EN BANC

[G.R. No. 105938. September 20, 1996]

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ,

JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P.
LAZATIN, and EDUARDO U. ESCUETA, petitioners, vs. THE
HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF
THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
ROCO, respondents.

[G.R. No. 108113. September 20, 1996]

PARAJA G. HAYUDINI, petitioner, vs. THE SANDIGANBAYAN and THE

REPUBLIC OF THE PHILIPPINES, respondents.

DECISION
KAPUNAN, J.:

These cases touch the very cornerstone of every State's judicial system,
upon which the workings of the contentious and adversarial system in the
Philippine legal process are based - the sanctity of fiduciary duty in the client-
lawyer relationship. The fiduciary duty of a counsel and advocate is also what
makes the law profession a unique position of trust and confidence, which
distinguishes it from any other calling. In this instance, we have no recourse but
to uphold and strengthen the mantle of protection accorded to the confidentiality
that proceeds from the performance of the lawyer's duty to his client.
The facts of the case are undisputed.
The matters raised herein are an offshoot of the institution of the Complaint
on July 31, 1987 before the Sandiganbayan by the Republic of the Philippines,
through the Presidential Commission on Good Government against Eduardo
M. Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged
ill-gotten wealth, which includes shares of stocks in the named corporations in
PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines
versus Eduardo Cojuangco, et al." [1]

Among the defendants named in the case are herein petitioners Teodoro
Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A.
Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and
herein private respondent Raul S. Roco, who all were then partners of the law
firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter
referred to as the ACCRA Law Firm). ACCRA Law Firm performed legal
services for its clients, which included, among others, the organization and
acquisition of business associations and/or organizations, with the correlative
and incidental services where its members acted as incorporators, or simply,
as stockholders. More specifically, in the performance of these services, the
members of the law firm delivered to its client documents which substantiate
the client's equity holdings, i.e., stock certificates endorsed in blank
representing the shares registered in the client's name, and a blank deed of
trust or assignment covering said shares. In the course of their dealings with
their clients, the members of the law firm acquire information relative to the
assets of clients as well as their personal and business circumstances. As
members of the ACCRA Law Firm, petitioners and private respondent Raul
Roco admit that they assisted in the organization and acquisition of the
companies included in Civil Case No. 0033, and in keeping with the office
practice, ACCRA lawyers acted as nominees-stockholders of the said
corporations involved in sequestration proceedings. [2]

On August 20, 1991, respondent Presidential Commission on Good

Government (hereinafter referred to as respondent PCGG) filed a "Motion to
Admit Third Amended Complaint" and "Third Amended Complaint" which
excluded private respondent Raul S. Roco from the complaint in PCGG Case
No. 33 as party-defendant. Respondent PCGG based its exclusion of private
[3]

respondent Roco as party-defendant on his undertaking that he will reveal the

identity of the principal/s for whom he acted as nominee/stockholder in the
companies involved in PCGG Case No. 33. [4]

Petitioners were included in the Third Amended Complaint on the strength

of the following allegations:
14. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion,
Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G.
Hayudini and Raul Roco of the Angara Concepcion Cruz Regala and Abello law
offices (ACCRA) plotted, devised, schemed. conspired and confederated with each
other in setting up, through the use of the coconut levy funds, the financial and
corporate framework and structures that led to the establishment of UCPB, UNICOM,
COCOLIFE, COCOMARK, CIC, and more than twenty other coconut levy funded
corporations, including the acquisition of San Miguel Corporation shares and its
institutionalization through presidential directives of the coconut monopoly. Through
insidious means and machinations, ACCRA, being the wholly-owned investment arm,
ACCRA Investments Corporation, became the holder of approximately fifteen million
shares representing roughly 3.3% of the total outstanding capital stock of UCPB as
of 31 March 1987. This ranks ACCRA Investments Corporation number 44 among
the top 100 biggest stockholders of UCPB which has approximately 1,400,000
shareholders. On the other hand, corporate books show the name Edgardo J. Angara
as holding approximately 3,744 shares as of February, 1984.[5]
In their answer to the Expanded Amended Complaint,
petitioners ACCRA lawyers alleged that:

4.4. Defendants-ACCRA lawyers participation in the acts with which their co-
defendants are charged, was in furtherance of legitimate lawyering.

4.4.1. In the course of rendering professional and legal services to clients, defendants-
ACCRA lawyers, Jose C. Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and
Eduardo U. Escueta, became holders of shares of stock in the corporations listed
under their respective names in Annex A of the expanded Amended Complaint as
incorporating or acquiring stockholders only and, as such, they do not claim any
proprietary interest in the said shares of stock.
4.5. Defendant ACCRA-lawyer Avelino V. Cruz was one of the incorporators in 1976
of Mermaid Marketing Corporation, which was organized for legitimate business
purposes not related to the allegations of the expanded Amended
Complaint. However, he has long ago transferred any material interest therein and
therefore denies that the shares appearing in his name in Annex A of the expanded
Amended Complaint are his assets. [6]

Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed
a separate answer denying the allegations in the complaint implicating him in
the alleged ill-gotten wealth. [7]

Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR

OPPOSITION" dated October 8, 1991 with Counter-Motion that respondent
PCGG similarly grant the same treatment to them (exclusion as parties-
defendants) as accorded private respondent Roco. The Counter-Motion for
[8]

dropping petitioners from the complaint was duly set for hearing on October 18,
1991 in accordance with the requirements of Rule 15 of the Rules of Court.
In its "Comment," respondent PCGG set the following conditions precedent
for the exclusion of petitioners, namely: (a) the disclosure of the identity of its
clients; (b) submission of documents substantiating the lawyer-client
relationship; and (c) the submission of the deeds of assignments petitioners
executed in favor of its clients covering their respective shareholdings. [9]

Consequently, respondent PCGG presented supposed proof to

substantiate compliance by private respondent Roco of the conditions
precedent to warrant the latter's exclusion as party-defendant in PCGG Case
No. 33, to wit: (a) Letter to respondent PCGG of the counsel of respondent Roco
dated May 24, 1989 reiterating a previous request for reinvestigation by the
PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by
private respondent Roco as Attachment to the letter aforestated in (a); and (c)
Letter of the Roco, Bunag, and Kapunan Law Offices dated September 21,
1988 to the respondent PCGG in behalf of private respondent Roco originally
requesting the reinvestigation and/or re-examination of the evidence of the
PCGG against Roco in its Complaint in PCGG Case No. 33. [10]

It is noteworthy that during said proceedings, private respondent Roco did

not refute petitioners' contention that he did actually not reveal the identity of
the client involved in PCGG Case No. 33, nor had he undertaken to reveal the
identity of the client for whom he acted as nominee-stockholder. [11]

On March 18, 1992, respondent Sandiganbayan promulgated the

Resolution, herein questioned, denying the exclusion of petitioners in PCGG
Case No. 33, for their refusal to comply with the conditions required by
respondent PCGG. It held:
x x x.

ACCRA lawyers may take the heroic stance of not revealing the identity of the client
for whom they have acted, i.e. their principal, and that will be their choice. But until
they do identify their clients, considerations of whether or not the
privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The
ACCRA lawyers cannot excuse themselves from the consequences of their acts until
they have begun to establish the basis for recognizing the privilege; the
existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the
PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that
Roco has apparently identified his principal, which revelation could show the lack of
cause against him. This in turn has allowed the PCGG to exercise its power both
under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the
Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed
of by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7,
PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred
not to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as
party defendants. In the same vein, they cannot compel the PCGG to be accorded the
same treatment accorded to Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA
lawyers and joined in by Atty. Paraja G. Hayudini for the same treatment by the
PCGG as accorded to Raul S. Roco is DENIED for lack of merit. [12]

ACCRA lawyers moved for a reconsideration of the above resolution but the
same was denied by the respondent Sandiganbayan. Hence, the ACCRA
lawyers filed the petition for certiorari, docketed as G.R. No. 105938, invoking
the following grounds:
I

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners

ACCRA lawyers who undisputably acted as lawyers in serving as nominee-
stockholders, to the strict application of the law of agency.
II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering

petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore,
deserving of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to
reveal, the identities of the client(s) for whom he acted as nominee-stockholder.
2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities
of the client(s), the disclosure does not constitute a substantial distinction as would
make the classification reasonable under the equal protection clause.
3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of
Mr. Roco in violation of the equal protection clause.
III
The Honorable Sandiganbayan committed grave abuse of discretion in not holding
that, under the facts of this case, the attorney-client privilege prohibits petitioners
ACCRA lawyers from revealing the identity of their client(s) and the other
information requested by the PCGG.

1. Under the peculiar facts of this case, the attorney-client privilege includes the identity
of the client(s).
2. The factual disclosures required by the PCGG are not limited to the identity of
petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters.
IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring

that the dropping of party-defendants by the PCGG must be based on reasonable and
just grounds and with due consideration to the constitutional right of petitioners
ACCRA lawyers to the equal protection of the law.

Petitioner Paraja G. Hayudini, likewise, filed his own motion for

reconsideration of the March 18, 1991 resolution which was denied by
respondent Sandiganbayan. Thus, he filed a separate petition for certiorari,
docketed as G.R. No. 108113, assailing respondent Sandiganbayan's
resolution on essentially the same grounds averred by petitioners in G.R. No.
105938.
Petitioners contend that the exclusion of respondent Roco as party-
defendant in PCGG Case No. 33 grants him a favorable treatment, on the
pretext of his alleged undertaking to divulge the identity of his client, giving him
an advantage over them who are in the same footing as partners in the ACCRA
law firm. Petitioners further argue that even granting that such an undertaking
has been assumed by private respondent Roco, they are prohibited from
revealing the identity of their principal under their sworn mandate and fiduciary
duty as lawyers to uphold at all times the confidentiality of information obtained
during such lawyer-client relationship.
Respondent PCGG, through its counsel, refutes petitioners' contention,
alleging that the revelation of the identity of the client is not within the ambit of
the lawyer-client confidentiality privilege, nor are the documents it required
(deeds of assignment) protected, because they are evidence of nominee
status.[13]

In his comment, respondent Roco asseverates that respondent PCGG

acted correctly in excluding him as party-defendant because he "(Roco) has not
filed an Answer. PCGG had therefore the right to dismiss Civil Case No. 0033
as to Roco `without an order of court by filing a notice of dismissal,'" and he [14]

has undertaken to identify his principal. [15]

Petitioners' contentions are impressed with merit.

I

It is quite apparent that petitioners were impleaded by the PCGG as co-

defendants to force them to disclose the identity of their clients. Clearly,
respondent PCGG is not after petitioners but the bigger fish as they say in street
parlance. This ploy is quite clear from the PCGGs willingness to cut a deal with
petitioners -- the names of their clients in exchange for exclusion from the
complaint. The statement of the Sandiganbayan in its questioned resolution
dated March 18, 1992 is explicit:

ACCRA lawyers may take the heroic stance of not revealing the identity of the client
for whom they have acted, i.e., their principal, and that will be their choice. But until
they do identify their clients, considerations of whether or not the privilege claimed by
the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers
cannot excuse themselves from the consequences of their acts until they have begun to
establish the basis for recognizing the privilege; the existence and identity of the
client.

This is what appears to be the cause for which they have been impleaded by the
PCGG as defendants herein. (Underscoring ours)

In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third
Division, entitled Primavera Farms, Inc., et al. vs. Presidential Commission on
Good Government respondent PCGG, through counsel Mario Ongkiko,
manifested at the hearing on December 5, 1991 that the PCGG wanted to
establish through the ACCRA that their so called client is Mr. Eduardo
Cojuangco; that it was Mr. Eduardo Cojuangco who furnished all the monies to
those subscription payments in corporations included in Annex A of the Third
Amended Complaint; that the ACCRA lawyers executed deeds of trust and
deeds of assignment, some in the name of particular persons, some in blank.
We quote Atty. Ongkiko:

ATTY. ONGKIKO:

With the permission of this Hon. Court. I propose to establish through these ACCRA
lawyers that, one, their so-called client is Mr. Eduardo Cojuangco. Second, it was Mr.
Eduardo Cojuangco who furnished all the monies to these subscription payments of
these corporations who are now the petitioners in this case. Third, that these lawyers
executed deeds of trust, some in the name of a particular person, some in blank. Now,
these blank deeds are important to our claim that some of the shares are actually being
held by the nominees for the late President Marcos. Fourth, they also executed deeds
of assignment and some of these assignments have also blank assignees. Again, this is
important to our claim that some of the shares are for Mr. Cojuangco and some are for
Mr. Marcos. Fifth, that most of these corporations are really just paper
corporations. Why do we say that? One: There are no really fixed sets of officers, no
fixed sets of directors at the time of incorporation and even up to 1986, which is the
crucial year. And not only that, they have no permits from the municipal authorities in
Makati. Next, actually all their addresses now are care of Villareal Law Office. They
really have no address on records. These are some of the principal things that we
would ask of these nominees stockholders, as they called themselves. [16]

It would seem that petitioners are merely standing in for their clients as
defendants in the complaint. Petitioners are being prosecuted solely on the
basis of activities and services performed in the course of their duties as
lawyers. Quite obviously, petitioners inclusion as co-defendants in the
complaint is merely being used as leverage to compel them to name their clients
and consequently to enable the PCGG to nail these clients. Such being the
case, respondent PCGG has no valid cause of action as against petitioners and
should exclude them from the Third Amended Complaint.
II

The nature of lawyer-client relationship is premised on the Roman Law

concepts of locatio conductio operarum (contract of lease of services) where
one person lets his services and another hires them without reference to the
object of which the services are to be performed, wherein lawyers' services may
be compensated by honorarium or for hire, and mandato(contract of agency)
[17]

wherein a friend on whom reliance could be placed makes a contract in his

name, but gives up all that he gained by the contract to the person who
requested him. But the lawyer-client relationship is more than that of the
[18]

principal-agent and lessor-lessee.

In modern day perception of the lawyer-client relationship, an attorney is
more than a mere agent or servant, because he possesses special powers of
trust and confidence reposed on him by his client. A lawyer is also as
[19]

independent as the judge of the court, thus his powers are entirely different from
and superior to those of an ordinary agent. Moreover, an attorney also
[20]

occupies what may be considered as a "quasi-judicial office" since he is in fact

an officer of the Court and exercises his judgment in the choice of courses of
[21]

action to be taken favorable to his client.

Thus, in the creation of lawyer-client relationship, there are rules, ethical
conduct and duties that breathe life into it, among those, the fiduciary duty to
his client which is of a very delicate, exacting and confidential character,
requiring a very high degree of fidelity and good faith, that is required by
[22]

reason of necessity and public interest based on the hypothesis that

[23]

abstinence from seeking legal advice in a good cause is an evil which is fatal to
the administration of justice. [24]

It is also the strict sense of fidelity of a lawyer to his client that distinguishes
him from any other professional in society. This conception is entrenched and
embodies centuries of established and stable tradition. In Stockton v. [25]

Ford, the U.S. Supreme Court held:

[26]

There are few of the business relations of life involving a higher trust and confidence
than that of attorney and client, or generally speaking, one more honorably and
faithfully discharged; few more anxiously guarded by the law, or governed by the
sterner principles of morality and justice; and it is the duty of the court to administer
them in a corresponding spirit, and to be watchful and industrious, to see that
confidence thus reposed shall not be used to the detriment or prejudice of the rights of
the party bestowing it. [27]

In our jurisdiction, this privilege takes off from the old Code of Civil
Procedure enacted by the Philippine Commission on August 7, 1901. Section
383 of the Code specifically forbids counsel, without authority of his client to
reveal any communication made by the client to him or his advice given thereon
in the course of professional employment. Passed on into various provisions
[28]

of the Rules of Court, the attorney-client privilege, as currently worded provides:

Sec. 24. Disqualification by reason of privileged communication. - The following

persons cannot testify as to matters learned in confidence in the following cases:
 xxx

An attorney cannot, without the consent of his client, be examined as to any

communication made by the client to him, or his advice given thereon in the course
of, or with a view to, professional employment, can an attorneys secretary,
stenographer, or clerk be examined, without the consent of the client and his
employer, concerning any fact the knowledge of which has been acquired in such
capacity.[29]

Further, Rule 138 of the Rules of Court states:

Sec. 20. It is the duty of an attorney:

(e) to maintain inviolate the confidence, and at every peril to himself, to preserve the
secrets of his client, and to accept no compensation in connection with his clients
business except from him or with his knowledge and approval.

This duty is explicitly mandated in Canon 17 of the Code of Professional

Responsibility which provides that:

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

Canon 15 of the Canons of Professional Ethics also demands a lawyer's

fidelity to client:

The lawyer owes "entire devotion to the interest of the client, warm zeal in the
maintenance and defense of his rights and the exertion of his utmost learning and
ability," to the end that nothing be taken or be withheld from him, save by the rules of
law, legally applied. No fear of judicial disfavor or public popularity should restrain
him from the full discharge of his duty. In the judicial forum the client is entitled to
the benefit of any and every remedy and defense that is authorized by the law of the
land, and he may expect his lawyer to assert every such remedy or defense. But it is
steadfastly to be borne in mind that the great trust of the lawyer is to be performed
within and not without the bounds of the law. The office of attorney does not permit,
much less does it demand of him for any client, violation of law or any manner of
fraud or chicanery. He must obey his own conscience and not that of his client.

Considerations favoring confidentiality in lawyer-client relationships are

many and serve several constitutional and policy concerns. In the constitutional
sphere, the privilege gives flesh to one of the most sacrosanct rights available
to the accused, the right to counsel. If a client were made to choose between
legal representation without effective communication and disclosure and legal
representation with all his secrets revealed then he might be compelled, in
some instances, to either opt to stay away from the judicial system or to lose
the right to counsel. If the price of disclosure is too high, or if it amounts to self
incrimination, then the flow of information would be curtailed thereby rendering
the right practically nugatory. The threat this represents against another
sacrosanct individual right, the right to be presumed innocent is at once self-
evident.
 Encouraging full disclosure to a lawyer by one seeking legal services opens
the door to a whole spectrum of legal options which would otherwise be
circumscribed by limited information engendered by a fear of disclosure. An
effective lawyer-client relationship is largely dependent upon the degree of
confidence which exists between lawyer and client which in turn requires a
situation which encourages a dynamic and fruitful exchange and flow of
information. It necessarily follows that in order to attain effective representation,
the lawyer must invoke the privilege not as a matter of option but as a matter of
duty and professional responsibility.
The question now arises whether or not this duty may be asserted in
refusing to disclose the name of petitioners' client(s) in the case at bar. Under
the facts and circumstances obtaining in the instant case, the answer must be
in the affirmative.
As a matter of public policy, a clients identity should not be shrouded in
mystery. Under this premise, the general rule in our jurisdiction as well as in
[30]

the United States is that a lawyer may not invoke the privilege and refuse to
divulge the name or identity of his client. [31]

The reasons advanced for the general rule are well established.
First, the court has a right to know that the client whose privileged
information is sought to be protected is flesh and blood.
Second, the privilege begins to exist only after the attorney-client
relationship has been established. The attorney-client privilege does not attach
until there is a client.
Third, the privilege generally pertains to the subject matter of the
relationship.
Finally, due process considerations require that the opposing party should,
as a general rule, know his adversary. A party suing or sued is entitled to know
who his opponent is. He cannot be obliged to grope in the dark against
[32]

unknown forces. [33]

Notwithstanding these considerations, the general rule is however qualified

by some important exceptions.
1) Client identity is privileged where a strong probability exists that revealing the clients
name would implicate that client in the very activity for which he sought the lawyers
advice.

In Ex-Parte Enzor, a state supreme court reversed a lower court order

[34]

requiring a lawyer to divulge the name of her client on the ground that the
subject matter of the relationship was so closely related to the issue of the
clients identity that the privilege actually attached to both. In Enzor, the
unidentified client, an election official, informed his attorney in confidence that
he had been offered a bribe to violate election laws or that he had accepted a
bribe to that end. In her testimony, the attorney revealed that she had advised
her client to count the votes correctly, but averred that she could not remember
whether her client had been, in fact, bribed. The lawyer was cited for contempt
for her refusal to reveal his clients identity before a grand jury. Reversing the
lower courts contempt orders, the state supreme court held that under the
circumstances of the case, and under the exceptions described above, even
the name of the client was privileged.
U.S. v. Hodge and Zweig, involved the same exception, i.e. that client
[35]

identity is privileged in those instances where a strong probability exists that the
disclosure of the client's identity would implicate the client in the very criminal
activity for which the lawyers legal advice was obtained.
The Hodge case involved federal grand jury proceedings inquiring into the
activities of the Sandino Gang, a gang involved in the illegal importation of drugs
in the United States. The respondents, law partners, represented key witnesses
and suspects including the leader of the gang, Joe Sandino.
In connection with a tax investigation in November of 1973, the IRS issued
summons to Hodge and Zweig, requiring them to produce documents and
information regarding payment received by Sandino on behalf of any other
person, and vice versa. The lawyers refused to divulge the names. The Ninth
Circuit of the United States Court of Appeals, upholding non-disclosure under
the facts and circumstances of the case, held:
A clients identity and the nature of that clients fee arrangements may be
privileged where the person invoking the privilege can show that a strong
probability exists that disclosure of such information would implicate that client
in the very criminal activity for which legal advice was sought Baird v. Koerner,
279 F.2d at 680. While in Baird Owe enunciated this rule as a matter of
California law, the rule also reflects federal law. Appellants contend that
the Baird exception applies to this case.
The Baird exception is entirely consonant with the principal policy behind
the attorney-client privilege. In order to promote freedom of consultation of legal
advisors by clients, the apprehension of compelled disclosure from the legal
advisors must be removed; hence, the law must prohibit such disclosure except
on the clients consent. 8 J. Wigmore, supra sec. 2291, at 545. In furtherance of
this policy, the clients identity and the nature of his fee arrangements are, in
exceptional cases, protected as confidential communications. [36]

2) Where disclosure would open the client to civil liability, his identity is privileged. For
instance, the peculiar facts and circumstances of Neugass v. Terminal Cab
Corporation,[37] prompted the New York Supreme Court to allow
a lawyers claim to the effect that he could not reveal the name of his client because
this would expose the latter to civil litigation.

In the said case, Neugass, the plaintiff, suffered injury when the taxicab she
was riding, owned by respondent corporation, collided with a second taxicab,
whose owner was unknown. Plaintiff brought action both against defendant
corporation and the owner of the second cab, identified in the information only
as John Doe. It turned out that when the attorney of defendant corporation
appeared on preliminary examination, the fact was somehow revealed that the
lawyer came to know the name of the owner of the second cab when a man, a
client of the insurance company, prior to the institution of legal action, came to
him and reported that he was involved in a car accident. It was apparent under
the circumstances that the man was the owner of the second cab. The state
supreme court held that the reports were clearly made to the lawyer in his
professional capacity. The court said:
 That his employment came about through the fact that the insurance
company had hired him to defend its policyholders seems immaterial. The
attorney in such cases is clearly the attorney for the policyholder when the
policyholder goes to him to report an occurrence contemplating that it would be
used in an action or claim against him. [38]

x x x xxx xxx.
All communications made by a client to his counsel, for the purpose of
professional advice or assistance, are privileged, whether they relate to a suit
pending or contemplated, or to any other matter proper for such advice or aid;
x x x And whenever the communication made, relates to a matter so connected
with the employment as attorney or counsel as to afford presumption that it was
the ground of the address by the client, then it is privileged from disclosure. xxx.
It appears... that the name and address of the owner of the second cab
came to the attorney in this case as a confidential communication. His client is
not seeking to use the courts, and his address cannot be disclosed on that
theory, nor is the present action pending against him as service of the summons
on him has not been effected. The objections on which the court reserved
decision are sustained. [39]

In the case of Matter of Shawmut Mining Company, the lawyer involved

[40]

was required by a lower court to disclose whether he represented certain clients

in a certain transaction. The purpose of the courts request was to determine
whether the unnamed persons as interested parties were connected with the
purchase of properties involved in the action. The lawyer refused and brought
the question to the State Supreme Court. Upholding the lawyers refusal to
divulge the names of his clients the court held:
If it can compel the witness to state, as directed by the order appealed from,
that he represented certain persons in the purchase or sale of these mines, it
has made progress in establishing by such evidence their version of the
litigation. As already suggested, such testimony by the witness would compel
him to disclose not only that he was attorney for certain people, but that, as the
result of communications made to him in the course of such employment as
such attorney, he knew that they were interested in certain transactions. We
feel sure that under such conditions no case has ever gone to the length of
compelling an attorney, at the instance of a hostile litigant, to disclose not only
his retainer, but the nature of the transactions to which it related, when such
information could be made the basis of a suit against his client. [41]

3) Where the governments lawyers have no case against an attorneys client

unless, by revealing the clients name, the said name would furnish the only link
that would form the chain of testimony necessary to convict an individual of a
crime, the clients name is privileged.
In Baird vs Korner, a lawyer was consulted by the accountants and the
[42]

lawyer of certain undisclosed taxpayers regarding steps to be taken to place

the undisclosed taxpayers in a favorable position in case criminal charges were
brought against them by the U.S. Internal Revenue Service (IRS).
It appeared that the taxpayers returns of previous years were probably
incorrect and the taxes understated. The clients themselves were unsure about
whether or not they violated tax laws and sought advice from Baird on the
hypothetical possibility that they had. No investigation was then being
undertaken by the IRS of the taxpayers. Subsequently, the attorney of the
taxpayers delivered to Baird the sum of $12,706.85, which had been previously
assessed as the tax due, and another amount of money representing his fee
for the advice given. Baird then sent a check for $12,706.85 to the IRS in
Baltimore, Maryland, with a note explaining the payment, but without naming
his clients. The IRS demanded that Baird identify the lawyers, accountants, and
other clients involved. Baird refused on the ground that he did not know their
names, and declined to name the attorney and accountants because this
constituted privileged communication. A petition was filed for the enforcement
of the IRS summons. For Bairds repeated refusal to name his clients he was
found guilty of civil contempt. The Ninth Circuit Court of Appeals held that, a
lawyer could not be forced to reveal the names of clients who employed him to
pay sums of money to the government voluntarily in settlement of undetermined
income taxes, unsued on, and with no government audit or investigation into
that clients income tax liability pending. The court emphasized the exception
that a clients name is privileged when so much has been revealed concerning
the legal services rendered that the disclosure of the clients identity exposes
him to possible investigation and sanction by government agencies. The Court
held:

The facts of the instant case bring it squarely within that exception to the general
rule. Here money was received by the government, paid by persons who thereby
admitted they had not paid a sufficient amount in income taxes some one or more
years in the past. The names of the clients are useful to the government for but one
purpose - to ascertain which taxpayers think they were delinquent, so that it may
check the records for that one year or several years. The voluntary nature of the
payment indicates a belief by the taxpayers that more taxes or interest or penalties are
due than the sum previously paid, if any.It indicates a feeling of guilt for nonpayment
of taxes, though whether it is criminal guilt is undisclosed. But it may well be the link
that could form the chain of testimony necessary to convict an individual of a federal
crime. Certainly the payment and the feeling of guilt are the reasons the attorney here
involved was employed - to advise his clients what, under the circumstances, should
be done.[43]

Apart from these principal exceptions, there exist other situations which
could qualify as exceptions to the general rule.
For example, the content of any client communication to a lawyer lies within
the privilege if it is relevant to the subject matter of the legal problem on which
the client seeks legal assistance. Moreover, where the nature of the attorney-
[44]

client relationship has been previously disclosed and it is the identity which is
intended to be confidential, the identity of the client has been held to be
privileged, since such revelation would otherwise result in disclosure of the
entire transaction. [45]

Summarizing these exceptions, information relating to the identity of a client

may fall within the ambit of the privilege when the clients name itself has an
independent significance, such that disclosure would then reveal client
confidences. [46]
 The circumstances involving the engagement of lawyers in the case at
bench, therefore, clearly reveal that the instant case falls under at least two
exceptions to the general rule. First, disclosure of the alleged client's name
would lead to establish said client's connection with the very fact in issue of the
case, which is privileged information, because the privilege, as stated earlier,
protects the subject matter or the substance (without which there would be no
attorney-client relationship).
The link between the alleged criminal offense and the legal advice or legal
service sought was duly established in the case at bar, by no less than the
PCGG itself. The key lies in the three specific conditions laid down by the
PCGG which constitutes petitioners ticket to non-prosecution should they
accede thereto:

(a) the disclosure of the identity of its clients;

(b) submission of documents substantiating the lawyer-client relationship; and

(c) the submission of the deeds of assignment petitioners executed in favor of their
clients covering their respective shareholdings.

From these conditions, particularly the third, we can readily deduce that the
clients indeed consulted the petitioners, in their capacity as lawyers, regarding
the financial and corporate structure, framework and set-up of the corporations
in question. In turn, petitioners gave their professional advice in the form of,
among others, the aforementioned deeds of assignment covering their clients
shareholdings.
There is no question that the preparation of the aforestated documents was
part and parcel of petitioners legal service to their clients. More important, it
constituted an integral part of their duties as lawyers. Petitioners, therefore,
have a legitimate fear that identifying their clients would implicate them in the
very activity for which legal advice had been sought, i.e., the alleged
accumulation of ill-gotten wealth in the aforementioned corporations.
Furthermore, under the third main exception, revelation of the client's name
would obviously provide the necessary link for the prosecution to build its case,
where none otherwise exists. It is the link, in the words of Baird, that would
inevitably form the chain of testimony necessary to convict the (client) of a...
crime." [47]

An important distinction must be made between a case where a client takes

on the services of an attorney for illicit purposes, seeking advice about how to
go around the law for the purpose of committing illegal activities and a case
where a client thinks he might have previously committed something illegal and
consults his attorney about it. The first case clearly does not fall within the
privilege because the same cannot be invoked for purposes illegal. The second
case falls within the exception because whether or not the act for which the
advice turns out to be illegal, his name cannot be used or disclosed if the
disclosure leads to evidence, not yet in the hands of the prosecution, which
might lead to possible action against him.
These cases may be readily distinguished, because the privilege cannot be
invoked or used as a shield for an illegal act, as in the first example; while the
prosecution may not have a case against the client in the second example and
cannot use the attorney client relationship to build up a case against the
latter. The reason for the first rule is that it is not within the professional
character of a lawyer to give advice on the commission of a crime. The reason
[48]

for the second has been stated in the cases above discussed and are founded
on the same policy grounds for which the attorney-client privilege, in general,
exists.
In Matter of Shawmut Mining Co., supra, the appellate court therein stated
that "under such conditions no case has ever yet gone to the length of
compelling an attorney, at the instance of a hostile litigant, to disclose not only
his retainer, but the nature of the transactions to which it related, when such
information could be made the basis of a suit against his
client. "Communications made to an attorney in the course of any personal
[49]

employment, relating to the subject thereof, and which may be supposed to

be drawn out in consequence of the relation in which the parties stand to each
other, are under the seal of confidence and entitled to protection as privileged
communications." Where the communicated information, which clearly falls
[50]

within the privilege, would suggest possible criminal activity but there would be
not much in the information known to the prosecution which would sustain a
charge except that revealing the name of the client would open up other
privileged information which would substantiate the prosecutions suspicions,
then the clients identity is so inextricably linked to the subject matter itself that
it falls within the protection. The Baird exception, applicable to the instant case,
is consonant with the principal policy behind the privilege, i.e., that for the
purpose of promoting freedom of consultation of legal advisors by clients,
apprehension of compelled disclosure from attorneys must be eliminated. This
exception has likewise been sustained in In re Grand Jury
Proceedings and Tillotson v. Boughner. What these cases unanimously
[51] [52]

seek to avoid is the exploitation of the general rule in what may amount to a
fishing expedition by the prosecution.
There are, after all, alternative sources of information available to the
prosecutor which do not depend on utilizing a defendant's counsel as a
convenient and readily available source of information in the building of a case
against the latter. Compelling disclosure of the client's name in circumstances
such as the one which exists in the case at bench amounts to sanctioning
fishing expeditions by lazy prosecutors and litigants which we cannot and will
not countenance. When the nature of the transaction would be revealed by
disclosure of an attorney's retainer, such retainer is obviously protected by the
privilege. It follows that petitioner attorneys in the instant case owe their
[53]

client(s) a duty and an obligation not to disclose the latter's identity which in turn
requires them to invoke the privilege.
In fine, the crux of petitioners' objections ultimately hinges on their
expectation that if the prosecution has a case against their clients, the latter's
case should be built upon evidence painstakingly gathered by them from their
own sources and not from compelled testimony requiring them to reveal the
name of their clients, information which unavoidably reveals much about the
nature of the transaction which may or may not be illegal. The logical nexus
between name and nature of transaction is so intimate in this case that it would
be difficult to simply dissociate one from the other. In this sense, the name is as
much "communication" as information revealed directly about the transaction in
question itself, a communication which is clearly and distinctly privileged. A
lawyer cannot reveal such communication without exposing himself to charges
of violating a principle which forms the bulwark of the entire attorney-client
relationship.
The uberrimei fidei relationship between a lawyer and his client therefore
imposes a strict liability for negligence on the former. The ethical duties owing
to the client, including confidentiality, loyalty, competence, diligence as well as
the responsibility to keep clients informed and protect their rights to make
decisions have been zealously sustained. In Milbank, Tweed, Hadley and
McCloy v. Boon, the US Second District Court rejected the plea of the
[54]

petitioner law firm that it breached its fiduciary duty to its client by helping the
latter's former agent in closing a deal for the agent's benefit only after its client
hesitated in proceeding with the transaction, thus causing no harm to its
client. The Court instead ruled that breaches of a fiduciary relationship in any
context comprise a special breed of cases that often loosen normally stringent
requirements of causation and damages, and found in favor of the client.
To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and
Shipley P.A. v. Scheller requiring strict obligation of lawyers vis-a-
[55]

vis clients. In this case, a contingent fee lawyer was fired shortly before the end
of completion of his work, and sought payment quantum meruit of work
done. The court, however, found that the lawyer was fired for cause after he
sought to pressure his client into signing a new fee agreement while settlement
negotiations were at a critical stage. While the client found a new lawyer during
the interregnum, events forced the client to settle for less than what was
originally offered. Reiterating the principle of fiduciary duty of lawyers to clients
in Meinhard v. Salmon famously attributed to Justice Benjamin Cardozo that
[56]

"Not honesty alone, but the punctilio of an honor the most sensitive, is then the
standard of behavior," the US Court found that the lawyer involved was fired for
cause, thus deserved no attorney's fees at all.
The utmost zeal given by Courts to the protection of the lawyer-client
confidentiality privilege and lawyer's loyalty to his client is evident in the duration
of the protection, which exists not only during the relationship, but extends even
after the termination of the relationship. [57]

Such are the unrelenting duties required of lawyers vis-a-vis their clients
because the law, which the lawyers are sworn to uphold, in the words of Oliver
Wendell Holmes, "xxx is an exacting goddess, demanding of her votaries in
[58]

intellectual and moral discipline." The Court, no less, is not prepared to accept
respondents position without denigrating the noble profession that is lawyering,
so extolled by Justice Holmes in this wise:

Every calling is great when greatly pursued. But what other gives such scope to
realize the spontaneous energy of one's soul? In what other does one plunge so deep in
the stream of life - so share its passions its battles, its despair, its triumphs, both as
witness and actor? x x x But that is not all. What a subject is this in which we are
united - this abstraction called the Law, wherein as in a magic mirror, we see
reflected, not only in our lives, but the lives of all men that have been. When I think
on this majestic theme my eyes dazzle. If we are to speak of the law as our mistress,
we who are here know that she is a mistress only to be won with sustained and lonely
passion - only to be won by straining all the faculties by which man is likened to God.

We have no choice but to uphold petitioners' right not to reveal the identity
of their clients under pain of the breach of fiduciary duty owing to their clients,
because the facts of the instant case clearly fall within recognized exceptions
to the rule that the clients name is not privileged information.
If we were to sustain respondent PCGG that the lawyer-client confidential
privilege under the circumstances obtaining here does not cover the identity of
the client, then it would expose the lawyers themselves to possible litigation by
their clients in view of the strict fiduciary responsibility imposed on them in the
exercise of their duties.
The complaint in Civil Case No. 0033 alleged that the defendants therein,
including herein petitioners and Eduardo Cojuangco, Jr. conspired with each
other in setting up through the use of coconut levy funds the financial and
corporate framework and structures that led to the establishment of UCPB,
UNICOM and others and that through insidious means and machinations,
ACCRA, using its wholly-owned investment arm, ACCRA Investments
Corporation, became the holder of approximately fifteen million shares
representing roughly 3.3% of the total capital stock of UCPB as of 31 March
1987. The PCGG wanted to establish through the ACCRA lawyers that Mr.
Cojuangco is their client and it was Cojuangco who furnished all the monies to
the subscription payment; hence, petitioners acted as dummies, nominees
and/or agents by allowing themselves, among others, to be used as instrument
in accumulating ill-gotten wealth through government concessions, etc., which
acts constitute gross abuse of official position and authority, flagrant breach of
public trust, unjust enrichment, violation of the Constitution and laws of the
Republic of the Philippines.
By compelling petitioners, not only to reveal the identity of their clients, but
worse, to submit to the PCGG documents substantiating the client-lawyer
relationship, as well as deeds of assignment petitioners executed in favor of its
clients covering their respective shareholdings, the PCGG would exact from
petitioners a link that would inevitably form the chain of testimony necessary to
convict the (client) of a crime.
III

In response to petitioners' last assignment of error, respondents allege that

the private respondent was dropped as party defendant not only because of his
admission that he acted merely as a nominee but also because of his
undertaking to testify to such facts and circumstances "as the interest of truth
may require, which includes... the identity of the principal." [59]

First, as to the bare statement that private respondent merely acted as a

lawyer and nominee, a statement made in his out-of-court settlement with the
PCGG, it is sufficient to state that petitioners have likewise made the same
claim not merely out-of- court but also in their Answer to plaintiff's Expanded
Amended Complaint, signed by counsel, claiming that their acts were made in
furtherance of "legitimate lawyering. Being "similarly situated" in this regard,
[60]

public respondents must show that there exist other conditions and
circumstances which would warrant their treating the private respondent
differently from petitioners in the case at bench in order to evade a violation of
the equal protection clause of the Constitution.
To this end, public respondents contend that the primary consideration
behind their decision to sustain the PCGG's dropping of private respondent as
a defendant was his promise to disclose the identities of the clients in
question. However, respondents failed to show - and absolutely nothing
exists in the records of the case at bar - that private respondent actually
revealed the identity of his client(s) to the PCGG. Since the undertaking
happens to be the leitmotif of the entire arrangement between Mr. Roco and the
PCGG, an undertaking which is so material as to have justified PCGG's special
treatment exempting the private respondent from prosecution, respondent
Sandiganbayan should have required proof of the undertaking more substantial
than a "bare assertion" that private respondent did indeed comply with the
undertaking. Instead, as manifested by the PCGG, only three documents were
submitted for the purpose, two of which were mere requests for re-investigation
and one simply disclosed certain clients which petitioners (ACCRA lawyers)
were themselves willing to reveal. These were clients to whom both petitioners
and private respondent rendered legal services while all of them were partners
at ACCRA, and were not the clients which the PCGG wanted disclosed for the
alleged questioned transactions. [61]

To justify the dropping of the private respondent from the case or the filing
of the suit in the respondent court without him, therefore, the PCGG should
conclusively show that Mr. Roco was treated as a species apart from the rest
of the ACCRA lawyers on the basis of a classification which made substantial
distinctions based on real differences. No such substantial distinctions exist
from the records of the case at bench, in violation of the equal protection clause.
The equal protection clause is a guarantee which provides a wall of
protection against uneven application of statutes and regulations. In the
broader sense, the guarantee operates against uneven application of legal
norms so that all persons under similar circumstances would be accorded the
same treatment. Those who fall within a particular class ought to be treated
[62]

alike not only as to privileges granted but also as to the liabilities imposed.

x x x. What is required under this constitutional guarantee is the uniform operation of

legal norms so that all persons under similar circumstances would be accorded the
same treatment both in the privileges conferred and the liabilities imposed. As was
noted in a recent decision: Favoritism and undue preference cannot be allowed. For
the principle is that equal protection and security shall be given to every person under
circumstances, which if not identical are analogous. If law be looked upon in terms of
burden or charges, those that fall within a class should be treated in the same fashion,
whatever restrictions cast on some in the group equally binding the rest.[63]

We find that the condition precedent required by the respondent PCGG of

the petitioners for their exclusion as parties-defendants in PCGG Case No. 33
violates the lawyer-client confidentiality privilege. The condition also constitutes
a transgression by respondents Sandiganbayan and PCGG of the equal
protection clause of the Constitution. It is grossly unfair to exempt one similarly
[64]

situated litigant from prosecution without allowing the same exemption to the
others. Moreover, the PCGGs demand not only touches upon the question of
the identity of their clients but also on documents related to the suspected
transactions, not only in violation of the attorney-client privilege but also of the
constitutional right against self-incrimination.Whichever way one looks at it, this
is a fishing expedition, a free ride at the expense of such rights.
An argument is advanced that the invocation by petitioners of the privilege
of attorney-client confidentiality at this stage of the proceedings is premature
and that they should wait until they are called to testify and examine as
witnesses as to matters learned in confidence before they can raise their
objections. But petitioners are not mere witnesses. They are co-principals in the
case for recovery of alleged ill-gotten wealth. They have made their position
clear from the very beginning that they are not willing to testify and they cannot
be compelled to testify in view of their constitutional right against self-
incrimination and of their fundamental legal right to maintain inviolate the
privilege of attorney-client confidentiality.
It is clear then that the case against petitioners should never be allowed to
take its full course in the Sandiganbayan. Petitioners should not be made to
suffer the effects of further litigation when it is obvious that their inclusion in the
complaint arose from a privileged attorney-client relationship and as a means
of coercing them to disclose the identities of their clients.To allow the case to
continue with respect to them when this Court could nip the problem in the bud
at this early opportunity would be to sanction an unjust situation which we
should not here countenance. The case hangs as a real and palpable threat, a
proverbial Sword of Damocles over petitioners' heads. It should not be allowed
to continue a day longer.
While we are aware of respondent PCGGs legal mandate to recover ill-
gotten wealth, we will not sanction acts which violate the equal protection
guarantee and the right against self-incrimination and subvert the lawyer-client
confidentiality privilege.
WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of
respondent Sandiganbayan (First Division) promulgated on March 18, 1992
and May 21, 1992 are hereby ANNULLED and SET ASIDE. Respondent
Sandiganbayan is further ordered to exclude petitioners Teodoro D. Regala,
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan,
*

Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayuduni as parties-

defendants in SB Civil Case No. 0033 entitled "Republic of the Philippines v.
Eduardo Cojuangco, Jr., et al.".
SO ORDERED.
 FIRST DIVISION
MA. LUISA HADJULA, A.C. No. 6711
Complainant, Present:

PUNO, C.J., Chairperson,

*
SANDOVAL-GUTIERREZ,
CORONA,
- versus - AZCUNA, and
GARCIA, JJ.

Promulgated:

ATTY. ROCELES F. MADIANDA, July 3, 2007

Respondent.

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

DECISION

GARCIA, J.:

Under consideration is Resolution No. XVI-2004-472 of the Board of Governors,

Integrated Bar of the Philippines (IBP), relative to the complaint for disbarment filed
by herein complainant Ma. Luisa Hadjula against respondent Atty. Roceles F.
Madianda.

The case started when, in an AFFIDAVIT-COMPLAINT[1] bearing date September

7, 2002 and filed with the IBP Commission on Bar Discipline, complainant charged
Atty. Roceles F. Madianda with violation of Article 209[2] of the Revised Penal Code
and Canon Nos. 15.02 and 21.02 of the Code of Professional Responsibility.

In said affidavit-complaint, complainant alleged that she and respondent used to be

friends as they both worked at the Bureau of Fire Protection (BFP) whereat
respondent was the Chief Legal Officer while she was the Chief Nurse of the
Medical, Dental and Nursing Services. Complainant claimed that, sometime in 1998,
she approached respondent for some legal advice. Complainant further alleged that,
in the course of their conversation which was supposed to be kept confidential, she
disclosed personal secrets and produced copies of a marriage contract, a birth
certificate and a baptismal certificate, only to be informed later by the
respondent that she (respondent) would refer the matter to a lawyer friend. It was
malicious, so complainant states, of respondent to have refused handling her case
only after she had already heard her secrets.

Continuing, complainant averred that her friendship with respondent soured after her
filing, in the later part of 2000, of criminal and disciplinary actions against the latter.
What, per complainants account, precipitated the filing was when respondent, then
a member of the BFP promotion board, demanded a cellular phone in exchange for
the complainants promotion.

According to complainant, respondent, in retaliation to the filing of the aforesaid

actions, filed a COUNTER COMPLAINT[3] with the Ombudsman charging her
(complainant) with violation of Section 3(a) of Republic Act No.
3019,[4] falsification of public documents and immorality, the last two charges being
based on the disclosures complainant earlier made to respondent. And also on the
basis of the same disclosures, complainant further stated, a disciplinary case was
also instituted against her before the Professional Regulation Commission.

Complainant seeks the suspension and/or disbarment of respondent for the latters act
of disclosing personal secrets and confidential information she revealed in the course
of seeking respondents legal advice.

In an order dated October 2, 2002, the IBP Commission on Bar Discipline required
respondent to file her answer to the complaint.

In her answer, styled as COUNTER-AFFIDAVIT,[5] respondent denied giving legal

advice to the complainant and dismissed any suggestion about the existence of a
lawyer-client relationship between them. Respondent also stated the observation that
the supposed confidential data and sensitive documents adverted to are in
fact matters of common knowledge in the BFP. The relevant portions of the answer
read:

5. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA

in paragraph 4 of her AFFIDAVIT-COMPLAINT for reason that she never WAS
MY CLIENT nor we ever had any LAWYER-CLIENT RELATIONSHIP that ever
existed ever since and that never obtained any legal advice from me regarding her
PERSONAL PROBLEMS or PERSONAL SECRETS. She likewise never
delivered to me legal documents much more told me some confidential information
or secrets. That is because I never entertain LEGAL QUERIES or
CONSULTATION regarding PERSONAL MATTERS since I know as a
LAWYER of the Bureau of Fire Protection that I am not allowed to privately
 practice law and it might also result to CONFLICT OF INTEREST. As a matter of
fact, whenever there will be PERSONAL MATTERS referred to me, I just referred
them to private law practitioners and never entertain the same, NOR listen to their
stories or examine or accept any document.

9. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA

in paragraph 8 of her AFFIDAVIT-COMPLAINT, the truth of the matter is that her
ILLICIT RELATIONSHIP and her illegal and unlawful activities are known in the
Bureau of Fire Protection since she also filed CHILD SUPPORT case against her
lover where she has a child .

Moreover, the alleged DOCUMENTS she purportedly have shown to me

sometime in 1998, are all part of public records .

Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant case

just to get even with me or to force me to settle and withdraw the CASES I FILED
AGAINST HER since she knows that she will certainly be DISMISSED FROM
SERVICE, REMOVED FROM THE PRC ROLL and CRIMINALLY
CONVICTED of her ILLICIT, IMMORAL, ILLEGAL and UNLAWFUL ACTS.

On October 7, 2004, the Investigating Commissioner of the IBP Commission on Bar

Discipline came out with a Report and Recommendation, stating that the information
related by complainant to the respondent is protected under the attorney-client
privilege communication. Prescinding from this postulate, the Investigating
Commissioner found the respondent to have violated legal ethics when
she [revealed] information given to her during a legal consultation, and accordingly
recommended that respondent be reprimanded therefor, thus:

WHEREFORE, premises considered, it is respectfully recommended that

respondent Atty. Roceles Madianda be reprimanded for revealing the secrets of the
complainant.

On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-
2004-472 reading as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and
APPROVED, the Report and Recommendation of the Investigating Commissioner
of the above-entitled case, herein made part of this Resolution as Annex A; and ,
finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, and considering the actuation of revealing information
given to respondent during a legal consultation, Atty. Roceles Madianda is
hereby REPRIMANDED.

We AGREE with the recommendation and the premises holding it together.

 As it were, complainant went to respondent, a lawyer who incidentally was
also then a friend, to bare what she considered personal secrets and sensitive
documents for the purpose of obtaining legal advice and assistance. The moment
complainant approached the then receptive respondent to seek legal advice, a
veritable lawyer-client relationship evolved between the two. Such relationship
imposes upon the lawyer certain restrictions circumscribed by the ethics of the
profession. Among the burdens of the relationship is that which enjoins the lawyer,
respondent in this instance, to keep inviolate confidential information acquired or
revealed during legal consultations. The fact that one is, at the end of the day, not
inclined to handle the clients case is hardly of consequence. Of little moment, too, is
the fact that no formal professional engagement follows the consultation.Nor will it
make any difference that no contract whatsoever was executed by the parties to
memorialize the relationship. As we said in Burbe v. Magulta,[6] -

A lawyer-client relationship was established from the very first moment

complainant asked respondent for legal advise regarding the formers business. To
constitute professional employment, it is not essential that the client employed the
attorney professionally on any previous occasion.

It is not necessary that any retainer be paid, promised, or charged; neither is

it material that the attorney consulted did not afterward handle the case for which
his service had been sought.

It a person, in respect to business affairs or troubles of any kind, consults a

lawyer with a view to obtaining professional advice or assistance, and the attorney
voluntarily permits or acquiesces with the consultation, then the professional
employments is established.

Likewise, a lawyer-client relationship exists notwithstanding the close

personal relationship between the lawyer and the complainant or the non-payment
of the formers fees.

Dean Wigmore lists the essential factors to establish the existence of the attorney-
client privilege communication, viz:

(1) Where legal advice of any kind is sought (2) from a professional legal adviser
in his capacity as such, (3) the communications relating to that purpose, (4) made
in confidence (5) by the client, (6) are at his instance permanently protected (7)
from disclosure by himself or by the legal advisor, (8) except the protection be
waived.[7]

With the view we take of this case, respondent indeed breached his duty of
preserving the confidence of a client. As found by the IBP Investigating
Commissioner, the documents shown and the information revealed in confidence to
the respondent in the course of the legal consultation in question, were used as bases
in the criminal and administrative complaints lodged against the complainant.

The purpose of the rule of confidentiality is actually to protect the client from
possible breach of confidence as a result of a consultation with a lawyer.
The seriousness of the respondents offense notwithstanding, the Court feels that
there is room for compassion, absent compelling evidence that the respondent acted
with ill-will.Without meaning to condone the error of respondents ways, what at
bottom is before the Court is two former friends becoming bitter enemies and filing
charges and counter-charges against each other using whatever convenient tools and
data were readily available. Unfortunately, the personal information respondent
gathered from her conversation with complainant became handy in her quest to even
the score. At the end of the day, it appears clear to us that respondent was actuated
by the urge to retaliate without perhaps realizing that, in the process of giving vent
to a negative sentiment, she was violating the rule on confidentiality.

IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is

hereby REPRIMANDED and admonished to be circumspect in her handling of
information acquired as a result of a lawyer-client relationship. She is
also STERNLY WARNED against a repetition of the same or similar act
complained of.

SO ORDERED.
 SECOND DIVISION

[A.C. No. 5280. March 30, 2004]

WILLIAM S. UY, complainant, vs. ATTY. FERMIN L.

GONZALES, respondent.

RESOLUTION
AUSTRIA-MARTINEZ, J.:

William S. Uy filed before this Court an administrative case against Atty.

Fermin L. Gonzales for violation of the confidentiality of their lawyer-client
relationship. The complainant alleges:
Sometime in April 1999, he engaged the services of respondent lawyer to
prepare and file a petition for the issuance of a new certificate of title. After
confiding with respondent the circumstances surrounding the lost title and
discussing the fees and costs, respondent prepared, finalized and submitted to
him a petition to be filed before the Regional Trial Court of Tayug, Pangasinan.
When the petition was about to be filed, respondent went to his (complainants)
office at Virra Mall, Greenhills and demanded a certain amount from him other
than what they had previously agreed upon. Respondent left his office after
reasoning with him. Expecting that said petition would be filed, he was shocked
to find out later that instead of filing the petition for the issuance of a new
certificate of title, respondent filed a letter-complaint dated July 26, 1999 against
him with the Office of the Provincial Prosecutor of Tayug, Pangasinan for
Falsification of Public Documents.[1] The letter-complaint contained facts and
circumstances pertaining to the transfer certificate of title that was the subject
matter of the petition which respondent was supposed to have filed. Portions of
said letter-complaint read:

The undersigned complainant accuses WILLIAM S. UY, of legal age, Filipino,

married and a resident of 132-A Gilmore Street corner 9th Street, New Manila,
Quezon City, Michael Angelo T. UY, CRISTINA EARL T. UY, minors and residents
of the aforesaid address, Luviminda G. Tomagos, of legal age, married, Filipino and a
resident of Carmay East, Rosales, Pangasinan, and F. Madayag, with office address at
A12, 2/F Vira Mall Shopping Complex, Greenhills, San Juan, Metro Manila, for
ESTAFA THRU FALSIFICATION OF PUBLIC DOCUMENTS, committed as
follows:

That on March 15, 1996, William S. Uy acquired by purchase a parcel of land

consisting of 4.001 ha. for the amount of P100,000.00, Philippine Currency, situated
at Brgy. Gonzales, Umingan, Pangasinan, from FERMIN C. GONZALES, as
evidenced by a Deed of Sale executed by the latter in favor of the former; that in the
said date, William S. Uy received the Transfer Certificate of Title No. T-33122,
covering the said land;

That instead of registering said Deed of Sale and Transfer Certificate of Title (TCT)
No. T-33122, in the Register of Deeds for the purpose of transferring the same in his
name, William S. Uy executed a Deed of Voluntary Land Transfer of the aforesaid
land in favor of his children, namely, Michael Angelo T. Uy and Cristina Earl T. Uy,
wherein William S. Uy made it appear that his said children are of legal age, and
residents of Brgy. Gonzales, Umingan, Pangasinan, when in fact and in truth, they are
minors and residents of Metro Manila, to qualify them as farmers/beneficiaries, thus
placing the said property within the coverage of the Land Reform Program;

That the above-named accused, conspiring together and helping one another procured
the falsified documents which they used as supporting papers so that they can secure
from the Office of the Register of Deeds of Tayug, Pangasinan, TCT No. T-5165
(Certificate of Land Ownership Award No. 004 32930) in favor of his above-named
children. Some of these Falsified documents are purported Affidavit of
Seller/Transferor and Affidavit of Non-Tenancy, both dated August 20, 1996, without
the signature of affiant, Fermin C. Gonzales, and that on that said date, Fermin C.
Gonzales was already dead ;

That on December 17, 1998, William S. Uy with deceit and evident intent to defraud
undersigned, still accepted the amount of P340,000.00, from Atty. Fermin L.
Gonzales, P300,000.00, in PNB Check No. 0000606, and P40,000.00, in cash, as full
payment of the redemption of TCT No. 33122knowing fully well that at that time the
said TCT cannot be redeemed anymore because the same was already transferred in
the name of his children;

That William S. Uy has appropriated the amount covered by the aforesaid check, as
evidenced by the said check which was encashed by him;

That inspite of repeated demands, both oral and in writing, William S. Uy refused and
continue to refuse to deliver to him a TCT in the name of the undersigned or to return
and repay the said P340,000.00, to the damage and prejudice of the undersigned.[2]

With the execution of the letter-complaint, respondent violated his oath as a

lawyer and grossly disregarded his duty to preserve the secrets of his
client. Respondent unceremoniously turned against him just because he
refused to grant respondents request for additional
compensation. Respondents act tarnished his reputation and social standing.[3]
In compliance with this Courts Resolution dated July 31, 2000,[4] respondent
filed his Comment narrating his version, as follows:
On December 17, 1998, he offered to redeem from complainant a 4.9
hectare-property situated in Brgy. Gonzales, Umingan, Pangasinan covered by
TCT No. T-33122 which the latter acquired by purchase from his (respondents)
son, the late Fermin C. Gonzales, Jr.. On the same date, he paid complainant
P340,000.00 and demanded the delivery of TCT No. T-33122 as well as the
execution of the Deed of Redemption. Upon request, he gave complainant
additional time to locate said title or until after Christmas to deliver the same
and execute the Deed of Redemption. After the said period, he went to
complainants office and demanded the delivery of the title and the execution of
the Deed of Redemption. Instead, complainant gave him photocopies of TCT
No. T-33122 and TCT No. T-5165. Complainant explained that he had already
transferred the title of the property, covered by TCT No.T-5165 to his children
Michael and Cristina Uy and that TCT No. T-5165 was misplaced and cannot
be located despite efforts to locate it. Wanting to protect his interest over the
property coupled with his desire to get hold of TCT No. T-5165 the earliest
possible time, he offered his assistance pro bono to prepare a petition for lost
title provided that all necessary expenses incident thereto including expenses
for transportation and others, estimated at P20,000.00, will be shouldered by
complainant. To these, complainant agreed.
On April 9, 1999, he submitted to complainant a draft of the petition for the
lost title ready for signing and notarization. On April 14, 1999, he went to
complainants office informing him that the petition is ready for filing and needs
funds for expenses. Complainant who was with a client asked him to wait at the
anteroom where he waited for almost two hours until he found out that
complainant had already left without leaving any instructions nor funds for the
filing of the petition. Complainants conduct infuriated him which prompted him
to give a handwritten letter telling complainant that he is withdrawing the petition
he prepared and that complainant should get another lawyer to file the petition.
Respondent maintains that the lawyer-client relationship between him and
complainant was terminated when he gave the handwritten letter to
complainant; that there was no longer any professional relationship between
the two of them when he filed the letter-complaint for falsification of public
document; that the facts and allegations contained in the letter-complaint for
falsification were culled from public documents procured from the Office of the
Register of Deeds in Tayug, Pangasinan.[5]
In a Resolution dated October 18, 2000, the Court referred the case to the
Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation.[6]
Commissioner Rebecca Villanueva-Maala ordered both parties to appear
on April 2, 2003 before the IBP.[7] On said date, complainant did not appear
despite due notice. There was no showing that respondent received the notice
for that days hearing and so the hearing was reset to May 28, 2003.[8]
On April 29, 2003, Commissioner Villanueva-Maala received a letter from
one Atty. Augusto M. Macam dated April 24, 2003, stating that his client, William
S. Uy, had lost interest in pursuing the complaint he filed against Atty. Gonzales
and requesting that the case against Atty. Gonzales be dismissed.[9]
On June 2, 2003, Commissioner Villanueva-Maala submitted her report and
recommendation, portions of which read as follows:

The facts and evidence presented show that when respondent agreed to handle the
filing of the Verified Petition for the loss of TCT No. T-5165, complainant had
confided to respondent the fact of the loss and the circumstances attendant
thereto. When respondent filed the Letter-Complaint to the Office of the Special
Prosecutor in Tayug, Pangasinan, he violated Canon 21 of the Code of Professional
Responsibility which expressly provides that A lawyer shall preserve the confidences
and secrets of his client even after the attorney-client relation is
terminated. Respondent cannot argue that there was no lawyer-client relationship
between them when he filed the Letter-Complaint on 26 July 1999 considering that as
early as 14 April 1999, or three (3) months after, respondent had already terminated
complainants perceived lawyer-client relationship between them. The duty to maintain
inviolate the clients confidences and secrets is not temporary but permanent. It is in
effect perpetual for it outlasts the lawyers employment (Canon 37, Code of
Professional Responsibility) which means even after the relationship has been
terminated, the duty to preserve the clients confidences and secrets remains
effective. Likewise Rule 21.02, Canon 21 of the Rules of Professional Responsibility
provides that A lawyer shall not, to the disadvantage of his client, use information
acquired in the course of employment, nor shall he use the same to his own advantage
or that of a third person, unless the client with the full knowledge of the circumstances
consents thereto.

On 29 April 2003, the Commission received a letter dated 24 April 2003 from Atty.
Augusto M. Macam, who claims to represent complainant, William S. Uy, alleging
that complainant is no longer interested in pursuing this case and requested that the
same be dismissed. The aforesaid letter hardly deserves consideration as proceedings
of this nature cannot be interrupted by reason of desistance, settlement, compromise,
restitution, withdrawal of the charges, or failure of the complainant to prosecute the
same. (Section 5, Rule 139-B, Rules of Court). Moreover, in Boliver vs. Simbol, 16
SCRA 623, the Court ruled that any person may bring to this Courts attention the
misconduct of any lawyer, and action will usually be taken regardless of the interest
or lack of interest of the complainant, if the facts proven so warrant.

IN VIEW OF THE FOREGOING, we find respondent Atty. Fermin L. Gonzales to

have violated the Code of Professional Responsibility and it is hereby recommended
that he be SUSPENDED for a period of SIX (6) MONTHS from receipt hereof, from
the practice of his profession as a lawyer and member of the Bar.[10]

On June 21, 2003, the Board of Governors of the Integrated Bar of

the Philippines issued Resolution No. XV-2003-365, thus:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and

APPROVED, the Report and Recommendation of the Investigating Commissioner of
the above-entitled case, herein made part of this Resolution/Decision as Annex A; and
finding the recommendation fully supported by the evidence on record and applicable
laws and rules, and considering that respondent violated Rule 21.02, Canon 21 of the
Canons of Professional Responsibility, Atty. Fermin L. Gonzales is
hereby SUSPENDED from the practice of law for six (6) months.[11]

Preliminarily, we agree with Commissioner Villanueva-Maala that the

manifestation of complainant Uy expressing his desire to dismiss the
administrative complaint he filed against respondent, has no persuasive
bearing in the present case.
Sec. 5, Rule 139-B of the Rules of Court states that:

No investigation shall be interrupted or terminated by reason of the desistance,

settlement, compromise, restitution, withdrawal of the charges, or failure of the
complainant to prosecute the same.

This is because:
A proceeding for suspension or disbarment is not in any sense a civil action where the
complainant is a plaintiff and the respondent lawyer is a defendant. Disciplinary
proceedings involve no private interest and afford no redress for private
grievance. They are undertaken and prosecuted solely for the public welfare. They are
undertaken for the purpose of preserving courts of justice from the official
ministration of persons unfit to practice in them. The attorney is called to answer to
the court for his conduct as an officer of the court. The complainant or the person who
called the attention of the court to the attorney's alleged misconduct is in no sense a
party, and has generally no interest in the outcome except as all good citizens may
have in the proper administration of justice. Hence, if the evidence on record warrants,
the respondent may be suspended or disbarred despite the desistance of complainant
or his withdrawal of the charges.[12]

Now to the merits of the complaint against the respondent.

Practice of law embraces any activity, in or out of court, which requires the
application of law, as well as legal principles, practice or procedure and calls
for legal knowledge, training and experience.[13] While it is true that a lawyer
may be disbarred or suspended for any misconduct, whether in his professional
or private capacity, which shows him to be wanting in moral character, in
honesty, probity and good demeanor or unworthy to continue as an officer of
the court,[14] complainant failed to prove any of the circumstances enumerated
above that would warrant the disbarment or suspension of herein respondent.
Notwithstanding respondents own perception on the matter, a scrutiny of
the records reveals that the relationship between complainant and respondent
stemmed from a personal transaction or dealings between them rather than the
practice of law by respondent. Respondent dealt with complainant only
because he redeemed a property which complainant had earlier purchased
from his (complainants) son. It is not refuted that respondent paid
complainant P340,000.00 and gave him ample time to produce its title and
execute the Deed of Redemption. However, despite the period given to him,
complainant failed to fulfill his end of the bargain because of the alleged loss of
the title which he had admitted to respondent as having prematurely transferred
to his children, thus prompting respondent to offer his assistance so as to
secure the issuance of a new title to the property, in lieu of the lost one, with
complainant assuming the expenses therefor.
As a rule, an attorney-client relationship is said to exist when a lawyer
voluntarily permits or acquiesces with the consultation of a person, who in
respect to a business or trouble of any kind, consults a lawyer with a view of
obtaining professional advice or assistance. It is not essential that the client
should have employed the attorney on any previous occasion or that any
retainer should have been paid, promised or charged for, neither is it material
that the attorney consulted did not afterward undertake the case about which
the consultation was had, for as long as the advice and assistance of the
attorney is sought and received, in matters pertinent to his profession.[15]
Considering the attendant peculiar circumstances, said rule cannot apply to
the present case. Evidently, the facts alleged in the complaint for Estafa
Through Falsification of Public Documents filed by respondent against
complainant were obtained by respondent due to his personal dealings with
complainant. Respondent volunteered his service to hasten the issuance of the
certificate of title of the land he has redeemed from complainant. Respondents
immediate objective was to secure the title of the property that complainant had
earlier bought from his son. Clearly, there was no attorney-client relationship
between respondent and complainant. The preparation and the proposed filing
of the petition was only incidental to their personal transaction.
Canon 21 of the Code of Professional Responsibility reads:

Canon 21 A LAWYER SHALL PRESERVE THE CONFIDENCE AND SECRETS

OF HIS CLIENT EVEN AFTER THE ATTORNEY-CLIENT RELATION IS
TERMINATED.

Rule 21.01 A lawyer shall not reveal the confidences or secrets of his client except:

a) When authorized by the client after acquainting him of the consequences of the
disclosure;

b) When required by law;

c) When necessary to collect his fees or to defend himself, his employees or associates
or by judicial action.

The alleged secrets of complainant were not specified by him in his affidavit-
complaint. Whatever facts alleged by respondent against complainant were not
obtained by respondent in his professional capacity but as a redemptioner of a
property originally owned by his deceased son and therefore, when respondent
filed the complaint for estafa against herein complainant, which necessarily
involved alleging facts that would constitute estafa, respondent was not, in any
way, violating Canon 21. There is no way we can equate the filing of the
affidavit-complaint against herein complainant to a misconduct that is wanting
in moral character, in honesty, probity and good demeanor or that renders him
unworthy to continue as an officer of the court. To hold otherwise would be
precluding any lawyer from instituting a case against anyone to protect his
personal or proprietary interests.
WHEREFORE, Resolution No. XV-2003-365 dated June 21, 2003 of the
Integrated Bar of the Philippines is REVERSED and SET ASIDE and the
administrative case filed against Atty. Fermin L. Gonzales, docketed as A.C.
No. 5280, is DISMISSED for lack of merit.
SO ORDERED.
 SECOND DIVISION

[A.C. No. 5174. February 28, 2002]

ERNESTO M. RAMOS, complainant, vs. ATTY. MARIANO A. DAJOYAG,

JR., respondent.

DECISION
MENDOZA, J.:

This is a complaint filed by Ernesto M. Ramos against Atty. Mariano A.

Dajoyag, Jr. for negligence in failing to appeal a ruling of the National Labor
Relations Commission, which affirmed the dismissal by the Labor Arbiter of a
[1]

complaint for illegal dismissal filed by complainant against DCCD Engineering

Corporation. In a letter addressed to the Chief Justice, dated November 15,
1999, complainant stated:

As a result of the dismissal by the NLRC of my complaint, I have been physically and
emotionally affected. Considering my status in the community of the respondents and
where I live as a Civil Engineer, now 73 1/2 years of age, the illegal termination of my
employment continuously caused me sleepless nights, mental anguish and torture,
social humiliation and besmirch[ed] reputation. These have been compounded by the
failure of my lawyer, Atty. MARIANO A. DAJOYAG, Jr. to file on time the petition
for certiorari, which [the] Honorable Supreme Court dismissed with finality . . . To
lessen the impact of my sufferings and mental torture, which I could no longer bear
for nearly six years since I received the notice of termination of my services in
December 1993, I finally decided to report my lawyers failure to perfect an appeal
within the prescribed period which constitutes negligence and malpractice . . .

This fact arose out of case G.R. 125244 (Ernesto Ramos vs. National Labor Relations
Commission, DCCD Engineering Corp., et al.) Our motion for last extension of time
within which to file [a] petition for review on certiorari [was] DENIED, petitioner
having been previously warned in the resolution of July 24, 1996 that no further
extension will be given per resolution of the First Division of [the] Honorable Court
dated August 26, 1996. Our petition for certiorari filed on August 14, 1996 was
dismissed per resolution of the First Division of [the] Honorable Court
dated December 2, 1996 for having [been] filed out of time. Our motion for
reconsideration [of] the resolution [dated] December 2, 1996, which dismissed the
petition for certiorari, was likewise denied with finality per resolution dated February
19, 1997of the First Division of [the] Honorable Court. Machine [copies] of the
above-mentioned resolutions [are] attached hereto.

Because it was not my fault or shortcoming but that of my lawyer, Atty. Mariano A.
Dajoyag, Jr., for his failure [in] his devotion to his client, warmth and zeal in the
defense of his clients rights, it is requested that said erring lawyer be duly sanctioned
and my petition for certiorari be reconsidered and accepted. Or through another
counsel, I be allowed to file another petition for certiorari with [an] important
addendum, which my said former lawyer failed to mention due to time constraint in
filing [the] petition for certiorari.[2]

Respondent denied the allegations against him. Commenting on the

complaint, he said:
1. The records will show that complainant filed a complaint against DCCD Engineering
Corp. on May 1994 before the National Labor Relations Commission docketed under
NLRC-NCR Case No. 00-05-03667-94 for illegal lay-off, illegal deduction, overtime
pay, service incentive leave pay, and related claims;
2. Complainant approached me being a kababayan from our hometown of Calaca,
Batangas. He said that he was a friend of my late father, Atty. Mariano Dajoyag, Sr.,
and knew also my mother, Atty. Aurora Ampil Dajoyag, who is still living but in her
middle eighties. After appealing to our common regional origin, complainant urged
me to accept his case;
3. Being a kabayan, I was hesitant to secure a contract for legal services and that as it
usually goes with such situation, it was bahala na lang pag natapos ang kaso,;
...
5. That before the Labor Arbiter, I filed the following:

a) Amended Complaint to implead proper parties and to include changes in

the causes of action for a more plausible plea;

b) Position Paper consisting of 15 pages with annexes consisting of 11 pages;

c) Reply to Respondents Position Paper consisting of 16 pages and annexes

consisting of 24 pages;

d) Memorandum for Complainant consisting of 22 pages and annexes

consisting of 4 pages;

6. That after the case was submitted for resolution, the Honorable Labor Arbiter
dismissed the complaint in a decision dated April 3, 1995. Said decision in a nutshell
concluded that: Complainant was a managerial employee with a field assignment for
which he was not entitled to overtime pay and service incentive leave pursuant to the
Labor Code, and that complainants term of employment was [for] a fixed duration
which already expired. . . .
To this decision, I prepared a Memorandum of Appeal in behalf of
Complainant consisting of 18 pages which I also filed within the reglementary period
at my own expense except the appeal fee and legal research fee which complainant
had to pay being the party-litigant;
7. After the filing of this Memorandum of Appeal, and the respondent Company had filed
its opposition, the NLRC ruled to affirm the Labor Arbiters decision. The NLRC found
that complainant was engaged as a consultant for a fixed period of time for which the
termination of employment depended upon the termination of the agreement; and that
complainant had also waived his right to file the complaint because he had executed
a waiver and release wherein he expressly declared that his separation was legally
valid. And there was no evidence that complainant was forced to sign this release
which was held to be valid.
8. That in the face of this adverse ruling, I still filed a Motion for Reconsideration which
was duly verified by complainant. This Motion for Reconsideration was thereafter
denied in a Resolution, to wit:
After due consideration of the Motion for Reconsideration filed by the complainant
on February 9, 1996, from the Decision of January 22, 1996 of the Commission
(Second Division) [the Court] RESOLVED to deny the same for lack of merit.
 9. That despite another adverse ruling and even as I have to attend to daily hearings of
my other cases or attend to other paper work, I still prepare[d] a Petition for Certiorari
with the Supreme Court.
10. Thus on June 25th, 1996, I filed a Motion for Extension of time to file a Petition for
Certiorari asking for 30 days which was up to July 25, 1996. Note: This Motion for
Extension was granted through a Resolution of this Honorable Court dated July
24th 1996 - but which I only received on August 28, 1996. However, as July 25th 1996
was fast approaching, and I was still saddled with heavy workload aside from the fact
that I needed numerous xerox copies of documents as well as [c]ertified [t]rue [c]opies
also of certain crucial documents which had to be secured from the NLRC, I was really
constrained to ask for a second extension of time FOR ONLY 20 DAYS OR UP TO
AUGUST 14th, 1996 to file the aforesaid Petition;

....

12. That to my utter surprise and sadness, the Resolution of the Honorable Court
granting my first Motion for Extension from June 25th to July 25th contained a warning
that it should be the last but which I ONLY received on August 28th after I have already
filed the second Motion for Extension for only 20 days and also the basic Petition for
Certiorari.
To summarize:
A) Motion for First Extension 30 days from June 25th, 1996 to July 25th - filed on
June 25th;
B) Motion for Second Extension for 20 days or from July 25, 1996 to August 14th -
filed July 25th;
C) Resolution dated July 24th granting First Motion for Extension from June 25th to
July 25th with warning that no further extension shall be given-received ONLY on
August 28th;
D) Petition for Certiorari filed on August 14th - exactly within the period of the request
[for] second extension had this second extension for only 20 days been granted.
13. That as mentioned above, the July 24th, 1996 Resolution reads as follows:

G.R. No. 124244 (Ernesto Ramos vs. National Labor Relations Commission, DCCD
Engineering Corp., et al.). The motion of petitioner for extension of thirty (30) days
from June 25, 1996 within which to file petition for certiorari is GRANTED WITH
WARNING THAT THE SAME SHALL BE THE LAST AND THAT NO
FURTHER EXTENSION will be given.

14. That on August 26th 1996, a resolution was promulgated by the Honorable Court
which was received by respondent counsel on October 5, 1996, to wit:

G.R. No. 124244 (Ernesto Ramos vs. National Labor Relations Commission, DCCD
Engineering Corp., et al.,). The motion of petitioner for a second extension of twenty
(20) days from July 25, 1996 within which to file petition for review on certiorari is
DENIED, petitioner having been previously warned in the resolution of July 25,
1996 that no further extension will be given.

15. That to this denial I filed a Motion for Reconsideration on October 18, 1996 of
this August 26th 1996 denial order.
16. That prior to the filing of the Motion for Reconsideration of the denial of the second
Motion for Extension of Time to file petition, the Honorable Court issued a Resolution
dated October 9, 1996directing respondents to file Comment - which was received
on Nov. 5, 1996;
 17. That pursuant to this Resolution, private respondent filed its Comment and the
Solicitor General requested for extension of time to file his Comment. But after the
Comment of private respondent, the Honorable Court issued a Resolution
dated December 2, 1996, to wit:

G.R. No. 124244 (Ernesto Ramos v. National Labor Relations Commission, DCCD
Engineering Corp., et al.). - Considering the private respondents Comment/Opposition
to the petition for certiorari, the Court Resolved to DISMISS the petition for having
been filed out of time.

The motion of the Solicitor General for an extension of thirty (30) days
from November 8, 1996 within which to file Comment on the petition for Certiorari is
further NOTED in view of the dismissal of the petition.

18. That from the said Resolution dated December 2, 1996, the undersigned respondent
counsel in behalf of complainant still filed a Motion for Reconsideration pleading for
the reinstatement of the Petition[.] But inspite of my earnest and sincere efforts, the
Honorable Court denied the Motion for Reconsideration with finality;
19. That complainant was properly informed of this adverse ruling. He insisted that I file
another Motion for Reconsideration. I did not accede to his desire and I told him that
the dismissal was with finality and we might be cited for contempt for filing such
pleading. He was unhappy about it and that was the last time we saw each other.

....

It appears that the Resolution granting my request for 1st extension contained a
warning that no further extension would be given. BUT I WAS NOT AWARE OF
THIS BECAUSE WHEN I FILED MY MOTION FOR LAST EXTENSION FOR
ONLY 20 DAYS, I HAVE NOT YET RECEIVED THE COPY OF SAID
RESOLUTION. And in fact, even at the time I filed the basic Petition for Certiorari, I
HAVE NOT YET STILL received said July 24, 1996 Resolution.

I RELIED IN GOOD FAITH AND IN THE HONEST BELIEF THAT THE FIRST
MOTION FOR EXTENSION FOR 30 DAYS WOULD BE GRANTED - WITHOUT
THE WARNING - SINCE IT WAS MERELY A FIRST EXTENSION. Then even as
I was terribly saddled with heavy load and at times had some difficulty in getting in
touch with complainant, I dropped everything to be able to beat the supposed deadline
of August 14th, 1996.

I am sorry if I had to rely in good faith that my Motion for 1 st Extension of 30 days
would be granted without the warning - as this was a first extension only; and also that
I request for a second and last extension of 20 days for which I complied with the
filing of the Petition for Certiorari on the last day of the supposed extended period.

....

And even assuming there could be a charge of negligence, still this is excusable under
existing jurisprudence. The Honorable Court declared in a case:

Negligence is excusable where it is caused by failure to receive notice of the action or

the trial, x x x Fernandez vs Tan Tiong Tick, 1 SCRA 1138; underscoring supplied).
In this case, there was failure on my part to receive notice of the action of the
Honorable Court on my first motion for extension before I filed the second and last
motion for extension of time to file petition as well as the basic petition for certiorari
itself.
[3]

The case was referred to the Integrated Bar of the Philippines for
investigation, report, and recommendation. On October 27, 2001, the IBP
approved the report and recommendation of Investigating Commissioner
Tyrone R. Cimafranca that respondent be reprimanded and warned that any
other complaint for breach of his professional duties would be dealt with more
severely.
Acknowledging respondents efforts in prosecuting complainants case
before the Labor Arbiter and the National Labor Relations Commission, the
investigating commissioner found that respondent was not guilty of willful
breach of professional duty but only of simple neglect of duty and accordingly
recommended that he be given a mere reprimand. Thus, the investigating
commissioner reasoned:

Respondent has failed to show that he exercised that degree of competence and
diligence required of him in prosecuting complainants petition for certiorari before the
Honorable Supreme Court. His reliance on good faith cannot be credited fully in his
favor. Lawyers should not presume that the courts would grant their motion for
extension of time to file the required pleading or brief nor expect that the extension
that may be granted shall be counted from notice. They should file their brief or
pleadings within the extended period requested. Failing in this, they have only
themselves to blame if their appeal or case is dismissed (Roxas vs. Court of Appeals,
156 SCRA 252). Neither would the fact that he has not been paid his fees exonerate
him from liability. Every case a lawyer accepts deserves his full attention, diligence,
skill and competence regardless of its importance and whether he accepts it for a fee
or for free. (Santiago, et al. vs. Atty. Amado R. Fojas, A.C. No. 4103, September 7,
1995). [4]

We find the investigating commissioners report and recommendation well

taken.
First. Respondent pleads good faith and excusable neglect of duty. He
stresses the fact that he filed the petition for certiorari within the 20-day period
of extension that he sought in his second motion for extension and claims that
he learned that the period of extension granted in his first motion for extension
was inextendible only after the expiration of the two periods of extension that
he prayed for.
Respondents contentions have no merit. The decision of the National Labor
Relations Commission affirming the Labor Arbiters dismissal of complainants
claims against his former employers was promulgated on January 22,
1996. Respondent was notified of the decision on February 8, 1996 and he filed
a motion for reconsideration within the reglementary period. His motion was
denied on March 12, 1996 and respondent was notified thereof on March 25,
1996. On June 25, 1996, the last day of the 90-day period allowed at that time
for filing a special civil action for certiorari, he filed with this Court a motion
[5]

seeking an extension of thirty (30) days for filing the petition for certiorari under
Rule 65 on the ground that because of pressure of work he was prevented him
from filing the same earlier. On July 25, 1996, the last day of the period he
asked for in his first motion for extension, respondent filed a motion praying for
another extension of twenty (20) days for filing the petition for certiorari. On the
last day of the second period of extension that he asked for, August 14, 1996,
respondent finally filed the petition for certiorari.
Meanwhile, on July 24, 1996, this Court issued a resolution granting
respondents first motion for extension, with a warning that no further extension
would be granted. Respondent received a copy of the resolution on August 28,
1996. On August 26, 1996, the Court denied the petition for certiorari for being
filed out of time. Respondent received a copy of the resolution, dated August
26, 1996, denying his petition on October 5, 1996. On October 18, 1996,
respondent filed a motion for reconsideration, but the same was denied by the
Court in its resolution of December 2, 1996.
To begin with, motions for extension are not granted as a matter of right but
in the sound discretion of the court, and lawyers should never presume that
their motions for extension or postponement will be granted or that they will be
granted the length of time they pray for. Due diligence requires that they should
conduct a timely inquiry with the division clerks of court of the action on their
motions and the lack of notice thereof will not make them any less accountable
for their omission. Rule 12.03 of the Code of Professional Responsibility
[6]

provides:

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

Regardless of the agreement he had with complainant with respect to the

payment of his fees, respondent owed it to complainant to do his utmost to
ensure that every remedy allowed by law is availed of. Rule 14.04 of the Code
[7]

of Professional Responsibility enjoins every lawyer to devote his full attention,

diligence, skills, and competence to every case that he accepts.Pressure and
large volume of legal work do not excuse respondent for filing the petition for
certiorari out of time. [8]

Respondent cites the ruling in Fernandez v. Tan Tiong Tick, in support of

[9]

his claim that his negligence is excusable. Such reliance is

misplaced. In Fernandez v. Tan Tiong Tick, the appellant cited in support of his
petition for the reopening of his case the failure of his former counsel to inform
him of the status of his case. He argued that his own failure to inquire from his
former counsel the status of his case was excusable. This Court rejected the
contention:

Negligence is excusable where it is caused by failure to receive notice of the action or

the trial, by a genuine and excusable mistake or miscalculation, by reliance upon
assurances given by those upon whom the party had a right to depend, as the adverse
party or counsel retained in the case, or a competent adviser, that it would not be
necessary for him to take an active part in the case, or that the suit would not be
prosecuted, by relying on another person to attend to the case for him, when such
other person promised to do so, or was chargeable with that duty or by a well-founded
belief that the case would not be reached for trial as it was in fact reached, or by other
circumstances not involving fault of the moving party. . . .

The Court pointed out that appellants counsel was duly notified of the
proceedings in the case, and appellant was bound by his counsels conduct and
handling of his case.
In the case at bar, respondent was ill-informed about the disposition of his
first motion for extension not by reason of genuine and excusable mistake or
miscalculation but by his sheer negligence. It is noteworthy that the motions for
extension, and even the petition for certiorari, were all filed at the last
moment. Respondent had 120 days within which he could have filed the petition
for certiorari. However, because of his cavalier attitude toward deadlines for the
filing of pleadings, including the one set by himself in his first motion for
extension, respondent lost the opportunity for filing the petition for review.
Nevertheless, having said this, it ought to be remembered, on the other
hand, that respondent exerted efforts to protect the rights and interests of
complainant, including trying to secure a reconsideration of the denial of his
petition for certiorari in this Court. For this reason, we are inclined to adopt the
investigating commissioners recommendation that respondent be merely
reprimanded for his simple neglect of duty.
Second. Complainant prays that we admit and consider the merits of the
petition for certiorari filed by respondent, or that he be allowed to file anew a
separate petition for certiorari. We understand the plight of the complainant, but
we cannot grant his plea. This is an administrative case, separate from G.R.
No. 125244 in which the dismissal of the petition for certiorari was made. The
resolution of the Court in that case operated as a judgment on the merits and
is now final. Indeed, public policy and sound practice demand that, at the risk
[10]

of occasional errors, the judgments of courts should become final at some

definite date fixed by law, and that every party be bound by his counsels
[11]

decision regarding the conduct of the case, including his mistakes, save only
when the negligence of counsel is so gross, reckless, and inexcusable as to
amount to a deprivation of the clients day in court. This is not the situation in
[12]

this case.
WHEREFORE, Atty. Mariano A. Dajoyag, Jr. is REPRIMANDED. He is
admonished henceforth to exercise greater care and diligence in the
performance of his duties towards his clients and the courts and warned that
repetition of the same or similar offense will be more severely dealt with.
Complainants prayer that the petition for certiorari filed by respondent be
considered and given due course despite its denial for having been filed out of
time is DENIED for lack of merit.
SO ORDERED.
G.R. No. L-961 September 21, 1949

BLANDINA GAMBOA HILADO, petitioner,

vs.
JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD and SELIM JACOB
ASSAD, respondents.

Delgado, Dizon and Flores for petitioner.

Vicente J. Francisco for respondents.

TUASON, J.:

It appears that on April 23, 1945, Blandina Gamboa Hilado brought an action against Selim Jacob
Assad to annul the sale of several houses and lot executed during the Japanese occupation by Mrs.
Hilado's now deceased husband.

On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on behalf of the defendant; and
on June 15, Attorneys Delgado, Dizon, Flores and Rodrigo registered their appearance as counsel
for the plaintiff. On October 5, these attorneys filed an amended complaint by including Jacob Assad
as party defendant.

On January 28, 1946, Attorney Francisco entered his appearance as attorney of record for the
defendant in substitution for Attorney Ohnick, Velilla and Balonkita who had withdrawn from the
case.

On May 29, Attorney Dizon, in the name of his firm, wrote Attorney Francisco urging him to
discontinue representing the defendants on the ground that their client had consulted with him about
her case, on which occasion, it was alleged, "she turned over the papers" to Attorney Francisco, and
the latter sent her a written opinion. Not receiving any answer to this suggestion, Attorney Delgado,
Dizon, Flores and Rodrigo on June 3, 1946, filed a formal motion with the court, wherein the case
was and is pending, to disqualify Attorney Francisco.

Attorney Francisco's letter to plaintiff, mentioned above and identified as Exhibit A, is in full as
follows:

VICENTE J. FRANCISCO
Attorney-at-Law
1462 Estrada, Manila

July 13, 1945.

Mrs. Blandina Gamboa Hilado

Manila, Philippines

My dear Mrs. Hilado:

From the papers you submitted to me in connection with civil case No. 70075 of the Court of
First Instance of Manila, entitled "Blandina Gamboa Hilado vs. S. J. Assad," I find that the
basic facts which brought about the controversy between you and the defendant therein are
as follows:

(a) That you were the equitable owner of the property described in the complaint, as the
same was purchased and/or built with funds exclusively belonging to you, that is to say, the
houses and lot pertained to your paraphernal estate;

(b) That on May 3, 1943, the legal title to the property was with your husband, Mr. Serafin P.
Hilado; and

(c) That the property was sold by Mr. Hilado without your knowledge on the aforesaid date of
May 3, 1943.
 Upon the foregoing facts, I am of the opinion that your action against Mr. Assad will not
ordinarily prosper. Mr. Assad had the right to presume that your husband had the legal right
to dispose of the property as the transfer certificate of title was in his name. Moreover, the
price of P110,000 in Japanese military notes, as of May 3, 1943, does not quite strike me as
so grossly inadequate as to warrant the annulment of the sale. I believe, lastly, that the
transaction cannot be avoided merely because it was made during the Japanese occupation,
nor on the simple allegation that the real purchaser was not a citizen of the Philippines. On
his last point, furthermore, I expect that you will have great difficulty in proving that the real
purchaser was other than Mr. Assad, considering that death has already sealed your
husband's lips and he cannot now testify as to the circumstances of the sale.

For the foregoing reasons, I regret to advise you that I cannot appear in the proceedings in
your behalf. The records of the case you loaned to me are herewith returned.

Yours very truly,

(Sgd.) VICENTE J. FRANCISCO

VJF/Rag.

In his answer to plaintiff's attorneys' complaint, Attorney Francisco alleged that about May, 1945, a
real estate broker came to his office in connection with the legal separation of a woman who had
been deserted by her husband, and also told him (Francisco) that there was a pending suit brought
by Mrs. Hilado against a certain Syrian to annul the sale of a real estate which the deceased Serafin
Hilado had made to the Syrian during the Japanese occupation; that this woman asked him if he was
willing to accept the case if the Syrian should give it to him; that he told the woman that the sales of
real property during the Japanese regime were valid even though it was paid for in Japanese military
notes; that this being his opinion, he told his visitor he would have no objection to defending the
Syrian;

That one month afterwards, Mrs. Hilado came to see him about a suit she had instituted against a
certain Syrian to annul the conveyance of a real estate which her husband had made; that according
to her the case was in the hands of Attorneys Delgado and Dizon, but she wanted to take it away
from them; that as he had known the plaintiff's deceased husband he did not hesitate to tell her
frankly that hers was a lost case for the same reason he had told the broker; that Mrs. Hilado
retorted that the basis of her action was not that the money paid her husband was Japanese military
notes, but that the premises were her private and exclusive property; that she requested him to read
the complaint to be convinced that this was the theory of her suit; that he then asked Mrs. Hilado if
there was a Torrens title to the property and she answered yes, in the name of her husband; that he
told Mrs. Hilado that if the property was registered in her husband's favor, her case would not
prosper either;

That some days afterward, upon arrival at his law office on Estrada street, he was informed by
Attorney Federico Agrava, his assistant, that Mrs. Hilado had dropped in looking for him and that
when he, Agrava, learned that Mrs. Hilado's visit concerned legal matters he attended to her and
requested her to leave the "expediente" which she was carrying, and she did; that he told Attorney
Agrava that the firm should not handle Mrs. Hilado's case and he should return the papers, calling
Agrava's attention to what he (Francisco) already had said to Mrs. Hilado;

That several days later, the stenographer in his law office, Teofilo Ragodon, showed him a letter
which had been dictated in English by Mr. Agrava, returning the "expedients" to Mrs. Hilado; that
Ragodon told him (Attorney Francisco) upon Attorney Agrava's request that Agrava thought it more
proper to explain to Mrs. Hilado the reasons why her case was rejected; that he forthwith signed the
letter without reading it and without keeping it for a minute in his possession; that he never saw Mrs.
Hilado since their last meeting until she talked to him at the Manila Hotel about a proposed
extrajudicial settlement of the case;

That in January, 1946, Assad was in his office to request him to handle his case stating that his
American lawyer had gone to the States and left the case in the hands of other attorneys; that he
accepted the retainer and on January 28, 1946, entered his appearance.

Attorney Francisco filed an affidavit of stenographer Ragodon in corroboration of his answer.

The judge trying the case, Honorable Jose Gutierrez David, later promoted to the Court of Appeals,
dismissed the complaint. His Honor believed that no information other than that already alleged in
plaintiff's complaint in the main cause was conveyed to Attorney Francisco, and concluded that the
intercourse between the plaintiff and the respondent did not attain the point of creating the relation of
attorney and client.

Stripped of disputed details and collateral matters, this much is undoubted: That Attorney
Francisco's law firm mailed to the plaintiff a written opinion over his signature on the merits of her
case; that this opinion was reached on the basis of papers she had submitted at his office; that Mrs.
Hilado's purpose in submitting those papers was to secure Attorney Francisco's professional
services. Granting the facts to be no more than these, we agree with petitioner's counsel that the
relation of attorney and client between Attorney Francisco and Mrs. Hilado ensued. The following
rules accord with the ethics of the legal profession and meet with our approval:

In order to constitute the relation (of attorney and client) a professional one and not merely
one of principal and agent, the attorneys must be employed either to give advice upon a
legal point, to prosecute or defend an action in court of justice, or to prepare and draft, in
legal form such papers as deeds, bills, contracts and the like. (Atkinson vs. Howlett, 11 Ky.
Law Rep. (abstract), 364; cited in Vol. 88, A. L. R., p. 6.)

To constitute professional employment it is not essential that the client should have
employed the attorney professionally on any previous occasion. . . . It is not necessary that
any retainer should have been paid, promised, or charged for; neither is it material that the
attorney consulted did not afterward undertake the case about which the consultation was
had. If a person, in respect to his business affairs or troubles of any kind, consults with his
attorney in his professional capacity with the view to obtaining professional advice or
assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the
professional employment must be regarded as established. . . . (5 Jones Commentaries on
Evidence, pp. 4118-4119.)

An attorney is employed-that is, he is engaged in his professional capacity as a lawyer or

counselor-when he is listening to his client's preliminary statement of his case, or when he is
giving advice thereon, just as truly as when he is drawing his client's pleadings, or
advocating his client's cause in open court. (Denver Tramway Co. vs. Owens, 20 Colo., 107;
36 P., 848.)

Formality is not an essential element of the employment of an attorney. The contract may be
express or implied and it is sufficient that the advice and assistance of the attorney is sought
and received, in matters pertinent to his profession. An acceptance of the relation is implied
on the part of the attorney from his acting in behalf of his client in pursuance of a request by
the latter. (7 C. J. S., 848-849; see Hirach Bros. and Co. vs. R. E. Kennington Co., 88 A. L.
R., 1.)

Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney cannot, without the consent
of his client, be examined as to any communication made by the client to him, or his advice given
thereon in the course of professional employment;" and section 19 (e) of Rule 127 imposes upon an
attorney the duty "to maintain inviolate the confidence, and at every peril to himself, to preserve the
secrets of his client." There is no law or provision in the Rules of Court prohibiting attorneys in
express terms from acting on behalf of both parties to a controversy whose interests are opposed to
each other, but such prohibition is necessarily implied in the injunctions above quoted. (In re De la
Rosa, 27 Phil., 258.) In fact the prohibition derives validity from sources higher than written laws and
rules. As has been aptly said in In re Merron, 22 N. M., 252, L.R.A., 1917B, 378, "information so
received is sacred to the employment to which it pertains," and "to permit it to be used in the interest
of another, or, worse still, in the interest of the adverse party, is to strike at the element of confidence
which lies at the basis of, and affords the essential security in, the relation of attorney and client."

That only copies of pleadings already filed in court were furnished to Attorney Agrava and that, this
being so, no secret communication was transmitted to him by the plaintiff, would not vary the
situation even if we should discard Mrs. Hilado's statement that other papers, personal and private in
character, were turned in by her. Precedents are at hand to support the doctrine that the mere
relation of attorney and client ought to preclude the attorney from accepting the opposite party's
retainer in the same litigation regardless of what information was received by him from his first client.
 The principle which forbids an attorney who has been engaged to represent a client from
thereafter appearing on behalf of the client's opponent applies equally even though during
the continuance of the employment nothing of a confidential nature was revealed to the
attorney by the client. (Christian vs. Waialua Agricultural Co., 30 Hawaii, 553, Footnote 7, C.
J. S., 828.)

Where it appeared that an attorney, representing one party in litigation, had formerly
represented the adverse party with respect to the same matter involved in the litigation, the
court need not inquire as to how much knowledge the attorney acquired from his former
during that relationship, before refusing to permit the attorney to represent the adverse party.
(Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.)

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

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

Communications between attorney and client are, in a great number of litigations, a complicated
affair, consisting of entangled relevant and irrelevant, secret and well known facts. In the complexity
of what is said in the course of the dealings between an attorney and a client, inquiry of the nature
suggested would lead to the revelation, in advance of the trial, of other matters that might only
further prejudice the complainant's cause. And the theory would be productive of other un salutary
results. To make the passing of confidential communication a condition precedent; i.e., to make the
employment conditioned on the scope and character of the knowledge acquired by an attorney in
determining his right to change sides, would not enhance the freedom of litigants, which is to be
sedulously fostered, to consult with lawyers upon what they believe are their rights in litigation. The
condition would of necessity call for an investigation of what information the attorney has received
and in what way it is or it is not in conflict with his new position. Litigants would in consequence be
wary in going to an attorney, lest by an unfortunate turn of the proceedings, if an investigation be
held, the court should accept the attorney's inaccurate version of the facts that came to him. "Now
the abstinence from seeking legal advice in a good cause is by hypothesis an evil which is fatal to
the administration of justice." (John H. Wigmore's Evidence, 1923, Section 2285, 2290, 2291.)

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

So without impugning respondent's good faith, we nevertheless can not sanction his taking up the
cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not
necessarily to prevent any injustice to the plaintiff but to keep above reproach the honor and integrity
of the courts and of the bar. Without condemning the respondents conduct as dishonest, corrupt, or
fraudulent, we do believe that upon the admitted facts it is highly in expedient. It had the tendency to
bring the profession, of which he is a distinguished member, "into public disrepute and suspicion and
undermine the integrity of justice."

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

The defense that Attorney Agrava wrote the letter Exhibit A and that Attorney Francisco did not take
the trouble of reading it, would not take the case out of the interdiction. If this letter was written under
the circumstances explained by Attorney Francisco and he was unaware of its contents, the fact
remains that his firm did give Mrs. Hilado a formal professional advice from which, as heretofore
demonstrated, emerged the relation of attorney and client. This letter binds and estop him in the
same manner and to the same degree as if he personally had written it. An information obtained
from a client by a member or assistant of a law firm is information imparted to the firm. (6 C. J., 628;
7 C. J. S., 986.) This is not a mere fiction or an arbitrary rule; for such member or assistant, as in our
case, not only acts in the name and interest of the firm, but his information, by the nature of his
connection with the firm is available to his associates or employers. The rule is all the more to be
adhered to where, as in the present instance, the opinion was actually signed by the head of the firm
and carries his initials intended to convey the impression that it was dictated by him personally. No
progress could be hoped for in "the public policy that the client in consulting his legal adviser ought
to be free from apprehension of disclosure of his confidence," if the prohibition were not extended to
the attorney's partners, employers or assistants.

The fact that petitioner did not object until after four months had passed from the date Attorney
Francisco first appeared for the defendants does not operate as a waiver of her right to ask for his
disqualification. In one case, objection to the appearance of an attorney was allowed even on appeal
as a ground for reversal of the judgment. In that case, in which throughout the conduct of the cause
in the court below the attorney had been suffered so to act without objection, the court said: "We are
all of the one mind, that the right of the appellee to make his objection has not lapsed by reason of
failure to make it sooner; that professional confidence once reposed can never be divested by
expiration of professional employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321 A. L. R. 1316.)

The complaint that petitioner's remedy is by appeal and not by certiorari deserves scant attention.
The courts have summary jurisdiction to protect the rights of the parties and the public from any
conduct of attorneys prejudicial to the administration of the justice. The summary jurisdiction of the
courts over attorneys is not confined to requiring them to pay over money collected by them but
embraces authority to compel them to do whatever specific acts may be incumbent upon them in
their capacity of attorneys to perform. The courts from the general principles of equity and policy, will
always look into the dealings between attorneys and clients and guard the latter from any undue
consequences resulting from a situation in which they may stand unequal. The courts acts on the
same principles whether the undertaking is to appear, or, for that matter, not to appear, to answer
declaration, etc. (6 C.J., 718 C.J.S., 1005.) This summary remedy against attorneys flows from the
facts that they are officers of the court where they practice, forming a part of the machinery of the
law for the administration of justice and as such subject to the disciplinary authority of the courts and
to its orders and directions with respect to their relations to the court as well as to their clients.
(Charest vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, 7 C. J. S., 1007.) Attorney stand on
the same footing as sheriffs and other court officers in respect of matters just mentioned.

We conclude therefore that the motion for disqualification should be allowed. It is so ordered, without
costs.
A.C. No. 6051 April 2, 2007

CELIA ARROYO-POSIDIO,Complainant,
vs.
ATTY. JEREMIAS R. VITAN, Respondent.

DECISION

YNARES-SANTIAGO, J.:

In a verified complaint1 dated June 14, 2002, complainant Celia Arroyo-Posidio prayed for the
disbarment of respondent Atty. Jeremias R. Vitan on account of deceit, fraud, dishonesty and
commission of acts in violation of the lawyer’s oath.

Complainant alleged that she engaged the services of respondent in Special Proceeding No. C-525,
entitled "Testate Estate of deceased Nicolasa S. de Guzman Arroyo," filed before the Regional Trial
Court of Caloocan City. Complainant paid respondent legal fees in the amount of ₱20,000.00.
However, on June 6, 1990, respondent withdrew his appearance as counsel in the said case, thus
complainant engaged the services of another lawyer.

Sometime in August 1996, respondent contacted complainant and showed her documents
consisting of tax declarations of properties purportedly forming part of the estate of Nicolasa S. de
Guzman-Arroyo, but were not included in the Inventory of Properties for distribution in Special
Proceeding No. C-525. He convinced complainant to file another case to recover her share in the
alleged undeclared properties and demanded ₱100,000.00 as legal fees therefor. After several
months, however, respondent failed to institute any action. Complainant decided to forego the filing
of the case and asked for the return of the ₱100,000.00, but respondent refused despite repeated
demands.

Consequently, complainant filed an action for sum of money and damages against respondent
before Branch 81, Metropolitan Trial Court, Valenzuela City which was docketed as Civil Case No.
7130. On March 31, 1999, the trial court rendered a decision, the dispositive portion of which states:

WHEREEFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and
against the defendant ordering the latter to:

1. To pay plaintiff the sum of ₱100,000.00 with interest at the rate of 12% per annum from
September 7, 1996 until the same is fully paid and/or satisfied;

2. To pay plaintiff the amount of ₱8,000.00 as and for attorney’s fees; and

3. To pay the cost of suit.2

Respondent appealed to the Regional Trial Court which affirmed3 the Metropolitan Trial Court
decision in toto. Thus, complainant filed a Motion for Issuance of a Writ of Execution which was
granted on March 19, 2001.4

To satisfy the judgment against him, respondent issued Prudential Bank check number
03387425 dated May 31, 2001 in the amount of ₱120,000.00 in favor of complainant. However, upon
presentment for payment, the check was dishonored for the reason: ACCOUNT CLOSED. Despite a
written notice of dishonor and demand6 dated September 3, 2001, respondent refused to honor his
obligation. Hence, this administrative complaint charging respondent with deceit, fraud, dishonesty
and commission of acts in violation of the lawyer’s oath.

Respondent denied complainant’s allegations. He admitted having received the amount of

₱100,000.00 but claimed that the same was partial payment for his services in Special Proceeding
Case No. C-525. Further, he alleged that he had already paid complainant the amount of
₱150,000.00 as evidenced by a Receipt & Quitclaim7 dated August 10, 2000.

On March 1, 2004, the case was referred to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation. On January 15, 2006, the Investigating Commissioner
submitted his Report8 finding respondent guilty of violating the lawyer’s oath and the Code of
Professional Responsibility in defrauding his client and issuing a check without sufficient funds to
cover the same. Thus –

4.3 x x x

Noteworthy is the factual finding of the court that Complainant had already paid respondent the
amount of ₱20,000.00 for services he had rendered in Special Proceeding case No. C-525. Thus,
Respondent’s claim that the ₱100,000.00 given to him by Complainant allegedly for payment of his
legal services in the Special Proceeding is not correct. The MTC decision likewise found that
Respondent requested payment of the ₱100,000.00 in consideration for his representing
Complainant in the additional claims to be filed against the estate of Nicolasa S. de Guzman Arroyo.
Respondent, however, failed to file the claims. Hence, complainant demanded the return of the
₱100,000.00. The MTC decision has already become final and executory as evidenced by a copy of
the Order of Writ of Execution issued by the Court.

4.4 x x x

4.5 As already pointed out, the RTC had rendered a decision affirming in toto the decision of the
MTC that the ₱100,000.00 given by Complainant to Respondent is not for the payment of his
previous services rendered in the Special Proceeding case No. C-525 but rather as payment for
filing of an additional claim from the estate of the late Nicolasa S. de Guzman Arroyo. It is clear that
there is identity of parties in the civil case for recovery of sum of money and damages and in the
administrative case for disbarment filed by herein Complainant. Thus, while the causes of action are
different in the two cases, there is conclusiveness on the factual circumstances surrounding
Complainant’s delivery of the ₱100,000.00 to Respondent. Respondent[‘s] bare assertion that his
receipt of the ₱100,000.00 was for payment of legal services previously rendered in the Special
Proceeding case No. C-525 does not hold water and cannot overturn the factual conclusions
reached by the MTC in its decision.

4.6 A lawyer may be suspended or disbarred for deceit or misrepresentation to the prejudice of or as
a means to defraud his client. In the case of Munar v. Flores, the Supreme Court suspended an
attorney who deceitfully defrauded a client of a sum of money allegedly representing cost of
fees and other miscellaneous expenses for a suit to be filed but which promised suit he never
filed nor did he return the amount despite demands. Failure on the part of the lawyer, upon
demand, to return to his client the funds or property held by him on the latter’s behalf gives rise to
the presumption that he has appropriated the same for his own use to the prejudice of and in
violation of the trust reposed in him by his client.

It is clear in this case that Complainant made demands for the return of the ₱100,000.00, but the
same remained unanswered by Respondent. This prompted Complainant to file a civil case for
collection of sum of money and damages. Worse, after the decision was rendered in favor of
Complainant, and a writ of execution issued, Respondent issued a check purportedly to settle the
case only to have the check bounce for insufficiency of funds. The conversion of the client’s property
is a gross violation of general morality as well as professional ethics, and deserves severe
punishment. This conversion of client’s property is a ground for disciplinary action and presupposes
fraudulent intent on the part of the lawyer. In the case of Manalato v. Reyes, the Supreme Court
emphasized that fraudulent intent may be inferred from the lawyer’s refusal to make restitution after
demand. Such circumstance is present in this case.

xxxx

In view of the foregoing, this Commissioner respectfully recommends that a penalty ranging from
suspension for a period of six (6) months to one (1) year at the discretion of the Board be imposed
with warning that repetition of similar conduct in the future will warrant a more severe penalty.9

The IBP Board of Governors adopted the findings of the Investigating Commissioner but modified
the penalty from suspension to reprimand10 with stern warning that a similar misconduct will warrant
a more severe penalty.

We agree with the findings of the IBP. However, we find that the penalty of reprimand is not
commensurate to the gravity of wrong committed by respondent.
The ethics of the legal profession rightly enjoin every lawyer to act with the highest standards of
truthfulness, fair play and nobility in the course of his practice of law.11 Lawyers are prohibited from
engaging in unlawful, dishonest, immoral or deceitful conduct12 and are mandated to serve their
clients with competence and diligence.13 To this end, nothing should be done by any member of the
legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity,
honesty, and integrity of the profession.14

Rule 16.01, Canon 16 of the Code of Professional Responsibility requires the lawyer to account for
all money or property collected or received for or from his client. Where a client gives money to his
lawyer for a specific purpose, such as to file an action, appeal an adverse judgment, consummate a
settlement, or pay the purchase price of a parcel of land, the lawyer should, upon failure to take such
step and spend the money for it, immediately return the money to his client.15

In the instant case, respondent received the amount of ₱100,000.00 as legal fees for filing additional
claims against the estate of Nicolasa S. de Guzman Arroyo. However, he failed to institute an action,
thus it was imperative that he immediately return the amount to complainant upon demand therefor.
Having received payment for services which were not rendered, respondent was unjustified in
keeping complainant’s money. His obligation was to immediately return the said amount. His refusal
to do so despite complainant’s repeated demands constitutes a violation of his oath where he
pledges not to delay any man for money and swears to conduct himself with good fidelity to his
clients.

A lawyer should refrain from any action whereby for his personal benefit or gain, he abuses or takes
advantage of the confidence reposed in him by his client.16 A lawyer should be scrupulously careful
in handling money entrusted to him in his professional capacity, because a high degree of fidelity
and good faith on his part is exacted.17 In Barnachea v. Quiocho,18 the Court suspended a lawyer
from the practice of law for one year for his failure to return client’s funds which were given to him for
the expenses for the transfer of title over real property and in payment for his legal services. The
Court held:

A lawyer is obliged to hold in trust money or property of his client that may come to his possession.
He is a trustee to said funds and property. He is to keep the funds of his client separate and apart
from his own and those of others kept by him. Money entrusted to a lawyer for a specific purpose
such as for the registration of a deed with the Register of Deeds and for expenses and fees for the
transfer of title over real property under the name of his client if not utilized, must be returned
immediately to his client upon demand therefor. The lawyer’s failure to return the money of his
client upon demand gave rise to a presumption that he has misappropriated said money in
violation of the trust reposed on him. The conversion by a lawyer [of] funds entrusted to him
by his client is a gross violation of professional ethics and a betrayal of public confidence in
the legal profession.19(Emphasis supplied)

Respondent must likewise be reminded that a lawyer should, at all times, comply with what the court
lawfully requires.20 It bears stressing that the judgment against him in Civil Case No. 7130 has long
become final and executory. However, up to this date, he has failed to comply with the order to pay
complainant the amount of ₱100,000.00 as well as interest and attorney’s fees. His refusal to comply
with the said order constitutes a willful disobedience to the court’s lawful orders.

Lawyers are particularly called upon to obey court orders and processes and are expected to stand
foremost in complying with court directives being themselves officers of the court.21 And while
respondent issued a check in the amount of ₱120,000.00 in favor of complainant, purportedly to
satisfy the judgment against him, the check was later dishonored for having been drawn against a
closed account. Respondent never denied the issuance of the check or refuted complainant’s
allegations regarding the same. Neither did he question the veracity of complainant’s evidence which
consisted of the check itself.

Needless to say, the act of issuing a bouncing check further compounded respondent’s infractions.
Time and again, we have held that the act of a lawyer in issuing a check without sufficient funds to
cover the same constitutes willful dishonesty and immoral conduct as to undermine the public
confidence in law and lawyers.22 Such conduct indicates the respondent’s unfitness for the trust and
confidence reposed on him, shows such lack of personal honesty and good moral character as to
render him unworthy of public confidence and constitutes a ground for disciplinary action.23

It is clear from the foregoing that respondent fell short of the exacting moral and ethical standards
imposed on members of the legal profession. Respondent’s refusal to return complainant’s money
upon demand, his failure to comply with the lawful orders of the trial court, as well as the issuance of
a bouncing check, reveal his failure to live up to his duties as a lawyer in consonance with the
strictures of his oath and the Code of Professional Responsibility.

It cannot be overemphasized that membership in the legal profession is a privilege. Whenever it is

made to appear that an attorney is no longer worthy of the trust and confidence of the public, it
becomes not only the right but also the duty of this Court, which made him one of its officers and
gave him the privilege of ministering within its Bar, to withdraw the privilege.24

The Court believes that a penalty of suspension is called for under the circumstances. In Espiritu v.
Cabredo IV,25 a lawyer was suspended for one year for failure to account for and return the amount
of ₱51,161.00 to his client. In Reyes v. Maglaya,26 a lawyer was suspended for one year for failure to
return to his client the amount of ₱1,500.00 despite numerous demands. Likewise, in Castillo v.
Taguines,27 a lawyer was suspended for one year for failure to return to his client the amount of
₱500.00 and for issuing a bouncing check.

WHEREFORE, respondent Atty. Jeremias R. Vitan is SUSPENDED from the practice of law for a
period of one (1) year effective from notice, with a STERN WARNING that a repetition of the same
or similar acts will be dealt with more severely.

Let copies of this Decision be entered in the record of the respondent in the Office of the Bar
Confidant, and served on the Integrated Bar of the Philippines, as well as on the Court Administrator
who shall circulate it to all the courts for their information and guidance.

SO ORDERED.
A.C. No. 9390 August 1, 2012

EMILIA O. DHALIWAL, Complainant,

vs.
ATTY. ABELARDO B. DUMAGUING, Respondent.

RESOLUTION

PERLAS-BERNABE, J.:

Emilia O. Dhaliwal filed a complaint for violation of Canon 16 of the Code of Professional
Responsibility against Atty. Abelardo B. Dumaguing.

In her sworn statement, complainant alleged that she engaged the services of respondent in
connection with the purchase of a parcel of land from Fil-Estate Development, Inc. (Fil-Estate). On
June 13, 2000, upon the instruction of respondent, complainant's daughter and son-in-law withdrew
₱ 342,000.00 from the Philippine National Bank (PNB) and handed the cash over to respondent.
They then proceeded to BPI Family Bank Malcolm Square Branch where respondent purchased two
manager's checks in the amounts of ₱ 58,631.94 and ₱ 253,188.00 both payable to the order of Fil-
Estate Inc. When asked why the manager's checks were not purchased at PNB, respondent
explained that he has friends at the BPI Family Bank and that is where he maintains an account.
These manager's checks were subsequently consigned with the Housing and Land Use Regulatory
Board (HLURB) after complainant’s request to suspend payments to Fil-Estate had been granted.
On September 22, 2000, respondent, on behalf of complainant, filed with the HLURB a complaint for
delivery of title and damages against Fil-Estate. A week after or on September 29, 2000, he
withdrew the two manager's checks that were previously consigned. On March 3, 2003, complainant
informed the HLURB through a letter that respondent was no longer representing her. On March 11,
2003, the HLURB promulgated its Decision, adverse to complainant, finding the case for delivery of
title and damages premature as there was no evidence of full payment of the purchase price.
Thereafter, complainant made demands upon respondent to return and account to her the amounts
previously consigned with the HLURB. Respondent did not comply. Thus, complainant prays that
respondent be disbarred.

In his answer, respondent admitted substantially all of the allegations in the complaint. In defense,
he claims that the amount of P311,819.94 was consigned to the HLURB to cover the full payment of
the balance of the purchase price of the lot with Fil-Estate. Fil-Estate, however, did not accept the
same as it wanted complainant to also pay interests and surcharges totalling more than ₱
800,000.00. Because the amount was formally consigned with the HLURB, he allegedly filed a
motion1 to verify if the judgment in the case was already satisfied. He claimed that his motion has not
yet been acted upon; hence, he did not deem it proper as yet to return the consigned amount.

Following the submission by complainant of her verified position paper and the failure of respondent
to submit his, despite having been given ample opportunity to do so, the Commission on Bar
Discipline, through Attorney Gerely C. Rico, submitted its Report and Recommendation finding
complainant to have sufficiently established that respondent violated Canon 16 of the Code of
Professional Responsibility. It also found respondent to have submitted a false and fabricated piece
of documentary evidence, as the January 2004 Motion attached to his answer as Annex A did not
bear any proof of service upon the opposing party and proof of filing with the HLURB. The
Commission recommended that respondent be suspended from the practice of law for a period of
one (1) year. On September 19, 2007, the IBP Board of Governors passed Resolution No. XVIII-
2007-93, adopting with modification the Commission's Report and Recommendation, to wit:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with

modification, the Report and Recommendation of the Investigating Commissioner of the above-
entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation
fully supported by the evidence on record and the applicable laws and rules, and considering
Respondent's violation of Canon 16 of the Code of Professional Responsibility by his failure to return
and account to complainant the amount previously consigned with the HLURB despite demand, Atty.
Abelardo B. Dumaguing is hereby SUSPENDED from the practice of law for six (6) months and
Orderedto Return the amount of ₱ 311,819.94 to complainant within thirty (30) days from receipt of
notice.

Respondent's motion for reconsideration was denied by the IBP Board of Governors in Resolution
No. XX-2012-42.
The Court adopts the IBP's findings of fact and conclusions of law.

The Code of Professional Responsibility provides:

Canon 16-A lawyer shall hold in trust all moneys and properties of his client that may come into his
possession.
Rule 16.01-A lawyer shall account for all money or property collected or received for or from the
client.
Rule 16.02-A lawyer shall keep the funds of each client separate and apart from his own and those
of others kept by him.
Rule 16.03-A lawyer shall deliver the funds and property of his client when due or upon demand.

Money entrusted to a lawyer for a specific purpose, such as payment for the balance of the purchase
price of a parcel of land as in the present case, but not used for the purpose, should be immediately
returned.2 "A lawyer's failure to return upon demand the funds held by him on behalf of his client
gives rise to the presumption that he has appropriated the same for his own use in violation of the
trust reposed in him by his client. Such act is a gross violation of general morality as well as of
professional ethics. It impairs public confidence in the legal profession and deserves punishment."3

Since respondent withdrew the consignation of the BPI manager’s checks in the total amount of ₱
311,891.94 from the HLURB and the same was not used to settle the balance of the purchase price
of the parcel of land purchased by complainant from Fil-Estate, then reimbursement with legal
interest4 was properly ordered by the IBP.

Respondent's proffered excuse of having to await the HLURB action on his alleged motion-- the filing
of which he miserably failed to prove-- as a condition to the return of the sum of ₱ 311 ,891.94 to
complainant compounds his liability and even bolstered his attitude to use dishonest means if only to
evade his obligation. It underlines his failure to meet the high moral standards required of members
of the legal profession.

WHEREFORE, Atty. Abelardo B. Dumaguing is adjudged GUILTY of violating Canon 16 of the Code
of Professional Responsibility. He is hereby SUSPENDED from the practice of law for a period of six
(6) months effective upon receipt of this Resolution. He is also ordered to return to complainant
Emilia O. Dhaliwal, the amount of P311,819.94 with legal interest of six percent (6%) per annum
from the time of his receipt of the money on September 29, 2000 up to the finality of this Resolution
and twelve percent (12%) per annum from finality thereof until paid.

Let copies of this Resolution be furnished the Office of the Bar Confidant to be entered into
respondent’s personal records as attorney. Copies shall likewise be furnished the IBP and the Office
of the Court Administrator for circulation to all courts concerned.

SO ORDERED.
 EN BANC

[A.C. No. 4349. December 22, 1997]

LOURDES R. BUSIOS, complainant, vs. ATTY. FRANCISCO

RICAFORT, respondent.

RESOLUTION
PER CURIAM:

In a sworn complaint for disbarment dated 31 October 1994 but received by

us on 21 November 1994, complainant Lourdes R. Busios charged respondent
Atty. Francisco Ricafort, a practicing lawyer in Oas, Albay, with having
committed the crime of estafa under Article 315 (1) (b) of the Revised Penal
Code by misappropriating the sum of P32,000.00. Of this amount, P30,000.00
was entrusted to respondent for deposit in the bank account of complainants
husband, while P2,000.00 represented the amount respondent demanded from
complainant supposedly for a bond in Civil Case No. 5814, when no such bond
was required.
In the resolution of 18 January 1995, we required respondent to comment
on the complaint. Despite his receipt of a copy of the resolution, respondent did
not comply, compelling us in the resolution of 17 July 1995 to require him to
show cause why he should not be disciplinarily dealt with or held in contempt
for such failure.
Again respondent failed to comply. Hence in the resolution of 25 September
1996, we ordered him once more to file his comment within ten (10) days from
notice, and within the same period, to pay a fine of P1,000.00 or suffer
imprisonment of ten (10) days should he fail to so pay. In a Compliance and
Motion dated 24 October 196, respondent transmitted the fine of P1,000.00 by
way of postal money order, but asked for five (5) days from date to file his
comment. As respondent still failed to so file, we then declared, in the resolution
of 2 December 1996, that respondent was deemed to have waived his right to
file his comment, and referred the complaint to the Office of the Bar Confidant
for reception of complainants evidence and submission of a report and
recommendation thereon.
On 16 October 1997, the Bar Confidant, Atty. Erlinda C. Verzosa, submitted
her Report and Recommendation, material portions of which read as follows:

Respondent Atty. Francisco Ricafort stands charged with having misappropriated the
sum of P30,000.00 intended for his clients as well as having deceived his clients into
giving him the sum of P2,000.00 purportedly to be deposited as a bond in the case he
was handling.

Complainant Lourdes R. Busios is one of the heirs of Pedro Rodrigo who are the
defendants in Civil Case No. 1584, apparently a case involving the properties of the
late Pedro Rodrigo, father of herein complainant. Respondent was the counsel of
record for the defendants in the said case. On July 10, 1994, complainant representing
her co-heirs, executed a special power of attorney, appointing and constituting
respondent and/or Pedro Rodrigo, Jr. to be her true and lawful attorney-in-fact with
the following powers:

1. To attend to and represent me, testify, or otherwise enter into compromise during
the pre-trial stage or other proceedings in Civil Case No. 1584, entitled Heirs of
Rosario Rodrigo-Reantaso, vs. Heirs of Pedro Rodrigo Sr., et al. now pending before
the Regional Trial Court, Branch 12, Ligao, Albay;

2 To demand, collect and receipt for any and all sums of money that may now be
deposited in said court by the defendant Oas Standard High School or hereafter be
deposited by said defendant, due and owing to me or said Heirs of Pedro Rodrigo Sr.,
representing the rentals of said defendants for the lease of the property involved in
said case; and

3 To sign, authenticate, issue and deliver any and all deeds, instruments, papers and
other records necessary and pertinent to the above stated transactions.

On August 10, 1994, the Regional Trial Court of Ligao, Albay, Br. 12 issued an order,
directing the Clerk of Court to release any and all deposits of rentals made in
connection with this case (Civil Case No. 1584) to the defendants Heirs of Pedro
Rodrigo through Lourdes Rodrigo Businos who were receiving the rentals from Oas
Standard High School prior to the institution of this case.

In a letter dated August 10, 1994, the Clerk of Court of RTC, Ligao informed herein
complainant that respondent had already received the rental deposit of P25,000.00 on
eve date (see Annex C to the complaint). Respondent also received from Oas Standard
High School on August 17, 1994 the sum of P5,000.00 as payment for rental of school
site for the month of July 1994 (See Annex D to the complaint). The said sum was
entrusted to respondent with an obligation on his part to deposit the same in the
account of complainants husband at PNB, Ligao Branch. Instead, however, of
depositing the money, respondent converted the money to his own personal use, and
despite several demands, he failed to return the same to complainant. She was thus
constrained to file a criminal case for estafa and an administrative case for disbarment
against him. Thus, on November 21, 1994, complainant filed the instant
administrative case against respondent.

Complainant further accuses respondent for demanding and receiving P2,000.00 from
her which he said will be used for the bond in Civil Case No. 1584, but said amount
was never used as intended since no bond was required in the said case. Thus,
respondent merely pocketed the said amount.

xxx xxx xxx

Complainant, upon questioning by the undersigned, testified that: She authorized

respondent to withdraw the money amounting to P35,000.00 representing the rental
fee paid by Oas Standard High School from the Clerk of Court, with the instruction to
deposit the same in her savings account at the PNB. After she was informed by the
court that respondent had already withdrawn the money, she expected in vain to
receive the money a week later in Tarlac as respondent failed to effect the deposit of
the said sum in her account. She demanded from him to give her the money, but he
informed her that he had already spent the same. He promised, though to pay her the
said amount. (pp. 7-8, TSN, Reception of Evidence, April 18, 1997). She clarified that
respondent withdrew only the sum of P30,000.00 from the Clerk of Court, while
the P5,000.00 was withdrawn by respondent from Oas Standard High School (TSN, p.
8). Despite several demands, both from her and her lawyer, respondent failed to make
good his promise to give her the money he withdrew from the Clerk of Court and Oas
Standard High School (TSN, pp. 11-13). She was then constrained to file a criminal
case for estafa and an administrative case against respondent sometime in November
of 1994 to recover the money in question (TSN, pp. 14-16).On their third hearing of
the estafa case sometime in 1995, respondent came with the money and paid
complainant inside the courtroom (TSN, pp. 15, 19-20). Because of this development,
she did not anymore pursue the estafa case against respondent (TSN, p. 17). She has
no intention, however, of withdrawing the instant complaint (TSN, p. 18).

She further testified that respondent demanded from her the sum of P2,000.00 for the
bond required in the civil case. (TSN, p. 18). Respondent did not give her a receipt for
the said amount. (TSN, p. 19). Respondent gave back the P2,000.00 to complainant.
He paid complainant a total of P60,000.00 representing the money he withdrew from
the Clerk of Court and Oas Standard High School, the P2,000.00 he got from
complainant and attorneys fees, which he undertook to foot as a way of settlement.
(TSN, p. 19).

Although complainant failed to submit the original or certified true copies of the
documents in support of her complaint against respondent, respondents repeated
failure to comply with several resolutions of the Court requiring him to comment on
the complaint lends credence to the allegations of the complainant. It manifests his
tacit admission thereto. We have no other alternative, therefore, but to accept the said
documents at their [sic] face value.

There is no doubt that respondent is guilty of having used the money of his clients
without their consent. As the evidentiary value of the documents should be given
more weight than the oral testimony of complainant, we place the amount illegally
used by respondent at P30,000.00 and not P35,000.00 as claimed by complainant.
Respondents illegal use of his clients money is made more manifest [by] his letters to
complainant, all promising the latter to make good his promise to pay the money he
withdrew from the Clerk of Court and Oas Standard High School (See Annex E to the
complaint).

It bears emphasis that a lawyer, under his oath, pledges himself not to delay any man
for money or malice and is bound to conduct himself with all good fidelity to his
clients. He is obligated to report promptly the money of his client that has come into
his possession. He should not commingle it with his private property or use it for his
personal purposes without his cllients [sic] consent. He should maintain a reputation
for honesty and fidelity to private trust (Daroy vs. Legaspi, 65 SCRA 304).

Money collected by a lawyer in pursuance of a judgment in favor of his clients is held

in trust and must be immediately turned over to them (Aya vs. Bigornia, 57 Phil. 8).

Respondent, by converting the money of his clients to his own personal use without
their consent , and by deceiving the complainant into giving him the amount
of P2,000.00 purportedly to be used as a bond which was not required, is,
undoubtedly, guilty of deceit, malpractice and gross misconduct. By so doing, he
betrays the confidence reposed in him by his clients. Not only has he degraded
himself but as an unfaithful lawyer he has besmirched the fair name of an honorable
profession.

His belated payment of the amount he illegally used and fraudulently obtained do not
relieve him from any liability if only to impress upon him that the relation between an
attorney and his client is highly fiduciary in its nature and of a very delicate, exacting
and confidential character, requiring high degree of fidelity and good faith. In view of
that special relationship, lawyers are bound to promptly account for money or
property received by them on behalf of their clients and failure to do so constitutes
professional misconduct (Daroy vs. Legaspi, supra).

Moreover, his repeated failure to comply with the resolutions of the Court, requiring
him to comment on the complaint indicate the high degree of irresponsibility of
respondent.

PREMISES CONSIDERED, it is respectfully recommended that respondent

Atty.Francisco Ricafort be SUSPENDED from the practice of law for a period of
ONE (1) YEAR.

While the findings are in order, the penalty recommended is not

commensurate to respondents infractions.
Plainly, respondent breached Section 25 of Rule 138 of the Rules of Court,
Rule 1.01 of Canon 1 and Rules 16.01, 16.02 and 16.03 of Canon 16 of the
Code of Professional Responsibility which read:

SEC. 25 Unlawful retention of clients funds; contempt.--When an attorney unjustly

retains in his hands money of his client after it has been demanded he may be
punished for contempt as an officer of the Court who has misbehaved in his official
transactions; but proceedings under this section shall not be a bar to a criminal
prosecution.

CANON 1- A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE

LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL
PROCESSES.

Rule 1.01- A lawyer shall not engage in unlawful, dishonest, immoral or deceitful
conduct.

CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND

PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

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

Rule 16.02-- A lawyer shall keep the funds of each client separate and apart from his
own and those of others kept by him.
Rule 16.03-- A lawyer shall deliver the funds and property of his client when due or
upon demand. However, he shall have a lien over the funds and may apply so much
thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice
promptly thereafter to his client. He shall also have a lien to the same extent on all
judgments and executions he has secured for his client as provided for in the Rules of
Court.

Respondents transgressions manifested dishonesty and amounted to grave

misconduct and grossly unethical behavior which caused dishonor, not merely
to respondent, but to the noble profession to which he belongs, for it cannot be
denied that the respect of litigants for the profession is inexorably diminished
whenever a member of the Bar betrays their trust and confidence.

This Court has been nothing short of exacting in its demand for integrity and
good moral character from members of the Bar. In Marcelo v. Javier (A.C. No.
3248, 18 September 1992, 214 SCRA 1, 12-13), reiterated in Fernandez v.
Grecia, (A.C. No. 3694, 17 June 1993, 223 SCRA 425, 434), this Court
declared:

A lawyer shall at all times uphold the integrity and dignity of the legal profession. The
trust and confidence necessarily reposed by clients require in the attorney a high
standard and appreciation of his duty to his clients, his profession, the courts and the
public. The bar should maintain a high standard of legal proficiency as well as of
honesty and fair dealing . Generally speaking, a lawyer can do honor to the legal
profession by faithfully performing his duties to society, to the bar, to the courts and
to his clients. To this end, nothing should be done by any member of the legal
fraternity which might tend to lessen in any degree the confidence of the public in the
fidelity, honesty and integrity of the profession.

Here, respondent chose to forget that by swearing the lawyers oath, he

became a guardian of truth and the rule of law and an indispensable instrument
in the fair and impartial administration of justice -- a vital function of democracy
a failure of which is disastrous to society.
Any departure from the path which a lawyer must follow as demanded by
the virtues of his profession shall not be tolerated by this Court as the
disciplining authority. This is specially so, as here, where respondent even
deliberately defied the lawful orders of the Court for him to file his comment on
the complaint, thereby transgressing Canon 11 of the Code of Professional
Responsibility which requires a lawyer to observe and maintain the respect due
the courts.
WHEREFORE, for dishonesty, grave misconduct, grossly unethical
behavior in palpable disregard of Section 25 of Rule 138 of the Rules of Court,
Rule 1.01 of Canon 1 and Rules 16.01, 16.02 and 16.03 of Canon 16 of the
Code of Professional Responsibility, aggravated by a violation of Canon 11
thereof, and consistent with the urgent need to maintain the esteemed traditions
and high standards of the legal profession and to preserve undiminished public
faith in the members of the Philippine Bar, the Court Resolves to DISBAR
respondent ATTY. FRANCISCO RICAFORT from the practice law. His name is
hereby stricken from the Roll of Attorneys.
 This resolution shall take effect immediately and copies thereof furnished
the Office of the Bar Confidant, to be appended to respondents personal record;
the National Office and the Albay Chapter of the Integrated bar of the
Philippines; the Philippines Judges Association; and all courts of the land for
their information and guidance.
SO ORDERED.
 EN BANC

ARELLANO UNIVERSITY, INC., A.C. No. 8380

Complainant,
Present:
Puno, C.J.,
Carpio,
Corona,*
Carpio Morales,
- versus - Chico-Nazario,
Velasco, Jr.,*
Nachura,
Leonardo-De Castro,
Brion,
Peralta,*
Bersamin,
Del Castillo,
Abad, and
Villarama, Jr., JJ.
ATTY. LEOVIGILDO H. MIJARES III,
Respondent. Promulgated:
November 20, 2009
x ---------------------------------------------------------------------------------------- x

DECISION

PER CURIAM:
This disbarment case is about the need for a lawyer to account for funds entrusted
to him by his client.

The Facts and the Case

The facts are taken from the record of the case and the report and
recommendation of the Commission on Bar Discipline of the Integrated Bar of the
Philippines (IBP).

Sometime in January 2004, complainant Arellano University, Inc. (the University)

engaged the services of respondent Leovigildo H. Mijares III, a member of the Bar,
for securing a certificate of title covering a dried up portion of the Estero de San
Miguel that the University had been occupying. The property was the subject of a
Deed of Exchange dated October 1, 1958 between the City of Manila and the
University.

In its complaint for disbarment against Mijares, the University alleged that it gave
him all the documents he needed to accomplish his work. Later, Mijares asked the
University for and was given P500,000.00 on top of his attorneys fees, supposedly
to cover the expenses for facilitation and processing. He in turn promised to give
the money back in case he was unable to get the work done.

On July 5, 2004 Mijares informed the University that he already completed

Phase I of the titling of the property, meaning that he succeeded in getting the
Metro Manila Development Authority (MMDA) to approve it and that the
documents had already been sent to the Department of Environment and Natural
Resources (DENR). The University requested Mijares for copies of the MMDA
approval but he unjustifiably failed to comply despite his clients repeated
demands. Then he made himself scarce, prompting the University to withdraw all
the cases it had entrusted to him and demand the return of the P500,000.00 it gave
him.

On November 23, 2005 the University wrote Mijares by registered letter, formally
terminating his services in the titling matter and demanding the return of
the P500,000.00. But the letter could not be served because he changed office
address without telling the University. Eventually, the University found his new
address and served him its letter on January 2, 2006. Mijares personally received it
yet he did not return the money asked of him.

In his answer to the complaint, Mijares alleged that he and the University agreed
on a number of courses of action relating to the project assigned to him: first, get
the Universitys application for a survey plan which the DENR-NCR approved for a
facilitation cost of P500,000.00; second, get a favorable MMDA endorsement for a
facilitation cost of another P500,000.00; and, third, the titling of the property by
the Land Registration Authority for a facilitation cost of still another P500,000.00.

Mijares also alleged that the DENR-NCR Assistant Regional Director told him that
he needed to get a favorable endorsement from MMDA and that the person to talk
to about it was Undersecretary Cesar Lacuna. Mijares later met the latter through
a common friend. At their meeting, Mijares and Lacuna allegedly agreed on what
the latter would get for recommending approval of the application. Later, Mijares
said, he gave the P500,000.00 to Lacuna through their common friend on Lacunas
instruction.

Mijares next alleged that, after he received the money, Lacuna told him that the
University filed an identical application earlier on March 15, 2002. Mijares claimed
that the University deliberately withheld this fact from him. Lacuna said that,
because of the denial of that prior application, he would have difficulty
recommending approval of the present application. It appeared that Lacuna
endorsed the previous application to the Mayor of Manila on July 23, 2003 but the
latter did not act on it.

Mijares finally alleged that he and Lacuna wanted to bypass the Mayor of Manila
in the paper work but they were unable to arrive at a concrete plan. Mijares
claimed that the University gave him only P45,000.00 as his fees and that it was
with the Universitys conformity that he gave the P500,000.00 to Lacuna.

The IBP designated Atty. Dennis B. Funa as Commissioner to conduct a formal

investigation of the complaint. Despite numerous settings, however, Mijares failed
to appear before the Commissioner and adduce evidence in his defense.

On October 17, 2008 Commissioner Funa submitted his Report and

Recommendation[1] in the case to the Integrated Bar of the Phillippines Board of
Governors. The Report said that the University did not authorize Mijares to
give P500,000.00 to the then MMDA Deputy Chairman Cesar Lacuna; that Mijares
had been unable to account for and return that money despite repeated demands;
and that he admitted under oath having bribed a government official.

Commissioner Funa recommended a) that Mijares be held guilty of violating

Rules 1.01 and 1.02, Canon 15, Rule 15.05, Canon 16, Rules 16.01 and 16.03, and
Canon 18, Rule 18.04 of the Code of Professional Responsibility and meted out the
penalty of disbarment; b) that he be ordered to return the P500,000.00 and all the
pertinent documents to the University; and c) that Mijares sworn statement that
formed part of his Answer be endorsed to the Office of the Ombudsman for
investigation and, if warranted, for prosecution with respect to his shady dealing
with Deputy Chairman Lacuna.
On December 11, 2008 the IBP Board of Governors passed Resolution XVIII-2008-
631, adopting and approving the Investigating Commissioners recommendation
but modifying the penalty from disbarment to indefinite suspension from the
practice of law and ordering Mijares to return the P500,000.00 and all pertinent
documents to the University within six months from receipt of the Courts
decision.[2]

The Question Presented

The only question presented in this case is whether or not respondent Mijares is
guilty of misappropriating the P500,000.00 that his client, the University, entrusted
to him for use in facilitating and processing the titling of a property that it claimed.

The Courts Ruling

Section 27, Rule 138 of the Revised Rules of Court provides for the disbarment or
suspension of a lawyer for the following: (1) deceit; (2) malpractice; (3) gross
misconduct in office; (4) grossly immoral conduct; (5) conviction of a crime
involving moral turpitude; (6) violation of the lawyers oath; (7) willful disobedience
of any lawful order of a superior court; and (8) willfully appearing as an attorney
for a party without authority to do so.[3]

Every lawyer has the responsibility to protect and advance the interests of his client
such that he must promptly account for whatever money or property his client may
have entrusted to him. As a mere trustee of said money or property, he must hold
them separate from that of his own and make sure that they are used for their
intended purpose. If not used, he must return the money or property immediately
to his client upon demand, otherwise the lawyer shall be presumed to have
misappropriated the same in violation of the trust reposed on him.[4] A lawyers
conversion of funds entrusted to him is a gross violation of professional ethics.[5]

Here, respondent Mijares chose not to be heard on his evidence. Technically, the
only evidence on record that the Court can consider is the Universitys evidence that
he got P500,000.00 from complainant for expenses in facilitating and processing its
title application; that he undertook to return the money if he did not succeed in his
purpose; that he falsely claimed having obtained the MMDA approval of the
application; and that he nonetheless refused to return the money despite repeated
demands. Unopposed, this evidence supports the finding of guilt of the
Investigating Commissioner and the IBP Board of Governors.

Besides, even if the Court were to consider the defense that Mijares laid out
in his answer, the same does not rouse sympathy. He claims that he gave
the P500,000.00 to Undersecretary Lacuna, with the Universitys conformity, for a
favorable MMDA endorsement to the Mayor of Manila. He also claims that, in a
complete turnaround, Lacuna later said that he could not provide the endorsement
because, as it turned out, the MMDA had previously given such endorsement of
the Universitys earlier application and the Mayor of Manila did not act on that
endorsement.

But, if this were so, there was no reason for Mijares not to face the University
and make it see that it had no cause for complaint, having given him clearance to
pass on the P500,000.00 to Lacuna. Instead, Mijares kept silent. He did not deny
that the University went all over town looking for him after he could not return the
money. Nor did he take any action to compel Lacuna to hand back the money that
the University gave him. More, his not showing up to testify on his behalf at the
investigation of the case is a dead giveaway of the lack of merit of his defense. No
evidence exists to temper the doom that he faces.

Even more unfortunate for Mijares, he admitted under oath having bribed a
government official to act favorably on his clients application to acquire title to a
dried-up creek. That is quite dishonest. The Court is not, therefore, inclined to let
him off with the penalty of indefinite suspension which is another way of saying he
can resume his practice after a time if he returns the money and makes a promise
to shape up.
The Court is also not inclined to go along with the IBPs recommendation that the
Court include in its decision an order directing Mijares to return the P500,000.00
that the University entrusted to him. The University knowingly gave him that
money to spend for facilitation and processing. It is not nave. There is no legitimate
expense called facilitation fee. This term is a deodorized word for bribe money. The
Court will not permit the conversion of a disbarment proceeding into a remedy for
recovering bribe money lost in a bad deal.

WHEREFORE, the Court finds respondent Leovigildo H. Mijares III, a member of the
Bar, GUILTY of violation of Rules 1.01 and 1.02, Canon 15, Rule 15.05, Canon 16,
Rules 16.01 and 16.03, and Canon 18, Rule 18.04 of the Code of Professional
Responsibility and imposes on him the penalty of DISBARMENT. He is, in addition,
directed to return to complainant Arellano University, Inc. all the documents in his
possession covering the titling matter that it referred to him.

Let the sworn statement of respondent Mijares, forming his Answer, be forwarded
to the Office of the Ombudsman for whatever action it deems proper under the
circumstances.

SO ORDERED.
G.R. No. L-41957 August 28, 1937

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
SANTIAGO SY JUCO, defendant.
TEOPISTO B. REMO, petitioner-appellant.

Laurel, Del Rosario and Sabido for appellant.

Office of the Solicitor-General for appellee.

DIAZ, J.:

Upon petition of the agent and representatives of the Bureau of Internal Revenue, named Narciso
Mendiola, who alleged that, according to information given him by a person whom he considered
reliable, certain fraudulent bookletters and papers or records were being kept in the building marked
No. 482 on Juan Luna Street, Binondo, Manila, occupied by Santiago Sy Juco, a warrant to search
the building in question was issued against said person on March 7, 1933, by the Court of First
Instance of Manila, through Judge Mariano A. Albert. In said warrant, the peace officers to whom it
was directed for execution were required to seize the above-stated articles for the purpose of
delivering them to the court, for the proper action to be taken in due time. After making the required
search the officers concerned seized, among things, an art metal filing cabinet claimed by Attorney
Teopisto B. Remo to be his and to contain some letters, documents and papers belonging to his
clients. Inasmuch as said officers later refused to return the filing cabinet in question to him, he filed
a petition in the Court of First Instance of Manila, praying that the Collector of Internal Revenue and
his agents be prohibited from opening said art metal filing cabinet and that the sheriff of the City of
Manila likewise be ordered to take charge of said property in the meantime, on the ground that the
warrant by virtue of which the search was made is null and void, being illegal and against the
Constitution. A similar petition was later filed in the same case by the Salakan Lumber Co., Inc., the
same agents of the Bureau of Internal Revenue having also seized some books belonging to it by
virtue of the above-mentioned search warrant.

After due hearing, the Court of First Instance through Judge Delfin Jaranilla, decided to overrule both
petitions, declaring that the art metal filing cabinet and the books and papers claimed by the Salakan
Lumber Co., Inc., would be returned to Attorney Teopisto B. Remo and to the company, respectively,
as soon as it be proven, by means of an examination thereof to be made in the presence of the
interested parties, that they contain nothing showing that they have been used to commit fraud
against the Government. Only Attorney Teopisto B. Remo appealed from the decision of the court
and he now contends that it committed the nine errors assigned by him as follows:

1. The lower court erred in not holding that the search warrant, Exhibit B, issued in the case
at bar is unconstitutional and void ab initio and hence can confer no legal right upon the
Government to seize, much less to retain or open the filing cabinet in question, Exhibit 3.

2. The lower court erred in not holding that the search warrant, which is void ab initio may not
be legalized by evidence secured subsequent to the issuance, or in consequence, of said
illegal search warrant.

3. The lower court erred in not holding that the doctrine of the case of People vs. Rubio (G.
R. No. 35500, 57 Phil., 384), is not applicable to the case at bar.

4. The lower court erred in not holding that the search warrant, Exhibit B, was procured in
order to obtain evidence against the defendant Santiago Sy Juco.

5. The lower court erred in not holding that the search warrant, Exhibit B, was issued solely
against the premised occupied by the defendant Santiago Sy Juco, and hence cannot be
used against the premises occupied by a stranger, or the petitioner, Teopisto B. Remo.

6. The lower court erred in not holding that the filing cabinet, Exhibit 3, is the personal
property of the petitioner, Teopisto B. Remo, and not of the defendant Santiago Sy Juco.

7. The lower court erred in not upholding the inviolability of the contents of the filing cabinet,
Exhibit 3, the same being confidential documents entrusted to the herein petitioner, Attorney
 Teopisto B. Remo, by his clients, in his professional capacity and in connection with cases
pending before the courts of justice and administrative tribunals.

8. The lower court erred in not holding that the Internal Revenue agents gave infringed the
penal laws not only by procuring the search warrant, Exhibit B, against the premises of the
defendant, Santiago Sy Juco, without just cause, but also by exceeding their authority in
enforcing said search warrant against the premises of the petitioner, Teopisto B. Remo, who
is stranger to said search warrant, which acts also constitute a violation of the domicile of
said petitioner; and in not endorsing the matter to the city fiscal for proper action.

9. The lower court erred in not ordering the return of the filing cabinet, Exhibit 3, intact and
unopened, to its lawful owner, the petitioner Teopisto B. Remo.

The pertinent part of the search warrant in question was couched in the following language:

Proof by affidavit having this day been made before me, Mariano Albert, Judge of the
Court of First Instance of the City of Manila, Philippine Islands, by the complainant on
oath of Narciso Mendiola, special investigator, Bureau of Internal Revenue, Manila,
that the defendant, Santiago Sy Juco, of No. 482 Juan Luna, Manila, keeps illegally
and feloniously fraudulent books, correspondence, and records and that he verily
believes upon probable cause that the said books, correspondence and records at
No. 482 Juan Luna, Manila, and the said (personal) property is now being used in the
commission of fraud of the revenue of the Government.

You are therefore commanded to take with you the necessary and proper assistance
and to enter, in the daytime, into the said premises and there diligently search for
fraudulent books, correspondence and records and that you seize and bring them
before the court to be disposed of according to law.

Given under my hands this 7th day of March, 1933, in the City of Manila.

[SEAL] (Sgd.) MARIANO A. ALBERT

Judge of Court of First instance of Manila

The affidavit or deposition referred to in the warrant above-quoted contained the following questions
and answers:

TESTIMONY TAKEN BEFORE HON. JUDGE MARIANO A. ALBERT, Narciso Mendiola,

being duly sworn, testifies as follows:

Q. What is your name, residence and occupation? — A. Narciso Mendiola, special

investigator, Bureau of Internal Revenue, Manila.

Q. Are you the applicant for this search warrant? — A. Yes, sir.

Q. do you know the premises situated at No. 482 Juan Luna, Manila? — A. Yes, sir.

Q. Do you know who occupy said premises? — A. According to the best of my information,
the house is occupied by Santiago Sy Juco.

Q. What are your reasons for applying for a search warrant? — A. It has been reported to us
by person whom I considered reliable that in said premises are fraudulent books,
correspondence and records.

I. Narciso Mendiola, being duly sworn, depose and say that I have read the foregoing
questions and answers and that I found the same to be correct and true to the best of
my knowledge and belief.

(Sgd.) NARCISCO MENDIOLA.

Subscribed and sworn to before me this 7th day of March, 1933, in the City of
Manila, P. I.
 [SEAL] (Sgd.) MARIANO A. ALBERT
Judge, Court of First Instance, Manila

It appears clear to this court that the question that the appellant wishes to raise by means of the
allege errors attributed by him to the lower court, may be reduced to the following:

1. Is the search warrant in question valid or not, taking into consideration the provisions of
the law and of the Constitution relative thereto?

2. Does the art metal filing cabinet seized by the agents of the Bureau of Internal Revenue
belong to Santiago Sy Juco or to Teopisto B. Remo?

3. Could the search warrant in question affect Attorney Teopisto B. Remo, not being the
person against whom it was directed?

4. Had the court authority to order the opening of the cabinet in question for the purpose of
determining, by an examination of the books, documents and records contained therein,
whether or not same were used to commit fraud against the Government?

1. A question which is very similar to the first one herein raised by the appellant, has been decided
by this court in the negative in its judgment rendered in the case of Alvarez vs. Court of First
Instance of Tayabas and Anti Usury Board, p. 33, ante. According to our laws in force on the date in
question, which do not differ substantially from the provisions of the Constitution of the
Commonwealth in matters regarding search, in order that a search warrant may be valid, the
following requisites, among others, must be present: That the application upon which it is issued be
supported by oath; That the search warrant particularly describes not only place to be searched but
also the person or thing to be seized and that there be probable cause (sec. 97, General Orders, No.
58: sec. 3, Jones Law; Article III, sec. 1, paragraph 3, Constitution of the Commonwealth).

In the above-cited case of Alvarez vs. Court of First Instance of Tayabas and Anti-Usury Board,
supra, and in that of United States vs. Addison (28 Phil., 566), this court held that the oath required
must be such that it constitutes a guaranty that the person taking it has personal knowledge of the
facts of the case and that it convince the committing magistrate, not the individual seeking the
issuance of the warrant or the person making the averment by hearsay, of the existence of the
requisite of probable cause. It has likewise been held by this court that by probable cause are meant
such facts and circumstances antecedent to the issuance thereof. It has furthermore been held that
the true test of the sufficiency of an affidavit to warrant issuance of a search warrant is whether it has
been drawn in such a manner that perjury could be charged thereon in case the allegations
contained therein prove false (Sate vs. Roosevelt, 244 Pac., 280), and that the provisions of the
Constitution and the statutes relative to searches and seizures must be construed liberally in favor of
the individual who may be affected thereby, and strictly against the State and against the person
invoking them for the issuance of the warrant ordering their execution (Elardo vs. State of Misissippi,
145 So., 615; Fowler vs. U. S., 62 Fed. [2d], 656; Saforik vs. U. S. Feed. [2d], 892; Boyd vs. U. S.,
116 U. S., 616; 29 Law. ed., 746), for the simple reason that the proceedings of search and seizure
are, by their very nature, summary and drastic ones (Alvarez vs. Court of First Instance of Tayabas
and Anti-Usury Board, supra, and the authorities cited therein).

By reading the affidavit which gave rise to the issuance of the search warrant in question, it will be
seen that the latter does not fulfill the necessary conditions in support of its validity. In the first place,
it is not stated in said affidavit that the books, documents or records referred to therein are being
used or are intended to be used in the commission of fraud against the Government and,
notwithstanding the lack of such allegation, the warrant avers that they are actually being used for
such purpose. In the second place, it assumes that the entire building marked No. 482 on Juan Luna
Street is occupied by Santiago Sy Juco against whom the warrant was exclusively issued, when the
only ground upon which such assumption is based is Narciso Mendiola's statement which is mere
hearsay and when in fact part thereof was occupied by the appellant. In the third place, it was not
asked that the things belonging to the appellant and to others also be searched. In otherwords, the
warrant in question has gone beyond what had been applied for by Narciso Mendiola and the agent
who executed it performed acts not authorized by the warrant, and it is for this and the above-stated
reason why it is unreasonable, it being evidence that the purpose thereof was solely to fish for
evidence or search for it by exploration, in case some could be found. It is of common knowledge
that search warrants have not been designed for such purpose (Gouled vs. U. S., 255 U. S., 298, S.
C. R., 65 Law. ed., 647; Uy Kheytin vs. Villareal, 42 Phil., 886) much less in a case as the one under
consideration where it has not even been alleged in the affidavit of Narciso Mendiola what crime had
been committed by Santiago Sy Juco or what crime he was about commit. On this point said affidavit
merely contained the following allegation: "It has been reported to us by a person whom I considered
reliable that in said premises are fraudulent books, correspondence and records." Therefore, the first
question raised should be decided in the negative.

2. The resolution of the second question depends entirely on the nature of the evidence presented
and the relative preponderance thereof. The only witness who testified that the art metal filing
cabinet belongs to the accused Santiago Sy Juco, is Macario Garcia. Against Garcia's testimony, we
certainly have that of the appellant himself and his witnesses Rufino C. Wenceslao, Vicente del
Rosario, Jose Jeuquenco and Feliciano Belmonte, besides Exhibits E, F, G, H and L, which
conclusively proves that the furniture in question was purchased by said appellant at the beginning
of January, 1933, and that he had it precisely in a room on one of the upper floors of building No.
482 on Juan Luna Street, which he was then subleasing from Santiago Sy Juco, to keep his records
and those of his clients. On the otherhand, it is unimportant now to determine whether the furniture
in question belongs to Santiago Sy Juco or to the appellant Attorney Topisto B. Remo. It should
have been alleged at the time he applied for the issuance of the search warrant, to show with the
other allegations, reason and evidence that the issuance thereof was justified because of the
existence of probable cause, the latter being a requisite without which the issuance of the judicial
warrant authorizing such search would be unwarranted. For these reasons, this court concludes that
the second question raised calls for an answer in the negative.

3. After the considerations just made, the third question cannot be resolved except in the negative.
The search warrant in question could not and should not in any way affect the appellant attorney on
the ground that he is not the person against whom it had been sought. It is Santiago Sy Juco alone
against whom the search warrant could be used, because it had been obtained precisely against
him; so much so that Narciso Mendiola, who applied for it, mentioned him expressly in his affidavit
and again did so in his report to his superior, that is, the Collector of Internal Revenue (Exhibit C);
and at the trial of this case, it was insisted that there was necessity of making the search in the
premises occupied by Santiago Sy Juco because an investigation was then pending against him, for
having defrauded the Government in its public revenue. The doctrine laid down in the case of People
vs. Rubio (57 Phil., 384), invoked against the appellant, is not applicable to the case at bar because,
unlike in the above-cited case, neither books nor record indicating fraud were found in his
possession, and it is not he against whom the warrant was issued.

4. It is clear that the court could not and can not order the opening of the art metal filing cabinet in
question because, it having been proven that it belongs to the appellant attorney and that in it he
keeps the records and documents of his clients, to do so would be in violation of his right as such
attorney, since it would be tantamount to compelling him to disclose or divulge facts or things
belonging to his clients, which should be kept secret, unless she is authorized by them to make such
disclosure, it being a duty imposed by law upon an attorney to strictly preserve the secrets or
communications made to him. Such an act would constitute a qualified violation of section 383, No.
4, and of section 31 of Act No. 190, which read as follows:

An attorney can not, without the consent of his client, be examined as to any communication
made by the client to him, or his advice given thereon in the course of professional
employment; nor can an attorney's secretary stenographer, or clerk be examined, without the
consent of client and his employer, concerning any fact, the knowledge of which has been
acquired in such capacity. (Sec. 383, No. 4, Act No. 190.)

A lawyer must strictly maintain inviolate the confidence and preserve the secrets of his client.
He shall not be permitted in any court without the consent of his client, given in open court, to
testify to any facts imparted to him by his client in professional consultation, or for the
purpose of obtaining advice upon legal matters. (Sec. 31, Act No. 190.)

For all the foregoing reasons, and finding that the errors assigned by the appellant are very well
founded, the appealed judgment is reversed, and it is ordered that the art metal filing cabinet,
together with the key thereof seized by the internal revenue agent by virtue of the judicial warrant in
question, which is hereby declared null and void, be immediately returned unopened to the
appellant; and that a copy of this decision be sent to the Solicitor-General for him to take action, if he
deems it justified, upon careful investigation of the facts, against the internal revenue agent or
agents who obtained and executed the warrant in question, in accordance with the provisions of
article 129 of the Revised Penal Code, without special pronouncement as to costs. So ordered.
 A.C. No. 7749, July 08, 2013

JOSEFINA CARANZA VDA. DE SALDIVAR, Complainant, v. ATTY. RAMON SG CABANES,

JR.,Respondent.

RESOLUTION

PERLAS-BERNABE, J.:

For the Court’s resolution is an administrative complaint1 filed by Josefina Caranza vda. de Saldivar
(complainant) against Atty. Ramon SG Cabanes, Jr. (respondent), charging him for gross negligence in
violation of Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional Responsibility
(Code).

The Facts

Complainant was the defendant in an unlawful detainer case, docketed as Civil Case No. 1972,2 filed by the
heirs of one Benjamin Don (heirs) before the Municipal Trial Court of Pili, Camarines Sur (MTC), wherein she
was represented by respondent. While respondent duly filed an answer to the unlawful detainer complaint,
he, however, failed to submit a pre-trial brief as well as to attend the scheduled preliminary conference.
Consequently, the opposing counsel moved that the case be submitted for decision which motion was
granted in an Order3 dated November 27, 2003. When complainant confronted respondent about the
foregoing, the latter just apologized and told her not to worry, assuring her that she will not lose the case
since she had the title to the subject property.

On December 30, 2003, the MTC issued a Decision4 (MTC Decision) against complainant, ordering her to
vacate and turn-over the possession of the subject property to the heirs as well as to pay them damages.
On appeal, the Regional Trial Court of Pili, Camarines Sur, Branch 32 (RTC), reversed the MTC Decision and
dismissed the unlawful detainer complaint.5 Later however, the Court of Appeals (CA) reversed the RTC’s
ruling and reinstated the MTC Decision.6 Respondent received a copy of the CA’s ruling on January 27, 2006.
Yet, he failed to inform complainant about the said ruling, notwithstanding the fact that the latter frequented
his work place. Neither did respondent pursue any further action.7 As such, complainant decided to engage
the services of another counsel for the purpose of seeking other available remedies. Due to respondent’s
failure to timely turn-over to her the papers and documents in the case, such other remedies were,
however, barred. Thus, based on these incidents, complainant filed the instant administrative complaint,
alleging that respondent’s acts amounted to gross negligence which resulted in her loss.8

In a Resolution9 dated March 10, 2008, the Court directed respondent to comment on the administrative
complaint within ten (10) days from notice.

Accordingly, respondent filed a Manifestation with Compliance10 dated May 19, 2008, admitting to have
agreed to represent complainant who claimed to be the tenant and rightful occupant of the subject property
owned by the late Pelagia Lascano (Pelagia). He alleged that upon careful examination of the heirs' unlawful
detainer complaint, he noticed a discrepancy between the descriptions of the subject property as indicated in
the said pleading as opposed to that which complainant supplied to him. On the belief that the parties may
be contesting two (2) sets of properties which are distinct and separate from one another, respondent, at
the preliminary conference conducted on October 28, 2003, moved for the suspension of further proceedings
and proposed that a commissioner be appointed to conduct a re-survey in order to determine the true
identity of the property in dispute. The MTC allowed the counsels for both parties to decide on the manner of
the proposed re-survey, leading to the assignment of a Department of Agrarian Reform Survey Engineer
(DAR Engineer) for this purpose. In relation, the heirs’ counsel agreed to turn-over to respondent in his
office11 certain documents which indicated the subject property’s description. Thus, pending the conduct and
results of the re-survey, the preliminary conference was tentatively reset to November 27, 2003.12

As it turned out, the heirs’ counsel was unable to furnish respondent copies of the above-stated documents,
notwithstanding their agreement. This led the latter to believe that the preliminary conference scheduled on
November 27, 2003 would not push through. Respondent averred that the aforesaid setting also happened
to coincide with an important provincial conference which he was required to attend. As such, he
inadvertently missed the hearing.13 Nonetheless, he proffered that he duly appealed the adverse MTC
Decision to the RTC,14 resulting to the dismissal of the unlawful detainer complaint, albeit later reversed by
the CA.

Thereafter, pending the heirs' appeal to the CA, respondent came upon the information that the disputed
property was subject of a petition for exemption from the coverage of Presidential Decree No. (PD) 2715filed
by Pelagia against complainant’s mother, Placida Caranza (Placida). Based on several documents furnished
to him by certain DAR personnel, respondent was satisfied that Placida indeed held the subject property for
a long time and actually tilled the same in the name of Pelagia, thereby placing it under PD 27 coverage.
Due to such information, respondent was convinced that Placida – and consequently, complainant (who took
over the tilling) – was indeed entitled to the subject property. Hence, he advised complainant that it would
be best to pursue remedies at the administrative level, instead of contesting the appeal filed by the heirs
before the CA. It was respondent’s calculated legal strategy that in the event the CA reverses the decision of
the RTC, an opposition to the issuance of a writ of execution or a motion to quash such writ may be filed
based on the afore-stated reasons, especially if an approved plan and later, an emancipation patent
covering the subject property is issued.16

Meanwhile, the survey conducted by the DAR Engineer revealed that complainant's tillage extended to about
5,000 square meters of the subject property which was determined to belong to the heirs, the rest being
covered by the title of Pelagia. Dissatisfied, complainant manifested her intention to secure the services of a
private surveyor of her own choice, and promised to furnish respondent a copy of the survey results, which
she, however, failed to do. Later, complainant accused respondent of manipulating the DAR Survey Results
which caused their lawyer-client relationship to turn sour and eventually be severed. She has since retrieved
the entire case folders and retained the services of another lawyer.17

In a Resolution18 dated July 7, 2008, the Court resolved to refer the instant administrative case to the
Integrated Bar of the Philippines (IBP) for its evaluation, report and recommendation.

The IBP Commission on Bar Discipline set the case for mandatory conference on April 15, 200919 and
required the parties to submit their respective position papers.20

The IBP’s Report and Recommendation

On June 18, 2009, the Investigating IBP Commissioner, Rebecca Villanueva-Maala (Investigating
Commissioner), issued a Report and Recommendation (Commissioner’s Report),21 finding respondent to
have been negligent in failing to attend the preliminary conference in Civil Case No. 1972 set on November
27, 2003 which resulted in the immediate submission of the said case for decision and eventual loss of
complainant’s cause.

The Investigating Commissioner observed that respondent could have exercised ordinary diligence by
inquiring from the court as to whether the said preliminary conference would push through, considering that
the November 27, 2003 setting was only tentative and the heirs’ counsel was not able to confer with him.
Further, the fact that respondent had to attend an important provincial conference which coincided with the
said setting hardly serves as an excuse since he should have sent a substitute counsel on his behalf. Also,
respondent never mentioned any legal remedy that he undertook when the heirs elevated the decision of
the RTC to the CA. In fact, he did not file any comment or opposition to the heirs’ appeal. Finally,
respondent’s enumerations of his legal options to allegedly protect the complainant’s interests were found to
be thought only after the fact.22

Thus, based on the foregoing, the Investigating Commissioner ruled that respondent failed to exercise
ordinary diligence in handling his client's cause, warranting his suspension from the practice of law for a
period of six (6) months.23

The IBP Board of Governors adopted and approved the Commissioner’s Report in Resolution No. XIX-2011-
26624 dated May 14, 2011, finding the same to be fully supported by the evidence on record and in accord
with applicable laws and rules.

Respondent filed a motion for reconsideration25 which was, however, denied, in Resolution No. XX-2012-
51726 dated December 14, 2012.

The Court's Ruling

The Court resolves to adopt the IBP's findings and recommendation.

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

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

CANON 18 – A lawyer shall serve his client with competence and diligence.

xxxx

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

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

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

Applying these principles to the present case, the Court finds that respondent failed to exercise the required
diligence in handling complainant’s cause.

Records show that he failed to justify his absence during the scheduled preliminary conference hearing in
Civil Case No. 1972 which led the same to be immediately submitted for decision. As correctly observed by
the Investigating Commissioner, respondent could have exercised ordinary diligence by inquiring from the
court as to whether the said hearing would push through, especially so since it was only tentatively set and
considering further that he was yet to confer with the opposing counsel. The fact that respondent had an
important commitment during that day hardly exculpates him from his omission since the prudent course of
action would have been for him to send a substitute counsel to appear on his behalf. In fact, he should have
been more circumspect to ensure that the aforesaid hearing would not have been left unattended in view of
its adverse consequences, i.e., that the defendant’s failure to appear at the preliminary conference already
entitles the plaintiff to a judgment.31 Indeed, second-guessing the conduct of the proceedings, much less
without any contingent measure, exhibits respondent’s inexcusable lack of care and diligence in managing
his client’s cause.

Equally compelling is the fact that respondent purposely failed to assail the heirs’ appeal before the
CA. Records disclose that he even failed to rebut complainant's allegation that he neglected to inform her
about the CA ruling which he had duly received, thereby precluding her from availing of any further
remedies. As regards respondent’s suggested legal strategy to pursue the case at the administrative level,
suffice it to state that the same does not excuse him from failing to file a comment or an opposition to an
appeal, or even, inform his client of any adverse resolution, as in this case. Irrefragably, these are basic
courses of action which every diligent lawyer is expected to make.

All told, it cannot be gainsaid that respondent was guilty of gross negligence, in violation of the above-cited
provisions of the Code.

As regards the appropriate penalty, several cases show that lawyers who have been held liable for gross
negligence for infractions similar to those of the respondent were suspended for a period of six (6) months.
In Aranda v. Elayda,32 a lawyer who failed to appear at the scheduled hearing despite due notice which
resulted in the submission of the case for decision was found guilty of gross negligence and hence,
suspended for six (6) months. In Heirs of Tiburcio F. Ballesteros, Sr. v. Apiag,33 a lawyer who did not file a
pre-trial brief and was absent during the pre-trial conference was likewise suspended for six (6) months.
In Abiero v. Juanino,34 a lawyer who neglected a legal matter entrusted to him by his client in breach of
Canons 17 and 18 of the Code was also suspended for six (6) months. Thus, consistent with existing
jurisprudence, the Court finds it proper to impose the same penalty against respondent and accordingly
suspends him for a period of six (6) months.

WHEREFORE, respondent Atty. Ramon SG Cabanes, Jr. is found guilty of gross negligence in violation of
Canon 17, and Rules 18.03 and 18.04 of Canon 18 of the Code of Professional Responsibility. He is
hereby SUSPENDED from the practice of law for a period of six (6) months, effective upon his receipt of
this Resolution, and is STERNLY WARNED that a repetition of the same or similar acts will be dealt with
more severely.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all the courts.

SO ORDERED.
A.M. No. 258 December 21, 1963

RUFINA BAUTISTA, complainant-petitioner,

vs.
ATTY. BENJAMIN O. BARRIOS, defendant-respondent.

BENGZON, C.J.:

Rufina Bautista complains that Atty. Barrios committed malpractice in that having drafted a deed of
partition at her request, and as her attorney, he afterwards suit to enforce it, refused to appear for
her, and what is worse, he appeared instead as counsel for the other to the deed of partition and
opposed her rights thereunder.

The evidence shows that in August 1955, Rufina Bautista engaged the services of respondent Atty.
Barrios to draft an extra-judicial partition between Rufina Bautista and her brother and sisters on one
side and Federico Rovero on the other. The deed distributed the conjugal properties of Rovero and
his deceased wife Maria Bautista who was a sister of the Bautista's and who intestate in 1952. The
deed was prepared by said Barrios and was accordingly signed. Thereafter, in September of the
same year, because Rovero refused to comply the terms of the deed, Rufina Bautista sued him
(Civil Case No, K-689, Capiz Court of First Instance) to deliver the properties awarded to her in the
said extra-judicial partition. She asked respondent Barrios to represent her; but upon her refusal,
Rufina was compelled to, and did engaged the services of Atty. Artemio S. Arrieta. Thereafter, Atty.
Barrios appeared for Federico Rovero, and opposed the demand of Rufina Bautista.

In an attempt to clear himself, respondent Barrios declared that it was not Rufina Bautista who had
solicited his services in the preparation of the deed of partition, but that it was Federico Rovero.

As against the contrary assertions of Rufina Bautista, the defense of Atty. Barrios cannot prevail, for
the reason that he himself in his answer to the complaint in this Court, admitted that he had prepared
the deed "upon the joint request of Federico Rovero, Rufina Bautista and Fransisco Bautista."
Furthermore, the circumstance that upon refusal of Rovero to comply with the terms of the deed,
Rufina went to ask Barrios to enforce it — he admits Rufina went to see him — by filing a complaint
against Rovero, strongly corroborates Rufina's testimony that she had actually engaged his services
to draft the partition. Indeed, when she asked him to file the complaint, and he refused, he did not tell
her that he had been engaged by Rovero to draft the partition. He merely told her she had no case,
and that she was reluctant "to take up a lost cause."

On this issue of fact, that Solicitor General finds against respondent. And we agree with said official.

Furthermore, even supposing that, as claimed by Atty. Barrios, he was employed by both Rovero
and the Bautista brothers to draft the partition, it is doubtful whether he could appear for one as
against the other in a subsequent litigation. At most, if he could appear for one client, it should be for
him who seeks to enforce the partition as drafter. Yet he appeared for Rovero who sought to avoid
compliance with it, asserting that it did not contain all the terms of the agreement, that it was subject
to certain modifications, etc. Moreover, in his defense of Rovero, he raised issues which obviously
violated Rufina's confidence, because he alleged — in behalf of Rovero — that the undisclosed
modifications were known to Rufina at the time of execution of the partition. lawphil.net

The inconsistent positions taken by the respondent coupled with some flimsy arguments he had
advanced1 , do not favorably impress this Court with his alleged good faith in the matter.

Corrective measures are called for, and, in accordance with the Solicitor General's recommendation,
Atty. Barrios is hereby suspended from the practice of his profession for a period of two years from
the time this becomes final. So ordered.

Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala and Makalintal,
JJ., concur.
Concepcion, J., took no part.
 Republic of the Philippines
Supreme Court
Manila

EN BANC

CLARITA J. SAMALA, ADM. CASE NO. 5439

Complainant,
Present:

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
- versus - CORONA,
CARPIO MORALES,
CALLEJO, SR.,
AZCUNA,
TINGA,
CHICO-NAZARIO,
GARCIA, and
VELASCO, JR., JJ.

ATTY. LUCIANO D. VALENCIA, Promulgated:

Respondent. _______________________
x-----------------------------------------------------------x

RESOLUTION

AUSTRIA-MARTINEZ, J.

Before us is a complaint[1] dated May 2, 2001 filed by Clarita

J. Samala (complainant) against Atty. Luciano D. Valencia (respondent) for
Disbarment on the following grounds: (a) serving on two separate occasions as
counsel for contending parties; (b) knowingly misleading the court by submitting
false documentary evidence; (c) initiating numerous cases in exchange for
nonpayment of rental fees; and (d) having a reputation of being immoral by siring
illegitimate children.

After respondent filed his Comment, the Court, in its Resolution of October 24,
2001, referred the case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.[2]

The investigation was conducted by Commissioner Demaree Jesus B. Raval. After a

series of hearings, the parties filed their respective memoranda[3] and the case was
deemed submitted for resolution.

Commissioner Wilfredo E.J.E. Reyes prepared the Report and

[4]
Recommendation dated January 12, 2006. He found respondent guilty of
violating Canons 15 and 21 of the Code of Professional Responsibility and
recommended the penalty of suspension for six months.

In a minute Resolution[5] passed on May 26, 2006, the IBP Board of Governors
adopted and approved the report and recommendation of Commissioner
Reyes but increased the penalty of suspension from six months to one year.

We adopt the report of the IBP Board of Governors except as to the issue on
immorality and as to the recommended penalty.

On serving as counsel for contending parties.

Records show that in Civil Case No. 95-105-MK, filed in the Regional Trial Court
(RTC), Branch 272, Marikina City, entitled Leonora M. Aville v. Editha Valdez for
nonpayment of rentals, herein respondent, while being the counsel for defendant
Valdez, also acted as counsel for the tenants Lagmay,
[6]
Valencia, Bustamante and Bayuga by filing an Explanation and Compliance
before the RTC.[7]

In Civil Case No. 98-6804 filed in the Metropolitan Trial Court (MTC), Branch
75, Marikina City, entitled Editha S. Valdez and Joseph J. Alba, Jr. v.
Salve Bustamante and her husband for ejectment, respondent represented Valdez
against Bustamante one of the tenants in the property subject of the
controversy. Defendants appealed to the RTC, Branch 272, Marikina City docketed
as SCA Case No. 99-341-MK. In his decision dated May 2, 2000,[8] Presiding Judge
Reuben P. dela Cruz[9] warned respondent to refrain from repeating the act of
being counsel of record of both parties in Civil Case No. 95-105-MK.

But in Civil Case No. 2000-657-MK, filed in the RTC, Branch 273, Marikina City,
entitled Editha S. Valdez v. Joseph J. Alba, Jr. and Register of Deeds
of Marikina City,respondent, as counsel for Valdez, filed a Complaint for Rescission
of Contract with Damages and Cancellation of Transfer Certificate of Title No.
275500 against Alba, respondent's former client in Civil Case No. 98-6804 and SCA
Case No. 99-341-MK.

Records further reveal that at the hearing of November 14, 2003, respondent
admitted that in Civil Case No. 95-105-MK, he was the lawyer for Lagmay (one of
the tenants) but not for Bustamante and Bayuga[10] albeit he filed the Explanation
and Compliance for and in behalf of the tenants.[11] Respondent also admitted that
he represented Valdez in Civil Case No. 98-6804 and SCA Case No. 99-341-MK
against Bustamante and her husband but denied being the counsel for Alba
although the case is entitled Valdez and Albav. Bustamante and her
husband, because Valdez told him to include Alba as the two were the owners of
the property[12] and it was only Valdez who signed the complaint
for ejectment.[13] But, while claiming that respondent did not represent Alba,
respondent, however, avers that he already severed his representation for Alba
when the latter charged respondent with estafa.[14] Thus, the filing of Civil Case No.
2000-657-MK against Alba.

Rule 15.03, Canon 15 of the Code of Professional Responsibility provides that a

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

A lawyer may not, without being guilty of professional misconduct, act as counsel
for a person whose interest conflicts with that of his present or former client.[15] He
may not also undertake to discharge conflicting duties any more than he may
represent antagonistic interests. This stern rule is founded on the principles of
public policy and good taste.[16] It springs from the relation of attorney and client
which is one of trust and confidence. Lawyers are expected not only to keep
inviolate the clients confidence, but also to avoid the appearance of treachery and
double-dealing for only then can litigants be encouraged to entrust their secrets to
their lawyers, which is of paramount importance in the administration of justice.[17]
One of the tests of inconsistency of interests is whether the acceptance of a new
relation would prevent the full discharge of the lawyers duty of undivided fidelity
and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in
the performance of that duty.[18]

The stern rule against representation of conflicting interests is founded on

principles of public policy and good taste. It springs from the attorneys duty to
represent his client with undivided fidelity and to maintain inviolate the clients
confidence as well as from the injunction forbidding the examination of an attorney
as to any of the privileged communications of his client.[19]

An attorney owes loyalty to his client not only in the case in which he has
represented him but also after the relation of attorney and client has
terminated.[20] The bare attorney-client relationship with a client precludes an
attorney from accepting professional employment from the clients adversary
either in the same case[21] or in a different but related action.[22] A lawyer is
forbidden from representing a subsequent client against a former client when the
subject matter of the present controversy is related, directly or indirectly, to the
subject matter of the previous litigation in which he appeared for the former
client.[23]

We held in Nombrado v. Hernandez[24] that the termination of the relation of

attorney and client provides no justification for a lawyer to represent an interest
adverse to or in conflict with that of the former client. The reason for the rule is
that the clients confidence once reposed cannot be divested by the expiration of
the professional employment.[25]Consequently, a lawyer should not, even after the
severance of the relation with his client, do anything which will injuriously affect
his former client in any matter in which he previously represented him nor should
he disclose or use any of the clients confidences acquired in the previous
relation.[26]

In this case, respondents averment that his relationship with Alba has long been
severed by the act of the latter of not turning over the proceeds collected in Civil
Case No. 98-6804, in connivance with the complainant, is unavailing. Termination
of the attorney-client relationship precludes an attorney from representing a new
client whose interest is adverse to his former client. Alba may not be his original
client but the fact that he filed a case entitled Valdez and Alba v. Bustamante and
her husband, is a clear indication that respondent is protecting the interests of
both Valdez and Alba in the said case. Respondent cannot just claim that the
lawyer-client relationship between him and Alba has long been severed without
observing Section 26, Rule 138 of the Rules of Court wherein the written consent
of his client is required.

In Gonzales v. Cabucana, Jr.,[27] citing the case of Quiambao v. Bamba,[28] we held

that:

The proscription against representation of conflicting interests applies to

a situation where the opposing parties are present clients in the same
action or in an unrelated action. It is of no moment that the lawyer would
not be called upon to contend for one client that which the lawyer has to
oppose for the other client, or that there would be no occasion to use
the confidential information acquired from one to the disadvantage of
the other as the two actions are wholly unrelated. It is enough that the
opposing parties in one case, one of whom would lose the suit, are
present clients and the nature or conditions of the lawyers respective
retainers with each of them would affect the performance of the duty of
undivided fidelity to both clients.[29]

Respondent is bound to comply with Canon 21 of the Code of Professional

Responsibility which states that a lawyer shall preserve the confidences and secrets
of his client even after the attorney-client relation is terminated.

The reason for the prohibition is found in the relation of attorney and client, which
is one of trust and confidence of the highest degree. A lawyer becomes familiar
with all the facts connected with his clients case. He learns from his client the weak
points of the action as well as the strong ones. Such knowledge must be considered
sacred and guarded with care.[30]

From the foregoing, it is evident that respondents representation of Valdez and

Alba against Bustamante and her husband, in one case, and Valdez against Alba, in
another case, is a clear case of conflict of interests which merits a corresponding
sanction from this Court. Respondent may have withdrawn his representation in
Civil Case No. 95-105-MK upon being warned by the court,[31] but the same will not
exculpate him from the charge of representing conflicting interests in his
representation in Civil Case No. 2000-657-MK.
Respondent is reminded to be more cautious in accepting professional
employments, to refrain from all appearances and acts of impropriety including
circumstances indicating conflict of interests, and to behave at all times with
circumspection and dedication befitting a member of the Bar, especially observing
candor, fairness and loyalty in all transactions with his clients.[32]

On knowingly misleading the court by submitting false documentary evidence.

Complainant alleges that in Civil Case No. 00-7137 filed before MTC, Branch 75
for ejectment, respondent submitted TCT No. 273020 as evidence of Valdez's
ownership despite the fact that a new TCT No. 275500 was already issued in the
name of Alba on February 2, 1995.

Records reveal that respondent filed Civil Case No. 00-7137 on November 27,
2000 and presented TCT No. 273020 as evidence of Valdez's ownership of the
subject property.[33] During the hearing before Commissioner Raval, respondent
avers that when the Answer was filed in the said case, that was the time that he
came to know that the title was already in the name of Alba; so that when the court
dismissed the complaint, he did not do anything anymore.[34] Respondent further
avers that Valdez did not tell him the truth and things were revealed to him only
when the case for rescission was filed in 2002.

Upon examination of the record, it was noted that Civil Case No. 2000-657-MK for
rescission of contract and cancellation of TCT No. 275500 was also filed
on November 27, 2000,[35] before RTC, Branch 273, Marikina City, thus belying the
averment of respondent that he came to know of Alba's title only in 2002 when the
case for rescission was filed. It was revealed during the hearing before
Commissioner Raval that Civil Case Nos. 00-7137 and 2000-657-MK were filed on
the same date, although in different courts and at different times.

Hence, respondent cannot feign ignorance of the fact that the title he submitted
was already cancelled in lieu of a new title issued in the name of Alba in 1995 yet,
as proof of the latter's ownership.
Respondent failed to comply with Canon 10 of the Code of Professional
Responsibility which provides that a lawyer shall not do any falsehood, nor consent
to the doing of any in court; nor shall he mislead, or allow the Court to
be mislead by any artifice. It matters not that the trial court was not misled by
respondent's submission of TCT No. 273020 in the name of Valdez, as shown by its
decision dated January 8, 2002[36] dismissing the complaint for ejectment. What is
decisive in this case is respondent's intent in trying to mislead the court by
presenting TCT No. 273020 despite the fact that said title was already cancelled and
a new one, TCT No. 275500, was already issued in the name of Alba.

In Young v. Batuegas,[37] we held that a lawyer must be a disciple of truth. He swore

upon his admission to the Bar that he will do no falsehood nor consent to the doing
of any in court and he shall conduct himself as a lawyer according to the best of his
knowledge and discretion with all good fidelity as well to the courts as to his
clients.[38] He should bear in mind that as an officer of the court his high vocation is
to correctly inform the court upon the law and the facts of the case and to aid it in
doing justice and arriving at correct conclusion.[39] The courts, on the other hand,
are entitled to expect only complete honesty from lawyers appearing and pleading
before them. While a lawyer has the solemn duty to defend his clients rights and is
expected to display the utmost zeal in defense of his clients cause, his conduct must
never be at the expense of truth.

A lawyer is the servant of the law and belongs to a profession to which society has
entrusted the administration of law and the dispensation of justice.[40] As such, he
should make himself more an exemplar for others to emulate.[41]

On initiating numerous cases in exchange for nonpayment of rental fees.

Complainant alleges that respondent filed the following cases: (a) Civil Case No.
2000-657-MK at the RTC, Branch 272; (b) Civil Case No. 00-7137 at the MTC, Branch
75; and(c) I.S. Nos. 00-4439 and 01-036162 both
entitled Valencia v. Samala for estafa and grave coercion, respectively, before
the Marikina City Prosecutor. Complainant claims that the two criminal cases were
filed in retaliation for the cases she filed against Lagmay docketed as I.S. No. 00-
4306 for estafa and I.S. No. 00-4318 against Alvin Valencia (son of respondent) for
trespass to dwelling.
As culled from the records, Valdez entered into a retainer agreement with
respondent. As payment for his services, he was allowed to occupy the property
for free and utilize the same as his office pursuant to their retainer agreement.[42]

Respondent filed I.S. Nos. 00-4439[43] and 01-036162[44] both

entitled Valencia v. Samala for estafa and grave coercion, respectively, to protect
his client's rights against complainant who filed I.S. No. 00-
4306[45] for estafa against Lagmay, and I.S. No. 00-4318[46] against Alvin
Valencia[47] for trespass to dwelling.

We find the charge to be without sufficient basis. The act of respondent of filing
the aforecited cases to protect the interest of his client, on one hand, and his own
interest, on the other, cannot be made the basis of an administrative charge unless
it can be clearly shown that the same was being done to abuse judicial processes
to commit injustice.

The filing of an administrative case against respondent for protecting the interest
of his client and his own right would be putting a burden on a practicing lawyer who
is obligated to defend and prosecute the right of his client.

On having a reputation for being immoral by siring illegitimate children.

We find respondent liable for being immoral by siring illegitimate children.

During the hearing, respondent admitted that he sired three children

by Teresita Lagmay who are all over 20 years of age,[48] while his first wife was still
alive. He also admitted that he has eight children by his first wife, the youngest of
whom is over 20 years of age, and after his wife died in 1997, he married Lagmay in
1998.[49] Respondent further admitted that Lagmay was staying in one of the
apartments being claimed by complainant. However, he does not consider his affair
with Lagmay as a relationship[50] and does not consider the latter as his second
family.[51] He reasoned that he was not staying with Lagmay because he has two
houses, one in Muntinlupa and another in Marikina.[52]
In this case, the admissions made by respondent are more than enough to hold him
liable on the charge of immorality. During the hearing, respondent did not show
any remorse.He even justified his transgression by saying that he does not have any
relationship with Lagmay and despite the fact that he sired three children by
the latter, he does not consider them as his second family. It is noted that during
the hearing, respondent boasts in telling the commissioner that he has two
houses - in Muntinlupa, where his first wife lived, and in Marikina,
[53]
where Lagmay lives. It is of no moment that respondent eventually
married Lagmay after the death of his first wife. The fact still remains that
respondent did not live up to the exacting standard of morality and decorum
required of the legal profession.

Under Canon 1, Rule 1.01 of the Code of Professional Responsibility, a lawyer shall
not engage in unlawful, dishonest, immoral or deceitful conduct. It may be difficult
to specify the degree of moral delinquency that may qualify an act as immoral, yet,
for purposes of disciplining a lawyer, immoral conduct has been defined as that
conduct which is willful, flagrant, or shameless, and which shows a moral
indifference to the opinion of respectable members of the community.[54] Thus, in
several cases, the Court did not hesitate to discipline a lawyer for keeping a mistress
in defiance of the mores and sense of morality of the community.[55] That
respondent subsequently married Lagmay in 1998 after the death of his wife and
that this is his first infraction as regards immorality serve to mitigate his liability.

ACCORDINGLY, the Court finds respondent Atty. Luciano D. Valencia GUILTY of

misconduct and violation of Canons 21, 10 and 1 of the Code of Professional
Responsibility. He is SUSPENDED from the practice of law for three (3) years,
effective immediately upon receipt of herein Resolution.

Let copies of this Resolution be furnished all courts of the land, the Integrated Bar
of the Philippines as well as the Office of the Bar Confidant for their information
and guidance, and let it be entered in respondents personal records.

SO ORDERED.
 [A.C. No. 5128. March 31, 2005]

ELESIO[1] C. PORMENTO, SR., complainant, vs. ATTY. ALIAS A.

PONTEVEDRA, respondent.

RESOLUTION
AUSTRIA-MARTINEZ, J.:

In a verified Complaint[2] dated August 7, 1999, Elesio C. Pormento, Sr.

charged Atty. Elias A. Pontevedra with malpractice and misconduct, praying
that on the basis of the facts alleged therein, respondent be disbarred.
Complainant alleges that between 1964 and 1994, respondent is his familys
legal counsel having represented him and members of his family in all legal
proceedings in which they are involved. Complainant also claims that his
familys relationship with respondent extends beyond mere lawyer-client
relations as they gave respondent moral, spiritual, physical and financial
support in his different endeavors.[3]
Based on the allegations in the complaint, the rift between complainant and
respondent began when complainants counterclaim in Civil Case No. 1648 filed
with the Regional Trial Court of Bacolod City was dismissed. Complainant
claims that respondent, who was his lawyer in the said case, deliberately failed
to inform him of the dismissal of his counterclaim despite receipt of the order of
dismissal by the trial court, as a result of which, complainant was deprived of
his right to appeal said order. Complainant asserts that he only came to know
of the existence of the trial courts order when the adverse party in the said case
extrajudicially foreclosed the mortgage executed over the parcel of land which
is the subject matter of the suit. In order to recover his ownership over the said
parcel of land, complainant was constrained to hire a new lawyer as Atty.
Pontevedra refused to institute an action for the recovery of the subject
property.[4]
Complainant also claims that in order to further protect his rights and
interests over the said parcel of land, he was forced to initiate a criminal case
for qualified theft against the relatives of the alleged new owner of the said land.
Respondent is the counsel of the accused in said case. Complainant claims
that as part of his defense in said criminal case, respondent utilized pieces of
confidential information he obtained from complainant while the latter is still his
client.[5]
In a separate incident, complainant claims that in 1967, he bought a parcel
of land located at Escalante, Negros Occidental. The Deed of Declaration of
Heirship and Sale of said land was prepared and notarized by respondent.
Since there was another person who claims ownership of the property,
complainant alleges that he heeded respondents advice to build a small house
on the property and to allow his (complainants) nephew and his family to occupy
the house in order for complainant to establish his possession of the said
property. Subsequently, complainants nephew refused to vacate the property
prompting the former to file an ejectment case with the Municipal Trial Court of
Escalante, Negros Occidental, docketed as Civil Case No. 528. Respondent
acted as the counsel of complainants nephew.[6]
Complainant contends that respondent is guilty of malpractice and
misconduct by representing clients with conflicting interests and should be
disbarred by reason thereof.[7]
In his Comment,[8] respondent contends that he was never a direct recipient
of any monetary support coming from the complainant. Respondent denies
complainants allegation that he (respondent) did not inform complainant of the
trial courts order dismissing the latters counterclaim in Civil Case No. 1648.
Respondent claims that within two days upon his receipt of the trial courts order
of dismissal, he delivered to complainant a copy of the said order, apprising him
of its contents. As to his representation of the persons against whom
complainant filed criminal cases for theft,[9] respondent argues that he honestly
believes that there exists no conflict between his present and former clients
interests as the cases he handled for these clients are separate and distinct
from each other. He further contends that he took up the cause of the accused
in the criminal cases filed by complainant for humanitarian considerations since
said accused are poor and needy and because there is a dearth of lawyers in
their community. With respect to the case for ejectment filed by complainant
against his nephew, respondent admits that it was he who notarized the deed
of sale of the parcel of land sold to complainant. However, he contends that
what is being contested in the said case is not the ownership of the subject land
but the ownership of the house built on the said land.[10]
On December 21, 1999, complainant filed a Reply to respondents
Comment.[11]
On January 19, 2000, the Court referred the instant case to the Integrated
Bar of the Philippines (IBP) for investigation, report and recommendation.[12]
On February 18, 2002, respondent filed a Rejoinder to complainants Reply
adding that the instant complaint was orchestrated by complainants son who
wanted political vengeance because he lost the vice-mayoralty post to
respondent during the 1988 local elections.[13]
On February 20, 2002, complainant filed a Sur-Rejoinder to respondents
Rejoinder.[14]
Thereafter, the parties filed their respective Position Papers,[15] after which
the case was deemed submitted for resolution.
In his Report and Recommendation dated February 20, 2004, Investigating
Commissioner Agustinus V. Gonzaga found respondent guilty of violating Rule
15.03, Canon 15 of the Code of Professional Responsibility. He recommended
that respondent be meted the penalty of suspension for one month.
In a minute Resolution passed on July 30, 2004, the IBP Board of Governors
resolved to annul and set aside the recommendation of the Investigating
Commissioner and instead approved the dismissal of the complaint for lack of
merit, to wit:
RESOLUTION NO. XVI-2004-387
Adm. Case No. 5128
Elesio C. Pormento, Sr., vs. Atty. Elias A. Pontevedra
RESOLVED to ANNUL and SET ASIDED [sic], as it is hereby ANNULED and SET
ASIDE, the Recommendation of the Investigating Commission, and to APPROVE
the DISMISSAL of the above-entitled case for lack of merit of the complaint.

We do not agree with the dismissal of the complaint.

At the outset, we reiterate the settled rule that in complaints for disbarment,
a formal investigation is a mandatory requirement which may not be dispensed
with except for valid and compelling reasons.[16] Formal investigations entail
notice and hearing. However, the requirements of notice and hearing in
administrative cases do not necessarily connote full adversarial proceedings,
as actual adversarial proceedings become necessary only for clarification or
when there is a need to propound searching questions to witnesses who give
vague testimonies.[17] Due process is fulfilled when the parties were given
reasonable opportunity to be heard and to submit evidence in support of their
arguments.[18]
From the records extant in the present case, it appears that the Investigating
Commissioner conducted a hearing on January 16, 2002 where it was agreed
that the complainant and the respondent shall file their respective position
papers, after which the case shall be deemed submitted for resolution.[19] No
further hearings were conducted.
It is also disturbing to note that the abovementioned Resolution of the IBP
Board of Governors, annulling and setting aside the recommendation of the
Investigating Commissioner, is bereft of any findings of facts or explanation as
to how and why it resolved to set aside the recommendation of the Investigating
Commissioner and instead dismissed the complaint against respondent.
Section 12(a), Rule 139-B of the Rules of Court provides:

SEC. 12. Review and decision by the Board of Governors.

(a) Every case heard by an investigator shall be reviewed by the IBP Board of
Governors upon the record and evidence transmitted to it by the
Investigator with his report. The decision of the Board upon such
review shall be in writing and shall clearly and distinctly state the
facts and the reasons on which it is based. It shall be promulgated
within a period not exceeding thirty (30) days from the next meeting of
the Board following the submittal of the Investigators report. (Emphasis
supplied)

In Cruz vs. Cabrera,[20] we reiterated the importance of the requirement that

the decision of the IBP Board of Governors must state the facts and the reasons
on which such decision is based, which is akin to what is required of the
decisions of courts of record. We held therein that:

[A]side from informing the parties the reason for the decision to enable them to point
out to the appellate court the findings with which they are not in agreement, in case
any of them decides to appeal the decision, it is also an assurance that the judge, or the
Board of Governors in this case, reached his judgment through the process of legal
reasoning.
Noncompliance with this requirement would normally result in the remand of the
case.[21]
Moreover, while we may consider the act of the IBP Board of Governors in
simply adopting the report of the Investigating Commissioner as substantial
compliance with said Rule, in this case, we cannot countenance the act of the
IBP Board of Governors in merely stating that it is annulling the Commissioners
recommendation and then dismiss the complaint without stating the facts and
the reasons for said dismissal.
However, considering that the present controversy has been pending
resolution for quite some time, that no further factual determination is required,
and the issues being raised may be determined on the basis of the numerous
pleadings filed together with the annexes attached thereto, we resolve to
proceed and decide the case on the basis of the extensive pleadings on record,
in the interest of justice and speedy disposition of the case.[22]
Coming to the main issue in the present case, respondent is being accused
of malpractice and misconduct on three grounds: first, for representing interests
which conflict with those of his former client, herein complainant; second, for
taking advantage of the information and knowledge that he obtained from
complainant; and, third, for not notifying complainant of the dismissal of his
counterclaim in Civil Case No. 1648.
We shall concurrently discuss the first and second grounds as they are
interrelated.
Rule 15.03, Canon 15 of the Code of Professional Responsibility provides:

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

Corollary to this, Canon 21 of the same Code enjoins a lawyer to preserve the
confidences and secrets of his clients even after the attorney-client relation is
terminated. Rule 21.02, Canon 21 specifically requires that:

A lawyer shall not, to the disadvantage of his client, use information acquired in the
course of employment, nor shall he use the same to his own advantage or that of a
third person, unless the client with full knowledge of the circumstances consents
thereto.

In addition, Canon 6 of the Canons of Professional Ethics states:

It is the duty of a lawyer at the time of retainer to disclose to the client all the
circumstances of his relations to the parties and any interest in or connection with the
controversy, which might influence the client in the selection of counsel.

It is unprofessional to represent conflicting interests, except by express consent of all

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

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

Jurisprudence instructs that there is a representation of conflicting interests

if the acceptance of the new retainer will require the attorney to do anything
which will injuriously affect his first client in any matter in which he represents
him and also whether he will be called upon in his new relation, to use against
his first client any knowledge acquired through their connection.[23] Another test
to determine if there is a representation of conflicting interests is whether the
acceptance of a new relation will prevent an attorney from the full discharge of
his duty of undivided fidelity and loyalty to his client or invite suspicion of
unfaithfulness or double dealing in the performance thereof.[24]
A lawyer is forbidden from representing a subsequent client against a former
client when the subject matter of the present controversy is related, directly or
indirectly, to the subject matter of the previous litigation in which he appeared
for the former client.[25] Conversely, he may properly act as counsel for a new
client, with full disclosure to the latter, against a former client in a matter wholly
unrelated to that of the previous employment, there being in that instance no
conflict of interests.[26] Where, however, the subject matter of the present suit
between the lawyers new client and his former client is in some way connected
with that of the former clients action, the lawyer may have to contend for his
new client that which he previously opposed as counsel for the former client or
to use against the latter information confided to him as his counsel.[27] As we
have held in Maturan vs. Gonzales:[28]

The reason for the prohibition is found in the relation of attorney and client, which is
one of trust and confidence of the highest degree. A lawyer becomes familiar with all
the facts connected with his clients case. He learns from his client the weak points of
the action as well as the strong ones. Such knowledge must be considered sacred and
guarded with care. No opportunity must be given him to take advantage of the clients
secrets. A lawyer must have the fullest confidence of his client. For if the confidence
is abused, the profession will suffer by the loss thereof.[29]

The proscription against representation of conflicting interests finds

application where the conflicting interests arise with respect to the same general
matter and is applicable however slight such adverse interest may be.[30] In
essence, what a lawyer owes his former client is to maintain inviolate the clients
confidence or to refrain from doing anything which will injuriously affect him in
any matter in which he previously represented him.[31]
In the present case, we find no conflict of interests when respondent
represented herein complainants nephew and other members of his family in
the ejectment case, docketed as Civil Case No. 528, and in the criminal
complaint, denominated as I.S. Case No. 99-188, filed by herein complainant
against them. The only established participation respondent had with respect
to the parcel of land purchased by complainant, is that he was the one who
notarized the deed of sale of the said land. On that basis alone, it does not
necessarily follow that respondent obtained any information from herein
complainant that can be used to the detriment of the latter in the ejectment case
he filed.
 While complainant alleges that it was respondent who advised him to allow
his nephew to temporarily occupy the property in order to establish
complainants possession of said property as against another claimant, no
corroborating evidence was presented to prove this allegation. Defendant, in
his answer to the complaint for ejectment, raised the issue as to the right of the
vendor to sell the said land in favor of complainant.[32] However, we find this
immaterial because what is actually in issue in the ejectment case is not the
ownership of the subject lot but the ownership of the house built on the said lot.
Furthermore, the subject matter of I.S. Case No. 99-188 filed by complainant
against his nephew and other members of his family involves several parts of
trucks owned by herein complainant.[33] This case is not in any way connected
with the controversy involving said parcel of land. In fine, with respect to Civil
Case No. 528 and I.S. Case No. 99-188, complainant failed to present
substantial evidence to hold respondent liable for violating the prohibition
against representation of conflicting interests.
However, we find conflict of interests in respondents representation of
herein complainant in Civil Case No. 1648 and his subsequent employment as
counsel of the accused in Criminal Case No. 3159.
The subject matter in Civil Case No. 1648 is Lot 609 located at Escalante,
Negros Occidental, the same parcel of land involved in Criminal Case No. 3159
filed by herein complainant against several persons, accusing them of theft for
allegedly cutting and stealing coconut trees within the premises of the said lot.
Complainant contends that it is in this criminal case that respondent used
confidential information which the latter obtained from the former in Civil Case
No. 1648.
To prove his contention, complainant submitted in evidence portions of the
transcript of stenographic notes taken during his cross-examination in Criminal
Case No. 3159. However, after a reading of the said transcript, we find no direct
evidence to prove that respondent took advantage of any information that he
may have been acquired from complainant and used the same in the defense
of his clients in Criminal Case No. 3159. The matter discussed by respondent
when he cross-examined complainant is the ownership of Lot 609 in its entirety,
only a portion of which was purportedly sold to complainant. Part of the defense
raised by his clients is that herein complainant does not have the personality to
file the criminal complaint as he is not the owner of the lot where the supposed
theft occurred. It is possible that the information as to the ownership of the
disputed lot used by respondent in bringing up this issue may have been
obtained while he still acted as counsel for complainant. It is also probable that
such information may have been taken from other sources, like the Registry of
Deeds, the Land Registration Authority or the respondents clients themselves.
Nonetheless, be that as it may, it cannot be denied that when respondent
was the counsel of complainant in Civil Case No. 1648, he became privy to the
documents and information that complainant possessed with respect to the said
parcel of land. Hence, whatever may be said as to whether or not respondent
utilized against complainant any information given to him in a professional
capacity, the mere fact of their previous relationship should have precluded him
from appearing as counsel for the opposing side. As we have previously held:
The relations of attorney and client is [are] founded on principles of public policy, on
good taste. The question is not necessarily one of the rights of the parties, but as to
whether the attorney has adhered to proper professional standard. With these thoughts
in mind, it behooves attorneys, like Caesars wife, not only to keep inviolate the clients
confidence, but also to avoid the appearance of treachery and double-dealing. Only
thus can litigants be encouraged to entrust their secrets to their attorneys which is of
paramount importance in the administration of justice.[34]

Moreover, we have held in Hilado vs. David[35] that:

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

complicated affair, consisting of entangled relevant and irrelevant, secret and well
known facts. In the complexity of what is said in the course of dealings between an
attorney and client, inquiry of the nature suggested would lead to the revelation, in
advance of the trial, of other matters that might only further prejudice the
complainants cause.[36]

Thus, respondent should have declined employment in Criminal Case No. 3159
so as to avoid suspicion that he used in the criminal action any information he
may have acquired in Civil Case No. 1648.
Moreover, nothing on record would show that respondent fully apprised
complainant and his new clients and secured or at least tried to secure their
consent when he took the defense of the accused in Criminal Case No. 3159.
Respondent contends that he handled the defense of the accused in the
subject criminal case for humanitarian reasons and with the honest belief that
there exists no conflict of interests. However, the rule is settled that the
prohibition against representation of conflicting interests applies although the
attorneys intentions and motives were honest and he acted in good
faith.[37] Moreover, the fact that the conflict of interests is remote or merely
probable does not make the prohibition inoperative.[38]
Respondent also asserts that when he accepted employment in Criminal
Case No. 3159, the attorney-client relations between him and complainant in
Civil Case No. 1648 had already been terminated. This defense does not hold
water because the termination of the relation of attorney and client provides no
justification for a lawyer to represent an interest adverse to or in conflict with
that of the former client.[39]
Thus, we find respondent guilty of misconduct for representing conflicting
interests.
As to the third ground, we find that complainant failed to present substantial
evidence to prove that respondent did not inform him of the dismissal of his
counterclaim in Civil Case No. 1648. On the contrary, we find sufficient
evidence to prove that complainant has been properly notified of the trial courts
order of dismissal. The only proof presented by complainant to support his claim
is the affidavit of his daughter confirming complainants contention that
respondent indeed failed to inform him of the dismissal of his
counterclaim.[40] However, in the same affidavit, complainants daughter admits
that it was on December 4, 1989 that respondent received the order of the trial
court dismissing complainants counterclaim. Respondent, presented a
certification dated December 11, 1989, or one week after his receipt of the trial
courts order, where complainants daughter acknowledged receipt of the entire
records of Civil Case No. 1648 from complainant.[41] The same certification
relieved respondent of his obligation as counsel of complainant. From the
foregoing, it can be inferred that respondent duly notified complainant of the
dismissal of his counterclaim. Otherwise, complainant could not have ordered
his daughter to withdraw the records of his case from respondent at the same
time relieving the latter of responsibility arising from his obligation as
complainants counsel in that particular case.
As to the penalty to be imposed, considering respondents honest belief that
there is no conflict of interests in handling Civil Case No. 1648 and Criminal
Case No. 3159, and it appearing that this is respondents first infraction of this
nature, we find the penalty of suspension to be disproportionate to the offense
committed.[42] Moreover, we take into account respondents undisputed claim
that there are only three lawyers who are actually engaged in private practice
in Escalante, Negros Occidental, where both complainant and respondent
reside. One of the lawyers is already handling complainants case, while the
other lawyer is believed by respondents clients to be a relative of complainant.
Hence, respondents clients believed that they had no choice but go to him for
help. We do not find this situation as an excuse for respondent to accept
employment because he could have referred his clients to the resident lawyer
of the Public Attorneys Office or to other lawyers in the neighboring towns.
Nonetheless, in view of respondents belief that he simply adhered to his sworn
duty to defend the poor and the needy, we consider such situation as a
circumstance that mitigates his liability. Considering the foregoing facts and
circumstances, we find it proper to impose a fine on respondent. In Sibulo vs.
Cabrera,[43] the respondent is fined for having been found guilty of unethical
conduct in representing two conflicting interests.
Respondent is further reminded to be more cautious in accepting
professional employments, to refrain from all appearances and acts of
impropriety including circumstances indicating conflict of interests, and to
behave at all times with circumspection and dedication befitting a member of
the Bar, especially observing candor, fairness and loyalty in all transactions with
his clients.[44]
WHEREFORE, respondent Atty. Elias A. Pontevedra is found GUILTY of
representing conflicting interests and is hereby FINED in the amount of Ten
Thousand (P10,000.00) Pesos. He is WARNED that a repetition of the same or
similar acts will be dealt with more severely.
The Board of Governors of the Integrated Bar of the Philippines is
DIRECTED to be heedful of the requirements provided for in Section 12(a),
Rule 139-B of the Rules of Court as discussed in the text of herein decision.
SO ORDERED.
G.R. No. 104600 July 2, 1999

RILLORAZA, AFRICA, DE OCAMPO and AFRICA, petitioner,

vs.
EASTERN TELECOMMUNICATIONS PHILS., INC. and PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, respondents.

PARDO, J.:

The basic issue submitted for consideration of the Court is whether or not petitioner is entitled to
recover attorney's fees amounting to Twenty Six Million Three Hundred Fifty Thousand Seven
Hundred Seventy Nine Pesos and Ninety One Centavos (P26,350,779.91) for handling the case for
its client Eastern Telecommunications Philippines, Inc. filed with the Regional Trial Court, Makati,
though its services were terminated in midstream and the client directly compromised the case with
the adverse party.

The Facts

In giving due course to the petition, we carefully considered the facts attendant to the case. On
August 28, 1987, Eastern Telecommunications Philippines, Inc. (ETPI) represented by the law firm
San Juan, Africa, Gonzales and San Agustin (SAGA), filed with the Regional Trial Court, Makati, a
complaint for recovery of revenue shares against Philippine Long Distance Telephone Company
(PLDT). Atty. Francisco D. Rilloraza, a partner of the firm appeared for ETPI.

After ETPI rested its case, it paid SAGA the billed amount of One Hundred Thousand Pesos
(P100,000.00). On September 18, 1987, the trial court issued a resolution granting ETPI's
application for preliminary restrictive and mandatory injunctions. During this period, SAGA was
dissolved and four of the junior partners formed the law firm Rilloraza, Africa, De Ocampo & Africa
(RADA), which took over as counsel in the case for ETPI. The latter signed a retainer agreement
with counsel dated October 1, 1987. 1

Petitioners presented the three aspects of the main case in the trial court. First, the traffic revenue
shares which ETPI sought to recover from PLDT in accordance with the contract between them.
Second, ETPI sought preventive injunctive relief against the PLDT's threats to deny ETPI access to
the Philippines international gateway switch. Third, ETPI called this the "foreign correspondentships
aspect" where ETPI sought preventive injunctive relief against PLDT's incursions and inducements
directed at ETPI's foreign correspondents in Hongkong, Taiwan and Singapore, to break their
correspondentship contracts with PLDT, using the threat of denying them access to the international
gateway as leverage.

In this connection, ETPI filed with the trial court two urgent motions for restraining order, one on
October 30, 1987 and another on November 4, 1987. As the applications were not acted upon, ETPI
brought the case up to the Court of Appeals by petition for certiorari.

On June 28, 1988, petitioner received a letter from ETPI signed by E. M. Villanueva, President and
Chief Executive Officer. In substance, the letter stated that ETPI was terminating the retainer
contract dated October 1, 1987, effective June 30, 1988.

On June 29, 1988, petitioner filed with the Regional Trial Court a notice of attorney's lien, furnishing
copies to the plaintiff ETPI, to the signatory of the termination letter and PLDT. On the same date,
petitioner additionally sent a letter to ETPI attaching its partial billing statement. In its notice, RADA
informed the court that there were negotiations towards a compromise between ETPI and PLDT.

In April 1990, petitioner confirmed that indeed the parties arrived at an amicable settlement and that
the same was entered as a judgment. On April 26, 1990, petitioner filed a motion for the
enforcement of attorney's lien with the Regional Trial Court of Makati and then appraised the
Supreme Court thereof by manifestation. 2 We noted the manifestation in a resolution dated July 23,
1990.
On May 24, 1990, PLDT filed with the trial court a manifestation that it is not a party to nor in any
manner involved in the attorney's lien being asserted by Atty. Rilloraza for and in behalf of the law
firm, 3 while ETPI filed its opposition thereto on June 11, 1990.

The Lower Court's Ruling

The trial court in its resolution dated September 14, 1990 denied the motion for enforcement of
attorney's lien. Thus:

WHEREFORE, premises considered, the court finds that the Notice of Attorney's
Lien filed by the law firm of Rilloraza, Africa, De Ocampo and Africa has no basis in
fact and in law, and therefore denies the Motion for Enforcement of Attorney's Lien.

SO ORDERED.

Makati, Metro Manila, September 4, 1990.

(s/t)
ZEUS
C,
ABRO
GAR

Judge 4

On October 10, 1990, petitioner filed with the trial court a notice of appeal from the above-mentioned
order to the Supreme Court. On November 6, 1990, ETPI filed a Motion to Dismiss Appeal
contending that the case could be brought to the Supreme Court only via a petition for review
on certiorari, not by a mere notice of appeal. In an order dated January 16, 1991, the trial court
dismissed RADA's appeal.

The trial court said:

There is no more regular appeal from the Regional Trial Court to the Supreme Court.
Under the amendment of Section 17 of the Judiciary Act by R.A. 5440, orders and
judgments of the Regional Trial Court may be elevated to the Supreme Court only by
petition for review on certiorari.

xxx xxx xxx

Wherefore, premises considered, the order dated September 14, 1990 is hereby
reconsidered and set aside. The Notice of Appeal filed by movant RADA is
dismissed.

SO ORDERED.

Given this 16th day of January, 1991, at Makati, Metro Manila.

(s/t)
ZEUS
C,
ABRO
GAR

Judge 5

Hence, on February 9, 1991, petitioner filed a petition for certiorari with the Supreme Court, which
we remanded to the Court of Appeals. The latter dismissed the petition in a decision promulgated on
November 14, 1991, 6 ruling that the judge committed no abuse of discretion in denying petitioner's
motion for enforcement of attorney's lien. Thus:
 We therefore rule that respondent judge committed no abuse of discretion, much less
a grave one, in denying petitioner's motion for enforcement of attorney's lien.

Assuming that respondent judge committed an error in denying petitioner's motion for
enforcement of attorney's lien, it cannot be corrected by certiorari.

WHEREFORE, the writs prayed for are DENIED, and the petition is hereby
DISMISSED, with cost against petitioner.

SO ORDERED.

(s/t) REGINA G.
ORDOÑEZ-BENITEZ

Associate Justice

WE CONCUR:

(s/t) JOSE A. R. MELO (s/t) EMETERIO C, CUI

Associate Justice Associate Justice 7

DISCUSSION

A. The Procedural Aspect

There is nothing sacrosanct about procedural rules, which are liberally construed in order to promote
their objectives and assist the parties in obtaining just, speedy and inexpensive determination of
every action or proceeding. 8 In analogous case, 9 we ruled that where the rigid application of the
rules would frustrate substantial justice 10, or bar the vindication of a legitimate grievance, the courts
are justified in exempting a particular case from the operation of the rules.

In A-One Feeds, Inc. vs. Court of Appeals, we said —

Litigations should, as much as possible, be decided on the merits and not on

technicality. Dismissal of appeals purely on technical grounds is frowned upon, and
the rules of procedure ought not to be applied in a very rigid, technical sense, for
they are adopted to help secure, not override, substantial justice and thereby defeat
their very claims. As has been the constant ruling of this Court, every party litigant
should be afforded the amplest opportunity for the proper and just determination of
his cause, free from the constraints of technicalities. 11

A basic legal principle is that no one shall be unjustly enriched at the expense of another. 12 This
principle is one of the mainstays of every legal system for centuries and which the Civil Code
echoes:

Art. 22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him. 13

The Code Commission, its report, emphasized that:

It is most needful that this ancient principle be clearly and specifically consecrated in
the proposed Civil Code to the end that in cases not foreseen by the lawmaker, no
one may unjustly benefit himself to the prejudice of another. The German Civil Code
has a similar provision (Art. 812). 14

With this in mind, one could easily understand why, despite technical deficiencies, we resolved to
give due course to this petition. More importantly, the case on its face appears to be impressed with
merit.

B. The Attorney's Fees

We understand that Atty. Francisco Rilloraza handled the case from its inception until ETPI
terminated the law firm's services in 1988. Petitioner's claim for attorney's fees hinges on two
grounds: first, the fact that Atty. Rilloraza personally handled the case when he was working for
SAGA; and second, the retainer agreement dated October 1, 1987.

We agree that petitioners are entitled to attorneys' fees. We, however, are not convinced with the
petitioner's arguments that the services RADA rendered merit the amount they are claiming.

First, petitioner contends that Atty. Rilloraza initiated the filing of the complaint. When a client
employs the services of a law firm, he does not employ the services of the lawyer who is assigned to
personally handle the case. Rather, he employs the entire law firm. In the event that the counsel
appearing for the client resigns, the firm is bound to provide a replacement. Thus, RADA could not
claim to have initiated the filing of the complaint considering that ETPI hired SAGA. What is more, on
September 17, 1987, ETPI paid SAGA the amount of One Hundred Thousand Pesos
(P100,00.00) 15 representing services performed prior to September 17, 1987. SAGA assigned one of
its associates, Atty. Francisco Rilloraza, to handle the case for the firm. Although Atty. Rilloraza
handled the case personally, he did so for and in behalf of SAGA.

Second, petitioner claims that under the retainer agreement, which provides:

6.2 B.Court Cases:

Should recourse to judicial action be necessary to effect collection or judicial action

be taken by adverse party, our attorney's fees shall be fifteen percent (15%) of the
amounts collected or the value of the property acquired or liability saved. 16

the firm is entitled to the fees agreed upon.

However, the retainer agreement has been terminated. True, Attorney Rilloraza played a vital role
during the inception of the case and in the course of the trial. We cannot also ignore the fact that an
attorney-client relationship between petitioner and respondent no longer existed during its
culmination by amicable agreement. To award the attorneys' fees amounting to 15% of the sum of
One Hundred Twenty Five Million Six Hundred Seventy One Thousand Eight Hundred Eighty Six
Pesos and Four Centavos (P125,671,886.04) plus Fifty Million Pesos (P50,000,000.00) paid by
PLDT to ETPI would be too unconscionable. 1âwphi1.nêt

"In any case, whether there is an agreement or not, the courts shall fix a reasonable compensation
which lawyers may receive for their professional services. "17 "A lawyer has the right to be paid for
the legal services he has extended to his client, which compensation must be reasonable." 18 A
lawyer would be entitled to receive what he merits for his services. Otherwise stated, the amount
must be determined on a quantum meruit basis.

"Quantum meruit, meaning 'as much as he deserved' is used as a basis for determining the lawyer's
professional fees in the absence of a contract but recoverable by him from his client. 19 Recovery of
attorney's fees on the basis of quantum meruit is authorized when (1) there is no express contract
for payment of attorney's fees agreed upon between the lawyer and the client; (2) when although
there is a formal contract for attorney's fees, the fees stipulated are found unconscionable or
unreasonable by the court; and (3) when the contract for attorney's fee's is void due to purely formal
defects of execution; (4) when the counsel, for justifiable cause, was not able to finish the case to its
conclusion; (5) when lawyer and client disregard the contract for attorney's
fees, 20

In fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum
meruit, the elements to be considered are generally (1) the importance of the subject matter in
controversy, (2) the extent of services rendered, and (3) the professional standing of the lawyer. A
determination of these factors would indispensably require nothing less than a full-blown trial where
private respondents can adduce evidence to establish the right to lawful attorney's fees and for
petitioner to oppose or refute the same. 21 The trial court has the principal task of fixing the amount of
attorney's fees. 22 Hence, the necessity of a hearing is beyond cavil.

C. Charging Lien
Petitioner contends that pursuant to Rule 138 of the Revised Rules of Court, it is entitled to a
charging lien. The rule provides:

Sec. 37. Attorney's liens. — An attorney shall have a lien upon the funds, documents
and papers of his client, which have lawfully come into his possession and may
retain the same until his lawful fees and disbursements have been paid, and may
apply such funds to the satisfaction thereof. He shall also have a lien to the same
extent upon all judgments for the payment of money, and executions issued in
pursuance of such judgments, which he has secured in a litigation of his client, from
and after the time when he shall have caused a statement of his claim of such lien to
be entered upon the records of the court rendering such judgment, or issuing such
execution, and shall have caused written notice thereof to be delivered to his client
and to the adverse party; and he shall have the same right and power over such
judgments and executions as his client would have to enforce his lien and secure the
payment of his just fees and disbursements." (Emphasis supplied).

We do not agree. A charging lien to be enforceable as security for the payment of attorney's fees
requires as a condition sine qua non a judgment for money and execution in pursuance of such
judgment secured in the main action by the attorney in favor of his client 23. A charging lien
presupposes that the attorney has secured a favorable money judgment for his client. 24 From the
facts of the case it would seem that petitioner had no hand in the settlement that occurred, nor did it
ever obtain a favorable judgment for ETPI.

ETPI entered into a compromise agreement when it ended the services of petitioner and through the
effort of ETPI's new lawyers, the law firm Romulo, Mabanta, Buenaventura, Sayoc and De los
Angeles. Whether there was bad faith in the substitution of the lawyers to avoid compliance with the
retainer agreement could only be determined after a trial of the case on the merits.

This decision, however, should not be interpreted as to impose upon petitioner any additional burden
in collecting its attorney's fees. The petitioner must avail itself of the proper remedy in order to
forestall the possibility of any injustice on or unjust enrichment of any of the parties.

The Judgment (Fallo)

ACCORDINGLY, the Court GRANTS the petition, REVERSES the decision of the Court of Appeals
in CA-G. R. SP No. 24463 and REMANDS the case to the court of origin for the determination of the
amount of attorney's fees to which petitioner is entitled.

No costs.

SO ORDERED