on the services of an attorney for illicit purposes, seeking advice
about how to go around the law for the purpose of committing illegal
activities and a case where a client thinks he might have previously
committed something illegal and consults his attorney about it. The first
case clearly does not fall within the privilege because the same cannot
be invoked for purposes illegal. The second case falls within the exception
because whether or not the act for which the client sought advice turns
out to be illegal, his name cannot be used or disclosed if the disclosure
leads to evidence, not yet in the hands of the prosecution, which might
lead to possible action against him.
These cases may be readily distinguished, because the privilege cannot
be invoked or used as a shield for an illegal act, as in the first example;
while the prosecution may not have a case against the client in the second
example and cannot use the attorney client relationship to build up a case
against the latter. The reason for the first rule is that it is not within the
professional character of a lawyer to give advice on the commission of a
crime. 48 The reason for the second has been stated in the cases above
discussed and are founded on the same policy grounds for which the
attorney-client privilege, in general, exists.
In Matter of Shawmut Mining Co., supra, the appellate court therein
stated that "under such conditions no case has ever yet gone to the length
of compelling an attorney, at the instance of a hostile litigant, to disclose
not only his retainer, but the nature of the transactions to which it related,
when such information could be made the basis of a suit against his
client." 49 "Communications made to an attorney in the course of any
personal employment, relating to the subject thereof, and which may be
supposed to be drawn out in consequence of the relation in which the
parties stand to each other, are under the seal of confidence and entitled
to protection as privileged communications."50 Where the communicated
information, which clearly falls within the privilege, would suggest possible
criminal activity but there would be not much in the information known to
the prosecution which would sustain a charge except that revealing the
name of the client would open up other privileged information which would
substantiate the prosecution's suspicions, then the client's identity is so
inextricably linked to the subject matter itself that it falls within the
protection. The Baird exception, applicable to the instant case, is
consonant with the principal policy behind the privilege, i.e., that for the
purpose of promoting freedom of consultation of legal advisors by clients,
apprehension of compelled disclosure from attorneys must be eliminated.
This exception has likewise been sustained in In re Grand Jury
Proceedings51 and Tillotson v. Boughner.52 What these cases
unanimously seek to avoid is the exploitation of the general rule in what
may amount to a fishing expedition by the prosecution.
There are, after all, alternative source of information available to the
prosecutor which do not depend on utilizing a defendant's counsel as a
convenient and readily available source of information in the building of a
case against the latter. Compelling disclosure of the client's name in
circumstances such as the one which exists in the case at bench amounts
to sanctioning fishing expeditions by lazy prosecutors and litigants which
we cannot and will not countenance. When the nature of the transaction
would be revealed by disclosure of an attorney's retainer, such retainer is
obviously protected by the privilege. 53 It follows that petitioner attorneys
in the instant case owe their client(s) a duty and an obligation not to
disclose the latter's identity which in turn requires them to invoke the
privilege.
In fine, the crux of petitioners' objections ultimately hinges on their
expectation that if the prosecution has a case against their clients, the
latter's case should be built upon evidence painstakingly gathered by
them from their own sources and not from compelled testimony requiring
them to reveal the name of their clients, information which unavoidably
reveals much about the nature of the transaction which may or may not
be illegal. The logical nexus between name and nature of transaction is
so intimate in this case the it would be difficult to simply dissociate one
from the other. In this sense, the name is as much "communication" as
information revealed directly about the transaction in question itself, a
communication which is clearly and distinctly privileged. A lawyer cannot
reveal such communication without exposing himself to charges of
violating a principle which forms the bulwark of the entire attorney-client
relationship.
The uberrimei fidei relationship between a lawyer and his client therefore
imposes a strict liability for negligence on the former. The ethical duties
owing to the client, including confidentiality, loyalty, competence,
diligence as well as the responsibility to keep clients informed and protect
their rights to make decisions have been zealously sustained. In Milbank,
Tweed, Hadley and McCloy v. Boon,54 the US Second District Court
rejected the plea of the petitioner law firm that it breached its fiduciary
duty to its client by helping the latter's former agent in closing a deal for
the agent's benefit only after its client hesitated in proceeding with the
transaction, thus causing no harm to its client. The Court instead ruled
that breaches of a fiduciary relationship in any context comprise a special
breed of cases that often loosen normally stringent requirements of
causation and damages, and found in favor of the client.
To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and
Shipley P.A. v. Scheller55 requiring strict obligation of lawyers vis-a-
vis clients. In this case, a contingent fee lawyer was fired shortly before
the end of completion of his work, and sought payment quantum meruit of
work done. The court, however, found that the lawyer was fired for cause
after he sought to pressure his client into signing a new fee agreement
while settlement negotiations were at a critical stage. While the client
found a new lawyer during the interregnum, events forced the client to
settle for less than what was originally offered. Reiterating the principle of
fiduciary duty of lawyers to clients in Meinhard v. Salmon56 famously
attributed to Justice Benjamin Cardozo that "Not honesty alone, but
the punctilioof an honor the most sensitive, is then the standard of
behavior," the US Court found that the lawyer involved was fired for
cause, thus deserved no attorney's fees at all.
The utmost zeal given by Courts to the protection of the lawyer-client
confidentiality privilege and lawyer's loyalty to his client is evident in the
duration of the protection, which exists not only during the relationship,
but extends even after the termination of the relationship. 57
Such are the unrelenting duties required by lawyers vis-a-vis their clients
because the law, which the lawyers are sworn to uphold, in the words of
Oliver Wendell Holmes, 58 ". . . is an exacting goddess, demanding of her
votaries in intellectual and moral discipline." The Court, no less, is not
prepared to accept respondents' position without denigrating the noble
profession that is lawyering, so extolled by Justice Holmes in this wise:
Every calling is great when greatly pursued. But what
other gives such scope to realize the spontaneous
energy of one's soul? In what other does one plunge
so deep in the stream of life — so share its passions
its battles, its despair, its triumphs, both as witness
and actor? . . . But that is not all. What a subject is
this in which we are united — this abstraction called
the Law, wherein as in a magic mirror, we see
reflected, not only in our lives, but the lives of all men
that have been. When I think on this majestic theme
my eyes dazzle. If we are to speak of the law as our
mistress, we who are here know that she is a
mistress only to be won with sustained and lonely
passion — only to be won by straining all the faculties
by which man is likened to God.
We have no choice but to uphold petitioners' right not to reveal the identity
of their clients under pain of the breach of fiduciary duty owing to their
clients, because the facts of the instant case clearly fall within recognized
exceptions to the rule that the client's name is not privileged information.
If we were to sustain respondent PCGG that the lawyer-client confidential
privilege under the circumstances obtaining here does not cover the
identity of the client, then it would expose the lawyers themselves to
possible litigation by their clients in view of the strict fiduciary
responsibility imposed on them in the exercise of their duties.
The complaint in Civil Case No. 0033 alleged that the
defendants therein, including herein petitioners and Eduardo
Cojuangco, Jr. conspired with each other in setting up through
the use of coconut levy funds the financial and corporate
framework and structures that led to the establishment of
UCPB, UNICOM and others and that through insidious means
and machinations, ACCRA, using its wholly-owned investment
arm, ACCRA Investment Corporation, became the holder of
approximately fifteen million shares representing roughly 3.3%
of the total capital stock of UCPB as of 31 March 1987. The
PCGG wanted to establish through the ACCRA lawyers that
Mr. Cojuangco is their client and it was Cojuangco who
furnished all the monies to the subscription payment; hence,
petitioners acted as dummies, nominees and/or agents by
allowing themselves, among others, to be used as instrument
in accumulating ill-gotten wealth through government
concessions, etc., which acts constitute gross abuse of official
position and authority, flagrant breach of public trust, unjust
enrichment, violation of the Constitution and laws of the
Republic of the Philippines.
By compelling petitioners, not only to reveal the identity of their
clients, but worse, to submit to the PCGG documents
substantiating the client-lawyer relationship, as well as deeds
of assignment petitioners executed in favor of its clients
covering their respective shareholdings, the PCGG would
exact from petitioners a link "that would inevitably form the
chain of testimony necessary to convict the (client) of a crime."
III
In response to petitioners' last assignment of error,
respondents alleged that the private respondent was dropped
as party defendant not only because of his admission that he
acted merely as a nominee but also because of his undertaking
to testify to such facts and circumstances "as the interest of
truth may require, which includes . . . the identity of the
principal."59
First, as to the bare statement that private respondent merely
acted as a lawyer and nominee, a statement made in his out-
of-court settlement with the PCGG, it is sufficient to state that
petitioners have likewise made the same claim not merely out-
of-court but also in the Answer to plaintiff's Expanded Amended
Complaint, signed by counsel, claiming that their acts were
made in furtherance of "legitimate lawyering."60 Being "similarly
situated" in this regard, public respondents must show that
there exist other conditions and circumstances which would
warrant their treating the private respondent differently from
petitioners in the case at bench in order to evade a violation of
the equal protection clause of the Constitution.
To this end, public respondents contend that the primary
consideration behind their decision to sustain the PCGG's
dropping of private respondent as a defendant was his promise
to disclose the identities of the clients in question. However,
respondents failed to show — and absolute nothing exists in
the records of the case at bar — that private respondent
actually revealed the identity of his client(s) to the PCGG. Since
the undertaking happens to be the leitmotif of the entire
arrangement between Mr. Roco and the PCGG, an undertaking
which is so material as to have justified PCGG's special
treatment exempting the private respondent from prosecution,
respondent Sandiganbayan should have required proof of the
undertaking more substantial than a "bare assertion" that
private respondent did indeed comply with the undertaking.
Instead, as manifested by the PCGG, only three documents
were submitted for the purpose, two of which were mere
requests for re-investigation and one simply disclosed certain
clients which petitioners (ACCRA lawyers) were themselves
willing to reveal. These were clients to whom both petitioners
and private respondent rendered legal services while all of
them were partners at ACCRA, and were not the clients which
the PCGG wanted disclosed for the alleged questioned
transactions.61
To justify the dropping of the private respondent from the case
or the filing of the suit in the respondent court without him,
therefore, the PCGG should conclusively show that Mr. Roco
was treated as species apart from the rest of the ACCRA
lawyers on the basis of a classification which made substantial
distinctions based on real differences. No such substantial
distinctions exist from the records of the case at bench, in
violation of the equal protection clause.
The equal protection clause is a guarantee which provides a
wall of protection against uneven application of status and
regulations. In the broader sense, the guarantee operates
against uneven application of legal norms so
that all persons under similar circumstances would be
62
accorded the same treatment. Those who fall within a
particular class ought to be treated alike not only as to
privileges granted but also as to the liabilities imposed.
. . . What is required under this constitutional
guarantee is the uniform operation of legal norms so
that all persons under similar circumstances would
be accorded the same treatment both in the
privileges conferred and the liabilities imposed. As
was noted in a recent decision: "Favoritism and
undue preference cannot be allowed. For the
principle is that equal protection and security shall be
given to every person under circumstances, which if
not identical are analogous. If law be looked upon in
terms of burden or charges, those that fall within a
class should be treated in the same fashion,
whatever restrictions cast on some in the group
equally binding the rest.63
We find that the condition precedent required by the
respondent PCGG of the petitioners for their exclusion as
parties-defendants in PCGG Case No. 33 violates the lawyer-
client confidentiality privilege. The condition also constitutes a
transgression by respondents Sandiganbayan and PCGG of
the equal protection clause of the Constitution.64 It is grossly
unfair to exempt one similarly situated litigant from prosecution
without allowing the same exemption to the others. Moreover,
the PCGG's demand not only touches upon the question of the
identity of their clients but also on documents related to the
suspected transactions, not only in violation of the attorney-
client privilege but also of the constitutional right against self-
incrimination. Whichever way one looks at it, this is a fishing
expedition, a free ride at the expense of such rights.
An argument is advanced that the invocation by petitioners of
the privilege of attorney-client confidentiality at this stage of the
proceedings is premature and that they should wait until they
are called to testify and examine as witnesses as to matters
learned in confidence before they can raise their objections. But
petitioners are not mere witnesses. They are co-principals in
the case for recovery of alleged ill-gotten wealth. They have
made their position clear from the very beginning that they are
not willing to testify and they cannot be compelled to testify in
view of their constitutional right against self-incrimination and
of their fundamental legal right to maintain inviolate the
privilege of attorney-client confidentiality.
It is clear then that the case against petitioners should never be
allowed to take its full course in the Sandiganbayan. Petitioners
should not be made to suffer the effects of further litigation
when it is obvious that their inclusion in the complaint arose
from a privileged attorney-client relationship and as a means of
coercing them to disclose the identities of their clients. To allow
the case to continue with respect to them when this Court could
nip the problem in the bud at this early opportunity would be to
sanction an unjust situation which we should not here
countenance. The case hangs as a real and palpable threat, a
proverbial Sword of Damocles over petitioners' heads. It should
not be allowed to continue a day longer.
While we are aware of respondent PCGG's legal mandate to
recover ill-gotten wealth, we will not sanction acts which violate
the equal protection guarantee and the right against self-
incrimination and subvert the lawyer-client confidentiality
privilege.
WHEREFORE, IN VIEW OF THE FOREGOING, the
Resolutions of respondent Sandiganbayan (First Division)
promulgated on March 18, 1992 and May 21, 1992 are hereby
ANNULLED and SET ASIDE. Respondent Sandiganbayan is
further ordered to exclude petitioners Teodoro D. Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion,
Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayuduni
as parties-defendants in SB Civil Case No. 0033 entitled
"Republic of the Philippines v. Eduardo Cojuangco, Jr., et al."
SO ORDERED.
A.M. No. 936 July 25, 1975
FERMINA LEGASPI DAROY, LYDIA LEGASPI and AGRIPINO
LEGASPI, complainants,
vs.
ATTORNEY RAMON CHAVES LEGASPI, respondent.
AQUINO, J.:
Fermina Legazpi-Daroy, Lydia Legaspi-Acha and Agripino Legaspi of
Iligan City, in a verified complaint dated March 10, 1970, charged Attorney
Ramon Chaves Legaspi of Cagayan de Oro City with malpractice for
having misappropriated the sum of four thousand pesos which he had
collected for them. They prayed that the respondent be disbarred.1 (He
was 59 years old in 1974. He passed the 1954 bar examinations with a
rating of 75.75%).
The evidence shows that the complainants hired the respondent in May,
1962 to represent them in the intestate proceeding for the settlement of
the estate of the spouses Aquilino Gonzaga and Paz Velez-Gonzaga. The
complainants, together with their brother, Vivencio, who was abroad,
were adjudged as one of the six groups of heirs of the late Gonzaga
spouses, their deceased mother, Consuelo Gonzaga-Legaspi, being a
daughter of the spouses. The heirs in a joint petition dated April 11, 1969,
which the respondent signed as counsel for the complainants, agreed that
the coconut land left by the decedents would be divided into six equal
parts, that the administrator be authorized to sell the land, and that, after
payment of the obligations of the estate, the net proceeds would be
distributed among the six groups of heirs. The probate court approved
that agreement in its order of April 29, 1969 (Spec. Proc. Nop. 640 of the
Misamis Oriental CFI, Exh. A).
The land was sold. Fermina Legaspi-Daroy came to know of the sale only
when the respondent wrote a note dated November 28, 1969 to her
father, Teofilo Legaspi, wherein he stated "that the money we have
deposited may be withdrawn on December 8, 1969 at 9:00 o'clock". The
respondent advised Teofilo Legaspito see him on that date so that the
money could be withdrawn (Exh. B).
The complainants were not able to get the money on December 8
because the respondent on December 7 sent to Mrs. Daroy a telegram
countermanding his prior advice and directing here to go to Cagayan de
Oro City on December 10, a Wednesday, to receive the money (Exh. C).
On December 9, a certain Atty. Sugamo sent a handwritten note to Mrs.
Daroy advising her not to go to Cagayan de Oro City on December 10
because according to the respondent "his postdated checks can be paid
and/or collected either Thursday or Friday yet" (Exh. D).
In the afternoon of that same day, December 9, Mrs. Daroy received
another note, this time from the respondent himself, "Cousin Ramon". The
note contained the disturbing intelligence that Mrs. Daroy's "Cousin
Ramon" had withdrawn the money amounting to P4,000 and had spent it.
The letter, a sort of extrajudicial confession or mea culpa on respondent's
part, reads as follows (Exh. E):
Dear Fermina,
I wrote this letter with the hope that you will
understand me. I have received P4,000.00 our share
in the case filed and is now in my custody.
Previous (sic) I have a case wherein I was forced to
use our money to solve my problem.
Now to pay the amount I have used, I sold my jeep
to Mr. Ricarte Gorospe, an Employee of the BIR here
in Cag. But I am not paid as yet. So, I am waiting as
he will pay at 3:00 p.m. today and it's close as I have
promised to give it on the 10th, I mean our money.
Kindly help me, defer the giving you of the sum or at
least until Thursday or Friday, I bring it to you.
I know, my responsibility on this matter.
Thanks

It turned out that on October 20, 1969 the respondent, as to "counsel for
Fermina Daroy et al.", received from Deputy Provincial Sheriff Jose V.
Yasay the said sum of P4,000 as "one (1) share in participation of my
clients Fermina Daroy et al. in connection with (the) order of Judge B. K.
Gorospe" in the aforementioned intestate proceeding. The respondent
signed a receipt for that amount (Exh. L-1). The sheriff paid to Attorneys
Angel Quimpo, Leovigildo Tandog, Jr. and Teogenes Velez, Jr. the
respective shares of the other groups of heirs also in the sum of P4,000
for each group. Those lawyers turned over the amounts withdrawn to their
respective clients (Exh. L).
It is evident that the respondent, in writing on November 28, 1969 to
Teofilo Legaspi that the money deposited could be withdrawn on
December 8, 1969, acted in bad faith. He had already withdrawn the
money before that date. He concealed that fact from the complainants.
Before the disbarment complaint was filed several demands were made
upon the respondent to pay to the complainants the amount which he had
misappropriated. He repeatedly broke his promises to make payment. As
complainants' patience was already exhausted, they filed their complaint
for disbarment on March 13, 1970.2
Atty. Alfredo R. Busico, the lawyer for the complainants, in a letter to this
Court's Clerk of Court dated May 26, 1970, expressed the hope that
preferential attention would be given to the case. He said that he had
"reliable information from Cagayan de Oro City" that the respondent "has
been bragging that nothing will happen to this case" (p.
20, Rollo).1äwphï1.ñët
The case was referred to the Solicitor General for investigation, report
and recommendation. In 1973 he requested the City Fiscal of Iligan City
to conduct the investigation. 3 After the investigation was finished, the
case was set for hearing. The respondent did not appear at the hearing.
Respondent Legaspi in his testimony admitted that he received the said
sum of P4,000 as shown in the receipt, Exhibit D dated October 20, 1969.
He said that after receiving it he immediately wired Teofilo Legaspi at
Iligan City to see him (the respondent) in his office at Cagayan de Oro
City so that Teofilo Legaspi could tell him "the proper disposal" of that
amount.
Teofilo Legaspi supposedly went to see him on October 21, 1969 and at
their conference they supposedly agreed that the sum of P700 would be
deducted from the P4,000 to cover the expenses which he (Legaspi)
described as "expenses involved from the parties litigants, expenses
seeking evidence and other expenses relevant to the case" and "major
expenses" in the case (sic); that his attorney's fees would be equivalent
"to a share of the petitioners", an agreement which was later placed in
formal form (referring to 1968 extrajudicial settlement attached to his
answer); that the balance of P3,300 would be divided into six equal parts
(six because of the four Legaspi children, the father Teofilo Legaspi and
the lawyer Ramon C. Legaspi); that under such division each participant
would receive P412 each (P3,300 divided by six gives a quotient of P550
not P412), and that he gave Teofilo the sum of P412. The respondent did
not present any receipt to prove that alleged payment.
He said that at first Teofilo Legaspi told him to keep the share of Vivencio
Legaspi, who was abroad, but at the end of October or the first week of
November, 1969 Teofilo got from him (the respondent) Vivencio's share.
Again, the respondent did not ask Teofilo to sign a receipt for Vivencio's
share. After paying the shares of Teofilo and Vivencio, the balance of the
amount left in respondent's possession amounted to P2,476.
According to respondent's version, the complainants "refused
consistently to receive" the said balance from him because they wanted
the full amount of P4,000. He said that he had already paid to them the
sum of P2,000 and that only the sum of P476 was left in his custody. He
did not present any receipt to prove the alleged payment of P2,000. He
said that he could deliver that amount of P476 to the complainants.
Mrs. Daroy, in rebuttal, denied that her father, Teofilo Legaspi, received
the sum of P412 from the respondent. She said that her father never went
to Cagayan de Oro City to confer with the respondent. She said that there
was no agreement that the respondent would participate like an heir in
the partition of the sum of P4,000. She denied that the respondent offered
to pay her and her brother and sister the sum of P2,746. She denied that
the respondent paid to the complainants P2,000.
After a careful examination of the evidence,s we find that respondent's
testimony cannot be given any credence. iIn his memorandum he stated
that after he received from the sheriff "on nOctober 29, 1969" the sum of
P4,000, he "immediately wired" his kinsman, R Teofilo Legaspi, to come to
Cagayan de Oro City and that Teofilo "came a on October 21, 1969".
Respondent meant October 20, 1969, the m date of the receipt, Exhibit L-1.
o
n
The truth is that he did not send any such wire. The statement of the
sheriff and respondent's office clerk in their affidavits of March 18, 1975
that such a wire was sent is false. What he sent to Teofilo Legaspi was a
handwritten note dated November 28, 1969 (Exh. B) wherein the
respondent made it appear that the said sum of P4,000 was going to be
withdrawn on "December 8, 1969 at nine o'clock". That the respondent in
his testimony and memorandum forgot that note, which is Annex C of the
complaint for disbarment and which he admitted in paragraph 4 of his
answer, is an indication that he does not know the facts of his own case
and that he had no scruples in trying to mislead and deceive this Court.
That note of respondent to Teofilo Legaspi, his telegram and his letter
(already quoted) to Mrs. Daroy dated December 7 and 9, 1969,
respectively (Exh. B, C and E) overwhelmingly belie his fabricated theory
that he conferred with Teofilo Legaspi at the end of October or in the first
week of November, 1969. He was tempted to concoct a story as to his
alleged payments to Teofilo Legaspi because the latter is dead and could
not refute him. However, complainants' documentary evidence refutes his
prevarications, distortions and fabrications.
He attached to his memorandum (of which he did not furnish
complainants a copy) his Exhibit 2, a supposed typewritten claim against
him which totalled P10,406.05. Exhibit 2 does not bear any signature. The
respondent wants to imply that the complainants were trying to blackmail
him. No probative value can be given to Exhibit 2.
The flimsiness and incredible character of respondent's defense are
discernible in his Exhibit 1, which he attached to his answer to the original
complaint.
Exhibit 1 as a carbon copy of a supposed extrajudicial partition executed
in 1968 by the four children of Consuelo Gonzaga, by her surviving
husband, Teofilo Legaspi and by the respondent, Atty. Legaspi, all the six
being described in the document as "the legitimate children and sole heirs
of Consuelo Gonzaga, who died on March 12. 1941". Why the respondent
was an heir of Consuelo Gonzaga was not explained.
In that curious instrument, the spaces for the day and month when it was
signed and acknowledged before a notary, the spaces for the description
of the fourth parcel of land, the spaces for the shares adjudicated to the
heirs, the spaces for the instrumental witnesses and the spaces for the
numbers of the residence certificates and the dates and places of issue
were left blank. Yet the instrument was signed by the above six persons
and duly notarized by a notary whose signature is illegible.
In that extrajudicial partition Consuelo Gonzaga was alleged to have left
four parcels of land located at Barrio Maputi, Initao, Misamis Oriental
which she inherited from her father Aquilino Gonzaga. However, in the
order of the Court of First Instance of Misamis Oriental dated April 29,
1969 Consuelo Gonzaga inherited only a one-sixth share in a parcel of
land located at Maputi, Initao, Misamis Oriental.
How Vivencio Legaspi, who, according to the instrument, was a resident
of Alameda, California, was able to sign it and to appear before a notary
was not explained.
The incomplete document, far from being of any help to respondent
Legaspi, casts a reflection on his competency and integrity as a lawyer
and on the competency and integrity of the notary before whom it was
acknowledged. As already noted, it was made to appear herein that
respondent Legaspi was an heir of Consuelo Gonzaga when, obviously,
he did not possess that status. The document does not even mention
whether the deceased died intestate.
That document has no connection with the P4,000 and does not justify
the misappropriation or breach of trust committed by the respondent.
A lawyer, under his oath, pledges himself not to delay any man for money
or malice and is bound to conduct himself with all good fidelity to his
clients. He is obligated to report promptly the money of his clients that has
come into his possession. He should not commingle it with his private
property or use it for his personal purposes without his client's consent.
He should maintain a reputation for honesty and fidelity to private trust
(Pars. 11 and 32, Canons of Legal Ethics).
Money collected by a lawyer in pursuance of a judgment in favor of his
clients is held in trust and must be immediately turned over to them (Aya
vs. Bigornia, 57 Phil. 8, 11).1äwphï1.ñët
Section 25, Rule 138 of the Rules of Court provides that when an attorney Delgado, Dizon and Flores for petitioner.
unjustly retains in his hands money of his client after it has been Vicente J. Francisco for respondents.
demanded, he may be punished for contempt as an officer of the court
who has misbehaved in his official transactions and he is liable to a
TUASON, J.:
criminal prosecution.

It appears that on April 23, 1945, Blandina Gamboa Hilado brought an

A lawyer may be disbarred for any deceit, malpractice or other gross
action against Selim Jacob Assad to annul the sale of several houses and
misconduct in his office as attorney or for any violation of the lawyer's
lot executed during the Japanese occupation by Mrs. Hilado's now
oath (Ibid, sec. 27).
deceased husband.

"The relation between an attorney and his client is highly fiduciary in its
On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on
nature and of a very delicate, exacting and confidential character,
behalf of the defendant; and on June 15, Attorneys Delgado, Dizon,
requiring a high degree of fidelity and good faith" (7 Am. Jur. 2d 105). In
Flores and Rodrigo registered their appearance as counsel for the
view of that special relationship, "lawyers are bound to promptly account
plaintiff. On October 5, these attorneys filed an amended complaint by
for money or property received by them on behalf of their clients and
including Jacob Assad as party defendant.
failure to do so constitutes professional misconduct. The fact that a lawyer
has a lien for fees on money in his hands collected for his clients does not
relieve him from the duty of promptly accounting for the funds received." On January 28, 1946, Attorney Francisco entered his appearance as
(Syllabus, In re Bamberger, 49 Phil. 962). attorney of record for the defendant in substitution for Attorney Ohnick,
Velilla and Balonkita who had withdrawn from the case.
The conversion of funds entrusted to an attorney is a gross violation of
general morality as well as professional ethics. It impairs public On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
confidence in the legal profession, "It deserves severe punishment" (Sturr Francisco urging him to discontinue representing the defendants on the
vs. State Bar of California, 52 Cal. 2d 125, 338 Pac. 2d 897).1äwphï1.ñët ground that their client had consulted with him about her case, on which
occasion, it was alleged, "she turned over the papers" to Attorney
Francisco, and the latter sent her a written opinion. Not receiving any
A member of the bar who converts the money of his client to his own
answer to this suggestion, Attorney Delgado, Dizon, Flores and Rodrigo
benefit through false pretenses is guilty of deceit, malpractice and gross
on June 3, 1946, filed a formal motion with the court, wherein the case
misconduct in his office of lawyer. The attorney, who violates his oath of
was and is pending, to disqualify Attorney Francisco.
office, betrays the confidence reposed in him by a client and practices
deceit cannot be permitted to continue as a law practitioner. Not alone
has he degraded himself but as an unfaithful lawyer he has besmirched Attorney Francisco's letter to plaintiff, mentioned above and identified as
the fair name of an honorable profession (In re Paraiso, 41 Phil. 24, 25; In Exhibit A, is in full as follows:
re David, 84 Phil. 627; Manaloto vs. Reyes, Adm. Case No. 503, October
29, 1965, 15 SCRA 131; See Cabigao and Yzquierdo vs. Fernando
Rodrigo, 57 Phil. 20). VICENTE J. FRANCISCO
Attorney-at-Law
1462 Estrada, Manila
We find respondent Legaspi guilty of deceit, malpractice and professional
misconduct for having misappropriated the funds of his clients. His
manufactured defenses, his lack of candor and his repeated failure to July 13, 1945.
appear at the investigation conducted by the City Fiscal of Iligan and at
the hearings scheduled by this Court, thus causing this proceeding to
drag on for a long time, demonstrate his unworthiness to remain as a
member of the noble profession of law. (See Capulong vs. Aliño, Adm. Mrs. Blandina Gamboa Hilado
Case No. 381, February 10, 1968, 22 SCRA 491). Manila, Philippines

Taking into account the environmental circumstances of the case, we hold My dear Mrs. Hilado:
that the proper disciplinary action against the respondent is disbarment.
Its salutary purpose is to protect the court and the public from the
From the papers you submitted to me in connection with civil
misconduct of an officer of the court. It is premised on the assumption that
case No. 70075 of the Court of First Instance of Manila, entitled
a member of the bar should be competent, honorable and reliable, a
"Blandina Gamboa Hilado vs. S. J. Assad," I find that the basic
person in whom courts and clients may repose confidence (In
facts which brought about the controversy between you and the
re MacDougall, 3 Phil. 70, 78).
defendant therein are as follows:

Its objectives are to compel the lawyer to deal fairly and honestly with his
(a) That you were the equitable owner of the property described
client and to remove from the profession a person whose misconduct has
in the complaint, as the same was purchased and/or built with
proven him unfit for the duties and responsibilities belonging to the office
funds exclusively belonging to you, that is to say, the houses
of an attorney (6 Moran's Comments on the Rules of Court, 1970 Ed., p.
and lot pertained to your paraphernal estate;
242).1äwphï1.ñët

(b) That on May 3, 1943, the legal title to the property was with
The prayer of the complainants that the respondent be ordered to pay
your husband, Mr. Serafin P. Hilado; and
them the said amount of P4,000 plus attorney's fees and miscellaneous
expenses incurred in the prosecution of this case amounting to more than
P1,000 cannot be granted in this disbarment proceeding. That amount (c) That the property was sold by Mr. Hilado without your
should be recovered in an ordinary action. knowledge on the aforesaid date of May 3, 1943.

WHEREFORE, the respondent is disbarred. The Clerk of Court is directed Upon the foregoing facts, I am of the opinion that your action
to strike out his name from the Roll of Attorneys. against Mr. Assad will not ordinarily prosper. Mr. Assad had the
right to presume that your husband had the legal right to
dispose of the property as the transfer certificate of title was in
SO ORDERED.
his name. Moreover, the price of P110,000 in Japanese military
notes, as of May 3, 1943, does not quite strike me as so grossly
Makalintal, C.J., Castro, Fernando, Barredo, Makasiar, Antonio, inadequate as to warrant the annulment of the sale. I believe,
Esguerra, Muñoz Palma, Concepcion Jr., and Martin, JJ., concur. lastly, that the transaction cannot be avoided merely because
it was made during the Japanese occupation, nor on the simple
allegation that the real purchaser was not a citizen of the
Teehankee, J., is on leave. Philippines. On his last point, furthermore, I expect that you will
have great difficulty in proving that the real purchaser was other
than Mr. Assad, considering that death has already sealed your
husband's lips and he cannot now testify as to the
circumstances of the sale.
G.R. No. L-961 September 21, 1949
For the foregoing reasons, I regret to advise you that I cannot
BLANDINA GAMBOA HILADO, petitioner, appear in the proceedings in your behalf. The records of the
vs. case you loaned to me are herewith returned.
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD
and SELIM JACOB ASSAD, respondents.

Yours very truly,
(Sgd.) VICENTE J. FRANCISCO
VJF/Rag.
In his answer to plaintiff's attorneys' complaint, Attorney Francisco alleged
that about May, 1945, a real estate broker came to his office in connection
with the legal separation of a woman who had been deserted by her
husband, and also told him (Francisco) that there was a pending suit
brought by Mrs. Hilado against a certain Syrian to annul the sale of a real
estate which the deceased Serafin Hilado had made to the Syrian during
the Japanese occupation; that this woman asked him if he was willing to
accept the case if the Syrian should give it to him; that he told the woman
that the sales of real property during the Japanese regime were valid even
though it was paid for in Japanese military notes; that this being his
opinion, he told his visitor he would have no objection to defending the
Syrian;
That one month afterwards, Mrs. Hilado came to see him about a suit she
had instituted against a certain Syrian to annul the conveyance of a real
estate which her husband had made; that according to her the case was
in the hands of Attorneys Delgado and Dizon, but she wanted to take it
away from them; that as he had known the plaintiff's deceased husband
he did not hesitate to tell her frankly that hers was a lost case for the same
reason he had told the broker; that Mrs. Hilado retorted that the basis of
her action was not that the money paid her husband was Japanese
military notes, but that the premises were her private and exclusive
property; that she requested him to read the complaint to be convinced
that this was the theory of her suit; that he then asked Mrs. Hilado if there
was a Torrens title to the property and she answered yes, in the name of
her husband; that he told Mrs. Hilado that if the property was registered
in her husband's favor, her case would not prosper either;
That some days afterward, upon arrival at his law office on Estrada street,
he was informed by Attorney Federico Agrava, his assistant, that Mrs.
Hilado had dropped in looking for him and that when he, Agrava, learned
that Mrs. Hilado's visit concerned legal matters he attended to her and
requested her to leave the "expediente" which she was carrying, and she
did; that he told Attorney Agrava that the firm should not handle Mrs.
Hilado's case and he should return the papers, calling Agrava's attention
to what he (Francisco) already had said to Mrs. Hilado;
That several days later, the stenographer in his law office, Teofilo
Ragodon, showed him a letter which had been dictated in English by Mr.
Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon told him
(Attorney Francisco) upon Attorney Agrava's request that Agrava thought
it more proper to explain to Mrs. Hilado the reasons why her case was
rejected; that he forthwith signed the letter without reading it and without
keeping it for a minute in his possession; that he never saw Mrs. Hilado
since their last meeting until she talked to him at the Manila Hotel about
a proposed extrajudicial settlement of the case;
That in January, 1946, Assad was in his office to request him to handle
his case stating that his American lawyer had gone to the States and left
the case in the hands of other attorneys; that he accepted the retainer
and on January 28, 1946, entered his appearance.
Attorney Francisco filed an affidavit of stenographer Ragodon in
corroboration of his answer.
The judge trying the case, Honorable Jose Gutierrez David, later
promoted to the Court of Appeals, dismissed the complaint. His Honor
believed that no information other than that already alleged in plaintiff's
complaint in the main cause was conveyed to Attorney Francisco, and
concluded that the intercourse between the plaintiff and the respondent
did not attain the point of creating the relation of attorney and client.
Stripped of disputed details and collateral matters, this much is
undoubted: That Attorney Francisco's law firm mailed to the plaintiff a
written opinion over his signature on the merits of her case; that this
opinion was reached on the basis of papers she had submitted at his
office; that Mrs. Hilado's purpose in submitting those papers was to
secure Attorney Francisco's professional services. Granting the facts to
be no more than these, we agree with petitioner's counsel that the relation
of attorney and client between Attorney Francisco and Mrs. Hilado
ensued. The following rules accord with the ethics of the legal profession
and meet with our approval:
In order to constitute the relation (of attorney and client) a
professional one and not merely one of principal and agent, the
attorneys must be employed either to give advice upon a legal
point, to prosecute or defend an action in court of justice, or to
prepare and draft, in legal form such papers as deeds, bills,
contracts and the like. (Atkinson vs. Howlett, 11 Ky. Law Rep.
(abstract), 364; cited in Vol. 88, A. L. R., p. 6.)
To constitute professional employment it is not essential that
the client should have employed the attorney professionally on
any previous occasion. . . . It is not necessary that any retainer
should have been paid, promised, or charged for; neither is it
material that the attorney consulted did not afterward undertake
the case about which the consultation was had. If a person, in
respect to his business affairs or troubles of any kind, consults
with his attorney in his professional capacity with the view to
obtaining professional advice or assistance, and the attorney
voluntarily permits or acquiesces in such consultation, then the
professional employment must be regarded as established. . .
. (5 Jones Commentaries on Evidence, pp. 4118-4119.)
An attorney is employed-that is, he is engaged in his
professional capacity as a lawyer or counselor-when he is
listening to his client's preliminary statement of his case, or
when he is giving advice thereon, just as truly as when he is
drawing his client's pleadings, or advocating his client's cause
in open court. (Denver Tramway Co. vs. Owens, 20 Colo., 107;
36 P., 848.)
Formality is not an essential element of the employment of an
attorney. The contract may be express or implied and it is
sufficient that the advice and assistance of the attorney is
sought and received, in matters pertinent to his profession. An
acceptance of the relation is implied on the part of the attorney
from his acting in behalf of his client in pursuance of a request
by the latter. (7 C. J. S., 848-849; see Hirach Bros. and Co. vs.
R. E. Kennington Co., 88 A. L. R., 1.)
Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney
cannot, without the consent of his client, be examined as to any
communication made by the client to him, or his advice given thereon in
the course of professional employment;" and section 19 (e) of Rule 127
imposes upon an attorney the duty "to maintain inviolate the confidence,
and at every peril to himself, to preserve the secrets of his client." There
is no law or provision in the Rules of Court prohibiting attorneys in express
terms from acting on behalf of both parties to a controversy whose
interests are opposed to each other, but such prohibition is necessarily
implied in the injunctions above quoted. (In re De la Rosa, 27 Phil., 258.)
In fact the prohibition derives validity from sources higher than written
laws and rules. As has been aptly said in In re Merron, 22 N. M., 252,
L.R.A., 1917B, 378, "information so received is sacred to the employment
to which it pertains," and "to permit it to be used in the interest of another,
or, worse still, in the interest of the adverse party, is to strike at the
element of confidence which lies at the basis of, and affords the essential
security in, the relation of attorney and client."
That only copies of pleadings already filed in court were furnished to
Attorney Agrava and that, this being so, no secret communication was
transmitted to him by the plaintiff, would not vary the situation even if we
should discard Mrs. Hilado's statement that other papers, personal and
private in character, were turned in by her. Precedents are at hand to
support the doctrine that the mere relation of attorney and client ought to
preclude the attorney from accepting the opposite party's retainer in the
same litigation regardless of what information was received by him from
his first client.
The principle which forbids an attorney who has been engaged
to represent a client from thereafter appearing on behalf of the
client's opponent applies equally even though during the
continuance of the employment nothing of a confidential nature
was revealed to the attorney by the client. (Christian vs.
Waialua Agricultural Co., 30 Hawaii, 553, Footnote 7, C. J. S.,
828.)
Where it appeared that an attorney, representing one party in
litigation, had formerly represented the adverse party with
respect to the same matter involved in the litigation, the court
need not inquire as to how much knowledge the attorney
acquired from his former during that relationship, before
refusing to permit the attorney to represent the adverse party.
(Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.)
In order that a court may prevent an attorney from appearing
against a former client, it is unnecessary that the ascertain in
detail the extent to which the former client's affairs might have
a bearing on the matters involved in the subsequent litigation
on the attorney's knowledge thereof. (Boyd vs. Second Judicial
Dist. Court, 274 P., 7; 51 Nev., 264.)
This rule has been so strictly that it has been held an attorney,
on terminating his employment, cannot thereafter act as
counsel against his client in the same general matter, even
though, while acting for his former client, he acquired no
knowledge which could operate to his client's disadvantage in
the subsequent adverse employment. (Pierce vs. Palmer
[1910], 31 R. I., 432; 77 Atl., 201, Ann. Cas., 1912S, 181.)
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 un salutary 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 in
consequence be wary in going to an attorney, lest by an unfortunate turn
of the proceedings, if an investigation be held, the court should accept the
attorney's inaccurate version of the facts that came to him. "Now the
abstinence from seeking legal advice in a good cause is by hypothesis an
evil which is fatal to the administration of justice." (John H. Wigmore's
Evidence, 1923, Section 2285, 2290, 2291.)
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 Ill., 97; 47 L.R.A., 792.) It is founded on
principles of public policy, on good taste. As has been said in 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.
So without impugning respondent's good faith, we nevertheless can not
sanction his taking up the cause of the adversary of the party who had
sought and obtained legal advice from his firm; this, not necessarily to
prevent any injustice to the plaintiff but to keep above reproach the honor
and integrity of the courts and of the bar. Without condemning the
respondents conduct as dishonest, corrupt, or fraudulent, we do believe
that upon the admitted facts it is highly in expedient. It had the tendency
to bring the profession, of which he is a distinguished member, "into public
disrepute and suspicion and undermine the integrity of justice."
There is in legal practice what called "retaining fee," the purpose of which
stems from the realization that the attorney is disabled from acting as
counsel for the other side after he has given professional advice to the
opposite party, even if he should decline to perform the contemplated
services on behalf of the latter. It is to prevent undue hardship on the
attorney resulting from the rigid observance of the rule that a separate
and independent fee for consultation and advice was conceived and
authorized. "A retaining fee is a preliminary fee given to an attorney or
counsel to insure and secure his future services, and induce him to act
for the client. It is intended to remunerate counsel for being deprived, by
being retained by one party, of the opportunity of rendering services to
the other and of receiving pay from him, and the payment of such fee, in
the absence of an express understanding to the contrary, is neither made
nor received in payment of the services contemplated; its payment has
no relation to the obligation of the client to pay his attorney for the services
which he has retained him to perform." (7 C.J.S., 1019.)
The defense that Attorney Agrava wrote the letter Exhibit A and that
Attorney Francisco did not take the trouble of reading it, would not take
the case out of the interdiction. If this letter was written under the
circumstances explained by Attorney Francisco and he was unaware of
its contents, the fact remains that his firm did give Mrs. Hilado a formal
professional advice from which, as heretofore demonstrated, emerged
the relation of attorney and client. This letter binds and estop him in the
same manner and to the same degree as if he personally had written it.
An information obtained from a client by a member or assistant of a law
firm is information imparted to the firm. (6 C. J., 628; 7 C. J. S., 986.) This
is not a mere fiction or an arbitrary rule; for such member or assistant, as
in our case, not only acts in the name and interest of the firm, but his
information, by the nature of his connection with the firm is available to
his associates or employers. The rule is all the more to be adhered to
where, as in the present instance, the opinion was actually signed by the
head of the firm and carries his initials intended to convey the impression
that it was dictated by him personally. No progress could be hoped for in
"the public policy that the client in consulting his legal adviser ought to be
free from apprehension of disclosure of his confidence," if the prohibition
were not extended to the attorney's partners, employers or assistants.
The fact that petitioner did not object until after four months had passed
from the date Attorney Francisco first appeared for the defendants does
not operate as a waiver of her right to ask for his disqualification. In one
case, objection to the appearance of an attorney was allowed even on
appeal as a ground for reversal of the judgment. In that case, in which
throughout the conduct of the cause in the court below the attorney had
been suffered so to act without objection, the court said: "We are all of
the one mind, that the right of the appellee to make his objection has not
lapsed by reason of failure to make it sooner; that professional confidence
once reposed can never be divested by expiration of professional
employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A. L. R. 1316.)
The complaint that petitioner's remedy is by appeal and not by certiorari
deserves scant attention. The courts have summary jurisdiction to protect
the rights of the parties and the public from any conduct of attorneys
prejudicial to the administration of the justice. The summary jurisdiction of
the courts over attorneys is not confined to requiring them to pay over
money collected by them but embraces authority to compel them to do
whatever specific acts may be incumbent upon them in their capacity of
attorneys to perform. The courts from the general principles of equity and
policy, will always look into the dealings between attorneys and clients
and guard the latter from any undue consequences resulting from a
situation in which they may stand unequal. The courts acts on the same
principles whether the undertaking is to appear, or, for that matter, not to
appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This
summary remedy against attorneys flows from the facts that they are
officers of the court where they practice, forming a part of the machinery
of the law for the administration of justice and as such subject to the
disciplinary authority of the courts and to its orders and directions with
respect to their relations to the court as well as to their clients. (Charest
vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.)
Attorney stand on the same footing as sheriffs and other court officers in
respect of matters just mentioned.
We conclude therefore that the motion for disqualification should be
allowed. It is so ordered, without costs.
A.C. No. 6711 July 3, 2007
MA. LUISA HADJULA, complainant,
vs.
ATTY. ROCELES F. MADIANDA, respondent.
DECISION
GARCIA, J.:
Under consideration is Resolution No. XVI-2004-472 of the Board of
Governors, Integrated Bar of the Philippines (IBP), relative to the
complaint for disbarment filed by herein complainant Ma. Luisa Hadjula
against respondent Atty. Roceles F. Madianda.
The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date
September 7, 2002 and filed with the IBP Commission on Bar Discipline,
complainant charged Atty. Roceles F. Madianda with violation of Article
2092 of the Revised Penal Code and Canon Nos. 15.02 and 21.02 of the
Code of Professional Responsibility.
In said affidavit-complaint, complainant alleged that she and respondent
used to be friends as they both worked at the Bureau of Fire Protection
(BFP) whereat respondent was the Chief Legal Officer while she was the
Chief Nurse of the Medical, Dental and Nursing Services. Complainant
claimed that, sometime in 1998, she approached respondent for some
legal advice. Complainant further alleged that, in the course of their
conversation which was supposed to be kept confidential, she disclosed
personal secrets and produced copies of a marriage contract, a birth
certificate and a baptismal certificate, only to be informed later by the
respondent that she (respondent) would refer the matter to a lawyer
friend. It was malicious, so complainant states, of respondent to have
refused handling her case only after she had already heard her secrets.
Continuing, complainant averred that her friendship with respondent
soured after her filing, in the later part of 2000, of criminal and disciplinary
actions against the latter. What, per complainant's account, precipitated
the filing was when respondent, then a member of the BFP promotion
board, demanded a cellular phone in exchange for the complainant's
promotion.
According to complainant, respondent, in retaliation to the filing of the
aforesaid actions, filed a COUNTER COMPLAINT3 with the Ombudsman
charging her (complainant) with violation of Section 3(a) of Republic Act
No. 3019,4 falsification of public documents and immorality, the last two
charges being based on the disclosures complainant earlier made to
respondent. And also on the basis of the same disclosures, complainant
further stated, a disciplinary case was also instituted against her before
the Professional Regulation Commission.
Complainant seeks the suspension and/or disbarment of respondent for
the latter's act of disclosing personal secrets and confidential information
she revealed in the course of seeking respondent's legal advice.
In an order dated October 2, 2002, the IBP Commission on Bar Discipline
required respondent to file her answer to the complaint.
In her answer, styled as COUNTER-AFFIDAVIT,5 respondent denied
giving legal advice to the complainant and dismissed any suggestion
about the existence of a lawyer-client relationship between them.
Respondent also stated the observation that the supposed confidential
data and sensitive documents adverted to are in fact matters of common
knowledge in the BFP. The relevant portions of the answer read:
5. I specifically deny the allegation of F/SUPT. MA. LUISA C.
HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for
reason that she never WAS MY CLIENT nor we ever had any
LAWYER-CLIENT RELATIONSHIP that ever existed ever
since and that never obtained any legal advice from me
regarding her PERSONAL PROBLEMS or PERSONAL
SECRETS. She likewise never delivered to me legal
documents much more told me some confidential information
or secrets. That is because I never entertain LEGAL QUERIES
or CONSULTATION regarding PERSONAL MATTERS since I
know as a LAWYER of the Bureau of Fire Protection that I am
not allowed to privately practice law and it might also result to
CONFLICT OF INTEREST. As a matter of fact, whenever there
will be PERSONAL MATTERS referred to me, I just referred
them to private law practitioners and never entertain the same,
NOR listen to their stories or examine or accept any document.
9. I specifically deny the allegation of F/SUPT. MA. LUISA C.
HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the
truth of the matter is that her ILLICIT RELATIONSHIP and her
illegal and unlawful activities are known in the Bureau of Fire
Protection since she also filed CHILD SUPPORT case against
her lover … where she has a child ….
Moreover, the alleged DOCUMENTS she purportedly have
shown to me sometime in 1998, are all part of public records
….
Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the
instant case just to get even with me or to force me to settle
and withdraw the CASES I FILED AGAINST HER since she
knows that she will certainly be DISMISSED FROM SERVICE,
REMOVED FROM THE PRC ROLL and CRIMINALLY
CONVICTED of her ILLICIT, IMMORAL, ILLEGAL and
UNLAWFUL ACTS.
On October 7, 2004, the Investigating Commissioner of the IBP
Commission on Bar Discipline came out with a Report and
Recommendation, stating that the information related by complainant to
the respondent is "protected under the attorney-client privilege
communication." Prescinding from this postulate, the Investigating
Commissioner found the respondent to have violated legal ethics when
she "[revealed] information given to her during a legal consultation," and
accordingly recommended that respondent be reprimanded therefor,
thus:
WHEREFORE, premises considered, it is respectfully
recommended that respondent Atty. Roceles Madianda be
reprimanded for revealing the secrets of the complainant.
On November 4, 2004, the IBP Board of Governors issued Resolution No.
XVI-2004-472 reading as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby
ADOPTED and APPROVED, the Report and Recommendation
of the Investigating Commissioner of the 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 the
actuation of revealing information given to respondent during a
legal consultation, Atty. Roceles Madianda is
hereby REPRIMANDED.
We AGREE with the recommendation and the premises holding it
together.
As it were, complainant went to respondent, a lawyer who incidentally
was also then a friend, to bare what she considered personal secrets and
sensitive documents for the purpose of obtaining legal advice and
assistance. The moment complainant approached the then receptive
respondent to seek legal advice, a veritable lawyer-client relationship
evolved between the two. Such relationship imposes upon the lawyer
certain restrictions circumscribed by the ethics of the profession. Among
the burdens of the relationship is that which enjoins the lawyer,
respondent in this instance, to keep inviolate confidential information
acquired or revealed during legal consultations. The fact that one is, at
the end of the day, not inclined to handle the client's case is hardly of
consequence. Of little moment, too, is the fact that no formal professional
engagement follows the consultation. Nor will it make any difference that
no contract whatsoever was executed by the parties to memorialize the
relationship. As we said in Burbe v. Magulta,6 -
A lawyer-client relationship was established from the very first
moment complainant asked respondent for legal advise
regarding the former's business. To constitute professional
employment, it is not essential that the client employed the
attorney professionally on any previous occasion.
It is not necessary that any retainer be paid, promised, or
charged; neither is it material that the attorney consulted did
not afterward handle the case for which his service had been
sought.
It a person, in respect to business affairs or troubles of any kind,
consults a lawyer with a view to obtaining professional advice
or assistance, and the attorney voluntarily permits or
acquiesces with the consultation, then the professional
employments is established.
Likewise, a lawyer-client relationship exists notwithstanding the
close personal relationship between the lawyer and the
complainant or the non-payment of the former's fees.
Dean Wigmore lists the essential factors to establish the existence of the
attorney-client privilege communication, viz:
(1) Where legal advice of any kind is sought (2) from a
professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance permanently
protected (7) from disclosure by himself or by the legal advisor,
(8) except the protection be waived.7
With the view we take of this case, respondent indeed breached his duty
of preserving the confidence of a client. As found by the IBP Investigating
Commissioner, the documents shown and the information revealed in
confidence to the respondent in the course of the legal consultation in
question, were used as bases in the criminal and administrative
complaints lodged against the complainant.
The purpose of the rule of confidentiality is actually to protect the client
from possible breach of confidence as a result of a consultation with a
lawyer.
The seriousness of the respondent's offense notwithstanding, the Court
feels that there is room for compassion, absent compelling evidence that
the respondent acted with ill-will. Without meaning to condone the error
of respondent's ways, what at bottom is before the Court is two former
friends becoming bitter enemies and filing charges and counter-charges
against each other using whatever convenient tools and data were readily
available. Unfortunately, the personal information respondent gathered
from her conversation with complainant became handy in her quest to
even the score. At the end of the day, it appears clear to us that
respondent was actuated by the urge to retaliate without perhaps realizing
that, in the process of giving vent to a negative sentiment, she was
violating the rule on confidentiality.
IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is
hereby REPRIMANDED and admonished to be circumspect in her
handling of information acquired as a result of a lawyer-client relationship.
She is also STERNLY WARNED against a repetition of the same or
similar act complained of.
SO ORDERED.
A.C. No. 5280 March 30, 2004
WILLIAM S. UY, complainant,
vs.
ATTY. FERMIN L. GONZALES, respondent.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
William S. Uy filed before this Court an administrative case against Atty.
Fermin L. Gonzales for violation of the confidentiality of their lawyer-client
relationship. The complainant alleges:
Sometime in April 1999, he engaged the services of respondent lawyer
to prepare and file a petition for the issuance of a new certificate of title.
After confiding with respondent the circumstances surrounding the lost
title and discussing the fees and costs, respondent prepared, finalized
and submitted to him a petition to be filed before the Regional Trial Court
of Tayug, Pangasinan. When the petition was about to be filed,
respondent went to his (complainant’s) office at Virra Mall, Greenhills and
demanded a certain amount from him other than what they had previously
agreed upon. Respondent left his office after reasoning with him.
Expecting that said petition would be filed, he was shocked to find out
later that instead of filing the petition for the issuance of a new certificate
of title, respondent filed a letter-complaint dated July 26, 1999 against him
with the Office of the Provincial Prosecutor of Tayug, Pangasinan for
"Falsification of Public Documents."1 The letter-complaint contained facts
and circumstances pertaining to the transfer certificate of title that was the
subject matter of the petition which respondent was supposed to have
filed. Portions of said letter-complaint read:
The undersigned complainant accuses WILLIAM S. UY, of
legal age, Filipino, married and a resident of 132-A Gilmore
Street corner 9th Street, New Manila, Quezon City, Michael
Angelo T. UY, CRISTINA EARL T. UY, minors and residents of
the aforesaid address, Luviminda G. Tomagos, of legal age,
married, Filipino and a resident of Carmay East, Rosales,
Pangasinan, and F. Madayag, with office address at A12, 2/F
Vira Mall Shopping Complex, Greenhills, San Juan, Metro
Manila, for ESTAFA THRU FALSIFICATION OF PUBLIC
DOCUMENTS, committed as follows:
That on March 15, 1996, William S. Uy acquired by purchase a
parcel of land consisting of 4.001 ha. for the amount of
P100,000.00, Philippine Currency, situated at Brgy. Gonzales,
Umingan, Pangasinan, from FERMIN C. GONZALES, as
evidenced by a Deed of Sale executed by the latter in favor of
the former…; that in the said date, William S. Uy received the
Transfer Certificate of Title No. T-33122, covering the said land;
That instead of registering said Deed of Sale and Transfer
Certificate of Title (TCT) No. T-33122, in the Register of Deeds
for the purpose of transferring the same in his name, William S.
Uy executed a Deed of Voluntary Land Transfer of the
aforesaid land in favor of his children, namely, Michael Angelo
T. Uy and Cristina Earl T. Uy, wherein William S. Uy made it
appear that his said children are of legal age, and residents of
Brgy. Gonzales, Umingan, Pangasinan, when in fact and in
truth, they are minors and residents of Metro Manila, to qualify
them as farmers/beneficiaries, thus placing the said property
within the coverage of the Land Reform Program;
That the above-named accused, conspiring together and
helping one another procured the falsified documents which
they used as supporting papers so that they can secure from
the Office of the Register of Deeds of Tayug, Pangasinan, TCT
No. T-5165 (Certificate of Land Ownership Award No. 004
32930) in favor of his above-named children. Some of these
Falsified documents are purported Affidavit of Seller/Transferor
and Affidavit of Non-Tenancy, both dated August 20, 1996,
without the signature of affiant, Fermin C. Gonzales, and that
on that said date, Fermin C. Gonzales was already dead… ;
That on December 17, 1998, William S. Uy with deceit and
evident intent to defraud undersigned, still accepted the
amount of P340,000.00, from Atty. Fermin L. Gonzales,
P300,000.00, in PNB Check No. 0000606, and P40,000.00, in
cash, as full payment of the redemption of TCT No.
33122…knowing fully well that at that time the said TCT cannot
be redeemed anymore because the same was already
transferred in the name of his children;
That William S. Uy has appropriated the amount covered by the
aforesaid check, as evidenced by the said check which was
encashed by him…;
That inspite of repeated demands, both oral and in writing,
William S. Uy refused and continue to refuse to deliver to him
a TCT in the name of the undersigned or to return and repay
the said P340,000.00, to the damage and prejudice of the
undersigned.2
With the execution of the letter-complaint, respondent violated his oath as
a lawyer and grossly disregarded his duty to preserve the secrets of his
client. Respondent unceremoniously turned against him just because he
refused to grant respondent’s request for additional compensation.
Respondent’s act tarnished his reputation and social standing. 3
In compliance with this Court’s Resolution dated July 31,
2000,4 respondent filed his Comment narrating his version, as follows:
On December 17, 1998, he offered to redeem from complainant a 4.9
hectare-property situated in Brgy. Gonzales, Umingan, Pangasinan
covered by TCT No. T-33122 which the latter acquired by purchase from
his (respondent’s) son, the late Fermin C. Gonzales, Jr.. On the same
date, he paid complainant P340,000.00 and demanded the delivery of
TCT No. T-33122 as well as the execution of the Deed of Redemption.
Upon request, he gave complainant additional time to locate said title or
until after Christmas to deliver the same and execute the Deed of
Redemption. After the said period, he went to complainant’s office and
demanded the delivery of the title and the execution of the Deed of
Redemption. Instead, complainant gave him photocopies of TCT No. T-
33122 and TCT No. T-5165. Complainant explained that he had already
transferred the title of the property, covered by TCT No.T-5165 to his
children Michael and Cristina Uy and that TCT No. T-5165 was misplaced
and cannot be located despite efforts to locate it. Wanting to protect his
interest over the property coupled with his desire to get hold of TCT No.
T-5165 the earliest possible time, he offered his assistance pro bono to
prepare a petition for lost title provided that all necessary expenses
incident thereto including expenses for transportation and others,
estimated at P20,000.00, will be shouldered by complainant. To these,
complainant agreed.
On April 9, 1999, he submitted to complainant a draft of the petition for
the lost title ready for signing and notarization. On April 14, 1999, he went
to complainant’s office informing him that the petition is ready for filing
and needs funds for expenses. Complainant who was with a client asked
him to wait at the anteroom where he waited for almost two hours until he
found out that complainant had already left without leaving any
instructions nor funds for the filing of the petition. Complainant’s conduct
infuriated him which prompted him to give a handwritten letter telling
complainant that he is withdrawing the petition he prepared and that
complainant should get another lawyer to file the petition.
Respondent maintains that the lawyer-client relationship between him
and complainant was terminated when he gave the handwritten letter to
complainant; that there was no longer any professional relationship
between the two of them when he filed the letter-complaint for falsification
of public document; that the facts and allegations contained in the letter-
complaint for falsification were culled from public documents procured
from the Office of the Register of Deeds in Tayug, Pangasinan. 5
In a Resolution dated October 18, 2000, the Court referred the case to
the Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.6
Commissioner Rebecca Villanueva-Maala ordered both parties to appear
on April 2, 2003 before the IBP.7 On said date, complainant did not appear
despite due notice. There was no showing that respondent received the
notice for that day’s hearing and so the hearing was reset to May 28,
2003.8
On April 29, 2003, Commissioner Villanueva-Maala received a letter from
one Atty. Augusto M. Macam dated April 24, 2003, stating that his client,
William S. Uy, had lost interest in pursuing the complaint he filed against
Atty. Gonzales and requesting that the case against Atty. Gonzales be
dismissed.9
On June 2, 2003, Commissioner Villanueva-Maala submitted her report
and recommendation, portions of which read as follows:
The facts and evidence presented show that when respondent
agreed to handle the filing of the Verified Petition for the loss of
TCT No. T-5165, complainant had confided to respondent the
fact of the loss and the circumstances attendant thereto. When
respondent filed the Letter-Complaint to the Office of the
Special Prosecutor in Tayug, Pangasinan, he violated Canon
21 of the Code of Professional Responsibility which expressly
provides that "A lawyer shall preserve the confidences and
secrets of his client even after the attorney-client relation is
terminated." Respondent cannot argue that there was no
lawyer-client relationship between them when he filed the
Letter-Complaint on 26 July 1999 considering that as early as
14 April 1999, or three (3) months after, respondent had
already terminated complainant’s perceived lawyer-client
relationship between them. The duty to maintain inviolate the
client’s confidences and secrets is not temporary but
permanent. It is in effect perpetual for "it outlasts the lawyer’s
employment" (Canon 37, Code of Professional Responsibility)
which means even after the relationship has been terminated,
the duty to preserve the client’s confidences and secrets
remains effective. Likewise Rule 21.02, Canon 21 of the Rules
of Professional Responsibility provides that "A lawyer shall
not, to the disadvantage of his client, use information
acquired in the course of employment, nor shall he use the
same to his own advantage or that of a third person, unless the
 client with the full knowledge of the circumstances consents
thereto."
On 29 April 2003, the Commission received a letter dated 24
April 2003 from Atty. Augusto M. Macam, who claims to
represent complainant, William S. Uy, alleging that complainant
is no longer interested in pursuing this case and requested that
the same be dismissed. The aforesaid letter hardly deserves
consideration as proceedings of this nature cannot
be "interrupted by reason of desistance, settlement,
compromise, restitution, withdrawal of the charges, or failure of
the complainant to prosecute the same. (Section 5, Rule 139-
B, Rules of Court). Moreover, in Boliver vs. Simbol, 16 SCRA
623, the Court ruled that "any person may bring to this Court’s
attention the misconduct of any lawyer, and action will usually
be taken regardless of the interest or lack of interest of the
complainant, if the facts proven so warrant."
IN VIEW OF THE FOREGOING, we find respondent Atty.
Fermin L. Gonzales to have violated the Code of Professional
Responsibility and it is hereby recommended that he
be SUSPENDED for a period of SIX (6) MONTHS from receipt
hereof, from the practice of his profession as a lawyer and
member of the Bar.10
On June 21, 2003, the Board of Governors of the Integrated Bar of the
Philippines issued Resolution No. XV-2003-365, thus:
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/Decision as Annex "A"; and
finding the recommendation fully supported by the evidence on
record and applicable laws and rules, and considering that
respondent violated Rule 21.02, Canon 21 of the Canons of
Professional Responsibility, Atty. Fermin L. Gonzales is
hereby SUSPENDED from the practice of law for six (6)
months.11
Preliminarily, we agree with Commissioner Villanueva-Maala that the
manifestation of complainant Uy expressing his desire to dismiss the
administrative complaint he filed against respondent, has no persuasive
bearing in the present case.
Sec. 5, Rule 139-B of the Rules of Court states that:
….
No investigation shall be interrupted or terminated by reason of
the desistance, settlement, compromise, restitution, withdrawal
of the charges, or failure of the complainant to prosecute the
same.
This is because:
A proceeding for suspension or disbarment is not in any sense
a civil action where the complainant is a plaintiff and the
respondent lawyer is a defendant. Disciplinary proceedings
involve no private interest and afford no redress for private
grievance. They are undertaken and prosecuted solely for the
public welfare. They are undertaken for the purpose of
preserving courts of justice from the official ministration of
persons unfit to practice in them. The attorney is called to
answer to the court for his conduct as an officer of the court.
The complainant or the person who called the attention of the
court to the attorney's alleged misconduct is in no sense a
party, and has generally no interest in the outcome except as
all good citizens may have in the proper administration of
justice. Hence, if the evidence on record warrants, the
respondent may be suspended or disbarred despite the
desistance of complainant or his withdrawal of the charges. 12
Now to the merits of the complaint against the respondent.
Practice of law embraces any activity, in or out of court, which requires
the application of law, as well as legal principles, practice or procedure
and calls for legal knowledge, training and experience. 13 While it is true
that a lawyer may be disbarred or suspended for any misconduct, whether
in his professional or private capacity, which shows him to be wanting in
moral character, in honesty, probity and good demeanor or unworthy to
continue as an officer of the court,14 complainant failed to prove any of the
circumstances enumerated above that would warrant the disbarment or
suspension of herein respondent.
Notwithstanding respondent’s own perception on the matter, a scrutiny of
the records reveals that the relationship between complainant and
respondent stemmed from a personal transaction or dealings between
them rather than the practice of law by respondent. Respondent dealt with
complainant only because he redeemed a property which complainant
had earlier purchased from his (complainant’s) son. It is not refuted that
respondent paid complainant P340,000.00 and gave him ample time to
produce its title and execute the Deed of Redemption. However, despite
the period given to him, complainant failed to fulfill his end of the bargain
because of the alleged loss of the title which he had admitted to
respondent as having prematurely transferred to his children, thus
prompting respondent to offer his assistance so as to secure the issuance
of a new title to the property, in lieu of the lost one, with complainant
assuming the expenses therefor.
As a rule, an attorney-client relationship is said to exist when a lawyer
voluntarily permits or acquiesces with the consultation of a person, who
in respect to a business or trouble of any kind, consults a lawyer with a
view of obtaining professional advice or assistance. It is not essential that
the client should have employed the attorney on any previous occasion
or that any retainer should have been paid, promised or charged for,
neither is it material that the attorney consulted did not afterward
undertake the case about which the consultation was had, for as long as
the advice and assistance of the attorney is sought and received, in
matters pertinent to his profession.15
Considering the attendant peculiar circumstances, said rule cannot apply
to the present case. Evidently, the facts alleged in the complaint for
"Estafa Through Falsification of Public Documents" filed by respondent
against complainant were obtained by respondent due to his personal
dealings with complainant. Respondent volunteered his service to hasten
the issuance of the certificate of title of the land he has redeemed from
complainant. Respondent’s immediate objective was to secure the title of
the property that complainant had earlier bought from his son. Clearly,
there was no attorney-client relationship between respondent and
complainant. The preparation and the proposed filing of the petition was
only incidental to their personal transaction.
Canon 21 of the Code of Professional Responsibility reads:
Canon 21 – A LAWYER SHALL PRESERVE THE
CONFIDENCE AND SECRETS OF HIS CLIENT EVEN AFTER
THE ATTORNEY-CLIENT RELATION IS TERMINATED.
Rule 21.01 – A lawyer shall not reveal the confidences or
secrets of his client except:
a) When authorized by the client after acquainting him of the
consequences of the disclosure;
b) When required by law;
c) When necessary to collect his fees or to defend himself, his
employees or associates or by judicial action.
The alleged "secrets" of complainant were not specified by him in his
affidavit-complaint. Whatever facts alleged by respondent against
complainant were not obtained by respondent in his professional capacity
but as a redemptioner of a property originally owned by his deceased son
and therefore, when respondent filed the complaint for estafa against
herein complainant, which necessarily involved alleging facts that would
constitute estafa, respondent was not, in any way, violating Canon 21.
There is no way we can equate the filing of the affidavit-complaint against
herein complainant to a misconduct that is wanting in moral character, in
honesty, probity and good demeanor or that renders him unworthy to
continue as an officer of the court. To hold otherwise would be precluding
any lawyer from instituting a case against anyone to protect his personal
or proprietary interests.
WHEREFORE, Resolution No. XV-2003-365 dated June 21, 2003 of the
Integrated Bar of the Philippines is REVERSED and SET ASIDE and the
administrative case filed against Atty. Fermin L. Gonzales, docketed as
A.C. No. 5280, is DISMISSED for lack of merit.
SO ORDERED.
A.C. No. L-1117 March 20, 1944
THE DIRECTOR OF RELIGIOUS AFFAIRS, complainant,
vs.
ESTANISLAO R. BAYOT, respondent.
Office of the Solicitor General De la Costa and Solicitor Feria for
complainant.
Francisco Claravall for respondent.
OZAETA, J.:
The respondent, who is an attorney-at-law, is charged with malpractice
for having published an advertisement in the Sunday Tribune of June 13,
1943, which reads as follows:
Marriage
license promptly secured thru our assistance & the annoyance
of delay or publicity avoided if desired, and marriage arranged
to wishes of parties. Consultation on any matter free for the
poor. Everything confidential.
Legal assistance service
12 Escolta, Manila, Room, 105
Tel. 2-41-60.
Appearing in his own behalf, respondent at first denied having published
the said advertisement; but subsequently, thru his attorney, he admitted
having caused its publication and prayed for "the indulgence and mercy"
of the Court, promising "not to repeat such professional misconduct in the
future and to abide himself to the strict ethical rules of the law profession."
In further mitigation he alleged that the said advertisement was published
only once in the Tribune and that he never had any case at law by reason
thereof.
Upon that plea the case was submitted to the Court for decision.
It is undeniable that the advertisement in question was a flagrant violation
by the respondent of the ethics of his profession, it being a brazen
solicitation of business from the public. Section 25 of Rule 127 expressly
provides among other things that "the practice of soliciting cases at law
for the purpose of gain, either personally or thru paid agents or brokers,
constitutes malpractice." It is highly unethical for an attorney to advertise
his talents or skill as a merchant advertises his wares. Law is a profession
and not a trade. The lawyer degrades himself and his profession who
stoops to and adopts the practices of mercantilism by advertising his
services or offering them to the public. As a member of the bar, he defiles
the temple of justice with mercenary activities as the money-changers of
old defiled the temple of Jehovah. "The most worth and effective
advertisement possible, even for a young lawyer, . . . is the establishment
of a well-merited reputation for professional capacity and fidelity to trust.
This cannot be forced but must be the outcome of character and conduct."
(Canon 27, Code of Ethics.)
In In re Tagorda, 53 Phil., the respondent attorney was suspended from
the practice of law for the period of one month for advertising his services
and soliciting work from the public by writing circular letters. That case,
however, was more serious than this because there the solicitations were
repeatedly made and were more elaborate and insistent.
Considering his plea for leniency and his promise not to repeat the
misconduct, the Court is of the opinion and so decided that the
respondent should be, as he hereby is, reprimanded.
Yulo, C.J., Moran, Horrilleno, Paras and Bocobo, JJ., concur.
March 23, 1929
In re LUIS B. TAGORDA,
Duran & Lim for respondent.
Attorney-General Jaranilla and Provincial Fiscal Jose for the
Government.
MALCOLM, J.:
The respondent, Luis B. Tagorda, a practising attorney and a
member of the provincial board of Isabela, admits that previous
to the last general elections he made use of a card written in
Spanish and Ilocano, which, in translation, reads as follows:
LUIS B. TAGORDA
Attorney
Notary Public
CANDIDATE FOR THIRD MEMBER
Province of Isabela
(NOTE. — As notary public, he can execute for you a deed of
sale for the purchase of land as required by the cadastral office;
can renew lost documents of your animals; can make your
application and final requisites for your homestead; and can
execute any kind of affidavit. As a lawyer, he can help you
collect your loans although long overdue, as well as any
complaint for or against you. Come or write to him in his town,
Echague, Isabela. He offers free consultation, and is willing to
help and serve the poor.)
The respondent further admits that he is the author of a letter
addressed to a lieutenant of barrio in his home municipality
written in Ilocano, which letter, in translation, reads as follows:
ECHAGUE, ISABELA, September 18, 1928
MY DEAR LIEUTENANT: I would like to inform you of the
approaching date for our induction into office as member of the
Provincial Board, that is on the 16th of next month. Before my
induction into office I should be very glad to hear your
suggestions or recommendations for the good of the province
in general and for your barrio in particular. You can come to my
house at any time here in Echague, to submit to me any kind
of suggestion or recommendation as you may desire.
I also inform you that despite my membership in the Board I will
have my residence here in Echague. I will attend the session
of the Board of Ilagan, but will come back home on the following
day here in Echague to live and serve with you as a lawyer and
notary public. Despite my election as member of the Provincial
Board, I will exercise my legal profession as a lawyer and
notary public. In case you cannot see me at home on any week
day, I assure you that you can always find me there on every
Sunday. I also inform you that I will receive any work regarding
preparations of documents of contract of sales and affidavits to
be sworn to before me as notary public even on Sundays.
I would like you all to be informed of this matter for the reason
that some people are in the belief that my residence as member
of the Board will be in Ilagan and that I would then be
disqualified to exercise my profession as lawyer and as notary
public. Such is not the case and I would make it clear that I am
free to exercise my profession as formerly and that I will have
my residence here in Echague.
I would request you kind favor to transmit this information to
your barrio people in any of your meetings or social gatherings
so that they may be informed of my desire to live and to serve
with you in my capacity as lawyer and notary public. If the
people in your locality have not as yet contracted the services
of other lawyers in connection with the registration of their land
titles, I would be willing to handle the work in court and would
charge only three pesos for every registration.

Yours respectfully,
(Sgd.) LUIS TAGORDA
Attorney
Notary Public.
The facts being conceded, it is next in order to write down the
applicable legal provisions. Section 21 of the Code of Civil
Procedure as originally conceived related to disbarments of
members of the bar. In 1919 at the instigation of the Philippine
Bar Association, said codal section was amended by Act No.
2828 by adding at the end thereof the following: "The practice
of soliciting cases at law for the purpose of gain, either
personally or through paid agents or brokers, constitutes
malpractice."
The statute as amended conforms in principle to the Canons of
Professionals Ethics adopted by the American Bar Association
in 1908 and by the Philippine Bar Association in 1917. Canons
27 and 28 of the Code of Ethics provide:
27. ADVERTISING, DIRECT OR INDIRECT. — The most
worthy and effective advertisement possible, even for a young
lawyer, and especially with his brother lawyers, is the
establishment of a well-merited reputation for professional
capacity and fidelity to trust. This cannot be forced, but must be
the outcome of character and conduct. The publication or
circulation of ordinary simple business cards, being a matter of
personal taste or local custom, and sometimes of convenience,
is not per se improper. But solicitation of business by circulars
or advertisements, or by personal communications or interview
not warranted by personal relations, is unprofessional. It is
equally unprofessional to procure business by indirection
through touters of any kind, whether allied real estate firms or
trust companies advertising to secure the drawing of deeds or
wills or offering retainers in exchange for executorships or
trusteeships to be influenced by the lawyer. Indirect
advertisement for business by furnishing or inspiring
newspaper comments concerning the manner of their conduct,
the magnitude of the interest involved, the importance of the
lawyer's position, and all other like self-laudation, defy the
traditions and lower the tone of our high calling, and are
intolerable.
28. STIRRING UP LITIGATION, DIRECTLY OR THROUGH
AGENTS. — It is unprofessional for a lawyer to volunteer
advice to bring a lawsuit, except in rare cases where ties of
blood, relationship or trust make it his duty to do so. Stirring up
strife and litigation is not only unprofessional, but it is indictable
at common law. It is disreputable to hunt up defects in titles or
other causes of action and inform thereof in order to the
employed to bring suit, or to breed litigation by seeking out
those with claims for personal injuries or those having any other
grounds of action in order to secure them as clients, or to
employ agents or runners for like purposes, or to pay or reward
directly or indirectly, those who bring or influence the bringing
of such cases to his office, or to remunerate policemen, court
or prison officials, physicians, hospital attaches or others who
may succeed, under the guise of giving disinterested friendly
advice, in influencing the criminal, the sick and the injured, the
ignorant or others, to seek his professional services. A duty to
the public and to the profession devolves upon every member
of the bar having knowledge of such practices upon the part of
any practitioner immediately to inform thereof to the end that
the offender may be disbarred.
Common barratry consisting of frequently stirring up suits and
quarrels between individuals was a crime at the common law,
and one of the penalties for this offense when committed by an
attorney was disbarment. Statutes intended to reach the same
evil have been provided in a number of jurisdictions usually at
the instance of the bar itself, and have been upheld as
constitutional. The reason behind statutes of this type is not
difficult to discover. The law is a profession and not a business.
The lawyer may not seek or obtain employment by himself or
through others for to do so would be unprofessional. (State vs.
Rossman [1909], 53 Wash., 1; 17 Ann. Cas., 625; People vs.
Mac Cabe [1893], 19 L. R. A., 231; 2 R. C. L., 1097.)
It becomes our duty to condemn in no uncertain terms the ugly
practice of solicitation of cases by lawyers. It is destructive of
the honor of a great profession. It lowers the standards of that
profession. It works against the confidence of the community in
the integrity of the members of the bar. It results in needless
litigation and in incenting to strife otherwise peacefully inclined
citizens.
The solicitation of employment by an attorney is a ground for
disbarment or suspension. That should be distinctly
understood.
Giving application of the law and the Canons of Ethics to the
admitted facts, the respondent stands convicted of having
solicited cases in defiance of the law and those canons.
Accordingly, the only remaining duty of the court is to fix upon
the action which should here be taken. The provincial fiscal of
Isabela, with whom joined the representative of the Attorney-
General in the oral presentation of the case, suggests that the
respondent be only reprimanded. We think that our action
should go further than this if only to reflect our attitude toward
cases of this character of which unfortunately the respondent's
is only one. The commission of offenses of this nature would
amply justify permanent elimination from the bar. But as
mitigating, circumstances working in favor of the respondent
there are, first, his intimation that he was unaware of the
impropriety of his acts, second, his youth and inexperience at
the bar, and, third, his promise not to commit a similar mistake
in the future. A modest period of suspension would seem to fit
the case of the erring attorney. But it should be distinctly
understood that this result is reached in view of the
considerations which have influenced the court to the relatively
lenient in this particular instance and should, therefore, not be
taken as indicating that future convictions of practice of this kind
will not be dealt with by disbarment.
In view of all the circumstances of this case, the judgment of
the court is that the respondent Luis B. Tagorda be and is
hereby suspended from the practice as an attorney-at-law for
the period of one month from April 1, 1929,
Street, Johns, Romualdez, and Villa-Real, JJ., concur.
Johnson, J., reserves his vote.
G.R. No. L-22320 July 29, 1968
MERCEDES RUTH COBB-PEREZ and DAMASO P. PEREZ,
petitioners,
vs.
HON. GREGORIO LANTIN, Judge of the Court of First
Instance of Manila,
RICARDO P. HERMOSO and the CITY SHERIFF OF MANILA,
respondents.
Crispin D. Baizas and Associates for petitioners.
Isidro T. Almeda for respondents.
CASTRO, J.:
This is a motion for partial reconsideration of this Court's
decision of May 22, 1968, specifically directed against the
following observation therein made:
We feel compelled to observe that during the protracted
litigation below, the petitioners resorted to a series of actions
and petitions, at some stages alternatingly, abetted by their
counsel, for the sole purpose of thwarting the execution of a
simple money judgment which has long become final and
executory. Some of the actions were filed, only to be
abandoned or withdrawn. The petitioners and their counsel, far
from viewing courts as sanctuaries for those who seek justice,
have tried to use them to subvert the very ends of justice.
Corollarily, this Court assessed treble costs against the
petitioners, to "be paid by their counsel.".
The herein movants, Attys. Crispin D. Baizas and A. N. Bolinas,
counsels for the petitioners, while submitting to the judgment
on the merits, seek reconsideration of the decision in so far as
it reflects adversely upon their "professional conduct" and
condemns them to pay the treble costs adjudged against their
clients.
At first blush, the motion for reconsideration presents a
semblance of merit. After mature deliberation and patient
reprobing into the records of the case, however, we are of the
firmer conviction that the protracted litigation, alluded to in the
above-quoted portion of our decision, was designed to cause
delay, and the active participation of the petitioners' counsels
in this adventure is patent.
After November 15, 1962 when the Court of Appeals rendered
judgment sustaining Damaso Perez' position with respect to the
extent of the levy, the subsequent proceedings interposed
alternatingly by the petitioner spouses were obviously quixotic
maneuvers expected to be overthrown by the courts but
calculated to delay an execution long overdue.
Had the petitioners and their counsels seriously believed that
the levied shares of stock were conjugal property, why did they
not adopt this position from the very start, or, at the latest, in
CA-G.R. 29962-R, wherein Damaso Perez challenged the
legality of the levy's coverage, in order to end the litigation with
reasonable dispatch? They chose, however, to attack the
execution in a piecemeal fashion, causing the postponement of
the projected execution sale six times. More than eight years
after the finality of the judgment have passed, and the same
has yet to be satisfied.
In a determined effort to prolong the litigation, the Perez
spouses, as represented by their counsels, sought the
issuance of preliminary injunctions to restrain the execution of
the final judgment in civil case 39407 from courts which did not
have jurisdiction and which would, as expected, initially or
ultimately deny their prayer. For instance, after Damaso Perez
bowed out temporarily from the scene following the rendition of
the aforementioned Court of Appeals decision, his wife,
Mercedez, Ruth Cobb-Perez, intruded into the controversy and
asked for an ex parte writ of preliminary injunction from the
Court of First Instance of Rizal in connection with civil case
7532 which she filed with the said court, knowing fully well that
the basic civil case 39407 was decided by the Court of First
Instance of Manila (Branch VII presided by the respondent
Judge Lantin), which latter court was the proper forum for any
action relative to the execution. Judge Eulogio Mencias of the
Court of First Instance of Rizal, looking to Acosta vs. Alvendia
(L-14598, October 31, 1960), which held that courts of first
instance have no power to restrain acts outside their territorial
jurisdictions, lifted on October 4, 1963 the ex parte writ which
he previously issued enjoining the respondent sheriff from
carrying out the execution sale. It is clear, however, that Mrs.
Perez and her counsels, the movants, knew or ought to have
known beforehand that the Court of First Instance of Rizal did
not have jurisdiction to issue the writ which Mrs. Perez herself
sought, and, anticipating the recall of the writ improvidently
issued, on September 3, 1963, a month before the said writ
was actually lifted, filed in the basic civil case 39407 an urgent
motion to lift the writ of execution issued on August 15, 1961,
alleging as justification the conjugal nature of the levied shares
of stock and the personal nature of Damaso Perez' judgment
debt, the very same reasons advanced in civil case 7532 which
was then still pending in the Court of First Instance of Rizal.
Incidentally, Mrs. Perez failed to adduce any evidence in
support of her aforesaid urgent motion, as in fact neither she
nor her counsels appeared during the scheduled hearing,
prompting the respondent judge to issue the following order:
When the urgent motion to recall or lift writ of execution was
called this morning for hearing, counsel for the movant did not
appear despite the fact that he had been duly notified of the
motion for hearing. In view thereof the court assumes that he is
waiving his right to present evidence in support of his urgent
motion to recall or lift writ of execution. Said urgent motion is
therefore deemed submitted for resolution.
Despite the recall of the aforementioned writ of injunction by
Judge Mencias on a disclaimer of jurisdiction (since the
execution sought to be enjoined was ordered by another
tribunal), Mrs. Perez, now assisted by her husband who had
staged a comeback, prayed for the issuance of another
injunction, this time from Branch XXII of the Court of First
Instance of Manila (not the same Branch which issued the
controverted writ of execution), in connection with civil case
7532, then still pending in the Court of First Instance of Rizal.
As most probably anticipated anew by the Perez spouses and
their counsels, Judge Alikpala, presiding judge of Branch XXII,
on November 8, 1963 denied the preliminary injunction sought,
on the ground, among others, that he had no power to interfere
by injunction with the judgment or decree of a court of
concurrent or coordinate jurisdiction. On the very day the
injunction was denied, Damaso Perez, as if expecting the
reversal from Judge Alikpala, was already prepared with
another "remedy," as in fact on that day, November 8, 1963, he
filed in the basic civil case 39407 an "Urgent Motion for
Reconsideration" of the order of October 19, 1963, which
denied his wife's above-mentioned motion to recall the
controverted writ of execution.
The foregoing motion, far from seriously seeking the
reconsideration of the order of October 19, 1963, which in the
first place Damaso Perez could not legally do for he was not
even a party to the denied "Urgent Motion to Recall Writ of
Execution" (filed by his wife alone), was merely an offer to
replace the levied stocks with supposed cash dividends due to
the Perez spouses as stockholders in the Republic Bank.1 As
a matter of fact, when the motion was set for hearing on
December 21, 1963, the counsels for Damaso Perez promised
to produce the said cash dividends within five days, but the
promise was never fulfilled.2 Consequently, the respondent
Judge on January 4, 1964, denied the said motion for
reconsideration.
The above exposition of the circumstances relative to the
protracted litigation clearly negates the avowal of the movants
that "in none of the various incidents in the case at bar has any
particular counsel of petitioners acted with deliberate
aforethought to delay the enforcement of the judgment in Civil
Case No. 39407." From the chronology of antecedent events,
the fact becomes inescapable that the Perez spouses, coached
by their counsels, had sallied forth on a strategem of
"remedies" projected to foil the lawful execution of a simple
money judgment. It is equally obvious that they foreshadowed
their own reversals in the "remedies" they ventured to adopt,
such that even before, one remedy had been exhausted, they
interposed another until the case reached this Court for the
It is the duty of a counsel to advise his client, ordinarily a layman
second time. 3 Meanwhile, justice was delayed, and more than
to the intricacies and vagaries of the law, on the merit or lack
one member of this Court are persuaded that justice was
of merit of his case. If he finds that his client's cause is
practically waylaid.
defenseless, then it is his bounden duty to advise the latter to
acquiesce and submit, rather than traverse the incontrovertible.
A lawyer must resist the whims and caprices of his client, and
temper his client's propensity to litigate. A lawyer's oath to
uphold the cause of justice is superior to his duty to his client;
The movants also contend that even this Court sanctions the
its primacy is indisputable.
aforesaid civil cases 7532 and 55292 as the "proper remedy"
when we said that.

The movants finally state that the "Petitioners have several

counsel in this case but the participation of each counsel was
In reality, what they attacked is not the writ of execution, the
rather limited implying that the decision of this Court ordering
validity and regularity of which are unchallenged, but the levy
that "treble costs are assessed against the petitioners, which
made by the respondent Sheriff. In this regard, the remedy is
shall be paid by their counsel" is not clear. The word "counsel"
not the recall of the writ, but an independent action to enjoin the
may be either singular or plural in construction, so that when
Sheriff from proceeding with the projected sale, in which action
we said "counsel" we meant the counsels on record of the
the conjugal nature of the levied stocks should be established
petitioners who were responsible for the inordinate delay in the
as a basis for the subsequent issuance of a permanent
execution of the final judgment in the basic civil case 39407,
injunction, in the event of a successful claim. Incidentally, in the
after the Court of Appeals had rendered its aforementioned
course of the protracted litigation, the petitioners had already
decision of November 15, 1962. And it is on record that the
availed of this remedy in civil cases 7532 and 55292, only to
movants are such counsels. Atty. Bolinas, upon his own
abandon it as they incessantly sought other, and often
admission, "entered his appearance in the case at bar about
simultaneous, devices of thwarting satisfaction of the judgment
the time the Court of First Instance of Manila dismissed the
debt. (Emphasis supplied) .
petitioners' Petition for Relief in Civil Case No. 39407," or about
August 3, 1961 and even prior to the Court of Appeals decision
above-mentioned. Atty. Baizas claims that he "became
petitioners' counsel only in October, 1963 when he filed, with
Atty. A.N. Bolinao, Jr. Civil Case No. 55292 before the Court of
And because of this statement, they now counter that the said First Instance of Manila presided by the Hon. Judge Alikpala
cases could not be branded as having been instituted for delay. although it appears on record that the urgent motion to recall
writ of execution filed by Mrs. Perez in the basic civil case
39407 on September 3, 1963, was over the signature of one
Ruby Zaida of the law firm of "Crispin Baizas & Associates" as
counsel for Mrs. Perez. It is to be recalled that the said urgent
The reference we made to civil cases 7532 and 55292 in the motion is the same motion discussed above, which, curiously
above-quoted statement must not be considered out of context. enough, antedated by at least one month the lifting of the writ
We said that the petitioners incidentally had already availed of of preliminary injunction issued in civil case 7532.
the suggested remedy only in the sense that said civil cases
7532 and 55292 were apparently instituted to prove the
conjugal nature of the levied shares of stocks in question. We
used the word incidentally advisedly to show that in their
incessant search for devices to thwart the controverted
ACCORDINGLY, the motion for partial reconsideration is
execution, they accidentally stumbled on the suggested denied. Our decision of May 22, 1968 is hereby modified in the
remedy. But the said civil cases were definitely not the "proper sense that Attys. Crispin D. Baizas and A.N. Bolinao, Jr. shall
remedy" in so far as they sought the issuance of writs of
pay jointly and severally the treble costs assessed against the
preliminary injunction from the Court of First Instance of Rizal petitioners.
and the Court of First Instance of Manila (Branch XXII) where
civil cases 7532 and 55292 were filed respectively, for the said
courts did not have jurisdiction to restrain the enforcement of
the writ of execution issued by the Court of First Instance of
Manila (Branch VII) under the settled doctrines that Courts are
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, and
without power to restrain acts outside of their territorial
Angeles, JJ., concur.
jurisdiction 4 or interfere with the judgment or decree of a court
of concurrent or coordinate jurisdiction. 5 However, the recall
and the denial of the writs of preliminary injunction in civil cases Concepcion C.J., voted for denial of the motion for
7532 and 55292 did not amount to the termination or dismissal reconsideration.
of the principal action in each case. Had the Perez spouses
desired in earnest to continue with the said cases they could
Fernando, J., took no part.
have done so. But the fact is that Mrs. Perez practically
abandoned civil case 7532 when she instituted the above
mentioned urgent motion to recall writ of execution in the basic A.C. No. 4103 September 7, 1995
civil case 39407, anchored on the same grounds which she
advanced in the former case, until the said civil case 7532 was
dismissed on November 9, 1963, upon her own motion. Anent
civil case 55292, the Perez spouses virtually deserted the same
when they instituted the herein petition for certiorari with urgent VERONICA S. SANTIAGO, BENJAMIN Q. HONTIVEROS,
writ of preliminary injunction based on the same grounds MR. SOCORRO F. MANAS, and TRINIDAD NORDISTA,
proffered in the said civil case — until the latter was also complainants,
dismissed on March 20, 1964, with the consent of the parties
because of the pendency then of the aforesaid petition for
certiorari. vs.

ATTY. AMADO R. FOJAS, respondent.

The movants further contend that "If there was delay, it was
because petitioners' counsel happened to be more assertive ...
a quality of the lawyers (which) is not to be condemned."

DAVIDE JR., J.:

A counsel's assertiveness in espousing with candour and

honesty his client's cause must be encouraged and is to be
commended; what we do not and cannot countenance is a
lawyer's insistence despite the patent futility of his client's In their letter of 8 September 1993, the complainants, former
position, as in the case at bar. clients of the respondent, pray that the latter be disbarred for
"malpractice, neglect and other offenses which may be
discovered during the actual investigation of this complaint."
They attached thereto an Affidavit of Merit wherein they
specifically allege:
1. That we are Defendants-Appellates [sic] in the Court
of Appeals Case No. CA-G.N. CV No. 38153 of which to our
surprise lost unnecessarily the aforesaid Petition [sic]. A close
perusal of the case reveals the serious misconduct of our
attorney on record, Atty. Amado Fojas tantamount to
malpractice and negligence in the performance of his duty
obligation to us, to defend us in the aforesaid case. That the
said attorney without informing us the reason why and riding
high on the trust and confidence we repose on him either
abandoned, failed to act accordingly, or seriously neglected to
answer the civil complaint against us in the sala of Judge
Teresita Capulong Case No. 3526-V-91 Val. Metro Manila so
that we were deduced [sic] in default.
2. That under false pretenses Atty. Fojas assured us
that everything was in order. That he had already answered the
complaint so that in spite of the incessant demand for him to
give us a copy he continued to deny same to us. Only to
disclose later that he never answered it after all because
according to him he was a very busy man. Please refer to Court
of Appeals decision dated August 17, 1993.
3. That because of Atty. Amado Foja's neglect and
malpractice of law we lost the Judge Capulong case and our
appeal to the Court of Appeals. So that it is only proper that
Atty. Fojas be disciplined and disbarred in the practice of his
profession.
In his Comment, the respondent admits his "mistake" in failing
to file the complainants' answer in Civil Case No. 3526-V-91,
but he alleges that it was cured by his filing of a motion for
reconsideration, which was unfortunately denied by the court.
He asserts that Civil Case No. 3526-V-91 was a "losing cause"
for the complainants because it was based on the expulsion of
the plaintiff therein from the Far Eastern University Faculty
Association (FEUFA) which was declared unlawful in the final
decision in NCR-OD-M-90-10-050. Thus, "[t]he unfavorable
judgment in the Regional Trial Court is not imputable to [his]
mistake but rather imputable to the merits of the case, i.e., the
decision in the Expulsion case wherein defendants
(complainants herein) illegally removed from the union
(FEUFA) membership Mr. Paulino Salvador. . . ." He further
claims that the complainants filed this case to harass him
because he refused to share his attorney's fees in the main
labor case he had handled for them. The respondent then prays
for the dismissal of this complaint for utter lack of merit, since
his failure to file the answer was cured and, even granting for
the sake of argument that such failure amounted to negligence,
it cannot warrant his disbarment or suspension from the
practice of the law profession.
The complainants filed a Reply to the respondent's Comment.
Issues having been joined, we required the parties to inform us
whether they were willing to submit this case for decision on
the basis of the pleadings they have filed. In their separate
compliance, both manifested in the affirmative.
The facts in this case are not disputed.
Complainants Veronica Santiago, Benjamin Hontiveros, Ma.
Socorro Manas, and Trinidad Nordista were the President,
Vice-President, Treasurer, and Auditor, respectively, of the
FEUFA. They allegedly expelled from the union Paulino
Salvador. The latter then commenced with the Department of
Labor and Employment (DOLE) a complaint (NCR-OD-M-90-
10-050) to declare illegal his expulsion from the union.
In his resolution of 22 November 1990, Med-Arbiter Tomas
Falconitin declared illegal Salvador's expulsion and directed
the union and all its officers to reinstate Salvador's name in the
roll of union members with all the rights and privileges
appurtenant thereto. This resolution was affirmed in toto by the
Secretary of Labor and Employment.
Subsequently, Paulino Salvador filed with the Regional Trial
Court (RTC) of Valenzuela, Metro Manila, Branch 172, a
complaint against the complainants herein for actual, moral,
and exemplary damages and attorney's fees, under Articles 19,
20, and 21 of the Civil Code. The case was docketed as Civil
Case No. 3526-V-91.
As the complainants' counsel, the respondent filed a motion to
dismiss the said case on grounds of (1) res judicata by virtue
of the final decision of the Med-Arbiter in NCR-OD-M-90-10-
050 and (2) lack of jurisdiction, since what was involved was an
intra-union issue cognizable by the DOLE. Later, he filed a
supplemental motion to dismiss.
The trial court, per Judge Teresita Dizon-Capulong, granted the
motion and ordered the dismissal of the case. Upon Salvador's
motion for reconsideration, however, it reconsidered the order
of dismissal, reinstated the case, and required the
complainants herein to file their answer within a nonextendible
period of fifteen days from notice.
Instead of filing an answer, the respondent filed a motion for
reconsideration and dismissal of the case. This motion having
been denied, the respondent filed with this Court a petition for
certiorari, which was later referred to the Court of Appeals and
docketed therein as CA-G.R. SP No. 25834.
Although that petition and his subsequent motion for
reconsideration were both denied, the respondent still did not
file the complainants' answer in Civil Case No. 3526-V-91.
Hence, upon plaintiff Salvador's motion, the complainants were
declared in default, and Salvador was authorized to present his
evidence ex-parte.
The respondent then filed a motion to set aside the order of
default and to stop the ex-parte reception of evidence before
the Clerk of Court, but to no avail.
Thereafter, the trial court rendered a decision ordering the
complainants herein to pay, jointly and severally, plaintiff
Salvador the amounts of P200,000.00 as moral damages;
P50,000.00 as exemplary damages or corrective damages;
and P65,000.00 as attorney's fees; plus cost of suit.
The complainants, still assisted by the respondent, elevated
the case to the Court of Appeals, which, however, affirmed in
toto the decision of the trial court.
The respondent asserts that he was about to appeal the said
decision to this Court, but his services as counsel for the
complainants and for the union were illegally and unilaterally
terminated by complainant Veronica Santiago.
 that the trial court had committed a reversible error or grave
abuse of discretion in issuing an order reconsidering its
previous order of dismissal of Salvador's complaint and in
The core issue that presents itself is whether the respondent
denying the motion to reconsider the said order. The second
committed culpable negligence, as would warrant disciplinary
ground is purely based on forgetfulness because of his other
action, in failing to file for the complainants an answer in Civil
commitments.
Case No. 3526-V-91 for which reason the latter were declared
in default and judgment was rendered against them on the
basis of the plaintiff's evidence, which was received ex-parte.

Whether it be the first or the second ground, the fact remains

that the respondent did not comply with his duty to file an
answer in Civil Case No. 3526-V-91. His lack of diligence was
It is axiomatic that no lawyer is obliged to act either as adviser
compounded by his erroneous belief that the trial court
or advocate for every person who may wish to become his
committed such error or grave abuse of discretion and by his
client. He has the right to decline employment,1 subject,
continued refusal to file an answer even after he received the
however, to Canon 14 of the Code of Professional
Court of Appeals' decision in the certiorari case. There is no
Responsibility. Once he agrees to take up the cause of a client,
showing whatsoever that he further assailed the said decision
the lawyer owes fidelity to such cause and must always be
before this Court in a petition for review under Rule 45 of the
mindful of the trust and confidence reposed in him.2 He must
Rules of Court to prove his claim of overzealousness to
serve the client with competence and diligence,3 and champion
challenge the trial court's order. Neither was it shown that he
the latter's cause with wholehearted fidelity, care, and
alleged in his motion to lift the order of default that the
devotion.4 Elsewise stated, he owes entire devotion to the
complainants had a meritorious defense. 10 And, in his appeal
interest of the client, warm zeal in the maintenance and
from the judgment by default, he did not even raise as one of
defense of his client's rights, and the exertion of his utmost
the errors of the trial court either the impropriety of the order of
learning and ability to the end that nothing be taken or withheld
default or the court's grave abuse of discretion in denying his
from his client, save by the rules of law, legally applied.5 This
motion to lift that order.
simply means that his client is entitled to the benefit of any and
every remedy and defense that is authorized by the law of the
land and he may expect his lawyer to assert every such remedy
or defense.6 If much is demanded from an attorney, it is
because the entrusted privilege to practice law carries with it
Pressure and large volume of legal work provide no excuse for
the correlative duties not only to the client but also to the court,
the respondent's inability to exercise due diligence in the
to the bar, and to the public. A lawyer who performs his duty
performance of his duty to file an answer. Every case a lawyer
with diligence and candor not only protects the interest of his
accepts deserves his full attention, diligence, skill, and
client; he also serves the ends of justice, does honor to the bar,
competence, regardless of its importance and whether he
and helps maintain the respect of the community to the legal
accepts it for a fee or for free.
profession. 7

All told, the respondent committed a breach of Canon 18 of the

The respondent admits that it was his duty to file an answer in
Code of Professional Responsibility which requires him to
Civil Case No. 3526-V-91. He justifies his failure to do so in this
serve his clients, the complainants herein, with diligence and,
wise:
more specifically, Rule 18.03 thereof which provides: "A lawyer
shall not neglect a legal matter entrusted to him, and his
negligence in connection therewith shall render him liable."

[I]n his overzealousness to question the Denial Order of the trial

court, 8 [he] instead, thru honest mistake and excusable
neglect, filed a PETITION FOR CERTIORARI with the
The respondent's negligence is not excused by his claim that
Honorable Court, docketed as G.R. No. 100983. . . .
Civil Case No. 3526-V-91 was in fact a "losing cause" for the
complainants since the claims therein for damages were based
on the final decision of the Med-Arbiter declaring the
complainants' act of expelling Salvador from the union to be
illegal. This claim is a mere afterthought which hardly
And, when the Court of Appeals, to which G.R. No. 100983 was
persuades us. If indeed the respondent was so convinced of
referred, dismissed the petition, he again "inadvertently" failed
the futility of any defense therein, he should have seasonably
to file an answer "[d]ue to honest mistake and because of his
informed the complainants thereof. Rule 15.05, Canon 15 of
overzealousness as stated earlier. . . . "
the Code of Professional Responsibility expressly provides:

In their Reply, the complainants allege that his failure to file an

A lawyer, when advising his client, shall give a candid and
answer was not an honest mistake but was "deliberate,
honest opinion on the merits and probable results of the client's
malicious and calculated to place them on the legal
case, neither overstating nor understanding the prospects of
disadvantage, to their damage and prejudice" for, as admitted
the case.
by him in his motion to set aside the order of default, his failure
to do so was "due to volume and pressure of legal work."9 In
short, the complainants want to impress upon this Court that
the respondent has given inconsistent reasons to justify his
failure to file an answer.
Then too, if he were unconvinced of any defense, we are
unable to understand why he took all the trouble of filing a
motion to dismiss on the grounds of res judicata and lack of
jurisdiction and of questioning the adverse ruling thereon
initially with this Court and then with the Court of Appeals,
We agree with the complainants. In his motion for
unless, of course, he meant all of these to simply delay the
reconsideration of the default order, the respondent explained
disposition of the civil case. Finally, the complainants were not
his non-filing of the required answer by impliedly invoking
entirely without any valid or justifiable defense. They could
forgetfulness occasioned by a large volume and pressure of
prove that the plaintiff was not entitled to all the damages
legal work, while in his Comment in this case he attributes it to
sought by him or that if he were so, they could ask for a
honest mistake and excusable neglect due to his
reduction of the amounts thereof.
overzealousness to question the denial order of the trial court.

We do not therefore hesitate to rule that the respondent is not

Certainly, "overzealousness" on the one hand and "volume and
free from any blame for the sad fate of the complainants. He is
pressure of legal work" on the other are two distinct and
liable for inexcusable negligence.
separate causes or grounds. The first presupposes the
respondent's full and continuing awareness of his duty to file an
answer which, nevertheless, he subordinated to his conviction
WHEREFORE, ATTY. AMADO R. FOJAS is hereby
REPRIMANDED and ADMONISHED to be, henceforth, more
careful in the performance of his duty to his clients.
SO ORDERED.
G.R. No. 62386 November 9, 1988
BATANGAS-I ELECTRIC COOPERATIVE LABOR UNION,
petitioner,
vs.
ROMEO A. YOUNG, OFFICER IN CHARGE, BUREAU OF
LABOR RELATIONS, AND BATANGAS-I ELECTRIC
COOPERATIVE, INC., respondents.
G.R. No. 70880 November 9, 1988
BULACAN II ELECTRIC COOPERATIVE, INC., petitioner,
vs.
HON. ELISEO A. PEÑAFLOR, THE CHIEF MED-ARBITER OF
THE REGIONAL ARBITRATION OFFICE, BRANCH NO. III,
SAN FERNANDO, PAMPANGA, HON. CRESENCIANO B.
TRAJANO, THE DIRECTOR, BUREAU OF LABOR
RELATIONS, MINISTRY OF LABOR AND EMPLOYMENT,
MANILA, AND FEDERATION OF FREE WORKERS (BECO II
COOP., INC., CHAPTER), respondents.
G.R. No. 74560 November 9, 1988
ALBAY ELECTRIC COOPERATIVE I, petitioner,
vs.
CRESENCIANO B. TRAJANO, DIRECTOR, BUREAU OF
LABOR RELATIONS AND FFW ALECO I CHAPTER,
respondents.
Pedro N. Belmi for petitioner in G.R. No. 62386.
Estebal & Associates Law firm for petitioner in G.R. No. 70880.
Juan B. Cabredo IV for petitioner in G.R. No. 74560.
The Solicitor General for public respondent.
Ricardo T. Diaz for private respondent in G.R. No. 62386.
Ireneo P. Bernardo for respondent FFW in G. R. No. 7 0880.
MEDIALDEA, J.:
This refers to three (3) separate petitions for certiorari under
Rule 65 of the Rules of Court, namely: (1) G.R. No. 62386,
entitled "BATANGAS-I ELECTRIC COOPERATIVE LABOR
UNION, Petitioner, versus ROMEO A. YOUNG, OFFICER IN
CHARGE, BUREAU OF LABOR RELATIONS, AND
BATANGAS-I ELECTRIC COOPERATIVE INC.,
Respondents;" (2) G.R. No. 70880, entitled "BULACAN II
ELECTRIC COOPERATIVE, INCORPORATED, Petitioner,
versus HON. ELISEO A. PENAFLOR, The Chief Med-Arbiter
of the Regional Arbitration Office, Branch IN, San Fernando,
Pampanga, et al., Respondents, and (3) G.R. No. 74560,
entitled "ALBAY ELECTRIC COOPERATIVE I, Petitioner,
versus CRESENCIO B. TRAJANO, DIRECTOR, BUREAU OF
LABOR RELATIONS AND FFW ALECO I CHAPTER,
Respondents." The same issue is involved in these petitions.
The antecedent facts are as follows:
G.R. No. 62386
On June 1, 1981, the Batangas-I Electric Cooperative Union
(hereinafter referred to as UNION) filed with the Regional Office
No. IV-A, Ministry of Labor and Employment (now Department
of Labor and Employment), at San Pablo City, a petition for
certification election. The UNION alleged, inter alia, that it is a
legitimate labor organization; that the Batangas-I Electric
Cooperative Inc. BATELEC has 150 employees, more or less;
that the UNION desires to represent the regular rank and file
employees of BATELEC for purposes of collective bargaining;
that there is no other union existing in BATELEC except the
UNION; that there is no certified collective bargaining
agreement in the said cooperative; and that there has been no
certification election conducted in BATELEC during the last
twelve (12) months preceding the filing of the petition. On
August 20, 1981, Med-Arbiter Paterno D. Adap issued a
resolution (pp. 21-23, Rollo) which gave due course to the
petition and ordered the holding of a certification election. On
August 31, 1981, BATELEC filed a motion for reconsideration
(pp. 24-30, Rollo) of the Med-Arbiter's resolution contending,
inter alia, that there was a legal impediment to the holding of a
certification election considering that the formation of a union
in a cooperative is illegal and invalid, the officers and members
of the union being the owners thereof. This motion was treated
as an appeal from the Med-Arbiter's resolution of August 20,
1981. On November 27, 1981, a resolution (pp. 38-40, Rollo)
was issued by Romeo A. Young, Officer in Charge, Bureau of
Labor Relations, granting the appeal and revoking the Med-
Arbiter's order mandating the holding of a certification election.
This Resolution, inter alia, stated:
The sole issue that confronts Us in the instant case is whether
or not employees of an electric cooperative who are at the
same time members of the cooperative, may be allowed to form
or join a labor union in the electric cooperative for purposes of
collective bargaining.
We rule in the negative.
A cursory analysis of Section 35, Presidential Decree 269, as
amended, readily shows that employees of an electric
cooperative who are themselves members of the cooperative
have no right to form or join a labor organization for purposes
of collective bargaining.
 Labor Code; that the FFW seeks to be certified as the sole and
exclusive collective bargaining representative of the regular
rank and file employees and workers of BECO II for purposes
In the first instance, a cooperative is established primarily for
of collective bargaining; that there are more or less 140 regular
the mutual aid and protection of the members thereof. It was
rank and file employees and workers of BECO II; that there is
never intended to operate like an ordinary company or
no other union existing in BECO II except the FFW and that
corporation. A cooperative is a non-profit organization, so that
there is no certified collective bargaining agreement in said
if ever there are gains, income or benefits derived therefrom,
establishment; and that there has been no certification election
the same are equally divided among its members. For all legal
conducted in BECO II during the last twelve (12) months
intents and purposes, therefore, members of a cooperative are
preceding the filing of the petition.
part-owners thereof.

On September 24, 1982, BECO II filed its answer (pp. 17-18,

In the instant case, petitioner strongly contended that they are
Rollo) contending that the petition does not comply with the
not co-owners of the cooperative because the only benefits that
30% jurisdictional requirement considering that it has a total of
they derive therefrom are in the form of electrical services and
143 employees, 24 of whom are members of the cooperative,
that they never exercise the attributes of ownership recognized
28 are managerial employees, 3 are confidential employees,
under Article 428 of the New Civil Code. We do not concur. The
23 are contractual employees and 28 are casual employees,
fact that these employees/members enjoy free electrical
thereby leaving only 37 employees belonging to the rank and
services which are not available to non-members is a clear
file; and that to grant the petition would be violative of Article
indication that these employees are co-owners of the
244 (now Article 243) of the Labor Code and Section 35 of PD
cooperative. Petitioner must be reminded that benefits from
269.
cooperative accruing to co-owners may not come only in the
form of monetary benefits but also in the form of services.

Later, the FFW filed its position paper contending that it has
complied substantially with the 30% jurisdictional requirement
Petitioner also advanced the theory that if self-employed
with the 73 signatures it submitted and that there is nothing in
persons are allowed to form a labor organization under Article
the law that prohibits or restricts cooperative members from
244, Presidential Decree 442, as amended, then it is with more
joining labor organizations.
reason that employees of the cooperative should also be
allowed to form their union. Article 244, PD 442 as amended,
provides:

On the other hand, BECO II, through its position paper dated
October 4, 1982 (pp. 19-26, Rollo), contended, inter alia, that it
is not among those covered by Article 244 of the Labor Code,
... Ambulant, intermittent and itinerant workers, self employed
as amended by BP 70, as it is not a commercial, industrial or
people, rural workers and those without any definite employers
agricultural enterprise and neither is it a religious, charitable,
may form a labor organization for their mutual aid and
medical or educational institution; that since electric
protection.
cooperatives are subject to the supervision and control of the
National Electrification Administration pursuant to PD 269, as
amended by PD 1645, BECO II in effect is a government
institution; and that there is no representation issue as there is
no other labor organization involved except the FFW.
It must be noted that although the self- employed people are
allowed by the Labor Code to form a labor organization, the
purpose of such organization is for mutual aid and protection
but not for the purpose of collective bargaining.
On October 14, 1982, Eliseo A. Peñaflor, Chief Med-Arbiter of
the Regional Office III, issued an order (pp. 27-28, Rollo)
directing the holding of a certification election among the rank
and file employees and workers of BECO II.
Finally, while Article 244, PD 442, as amended, now allows
workers of non- profit institutions to form labor organizations,
nevertheless, the same provisions can not extend to a
cooperative considering the absence of employer-employee
relationship therein. (p. 39-40, Rollo).
BECO II appealed from this Order to the Bureau of Labor
Relations. On January 16,1985, Director Cresenciano Trajano
of the said bureau rendered a decision (pp. 42-43, Rollo)
dismissing the appeal and affirming the questioned order. This
decision, inter alia, stated:
After its motion for reconsideration was denied, the UNION filed
the instant petition contending that the respondent Director of
the Bureau of Labor Relations committed a palpable error of
law and/or grave abuse of discretion amounting to lack of
and/or in excess of jurisdiction in finding and concluding that
xxx xxx xxx
employees of an electric cooperative who are at the same time
members of the cooperative are not allowed to form or join a
labor union in the electric cooperative for purposes of collective
bargaining, and in revoking and setting aside the resolution
dated August 20, 1981 of the Med-Arbiter directing the holding
... We dismiss the Appeal.
of a certification election among the rank and file employees of
BATELEC.

Our resolution in the case of Batangas I Electric Cooperative

Labor Union dated 27 November 1981 is not applicable in the
G.R. No. 70880
case at bar as the facts therein are different. There, the petition
for certification election was supported by workers who are
members of the cooperative. No employer-employee
relationship exists between the members and the cooperative
firm. In the case at bai respondent did admit the existence of
On September 1, 1982, the Federation of Free Workers (FFW)
employer-employee relationship with workers of the
filed with the Regional Office IN, Ministry of Labor and
cooperative who are not cooperative members when it alleced
Employment (now Department of Labor and Employment), at
that of the total 143 employees only 24 are cooperative
San Fernando, Pampanga, a petition for certification election.
members. Thus, even if we deduct the 24 cooperative
The petition alleged, inter alia, that the FFW is a legitimate labor
members from the numbelof workers supporting the petition,
organization; that the Bulacan II Electric Cooperative Inc.
there still remain 49 signatures which aie more than enough
BECO II) is engaged in the service and supply of electric
compliance with the 30% requirement.
current and, therefore, an employer under the provisions of the
 It alleged that of the 63 signatories to the petition, 51 are not
qualified to join the union as they are members-consumers of
the ALECO I and are considered joint owners of the
Going to Presidential Decree No. 269, there is no showing that
cooperative pursuant to PD 269, and Art. II Sec. I of the revised
that such prohibits formation of unions between and among
by laws of ALECO I.
employees who are members of the cooperative. Rather,
Section 35 of PD 269 shows that the prohibition against
formation of a labor organization for purposes of collective bar-
dining extends to employees of an electric cooperative who ale
themselves members of the cooperative.
FFW in its reply (pp. 18-20, Rollo), argued that the 51 disputed
signatories to the petition are regular rank and file employees
and workers of ALECO I and are entitled to selforganization
under Article 244 (now Article 243) of the Labor Code.
Finally, the fact that tlie petition foi cel tificatioll election was
filed already gives 1ise to representation issue, irrespective of
whetheronly one union is involved.
On February 26, 1986, the Med-Arbiter, finding that there was
compliance with the 30% subscription requirement, issued an
Order (pp. 21-25, Rollo) calling for a certification election.
ALECO I appealed from this order to the Bureau of Labor
Considering satisfaction of the 30% subscriptional requirement
Relations.
coupled with the findings that the workers who aie not members
of the cooperative are eligible to uinoii membership, we have
no other-alternative but to affirm the Order of the MedAibitei to
hold a certification election. ... (p. 43, Rollo).
In the meantime, on April 25, 1986, the Association of
Democratic Labor Organization ADLO moved to intervene in
the petition claiming that it has a legal interest to protect.
BECO II filed the instant petition contending that the public
respondents acted with grave abuse of discretion in ruling that
under Article 244 (now Article 243) of the Labor Code,
members and part owners of electric cooperatives are eligible
On May 15, 1986, Cresenciano B. Trajano, Director of the
to form, join or assist labor organizations for purposes of
Bureau of Labor Relations, rendered a decision (pp. 27-29,
collective bargaining.
Rollo) dismissing ALECO Is appeal for lack of merit, claiming
that there was a "clear proof of compliance with the 30%
subscription requirement, coupled with the finding that the
subscribers to the petition who are members/owners of the
respondent cooperative can validly be eligible for union
On May 29, 1985, a temporary restraining order was issued by
membership." This decision, inter alia, stated:
this Court enjoiililig the respondents from enforcing the
questioned orders.

The sole issue now for resolution is whether or not the

petitioners who are members/owners of the cooperative are
G.R. No. 74560
eligible to join a labor organization for the purpose of collective
bargaining.

On October 1, 1985, the Federation of Free Workers (FFW)

ALECO I Chapter filed a petition for certification election,
We find for petitioner.
alleging, inter alia, that it is a legitimate labor onganization" that
the Albay Electric Cooperative I ALECO 1) is an electric
cooperative servicing electricity in the Province of Albay- that
ALECO I has 160 employees, more or less, majority of whom
are FFW members; that there is no other union existing nor a
While it may be true that the subscribers to the petition are in
collective bargaining agreement existing in the,cooperative"
themselves members/owners of the cooperative, nevertheless,
that no certification election has been held for the past twelve
as we have often ruled, that alone does not militate against their
(12) months prior to the filing of the petition.
exercise of the right of self-organization. ln the present petition,
they are not acting in the capacity of part-owners/members but
as mere employees of the cooperative. As such, they do not
have direct control and management of the affairs and
operation of the cooperative. We thus see no conflict of interest
On November 29, 1985, the FFW submitted 63 signatures in
between the organization of the employees into a union and
support of the petition for certification election. On the same
their being members of the cooperative.
date, counsel for ALECO I employees for a "NO-UNION
STAND" intervened and submitted a copy of the ALECO I 1985
budget showing that the said cooperative has a total of 141
rank and file employees.On December 11, 1985, the FFW filed
its position paper contending, inter alia, that the ALECO I is
Moreover, the existence of employer- employee relationship
covered by the Labor Code: that it has a right to organize and
with the workers of the cooperative was not disputed by
be represented by a union; that there is no legal impediment to
respondent. Like all other workers, the petitioners are entitled
the holding of a certification election considering that out of the
to the exercise of the right to self organization and collective
141 rank and file employees, 63 supported the petition.
bargaining as guaranteed by the Constitution. Surely, it is not
the intention of Presidential Decree No. 269 to discourage
unionism of employees. The encouragement of the right to self
organization is expected to promote industrial peace through
the promotion of the workers' moral, social and economic well-
On December 18, 1985, ALECO I filed its position paper
being.
seeking the dismissal of the petition on the allegation that FFW
failed to comply with 30% requirement considering that 112
rank and file employees have manifested in a "declaration" they
that do not desire to be represented by any union.
There being clear proof of compliance with the 30%
subscription requirement, coupled with the finding that the
subscribers to the petition who are members/owners of the
respondent cooperative can validly be eligible for union
On December 24,1985, intervenor ALECO I employees for a
membership, we rule to affirm the Order of the Med-Arbiter.
"NO-UNION STAND") filed its position paper (pp. 15- 17, Rollo)
seeking likewise the dismissal of the petition, alleging that the
30% written consent requirement has not been complied with.
WHEREFORE, premises considered, the instant appeal is
hereby denied for lack of merit and the Order of the MedAlbiter
dated 26 February 1986 is affirmed with the modification that
the Association of Democratic Labor Organizations ADLO shall
be included as a contending party in the certification election.
Let the records of the case be immediately forwarded to the
office of origin for implementation of this Decision.
SO ORDERED (pp. 28-29, Rollo).
Hence, ALECO I filed the instant petition contending that the
public respondent erred in holding that the FFW ALECO I
CHAPTER whose members are members/part owners of the
cooperative are eligible to join a labor organization for collective
bargaining.
On June 6, 1986, a temporary restraining order was issued by
this Court enjoining the respondents from enforcing the
questioned decision.
The Solicitor General who was earlier required to give his
comment, filed on June 11, 1986, a manifestation and motion
to be excused from filing said comment, which was later
granted by this Court. In the said manifestation, the Solicitor
General stated:
xxx xxx xxx
2. The issue presented in tlie petition is whether private
respondents most of whom aie members of petitioner Albay
Electric Cooperative I may form or joili a labor union within said
cooperative. The same issue was raised in BLR Case No. A-
0265-81, elevated to this Honorable Court as G.R. No. 62386,
entitled "Batangas Electric Cooperative Labor Union vs. BLR
Officer in Charge Romeo A. Young, et. al." In that case
respondent BLR Officer-in-Chairge Romeo Young ruled that
employees who aie at the same time members of an electric
cooperative are not entitled to form ol join a labor union. This
Office in its comment sustained the decision of BLR OIC
Romeo Young, as follows:
xxx xxx xxx
Petitioner claims that the members of the cooperative may form
or join a labor union within the cooperative for the purpose of
collective bargaining because they fall within the ambit of Art.
244 of the Labor Code, as amended by BP 70, as follows;
Coverage and employees right to self-organization. — All
persons employed in commercial, industrial and agricultural
elitelprises aild in religious, charitable, medical or educational
institutions whether operating for profit oi not, shall have the iiht
to self-organization and to form, join or assist labor organization
of their own choosin folthe purpose of collective bargaining. ...
It is submitted that this provision does not apply to the members
of the petitioner- union since they are co-owners of the
cooperative. The word 'employed' within the meaning of the
above-cited provisions, eliminates members of cooperatives
who are co-owners of the corporation. Said term means
persons strictly under hire and without any involvement in the
ownership of the firm. This construction is buttressed by the
qualification that the labor union formed was for the purpose of
collective bargaining. The duty to bargain exists only between
employer and its employees. An employer has no duty to
bargain with its cooperatives of the corporation.
xxx xxx xxx
At this point, it may be emphasized that the exclusion from the
right to self organization is limited only to membersowners of
the electric cooperative. Employees who are not members of
the cooperative are not prohibited to form, join or assist labor
unions because they are not co-owners. However, as already
discussed, members of petitioner union are necessarily co-
owners of the electric cooperative. Therefore, being co-owners
of the electric cooperative, members of petitioner union are not
entitled to the right to self- organization within the electric
cooperative.
4. Assuming a position contrary to that taken by BLR OIC
Romeo Young in the above case, public respondent BLR
Director Cresenciano B. Trajano in this case ruled that
employees most of whom are members of the electric
cooperative may form or join a labor organization in said
cooperative.
5. For this Office, therefore, to sustain the decision of
respondent BLR Director Cresenciano B. Trajano in this case,
would be to assume a position directly opposite and in conflict
with that it had previously taken in G.R. No. 62386, now
pending before this Honorable Court (pp. 47-50, Rollo).
The common issue raised in these three (3) instant petitions is
whether or not employees of electric cooperatives are qualified
to form or join labor organizations for purposes of collective
bargaining.
Eligibility to form, join or assist labor organizations for purposes
of collective bargaining is governed by Article 243 (formerly
Article 244) of the Labor Code, as amended, which provides:
Art. 243. Coverage and employees' right to self-organization.
— All persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical, or
educational institutions whether operating for profit or not, shall
have the right to selforganization and to form, join, or assist
labor organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those without
any definite employers may form labor organizations for their
mutual aid and protection.
In Cooperative Rural Bank of Davao City, Inc. vs. Pura Ferrer-
Calleja, Director, Bureau of Labor Relations, et al., G.R. No.
77951, September 26, 1988, it was held that an employee of a
cooperative who is a member and co-owner thereof cannot
invoke the right to collective bargaining. The decision in the
case, inter alia, stated:
xxx xxx xxx
A cooperative, therefore, is by its nature different from an
ordinary business concern being run either by persons,
partnerships, or corporations. Its owners and/or members are
the ones who run and operate the business while the others
are its employees. As above stated, irrespective of the name of
shares owned by its member they are entitled to cast one vote
each in deciding upon the affair of the cooperative. Their share
In the present Article 257 of the Labor Code, it is now provided
capital eam limited interests. They enjoy special privileges as
that in any establishment where there is no certified bargaining
— exemption from income tax and sales taxes, preferential
agent, the petition for certification election filed by a legitimate
right to supply their products to State agencies and even
labor organization shall be supported by the written consent of
exemption from the minimum wage laws.
at least twenty (20%) percent of all the employees in the
bargaining unit holding of a certification election in order to
determine the exclusive bargaining agent of the employees.
With such, the Bureau is left without any discretion but to order
the holding of a certification election Arguelles vs. Young, G.R.
An employee therefore of such a cooperative who is a member
No. 59880, September 11, 1987,153 SCRA 690).
and co-owner thereof cannot invoke the right to collective
bargaining for certainly an owner cannot bargain with himself
or his co-owners. In the opinion of August 14, 1981 of the
Solicitor General he correctly opined that employees of
cooperatives who are themselves members of the cooperative
With respect to G.R. No. 74560, the decision dated May 15,
have no right to form orjoin labor organizations for purposes of
1986 of the respondent Director of the Bureau of Labor
collective bargaining for being themselves co-owners of the
Relations, affirming the Med-Arbiter's order for the holding of a
cooperative.
certification election, is reversed. It is clear from the records in
this case that the petitioner ALECO I has 141 rank and file
employees. Hence, there are 90 rank and file employees,
nonmembers of the cooperative, who may validly form, join or
assist labor organizations for purposes of collective bargaining.
However, in so far as it involves cooperatives with employees
who are not members or co-owners thereof, certainly such
employees are entitled to exercise the rights of all workers to
organization, collective bargaining, negotiations and others as
are enshrined in the Constitution and existing laws of the
It is likewise clear that 63 rank and file employees supported
country.
the petition for certification election but 51 of them are members
of the petitioner cooperative, a fact not disputed by the private
respondent union. Hence, only 12 rank and file employees who
were qualified to form, join or assist labor organizations for
purposes of collective bargaining, signed the petition, which
In the light of the above-stated pronouncement, the assailed
definitely is a number short of the 30% jurisdictional
resolution dated November 27, 1981 of Romeo A. Young,
requirement as provided in Article 258 of the Labor Code, the
Officer-in-Charge, Bureau of Labor Relations, in G.R. No.
law then prevailing. Thirty (30%) percent of the 90 rank and file
62386, revoking the Med-Arbiter's order calling for a
employees who are not members of the cooperative is 27.
certification election must be upheld. The records in this case
do not show that minus the rank and file employees (also
members of the respondent BATELEC) who supported the
petition, there was still a sufficient number to constitute 30% of
the bargaining unit as a jurisdictional requirement. On the
ACCORDINGLY, judgment is hereby rendered as follows:
contrary, there is sufficient evidence showing that all those who
supported the petition were such members. Petitioner UNION
admitted in its petition that its officers and members are also
membersconsumers of the cooperative (p. 6, Rollo). Such
being the case, the employees belonging to petitioner UNION
1. In G.R. No. 62386, the petition is DISMISSED and the
are not qualified to form a labor organization and bargain
collectively. challenged decision dated November 27, 1981 of respondent
Romeo A. Young, OIC of the Bureau of Labor Relations is
AFFIRMED.

The records in G.R. No. 70880 show that the petitioner BECO
II has 143 employees and that 73 employees of the petitioner
supported the petition for certification election. No clear
evidence was adduced by petitioner to prove that 28 of its
employees are managerial employees. However, 24
employees are members of the cooperative. Thus, even if the
24 cooperative members, assuming, in gratia arguinenti that all
of them supported the petition, are to be deducted from the said
73 employees, there still remain forty-nine (49), a sufficient
compliance with the 30% jurisdictional requirement provided in
the old Article 258 of the Labor Code, the law then prevailing.
2. In G.R. No. 70880, the petition is DISMISSED and the
decision dated January 16, 1985 of respondent Cresenciano B.
Trajano, Director, Bureau of Labor Relations, ordering the
holding of a certification election is hereby AFFIRMED.
Notwithstanding the inclusion of the 24 members or co-owners
of the cooperative, the 30% subscriptional requirement for the
filing of a petition for certification election has been satisfied.
The temporary restraining order dated May 29,1985 is LIFMD

3. In G.R. No. 74560, the petition is GRANTED and the

In sustaining the order of the Med-Arbiter, Director Trajano, assailed decision dated May 15, 1986 of respondent
inter alia, said: Cresenciano B. Trajano, Director, Bureau of Labor Relations is
hereby REVERSED and SET ASIDE. The temporary
restraining order dated June 2, 1986 is LIFTED.

Considering satisfaction of the 30% subscriptional requirement

coupled with the findings that the workers who are not
members of the cooperative are eligible to union membership, SO ORDERED.
we have no other alternative but to aff iim the Order of the Med-
Arbiter to hold a certification election. (p. 43,
Rollo).<äre||anº•1àw>

G.R. No. L-28546 July 30, 1975

We find no valid reason to disturb this finding. Employees of a

cooperative who are not members thereof are entitled to
exercise the rights of all workers to form, join or assist labor VENANCIO CASTANEDA and NICETAS HENSON,
organizations for purposes of collective bargaining. petitioners,
Compliance with the jurisdictional requirement makes it
mandatory on the part of the Bureau of Labor Relations to order vs.
the
PASTOR D. AGO, LOURDES YU AGO and THE COURT OF the court finally, and for the third time, lifted the restraining
APPEALS, respondents. order.

Quijano and Arroyo for petitioners. While the battle on the matter of the lifting and restoring of the
restraining order was being fought in the Quezon City court, the
Agos filed a petition for certiorari and prohibition with this Court
under date of May 26, 1966, docketed as L-26116, praying for
a writ of preliminary injunction to enjoin the sheriff from
Jose M. Luison for respondents. enforcing the writ of possession. This Court found no merit in
the petition and dismissed it in a minute resolution on June 3,
1966; reconsideration was denied on July 18, 1966. The
respondents then filed on August 2, 1966 a similar petition for
certiorari and prohibition with the Court of Appeals (CA-G.R.
37830-R), praying for the same preliminary injunction. The
Court of Appeals also dismissed the petition. The respondents
then appealed to this Court (L-27140).1äwphï1.ñët We
CASTRO, J.: dismissed the petition in a minute resolution on February 8,
1967.

The parties in this case, except Lourdes Yu Ago, have been

commuting to this Court for more than a decade. The Ago spouses repaired once more to the Court of Appeals
where they filed another petition for certiorari and prohibition
with preliminary injunction (CA-G.R. 39438-R). The said court
gave due course to the petition and granted preliminary
injunction. After hearing, it rendered decision, the dispositive
In 1955 the petitioners Venancio Castañeda and Nicetas portion of which reads:
Henson filed a replevin suit against Pastor Ago in the Court of
First Instance of Manila to recover certain machineries (civil
case 27251). In 1957 judgment was rendered in favor of the
plaintiffs, ordering Ago to return the machineries or pay definite
sums of money. Ago appealed, and on June 30, 1961 this WHEREFORE, writ of preliminary injunction from enforcement
Court, in Ago vs. Castañeda, L-14066, affirmed the judgment. of the writ of possession on and ejectment from the one-half
After remand, the trial court issued on August 25, 1961 a writ share in the properties involved belonging to Lourdes Yu Ago
of execution for the sum of P172,923.87. Ago moved for a stay dated June 15, 1967 is made permanent pending decision on
of execution but his motion was denied, and levy was made on the merits in Civil Case No. Q-7986 and ordering respondent
Ago's house and lots located in Quezon City. The sheriff then Court to proceed with the trial of Civil Case No. Q-7986 on the
advertised them for auction sale on October 25, 1961. Ago merits without unnecessary delay. No pronouncement as to
moved to stop the auction sale, failing in which he filed a costs.
petition for certiorari with the Court of Appeals. The appellate
court dismissed the petition and Ago appealed. On January
31,1966 this Court, in Ago vs. Court of Appeals, et al., L-19718,
affirmed the dismissal. Ago thrice attempted to obtain a writ of
preliminary injunction to restrain the sheriff from enforcing the Failing to obtain reconsideration, the petitioners Castañeda
writ of execution "to save his family house and lot;" his motions and Henson filed the present petition for review of the aforesaid
were denied, and the sheriff sold the house and lots on March
decision.
9, 1963 to the highest bidders, the petitioners Castañeda and
Henson. Ago failed to redeem, and on April 17, 1964 the sheriff
executed the final deed of sale in favor of the vendees
Castañeda and Henson. Upon their petition, the Court of First
Instance of Manila issued a writ of possession to the properties.
1. We do not see how the doctrine that a court may not
interfere with the orders of a co-equal court can apply in the
case at bar. The Court of First Instance of Manila, which issued
the writ of possession, ultimately was not interfered with by its
co-equal court, the Court of First Instance of Quezon City as
However, on May 2, 1964 Pastor Ago, now joined by his wife,
the latter lifted the restraining order it had previously issued
Lourdes Yu Ago, as his co-plaintiff, filed a complaint in the against the enforcement of the Manila court's writ of
Court of First Instance of Quezon City (civil case Q-7986) to possession; it is the Court of Appeals that enjoined, in part, the
annul the sheriff's sale on the ground that the obligation of
enforcement of the writ.
Pastor Ago upon which judgment was rendered against him in
the replevin suit was his personal obligation, and that Lourdes
Yu Ago's one-half share in their conjugal residential house and
lots which were levied upon and sold by the sheriff could not
legally be reached for the satisfaction of the judgment. They
2. Invoking Comilang vs. Buendia, et al.,1 where the
alleged in their complaint that wife Lourdes was not a party in
wife was a party in one case and the husband was a party in
the replevin suit, that the judgment was rendered and the writ
another case and a levy on their conjugal properties was
of execution was issued only against husband Pastor, and that
upheld, the petitioners would have Lourdes Yu Ago similarly
wife Lourdes was not a party to her husband's venture in the
bound by the replevin judgment against her husband for which
logging business which failed and resulted in the replevin suit
their conjugal properties would be answerable. The case
and which did not benefit the conjugal partnership.
invoked is not at par with the present case. In Comilang the
actions were admittedly instituted for the protection of the
common interest of the spouses; in the present case, the Agos
deny that their conjugal partnership benefited from the
husband's business venture.
The Court of First Instance of Quezon City issued an ex parte
writ of preliminary injunction restraining the petitioners, the
Register of Deeds and the sheriff of Quezon City, from
registering the latter's final deed of sale, from cancelling the
respondents' certificates of title and issuing new ones to the
3. Relying upon Omnas vs. Rivera, 67 Phil. 419, the
petitioners and from carrying out any writ of possession. A
Court of Appeals held that a writ of possession may not issue
situation thus arose where what the Manila court had ordered
until the claim of a third person to half-interest in the property is
to be done, the Quezon City court countermanded. On
adversely determined, the said appellate court assuming that
November 1, 1965, however, the latter court lifted the
Lourdes Yu Ago was a "stranger" or a "third-party" to her
preliminary injunction it had previously issued, and the Register
husband. The assumption is of course obviously wrong, for,
of deeds of Quezon City cancelled the respondents' certificates
besides living with her husband Pastor, she does not claim
of title and issued new ones in favor of the petitioners. But
ignorance of his business that failed, of the relevant cases in
enforcement of the writ of possession was again thwarted as
which he got embroiled, and of the auction sale made by the
the Quezon City court again issued a temporary restraining
sheriff of their conjugal properties. Even then, the ruling in
order which it later lifted but then re-restored. On May 3, 1967
Omnas is not that a writ of possession may not issue until the
claim of a third person is adversely determined, but that the writ
of possession being a complement of the writ of execution, a
judge with jurisdiction to issue the latter also has jurisdiction to
issue the former, unless in the interval between the judicial sale
and the issuance of the writ of possession, the rights of third
parties to the property sold have supervened. The ruling in
Omnas is clearly inapplicable in the present case, for, here,
there has been no change in the ownership of the properties or
of any interest therein from the time the writ of execution was
issued up to the time writ of possession was issued, and even
up to the present.
4. We agree with the trial court (then presided by Judge
Lourdes P. San Diego) that it is much too late in the day for the
respondents Agos to raise the question that part of the property
is unleviable because it belongs to Lourdes Yu Ago,
considering that (1) a wife is normally privy to her husband's
activities; (2) the levy was made and the properties advertised
for auction sale in 1961; (3) she lives in the very properties in
question; (4) her husband had moved to stop the auction sale;
(5) the properties were sold at auction in 1963; (6) her husband
had thrice attempted to obtain a preliminary injunction to
restrain the sheriff from enforcing the writ of execution; (7) the
sheriff executed the deed of final sale on April 17, 1964 when
Pastor failed to redeem; (8) Pastor had impliedly admitted that
the conjugal properties could be levied upon by his pleas "to
save his family house and lot" in his efforts to prevent
execution; and (9) it was only on May 2, 1964 when he and his
wife filed the complaint for annulment of the sheriff's sale upon
the issue that the wife's share in the properties cannot be levied
upon on the ground that she was not a party to the logging
business and not a party to the replevin suit. The spouses Ago
had every opportunity to raise the issue in the various
proceedings hereinbefore discussed but did not; laches now
effectively bars them from raising it.
Laches, in a general sense, is failure or neglect, for an
unreasonable and unexplained length of time, to do that which,
by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert
it.2
5. The decision of the appellate court under review
suffers from two fatal infirmities.
(a) It enjoined the enforcement of the writ of possession
to and ejectment from the one-half share in the properties
involved belonging to Lourdes Yu Ago. This half-share is not in
esse, but is merely an inchoate interest, a mere expectancy,
constituting neither legal nor equitable estate, and will ripen into
title when only upon liquidation and settlement there appears
to be assets of the community.3 The decision sets at naught
the well-settled rule that injunction does not issue to protect a
right not in esse and which may never arise.4
(b) The decision did not foresee the absurdity, or even
the impossibility, of its enforcement. The Ago spouses
admittedly live together in the same house5 which is conjugal
property. By the Manila court's writ of possession Pastor could
be ousted from the house, but the decision under review would
prevent the ejectment of Lourdes. Now, which part of the house
would be vacated by Pastor and which part would Lourdes
continue to stay in? The absurdity does not stop here; the
decision would actually separate husband and wife, prevent
them from living together, and in effect divide their conjugal
properties during coverture and before the dissolution of the
conjugal union.
6. Despite the pendency in the trial court of the
complaint for the annulment of the sheriff's sale (civil case Q-
7986), elementary justice demands that the petitioners, long
denied the fruits of their victory in the replevin suit, must now
enjoy them, for, the respondents Agos, abetted by their lawyer
Jose M. Luison, have misused legal remedies and prostituted
the judicial process to thwart the satisfaction of the judgment,
to the extended prejudice of the petitioners. The respondents,
with the assistance of counsel, maneuvered for fourteen (14)
years to doggedly resist execution of the judgment thru
manifold tactics in and from one court to another (5 times in the
Supreme Court).
We condemn the attitude of the respondents and their counsel
who,
far from viewing courts as sanctuaries for those who seek
justice, have tried to use them to subvert the very ends of
justice.6
Forgetting his sacred mission as a sworn public servant and his
exalted position as an officer of the court, Atty. Luison has
allowed himself to become an instigator of controversy and a
predator of conflict instead of a mediator for concord and a
conciliator for compromise, a virtuoso of technicality in the
conduct of litigation instead of a true exponent of the primacy
of truth and moral justice.
A counsel's assertiveness in espousing with candour and
honesty his client's cause must be encouraged and is to be
commended; what we do not and cannot countenance is a
lawyer's insistence despite the patent futility of his client's
position, as in the case at bar.
It is the duty of a counsel to advise his client, ordinarily a layman
to the intricacies and vagaries of the law, on the merit or lack
of merit of his case. If he finds that his client's cause is
defenseless, then it is his bounden duty to advise the latter to
acquiesce and submit, rather than traverse the incontrovertible.
A lawyer must resist the whims and caprices of his client, and
temper his clients propensity to litigate. A lawyer's oath to
uphold the cause of justice is superior to his duty to his client;
its primacy is indisputable.7
7. In view of the private respondents' propensity to use
the courts for purposes other than to seek justice, and in order
to obviate further delay in the disposition of the case below
which might again come up to the appellate courts but only to
fail in the end, we have motu proprio examined the record of
civil case Q-7986 (the mother case of the present case). We
find that
(a) the complaint was filed on May 2, 1964 (more than
11 years ago) but trial on the merits has not even started;
(b) after the defendants Castañedas had filed their
answer with a counterclaim, the plaintiffs Agos filed a
supplemental complaint where they impleaded new parties-
defendants;
(c) after the admission of the supplemental complaint,
the Agos filed a motion to admit an amended supplemental
complaint, which impleads an additional new party-defendant
(no action has yet been taken on this motion);
(d) the defendants have not filed an answer to the
admitted supplemental complaint; and
 derives its life from the preceding causes of action, which, as
shown, are baseless, the said fourth cause of action must
necessarily fail.
(e) the last order of the Court of First Instance, dated
April 20, 1974, grants an extension to the suspension of time
to file answer. (Expediente, p. 815)

The Counterclaim

We also find that the alleged causes of action in the complaint,

supplemental complaint and amended supplemental complaint
are all untenable, for the reasons hereunder stated. The
As a counterclaim against the Agos, the Castañedas aver that
Complaint
the action was unfounded and as a consequence of its filing
they were compelled to retain the services of counsel for not
less than P7,500; that because the Agos obtained a preliminary
injunction enjoining the transfer of titles and possession of the
properties to the Castañedas, they were unlawfully deprived of
Upon the first cause of action, it is alleged that the sheriff levied
the use of the properties from April 17, 1964, the value of such
upon conjugal properties of the spouses Ago despite the fact
deprived use being 20% annually of their actual value; and that
that the judgment to be satisfied was personal only to Pastor
the filing of the unfounded action besmirched their feelings, the
Ago, and the business venture that he entered into, which
pecuniary worth of which is for the court to assess.
resulted in the replevin suit, did not redound to the benefit of
the conjugal partnership. The issue here, which is whether or
not the wife's inchoate share in the conjugal property is
leviable, is the same issue that we have already resolved, as
barred by laches, in striking down the decision of the Court of
The Supplemental Complaint
Appeals granting preliminary injunction, the dispositive portion
of which was herein-before quoted. This ruling applies as well
to the first cause of action of the complaint.

Upon the first cause of action, it is alleged that after the filing of
the complaint, the defendants, taking advantage of the
dissolution of the preliminary injunction, in conspiracy and with
Upon the second cause of action, the Agos allege that on
gross bad faith and evident intent to cause damage to the
January 5, 1959 the Castañedas and the sheriff, pursuant to an
plaintiffs, caused the registration of the sheriff's final deed of
alias writ of seizure, seized and took possession of certain
sale; that, to cause more damage, the defendants sold to their
machineries, depriving the Agos of the use thereof, to their
lawyer and his wife two of the parcels of land in question; that
damage in the sum of P256,000 up to May 5, 1964. This
the purchasers acquired the properties in bad faith; that the
second cause of action fails to state a valid cause of action for
defendants mortgaged the two other parcels to the Rizal
it fails to allege that the order of seizure is invalid or illegal.
Commercial Banking Corporation while the defendants' lawyer
and his wife also mortgaged the parcels bought by them to the
Rizal Commercial Bank; and that the bank also acted in bad
faith.
It is averred as a third cause of action that the sheriff's sale of
the conjugal properties was irregular, illegal and unlawful
because the sheriff did not require the Castañeda spouses to
pay or liquidate the sum of P141,750 (the amount for which
The second cause of action consists of an allegation of
they bought the properties at the auction sale) despite the fact
additional damages caused by the defendants' bad faith in
that there was annotated at the back of the certificates of title a
entering into the aforesaid agreements and transactions.
mortgage of P75,000 in favor of the Philippine National Bank;
moreover, the sheriff sold the properties for P141,750 despite
the pendency of L-19718 where Pastor Ago contested the
amount of P99,877.08 out of the judgment value of
P172,923.37 in civil case 27251; and because of said acts, the
The Amended Supplemental Complaint
Agos suffered P174,877.08 in damages.

Anent this third cause of action, the sheriff was under no
obligation to require payment of the purchase price in the
auction sale because "when the purchaser is the judgment
creditor, and no third-party claim has been filed, he need not
pay the amount of the bid if it does not exceed the amount of
his judgment." (Sec. 23, Rule 39, Rules of Court)
The annotated mortgage in favor of the PNB is the concern of
the vendees Castañedas but did not affect the sheriff's sale; the
cancellation of the annotation is of no moment to the Agoo.
The amendment made pertains to the first cause of action of
the supplemental complaint, which is, the inclusion of a
paragraph averring that, still to cause damage and prejudice to
the plaintiffs, Atty. & Mrs. Juan Quijano, in bad faith sold the
two parcels of land they had previously bought to Eloy Ocampo
who acquired them also in bad faith, while Venancio Castañeda
and Nicetas Henson in bad faith sold the two other parcels to
Juan Quijano (60%) and Eloy Ocampo (40%) who acquired
them in bad faith and with knowledge that the properties are
the subject of a pending litigation.
Discussion on The Causes of Action

of The Supplemental Complaint And

Case L-19718 where Pastor Ago contested the sum of
P99,877.08 out of the amount of the judgment was dismissed
The Amended Supplemental Complaint
by this Court on January 31, 1966.

This third cause of action, therefore, actually states no valid
cause of action and is moreover barred by prior judgment.
The fourth cause of action pertains to moral damages allegedly
suffered by the Agos on account of the acts complained of in
the preceding causes of action. As the fourth cause of action
Assuming hypothetically as true the allegations in the first
cause of action of the supplemental complaint and the
amended supplemental complaint, the validity of the cause of
action would depend upon the validity of the first cause of
action of the original complaint, for, the Agos would suffer no
transgression upon their rights of ownership and possession of
the properties by reason of the agreements subsequently
entered into by the Castañedas and their lawyer if the sheriff's
levy and sale are valid. The reverse is also true: if the sheriff's
 levy and sale are invalid on the ground that the conjugal
properties could not be levied upon, then the transactions
would perhaps prejudice the Agos, but, we have already
indicated that the issue in the first cause of action of the original
complaint is barred by laches, and it must therefore follow that
the first cause of action of the supplemental complaint and the
amended supplemental complaint is also barred.
For the same reason, the same holding applies to the
remaining cause of action in the supplemental complaint and
the amended supplemental complaint.
ACCORDINGLY, the decision of the Court of Appeals under
review is set aside. Civil case Q-7986 of the Court of First
Instance of Rizal is ordered dismissed, without prejudice to the
re-filing of the petitioners' counterclaim in a new and
independent action. Treble costs are assessed against the
spouses Pastor Ago and Lourdes Yu Ago, which shall be paid
by their lawyer, Atty. Jose M. Luison. Let a copy of this decision
be made a part of the personal file of Atty. Luison in the custody
of the Clerk of Court.
Makasiar, Esguerra, Muñoz Palma and Martin, JJ., concur.
Teehankee, J., is on leave.
A.C. No. 5736 June 18, 2010
RURAL BANK OF CALAPE, INC. (RBCI) BOHOL, Complainant,
vs.
ATTY. JAMES BENEDICT FLORIDO, Respondent.
DECISION
CARPIO, J.:
The Case
This is a complaint for disbarment filed by the members of the Board of
Directors1 of the Rural Bank of Calape, Inc. (RBCI) Bohol against
respondent Atty. James Benedict Florido (respondent) for "acts
constituting grave coercion and threats when he, as counsel for the
minority stockholders of RBCI, led his clients in physically taking over the
management and operation of the bank through force, violence and
intimidation."
The Facts
On 18 April 2002, RBCI filed a complaint for disbarment against
respondent.2 RBCI alleged that respondent violated his oath and the
Code of Professional Responsibility (Code).
According to RBCI, on 1 April 2002, respondent and his clients, Dr.
Domeciano Nazareno, Dr. Remedios Relampagos, Dr. Manuel
Relampagos, and Felix Rengel (Nazareno-Relampagos group), through
force and intimidation, with the use of armed men, forcibly took over the
management and the premises of RBCI. They also forcibly evicted Cirilo
A. Garay (Garay), the bank manager, destroyed the bank’s vault, and
installed their own staff to run the bank.
In his comment, respondent denied RBCI’s allegations. Respondent
explained that he acted in accordance with the authority granted upon
him by the Nazareno-Relampagos group, the lawfully and validly elected
Board of Directors of RBCI. Respondent said he was merely effecting a
lawful and valid change of management. Respondent alleged that a
termination notice was sent to Garay but he refused to comply. On 1 April
2002, to ensure a smooth transition of managerial operations, respondent
and the Nazareno-Relampagos group went to the bank to ask Garay to
step down. However, Garay reacted violently and grappled with the
security guard’s long firearm. Respondent then directed the security
guards to prevent entry into the bank premises of individuals who had no
transaction with the bank. Respondent, through the orders of the
Nazareno-Relampagos group, also changed the locks of the bank’s vault.
Respondent added that the criminal complaint for malicious mischief filed
against him by RBCI was already dismissed; while the complaint for grave
coercion was ordered suspended because of the existence of a
prejudicial question. Respondent said that the disbarment complaint was
filed against him in retaliation for the administrative cases he filed against
RBCI’s counsel and the trial court judges of Bohol.
Moreover, respondent claimed that RBCI failed to present any evidence
to prove their allegations. Respondent added that the affidavits attached
to the complaint were never identified, affirmed, or confirmed by the
affiants and that none of the documentary exhibits were originals or
certified true copies.
The Ruling of the IBP
On 28 September 2005, IBP Commissioner Leland R. Villadolid, Jr.
(Commissioner Villadolid, Jr.) submitted his report and declared that
respondent failed to live up to the exacting standards expected of him as
vanguard of law and justice.3 Commissioner Villadolid, Jr. recommended
the imposition on respondent of a penalty of suspension from the practice
of law for six months to one year with a warning that the repetition of
similar conduct in the future will warrant a more severe penalty.
According to Commissioner Villadolid, Jr., respondent knew or ought to
have known that his clients could not just forcibly take over the
management and premises of RBCI without a valid court order.
Commissioner Villadolid, Jr. noted that the right to manage and gain
majority control over RBCI was one of the issues pending before the trial
court in Civil Case No. 6628. Commissioner Villadolid, Jr. said that
respondent had no legal basis to implement the take over of RBCI and
that it was a "naked power grab without any semblance of legality
whatsoever."
Commissioner Villadolid, Jr. added that the administrative complaint
against respondent before the IBP is independent of the dismissal and
suspension of the criminal cases against respondent. Commissioner
Villadolid, Jr. also noted that RBCI complied with the IBP Rules of
Procedure when they filed a verified complaint and submitted duly
notarized affidavits. Moreover, both RBCI and respondent agreed to
dispense with the mandatory conference hearing and, instead,
simultaneously submit their position papers.
On 20 March 2006, the IBP Board of Governors issued Resolution No.
XVII-2006-120 which declared that respondent dismally failed to live up
to the exacting standards of the law profession and suspended
respondent from the practice of law for one year with a warning that
repetition of similar conduct will warrant a more severe penalty.4
On 5 July 2006, respondent filed a motion for reconsideration. In its 11
December 2008 Resolution, the IBP denied respondent’s motion.5
The Ruling of the Court
We affirm the IBP Board of Governors’ resolution.
The first and foremost duty of a lawyer is to maintain allegiance to the
Republic of the Philippines, uphold the Constitution and obey the laws of
the land.6 Likewise, it is the lawyer’s duty to promote respect for the law
and legal processes and to abstain from activities aimed at defiance of
the law or lessening confidence in the legal system.7
Canon 19 of the Code provides that a lawyer shall represent his client
with zeal within the bounds of the law. For this reason, Rule 15.07 of the
Code requires a lawyer to impress upon his client compliance with the law
and principles of fairness. A lawyer must employ only fair and honest
means to attain the lawful objectives of his client.8 It is his duty to counsel
his clients to use peaceful and lawful methods in seeking justice and
refrain from doing an intentional wrong to their adversaries.9
We agree with Commissioner Villadolid, Jr.’s conclusion:
Lawyers are indispensable instruments of justice and peace. Upon taking
their professional oath, they become guardians of truth and the rule of
law. Verily, when they appear before a tribunal, they act not merely as
representatives of a party but, first and foremost, as officers of the court.
Thus, their duty to protect their clients’ interests is secondary to their
obligation to assist in the speedy and efficient administration of justice.
While they are obliged to present every available legal remedy or
defense, their fidelity to their clients must always be made within the
parameters of law and ethics, never at the expense of truth, the law, and
the fair administration of justice.10
A lawyer’s duty is not to his client but to the administration of justice. To
that end, his client’s success is wholly subordinate. His conduct ought to
and must always be scrupulously observant of the law and ethics.11 Any
means, not honorable, fair and honest which is resorted to by the lawyer,
even in the pursuit of his devotion to his client’s cause, is condemnable
and unethical.12
WHEREFORE, we find respondent Atty. James Benedict Florido GUILTY
of violating Canon 19 and Rules 1.02 and 15.07 of the Code of
Professional Responsibility. Accordingly, we SUSPEND respondent from
the practice of law for one year effective upon finality of this Decision.
Let copies of this decision be furnished the Office of the Bar Confidant, to
be appended to respondent’s personal record as attorney. Likewise,
copies shall be furnished to the Integrated Bar of the Philippines and in
all courts in the country for their information and guidance.
SO ORDERED.
A.M. No. 1311 July 18, 1991
RAMONA L. VDA. DE ALISBO and NORBERTO S. ALISBO, petitioners,
vs.
ATTY. BENITO JALANDOON, SR., respondent.
GRIÑO-AQUINO, J.:
A verified complaint for disbarment was filed with then Secretary of
National Defense Juan Ponce Enrile on January 2, 1974, by Ramona L.
Vda. de Alisbo and Norberto S. Alisbo against their former counsel,
Attorney Benito Jalandoon, Sr., charging him with deceit, malpractice,
and professional infidelity. The complaint was referred to this Court on
February 5, 1974.
After the complainants had submitted the required number of copies of
their complaint, the respondent was ordered to file his answer thereto
which he did on June 5, 1974.
On August 20, 1974, the complainants filed a reply.
On August 28, 1974, the Court referred the complaint to the Solicitor
General for investigation, report and recommendation. On February 2,
1990, or after sixteen (16) years, the Solicitor General submitted his
report to the Court, together with the transcripts of stenographic notes
taken at the investigation and folders of exhibits submitted by the parties.
The facts of the case, as found by the Solicitor General, are the following:
On March 16, 1970, Ramon Alisbo engaged respondent Attorney Benito
Jalandoon, Sr., as his counsel to commence an action to recover his
share of the estate of the deceased spouses Catalina Sales and Restituto
Gozuma which had been adjudicated to him under the judgment dated
April 29, 1961 of the Court of First Instance of Negros Oriental in Civil
Case No. 4963, because Alisbo failed to file a motion for execution of the
judgment in his favor within the reglementary five-year period (Sec. 6,
Rule, 39, Rules of Court). The salient provisions of the Contract for
Professional Services (Exhibit A) between Alisbo and Attorney Jalandoon
were the following:
1. That respondent will decide whether or not to file a suit for the
recovery of Ramon Alisbo's share or claim;
2. That respondent will shoulder all expenses of litigation; and
3. As attorney's fees, respondent will be paid fifty per cent (50%)
of the value of the property recovered.
On April 18, 1970, respondent prepared a complaint for revival of the
judgment in Civil Case No. 4963 but filed it only on September 12, 1970
on five (5) months later. It was docketed as Civil Case No. 9559, entitled:
"Ramon S. Alisbo, Teotimo S. Alisbo and Pacifico S. Alisbo vs. Carlito
Sales, in his own capacity and as Judicial Administrator of the deceased
Pedro Sales." The complaint was signed by respondent alone. However,
no sooner had he filed the complaint than he withdrew it and filed in its
stead (on the same day and in the same case) a second complaint dated
August 31, 1970, with Ramon S. Alisbo as the lone plaintiff, praying for
the same relief. Teotimo S. Alisbo and Pacifico S. Alisbo were excluded
as plaintiffs and were impleaded as defendants instead. Attorneys
Bernardo B. Pablo and Benito Jalandoon, Sr. (herein respondent) signed
as counsel.
On December 8, 1971, an amended complaint was filed wherein the
plaintiffs were: Ramon S. Alisbo, assisted by his judicial guardian,
Norberto S. Alisbo, and eight (8) others, namely: Pacifico S. Alisbo,
Ramona Vda. de Alisbo and Ildefonso, Evangeline, Teotimo, Jr.,
Reynaldo, Elizabeth and Teresita, all surnamed Alisbo. The amended
complaint was signed by Attorney Bernardo B. Pablo alone as counsel of
the plaintiffs.
On August 21, 1973, defendant Carlito Sales filed a Motion to Dismiss the
complaint on the ground that the action for revival of judgment in Civil
Case No. 4963 had already prescribed (Exh. 21). Plaintiffs filed an
Opposition to the Motion to Dismiss (Exh. 22).
On October 3, 1973, the Court of First Instance of Negros Occidental
dismissed the complaint on the ground of prescription as the judgment in
Civil Case No. 4963 became final on May 30, 1961 yet, and, although a
complaint for revival of said judgment was filed by Ramon Alisbo on
September 12, 1970, before the ten-year prescriptive period expired, that
complaint was null and void for Ramon Alisbo was insane, hence,
incompetent and without legal capacity to sue when he instituted the
action. The subsequent filing of an Amended Complaint on December 8,
1972, after the statutory limitation period had expired, was too late to save
the plaintiffs right of action. Thereafter, nothing more was done by any of
the parties in the case.
On January 2, 1974, the complainants charged respondent Attorney
Benito Jalandoon, Sr. with having deliberately caused the dismissal of
Civil Case No. 9559 and with having concealed from them the material
fact that he had been the former legal counsel of Carlito Sales, their
adversary in the probate proceedings. The respondent filed a general
denial of the charges against him.
When Ramon S. Alisbo engaged the services of Attorney Jalandoon to
enforce the decision in Civil Case No. 4963, that decision was already
nine (9) years old, hence, it could no longer be executed by mere motion
(Sec. 6, Rule 39, Rules of Court). Complainants had only about a year left
within which to enforce the judgment by an independent action.
Ramon Alisbo was already insane or incompetent when he hired Attorney
Jalandoon to file Civil Case No. 9559 for him. Attorney Jalandoon
concealed from Alisbo the fact that he (Atty. Jalandoon) had been the
former counsel of Carlito Sales in the probate proceedings where Alisbo
and Sales had litigated over their shares of the inheritance.
However, according to Attorney Jalandoon, it was only on October 6,
1972, when Civil Case No. 9559 was called for pre-trial, that he
discovered his previous professional relationship with Sales. At that time,
the ten-year prescriptive period for revival of the judgment in favor of
Alisbo had already expired. He thereupon asked Alisbo's permission to
allow him (Jalandoon) to withdraw from the case. He also informed the
court about his untenable position and requested that he be allowed to
retire therefrom. His request was granted.
In his report to the Court, the Solicitor General made the following
observations:
Evident from the foregoing is the fact that in handling the case for Ramon
S. Alisbo which eventually led to its dismissal, respondent committed
several errors, among which are:
1. He did not verify the real status of Ramon Alisbo before filing
the case. Otherwise, his lack of capacity to sue would not have been at
issue.
2. He postponed the motion to revive judgment and gave way
instead to a motion to resolve pending incidents in Civil Case 4963. In
doing so, he frittered away precious time.
3. He dropped Ramon Alisbo's co-plaintiffs and impleaded them
as defendants.1âwphi1 Otherwise, the complaint would have been
defective only in part.
Had not respondent committed the above mistakes, Civil Case No. 9559
in all probability would not have been dismissed on the ground of
prescription. (pp. 9-10, Solicitor General's Report.)
While the Solicitor General does not believe that Attorney Jalandoon's
mistakes in handling Alisbo's case were deliberate or made with malice
aforethought because there is no "proof of collusion or conspiracy
between respondent and those who would benefit from the dismissal of
Civil Case No. 9559 . . . and that, on the other hand, respondent stood to
gain substantially (50% of the amount recovered) if he had succeeded in
having the judgment revived and executed" (pp. 10-11, Solicitor General's
Report), still those errors are so gross and glaring that they could not have
resulted from mere negligence or lack of due care.
Attorney Jalandoon's pretense that he did not know before the pre-trial
that the Sales defendants had been his clients in the past, is unbelievable
because:
1. Before he filed the complaint for revival of judgment, he had
had several interviews with Ramon S. Alisbo and Norberto Alisbo
regarding Civil Case No. 4963.
2. He must have done some research on the court records of Civil
Case No. 4963, so he could not have overlooked his own participation in
that case as counsel for Carlito Sales, et al.
3. To prepare the complaint for revival of judgment (Civil Case No.
9559), he had to inform himself about the personal circumstances of the
defendants-Carlito Sales, et al. The fact that they had been his clients
could not have eluded him.
In view of his former association with the Saleses, Attorney Jalandoon,
as a dutiful lawyer, should have declined the employment proffered by
Alisbo on the ground of conflict of interest. Had he done that soon enough,
the Alisbos (herein complainants) would have had enough time to engage
the services of another lawyer and they would not have lost their case
through prescription of the action.
The actuations of respondent attorney violated Paragraphs 1 and 2, No.
6 of the Canons of Professional Ethics which provide:
6. ADVERSE INFLUENCE AND CONFLICTING INTEREST
It is the duty of a lawyer at the time of retainer to disclose to the client all
the circumstances of his relations to the parties, and any interest in or
connection with the controversy, which might influence the client in the
selection of counsel.
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. (pp. 14-15, Solicitor General's
Report.)
The impression we gather from the facts is that Attorney Jalandoon used
his position as Alisbo's counsel precisely to favor his other client, Carlito
Sales, by delaying Alisbo's action to revive the judgment in his favor and
thereby deprive him of the fruits of his judgment which Attorney
Jalandoon, as Sales' counsel, had vigorously opposed. Thus, although
Atty. Jalandoon prepared Alisbo's complaint for revival of judgment on
April 18, 1970, he delayed its filing until September 12, 1970. He
postponed filing the action by asking the Court instead to resolve pending
incidents in said Civil Case No. 4963. By doing that, he frittered away
what little time was left before the action would prescribe. The original
complaint which he filed in the names of Ramon Alisbo and his brothers
was only partially defective because of Ramon's incompetence. By
dropping the other plaintiffs, leaving alone the incompetent Ramon to
prosecute the action, respondent made the second complaint wholly
defective and ineffectual to stop the running of the prescriptive period.
After filing the complaint, Attorney Jalandoon sat on the case. While he
allegedly found out about Ramon Alisbo's insanity on July 17, 1971 only,
he amended the complaint to implead Alisbo's legal guardian as plaintiff
on December 8, 1971 only, or almost five (5) months later. By that time
the prescriptive period had run out.
The surrounding circumstances leave us with no other conclusion than
that Attorney Jalandoon, betrayed his client Ramon Alisbo's trust and did
not champion his cause with that wholehearted fidelity, care and devotion
that a lawyer is obligated to give to every case that he accepts from a
client. There is more than simple negligence resulting in the
extinguishment and loss of his client's right of action; there is a hint of
duplicity and lack of candor in his dealings with his client, which call for
the exercise of this Court's disciplinary power.
The Honorable Solicitor General who conducted the investigation of this
case found respondent Attorney Benito Jalandoon, Sr. guilty of serious
misconduct and infidelity. Although the Solicitor General recommended
the suspension of respondent Attorney Benito Jalandoon Sr. from the
practice of law for a period of one (1) year, the Court, after due
deliberation, decided to suspend him for a period of two (2) years from
the finality of this decision.
IT IS SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Padilla, Bidin,
Sarmiento, Medialdea, Regalado and Davide, Jr., JJ., concur.
Gancayco, J., is on leave.
ALFONSO VISITACION, plaintiff-appellee,
vs.
VICTOR MANIT, substituted by his widow LEONARDA MANIT and
daughters VIRGINIA DUNGOG, VICTORIA BATUCAN and MERLINDA
MANIT, defendants-appellants.
Amadeo Seno for plaintiff-appellee.
Jesus P. Garcia for defendants-appellants.
TEEHANKEE, J.:
Appeal from a decision of the Court of First Instance of Cebu and
certified by the Court of Appeals to this Court, since the issues raised on
appeal are all questions of law.
The Court of Appeals in its Resolution of January 17, 1967 certifying the
case as falling within the exclusive jurisdiction of this Court points out that
this appeal is "unique" in the sense that the appellant purports to be not
the original defendant, Victor Manit, now deceased, nor his heirs, his
widow and three daughters of age, substituted for him upon his death, per
the title of this case above, but rather his counsel of record, Atty. Jesus
P. Garcia, who on April 13, 1960, after the trial court's adverse decision,
filed the Notice of Appeal and cash bond on Appeal as "Attorney for Victor
Manit deceased" and on the same date filed the Record on Appeal as
"Jesus P. Garcia, in his capacity as officer of the Court and as former
counsel of the deceased." 1 The Record on Appeal and appeal bond were
thereafter approved on April 25, 1960 by the trial court and the case
forwarded on appeal to the Court of Appeals, and in turn certified to this
Court.
The case originated on January 18, 1956 when plaintiff appellee filed
this case against defendant Victor Manit to hold him liable subsidiarily as
employer for the death of plaintiff's son, Delano Visitacion, as a result of
injuries sustained in a vehicular collision involving laid defendant's driver
Rudolfo Giron, who was found insolvent after having been convicted and
sentenced in a previous criminal case arising out of said death, to
indemnify the victim's heirs in the amount of P3,000.00.lawphi1.ñet
An Answer to the complaint was filed in due course by Atty. Garcia on
behalf of defendant. On June 1, 1956, the case was heard, without
defendant or his counsel being present, and plaintiff presented his
evidence and the case, was submitted for decision. On June 6, 1956,
defendant, however, filed a motion for new trial which was granted by the
trial court on June 9, 1956.2
Plaintiff presented his oral and documentary evidence and was cross-
examined by Atty. Garcia. 3 The record further shows that on March 19,
1958, Atty. Garcia commenced the presentation of evidence on behalf of
defendant. He presented defendant's wife, Leonarda Manit who testified
that her husband, Victor Manit "had no business of his own, because he
is sickly" and that she was the one operating and managing their
transportation business of three trucks. 4
On October 14, 1958, when the case was scheduled for continuation of
the trial, Atty. Garcia manifested that the original defendant, Victor Manit
had recently died, and the trial court on the same date directed him to
furnish plaintiff's counsel the names of the said defendant's heirs, so that
plaintiff could amend the complaint accordingly. On August 11, 1959,
plaintiff's counsel submitted a Motion to Admit the Amended Complaint
attached thereto, furnishing copy of said pleadings to Atty. Garcia, who
acknowledged receipt thereof as "Attorney for the defendant." The only
amendment in the complaint consisted in impleading the widow and heirs
of the deceased original defendant in substitution for him, pursuant to
Rule 3, section 17 of the Rules of Court. At the hearing of the said motion
on the same date, the trial court, after noting that there was no opposition
thereto by Atty. Garcia, admitted the Amended Complaint in its Order of
August 11, 1959, wherein "(A)s prayed for by counsel for the defendants,
defendants are hereby given fifteen (15) days' time within which to file an
answer to said amended complaint." 5 No answer to the amended
complaint having been filed, the original answer stood as defendants'
answer to the amended complaint, in accordance with Rule 11, section 3
of the Rules of Court. 6
The case was again set for hearing on January 28, 1960 with notice to
the parties through their counsels of record. One day before the hearing,
on January 27, 1960, Atty. Garcia filed a "Motion to Withdraw as
Counsel", alleging that "the heirs of Victor Manit have not hired (him) to
represent them and consequently, (his) continued appearance in
representation of a dead client would be illegal" and asking the trial court
"that he be relieved as counsel in the above-entitled case for the reasons
stated herein." 7
When the case was called on the next day, neither defendants nor Atty.
Garcia appeared, and the trial court noting "defendants' apparent lack of
interest as can be gleaned from the records" considered them to have
renounced their right to appear and present evidence to contest plaintiff's
claim. It did not pass upon Atty. Garcia's Motion to Withdraw as Counsel
and proceeded to render judgment in favor of plaintiff, the dispositive part
of which provides as follows:
IN VIEW OF ALL THE FOREGOING, the Court pronounces judgment in
favor of the plaintiff and against the defendants; and hereby sentences
the defendants, jointly and severally, to pay the plaintiff the amount of
P3,000.00 as indemnity for the death of Delano Visitacion, plus P3,000.00
in concept of moral damages, and the additional sum of P2,000.00 as
attorney's fees, as well as the costs of this action.8
Atty. Garcia's Motion for Reconsideration, based on the same grounds
hereinafter discussed having been denied by the trial court, he filed the
present appeal, and assigns the following errors in his "Brief for
Defendant-Appellant":
First Error:
THE LOWER COURT ERRED IN CONTINUING WITH THE CASE
WITHOUT THE NEW DEFENDANTS BROUGHT TO ITS
JURISDICTION BY SUMMONS AND WITHOUT EVEN INFORMING
SAID DEFENDANTS THAT THEY HAVE BECOME PARTIES TO THE
CASE.
Second Error:
THE LOWER COURT ERRED IN IGNORING THE MOTION TO
WITHDRAW AS COUNSEL FILED BY A LAWYER WHO HAD LOST
AUTHORITY TO RE PRESENT A DEAD CLIENT.
Third Error:
THE LOWER COURT ERRED IN RENDERING A PREMATURE
JUDGMENT IN AN UNFINISHED CASE WHERE THE NEW
DEFENDANTS WERE NOT GIVEN THEIR DAY IN COURT.

He prayed therein that the appellate Court render judgment:
(a). Annulling the decision appealed from;
(b). Remanding the case to the lower court for further proceedings by
serving summons on the defendants and giving them a chance to present
their evidence;
(c). Relieving the undersigned counsel from all responsibility in
connection with this case in view of the death of his client; and
(d). Granting such other and further reliefs and remedies in accordance
with law and equity. (Appellants' Brief, p. 10)
We hold this "unique" appeal by the counsel of record, Atty. Jesus P.
Garcia, allegedly "in his capacity as officer of the Court and as former
counsel of the deceased Victor Manit" to be untenable.
There are two fundamental errors on which Atty. Garcia's appeal is
premised. First, if he presents this appeal "in his capacity as officer of the
Court and as former counsel of the deceased Victor Manit", his appeal
should be thrown out, as not being a party to the case, much less a party
in interest, he has no legal standing whatsoever to prosecute this appeal.
Second, in filing his Notice of Appeal and Cash Appeal Bond, he
represented himself as "Attorney for Victor Manit, deceased", depositing
the sum of P60.00 as appeal bond "to answer or respond for the costs
which the appellate court may award against the herein defendant-
appellant," 9 thus representing anew to the trial Court that he was duly
authorized to present the appeal on behalf of the estate of the original
defendant, Victor Manit deceased, who had earlier been substituted in the
case by his heirs, the widow and three daughters of legal age. The trial
Court was perfectly correct in relying upon this representation in
accordance with Rule 138, section 21 of the Rules of Court which
provides that "(A)n attorney is presumed to be properly authorized to
represent any case in which he appears ...." This appeal must accordingly
be dealt with as an appeal on behalf of said heirs as defendants-
appellants and not in the "unique" concept with which Atty. Garcia would
circumscribe it.
1. As to the first error assigned, no error was committed by the trial court
in continuing with the ease and handing down its decision against
defendants-appellants. The contention that said defendants-appellants,
as substituted parties-defendants by virtue of their being the heirs of the
deceased original defendant pursuant to the trial court's Orders of
October 24, 1958 and August 11, 1959 in accordance with Rule 3, section
17 of the Rules of Court 10 , should have been brought within the Court's
jurisdiction by summons is fallacious. For the record shows that Atty.
Garcia at the time acknowledged receipt of the Amended Complaint
substituting said defendants-heirs for the deceased original defendant as
"Attorney for the defendants", presented no opposition thereto, and
furthermore prayed for and was granted by the Court a period of 15 days
to file an answer to the Amended Complaint. Having been duly impleaded
and having submitted to the Court's jurisdiction through their counsel,
Atty. Garcia, the issuance of a summons was unnecessary. The other
contention that "there is oven no record showing that these defendants
were at all informed that they had become parties to the above-captioned
case" 11 is equally fallacious. Nowhere in appellants' brief is there an
assertion by Atty. Garcia, that, he, as their attorney of record, and in
compliance with his duty as such and as an officer of the Court, failed or
neglected to inform them of the admission of the Amended Complaint
substituting them for the deceased original defendant.
2. Appellants claim in their second assignment of error that the trial court
erred in ignoring the Motion to Withdraw as Counsel filed by Atty. Garcia.
In the face of Atty. Garcia's previous representations and appearance as
counsel of record for the substituted defendants, his last hour motion to
withdraw as counsel and disclaimer that said defendants have hired him
to represent them — which he filed one day before the date set for
resumption of the hearing — came too late and was properly ignored by
the Court. The Court could not accept this turn-about on his mere "say-
so." His motion was not verified. Aside from the fact that his said motion
carried no notice, in violation of the requirement of Rule 15, section 4 of
the Rules of Court, and could therefore be treated as a "mere scrap of
paper", 12 the said motion was likewise fatally defective in that it carried
no notice to his clients on record, the defendants-appellants, as required
by Rule 138, section 26 of the Rules of Court. Furthermore, it is well
settled that "(A)n attorney seeking to withdraw must make an application
to the court, for the relation does not terminate formally until there is a
withdrawal of record; at least so far as the opposite party is concerned,
the relation otherwise continues until the end of the litigation." 13 The trial
court's ignoring of the last-hour motion and its handing down of its
decision on the day of the hearing, upon the failure of defendants and
their counsel to appear, in spite of their having been duly notified thereof,
was in effect a denial of counsel's application for withdrawal. Atty.
Garcia's unexplained failure to appear was unexcusable. He had no right
to presume that the Court would grant his withdrawal. If he had then
appeared and insisted on his withdrawal, the trial court could then have
had the opportunity to order the appearance of defendants-appellants
and verify from them the truth of his assertion that they had not "hired him
to represent them."
3. The trial court, therefore, did not render a "premature judgment in an
unfinished case where the defendants were not given their day in court",
as claimed in the last error assigned by appellants. As stated earlier, the
record shows that on March 19, 1958, the original defendant's widow,
Leonarda Manit was placed by Atty. Garcia on the witness stand during
the deceased's lifetime and testified that her husband "has no business
of his own, because he is sickly" and that she was the one operating and
managing their transportation business of three trucks since as early as
1952, some years before the filing of the complaint on January 18, 1956.
14 In effect, the widow, Leonarda Manit had then submitted herself to the
Court's jurisdiction, asserting as she did that she was the one operating
the business and that her husband had no business of his own. The
widow and her three children of age as heirs of the deceased cannot
therefore claim ignorance of the pendency of the case, and that
notwithstanding that she was the actual operator and manager of the
business, that she has been kept in complete ignorance of its subsequent
developments, after her husband's death over 10 years ago. Almost 10
years have elapsed since they were substituted in 1959 as defendants
for the deceased, and it taxes all credibility for them to claim now in their
brief that "said new defendants did not even know that they became
parties in the Amended Complaint," 15 and that all this time not the
slightest effort was made by them to find out from Atty. Garcia or from the
Court for that matter what had happened to the case nor did Atty. Garcia
in compliance with his duty as an officer of the Court inform them of the
decision handed down by the Court Over 9 years ago. Having failed to
appear on the day set for trial without any justifiable explanation to the
Court nor having presented an affidavit of merits as to the existence of
valid and lawful defenses, they cannot now complain of having been
deprived of their day in Court.
The circumstances of the case and the appeal taken all together lead to
the conclusion that the last-hour withdrawal application of Atty. Garcia
and his appeal "as officer of the Court and then counsel of the deceased"
was but a device to prolong this case and delay in the execution of the
judgment, which should have been carried out years ago. The imposition
of double costs is therefore in order.
ACCORDINGLY, the judgment appealed from is hereby affirmed, with
double costs to be paid by the attorney for defendants. So ordered.
Concepcion C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, Fernando and Capistrano, JJ., concur.
Barredo, J., concurs in the result.
People vs nadera (see pdf)
PERLAS-BERNABE, J.:
For the Court's resolution is a Complaint-Affidavit[1] filed on February 11,
2005 by complainant Cleo B. Dongga-as (complainant), before the
Integrated Bar of the Philippines (IBP) – Commission on Bar Discipline
(CBD), against respondents Atty. Rose Beatrix Cruz-Angeles (Atty. Cruz-
Angeles), Atty. Wylie M. Paler (Atty. Paler), and Atty. Angeles Grandea
(Atty. Grandea; collectively, respondents) of the Angeles, Grandea &
Paler Law Office (law firm), charging them of various violations of the
Code of Professional Responsibility (CPR) for, inter alia, refusing to return
the money given by complainant in exchange for legal services which
respondents failed to perform.
The Facts
Complainant alleged that sometime in May 2004, he engaged the law firm
of respondents to handle the annulment of his marriage with his wife,
Mutya Filipinas Puno-Dongga-as (Mutya). In his meeting with Attys. Cruz-
Angeles and Paler, complainant was told that: (a) the case would cost
him P300,000.00, with the first P100,000.00 payable immediately and the
remaining P200,000.00 payable after the final hearing of the case; (b)
respondents will start working on the case upon receipt of PI00,000.00,
which will cover the acceptance fee, psychologist fee, and filing fees; and
(c) the time-frame for the resolution of the case will be around three (3) to
four (4) months from filing. Accordingly, complainant paid respondents
P100,000.00 which was duly received by Atty. Cruz-Angeles.[2]
From then on, complainant constantly followed-up his case with Attys.
Cruz-Angeles and Paler. However, despite his constant prodding, Attys.
Cruz-Angeles and Paler could not present any petition and instead,
offered excuses for the delay, saying that: (a) they still had to look for a
psychologist to examine Mutya; (b) they were still looking for a "friendly"
court and public prosecutor; and (c) they were still deliberating where to
file the case.[3] They promised that the petition would be filed on or before
the end of June 2004, but such date passed without any petition being
filed. As an excuse, they reasoned out that the petition could not be filed
since they have yet to talk to the judge who they insinuated will favorably
resolve complainant's petition.[4]
Sometime in the third week of July 2004, Attys. Cruz-Angeles and Paler
asked for an additional payment of P250,000.00 in order for them to
continue working on the case. Hoping that his petition would soon be filed,
complainant dutifully paid the said amount on July 23, 2004, which was
again received by Atty. Cruz-Angeles.[5] However, to complainant's
dismay, no appreciable progress took place. When complainant inquired
about the delay in the filing of the case, Atty. Cruz-Angeles attempted to
ease his worries by saying that the draft petition was already submitted
to the judge for editing and that the petition will soon be finalized.[6]
In the last week of September 2004, complainant received a text message
from Atty. Cruz-Angeles informing him that the National Statistics Office
bore no record of his marriage. The latter explained then that this
development was favorable to complainant's case because, instead of the
proposed petition for annulment of marriage, they would just need to file
a petition for declaration of nullity of marriage. She also informed
complainant that they would send someone to verify the records of his
marriage at the Local Civil Registrar of La Trinidad, Benguet (Civil
Registrar) where his marriage was celebrated. However, upon
complainant's independent verification through his friend, he discovered
that the records of his marriage in the Civil Registrar were intact, and that
the alleged absence of the records of his marriage was a mere ruse to
cover up the delay in the filing of the petition.[7]
Utterly frustrated with the delay in the filing of his petition for annulment,
complainant went to respondents' law office to terminate their
engagement and to demand for a refund of the aggregate amount of
P350,000.00 he earlier paid them. However, Attys. Cruz-Angeles and
Paler refused to return the said amount, and to complainant's surprise,
sent him two (2) billing statements dated October 5, 2004[8] and October
10, 2004[9] in the amounts of P258,000.00 and P324,000.00,
respectively. Notably, the October 5, 2004 billing statement included a fee
for "consultants (prosecutors)" amounting to P45,000.00.[10] In view of
the foregoing, complainant filed the instant Complaint-Affidavit before the
IBP-CBD, docketed as CBD Case No. 05-1426.
In her defense,[11] Atty. Cruz-Angeles admitted to have received a total
of P350,000.00 from complainant,[12] but denied that she was remiss in
her duties, explaining that the delay in the filing of the petition for
annulment of marriage was due to complainant's failure to give the current
address of Mutya and provide sufficient evidence to support the
petition.[13] Further, Atty. Cruz-Angeles alleged that it was Atty. Paler
who was tasked to draft and finalize the petition.[14] For his part,[15] Atty.
Paler moved for the dismissal of the case for failure to state a cause of
action, arguing too that complainant filed the present administrative
complaint only to avoid payment of attorney's fees.[16]
The IBP's Report and Recommendation
In a Report and Recommendation[17] dated July 10, 2012, the IBP
Investigating Commissioner found Attys. Cruz-Angeles and Paler
administratively liable and, accordingly, recommended that they be meted
the penalty of suspension from the practice of law for four (4) months.
However, Atty. Grandea was exonerated of any liability as his
participation in the charges has not been discussed, much less
proven.[18]
The Investigating Commissioner found that complainant indeed engaged
the services of Attys. Cruz-Angeles and Paler in order to annul his
marriage with his wife, Mutya. Despite receiving the aggregate amount of
P350,000.00 from complainant, Attys. Cruz-Angeles and Paler neglected
the legal matter entrusted to them, as evidenced by their failure to just
even draft complainant's petition for annulment despite being engaged for
already five (5) long months.[19] Moreover, as pointed out by the
Investigating Commissioner, despite their preliminary assessment that
complainant's petition would not likely prosper, Attys. Cruz-Angeles and
Paler still proceeded to collect an additional P250,000.00 from
complainant. Worse, they even billed him an exorbitant sum of
P324,000.00.[20] Thus, the Investigating Commissioner opined that the
amounts respondents had already collected and would still want to further
collect from complainant can hardly be spent for research in connection
with the annulment case that was not filed at all. Neither can they cover
just fees for Attys. Cruz-Angeles and Paler who did nothing to serve
complainant's cause.[21]
In a Resolution[22] dated September 28, 2013, the IBP Board of
Governors adopted and approved the aforesaid Report and
Recommendation, with modification increasing the recommended penalty
to two (2) years suspension from the practice of law. Atty. Cruz-Angeles
moved for reconsideration,[23] which was, however, denied in a
Resolution[24] dated June 7, 2015.
The Issue Before the Court
The essential issue in this case is whether or not Attys. Cruz-Angeles and
Paler should be held administratively liable for violating the CPR.
The Court's Ruling
A judicious perusal of the records reveals that sometime in May 2004,
complainant secured the services of Attys. Cruz-Angeles and Paler for
the purpose of annulling his marriage with Mutya, and in connection
therewith, paid Attys. Cruz-Angeles and Paler the aggregate sum of
P350,000.00 representing legal fees. However, despite the passage of
more than five (5) months from the engagement, Attys. Cruz-Angeles and
Paler failed to file the appropriate pleading to initiate the case before the
proper court; and worse, could not even show a finished draft of such
pleading. Such neglect of the legal matter entrusted to them by their client
constitutes a flagrant violation of Rule 18.03, Canon 18 of the CPR, to wit:
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.
Case law exhorts 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
client's 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. Therefore, a
lawyer's neglect of a legal matter entrusted to him by his client constitutes
inexcusable negligence for which he must be held administratively
liable,"[25] as in this case.

In this relation, Attys. Cruz-Angeles and Paler also violated Rules 16.01
and 16.03, Canon 16 of the CPR when they failed to return to complainant
the amount of P350,000.00 representing their legal fees, 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.
It bears stressing that "the relationship between a lawyer and his client is
highly fiduciary and prescribes on a lawyer a great fidelity and good faith.
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. Thus, a lawyer's failure to return upon demand the funds
held by him on behalf of his client, as in this case, 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]
Furthermore, Attys. Cruz-Angeles and Paler misrepresented to
complainant that the delay in the filing of his petition for annulment was
due to the fact that they were still looking for a "friendly" court, judge, and
public prosecutor who will not be too much of a hindrance in achieving
success in the annulment case. In fact, in the two (2) billing statements
dated October 5, 2004[27] and October 10, 2004,[28] Attys. Cruz-Angeles
and Paler made it appear that they went to various locations to look for a
suitable venue in filing the said petition, and even paid various amounts
to prosecutors and members of the National Bureau of Investigation to
act as their "consultants." Such misrepresentations and deceits on the
part of Attys. Cruz-Angeles and Paler are violations of Rule 1.01, Canon
1 of the CPR, viz.:
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.
Rule 1.01, Canon 1 of the CPR instructs that "[a]s 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."[29]
Clearly, Attys. Cruz-Angeles and Paler fell short of such standard when
they committed the afore-described acts of misrepresentation and
deception against complainant. Their acts are not only unacceptable,
disgraceful, and dishonorable to the legal profession; they also reveal
basic moral flaws that make Attys. Cruz-Angeles and Paler unfit to
practice law.[30]
As members of the Bar, Attys. Cruz-Angeles and Paler should not perform
acts that would tend to undermine and/or denigrate the integrity of the
courts, such as insinuating that they can find a "friendly" court and judge
that will ensure a favorable ruling in complainant's annulment case. It is
their sworn duty as lawyers and officers of the court to uphold the dignity
and authority of the courts. Respect for the courts guarantees the stability
of the judicial institution. Without this guarantee, the institution would be
resting on very shaky foundations.[31] This is the very thrust of Canon 11
of the CPR, which provides that "[a] lawyer shall observe and maintain
the respect due to the courts and to judicial officers and should insist on
similar conduct by others." Hence, lawyers who are remiss in performing
such sworn duty violate the aforesaid Canon 11, and as such, should be
held administratively liable and penalized accordingly, as in this case.[32]
Moreover, Canon 7 of the CPR commands every lawyer to "at all times
uphold the integrity and dignity of the legal profession" for the strength of
the legal profession lies in the dignity and integrity of its members. It is
every lawyer's duty to maintain the high regard to the profession by
staying true to his oath and keeping his actions beyond reproach. It must
be reiterated that as an officer of the court, it is a lawyer's sworn and moral
duty to help build and not destroy unnecessarily that high esteem and
regard towards the courts so essential to the proper administration of
justice; as acts and/or omissions emanating from lawyers which tend to
undermine the judicial edifice is disastrous to the continuity of the
government and to the attainment of the liberties of the people. Thus, all
lawyers should be bound not only to safeguard the good name of the legal
profession, but also to keep inviolable the honor, prestige, and reputation
of the judiciary.[33] In this case, Attys. Cruz-Angeles and Paler
compromised the integrity not only of the judiciary, but also of the national
prosecutorial service, by insinuating that they can influence a court, judge,
and prosecutor to cooperate with them to ensure the annulment of
complainant's marriage. Indubitably, Attys. Cruz-Angeles and Paler also
violated Canon 7 of the CPR, and hence, they should be held
administratively liable therefor.
Anent the proper penalty for Attys. Cruz-Angeles and Paler, jurisprudence
provides that in similar cases where lawyers neglected their client's
affairs, failed to return the latter's money and/or property despite demand,
and at the same time committed acts of misrepresentation and deceit
against their clients, the Court imposed upon them the penalty of
suspension from the practice of law for a period of two (2) years. In Jinon
v. Jiz [34] the Court suspended the lawyer for a period of two (2) years
for his failure to return the amount his client gave him for his legal services
which he never performed. Also, in Agot v. Rivera, [35] the Court
suspended the lawyer for a period of two (2) years for his (a) failure to
handle the legal matter entrusted to him and to return the legal fees in
connection therewith; and (b) misrepresentation that he was an
immigration lawyer, when in truth, he was not. Finally, in Spouses Lopez
v. Limos, [36] the Court suspended the erring lawyer for three (3) years
for her failure to file a petition for adoption on behalf of complainants,
return the money she received as legal fees, and for her commission of
deceitful acts in misrepresenting that she had already filed such petition
when nothing was actually filed, resulting in undue prejudice to therein
complainants. In this case, not only did Attys. Cruz-Angeles and Paler fail
to file complainant's petition for annulment of marriage and return what
the latter paid them as legal fees, they likewise misrepresented that they
can find a court, judge, and prosecutor who they can easily influence to
ensure a favorable resolution of such petition, to the detriment of the
judiciary and the national prosecutorial service. Under these
circumstances, the Court individually imposes upon Attys. Cruz-Angeles
and Paler the penalty of suspension from the practice of law for a period
of three (3) years.
Finally, the Court sustains the IBP's recommendation ordering Attys.
Cruz-Angeles and Paler to return the amount of P350,000.00 they
received from complainant as legal fees. It is well to note that "while the
Court has previously held that disciplinary proceedings should only
revolve around the determination of the respondent-lawyer's
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 and not
intrinsically linked to his professional engagement."[37] Hence, since
Attys. Cruz-Angeles and Paler received the aforesaid amount as part of
their legal fees, the Court finds the return thereof to be in order.
WHEREFORE, respondents Atty. Rose Beatrix Cruz-Angeles and Atty.
Wylie M. Paler are found GUILTY of violating Rule 1.01, Canon 1, Canon
7, Canon 11, Rule 18.03, Canon 18, and Rules 16.01 and 16.03, Canon
16 of the Code of Professional Responsibility. Accordingly, each of them
is hereby SUSPENDED from the practice of law for a period of three (3)
years, effective upon the finality of this Decision, with a STERN
WARNING that a repetition of the same or similar acts will be dealt with
more severely.
Likewise, respondents Atty. Rose Beatrix Cruz-Angeles and Atty. Wylie
M. Paler are ORDERED to return to complainant Cleo B. Dongga-as the
legal fees they received from the latter in the aggregate amount of
P350,000.00 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.
Meanwhile, the complaint as against Atty. Angeles Grandea is
DISMISSED for lack of merit.
Let copies of this Decision be served on the Office of the Bar Confidant,
the Integrated Bar of the Philippines, and all courts in the country for their
information and guidance and be attached to respondents' personal
records as attorney.
SO ORDERED.
Angeles v. Uy
A.C. No. 5019. April 6, 2000
Facts:
In a Criminal case, a certain Norma Trajano alleged that she paid 20k to
private complainant Del Rosario and the balance of 16.5k was delivered
to Atty. Uy, the lawyer of private complainant in the said case.
Complainant Del Rosario manifested that she did not receive the 16.5k
pesos that was paid to Atty. Uy.
Atty. Uy however argued that his client was the one that did not accept
the money since they wanted to receive the whole amount. But such an
assertion was belied when Del Rosario manifested her willingness to
accept the money.
Atty. Uy alleged that the amount was safely in his office in the same
building. As such, the proceedings were suspended in order for Uy to get
the money from his office. Yet, Atty. Uy never returned hence the
administrative case against him.
In his comment, Atty. Uy contends that he kept the money in his office
because it was the wish of his client. He allegedly informed them of such
money and tried to give it to them but they insisted that he retain it in order
for them to not spend it.
The Office of the Bar Confidant recommended that Atty. Uy be suspended
for one month. It was decided that the complainant’s side of the story had
more merit.
Issue: WON Uy is guilty of violating Canon 16 of the CPR
Held:
The Court agreed with the Office of the Bar Confidant.
The relationship between a lawyer and a client is highly fiduciary. It
requires a high degree of fidelity and good faith. It is designed to remove
all such temptation and to prevent everything of that kind from being done
for the protection of the client.
Canon 16 of the CPR provides that ―a lawyer shall hold in trust all
moneys and properties of his client that may come into his possession.
Furthermore, Rule 16.01 states that ―a lawyer shall account for all the
money or property collected or received for or from the client.
Respondent failed to promptly report and account for the 16.5k he had
received fromTrajano on behalf of his client.
If it were true that Del Rosario was informed about the payment and that
she entrusted it to Atty. Uy, she would have known his whereabouts. That
she did not know it showed falsity of the claim.
In Aya v. Bigornia, the Court ruled that money collected by a lawyer in
favor of his clients must be immediately turned over to them.
In Daroy v. Legaspi, the Court held that ―lawyers are bound to promptly
account for money or property received by them on behalf of their clients
and failure to do so constitutes professional misconduct.
Verily, the question is not necessarily whether the rights of the clients
have been prejudiced, but whether the lawyer has adhered to the ethical
standards of the bar.
In this light, the Court must stress that it has the duty to look into dealings
between attorneys and their clients and to guard the latter from any undue
consequences resulting from a situation in which they may stand unequal.
In the present case, the records merely show that respondent did not
promptly report that he received money on behalf of his client. There is
no clear evidence of misappropriation. Under the circumstances, Atty. Uy
should be suspended for only one month.
[Adm. Case No. 5235. March 22, 2000.]
FERNANDO C. CRUZ AND AMELIA CRUZ, Complainants, v. ATTY.
ERNESTO C. JACINTO, Respondent.
RESOLUTION
MELO, J.:
In their sworn complaint, spouses Fernando C. Cruz and Amelia Manimbo
Cruz seek the disbarment of Atty. Ernesto C. Jacinto. The Integrated Bar
of the Philippines, through Commissioner Jesulito A. Manalo of the
Commission on Bar Discipline, conducted an investigation. Thereafter, he
submitted his Findings and Recommendation, thusly:chanrobles.com :
chanrobles.com.ph
This is a disbarment case filed by the spouses Fernando and Amelia Cruz
against Atty. Ernesto C. Jacinto. This case was filed with the Commission
on Bar Discipline last 30 January 1991.
The evidence of the complainants show that sometime in June 1990, Atty.
Ernesto Jacinto, lawyer of the couple in an unrelated case, requested the
Cruz spouses for a loan in behalf of a certain Concepcion G. Padilla, who
he claimed to be an old friend as she was allegedly in need of money.
The loan requested was for PhP 285,000.00 payable after 100 days for
PhP 360,000 to be secured by a real estate mortgage on a parcel of land
located at Quezon City.
The spouses, believing and trusting the representations of their lawyer
that Padilla was a good risk, authorized him to start preparing all the
necessary documents relative to the registration of the Real Estate
Mortgage to secure the payment of the loan in favor of the Cruz spouses.
On 4 July 1990, the complainants agreed to the request of Atty. Jacinto
and were presented by the latter with a Real Estate Mortgage Contract
and a Transfer Certificate of Title No. 127275 in the name of Concepcion
G. Padilla. The amount of PhP 285,000.00 was given by the spouses to
the respondent in cash (PhP 270,000.00) and a PBCom check no.
713929 for PhP 15,000.00.
Upon maturity of the loan on 15 October 1990, the spouses demanded
payment from Concepcion G. Padilla by going to the address given by the
respondent but there proved to be no person by that name living therein.
When the complainants verified the genuineness of TCT No. 127275 with
the Register of Deeds of Quezon City, it was certified by the said office to
be a fake and spurious title. Further efforts to locate the debtor-mortgagor
likewise proved futile.
In their sworn affidavits given before the National Bureau of Investigation
(NBI), the spouses claim that they relied much on the reassurances made
by Atty. Jacinto as to Concepcion G. Padilla’s credit, considering that he
was their lawyer. It was also their trust and confidence in Atty. Jacinto that
made them decide to forego meeting the debtor-mortgagor.
The complainants’ evidence also included the sworn statements of
Estrella Ermino Palipada, the secretary of the respondent at the Neri Law
Office, and Avegail Payos, a housemaid of Atty. Jacinto. Ms. Palipada
stated that:chanrob1es virtual 1aw library
1. she was the one who prepared the Real Estate Mortgage
Contract and the Receipt of the loan upon the instruction of the
respondent;
2. she was a witness to the transaction and never once saw the
person of Concepcion G. Padilla, the alleged mortgagor; and that
3. she was instructed by Atty. Jacinto to notarize the said contract
by signing the name of one Atty. Ricardo Neri.
Avegail Payos, the housemaid of the respondent, in turn stated that she
was the one who simulated the signature of one Emmanuel Gimarino, the
Deputy Register of Deeds of Quezon City upon the instruction of Atty.
Jacinto. This was done to make it appear that the real estate mortgage
was registered and the annotation to appear at the back of the TCT as an
encumbrance.
On 14 November 1997, a case for Estafa thru Falsification of Public
documents under Art. 315 was filed against Atty. Jacinto. He was arrested
and detained by the NBI.
The defense of the respondent, on the other hand, was embodied in his
Answer with Motion to Dismiss filed with the Commission on Bar
Discipline. Therein, he alleged that the criminal information for estafa thru
falsification filed against him had already been dismissed because of the
voluntary desistance of the complainants.
In his version of the facts, Atty. Jacinto averred that while he indeed
facilitated the loan agreement between the Cruz spouses and
Concepcion G. Padilla, he had no idea that the latter would give a falsified
Certificate of Title and use it to obtain a loan. He claimed that he himself
was. a victim under the circumstances.
Respondent further alleged that he had not been remiss nor negligent in
collecting the proceeds of the loan; that in fact, he had even advanced
the full payment of the loan due to the complainants from his own savings,
even if Concepcion G. Padilla had not yet paid, much less found.
RECOMMENDATIONS
It is every lawyer’s sworn duty to obey the laws of the and to promote
respect for law and legal processes. The Code of Professional
Responsibility command that he shall not engage in unlawful, dishonest,
immoral or deceitful conduct. (Rule 1.01, Code of Professional
Responsibility)
In the instant case, there was a clear yet unrebutted allegation in the
complaint that the Respondent had ordered his secretary and housemaid
to falsify the signatures of the notary public and the Deputy Register of
Deeds respectively to make it appear that the real estate mortgage
contract was duly registered and thus binding.
While it may be true that the complaint for Estafa thru Falsification filed
against the Respondent had been dismissed, the dismissal was because
of the complainant’s voluntary desistance and not a finding of innocence.
It neither confirms nor denies Respondent’s non-culpability. Furthermore,
it is well-settled that disciplinary proceedings are "sui generis", the
primary object of which is not so much to punish the individual attorney
himself, as to safeguard the administration of justice by protecting the
court and the public from the misconduct of lawyers and to remove from
the professions persons whose disregard of their oath have proven them
unfit to continue discharging the trust reposed in them as members of the
bar. Thus, disciplinary cases may still proceed despite the dismissal of
civil and/or criminal cases against a lawyer.chanroblesvirtuallawlibrary
A lawyer who does any unlawful fraudulent or dishonest act may and
should be held administratively liable therefor. In the case at bar, the
Respondent should not be made an exception. While it may be shown
that he indeed advanced the payment due to his erstwhile clients, such
will not exempt him from administrative liability. At best it can only
mitigate. Respondent is recommended to be suspended for six (6)
months from the practice of law.
(Findings and Recommendation, pp. 1-4)
On February 28, 1998, the Board of Governors of the IBP passed
Resolution XIII-97-199 adopting and approving the Findings and
Recommendation of the Investigating Commissioner, which
reads:chanrob1es virtual 1aw library
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and
APPROVED, the Report and Recommendation of the Investigating
Commissioner in the above-entitled case, herein made part of this
Resolution/Decision as Annex "A" and, finding the recommendation fully
supported by the evidence on record and the applicable laws and rules,
respondent Atty. Ernesto C. Jacinto is SUSPENDED from the practice of
law for six (6) months for his unlawful, fraudulent or dishonest act.
(Notice of Resolution [dated Feb. 28, 1998]).
In his Comment and Answer with Motion to Dismiss, respondent averred
that complainants have no cause of action against him as the same has
been waived, settled, and extinguished on account of the affidavits of
voluntary desistance and quitclaim executed by them in the criminal case
filed against him.
The assertion must necessarily fail. The practice of law is so intimately
affected with public interest that it is both a right and a duty of the State
to control and regulate it in order to promote the public welfare. The
Constitution vests this power of control and regulation in this Court. Since
the practice of law is inseparably connected with the exercise of its judicial
power in administration of justice, the Court cannot be divested of its
constitutionally ordained prerogative which includes the authority to
discipline, suspend or disbar any unfit and unworthy member of the Bar
by a mere execution of affidavits of voluntary desistance and quitclaim
(par. [5], Sec. 5, 1987 Constitution).
A lawyer may he disciplined or suspended for any misconduct, whether
in his professional or private capacity, which shows him to be wanting in
moral character, in honesty, in probity and good demeanor, thus
rendering unworthy to continue as an officer of the court (Maligsa v.
Cabanting, 272 SCRA 408 [1997]), and the complainants who called the
attention of the Court to the attorney’s alleged misconduct are in no sense
a party, and have generally no interest in the outcome except as all good
citizens may have in the proper administration of justice (Rayos-Ombac
v. Rayos, 285 SCRA 93 [1998]).
Undeniably, respondent represented complainants in the loan
transaction. By his own admission, he was the one who negotiated with
the borrower, his long-time friend and a former client. He acted not merely
as an agent but as a lawyer of complainants, thus, the execution of the
real estate mortgage contract, as well as its registration and annotation
on the title were entrusted to him In fact, respondent even received his
share in the interest earnings which complainants realized from the
transaction. His refusal to recognize any wrongdoing or carelessness by
claiming that he is likewise a victim when it was shown that the title to the
property, the registration of the real estate mortgage contract, and the
annotation thereon were all feigned, will not at all exonerate him.
As a rule, a lawyer is not barred from dealing with his client but the
business transaction must be characterized with utmost honesty and
good faith. However, the measure of good faith which an attorney is
required to exercise in his dealings with his client is a much higher
standard than is required in business dealings where the parties trade at
arms length. Business transactions between an attorney and his client
are disfavored and discouraged by the policy of the law. Hence, courts
carefully watch these transactions to be sure that no advantage is taken
by a lawyer over his client. This rule is founded on public policy for, by
virtue of his office, an attorney is in an easy position to take advantage of
the credulity and ignorance of his client. Thus, no presumption of
innocence or improbability of wrongdoing is considered in an attorney’s
favor (Nakpit v. Valdes, 286 SCRA 758 [1998]). Further, his fidelity to the
cause of his client requires him to be evermindful of the responsibilities
that should be expected of him.
Verily, a lawyer may not, without being guilty of professional misconduct,
act as counsel for a person whose interest conflicts with that of his former
client. The reason for the prohibition is found in the relation of attorney
and client, which is one of trust and confidence at the highest degree
(Maturan v. Gonzales, 287 SCRA 943 [1998]).
Respondent utterly failed to perform his duties and responsibilities
faithfully as well as to protect the rights and interests of his clients and by
his deceitful actuations constituting violations of the Code of Professional
Responsibilities must be subjected to disciplinary measures for his own
good, as well as for the good of the entire membership of the Bar as a
whole.
WHEREFORE, the Court hereby adopts the resolution of the Board of
Governors of the Integrated Bar of the Philippines and orders respondent
Atty. Ernesto C. Jacinto suspended from the practice of law for six (6)
months with the warning that a repetition of the same or similar offense
will be dealt with more severely.
SO ORDERED.chanrobles virtual lawlibrary
December 8, 1923
VICENTE DIAZ, complainant,
vs.
RUPERTO KAPUNAN, respondent.
Attorney-General Villa-Real for the Government.
Perfecto Gabriel and Rafael Palma for respondent.
MALCOLM, J.:
This action for malpractice brought by Vicente Diaz against Attorney
Ruperto Kapunan, has to do with the conduct of Attorney Kapunan during
the legal proceedings which followed the business troubles of Vicente
Diaz and Secundino de Mendezona, and particularly relates to the
conduct of Attorney Kapunan in civil case No. 2098 of the Court of First
Instance of Leyte. The ultimate question on which we would concentrate
attention concerns the agreement between Diaz and Kapunan at the time
of the sale of the property of Mendoza, whereby Kapunan, on the promise
of Diaz to pay him P1,000, agreed to desist from further participation in
the sale, all in alleged violation of article 1459 of the Civil Code and article
542 of the Penal Code.
Omitting the irrelevant matter interjected into this case, the principal facts
of record are the following:
In 1917, Vicente Diaz and Secundino de Mendezona formed a
partnership and entered into extensive business transactions in the
Province of Leyte. The capital of the partnership was P380,000.
Unfortunately, however, the business failed to prosper, with the result that
on liquidation, it was found to have suffered a loss of P67,000. When Diaz
and Mendezona came to settle up their affairs, they eventually formulated
a document of sale and mortgage in which Mendezona recognized a debt
in favor of Diaz in the sum of P80,000 and an additional sum of P10,000
owing to Diaz, laid upon the hacienda "Mapuyo," and to be paid within the
term of one year. When the year had expired Mendezona was not to be
found and his family was unable to meet the payment. There followed the
usual proceedings for foreclosure and sale, which, after considerable
delay, resulted in the hacienda's being offered for sale at public auction.
At the time fixed for the sale, December 23, 1922, there appeared Vicente
Diaz, accompanied by his lawyer Emilio Benitez, and Attorney Ruperto
Kapunan. Luis Velarde, the deputy sheriff of Leyte, is authority for the
statement that Kapunan told him that he, Kapunan, was ready to bid on
the property up to P16,000 in order to assist the Mendezona family which
was in financial straits. At any rate, the bidding was opened by Kapunan
offering P12,000 for the property and with Diaz and Kapunan raising the
bids until finally Diaz offered P12,500. There the bids stopped on account
of Diaz and Kapunan entering into the agreement, of decisive importance,
which we next quote in full:
We, Vicente Diaz and Ruperto Kapunan, both being the bidders at the
auction held for the sale of the properties of Secundino Mendezona, do
hereby agreed that Don Ruperto Kapunan should withdraw his bid and
refrain from bidding at the said auction as he does hereby withdraw his
bid, and in consideration thereof, the said Mr. Diaz offers him a premium
of one thousand pesos (P1,000) which, out of consideration to said Don
Vicente Diaz, Mr. Kapunan accepts and has, for this reason, refrained
from bidding in competition with said Mr. Diaz.lawphi1.net
Tacloban, Leyte, December 23, 1922.
(Sgd.) "V. DIAZ. (Sgd.) RUPERTO
KAPUNAN."
Following the termination of the sheriff's sale, Diaz on December 26,
1922, gave Kapunan P500 of the P1,000 mentioned in the above quoted
document. Diaz further followed the usual procedure to take over the
property of Mendezona pursuant to his bid of P12,500, which covered the
amount of the mortgage with its accumulated interest and with the judicial
expenses.
Although it was on December 23, 1922, that Diaz and Kapunan entered
into the agreement, Diaz could only wait until January 4, 1923, following,
to lay before this court charges against Attorney Kapunan for alleged
unprofessional conduct. Undoubtedly, before Kapunan had knowledge of
the disbarment proceedings, on January 10, 1923, he presented a motion
in the Court of First Instance of Leyte asking that he be permitted to retain
the P500 in question, in part payment of his professional fees. Later, on
February 4, 1923, when Kapunan must have had knowledge of the
disbarment proceedings, he filed another motion, withdrawing his former
motion and asking the court to permit him to turn over the P500 to Diaz,
which Judge Causing refused to do on the ground that it was a personal
matter. Nevertheless, on July 10, 1923, the clerk of the Court of First
Instance of Leyte handed the P500 to Diaz who, in turn, receipted for that
amount. lawphil.net
From correspondence, it further is evident that the family of Mendezona
was led to believe that the P500 would shortly be sent them. Without
doubt, the Mendezona family would have been gratified to receive even
the P500 pittance out of the business wreck in Leyte of the senior
Mendezona.
During much of the time here mentioned, Kapunan was the attorney of
Mendezona. Kapunan was given extensive authority by the letter of
Mendezona of April 12, 1919. When Kapunan took part in the sale, it must
be assumed that he was bidding in representation of his client and for the
benefit of the client.
It remains to be said that following the presentation of the charges against
Attorney Kapunan in this court, he was given an opportunity to answer,
and the usual investigation of his professional conduct was made by the
provincial fiscal of Leyte acting under the supervision of the Attorney-
General. From the report of the fiscal, indorsed by the Attorney-General,
three charges seem to have been considered. The first two, relating to
Kapunan's attempt to represent both the parties in the case, and to molest
and disturb Diaz by frivolous motions, the law officer of the Government
finds not substantiated; and with this conclusion we fully agree. The third
charge is more serious and has to do with Kapunan having intervened in
the manner in which he did in the sale of the property of his client
Mendezona. The Attorney-General is of the opinion on this point that the
facts constitute a flagrant violation of the provisions of article 1459 of the
Civil Code and article 542 of the Penal Code. "In view thereof, it is
recommended that corrective measures commensurate with the
irregularity committed by Attorney Kapunan, be taken against him."
Article 1459 of the Civil Code was held in force in the case of Hernandez
vs. Villanueva ([1920], 40 Phil., 775). It provides that the following
persons, naming them, "cannot take by purchase, even at a public or
judicial auction, either in person or through the mediation of another." The
provision contained in the last paragraph of said article is made to include
lawyers, with respect to any property or rights involved in any litigation in
which they may take party by virtue of their profession and office. We do
not believe this article has been infringed by the respondent because he
has not purchased property at a public or judicial auction and because his
participation in the auction was in representation of his client. It has been
held that an execution sale to the attorney of the defendant is not unlawful
if made in good faith, with the consent of the client, and without any
purpose of defrauding the latter's creditors. (2 R. C. L., 1011; 1 Thornton
on Attorneys at Law, pp. 298, 299; Smith vs. Smith [1848], 1 Iowa, 307.)
The more puzzling question relates to the alleged violation by Attorney
Kapunan of article 542 of the Penal Code. This article punishes "any
person who shall solicit any gift or promise as a consideration for agreeing
to refrain from taking part in any public auction." The crime is
consummated by the mere act of soliciting a gift or promise for the
purpose of abstaining from taking part in the auction. Not permitting our
minds to be confused by the varied explanations of Diaz and Kapunan,
the document formulated by them and hereinbefore quoted,
demonstrates that Kapunan, on the promise of Diaz to pay P1,000,
refrained from further participation in the sale of the property of
Mendezona, which is exactly the situation covered by article 542 of the
Penal Code.
Public policy discountenances combinations or agreements on the part of
bidders at execution sales, the objects and effects of which are to stifle
competition. The courts will consider an agreement between a judgment
creditor and one claiming an interest in the thing about to be sold under
an execution, that neither shall bid against the other, as void, unless all
parties concerned know of the arrangement and consent thereto.
Execution sales should be open to free and full competition, in order to
secure the maximum benefit for the debtor. Article 542 of the Penal Code
is, therefore, a wise provision even though rarely invoked, and should be
used to discourage the stifling of bids at judicial sales. (23 C.J., 647;
Packard vs. Bird and Chapman [1870], 40 Cal., 378; 3 Viada, Codigo
Penal, 594.)
We conclude that Attorney Kapunan has been guilty of a technical
violation of article 542 of the Penal Code. But we cannot adopt the
vigorous recommendation of the Attorney-General, for we consider
present certain mitigating circumstances which exert an influence in favor
of the respondent. In the first place, as disclosed by the judicial records,
no reported prosecution under article 542 has been attempted, which is
eloquent proof of the practical disuse of this article; and the Spanish
jurisprudence, while indicative of the meaning of the article, relies
principally on the decisions of the French Court of Cassation. (See Code
of Napoleon, arts. 222, 223; decisions of the French Court of Cassation
of October 16, 1844, May 15, 1857, and January 8, 1863.) In the next
place, the complainant Diaz is equally guilty with the respondent
Kapunan. And lastly, Kapunan appears to have been acting in good faith
for his client, although adopting an irregular procedure, and although
attempting to make tardy restitution of the money received by him.
Our judgment is that Attorney Ruperto Kapunan shall stand reprimanded
and that the complainant, Vicente Diaz, shall immediately return to the
clerk of the Court of First Instance of Leyte the P500 received by Diaz
from the clerk and receipted for by Diaz, and the clerk of court shall
transmit the P500 to Secundino de Mendezona or, in case of his absence,
to Miss Carmen de Mendezona. Costs shall be taxed in accordance with
the provisions of the Code of Civil Procedure. So ordered.
A.C. No. 4083 March 27, 2000
LEONITO GONATO and PRIMROSE GONATO, complainants,
vs.
ATTY. CESILO A. ADAZA, respondent.
RESOLUTION
MELO, J.:
At bar is an administrative complaint for disbarment filed by the
complainant spouses Leonito and Primrose Gonato against their former
counsel, Atty. Cesilo A. Adaza, charging him with malpractice and
violation of trust. Pursuant to Rule 139-B of the Rules of Court and the
Resolution of the Court dated December 1, 1993, the present
administrative case was referred to the Integrated Bar of the Philippines
(IBP) for investigation, report, and recommendation.
It appears that sometime in February, 1993, complainants engaged the
services of respondent as their counsel in Civil Case No. 92-263 entitled
"Goking vs. Yacapin, et al." filed with the Regional Trial Court of Misamis
Oriental, wherein complainants were among the defendants in said case.
Complainants alleged that respondent demanded from them the sum of
P15,980.00 to be used in paying the docket fee and other court fees in
connection with the aforementioned case. Said amount was loaned to
complainants by a friend, Vic Manzano, who delivered the same to
respondent, as evidenced by an acknowledgment receipt dated February
10, 1993 and signed by respondent's secretary, Mayette Salceda.
Thereafter, complainants asked for the official receipts evidencing the
amount of court fees purportedly paid by respondent. Vic Manzano told
complainants that respondent only gave him photocopies of two Republic
of the Philippines receipts with numbers 9627143 (Exhibit "C") dated
February 11, 1993, in the amount of P15,830.00; and 7447868 (Exhibit
"D") also dated February 11, 1993, in the amount of P150.00. Dissatisfied,
complainant Primrose Gonato personally went to respondent's law office
at least three times, and asked for the original copies of the receipts, but
to no avail. Primrose's suspicion grew stronger, and this prompted her to
verify the authenticity of said receipts with the office of the Clerk of Court
of the Regional Trial Court of Cagayan de Oro City. There, it was
discovered that the triplicate original copies of the receipts did not reflect
the same amount contained on the photocopies of the receipts given by
respondent. Receipt No. 9627143 in the Clerk of Court's Office showed
only the amount of P2,470,00 and was dated May 15, 1992, while that
given by respondent bore the amount of P15,830,00. On the other hand,
Receipt No. 7447868 per Office of Clerk of Court records revealed the
sum of P4,000.00, while that provided by respondent disclosed the sum
of P150.00, presumably to conform to the amount paid by complainant
which was P15,980.00. Complainants demanded the return of
P15,980.00 but respondent refused to do so. Thus, in April, 1993,
complainants urged respondent to withdraw as counsel due to loss of
trust and confidence.
For his part, respondent lawyer admits that he received from Vic Manzano
the amount of P15,980.00 which was initially intended to cover the, filing
fees, sheriff fees, and U.P. Law Center fees in the filing of counterclaim
on behalf of herein complainants. But according to him, after careful
study, he realized that the counter-claim is compulsory and not
permissive, and so he applied instead the aforesaid sum of P15,980.00
to his acceptance and appearance fees, which fact was even
communicated to Vic Manzano, who was complainants' contact or liason
person with respondent. Respondent also specifically denied that he
caused the delivery of the falsified photocopies of O.R. Nos. 9627147 and A.C. No. 7418 October 9, 2007
7447868 to complainant spouses.

ANDREA BALCE CELAJE, complainant,

In its Resolution dated January 28, 1999, the Board of Governors of the
Integrated Bar of the Philippines adopted and approved the Investigating vs.
Commissioner's report and recommendation with an amendment that ATTY. SANTIAGO C. SORIANO, respondent.
respondent be suspended from the practice of law for three (3) months.

RESOLUTION
The IBP Commission on Bar Discipline found sufficient evidence to
sustain complainants' claim that respondent charged them the amount of
P15,980.00 for filing fees when in fact no such fees were due. It rejected
respondent's claim that the subject amount was applied to his attorney's AUSTRIA-MARTINEZ, J.:
fees as this is belied by the statement of account he issued to
complainants indubitably showing that complainants were charged of said
amount for filing fees.
Before this Court is a disbarment case filed against Atty. Santiago C.
Soriano (respondent) for gross misconduct.

This Court is in full accord with the findings and recommendation of the
IBP that respondent lawyer has sufficiently demonstrated conduct
showing his unfitness for the confidence and trust which characterize the
attorney-client relationship. His act of requiring complainants to pay an
exorbitant amount on the pretext that it was needed for the payment of
court fees which were not even substantiated by proper official receipts,
constitutes malpractice which is a serious breach of professional duty
toward complainants whose trust respondent disregarded and violated.
Respondent expressly admitted having received the money, but he
persistently refused to return the same despite repeated demands by the
complainants. This conduct of the respondent is clearly indicative of lack
of integrity and moral soundness, as he was clinging to something which
was not his and to which he absolutely had no right. Respondent's shallow
excuse that he applied said money to his attorney's fees is merely all
afterthought and cannot justify his refusal to return the same, as this was
made without the acquiescence of the complainants. It is settled that the
conversion by a lawyer of funds entrusted to him is a gross violation of
professional ethics and a betrayal of public confidence in the legal
profession (Obia vs. Catimbang, 196 SCRA 23 [1991]). Likewise,
respondent offered no solid proof to support his denial that he delivered
the two falsified receipts to complainants.
In the Complaint dated June 1, 2005 filed before the Integrated Bar of the
Philippines (IBP), Andrea Balce Celaje (complainant) alleged that
respondent asked for money to be put up as an injunction bond, which
complainant found out later, however, to be unnecessary as the
application for the writ was denied by the trial court. Respondent also
asked for money on several occasions allegedly to spend for or to be
given to the judge handling their case, Judge Milagros Quijano, of the
Regional Trial Court, Iriga City, Branch 36. When complainant
approached Judge Quijano and asked whether what respondent was
saying was true, Judge Quijano outrightly denied the allegations and
advised her to file an administrative case against respondent.1
In his Answer, respondent denied the charges against him and averred
that the same were merely concocted by complainant to destroy his
character. He also contended that it was complainant who boasted that
she is a professional fixer in administrative agencies as well as in the
judiciary; and that complainant promised to pay him large amounts of
attorney's fees which complainant however did not keep.2

Canon 7 of the Code of Professional Responsibility mandates that "a
lawyer shall at all times uphold the integrity and dignity of the legal
profession." The trust and confidence necessarily reposed by clients
require in the lawyer a high standard and appreciation of his duty to them.
To this end, nothing should be done by any member of the legal fraternity
which might tend to lessen in any degree the confidence of the public in
the fidelity, honesty, and integrity of the profession. (Marcelo vs. Javier,
Sr., 214 SCRA 1 [1992]).
Both parties appeared in the Mandatory Conference and Hearing on
January 18, 2006. Thereafter, the case was submitted for decision.3
In the Report and Recommendation dated January 24, 2006, IBP-
Commission on Bar Discipline Commissioner Dennis A.B. Funa found
respondent guilty of Gross Misconduct in his relations with his client and
recommended that respondent be suspended for three years from the
practice of law.4

The facts and evidence obtaining in this case glaringly reveal

respondent's failure to live up to his duties as a lawyer in consonance the
strictures of his oath and the Code of Professional Responsibility, In the Report, Commissioner Funa found that:
particularly Canon 16 which provides that "a lawyer shall hold in trust all
moneys and properties of his client that may come into his possession."
As a member of the Bar, respondent was and is expected to always live
During the hearing conducted, Complainant alleged that she has remitted
up to the standards embodied in said Code particularly Canons 15, 16,
to Respondent, on various dates, amounts of money totaling to more or
17 and 20, for the relationship between an attorney and his client is highly
less P270,000.00.
fiduciary in nature and demands utmost fidelity and good faith (Igual vs.
Javier, 254 SCRA 416 [1996]). The Court believes that a longer period of
suspension than that recommended by the IBP is called for under the
circumstances.1âwphi1 According to Complainant the amounts given in several instances were
all undocumented and not acknowledged in writing.

WHEREFORE, respondent Atty. Cesilo A. Adaza is hereby suspended

from the practice of law for a period of six (6) months from notice, with the However, for the alleged amount of P14,000.00 intended for an injunction
warning that a repetition of the same or similar acts will be dealt with more bond, some documents in writing were made.
severely. Respondent is further ordered to restitute to complainants the
amount of P15,980.00 within 30 days from notice, without prejudice to
whatever judicial action he may take to recover his unsatisfied attorney's
fees, if any. Let copies of this resolution be furnished all courts in the land, xxxx
the Integrated Bar of the Philippines, the Office of the Bar Confidant, and
let it be spread in respondent's personal record.1âwphi1.nêt
While the amounts remitted by Complainant to Respondent were never
acknowledged in writing and were not documented, due credence must
SO ORDERED. be given to Complainant's allegations especially over the amount of
P14,800.00 intended for the injunction. Indeed, there is no ill-motive at all
on the part of Complainant to fabricate charges against Respondent.
Unfortunately, none of the P270,000.00 given by Complainant to
Respondent was ever documented and therefore accuracy of the
amounts could not be established and substantiated.
What has been documented only pertains to the unpaid P5,800.00
intended for the injunction bond. However, it has been established that
indeed an accumulated amount of P9,000.00 has been remitted by
Respondent to Valentina Ramos and only the unpaid P5,800.00 remains
unaccounted for by the Respondent.
During the hearing conducted, Complainant reiterated her accusations
against the Respondent and expressed that she has been aggrieved and
misled by Respondent. According to Complainant, this was made
possible because she was not aware of or knowledgeable on legal
matters and practices. Respondent has only offered denials to the
charges. However, the circumstances gives credibility to herein
Complainant in the absence of any evil motive on her part.
Accordingly, Respondent is clearly guilty of misappropriating his client's
funds in the amount of P5,800.00. While other amounts may have been
misappropriated, Complainant alleges P270,000.00, the exactness of the
amounts could not be established.
Respondent is also guilty of deceiving his client and abusing his client's
confidence in requesting for several amounts of money on the pretense
that he had to spend for and pay the trial judge.
Respondent is hereby ORDERED to immediately deliver the
unaccounted for amount of Five Thousand Eight Hundred Pesos
(P5,800.00) to Complainant, submitting a Compliance Report thereon.5
On September 8, 2006, the Board of Governors of the IBP passed a
Resolution thus:
RESOLVED to ADOPT and Approve, as it is hereby ADOPTED and
APPROVED, with modification, the Report and Recommendation of the
Investigating Commissioner of the above-entitled case, herein made part
of this Resolution as Annex "A-; and, finding the recommendation fully
supported by the evidence on record and the applicable laws and rules,
and considering that Respondent is guilty of gross misconduct for
misappropriating his client's funds, Atty. Santiago C. Soriano is hereby
SUSPENDED from the practice of law for two (2) years and likewise
Ordered to immediately deliver that unaccounted amount of P5,800.00 to
complainant.6
The IBP transmitted the Notice of Resolution issued by the IBP Board of
Governors as well as the records of the case, pursuant to Rule 139-B.7
Then in compliance with the Court's Resolution dated February 20, 2007,
the IBP through Director for Discipline Rogelio Vinluan informed the Court
that per records of the IBP, no Motion for Reconsideration was filed by
either party.
The Court agrees with the IBP Resolution.
The Code of Professional Responsibility (CPR), particularly Canon 16
thereof, mandates that a lawyer shall hold in trust all moneys and
properties of his client that may come into his possession. He shall
account for all money or property collected or received from his client8
and shall deliver the funds and property of his client when due or upon
demand.9
As found by Commissioner Funa, it was established that respondent
could not account for P5,800.00 which was part of the sum given by
complainant to him for the purpose of filing an injunctive bond.
Respondent admitted having received from complainant P17,800.00 on
April 19, 2002 for the preliminary injunction10 and admitted to having a
balance of P9,000.00 in his promissory note to the Manila Insurance Co.,
Inc. dated April 23, 2002, which was reduced to P5,800.00 by reason of
an additional payment of P4,000.00,11 leaving an amount of P5,800.00
unaccounted for. The affidavit of the insurance agent, Valentina Ramos,
dated December 8, 2005 also states that even up to said date, respondent
had not yet paid the balance of P5,800.00.12
Respondent's failure to return the money to complainant upon demand
gave rise to the presumption that he misappropriated it for his own use to
the prejudice of, and in violation of the trust reposed in him by his client.13
It is a gross violation of general morality and of professional ethics and
impairs public confidence in the legal profession which deserves
punishment.14
As the Court has pronounced, 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.15
The Court has been exacting in its demand for integrity and good moral
character of members of the Bar who are 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 by the
public in the fidelity, honesty, and integrity of the legal profession. Indeed,
membership in the legal profession is a privilege.16 The attorney-client
relationship is highly fiduciary in nature. As such, it requires utmost good
faith, loyalty, fidelity and disinterestedness on the part of the lawyer.17
In Small v. Banares18 the respondent was suspended for two years for
violating Canon 16 of the CPR, particularly for failing to file a case for
which the amount of P80,000.00 was given him by his client, and for
failing to return the said amount upon demand. Considering that similar
circumstances are attendant in this case, the Court finds the Resolution
of the IBP imposing on respondent a two-year suspension to be in order.
WHEREFORE, respondent Atty. Santiago C. Soriano is found GUILTY of
violating Canon 16 of the Code of Professional Responsibility and is
hereby SUSPENDED from the practice of law for a period of two (2) years
from notice, with a STERN WARNING that a repetition of the same or
similar acts shall be dealt with more severely.
Respondent is further ordered to restitute to his clients through Andrea
Balce Celaje, within 30 days from notice, the amount of P5,800.00.
Respondent is directed to submit to the Court proof of payment within
fifteen days from payment of the full amount.
Let copies of this Resolution be furnished all courts of the land, the
Integrated Bar of the Philippines, as well as the Office of the Bar Confidant
for their information and guidance, and let it be entered in respondent's
record in this Court.
SO ORDERED.
shall not engage in unlawful, dishonest, immoral or deceitful conduct."
It is glaringly clear that respondent's non-remittance for over one year of
the funds coming from Encarnacion Pascual constitutes conduct in gross
violation of the above canon. The belated payment of the same to the
SSS does not excuse his misconduct. While Pascual may not strictly be
considered a client of respondent, the rules relating to a lawyer's handling
of funds of a client is applicable. In Daroy v. Legaspi, 1 this court held that
"(t)he relation between an attorney and his client is highly fiduciary in
nature... [thus] lawyers are bound to promptly account for money or
property received by them on behalf of their clients and failure to do so
constitutes professional misconduct." The failure of respondent to
immediately remit the amount to the SSS gives rise to the presumption
that he has misappropriated it for his own use. This is a gross violation of
general morality as well as professional ethics; it impairs public
confidence in the legal profession and deserves punishment.2
Respondent's claim that he may not be held liable because he committed
such acts, not in his capacity as a private lawyer, but as a prosecutor is
unavailing. Canon 6 of the Code of Professional Responsibility provides:
These canons shall apply to lawyers in government services in the
discharge of their official tasks.
As stated by the IBP Committee that drafted the Code, "a lawyer does not
shed his professional obligations upon assuming public office. In fact, his
public office should make him more sensitive to his professional
obligations because a lawyer's disreputable conduct is more likely to be
magnified in the public's eye. 3 Want of moral integrity is to be more
severely condemned in a lawyer who holds a responsible public office. 4
ACCORDINGLY, this Court REPRIMANDS respondent with a STERN
WARNING that the commission of the same or similar offense will be
dealt with more severely in the future.
LET copies of this decision be spread in his records and copies be
furnished the Department of Justice and the Office of the Bar Confidant.
SO ORDERED.
G.R. No. L-35702 May 29, 1973
DOMINGO D. RUBIAS, plaintiff-appellant,
vs.
ISAIAS BATILLER, defendant-appellee.
Gregorio M. Rubias for plaintiff-appellant.
Vicente R. Acsay for defendant-appellee.
TEEHANKEE, J.:
In this appeal certified by the Court of Appeals to this Court as involving
purely legal questions, we affirm the dismissal order rendered by the Iloilo
court of first instance after pre-trial and submittal of the pertinent
documentary exhibits.
Such dismissal was proper, plaintiff having no cause of action, since it
was duly established in the record that the application for registration of
the land in question filed by Francisco Militante, plaintiff's vendor and
predecessor interest, had been dismissed by decision of 1952 of the land
registration court as affirmed by final judgment in 1958 of the Court of
Appeals and hence, there was no title or right to the land that could be
transmitted by the purported sale to plaintiff.
As late as 1964, the Iloilo court of first instance had in another case of
ejectment likewise upheld by final judgment defendant's "better right to
possess the land in question . having been in the actual possession
thereof under a claim of title many years before Francisco Militante sold
the land to the plaintiff."
Furthermore, even assuming that Militante had anything to sell, the deed
of sale executed in 1956 by him in favor of plaintiff at a time when plaintiff
was concededly his counsel of record in the land registration case
involving the very land in dispute (ultimately decided adversely against
Militante by the Court of Appeals' 1958 judgment affirming the lower
court's dismissal of Militante's application for registration) was properly
declared inexistent and void by the lower court, as decreed by Article
1409 in relation to Article 1491 of the Civil Code.
The appellate court, in its resolution of certification of 25 July 1972, gave
the following backgrounder of the appeal at bar:
On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to
recover the ownership and possession of certain portions of lot under
Psu-99791 located in Barrio General Luna, Barotac Viejo, Iloilo which he
bought from his father-in-law, Francisco Militante in 1956 against its
present occupant defendant, Isaias Batiller, who illegally entered said
portions of the lot on two occasions — in 1945 and in 1959. Plaintiff
prayed also for damages and attorneys fees. (pp. 1-7, Record on Appeal).
In his answer with counter-claim defendant claims the complaint of the
plaintiff does not state a cause of action, the truth of the matter being that
he and his predecessors-in-interest have always been in actual, open and
continuous possession since time immemorial under claim of ownership
of the portions of the lot in question and for the alleged malicious
institution of the complaint he claims he has suffered moral damages in
the amount of P 2,000.00, as well as the sum of P500.00 for attorney's
fees. ...
On December 9, 1964, the trial court issued a pre-trial order, after a pre-
trial conference between the parties and their counsel which order reads
as follows..
'When this case was called for a pre-trial conference today, the plaintiff
appeared assisted by himself and Atty. Gregorio M. Rubias. The
defendant also appeared, assisted by his counsel Atty. Vicente R. Acsay.
A. During the pre-trial conference, the parties have agreed that the
following facts are attendant in this case and that they will no longer
introduced any evidence, testimonial or documentary to prove them:
1. That Francisco Militante claimed ownership of a parcel of land
located in the Barrio of General Luna, municipality of Barotac Viejo
province of Iloilo, which he caused to be surveyed on July 18-31, 1934,
whereby he was issued a plan Psu-99791 (Exhibit "B"). (The land claimed
contained an area of 171:3561 hectares.)
2. Before the war with Japan, Francisco Militante filed with the
Court of First Instance of Iloilo an application for the registration of the title
of the land technically described in psu-99791 (Exh. "B") opposed by the
Director of Lands, the Director of Forestry and other oppositors. However,
during the war with Japan, the record of the case was lost before it was
heard, so after the war Francisco Militante petitioned this court to
reconstitute the record of the case. The record was reconstituted on the
Court of the First Instance of Iloilo and docketed as Land Case No. R-
695, GLRO Rec. No. 54852. The Court of First Instance heard the land
registration case on November 14, 1952, and after the trial this court
dismissed the application for registration. The appellant, Francisco
Militante, appealed from the decision of this Court to the Court of Appeals
where the case was docketed as CA-GR No. 13497-R..
3. Pending the disposal of the appeal in CA-GR No. 13497-R and
more particularly on June 18, 1956, Francisco Militante sold to the
plaintiff, Domingo Rubias the land technically described in psu-99791
(Exh. "A"). The sale was duly recorded in the Office of the Register of
Deeds for the province of Iloilo as Entry No. 13609 on July 11, 1960 (Exh.
"A-1").
(NOTE: As per deed of sale, Exh. A, what Militante purportedly sold to
plaintiff-appellant, his son-in-law, for the sum of P2,000.00 was "a parcel
of untitled land having an area Of 144.9072 hectares ... surveyed under
Psu 99791 ... (and) subject to the exclusions made by me, under (case)
CA-i3497, Land Registration Case No. R-695, G.L.R.O. No. 54852, Court
of First Instance of the province of Iloilo. These exclusions referred to
portions of the original area of over 171 hectares originally claimed by
Militante as applicant, but which he expressly recognized during the trial
to pertain to some oppositors, such as the Bureau of Public Works and
Bureau of Forestry and several other individual occupants and
accordingly withdrew his application over the same. This is expressly
made of record in Exh. A, which is the Court of Appeals' decision of 22
September 1958 confirming the land registration court's dismissal of
Militante's application for registration.)
4. On September 22,1958 the Court of appeals in CA-G.R. No.
13497-R promulgated its judgment confirming the decision of this Court
in Land Case No. R-695, GLRO Rec. No. 54852 which dismissed the
application for Registration filed by Francisco Militante (Exh. "I").
5. Domingo Rubias declared the land described in Exh. 'B' for
taxation purposes under Tax Dec. No. 8585 (Exh. "C") for 1957; Tax Dec.
Nos. 9533 (Exh. "C-1") and 10019 (Exh. "C-3")for the year 1961; Tax Dec.
No. 9868 (Exh. "C-2") for the year 1964, paying the land taxes under Tax
Dec. No. 8585 and 9533 (Exh. "D", "D-1", "G-6").
6. Francisco Militante immediate predecessor-in-interest of the
plaintiff, has also declared the land for taxation purposes under Tax Dec.
No. 5172 in 1940 (Exh. "E") for 1945; under Tax Dec. No. T-86 (Exh. "E-
1") for 1948; under Tax Dec. No. 7122 (Exh. "2"), and paid the land taxes
for 1940 (Exhs. "G" and "G-7"), for 1945 46 (Exh. "G-1") for 1947 (Exh.
"G-2"), for 1947 & 1948 (Exh. "G-3"), for 1948 (Exh. "G-4"), and for 1948
and 1949 (Exh. "G-5").
7. Tax Declaration No. 2434 in the name of Liberato Demontaño
for the land described therein (Exh. "F") was cancelled by Tax. Dec. No.
5172 of Francisco Militante (Exh. "E"). Liberato Demontaño paid the land
tax under Tax Dec. No. 2434 on Dec. 20, 1939 for the years 1938 (50%)
and 1959 (Exh. "H").
8. The defendant had declared for taxation purposes Lot No. 2 of
the Psu-155241 under Tax Dec. Not. 8583 for 1957 and a portion of Lot
No. 2, Psu-155241, for 1945 under Tax Dec. No. 8584 (Exh. "2-A" Tax
No. 8583 (Exh. "2") was revised by Tax Dec. No. 9498 in the name of the
defendant (Exh. "2-B") and Tax Dec. No. 8584 (Exh. "2-A") was cancelled
by Tax Dec. No. 9584 also in the name of the defendant (Exh. "2-C"). The
defendant paid the land taxes for Lot 2, Psu-155241, on Nov. 9, 1960 for
the years 1945 and 1946, for the year 1950, and for the year 1960 as
shown by the certificate of the treasurer (Exh. "3"). The defendant may
present to the Court other land taxes receipts for the payment of taxes for
this lot.
9. The land claimed by the defendant as his own was surveyed
on June 6 and 7,1956, and a plan approved by Director of Land on
November 15, 1956 was issued, identified as Psu 155241 (Exh. "5").
10. On April 22, 1960, the plaintiff filed forcible Entry and Detainer
case against Isaias Batiller in the Justice of the Peace Court of Barotac
Viejo Province of Iloilo (Exh. "4") to which the defendant Isaias Batiller
riled his answer on August 29, 1960 (Exh. "4-A"). The Municipal Court of
Barotac Viejo after trial, decided the case on May 10, 1961 in favor of the
defendant and against the plaintiff (Exh. "4-B"). The plaintiff appealed
from the decision of the Municipal Court of Barotac Viejo which was
docketed in this Court as Civil Case No. 5750 on June 3, 1961, to which
the defendant, Isaias Batiller, on June 13, 1961 filed his answer (Exh. "4-
C"). And this Court after the trial. decided the case on November 26,
1964, in favor of the defendant, Isaias Batiller and against the plaintiff
(Exh. "4-D").
(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance decision
of 26 November 1964 dismissing plaintiff's therein complaint for ejectment
against defendant, the iloilo court expressly found "that plaintiff's
complaint is unjustified, intended to harass the defendant" and "that the
defendant, Isaias Batiller, has a better right to possess the land in
question described in Psu 155241 (Exh. "3"), Isaias Batiller having been
in the actual physical possession thereof under a claim of title many years
before Francisco Militante sold the land to the plaintiff-hereby dismissing
plaintiff's complaint and ordering the plaintiff to pay the defendant
attorney's fees ....")
B. During the trial of this case on the merit, the plaintiff will prove
by competent evidence the following:
1. That the land he purchased from Francisco Militante under Exh.
"A" was formerly owned and possessed by Liberato Demontaño but that
on September 6, 1919 the land was sold at public auction by virtue of a
judgment in a Civil Case entitled "Edw J. Pflieder plaintiff vs. Liberato
Demontaño Francisco Balladeros and Gregorio Yulo, defendants", of
which Yap Pongco was the purchaser (Exh. "1-3"). The sale was
registered in the Office of the Register of Deeds of Iloilo on August 4,
1920, under Primary Entry No. 69 (Exh. "1"), and a definite Deed of Sale
was executed by Constantino A. Canto, provincial Sheriff of Iloilo, on Jan.
19, 1934 in favor of Yap Pongco (Exh. "I"), the sale having been
registered in the Office of the Register of Deeds of Iloilo on February 10,
1934 (Exh. "1-1").
2. On September 22, 1934, Yap Pongco sold this land to
Francisco Militante as evidenced by a notarial deed (Exh. "J") which was
registered in the Registry of Deeds on May 13, 1940 (Exh. "J-1").
3. That plaintiff suffered damages alleged in his complaint.
C. Defendants, on the other hand will prove by competent
evidence during the trial of this case the following facts:
1. That lot No. 2 of the Psu-1552 it (Exh. '5') was originally owned
and possessed by Felipe Batiller, grandfather of the defendant Basilio
Batiller, on the death of the former in 1920, as his sole heir. Isaias Batiller
succeeded his father , Basilio Batiller, in the ownership and possession
of the land in the year 1930, and since then up to the present, the land
remains in the possession of the defendant, his possession being actual,
open, public, peaceful and continuous in the concept of an owner,
exclusive of any other rights and adverse to all other claimants.
2. That the alleged predecessors in interest of the plaintiff have
never been in the actual possession of the land and that they never had
any title thereto.
3. That Lot No. 2, Psu 155241, the subject of Free Patent
application of the defendant has been approved.
4. The damages suffered by the defendant, as alleged in his
counterclaim."'1
The appellate court further related the developments of the case, as
follows:
On August 17, 1965, defendant's counsel manifested in open court that
before any trial on the merit of the case could proceed he would file a
motion to dismiss plaintiff's complaint which he did, alleging that plaintiff
does not have cause of action against him because the property in
dispute which he (plaintiff) allegedly bought from his father-in-law,
Francisco Militante was the subject matter of LRC No. 695 filed in the CFI
of Iloilo, which case was brought on appeal to this Court and docketed as
CA-G.R. No. 13497-R in which aforesaid case plaintiff was the counsel
on record of his father-in-law, Francisco Militante. Invoking Arts. 1409 and
1491 of the Civil Code which reads:
'Art. 1409. The following contracts are inexistent and void from the
beginning:
xxx xxx xxx
(7) Those expressly prohibited by law.
'ART. 1491. The following persons cannot acquire any purchase,
even at a public auction, either in person of through the mediation of
another: .
xxx xxx xxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and
inferior courts, and other officers and employees connected with the
administration of justice, the property and rights of in litigation or levied
upon an execution before the court within whose jurisdiction or territory
they exercise their respective functions; this prohibition includes the act
of acquiring an assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they
may take part by virtue of their profession.'
defendant claims that plaintiff could not have acquired any interest in the
property in dispute as the contract he (plaintiff) had with Francisco
Militante was inexistent and void. (See pp. 22-31, Record on Appeal).
Plaintiff strongly opposed defendant's motion to dismiss claiming that
defendant can not invoke Articles 1409 and 1491 of the Civil Code as
Article 1422 of the same Code provides that 'The defense of illegality of
contracts is not available to third persons whose interests are not directly
affected' (See pp. 32-35 Record on Appeal).
On October 18, 1965, the lower court issued an order disclaiming plaintiffs
complaint (pp. 42-49, Record on Appeal.) In the aforesaid order of
dismissal the lower court practically agreed with defendant's contention
that the contract (Exh. A) between plaintiff and Francism Militante was
null and void. In due season plaintiff filed a motion for reconsideration (pp.
50-56 Record on Appeal) which was denied by the lower court on January
14, 1966 (p. 57, Record on Appeal).
Hence, this appeal by plaintiff from the orders of October 18, 1965 and
January 14, 1966.
Plaintiff-appellant imputes to the lower court the following errors:
'1. The lower court erred in holding that the contract of sale
between the plaintiff-appellant and his father-in-law, Francisco Militante,
Sr., now deceased, of the property covered by Plan Psu-99791, (Exh. "A")
was void, not voidable because it was made when plaintiff-appellant was
the counsel of the latter in the Land Registration case.
'2. The lower court erred in holding that the defendant-appellee is
an interested person to question the validity of the contract of sale
between plaintiff-appellant and the deceased, Francisco Militante, Sr.
'3. The lower court erred in entertaining the motion to dismiss of
the defendant-appellee after he had already filed his answer, and after
the termination of the pre-trial, when the said motion to dismiss raised a
collateral question.
'4. The lower court erred in dismissing the complaint of the
plaintiff-appellant.'
The appellate court concluded that plaintiffs "assignment of errors gives
rise to two (2) legal posers — (1) whether or not the contract of sale
between appellant and his father-in-law, the late Francisco Militante over
the property subject of Plan Psu-99791 was void because it was made
when plaintiff was counsel of his father-in-law in a land registration case
involving the property in dispute; and (2) whether or not the lower court
was correct in entertaining defendant-appellee's motion to dismiss after
the latter had already filed his answer and after he (defendant) and
plaintiff-appellant had agreed on some matters in a pre-trial conference.
Hence, its elevation of the appeal to this Court as involving pure questions
of law.
It is at once evident from the foregoing narration that the pre-trial
conference held by the trial court at which the parties with their counsel
agreed and stipulated on the material and relevant facts and submitted
their respective documentary exhibits as referred to in the pre-trial order,
supra,2 practically amounted to a fulldress trial which placed on record all
the facts and exhibits necessary for adjudication of the case.
The three points on which plaintiff reserved the presentation of evidence
at the-trial dealing with the source of the alleged right and title of Francisco
Militante's predecessors, supra,3 actually are already made of record in
the stipulated facts and admitted exhibits. The chain of Militante's alleged
title and right to the land as supposedly traced back to Liberato
Demontaño was actually asserted by Militante (and his vendee, lawyer
and son-in-law, herein plaintiff) in the land registration case and rejected
by the Iloilo land registration court which dismissed Militante's application
for registration of the land. Such dismissal, as already stated, was
affirmed by the final judgment in 1958 of the Court of Appeals.4
The four points on which defendant on his part reserved the presentation
of evidence at the trial dealing with his and his ancestors' continuous,
open, public and peaceful possession in the concept of owner of the land
and the Director of Lands' approval of his survey plan thereof, supra,5 are
likewise already duly established facts of record, in the land registration
case as well as in the ejectment case wherein the Iloilo court of first
instance recognized the superiority of defendant's right to the land as
against plaintiff.
No error was therefore committed by the lower court in dismissing
plaintiff's complaint upon defendant's motion after the pre-trial.
1. The stipulated facts and exhibits of record indisputably
established plaintiff's lack of cause of action and justified the outright
dismissal of the complaint. Plaintiff's claim of ownership to the land in
question was predicated on the sale thereof for P2,000.00 made in 1956
by his father-in- law, Francisco Militante, in his favor, at a time when
Militante's application for registration thereof had already been dismissed
by the Iloilo land registration court and was pending appeal in the Court
of Appeals.
With the Court of Appeals' 1958 final judgment affirming the dismissal of
Militante's application for registration, the lack of any rightful claim or title
of Militante to the land was conclusively and decisively judicially
determined. Hence, there was no right or title to the land that could be
transferred or sold by Militante's purported sale in 1956 in favor of plaintiff.
Manifestly, then plaintiff's complaint against defendant, to be declared
absolute owner of the land and to be restored to possession thereof with
damages was bereft of any factual or legal basis.
2. No error could be attributed either to the lower court's holding
that the purchase by a lawyer of the property in litigation from his client is
categorically prohibited by Article 1491, paragraph (5) of the Philippine
Civil Code, reproduced supra;6 and that consequently, plaintiff's
purchase of the property in litigation from his client (assuming that his
client could sell the same since as already shown above, his client's claim
to the property was defeated and rejected) was void and could produce
no legal effect, by virtue of Article 1409, paragraph (7) of our Civil Code
which provides that contracts "expressly prohibited or declared void by
law' are "inexistent and that "(T)hese contracts cannot be ratified. Neither
can the right to set up the defense of illegality be waived."
The 1911 case of Wolfson vs. Estate of Martinez7 relied upon by plaintiff
as holding that a sale of property in litigation to the party litigant's lawyer
"is not void but voidable at the election of the vendor" was correctly held
by the lower court to have been superseded by the later 1929 case of
Director of Lands vs. Abagat.8 In this later case of Abagat, the Court
expressly cited two antecedent cases involving the same transaction of
purchase of property in litigation by the lawyer which was expressly
declared invalid under Article 1459 of the Civil Code of Spain (of which
Article 1491 of our Civil Code of the Philippines is the counterpart) upon
challenge thereof not by the vendor-client but by the adverse parties
against whom the lawyer was to enforce his rights as vendee thus
acquired.

These two antecedent cases thus cited in Abagat clearly superseded
(without so expressly stating the previous ruling in Wolfson:
The spouses, Juan Soriano and Vicente Macaraeg, were the owners of
twelve parcels of land. Vicenta Macaraeg died in November, 1909,
leaving a large number of collateral heirs but no descendants. Litigation
between the surviving husband, Juan Soriano, and the heirs of Vicenta
immediately arose, and the herein appellant Sisenando Palarca acted as
Soriano's lawyer. On May 2, 1918, Soriano executed a deed for the
aforesaid twelve parcels of land in favor of Sisenando Palarca and on the
following day, May 3, 1918, Palarca filed an application for the registration
of the land in the deed. After hearing, the Court of First Instance declared
that the deed was invalid by virtue of the provisions of article 1459 of the
Civil Code, which prohibits lawyers and solicitors from purchasing
property rights involved in any litigation in which they take part by virtue
of their profession. The application for registration was consequently
denied, and upon appeal by Palarca to the Supreme Court, the judgement
of the lower court was affirmed by a decision promulgated November
16,1925. (G.R. No. 24329, Palarca vs. Director of Lands, not reported.)
In the meantime cadastral case No. 30 of the Province of Tarlac was
instituted, and on August 21, 1923, Eleuteria Macaraeg, as administratrix
of the estate of Vicente Macaraeg, filed claims for the parcels in question.
Buenaventura Lavitoria administrator of the estate of Juan Soriano, did
likewise and so did Sisenando Palarca. In a decision dated June 21,
1927, the Court of First Instance, Judge Carballo presiding, rendered
judgment in favor of Palarea and ordered the registration of the land in
his name. Upon appeal to this court by the administration of the estates
of Juan Soriano and Vicente Macaraeg, the judgment of the court below
was reversed and the land adjudicated to the two estates as conjugal
property of the deceased spouses. (G.R. No. 28226, Director of Lands
vs. Abagat, promulgated May 21, 1928, not reported.)9
In the very case of Abagat itself, the Court, again affirming the invalidity
and nullity of the lawyer's purchase of the land in litigation from his client,
ordered the issuance of a writ of possession for the return of the land by
the lawyer to the adverse parties without reimbursement of the price paid
by him and other expenses, and ruled that "the appellant Palarca is a
lawyer and is presumed to know the law. He must, therefore, from the
beginning, have been well aware of the defect in his title and is,
consequently, a possessor in bad faith."
As already stated, Wolfson and Abagat were decided with relation to
Article 1459 of the Civil Code of Spain then adopted here, until it was
superseded on August 30, 1950 by the Civil Code of the Philippines
whose counterpart provision is Article 1491.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code)
prohibits in its six paragraphs certain persons, by reason of the relation
of trust or their peculiar control over the property, from acquiring such
property in their trust or control either directly or indirectly and "even at a
public or judicial auction," as follows: (1) guardians; (2) agents; (3)
administrators; (4) public officers and employees; judicial officers and
employees, prosecuting attorneys, and lawyers; and (6) others especially
disqualified by law.
In Wolfson which involved the sale and assignment of a money judgment
by the client to the lawyer, Wolfson, whose right to so purchase the
judgment was being challenged by the judgment debtor, the Court,
through Justice Moreland, then expressly reserved decision on "whether
or not the judgment in question actually falls within the prohibition of the
article" and held only that the sale's "voidability can not be asserted by
one not a party to the transaction or his representative," citing from
Manresa 10 that "(C)onsidering the question from the point of view of the
civil law, the view taken by the code, we must limit ourselves to classifying
as void all acts done contrary to the express prohibition of the statute.
Now then: As the code does not recognize such nullity by the mere
operation of law, the nullity of the acts hereinbefore referred to must be
asserted by the person having the necessary legal capacity to do so and
decreed by a competent
court." 11
The reason thus given by Manresa in considering such prohibited
acquisitions under Article 1459 of the Spanish Civil Code as merely
voidable at the instance and option of the vendor and not void — "that the
Code does not recognize such nullity de pleno derecho" — is no longer
true and applicable to our own Philippine Civil Code which does recognize
the absolute nullity of contracts "whose cause, object, or purpose is
contrary to law, morals, good customs, public order or public policy" or
which are "expressly prohibited or declared void by law" and declares
such contracts "inexistent and void from the beginning." 12
The Supreme Court of Spain and modern authors have likewise veered
from Manresa's view of the Spanish codal provision itself. In its sentencia
of 11 June 1966, the Supreme Court of Spain ruled that the prohibition of
Article 1459 of the Spanish Civil Code is based on public policy, that
violation of the prohibition contract cannot be validated by confirmation or
ratification, holding that:
... la prohibicion que el articulo 1459 del C.C. establece respecto a los
administradores y apoderados, la cual tiene conforme a la doctrina de
esta Sala, contendia entre otras, en S. de 27-5-1959, un fundamento de
orden moral lugar la violacion de esta a la nulidad de pleno derecho del
acto o negocio celebrado, ... y prohibicion legal, afectante orden publico,
no cabe con efecto alguno la aludida retification ... 13
The criterion of nullity of such prohibited contracts under Article 1459 of
the Spanish Civil Code (Article 1491 of our Civil Code) as a matter of
public order and policy as applied by the Supreme Court of Spain to
administrators and agents in its above cited decision should certainly
apply with greater reason to judges, judicial officers, fiscals and lawyers
under paragraph 5 of the codal article.
Citing the same decisions of the Supreme Court of Spain, Gullon
Ballesteros, his "Curso de Derecho Civil, (Contratos Especiales)"
(Madrid, 1968) p. 18, affirms that, with respect to Article 1459, Spanish
Civil Code:.
Que caracter tendra la compra que se realice por estas personas?
Porsupuesto no cabe duda de que el caso (art.) 1459, 40 y 50, la nulidad
esabsoluta porque el motivo de la prohibicion es de orden publico. 14
Perez Gonzales in such view, stating that "Dado el caracter prohibitivo
delprecepto, la consequencia de la infraccion es la nulidad radical y ex
lege." 15
Castan, quoting Manresa's own observation that.
"El fundamento do esta prohibicion es clarisimo. No sa trata con este
precepto tan solo de guitar la ocasion al fraude; persiguese, ademasel
proposito de rodear a las personas que intervienen en la administrcionde
justicia de todos los retigios que necesitan pora ejercer su ministerio
librandolos de toda suspecha, que aunque fuere in fundada, redundura
endescredito de la institucion." 16 arrives at the contrary and now
accepted view that "Puede considerace en nuestro derecho inexistente
'o radicalmente nulo el contrato en los siguentes cases: a) ...; b) cuando
el contrato se ha celebrado en violacion de una prescripcion 'o prohibicion
legal, fundada sobre motivos de orden publico (hipotesis del art. 4 del
codigo) ..." 17
It is noteworthy that Caltan's rationale for his conclusion that fundamental
consideration of public policy render void and inexistent such expressly
prohibited purchase (e.g. by public officers and employees of government
property intrusted to them and by justices, judges, fiscals and lawyers of
property and rights in litigation and submitted to or handled by them,
under Article 1491, paragraphs (4) and (5) of our Civil Code) has been
adopted in a new article of our Civil Code, viz, Article 1409 declaring such
prohibited contracts as "inexistent and void from the beginning." 18
Indeed, the nullity of such prohibited contracts is definite and permanent
and cannot be cured by ratification. The public interest and public policy
remain paramount and do not permit of compromise or ratification. In his
aspect, the permanent disqualification of public and judicial officers and
lawyers grounded on public policy differs from the first three cases of
guardians, agents and administrators (Article 1491, Civil Code), as to CORTES, J.:
whose transactions it had been opined that they may be "ratified" by
means of and in "the form of a new contact, in which cases its validity
shall be determined only by the circumstances at the time the execution
In a verified complaint for disbarment dated July 5, 1982, Mauro P.
of such new contract. The causes of nullity which have ceased to exist
Mananquil charged respondent Atty. Crisostomo C. Villegas with gross
cannot impair the validity of the new contract. Thus, the object which was
misconduct or malpractice committed while acting as counsel of record of
illegal at the time of the first contract, may have already become lawful at
one Felix Leong in the latter's capacity as administrator of the Testate
the time of the ratification or second contract; or the service which was
Estate of the late Felomina Zerna in Special Proceedings No. 460 before
impossible may have become possible; or the intention which could not
then Court of First Instance of Negros Occidental. The complainant was
be ascertained may have been clarified by the parties. The ratification or
appointed special administrator after Felix Leong died.
second contract would then be valid from its execution; however, it does
not retroact to the date of the first contract." 19

In compliance with a resolution of this Court, respondent filed his

comment to the complaint on January 20, 1983. After complainant filed
As applied to the case at bar, the lower court therefore properly acted
his reply, the Court resolved to refer the case to the Solicitor General for
upon defendant-appellant's motion to dismiss on the ground of nullity of
investigation, report and recommendation.
plaintiff's alleged purchase of the land, since its juridical effects and
plaintiff's alleged cause of action founded thereon were being asserted
against defendant-appellant. The principles governing the nullity of such
prohibited contracts and judicial declaration of their nullity have been well In a hearing conducted on May 15, 1985 by the investigating officer
restated by Tolentino in his treatise on our Civil Code, as follows: assigned to the case, counsel for the complainant proposed that the case
be considered on the basis of position papers and memoranda to be
submitted by the parties. Respondent agreed. Thus, the investigating
officer required the parties to submit their respective position papers and
Parties Affected. — Any person may invoke the in existence of the
memoranda, with the understanding that with or without the memoranda,
contract whenever juridical effects founded thereon are asserted against
the case will be deemed submitted for resolution after the expiration of 30
him. Thus, if there has been a void transfer of property, the transferor can
days. In compliance, both parties submitted their respective position
recover it by the accion reinvindicatoria; and any prossessor may refuse
papers; but no memorandum was filed by either party. Thereafter, the
to deliver it to the transferee, who cannot enforce the contract. Creditors
case was deemed submitted.
may attach property of the debtor which has been alienated by the latter
under a void contract; a mortgagee can allege the inexistence of a prior
encumbrance; a debtor can assert the nullity of an assignment of credit
as a defense to an action by the assignee. In the pleadings submitted before the Court and the Office of the Solicitor
General, complainant alleges that over a period of 20 years, respondent
allowed lease contracts to be executed between his client Felix Leong
and a partnership HIJOS DE JOSE VILLEGAS, of which respondent is
Action On Contract. — Even when the contract is void or inexistent, an
one of the partners, covering several parcels of land of the estate, i.e.
action is necessary to declare its inexistence, when it has already been
Lots Nos. 1124, 1228, 2221, 2402, 3939, 3942 and 3957 of the Tanjay
fulfilled. Nobody can take the law into his own hands; hence, the
Cadastre, under iniquitous terms and conditions. Moreover, complainant
intervention of the competent court is necessary to declare the absolute
charges that these contracts were made without the approval of the
nullity of the contract and to decree the restitution of what has been given
probate court and in violation of Articles 1491 and 1646 of the new Civil
under it. The judgment, however, will retroact to the very day when the
Code.
contract was entered into.

If the void contract is still fully executory, no party need bring an action to
declare its nullity; but if any party should bring an action to enforce it, the
other party can simply set up the nullity as a defense. 20
ACCORDINGLY, the order of dismissal appealed from is hereby affirmed,
with costs in all instances against plaintiff-appellant. So ordered.
Makalintal, Zaldivar, Castro,. Fernando, Barredo, Makasiar, Antonio and
Esguerra, JJ., concur.
On the basis of the pleadings submitted by the parties, and other pertinent
records of the investigation, the Solicitor General submitted his report
dated February 21, 1990, finding that respondent committed a breach in
the performance of his duties as counsel of administrator Felix Leong
when he allowed the renewal of contracts of lease for properties involved
in the testate proceedings to be undertaken in favor of HIJOS DE JOSE
VILLEGAS without notifying and securing the approval of the probate
court. However, the Solicitor General opined that there was no sufficient
evidence to warrant a finding that respondent had allowed the properties
to be leased in favor of his family partnership at a very low rental or in
violation of Articles 1491 and 1646 of the new Civil Code. Thus, the
Solicitor General recommended that respondent be suspended from the
practice of law for a period of THREE (3) months with a warning that future
misconduct on respondent's part will be more severely dealt with [Report
and Recommendation of the Solicitor General, pp. 1-10; Rollo, pp. 37-46.
Also, Complaint of the Solicitor General, pp. 1-3; Rollo, pp. 47-49].

As gleaned from the record of the case and the report and
Footnotes
recommendation of the Solicitor General, the following facts are
uncontroverted:

A.M. No. 2430 August 30, 1990

That as early as March 21, 1961, respondent was retained as counsel of
record for Felix Leong, one of the heirs of the late Felomina Zerna, who
MAURO P. MANANQUIL, complainant, was appointed as administrator of the Testate Estate of the Felomina
Zerna in Special No. 460 on May 22, 1961;
vs.

ATTY. CRISOSTOMO C. VILLEGAS, respondent.

That, a lease contract dated August 13, 1963 was executed between Felix
Leong and the "Heirs of Jose Villegas" represented by respondent's
brother-in-law Marcelo Pastrano involving, among others, sugar lands of
Geminiano M. Eleccion for complainant. the estate designated as Lot Nos. 1124, 1228, 2221, 2402, 3939, 3942
and 3957 of the Tanjay Cadastre;

RESOLUTION
That Felix Leong was designated therein as administrator and "owner, by
testamentary disposition, of 5/6 of all said parcels of land";
That, the lifetime of the lease contract was FOUR (4) sugar crop years,
with a yearly rental of TEN PERCENT (10%) of the value of the sugar
produced from the leased parcels of land;
That, on April 20, 1965, the formal partnership of HIJOS DE JOSE
VILLEGAS was formed amongst the heirs of Jose Villegas, of which
respondent was a member;
That, on October 18, 1965, another lease contract was executed between
Felix Leong and the partnership HIJOS DE JOSE VILLEGAS, containing
basically the same terms and conditions as the first contract, with Marcelo
Pastrano signing once again as representative of the lessee;
That, on March 14, 1968, after the demise of Marcelo Pastrano,
respondent was appointed manager of HIJOS DE JOSE VILLEGAS by
the majority of partners;
That, renewals of the lease contract were executed between Felix Leong
and HIJOS DE JOSE VILLEGAS on January 13, 1975 and on December
4, 1978, with respondent signing therein as representative of the lessee;
and,
That, in the later part of 1980, respondent was replaced by his nephew
Geronimo H. Villegas as manager of the family partnership.
Under the above circumstances, the Court finds absolutely no merit to
complainant's charge, and the Solicitor General's finding, that respondent
committed acts of misconduct in failing to secure the approval of the court
in Special Proceedings No. 460 to the various lease contracts executed
between Felix Leong and respondent's family partnership.
Pursuant to Section 3 of Rule 84 of the Revised Rules of Court, a judicial
executor or administrator has the right to the possession and
management of the real as well as the personal estate of the deceased
so long as it is necessary for the payment of the debts and the expenses
of administration. He may, therefore, exercise acts of administration
without special authority from the court having jurisdiction of the estate.
For instance, it has long been settled that an administrator has the power
to enter into lease contracts involving the properties of the estate even
without prior judicial authority and approval [See Ferraris v. Rodas, 65
Phil. 732 (1938); Jocson de Hilado v. Nava, 69 Phil. 1 (1939); San Diego,
Sr. v. Hombre, G.R No. L-19265, May 29, 1964, 11 SCRA 165].
Thus, considering that administrator Felix Leong was not required under
the law and prevailing jurisprudence to seek prior authority from the
probate court in order to validly lease real properties of the estate,
respondent, as counsel of Felix Leong, cannot be taken to task for failing
to notify the probate court of the various lease contracts involved herein
and to secure its judicial approval thereto.
Nevertheless, contrary to the opinion of the Solicitor General, the Court
finds sufficient evidence to hold respondent subject to disciplinary
sanction for having, as counsel of record for the administrator in Special
Proceedings No. 460, participated in the execution in 1975 and 1978 of
renewals of the lease agreement involving properties of the estate in favor
of the partnership HIJOS DE JOSE VILLEGAS, of which respondent is a
member and in 1968 was appointed managing partner.
By virtue of Article 1646 of the new Civil Code, the persons referred to in
Article 1491 are prohibited from leasing, either in person or through the
mediation of another, the properties or things mentioned in that article, to
wit:
xxx xxx xxx
(1) The guardian, the property of the person or persons who may
be under his guardianship;
(2) Agents, the property whose administration or sale may have been
intrusted to them, unless the consent of the principal have been given;
(3) Executors and administrators, the property of the estate under
administration
(4) Public officers and employees, the property of the State or of
any subdivision thereof, or of any government owned or controlled
corporation, or institution, the administration of which has been intrusted
to them; this provision shall apply to judges and government experts who,
in any manner whatsoever, take part in the sale;
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the
administration of justice, the property or rights in litigation or levied upon
on execution before the court within whose jurisdiction or territory they
exercise their respective functions; this prohibition includes the act of
acquiring by assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in which they
may take part by virtue of their profession.
(6) Any others specially disqualified by law
xxx xxx xxx
[Article 1491 of the new Civil Code; Emphasis supplied.]
The above disqualification imposed on public and judicial officers and
lawyers is grounded on public policy considerations which disallow the
transactions entered into by them, whether directly or indirectly, in view
of the fiduciary relationship involved, or the peculiar control exercised by
these individuals over the properties or rights covered [See Rubias v.
Batiller, G.R. No. L-35702, May 29, 1973, 51 SCRA 120; Maharlika
Publishing Corporation v. Tagle, G.R. No. 65594, July 9, 1986, 142 SCRA
553; Fornilda v. The Branch 164, RTC Fourth Judicial Region, Pasig, G.R.
No. 72306, October 5, 1988, 166 SCRA 281 and January 24, 1989, 169
SCRA 351].
Thus, even if the parties designated as lessees in the assailed lease
contracts were the "Heirs of Jose Villegas" and the partnership HIJOS DE
JOSE VILLEGAS, and respondent signed merely as an agent of the latter,
the Court rules that the lease contracts are covered by the prohibition
against any acquisition or lease by a lawyer of properties involved in
litigation in which he takes part. To rule otherwise would be to lend a
stamp of judicial approval on an arrangement which, in effect,
circumvents that which is directly prohibited by law. For, piercing through
the legal fiction of separate juridical personality, the Court cannot ignore
the obvious implication that respondent as one of the heirs of Jose
Villegas and partner, later manager of, in HIJOS DE JOSE VILLEGAS
stands to benefit from the contractual relationship created between his
client Felix Leong and his family partnership over properties involved in
the ongoing testate proceedings.
In his defense, respondent claims that he was neither aware of, nor
participated in, the execution of the original lease contract entered into
between his client and his family partnership, which was then represented
by his brother-in-law Marcelo Pastrano. And although he admits that he
participated in the execution of subsequent renewals of the lease contract
as managing partner of HIJOS DE JOSE VILLEGAS, he argues that he
acted in good faith considering that the heirs of Filomena Zerna
consented or acquiesced to the terms and conditions stipulated in the
original lease contract. He further contends that pursuant to the ruling of
the Court in Tuason v. Tuason [88 Phil. 428 (1951)] the renewal contracts
do not fall within the prohibition of Articles 1491 and 1646 since he signed
the same as a mere agent of the partnership.
Respondent's contentions do not provide sufficient basis to escape RESOLUTION
disciplinary action from this Court.

It taxes this Courts imagination that respondent disclaims any knowledge

in the execution of the original lease contract between his client and his PER CURIAM:
family partnership represented by his brother-in-law. Be that as it may, it
cannot be denied that respondent himself had knowledge of and allowed
the subsequent renewals of the lease contract. In fact, he actively
This is a complaint for the disbarment of respondent Atty. Josephine
participated in the lease contracts dated January 13, 1975 and December
Palogan-Eduarte originally filed with this Court on April 18, 1988. On
4, 1978 by signing on behalf of the lessee HIJOS DE JOSE VILLEGAS.
August 10, 1989, the Commission on Bar Discipline of the Integrated Bar
of the Philippines, to which the case was referred for investigation,
submitted a report confirming in substance the charge of violation of Art.
Moreover, the claim that the heirs of Filomena Zerna have acquiesced 1491 of the Civil Code and part of the Oath of Office of a lawyer and
and consented to the assailed lease contracts does not militate against recommending the suspension of herein respondent.
respondent's liability under the rules of professional ethics. The
prohibition referred to in Articles 1491 and 1646 of the new Civil Code, as
far as lawyers are concerned, is intended to curtail any undue influence
The evidence discloses that on July 18, 1983, Antonia Ulibari filed with
of the lawyer upon his client on account of his fiduciary and confidential
the RTC, Branch XXII, Cabagan, Isabela, Civil Case No. 391 for
association [Sotto v. Samson, G.R. No. L-16917, July 31, 1962, 5 SCRA
annulment of a document (known as Affidavit of Adjudication of the Estate
733]. Thus, the law makes the prohibition absolute and permanent
of Felicisimo Velasco and Quitclaim Thereof) against her children. The
[Rubias v. Batiller, supra]. And in view of Canon 1 of the new Code of
case was handled by Atty. Henedino Eduarte, herein respondent's
Professional Responsibility and Sections 3 & 27 of Rule 138 of the
husband, until his appointment as RTC judge on October 26, 1984. His
Revised Rules of Court, whereby lawyers are duty-bound to obey and
wife, Atty. Josephine Palogan-Eduarte, took over. On August 22, 1985,
uphold the laws of the land, participation in the execution of the prohibited
decision in Civil Case No. 391 was rendered in favor of Antonia Ulibari.
contracts such as those referred to in Articles 1491 and 1646 of the new
Except for Dominga Velasco-Ordonio, one of the children of Antonia
Civil Code has been held to constitute breach of professional ethics on
Ulibari and complainant in the instant case, the rest of the defendants did
the part of the lawyer for which disciplinary action may be brought against
not appeal. On June 13, 1987, while Civil Case No. 391 was pending
him [See Bautista v. Gonzalez, Adm. Matter No. 1625, February 12,
appeal in the Court of Appeals, Antonia Ulibari conveyed some parcels of
1990). Accordingly, the Court must reiterate the rule that the claim of good
her land to her children in the form of deeds of absolute sale, prepared
faith is no defense to a lawyer who has failed to adhere faithfully to the
and notarized by herein respondent. Significantly, on the same day,
legal disqualifications imposed upon him, designed to protect the interests
Antonia Ulibari also conveyed 20 hectares of land to herein respondent
of his client [See In re Ruste, 70 Phil. 243 (1940); Also, Severino v.
and her husband as their Attorney's fees for legal services rendered. All
Severino, 44 Phil. 343 (1923)].
the titles of the lands subject of the deeds of absolute sale and the deed
of conveyance however remained in the name of Antonia Ulibari.

Neither is there merit in respondent's reliance on the case of Tuason v.

Tuason [supra.] It cannot be inferred from the statements made by the
On April 4, 1988, Dominga Velasco-Ordonio filed this complaint for
Court in that case that contracts of sale or lease where the vendee or
disbarment against herein respondent on the basis of an affidavit
lessee is a partnership, of which a lawyer is a member, over a property
executed by her mother Antonia Ulibari on March 2, 1988 stating that
involved in a litigation in which he takes part by virtue of his profession,
affiant never conveyed the subject parcel of land to respondent as her
are not covered by the prohibition under Articles 1491 and 1646.
attorney's fees and that the deeds of absolute sale executed in favor of
her children were not known to her (and that she received no
consideration therefor).
However, the Court sustains the Solicitor General's holding that there is
no sufficient evidence on record to warrant a finding that respondent
allowed the properties of the estate of Filomena Zerna involved herein to
On August 10, 1989, the Investigation Commissioner submitted a report
be leased to his family partnership at very low rental payments. At any
finding the charges to be true and recommending a one-year suspension
rate, it is a matter for the court presiding over Special Proceedings No.
of the respondent from the practice of law.
460 to determine whether or not the agreed rental payments made by
respondent's family partnership is reasonable compensation for the use
and occupancy of the estate properties.
The first issue to be resolved is whether Antonia Ulibari was defrauded
into signing the Deed of Conveyance transferring to her lawyer (herein
respondent) the subject parcel of land containing 298,420 square meters
Considering thus the nature of the acts of misconduct committed by
as the latter's attorney's fees. It is clear from Antonia Ulibari's affidavit and
respondent, and the facts and circumstances of the case, the Court finds
deposition that she never conveyed the said land to her lawyer as
sufficient grounds to suspend respondent from the practice of law for a
attorney's fees.
period of three (3) months.

Even granting for the sake argument that Antonia Ulibari knowingly and
WHEREFORE, finding that respondent Atty. Crisostomo C. Villegas
voluntarily conveyed the subject property in favor of the respondent and
committed acts of gross misconduct, the Court Resolved to SUSPEND
her husband, the respondent, in causing the execution of the Deed of
respondent from the practice of law for four (4) months effective from the
Conveyance during the pendency of the appeal of the case involving the
date of his receipt of this Resolution, with a warning that future
said property, has violated Art. 1491 of the Civil Code which prohibits
misconduct on respondent's part will be more severely dealt with. Let
lawyers from "acquiring by assignment property and rights which may be
copies of this Resolution be circulated to all courts of the country for their
the object of any litigation in which they may take part by virtue of their
information and guidance, and spread in the personal record of Atty.
profession."
Villegas.

In the case at bar, the property (which includes the more than 20 hectares
SO ORDERED.
of land allegedly conveyed to the respondent) was already in actual
litigation first in the lower court and then in the Court of Appeals. Whether
the deed of conveyance was executed at the instance of the client driven
by financial necessity or of the lawyers is of no moment (In re: Atty.
Melchor E. Ruste, 70 Phil. 243). "In either case, an attorney occupies a
DOMINGA VELASCO ORDONIO, petitioner, vantage position to press upon or dictate his terms to a harrased client,
in breach of the rule so amply protective of the confidential relations,
vs. which must necessarily exist between attorney and client, and of the
rights of both." The act constitutes malpractice, even if the lawyer had
ATTY. JOSEPHINE PALOGAN EDUARTE, respondent. purchased the property in litigation. (Hernandez v. Villanueva, 40 Phil.
775; In re: Calderon, 7 Phil. 427). We agree with the Investigating
Commissioner's opinion that the prohibition applies when the lawyer has
not paid money for it and the property was merely assigned to him in
consideration of legal services rendered at a time when the property is
still the subject of a pending case.
For having improperly acquired the subject property, under the foregoing
circumstances, respondent has violated not only Art. 1491 of the Civil
Code but also Rule 10 of the Canons of Professional Ethics which
provides that "the lawyer should not purchase any interest in the subject
matter of the litigation which he is conducting."
The last issue to be resolved is whether respondent violated any law in
preparing and notarizing the deeds of absolute sale in making it appear
that there were considerations therefor, when in truth there were none so
received by the seller. In her answer, respondent admitted that Antonia
Ulibari did not actually sell the parcels of land to her children for the
considerations stated in the deeds of sale and that she (respondent)
"utilized the form of deed of sale as the most convenient and appropriate
document to effect the transfer of the parcels of land to Antonia Ulibari's
children in accordance with her wish that said parcels of land be given to
them.
In so doing, respondent has manifestly violated that part of her oath as a
lawyer that she shall not do any falsehood. Not only that. In preparing the
documents which do not reflect the true transaction, respondent has
likewise violated Rule 10.01 of the Code of Professional Responsibility
which provides:
Rule 10.01. A lawyer shall not do any falsehood, nor consent to
the doing of any in court; nor shall be mislead or allow the court to be
mislead by any artifice.
ACCORDINGLY, for having violated Article 1491 of the Civil Code,
respondent is hereby ordered suspended from the practice of law for a
period of six (6) months, and, for having stated falsehoods in the four (4)
deeds of absolute sale she prepared and notarized, in violation of the
lawyer's oath and Rule 10.01 of the Code of Professional Responsibility,
respondent is also ordered suspended from the practice or law for a
period of another six (6) months, resulting in a total period on one year,
effective from the date this judgment becomes final.
SUSPENSION ORDERED.
.C. No. 5859 November 23, 2010
(Formerly CBD Case No. 421)
ATTY. CARMEN LEONOR M. ALCANTARA, VICENTE P. MERCADO,
SEVERINO P. MERCADO AND SPOUSES JESUS AND ROSARIO
MERCADO, Complainants,
vs.
ATTY. EDUARDO C. DE VERA, Respondent.
RESOLUTION
PER CURIAM:
For our review is the Resolution1 of the Board of Governors of the
Integrated Bar of the Philippines (IBP) finding respondent Atty. Eduardo
C. De Vera liable for professional malpractice and gross misconduct and
recommending his disbarment.
The facts, as appreciated by the investigating commissioner,2 are
undisputed.
The respondent is a member of the Bar and was the former counsel of
Rosario P. Mercado in a civil case filed in 1984 with the Regional Trial
Court of Davao City and an administrative case filed before the Securities
and Exchange Commission, Davao City Extension Office.3
Pursuant to a favorable decision, a writ of execution pending appeal was
issued in favor of Rosario P. Mercado. Herein respondent, as her legal
counsel, garnished the bank deposits of the defendant, but did not turn
over the proceeds to Rosario. Rosario demanded that the respondent turn
over the proceeds of the garnishment, but the latter refused claiming that
he had paid part of the money to the judge while the balance was his, as
attorney’s fees. Such refusal prompted Rosario to file an administrative
case for disbarment against the respondent.4
On March 23, 1993, the IBP Board of Governors promulgated a
Resolution holding the respondent guilty of infidelity in the custody and
handling of client’s funds and recommending to the Court his one-year
suspension from the practice of law.5
Following the release of the aforesaid IBP Resolution, the respondent
filed a series of lawsuits against the Mercado family except George
Mercado. The respondent also instituted cases against the family
corporation, the corporation’s accountant and the judge who ruled against
the reopening of the case where respondent tried to collect the balance
of his alleged fee from Rosario. Later on, the respondent also filed cases
against the chairman and members of the IBP Board of Governors who
voted to recommend his suspension from the practice of law for one year.
Complainants allege that the respondent committed barratry, forum
shopping, exploitation of family problems, and use of intemperate
language when he filed several frivolous and unwarranted lawsuits
against the complainants and their family members, their lawyers, and the
family corporation.6 They maintain that the primary purpose of the cases
is to harass and to exact revenge for the one-year suspension from the
practice of law meted out by the IBP against the respondent. Thus, they
pray that the respondent be disbarred for malpractice and gross
misconduct under Section 27,7 Rule 138 of the Rules of Court.
In his defense the respondent basically offers a denial of the charges
against him.
He denies he has committed barratry by instigating or stirring up George
Mercado to file lawsuits against the complainants. He insists that the
lawsuits that he and George filed against the complainants were not
harassment suits but were in fact filed in good faith and were based on
strong facts.8
Also, the respondent denies that he has engaged in forum shopping. He
argues that he was merely exhausting the remedies allowed by law and
that he was merely constrained to seek relief elsewhere by reason of the
denial of the trial court to reopen the civil case so he could justify his
attorney’s fees.
Further, he denies that he had exploited the problems of his client’s
family. He argues that the case that he and George Mercado filed against
the complainants arose from their perception of unlawful transgressions
committed by the latter for which they must be held accountable for the
public interest.
Finally, the respondent denies using any intemperate, vulgar, or
unprofessional language. On the contrary, he asserts that it was the
complainants who resorted to intemperate and vulgar language in
accusing him of "extorting from Rosario shocking and unconscionable
attorney’s fees."9
After careful consideration of the records of this case and the parties’
submissions, we find ourselves in agreement with the findings and
recommendation of the IBP Board of Governors.
It is worth stressing that the practice of law is not a right but a privilege
bestowed by the State upon those who show that they possess, and
continue to possess, the qualifications required by law for the conferment
of such privilege.10 Membership in the bar is a privilege burdened with
conditions. A lawyer has the privilege and right to practice law only during
good behavior and can only be deprived of it for misconduct ascertained
and declared by judgment of the court after opportunity to be heard has
been afforded him. Without invading any constitutional privilege or right,
an attorney’s right to practice law may be resolved by a proceeding to
suspend or disbar him, based on conduct rendering him unfit to hold a
license or to exercise the duties and responsibilities of an attorney. It must
be understood that the purpose of suspending or disbarring an attorney
is to remove from the profession a person whose misconduct has proved
him unfit to be entrusted with the duties and responsibilities belonging to
an office of an attorney, and thus to protect the public and those charged
with the administration of justice, rather than to punish the attorney.11 In
Maligsa v. Cabanting,12 we explained that the bar should maintain a high
standard of legal proficiency as well as of honesty and fair dealing. A
lawyer brings honor to the legal profession by faithfully performing his
duties to society, to the bar, to the courts and to his clients. To this end a
member of the legal profession should refrain from doing any act which
might lessen in any degree the confidence and trust reposed by the public
in the fidelity, honesty and integrity of the legal profession. An attorney
may be disbarred or suspended for any violation of his oath or of his duties
as an attorney and counselor, which include statutory grounds
enumerated in Section 27, Rule 138 of the Rules of Court.
As officers of the court, lawyers have a responsibility to assist in the
proper administration of justice.1avvphil They do not discharge this duty
by filing frivolous petitions that only add to the workload of the judiciary.
A lawyer is part of the machinery in the administration of justice. Like the
court itself, he is an instrument to advance its ends – the speedy, efficient,
impartial, correct and inexpensive adjudication of cases and the prompt
satisfaction of final judgments. A lawyer should not only help attain these
objectives but should likewise avoid any unethical or improper practices
that impede, obstruct or prevent their realization, charged as he is with
the primary task of assisting in the speedy and efficient administration of
justice.18 Canon 12 of the Code of Professional Responsibility
promulgated on 21 June 1988 is very explicit that lawyers must exert
every effort and consider it their duty to assist in the speedy and efficient
administration of justice.
Further, the respondent not only filed frivolous and unfounded lawsuits
that violated his duties as an officer of the court in aiding in the proper
administration of justice, but he did so against a former client to whom he
owes loyalty and fidelity. Canon 21 and Rule 21.02 of the Code of
Professional Responsibility19 provides:

CANON 21 - A lawyer shall preserve the confidence and secrets of his

client even after the attorney-client relation is terminated.
In the present case, the respondent committed professional malpractice
and gross misconduct particularly in his acts against his former clients
after the issuance of the IBP Resolution suspending him from the practice
of law for one year. In summary, the respondent filed against his former Rule 21.02 – A lawyer shall not, to the disadvantage of his client, use
client, her family members, the family corporation of his former client, the information acquired in the course of employment, nor shall he use the
Chairman and members of the Board of Governors of the IBP who issued same to his own advantage or that of a third person, unless the client with
the said Resolution, the Regional Trial Court Judge in the case where his full knowledge of the circumstances consents thereto.
former client received a favorable judgment, and the present counsel of
his former client, a total of twelve (12) different cases in various fora which
included the Securities and Exchange Commission; the Provincial
The cases filed by the respondent against his former client involved
Prosecutors Office of Tagum, Davao; the Davao City Prosecutors Office;
matters and information acquired by the respondent during the time when
the IBP-Commission on Bar Discipline; the Department of Agrarian
he was still Rosario’s counsel. Information as to the structure and
Reform; and the Supreme Court.13
operations of the family corporation, private documents, and other
pertinent facts and figures used as basis or in support of the cases filed
by the respondent in pursuit of his malicious motives were all acquired
In addition to the twelve (12) cases filed, the respondent also re-filed through the attorney-client relationship with herein complainants. Such
cases which had previously been dismissed. The respondent filed six act is in direct violation of the Canons and will not be tolerated by the
criminal cases against members of the Mercado family separately Court.
docketed as I.S. Nos. 97-135; 97-136; 97-137; 97-138; 97-139; and 97-
140. With the exception of I.S. No. 97-139, all the aforementioned cases
are re-filing of previously dismissed cases.14
WHEREFORE, respondent Atty. Eduardo C. De Vera is hereby
DISBARRED from the practice of law effective immediately upon his
receipt of this Resolution.
Now, there is nothing ethically remiss in a lawyer who files numerous
cases in different fora, as long as he does so in good faith, in accordance
with the Rules, and without any ill-motive or purpose other than to achieve
Let copies of this Resolution be furnished the Bar Confidant to be spread
justice and fairness. In the present case, however, we find that the
on the records of the respondent; the Integrated Bar of the Philippines for
barrage of cases filed by the respondent against his former client and
distribution to all its chapters; and the Office of the Court Administrator for
others close to her was meant to overwhelm said client and to show her
dissemination to all courts throughout the country.
that the respondent does not fold easily after he was meted a penalty of
one year suspension from the practice of law.

SO ORDERED.
The nature of the cases filed by the respondent, the fact of re-filing them
after being dismissed, the timing of the filing of cases, the fact that the
respondent was in conspiracy with a renegade member of the
complainants’ family, the defendants named in the cases and the foul
language used in the pleadings and motions15 all indicate that the A.C. No. 5108 May 26, 2005
respondent was acting beyond the desire for justice and fairness. His act
of filing a barrage of cases appears to be an act of revenge and hate
driven by anger and frustration against his former client who filed the
disciplinary complaint against him for infidelity in the custody of a client’s ROSA F. MERCADO, complainant,
funds.
vs.

ATTY. JULITO D. VITRIOLO, respondent.

In the case of Prieto v. Corpuz,16 the Court pronounced that it is
professionally irresponsible for a lawyer to file frivolous lawsuits. Thus,
we stated in Prieto, DECISION

Atty. Marcos V. Prieto must be sanctioned for filing this unfounded PUNO, J.:
complaint. Although no person should be penalized for the exercise of the
right to litigate, however, this right must be exercised in good faith.17
Rosa F. Mercado filed the instant administrative complaint against Atty.
Julito D. Vitriolo, seeking his disbarment from the practice of law. The
complainant alleged that respondent maliciously instituted a criminal case
for falsification of public document against her, a former client, based on
confidential information gained from their attorney-client relationship.
Let us first hearken to the facts.
Complainant is a Senior Education Program Specialist of the Standards
Development Division, Office of Programs and Standards while
respondent is a Deputy Executive Director IV of the Commission on
Higher Education (CHED).1
Complainant's husband filed Civil Case No. 40537 entitled "Ruben G.
Mercado v. Rosa C. Francisco," for annulment of their marriage with the
Regional Trial Court (RTC) of Pasig City. This annulment case had been
dismissed by the trial court, and the dismissal became final and executory
on July 15, 1992.2
In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died.
On February 7, 1994, respondent entered his appearance before the trial
court as collaborating counsel for complainant.3
On March 16, 1994, respondent filed his Notice of Substitution of
Counsel,4 informing the RTC of Pasig City that he has been appointed as
counsel for the complainant, in substitution of Atty. de Leon.
It also appears that on April 13, 1999, respondent filed a criminal action
against complainant before the Office of the City Prosecutor, Pasig City,
entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado," and
docketed as I.S. No. PSG 99-9823, for violation of Articles 171 and 172
(falsification of public document) of the Revised Penal Code.5
Respondent alleged that complainant made false entries in the
Certificates of Live Birth of her children, Angelica and Katelyn Anne. More
specifically, complainant allegedly indicated in said Certificates of Live
Birth that she is married to a certain Ferdinand Fernandez, and that their
marriage was solemnized on April 11, 1979, when in truth, she is legally
married to Ruben G. Mercado and their marriage took place on April 11,
1978.
Complainant denied the accusations of respondent against her. She
denied using any other name than "Rosa F. Mercado." She also insisted
that she has gotten married only once, on April 11, 1978, to Ruben G.
Mercado.
In addition, complainant Mercado cited other charges against respondent
that are pending before or decided upon by other tribunals – (1) libel suit
before the Office of the City Prosecutor, Pasig City;6 (2) administrative
case for dishonesty, grave misconduct, conduct prejudicial to the best
interest of the service, pursuit of private business, vocation or profession
without the permission required by Civil Service rules and regulations,
and violations of the "Anti-Graft and Corrupt Practices Act," before the
then Presidential Commission Against Graft and Corruption;7 (3)
complaint for dishonesty, grave misconduct, and conduct prejudicial to
the best interest of the service before the Office of the Ombudsman,
where he was found guilty of misconduct and meted out the penalty of
one month suspension without pay;8 and, (4) the Information for violation
of Section 7(b)(2) of Republic Act No. 6713, as amended, otherwise
known as the Code of Conduct and Ethical Standards for Public Officials
and Employees before the Sandiganbayan.9
Complainant Mercado alleged that said criminal complaint for falsification
of public document (I.S. No. PSG 99-9823) disclosed confidential facts
and information relating to the civil case for annulment, then handled by
respondent Vitriolo as her counsel. This prompted complainant Mercado
to bring this action against respondent. She claims that, in filing the
criminal case for falsification, respondent is guilty of breaching their
privileged and confidential lawyer-client relationship, and should be
disbarred.
Respondent filed his Comment/Motion to Dismiss on November 3, 1999
where he alleged that the complaint for disbarment was all hearsay,
misleading and irrelevant because all the allegations leveled against him
are subject of separate fact-finding bodies. Respondent claimed that the
pending cases against him are not grounds for disbarment, and that he is
presumed to be innocent until proven otherwise.10 He also states that the
decision of the Ombudsman finding him guilty of misconduct and
imposing upon him the penalty of suspension for one month without pay
is on appeal with the Court of Appeals. He adds that he was found guilty,
only of simple misconduct, which he committed in good faith.11
In addition, respondent maintains that his filing of the criminal complaint
for falsification of public documents against complainant does not violate
the rule on privileged communication between attorney and client
because the bases of the falsification case are two certificates of live birth
which are public documents and in no way connected with the confidence
taken during the engagement of respondent as counsel. According to
respondent, the complainant confided to him as then counsel only matters
of facts relating to the annulment case. Nothing was said about the
alleged falsification of the entries in the birth certificates of her two
daughters. The birth certificates are filed in the Records Division of CHED
and are accessible to anyone.12
In a Resolution dated February 9, 2000, this Court referred the
administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.13
The IBP Commission on Bar Discipline set two dates for hearing but
complainant failed to appear in both. Investigating Commissioner
Rosalina R. Datiles thus granted respondent's motion to file his
memorandum, and the case was submitted for resolution based on the
pleadings submitted by the parties.14
On June 21, 2003, the IBP Board of Governors approved the report of
investigating commissioner Datiles, finding the respondent guilty of
violating the rule on privileged communication between attorney and
client, and recommending his suspension from the practice of law for one
(1) year.
On August 6, 2003, complainant, upon receiving a copy of the IBP report
and recommendation, wrote Chief Justice Hilario Davide, Jr., a letter of
desistance. She stated that after the passage of so many years, she has
now found forgiveness for those who have wronged her.
At the outset, we stress that we shall not inquire into the merits of the
various criminal and administrative cases filed against respondent. It is
the duty of the tribunals where these cases are pending to determine the
guilt or innocence of the respondent.
We also emphasize that the Court is not bound by any withdrawal of the
complaint or desistance by the complainant. The letter of complainant to
the Chief Justice imparting forgiveness upon respondent is
inconsequential in disbarment proceedings.
We now resolve whether respondent violated the rule on privileged
communication between attorney and client when he filed a criminal case
for falsification of public document against his former client.
A brief discussion of the nature of the relationship between attorney and
client and the rule on attorney-client privilege that is designed to protect
such relation is in order.
In engaging the services of an attorney, the client reposes on him special
powers of trust and confidence. Their relationship is strictly personal and
highly confidential and fiduciary. The relation is of such delicate, exacting
and confidential nature that is required by necessity and public interest.15
Only by such confidentiality and protection will a person be encouraged
to repose his confidence in an attorney. The hypothesis is that abstinence
from seeking legal advice in a good cause is an evil which is fatal to the
administration of justice.16 Thus, the preservation and protection of that
relation will encourage a client to entrust his legal problems to an attorney,
which is of paramount importance to the administration of justice.17 One
rule adopted to serve this purpose is the attorney-client privilege: an Our jurisprudence on the matter rests on quiescent ground. Thus, a
attorney is to keep inviolate his client's secrets or confidence and not to compromise agreement prepared by a lawyer pursuant to the instruction
abuse them.18 Thus, the duty of a lawyer to preserve his client's secrets of his client and delivered to the opposing party,29 an offer and counter-
and confidence outlasts the termination of the attorney-client offer for settlement,30 or a document given by a client to his counsel not
relationship,19 and continues even after the client's death.20 It is the glory in his professional capacity,31 are not privileged communications, the
of the legal profession that its fidelity to its client can be depended on, and element of confidentiality not being present.32
that a man may safely go to a lawyer and converse with him upon his
rights or supposed rights in any litigation with absolute assurance that the
lawyer's tongue is tied from ever disclosing it.21 With full disclosure of the
(3) The legal advice must be sought from the attorney in his professional
facts of the case by the client to his attorney, adequate legal
capacity.33
representation will result in the ascertainment and enforcement of rights
or the prosecution or defense of the client's cause.

The communication made by a client to his attorney must not be intended

for mere information, but for the purpose of seeking legal advice from his
Now, we go to the rule on attorney-client privilege. Dean Wigmore cites
attorney as to his rights or obligations. The communication must have
the factors essential to establish the existence of the privilege, viz:
been transmitted by a client to his attorney for the purpose of seeking
legal advice.34

(1) Where legal advice of any kind is sought (2) from a professional legal
adviser in his capacity as such, (3) the communications relating to that
If the client seeks an accounting service,35 or business or personal
purpose, (4) made in confidence (5) by the client, (6) are at his instance
assistance,36 and not legal advice, the privilege does not attach to a
permanently protected (7) from disclosure by himself or by the legal
communication disclosed for such purpose.
advisor, (8) except the protection be waived.22

In fine, the factors are as follows:
(1) There exists an attorney-client relationship, or a prospective attorney-
client relationship, and it is by reason of this relationship that the client
made the communication.
Matters disclosed by a prospective client to a lawyer are protected by the
rule on privileged communication even if the prospective client does not
thereafter retain the lawyer or the latter declines the employment.23 The
reason for this is to make the prospective client free to discuss whatever
he wishes with the lawyer without fear that what he tells the lawyer will be
divulged or used against him, and for the lawyer to be equally free to
obtain information from the prospective client.24
On the other hand, a communication from a (prospective) client to a
lawyer for some purpose other than on account of the (prospective)
attorney-client relation is not privileged. Instructive is the case of Pfleider
v. Palanca,25 where the client and his wife leased to their attorney a
1,328-hectare agricultural land for a period of ten years. In their contract,
the parties agreed, among others, that a specified portion of the lease
rentals would be paid to the client-lessors, and the remainder would be
delivered by counsel-lessee to client's listed creditors. The client alleged
that the list of creditors which he had "confidentially" supplied counsel for
the purpose of carrying out the terms of payment contained in the lease
contract was disclosed by counsel, in violation of their lawyer-client
relation, to parties whose interests are adverse to those of the client. As
the client himself, however, states, in the execution of the terms of the
aforesaid lease contract between the parties, he furnished counsel with
the "confidential" list of his creditors. We ruled that this indicates that client
delivered the list of his creditors to counsel not because of the
professional relation then existing between them, but on account of the
lease agreement. We then held that a violation of the confidence that
accompanied the delivery of that list would partake more of a private and
civil wrong than of a breach of the fidelity owing from a lawyer to his client.
Applying all these rules to the case at bar, we hold that the evidence on
record fails to substantiate complainant's allegations. We note that
complainant did not even specify the alleged communication in
confidence disclosed by respondent. All her claims were couched in
general terms and lacked specificity. She contends that respondent
violated the rule on privileged communication when he instituted a
criminal action against her for falsification of public documents because
the criminal complaint disclosed facts relating to the civil case for
annulment then handled by respondent. She did not, however, spell out
these facts which will determine the merit of her complaint. The Court
cannot be involved in a guessing game as to the existence of facts which
the complainant must prove.
Indeed, complainant failed to attend the hearings at the IBP. Without any
testimony from the complainant as to the specific confidential information
allegedly divulged by respondent without her consent, it is difficult, if not
impossible to determine if there was any violation of the rule on privileged
communication. Such confidential information is a crucial link in
establishing a breach of the rule on privileged communication between
attorney and client. It is not enough to merely assert the attorney-client
privilege.37 The burden of proving that the privilege applies is placed
upon the party asserting the privilege.38
IN VIEW WHEREOF, the complaint against respondent Atty. Julito D.
Vitriolo is hereby DISMISSED for lack of merit.
SO ORDERED.
Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Tinga, J., out of the country.
A.C. No. 927 September 28, 1970

(2) The client made the communication in confidence.

IN THE MATTER OF THE COMPLAINT FOR DISBARMENT OF

ATTORNEY POTENCIANO A. PALANCA. WILLIAM C. PFLEIDER,
The mere relation of attorney and client does not raise a presumption of complainant,
confidentiality.26 The client must intend the communication to be
confidential.27 vs.

POTENCIANO A. PALANCA, respondent.

A confidential communication refers to information transmitted by

voluntary act of disclosure between attorney and client in confidence and
by means which, so far as the client is aware, discloses the information RESOLUTION
to no third person other than one reasonably necessary for the
transmission of the information or the accomplishment of the purpose for
which it was given.28
CASTRO, J.:
The respondent Atty. Potenciano A. Palanca was for sometime the legal
counsel of the complainant William C. Pfleider. According to the
complainant, he retained the legal services of Palanca from January
1966, whereas the latter insists that the attorney-client relationship
between them began as early as in 1960.
At all events, the relations between the two must have attained such a
high level of mutual trust that on October 10, 1969, Pfleider and his wife
leased to Palanca a 1,328 hectare agricultural land in Hinobaan, Negros
Occidental, known as the Hacienda Asia, for a period of ten years. In their
contract, the parties agreed, among others, that a specified portion of the
lease rentals would be paid to Pfleider, and the remainder would be
delivered by Palanca to Pfleider's listed creditors.
The arrangement worked smoothly until October 14, 1969 when the
rupture came with the filing by Pfleider of a civil suit (civil case 9187 of the
CFI of Negros Occidental) against Palanca for rescission of the contract
of lease on the ground of alleged default in the payment of rentals. In his
answer to the complaint, Palanca averred full satisfaction of his rental
liabilities, and therefore contended that the lease should continue. He also
charged that he had already been dispossessed of the hacienda by
Pfleider and the latter's goons at gunpoint and consequently had suffered
tremendous financial losses.
With this history in, perspective, we shall now consider the administrative
charges of gross misconduct in office brought by Pfleider against
Palanca. The indictment consists of four counts.
First count. In regard to a criminal case for estafa filed in December 1965
by one Gregorio Uy Matiao against Pfleider, the latter instructed Palanca
to offer in settlement the sum of P10,000, payable in installments, to Uy
Matiao for the dismissal of the case. After sometime, Palanca reported to
Pfleider that the offer has been rejected. Finally in October 1969, Palanca
supposedly informed Pfleider that he had succeeded in negotiating the
dismissal of the estafa case by leaving the sum of P5,000 with the
Dumaguete City Court where the action was then pending. Sometime in
December 1969, however, Pfleider was the object of a warrant of arrest
in connection with the same estafa case. It turned out, charged the
complainant Pfleider, that Palanca had not deposited the sum of P5,000
with the Dumaguete City Court, let alone communicated to Uy Matiao his
earlier offer of settlement.
We have closely examined all the pleadings filed by the parties in this
case and the annexes thereto, and it is our view that the first charge is
devoid of merit. In support of his claim of alleged assurance made by
Palanca that the estafa case had already been terminated, Pfleinder
relies on certain letters written to him by Palanca. Our own reading of
these letters, however, belies his claim. They contain nothing which might
reasonably induce the complainant to believe that the criminal action
against him had been finally settled by his attorney. On the contrary, the
letters merely report a continuing attempt on the part of Palanca to secure
a fair bargain for Pfleider. The letter-report of October 10, 1969, invoke
by the complainant, states in no uncertain terms that "I am bargaining this
(referring to the estafa case) even for P8,000.00 and I think they will
agree. I'll finalize this and pay Tingyan on Tuesday. I have already left in
Dumaguete P5,000.00 to show them the color of our money and I will
bring the balance when I go there Tuesday."
Nothing in the above letter indicates that Palanca had deposited the sum
of P5,000 with the Dumaguete City Court. What he did state is that he
had left that sum in that City to enable their adversaries to see "the color
of our money." In this connection, the veracity of the certification by
Felicisimo T. Hilay, Dumaguete branch manager of RCPI, that he (Hilay)
had been holding the sum of P5,000 during the early part of October in
trust for Pfleider and his lawyer, has not been assailed by Pfleider.
If Pfleider was the object of a warrant of arrest in December 1969, no
substantial blame can be laid at the door of the respondent Palanca
inasmuch as the latter's services were implicitly terminated by Pfleider
when the latter sued his lawyer in October of the same year. While the
object of the suit is the rescission of the contract of lease between the
parties, the conflict of interest which pits one against the other became
incompatible with that mutual confidence and trust essential to every
lawyer-client relation. Moreover, Pfleider fails to dispute Palanca's claim
that on October 26, 1968, Pfleider refused to acknowledge receipt of a
certain letter and several motions for withdrawal, including Palanca's
withdrawal as counsel in the estafa case.
Second count. Palanca had fraudulently charged the sum of P5,000
(which he supposedly had left with the City Court in Dumaguete) to his
rental account with Pfleider as part payment of the lease rentals of the
Hacienda Asia. Third count. In the same statement of account, Palanca
falsely represented having paid, for the account of Pfleider, one Samuel
Guintos the sum of P866.50 when the latter would swear that he had
received only the sum of P86.50.
These two charges are anchored upon the same "Statement of
Disbursements" submitted by Palanca to Pfleider. It is our view that this
statement is but a memorandum or report of the expenses which Palanca
considered as chargeable to the account of Pfleider. By its very tentative
nature, it is subject to the examination and subsequent approval or
disapproval of Pfleider, and any and every error which it contains may be
brought to the attention of Palanca for rectification or adjustment. Viewed
in relation to the contract of lease between Pfleinder and Palanca, this
"statement" is but one aspect of the prestation required of Palanca by the
contract. Whatever breach he might have committed in regard to this
prestation would be but a civil or contractual wrong which does not affect
his office as a member of the Bar.
Final count. It is charged that the list of creditors which Pfleider had
"confidentially" supplied Palanca for the purpose of carrying out the terms
of payment contained in the lease contract was disclosed by Palanca, in
violation of their lawyer-client relation, to parties whose interests are
adverse to those of Pfleider.
As Pfleider himself, however, in the execution of the terms of the
aforesaid lease contract between the parties, complainant furnished
respondent with a confidential list of his creditors." This should indicate
that Pfleider delivered the list of his creditors to Palanca not because of
the professional relation then existing between them, but on account of
the lease agreement. A violation therefore of the confidence that
accompanied the delivery of that list would partake more of a private and
civil wrong than of a breach of the fidelity owing from a lawyer to his client.
Moreover, Pfleider fails to controvert Palanca's claim that there is no such
thing as a "confidential" list of creditors and that the list of creditors
referred to by Pfleider is the same list which forms part of the pleadings
in civil case 9187 (the action for rescission of the lease contract) now,
pending between the complainant and the respondent lawyer, and
therefore is embraced within the category of public records open to the
perusal of persons properly interested therein.
In sum, we are satisfied, and we so hold, that nothing in written complaint
for disbarment against Palanca and in his reply to Palanca's answer
supports a prima facie finding of such misconduct in office by Palanca as
would warrant further proceedings in this case.
ACCORDINGLY, the complaint is hereby dismissed.
G.R. No. L-961 September 21, 1949
BLANDINA GAMBOA HILADO, petitioner,
vs.
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD
and SELIM JACOB ASSAD, respondents.
Delgado, Dizon and Flores for petitioner.
Vicente J. Francisco for respondents.
TUASON, J.:
It appears that on April 23, 1945, Blandina Gamboa Hilado brought an
action against Selim Jacob Assad to annul the sale of several houses and
lot executed during the Japanese occupation by Mrs. Hilado's now
deceased husband.
On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on
behalf of the defendant; and on June 15, Attorneys Delgado, Dizon,
Flores and Rodrigo registered their appearance as counsel for the
plaintiff. On October 5, these attorneys filed an amended complaint by
including Jacob Assad as party defendant.
On January 28, 1946, Attorney Francisco entered his appearance as
attorney of record for the defendant in substitution for Attorney Ohnick,
Velilla and Balonkita who had withdrawn from the case.
On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
Francisco urging him to discontinue representing the defendants on the
ground that their client had consulted with him about her case, on which
occasion, it was alleged, "she turned over the papers" to Attorney
Francisco, and the latter sent her a written opinion. Not receiving any
answer to this suggestion, Attorney Delgado, Dizon, Flores and Rodrigo
on June 3, 1946, filed a formal motion with the court, wherein the case
was and is pending, to disqualify Attorney Francisco.
Attorney Francisco's letter to plaintiff, mentioned above and identified as
Exhibit A, is in full as follows:
VICENTE J. FRANCISCO
Attorney-at-Law
1462 Estrada, Manila
July 13, 1945.
Mrs. Blandina Gamboa Hilado
Manila, Philippines
My dear Mrs. Hilado:
From the papers you submitted to me in connection with civil case No.
70075 of the Court of First Instance of Manila, entitled "Blandina Gamboa
Hilado vs. S. J. Assad," I find that the basic facts which brought about the
controversy between you and the defendant therein are as follows:
(a) That you were the equitable owner of the property described in
the complaint, as the same was purchased and/or built with funds
exclusively belonging to you, that is to say, the houses and lot pertained
to your paraphernal estate;
(b) That on May 3, 1943, the legal title to the property was with
your husband, Mr. Serafin P. Hilado; and
(c) That the property was sold by Mr. Hilado without your
knowledge on the aforesaid date of May 3, 1943.
Upon the foregoing facts, I am of the opinion that your action against Mr.
Assad will not ordinarily prosper. Mr. Assad had the right to presume that
your husband had the legal right to dispose of the property as the transfer
certificate of title was in his name. Moreover, the price of P110,000 in
Japanese military notes, as of May 3, 1943, does not quite strike me as
so grossly inadequate as to warrant the annulment of the sale. I believe,
lastly, that the transaction cannot be avoided merely because it was made
during the Japanese occupation, nor on the simple allegation that the real
purchaser was not a citizen of the Philippines. On his last point,
furthermore, I expect that you will have great difficulty in proving that the
real purchaser was other than Mr. Assad, considering that death has
already sealed your husband's lips and he cannot now testify as to the
circumstances of the sale.
For the foregoing reasons, I regret to advise you that I cannot appear in
the proceedings in your behalf. The records of the case you loaned to me
are herewith returned.
Yours very truly,
(Sgd.) VICENTE J. FRANCISCO
VJF/Rag.
In his answer to plaintiff's attorneys' complaint, Attorney Francisco alleged
that about May, 1945, a real estate broker came to his office in connection
with the legal separation of a woman who had been deserted by her
husband, and also told him (Francisco) that there was a pending suit
brought by Mrs. Hilado against a certain Syrian to annul the sale of a real
estate which the deceased Serafin Hilado had made to the Syrian during
the Japanese occupation; that this woman asked him if he was willing to
accept the case if the Syrian should give it to him; that he told the woman
that the sales of real property during the Japanese regime were valid even
though it was paid for in Japanese military notes; that this being his
opinion, he told his visitor he would have no objection to defending the
Syrian;
That one month afterwards, Mrs. Hilado came to see him about a suit she
had instituted against a certain Syrian to annul the conveyance of a real
estate which her husband had made; that according to her the case was
in the hands of Attorneys Delgado and Dizon, but she wanted to take it
away from them; that as he had known the plaintiff's deceased husband
he did not hesitate to tell her frankly that hers was a lost case for the same
reason he had told the broker; that Mrs. Hilado retorted that the basis of
her action was not that the money paid her husband was Japanese
military notes, but that the premises were her private and exclusive
property; that she requested him to read the complaint to be convinced
that this was the theory of her suit; that he then asked Mrs. Hilado if there
was a Torrens title to the property and she answered yes, in the name of
her husband; that he told Mrs. Hilado that if the property was registered
in her husband's favor, her case would not prosper either;
That some days afterward, upon arrival at his law office on Estrada street,
he was informed by Attorney Federico Agrava, his assistant, that Mrs.
Hilado had dropped in looking for him and that when he, Agrava, learned
that Mrs. Hilado's visit concerned legal matters he attended to her and
requested her to leave the "expediente" which she was carrying, and she
did; that he told Attorney Agrava that the firm should not handle Mrs.
Hilado's case and he should return the papers, calling Agrava's attention
to what he (Francisco) already had said to Mrs. Hilado;
That several days later, the stenographer in his law office, Teofilo
Ragodon, showed him a letter which had been dictated in English by Mr.
Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon told him
(Attorney Francisco) upon Attorney Agrava's request that Agrava thought
it more proper to explain to Mrs. Hilado the reasons why her case was
rejected; that he forthwith signed the letter without reading it and without
keeping it for a minute in his possession; that he never saw Mrs. Hilado
since their last meeting until she talked to him at the Manila Hotel about
a proposed extrajudicial settlement of the case;
That in January, 1946, Assad was in his office to request him to handle
his case stating that his American lawyer had gone to the States and left
the case in the hands of other attorneys; that he accepted the retainer
and on January 28, 1946, entered his appearance.
Attorney Francisco filed an affidavit of stenographer Ragodon in
corroboration of his answer.
The judge trying the case, Honorable Jose Gutierrez David, later
promoted to the Court of Appeals, dismissed the complaint. His Honor
believed that no information other than that already alleged in plaintiff's
complaint in the main cause was conveyed to Attorney Francisco, and
concluded that the intercourse between the plaintiff and the respondent
did not attain the point of creating the relation of attorney and client.
Stripped of disputed details and collateral matters, this much is
undoubted: That Attorney Francisco's law firm mailed to the plaintiff a
written opinion over his signature on the merits of her case; that this
opinion was reached on the basis of papers she had submitted at his
office; that Mrs. Hilado's purpose in submitting those papers was to
secure Attorney Francisco's professional services. Granting the facts to
be no more than these, we agree with petitioner's counsel that the relation
of attorney and client between Attorney Francisco and Mrs. Hilado
ensued. The following rules accord with the ethics of the legal profession
and meet with our approval:
In order to constitute the relation (of attorney and client) a professional
one and not merely one of principal and agent, the attorneys must be
employed either to give advice upon a legal point, to prosecute or defend
an action in court of justice, or to prepare and draft, in legal form such
papers as deeds, bills, contracts and the like. (Atkinson vs. Howlett, 11
Ky. Law Rep. (abstract), 364; cited in Vol. 88, A. L. R., p. 6.)
To constitute professional employment it is not essential that the client
should have employed the attorney professionally on any previous
occasion. . . . It is not necessary that any retainer should have been paid,
promised, or charged for; neither is it material that the attorney consulted
did not afterward undertake the case about which the consultation was
had. If a person, in respect to his business affairs or troubles of any kind,
consults with his attorney in his professional capacity with the view to
obtaining professional advice or assistance, and the attorney voluntarily
permits or acquiesces in such consultation, then the professional
employment must be regarded as established. . . . (5 Jones
Commentaries on Evidence, pp. 4118-4119.)
An attorney is employed-that is, he is engaged in his professional capacity
as a lawyer or counselor-when he is listening to his client's preliminary
statement of his case, or when he is giving advice thereon, just as truly
as when he is drawing his client's pleadings, or advocating his client's
cause in open court. (Denver Tramway Co. vs. Owens, 20 Colo., 107; 36
P., 848.)
Formality is not an essential element of the employment of an attorney.
The contract may be express or implied and it is sufficient that the advice
and assistance of the attorney is sought and received, in matters pertinent
to his profession. An acceptance of the relation is implied on the part of
the attorney from his acting in behalf of his client in pursuance of a request
by the latter. (7 C. J. S., 848-849; see Hirach Bros. and Co. vs. R. E.
Kennington Co., 88 A. L. R., 1.)
Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney
cannot, without the consent of his client, be examined as to any
communication made by the client to him, or his advice given thereon in
the course of professional employment;" and section 19 (e) of Rule 127
imposes upon an attorney the duty "to maintain inviolate the confidence,
and at every peril to himself, to preserve the secrets of his client." There
is no law or provision in the Rules of Court prohibiting attorneys in express
terms from acting on behalf of both parties to a controversy whose
interests are opposed to each other, but such prohibition is necessarily
implied in the injunctions above quoted. (In re De la Rosa, 27 Phil., 258.)
In fact the prohibition derives validity from sources higher than written
laws and rules. As has been aptly said in In re Merron, 22 N. M., 252,
L.R.A., 1917B, 378, "information so received is sacred to the employment
to which it pertains," and "to permit it to be used in the interest of another,
or, worse still, in the interest of the adverse party, is to strike at the
element of confidence which lies at the basis of, and affords the essential
security in, the relation of attorney and client."
That only copies of pleadings already filed in court were furnished to
Attorney Agrava and that, this being so, no secret communication was
transmitted to him by the plaintiff, would not vary the situation even if we
should discard Mrs. Hilado's statement that other papers, personal and
private in character, were turned in by her. Precedents are at hand to
support the doctrine that the mere relation of attorney and client ought to
preclude the attorney from accepting the opposite party's retainer in the
same litigation regardless of what information was received by him from
his first client.
The principle which forbids an attorney who has been engaged to
represent a client from thereafter appearing on behalf of the client's
opponent applies equally even though during the continuance of the
employment nothing of a confidential nature was revealed to the attorney
by the client. (Christian vs. Waialua Agricultural Co., 30 Hawaii, 553,
Footnote 7, C. J. S., 828.)
Where it appeared that an attorney, representing one party in litigation,
had formerly represented the adverse party with respect to the same
matter involved in the litigation, the court need not inquire as to how much
knowledge the attorney acquired from his former during that relationship,
before refusing to permit the attorney to represent the adverse party.
(Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.)
In order that a court may prevent an attorney from appearing against a
former client, it is unnecessary that the ascertain in detail the extent to
which the former client's affairs might have a bearing on the matters
involved in the subsequent litigation on the attorney's knowledge thereof.
(Boyd vs. Second Judicial Dist. Court, 274 P., 7; 51 Nev., 264.)
This rule has been so strictly that it has been held an attorney, on
terminating his employment, cannot thereafter act as counsel against his
client in the same general matter, even though, while acting for his former
client, he acquired no knowledge which could operate to his client's
disadvantage in the subsequent adverse employment. (Pierce vs. Palmer
[1910], 31 R. I., 432; 77 Atl., 201, Ann. Cas., 1912S, 181.)
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 un salutary 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 in
consequence be wary in going to an attorney, lest by an unfortunate turn
of the proceedings, if an investigation be held, the court should accept the
attorney's inaccurate version of the facts that came to him. "Now the
abstinence from seeking legal advice in a good cause is by hypothesis an
evil which is fatal to the administration of justice." (John H. Wigmore's
Evidence, 1923, Section 2285, 2290, 2291.)
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 Ill., 97; 47 L.R.A., 792.) It is founded on
principles of public policy, on good taste. As has been said in 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.
So without impugning respondent's good faith, we nevertheless can not Attorney stand on the same footing as sheriffs and other court officers in
sanction his taking up the cause of the adversary of the party who had respect of matters just mentioned.
sought and obtained legal advice from his firm; this, not necessarily to
prevent any injustice to the plaintiff but to keep above reproach the honor
and integrity of the courts and of the bar. Without condemning the
respondents conduct as dishonest, corrupt, or fraudulent, we do believe We conclude therefore that the motion for disqualification should be
that upon the admitted facts it is highly in expedient. It had the tendency allowed. It is so ordered, without costs.
to bring the profession, of which he is a distinguished member, "into public
disrepute and suspicion and undermine the integrity of justice."

A.C. No. 5439 January 22, 2007

There is in legal practice what called "retaining fee," the purpose of which
stems from the realization that the attorney is disabled from acting as
counsel for the other side after he has given professional advice to the
opposite party, even if he should decline to perform the contemplated CLARITA J. SAMALA, Complainant,
services on behalf of the latter. It is to prevent undue hardship on the
attorney resulting from the rigid observance of the rule that a separate vs.
and independent fee for consultation and advice was conceived and
authorized. "A retaining fee is a preliminary fee given to an attorney or ATTY. LUCIANO D. VALENCIA, Respondent.
counsel to insure and secure his future services, and induce him to act
for the client. It is intended to remunerate counsel for being deprived, by
being retained by one party, of the opportunity of rendering services to
RESOLUTION
the other and of receiving pay from him, and the payment of such fee, in
the absence of an express understanding to the contrary, is neither made
nor received in payment of the services contemplated; its payment has
no relation to the obligation of the client to pay his attorney for the services AUSTRIA-MARTINEZ, J.:
which he has retained him to perform." (7 C.J.S., 1019.)

Before us is a complaint1 dated May 2, 2001 filed by Clarita J. Samala

The defense that Attorney Agrava wrote the letter Exhibit A and that
Attorney Francisco did not take the trouble of reading it, would not take
the case out of the interdiction. If this letter was written under the
circumstances explained by Attorney Francisco and he was unaware of
its contents, the fact remains that his firm did give Mrs. Hilado a formal
professional advice from which, as heretofore demonstrated, emerged
the relation of attorney and client. This letter binds and estop him in the
same manner and to the same degree as if he personally had written it.
An information obtained from a client by a member or assistant of a law
firm is information imparted to the firm. (6 C. J., 628; 7 C. J. S., 986.) This
is not a mere fiction or an arbitrary rule; for such member or assistant, as
in our case, not only acts in the name and interest of the firm, but his
information, by the nature of his connection with the firm is available to
his associates or employers. The rule is all the more to be adhered to
where, as in the present instance, the opinion was actually signed by the
head of the firm and carries his initials intended to convey the impression
that it was dictated by him personally. No progress could be hoped for in
"the public policy that the client in consulting his legal adviser ought to be
free from apprehension of disclosure of his confidence," if the prohibition
were not extended to the attorney's partners, employers or assistants.
The fact that petitioner did not object until after four months had passed
from the date Attorney Francisco first appeared for the defendants does
not operate as a waiver of her right to ask for his disqualification. In one
case, objection to the appearance of an attorney was allowed even on
appeal as a ground for reversal of the judgment. In that case, in which
throughout the conduct of the cause in the court below the attorney had
been suffered so to act without objection, the court said: "We are all of
the one mind, that the right of the appellee to make his objection has not
lapsed by reason of failure to make it sooner; that professional confidence
once reposed can never be divested by expiration of professional
employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A. L. R. 1316.)
(complainant) against Atty. Luciano D. Valencia (respondent) for
Disbarment on the following grounds: (a) serving on two separate
occasions as counsel for contending parties; (b) knowingly misleading the
court by submitting false documentary evidence; (c) initiating numerous
cases in exchange for nonpayment of rental fees; and (d) having a
reputation of being immoral by siring illegitimate children.
After respondent filed his Comment, the Court, in its Resolution of
October 24, 2001, referred the case to the Integrated Bar of the
Philippines (IBP) for investigation, report and recommendation. 2
The investigation was conducted by Commissioner Demaree Jesus B.
Raval. After a series of hearings, the parties filed their respective
memoranda 3 and the case was deemed submitted for resolution.
Commissioner Wilfredo E.J.E. Reyes prepared the Report and
Recommendation 4 dated January 12, 2006. He found respondent guilty
of violating Canons 15 and 21 of the Code of Professional Responsibility
and recommended the penalty of suspension for six months.
In a minute Resolution 5 passed on May 26, 2006, the IBP Board of
Governors adopted and approved the report and recommendation of
Commissioner Reyes but increased the penalty of suspension from six
months to one year.
We adopt the report of the IBP Board of Governors except as to the issue
on immorality and as to the recommended penalty.

The complaint that petitioner's remedy is by appeal and not by certiorari

deserves scant attention. The courts have summary jurisdiction to protect
the rights of the parties and the public from any conduct of attorneys
prejudicial to the administration of the justice. The summary jurisdiction of
the courts over attorneys is not confined to requiring them to pay over
money collected by them but embraces authority to compel them to do
whatever specific acts may be incumbent upon them in their capacity of
attorneys to perform. The courts from the general principles of equity and
policy, will always look into the dealings between attorneys and clients
and guard the latter from any undue consequences resulting from a
situation in which they may stand unequal. The courts acts on the same
principles whether the undertaking is to appear, or, for that matter, not to
appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.) This
summary remedy against attorneys flows from the facts that they are
officers of the court where they practice, forming a part of the machinery
of the law for the administration of justice and as such subject to the
disciplinary authority of the courts and to its orders and directions with
respect to their relations to the court as well as to their clients. (Charest
vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.)
On serving as counsel for contending parties.
Records show that in Civil Case No. 95-105-MK, filed in the Regional Trial
Court (RTC), Branch 272, Marikina City, entitled "Leonora M. Aville v.
Editha Valdez" for nonpayment of rentals, herein respondent, while being
the counsel for defendant Valdez, also acted as counsel for the tenants
Lagmay, Valencia, Bustamante and Bayuga 6 by filing an Explanation
and Compliance before the RTC. 7
In Civil Case No. 98-6804 filed in the Metropolitan Trial Court (MTC),
Branch 75, Marikina City, entitled "Editha S. Valdez and Joseph J. Alba,
Jr. v. Salve Bustamante and her husband" for ejectment, respondent
represented Valdez against Bustamante - one of the tenants in the
property subject of the controversy. Defendants appealed to the RTC,
Branch 272, Marikina City docketed as SCA Case No. 99-341-MK. In his
decision dated May 2, 2000, 8 Presiding Judge Reuben P. dela Cruz 9
warned respondent to refrain from repeating the act of being counsel of
record of both parties in Civil Case No. 95-105-MK.
But in Civil Case No. 2000-657-MK, filed in the RTC, Branch 273,
Marikina City, entitled "Editha S. Valdez v. Joseph J. Alba, Jr. and
Register of Deeds of Marikina City," respondent, as counsel for Valdez,
filed a Complaint for Rescission of Contract with Damages and
Cancellation of Transfer Certificate of Title No. 275500 against Alba,
respondent's former client in Civil Case No. 98-6804 and SCA Case No.
99-341-MK.
Records further reveal that at the hearing of November 14, 2003,
respondent admitted that in Civil Case No. 95-105-MK, he was the lawyer
for Lagmay (one of the tenants) but not for Bustamante and Bayuga 10
albeit he filed the Explanation and Compliance for and in behalf of the
tenants. 11 Respondent also admitted that he represented Valdez in Civil
Case No. 98-6804 and SCA Case No. 99-341-MK against Bustamante
and her husband but denied being the counsel for Alba although the case
is entitled "Valdez and Alba v. Bustamante and her husband," because
Valdez told him to include Alba as the two were the owners of the property
12 and it was only Valdez who signed the complaint for ejectment. 13 But,
while claiming that respondent did not represent Alba, respondent,
however, avers that he already severed his representation for Alba when
the latter charged respondent with estafa. 14 Thus, the filing of Civil Case
No. 2000-657-MK against Alba.
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.
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. 15 He may not also undertake to discharge conflicting duties
any more than he may represent antagonistic interests. This stern rule is
founded on the principles of public policy and good taste. 16 It springs
from the relation of attorney and client which is one of trust and
confidence. 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. 17
One of the tests of inconsistency of interests is whether the acceptance
of a new relation would prevent the full discharge of the lawyer's duty of
undivided fidelity and loyalty to the client or invite suspicion of
unfaithfulness or double-dealing in the performance of that duty. 18
The stern rule against representation of conflicting interests is founded on
principles of public policy and good taste. It springs from the attorney's
duty to represent his client with undivided fidelity and to maintain inviolate
the client's confidence as well as from the injunction forbidding the
examination of an attorney as to any of the privileged communications of
his client. 19
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. 20 The bare attorney-client relationship with a client
precludes an attorney from accepting professional employment from the
client's adversary either in the same case 21 or in a different but related
action. 22 A lawyer is forbidden from representing a subsequent client
against a former client when the subject matter of the present controversy
is related, directly or indirectly, to the subject matter of the previous
litigation in which he appeared for the former client. 23
We held in Nombrado v. Hernandez 24 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 client's confidence once reposed cannot be divested
by the expiration of the professional employment. 25 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. 26
In this case, respondent's averment that his relationship with Alba has
long been severed by the act of the latter of not turning over the proceeds
collected in Civil Case No. 98-6804, in connivance with the complainant,
is unavailing. Termination of the attorney-client relationship precludes an
attorney from representing a new client whose interest is adverse to his
former client. Alba may not be his original client but the fact that he filed
a case entitled "Valdez and Alba v. Bustamante and her husband," is a
clear indication that respondent is protecting the interests of both Valdez
and Alba in the said case. Respondent cannot just claim that the lawyer-
client relationship between him and Alba has long been severed without
observing Section 26, Rule 138 of the Rules of Court wherein the written
consent of his client is required.
In Gonzales v. Cabucana, Jr., 27 citing the case of Quiambao v. Bamba,
28 we held that:
The proscription against representation of conflicting interests applies to
a situation where the opposing parties are present clients in the same
action or in an unrelated action. It is of no moment that the lawyer would
not be called upon to contend for one client that which the lawyer has to
oppose for the other client, or that there would be no occasion to use the
confidential information acquired from one to the disadvantage of the
other as the two actions are wholly unrelated. It is enough that the
opposing parties in one case, one of whom would lose the suit, are
present clients and the nature or conditions of the lawyer's respective
retainers with each of them would affect the performance of the duty of
undivided fidelity to both clients. 29
Respondent is bound to comply with Canon 21 of the Code of
Professional Responsibility which states that "a lawyer shall preserve the
confidences and secrets of his client even after the attorney-client relation
is terminated."
The reason for the prohibition is found in the relation of attorney and client,
which is one of trust and confidence of the highest degree. A lawyer
becomes familiar with all the facts connected with his client's case. He
learns from his client the weak points of the action as well as the strong
ones. Such knowledge must be considered sacred and guarded with
care. 30
From the foregoing, it is evident that respondent's representation of
Valdez and Alba against Bustamante and her husband, in one case, and
Valdez against Alba, in another case, is a clear case of conflict of interests
which merits a corresponding sanction from this Court. Respondent may
have withdrawn his representation in Civil Case No. 95-105-MK upon
being warned by the court, 31 but the same will not exculpate him from
the charge of representing conflicting interests in his representation in
Civil Case No. 2000-657-MK.
Respondent is reminded to be more cautious in accepting professional
employments, to refrain from all appearances and acts of impropriety
including circumstances indicating conflict of interests, and to behave at
all times with circumspection and dedication befitting a member of the
Bar, especially observing candor, fairness and loyalty in all transactions
with his clients. 32
On knowingly misleading the court by submitting false documentary
evidence.
Complainant alleges that in Civil Case No. 00-7137 filed before MTC,
Branch 75 for ejectment, respondent submitted TCT No. 273020 as
evidence of Valdez's ownership despite the fact that a new TCT No.
275500 was already issued in the name of Alba on February 2, 1995.
Records reveal that respondent filed Civil Case No. 00-7137 on
November 27, 2000 and presented TCT No. 273020 as evidence of
Valdez's ownership of the subject property. 33 During the hearing before
Commissioner Raval, respondent avers that when the Answer was filed
in the said case, that was the time that he came to know that the title was
already in the name of Alba; so that when the court dismissed the
complaint, he did not do anything anymore. 34 Respondent further avers
that Valdez did not tell him the truth and things were revealed to him only
when the case for rescission was filed in 2002.
Upon examination of the record, it was noted that Civil Case No. 2000-
657-MK for rescission of contract and cancellation of TCT No. 275500
was also filed on November 27, 2000, 35 before RTC, Branch 273,
Marikina City, thus belying the averment of respondent that he came to
know of Alba's title only in 2002 when the case for rescission was filed. It
was revealed during the hearing before Commissioner Raval that Civil
Case Nos. 00-7137 and 2000-657-MK were filed on the same date,
although in different courts and at different times.
Hence, respondent cannot feign ignorance of the fact that the title he
submitted was already cancelled in lieu of a new title issued in the name
of Alba in 1995 yet, as proof of the latter's ownership.
Respondent failed to comply with Canon 10 of the Code of Professional
Responsibility which provides that 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 mislead by any artifice. It matters not that the trial court was
not misled by respondent's submission of TCT No. 273020 in the name
of Valdez, as shown by its decision dated January 8, 2002 36 dismissing
the complaint for ejectment. What is decisive in this case is respondent's
intent in trying to mislead the court by presenting TCT No. 273020 despite
the fact that said title was already cancelled and a new one, TCT No.
275500, was already issued in the name of Alba.
In Young v. Batuegas,37 we held that 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." 38 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. 39 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
client's rights and is expected to display the utmost zeal in defense of his
client's cause, his conduct must never be at the expense of truth.
A lawyer is the servant of the law and belongs to a profession to which
society has entrusted the administration of law and the dispensation of
justice. 40 As such, he should make himself more an exemplar for others
to emulate. 41
>On initiating numerous cases in exchange for nonpayment of rental fees.
Complainant alleges that respondent filed the following cases: (a) Civil
Case No. 2000-657-MK at the RTC, Branch 272; (b) Civil Case No. 00-
7137 at the MTC, Branch 75; and (c) I.S. Nos. 00-4439 and 01-036162
both entitled "Valencia v. Samala" for estafa and grave coercion,
respectively, before the Marikina City Prosecutor. Complainant claims
that the two criminal cases were filed in retaliation for the cases she filed
against Lagmay docketed as I.S. No. 00-4306 for estafa and I.S. No. 00-
4318 against Alvin Valencia (son of respondent) for trespass to dwelling.
As culled from the records, Valdez entered into a retainer agreement with
respondent. As payment for his services, he was allowed to occupy the
property for free and utilize the same as his office pursuant to their
retainer agreement. 42
Respondent filed I.S. Nos. 00-4439 43 and 01-036162 44 both entitled
"Valencia v. Samala" for estafa and grave coercion, respectively, to
protect his client's rights against complainant who filed I.S. No. 00-4306
45 for estafa against Lagmay, and I.S. No. 00-4318 46 against Alvin
Valencia 47 for trespass to dwelling.
We find the charge to be without sufficient basis. The act of respondent
of filing the aforecited cases to protect the interest of his client, on one
hand, and his own interest, on the other, cannot be made the basis of an
administrative charge unless it can be clearly shown that the same was
being done to abuse judicial processes to commit injustice.
The filing of an administrative case against respondent for protecting the
interest of his client and his own right would be putting a burden on a
practicing lawyer who is obligated to defend and prosecute the right of his
client.
On having a reputation for being immoral by siring illegitimate children.
We find respondent liable for being immoral by siring illegitimate children.
During the hearing, respondent admitted that he sired three children by
Teresita Lagmay who are all over 20 years of age, 48 while his first wife
was still alive. He also admitted that he has eight children by his first wife,
the youngest of whom is over 20 years of age, and after his wife died in
1997, he married Lagmay in 1998. 49 Respondent further admitted that
Lagmay was staying in one of the apartments being claimed by
complainant. However, he does not consider his affair with Lagmay as a
relationship 50 and does not consider the latter as his second family. 51
He reasoned that he was not staying with Lagmay because he has two
houses, one in Muntinlupa and another in Marikina. 52
In this case, the admissions made by respondent are more than enough
to hold him liable on the charge of immorality. During the hearing,
respondent did not show any remorse. He even justified his transgression
by saying that he does not have any relationship with Lagmay and despite
the fact that he sired three children by the latter, he does not consider
them as his second family. It is noted that during the hearing, respondent
boasts in telling the commissioner that he has two houses - in Muntinlupa,
where his first wife lived, and in Marikina, where Lagmay lives. 53 It is of
no moment that respondent eventually married Lagmay after the death of
his first wife. The fact still remains that respondent did not live up to the
exacting standard of morality and decorum required of the legal
profession.
Under Canon 1, Rule 1.01 of the Code of Professional Responsibility, a
lawyer shall not engage in unlawful, dishonest, immoral or deceitful
conduct. It may be difficult to specify the degree of moral delinquency that
may qualify an act as immoral, yet, for purposes of disciplining a lawyer,
immoral conduct has been defined as that "conduct which is willful,
flagrant, or shameless, and which shows a moral indifference to the
opinion of respectable members of the community. 54 Thus, in several
cases, the Court did not hesitate to discipline a lawyer for keeping a
mistress in defiance of the mores and sense of morality of the community.
55 That respondent subsequently married Lagmay in 1998 after the death
of his wife and that this is his first infraction as regards immorality serve
to mitigate his liability.
ACCORDINGLY, the Court finds respondent Atty. Luciano D. Valencia
GUILTY of misconduct and violation of Canons 21, 10 and 1 of the Code
of Professional Responsibility. He is SUSPENDED from the practice of
law for three (3) years, effective immediately upon receipt of herein
Resolution.
Let copies of this Resolution be furnished all courts of the land, the
Integrated Bar of the Philippines as well as the Office of the Bar Confidant
for their information and guidance, and let it be entered in respondent's
personal records.
SO ORDERED.
REBECCA J. PALM, Complainant, v. ATTY. FELIPE ILEDAN, JR.,
Respondent.
DECISION
CARPIO, J.:
The Case
The case before the Court is a disbarment proceeding filed by Rebecca
J. Palm (complainant) against Atty. Felipe Iledan, Jr. (respondent) for
revealing information obtained in the course of an attorney-client
relationship and for representing an interest which conflicted with that of
his former client, Comtech Worldwide Solutions Philippines, Inc.
(Comtech).
The Antecedent Facts
Complainant is the President of Comtech, a corporation engaged in the
business of computer software development. From February 2003 to
November 2003, respondent served as Comtech's retained corporate
counsel for the amount of P6,000 per month as retainer fee. From
September to October 2003, complainant personally met with respondent
to review corporate matters, including potential amendments to the
corporate by-laws. In a meeting held on 1 October 2003, respondent
suggested that Comtech amend its corporate by-laws to allow
participation during board meetings, through teleconference, of members
of the Board of Directors who were outside the Philippines.
Prior to the completion of the amendments of the corporate by-laws,
complainant became uncomfortable with the close relationship between
respondent and Elda Soledad (Soledad), a former officer and director of
Comtech, who resigned and who was suspected of releasing
unauthorized disbursements of corporate funds. Thus, Comtech decided
to terminate its retainer agreement with respondent effective November
2003.
In a stockholders' meeting held on 10 January 2004, respondent attended
as proxy for Gary Harrison (Harrison). Steven C. Palm (Steven) and
Deanna L. Palm, members of the Board of Directors, were present
through teleconference. When the meeting was called to order,
respondent objected to the meeting for lack of quorum. Respondent
asserted that Steven and Deanna Palm could not participate in the
meeting because the corporate by-laws had not yet been amended to
allow teleconferencing.
On 24 March 2004, Comtech's new counsel sent a demand letter to
Soledad to return or account for the amount of P90,466.10 representing
her unauthorized disbursements when she was the Corporate Treasurer
of Comtech. On 22 April 2004, Comtech received Soledad's reply, signed
by respondent. In July 2004, due to Soledad's failure to comply with
Comtech's written demands, Comtech filed a complaint for Estafa against
Soledad before the Makati Prosecutor's Office. In the proceedings before
the City Prosecution Office of Makati, respondent appeared as Soledad's
counsel.
On 26 January 2005, complainant filed a Complaint1 for disbarment
against respondent before the Integrated Bar of the Philippines (IBP).
In his Answer,2 respondent alleged that in January 2002, Soledad
consulted him on process and procedure in acquiring property. In April
2002, Soledad again consulted him about the legal requirements of
putting up a domestic corporation. In February 2003, Soledad engaged
his services as consultant for Comtech. Respondent alleged that from
February to October 2003, neither Soledad nor Palm consulted him on
confidential or privileged matter concerning the operations of the
corporation. Respondent further alleged that he had no access to any
record of Comtech.
Respondent admitted that during the months of September and October
2003, complainant met with him regarding the procedure in amending the
corporate by-laws to allow board members outside the Philippines to
participate in board meetings.
Respondent further alleged that Harrison, then Comtech President,
appointed him as proxy during the 10 January 2004 meeting. Respondent
alleged that Harrison instructed him to observe the conduct of the
meeting. Respondent admitted that he objected to the participation of
Steven and Deanna Palm because the corporate by-laws had not yet
been properly amended to allow the participation of board members by
teleconferencing.
Respondent alleged that there was no conflict of interest when he
represented Soledad in the case for Estafa filed by Comtech. He alleged
that Soledad was already a client before he became a consultant for
Comtech. He alleged that the criminal case was not related to or
connected with the limited procedural queries he handled with Comtech.
The IBP's Report and Recommendation
In a Report and Recommendation dated 28 March 2006,3 the IBP
Commission on Bar Discipline (IBP-CBD) found respondent guilty of
violation of Canon 21 of the Code of Professional Responsibility and of
representing interest in conflict with that of Comtech as his former client.
The IBP-CBD ruled that there was no doubt that respondent was
Comtech's retained counsel from February 2003 to November 2003. The
IBP-CBD found that in the course of the meetings for the intended
amendments of Comtech's corporate by-laws, respondent obtained
knowledge about the intended amendment to allow members of the Board
of Directors who were outside the Philippines to participate in board
meetings through teleconferencing. The IBP-CBD noted that respondent
knew that the corporate by-laws have not yet been amended to allow the
teleconferencing. Hence, when respondent, as representative of
Harrison, objected to the participation of Steven and Deanna Palm
through teleconferencing on the ground that the corporate by-laws did not
allow the participation, he made use of a privileged information he
obtained while he was Comtech's retained counsel.
The IBP-CBD likewise found that in representing Soledad in a case filed
by Comtech, respondent represented an interest in conflict with that of a
former client. The IBP-CBD ruled that the fact that respondent
represented Soledad after the termination of his professional relationship
with Comtech was not an excuse.
The IBP-CBD recommended that respondent be suspended from the
practice of law for one year, thus:
WHEREFORE, premises considered, it is most respectfully
recommended that herein respondent be found guilty of the charges
preferred against him and be suspended from the practice of law for one
(1) year.4
In Resolution No. XVII-2006-5835 passed on 15 December 2006, the IBP
Board of Governors adopted and approved the recommendation of the
Investigating Commissioner with modification by suspending respondent
from the practice of law for two years.
Respondent filed a motion for reconsideration.6
In an undated Recommendation, the IBP Board of Governors First
Division found that respondent's motion for reconsideration did not raise
any new issue and was just a rehash of his previous arguments. However,
the IBP Board of Governors First Division recommended that respondent
be suspended from the practice of law for only one year.
In Resolution No. XVIII-2008-703 passed on 11 December 2008, the IBP
Board of Governors adopted and approved the recommendation of the
IBP Board of Governors First Division. The IBP Board of Governors
denied respondent's motion for reconsideration but reduced his
suspension from two years to one year.

The IBP Board of Governors forwarded the present case to this Court as
provided under Section 12(b), Rule 139-B7 of the Rules of Court.
The Ruling of this Court
We cannot sustain the findings and recommendation of the IBP.
Violation of the Confidentiality of Lawyer-Client Relationship
Canon 21 of the Code of Professional Responsibility provides:
Canon 21. A lawyer shall preserve the confidence and secrets of his client
even after the attorney-client relationship is terminated. (Emphasis
supplied)cralawlibrary
We agree with the IBP that in the course of complainant's consultations,
respondent obtained the information about the need to amend the
corporate by-laws to allow board members outside the Philippines to
participate in board meetings through teleconferencing. Respondent
himself admitted this in his Answer.
However, what transpired on 10 January 2004 was not a board meeting
but a stockholders' meeting. Respondent attended the meeting as proxy
for Harrison. The physical presence of a stockholder is not necessary in
a stockholders' meeting because a member may vote by proxy unless
otherwise provided in the articles of incorporation or by-laws.8 Hence,
there was no need for Steven and Deanna Palm to participate through
teleconferencing as they could just have sent their proxies to the meeting.
In addition, although the information about the necessity to amend the
corporate by-laws may have been given to respondent, it could not be
considered a confidential information. The amendment, repeal or
adoption of new by-laws may be effected by "the board of directors or
trustees, by a majority vote thereof, and the owners of at least a majority
of the outstanding capital stock, or at least a majority of members of a
non-stock corporation."9 It means the stockholders are aware of the
proposed amendments to the by-laws. While the power may be delegated
to the board of directors or trustees, there is nothing in the records to
show that a delegation was made in the present case. Further, whenever
any amendment or adoption of new by-laws is made, copies of the
amendments or the new by-laws are filed with the Securities and
Exchange Commission (SEC) and attached to the original articles of
incorporation and by-laws.10 The documents are public records and
could not be considered confidential.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
It is settled that the mere relation of attorney and client does not raise a
presumption of confidentiality.11 The client must intend the
communication to be confidential.12 Since the proposed amendments
must be approved by at least a majority of the stockholders, and copies
of the amended by-laws must be filed with the SEC, the information could
not have been intended to be confidential. Thus, the disclosure made by
respondent during the stockholders' meeting could not be considered a
violation of his client's secrets and confidence within the contemplation of
Canon 21 of the Code of Professional Responsibility.
Representing Interest in Conflict With the Interest of a Former Client
The IBP found respondent guilty of representing an interest in conflict with
that of a former client, in violation of Rule 15.03, Canon 15 of the Code of
Professional Responsibility which provides:
Rule 15.03 - A lawyer shall not represent conflicting interest except by
written consent of all concerned given after a full disclosure of the facts.
We do not agree with the IBP.
In Quiambao v. Bamba,13 the Court enumerated various tests to
determine conflict of interests. One test of inconsistency of interests is
whether the lawyer will be asked to use against his former client any
confidential information acquired through their connection or previous
employment.14 The Court has ruled that what a lawyer owes his former
client is to maintain inviolate the client's confidence or to refrain from
doing anything which will injuriously affect him in any matter in which he
previously represented him.15
We find no conflict of interest when respondent represented Soledad in a
case filed by Comtech. The case where respondent represents Soledad
is an Estafa case filed by Comtech against its former officer. There was
nothing in the records that would show that respondent used against
Comtech any confidential information acquired while he was still
Comtech's retained counsel. Further, respondent made the
representation after the termination of his retainer agreement with
Comtech. A lawyer's immutable duty to a former client does not cover
transactions that occurred beyond the lawyer's employment with the
client.16 The intent of the law is to impose upon the lawyer the duty to
protect the client's interests only on matters that he previously handled
for the former client and not for matters that arose after the lawyer-client
relationship has terminated.17
WHEREFORE, we DISMISS the complaint against Atty. Felipe Iledan, Jr.
for lack of merit.
SO ORDERED.
Orcino v Gaspar AC 3773
03
Thursday
Apr 2014
Posted by reylangarcia in Uncategorized ≈ Leave a comment
TagsAC 3773, Legal Ethics, Orcino v Gaspar, Orcino v Gaspar AC 3773,
Orcino v Gaspar case digest
TOPIC: Legal Ethics, termination of attorney-client relationship
FACTS:
Orcino engaged the services of Atty. Gaspar to prosecute a criminal case
she intended to file against several suspects in the slaying of her
husband. Orcino bound herself to pay respondent legal fees
ofP20,000.00 — P10,000.00 to be paid upon signing of the contract and
the balance to be paid on or before the conclusion of the case. She was
also to pay P500.00 per appearance of respondent before the court and
fiscal. This agreement was embodied in a contract executed on February
22, 1991. Orcino complied with the contract and Atty. Gaspar entered into
his duties. Atty. Gaspar, however failed to attend the hearing scheduled
in August 1991. It was at this hearing that the court, over complainant’s
objections, granted bail to all the accused. Orcino immediately went to
respondent’s residence and confronted him with his absence. Gaspar
explained that he did not receive formal notice of the hearing. She asked
for the records of the case saying that she could refer them to another
lawyer. Gaspar then gave her the records. Orcino never returned the
records nor did she see Gaspar. On September 18, 1991, Atty. Gaspar
filed before the trial court a Motion to Withdraw as Counsel without the
consent of Orcino. The court issued an order directing Gaspar to secure
complainant’s consent to the motion and his appearance as private
prosecutor shall continue until he has secured this consent. Oricno
refused to sign her conformity. Atty. Gaspar did not appear at the hearings
nor did he contact Orcino, thus she was compelled to engage the services
of another lawyer.
ISSUE:
Whether or not Atty. Gaspar had the right to terminate the attorney-client
relation
HELD:
The client has the absolute right to terminate the attorney-client relation
at any time with or without cause. The right of an attorney to withdraw or
terminate the relation other than for sufficient cause is, however,
considerably restricted. An attorney who undertakes to conduct an action
impliedly stipulates to carry it to its conclusion. He cannot abandon it
without reasonable cause. A lawyer’s right to withdraw from a case before
its final adjudication arises only from the client’s written consent or from a
good cause. Section 26 of Rule 138 of the Revised Rules of Court
provides: “Sec. 26. Change of attorneys — An attorney may retire at any
time 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.” In the present case, Orcina did not give her written consent to
Gaspar’s withdrawal. He did not even file an application with the court for
it to determine whether he should be allowed to withdraw.
But granting that respondent’s motion without complainant’s consent was
an application for withdrawal with the court, the Supreme Court found this
reason insufficient to justify the withdrawal. Atty. Gaspar’s withdrawal
was made on the ground that “there no longer exists the xxx confidence”
between them and that there had been “serious differences between them
relating to the manner of private prosecution. Rule 22.01 of Canon 22 of
the Code of Professional Responsibility provides:
“CANON 22 — A LAWYER SHALL WITHDRAW HIS SERVICES ONLY
FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE
CIRCUMSTANCES. Rule 22.01– A lawyer may withdraw his services in
any of the following cases: a) When the client pursues an illegal or
immoral course of conduct in connection with the matter he is handling;
b) When the client insists that the lawyer pursue conduct violative of
these canons and rules; c) When his inability to work with co-counsel will
not promote the best interest of the client; d) When the mental or physical
condition of the lawyer renders it difficult for him to carry out the
employment effectively; e) When the client deliberately fails to pay the
fees for the services or fails to comply with the retainer agreement; f)
When the lawyer is elected or appointed to public office; and g) Other
similar cases.” The instant case does not fall under any of the grounds
mentioned. Neither can this be considered similar or analogous to any.
Orcina was upset by Atty. Gaspar’s absence at the hearing where bail
was granted to the suspected killers of her husband and it was thus
natural for her to react by confrontation. Her words were uttered in a burst
of passion and cannot be construed to have intended to terminate Atty.
Gaspar’s services. She made this clear when she refused to sign his
“Motion to Withdraw as Counsel.” Even if Atty. Gaspar was justified in
terminating his services, he, however, cannot just do so and leave
complainant in the cold unprotected. The lawyer has no right to presume
that his petition for withdrawal will be granted by the court. Until his
withdrawal shall have been approved, the lawyer remains counsel of
record.
Return the amount owed to Orcina. Admonished to exercise prudence.
G.R. No. L-24163 April 28, 1969
REGINO B. ARO, petitioner,
vs.
THE HON. ARSENIO NAÑAWA, Presiding Judge of Branch IV, Court of
First Instance of Laguna, LUIS MAGTIBAY, PABLO MAGTIBAY,
AURELLO MARTINEZ, GREGORIO LONTOK, MARIA MENDOZA,
MAXIMO PORTO and ROSARlO ANDAYA, respondents.
Regino B. Aro in his own behalf as petitioner.
Enrique C. Villanueva for respondents.
BARREDO, J.:
Original petition: (1) for certiorari to annul the order of the Court of First
Instance of Laguna, dated November 21, 1964, dismissing its Civil Case
No. SC-525 "without prejudice to the right of Atty. Regino B. Aro
(petitioner herein) to file a separate action against both the plaintiffs and
defendants (private respondents herein) with respect to his alleged
attorney's fees", as well as its order dated January 9, 1965, denying
petitioner's motion for reconsideration thereof for lack of merit and (2) for
mandamus to compel respondent Judge to take cognizance of petitioner's
opposition and countermotion or petition dated November 3, 1964 and to
resolve the same on the merits.
There appears to be no dispute as to the following facts alleged in the
petition:
2. That the services of herein petitioner, as practising attorney, was
engaged by respondents Luis Magtibay and Pablo Magtibay for the
prosecution of their claim, as heirs, in the estate of their deceased uncle
Lucio Magtibay, consisting of properties which were in the possession of
the respondents Aurelia Martinez,1spouses Gregorio Lontok and Maria
Mendoza and spouses Maximo Porto and Rosario Andaya.
3. That being without means to prosecute their claim against the persons
concerned, respondents Luis Magtibay and Pablo Magtibay agreed with
herein petitioner to avail of his services and entrust the prosecution of
their claim on a contingent basis as shown in the agreement, copy of
which is hereto attached as Annex 'A' and is made an integral part
hereof.2
4. That by virtue of said agreement, herein petitioner took the necessary
steps to gather the needed papers and documents for the filing of a
petition to litigate as pauper and a complaint in the Court of First Instance
of Laguna, in which respondents Luis Magtibay and Pablo Magtibay were
the plaintiffs and the other respondents, excepting the respondent Judge,
were the defendants, ....
5. That said petition to litigate as pauper filed by herein petitioner for
respondents Luis Magtibay and Pablo Magtibay was granted by the
respondent Judge as per the order dated September 10, 1964, .....
6. That to plaintiffs' complaint in Civil Case No. SC-525, the defendants
in said case interposed a motion to dismiss dated September 29,
1964....3
7. That to the said motion to dismiss herein petitioner, as attorney for the
plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) filed an
opposition dated October 5, 1964.....4
8. That after the hearing of the motion to dismiss filed by the defendants
and the opposition thereto by the plaintiffs, which finally took place on
October 24, 1964, the respondent Judge issued its resolution or order
dated October 24, 1964, denying the motion to dismiss, ....5
9. That on the very day of and after the hearing of the motion to dismiss,
or on October 24, 1964, before receipt of a copy of the said order (Annex
'G'), there was a conversation which took place between herein petitioner
and the attorney of the defendants, Atty. Rustico de los Reyes, Jr., in the
civil case and one who was then acting as a sort of spokesman for the
defendants (Ex-Mayor Cordova of Sta. Maria, Laguna) for the amicable
settlement of the case between the plaintiffs and the defendants to the
effect that a certain property of the spouses Lucio Magtibay (deceased)
and respondent Aurelia Martinez, worth P3,000.00, would be given to the
plaintiffs in full settlement of their claim, as share in the properties left by
their deceased uncle Lucio Magtibay, it having been agreed by herein
petitioner and Atty. de los Reyes and the spokesman of the defendants
that for the purpose of said amicable settlement, the plaintiffs or one of
them and herein petitioner would go to Sta. Maria, Laguna, on October
23, 1964.
10. That having given notice to the plaintiffs (now respondents Luis
Magtibay and Pablo Magtibay) at their given address in Calauag, Quezon
to come to Candelaria for the purpose of going to Sta. Maria, Laguna on
October 23, 1964, petitioner had waited for said plaintiffs to go to his office
on or before said date for the engagement mentioned, but due to their
(plaintiffs') failure to come to Candelaria, petitioner had to send a telegram
to Ex-Mayor Cordova notifying him of his (petitioner's) and plaintiffs' not
being able to go to Sta. Maria because of the failure of any of the plaintiffs
to come to Candelria, ....
11. That it was only on October 28, 1964, when herein petitioner received
a copy of the order dated October 24, 1964 (Annex "G") and to his
surprise he also received on the said day a second motion to dismiss
dated October 26, 1964; together with Annex "A" of said motion, which is
entitled KASULATAN NG PAGHAHATIAN NA LABAS SA HUKUMAN AT
PAGPAPALABI, dated October 23, 1964 at Sta. Cruz, Laguna and signed
by the plaintiffs and defendant Aurelia Martinez (the three being now
respondents in this case), it having been made to appear in said Annex
"A" of the second motion to dismiss, among others, that the plaintiffs and
defendant Aurelia Martinez had made an extrajudicial partition of the
properties of the deceased Lucio Magtibay and the said Aurelia Martinez
adjudicating to the plaintiffs one-fourth (¼) share in the properties of the
spouses and three-fourth (3/4) share of the defendant Aurelia Martinez,
but making it appear also that said plaintiffs waived their share in favor of
Aurelia Martinez, ..., thru which fraudulent waiver, herein petitioner was
deprived of his contingent fees, agreed upon, as evidenced by Annex "A"
of this petition.6
xxx xxx xxx
14. That petitioner filed by registered mail, on November 4, 1964, his
"OPPOSITION TO THE SECOND MOTION TO DISMISS AND
COUNTER-MOTION OR PETITION TO SET ASIDE DEED OF
EXTRAJUDICIAL PARTITION AND WAIVER DATED OCTOBER 23,
1964 AND TO RECORD ATTORNEY'S LIEN", dated November 3, 1964,
wherein he (petitioner) prayed, among others, invoking the provisions of
Section 5(d) and Section 6, Rule 135 of the Revised Rules of Court, for
the protection of the rights of herein petitioner as an officer of the Court,
to wit:
(a) to deny the second motion to dismiss and get aside and annul the
deed of extrajudicial partition and waiver dated October 23, 1964;
(b) to fix the compensation of herein counsel in the proportion of one-third
(1/3) of the shares of plaintiffs, if in land, or in the amount of P1,000.00, if
in cash, and to record the same and expenses advanced by him for the
plaintiffs in the sum of P22.15 as lien in favor of herein claimant-petitioner
over the properties in litigation, particularly over the one-fourth (1/4) share
of the plaintiffs in all the properties of the spouses;
xxx xxx xxx
(d) as an alternative to prayer (a) above, to grant the second motion to
dismiss, subjecting, however, the properties in litigation and subject-
matters of the extrajudicial partition and waiver to the lien for attorney's
fees and expenses in favor of herein claimant-petitioner, after fixing said
attorney's fees as prayed for in (b) above.
xxx xxx xxx
15. That on the day f finally set for the hearing of the second motion to
dismiss, as well as of the counter-motion or petition, or on November 21,
1964, because of the inquiries or interpellation made by respondent
Judge to herein petitioner as to whether there is a Philippine precedent
which allows or directs the protection by the Court of the rights of any of
its officers (lawyer) against any collusion perpetrated by the parties in a
case to defraud or cheat an attorney of his compensation agreed upon by
him and his clients, and his answer that insofar as his researches were
concerned, he could not find any, although there are a number of cases
to that effect in American jurisdiction, the respondent Judge had opined
in open court that the claim for and the fixing of the attorney's fees should
better be done in a separate action and, in spite of petitioner's
memorandum citing American authorities to the effect that,
Though a party may without the consent of his attorney money make a
bona fide adjustment with the adverse party and dismiss an action or suit
before a judgment or a decree has been rendered thereon, if it appears,
however, that such settlement was collosive and consummated pursuant
to the intent of both parties to defraud the attorney, the court in which the
action was pending may interfere to protect him as one of its officers, by
setting aside the order of dismissal, .... (Jackson vs. Stearns, 48 Ore. 25,
84 Pac. 798).
... the respondent Judge, instead of denying the second motion to dismiss
and fixing his attorney's fees in the said case and recording the same as
lien, ... dismissed the case and refused to give herein petitioner any kind
of immediate protection to safeguard his rights ... in said Civil Case No.
SC-525 of the Court of First Instance of Laguna.
16. That by the express terms of the agreement, Annex "A" of this petition,
plaintiffs in Civil Case No. SC-525 had expressly ceded to herein
petitioner one-half (½) [later verbally reduced to one-third (1/3) or
P1,000.00] or whatever share they would get from the estate of their
deceased uncle Lucio Magtibay, and the defendants in said Civil Case
had full knowledge of said right of herein petitioner in the properties in
controversy from and after the time they were served with summons and
copies of the complaint in said civil case — because of the allegations
contained in par. 10 thereof. 7 [Emphasis by the Court]
18. That on December 5, 1964, herein petitioner filed his motion for
reconsideration dated December 4, 1664 asking for the reconsideration
of the order dated November 21, 1964, ....
19. That the motion for reconsideration was denied by the court, thru the
respondent Judge, as per the order dated January 9, 1965, ....
Upon these facts, petitioner tries to make out before this Court a case of
certiorari for grave abuse of discretion on the part of respondent Judge in
dismissing the case on the basis of the compromise agreement of the
parties, entered into at the back of petitioner notwithstanding the
reservation made in his favor to file an action against both parties "with
respect to his alleged attorney's fees", as well as a case of mandamus "to
order and command the said respondent judge" to take cognizance of
and resolve his opposition and counter-motion for the court to fix the
compensation he should be paid. Unable to find any local precedent to
support his position, he cites American authorities thus:
In the American jurisdiction, it would seem that, even without the specific
provisions of the rules of court cited above, courts had always intervened,
in the mere exercise of their inherent powers, to protect attorneys against
collusive agreements or fraudulent settlements entered into by the parties
in a case to cheat attorneys out of their costs or of their fees. Thus, it was
held or had been stated in:
(a) Coughlin vs. N.Y. Cont. & H.R.R. Co., 71 N.Y. 443, 27 Am. Rep. 75.
... But since the time of Lord Mansfield, it has been the practice of courts
to intervene to protect attorneys against settlement made to cheat them
out of their costs. If an attorney has commenced an action, and his client
settles it with the opposite party before judgment, collusively, to deprive
him of his costs, the court will permit the attorney to go on with the suit for
the purpose of collecting his costs. Swain v. Senate, 5 Bos. & Pul. 99;
Cole v. Bennett, 6 Price, 15; Moore v. Cook, 13 Id. 473; Talcott v.
Bronson, 4 Paige, 501; Rusquin v. The Knickerbocker Stage Col., 12 Abb.
Pr 324; Ward v. Syme, 9 How. Pr. 16; McDonald v. Napier, 14 Ga. 89.
There are many cases where this had been allowed to be done. It is
impossible to ascertain precisely when this practice commenced, nor how
originated, nor upon what principle it was based. It was not upon the
principle of a lien, because an attorney has no lien upon the cause of as
it upon the action before judgment for his costs; nor was it upon principle
that his services had produced the money paid his client upon the
settlement, because that could not be known, and in fact no money may
have been paid upon the settlement. So far as I can perceive, it was
based upon no principle. It was a mere arbitrary exercise of power by the
courts; not arbitrary in the sense that it was unjust or improper, but in the
sense that it was not based upon any right or principle recognized in other
cases. The parties being in court, and a suit commenced and pending,
for the purpose of protecting attorneys who were their officers and subject
to their control, the courts invented this practice and assumed this
extraordinary power to defeat attempts to cheat the attorneys out of their
costs. The attorney's fees were fixed in definite sums, easily determined
by taxation and this power was exercised to secure them their fees. (pp.
76-77)
(b) Randall v. Van Wagenan et al., 22 N.E. 361, 362.lawphi1.nêt
... But where such settlement is made collusively for the purpose of
defrauding the attorney out of his costs, courts have been accustomed to
intervene, and to protect the attorney by permitting him to proceed with
the suit, and, if he is able to establish a right to recover on the cause of
action as it originally stood, to permit such recovery to the extent of his
costs in the action. Coughlin v. Railroad Co., 71 N. Y. 443, and pages
cited. And the court will set aside an order of discontinuance if it stands
in the way. This is an adequate remedy, and we think the exclusive
remedy where the suit has been fraudulently settled by the parties before
judgment to cheat the attorney out of his costs. We have found no case
of an equitable action to enforce the inchoate right of an attorney, under
such circumstances, and no such precedent ought, we think, to be
established.
(c) Jackson v. Stearns, et al., 43 Ore 25, 84 Pac. 798.
... Though a party may, without the consent of his attorney, make a bona
fide adjustment with the adverse party, and dismiss an action or suit
before a judgment or a decree has been rendered therein, if it appears,
however, that such settlement was collusive and consummated pursuant
to the intent of both parties to defraud the attorney, the court in which the
action or suit was pending may interfere to protect him, as one of its
officers, by setting aside the order of dismissal and permitting him to
proceed in the cause in the name of his client to final determination to
ascertain what sum of money, or interest in the subject-matter, if any, is
due him for his services when fully performed. Jones v. Morgage 99 Am.
Dec. 458; Randall v. Van Wagenen (N.Y.) 22 N.E. 361, 12 Am. St. Rep.
828. (p. 800)
Before a court will set aside an order dismissing a suit or an action, made
upon stipulation of the parties, without the consent of plaintiff's attorney,
and allow the latter to proceed with the cause in the name of his client, to
determine the amount of fees due him, it must appear that the defendant
participated in the fraudulent intent to deprive the attorney of his
compensation. Courtney v. McGavock, 25 Wis. 619. When no adequate
consideration is given by the defendant for the settlement and discharge
of an action or a suit, the insufficiency of the inducement to the contract
affords evidence of his bad faith. Young v. Dearborn, 27 N.E. 324. It will
be remembered that the complaint alleges that the value of the real
property in question is $3,000.00, and that Stearns executed to Wilson a
deed to the premises for a nominal consideration. This is a sufficient
averment of the defendant's intent to deprive the plaintiff of his
compensation thereby imputing to Wilson bad faith. (p. 800)
(d) Desaman v. Butler Bros., 188 Minn. 198, 136 N.W. 747.
We have recently held that a client has always the right to settle his cause
of action and stop litigation at any stage of the proceeding, subject,
however, to the right of the attorney to receive compensation for services
rendered. Burho v. Camichael 135 N.W. 386. It is therefore contended by
defendant that a litigant retains the unrestricted right to determine for what
amount the cause of action may be settled, and, having so done, the lien
of his attorney for services is measured by the amount determined on and
actually settled for. Conceding, without deciding, that this may be true of
any time prior to the rendition of a verdict in the action which the attorney
has been employed to bring, we are of opinion that after verdict fixing the
amount of a plaintiff's cause of action a secret and collusive compromise
between parties litigant does not affect the amount of the attorney's lien...;
but therein is also clearly indicated by Mr. Justice Brown that, if there be
fraud and collusion to deprive the attorney of his lien, the settlement will
not be permitted to accomplish such result. (p. 748)
To be sure, these authorities are quite persuasive, but contrary to
petitioner's impression, there is already a precedent setting decision of
this Court handed down way back in 1922 in a case very similar to his,
that in Rustia vs. the Judge of the Court of First Instance of Batangas, et
al., 44 Phil. 62. As it is very brief, it can be quoted in full:
This is a petition for a writ of certiorari, the petitioner alleging that the
respondent Judge of the Court of First Instance exceeded his jurisdiction
in dismissing a pending action at the instance of the parties but without
the intervention of the attorney for the plaintiff in the case, the herein
petitioner.
It appears from the record that on July 31, 1921, the respondent Justo
Porcuna, for himself and on behalf of his wife, the respondent Rosa H. de
Porcuna, by means of a written contract, retained the petitioner to
represent them as their lawyer in case No. 1435 then pending in the Court
of First Instance of Batangas and in which Rosa H. de Porcuna was the
plaintiff and one Eulalia Magsombol was the defendant. The contract fixed
the petitioner's fee at P200 in advance with an additional contingent fee
of P1,300. It was also provided in the contract that Justo Porcuna should
not compromise the claim against the defendant in the case without
express consent of his lawyer, the herein petitioner.
After trial, the petitioner then being plaintiff's attorney of record, the Court
of First Instance, under date of December 24, 1921, rendered judgment
in favor of Justo Porcuna and Rosa H. de Porcuna ordering the defendant
Eulalia Magsombol to return to them 602 pieces of cloth or in default
thereof to pay to them the sum of P3,250. On January 14, 1922, Eulalia
Magsombol filed her exception to the judgment and on the following day
presented a motion for a new trial, which was denied on the 21st of the
same month. She thereupon gave notice of appeal and presented a bill
of exceptions which was approved on February 20, 1922. On March 2,
1922, and before the transmission of the bill of exceptions to this court,
the plaintiffs presented the following motion in the Court of First Instance:
The plaintiffs, without any further intervention of their attorney, now
appear before this Honorable Court and respectfully aver:
That, through Mr. Miguel Olgado they already settled this case with the
herein defendant.
That the basis of the compromise is that we, the plaintiffs, finally agree
that we should be paid the amount of eight hundred pesos (P800) in two
installments; P300 to be paid on this same date, and the remaining five
hundred pesos (P500) at the end of March, 1922.
That we, the plaintiffs, recognize not to have any further rights in this case
than to the aforesaid amount of eight hundred pesos (P800) and that this
is the total amount the defendant Eulalia Magsombol should pay us, and
we have no right whatever to any other amount than the aforementioned.
That we have not sold to any other person our rights as plaintiffs in this
case.
Wherefore, the plaintiffs respectfully request the dismissal of this case,
without any pronouncement as to costs, and that the appeal interposed
by the defendant be further dismissed.
Batangas, Batangas, P.I., March 2, 1922.

(Sgd) ROSA H. PORCUNA
Plaintiff
JUSTO M. PORCUNA
Plaintiff
The defendant, through her attorney, Jose Mayo Librea, having signified
her assent to the motion, the Court of First Instance on the same day,
March 2, dismissed the action without notice to counsel for the plaintiffs.
The petitioner alleges that he did not discover the dismissal of the action
until April 4, 1922. After an unsuccessful effort to obtain a reconsideration
of the order of dismissal from the trial court, he filed the present petition
for a writ of certiorari. By resolution dated October 24, 1922, this court
denied the petition and upon motion of the petitioner we shall now briefly
state our reasons for such denial.
The burden of the petitioner's contention is (1) that he, as attorney of
record, was entitled to notice of his client's motion to dismiss the case,
and (2) that after the approval of the bill of exceptions the lower court had
lost jurisdiction of the case and had no power to dismiss it. A moment's
reflection should make it clear that neither of these propositions is
tenable.
Both at the common law and under section 32 of the Code of Civil
Procedure a client may dismiss his lawyer at any time or at any stage of
the proceedings and there is nothing to prevent a litigant from appearing
before the court to conduct his own litigation. (Sec. 34, Code of Civil
Procedure.) The client has also an undoubted right to compromise a suit
without the intervention of his lawyer.
Though there is a valid agreement for the payment to the attorney of a
large proportion of the sum recovered in case of success this does not
give the attorney such an interest in the cause of action that it prevents
plaintiff from compromising the suit. (4 Cyc. 990, and authorities cited in
Note 6; see also Louque vs. Dejan 129 La. 519; Price vs. Western Loan
& Savings Co., 19 Am. Cas. 589 and Note.)
In the present instance the clients did nothing that they did not have a
perfect right to do. By appearing personally and presenting a motion they
impliedly dismissed their lawyer. The petitioner's contingent interests in
the judgment rendered did not appear of record. Neither as a party in
interest nor as and attorney was he therefore entitled to notice of the
motion.
As to the second proposition that the court below could not dismiss the
case after the bill of exceptions had been approved, it is very true that
upon such approval the lower court loses its jurisdiction over all
contentious matters connected with the issues in the case. But there is
nothing to prevent all of the parties by agreement to withdraw the bill of
exceptions with the consent of said court and resubmit the case to the
jurisdiction of the court. That was all that was done in this case. A valid
agreement between the parties to a case is the law of the case in
everything covered by the agreement. (Civil Code, art. 1091; Compania
General de Tabacos vs. Obed, 13 Phil. 391.) The petitioner might have
protected his interests by entering an attorney's lien under section 37 of
the Code of Civil Procedure.
The petition for a writ of certiorari was therefore properly denied. So
ordered.
The difference We perceive, however, between petitioner's case, on the
one hand, and that of Atty. Rustia, in the above decision, on the other, is
that in the latter's case, neither the court nor the party adverse to his
clients were aware of the exact agreement as to his fees, whereas in the
case of petitioner, both the court and the other parties knew the terms of
the contract for professional services between petitioner and his clients,
the Magtibay brothers, because the written contract therefor, Annex A,
was made part of the complaint, and none seriously disputes its
authenticity. Besides, the court had already dismissed the case when
Atty. Rustia raised the question of his fees before the court; in petitioner's
instance, he opposed the motion to dismiss and pleaded with the court to
protect his rights as officer of the court before the first order in question
was issued by respondent judge. Were it not for these differences, We
would have inclined towards denying the herein petition in line with the
Rustia ruling that, in any event, certiorari is not the appropriate remedy,
the American authorities cited by petitioner not withstanding.
Withal, there is another Philippine case which Us to sustain petitioner. In
the case of Recto vs. Harden, 100 Phil. 440, Atty. Claro M. Recto found
himself practically in the same situation as petitioner herein. After Atty.
Recto had rendered services to Mrs. Esperanza P. de Harden in a
protracted suit against her husband for the purposes of securing an
increase of her and her daughter's monthly support, (the spouses were
separated), to P10,000.00 and of protecting and preserving her rights in
the properties of the conjugal partnership, which suit lasted from 1941 to
1949, and after the Court of First Instance of Manila had rendered a
judgment favorable to Mrs. Harden acknowledging, inter alia, her rights
to the assets of the conjugal partnership, which turned out to be
P4,000,000, and awarding her a monthly support of P2,500, practically as
prayed for in Atty. Recto's pleadings, while the case was already pending
on appeal before this Court, Mrs. Harden and her husband, Mr. Fred
Harden, entered into a compromise of their case, without the knowledge
of Atty. Recto, whereby said spouses "purportedly agreed to settle their
differences in consideration of the sum of P5,000 paid by Mr. Harden to
Mrs. Harden, and a monthly pension of $500 to be paid by him to her; (2)
Mr. Harden created a trust fund of $20,000 from which said monthly
pension of $500 would be taken; and (3) Mr. and Mrs. Harden had
mutually released and forever discharged each other from all actions,
debts, duties, accounts, demands and claims to the conjugal partnership,
in consideration of the sum of $1." (p. 435)
Whereupon Atty. Recto filed a motion with this Court praying that:
a) Pending the resolution of this motion, the receiver appointed herein be
authorized to continue holding the properties above mentioned in his
custody in order not to defeat the undersigned's inchoate lien on them;
b) A day set aside to receive the evidence of the undersigned and those
of the plaintiff and the defendant Fred M. Harden, in order to determine
the amount of fees due to the undersigned, by the appointment of a
referee or commissioner for the reception of such evidence;
c) After due hearing, the undersigned be declared entitled to the sum of
P400,000 as his fees for services rendered in behalf of the plaintiff in this
case, under paragraph 3 of the contract, Annex "A" and to that end a
charging lien therefore be established upon the properties above-
mentioned;
d) And the receiver be ordered to pay to the undersigned the full amount
of the fees to which the latter is found to be entitled.
This motion was objected to by Mr. Hardens counsel, who in turn, moved
for the dismissal of the case, to which Atty. Recto objected. Under these
circumstances, this Court acceded to Atty. Recto's prayer that the case
be not dismissed, that the receivership be maintained except as to certain
properties not material to mention here, and that the case be remanded
to the lower court so that his fees may be determined and ordered paid.
Upon the remand of the case to the lower court, a commissioner was
appointed to hear the matter of the amount of the fees in question, and
after the commissioner had submitted a report recommending the
payment to Atty. Recto of the 20,70 attorney's fees stipulated in the
contract for his services, equivalent to P369,410.04, the court rendered
judgment as follows:
The contingent fee to which the claimant is entitled under paragraph 3 of
the contract, Exhibit JJJ or 20, is 20% of P1,920,554.85 or the sum of
P384,110.97.

WHEREFORE, this Court hereby approves the recommendation of the
Commissioner with the above-stated modification, and finds that Attorney
Claro M. Recto is entitled to the sum of THREE HUNDRED EIGHTY-
FOUR THOUSAND ONE HUNDRED AND TEN PESOS AND NINETY-
SEVEN CENTAVOS (P384,110.97), representing 20% of Esperanza P.
de Harden's share in the conjugal properties owned by her and her
husband, Fred M. Harden, as contingent fee stipulated in paragraph 3 of
the Contract of Professional Services, Exhibit JJJ or 20, and the said
Esperanza P. de Harden is hereby ordered to pay the said amount above-
stated.
On appeal from this judgment to this Court, the same was affirmed, the
decision stating pertinently in part:
The last objection is based upon principles of equity, but, pursuant
thereto, one who seeks equity must come with clean hands (Bastida et
al. vs. Dy Buncio & Co., 93 Phil. 195; 30 C.J.S. 475), and appellants have
not done so, for the circumstances surrounding the case show, to our
satisfaction, that their aforementioned agreements, ostensibly for the
settlement of the differences between husband and wife, were made for
the purpose of circumventing or defeating the rights of herein appellee,
under his above-quoted contract of services with Mrs. Harden. Indeed,
having secured a judgment in her favor, acknowledging her rights to the
assets of the conjugal partnership, which turned out to be worth almost
P4,000,000 in addition to litis expensae in the sum of P175,000, it is
inconceivable that Mrs. Harden would have waived such rights, as well
as the benefits of all orders and judgments in her favor, in consideration
of the paltry sum of $5,000 allegedly paid to her by Mr. Harden and the
additional sum of $20,000 to be paid by him in installments, at the rate of
$500 a month. In fact, no explanation has been given for this moat
unusual avowed settlement between Mr. and Mrs. Harden. One can not
even consider the possibility of a reconciliation between the spouses, the
same being inconsistent with the monetary consideration for said alleged
settlement. What is more, the records show that the relations between
said spouses — which were bad indeed, not only in July, 1941, when Mrs.
Harden engaged the services of the appellee, but, even, before, for Mr.
and Mrs. Harden were separated since 1938 — had worsened
considerably thereafter, as evidenced by an action for divorce filed by Mr.
Harden in New Jersey, in July 1948, upon the ground of repeated acts of
infidelity allegedly committed by Mrs. Harden in 1940 and 1941.
On the same considerations of equity, and for the better protection of
lawyers, who, trusting in the good faith of their clients, render professional
services on contingent basis, and so that it may not be said that this Court,
sanctions in any way the questionable practice of clients of compromising
their cases at the back of their counsel with the consequence that the
stipulated contingent fees of the lawyer are either unreasonably reduced
or even completely rendered without basis, as in this case — wherein the
clients waived the whole of their rights in favor of their opponent after the
latter had acknowledged, in effect, the correctness of said clients'
contention — We have decided to grant the herein petition, in so far as
the rights of petitioner have been prejudiced by the questioned
compromise agreement. While We here reaffirm the rule that "the client
has an undoubted right to compromise a suit without the intervention of
his lawyer", 8 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 lawyer's 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 attorney's fees in the same
proceeding, after hearing all the affected parties and without prejudice to
the finality of the compromise in so far as it does not adversely affect the
rights of the lawyer. Surely, "the client cannot, by setting, compromising
or dismissing his suit during its pendency, deprive the attorney of his
compensation for the agreed amount, unless the lawyer consents to such
settlement, compromise or dismissal", (Legal and Judicial Ethics by
Martin, 1967 Rev. Ed p. 121) for the, attorney is or "Shall be entitled to
have and recover from his client - a reasonable compensation (not more)
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", (Sec. 24, Rule 138, on Attorney and Admission
to Bar) albeit, under Canon 12 of the Canons of Professional Ethics, "in
fixing fees, it should not be forgotten that the profession is a branch of the
administration of justice and not a mere money-getting trade."
True it is also that "a client may, at anytime, dismiss his attorney or
substitute another in his place", (Sec. 26, Rule 138) but it must be
emphasized that the same provision, which is an incorporation of
Republic Act 636 into the Rules of Court, also provides that "if the contract
between client and attorney had been reduced to writing and the
dismissal of the attorney was without justifiable cause, he shall be entitled
to recover from the client full compensation ..." In the case at bar, by
entering into the compromise agreement in question and even inserting
therein a prayer to the court to dismiss their case filed by petitioner, (see
footnote 6, ante) petitioner's clients impliedly dismissed him. (Rustia vs.
the Court, etc., supra.) Such implied dismissal appears to Us to have
been made without justifiable cause, none is urged anywhere in the
record, and so, the above-quoted provision of Section 26, Rule 138
applies here. The terms of the compromise in question, as spelled out in
Annex A of Annex I of the petition, indicate clearly that Aurelia Martinez,
the defendant aunt in-law of petitioner's clients, acknowledged that the
rights of said clients were practically as alleged by petitioner in the
complaint he filed for them. In other words, through the services of
petitioner, his clients secured, in effect, a recognition, which had been
previously denied by their aunt-in-law, that they were entitled to a ¼ share
in the estate left by their uncle. We hold that under these circumstances,
and since it appears that said clients have no other means to pay
petitioner, since they instituted their case as paupers, and that their aunt-
in-law was aware of the terms of their contract of professional services
with petitioner', said clients had no right to waive the portion of their such
acknowledged rights in favor of their opponent to the extent that such
waiver would prejudice the stipulated contingent interest of their lawyer
and their aunt-in-law had no right to accept such waiver unqualified. The
Civil Code enjoins that:
ART. 19. 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.
Under the circumstance extant in the record, it is clear that the
compromise agreement in question falls short of the moral requirements
of this quoted article of the Civil Code. If for this reason alone, it should
not be allowed to prejudice the rights of petitioner. Accordingly, as all of
these circumstances were presented to respondent judge before he
issued the challenged order of dismissal and all the parties were heard
thereon, it was incumbent upon His Honor, in equity and to avoid
multiplicity of suits, particularly, because the amount claimed by petitioner
is only P1,000.00, to have directly passed upon petitioner's claim, and not
having done so, it would appear that the court a quo abused its discretion
gravely enough to warrant the writ of certiorari herein prayed for in so far
as the questioned orders prejudiced petitioner's right to the fees for the
professional services which appear to have been creditably rendered by
him. Respondents allege that the judgment of dismissal in question is
already final because no appeal was taken therefrom, but since We hold
that the same was rendered with enough grave abuse of discretion to
warrant the certiorari prayed for, such alleged finality could not have
materialized; obviously, petitioner could not have appealed, not being a
party in the case.
IN VIEW OF THE FOREGOING, the orders of the respondent court dated
November 21, 1964 and January 9, 1965 in Civil Case No. SC-525 are
hereby set aside in so far as they prejudice the payment of petitioner's
claim of attorney's fees in the form of either one-third of the ¼ share
acknowledged as his clients in the compromise in question or P1,000.00,
which should constitute as a lien on the said share, in spite of the waiver
thereof in favor of respondent Aurelia Martinez. It is unnecessary to
consider the petition for mandamus. Costs against, private respondents.
Reyes, J.B.L., Dizon,: Makalintal, Zaldivar, Sanchez, Fernando and
Teehankee, JJ., concur.
Concepcion, C.J. and Castro, J., are on leave.
Capistrano, J., took no part.
Footnotes
A.M. No. 219 September 29, 1962
CASIANO U. LAPUT, petitioner,
vs.
ATTY. FRANCISCO E.F. REMOTIGUE and ATTY. FORTUNATO P. Patalinghug but that of the said widow. It appears that the reason why
PATALINGHUG, respondents. Mrs. Barrera dismissed petitioner as her lawyer was that she did not trust
him any longer, for one time she found out that some dividend checks
which should have been sent to her were sent instead to petitioner,
making her feel that she was being cheated by petitioner. Moreover, she
found that withdrawals from the Philippine National Bank and Bank of the
Philippine Islands have been made by petitioner without her prior
LABRADOR, J.:
authority.

This is an original complaint filed with this Court charging respondents

We see no irregularity in the appearance of respondent Atty. Fortunato
with unprofessional and unethical conduct in soliciting cases and
Patalinghug as counsel for the widow; much less can we consider it as
intriguing against a brother lawyer, and praying that respondents be dealt
an actual grabbing of a case from petitioner. The evidence as found by
with accordingly.
the Solicitor General shows that Atty. Patalinghug's professional services
were contracted by the widow, a written contract having been made as to
the amount to be given him for his professional services.
The facts which led to the filing of this complaint are as follow: In May,
1952, petitioner was retained by Nieves Rillas Vda. de Barrera to handle
her case (Sp. Proc. No. 2-J) in the Court of First Instance of Cebu, entitled
Petitioner's voluntary withdrawal on February 5, 1955, as counsel for Mrs.
"Testate Estate of Macario Barrera". By January, 1955, petitioner had
Barrera after Atty. Patalinghug had entered his appearance, and his
contemplated the closing of the said administration proceedings and
(petitioner's) filing almost simultaneously of a motion for the payment of
prepared two pleadings: one, to close the proceedings and declare
his attorney's fees, amounted to an acquiescence to the appearance of
Nieves Rillas Vda. de Barrera as universal heir and order the delivery to
respondent Atty. Patalinghug as counsel for the widow. This should estop
her of the residue of the estate and, second, a notice for the rendition of
petitioner from now complaining that the appearance of Atty. Patalinghug
final accounting and partition of estate. At this point, however, the
was unprofessional.
administratrix Nieves Rillas Vda. de Barrera refused to countersign these
two pleadings and instead advised petitioner not to file them. Some weeks
later, petitioner found in the records of said proceedings that respondent
Atty. Fortunato Patalinghug had filed on January 11, 1955 a written Much less could we hold respondent Atty. Remotigue guilty of
appearance as the new counsel for Nieves Rillas Vda. de Barrera. On unprofessional conduct inasmuch as he entered his appearance, dated
February 5, 1955 petitioner voluntarily asked the court to be relieved as February 5, 1955, only on February 7, same year, after Mrs. Barrera had
counsel for Mrs. Barrera. On February 7, 1955, the other respondent, dispensed with petitioner's professional services on January 11, 1955,
Atty. Francisco E. F. Remotigue, entered his appearance, dated February and after petitioner had voluntarily withdrawn his appearance on February
5, 1955. 5, 1955.

Complainant here alleges that the appearances of respondents were With respect to the preparation by Atty. Patalinghug of the revocations of
unethical and improper for the reason that they had nursed the desire to power of attorney as complained of by petitioner, the Solicitor General
replace the petitioner as attorney for the estate and the administratrix and, found that the same does not appear to be prompted by malice or
taking advantage of her goodwill, intrigued against the preparation of the intended to hurt petitioner's feelings, but purely to safeguard the interest
final inventory and accounting and prodded Mrs. Barrera not to consent of the administratrix. Evidently, petitioner's pride was hurt by the issuance
to petitioner's decision to close the administration proceedings; that of these documents, and felt that he had been pictured as a dishonest
before their appearance, they brought petitioner's client to their law office lawyer; for he filed a case before the City Fiscal of Cebu against Atty.
and there made her sign four documents captioned "Revocation of Power Patalinghug and the widow for libel and falsification. It was shown,
of Attorney" and sent the same by mail to several corporations and however, that the case was dismissed.
establishments where the Estate of Macario Barrera is owner of
certificates of stocks and which documents purported to disauthorize the
petitioner from further collecting and receiving the dividends of the estate
from said corporations, when in fact and in truth the respondents fully No sufficient evidence having been submitted to sustain the charges,
knew that no power of attorney or authority was given to the petitioner by these are hereby dismissed and the case closed.
his client, the respondents motive being to embarrass petitioner to the
officials, lawyers and employees of said corporations, picturing him as a
dishonest lawyer and no longer trusted by his client — all with the purpose
of straining the relationship of the petitioner and his client, Nieves Rillas
Vda. de Barrera; and that Atty. Patalinghug entered his appearance
without notice to petitioner.

In answer, respondent Atty. Patalinghug stated that when he entered his

appearance on January 11, 1955 the administratrix Nieves Rillas Vda. de
Barrera had already lost confidence in her lawyer, the herein petitioner,
and had in fact already with her a pleading dated January 11, 1955,
entitled "Discharge of Counsel for the Administration and Motion to Cite
Atty. Casiano Laput", which she herself had filed with the
court.1awphîl.nèt

In answer, respondent Atty. Remotigue stated that when he filed his

appearance on February 7, 1955, the petitioner has already withdrawn as
counsel.

After separate answers were filed by the respondents, the Supreme Court
referred the case to the Solicitor General for investigation, report and
recommendation. The Solicitor General recommended the complete
exoneration of respondents.

It appears and it was found by the Solicitor General that before

respondent Atty. Fortunato Patalinghug entered his appearance, the
widow administratrix had already filed with the court a pleading
discharging the petitioner Atty. Casiano Laput. If she did not furnish Atty.
Laput with a copy of the said pleading, it was not the fault of Atty.