A.C. No.
L-1117 March 20, 1944 once in the Tribune and that he never had any case at
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
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.
G.R. No. L-23815 June 28, 1974
ADELINO H. LEDESMA, petitioner,
vs.
HON. RAFAEL C. CLIMACO, Presiding Judge of the Court of
First Instance of Negros Occidental, Branch I, Silay
City, respondent.
Adelino H. Ledesma in his own behalf.
Hon. Rafael C. Climaco in his own behalf.
FERNANDO, J.:p
What is assailed in this certiorari proceeding is an order of
respondent Judge denying a motion filed by petitioner to
be allowed to withdraw as counsel de oficio.1One of the
grounds for such a motion was his allegation that with his
appointment as Election Registrar by the Commission on
Elections, he was not in a position to devote full time to the
defense of the two accused. The denial by respondent
Judge of such a plea, notwithstanding the conformity of
the defendants, was due "its principal effect [being] to
delay this case."2 It was likewise noted that the prosecution
had already rested and that petitioner was previously
counsel de parte, his designation in the former category
being precisely to protect him in his new position without
prejudicing the accused. It cannot be plausibly asserted
that such failure to allow withdrawal of de oficio counsel
could ordinarily be characterized as a grave abuse of
discretion correctible by certiorari. There is, however, the
overriding concern for the right to counsel of the accused
that must be taken seriously into consideration. In
appropriate cases, it should tilt the balance. This is not one
of them. What is easily discernible was the obvious
reluctance of petitioner to comply with the responsibilities
incumbent on the counsel de oficio. Then, too, even on
the assumption that he continues in his position, his volume
of work is likely to be very much less at present. There is not
now the slightest pretext for him to shirk an obligation a
member of the bar, who expects to remain in good
standing, should fulfill. The petition is clearly without merit.
According to the undisputed facts, petitioner, on October
13, 1964, was appointed Election Registrar for the
Municipality of Cadiz, Province of Negros Occidental. Then
and there, he commenced to discharge its duties. As he
was counsel de parte for one of the accused in a case
pending in the sala of respondent Judge, he filed a
motion to withdraw as such. Not only did respondent
Judge deny such motion, but he also appointed him
counsel de oficio for the two defendants. Subsequently,
on November 3, 1964, petitioner filed an urgent motion to
be allowed to withdraw as counsel de oficio, premised on
the policy of the Commission on Elections to require full
time service as well as on the volume or pressure of work of
petitioner, which could prevent him from handling
adequately the defense. Respondent Judge, in the
challenged order of November 6, 1964, denied said
motion. A motion for reconsideration having proved futile,
he instituted this certiorari proceeding.3
As noted at the outset, the petition must fail.
1. The assailed order of November 6, 1964 denying the
urgent motion of petitioner to withdraw as counsel de
oficiospeaks for itself. It began with a reminder that a
crime was allegedly committed on February 17, 1962, with
the proceedings having started in the municipal court of
Cadiz on July 11, 1962. Then respondent Judge spoke of
his order of October 16, 1964 which reads thus: "In view of
the objection of the prosecution to the motion for
postponement of October 15, 1964 (alleging that counsel
for the accused cannot continue appearing in this case
without the express authority of the Commission on
Elections); and since according to the prosecution there
are two witnesses who are ready to take the stand, after
which the government would rest, the motion for
postponement is denied. When counsel for the accused
assumed office as Election Registrar on October 13, 1964,
he knew since October 2, 1964 that the trial would be
resumed today. Nevertheless, in order not to prejudice the
civil service status of counsel for the accused, he is hereby
designated counsel de oficio for the accused. The
defense obtained postponements on May 17, 1963, June
13, 1963, June 14, 1963, October 28, 1963, November 27,
1963, February 11, 1964, March 9, 1964, June 8, 1964 July 26,
1964, and September 7, 1964."4 Reference was then made
to another order of February 11, 1964: "Upon petition of
Atty. Adelino H. Ledesma, alleging indisposition, the
continuation of the trial of this case is hereby transferred to
March 9, 1964 at 8:30 in the morning. The defense is
reminded that at its instance, this case has been
postponed at least eight (8) times, and that the
government witnesses have to come all the way from
Manapala."5 After which, it was noted in such order that
there was no incompatibility between the duty of
petitioner to the accused and to the court and the
performance of his task as an election registrar of the
Commission on Elections and that the ends of justice
"would be served by allowing and requiring Mr. Ledesma
to continue as counsel de oficio, since the prosecution has
already rested its case."6
2. What is readily apparent therefore, is that petitioner was
less than duly mindful of his obligation as counsel de oficio.
He ought to have known that membership in the bar is a
privilege burdened with conditions. It could be that for
some lawyers, especially the neophytes in the profession,
being appointed counsel de oficio is an irksome chore. For
those holding such belief, it may come as a surprise that
counsel of repute and of eminence welcome such an
opportunity. It makes even more manifest that law is
indeed a profession dedicated to the ideal of service and
not a mere trade. It is understandable then why a high
degree of fidelity to duty is required of one so designated.
A recent statement of the doctrine is found in People v.
Daban:7 "There is need anew in this disciplinary
proceeding to lay stress on the fundamental postulate
that membership in the bar carries with it a responsibility to
live up to its exacting standard. The law is a profession, not
a trade or a craft. Those enrolled in its ranks are called
upon to aid in the performance of one of the basic
purposes of the State, the administration of justice. To
avoid any frustration thereof, especially in the case of an
indigent defendant, a lawyer may be required to act as
counsel de oficio. The fact that his services are rendered
without remuneration should not occasion a diminution in
his zeal. Rather the contrary. This is not, of course, to ignore
that other pressing matters do compete for his attention.
After all, he has his practice to attend to. That
circumstance possesses a high degree of relevance since
a lawyer has to live; certainly he cannot afford either to
neglect his paying cases. Nonetheless, what is incumbent
upon him as counsel de oficio must be fulfilled."8
So it has been from the 1905 decision of In re Robles
Lahesa,9 where respondent was de oficio counsel, the
opinion penned by Justice Carson making clear: "This
Court should exact from its officers and subordinates the
most scrupulous performance of their official duties,
especially when negligence in the performance of those
duties necessarily results in delays in the prosecution of
criminal cases ...."10 Justice Sanchez in People v.
Estebia11reiterated such a view in these words: "It is true
that he is a court-appointed counsel. But we do say that
as such counsel de oficio, he has as high a duty to the
accused as one employed and paid by defendant himself.
Because, as in the case of the latter, he must exercise his
best efforts and professional ability in behalf of the person
assigned to his care. He is to render effective assistance.
The accused-defendant expects of him due diligence, not
mere perfunctory representation. For, indeed a lawyer
who is a vanguard in the bastion of justice is expected to
have a bigger dose of social conscience and a little less of
self-interest."12
The weakness of the petition is thus quite evident.
3. If respondent Judge were required to answer the
petition, it was only due to the apprehension that
considering the frame of mind of a counsel loath and
reluctant to fulfill his obligation, the welfare of the accused
could be prejudiced. His right to counsel could in effect be
rendered nugatory. Its importance was rightfully stressed
by Chief Justice Moran in People v. Holgado in these
words: "In criminal cases there can be no fair hearing
unless the accused be given an opportunity to be heard
by counsel. The right to be heard would be of little avail if it
does not include the right to be heard by counsel. Even
the most intelligent or educated man may have no skill in
the science of law, particularly in the rules of procedure,
and; without counsel, he may be convicted not because
he is guilty but because he does not know how to establish
his innocence. And this can happen more easily to
persons who are ignorant or uneducated. It is for this
reason that the right to be assisted by counsel is deemed
so important that it has become a constitutional right and
it is so implemented that under rules of procedure it is not
enough for the Court to apprise an accused of his right to
have an attorney, it is not enough to ask him whether he
desires the aid of an attorney, but it is essential that the
court should assign one de oficio for him if he so desires
and he is poor or grant him a reasonable time to procure
an attorney of his
own."13 So it was under the previous Organic Acts.14 The
present Constitution is even more emphatic. For, in
addition to reiterating that the accused "shall enjoy the
right to be heard by himself and counsel,"15 there is this
new provision: "Any person under investigation for the
commission of an offense shall have the right to remain
silent and to counsel, and to be informed of such right. No
force, violence, threat, intimidation, or any other means
which vitiates the free will shall be used against him. Any
confession obtained in violation of this section shall be
inadmissible in evidence."16
Thus is made manifest the indispensable role of a member
of the Bar in the defense of an accused. Such a
consideration could have sufficed for petitioner not being
allowed to withdraw as counsel de oficio. For he did
betray by his moves his lack of enthusiasm for the task
entrusted to him, to put matters mildly. He did point
though to his responsibility as an election registrar.
Assuming his good faith, no such excuse could be availed
now. There is not likely at present, and in the immediate
future, an exorbitant demand on his time. It may likewise
be assumed, considering what has been set forth above,
that petitioner would exert himself sufficiently to perform
his task as defense counsel with competence, if not with
zeal, if only to erase doubts as to his fitness to remain a
member of the profession in good standing. The
admonition is ever timely for those enrolled in the ranks of
legal practitioners that there are times, and this is one of
them, when duty to court and to client takes precedence
over the promptings of self-interest.

WHEREFORE, the petition for certiorari is dismissed. Costs

against petitioner.

Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ.,

concur.

Barredo, J., took no part.

In Re Rothman
12 N.J. 528 (1953)
97 A.2d 621
IN THE MATTER OF GEORGE I. ROTHMAN AND DAVID
IRVING, JR., ATTORNEYS AT LAW.
The Supreme Court of New Jersey.
Argued March 30, 1953.
Decided June 8, 1953.
*529 Mr. Milton T. Lasher, by designation of the Ethics and
Grievance Committee for Bergen County, argued the
cause for the committee.
Mr. Samuel Kaufman argued the cause for the respondent
David Irving, Jr.
Mr. Julius E. Kramer argued the cause for the respondent
George I. Rothman.
The opinion of the court was delivered by VANDERBILT, C.J.
This matter comes before us on the return of an order to
show cause issued on a presentment filed by the Ethics
and Grievance Committee for Bergen County charging
the respondents with various violations *530 of the 27th,
35th and 47th Canons of Professional Ethics. These
violations involve (1) extensive advertising and direct
solicitation of mortgage business by a corporation owned
by the respondents, leading directly and inevitably to the
acquisition by them of a very substantial amount of
professional employment which they would not have
obtained without such advertising and solicitation, in
violation of Canon 27; (2) the receipt by the corporation
owned by them of substantial legal fees, in violation of
Canon 47, forbidding a member of the bar to aid the
unauthorized practice of the law by any lay agency, and
of Canon 35 prohibiting the intervention of a lay agency
between client and lawyer.
I. THE FACTS
The facts are not in dispute. The background of the
respondents is summarized in the respondents' brief as
follows:
Irving was admitted to the bar in 1940 after having spent
some years in the handling of claims for an insurance
company. His partnership for the practice of law with
George I. Rothman was formed in 1945. At that time Mr.
Irving had an independent clientele wholly unrelated to
the mortgage financing or real estate business. His
practice consisted of the usual trial work in the negligence
and compensation fields and in the handling of industrial
relations.
George I. Rothman, his law partner, was interested solely in
the real estate and mortgage field where he and his
family had wide and extensive experience. When he
received his discharge from military service, his home
community was in the midst of a great building boom
which still continues unabated. Residential housing and
industrial and commercial development were in the midst
of an unparalleled growth. The mortgage insurance which
underlay G.I. loans presented an outstanding opportunity
for banks, savings and loans and mortgage lending
institutions all over the metropolitan area to assist in the
financing of these large building ventures. Rothman
determined that his opportunity lay in this area.
*531 In 1946 Rothman took over the trade name of
Northern New Jersey Mortgage Associates from Irving's
brother and began to develop a mortgage business in the
same quarters as the law partnership at 12 Engle Street,
Englewood. By 1949 the business had developed to such
an extent that they moved to larger quarters at 63 West
Palisade Avenue, Englewood, where the partners formed
a corporation, Northern New Jersey Mortgage Associates,
whereupon the similar trade name was cancelled of
record. Where Rothman had previously owned the trade
name, each partner then owned 50% of the stock of the
corporation. The mortgage business of the corporation
was carried on in rooms leased by the partnership.
Although Irving then had some clients other than the
mortgage company, he devoted most of his time to legal
work in connection with the mortgage loans of the
corporation and eventually he abandoned practically all
of his other law practice. Rothman did not practice law to
any extent from 1949 on, but became the president and
guiding hand in the mortgage company, the business of
which increased tremendously. It had from 45 to 50
mortgage closings a week, and it handled around a
quarter of a billion dollars in mortgages in seven years. In
1951 the law partnership had from 15 to 18 employees,
while the corporation had another 12 to 20, all in the same
offices. Of them six or seven were fieldmen soliciting
mortgage business. They had a single telephone number
and eventually a 16-line switchboard, for the use of both
the law firm and the corporation. In answering calls the
operator would answer with the number rather than the
name of the firm or of the corporation. The corporation
employed two firms of accountants. For a time it had a
branch office in Newark and acted as a broker in at least
one real estate development in Burlington County.
The business of the mortgage company and the practice
of the law firm were conducted as a single intermingled
enterprise. Thus, prior to June 30, 1951 the law partnership
paid all telephone bills and the salary of the switchboard
operator. From July 1, 1951 to June 30, 1952 the mortgage
*532 corporation paid the telephone bills and salary of the
switchboard operator. From July 1, 1952 to October 31,
1952 the law partnership again paid the telephone bills
and switchboard operator's salary. The law partnership,
moreover, paid the entire rent for the premises at 63 W.
Palisade Avenue, Englewood, for the years 1949, 1950,
1951 and 1952. From July 1, 1951 to June 30, 1952 the
mortgage company paid the partnership rent of $300 a
month. Employees were frequently shifted back and forth
between the two payrolls. Although Rothman did not
practice law during the period from July 1, 1951 to June 30,
1952, yet he shared in all of the profits of the law
partnership from 1945 on, including the annual payment
from the mortgage company to the law partnership
pursuant to the contract agreement mentioned hereafter.
Irving, on the other hand, did not engage in the mortgage
business, yet as the 50% owner of the stock of the
corporation he was entitled to one-half of its substantial
profits. The accountants seldom made any adjustments
between the mortgage company and the law partnership.
The ownership of the title plant was so uncertain that even
Rothman himself could not tell the committee whether the
law firm or the mortgage company owns it, as a result of
the complete commingling of the business of the
mortgage company and the practice of law by the
partnership "under one friendly roof," as the mortgage
company aptly phrased it in its advertisements.
The mortgage company was paid large amounts by
borrowers for legal fees. On July 1, 1951 the mortgage
company made a written contract to pay the law
partnership $42,000 annually, later reduced to $33,000, for
legal services to be rendered by it. An outstanding
instance of the interrelatedness of the two enterprises is
found in the fact that while the agreement was in force
the mortgage company received all moneys paid by
mortgage borrowers for services including legal fees.
Rothman testified that the law firm also received
additional fees besides the $33,000 annual payment. The
mortgage company's closing statement form even
included an item for search fees. These fees were
considerable. *533 Rothman testified that on the sale of a
house to a G.I. for $15,000 the mortgage company's fees
totalled $483. These fees were made up of 1% G.I. discount,
recording fees, the cost of the title policy, three months'
taxes, the fire insurance premium, a survey and the closing
fee of $150. In addition thereto, if the mortgage were a
construction mortgage the builder was required to pay a
construction mortgage fee of $111. While the contract
providing for this annual payment was in force, Rothman
received $3,600 and Irving received $2,275 as officers of
Northern New Jersey Mortgage Associates for each of the
first two quarters of 1952.
Of equal significance is the mortgage company's course
in the solicitation of mortgage business. Rothman solicited
work for the mortgage company by letters to builders and
developers, emphasizing the company's complete and
speedy service, always a telling argument with important
real estate developers and mortgage borrowers. The
salesmen of the mortgage company were instructed to
take the same theme of speedy service in their selling
efforts. In addition to the solicitation of mortgage business
through advertising, letters to builders and through
salesmen, the corporation secured 25% of its business from
real estate brokers to whom it paid commissions. The
company employed several advertising firms and public
relations counsel who aided Rothman in the preparation
of large newspaper advertisements and press releases
extolling the services of the mortgage company in the
highest terms. On at least one occasion the mortgage
company made a direct payment to a newspaper
reporter. On December 6, 1952, even after the hearings in
this matter had started before the committee, the
mortgage company had three consecutive pages of
advertisements and reading matter in the Bergen Evening
Record announcing the opening of the new offices at 133
Cedar Lane, Teaneck, in a building owned by a
corporation of which the respondents are equal one-third
stockholders. The advertisements and press releases, which
will be discussed later, made it clear that the corporation
would furnish complete service to builders, developers,
and others. The title facilities and personnel of the *534
corporation were extolled in the highest terms. A great
many news items were released to the daily press,
including the New York Times, the New York Herald Tribune,
the New York Post and Telegram in New York City and
newspapers in Newark and Passaic. Such articles
appeared once or twice a week for five years. A recurring
advertisement was carried in the Bergen Evening Record
for at least a year. For all of these advertisements, which
we will discuss later, Rothman assumes responsibility.
On July 1, 1952 the contract between the mortgage
company and the law partnership was abandoned and
thereafter the legal fees were paid by the borrowers
directly to the partnership. On November 1, 1952 Irving
and Rothman dissolved their law partnership. Irving still
continues to do the legal work of the mortgage company
and to own stock in it, one-half up to November 26, 1952
and one-third since then, when a third stockholder took
title to one-third of his and of Rothman's stockholdings,
after hearings had commenced before the Ethics and
Grievance Committee. At the oral argument before us on
the presentment, Irving offered unreservedly to dispose of
his stock in the mortgage company and also, if the court
insisted, of his stock in the company owning the office
building.
Rothman filed no brief in his own behalf, but at the oral
argument his counsel "adopted" Irving's brief. Counsel's
only excuse for not filing a brief was that he had been in
Washington the week before the argument. He stated that
Rothman had never read the brief filed by the Committee
on Ethics and Grievances for Bergen County, although he
had "gone over it" with Rothman. Rothman frequently
stated in printed articles, in statements before the
committee and through counsel before us that he did not
intend to return to the practice of law when he left the
armed services, but to engage in the mortgage and real
estate business. At one point he testified that if he devoted
five percent of his time in 1951 to the practice of law it was
a lot, and at another time he said he had not actively
engaged in the practice of law during the last five years.
Rothman held a real estate *535 broker's license and was
interested in various building corporations that had offices
with the mortgage company and the law partnership.
II. THE CONTROLLING AUTHORITIES
The controlling authorities in the instant case are the 27th,
35th and 47th Canons of Professional Ethics and the
unanimous opinion of this court of less than two years ago
in In the Matter of L.R., an Attorney at Law, 7 N.J. 390
(1951).
The Canons of Professional Ethics of the American Bar
Association, with the exception of one amendment not
pertinent here, were adopted by Rule 1:7-6; they "shall
govern the conduct of the judges and the members of the
bar of this State." This rule is grounded not only on the rule-
making power of the Supreme Court, but on its express
jurisdiction over the discipline of members of the bar, N.J.
Const., Art. VI, Sec. II, par. 3.
The Canons of Professional Ethics undertake to codify in
convenient form the traditions and practice that have
been recognized over the centuries as part of the
common law with respect to the lawyer's obligations to
the courts and the administration of justice, to the public
and his clients, and to his profession and his fellow
practitioners. They are as obligatory on him as if cast in
statutory form, as indeed they are in large part in many
states.
The three canons referred to relate in one aspect to the
lawyer's duties to his profession and his fellow practitioners.
If the practice of the law is to remain a profession and not
to become a mere trade, it is quite as important that
ethical practitioners be protected from unfair competition
within the profession as from the unauthorized practice of
the law outside the profession by laymen and corporations.
But this is not the only aspect of these canons. Their
enforcement is of concern not merely to the members of
the profession. It is equally essential to the public. Our
citizens have a right to expect from the members of a
learned profession who are *536 granted by the State the
privilege to practice law that they in return for this privilege
will live up to the standards long recognized at common
law and in large part codified in the Canons of
Professional Ethics.
One has but to read the three canons above referred to
to see how directly and immediately they apply to the
facts of this case as summarized herein:
"27. ADVERTISING, DIRECT OR INDIRECT. It is unprofessional
to solicit professional employment by circulars,
advertisements, through touters or by personal
communications or interviews not warranted by personal
relations. Indirect advertisements for professional
employment such as furnishing or inspiring newspaper
comments, or procuring his photograph to be published in
connection with causes in which the lawyer has been or is
engaged or 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, offend
the traditions and lower the tone of our profession and are
reprehensible; but the customary use of simple professional
cards is not improper. * * *
"35. INTERMEDIARIES. The professional services of a lawyer
should not be controlled or exploited by any lay agency,
personal or corporate, which intervenes between client
and lawyer. A lawyer's responsibilities and qualifications
are individual. He should avoid all relations which direct
the performance of his duties by or in the interest of such
intermediary. A lawyer's relation to his client should be
personal, and the responsibility should be direct to the
client. * * *
"47. AIDING THE UNAUTHORIZED PRACTICE OF LAW. No
lawyer shall permit his professional services, or his name, to
be used in aid of, or to make possible, the unauthorized
practice of law by any lay agency, personal or corporate."
Nor do we have to look far afield for a judicial application
of these canons to the facts of the pending case, for in In
re L.R. supra, we dealt with a similar situation, the chief
differences being (1) that in that case the business was
relatively small, (2) but there the unprofessional scheme
was nipped in the bud, whereas here the business ran to
"more than a quarter of a billion dollars worth of loans
since 1945," to quote one of the mortgage company's
advertisements, and has been carried on for seven years,
the last two years in the face of the decision of this court in
In re L.R., and (3) that the methods of the respondents
here were somewhat more *537 subtle but no less
effective in getting business than were those of L.R.
In the earlier case the respondent operated a realty
corporation under his family name. Agents of his
corporation informed prospective customers that the
corporation would obtain the desired mortgage, make
the title search, prepare all the legal papers, and do
everything necessary to close the transaction and that,
the respondent being a lawyer himself, it was not
necessary for the customer to engage his own lawyer,
although he might do so if he desired. The respondent
paid for complimentary press notices, featuring
biographical sketches of himself and including his
photograph, emphasizing the corporation's volume of
business and growing staff, and broadcasting that "the firm
has a 1-package system which includes servicing a
transaction from its inception to its closing. The corporation
has its own legal department which processes and
expedites every mortgage applied for through the office."
We there held that:
"The practice which has been referred to as `a one-
package system' is a system whereby commercial services,
including a lawyer's fee, are rendered to a person for a
single charge. This throws the practice of law into a
commercial atmosphere which is wholly foreign to the
concept of a correct practice and which has been
soundly condemned. Stack v. P.G. Garage, Inc., 7 N.J. 118,
[decided May 7, 1951]; In the Matter of A.B.C., an attorney
and counselor at law [7 N.J. 388, decided June 4, 1951]."
The similarity between the facts in the earlier case and the
facts in the pending case is striking, except that the
violations here proved are far more extensive in amount, in
the length of time pursued and in subtlety than they were
in the earlier case, and also in willfulness in flaunting the
clearcut declarations of In re L.R. In the earlier case L.R.
operated a realty corporation in his family name, while
here a trade name totally unrelated to either party was
purchased by the respondents from a brother of one of
them. L.R. testified that he telephoned his complimentary
press notices to the newspaper and did not concern
himself with making any corrections thereof. Here the
respondent Rothman either *538 wrote the press notices or
had them written for him by publicity men or public
relations counsel and sent them to the newspaper, while
the respondent Irving never disclaimed any of the benefits
proceeding therefrom. Neither took any steps to curb the
advertising or press notices or to renounce any statements
contained therein. While L.R. advertised the unusual
facilities of his title plant, quick service and a one-package
deal, the mortgage company here even after the
decision in In re L.R. continued to advertise the unusual
facilities of its title plant and quick service "under one
friendly roof," its equivalent of L.R.'s one-package deal. As
far as the customer was concerned, everything was being
done for him by the mortgage company. He saw a
mortgage company and a law firm whose physical set-up
and work were so intertwined that it was impossible to
separate them. Rothman himself could not satisfactorily
explain the arrangement between the corporation and
the law firm under the contract dated July 1, 1951,
whereby the law firm agreed to provide legal closing
services for all real estate and mortgage transactions
negotiated by Northern New Jersey Mortgage Associates.
Still further proof, if any be needed, of the fusion of the
respondents' professional and corporate interests may be
found in Irving's explanation of his rental agreement in the
new building in Teaneck:
"Q. What is the gist of the agreement? A. Well, on what I
can afford to pay on the income that I will derive. I haven't
arrived at a common denominator yet."
The two cases have these salient points in common: (1)
The use of extensive, extravagant advertising by a
corporation owned by lawyers to produce a large volume
of law business which they would otherwise not have
obtained, and (2) the carrying on of the work of the
corporation and of the law business as a single interrelated
unit.
There is little difference between the advertising done in In
re L.R. and here except that here the advertising was
done on a much greater scale. The attorney in the earlier
*539 case frankly advertised his one-package deal. Here
the respondents just as effectively advertised their one-
package deal "under one friendly roof" through their
salesmen and also through newspaper advertising,
through their common telephone and their commingled
law and mortgage office. A glance at a few newspaper
advertisements and articles, all admittedly printed at the
instigation of Rothman and without repudiation by Irving,
reveals a continual program of publicity for the company's
efficient and quick service in handling mortgage loans. In
addition we find many laudatory articles concerning
Rothman, in many of which his background as an attorney
is mentioned. Such advertising continued, even after the
complaint was filed by the Ethics and Grievance
Committee. Thus on November 8, 1952, there appeared
on the first page of the real estate and building section of
the Bergen Evening Record a large article headlined
"Business Volume Hits New High, Sets Theme for Firm
Expansion." This article gives a summary of a statement by
Rothman to the effect that he attributes the mortgage
company's success to the "specialized service for builders
and technical current knowledge to do the job correctly,"
as well as a "complete technical requirement aspects of
conventional and Governmental financing, including
application procedure in accordance with Government
regulation, preliminary requirements of local and
Government authorities, and procedure to insure a fast
and successful moving project." Such self-praise is, of
course, a clear violation of Canon 27.
The three pages of advertisements and articles in the
Bergen Evening Record for December 6, 1952, are
especially significant in view of the fact that at that time
the charges here under review had been made by the
Ethics and Grievance Committee for Bergen County and
the hearings before it were under way. The articles are
devoted largely to an enumeration of Rothman's
accomplishments. The first page carries two photographs
of the new office in Teaneck, New Jersey, one of the
outside of the building and the other of the title and
mortgage analysis department. There is also an
advertisement for the company in which is a sketch of the
*540 new office building. It mentions the "complete
facilities" of the company and further provides "Time
Saved ... Expense Avoided Loans are expedited, and
expense avoided, by our knowledge of the requirements
of the various government loan agencies." There is a two-
column spread giving a history of the firm with a
biographical sketch of and a laudatory article on
Rothman. The article states that Rothman is an attorney, a
graduate of Columbia University and Newark Law School,
and that:
"Unwilling to go back to his law practice when he was
handed his service discharge, Rothman scanned the field
for new opportunities. He finally chose the mortgage
business, deciding that his legal background, plus a
knowledge of the maze of new Government regulations
for veterans and nonveterans fitted him for that field."
The article further provides:
"Success and growth of the firm is attributed by Rothman
to key personnel, availability of funds even during the most
stringent periods, technical know-how, and competent
service. * * *
Another ambitious undertaking of the company has been
its investments in the ability of a number of young
energetic builders who had the experience to go along
with their ambitions. The firm backed a number of these
builders financially, Rothman said, and today several are
included in the State's top echelon in the construction
field."
On the second page, headlined "Rothman Sees His Dream
Come True," appear several pictures of the new offices, as
well as a photograph of Rothman. Another article on
Rothman states:
"From Columbia Rothman went to New Jersey Law School,
graduating in 1939 and passing his bar examination. Then
after a brief period at practicing law, Rothman went into
the service. * * *
While in the service he decided to make a phase of the
real estate business his career. He formed Northern New
Jersey Mortgage Associates in November, 1945 after
receiving his discharge from the service, and opened an
office on Engle Street in Englewood."
*541 On the same page an advertisement states, among
other things:
"Title and Analysis Depts.
Providing a service that helps to assure quick action on
loan applications. Title Dept. files contain thousands of
detailed maps for quick reference."
The third page has a picture of the new Modernization
Loan Department of the Mortgage Company, another
picture of Rothman, and a photograph of the Title Closing
Room. There are also two more articles. One states:
"The youthful executive attributes the firm's success in this
department to its specialized service for builders and
technical knowledge to do the job correctly.
The department offers builders such services as character-
zoning, availability of land, information on price fields in
varied types of construction for particular sections and
areas, house designs best suited for sale and mortgage
purposes, complete technical requirement aspects of
conventional and Governmental financing, including
application procedure in accordance with Government
regulation, preliminary requirements of local and
Government authorities, and procedure to insure a fast
and successful moving project. * * *
`We expect to continue to supply this fine service from our
new building,' says Rothman, `with our entire organization
ready to serve builders, brokers, and modernization
dealers and contractors.'"
The other provides:
"The company's Title Departments are headed by Garrett
Cooper of Clifton and Reginald Dugdale of Totowa.
Cooper, who has been in the title business for 25 years, is
title officer for used construction; while Dugdale is title
officer for new construction. Both men have large staffs
working in their departments."
These advertisements and accompanying articles, after
charges made and with hearing under way and pending,
are patently inconsistent with the assertions of good faith
and protestations of innocence made by the respondents.
They did nothing that would interfere with their business
enterprise and they obviously resolved all doubts in their
own favor and against the Canons of Professional Ethics,
notwithstanding *542 the fact that they must have been
conscious of their precarious position.
Advertising by any professional man inevitably involves
self-praise and puffing. If competitive advertising among
lawyers were permitted, the conscientious, ethical
practitioner would be inescapably at the mercy of the
braggart. An advertisement of the Northern New Jersey
Mortgage Associates of September 13, 1952, in the Bergen
Evening Record graphically illustrates this evil. The article
quotes Rothman:
"According to the mortgage firm's president, his firm has
been able to close more than a quarter billion dollars
worth of loans since 1945 when N.N.J.M.A. was first
organized in Englewood. Now regarded as one of the
major finance companies in the East the Englewood firm is
continuing its ambitious program of expansion with
construction of a 3-story building on Cedar Lane and Red
Road, Teaneck. * * *
It will have approximately 48 offices with facilities to
employ more than 175 persons." (Emphasis supplied)
Again in the Bergen Evening Record for December 6, 1952,
also while the hearings were pending, a press release
appeared in a special box as follows:
"Firm's Success Story Revealed By its Figures
Teaneck: Northern New Jersey Mortgage Associates,
which celebrated its seventh anniversary last month, has
financed over 20,000 new homes, multi-family dwellings,
commercial and industrial units for a total of $250 million.
The Company also financed over 12,000 existing homes for
the same period with a total mortgage volume of $14
million."
The advertisements in the various exhibits in the case are
replete with similar statements of which the foregoing are
merely samples.
The publicity program of the respondents through direct
advertisements and indirect advertisements thinly
disguised as newspaper articles, the direct solicitation of
business by salesmen in the field, and the commissions
paid real estate brokers combine to produce a
tremendous volume of professional legal employment that
makes the more familiar offenses of ambulance chasing
and the operating of collection *543 agencies as a
facade for obtaining law work look picayune and
amateurish indeed.
In defense it is urged that the advertising was designed
solely to promote the business of the mortgage company
and not to produce law business. It is the nature of a
mortgage business that it inevitably produces law business
on each mortgage transaction. That the volume of the
law business was substantial is revealed in the number of
employees of each; as we have seen, the law partnership
had from 15 to 18 employees, while the corporation had
from 12 to 20, all operating out of the same offices.
There are other important points in which the respondents
here went far beyond L.R. in violating Canons 35 and 47.
L.R. billed for and was paid fees for his legal services. Here
for a full year the mortgage company received the fees
paid it by its customers and paid the law partnership a flat
retainer in clear violation of both Canons 35 and 47. We
shall have occasion to refer again to his practice later on
in dealing with the specific defenses urged by the
defendants. On the other hand, even though he did no
legal work, throughout the entire period of the partnership,
Rothman shared in the profits, obviously as a reward for
turning over to the partnership the law business of the
mortgage company. It is urged that in performing the
legal work in connection with a mortgage loan the law
firm was acting for the financial institutions, such as banks
and insurance companies, rather than the mortgage
company. This, however, is not so for Rothman makes
much of the point that in many cases the mortgage
company itself made the mortgage loan and later sold
the mortgages to various financial institutions. But even
where the mortgage was taken directly by a financial
institution it was the mortgage company as broker that
controlled where the legal business should go.
It remains to consider the defenses urged by each of the
respondents. The respondent Irving in his brief and in the
oral argument in his behalf cited no authorities whatsoever
but made four general arguments by way of defense or in
mitigation of discipline, none of which has any validity.
*544 First, it was urged that Irving is in the same position as
an attorney for a savings and loan association or of a
bank or trust company in passing on a mortgage loan. But
a savings and loan association is a mutual institution; it is
not owned by its attorneys but by its stockholders. Nor is a
bank or trust company in the usual case so owned by an
attorney or group of attorneys; if it were, and if it were
used as a mortgage company was used here and its
business were commingled with that of the law office, its
conduct would be equally offensive. But such a situation is
impossible, not only with a bank or trust company, but also
with a savings and loan association by reason of many
factors, including the official supervision of its activities,
which of course does not exist in the case of the
defendants' mortgage company incorporated under the
General Corporation Act.
Second, it is argued that after the publication of In re L.R.,
a case originating in Englewood where the respondents
had their law offices until recently, the respondents took
legal advice of several lawyers and sought to conform to
their opinions as to the meaning of In re L.R. The proofs on
this point are not only fatally defective, but they throw
grave doubt on the good faith of the respondents in
presenting their defense. Not a single written opinion is
produced from any member of the bar. Not a single
lawyer was put on the stand to testify to the opinion he is
alleged to have given to the respondents. There is no
testimony as to what facts were related to each lawyer
allegedly consulted on which he might base his opinion.
There is no testimony as to what the opinion of each of
these lawyers was or what changes he recommended to
the respondents in their operation to conform to the
decision in In re L.R. If such opinions were given at all, they
were "curbstone opinions" and worth no more than such
opinions traditionally are. All that the testimony with
respect to such opinions serves to do is to reveal the
doubts that were existing in the minds of the respondents
as to the propriety of their scheme of operations.
None of the attorneys who are alleged to have given
advice to the respondents were called as witnesses by the
*545 respondents and their testimony in this respect is
entirely without corroboration. In this view of the facts we
are not required to pass on the question of the efficacy of
the advice of counsel, save to remark that this is not a suit
for malicious prosecution and it is therefore difficult to
perceive how the advice of counsel has any bearing
upon the matter. A layman cannot excuse a violation of
the law by saying that he acted on the advice of counsel,
and there would appear to be no sound reason for
extending such an immunity to an attorney charged with
unethical conduct. Were the rule otherwise, a more
effective means of circumventing the Canons of
Professional Ethics could hardly be devised. Even more
troublesome is the fact that the record shows that the
respondents did not make the slightest effort to conform to
In re L.R.; on the contrary, they continued their soliciting
and their advertising on an enlarged scale even after
proceedings were commenced against them. It is
important at this point to note the chronology. In re L.R.
was decided on June 25, 1951. On July 1, 1951, six days
later, the contract hereinbefore mentioned between the
law partnership and the mortgage company was entered
into whereby all legal fees were paid by the borrowers to
the mortgage company, and the mortgage company
paid a fixed annual sum, first of $42,000, later reduced to
$33,000, to the law firm. It is impossible for us to
comprehend how this can be taken as compliance with
the ruling laid down in In re L.R. in which the pertinent
canons, as here, were quoted at length.
Third, it is argued that there are other lawyers in the State,
and especially in Bergen County, who are guilty of the
same offenses. This is, of course, no defense; it merely
furnishes the information for the institution of disciplinary
action against the offenders.
Finally, it is urged in behalf of the respondent Irving that if
he were guilty of the offenses charged, they were cured
by the dissolution of the partnership on November 1, 1952.
Passing over the question of whether the dissolution of the
partnership was the result of the pending proceedings or
rumors thereof, it is quite clear that the present set-up is a
*546 violation of all three canons. The mortgage company,
of which Irving is still a one-third stockholder, is still
advertising and still soliciting business by exactly the same
methods as before. The business of Irving as a lawyer and
the business of the mortgage company are still
intermingled. For example, Irving testified that he did not
yet know what his rent would be, even though he is a one-
third owner of the corporation. Nor is it to be overlooked
that Irving owes his present legal business to his long
continued violations of the three canons relied on herein.
The respondent Rothman, as we have said, filed no brief
but at the oral argument "adopted" the brief filed in behalf
of Irving, which had no special applicability to the case of
Rothman. At the oral argument Rothman's counsel took
the position that while Rothman was not practicing law, he
was not bound by the Canons of Professional Ethics
although still a member of the bar. It is not difficult to
imagine the results which would flow from the
acceptance of such a novel doctrine. Fortunately for the
profession and the public alike, it has not been and is not
now the law. Obligations of the lawyer are binding upon
him as long as he remains admitted to the bar. The fact
that an attorney is no longer practicing law does not
relieve him of the responsibility of living up to the Canons
of Ethics. In In re O'Neil, 228 App. Div. 129, 239 N.Y.S. 297,
299 (App. Div. 1930), the court stated:
"We are of the opinion that respondent, as an attorney,
was bound to practice good faith and observe the
canons of ethics of his profession as fully when he became
vice president or president of the [insurance] company as
when he was its general counsel."
Rothman has gambled for large stakes in business and has
won them, but by reason of his blatent flaunting of the
Canons of Professional Ethics it should be at the expense
of his right to practice law. There is scarcely a phrase in
Canon 27 that he has not deliberately and over a long
period of years consistently violated, by soliciting
"professional employment, by circulars, advertisements,
through touters or by personal *547 communications or
interviews not warranted by personal relations." He has
disregarded the admonition that "indirect advertisements
for professional employment such as furnishing or inspiring
newspaper comments, or procuring his photograph to be
published in connection with causes in which the lawyer
has been or is engaged or concerning the manner of their
conduct, the magnitude of the interest involved [here a
quarter of a billion dollars worth of mortgages], the
importance of the lawyer's position and all other like self-
laudation, offend the traditions and lower the tone of our
profession and are reprehensible." He has set up a
corporation between the customers he solicited and the
former law firm originally and the respondent Irving now,
and he has permitted the corporation to collect legal fees
from these customers where the real work was done by
the law firm or by Irving. Irving likewise has been a party to
all of these matters and, with Rothman, has made possible
the unauthorized practice of the law by their mortgage
company.
Both respondents are clearly guilty of violating the 27th,
the 35th, and 47th Canons of Professional Ethics.
III. SUPPORTING AUTHORITIES
Although we deem the cited canons and decisions in this
State controlling, in view, first, of the division in the court
and, secondly, of the importance to the profession of the
issues raised, it seems desirable to supplement these
authorities by reference, without attempting to be
exhaustive, to pertinent decisions in other states, to the
interpretation of the canons by authorized committees of
the bar, to the practice set up in codes of conduct
entered into by the bar with various related callings, and
to legal writers on the subject. It should be noted at the
outset that relatively few cases concerning the canons
reach the courts, first, because the canons are clear and,
secondly, because the bar in general respects them. It is
only where the necessities are overwhelming or the stakes
great that a lawyer in his right senses is tempted to violate
them.
*548 The Canons of Professional Ethics are based on the
fundamental premise that the practice of law is a
profession and not a business. It is a profession
notwithstanding the fact that lawyers make a living out of
their practice. Dean Roscoe Pound has with his customary
clarity set forth the fundamental characteristic of a
profession:
"What we mean by the term profession when we speak of
the old recognized professions (medicine, the law, ministry).
We mean an organized calling in which men pursue a
learned art and are united in the pursuit of it as a public
service as I have said, no less a public service because
they may make a livelihood thereby. Here, from the
professional standpoint there are three essential ideas
organization, learning, and a spirit of public service. The
gaining of a livelihood is not a professional consideration.
Indeed, the professional spirit, the spirit of a public service,
constantly curbs the urge of that instinct." (Address before
Nebraska State Bar Association, October 20, 1949, p. 2.)
Dean John H. Wigmore has stressed the fact that a
profession involves a way of living and therefore the
canons are much more than rules of ethics:
"For lawyers, the most important truth about the law is that
it is a profession. * * * As a profession, the law must be
thought of as ignoring commercial standards of success as
possessing special duties to serve the state's justice and as
an applied science requiring scientific training.
And, if it is thus set apart as a profession, it must have
traditions and tenets of its own, which are to be mastered
and lived up to. This living spirit of the profession, which
limits yet uplifts it as a livelihood, has been customarily
known by the vague term `legal ethics.' There is much
more to it than rules of ethics. There is a whole atmosphere
of life's behavior. What is signified is all the learning about
the traditions of behavior that mark off and emphasize the
legal profession as a guild of public officers. And the
apprentice must hope and expect to make full
acquaintance with this body of traditions, as his manual of
equipment, without which he cannot do his part to keep
the law on the level of a profession." (Foreword to Carter's,
The Ethics of the Legal Profession, 1915)
The result of these considerations on the lawyer is
epitomized by Chief Judge Cardozo with characteristic
felicity: "Membership in the bar is a privilege burdened
*549 with conditions," People ex rel. Karlin v. Culkin, 248 N.Y.
465, 467, 162 N.E. 487, 489, 60 A.L.R. 851 (Ct. App. 1928).
Many of these conditions are set forth in the Canons of
Professional Ethics.
Our best courts have consistently adhered to these
principles. Thus in In re Disbarment of Tracy, 197 Minn. 35,
38, 266 N.W. 88, 91, 267 N.W. 142 (1936), the Minnesota
Supreme Court stated:
"The point is in the fundamental difference between any
commercial business and a profession. The vocation of a
lawyer is a profession. * * * his conduct * * * is to be
measured not by the indefinite, still developing and largely
unwritten standards of trade and counting house, but by
those of his profession which, while they have not reached
their ultimate state, have yet attained the development
and degree of formulation evidenced by the Canons of
Ethics."
No infringements of the canons, other than those involving
sheer dishonesty, have called forth stronger judicial and
professional denunciation than violations of Canon 27
prohibiting advertising and soliciting. In In re Cohen, 261
Mass. 484, 486, 159 N.E. 495, 497, 55 A.L.R. 1309 (1928), the
Supreme Judicial Court of Massachusetts in a case
involving a lawyer who advertised for business stated:
"The foundation on which this principle of conduct rests is
that attorneys at law practice a profession; they do not
conduct a trade. It is incompatible with the maintenance
of correct professional standards to employ commercial
methods of attracting patronage. Advertising such as that
disclosed on this record is commonly designed to stimulate
public thought and challenge popular attention to the
end that the business of the advertiser may be increased. *
* * Whatever may be his constitutional rights, a member of
the bar must conduct himself as an officer of the court in
such manner as not to offend against reasonable rules of
propriety established by the court for the general welfare.
Courts are solicitous for the rights of one duly admitted to
practice law. * * * They owe an equal duty to see to it that
the public interests are conserved by observance on the
part of lawyers of proprieties indicative of a due
appreciation of their responsibilities to the court and to the
community, even though purely selfish tendencies and
profit may be thereby restrained."
*550 The courts of New York have been equally emphatic.
In In re Schwarz, 175 App. Div. 335, 339, 161 N.Y.S. 1079,
1083 (App. Div. 1916), the court, in dealing with an
attorney who had by the use of letters, circulars and
newspaper advertisements solicited patronage for his
collection business, said:
"They are typical of modern advertising business methods,
and would be appropriate to the exploitation of patent
medicines or other proprietary articles, but are utterly
abhorrent to professional notions or standards. Unless the
ancient and honorable profession of the law, whose
practitioners are officers of the court of the highest
fiduciary character, under obligations of service to the
state, to the community, and to the court, is to be
degraded to the rank of a quack medicine business
enterprise, the advertising and business solicitation
methods here under review must be emphatically and
absolutely condemned. * * *
It is precisely because of the `business' emphasis which the
respondent attaches to his professional title of attorney
and counselor at law that his methods and practices are
so offensive. * * *
The court has no disciplinary supervision of business
enterprises. It has jurisdiction over its own officers, and is
authorized to discipline any attorney who is guilty of
professional misconduct. We are of the opinion that by
using the methods, letters, circulars, and advertisements
here under consideration the respondent is guilty of
professional misconduct. If respondent wishes to retain
and carry on the business which he claims is so valuable to
him, he may do so outside of the profession whose
standards and rules of conduct he has violated; he
cannot remain a member of the bar of this state, and,
while such member, indulge in such practices."
The same attorney was later disbarred in In re Schwarz, 195
App. Div. 194, 197, 186 N.Y.S. 535, 538 (App. Div. 1921),
affirmed 231 N.Y. 642, 132 N.E. 921 (Ct. App. 1921), the
court adopting the opinion below which contained these
pertinent observations:
"It is evident that the respondent has no conception of the
ethics of the profession, and is obsessed by the notion that
self-advertisement is a proper means of obtaining
professional employment, and that his efforts are directed
to so shaping his letters and circulars as to obtain the
results of such advertisement and at the same time
escape judicial condemnation. He had fair warning, but
has deliberately violated the spirit of our former decision,
while asserting that he has observed its letter. The court
told him plainly *551 that if he wished to continue his
business, for that is what he then claimed it was, in the
manner and by the methods employed, he must do it as a
business man, and not masquerade as a professional man,
while violating the fundamental ideals and principles of
the profession."
The opinions of the Committee on Professional Ethics and
Grievances of the American Bar Association are equally
explicit, e.g., in Opinion No. 62, dated March 19, 1932, the
committee was concerned with the application of Canon
27 to an attorney's acquiescence in a newspaper's
repeated publication of laudatory announcements
regarding him and his legal practice. In its opinion the
committee stated:
"The assumptions in questions one and two stretch
credulity almost to the breaking point. The facts stated in
the preamble clearly disclose improper advertising of the
most flagrant nature. We cannot believe that the
newspaper's repeated publication of the attorney's
picture and announcement could have occurred without
his request or consent. But if it be true that such
publication has been made as suggested in question one,
nevertheless, it was the duty of the lawyer, as soon as his
attention was called thereto, to request and require the
publisher to discontinue publication of the article. The
failure so to do would permit him to be `advertised' by
indirection contrary to the provisions of Canon 27. Such
advertising we disapprove." (Opinions of the Committee
on Professional Ethics and Grievances (1946), pp. 156-157)
To the same effect is Opinion No. 44-2 of the Committee
on Professional Ethics of the Chicago Bar Association:
"It is the opinion of the Committee that such advertising,
whether it mentions the attorney or not, if it is with his
knowledge or consent, or if he participates in the results of
such solicitation, constitutes a violation of Canon 27
`Advertising, Direct or Indirect.'"
Violations of Canon 27 concerning advertising and
soliciting are likely to be interwoven, as here, with
violations of Canons 35 and 47 dealing with intermediaries
and aiding in the unauthorized practice of the law. Thus,
Opinion No. 122, dated December 14, 1934, of the
Committee on Professional Ethics and Grievances of the
American Bar Association states:
*552 "There never could have arisen in this country any
widespread lay practice of the law without the assistance
(and we may say the suggestion and inventive genius) of
intelligent, but highly unprofessional lawyers. It may fairly
be said now that no lawyer can urge unfamiliarity either
with the ethical or legal improprieties of such misconduct.
It must cease or be stopped by the activities of the
organized profession. Drastic action should hereafter be
taken against any lawyer participating therein."
See also Opinion No. 31 of the committee, dated March 2,
1931, in which it was said:
"In our opinion, it is improper for an attorney to aid a
corporation to practice law, or in any way to participate in
or sanction such practice, and it is, therefore, improper for
him to allow his name to be displayed on the letterheads
or advertising matter of such a corporation. Furthermore,
the solicitation of `law practice' is contrary to Canon 27,
not only when it is done by the lawyer but also when he
acquiesces in the use of his name in connection with such
solicitation by others.
The conclusion would not be different if he were a full time
salaried officer of a corporation soliciting `law practice.'
An attorney may properly, for a salary, devote his entire
time to the performance of legal services for a corporation,
provided the legal services performed concern only the
corporation's own affairs, but when he allows it to sell his
professional services, he violates Canon 35."
The decisions are to the same effect. In re Tuthill, 256 App.
Div. 539, 10 N.Y.S.2d 643, 649 (App. Div. 1939), was a
disciplinary action under Canon 35 in which an attorney
for one of the so-called "heir hunting" companies was
disbarred. The corporation had been found to be
engaged in the unlawful practice of law. The respondent-
attorney advised the formation of a New Jersey
corporation to evade criminal prosecution in New York
and otherwise aided the corporation in its unlawful
practice of law. In its opinion the court stated:
"The record leaves no doubt that respondent was aware
of the fact that the corporation obtained its business
through solicitation. As an attorney, respondent himself
could not so solicit. In accepting engagements from the
corporation, respondent was doing indirectly what he
could not ethically do directly. * * *
"The relationship of attorney and client did not exist
between respondent and those for whom he appeared as
attorney of record. *553 He was, in reality, the attorney for
the corporation which selected and employed him, to
which he accounted and which fixed his compensation.
"He wholly disregarded the 35th Canon of Professional
Ethics of the American Bar Association * * *."
Here the mortgage company was engaging in the
unauthorized practice of law and the respondents
permitted their services and names to be used in aid
thereof, contrary to Canon 47. Hexter Title & Abstract Co. v.
Grievance Committee, 142 Tex. 506, 179 S.W.2d 946, 951
(Sup. Ct. 1944), where the title company was adjudged
guilty of the unlawful practice of law contrary to statute is
pertinent. The Supreme Court of Texas in affirming said:
"According to the facts set out in the agreed statement,
and particularly paragraph 3 thereof, the defendant
draws deeds, notes, mortgages, and releases relating to
the property rights of others.
According to paragraph 2 of the stipulation it has been
furnishing opinions as to the condition of the title to real
estate, and according to paragraphs 7 and 8 it holds itself
out as possessing authority to render such services, and
advises interested parties as to the purpose and legal
effect of the instruments drawn by it. It therefore advises
others as to the secular law, and draws deeds and other
papers relating to secular rights within the inhibition of the
above statute. These acts, when performed for a
consideration, constitute the practice of law, both within
the terms of the statute above referred to and the
decisions of the courts on the subject."
These canons do not, however, preclude an attorney from
engaging in all business. The line of demarcation is clearly
indicated in Opinion No. 57 of the Committee on
Professional Ethics of the American Bar Association, dated
March 19, 1932, which provides in part:
"It is not necessarily improper for an attorney to engage in
a business; but impropriety arises when the business is of
such a nature or is conducted in such a manner as to be
inconsistent with the lawyer's duties as a member of the
Bar. Such an inconsistency arises when the business is one
that will readily lend itself as a means for procuring
professional employment for him, is such that it can be
used as a cloak for indirect solicitation on his behalf, or is of
a nature that, if handled by a lawyer, would be regarded
as the practice of law. To avoid such inconsistencies it is
always desirable and usually necessary that the lawyer
keep any business in *554 which he is engaged entirely
separate and apart from his practice of the law and he
must, in any event, conduct it with due observance of the
standards of conduct required of him as a lawyer.
(Emphasis supplied)
Some businesses in which laymen engage are so closely
associated with the practice of law that their solicitation of
business may readily become a means of indirect
solicitation of business for any lawyer that is associated
with them. * * *
For the reasons stated a lawyer cannot properly devote a
portion of his time to managing a bureau for the
adjustment of insurance claims nor permit his name to be
used on its stationery. Having thus answered the first and
third questions in the negative, it is unnecessary to answer
the second question. Nevertheless, reference to it is
desirable because it so aptly illustrates the necessity of
keeping any business in which a lawyer may be engaged
entirely separate and apart from his practice of law. If
such a business and his law practice should be conducted
from the same office, the public could not be expected to
distinguish between his dual capacities and know when
he is acting in the capacity of a lawyer and when in that
of a layman."
This problem is further elaborated by Henry S. Drinker in his
forthcoming Legal Ethics:
"There is, of course, nothing in the Canons to prevent this
as to an occupation entirely distinct from and unrelated to
his law practice. Thus, no one would dispute the right of a
lawyer to be a teacher, or a violinist or doctor or a farmer,
or to sell rare postage stamps, provided he in no way used
such occupation to advertise, or as a feeder to his law
practice.
As a Michigan Committee aptly said in a recent case:
`There is, of course, nothing to prevent a lawyer from
adding to his general qualifications by becoming a
certified public accountant and using his added skill in
appropriate matters as they arise. It is only when the
lawyer seeks to publicize the fact that he is also an
accountant that the question arises.' (Mich. op. 124)
Much, of course, depends on the surrounding
circumstances. In small communities where everyone
knows what everyone else is doing, and where there is
comparatively little remunerative law practice, it is quite
the usual thing for lawyers to be engaged in collateral
occupations such as licensed broker or insurance agent. If
they do so using distinct letterheads and not using the
other occupation as a means of solicitation or securing
employment as a lawyer, it is not considered improper.
Thus a lawyer may properly conduct an independent real
estate business in another county (heretofore unpublished
op. 38 of A.B.A. Com. now published in App. A), or may
offer to manage an apartment house in exchange for the
use of an apartment (N.Y. City ops. 344, 475) or may
publish a newspaper and write editorials, *555 but not to
exploit himself as a lawyer (heretofore unpublished op. 37
of the A.B.A. Com.) or may be the salaried trust officer of a
bank (N.Y. County op. 267).
Where, however, the second occupation, although
theoretically and professedly distinct, is one closely related
to the practice of law, and one which normally involves
the solution of what are essentially legal problems, it is
inevitable that, in conducting it, the lawyer will be
confronted with situations where, if not technically, at least
in substance he will violate the spirit of the Canons (N.Y.
City op. 767, income tax service for lawyers), particularly
that precluding advertising and solicitation. The likelihood
of this is the greatest when the collateral business is one
which, when engaged in by a lawyer, constitutes the
practice of law (A.B.A. ops. 31, 35, 57, 194, 201, 225, 257,
272; N.Y. City op. 413) and when it is conducted from his
law office. (Heretofore unpublished op. 43 of A.B.A. Com.)
Thus there is apparently no doubt as to the impropriety of
conducting, from the same office, a supposedly distinct
and independent business of collection agent (N.Y.
County op. 260 and ops. cited; N.Y. City ops. 211, 633; N.Y.
City ops. 102, 479), stock broker (heretofore unpublished
op. 39 of A.B.A. Com.), estate planning (heretofore
unpublished op. 43 of A.B.A. Com.), insurance adjusters
bureau (heretofore unpublished op. 57 of A.B.A. Com.),
tax consultant (A.B.A. op. 57), or mortgage service (N.Y.
County op. 344; N.Y. City op. B-106) or to organize and
operate under a trade name, even though in an adjacent
office, a corporation conducting servicing business
drafting charters and other corporate papers (N.Y. City op.
768; heretofore unpublished op. 77 of A.B.A. Com.). Clearly
a lawyer may not use his legal stationery to solicit business
in the collateral line (N.Y. City op. 636)."
These obvious distinctions are applied by the American Bar
Association Committee in Opinion 225 to collection
agencies, in Opinion 272 to certified public accountants,
and in Librarian v. State Bar, 21 Cal. 2d 862, 863, 136 P.2d
321, 323 (Sup. Ct. 1943), to an attorney who publicized
himself as notary public and tax expert, though not as
attorney, although signs on his office showed he was an
attorney, where the court held:
"If the petitioner should choose to continue as a
practitioner at the bar of this state, he must comply with
the standards of the legal profession. He should
appreciate that when he is licensed to practice as an
attorney at law, the professional services that he thus
performs are performed by him as an attorney, whether or
not some of the services could also be rendered by one
licensed in a different profession. One who is licensed to
practice as an attorney *556 in this state must conform to
the professional standards in whatever capacity he may
be acting in a particular matter. Jacobs v. State Bar, 219
Cal. 59, 25 P.2d 401. As a practicing attorney, he may not
solicit employment nor may he advertise contrary to the
rules. The restrictions, limitations, and permissible conduct
in those respects are familiar both to the lawyer and to the
layman."
These authorities clearly define the line between the
permissible business activities of a lawyer and those which
violate the Canons of Professional Ethics. They do not
interfere with the customary methods of practicing law.
They are aimed only at the sharp practice of a relatively
few members of the bar who are seeking to invade the
plain intent of the canons to their own personal financial
advantage. The first sign of any such intent is likely to be
extravagant, extensive advertising, a field in which they
have no competitors. The second sign is apt to be the
intermingling of the practice of law with the operation of
some business that directly and necessarily produces legal
work in large volume. Such a set-up, which must be
condemned if the canons are not to become a dead
letter in protecting legitimate practitioners, is far removed
from service as a director or officer of a bank, a savings
and loan association or of an ordinary manufacturing or
merchandising establishment, or acting as a real estate or
insurance broker and the difference is not merely one of
degree but it is a difference in intent and methods.
The New Jersey State Bar Association, like many other bar
associations, has sought to protect the profession and
likewise the public by entering into codes with related
callings. Thus its code with the collection agencies
contains the following:
"3. It is held to be improper for an agency to solicit claims
for any purpose at the instigation of any attorney."
"5. It is held to be improper for an agency to communicate
with debtors in the name of an attorney or upon the
stationery of any attorney, or to prepare any forms of
instrument which only attorneys are authorized to
prepare."
"8. In the forwarding of claims to a lawyer for collection, an
agency shall not intervene between the creditor and
attorney in any manner which would exploit the services of
the attorney or which would direct those services in the
interest of the agency, and shall *557 disclose to the
attorney the service charge made by the agency to the
creditor if such service charge is greater than the
Commercial Law League of America minimum rates. If the
attorney corresponds directly with the creditor, the
agency may request that copies of such correspondence
be sent to the agency."
"9. It is held to be improper for an agency to demand or
obtain in any manner a share of the proper compensation
for services performed by an attorney in collecting a claim
or any legal proceedings upon or arising out of such claim,
irrespective of whether or not the agency may have
previously attempted collection thereof."
The same respect for the rules here laid down is also
reflected in the "Statement of Principles Applicable to
Corporate Fiduciaries and Members of the Bar," which
statement has been approved by the New Jersey Bankers
Association, where we find the following provisions:
"5. A corporate fiduciary shall not, directly or indirectly,
influence the employment by the prospective testator of
any specified attorney at law for the preparation of any
will or codicil under which it is to be appointed in any
fiduciary capacity."
"17. A corporate fiduciary shall not extend by
advertisement, or otherwise, an invitation to the public to
`bring its legal problems to the fiduciary' or hold itself out
as prepared to give legal advice or legal service or to
practice law."
"18. A corporate fiduciary shall not advertise that it will, or
that, through the services of its officers, agents or attorneys,
it will draft or prepare or assist in the drafting or
preparation of any will, codicil, trust agreement, contract
or other legal document."
The corporate fiduciaries of this State have recognized the
evils in such a situation and voluntarily entered into a code
prohibiting such practices on their part. The question of
legal services is absolutely divorced from all their
advertising, and in fact they are to maintain a hands-off
policy when it comes to the question of recommending an
attorney who shall perform the legal services for the
customer. Certainly this code entered into between the
bar association and the corporate fiduciaries goes to
great length in furthering the principle of divorcing the
legal profession from the lay activities of the banks and
trust companies. In the case at bar we have a very serious
violation of this principle. We have a situation where a
mortgage company and a law *558 partnership, both
controlled by the same two men, are feathering each
other's nest. The mortgage company's big selling point in
its highly competitive business is the tie-up with the law firm,
as a result of which more efficient service is offered to the
customer. The law partnership allows the mortgage
company to use this selling point, and as a result its own
business is greatly increased. We have here a flagrant
abuse of this principle that is prohibited in the code of the
corporate fiduciaries.
The respondent-attorneys allowed the mortgage
company to extend by advertisement an invitation to the
public to come to them because of their speedy and
efficient service available to a large extent because of the
close tie-up with the law firm. As a matter of fact, there
appears to be no doubt that Rothman actively
encouraged such advertising, both in newspapers and in
the dissemination of this information through the salesmen,
while Irving, who undoubtedly had knowledge of same,
acquiesced therein. The advertisement of the legal
services available helped to increase the business
transactions of the mortgage company, which in turn
resulted in an increase in business of the law firm. Such
advertising a lawyer has never been permitted to do in his
own name; to allow the respondents to do so through an
intermediary is to place the ethical practitioner at a great
disadvantage in competing with those who would turn
their profession into a business.
The decisions in other states, the opinions of authorized
committees elsewhere, and the codes entered into by the
New Jersey State Bar Association with related callings all
support the conclusions we have reached on the basis of
the controlling authorities in this state that the defendants
have willfully and for long periods of time violated the 27th,
the 35th and the 47th Canons of Professional Ethics.
IV. THE MEASURE OF DISCIPLINE
While the justices subscribing to this opinion differ as to the
extent of the discipline to be imposed on the respondents,
*559 we are all agreed that they are at least deserving of
severe reprimand. The bar is put on notice that similar
offenses occurring hereafter will be dealt with more
severely.
WILLIAM J. BRENNAN, JR., J. (dissenting).
The majority finds that the activities of the mortgage
company, the advertising and the sales efforts, were
carried on primarily to produce professional legal
employment for the law partnership so that respondents as
the law partners and the owners of the mortgage
company are guilty of violating Canon 27. But the majority
opinion recognizes that the mortgage company realizes
"substantial profits" from brokerage and "percentage
point" and processing fees incurred by financial institutions
which acquire the mortgages through the mortgage
company, which fees are either paid by the institutions or
are passed on by the institutions to the mortgagors. This
income apparently exceeded by a considerable amount
the legal fees received by the law partnership before its
dissolution. The record, as I read it, clearly supports the
inference that the advertising and sales efforts were
directed exclusively to garnering the mortgage business
and the mortgage fees which go with it; the professional
work obtained by the partnership was an incident and not
the object of the mortgage company's activities.
The majority also finds that the mortgage company, in
violation of Canon 35, was interposed as an intermediary
between the law partnership and those for whom legal
services were rendered, the "customers" of the mortgage
company. But the "customers" for whom legal services
were rendered were primarily the mortgagees who loaned
their money through the agency of the mortgage
company, and I fail to see how the legal services rendered
on behalf of the mortgagees could be said to have been
performed in the interest of the supposed intermediary.
True, the mortgagors, almost entirely individuals purchasing
homes and apparently most of them G.I.'s, who
responded to the opportunity offered them by the
advertising to get mortgage loans through the mortgage
company were often required to pay legal fees *560
charged for the services rendered to the mortgagees, and
also the other charges for non-legal services. But that was
a condition imposed by the mortgagees and is common
and accepted practice in all such mortgage transactions
and does not make the mortgagors the "customers" in any
true sense. It may be that the mortgagors frequently did
not retain their own attorneys independently to advise
them as to the form and legal significance of the
mortgage documents, but it is clear that they were entirely
free to do so. It is also clear that the mortgagors paid no
additional fees to the partnership.
The violation of Canon 47 is rested primarily upon the
finding that the mortgage company offered a form of
"one package deal" comparable to that condemned by
this court in In re L.R., 7 N.J. 390 (1951). This is attempted to
be spelled out of the "publicity for the company's efficient
and quick service in handling mortgage loans," the
advertising of "the unusual facilities of its title plant and
quick service `under one friendly roof,'" and, as to some G.I.
loans, the inclusion in the down payment of an amount for
legal services. I cannot find that the advertisements
anywhere emphasize legal services in the manner
highlighted by the practitioner involved in In re L.R. They
strike me as being more concerned with emphasizing the
company's talent for cutting through the red tape incident
to mortgage financing under governmental auspices,
particularly as they involve G.I. loans. The inclusion of the
legal fees in the down payment was nothing more than
part of the program of the federal agencies to liberalize
the terms upon which G.I.'s could purchase homes.
In any event, this case involves only questions of
professional propriety. There is no suggestion that
respondents did anything dishonest or that they imposed
upon or dealt unfairly with the mortgagees, the borrowers
or the public. The rules they are charged with transgressing
are of the kind which it has been said "have as their main
object to secure that no member of the profession shall
have any but a purely professional interest in his work, by
excluding the incentive of speculative profit," and the
incidental object also "to prevent *561 the economic
standards of the profession being lowered by unscrupulous
competition," E.H. Tawney, The Acquisitive Society (1920).
The obligations assumed by the practitioner thereunder
when he joins the profession help preserve and foster the
ideal of the profession, which subordinates the criterion of
financial return as the mark of success, and the essence of
which is that "though men enter it for the sake of livelihood,
the measure of their success is the service which they
perform, not the gains which they amass." Tawney, supra.
It is to be regretted that all who engage in the practice of
the law do not primarily reserve themselves for the
practice of their profession only. A business man seeking
business may with complete propriety employ methods
which if resorted to by a lawyer desiring professional
employment would be dishonorable because
unprofessional. The profession and the public interest are
better served by the lawyers, fortunately the great majority,
who do not attempt to make the inherently incompatible
admixture. But our professional code does not require that
practitioners refrain from commercial pursuits while at the
same time actively practicing their profession. Chief
Justice Qua of the Massachusetts Supreme Judicial Court
has noted that "commonly a member of the bar is free to
engage in commercial pursuits of an honorable character
and to advertise and to extend his purely mercantile
business honestly and fairly by ordinary commercial
methods." In re Thibodeau, 295 Mass. 374, 3 N.E.2d 749, 750,
106 A.L.R. 542 (1936). The business, however, must not be
merely a cover behind which to solicit professional
employment by methods denied the lawyer although
proper for the business man seeking business for a business.
When alleged professional conduct concerns only matters
of professional propriety, the attitude of the lawyers under
inquiry toward their obligations under our professional
code is, of course, of first importance. The majority says
that the respondents "obviously resolved all doubts in their
own favor and against the Canons of Professional Ethics,
notwithstanding the fact that they must have been
conscious *562 of their precarious position." I do not have
that impression from my reading of the record. I see no
evidence that their effort to live up to their professional
obligations was and is not sincere. The evidence impresses
me the other way. Mr. Irving first sought advice as far back
as "the early part of 1946 and 1947" when the rapidly
accelerating growth of the mortgage enterprise cramped
their quarters and the practical difficulties of avoiding the
mingling of personnel and activities became apparent.
Changes were initiated from time to time to accomplish
not only the fact but also the appearance of separateness
between the mortgage business and the professional
practice. These changes were made both before and
after our decision in In re L.R., supra, and culminated in the
arrangement which now exists and which existed at the
time of the hearing before the committee. Under that
arrangement the partnership of Rothman & Irving has
been dissolved, nothing remotely suggesting legal services
is done by the mortgage company or its affiliates, (indeed,
I discover no proof that this ever was the case), Mr.
Rothman devotes himself exclusively to the management
of the mortgage business and has no participation in the
proceeds of the law practice which Mr. Irving carries on
with his own staff in quarters completely separated from,
though located in the same building with, the mortgage
company and its affiliated enterprises. In that posture of
affairs it seems to me that, there being nothing whatever
to indicate that the precautions taken to separate the
business from the law practice now carried on exclusively
by Mr. Irving are not real or that they cover any subterfuge,
the respondents should be judged upon whether their
present arrangement violates the canons or any of them
and not upon practices or methods which have been
abandoned. This was the conclusion reached by the
Massachusetts Supreme Judicial Court in the not dissimilar
situation presented in In re Thibodeau, supra, and appeals
to my sense of justice and fairness to practitioners whose
endeavors to live up to their professional obligations do
not appear, on this record, to be lacking in sincerity. I
agree that the mortgage company's *563 advertisements
might be still further revised as regards the references to Mr.
Rothman, the lawyer, but I see no reason to question the
earnestness of the proffer by respondents at the opening
and close of the hearings and repeated on the oral
argument to make any additional changes indicated by
the committee or the court as desirable in the interest of
complete and literal compliance with the canons.
It is, of course, true that Mr. Irving's professional income is
and probably will continue to be realized largely from the
professional work which comes to him from the mortgage
company and its affiliates. In that sense the mortgage
company is the "feeder" of his law practice. While he has
no part whatever in the management of the mortgage
business he is a one-third owner thereof and perforce
shares in its success to the extent of the dividends on his
stock interest. Is Mr. Irving's present situation, which, in my
view, is the only just area of inquiry, in truth so "far
removed" from that of innumerable past and present
leaders of the bar who have been and are identified in
executive capacities, as directors, and as owners, with
building and loan associations, insurance companies,
savings and loan associations, banks and trust companies,
and like socially useful enterprises, with the result and in
some cases for the purpose of having their law practices
benefit from these connections? Neither the institutions nor
the law practices which serve them have ever been any
less socially useful because of the connection. And such
institutions are of course peculiarly fruitful sources of legal
work. If respondents' present arrangement, including Mr.
Irving's retention of his one-third stock interest, is contrary to
the canons, so also are these other arrangements which
the bar knows are commonplace throughout the State. If
these practices are to be prohibited that should be
accomplished by unmistakable rules to be applied
prospectively and equally among all members of the bar.
Upon the plainest principles of simple fairness in the
exercise of our disciplinary powers, these respondents
should not be singled out for punishment.

Justices WACHENFELD and JACOBS join in this dissent.

*564 Guilty and for reprimand Chief Justice VANDERBILT,

and Justices HEHER, OLIPHANT and BURLING 4.

Not guilty and for dismissal Justices WACHENFELD, JACOBS

and BRENNAN 3.
G.R. No. L-77691 August 8,1988
PATERNO R. CANLAS, petitioner,
vs.
HON. COURT OF APPEALS, and FRANCISCO
HERRERA, respondents.
Paterno R. Canlas Law Offices for petitioner.
Abalos, Gatdula & Bermejo for private respondent.
SARMIENTO, J.:
The case dramatizes the unpleasant spectacle of a lawyer
tangling with his own client, more often than not, in the
matter of fees. The lawyer, the petitioner himself, would
have his petition decided on pure questions of procedure,
yet, the Court cannot let pass unnoticed the murkier face
of the controversy, wherein the law is corrupted to
promote a lawyer's selfseeking ends, and the law
profession, debased into a simple business dealing.
Accordingly, we resolve it on the basis not only of the
questions raised by the petitioner pertaining to procedure,
but considering its serious ethical implications, on its merits
as well.
We turn to the facts.
The private respondent was the registered owner of eight
(six, according to the petitioner) parcels of land located in
Quezon City. 1 Between 1977 and 1978, 2 he obtained
various loans from the L & R Corporation, a financing
institution, in various sums totalling P420,000.00 As security
therefor, he executed deeds of mortgage in favor of the
corporation over the parcels aforesaid. On August 28,1979,
and upon the maturing of said loans, the firm caused an
extrajudicial foreclosure of mortgage following his failure
to pay, as a consequence of which, the said eight (six,
according to the petitioner) parcels of land were disposed
of at public auction, and in which L & R Corporation was
itself the highest bidder.
Pending redemption, the private respondent filed a
complaint for injunction against L & R Corporation, to
enjoin consolidation of title in its name, in which he
succeeded in obtaining preliminary injunctive relief. He
was represented by the petitioner. Two years later, and
with no imminent end to the litigation in sight, the parties
entered into a compromise agreement whereby L & R
Corporation accorded the private respondent another
year to redeem the foreclosed properties subject to
payment of P600,000.00, with interest thereon at one per
cent per month. They likewise stipulated that the petitioner
shall be entitled to attorney's fees of P100,000.00. On
November 19, 1982, the court 3 approved the compromise.
The private respondent, however, remained in dire
financial straits — a fact the petitioner himself
concede 4 — for which reason he failed to acquire the
finding to repay the loans in question, let alone the sum of
P100,000.00 in attorney's fees demanded by the petitioner.
That notwithstanding, the petitioner moved for execution
insofar as his fees were concemed. The court granted
execution, although it does not appear that the sum was
actually collected. 5
Sometime thereafter, the petitioner and the private
respondent met to discuss relief for the latter with respect
to his liability to L & R Corporation on the one hand, and
his obligation to the petitioner on the other. The petitioner
contends that the private respondent "earnestly
implored" 6 him to redeem the said properties; the private
respondent maintains that it was the petitioner himself who
'offered to advance the money," 7 provided that he, the
private respondent, executed a "transfer of
mortgage" 8 over the properties in his favor. Who implored
whom is a bone of contention, but as we shall see shortly,
we are inclined to agree with the private respondent's
version, considering primarily the petitioner's moral
ascendancy over his client and the private respondent's
increasing desperation.
The records further show that the parties, pursuant to their
agreement, executed a "Deed of Sale and Transfer of
Rights of Redemption and/or to Redeem," a document
that enabled the petitioner, first, to redeem the parcels in
question, and secondly, to register the same in his name.
The private respondent alleges that he subsequently filed
loan applications with the Family Savings Bank to finance
a wet market project upon the subject premises to find,
according to him, and to his dismay, the properties
already registered in the name of the petitioner. He
likewise contends that the "Deed of Sale and Transfer of
Rights of Redemption and/or to Redeem" on file with the
Register of Deeds (for Quezon City) had been falsified as
follows:
WHEREFORE, for and in full settlement of the
attorney's fees of TRANSFEREE in the amount
of ONE HUNDRED THOUSAND PESOS
(Pl00,000.00) I, FRANCISCO HERRERA, hereby
transfer, assign and convey unto TRANSFEREE,
Atty. Paterno R. Canlas, any and all my rights
of the real properties and/or to redeem from
the Mortgagee, L & R Corporation my
mortgaged properties foreclosed and sold at
public auction by the Sheriff of Quezon City
and subject matter of the above Compromise
Agreement in Civil Case No. Q30679 ... 9
whereas it originally reads:
WHEREFORE, for and in full settlement of the
attorney's fees of TRANSFEREE in the amount
of ONE HUNDRED THOUSAND PESOS
(P100,000.00), I, FRANCISCO HERRERA, hereby
transfer, assign and convey unto TRANSFEREE,
Atty. Paterno R. Canlas, any and all my rights
of equity of redemption and/or to redeem
from the Mortgagee, L & R Corporation my
mortgaged properties foreclosed and sold at
public auction by the Sheriff of Quezon City
and subject matter of the above Compromise
Agreement in Civil Case No. Q30679. . .10
As a consequence, the private respondent caused the
annotation of an adverse claim upon the respective
certificates of title embracing the properties. Upon
learning of the same, the petitioner moved for the
cancellation of the adverse claim and for the issuance of
a writ of possession. The court granted both motions. The
private respondent countered with a motion for a
temporary restraining order and later, a motion to recall
the writ of possession. He likewise alleges that he
commenced disbarment proceedings before this Court
against the petitioner 11 as well as various criminal
complaints for estafa, falsification, and "betrayal of
trust" 12 with the Department of Justice. On December 1,
1983, finally, he instituted an action for reconveyance and
reformation of document, 13praying that the certificates of
title issued in the name of the petitioner be cancelled and
that "the Deed of Sale and Transfer of Rights of Equity of
Redemption and/or to Redeem dated May 3, 1983 ... be
reformed to reflect the true agreement of Francisco
Herrera and Paterno R. Canlas, of a mortgage." 14 He
vehemently maintains that the petitioner's "agreement
with [him] was that the latter would lend the money to the
former for a year, so that [petitioner] would have time to
look for a loan for the wet market which [the petitioner]
intended to put up on said property." 15 Predictably, the
petitioner moved for dismissal.
The trial court, however, denied the private respondent's
petition. It held that the alteration complained of did not
change the meaning of the contract since it was "well
within [the petitioner's] rights" 16 "to protect and insure his
interest of P654,000.00 which is the redemption price he
has paid;" 17 secondly, that the petitioner himself had
acquired an interest in the properties subject of
reconveyance based on the
compromise agreement approved by Judge Castro in the
injunction case, pursuant to Section 29(b), of Rule 39, of
the Rules of Court, that had, consequently, made him a
judgment creditor in his own right; thirdly, that the private
respondent had lost all rights over the same arising from his
failure to redeem them from L & R Corporation within the
extended period; and finally, that the petitioner cannot be
said to have violated the ban against sales of properties
in custodia legis to lawyers by their clients pendente lite,
since the sale in question took place after judgment in the
injunction case abovesaid had attained finality. The
complaint was consequently dismissed, a dismissal that
eventually attained a character of finality.
Undaunted, the private respondent, on December 6, 1985,
filed a suit for "Annulment Of Judgment 18 in the
respondent Court of Appeals, 19 praying that the orders of
Judge Castro: (1). granting execution over the portion of
the compromise agreement obliging the private
respondent to pay the petitioner P100,000.00 as attorney's
fees; (2) denying the private respondent's prayer for a
restraining order directed against the execution: and (3)
denying the motion to recall writ of possession, all be set
aside.
The petitioner filed a comment on the petition, but
followed it up with a motion to dismiss. On December 8,
1986, the respondent Court of Appeals promulgated the
first of its challenged resolutions, denying the motion to
dismiss. On March 3, 1987, the Appellate Court denied
reconsideration. 20
Hence the instant petition.
As we stated, the petitioner assails these twin resolutions on
grounds of improper procedure. Specifically, he assigns
the following errors:
I.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS
DISCRETION IN NOT DISMISSING AC G.R. NO. 07860 ON THE
GROUND THAT IT IS IN REALITY A PETITION FOR CERTIORARI
FILED OUT OF TIME AND SHOULD NOT BE GIVEN DUE
COURSE.
II.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS
DISCRETION IN NOT DISMISSING AC G.R. NO. 07860 ON THE
GROUND OF RES JUDICATA
III.
THE RESPONDENT COURT GRAVELY ABUSE [sic] ITS
DISCRETION IN NOT CONSIDERING AC G. R. 07860 AS
MOOT AND ACADEMIC SINCE PETITIONER HAD DISPOSED
OF THE SUBJECT PROPERTIES LONG BEFORE THE FILING OF
THIS SUIT.
IV
THE RESPONDENT COURT GRAVELY ABUSED ITS DISCRETION
IN NOT DENYING PETITIONER'S MOTION TO DISMISS SOLELY
ON THE GROUND THAT THE ARGUMENT RAISED THEREIN ARE
BUT REHASH OF THE ARGUMENTS IN HIS COMMENT TO THE
PETITION. 21
The petitioner argues that the petition pending with the
respondent court "is actually a petition for
certiorari," 22disguised as a pleading for annulment of
judgment and that in such a case, it faces alleged legal
impediments (1) It had been filed out of time, allegedly
two years from the issuance of the assailed orders, and (2)
It was not preceded by a motion for reconsideration. He
adds that assuming annulment of judgment were proper,
no judgment allegedly exists for annulment, the aforesaid
two orders being in the nature of interlocutory issuances.
On purely technical grounds, the petitioner's arguments
are impressive. Annulment of judgment, we have had
occasion to rule, rests on a single ground: extrinsic fraud.
What "extrinsic fraud" means is explained in Macabingkil v.
People's Homesite and Housing Corporation : 23
xxx xxx xxx
It is only extrinsic or collateral fraud, as
distinguished from intrinsic fraud, however,
that can serve as a basis for the annulment of
judgment. Fraud has been regarded as
extrinsic or collateral, within the meaning of
the rule, "where it is one the effect of which
prevents a party from having a trial, or real
contest, or from presenting all of his case to
the court, or where it operates upon matters
pertaining, not to the judgment itself, but of
the manner in which it was procured so that
there is not a fair submission of the
controversy." In other words, extrinsic fraud
refers to any fraudulent act of the prevailing
party in the litigation which is committed
outside of the trial of the case, whereby the
defeated party has been prevented from
exhibiting fully his side of the case, by fraud or
deception practiced on him by his
opponent. 24
A perusal of the petition of therein private respondent
Herrera pending before the respondent Court reveals no
cause of action for annulment of judgment. In the first
place, and as herein petitioner Canlas correctly points out,
the judgment itself is not assailed, but rather, the orders
merely implementing it. Secondly, there is no showing that
extrinsic fraud, as Makabingkil defines it, indeed vitiated
the proceedings presided over by Judge Castro. On the
contrary, Herrera's petition in the respondent court will
show that he was privy to the incidents he complains of,
and in fact, had entered timely oppositions and motions to
defeat Atty. Canlas' claims under the compromise
agreement.
What he objects to is his suspected collusion between Atty.
Canlas and His Honor to expedite the former's collection of
his fees. He alleges that his counsel had deliberately, and
with malevolent designs, postponed execution to force
him (Herrera) to agree to sell the properties in controversy
to him (Atty. Canlas) subject to redemption. ("...[I]t was
understandable that respondent Atty. Paterno R. Canlas
did not implement the writ of execution, instead he
contacted petitioner in order that petitioner would sign
the questioned documents. This was the clincher of the
plan of respondent Atty, Paterno R. Canlas to divest
petitioner of his properties. For this purpose, it is obvious
that respondent Atty. Paterno R. Canlas had to conspire
with the respondent court judge to achieve his plan." 25)
Aside from being plain speculation, it is no argument to
justify annulment. Clearly, it does not amount to extrinsic
fraud as the term is defined in law.
Neither is it proper for the extraordinary remedy of
certiorari. Certiorari presupposes the absence of an
appeal 26 and while there is no appeal from execution of
judgment, appeal lies in case of irregular implementation
of the writ. 27 In the case at bar, there is no irregular
execution to speak of As a rule, "irregular execution"
means the failure of the writ to conform to the decree of
the decision executed. 28 In the instant case, respondent
Herrera's charges, to wit, that Judge Castro had erred in
denying his motions for temporary restraining order and to
recall writ of possession, or that His Honor had acted hastily
(". . . that respondent court/judge took only one [1) day to
resolve petitioner's motion for issuance of [a] [restraining]
order. . ." 29) in denying his twofold motions, do not make
out a case for irregular execution. The orders impugned
are conformable to the letter of the judgment approving
the parties'compromise agreement.
The lengths the private respondent, Francisco Herrera,
would go to in a last-ditch bid to hold on to his lands and
constraints of economic privation have not been lost on us.
It is obvious that he is uneasy about the judgment on
compromise itself, as well as the subsequent contract
between him and his lawyer. In such a case, Article 2038
of the Civil Code applies:
Art. 2038. A compromise in which there is
mistake, fraud, violence intimidation, undue
influence, or falsity of documents, is subject to
the provisions of article 1330 of this Code ...
in relation to Article 1330 thereof:
Art. 1330. A contract where consent is given
through mistake, violence, intimidation, undue
influence, or fraud is voidable.
in relation to its provisions on avoidance
of'contracts. 30 The court notes that he had, for this
purpose, gone to the Regional Trial Court, a vain effort as
we stated, and in which the decision had become final.
We, however, sustain Atty. Canlas' position-on matters of
procedure — for the enlightenment solely of the bench
and the bar. It does not mean that we find merit in his
petition. As we have intimated, we cannot overlook the
unseemlier side of the proceeding, in which a member of
the bar would exploit his mastery of procedural law to
score a "technical knockout" over his own client, of all
people. Procedural rules, after all, have for their object
assistance unto parties "in obtaining just, speedy, and
inexpensive determination of every action and
proceeding." 31If procedure were to be an impediment to
such an objective, "it deserts its proper office as an aid to
justice and becomes its great hindrance and chief
enemy." 32 It was almost eight decades ago that the Court
held:
 ... A litigation is not a game of technicalities in
which one, more deeply schooled and skilled
in the subtle art of movement and position,
entraps and destroys the other. It is, rather, a
contest in which each contending party fully
and fairly lays before the court the facts in
issue and then, brushing aside as wholly trivial
and indecisive all imperfections of form and
technicalities of procedure, asks that justice
be done upon the merits. Lawsuits, unlike
duels, are not to be won by the a rapier's
thrust ... 33
It is a ruling that almost eight decades after it was
rendered, holds true as ever.
By Atty. Canlas' own account, "due to lack of paying
capacity of respondent Herrera, no financing entity was
willing to extend him any loan with which to pay the
redemption price of his mortgaged properties and
petitioner's P100,000.00 attorney's fees awarded in the
Compromise Judgment," 34 a development that should
have tempered his demand for his fees. For obvious
reasons, he placed his interests over and above those of
his client, in opposition to his oath to "conduct himself as a
lawyer ... with all good fidelity ... to [his] clients." 35 The
Court finds the occasion fit to stress that lawyering is not a
moneymaking venture and lawyers are not merchants, a
fundamental standard that has, as a matter of judicial
notice, eluded not a few law advocates. The petitioner's
efforts partaking of a shakedown" of his own client are not
becoming of a lawyer and certainly, do not speak well of
his fealty to his oath to "delay no man for money." 36
It is true that lawyers are entitled to make a living, in spite
of the fact that the practice of law is not a commercial
enterprise; but that does not furnish an excuse for plain lust
for material wealth, more so at the expense of another.
Law advocacy, we reiterate, is not capital that yields
profits. The returns it births are simple rewards for a job
done or service rendered. It is a calling that, unlike
mercantile pursuits which enjoy a greater deal of freedom
from government interference, is impressed with a public
interest, for which it is subject to State regulation. 37 Anent
attomey's fees, section 24, of Rule 138, of the Rules,
provides in part as follows:
SEC. 24. Compensation of attorneys,
agreement as to fees. — An attorney shall be
entitled to have and recover from his client no
more than a reasonable compensation for his
services, with a view to the importance of the
subject matter of the controversy, the extent
of the services rendered, and the professional
standing of the attorney... A written contract
for services shall control the amount to be
paid therefor unless found by the court to be
unconscionable or unreasonable.
So also it is decreed by Article 2208 of the Civil Code,
reproduced in part, as follows:
Art. 2208 ...
In all cases, the attorney's fees and expenses
of litigation must be reasonable.
We do not find the petitioner's claim of attorney's fees in
the sum of P100,000.00 reasonable. We do not believe that
it satisfies the standards set forth by the Rules. The extent of
the services he had rendered in Civil Case No. 30679, and
as far as the records will yield, is not impressive to justify
payment of such a gargantuan amount. The case itself
moreover did not involve complex questions of fact or law
that would have required substantial effort as to research
or leg work for the petitioner to warrant his demands. The
fact that the properties subject thereof commanded quite
handsome prices in the market should not be a measure
of the importance or non-importance of the case. We are
not likewise persuaded that the petitioner's stature
warrants the sum claimed.
All things considered, we reduce the petitioner's fees, on
a quantum meruit basis, to P20,000.00.
It is futile to invoke the rule granting attorneys a lien upon
the things won in litigation similar to that vested upon
redemptioners. 38 To begin with, the rule refers to realty
sold as a result of execution in satisfaction of judgment. In
this case, however, redemption was decreed by
agreement (on compromise) between the mortgagor and
mortgagee. It did not give the petitioner any right to the
properties themselves, much less the right of redemption,
although provisions for his compensation were purportedly
provided. It did not make him a redemptioner for the plain
reason that he was not named one in the amicable
settlement. To this extent, we reverse Judge Pedro
Santiago's ruling in Civil Case No. 40066, recognizing Atty.
Canlas' "legal right, independent of the questioned deed
of sale and transfer which was executed subsequently on
May 3, 1983, to redeem the subject realty from the L & R
Corporation pursuant to Sec. 29 (b), Rule 39 of the Rules of
Court." 39 Whatever right he had, it was, arguably with
respect alone to his renumeration. It did not extend to the
lands.
Secondly, and assuming that such a right exists, it must be
in proportion to the "just fees and disbursements" 40 due
him. It is still subject to the tempering hand of this Court.
The Court notes a hidden agenda in the petitioner's haste
to execute the compromise agreement and subsequently,
to force the transfer of the properties to himself. As we
have observed, in spite of the issuance of the writ of
execution, it does not appear that the petitioner took
pains to implement it. We find this perplexing given his
passionate and persistent pleas that he was entitled to the
proceeds. There can indeed be no plausible explanation
other than to enable him to keep an "ace" against the
private respondent that led finally, to the conveyance of
the properties in his favor. To be sure, he would have us
beheve that by redeeming the same from the mortgagee
and by in fact parting with his own money he had actually
done the private respondent a favor, but this is to assume
that he did not get anything out of the transaction. Indeed,
he himself admits that "[t]itles to the properties have been
issued to the new owners long before the filing of private
respondents [sic] petition for annulment." 41 To say that he
did not profit therefrom is to take either this Court or the
petitioner for naive, a proposition this Court is not prepared
to accept under the circumstances.
We are likewise convinced that it was the petitioner who
succeeded in having the private respondent sign the
"Deed of Sale and Transfer of Rights of Equity of
Redemption and/or to Redeem," a pre-prepared
document apparently, that allowed him (the petitioner) to
exercise the right of redemption over the properties and to
all intents and purposes, acquire ownership thereof. As we
have earlier averred, the private respondent, by reason of
bankruptcy, had become an easy quarry to his counsel's
moral influence and ascendancy. We are hard put to
believe that it was the private respondent who "earnestly
implored" 42 him to undertake the redemption amid the
former's obstinate attempts to keep his lands that have
indeed led to the multiple suits the petitioner now
complains of, apart from the fact that the latter himself
had something to gain from the transaction, as alluded to
above. We are of the opinion that in ceding his right of
redemption, the private respondent had intended merely
to forestall the total loss of the parcels to the mortgagee
upon the understanding that his counsel shall acquire the
same and keep them therefore within reach, subject to
redemption by his client under easier terms and conditions.
Surely, the petitioner himself would maintain that he
agreed to make the redemption"in order that [he] may
already be paid the P100,000.00 attorney's fees awarded
him in the Compromise Agreement," 43 and if his sole
concern was his fees, there was no point in keeping the
properties in their entirety.
The Court simply cannot fag for the petitioner's pretensions
that he acquired the properties as a gesture of
magnanimity and altruism He denies, of course, having
made money from it, but what he cannot dispute is the
fact that he did resell the properties. 44
But if he did not entertain intents of making any profit, why
was it necessary to reword the conveyance document
executed by the private respondent? It shall be recalled
that the deed, as originally drafted, provided for
conveyance of the private respondent's "rights of equity of
redemption and/or redeem" 45 the properties in his favor,
whereas the instrument registered with the Register of
Deeds purported to transfer "any and all my rights of the
real properties and/or to redeem," 46 in his favor. He admits
having entered the intercalations in question but argues
that he did so "to facilitate the registration of the
questioned deed with the Register of Deeds" 47 and that it
did not change the meaning of the paper, for which
Judge Santiago acquitted him of any falsification
charges. 48 To start with, the Court is at a loss how such an
alteration could "facilitate" registration. Moreover, if it did
not change the tenor of the deed, why was it necessary
then? And why did he not inform his client? At any rate,
the agreement is clearly a contract of adhesion. Its
provisions should be read against the party who prepared
it.
But while we cannot hold the petitioner liable for
falsification — this is not the proper occasion for it — we
condemn him nonetheless for infidelity to his oath "to do
no falsehood" 49
This brings us to the final question: Whether or not the
conveyance in favor of the petitioner is subject to the ban
on acquisition by attorneys of things in litigation. The
pertinent provisions of the Civil Code state as follows:
Art. 1491. The following persons cannot
acquire by purchase, even at a public or
judicial action, either in person or through the
mediation of another:
(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 instrusted to
them; this provision shall apply to judges and
government experts who, in any manner
whatsoever, take part in the sale;
(5) Justice judges prosecuting attorneys clerks
of superior and inferior courts, and other
officers and employees connected with the
administration of justice, the property and
rights in 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 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.**
In Rubias v. Batiller, 50 we declared such contracts to be
void by force of Article 1409, paragraph (7), of the Civil
Code, defining inexistent contracts. In Director of Lands v.
Ababa 51 however, we said that the prohibition does not
apply to contingent contracts, in which the conveyance
takes place after judgment, so that the property can no
longer be said to be "subject of litigation."
In the instant case, the Court observes that the "Deed of
Sale and Transfer of Rights of Equity of Redemption and/or
to Redeem" was executed following the finality of the
decision approving the compromise agreement. It is
actually a new contract — not one in pursuance of what
had been agreed upon on compromise — in which, as we
said, the petitioner purportedly assumed redemption rights
over the disputed properties (but in reality, acquired
absolute ownership thereof). By virtue of such a
subsequent agreement, the lands had ceased to be
properties which are "the object of any litigation."
Parenthetically, the Court states that a writ of possession is
improper to eject another from possession unless sought in
connection with: (1) a land registration proceeding; (2) an
extrajudicial foreclosure of mortgage of real property; (3)
in a judicial foreclosure of property provided that the
mortgagor has possession and no third party has
intervened; and (4) in execution sales. 52 It is noteworthy
that in this case, the petitioner moved for the issuance of
the writ pursuant to the deed of sale between him and the
private respondent and not the judgment on compromise.
(He was, as we said, issued a writ of execution on the
compromise agreement but as we likewise observed, he
did not have the same enforced. The sale agreement
between the parties, it should be noted, superseded the
compromise.) The writ does not lie in such a case. His
remedy is specific performance.
At any rate, the transfer, so we hold, is not subject to the
injunction of Article 1491 of the Civil Code. But like all
voidable contracts, it is open to annulment on the ground
of mistake, fraud, or undue influence, 53 which is in turn
subject to the right of innocent purchasers for value. 54
For this reason, we invalidate the transfer in question
specifically for undue influence as earlier detailed. While
the respondent Herrera has not specifically prayed for
invalidation, this is the clear tenor of his petition for
annulment in the Appellate Court. It appearing, however,
that the properties have been conveyed to third persons
whom we presume to be innocent purchasers for value,
the petitioner, Atty. Paterno Canlas, must be held liable,
by way of actual damages, for such a loss of properties.
We are not, however, condoning the private respondent's
own shortcomings. In condemning Atty. Canlas monetarily,
we cannot overlook the fact that the private respondent
has not settled his hability for payment of the properties. To
hold Atty. Canlas alone liable for damages is to enrich said
respondent at the expense of his lawyer. The parties must
then set off their obligations against the other. To obviate
debate as the actual amounts owing by one to the other,
we hold Francisco Herrera, the private respondent, liable
to Atty. Paterno Canlas, the petitioner, in the sum of
P654,000.00 representing the redemption price of the
properties, 55 in addition to the sum of P20,000. 00 as and
for attomey's fees. We order Atty. Canlas, in turn, to pay
the respondent Herrera the amount of P1,000,000.00, the
sum he earned from the resale thereof, 56 such that he
shall, after proper adjustments, be indebted to his client in
the sum of P326,000.00 as and for damages.
Needless to say, we sustain the action of the respondent
Court of Appeals in taking cognizance of the petition
below. But as we have stated, we are compelled, as the
final arbiter of justiciable cases and in the highest interests
ofjustice, to write finis to the controversy that has taxed
considerably the dockets of the inferior courts.
Let the Court further say that while its business is to settle
actual controversies and as a matter of general policy, to
leave alone moot ones, its mission is, first and foremost, to
dispense justice. At the outset, we have made clear that
from a technical vantage point, certiorari, arguably lies,
but as we have likewise stated, the resolution of the case
rests not only on the mandate of technical rules, but if the
decision is to have any real meaning, on the merits too.
This is not the first time we would have done so; in many
cases we have eschewed the rigidity of the Rules of Court
if it would establish a barrier upon the administration
ofjustice. It is especially so in the case at bar, in which no
end to suit and counter-suit appears imminent and for
which it is high time that we have the final say. We likewise
cannot, as the overseer of good conduct in both the
bench and the bar, let go unpunished what convinces us
as serious indiscretions on the part of a lawyer.
WHEREFORE, judgment is hereby rendered.
1. ORDERING the petitioner, Atty. Patemo Canlas, to pay
to the private respondent, Francisco Herrera, the sum of
P326,000.00, as and for damages;
2. ORDERING the petitioner to SHOW CAUSE why no
disciplinary action may be imposed on him for violation of
his oath, as a lawyer, within ten (10) days from notice, after
which the same will be consolidated with AC No. 2625;
3. DISMISSING this petition and REMANDING the case to
the respondent Court of Appeals for execution; and
4. ORDERING the petitioner to pay costs.
SO ORDERED.
Melencio-Herrera (Chairperson) and Medialdea, ** JJ.,
concur.
Paras and Padilla, JJ., took no part.
A.C. No. 528 October 11, 1967
ANGEL ALBANO, complainant,
vs.
ATTY. PERPETUA COLOMA, respondent.
FERNANDO, J.:
This proceeding for disbarment was filed by complainant
Angel Albano against respondent Perpetua Coloma, a
member of the Philippine Bar. In a letter dated June 20,
1962 addressed to this Court, complainant alleged that
during the Japanese occupation his mother, Delfina
Aquino, and he retained the services of respondent as
counsel for them as plaintiffs in Civil Case No. 4147 of the
Court of First Instance of Ilocos Norte. After which came
the accusation that after liberation and long after the
courts had been reorganized, respondent failed to
expedite the hearing and termination of the case, as a
result of which they had themselves represented by
another lawyer. This notwithstanding, it was claimed that
respondent intervened in the case to collect her attorney's
fees. It was then alleged that during the hearing they were
surprised when respondent presented in exhibit a
document showing that they as well as their co-plaintiffs in
the case promised to pay her a contingent fee of 33-¹/3%
of whatever could be recovered whether in land or
damages. A copy of such document was attached to the
letter. The more serious charge was that the signature
therein appearing, purportedly that of the complainant,
and the writing after the name of his mother were not
made by them. It was further stated that the Honorable
Delfin B. Flores, then Judge of the Court of First Instance of
Ilocos Norte, submitted the document in question to the
National Bureau of Investigation (hereinafter referred to as
NBI) together with samples of his genuine signature. A
copy of the finding of the NBI was attached, the
conclusion being that the questioned signature "is NOT in
the hand of the person whose sample signatures were
received."
Complainant stated that being a poor man, he could
hardly pay for the services of a lawyer to assist him in the
disbarment proceedings. He added the information that
respondent Coloma "is a very influential woman in the
province of Ilocos Norte" as she was then a member of the
provincial board. The prayer was for the "kind and
generous help regarding this matter in order that Atty.
Perpetua Coloma may be made to stand before the bar
of justice and disbarred from the practice of her profession
as a lawyer."
In a resolution dated July 20, 1962, this Court required
respondent Perpetua Coloma to answer the complaint.
The answer came in September 4, 1962. There was a
specific denial of the allegation that the complainant was
"a victim of injustice," respondent alleging that the same
was "untrue, unfounded and imaginary." While admitting
that her services were contracted by complainant and his
mother and their co-plaintiffs, in Civil Case No. 4147, she
stated that there was a contingent fee of one-third (¹/3) of
whatever land and damages could be obtained for the
plaintiffs. She denied that she did nothing to expedite the
hearing and termination of such civil case as the record
would show that she filed "more than twenty (20) papers
and pleadings, went to trial for several days and with the
assistance of her sister, Atty. Oliva D. Coloma, obtained a
favorable judgment in the Court of First Instance for the
petitioner and his co-plaintiffs and filed with the Honorable
Court of Appeals a thirty-five (35) page brief, finished after
careful, conscientious and exhaustive study and
preparation." She attached a copy of the favorable
decision rendered by Judge Simeon Ramos of November
10, 1948;1 the decision of the Court of Appeals
promulgated on October 13, 1950, confirming the above
favorable decision, which was penned by the then Justice
Gutierrez David;2 and the dismissal of a petition
for certiorari to review such decision in the resolution of this
Court of January 10, 1951.3 Then came a reference to a
decision by the Court of Appeals in CA-G.R. No. 10563-R,
the complainant as one of the plaintiffs having appealed
from an order of the lower court, sustaining her lien upon
the judgment as well as "her share of one-third (¹/3) of the
lands adjudicated" which according to the lower court
however would require that the proper action be filed. In
the opinion of the Court of Appeals penned by Justice
Sanchez, now a member of this Court, an evaluation of
her service was made thus:
"Appellee served as plaintiffs' counsel for a period of about
seven years. The record shows that she was diligent in her
work. That she had rendered valuable services cannot be
doubted. In fact, the final decision favorable to plaintiffs is
almost wholly the result of her efforts. Literally, she
gambled on the success or failure of the litigation. She was
a member of the Bar since 1940. Gauged by the familiar
rule that an attorney shall be entitled to have reasonable
compensation for his services, with a view to the
importance of the subject matter of the controversy, the
extent of the services rendered, and the professional
standing of the attorney, . . ., we feel, as did the trial court,
that appellee is entitled to one-third of all the lands and
damages recoverable by plaintiffs under the judgment of
the Court below."
She likewise denied that she could have been removed
for her failure to comply with her obligations as counsel as
she served "faithfully, efficiently, continuously and to the
best of her knowledge and capacity." Her dismissal then,
according to her, "was made without cause and without
the consent of herein respondent and only on June 18,
1951, when the undersigned had already won the case for
them in the Court of First Instance and in the Court of
Appeals." In view of the failure of the new lawyers retained
to be at times available in the Court of First Instance of
Ilocos Norte and as pleadings by opposing counsel were
still sent to her and out of loyalty to her former clients she
continued "to render professional legal services to
complainant and his mother." Then came the allegation
"that after the case was won in the trial court and in the
Court of Appeals, complainant and his co-plaintiffs
stopped seeing the undersigned and even disowned their
contract with her in the trial of [her] petition to record
attorney's lien which was granted by the trial court and
affirmed by the Court of Appeals." Copies of the decisions
of the trial court and the Court of Appeals, were submitted
together with the answer.4 She characterized as "false and
unjust" the averment of complainant "that the latter and
his mother did not sign Annex 'A' because they really
signed the instrument in the presence of attesting
witnesses who testified to and confirmed the signing of the
same, which fact (of signing) was found and confirmed by
the trial court after and affirmed by the Court of
Appeals, . . . ."
Then came the denial of the allegation of complainant
that due to the seriousness of the charge, Judge Delfin B.
Flores submitted the alleged falsified document to the NBI
for examination, the truth being that it was complainant
who did so. She likewise "specifically denies the
authenticity and veracity of the alleged findings of the
National Bureau of Investigation on Annex 'A' because the
signatures therein are genuine and have been found to
be so by the trial and appellate courts after hearing the
testimony of the instrumental witnesses and comparing the
signatures in Annex 'A' with signatures admitted to be
genuine by the complainant as well as upon the
affirmation of complainant's sister and a co-plaintiff in Civil
Case No. 4147." She then referred to a rule which she
considered well-settled in this jurisdiction that a question of
whether or not a given document is genuine falls within
the general knowledge and competence of a judge who
may inquire into its authenticity, the testimony of
instrumental witnesses sufficing, without the court being
bound even by real experts. Nor could she agree that the
complainant was a poor man and could hardly afford the
services of a lawyer because thru her efforts, he and his
co-plaintiffs were richer "by about P100,000.00 (P85,000.00
in realty and P15,000.00 in cash as damages) by winning
Civil Case No. 4147 for them" notwithstanding, which
ingratitude had been her reward. Respondent also denied
the insinuation that she was using her influence as a board
member. She stated that from 1944 to 1951, when she
rendered her services for complainant, she was in private
life, not having been elected to the provincial board until
1959.
She concluded by saying that "during her practice of law
for more than twenty (20) years [she] has strictly adhered
to the ethics of the profession and has always been
guided by the principles of justice, fairness and respect for
individual rights and that as a public official, [she] has
never used her influence to corrupt public servants or
ordinary citizens, and all the people of Ilocos Norte well
know that complainant has no sense of justice, no integrity
to preserve, no honor to treasure and no future to build.
On the other hand, the people of said province have
faithfully supported [her] in her aspirations, first as councilor
and then as board member with overwhelming majorities.
Said support speaks of vindication and means full faith
and credit to [her] integrity, ability and honesty." She
further submitted as affirmative defenses the cause of
action being barred by (1) prior judgment and (2) by the
statute of limitations. She prayed for the dismissal of the
complaint against her.
The matter was referred to the Solicitor General for
investigation, report and recommendation in a resolution
of this Court dated September 7, 1962. On September 12,
1967, the report and recommendation of the Solicitor
General was submitted. He asked "that this case be
dismissed." We grant such a plea.
In his report, the Solicitor General noted that in the
investigation conducted on his behalf by the provincial
fiscal of Ilocos Norte, "only the complainant
appeared."5 No evidence was introduced by him other
than the NBI report on the alleged falsified signatures. He
manifested that all his evidence could be found in the
records of Civil Case No. 4147 of the Court of First Instance
of Ilocos Norte.6 Respondent on her part, according to the
Solicitor General, "merely filed a manifestation to the
effect that the contract for attorney's fees in question had
already been declared genuine and authentic by the
Court of First Instance of Ilocos Norte, the Court of Appeals,
and this Honorable Court, in their respective decisions,
copies of which were attached to her answer; that said
Contract was signed by petitioner and the instrumental
witnesses thereto in her presence; and that she was
submitting the case on the annexes to her answer and the
transcript of the trial of the proceedings on the recording
of her attorney's lien in Civil Case No. 4147. . . ."7
The facts as found by the Solicitor General in so far as the
services of respondent as counsel for the complainant and
his mother were concerned reveal the utmost diligence
and conscientiousness on her part. What she said in her
answer was sustained in all respects.
The express finding was then made by the Solicitor
General that the question of the genuineness and due
execution to pay respondent her attorney's fees "had
already been litigated by the parties in the course of the
proceedings for the recording and enforcement of the
attorney's lien of respondent in Civil Case No. 4147 of the
Court of First Instance of Ilocos Norte; that the plaintiffs in
said case (one of whom is the complainant in this case)
denied the genuineness and due execution of said
agreement Exh. 'A'; that they had full opportunity to
present evidence in support of their said contention; that
after hearing, the trial court found said document to be
genuine (pp. 43-48, rec.); and that on appeal to the Court
of Appeals, said court likewise found said document
genuine . . ."8
On this point an extended excerpt from the decision of the
Court of Appeals, the opinion being penned as noted by
Justice Sanchez, was quoted. Thus:
1. Exhibit A, the written contract of professional
services, shows that appellee, as plaintiffs' attorney,
is entitled to one-third of all the lands and damages
which may be awarded plaintiffs; otherwise, if the
case is lost, then appellee is not entitled to
compensation.
That Exhibit A was duly executed is a proven fact. A
witness to that document, namely, Sergio Manuel,
testified that the cross after the name of Delfina
Aquino was placed by her and that the signature of
Angel Albano, one of the plaintiffs, is the genuine
signature of the said Angel Albano. It is true that on
the witness stand Delfina Aquino denied that she
placed a cross after the typewritten words "Delfina
Aquino" in Exhibit A, and that Angel Albano likewise
denied his signature therein. Suffice it to say that this
negative testimony will not prevail over the positive
testimony of appellee and her witness
aforesaid. People vs. Bueno, 41 Phil. 447, 452; People
vs. Ferrer, 44 O.G., No. 1, pp. 112, 115.
Further, appellee's evidence on this point is not
limited merely to Exhibit A. The record shows that
previous thereto, there was a verbal agreement
regarding said attorney's fee's. On this point,
appellee finds corroboration in the testimony of
Rosario Lagasca, a blood relation of plaintiff and
Silvina Guillermo.
Plaintiffs' evidence that in 1955 appellee undertook
to take up the case of plaintiffs for a stipulated
contingent fee of P2,000.00 does not merit serious
consideration. It does not seem probable that
appellee would take the case on a win-or-lose basis,
i.e., for the sum of P2,000.00 in case the litigation is
won and nothing in case of loss, because at that
time P2,000.00 was worth only a few gantas of rice.
No lawyer in his right mind would accept such a
miserable fee.
The following testimony of Felicidad Albano, one of
the plaintiffs, given in an obviously unguarded
moment, stripped plaintiffs naked of the pretense
that there was no such contract for one-third share
as fees:
 "Q — Did you not authorize your brother,
Angel Albano, or your mother, to give one-
third (1/3) of all the properties and damages?
"A — We authorized them." Tr., p. 8,
Galapon.
The court below, therefore, is correct in declaring
that, after weighing and considering the evidence
of both parties, Exhibit A is genuine. (pp. 61- 62,
rec.)9
The Solicitor General thus concluded that the finding of
the Court of First Instance of Ilocos Norte, and of the Court
of Appeals that the questioned document "is genuine, is
now res judicata and bars complainant Angel Albano
(one of the plaintiffs in Civil Case No. 4147) from raising
said question anew in these disbarment proceedings. As
repeatedly held, the fundamental principle of res
judicata applied to all cases and proceedings, in
whatever form they may be (Brillantes vs. Castro, L-9223,
June 30, 1956, 99 Phil. 497; 60 C.J.S. 31, 267), and a party
can not escape the bar of a judgment against him in a
new suit on the same cause of action by varying the form
of his action or adopting a different method of presenting
his cage (Wensel v. Surigao Consolidated Mining Inc., 57
O.G. 6958; Vda. de Padilla vs. Paterno, G.R. No. L-8748,
Dec. 26, 1961; 50 C. J., S. 98)."10
It was noted further that there was no oral testimony as to
the alleged falsification, except the report of the NBI,
lacking in persuasive force in that it failed to state the
reason or basis for its conclusion. The observation of the
Solicitor General here made is both pertinent and relevant:
"The mere conclusion in the aforesaid NBI report that the
signature of complainant Angel Albano on the document
Exh. A was not written in the same hand that wrote the
genuine specimens of his signature, without any reason or
reasons supporting it, is, therefore, of little or no value in
evidence and consequently, it cannot support the present
charge of falsification against respondent, apart from the
fact that, as already stated, it is inadmissible on the ground
of estoppel by judgment."11 On the reasonableness of the
contingent fee collected by respondent, the Solicitor
General adopted the same view found in the decision of
the Court of Appeals, already referred to being part of
respondent's answer, that such indeed was the case.
The Solicitor General could thus rightfully assert that if there
was anyone guilty of bad faith in this case "it is
complainant and his co-plaintiffs in Civil Case No. 4147
who, after benefiting from the valuable services of
respondent in said case, tried to renege on their
agreement for the payment of the latter's contingent
attorney's fees by dismissing her as their counsel after she
had already won for them said case in the trial court and
the Court of Appeals, and later, by attempting to impugn
the authenticity and genuineness of their written
agreement for the payment of attorney's fees, . . . ."12
He was of the opinion then that even if for purposes of said
case the findings in judicial cases could not be considered
binding "it is safe to conclude, from a review of the
evidence in said court proceedings taken together with
the evidence before us in this case, that respondent may
be exonerated herein."13 With such a conclusion of the
Solicitor General, this Court, to repeat, is in full agreement.
Counsel, any counsel, who is worthy of his hire, is entitled to
be fully recompensed for his services. With his capital
consisting solely of his brains and with his skill, acquired at
tremendous cost not only in money but in the expenditure
of time and energy, he is entitled to the protection of any
judicial tribunal against any attempt on the part of a client
to escape payment of his fees. It is indeed ironic if after
putting forth the best that is in him to secure justice for the
party he represents, he himself would not get his due. Such
an eventuality this Court is determined to avoid. It views
with disapproval any and every effort of those benefited
by counsel's services to deprive him of his hard-earned
honorarium. Such an attitude deserves condemnation.

There is this additional point to consider. As Cardozo aptly

observed: "Reputation [in the legal profession] is a plant of
tender growth, and its bloom, once lost, is not easily
restored."14 This Court, certainly is not averse to having
such a risk minimized. Where, as in this case, the good
name of counsel was traduced by an accusation made in
reckless disregard of the truth, an action prompted by
base ingratitude, the severest censure is called for.

Certainly, this is not to say that if a case were presented

showing nonfeasance or malfeasance on the part of a
lawyer, appropriate disciplinary action would not be taken.
This is not such a case however. Respondent, as has been
so clearly shown, was in no wise culpable; there is no
occasion for the corrective power of this Court coming
into play.

WHEREFORE, the charge against respondent Perpetua

Coloma, member of the Philippine Bar, is hereby dismissed.

Reyes, J.B.L., Dizon, Makalintal, Zaldivar and Angeles,

JJ., concur.
Concepcion, C.J. and Bengzon, J.P., are on leave.
Sanchez and Castro, JJ., took no part.
July 30, 1979
PETITION FOR AUTHORITY TO CONTINUE USE OF THE FIRM
NAME "SYCIP, SALAZAR, FELICIANO, HERNANDEZ &
CASTILLO." LUCIANO E. SALAZAR, FLORENTINO P. FELICIANO,
BENILDO G. HERNANDEZ. GREGORIO R. CASTILLO. ALBERTO
P. SAN JUAN, JUAN C. REYES. JR., ANDRES G. GATMAITAN,
JUSTINO H. CACANINDIN, NOEL A. LAMAN, ETHELWOLDO E.
FERNANDEZ, ANGELITO C. IMPERIO, EDUARDO R. CENIZA,
TRISTAN A. CATINDIG, ANCHETA K. TAN, and ALICE V.
PESIGAN, petitioners.
IN THE MATTER OF THE PETITION FOR AUTHORITY TO
CONTINUE USE OF THE FIRM NAME "OZAETA, ROMULO, DE
LEON, MABANTA & REYES." RICARDO J. ROMULO, BENJAMIN
M. DE LEON, ROMAN MABANTA, JR., JOSE MA, REYES, JESUS
S. J. SAYOC, EDUARDO DE LOS ANGELES, and JOSE F.
BUENAVENTURA, petitioners.
RESOLUTION
MELENCIO-HERRERA, J.:ñé+.£ªwph!1
Two separate Petitions were filed before this Court 1) by
the surviving partners of Atty. Alexander Sycip, who died
on May 5, 1975, and 2) by the surviving partners of Atty.
Herminio Ozaeta, who died on February 14, 1976, praying
that they be allowed to continue using, in the names of
their firms, the names of partners who had passed away. In
the Court's Resolution of September 2, 1976, both Petitions
were ordered consolidated.
Petitioners base their petitions on the following arguments:
1. Under the law, a partnership is not prohibited from
continuing its business under a firm name which includes
the name of a deceased partner; in fact, Article 1840 of
the Civil Code explicitly sanctions the practice when it
provides in the last paragraph that: têñ.£îhqwâ£
The use by the person or partnership
continuing the business of the partnership
name, or the name of a deceased partner as
part thereof, shall not of itself make the
individual property of the deceased partner
liable for any debts contracted by such
person or partnership. 1
2. In regulating other professions, such as accountancy
and engineering, the legislature has authorized the
adoption of firm names without any restriction as to the
use, in such firm name, of the name of a deceased
partner; 2 the legislative authorization given to those
engaged in the practice of accountancy — a profession
requiring the same degree of trust and confidence in
respect of clients as that implicit in the relationship of
attorney and client — to acquire and use a trade name,
strongly indicates that there is no fundamental policy that
is offended by the continued use by a firm of professionals
of a firm name which includes the name of a deceased
partner, at least where such firm name has acquired the
characteristics of a "trade name." 3
3. The Canons of Professional Ethics are not transgressed
by the continued use of the name of a deceased partner
in the firm name of a law partnership because Canon 33
of the Canons of Professional Ethics adopted by the
American Bar Association declares that: têñ.£îhqwâ£
... The continued use of the name of a
deceased or former partner when permissible
by local custom, is not unethical but care
 should be taken that no imposition or
deception is practiced through this use. ... 4
4. There is no possibility of imposition or deception because
the deaths of their respective deceased partners were
well-publicized in all newspapers of general circulation for
several days; the stationeries now being used by them
carry new letterheads indicating the years when their
respective deceased partners were connected with the
firm; petitioners will notify all leading national and
international law directories of the fact of their respective
deceased partners' deaths. 5
5. No local custom prohibits the continued use of a
deceased partner's name in a professional firm's
name; 6 there is no custom or usage in the Philippines, or at
least in the Greater Manila Area, which recognizes that
the name of a law firm necessarily Identifies the individual
members of the firm. 7
6. The continued use of a deceased partner's name in the
firm name of law partnerships has been consistently
allowed by U.S. Courts and is an accepted practice in the
legal profession of most countries in the world.8
The question involved in these Petitions first came under
consideration by this Court in 1953 when a law firm in
Cebu (the Deen case) continued its practice of including
in its firm name that of a deceased partner, C.D. Johnston.
The matter was resolved with this Court advising the firm to
desist from including in their firm designation the name of
C. D. Johnston, who has long been dead."
The same issue was raised before this Court in 1958 as an
incident in G. R. No. L-11964, entitled Register of Deeds of
Manila vs. China Banking Corporation. The law firm of
Perkins & Ponce Enrile moved to intervene as amicus
curiae. Before acting thereon, the Court, in a Resolution of
April 15, 1957, stated that it "would like to be informed why
the name of Perkins is still being used although Atty. E. A.
Perkins is already dead." In a Manifestation dated May 21,
1957, the law firm of Perkins and Ponce Enrile, raising
substantially the same arguments as those now being
raised by petitioners, prayed that the continued use of the
firm name "Perkins & Ponce Enrile" be held proper.
On June 16, 1958, this Court resolved: têñ.£îhqwâ£
After carefully considering the reasons given
by Attorneys Alfonso Ponce Enrile and
Associates for their continued use of the name
of the deceased E. G. Perkins, the Court found
no reason to depart from the policy it
adopted in June 1953 when it required
Attorneys Alfred P. Deen and Eddy A. Deen of
Cebu City to desist from including in their firm
designation, the name of C. D. Johnston,
deceased. The Court believes that, in view of
the personal and confidential nature of the
relations between attorney and client, and
the high standards demanded in the canons
of professional ethics, no practice should be
allowed which even in a remote degree
could give rise to the possibility of deception.
Said attorneys are accordingly advised to
drop the name "PERKINS" from their firm name.
Petitioners herein now seek a re-examination of the policy
thus far enunciated by the Court.
The Court finds no sufficient reason to depart from the
rulings thus laid down.
A. Inasmuch as "Sycip, Salazar, Feliciano, Hernandez and
Castillo" and "Ozaeta, Romulo, De Leon, Mabanta and
Reyes" are partnerships, the use in their partnership names
of the names of deceased partners will run counter to
Article 1815 of the Civil Code which provides: têñ.£îhqwâ£
Art. 1815. Every partnership shall operate
under a firm name, which may or may not
include the name of one or more of the
partners.
Those who, not being members of the
partnership, include their names in the firm
name, shall be subject to the liability, of a
partner.
It is clearly tacit in the above provision that names in a firm
name of a partnership must either be those of living
partners and. in the case of non-partners, should be living
persons who can be subjected to liability. In fact, Article
1825 of the Civil Code prohibits a third person from
including his name in the firm name under pain of
assuming the liability of a partner. The heirs of a deceased
partner in a law firm cannot be held liable as the old
members to the creditors of a firm particularly where they
are non-lawyers. Thus, Canon 34 of the Canons of
Professional Ethics "prohibits an agreement for the
payment to the widow and heirs of a deceased lawyer of
a percentage, either gross or net, of the fees received
from the future business of the deceased lawyer's clients,
both because the recipients of such division are not
lawyers and because such payments will not represent
service or responsibility on the part of the recipient. "
Accordingly, neither the widow nor the heirs can be held
liable for transactions entered into after the death of their
lawyer-predecessor. There being no benefits accruing,
there ran be no corresponding liability.
Prescinding the law, there could be practical objections to
allowing the use by law firms of the names of deceased
partners. The public relations value of the use of an old firm
name can tend to create undue advantages and
disadvantages in the practice of the profession. An able
lawyer without connections will have to make a name for
himself starting from scratch. Another able lawyer, who
can join an old firm, can initially ride on that old firm's
reputation established by deceased partners.
B. In regards to the last paragraph of Article 1840 of the
Civil Code cited by petitioners, supra, the first factor to
consider is that it is within Chapter 3 of Title IX of the Code
entitled "Dissolution and Winding Up." The Article primarily
deals with the exemption from liability in cases of a
dissolved partnership, of the individual property of the
deceased partner for debts contracted by the person or
partnership which continues the business using the
partnership name or the name of the deceased partner as
part thereof. What the law contemplates therein is a hold-
over situation preparatory to formal reorganization.
Secondly, Article 1840 treats more of
a commercial partnership with a good will to protect
rather than of a professional partnership, with no saleable
good will but whose reputation depends on the personal
qualifications of its individual members. Thus, it has been
held that a saleable goodwill can exist only in a
commercial partnership and cannot arise in a professional
partnership consisting of lawyers. 9têñ.£îhqwâ£
As a general rule, upon the dissolution of
a commercial partnership the succeeding
 partners or parties have the right to carry on
the business under the old name, in the
absence of a stipulation forbidding it, (s)ince
the name of a commercial partnership is a
partnership asset inseparable from the good
will of the firm. ... (60 Am Jur 2d, s 204, p. 115)
(Emphasis supplied)
On the other hand, têñ.£îhqwâ£
... a professional partnership the reputation of
which depends or; the individual skill of the
members, such as partnerships of attorneys or
physicians, has no good win to be distributed
as a firm asset on its dissolution, however
intrinsically valuable such skill and reputation
may be, especially where there is no provision
in the partnership agreement relating to good
will as an asset. ... (ibid, s 203, p. 115)
(Emphasis supplied)
C. A partnership for the practice of law cannot be likened
to partnerships formed by other professionals or for
business. For one thing, the law on accountancy
specifically allows the use of a trade name in connection
with the practice of accountancy.10 têñ.£îhqwâ£
A partnership for the practice of law is not a
legal entity. It is a mere relationship or
association for a particular purpose. ... It is not
a partnership formed for the purpose of
carrying on trade or business or of holding
property." 11 Thus, it has been stated that "the
use of a nom de plume, assumed or trade
name in law practice is improper. 12
The usual reason given for different standards
of conduct being applicable to the practice
of law from those pertaining to business is that
the law is a profession.
Dean Pound, in his recently published
contribution to the Survey of the Legal
Profession, (The Lawyer from Antiquity to
Modern Times, p. 5) defines a profession as "a
group of men pursuing a learned art as a
common calling in the spirit of public service,
— no less a public service because it may
incidentally be a means of livelihood."
xxx xxx xxx
Primary characteristics which distinguish the
legal profession from business are:
1. A duty of public service, of which the
emolument is a byproduct, and in which one
may attain the highest eminence without
making much money.
2. A relation as an "officer of court" to the
administration of justice involving thorough
sincerity, integrity, and reliability.
3. A relation to clients in the highest degree
fiduciary.
4. A relation to colleagues at the bar
characterized by candor, fairness, and
unwillingness to resort to current business
methods of advertising and encroachment on
their practice, or dealing directly with their
clients. 13
"The right to practice law is not a natural or constitutional
right but is in the nature of a privilege or franchise. 14 It is
limited to persons of good moral character with special
qualifications duly ascertained and certified. 15 The right
does not only presuppose in its possessor integrity, legal
standing and attainment, but also the exercise of a
special privilege, highly personal and partaking of the
nature of a public trust." 16
D. Petitioners cited Canon 33 of the Canons of Professional
Ethics of the American Bar Association" in support of their
petitions.
It is true that Canon 33 does not consider as unethical the
continued use of the name of a deceased or former
partner in the firm name of a law partnership when such a
practice is permissible by local custom but the Canon
warns that care should be taken that no imposition or
deception is practiced through this use.
It must be conceded that in the Philippines, no local
custom permits or allows the continued use of a deceased
or former partner's name in the firm names of law
partnerships. Firm names, under our custom, Identify the
more active and/or more senior members or partners of
the law firm. A glimpse at the history of the firms of
petitioners and of other law firms in this country would
show how their firm names have evolved and changed
from time to time as the composition of the partnership
changed. têñ.£îhqwâ£
The continued use of a firm name after the
death of one or more of the partners
designated by it is proper only where
sustained by local custom and not where by
custom this purports to Identify the active
members. ...
There would seem to be a question, under the
working of the Canon, as to the propriety of
adding the name of a new partner and at the
same time retaining that of a deceased
partner who was never a partner with the new
one. (H.S. Drinker, op. cit., supra, at pp. 207208)
(Emphasis supplied).
The possibility of deception upon the public, real or
consequential, where the name of a deceased partner
continues to be used cannot be ruled out. A person in
search of legal counsel might be guided by the familiar
ring of a distinguished name appearing in a firm title.
E. Petitioners argue that U.S. Courts have consistently
allowed the continued use of a deceased partner's name
in the firm name of law partnerships. But that is so because
it is sanctioned by custom.
In the case of Mendelsohn v. Equitable Life Assurance
Society (33 N.Y.S. 2d 733) which petitioners Salazar, et al.
quoted in their memorandum, the New York Supreme
Court sustained the use of the firm name Alexander &
Green even if none of the present ten partners of the firm
bears either name because the practice was sanctioned
by custom and did not offend any statutory provision or
legislative policy and was adopted by agreement of the
parties. The Court stated therein: têñ.£îhqwâ£
The practice sought to be proscribed has the
sanction of custom and offends no statutory
provision or legislative policy. Canon 33 of the
Canons of Professional Ethics of both the
 American Bar Association and the New York
State Bar Association provides in part as
follows: "The continued use of the name of a
deceased or former partner, when permissible
by local custom is not unethical, but care
should be taken that no imposition or
deception is practiced through this use." There
is no question as to local custom. Many firms in
the city use the names of deceased members
with the approval of other attorneys, bar
associations and the courts. The Appellate
Division of the First Department has
considered the matter and reached The
conclusion that such practice should not be
prohibited. (Emphasis supplied)
xxx xxx xxx
Neither the Partnership Law nor the Penal Law
prohibits the practice in question. The use of
the firm name herein is also sustainable by
reason of agreement between the partners. 18
Not so in this jurisdiction where there is no local custom
that sanctions the practice. Custom has been defined as
a rule of conduct formed by repetition of acts, uniformly
observed (practiced) as a social rule, legally binding and
obligatory. 19 Courts take no judicial notice of custom. A
custom must be proved as a fact, according to the rules
of evidence. 20 A local custom as a source of right cannot
be considered by a court of justice unless such custom is
properly established by competent evidence like any
other fact. 21 We find such proof of the existence of a local
custom, and of the elements requisite to constitute the
same, wanting herein. Merely because something is done
as a matter of practice does not mean that Courts can
rely on the same for purposes of adjudication as a juridical
custom. Juridical custom must be differentiated from
social custom. The former can supplement statutory law or
be applied in the absence of such statute. Not so with the
latter.
Moreover, judicial decisions applying or interpreting the
laws form part of the legal system. 22 When the Supreme
Court in the Deen and Perkins cases issued its Resolutions
directing lawyers to desist from including the names of
deceased partners in their firm designation, it laid down a
legal rule against which no custom or practice to the
contrary, even if proven, can prevail. This is not to speak of
our civil law which clearly ordains that a partnership is
dissolved by the death of any partner. 23 Custom which
are contrary to law, public order or public policy shall not
be countenanced. 24
The practice of law is intimately and peculiarly related to
the administration of justice and should not be considered
like an ordinary "money-making trade." têñ.£îhqwâ£
... It is of the essence of a profession that it is
practiced in a spirit of public service. A
trade ... aims primarily at personal gain; a
profession at the exercise of powers beneficial
to mankind. If, as in the era of wide free
opportunity, we think of free competitive self
assertion as the highest good, lawyer and
grocer and farmer may seem to be freely
competing with their fellows in their calling in
order each to acquire as much of the world's
good as he may within the allowed him by
law. But the member of a profession does not
regard himself as in competition with his
professional brethren. He is not bartering his
 services as is the artisan nor exchanging the
products of his skill and learning as the farmer
sells wheat or corn. There should be no such
thing as a lawyers' or physicians' strike. The
best service of the professional man is often
rendered for no equivalent or for a trifling
equivalent and it is his pride to do what he
does in a way worthy of his profession even if
done with no expectation of reward, This spirit
of public service in which the profession of law
is and ought to be exercised is a prerequisite
of sound administration of justice according to
law. The other two elements of a profession,
namely, organization and pursuit of a learned
art have their justification in that they secure
and maintain that spirit. 25

In fine, petitioners' desire to preserve the Identity of their

firms in the eyes of the public must bow to legal and
ethical impediment.

ACCORDINGLY, the petitions filed herein are denied and

petitioners advised to drop the names "SYCIP" and
"OZAETA" from their respective firm names. Those names
may, however, be included in the listing of individuals who
have been partners in their firms indicating the years
during which they served as such.

SO ORDERED.

Teehankee, Concepcion, Jr., Santos, Fernandez, Guerrero

and De Castro, JJ., concur

Fernando, C.J. and Abad Santos, J., took no part.

A.C. No. 6792 January 25, 2006
ROBERTO SORIANO, Complainant,
vs.
Atty. MANUEL DIZON, Respondent.
DECISION
PER CURIAM:
Before us is a Complaint-Affidavit1 for the disbarment of
Atty. Manuel Dizon, filed by Roberto Soriano with the
Commission on Bar Discipine (CBD) of the Integrated Bar
of the Philippines (IBP). Complainant alleges that the
conviction of respondent for a crime involving moral
turpitude, together with the circumstances surrounding the
conviction, violates Canon 1 of Rule 1.01 of the Code of
Professional Responsibility;2 and constitutes sufficient
ground for his disbarment under Section 27 of Rule 138 of
the Rules of Court.3
Because of the failure of Atty. Dizon to submit his Answer to
the Complaint, the CBD issued a Notice dated May 20,
2004, informing him that he was in default, and that an ex-
parte hearing had been scheduled for June 11, 2004.4After
that hearing, complainant manifested that he was
submitting the case on the basis of the Complaint and its
attachments.5 Accordingly, the CBD directed him to file his
Position Paper, which he did on July 27, 2004.6Afterwards,
the case was deemed submitted for resolution.
On December 6, 2004, Commissioner Teresita J. Herbosa
rendered her Report and Recommendation, which was
later adopted and approved by the IBP Board of
Governors in its Resolution No. XVI-2005-84 dated March 12,
2005.
In his Complaint-Affidavit, Soriano alleged that respondent
had violated Canon 1, Rule 1.01 of the Code of
Professional Responsibility; and that the conviction of the
latter for frustrated homicide,7 which involved moral
turpitude, should result in his disbarment.
The facts leading to respondent’s conviction were
summarized by Branch 60 of the Regional Trial Court of
Baguio City in this wise:
"x x x. The accused was driving his brown Toyota Corolla
and was on his way home after gassing up in preparation
for his trip to Concepcion, Tarlac with his wife. Along
Abanao Street, a taxi driver overtook the car driven by the
accused not knowing that the driver of the car he had
overtaken is not just someone, but a lawyer and a
prominent member of the Baguio community who was
under the influence of liquor. Incensed, the accused tailed
the taxi driver until the latter stopped to make a turn at
[the] Chugum and Carino Streets. The accused also
stopped his car, berated the taxi driver and held him by his
shirt. To stop the aggression, the taxi driver forced open his
door causing the accused to fall to the ground. The taxi
driver knew that the accused had been drinking because
he smelled of liquor. Taking pity on the accused who
looked elderly, the taxi driver got out of his car to help him
get up. But the accused, by now enraged, stood up
immediately and was about to deal the taxi driver a fist
blow when the latter boxed him on the chest instead. The
accused fell down a second time, got up again and was
about to box the taxi driver but the latter caught his fist
and turned his arm around. The taxi driver held on to the
accused until he could be pacified and then released him.
The accused went back to his car and got his revolver
making sure that the handle was wrapped in a
handkerchief. The taxi driver was on his way back to his
vehicle when he noticed the eyeglasses of the accused
on the ground. He picked them up intending to return
them to the accused. But as he was handing the same to
the accused, he was met by the barrel of the gun held by
the accused who fired and shot him hitting him on the
neck. He fell on the thigh of the accused so the latter
pushed him out and sped off. The incident was witnessed
by Antonio Billanes whose testimony corroborated that of
the taxi driver, the complainant in this case, Roberto
Soriano."8
It was the prosecution witness, Antonio Billanes, who came
to the aid of Soriano and brought the latter to the hospital.
Because the bullet had lacerated the carotid artery on
the left side of his neck,9 complainant would have surely
died of hemorrhage if he had not received timely medical
assistance, according to the attending surgeon, Dr.
Francisco Hernandez, Jr. Soriano sustained a spinal cord
injury, which caused paralysis on the left part of his body
and disabled him for his job as a taxi driver.
The trial court promulgated its Decision dated November
29, 2001. On January 18, 2002, respondent filed an
application for probation, which was granted by the court
on several conditions. These included satisfaction of "the
civil liabilities imposed by [the] court in favor of the
offended party, Roberto Soriano."10
According to the unrefuted statements of complainant,
Atty. Dizon, who has yet to comply with this particular
undertaking, even appealed the civil liability to the Court
of Appeals.11
In her Report and Recommendation, Commissioner
Herbosa recommended that respondent be disbarred
from the practice of law for having been convicted of a
crime involving moral turpitude.
The commissioner found that respondent had not only
been convicted of such crime, but that the latter also
exhibited an obvious lack of good moral character, based
on the following facts:
"1. He was under the influence of liquor while driving
his car;
"2. He reacted violently and attempted to assault
Complainant only because the latter, driving a taxi,
had overtaken him;
"3. Complainant having been able to ward off his
attempted assault, Respondent went back to his car,
got a gun, wrapped the same with a handkerchief
and shot Complainant[,] who was unarmed;
"4. When Complainant fell on him, Respondent
simply pushed him out and fled;
"5. Despite positive identification and overwhelming
evidence, Respondent denied that he had shot
Complainant;
"6. Apart from [his] denial, Respondent also lied
when he claimed that he was the one mauled by
Complainant and two unidentified persons; and,
"7. Although he has been placed on probation,
Respondent has[,] to date[,] not yet satisfied his civil
liabilities to Complainant."12
On July 8, 2005, the Supreme Court received for its final
action the IBP Resolution adopting the Report and
Recommendation of the Investigating Commissioner.
We agree with the findings and recommendations of
Commissioner Herbosa, as approved and adopted by the
IBP Board of Governors.
Under Section 27 of Rule 138 of the Rules of Court,
conviction for a crime involving moral turpitude is a
ground for disbarment or suspension. By such conviction, a
lawyer is deemed to have become unfit to uphold the
administration of justice and to be no longer possessed of
good moral character.13 In the instant case, respondent
has been found guilty; and he stands convicted, by final
judgment, of frustrated homicide. Since his conviction has
already been established and is no longer open to
question, the only issues that remain to be determined are
as follows: 1) whether his crime of frustrated homicide
involves moral turpitude, and 2) whether his guilt warrants
disbarment.
Moral turpitude has been defined as "everything which is
done contrary to justice, modesty, or good morals; an act
of baseness, vileness or depravity in the private and social
duties which a man owes his fellowmen, or to society in
general, contrary to justice, honesty, modesty, or good
morals."14
The question of whether the crime of homicide involves
moral turpitude has been discussed in International Rice
Research Institute (IRRI) v. NLRC,15 a labor case concerning
an employee who was dismissed on the basis of his
conviction for homicide. Considering the particular
circumstances surrounding the commission of the crime,
this Court rejected the employer’s contention and held
that homicide in that case did not involve moral turpitude.
(If it did, the crime would have been violative of the IRRI’s
Employment Policy Regulations and indeed a ground for
dismissal.) The Court explained that, having disregarded
the attendant circumstances, the employer made a
pronouncement that was precipitate. Furthermore, it was
not for the latter to determine conclusively whether a
crime involved moral turpitude. That discretion belonged
to the courts, as explained thus:
"x x x. Homicide may or may not involve moral turpitude
depending on the degree of the crime. Moral turpitude is
not involved in every criminal act and is not shown by
every known and intentional violation of statute,
but whether any particular conviction involves moral
turpitude may be a question of fact and frequently
depends on all the surrounding circumstances. x x
x."16 (Emphasis supplied)
In the IRRI case, in which the crime of homicide did not
involve moral turpitude, the Court appreciated the
presence of incomplete self-defense and total absence of
aggravating circumstances. For a better understanding of
that Decision, the circumstances of the crime are quoted
as follows:
"x x x. The facts on record show that Micosa [the IRRI
employee] was then urinating and had his back turned
when the victim drove his fist unto Micosa's face; that the
victim then forcibly rubbed Micosa's face into the filthy
urinal; that Micosa pleaded to the victim to stop the
attack but was ignored and that it was while Micosa was
in that position that he drew a fan knife from the left
pocket of his shirt and desperately swung it at the victim
who released his hold on Micosa only after the latter had
stabbed him several times. These facts show that Micosa's
intention was not to slay the victim but only to defend his
person. The appreciation in his favor of the mitigating
circumstances of self-defense and voluntary surrender,
plus the total absence of any aggravating circumstance
demonstrate that Micosa's character and intentions were
not inherently vile, immoral or unjust."17
The present case is totally different. As the IBP correctly
found, the circumstances clearly evince the moral
turpitude of respondent and his unworthiness to practice
law.
Atty. Dizon was definitely the aggressor, as he pursued and
shot complainant when the latter least expected it. The
act of aggression shown by respondent will not be
mitigated by the fact that he was hit once and his arm
twisted by complainant. Under the circumstances, those
were reasonable actions clearly intended to fend off the
lawyer’s assault.
We also consider the trial court’s finding of treachery as a
further indication of the skewed morals of respondent. He
shot the victim when the latter was not in a position to
defend himself. In fact, under the impression that the
assault was already over, the unarmed complainant was
merely returning the eyeglasses of Atty. Dizon when the
latter unexpectedly shot him. To make matters worse,
respondent wrapped the handle of his gun with a
handkerchief so as not to leave fingerprints. In so doing, he
betrayed his sly intention to escape punishment for his
crime.
The totality of the facts unmistakably bears the earmarks of
moral turpitude. By his conduct, respondent revealed his
extreme arrogance and feeling of self-importance. As it
were, he acted like a god on the road, who deserved to
be venerated and never to be slighted. Clearly, his
inordinate reaction to a simple traffic incident reflected
poorly on his fitness to be a member of the legal profession.
His overreaction also evinced vindictiveness, which was
definitely an undesirable trait in any individual, more so in
a lawyer. In the tenacity with which he pursued
complainant, we see not the persistence of a person who
has been grievously wronged, but the obstinacy of one
trying to assert a false sense of superiority and to exact
revenge.
It is also glaringly clear that respondent seriously
transgressed Canon 1 of the Code of Professional
Responsibility through his illegal possession of an
unlicensed firearm18 and his unjust refusal to satisfy his civil
liabilities.19 He has thus brazenly violated the law and
disobeyed the lawful orders of the courts. We remind him
that, both in his attorney’s oath20 and in the Code of
Professional Responsibility, he bound himself to "obey the
laws of the land."
All told, Atty. Dizon has shown through this incident that he
is wanting in even a basic sense of justice. He obtained
the benevolence of the trial court when it suspended his
sentence and granted him probation. And yet, it has been
four years21 since he was ordered to settle his civil liabilities
to complainant. To date, respondent remains adamant in
refusing to fulfill that obligation. By his extreme impetuosity
and intolerance, as shown by his violent reaction to a
simple traffic altercation, he has taken away the earning
capacity, good health, and youthful vigor of his victim. Still,
Atty. Dizon begrudges complainant the measly amount
that could never even fully restore what the latter has lost.
Conviction for a crime involving moral turpitude may
relate, not to the exercise of the profession of lawyers, but
certainly to their good moral character.22 Where their
misconduct outside of their professional dealings is so gross
as to show them morally unfit for their office and unworthy
of the privileges conferred upon them by their license and
the law, the court may be justified in suspending or
removing them from that office.23
We also adopt the IBP’s finding that respondent displayed
an utter lack of good moral character, which is an
essential qualification for the privilege to enter into the
practice of law. Good moral character includes at least
common honesty.24
In the case at bar, respondent consistently displayed
dishonest and duplicitous behavior. As found by the trial
court, he had sought, with the aid of Vice-Mayor Daniel
Fariñas, an out-of-court settlement with complainant’s
family.25 But when this effort failed, respondent concocted
a complete lie by making it appear that it was
complainant’s family that had sought a conference with
him to obtain his referral to a neurosurgeon.26
The lies of Atty Dizon did not end there. He went on to
fabricate an entirely implausible story of having been
mauled by complainant and two other persons.27 The trial
court had this to say:
"The physical evidence as testified to by no less than three
(3) doctors who examined [Atty. Dizon] does not support
his allegation that three people including the complainant
helped each other in kicking and boxing him. The injuries
he sustained were so minor that it is improbable[,] if not
downright unbelievable[,] that three people who he said
were bent on beating him to death could do so little
damage. On the contrary, his injuries sustain the
complainant’s version of the incident particularly when he
said that he boxed the accused on the chest. x x x."28
Lawyers must be ministers of truth. No moral qualification
for bar membership is more important than
truthfulness.29The rigorous ethics of the profession places a
premium on honesty and condemns duplicitous
behavior.30 Hence, lawyers must not mislead the court or
allow it to be misled by any artifice. In all their dealings,
they are expected to act in good faith.
The actions of respondent erode rather than enhance
public perception of the legal profession. They constitute
moral turpitude for which he should be disbarred. "Law is a
noble profession, and the privilege to practice it is
bestowed only upon individuals who are competent
intellectually, academically and, equally important,
morally. Because they are vanguards of the law and the
legal system, lawyers must at all times conduct themselves,
especially in their dealings with their clients and the public
at large, with honesty and integrity in a manner beyond
reproach."31
The foregoing abhorrent acts of respondent are not
merely dishonorable; they reveal a basic moral flaw.
Considering the depravity of the offense he committed,
we find the penalty recommended by the IBP proper and
commensurate.
The purpose of a proceeding for disbarment is to protect
the administration of justice by requiring that those who
exercise this important function be competent, honorable
and reliable -- lawyers in whom courts and clients may
repose confidence.32 Thus, whenever a clear case of
degenerate and vile behavior disturbs that vital yet fragile
confidence, we shall not hesitate to rid our profession of Philippines, and on the Office of the Court Administrator
odious members. for circulation to all courts in the country.

We remain aware that the power to disbar must be SO ORDERED.

exercised with great caution, and that disbarment should
never be decreed when any lesser penalty would
accomplish the end desired. In the instant case, however,
the Court cannot extend that munificence to respondent.
His actions so despicably and wantonly disregarded his
duties to society and his profession. We are convinced
that meting out a lesser penalty would be irreconcilable
with our lofty aspiration for the legal profession -- that
every lawyer be a shining exemplar of truth and justice.

We stress that membership in the legal profession is a

privilege demanding a high degree of good moral
character, not only as a condition precedent to admission,
but also as a continuing requirement for the practice of
law. Sadly, herein respondent has fallen short of the
exacting standards expected of him as a vanguard of the
legal profession.

In sum, when lawyers are convicted of frustrated homicide,

the attending circumstances – not the mere fact of their
conviction – would demonstrate their fitness to remain in
the legal profession. In the present case, the appalling
vindictiveness, treachery, and brazen dishonesty of
respondent clearly show his unworthiness to continue as a
member of the bar.

WHEREFORE, RESPONDENT MANUEL DIZON is

hereby DISBARRED, and his name is ORDERED STRICKEN
from the Roll of Attorneys. Let a copy of this Decision be
entered in his record as a member of the Bar; and let
notice of the same be served on the Integrated Bar of the
AC No. 99-634 June 10, 2002
DOMINADOR P. BURBE, complainant,
vs.
ATTY. ALBERTO C. MAGULTA, respondent.
PANGANIBAN, J.:
After agreeing to take up the cause of a client, a lawyer
owes fidelity to both cause and client, even if the client
never paid any fee for the attorney-client relationship.
Lawyering is not a business; it is a profession in which duty
to public service, not money, is the primary consideration.
The Case
Before us is a Complaint for the disbarment or suspension
or any other disciplinary action against Atty. Alberto C.
Magulta. Filed by Dominador P. Burbe with the
Commission on Bar Discipline of the Integrated Bar of the
Philippines (IBP) on June 14, 1999, the Complaint is
accompanied by a Sworn Statement alleging the
following:
"x x x xxx xxx
"That in connection with my business, I was
introduced to Atty. Alberto C. Magulta, sometime in
September, 1998, in his office at the Respicio,
Magulta and Adan Law Offices at 21-B Otero
Building, Juan de la Cruz St., Davao City, who
agreed to legally represent me in a money claim
and possible civil case against certain parties for
breach of contract;
"That consequent to such agreement, Atty. Alberto
C. Magulta prepared for me the demand letter and
some other legal papers, for which services I have
accordingly paid; inasmuch, however, that I failed
to secure a settlement of the dispute, Atty. Magulta
suggested that I file the necessary complaint, which
he subsequently drafted, copy of which is attached
as Annex A, the filing fee whereof will require the
amount of Twenty Five Thousand Pesos (P25,000.00);
"That having the need to legally recover from the
parties to be sued I, on January 4, 1999, deposited
the amount of P25,000.00 to Atty. Alberto C.
Magulta, copy of the Receipt attached as Annex B,
upon the instruction that I needed the case filed
immediately;
"That a week later, I was informed by Atty. Alberto C.
Magulta that the complaint had already been filed
in court, and that I should receive notice of its
progress;
"That in the months that followed, I waited for such
notice from the court or from Atty. Magulta but
there seemed to be no progress in my case, such
that I frequented his office to inquire, and he would
repeatedly tell me just to wait;
"That I had grown impatient on the case,
considering that I am told to wait [every time] I
asked; and in my last visit to Atty. Magulta last May
25, 1999, he said that the court personnel had not
yet acted on my case and, for my satisfaction, he
even brought me to the Hall of Justice Building at
Ecoland, Davao City, at about 4:00 p.m., where he
left me at the Office of the City Prosecutor at the
ground floor of the building and told to wait while he
personally follows up the processes with the Clerk of
 Court; whereupon, within the hour, he came back
and told me that the Clerk of Court was absent on
that day;
"That sensing I was being given the run-around by
Atty. Magulta, I decided to go to the Office of the
Clerk of Court with my draft of Atty. Magulta's
complaint to personally verify the progress of my
case, and there told that there was no record at all
of a case filed by Atty. Alberto C. Magulta on my
behalf, copy of the Certification dated May 27, 1999,
attached as Annex C;
"That feeling disgusted by the way I was lied to and
treated, I confronted Atty. Alberto C. Magulta at his
office the following day, May 28, 1999, where he
continued to lie to with the excuse that the delay
was being caused by the court personnel, and only
when shown the certification did he admit that he
has not at all filed the complaint because he had
spent the money for the filing fee for his own
purpose; and to appease my feelings, he offered to
reimburse me by issuing two (2) checks, postdated
June 1 and June 5, 1999, in the amounts
of P12,000.00 and P8,000.00, respectively, copies of
which are attached as Annexes D and E;
"That for the inconvenience, treatment and
deception I was made to suffer, I wish to complain
Atty. Alberto C. Magulta for misrepresentation,
dishonesty and oppressive conduct;"
xxx xxx x x x.1
On August 6, 1999, pursuant to the July 22, 1999 Order of
the IBP Commission on Bar Discipline,2 respondent filed his
Answer3 vehemently denying the allegations of
complainant "for being totally outrageous and baseless."
The latter had allegedly been introduced as
a kumpadre of one of the former's law partners. After their
meeting, complainant requested him to draft a demand
letter against Regwill Industries, Inc. -- a service for which
the former never paid. After Mr. Said Sayre, one of the
business partners of complainant, replied to this letter, the
latter requested that another demand letter -- this time
addressed to the former -- be drafted by respondent, who
reluctantly agreed to do so. Without informing the lawyer,
complainant asked the process server of the former's law
office to deliver the letter to the addressee.
Aside from attending to the Regwill case which had
required a three-hour meeting, respondent drafted a
complaint (which was only for the purpose of compelling
the owner to settle the case) and prepared a compromise
agreement. He was also requested by complainant to do
the following:
1. Write a demand letter addressed to Mr. Nelson
Tan
2. Write a demand letter addressed to ALC
Corporation
3. Draft a complaint against ALC Corporation
4. Research on the Mandaue City property claimed
by complainant's wife
All of these respondent did, but he was never paid for his
services by complainant.
Respondent likewise said that without telling him why,
complainant later on withdrew all the files pertinent to the
Regwill case. However, when no settlement was reached,
the latter instructed him to draft a complaint for breach of
contract. Respondent, whose services had never been
paid by complainant until this time, told the latter about
his acceptance and legal fees. When told that these fees
amounted to P187,742 because the Regwill claim was
almost P4 million, complainant promised to pay on
installment basis.
On January 4, 1999, complainant gave the amount
of P25,000 to respondent's secretary and told her that it
was for the filing fee of the Regwill case. When informed of
the payment, the lawyer immediately called the attention
of complainant, informing the latter of the need to pay
the acceptance and filing fees before the complaint
could be filed. Complainant was told that the amount he
had paid was a deposit for the acceptance fee, and that
he should give the filing fee later.
Sometime in February 1999, complainant told respondent
to suspend for the meantime the filing of the complaint
because the former might be paid by another company,
the First Oriental Property Ventures, Inc., which had offered
to buy a parcel of land owned by Regwill Industries. The
negotiations went on for two months, but the parties never
arrived at any agreement.
Sometime in May 1999, complainant again relayed to
respondent his interest in filing the complaint. Respondent
reminded him once more of the acceptance fee. In
response, complainant proposed that the complaint be
filed first before payment of respondent's acceptance
and legal fees. When respondent refused, complainant
demanded the return of the P25,000. The lawyer returned
the amount using his own personal checks because their
law office was undergoing extensive renovation at the
time, and their office personnel were not reporting
regularly. Respondent's checks were accepted and
encashed by complainant.
Respondent averred that he never inconvenienced,
mistreated or deceived complainant, and if anyone had
been shortchanged by the undesirable events, it was he.
The IBP's Recommendation
In its Report and Recommendation dated March 8, 2000,
the Commission on Bar Discipline of the Integrated Bar of
the Philippines (IBP) opined as follows:
"x x x [I]t is evident that the P25,000 deposited by
complainant with the Respicio Law Office was for
the filing fees of the Regwill complaint. With
complainant's deposit of the filing fees for the
Regwill complaint, a corresponding obligation on
the part of respondent was created and that was to
file the Regwill complaint within the time frame
contemplated by his client, the complainant. The
failure of respondent to fulfill this obligation due to
his misuse of the filing fees deposited by
complainant, and his attempts to cover up this
misuse of funds of the client, which caused
complainant additional damage and prejudice,
constitutes highly dishonest conduct on his part,
unbecoming a member of the law profession. The
subsequent reimbursement by the respondent of
part of the money deposited by complainant for
filing fees, does not exculpate the respondent for his
misappropriation of said funds. Thus, to impress upon
the respondent the gravity of his offense, it is
recommended that respondent be suspended from
the practice of law for a period of one (1) year."4
 The Court's Ruling
We agree with the Commission's recommendation.
Main Issue:
Misappropriation of Client's Funds
Central to this case are the following alleged acts of
respondent lawyer: (a) his non-filing of the Complaint on
behalf of his client and (b) his appropriation for himself of
the money given for the filing fee.
Respondent claims that complainant did not give him the
filing fee for the Regwill complaint; hence, the former's
failure to file the complaint in court. Also, respondent
alleges that the amount delivered by complainant to his
office on January 4, 1999 was for attorney's fees and not
for the filing fee.
We are not persuaded. Lawyers must exert their best
efforts and ability in the prosecution or the defense of the
client's cause. They who perform that duty with diligence
and candor not only protect the interests of the client, but
also serve the ends of justice. They do honor to the bar
and help maintain the respect of the community for the
legal profession.5 Members of the bar must do nothing that
may tend to lessen in any degree the confidence of the
public in the fidelity, the honesty, and integrity of the
profession.6
Respondent wants this Court to believe that no lawyer-
client relationship existed between him and complainant,
because the latter never paid him for services rendered.
The former adds that he only drafted the said documents
as a personal favor for the kumpadre of one of his partners.
We disagree. A lawyer-client relationship was established
from the very first moment complainant asked respondent
for legal advice 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.
If a person, in respect to business affairs or troubles of any
kind, consults a lawyer with a view to obtaining
professional advice or assistance, and the attorney
voluntarily permits or acquiesces with the consultation,
then the professional employment is established.7
Likewise, a lawyer-client relationship exists notwithstanding
the close personal relationship between the lawyer and
the complainant or the nonpayment of the former's
fees.8 Hence, despite the fact that complainant
was kumpadre of a law partner of respondent, and that
respondent dispensed legal advice to complainant as a
personal favor to the kumpadre, the lawyer was duty-
bound to file the complaint he had agreed to prepare --
and had actually prepared -- at the soonest possible time,
in order to protect the client's interest. Rule 18.03 of the
Code of Professional Responsibility provides that lawyers
should not neglect legal matters entrusted to them.
This Court has likewise constantly held that once lawyers
agree to take up the cause of a client, they owe fidelity to
such cause and must always be mindful of the trust and
confidence reposed in them.9 They owe entire devotion to
the interest of the client, warm zeal in the maintenance
and the defense of the client's rights, and the exertion of
their utmost learning and abilities to the end that nothing
be taken or withheld from the client, save by the rules of
law legally applied.10
Similarly unconvincing is the explanation of respondent
that the receipt issued by his office to complainant on
January 4, 1999 was erroneous. The IBP Report correctly
noted that it was quite incredible for the office personnel
of a law firm to be prevailed upon by a client to issue a
receipt erroneously indicating payment for something else.
Moreover, upon discovering the "mistake" -- if indeed it
was one -- respondent should have immediately taken
steps to correct the error. He should have lost no time in
calling complainant's attention to the matter and should
have issued another receipt indicating the correct
purpose of the payment.
The Practice of Law -- a
Profession, Not a Business
In this day and age, members of the bar often forget that
the practice of law is a profession and not a
business.11Lawyering is not primarily meant to be a money-
making venture, and law advocacy is not a capital that
necessarily yields profits.12 The gaining of a livelihood is not
a professional but a secondary consideration.13 Duty to
public service and to the administration of justice should
be the primary consideration of lawyers, who must
subordinate their personal interests or what they owe to
themselves. The practice of law is a noble calling in which
emolument is a byproduct, and the highest eminence
may be attained without making much money.14
In failing to apply to the filing fee the amount given by
complainant -- as evidenced by the receipt issued by the
law office of respondent -- the latter also violated the rule
that lawyers must be scrupulously careful in handling
money entrusted to them in their professional
capacity.15 Rule 16.01 of the Code of Professional
Responsibility states that lawyers shall hold in trust all
moneys of their clients and properties that may come into
their possession.
Lawyers who convert the funds entrusted to them are in
gross violation of professional ethics and are guilty of
betrayal of public confidence in the legal profession.16 It
may be true that they have a lien upon the client's funds,
documents and other papers that have lawfully come into
their possession; that they may retain them until their lawful
fees and disbursements have been paid; and that they
may apply such funds to the satisfaction of such fees and
disbursements. However, these considerations do not
relieve them of their duty to promptly account for the
moneys they received. Their failure to do so constitutes
professional misconduct.17 In any event, they must still
exert all effort to protect their client's interest within the
bounds of law.
If much is demanded from an attorney, it is because the
entrusted privilege to practice law carries with it
correlative duties not only to the client but also to the
court, to the bar, and to the public.18 Respondent fell short
of this standard when he converted into his legal fees the
filing fee entrusted to him by his client and thus failed to file
the complaint promptly. The fact that the former returned
the amount does not exculpate him from his breach of
duty.
On the other hand, we do not agree with complainant's
plea to disbar respondent from the practice of law. The
power to disbar must be exercised with great caution.
Only in a clear case of misconduct that seriously affects
the standing and the character of the bar will disbarment
be imposed as a penalty.19

WHEREFORE, Atty. Alberto C. Magulta is found guilty of

violating Rules 16.01 and 18.03 of the Code of Professional
Responsibility and is hereby SUSPENDED from the practice
of law for a period of one (1) year, effective upon his
receipt of this Decision. Let copies be furnished all courts
as well as the Office of the Bar Confidant, which is
instructed to include a copy in respondent's file.

SO ORDERED.

Puno, J.*, Sandoval-Gutierrez, and Carpio, JJ., concur.