You are on page 1of 67

G.R. No.

105938 September 20, 1996 conspired and confederated with each other in
setting up, through the use of the coconut levy
funds, the financial and corporate framework and
TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ,
structures that led to the establishment of UCPB,
JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN
UNICOM, COCOLIFE, COCOMARK, CIC, and
and EDUARDO U. ESCUETA, petitioners,
more than twenty other coconut levy funded
vs.
corporations, including the acquisition of San
THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF
Miguel Corporation shares and its
THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL
institutionalization through presidential directives of
COMMISSION ON GOOD GOVERNMENT, and RAUL S.
the coconut monopoly. Through insidious means
ROCO, respondents.
and machinations, ACCRA, being the wholly-owned
investment arm, ACCRA Investments Corporation,
G.R. No. 108113 September 20, 1996 became the holder of approximately fifteen million
shares representing roughly 3.3% of the total
outstanding capital stock of UCPB as of 31 March
PARAJA G. HAYUDINI, petitioner, 1987. This ranks ACCRA Investments Corporation
vs. number 44 among the top 100 biggest stockholders
THE SANDIGANBAYAN and THE REPUBLIC OF THE of UCPB which has approximately 1,400,000
PHILIPPINES, respondents. shareholders. On the other hand, corporate books
show the name Edgardo J. Angara as holding
approximately 3,744 shares as of February, 1984.5

KAPUNAN, J.: In their answer to the Expanded Amended Complaint, petitioners


ACCRA lawyers alleged that:
These case touch the very cornerstone of every State's judicial system,
upon which the workings of the contentious and adversarial system in 4.4 Defendants-ACCRA lawyers' participation in the
the Philippine legal process are based — the sanctity of fiduciary duty in acts with which their codefendants are charged,
the client-lawyer relationship. The fiduciary duty of a counsel and was in furtherance of legitimate lawyering.
advocate is also what makes the law profession a unique position of
trust and confidence, which distinguishes it from any other calling. In this 4.4.1 In the course of rendering
instance, we have no recourse but to uphold and strengthen the mantle professional and legal services
of protection accorded to the confidentiality that proceeds from the to clients, defendants-ACCRA
performance of the lawyer's duty to his client. lawyers, Jose C. Concepcion,
Teodoro D. Regala, Rogelio A.
The facts of the case are undisputed. Vinluan and Eduardo U.
Escueta, became holders of
shares of stock in the
The matters raised herein are an offshoot of the institution of the corporations listed under their
Complaint on July 31, 1987 before the Sandiganbayan by the Republic respective names in Annex "A"
of the Philippines, through the Presidential Commission on Good of the expanded Amended
Government against Eduardo M. Cojuangco, Jr., as one of the principal Complaint as incorporating or
defendants, for the recovery of alleged ill-gotten wealth, which includes acquiring stockholders only
shares of stocks in the named corporations in PCGG Case No. 33 (Civil and, as such, they do not claim
Case No. 0033), entitled "Republic of the Philippines versus Eduardo any proprietary interest in the
Cojuangco, et al."1 said shares of stock.

Among the dependants named in the case are herein petitioners 4.5 Defendant ACCRA-lawyer Avelino V. Cruz was
Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. one of the incorporators in 1976 of Mermaid
Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta Marketing Corporation, which was organized for
and Paraja G. Hayudini, and herein private respondent Raul S. Roco, legitimate business purposes not related to the
who all were then partners of the law firm Angara, Abello, Concepcion, allegations of the expanded Amended Complaint.
Regala and Cruz Law Offices (hereinafter referred to as the ACCRA Law However, he has long ago transferred any material
Firm). ACCRA Law Firm performed legal services for its clients, which interest therein and therefore denies that the
included, among others, the organization and acquisition of business "shares" appearing in his name in Annex "A" of the
associations and/or organizations, with the correlative and incidental expanded Amended Complaint are his assets.6
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 Petitioner Paraja Hayudini, who had separated from ACCRA law firm,
substantiate the client's equity holdings, i.e., stock certificates endorsed filed a separate answer denying the allegations in the complaint
in blank representing the shares registered in the client's name, and a implicating him in the alleged ill-gotten wealth.7
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 Petitioners ACCRA lawyers subsequently filed their "COMMENT
information relative to the assets of clients as well as their personal and AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion
business circumstances. As members of the ACCRA Law Firm, that respondent PCGG similarly grant the same treatment to them
petitioners and private respondent Raul Roco admit that they assisted in (exclusion as parties-defendants) as accorded private respondent
the organization and acquisition of the companies included in Civil Case Roco.8 The Counter-Motion for dropping petitioners from the complaint
No. 0033, and in keeping with the office practice, ACCRA lawyers acted was duly set for hearing on October 18, 1991 in accordance with the
as nominees-stockholders of the said corporations involved in requirements of Rule 15 of the Rules of Court.
sequestration proceedings.2

In its "Comment," respondent PCGG set the following conditions


On August 20, 1991, respondent Presidential Commission on Good precedent for the exclusion of petitioners, namely: (a) the disclosure of
Government (hereinafter referred to as respondent PCGG) filed a the identity of its clients; (b) submission of documents substantiating the
"Motion to Admit Third Amended Complaint" and "Third Amended lawyer-client relationship; and (c) the submission of the deeds of
Complaint" which excluded private respondent Raul S. Roco from the assignments petitioners executed in favor of its client covering their
complaint in PCGG Case No. 33 as party-defendant. 3Respondent respective
PCGG based its exclusion of private respondent Roco as party- shareholdings.9
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 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
Petitioners were included in the Third Amended Complaint on the Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of
strength of the following allegations: respondent Roco dated May 24, 1989 reiterating a previous request for
reinvestigation by the PCGG in PCGG Case No. 33; (b) Affidavit dated
14. Defendants Eduardo Cojuangco, Jr., Edgardo J. March 8, 1989 executed by private respondent Roco as Attachment to
Angara, Jose C. Concepcion, Teodoro Regala, the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and
Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Kapunan Law Offices dated September 21, 1988 to the respondent
Escueta, Paraja G. Hayudini and Raul Roco of the PCGG in behalf of private respondent Roco originally requesting the
Angara Concepcion Cruz Regala and Abello law reinvestigation and/or re-examination of the evidence of the PCGG
offices (ACCRA) plotted, devised, schemed against Roco in its Complaint in PCGG Case No. 33. 10
It is noteworthy that during said proceedings, private respondent Roco 2. Even assuming that Mr.
did not refute petitioners' contention that he did actually not reveal the Roco had revealed, or had
identity of the client involved in PCGG Case No. 33, nor had he undertaken to reveal, the
undertaken to reveal the identity of the client for whom he acted as identities of the client(s), the
nominee-stockholder. 11 disclosure does not constitute a
substantial distinction as would
make the classification
On March 18, 1992, respondent Sandiganbayan promulgated the
reasonable under the equal
Resolution, herein questioned, denying the exclusion of petitioners in
protection clause.
PCGG Case No. 33, for their refusal to comply with the conditions
required by respondent PCGG. It held:
3. Respondent Sandiganbayan
sanctioned favoritism and
xxx xxx xxx
undue preference in favor of
Mr. Roco in violation of the
ACCRA lawyers may take the heroic stance of not equal protection clause.
revealing the identity of the client for whom they
have acted, i.e. their principal, and that will be their
III
choice. But until they do identify their clients,
considerations of whether or not the privilege
claimed by the ACCRA lawyers exists cannot even The Honorable Sandiganbayan committed grave
begin to be debated. The ACCRA lawyers cannot abuse of discretion in not holding that, under the
excuse themselves from the consequences of their facts of this case, the attorney-client privilege
acts until they have begun to establish the basis for prohibits petitioners ACCRA lawyers from revealing
recognizing the privilege; the existence and identity the identity of their client(s) and the other
of the client. information requested by the PCGG.

This is what appears to be the cause for which they 1. Under the peculiar facts of
have been impleaded by the PCGG as defendants this case, the attorney-client
herein. privilege includes the identity of
the client(s).
5. The PCGG is satisfied that defendant Roco has
demonstrated his agency and that Roco has 2. The factual disclosures
apparently identified his principal, which revelation required by the PCGG are not
could show the lack of cause against him. This in limited to the identity of
turn has allowed the PCGG to exercise its power petitioners ACCRA lawyers'
both under the rules of Agency and under Section 5 alleged client(s) but extend to
of E.O. No. 14-A in relation to the Supreme Court's other privileged matters.
ruling in Republic v. Sandiganbayan (173 SCRA
72).
IV

The PCGG has apparently offered to the ACCRA


The Honorable Sandiganbayan committed grave
lawyers the same conditions availed of by Roco; full
abuse of discretion in not requiring that the
disclosure in exchange for exclusion from these
dropping of party-defendants by the PCGG must be
proceedings (par. 7, PCGG's COMMENT dated
based on reasonable and just grounds and with due
November 4, 1991). The ACCRA lawyers have
consideration to the constitutional right of
preferred not to make the disclosures required by
petitioners ACCRA lawyers to the equal protection
the PCGG.
of the law.

The ACCRA lawyers cannot, therefore, begrudge


Petitioner Paraja G. Hayudini, likewise, filed his own motion for
the PCGG for keeping them as party defendants. In
reconsideration of the March 18, 1991 resolution which was denied by
the same vein, they cannot compel the PCGG to be
respondent Sandiganbayan. Thus, he filed a separate petition
accorded the same treatment accorded to Roco.
for certiorari, docketed as G.R. No. 108113, assailing respondent
Sandiganbayan's resolution on essentially the same grounds averred by
Neither can this Court. petitioners in G.R. No. 105938.

WHEREFORE, the Counter Motion dated October Petitioners contend that the exclusion of respondent Roco as party-
8, 1991 filed by the ACCRA lawyers and joined in defendant in PCGG Case No. 33 grants him a favorable treatment, on
by Atty. Paraja G. Hayudini for the same treatment the pretext of his alleged undertaking to divulge the identity of his client,
by the PCGG as accorded to Raul S. Roco is giving him an advantage over them who are in the same footing as
DENIED for lack of merit. 12 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
ACCRA lawyers moved for a reconsideration of the above resolution but
principal under their sworn mandate and fiduciary duty as lawyers to
the same was denied by the respondent Sandiganbayan. Hence, the
uphold at all times the confidentiality of information obtained during such
ACCRA lawyers filed the petition for certiorari, docketed as G.R. No.
lawyer-client relationship.
105938, invoking the following grounds:

Respondent PCGG, through its counsel, refutes petitioners' contention,


I
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
The Honorable Sandiganbayan gravely abused its it required (deeds of assignment) protected, because they are evidence
discretion in subjecting petitioners ACCRA lawyers of nominee status. 13
who undisputably acted as lawyers in serving as
nominee-stockholders, to the strict application of
In his comment, respondent Roco asseverates that respondent PCGG
the law of agency.
acted correctly in excluding him as party-defendant because he
"(Roco) has not filed an Answer. PCGG had therefore the right to
II dismiss Civil Case No.0033 as to Roco 'without an order of court by
filing a notice of dismissal'," 14 and he has undertaken to identify his
principal. 15
The Honorable Sandiganbayan committed grave
abuse of discretion in not considering petitioners
ACCRA lawyers and Mr. Roco as similarly situated Petitioners' contentions are impressed with merit.
and, therefore, deserving of equal treatment.
I
1. There is absolutely no
evidence that Mr. Roco had
It is quite apparent that petitioners were impleaded by the PCGG as co-
revealed, or had undertaken to
defendants to force them to disclose the identity of their clients. Clearly,
reveal, the identities of the
respondent PCGG is not after petitioners but the "bigger fish" as they
client(s) for whom he acted as
say in street parlance. This ploy is quite clear from the PCGG's
nominee-stockholder.
willingness to cut a deal with petitioners — the names of their clients in In modern day perception of the lawyer-client relationship, an attorney is
exchange for exclusion from the complaint. The statement of the more than a mere agent or servant, because he possesses special
Sandiganbayan in its questioned resolution dated March 18, 1992 is powers of trust and confidence reposed on him by his client. 19 A lawyer
explicit: is also as independent as the judge of the court, thus his powers are
entirely different from and superior to those of an ordinary
agent.20 Moreover, an attorney also occupies what may be considered
ACCRA lawyers may take the heroic stance of not
as a "quasi-judicial office" since he is in fact an officer of the Court 21 and
revealing the identity of the client for whom they
exercises his judgment in the choice of courses of action to be taken
have acted, i.e, their principal, and that will be their
favorable to his client.
choice. But until they do identify their clients,
considerations of whether or not the privilege
claimed by the ACCRA lawyers exists cannot even Thus, in the creation of lawyer-client relationship, there are rules, ethical
begin to be debated. The ACCRA lawyers cannot conduct and duties that breathe life into it, among those, the fiduciary
excuse themselves from the consequences of their duty to his client which is of a very delicate, exacting and confidential
acts until they have begun to establish the basis for character, requiring a very high degree of fidelity and good faith, 22 that
recognizing the privilege; the existence and identity is required by reason of necessity and public interest 23 based on the
of the client. hypothesis that abstinence from seeking legal advice in a good cause is
an evil which is fatal to the administration of justice. 24
This is what appears to be the cause for which they
have been impleaded by the PCGG as defendants It is also the strict sense of fidelity of a lawyer to his
herein. (Emphasis ours) client that distinguishes him from any other
professional in society. This conception is
entrenched and embodies centuries of established
In a closely related case, Civil Case No. 0110 of the Sandiganbayan,
and stable tradition. 25 In Stockton v. Ford,26 the U.
Third Division, entitled "Primavera Farms, Inc., et al. vs. Presidential
S. Supreme Court held:
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 There are few of the business relations of life
client is Mr. Eduardo Cojuangco;" that "it was Mr. Eduardo Cojuangco involving a higher trust and confidence than that of
who furnished all the monies to those subscription payments in attorney and client, or generally speaking, one more
corporations included in Annex "A" of the Third Amended Complaint; honorably and faithfully discharged; few more
that the ACCRA lawyers executed deeds of trust and deeds of anxiously guarded by the law, or governed by the
assignment, some in the name of particular persons; some in blank. 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
We quote Atty. Ongkiko:
industrious, to see that confidence thus reposed
shall not be used to the detriment or prejudice of
ATTY. ONGKIKO: the rights of the party bestowing it. 27

With the permission of this Hon. Court. I propose to In our jurisdiction, this privilege takes off from the old Code of Civil
establish through these ACCRA lawyers that, one, Procedure enacted by the Philippine Commission on August 7, 1901.
their so-called client is Mr. Eduardo Cojuangco. Section 383 of the Code specifically "forbids counsel, without authority
Second, it was Mr. Eduardo Cojuangco who of his client to reveal any communication made by the client to him or
furnished all the monies to these subscription his advice given thereon in the course of professional
payments of these corporations who are now the employment." 28Passed on into various provisions of the Rules of Court,
petitioners in this case. Third, that these lawyers the attorney-client privilege, as currently worded provides:
executed deeds of trust, some in the name of a
particular person, some in blank. Now, these blank
Sec. 24. Disqualification by reason of privileged
deeds are important to our claim that some of the
communication. — The following persons cannot
shares are actually being held by the nominees for
testify as to matters learned in confidence in the
the late President Marcos. Fourth, they also
following cases:
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 xxx xxx xxx
are for Mr. Conjuangco and some are for Mr.
Marcos. Fifth, that most of thes e corporations are
An attorney cannot, without the consent of his
really just paper corporations. Why do we say that?
client, be examined as to any communication made
One: There are no really fixed sets of officers, no
by the client to him, or his advice given thereon in
fixed sets of directors at the time of incorporation
the course of, or with a view to, professional
and even up to 1986, which is the crucial year. And
employment, can an attorney's secretary,
not only that, they have no permits from the
stenographer, or clerk be examined, without the
municipal authorities in Makati. Next, actually all
consent of the client and his employer, concerning
their addresses now are care of Villareal Law
any fact the knowledge of which has been acquired
Office. They really have no address on records.
in such capacity. 29
These are some of the principal things that we
would ask of these nominees stockholders, as they
called themselves. 16 Further, Rule 138 of the Rules of Court states:

It would seem that petitioners are merely standing in for their clients as Sec. 20. It is the duty of an attorney: (e) to maintain
defendants in the complaint. Petitioners are being prosecuted solely on inviolate the confidence, and at every peril to
the basis of activities and services performed in the course of their himself, to preserve the secrets of his client, and to
duties as lawyers. Quite obviously, petitioners' inclusion as co- accept no compensation in connection with his
defendants in the complaint is merely being used as leverage to compel client's business except from him or with his
them to name their clients and consequently to enable the PCGG to nail knowledge and approval.
these clients. Such being the case, respondent PCGG has no valid
cause of action as against petitioners and should exclude them from the
This duty is explicitly mandated in Canon 17 of the Code of Professional
Third Amended Complaint.
Responsibility which provides that:

II
Canon 17. A lawyer owes fidelity to the cause of his
client and he shall be mindful of the trust and
The nature of lawyer-client relationship is premised on the Roman Law confidence reposed in him.
concepts of locatio conductio operarum(contract of lease of services)
where one person lets his services and another hires them without
Canon 15 of the Canons of Professional Ethics also demands a lawyer's
reference to the object of which the services are to be performed,
fidelity to client:
wherein lawyers' services may be compensated by honorarium or for
hire, 17 and mandato (contract of agency) wherein a friend on whom
reliance could be placed makes a contract in his name, but gives up all The lawyers owes "entire devotion to the interest of
that he gained by the contract to the person who requested him. 18 But the client, warm zeal in the maintenance and
the lawyer-client relationship is more than that of the principal-agent and defense of his rights and the exertion of his utmost
lessor-lessee. 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 U .S. v. Hodge and Zweig,35 involved the same exception, i.e. that client
discharge of his duty. In the judicial forum the client identity is privileged in those instances where a strong probability exists
is entitled to the benefit of any and every remedy that the disclosure of the client's identity would implicate the client in the
and defense that is authorized by the law of the very criminal activity for which the lawyer's legal advice was obtained.
land, and he may expect his lawyer to assert every
such remedy or defense. But it is steadfastly to be
The Hodge case involved federal grand jury proceedings inquiring into
borne in mind that the great trust of the lawyer is to
the activities of the "Sandino Gang," a gang involved in the illegal
be performed within and not without the bounds of
importation of drugs in the United States. The respondents, law
the law. The office of attorney does not permit,
partners, represented key witnesses and suspects including the leader
much less does it demand of him for any client,
of the gang, Joe Sandino.
violation of law or any manner of fraud or chicanery.
He must obey his own conscience and not that of
his client. 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
Considerations favoring confidentially in lawyer-client relationships are
behalf of any other person, and vice versa. The lawyers refused to
many and serve several constitutional and policy concerns. In the
divulge the names. The Ninth Circuit of the United States Court of
constitutional sphere, the privilege gives flesh to one of the most
Appeals, upholding non-disclosure under the facts and circumstances of
sacrosanct rights available to the accused, the right to counsel. If a
the case, held:
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 A client's identity and the nature of that client's fee
either opt to stay away from the judicial system or to lose the right to arrangements may be privileged where the person
counsel. If the price of disclosure is too high, or if it amounts to self invoking the privilege can show that a strong
incrimination, then the flow of information would be curtailed thereby probability exists that disclosure of such information
rendering the right practically nugatory. The threat this represents would implicate that client in the very criminal
against another sacrosanct individual right, the right to be presumed activity for which legal advice was sought Baird
innocent is at once self-evident. 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
Encouraging full disclosure to a lawyer by one seeking legal services
that the Baird exception applies to this case.
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 The Baird exception is entirely consonant with the
upon the degree of confidence which exists between lawyer and client principal policy behind the attorney-client privilege.
which in turn requires a situation which encourages a dynamic and "In order to promote freedom of consultation of legal
fruitful exchange and flow of information. It necessarily follows that in advisors by clients, the apprehension of compelled
order to attain effective representation, the lawyer must invoke the disclosure from the legal advisors must be
privilege not as a matter of option but as a matter of duty and removed; hence, the law must prohibit such
professional responsibility. disclosure except on the client's consent." 8 J.
Wigmore, supra sec. 2291, at 545. In furtherance of
this policy, the client's identity and the nature of his
The question now arises whether or not this duty may be asserted in
fee arrangements are, in exceptional cases,
refusing to disclose the name of petitioners' client(s) in the case at bar.
protected as confidential communications. 36
Under the facts and circumstances obtaining in the instant case, the
answer must be in the affirmative.
2) Where disclosure would open the client to civil liability; his identity is
privileged. For instance, the peculiar facts and circumstances
As a matter of public policy, a client's identity should not be shrouded in
of Neugass v. Terminal Cab Corporation,37 prompted the New York
mystery 30 Under this premise, the general rule in our jurisdiction as well
Supreme Court to allow a lawyer's claim to the effect that he could not
as in the United States is that a lawyer may not invoke the privilege and
reveal the name of his client because this would expose the latter to civil
refuse to divulge the name or identity of this client. 31
litigation.

The reasons advanced for the general rule are well established.
In the said case, Neugass, the plaintiff, suffered injury when the taxicab
she was riding, owned by respondent corporation, collided with a
First, the court has a right to know that the client whose privileged second taxicab, whose owner was unknown. Plaintiff brought action
information is sought to be protected is flesh and blood. 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
Second, the privilege begins to exist only after the attorney-client
examination, the fact was somehow revealed that the lawyer came to
relationship has been established. The attorney-client privilege does not
know the name of the owner of the second cab when a man, a client of
attach until there is a client.
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
Third, the privilege generally pertains to the subject matter of the under the circumstances that the man was the owner of the second cab.
relationship. The state supreme court held that the reports were clearly made to the
lawyer in his professional capacity. The court said:
Finally, due process considerations require that the opposing party
should, as a general rule, know his adversary. "A party suing or sued is That his employment came about through the fact
entitled to know who his opponent is." 32 He cannot be obliged to grope that the insurance company had hired him to
in the dark against unknown forces. 33 defend its policyholders seems immaterial. The
attorney is such cases is clearly the attorney for the
policyholder when the policyholder goes to him to
Notwithstanding these considerations, the general rule is however report an occurrence contemplating that it would be
qualified by some important exceptions. used in an action or claim against him. 38

1) Client identity is privileged where a strong probability exists that xxx xxx xxx
revealing the client's name would implicate that client in the very activity
for which he sought the lawyer's advice.
All communications made by a client to his counsel,
34 for the purpose of professional advice or
In Ex-Parte Enzor, a state supreme court reversed a lower court order assistance, are privileged, whether they relate to a
requiring a lawyer to divulge the name of her client on the ground that suit pending or contemplated, or to any other matter
the subject matter of the relationship was so closely related to the issue proper for such advice or aid; . . . And whenever the
of the client's identity that the privilege actually attached to both. communication made, relates to a matter so
In Enzor, the unidentified client, an election official, informed his attorney connected with the employment as attorney or
in confidence that he had been offered a bribe to violate election laws or counsel as to afford presumption that it was the
that he had accepted a bribe to that end. In her testimony, the attorney ground of the address by the client, then it is
revealed that she had advised her client to count the votes correctly, but privileged from disclosure. . .
averred that she could not remember whether her client had been, in
fact, bribed. The lawyer was cited for contempt for her refusal to reveal
his client's identity before a grand jury. Reversing the lower court's It appears . . . that the name and address of the
contempt orders, the state supreme court held that under the owner of the second cab came to the attorney in
circumstances of the case, and under the exceptions described above, this case as a confidential communication. His
even the name of the client was privileged. client is not seeking to use the courts, and his
address cannot be disclosed on that theory, nor is employed — to advise his clients what, under the
the present action pending against him as service circumstances, should be done. 43
of the summons on him has not been effected. The
objections on which the court reserved decision are
Apart from these principal exceptions, there exist other situations which
sustained. 39
could qualify as exceptions to the general rule.

In the case of Matter of Shawmut Mining Company,40 the lawyer


For example, the content of any client communication to a lawyer lies
involved was required by a lower court to disclose whether he
within the privilege if it is relevant to the subject matter of the legal
represented certain clients in a certain transaction. The purpose of the
problem on which the client seeks legal assistance. 44 Moreover, where
court's request was to determine whether the unnamed persons as
the nature of the attorney-client relationship has been previously
interested parties were connected with the purchase of properties
disclosed and it is the identity which is intended to be confidential, the
involved in the action. The lawyer refused and brought the question to
identity of the client has been held to be privileged, since such
the State Supreme Court. Upholding the lawyer's refusal to divulge the
revelation would otherwise result in disclosure of the entire
names of his clients the court held:
transaction. 45

If it can compel the witness to state, as directed by


Summarizing these exceptions, information relating to the identity of a
the order appealed from, that he represented
client may fall within the ambit of the privilege when the client's name
certain persons in the purchase or sale of these
itself has an independent significance, such that disclosure would then
mines, it has made progress in establishing by such
reveal client confidences. 46
evidence their version of the litigation. As already
suggested, such testimony by the witness would
compel him to disclose not only that he was The circumstances involving the engagement of lawyers in the case at
attorney for certain people, but that, as the result of bench, therefore, clearly reveal that the instant case falls under at least
communications made to him in the course of such two exceptions to the general rule. First, disclosure of the alleged
employment as such attorney, he knew that they client's name would lead to establish said client's connection with the
were interested in certain transactions. We feel sure very fact in issue of the case, which is privileged information, because
that under such conditions no case has ever gone the privilege, as stated earlier, protects the subject matter or the
to the length of compelling an attorney, at the substance (without which there would be not attorney-client
instance of a hostile litigant, to disclose not only his relationship).
retainer, but the nature of the transactions to which
it related, when such information could be made the
The link between the alleged criminal offense and the legal advice or
basis of a suit against his client. 41
legal service sought was duly establishes in the case at bar, by no less
than the PCGG itself. The key lies in the three specific conditions laid
3) Where the government's lawyers have no case against an attorney's down by the PCGG which constitutes petitioners' ticket to non-
client unless, by revealing the client's name, the said name would prosecution should they accede thereto:
furnish the only link that would form the chain of testimony necessary to
convict an individual of a crime, the client's name is privileged.
(a) the disclosure of the identity of its clients;

In Baird vs. Korner,42 a lawyer was consulted by the accountants and


(b) submission of documents substantiating the
the lawyer of certain undisclosed taxpayers regarding steps to be taken
lawyer-client relationship; and
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). (c) the submission of the deeds of assignment
petitioners executed in favor of their clients covering
their respective shareholdings.
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 these conditions, particularly the third, we can readily deduce that
from Baird on the hypothetical possibility that they had. No investigation the clients indeed consulted the petitioners, in their capacity as lawyers,
was then being undertaken by the IRS of the taxpayers. Subsequently, regarding the financial and corporate structure, framework and set-up of
the attorney of the taxpayers delivered to Baird the sum of $12, 706.85, the corporations in question. In turn, petitioners gave their professional
which had been previously assessed as the tax due, and another advice in the form of, among others, the aforementioned deeds of
amount of money representing his fee for the advice given. Baird then assignment covering their client's shareholdings.
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 There is no question that the preparation of the aforestated documents
involved. Baird refused on the ground that he did not know their names, was part and parcel of petitioners' legal service to their clients. More
and declined to name the attorney and accountants because this important, it constituted an integral part of their duties as lawyers.
constituted privileged communication. A petition was filed for the Petitioners, therefore, have a legitimate fear that identifying their clients
enforcement of the IRS summons. For Baird's repeated refusal to name would implicate them in the very activity for which legal advice had been
his clients he was found guilty of civil contempt. The Ninth Circuit Court sought, i.e., the alleged accumulation of ill-gotten wealth in the
of Appeals held that, a lawyer could not be forced to reveal the names of aforementioned corporations.
clients who employed him to pay sums of money to the government
voluntarily in settlement of undetermined income taxes, unsued on, and Furthermore, under the third main exception, revelation of the client's
with no government audit or investigation into that client's income tax name would obviously provide the necessary link for the prosecution to
liability pending. The court emphasized the exception that a client's build its case, where none otherwise exists. It is the link, in the words of
name is privileged when so much has been revealed concerning the Baird, "that would inevitably form the chain of testimony necessary to
legal services rendered that the disclosure of the client's identity convict the (client) of a . . . crime." 47
exposes him to possible investigation and sanction by government
agencies. The Court held:
An important distinction must be made between a case where a client
takes on the services of an attorney for illicit purposes, seeking advice
The facts of the instant case bring it squarely within about how to go around the law for the purpose of committing illegal
that exception to the general rule. Here money was activities and a case where a client thinks he might have previously
received by the government, paid by persons who committed something illegal and consults his attorney about it. The first
thereby admitted they had not paid a sufficient case clearly does not fall within the privilege because the same cannot
amount in income taxes some one or more years in be invoked for purposes illegal. The second case falls within the
the past. The names of the clients are useful to the exception because whether or not the act for which the client sought
government for but one purpose — to ascertain advice turns out to be illegal, his name cannot be used or disclosed if
which taxpayers think they were delinquent, so that the disclosure leads to evidence, not yet in the hands of the prosecution,
it may check the records for that one year or which might lead to possible action against him.
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 These cases may be readily distinguished, because the privilege cannot
previously paid, if any. It indicates a feeling of guilt be invoked or used as a shield for an illegal act, as in the first example;
for nonpayment of taxes, though whether it is while the prosecution may not have a case against the client in the
criminal guilt is undisclosed. But it may well be the second example and cannot use the attorney client relationship to build
link that could form the chain of testimony up a case against the latter. The reason for the first rule is that it is not
necessary to convict an individual of a federal within the professional character of a lawyer to give advice on the
crime. Certainly the payment and the feeling of guilt commission of a crime. 48 The reason for the second has been stated in
are the reasons the attorney here involved was 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 Such are the unrelenting duties required by lawyers vis-a-vis their
stated that "under such conditions no case has ever yet gone to the clients because the law, which the lawyers are sworn to uphold, in the
length of compelling an attorney, at the instance of a hostile litigant, to words of Oliver Wendell Holmes, 58 ". . . is an exacting goddess,
disclose not only his retainer, but the nature of the transactions to which demanding of her votaries in intellectual and moral discipline." The
it related, when such information could be made the basis of a suit Court, no less, is not prepared to accept respondents' position without
against his client." 49 "Communications made to an attorney in the denigrating the noble profession that is lawyering, so extolled by Justice
course of any personal employment, relating to the subject thereof, and Holmes in this wise:
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
Every calling is great when greatly pursued. But
confidence and entitled to protection as privileged
what other gives such scope to realize the
communications."50 Where the communicated information, which clearly
spontaneous energy of one's soul? In what other
falls within the privilege, would suggest possible criminal activity but
does one plunge so deep in the stream of life — so
there would be not much in the information known to the prosecution
share its passions its battles, its despair, its
which would sustain a charge except that revealing the name of the
triumphs, both as witness and actor? . . . But that is
client would open up other privileged information which would
not all. What a subject is this in which we are united
substantiate the prosecution's suspicions, then the client's identity is so
— this abstraction called the Law, wherein as in a
inextricably linked to the subject matter itself that it falls within the
magic mirror, we see reflected, not only in our lives,
protection. The Baird exception, applicable to the instant case, is
but the lives of all men that have been. When I think
consonant with the principal policy behind the privilege, i.e., that for the
on this majestic theme my eyes dazzle. If we are to
purpose of promoting freedom of consultation of legal advisors by
speak of the law as our mistress, we who are here
clients, apprehension of compelled disclosure from attorneys must be
know that she is a mistress only to be won with
eliminated. This exception has likewise been sustained in In re Grand
sustained and lonely passion — only to be won by
Jury Proceedings51 and Tillotson v. Boughner.52 What these cases
straining all the faculties by which man is likened to
unanimously seek to avoid is the exploitation of the general rule in what
God.
may amount to a fishing expedition by the prosecution.

We have no choice but to uphold petitioners' right not to reveal the


There are, after all, alternative source of information available to the
identity of their clients under pain of the breach of fiduciary duty owing to
prosecutor which do not depend on utilizing a defendant's counsel as a
their clients, because the facts of the instant case clearly fall within
convenient and readily available source of information in the building of
recognized exceptions to the rule that the client's name is not privileged
a case against the latter. Compelling disclosure of the client's name in
information.
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 If we were to sustain respondent PCGG that the lawyer-client
the transaction would be revealed by disclosure of an attorney's retainer, confidential privilege under the circumstances obtaining here does not
such retainer is obviously protected by the privilege. 53 It follows that cover the identity of the client, then it would expose the lawyers
petitioner attorneys in the instant case owe their client(s) a duty and an themselves to possible litigation by their clients in view of the strict
obligation not to disclose the latter's identity which in turn requires them fiduciary responsibility imposed on them in the exercise of their duties.
to invoke the privilege.
The complaint in Civil Case No. 0033 alleged that the
In fine, the crux of petitioners' objections ultimately hinges on their defendants therein, including herein petitioners and Eduardo
expectation that if the prosecution has a case against their clients, the Cojuangco, Jr. conspired with each other in setting up through
latter's case should be built upon evidence painstakingly gathered by the use of coconut levy funds the financial and corporate
them from their own sources and not from compelled testimony framework and structures that led to the establishment of
requiring them to reveal the name of their clients, information which UCPB, UNICOM and others and that through insidious means
unavoidably reveals much about the nature of the transaction which and machinations, ACCRA, using its wholly-owned investment
may or may not be illegal. The logical nexus between name and nature arm, ACCRA Investment Corporation, became the holder of
of transaction is so intimate in this case the it would be difficult to simply approximately fifteen million shares representing roughly
dissociate one from the other. In this sense, the name is as much 3.3% of the total capital stock of UCPB as of 31 March 1987.
"communication" as information revealed directly about the transaction The PCGG wanted to establish through the ACCRA lawyers
in question itself, a communication which is clearly and distinctly that Mr. Cojuangco is their client and it was Cojuangco who
privileged. A lawyer cannot reveal such communication without exposing furnished all the monies to the subscription payment; hence,
himself to charges of violating a principle which forms the bulwark of the petitioners acted as dummies, nominees and/or agents by
entire attorney-client relationship. 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
The uberrimei fidei relationship between a lawyer and his client
position and authority, flagrant breach of public trust, unjust
therefore imposes a strict liability for negligence on the former. The
enrichment, violation of the Constitution and laws of the
ethical duties owing to the client, including confidentiality, loyalty,
Republic of the Philippines.
competence, diligence as well as the responsibility to keep clients
informed and protect their rights to make decisions have been zealously
sustained. In Milbank, Tweed, Hadley and McCloy v. Boon,54 the US By compelling petitioners, not only to reveal the identity of
Second District Court rejected the plea of the petitioner law firm that it their clients, but worse, to submit to the PCGG documents
breached its fiduciary duty to its client by helping the latter's former substantiating the client-lawyer relationship, as well as deeds
agent in closing a deal for the agent's benefit only after its client of assignment petitioners executed in favor of its clients
hesitated in proceeding with the transaction, thus causing no harm to its covering their respective shareholdings, the PCGG would
client. The Court instead ruled that breaches of a fiduciary relationship in exact from petitioners a link "that would inevitably form the
any context comprise a special breed of cases that often loosen chain of testimony necessary to convict the (client) of a
normally stringent requirements of causation and damages, and found crime."
in favor of the client.
III
To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart,
and Shipley P.A. v. Scheller55 requiring strict obligation of lawyers vis-a-
In response to petitioners' last assignment of error,
vis clients. In this case, a contingent fee lawyer was fired shortly before
respondents alleged that the private respondent was dropped
the end of completion of his work, and sought payment quantum
as party defendant not only because of his admission that he
meruit of work done. The court, however, found that the lawyer was fired
acted merely as a nominee but also because of his
for cause after he sought to pressure his client into signing a new fee
undertaking to testify to such facts and circumstances "as the
agreement while settlement negotiations were at a critical stage. While
interest of truth may require, which includes . . . the identity of
the client found a new lawyer during the interregnum, events forced the
the principal."59
client to settle for less than what was originally offered. Reiterating the
principle of fiduciary duty of lawyers to clients in Meinhard
v. Salmon56 famously attributed to Justice Benjamin Cardozo that "Not First, as to the bare statement that private respondent merely
honesty alone, but the punctilioof an honor the most sensitive, is then acted as a lawyer and nominee, a statement made in his out-
the standard of behavior," the US Court found that the lawyer involved of-court settlement with the PCGG, it is sufficient to state that
was fired for cause, thus deserved no attorney's fees at all. petitioners have likewise made the same claim not merely
out-of-court but also in the Answer to plaintiff's Expanded
Amended Complaint, signed by counsel, claiming that their
The utmost zeal given by Courts to the protection of the lawyer-client
acts were made in furtherance of "legitimate
confidentiality privilege and lawyer's loyalty to his client is evident in the
lawyering."60 Being "similarly situated" in this regard, public
duration of the protection, which exists not only during the relationship,
respondents must show that there exist other conditions and
but extends even after the termination of the relationship. 57
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 It is clear then that the case against petitioners should never
Constitution. 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
To this end, public respondents contend that the primary
arose from a privileged attorney-client relationship and as a
consideration behind their decision to sustain the PCGG's
means of coercing them to disclose the identities of their
dropping of private respondent as a defendant was his
clients. To allow the case to continue with respect to them
promise to disclose the identities of the clients in question.
when this Court could nip the problem in the bud at this early
However, respondents failed to show — and absolute nothing
opportunity would be to sanction an unjust situation which we
exists in the records of the case at bar — that private
should not here countenance. The case hangs as a real and
respondent actually revealed the identity of his client(s) to the
palpable threat, a proverbial Sword of Damocles over
PCGG. Since the undertaking happens to be the leitmotif of
petitioners' heads. It should not be allowed to continue a day
the entire arrangement between Mr. Roco and the PCGG, an
longer.
undertaking which is so material as to have justified PCGG's
special treatment exempting the private respondent from
prosecution, respondent Sandiganbayan should have While we are aware of respondent PCGG's legal mandate to
required proof of the undertaking more substantial than a recover ill-gotten wealth, we will not sanction acts which
"bare assertion" that private respondent did indeed comply violate the equal protection guarantee and the right against
with the undertaking. Instead, as manifested by the PCGG, self-incrimination and subvert the lawyer-client confidentiality
only three documents were submitted for the purpose, two of privilege.
which were mere requests for re-investigation and one simply
disclosed certain clients which petitioners (ACCRA lawyers)
WHEREFORE, IN VIEW OF THE FOREGOING, the
were themselves willing to reveal. These were clients to whom
Resolutions of respondent Sandiganbayan (First Division)
both petitioners and private respondent rendered legal
promulgated on March 18, 1992 and May 21, 1992 are hereby
services while all of them were partners at ACCRA, and were
ANNULLED and SET ASIDE. Respondent Sandiganbayan is
not the clients which the PCGG wanted disclosed for the
further ordered to exclude petitioners Teodoro D. Regala,
alleged questioned transactions.61
Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion,
Victor P. Lazatin, Eduardo U. Escueta and Paraja G.
To justify the dropping of the private respondent from the case Hayuduni as parties-defendants in SB Civil Case No. 0033
or the filing of the suit in the respondent court without him, entitled "Republic of the Philippines v. Eduardo Cojuangco,
therefore, the PCGG should conclusively show that Mr. Roco Jr., et al."
was treated as species apart from the rest of the ACCRA
lawyers on the basis of a classification which made
SO ORDERED.
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 A.M. No. 936 July 25, 1975
wall of protection against uneven application of status and
regulations. In the broader sense, the guarantee operates
against uneven application of legal norms so FERMINA LEGASPI DAROY, LYDIA LEGASPI and AGRIPINO
that all persons under similar circumstances would be LEGASPI, complainants,
accorded the same treatment. 62 Those who fall within a vs.
particular class ought to be treated alike not only as to ATTORNEY RAMON CHAVES LEGASPI, respondent.
privileges granted but also as to the liabilities imposed.

. . . What is required under this constitutional


guarantee is the uniform operation of legal norms AQUINO, J.:
so that all persons under similar circumstances
would be accorded the same treatment both in the
privileges conferred and the liabilities imposed. As Fermina Legazpi-Daroy, Lydia Legaspi-Acha and Agripino Legaspi of
was noted in a recent decision: "Favoritism and Iligan City, in a verified complaint dated March 10, 1970, charged
undue preference cannot be allowed. For the Attorney Ramon Chaves Legaspi of Cagayan de Oro City with
principle is that equal protection and security shall malpractice for having misappropriated the sum of four thousand pesos
be given to every person under circumstances, which he had collected for them. They prayed that the respondent be
which if not identical are analogous. If law be disbarred.1 (He was 59 years old in 1974. He passed the 1954 bar
looked upon in terms of burden or charges, those examinations with a rating of 75.75%).
that fall within a class should be treated in the same
fashion, whatever restrictions cast on some in the The evidence shows that the complainants hired the respondent in May,
group equally binding the rest.63 1962 to represent them in the intestate proceeding for the settlement of
the estate of the spouses Aquilino Gonzaga and Paz Velez-Gonzaga.
We find that the condition precedent required by the The complainants, together with their brother, Vivencio, who was
respondent PCGG of the petitioners for their exclusion as abroad, were adjudged as one of the six groups of heirs of the late
parties-defendants in PCGG Case No. 33 violates the lawyer- Gonzaga spouses, their deceased mother, Consuelo Gonzaga-Legaspi,
client confidentiality privilege. The condition also constitutes a being a daughter of the spouses. The heirs in a joint petition dated April
transgression by respondents Sandiganbayan and PCGG of 11, 1969, which the respondent signed as counsel for the complainants,
the equal protection clause of the Constitution. 64 It is grossly agreed that the coconut land left by the decedents would be divided into
unfair to exempt one similarly situated litigant from six equal parts, that the administrator be authorized to sell the land, and
prosecution without allowing the same exemption to the that, after payment of the obligations of the estate, the net proceeds
others. Moreover, the PCGG's demand not only touches upon would be distributed among the six groups of heirs. The probate court
the question of the identity of their clients but also on approved that agreement in its order of April 29, 1969 (Spec. Proc. Nop.
documents related to the suspected transactions, not only in 640 of the Misamis Oriental CFI, Exh. A).
violation of the attorney-client privilege but also of the
constitutional right against self-incrimination. Whichever way The land was sold. Fermina Legaspi-Daroy came to know of the sale
one looks at it, this is a fishing expedition, a free ride at the only when the respondent wrote a note dated November 28, 1969 to her
expense of such rights. father, Teofilo Legaspi, wherein he stated "that the money we have
deposited may be withdrawn on December 8, 1969 at 9:00 o'clock". The
An argument is advanced that the invocation by petitioners of respondent advised Teofilo Legaspito see him on that date so that the
the privilege of attorney-client confidentiality at this stage of money could be withdrawn (Exh. B).
the proceedings is premature and that they should wait until
they are called to testify and examine as witnesses as to The complainants were not able to get the money on December 8
matters learned in confidence before they can raise their because the respondent on December 7 sent to Mrs. Daroy a telegram
objections. But petitioners are not mere witnesses. They are countermanding his prior advice and directing here to go to Cagayan de
co-principals in the case for recovery of alleged ill-gotten Oro City on December 10, a Wednesday, to receive the money (Exh. C).
wealth. They have made their position clear from the very On December 9, a certain Atty. Sugamo sent a handwritten note to Mrs.
beginning that they are not willing to testify and they cannot Daroy advising her not to go to Cagayan de Oro City on December 10
be compelled to testify in view of their constitutional right because according to the respondent "his postdated checks can be paid
against self-incrimination and of their fundamental legal right and/or collected either Thursday or Friday yet" (Exh. D).
to maintain inviolate the privilege of attorney-client
confidentiality.
In the afternoon of that same day, December 9, Mrs. Daroy received quotient of P550 not P412), and that he gave Teofilo the sum of P412.
another note, this time from the respondent himself, "Cousin Ramon". The respondent did not present any receipt to prove that alleged
The note contained the disturbing intelligence that Mrs. Daroy's "Cousin payment.
Ramon" had withdrawn the money amounting to P4,000 and had spent
it. The letter, a sort of extrajudicial confession or mea culpa on
He said that at first Teofilo Legaspi told him to keep the share of
respondent's part, reads as follows (Exh. E):
Vivencio Legaspi, who was abroad, but at the end of October or the first
week of November, 1969 Teofilo got from him (the respondent)
Dear Fermina, Vivencio's share. Again, the respondent did not ask Teofilo to sign a
receipt for Vivencio's share. After paying the shares of Teofilo and
Vivencio, the balance of the amount left in respondent's possession
I wrote this letter with the hope that you will
amounted to P2,476.
understand me. I have received P4,000.00 our
share in the case filed and is now in my custody.
According to respondent's version, the complainants "refused
consistently to receive" the said balance from him because they wanted
Previous (sic) I have a case wherein I was forced to
the full amount of P4,000. He said that he had already paid to them the
use our money to solve my problem.
sum of P2,000 and that only the sum of P476 was left in his custody. He
did not present any receipt to prove the alleged payment of P2,000. He
Now to pay the amount I have used, I sold my jeep said that he could deliver that amount of P476 to the complainants.
to Mr. Ricarte Gorospe, an Employee of the BIR
here in Cag. But I am not paid as yet. So, I am
Mrs. Daroy, in rebuttal, denied that her father, Teofilo Legaspi, received
waiting as he will pay at 3:00 p.m. today and it's
the sum of P412 from the respondent. She said that her father never
close as I have promised to give it on the 10th, I
went to Cagayan de Oro City to confer with the respondent. She said
mean our money.
that there was no agreement that the respondent would participate like
an heir in the partition of the sum of P4,000. She denied that the
Kindly help me, defer the giving you of the sum or respondent offered to pay her and her brother and sister the sum of
at least until Thursday or Friday, I bring it to you. P2,746. She denied that the respondent paid to the complainants
P2,000.
I know, my responsibility on this matter.
After a careful examination of the evidence, we find that respondent's
testimony cannot be given any credence. In his memorandum he stated
Thanks that after he received from the sheriff "on October 29, 1969" the sum of
P4,000, he "immediately wired" his kinsman, Teofilo Legaspi, to come to
Cousin Cagayan de Oro City and that Teofilo "came on October 21, 1969".
Ramon Respondent meant October 20, 1969, the date of the receipt, Exhibit L-
1.
It turned out that on October 20, 1969 the respondent, as to "counsel for
Fermina Daroy et al.", received from Deputy Provincial Sheriff Jose V. The truth is that he did not send any such wire. The statement of the
Yasay the said sum of P4,000 as "one (1) share in participation of my sheriff and respondent's office clerk in their affidavits of March 18, 1975
clients Fermina Daroy et al. in connection with (the) order of Judge B. K. that such a wire was sent is false. What he sent to Teofilo Legaspi was a
Gorospe" in the aforementioned intestate proceeding. The respondent handwritten note dated November 28, 1969 (Exh. B) wherein the
signed a receipt for that amount (Exh. L-1). The sheriff paid to Attorneys respondent made it appear that the said sum of P4,000 was going to be
Angel Quimpo, Leovigildo Tandog, Jr. and Teogenes Velez, Jr. the withdrawn on "December 8, 1969 at nine o'clock". That the respondent
respective shares of the other groups of heirs also in the sum of P4,000 in his testimony and memorandum forgot that note, which is Annex C of
for each group. Those lawyers turned over the amounts withdrawn to the complaint for disbarment and which he admitted in paragraph 4 of
their respective clients (Exh. L). his answer, is an indication that he does not know the facts of his own
case and that he had no scruples in trying to mislead and deceive this
Court.
It is evident that the respondent, in writing on November 28, 1969 to
Teofilo Legaspi that the money deposited could be withdrawn on
December 8, 1969, acted in bad faith. He had already withdrawn the That note of respondent to Teofilo Legaspi, his telegram and his letter
money before that date. He concealed that fact from the complainants. (already quoted) to Mrs. Daroy dated December 7 and 9, 1969,
respectively (Exh. B, C and E) overwhelmingly belie his fabricated
theory that he conferred with Teofilo Legaspi at the end of October or in
Before the disbarment complaint was filed several demands were made the first week of November, 1969. He was tempted to concoct a story as
upon the respondent to pay to the complainants the amount which he to his alleged payments to Teofilo Legaspi because the latter is dead
had misappropriated. He repeatedly broke his promises to make and could not refute him. However, complainants' documentary
payment. As complainants' patience was already exhausted, they filed evidence refutes his prevarications, distortions and fabrications.
their complaint for disbarment on March 13, 1970.2

He attached to his memorandum (of which he did not furnish


Atty. Alfredo R. Busico, the lawyer for the complainants, in a letter to this complainants a copy) his Exhibit 2, a supposed typewritten claim
Court's Clerk of Court dated May 26, 1970, expressed the hope that against him which totalled P10,406.05. Exhibit 2 does not bear any
preferential attention would be given to the case. He said that he had signature. The respondent wants to imply that the complainants were
"reliable information from Cagayan de Oro City" that the respondent trying to blackmail him. No probative value can be given to Exhibit 2.
"has been bragging that nothing will happen to this case" (p.
20, Rollo).1äwphï1.ñët
The flimsiness and incredible character of respondent's defense are
discernible in his Exhibit 1, which he attached to his answer to the
The case was referred to the Solicitor General for investigation, report original complaint.
and recommendation. In 1973 he requested the City Fiscal of Iligan City
to conduct the investigation. 3 After the investigation was finished, the
case was set for hearing. The respondent did not appear at the hearing. Exhibit 1 as a carbon copy of a supposed extrajudicial partition executed
in 1968 by the four children of Consuelo Gonzaga, by her surviving
husband, Teofilo Legaspi and by the respondent, Atty. Legaspi, all the
Respondent Legaspi in his testimony admitted that he received the said six being described in the document as "the legitimate children and sole
sum of P4,000 as shown in the receipt, Exhibit D dated October 20, heirs of Consuelo Gonzaga, who died on March 12. 1941". Why the
1969. He said that after receiving it he immediately wired Teofilo Legaspi respondent was an heir of Consuelo Gonzaga was not explained.
at Iligan City to see him (the respondent) in his office at Cagayan de Oro
City so that Teofilo Legaspi could tell him "the proper disposal" of that
amount. In that curious instrument, the spaces for the day and month when it
was signed and acknowledged before a notary, the spaces for the
description of the fourth parcel of land, the spaces for the shares
Teofilo Legaspi supposedly went to see him on October 21, 1969 and at adjudicated to the heirs, the spaces for the instrumental witnesses and
their conference they supposedly agreed that the sum of P700 would be the spaces for the numbers of the residence certificates and the dates
deducted from the P4,000 to cover the expenses which he (Legaspi) and places of issue were left blank. Yet the instrument was signed by
described as "expenses involved from the parties litigants, expenses the above six persons and duly notarized by a notary whose signature is
seeking evidence and other expenses relevant to the case" and "major illegible.
expenses" in the case (sic); that his attorney's fees would be equivalent
"to a share of the petitioners", an agreement which was later placed in
formal form (referring to 1968 extrajudicial settlement attached to his In that extrajudicial partition Consuelo Gonzaga was alleged to have left
answer); that the balance of P3,300 would be divided into six equal four parcels of land located at Barrio Maputi, Initao, Misamis Oriental
parts (six because of the four Legaspi children, the father Teofilo which she inherited from her father Aquilino Gonzaga. However, in the
Legaspi and the lawyer Ramon C. Legaspi); that under such division order of the Court of First Instance of Misamis Oriental dated April 29,
each participant would receive P412 each (P3,300 divided by six gives a
1969 Consuelo Gonzaga inherited only a one-sixth share in a parcel of belonging to the office of an attorney (6 Moran's Comments on the
land located at Maputi, Initao, Misamis Oriental. Rules of Court, 1970 Ed., p. 242).1äwphï1.ñët

How Vivencio Legaspi, who, according to the instrument, was a resident The prayer of the complainants that the respondent be ordered to pay
of Alameda, California, was able to sign it and to appear before a notary them the said amount of P4,000 plus attorney's fees and miscellaneous
was not explained. expenses incurred in the prosecution of this case amounting to more
than P1,000 cannot be granted in this disbarment proceeding. That
amount should be recovered in an ordinary action.
The incomplete document, far from being of any help to respondent
Legaspi, casts a reflection on his competency and integrity as a lawyer
and on the competency and integrity of the notary before whom it was WHEREFORE, the respondent is disbarred. The Clerk of Court is
acknowledged. As already noted, it was made to appear herein that directed to strike out his name from the Roll of Attorneys.
respondent Legaspi was an heir of Consuelo Gonzaga when, obviously,
he did not possess that status. The document does not even mention
SO ORDERED.
whether the deceased died intestate.

Makalintal, C.J., Castro, Fernando, Barredo, Makasiar, Antonio,


That document has no connection with the P4,000 and does not justify
Esguerra, Muñoz Palma, Concepcion Jr., and Martin, JJ., concur.
the misappropriation or breach of trust committed by the respondent.

Teehankee, J., is on leave.


A lawyer, under his oath, pledges himself not to delay any man for
money or malice and is bound to conduct himself with all good fidelity to
his clients. He is obligated to report promptly the money of his clients
that has come into his possession. He should not commingle it with his
private property or use it for his personal purposes without his client's
consent. He should maintain a reputation for honesty and fidelity to G.R. No. L-961 September 21, 1949
private trust (Pars. 11 and 32, Canons of Legal Ethics).
BLANDINA GAMBOA HILADO, petitioner,
Money collected by a lawyer in pursuance of a judgment in favor of his vs.
clients is held in trust and must be immediately turned over to them (Aya JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD
vs. Bigornia, 57 Phil. 8, 11).1äwphï1.ñët and SELIM JACOB ASSAD, respondents.

Section 25, Rule 138 of the Rules of Court provides that when an Delgado, Dizon and Flores for petitioner.
attorney unjustly retains in his hands money of his client after it has Vicente J. Francisco for respondents.
been demanded, he may be punished for contempt as an officer of the
court who has misbehaved in his official transactions and he is liable to TUASON, J.:
a criminal prosecution.

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


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

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

We find respondent Legaspi guilty of deceit, malpractice and


professional misconduct for having misappropriated the funds of his
clients. His manufactured defenses, his lack of candor and his repeated July 13, 1945.
failure to appear at the investigation conducted by the City Fiscal of
Iligan and at the hearings scheduled by this Court, thus causing this
proceeding to drag on for a long time, demonstrate his unworthiness to
remain as a member of the noble profession of law. (See Capulong vs.
Aliño, Adm. Case No. 381, February 10, 1968, 22 SCRA 491). Mrs. Blandina Gamboa Hilado
Manila, Philippines
Taking into account the environmental circumstances of the case, we
hold that the proper disciplinary action against the respondent is My dear Mrs. Hilado:
disbarment. Its salutary purpose is to protect the court and the public
from the misconduct of an officer of the court. It is premised on the
From the papers you submitted to me in connection with civil
assumption that a member of the bar should be competent, honorable
case No. 70075 of the Court of First Instance of Manila,
and reliable, a person in whom courts and clients may repose
entitled "Blandina Gamboa Hilado vs. S. J. Assad," I find that
confidence (In re MacDougall, 3 Phil. 70, 78).
the basic facts which brought about the controversy between
you and the defendant therein are as follows:
Its objectives are to compel the lawyer to deal fairly and honestly with
his client and to remove from the profession a person whose
misconduct has proven him unfit for the duties and responsibilities
(a) That you were the equitable owner of the property Mrs. Hilado since their last meeting until she talked to him at the Manila
described in the complaint, as the same was purchased Hotel about a proposed extrajudicial settlement of the case;
and/or built with funds exclusively belonging to you, that is to
say, the houses and lot pertained to your paraphernal estate;
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
(b) That on May 3, 1943, the legal title to the property was the case in the hands of other attorneys; that he accepted the retainer
with your husband, Mr. Serafin P. Hilado; and and on January 28, 1946, entered his appearance.

(c) That the property was sold by Mr. Hilado without your Attorney Francisco filed an affidavit of stenographer Ragodon in
knowledge on the aforesaid date of May 3, 1943. corroboration of his answer.

Upon the foregoing facts, I am of the opinion that your action The judge trying the case, Honorable Jose Gutierrez David, later
against Mr. Assad will not ordinarily prosper. Mr. Assad had promoted to the Court of Appeals, dismissed the complaint. His Honor
the right to presume that your husband had the legal right to believed that no information other than that already alleged in plaintiff's
dispose of the property as the transfer certificate of title was in complaint in the main cause was conveyed to Attorney Francisco, and
his name. Moreover, the price of P110,000 in Japanese concluded that the intercourse between the plaintiff and the respondent
military notes, as of May 3, 1943, does not quite strike me as did not attain the point of creating the relation of attorney and client.
so grossly inadequate as to warrant the annulment of the
sale. I believe, lastly, that the transaction cannot be avoided
Stripped of disputed details and collateral matters, this much is
merely because it was made during the Japanese occupation,
undoubted: That Attorney Francisco's law firm mailed to the plaintiff a
nor on the simple allegation that the real purchaser was not a
written opinion over his signature on the merits of her case; that this
citizen of the Philippines. On his last point, furthermore, I
opinion was reached on the basis of papers she had submitted at his
expect that you will have great difficulty in proving that the real
office; that Mrs. Hilado's purpose in submitting those papers was to
purchaser was other than Mr. Assad, considering that death
secure Attorney Francisco's professional services. Granting the facts to
has already sealed your husband's lips and he cannot now
be no more than these, we agree with petitioner's counsel that the
testify as to the circumstances of the sale.
relation of attorney and client between Attorney Francisco and Mrs.
Hilado ensued. The following rules accord with the ethics of the legal
For the foregoing reasons, I regret to advise you that I cannot profession and meet with our approval:
appear in the proceedings in your behalf. The records of the
case you loaned to me are herewith returned.
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,
Yours very truly, 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.)
(Sgd.) VICENTE J. FRANCISCO

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
VJF/Rag. retainer should have been paid, promised, or charged for;
neither is it material that the attorney consulted did not
In his answer to plaintiff's attorneys' complaint, Attorney Francisco afterward undertake the case about which the consultation
alleged that about May, 1945, a real estate broker came to his office in was had. If a person, in respect to his business affairs or
connection with the legal separation of a woman who had been troubles of any kind, consults with his attorney in his
deserted by her husband, and also told him (Francisco) that there was a professional capacity with the view to obtaining professional
pending suit brought by Mrs. Hilado against a certain Syrian to annul the advice or assistance, and the attorney voluntarily permits or
sale of a real estate which the deceased Serafin Hilado had made to the acquiesces in such consultation, then the professional
Syrian during the Japanese occupation; that this woman asked him if he employment must be regarded as established. . . . (5 Jones
was willing to accept the case if the Syrian should give it to him; that he Commentaries on Evidence, pp. 4118-4119.)
told the woman that the sales of real property during the Japanese
regime were valid even though it was paid for in Japanese military An attorney is employed-that is, he is engaged in his
notes; that this being his opinion, he told his visitor he would have no professional capacity as a lawyer or counselor-when he is
objection to defending the Syrian; listening to his client's preliminary statement of his case, or
when he is giving advice thereon, just as truly as when he is
That one month afterwards, Mrs. Hilado came to see him about a suit drawing his client's pleadings, or advocating his client's cause
she had instituted against a certain Syrian to annul the conveyance of a in open court. (Denver Tramway Co. vs. Owens, 20 Colo.,
real estate which her husband had made; that according to her the case 107; 36 P., 848.)
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 Formality is not an essential element of the employment of an
husband he did not hesitate to tell her frankly that hers was a lost case attorney. The contract may be express or implied and it is
for the same reason he had told the broker; that Mrs. Hilado retorted sufficient that the advice and assistance of the attorney is
that the basis of her action was not that the money paid her husband sought and received, in matters pertinent to his profession. An
was Japanese military notes, but that the premises were her private and acceptance of the relation is implied on the part of the
exclusive property; that she requested him to read the complaint to be attorney from his acting in behalf of his client in pursuance of
convinced that this was the theory of her suit; that he then asked Mrs. a request by the latter. (7 C. J. S., 848-849; see Hirach Bros.
Hilado if there was a Torrens title to the property and she answered yes, and Co. vs. R. E. Kennington Co., 88 A. L. R., 1.)
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; 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
That some days afterward, upon arrival at his law office on Estrada the course of professional employment;" and section 19 (e) of Rule 127
street, he was informed by Attorney Federico Agrava, his assistant, that imposes upon an attorney the duty "to maintain inviolate the confidence,
Mrs. Hilado had dropped in looking for him and that when he, Agrava, and at every peril to himself, to preserve the secrets of his client." There
learned that Mrs. Hilado's visit concerned legal matters he attended to is no law or provision in the Rules of Court prohibiting attorneys in
her and requested her to leave the "expediente" which she was express terms from acting on behalf of both parties to a controversy
carrying, and she did; that he told Attorney Agrava that the firm should whose interests are opposed to each other, but such prohibition is
not handle Mrs. Hilado's case and he should return the papers, calling necessarily implied in the injunctions above quoted. (In re De la Rosa,
Agrava's attention to what he (Francisco) already had said to Mrs. 27 Phil., 258.) In fact the prohibition derives validity from sources higher
Hilado; 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
That several days later, the stenographer in his law office, Teofilo employment to which it pertains," and "to permit it to be used in the
Ragodon, showed him a letter which had been dictated in English by Mr. interest of another, or, worse still, in the interest of the adverse party, is
Agrava, returning the "expedients" to Mrs. Hilado; that Ragodon told him to strike at the element of confidence which lies at the basis of, and
(Attorney Francisco) upon Attorney Agrava's request that Agrava affords the essential security in, the relation of attorney and client."
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 That only copies of pleadings already filed in court were furnished to
and without keeping it for a minute in his possession; that he never saw 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 as counsel for the other side after he has given professional advice to
should discard Mrs. Hilado's statement that other papers, personal and the opposite party, even if he should decline to perform the
private in character, were turned in by her. Precedents are at hand to contemplated services on behalf of the latter. It is to prevent undue
support the doctrine that the mere relation of attorney and client ought to hardship on the attorney resulting from the rigid observance of the rule
preclude the attorney from accepting the opposite party's retainer in the that a separate and independent fee for consultation and advice was
same litigation regardless of what information was received by him from conceived and authorized. "A retaining fee is a preliminary fee given to
his first client. 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
The principle which forbids an attorney who has been
rendering services to the other and of receiving pay from him, and the
engaged to represent a client from thereafter appearing on
payment of such fee, in the absence of an express understanding to the
behalf of the client's opponent applies equally even though
contrary, is neither made nor received in payment of the services
during the continuance of the employment nothing of a
contemplated; its payment has no relation to the obligation of the client
confidential nature was revealed to the attorney by the client.
to pay his attorney for the services which he has retained him to
(Christian vs. Waialua Agricultural Co., 30 Hawaii, 553,
perform." (7 C.J.S., 1019.)
Footnote 7, C. J. S., 828.)

The defense that Attorney Agrava wrote the letter Exhibit A and that
Where it appeared that an attorney, representing one party in
Attorney Francisco did not take the trouble of reading it, would not take
litigation, had formerly represented the adverse party with
the case out of the interdiction. If this letter was written under the
respect to the same matter involved in the litigation, the court
circumstances explained by Attorney Francisco and he was unaware of
need not inquire as to how much knowledge the attorney
its contents, the fact remains that his firm did give Mrs. Hilado a formal
acquired from his former during that relationship, before
professional advice from which, as heretofore demonstrated, emerged
refusing to permit the attorney to represent the adverse party.
the relation of attorney and client. This letter binds and estop him in the
(Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.)
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
In order that a court may prevent an attorney from appearing firm is information imparted to the firm. (6 C. J., 628; 7 C. J. S., 986.)
against a former client, it is unnecessary that the ascertain in This is not a mere fiction or an arbitrary rule; for such member or
detail the extent to which the former client's affairs might have assistant, as in our case, not only acts in the name and interest of the
a bearing on the matters involved in the subsequent litigation firm, but his information, by the nature of his connection with the firm is
on the attorney's knowledge thereof. (Boyd vs. Second available to his associates or employers. The rule is all the more to be
Judicial Dist. Court, 274 P., 7; 51 Nev., 264.) 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
This rule has been so strictly that it has been held an attorney, be hoped for in "the public policy that the client in consulting his legal
on terminating his employment, cannot thereafter act as adviser ought to be free from apprehension of disclosure of his
counsel against his client in the same general matter, even confidence," if the prohibition were not extended to the attorney's
though, while acting for his former client, he acquired no partners, employers or assistants.
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.) 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
Communications between attorney and client are, in a great number of case, objection to the appearance of an attorney was allowed even on
litigations, a complicated affair, consisting of entangled relevant and appeal as a ground for reversal of the judgment. In that case, in which
irrelevant, secret and well known facts. In the complexity of what is said throughout the conduct of the cause in the court below the attorney had
in the course of the dealings between an attorney and a client, inquiry of been suffered so to act without objection, the court said: "We are all of
the nature suggested would lead to the revelation, in advance of the the one mind, that the right of the appellee to make his objection has not
trial, of other matters that might only further prejudice the complainant's lapsed by reason of failure to make it sooner; that professional
cause. And the theory would be productive of other un salutary results. confidence once reposed can never be divested by expiration of
To make the passing of confidential communication a condition professional employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321
precedent; i.e., to make the employment conditioned on the scope and A. L. R. 1316.)
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 The complaint that petitioner's remedy is by appeal and not by certiorari
believe are their rights in litigation. The condition would of necessity call deserves scant attention. The courts have summary jurisdiction to
for an investigation of what information the attorney has received and in protect the rights of the parties and the public from any conduct of
what way it is or it is not in conflict with his new position. Litigants would attorneys prejudicial to the administration of the justice. The summary
in consequence be wary in going to an attorney, lest by an unfortunate jurisdiction of the courts over attorneys is not confined to requiring them
turn of the proceedings, if an investigation be held, the court should to pay over money collected by them but embraces authority to compel
accept the attorney's inaccurate version of the facts that came to him. them to do whatever specific acts may be incumbent upon them in their
"Now the abstinence from seeking legal advice in a good cause is by capacity of attorneys to perform. The courts from the general principles
hypothesis an evil which is fatal to the administration of justice." (John of equity and policy, will always look into the dealings between attorneys
H. Wigmore's Evidence, 1923, Section 2285, 2290, 2291.) 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,
Hence the necessity of setting down the existence of the bare not to appear, to answer declaration, etc. (6 C.J., 718 C.J.S., 1005.)
relationship of attorney and client as the yardstick for testing This summary remedy against attorneys flows from the facts that they
incompatibility of interests. This stern rule is designed not alone to are officers of the court where they practice, forming a part of the
prevent the dishonest practitioner from fraudulent conduct, but as well to machinery of the law for the administration of justice and as such
protect the honest lawyer from unfounded suspicion of unprofessional subject to the disciplinary authority of the courts and to its orders and
practice. (Strong vs. Int. Bldg., etc.; Ass'n, 183 Ill., 97; 47 L.R.A., 792.) It directions with respect to their relations to the court as well as to their
is founded on principles of public policy, on good taste. As has been clients. (Charest vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26,
said in another case, the question is not necessarily one of the rights of 7 C. J. S., 1007.) Attorney stand on the same footing as sheriffs and
the parties, but as to whether the attorney has adhered to proper other court officers in respect of matters just mentioned.
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- We conclude therefore that the motion for disqualification should be
dealing. Only thus can litigants be encouraged to entrust their secrets to allowed. It is so ordered, without costs.
their attorneys which is of paramount importance in the administration of
justice.
A.C. No. 6711 July 3, 2007

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 MA. LUISA HADJULA, complainant,
sought and obtained legal advice from his firm; this, not necessarily to vs.
prevent any injustice to the plaintiff but to keep above reproach the ATTY. ROCELES F. MADIANDA, respondent.
honor and integrity of the courts and of the bar. Without condemning the
respondents conduct as dishonest, corrupt, or fraudulent, we do believe DECISION
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." GARCIA, J.:

There is in legal practice what called "retaining fee," the purpose of Under consideration is Resolution No. XVI-2004-472 of the Board of
which stems from the realization that the attorney is disabled from acting Governors, Integrated Bar of the Philippines (IBP), relative to the
complaint for disbarment filed by herein complainant Ma. Luisa Hadjula CRIMINALLY CONVICTED of her ILLICIT, IMMORAL,
against respondent Atty. Roceles F. Madianda. ILLEGAL and UNLAWFUL ACTS.

The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date On October 7, 2004, the Investigating Commissioner of the IBP
September 7, 2002 and filed with the IBP Commission on Bar Discipline, Commission on Bar Discipline came out with a Report and
complainant charged Atty. Roceles F. Madianda with violation of Article Recommendation, stating that the information related by complainant to
2092 of the Revised Penal Code and Canon Nos. 15.02 and 21.02 of the the respondent is "protected under the attorney-client privilege
Code of Professional Responsibility. 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
In said affidavit-complaint, complainant alleged that she and respondent
accordingly recommended that respondent be reprimanded therefor,
used to be friends as they both worked at the Bureau of Fire Protection
thus:
(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 WHEREFORE, premises considered, it is respectfully
respondent for some legal advice. Complainant further alleged that, in recommended that respondent Atty. Roceles Madianda be
the course of their conversation which was supposed to be kept reprimanded for revealing the secrets of the complainant.
confidential, she disclosed personal secrets and produced copies of a
marriage contract, a birth certificate and a baptismal certificate, only to
On November 4, 2004, the IBP Board of Governors issued Resolution
be informed later by the respondent that she (respondent) would refer
No. XVI-2004-472 reading as follows:
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. RESOLVED to ADOPT and APPROVE, as it is hereby
ADOPTED and APPROVED, the Report and
Recommendation of the Investigating Commissioner of the
Continuing, complainant averred that her friendship with respondent
above-entitled case, herein made part of this Resolution as
soured after her filing, in the later part of 2000, of criminal and
Annex "A"; and , finding the recommendation fully supported
disciplinary actions against the latter. What, per complainant's account,
by the evidence on record and the applicable laws and rules,
precipitated the filing was when respondent, then a member of the BFP
and considering the actuation of revealing information given to
promotion board, demanded a cellular phone in exchange for the
respondent during a legal consultation, Atty. Roceles
complainant's promotion.
Madianda is hereby REPRIMANDED.

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


We AGREE with the recommendation and the premises holding it
aforesaid actions, filed a COUNTER COMPLAINT 3 with the
together.
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 As it were, complainant went to respondent, a lawyer who incidentally
made to respondent. And also on the basis of the same disclosures, was also then a friend, to bare what she considered personal secrets
complainant further stated, a disciplinary case was also instituted and sensitive documents for the purpose of obtaining legal advice and
against her before the Professional Regulation Commission. 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
Complainant seeks the suspension and/or disbarment of respondent for
certain restrictions circumscribed by the ethics of the profession. Among
the latter's act of disclosing personal secrets and confidential
the burdens of the relationship is that which enjoins the lawyer,
information she revealed in the course of seeking respondent's legal
respondent in this instance, to keep inviolate confidential information
advice.
acquired or revealed during legal consultations. The fact that one is, at
the end of the day, not inclined to handle the client's case is hardly of
In an order dated October 2, 2002, the IBP Commission on Bar consequence. Of little moment, too, is the fact that no formal
Discipline required respondent to file her answer to the complaint. 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 -
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. A lawyer-client relationship was established from the very first
Respondent also stated the observation that the supposed confidential moment complainant asked respondent for legal advise
data and sensitive documents adverted to are in fact matters of common regarding the former's business. To constitute professional
knowledge in the BFP. The relevant portions of the answer read: employment, it is not essential that the client employed the
attorney professionally on any previous occasion.
5. I specifically deny the allegation of F/SUPT. MA. LUISA C.
HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for It is not necessary that any retainer be paid, promised, or
reason that she never WAS MY CLIENT nor we ever had any charged; neither is it material that the attorney consulted did
LAWYER-CLIENT RELATIONSHIP that ever existed ever not afterward handle the case for which his service had been
since and that never obtained any legal advice from me sought.
regarding her PERSONAL PROBLEMS or PERSONAL
SECRETS. She likewise never delivered to me legal
It a person, in respect to business affairs or troubles of any
documents much more told me some confidential information
kind, consults a lawyer with a view to obtaining professional
or secrets. That is because I never entertain LEGAL
advice or assistance, and the attorney voluntarily permits or
QUERIES or CONSULTATION regarding PERSONAL
acquiesces with the consultation, then the professional
MATTERS since I know as a LAWYER of the Bureau of Fire
employments is established.
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 Likewise, a lawyer-client relationship exists notwithstanding
to me, I just referred them to private law practitioners and the close personal relationship between the lawyer and the
never entertain the same, NOR listen to their stories or complainant or the non-payment of the former's fees.
examine or accept any document.
Dean Wigmore lists the essential factors to establish the existence of
9. I specifically deny the allegation of F/SUPT. MA. LUISA C. the attorney-client privilege communication, viz:
HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the
truth of the matter is that her ILLICIT RELATIONSHIP and her
(1) Where legal advice of any kind is sought (2) from a
illegal and unlawful activities are known in the Bureau of Fire
professional legal adviser in his capacity as such, (3) the
Protection since she also filed CHILD SUPPORT case against
communications relating to that purpose, (4) made in
her lover … where she has a child ….
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by the
Moreover, the alleged DOCUMENTS she purportedly have legal advisor, (8) except the protection be waived.7
shown to me sometime in 1998, are all part of public records
….
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
Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the Investigating Commissioner, the documents shown and the information
instant case just to get even with me or to force me to settle revealed in confidence to the respondent in the course of the legal
and withdraw the CASES I FILED AGAINST HER since she consultation in question, were used as bases in the criminal and
knows that she will certainly be DISMISSED FROM administrative complaints lodged against the complainant.
SERVICE, REMOVED FROM THE PRC ROLL and
The purpose of the rule of confidentiality is actually to protect the client That instead of registering said Deed of Sale and Transfer
from possible breach of confidence as a result of a consultation with a Certificate of Title (TCT) No. T-33122, in the Register of
lawyer. 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
The seriousness of the respondent's offense notwithstanding, the Court
Angelo T. Uy and Cristina Earl T. Uy, wherein William S. Uy
feels that there is room for compassion, absent compelling evidence
made it appear that his said children are of legal age, and
that the respondent acted with ill-will. Without meaning to condone the
residents of Brgy. Gonzales, Umingan, Pangasinan, when in
error of respondent's ways, what at bottom is before the Court is two
fact and in truth, they are minors and residents of Metro
former friends becoming bitter enemies and filing charges and counter-
Manila, to qualify them as farmers/beneficiaries, thus placing
charges against each other using whatever convenient tools and data
the said property within the coverage of the Land Reform
were readily available. Unfortunately, the personal information
Program;
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 That the above-named accused, conspiring together and
perhaps realizing that, in the process of giving vent to a negative helping one another procured the falsified documents which
sentiment, she was violating the rule on confidentiality. 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.
IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is
004 32930) in favor of his above-named children. Some of
hereby REPRIMANDED and admonished to be circumspect in her
these Falsified documents are purported Affidavit of
handling of information acquired as a result of a lawyer-client
Seller/Transferor and Affidavit of Non-Tenancy, both dated
relationship. She is also STERNLY WARNED against a repetition of the
August 20, 1996, without the signature of affiant, Fermin C.
same or similar act complained of.
Gonzales, and that on that said date, Fermin C. Gonzales
was already dead… ;
SO ORDERED.
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
A.C. No. 5280 March 30, 2004 cash, as full payment of the redemption of TCT No. 33122…
knowing fully well that at that time the said TCT cannot be
WILLIAM S. UY, complainant, redeemed anymore because the same was already
vs. transferred in the name of his children;
ATTY. FERMIN L. GONZALES, respondent.
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,


RESOLUTION 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


AUSTRIA-MARTINEZ, J.: as a lawyer and grossly disregarded his duty to preserve the secrets of
his client. Respondent unceremoniously turned against him just
William S. Uy filed before this Court an administrative case against Atty. because he refused to grant respondent’s request for additional
Fermin L. Gonzales for violation of the confidentiality of their lawyer- compensation. Respondent’s act tarnished his reputation and social
client relationship. The complainant alleges: standing.3

Sometime in April 1999, he engaged the services of respondent lawyer In compliance with this Court’s Resolution dated July 31,
to prepare and file a petition for the issuance of a new certificate of title. 2000,4 respondent filed his Comment narrating his version, as follows:
After confiding with respondent the circumstances surrounding the lost
title and discussing the fees and costs, respondent prepared, finalized On December 17, 1998, he offered to redeem from complainant a 4.9
and submitted to him a petition to be filed before the Regional Trial hectare-property situated in Brgy. Gonzales, Umingan, Pangasinan
Court of Tayug, Pangasinan. When the petition was about to be filed, covered by TCT No. T-33122 which the latter acquired by purchase from
respondent went to his (complainant’s) office at Virra Mall, Greenhills his (respondent’s) son, the late Fermin C. Gonzales, Jr.. On the same
and demanded a certain amount from him other than what they had date, he paid complainant P340,000.00 and demanded the delivery of
previously agreed upon. Respondent left his office after reasoning with TCT No. T-33122 as well as the execution of the Deed of Redemption.
him. Expecting that said petition would be filed, he was shocked to find Upon request, he gave complainant additional time to locate said title or
out later that instead of filing the petition for the issuance of a new until after Christmas to deliver the same and execute the Deed of
certificate of title, respondent filed a letter-complaint dated July 26, 1999 Redemption. After the said period, he went to complainant’s office and
against him with the Office of the Provincial Prosecutor of Tayug, demanded the delivery of the title and the execution of the Deed of
Pangasinan for "Falsification of Public Documents." 1 The letter-complaint Redemption. Instead, complainant gave him photocopies of TCT No. T-
contained facts and circumstances pertaining to the transfer certificate 33122 and TCT No. T-5165. Complainant explained that he had already
of title that was the subject matter of the petition which respondent was transferred the title of the property, covered by TCT No.T-5165 to his
supposed to have filed. Portions of said letter-complaint read: children Michael and Cristina Uy and that TCT No. T-5165 was
misplaced and cannot be located despite efforts to locate it. Wanting to
The undersigned complainant accuses WILLIAM S. UY, of protect his interest over the property coupled with his desire to get hold
legal age, Filipino, married and a resident of 132-A Gilmore of TCT No. T-5165 the earliest possible time, he offered his assistance
Street corner 9th Street, New Manila, Quezon City, Michael pro bono to prepare a petition for lost title provided that all necessary
Angelo T. UY, CRISTINA EARL T. UY, minors and residents of expenses incident thereto including expenses for transportation and
the aforesaid address, Luviminda G. Tomagos, of legal age, others, estimated at P20,000.00, will be shouldered by complainant. To
married, Filipino and a resident of Carmay East, Rosales, these, complainant agreed.
Pangasinan, and F. Madayag, with office address at A12, 2/F
Vira Mall Shopping Complex, Greenhills, San Juan, Metro On April 9, 1999, he submitted to complainant a draft of the petition for
Manila, for ESTAFA THRU FALSIFICATION OF PUBLIC the lost title ready for signing and notarization. On April 14, 1999, he
DOCUMENTS, committed as follows: went to complainant’s office informing him that the petition is ready for
filing and needs funds for expenses. Complainant who was with a client
That on March 15, 1996, William S. Uy acquired by purchase asked him to wait at the anteroom where he waited for almost two hours
a parcel of land consisting of 4.001 ha. for the amount of until he found out that complainant had already left without leaving any
P100,000.00, Philippine Currency, situated at Brgy. Gonzales, instructions nor funds for the filing of the petition. Complainant’s conduct
Umingan, Pangasinan, from FERMIN C. GONZALES, as infuriated him which prompted him to give a handwritten letter telling
evidenced by a Deed of Sale executed by the latter in favor of complainant that he is withdrawing the petition he prepared and that
the former…; that in the said date, William S. Uy received the complainant should get another lawyer to file the petition.
Transfer Certificate of Title No. T-33122, covering the said
land; 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 hereby SUSPENDED from the practice of law for six (6)
between the two of them when he filed the letter-complaint for months.11
falsification of public document; that the facts and allegations contained
in the letter-complaint for falsification were culled from public documents
Preliminarily, we agree with Commissioner Villanueva-Maala that the
procured from the Office of the Register of Deeds in Tayug,
manifestation of complainant Uy expressing his desire to dismiss the
Pangasinan.5
administrative complaint he filed against respondent, has no persuasive
bearing in the present case.
In a Resolution dated October 18, 2000, the Court referred the case to
the Integrated Bar of the Philippines (IBP) for investigation, report and
Sec. 5, Rule 139-B of the Rules of Court states that:
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 No investigation shall be interrupted or terminated by reason
received the notice for that day’s hearing and so the hearing was reset of the desistance, settlement, compromise, restitution,
to May 28, 2003.8 withdrawal of the charges, or failure of the complainant to
prosecute the same.
On April 29, 2003, Commissioner Villanueva-Maala received a letter
from one Atty. Augusto M. Macam dated April 24, 2003, stating that his This is because:
client, William S. Uy, had lost interest in pursuing the complaint he filed
against Atty. Gonzales and requesting that the case against Atty.
A proceeding for suspension or disbarment is not in any
Gonzales be dismissed.9
sense a civil action where the complainant is a plaintiff and
the respondent lawyer is a defendant. Disciplinary
On June 2, 2003, Commissioner Villanueva-Maala submitted her report proceedings involve no private interest and afford no redress
and recommendation, portions of which read as follows: 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
The facts and evidence presented show that when
ministration of persons unfit to practice in them. The attorney
respondent agreed to handle the filing of the Verified Petition
is called to answer to the court for his conduct as an officer of
for the loss of TCT No. T-5165, complainant had confided to
the court. The complainant or the person who called the
respondent the fact of the loss and the circumstances
attention of the court to the attorney's alleged misconduct is in
attendant thereto. When respondent filed the Letter-Complaint
no sense a party, and has generally no interest in the outcome
to the Office of the Special Prosecutor in Tayug, Pangasinan,
except as all good citizens may have in the proper
he violated Canon 21 of the Code of Professional
administration of justice. Hence, if the evidence on record
Responsibility which expressly provides that "A lawyer shall
warrants, the respondent may be suspended or disbarred
preserve the confidences and secrets of his client even after
despite the desistance of complainant or his withdrawal of the
the attorney-client relation is terminated." Respondent cannot
charges.12
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 Now to the merits of the complaint against the respondent.
after, respondent had already terminated complainant’s
perceived lawyer-client relationship between them. The duty
Practice of law embraces any activity, in or out of court, which requires
to maintain inviolate the client’s confidences and secrets is not
the application of law, as well as legal principles, practice or procedure
temporary but permanent. It is in effect perpetual for "it
and calls for legal knowledge, training and experience. 13 While it is true
outlasts the lawyer’s employment" (Canon 37, Code of
that a lawyer may be disbarred or suspended for any misconduct,
Professional Responsibility) which means even after the
whether in his professional or private capacity, which shows him to be
relationship has been terminated, the duty to preserve the
wanting in moral character, in honesty, probity and good demeanor or
client’s confidences and secrets remains effective. Likewise
unworthy to continue as an officer of the court, 14 complainant failed to
Rule 21.02, Canon 21 of the Rules of Professional
prove any of the circumstances enumerated above that would warrant
Responsibility provides that "A lawyer shall not, to the
the disbarment or suspension of herein respondent.
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 Notwithstanding respondent’s own perception on the matter, a scrutiny
full knowledge of the circumstances consents thereto." 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
On 29 April 2003, the Commission received a letter dated 24
with complainant only because he redeemed a property which
April 2003 from Atty. Augusto M. Macam, who claims to
complainant had earlier purchased from his (complainant’s) son. It is not
represent complainant, William S. Uy, alleging that
refuted that respondent paid complainant P340,000.00 and gave him
complainant is no longer interested in pursuing this case and
ample time to produce its title and execute the Deed of Redemption.
requested that the same be dismissed. The aforesaid letter
However, despite the period given to him, complainant failed to fulfill his
hardly deserves consideration as proceedings of this nature
end of the bargain because of the alleged loss of the title which he had
cannot be "interrupted by reason of desistance, settlement,
admitted to respondent as having prematurely transferred to his
compromise, restitution, withdrawal of the charges, or failure
children, thus prompting respondent to offer his assistance so as to
of the complainant to prosecute the same. (Section 5, Rule
secure the issuance of a new title to the property, in lieu of the lost one,
139-B, Rules of Court). Moreover, in Boliver vs. Simbol, 16
with complainant assuming the expenses therefor.
SCRA 623, the Court ruled that "any person may bring to this
Court’s attention the misconduct of any lawyer, and action will
usually be taken regardless of the interest or lack of interest As a rule, an attorney-client relationship is said to exist when a lawyer
of the complainant, if the facts proven so warrant." 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
IN VIEW OF THE FOREGOING, we find respondent Atty.
that the client should have employed the attorney on any previous
Fermin L. Gonzales to have violated the Code of Professional
occasion or that any retainer should have been paid, promised or
Responsibility and it is hereby recommended that he
charged for, neither is it material that the attorney consulted did not
be SUSPENDED for a period of SIX (6) MONTHS from
afterward undertake the case about which the consultation was had, for
receipt hereof, from the practice of his profession as a lawyer
as long as the advice and assistance of the attorney is sought and
and member of the Bar.10
received, in matters pertinent to his profession.15

On June 21, 2003, the Board of Governors of the Integrated Bar of the
Considering the attendant peculiar circumstances, said rule cannot
Philippines issued Resolution No. XV-2003-365, thus:
apply to the present case. Evidently, the facts alleged in the complaint
for "Estafa Through Falsification of Public Documents" filed by
RESOLVED to ADOPT and APPROVE, as it is hereby respondent against complainant were obtained by respondent due to his
ADOPTED and APPROVED, the Report and personal dealings with complainant. Respondent volunteered his service
Recommendation of the Investigating Commissioner of the to hasten the issuance of the certificate of title of the land he has
above-entitled case, herein made part of this redeemed from complainant. Respondent’s immediate objective was to
Resolution/Decision as Annex "A"; and finding the secure the title of the property that complainant had earlier bought from
recommendation fully supported by the evidence on record his son. Clearly, there was no attorney-client relationship between
and applicable laws and rules, and considering that respondent and complainant. The preparation and the proposed filing of
respondent violated Rule 21.02, Canon 21 of the Canons of the petition was only incidental to their personal transaction.
Professional Responsibility, Atty. Fermin L. Gonzales is
Canon 21 of the Code of Professional Responsibility reads: It is undeniable that the advertisement in question was a flagrant
violation by the respondent of the ethics of his profession, it being a
brazen solicitation of business from the public. Section 25 of Rule 127
Canon 21 – A LAWYER SHALL PRESERVE THE
expressly provides among other things that "the practice of soliciting
CONFIDENCE AND SECRETS OF HIS CLIENT EVEN
cases at law for the purpose of gain, either personally or thru paid
AFTER THE ATTORNEY-CLIENT RELATION IS
agents or brokers, constitutes malpractice." It is highly unethical for an
TERMINATED.
attorney to advertise his talents or skill as a merchant advertises his
wares. Law is a profession and not a trade. The lawyer degrades
Rule 21.01 – A lawyer shall not reveal the confidences or himself and his profession who stoops to and adopts the practices of
secrets of his client except: mercantilism by advertising his services or offering them to the public.
As a member of the bar, he defiles the temple of justice with mercenary
activities as the money-changers of old defiled the temple of Jehovah.
a) When authorized by the client after acquainting him of the "The most worth and effective advertisement possible, even for a young
consequences of the disclosure; lawyer, . . . is the establishment of a well-merited reputation for
professional capacity and fidelity to trust. This cannot be forced but must
b) When required by law; be the outcome of character and conduct." (Canon 27, Code of Ethics.)

c) When necessary to collect his fees or to defend himself, his In In re Tagorda, 53 Phil., the respondent attorney was suspended from
employees or associates or by judicial action. the practice of law for the period of one month for advertising his
services and soliciting work from the public by writing circular letters.
That case, however, was more serious than this because there the
The alleged "secrets" of complainant were not specified by him in his solicitations were repeatedly made and were more elaborate and
affidavit-complaint. Whatever facts alleged by respondent against insistent.
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 Considering his plea for leniency and his promise not to repeat the
estafa against herein complainant, which necessarily involved alleging misconduct, the Court is of the opinion and so decided that the
facts that would constitute estafa, respondent was not, in any way, respondent should be, as he hereby is, reprimanded.
violating Canon 21. There is no way we can equate the filing of the
affidavit-complaint against herein complainant to a misconduct that is Yulo, C.J., Moran, Horrilleno, Paras and Bocobo, JJ., concur.
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.
March 23, 1929
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.
In re LUIS B. TAGORDA,
SO ORDERED.

Duran & Lim for respondent.


A.C. No. L-1117 March 20, 1944
Attorney-General Jaranilla and Provincial Fiscal Jose for the
Government.
THE DIRECTOR OF RELIGIOUS AFFAIRS, complainant,
vs.
ESTANISLAO R. BAYOT, respondent.

Office of the Solicitor General De la Costa and Solicitor Feria for MALCOLM, J.:
complainant.
Francisco Claravall for respondent.

OZAETA, J.:
The respondent, Luis B. Tagorda, a practising attorney and a
member of the provincial board of Isabela, admits that
The respondent, who is an attorney-at-law, is charged with malpractice previous to the last general elections he made use of a card
for having published an advertisement in the Sunday Tribune of June written in Spanish and Ilocano, which, in translation, reads as
13, 1943, which reads as follows: follows:

Marriage

license promptly secured thru our assistance & the LUIS B. TAGORDA
annoyance of delay or publicity avoided if desired, and
marriage arranged to wishes of parties. Consultation on any
Attorney
matter free for the poor. Everything confidential.

Notary Public

Legal assistance service CANDIDATE FOR THIRD MEMBER


12 Escolta, Manila, Room, 105
Tel. 2-41-60.
Province of Isabela

Appearing in his own behalf, respondent at first denied having published


the said advertisement; but subsequently, thru his attorney, he admitted (NOTE. — As notary public, he can execute for you a deed of
having caused its publication and prayed for "the indulgence and mercy" sale for the purchase of land as required by the cadastral
of the Court, promising "not to repeat such professional misconduct in office; can renew lost documents of your animals; can make
the future and to abide himself to the strict ethical rules of the law your application and final requisites for your homestead; and
profession." In further mitigation he alleged that the said advertisement can execute any kind of affidavit. As a lawyer, he can help you
was published only once in the Tribune and that he never had any case collect your loans although long overdue, as well as any
at law by reason thereof. complaint for or against you. Come or write to him in his town,
Echague, Isabela. He offers free consultation, and is willing to
help and serve the poor.)
Upon that plea the case was submitted to the Court for decision.
The statute as amended conforms in principle to the Canons
of Professionals Ethics adopted by the American Bar
Association in 1908 and by the Philippine Bar Association in
The respondent further admits that he is the author of a letter
1917. Canons 27 and 28 of the Code of Ethics provide:
addressed to a lieutenant of barrio in his home municipality
written in Ilocano, which letter, in translation, reads as follows:

27. ADVERTISING, DIRECT OR INDIRECT. — The most


worthy and effective advertisement possible, even for a young
ECHAGUE, ISABELA, September 18, 1928
lawyer, and especially with his brother lawyers, is the
establishment of a well-merited reputation for professional
capacity and fidelity to trust. This cannot be forced, but must
be the outcome of character and conduct. The publication or
circulation of ordinary simple business cards, being a matter
MY DEAR LIEUTENANT: I would like to inform you of the of personal taste or local custom, and sometimes of
approaching date for our induction into office as member of convenience, is not per se improper. But solicitation of
the Provincial Board, that is on the 16th of next month. Before business by circulars or advertisements, or by personal
my induction into office I should be very glad to hear your communications or interview not warranted by personal
suggestions or recommendations for the good of the province relations, is unprofessional. It is equally unprofessional to
in general and for your barrio in particular. You can come to procure business by indirection through touters of any kind,
my house at any time here in Echague, to submit to me any whether allied real estate firms or trust companies advertising
kind of suggestion or recommendation as you may desire. to secure the drawing of deeds or wills or offering retainers in
exchange for executorships or trusteeships to be influenced
by the lawyer. Indirect advertisement for business by
furnishing or inspiring newspaper comments concerning the
manner of their conduct, the magnitude of the interest
I also inform you that despite my membership in the Board I involved, the importance of the lawyer's position, and all other
will have my residence here in Echague. I will attend the like self-laudation, defy the traditions and lower the tone of our
session of the Board of Ilagan, but will come back home on high calling, and are intolerable.
the following day here in Echague to live and serve with you
as a lawyer and notary public. Despite my election as member
of the Provincial Board, I will exercise my legal profession as
a lawyer and notary public. In case you cannot see me at
home on any week day, I assure you that you can always find 28. STIRRING UP LITIGATION, DIRECTLY OR THROUGH
me there on every Sunday. I also inform you that I will receive AGENTS. — It is unprofessional for a lawyer to volunteer
any work regarding preparations of documents of contract of advice to bring a lawsuit, except in rare cases where ties of
sales and affidavits to be sworn to before me as notary public blood, relationship or trust make it his duty to do so. Stirring
even on Sundays. up strife and litigation is not only unprofessional, but it is
indictable at common law. It is disreputable to hunt up defects
in titles or other causes of action and inform thereof in order to
the employed to bring suit, or to breed litigation by seeking out
those with claims for personal injuries or those having any
I would like you all to be informed of this matter for the reason other grounds of action in order to secure them as clients, or
that some people are in the belief that my residence as to employ agents or runners for like purposes, or to pay or
member of the Board will be in Ilagan and that I would then be reward directly or indirectly, those who bring or influence the
disqualified to exercise my profession as lawyer and as notary bringing of such cases to his office, or to remunerate
public. Such is not the case and I would make it clear that I policemen, court or prison officials, physicians, hospital
am free to exercise my profession as formerly and that I will attaches or others who may succeed, under the guise of
have my residence here in Echague. giving disinterested friendly advice, in influencing the criminal,
the sick and the injured, the ignorant or others, to seek his
professional services. A duty to the public and to the
profession devolves upon every member of the bar having
knowledge of such practices upon the part of any practitioner
I would request you kind favor to transmit this information to immediately to inform thereof to the end that the offender may
your barrio people in any of your meetings or social be disbarred.
gatherings so that they may be informed of my desire to live
and to serve with you in my capacity as lawyer and notary
public. If the people in your locality have not as yet contracted
the services of other lawyers in connection with the
registration of their land titles, I would be willing to handle the Common barratry consisting of frequently stirring up suits and
work in court and would charge only three pesos for every quarrels between individuals was a crime at the common law,
registration. and one of the penalties for this offense when committed by
an attorney was disbarment. Statutes intended to reach the
same evil have been provided in a number of jurisdictions
usually at the instance of the bar itself, and have been upheld
as constitutional. The reason behind statutes of this type is
Yours respectfully, not difficult to discover. The law is a profession and not a
business. The lawyer may not seek or obtain employment by
himself or through others for to do so would be
unprofessional. (State vs. Rossman [1909], 53 Wash., 1; 17
Ann. Cas., 625; People vs. Mac Cabe [1893], 19 L. R. A., 231;
(Sgd.) LUIS TAGORDA 2 R. C. L., 1097.)

Attorney

Notary Public. It becomes our duty to condemn in no uncertain terms the


ugly practice of solicitation of cases by lawyers. It is
destructive of the honor of a great profession. It lowers the
standards of that profession. It works against the confidence
of the community in the integrity of the members of the bar. It
The facts being conceded, it is next in order to write down the results in needless litigation and in incenting to strife
applicable legal provisions. Section 21 of the Code of Civil otherwise peacefully inclined citizens.
Procedure as originally conceived related to disbarments of
members of the bar. In 1919 at the instigation of the Philippine
Bar Association, said codal section was amended by Act No.
2828 by adding at the end thereof the following: "The practice
of soliciting cases at law for the purpose of gain, either The solicitation of employment by an attorney is a ground for
personally or through paid agents or brokers, constitutes disbarment or suspension. That should be distinctly
malpractice." understood.
Giving application of the law and the Canons of Ethics to the Corollarily, this Court assessed treble costs against the
admitted facts, the respondent stands convicted of having petitioners, to "be paid by their counsel.".
solicited cases in defiance of the law and those canons.
Accordingly, the only remaining duty of the court is to fix upon
the action which should here be taken. The provincial fiscal of
Isabela, with whom joined the representative of the Attorney-
General in the oral presentation of the case, suggests that the The herein movants, Attys. Crispin D. Baizas and A. N.
respondent be only reprimanded. We think that our action Bolinas, counsels for the petitioners, while submitting to the
should go further than this if only to reflect our attitude toward judgment on the merits, seek reconsideration of the decision
cases of this character of which unfortunately the in so far as it reflects adversely upon their "professional
respondent's is only one. The commission of offenses of this conduct" and condemns them to pay the treble costs
nature would amply justify permanent elimination from the bar. adjudged against their clients.
But as mitigating, circumstances working in favor of the
respondent there are, first, his intimation that he was unaware
of the impropriety of his acts, second, his youth and
inexperience at the bar, and, third, his promise not to commit
a similar mistake in the future. A modest period of suspension At first blush, the motion for reconsideration presents a
would seem to fit the case of the erring attorney. But it should semblance of merit. After mature deliberation and patient
be distinctly understood that this result is reached in view of reprobing into the records of the case, however, we are of the
the considerations which have influenced the court to the firmer conviction that the protracted litigation, alluded to in the
relatively lenient in this particular instance and should, above-quoted portion of our decision, was designed to cause
therefore, not be taken as indicating that future convictions of delay, and the active participation of the petitioners' counsels
practice of this kind will not be dealt with by disbarment. in this adventure is patent.

In view of all the circumstances of this case, the judgment of After November 15, 1962 when the Court of Appeals rendered
the court is that the respondent Luis B. Tagorda be and is judgment sustaining Damaso Perez' position with respect to
hereby suspended from the practice as an attorney-at-law for the extent of the levy, the subsequent proceedings interposed
the period of one month from April 1, 1929, alternatingly by the petitioner spouses were obviously quixotic
maneuvers expected to be overthrown by the courts but
calculated to delay an execution long overdue.

Street, Johns, Romualdez, and Villa-Real, JJ., concur.

Had the petitioners and their counsels seriously believed that


Johnson, J., reserves his vote.
the levied shares of stock were conjugal property, why did
they not adopt this position from the very start, or, at the
G.R. No. L-22320 July 29, 1968 latest, in CA-G.R. 29962-R, wherein Damaso Perez
challenged the legality of the levy's coverage, in order to end
the litigation with reasonable dispatch? They chose, however,
to attack the execution in a piecemeal fashion, causing the
postponement of the projected execution sale six times. More
MERCEDES RUTH COBB-PEREZ and DAMASO P. PEREZ, than eight years after the finality of the judgment have
petitioners, passed, and the same has yet to be satisfied.

vs.

HON. GREGORIO LANTIN, Judge of the Court of First In a determined effort to prolong the litigation, the Perez
Instance of Manila, spouses, as represented by their counsels, sought the
issuance of preliminary injunctions to restrain the execution of
the final judgment in civil case 39407 from courts which did
RICARDO P. HERMOSO and the CITY SHERIFF OF not have jurisdiction and which would, as expected, initially or
MANILA, respondents. ultimately deny their prayer. For instance, after Damaso Perez
bowed out temporarily from the scene following the rendition
of the aforementioned Court of Appeals decision, his wife,
Mercedez, Ruth Cobb-Perez, intruded into the controversy
and asked for an ex parte writ of preliminary injunction from
Crispin D. Baizas and Associates for petitioners. the Court of First Instance of Rizal in connection with civil
case 7532 which she filed with the said court, knowing fully
Isidro T. Almeda for respondents. well that the basic civil case 39407 was decided by the Court
of First Instance of Manila (Branch VII presided by the
respondent Judge Lantin), which latter court was the proper
forum for any action relative to the execution. Judge Eulogio
Mencias of the Court of First Instance of Rizal, looking to
CASTRO, J.: Acosta vs. Alvendia (L-14598, October 31, 1960), which held
that courts of first instance have no power to restrain acts
outside their territorial jurisdictions, lifted on October 4, 1963
the ex parte writ which he previously issued enjoining the
respondent sheriff from carrying out the execution sale. It is
This is a motion for partial reconsideration of this Court's clear, however, that Mrs. Perez and her counsels, the
decision of May 22, 1968, specifically directed against the movants, knew or ought to have known beforehand that the
following observation therein made: Court of First Instance of Rizal did not have jurisdiction to
issue the writ which Mrs. Perez herself sought, and,
anticipating the recall of the writ improvidently issued, on
September 3, 1963, a month before the said writ was actually
lifted, filed in the basic civil case 39407 an urgent motion to lift
We feel compelled to observe that during the protracted the writ of execution issued on August 15, 1961, alleging as
litigation below, the petitioners resorted to a series of actions justification the conjugal nature of the levied shares of stock
and petitions, at some stages alternatingly, abetted by their and the personal nature of Damaso Perez' judgment debt, the
counsel, for the sole purpose of thwarting the execution of a very same reasons advanced in civil case 7532 which was
simple money judgment which has long become final and then still pending in the Court of First Instance of Rizal.
executory. Some of the actions were filed, only to be Incidentally, Mrs. Perez failed to adduce any evidence in
abandoned or withdrawn. The petitioners and their counsel, support of her aforesaid urgent motion, as in fact neither she
far from viewing courts as sanctuaries for those who seek nor her counsels appeared during the scheduled hearing,
justice, have tried to use them to subvert the very ends of prompting the respondent judge to issue the following order:
justice.
When the urgent motion to recall or lift writ of execution was sought other, and often simultaneous, devices of thwarting
called this morning for hearing, counsel for the movant did not satisfaction of the judgment debt. (Emphasis supplied) .
appear despite the fact that he had been duly notified of the
motion for hearing. In view thereof the court assumes that he
is waiving his right to present evidence in support of his
urgent motion to recall or lift writ of execution. Said urgent
motion is therefore deemed submitted for resolution. And because of this statement, they now counter that the said
cases could not be branded as having been instituted for
delay.

Despite the recall of the aforementioned writ of injunction by


Judge Mencias on a disclaimer of jurisdiction (since the
execution sought to be enjoined was ordered by another The reference we made to civil cases 7532 and 55292 in the
tribunal), Mrs. Perez, now assisted by her husband who had above-quoted statement must not be considered out of
staged a comeback, prayed for the issuance of another context. We said that the petitioners incidentally had already
injunction, this time from Branch XXII of the Court of First availed of the suggested remedy only in the sense that said
Instance of Manila (not the same Branch which issued the civil cases 7532 and 55292 were apparently instituted to
controverted writ of execution), in connection with civil case prove the conjugal nature of the levied shares of stocks in
7532, then still pending in the Court of First Instance of Rizal. question. We used the word incidentally advisedly to show
As most probably anticipated anew by the Perez spouses and that in their incessant search for devices to thwart the
their counsels, Judge Alikpala, presiding judge of Branch XXII, controverted execution, they accidentally stumbled on the
on November 8, 1963 denied the preliminary injunction suggested remedy. But the said civil cases were definitely not
sought, on the ground, among others, that he had no power to the "proper remedy" in so far as they sought the issuance of
interfere by injunction with the judgment or decree of a court writs of preliminary injunction from the Court of First Instance
of concurrent or coordinate jurisdiction. On the very day the of Rizal and the Court of First Instance of Manila (Branch
injunction was denied, Damaso Perez, as if expecting the XXII) where civil cases 7532 and 55292 were filed
reversal from Judge Alikpala, was already prepared with respectively, for the said courts did not have jurisdiction to
another "remedy," as in fact on that day, November 8, 1963, restrain the enforcement of the writ of execution issued by the
he filed in the basic civil case 39407 an "Urgent Motion for Court of First Instance of Manila (Branch VII) under the settled
Reconsideration" of the order of October 19, 1963, which doctrines that Courts are without power to restrain acts
denied his wife's above-mentioned motion to recall the outside of their territorial jurisdiction 4 or interfere with the
controverted writ of execution. judgment or decree of a court of concurrent or coordinate
jurisdiction. 5 However, the recall and the denial of the writs of
preliminary injunction in civil cases 7532 and 55292 did not
amount to the termination or dismissal of the principal action
in each case. Had the Perez spouses desired in earnest to
The foregoing motion, far from seriously seeking the continue with the said cases they could have done so. But the
reconsideration of the order of October 19, 1963, which in the fact is that Mrs. Perez practically abandoned civil case 7532
first place Damaso Perez could not legally do for he was not when she instituted the above mentioned urgent motion to
even a party to the denied "Urgent Motion to Recall Writ of recall writ of execution in the basic civil case 39407, anchored
Execution" (filed by his wife alone), was merely an offer to on the same grounds which she advanced in the former case,
replace the levied stocks with supposed cash dividends due until the said civil case 7532 was dismissed on November 9,
to the Perez spouses as stockholders in the Republic Bank.1 1963, upon her own motion. Anent civil case 55292, the Perez
As a matter of fact, when the motion was set for hearing on spouses virtually deserted the same when they instituted the
December 21, 1963, the counsels for Damaso Perez herein petition for certiorari with urgent writ of preliminary
promised to produce the said cash dividends within five days, injunction based on the same grounds proffered in the said
but the promise was never fulfilled.2 Consequently, the civil case — until the latter was also dismissed on March 20,
respondent Judge on January 4, 1964, denied the said motion 1964, with the consent of the parties because of the pendency
for reconsideration. then of the aforesaid petition for certiorari.

The above exposition of the circumstances relative to the The movants further contend that "If there was delay, it was
protracted litigation clearly negates the avowal of the movants because petitioners' counsel happened to be more
that "in none of the various incidents in the case at bar has assertive ... a quality of the lawyers (which) is not to be
any particular counsel of petitioners acted with deliberate condemned."
aforethought to delay the enforcement of the judgment in Civil
Case No. 39407." From the chronology of antecedent events,
the fact becomes inescapable that the Perez spouses,
coached by their counsels, had sallied forth on a strategem of
"remedies" projected to foil the lawful execution of a simple A counsel's assertiveness in espousing with candour and
money judgment. It is equally obvious that they foreshadowed honesty his client's cause must be encouraged and is to be
their own reversals in the "remedies" they ventured to adopt, commended; what we do not and cannot countenance is a
such that even before, one remedy had been exhausted, they lawyer's insistence despite the patent futility of his client's
interposed another until the case reached this Court for the position, as in the case at bar.
second time. 3 Meanwhile, justice was delayed, and more
than one member of this Court are persuaded that justice was
practically waylaid.

It is the duty of a counsel to advise his client, ordinarily a


layman to the intricacies and vagaries of the law, on the merit
or lack of merit of his case. If he finds that his client's cause is
The movants also contend that even this Court sanctions the defenseless, then it is his bounden duty to advise the latter to
aforesaid civil cases 7532 and 55292 as the "proper remedy" acquiesce and submit, rather than traverse the
when we said that. incontrovertible. A lawyer must resist the whims and caprices
of his client, and temper his client's propensity to litigate. A
lawyer's oath to uphold the cause of justice is superior to his
duty to his client; its primacy is indisputable.

In reality, what they attacked is not the writ of execution, the


validity and regularity of which are unchallenged, but the levy
made by the respondent Sheriff. In this regard, the remedy is
not the recall of the writ, but an independent action to enjoin The movants finally state that the "Petitioners have several
the Sheriff from proceeding with the projected sale, in which counsel in this case but the participation of each counsel was
action the conjugal nature of the levied stocks should be rather limited implying that the decision of this Court ordering
established as a basis for the subsequent issuance of a that "treble costs are assessed against the petitioners, which
permanent injunction, in the event of a successful claim. shall be paid by their counsel" is not clear. The word "counsel"
Incidentally, in the course of the protracted litigation, the may be either singular or plural in construction, so that when
petitioners had already availed of this remedy in civil cases we said "counsel" we meant the counsels on record of the
7532 and 55292, only to abandon it as they incessantly petitioners who were responsible for the inordinate delay in
the execution of the final judgment in the basic civil case
39407, after the Court of Appeals had rendered its 2. That under false pretenses Atty. Fojas assured us
aforementioned decision of November 15, 1962. And it is on that everything was in order. That he had already answered
record that the movants are such counsels. Atty. Bolinas, the complaint so that in spite of the incessant demand for him
upon his own admission, "entered his appearance in the case to give us a copy he continued to deny same to us. Only to
at bar about the time the Court of First Instance of Manila disclose later that he never answered it after all because
dismissed the petitioners' Petition for Relief in Civil Case No. according to him he was a very busy man. Please refer to
39407," or about August 3, 1961 and even prior to the Court Court of Appeals decision dated August 17, 1993.
of Appeals decision above-mentioned. Atty. Baizas claims that
he "became petitioners' counsel only in October, 1963 when
he filed, with Atty. A.N. Bolinao, Jr. Civil Case No. 55292
before the Court of First Instance of Manila presided by the
Hon. Judge Alikpala although it appears on record that the 3. That because of Atty. Amado Foja's neglect and
urgent motion to recall writ of execution filed by Mrs. Perez in malpractice of law we lost the Judge Capulong case and our
the basic civil case 39407 on September 3, 1963, was over appeal to the Court of Appeals. So that it is only proper that
the signature of one Ruby Zaida of the law firm of "Crispin Atty. Fojas be disciplined and disbarred in the practice of his
Baizas & Associates" as counsel for Mrs. Perez. It is to be profession.
recalled that the said urgent motion is the same motion
discussed above, which, curiously enough, antedated by at
least one month the lifting of the writ of preliminary injunction
issued in civil case 7532.
In his Comment, the respondent admits his "mistake" in failing
to file the complainants' answer in Civil Case No. 3526-V-91,
but he alleges that it was cured by his filing of a motion for
reconsideration, which was unfortunately denied by the court.
ACCORDINGLY, the motion for partial reconsideration is He asserts that Civil Case No. 3526-V-91 was a "losing
denied. Our decision of May 22, 1968 is hereby modified in cause" for the complainants because it was based on the
the sense that Attys. Crispin D. Baizas and A.N. Bolinao, Jr. expulsion of the plaintiff therein from the Far Eastern
shall pay jointly and severally the treble costs assessed University Faculty Association (FEUFA) which was declared
against the petitioners. unlawful in the final decision in NCR-OD-M-90-10-050. Thus,
"[t]he unfavorable judgment in the Regional Trial Court is not
imputable to [his] mistake but rather imputable to the merits of
the case, i.e., the decision in the Expulsion case wherein
defendants (complainants herein) illegally removed from the
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, and union (FEUFA) membership Mr. Paulino Salvador. . . ." He
Angeles, JJ., concur. further claims that the complainants filed this case to harass
him because he refused to share his attorney's fees in the
main labor case he had handled for them. The respondent
Concepcion C.J., voted for denial of the motion for
then prays for the dismissal of this complaint for utter lack of
reconsideration.
merit, since his failure to file the answer was cured and, even
granting for the sake of argument that such failure amounted
Fernando, J., took no part. to negligence, it cannot warrant his disbarment or suspension
from the practice of the law profession.

A.C. No. 4103 September 7, 1995

The complainants filed a Reply to the respondent's Comment.

VERONICA S. SANTIAGO, BENJAMIN Q. HONTIVEROS,


MR. SOCORRO F. MANAS, and TRINIDAD NORDISTA,
complainants,
Issues having been joined, we required the parties to inform
vs. us whether they were willing to submit this case for decision
on the basis of the pleadings they have filed. In their separate
compliance, both manifested in the affirmative.
ATTY. AMADO R. FOJAS, respondent.

The facts in this case are not disputed.

DAVIDE JR., J.:

Complainants Veronica Santiago, Benjamin Hontiveros, Ma.


Socorro Manas, and Trinidad Nordista were the President,
Vice-President, Treasurer, and Auditor, respectively, of the
In their letter of 8 September 1993, the complainants, former FEUFA. They allegedly expelled from the union Paulino
clients of the respondent, pray that the latter be disbarred for Salvador. The latter then commenced with the Department of
"malpractice, neglect and other offenses which may be Labor and Employment (DOLE) a complaint (NCR-OD-M-90-
discovered during the actual investigation of this complaint." 10-050) to declare illegal his expulsion from the union.
They attached thereto an Affidavit of Merit wherein they
specifically allege:

In his resolution of 22 November 1990, Med-Arbiter Tomas


Falconitin declared illegal Salvador's expulsion and directed
1. That we are Defendants-Appellates [sic] in the the union and all its officers to reinstate Salvador's name in
Court of Appeals Case No. CA-G.N. CV No. 38153 of which to the roll of union members with all the rights and privileges
our surprise lost unnecessarily the aforesaid Petition [sic]. A appurtenant thereto. This resolution was affirmed in toto by
close perusal of the case reveals the serious misconduct of the Secretary of Labor and Employment.
our attorney on record, Atty. Amado Fojas tantamount to
malpractice and negligence in the performance of his duty
obligation to us, to defend us in the aforesaid case. That the
said attorney without informing us the reason why and riding
high on the trust and confidence we repose on him either Subsequently, Paulino Salvador filed with the Regional Trial
abandoned, failed to act accordingly, or seriously neglected to Court (RTC) of Valenzuela, Metro Manila, Branch 172, a
answer the civil complaint against us in the sala of Judge complaint against the complainants herein for actual, moral,
Teresita Capulong Case No. 3526-V-91 Val. Metro Manila so and exemplary damages and attorney's fees, under Articles
that we were deduced [sic] in default. 19, 20, and 21 of the Civil Code. The case was docketed as
Civil Case No. 3526-V-91.
As the complainants' counsel, the respondent filed a motion to withheld from his client, save by the rules of law, legally
dismiss the said case on grounds of (1) res judicata by virtue applied.5 This simply means that his client is entitled to the
of the final decision of the Med-Arbiter in NCR-OD-M-90-10- benefit of any and every remedy and defense that is
050 and (2) lack of jurisdiction, since what was involved was authorized by the law of the land and he may expect his
an intra-union issue cognizable by the DOLE. Later, he filed a lawyer to assert every such remedy or defense.6 If much is
supplemental motion to dismiss. demanded from an attorney, it is because the entrusted
privilege to practice law carries with it the correlative duties
not only to the client but also to the court, to the bar, and to
the public. A lawyer who performs his duty with diligence and
candor not only protects the interest of his client; he also
The trial court, per Judge Teresita Dizon-Capulong, granted serves the ends of justice, does honor to the bar, and helps
the motion and ordered the dismissal of the case. Upon maintain the respect of the community to the legal profession.
Salvador's motion for reconsideration, however, it 7
reconsidered the order of dismissal, reinstated the case, and
required the complainants herein to file their answer within a
nonextendible period of fifteen days from notice.

The respondent admits that it was his duty to file an answer in


Civil Case No. 3526-V-91. He justifies his failure to do so in
this wise:
Instead of filing an answer, the respondent filed a motion for
reconsideration and dismissal of the case. This motion having
been denied, the respondent filed with this Court a petition for
certiorari, which was later referred to the Court of Appeals and
docketed therein as CA-G.R. SP No. 25834. [I]n his overzealousness to question the Denial Order of the
trial court, 8 [he] instead, thru honest mistake and excusable
neglect, filed a PETITION FOR CERTIORARI with the
Honorable Court, docketed as G.R. No. 100983. . . .

Although that petition and his subsequent motion for


reconsideration were both denied, the respondent still did not
file the complainants' answer in Civil Case No. 3526-V-91.
Hence, upon plaintiff Salvador's motion, the complainants And, when the Court of Appeals, to which G.R. No. 100983
were declared in default, and Salvador was authorized to was referred, dismissed the petition, he again "inadvertently"
present his evidence ex-parte. failed to file an answer "[d]ue to honest mistake and because
of his overzealousness as stated earlier. . . . "

The respondent then filed a motion to set aside the order of


default and to stop the ex-parte reception of evidence before In their Reply, the complainants allege that his failure to file an
the Clerk of Court, but to no avail. answer was not an honest mistake but was "deliberate,
malicious and calculated to place them on the legal
disadvantage, to their damage and prejudice" for, as admitted
by him in his motion to set aside the order of default, his
failure to do so was "due to volume and pressure of legal
Thereafter, the trial court rendered a decision ordering the work."9 In short, the complainants want to impress upon this
complainants herein to pay, jointly and severally, plaintiff Court that the respondent has given inconsistent reasons to
Salvador the amounts of P200,000.00 as moral damages; justify his failure to file an answer.
P50,000.00 as exemplary damages or corrective damages;
and P65,000.00 as attorney's fees; plus cost of suit.

We agree with the complainants. In his motion for


reconsideration of the default order, the respondent explained
The complainants, still assisted by the respondent, elevated his non-filing of the required answer by impliedly invoking
the case to the Court of Appeals, which, however, affirmed in forgetfulness occasioned by a large volume and pressure of
toto the decision of the trial court. legal work, while in his Comment in this case he attributes it to
honest mistake and excusable neglect due to his
overzealousness to question the denial order of the trial court.

The respondent asserts that he was about to appeal the said


decision to this Court, but his services as counsel for the
complainants and for the union were illegally and unilaterally Certainly, "overzealousness" on the one hand and "volume
terminated by complainant Veronica Santiago. and pressure of legal work" on the other are two distinct and
separate causes or grounds. The first presupposes the
respondent's full and continuing awareness of his duty to file
an answer which, nevertheless, he subordinated to his
conviction that the trial court had committed a reversible error
The core issue that presents itself is whether the respondent or grave abuse of discretion in issuing an order reconsidering
committed culpable negligence, as would warrant disciplinary its previous order of dismissal of Salvador's complaint and in
action, in failing to file for the complainants an answer in Civil denying the motion to reconsider the said order. The second
Case No. 3526-V-91 for which reason the latter were declared ground is purely based on forgetfulness because of his other
in default and judgment was rendered against them on the commitments.
basis of the plaintiff's evidence, which was received ex-parte.

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


It is axiomatic that no lawyer is obliged to act either as adviser that the respondent did not comply with his duty to file an
or advocate for every person who may wish to become his answer in Civil Case No. 3526-V-91. His lack of diligence was
client. He has the right to decline employment,1 subject, compounded by his erroneous belief that the trial court
however, to Canon 14 of the Code of Professional committed such error or grave abuse of discretion and by his
Responsibility. Once he agrees to take up the cause of a continued refusal to file an answer even after he received the
client, the lawyer owes fidelity to such cause and must always Court of Appeals' decision in the certiorari case. There is no
be mindful of the trust and confidence reposed in him.2 He showing whatsoever that he further assailed the said decision
must serve the client with competence and diligence,3 and before this Court in a petition for review under Rule 45 of the
champion the latter's cause with wholehearted fidelity, care, Rules of Court to prove his claim of overzealousness to
and devotion.4 Elsewise stated, he owes entire devotion to challenge the trial court's order. Neither was it shown that he
the interest of the client, warm zeal in the maintenance and alleged in his motion to lift the order of default that the
defense of his client's rights, and the exertion of his utmost complainants had a meritorious defense. 10 And, in his
learning and ability to the end that nothing be taken or appeal from the judgment by default, he did not even raise as
one of the errors of the trial court either the impropriety of the vs.
order of default or the court's grave abuse of discretion in
denying his motion to lift that order.
ROMEO A. YOUNG, OFFICER IN CHARGE, BUREAU OF
LABOR RELATIONS, AND BATANGAS-I ELECTRIC
COOPERATIVE, INC., respondents.

Pressure and large volume of legal work provide no excuse


for the respondent's inability to exercise due diligence in the
performance of his duty to file an answer. Every case a lawyer
G.R. No. 70880 November 9, 1988
accepts deserves his full attention, diligence, skill, and
competence, regardless of its importance and whether he
accepts it for a fee or for free.

BULACAN II ELECTRIC COOPERATIVE, INC., petitioner,

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


the Code of Professional Responsibility which requires him to
serve his clients, the complainants herein, with diligence and,
HON. ELISEO A. PEÑAFLOR, THE CHIEF MED-ARBITER
more specifically, Rule 18.03 thereof which provides: "A
OF THE REGIONAL ARBITRATION OFFICE, BRANCH NO.
lawyer shall not neglect a legal matter entrusted to him, and
III, SAN FERNANDO, PAMPANGA, HON. CRESENCIANO B.
his negligence in connection therewith shall render him liable."
TRAJANO, THE DIRECTOR, BUREAU OF LABOR
RELATIONS, MINISTRY OF LABOR AND EMPLOYMENT,
MANILA, AND FEDERATION OF FREE WORKERS (BECO II
COOP., INC., CHAPTER), respondents.
The respondent's negligence is not excused by his claim that
Civil Case No. 3526-V-91 was in fact a "losing cause" for the
complainants since the claims therein for damages were
based on the final decision of the Med-Arbiter declaring the
G.R. No. 74560 November 9, 1988
complainants' act of expelling Salvador from the union to be
illegal. This claim is a mere afterthought which hardly
persuades us. If indeed the respondent was so convinced of
the futility of any defense therein, he should have seasonably
informed the complainants thereof. Rule 15.05, Canon 15 of
the Code of Professional Responsibility expressly provides: ALBAY ELECTRIC COOPERATIVE I, petitioner,

vs.

A lawyer, when advising his client, shall give a candid and CRESENCIANO B. TRAJANO, DIRECTOR, BUREAU OF
honest opinion on the merits and probable results of the LABOR RELATIONS AND FFW ALECO I CHAPTER,
client's case, neither overstating nor understanding the respondents.
prospects of the case.

Pedro N. Belmi for petitioner in G.R. No. 62386.


Then too, if he were unconvinced of any defense, we are
unable to understand why he took all the trouble of filing a
motion to dismiss on the grounds of res judicata and lack of
jurisdiction and of questioning the adverse ruling thereon
initially with this Court and then with the Court of Appeals, Estebal & Associates Law firm for petitioner in G.R. No.
unless, of course, he meant all of these to simply delay the 70880.
disposition of the civil case. Finally, the complainants were not
entirely without any valid or justifiable defense. They could
prove that the plaintiff was not entitled to all the damages
sought by him or that if he were so, they could ask for a
reduction of the amounts thereof. Juan B. Cabredo IV for petitioner in G.R. No. 74560.

We do not therefore hesitate to rule that the respondent is not The Solicitor General for public respondent.
free from any blame for the sad fate of the complainants. He
is liable for inexcusable negligence.

Ricardo T. Diaz for private respondent in G.R. No. 62386.

WHEREFORE, ATTY. AMADO R. FOJAS is hereby


REPRIMANDED and ADMONISHED to be, henceforth, more
careful in the performance of his duty to his clients.
Ireneo P. Bernardo for respondent FFW in G. R. No. 7 0880.

SO ORDERED.

MEDIALDEA, J.:

G.R. No. 62386 November 9, 1988


This refers to three (3) separate petitions for certiorari under
Rule 65 of the Rules of Court, namely: (1) G.R. No. 62386,
entitled "BATANGAS-I ELECTRIC COOPERATIVE LABOR
UNION, Petitioner, versus ROMEO A. YOUNG, OFFICER IN
CHARGE, BUREAU OF LABOR RELATIONS, AND
BATANGAS-I ELECTRIC COOPERATIVE LABOR UNION,
BATANGAS-I ELECTRIC COOPERATIVE INC.,
petitioner,
Respondents;" (2) G.R. No. 70880, entitled "BULACAN II
ELECTRIC COOPERATIVE, INCORPORATED, Petitioner, free electrical services which are not available to non-
versus HON. ELISEO A. PENAFLOR, The Chief Med-Arbiter members is a clear indication that these employees are co-
of the Regional Arbitration Office, Branch IN, San Fernando, owners of the cooperative. Petitioner must be reminded that
Pampanga, et al., Respondents, and (3) G.R. No. 74560, benefits from cooperative accruing to co-owners may not
entitled "ALBAY ELECTRIC COOPERATIVE I, Petitioner, come only in the form of monetary benefits but also in the
versus CRESENCIO B. TRAJANO, DIRECTOR, BUREAU OF form of services.
LABOR RELATIONS AND FFW ALECO I CHAPTER,
Respondents." The same issue is involved in these petitions.
The antecedent facts are as follows:

Petitioner also advanced the theory that if self-employed


persons are allowed to form a labor organization under Article
244, Presidential Decree 442, as amended, then it is with
G.R. No. 62386 more reason that employees of the cooperative should also
be allowed to form their union. Article 244, PD 442 as
amended, provides:

On June 1, 1981, the Batangas-I Electric Cooperative Union


(hereinafter referred to as UNION) filed with the Regional
Office No. IV-A, Ministry of Labor and Employment (now ... Ambulant, intermittent and itinerant workers, self employed
Department of Labor and Employment), at San Pablo City, a people, rural workers and those without any definite
petition for certification election. The UNION alleged, inter employers may form a labor organization for their mutual aid
alia, that it is a legitimate labor organization; that the and protection.
Batangas-I Electric Cooperative Inc. BATELEC has 150
employees, more or less; that the UNION desires to represent
the regular rank and file employees of BATELEC for purposes
of collective bargaining; that there is no other union existing in
BATELEC except the UNION; that there is no certified It must be noted that although the self- employed people are
collective bargaining agreement in the said cooperative; and allowed by the Labor Code to form a labor organization, the
that there has been no certification election conducted in purpose of such organization is for mutual aid and protection
BATELEC during the last twelve (12) months preceding the but not for the purpose of collective bargaining.
filing of the petition. On August 20, 1981, Med-Arbiter Paterno
D. Adap issued a resolution (pp. 21-23, Rollo) which gave due
course to the petition and ordered the holding of a certification
election. On August 31, 1981, BATELEC filed a motion for
reconsideration (pp. 24-30, Rollo) of the Med-Arbiter's Finally, while Article 244, PD 442, as amended, now allows
resolution contending, inter alia, that there was a legal workers of non- profit institutions to form labor organizations,
impediment to the holding of a certification election nevertheless, the same provisions can not extend to a
considering that the formation of a union in a cooperative is cooperative considering the absence of employer-employee
illegal and invalid, the officers and members of the union relationship therein. (p. 39-40, Rollo).
being the owners thereof. This motion was treated as an
appeal from the Med-Arbiter's resolution of August 20, 1981.
On November 27, 1981, a resolution (pp. 38-40, Rollo) was
issued by Romeo A. Young, Officer in Charge, Bureau of
Labor Relations, granting the appeal and revoking the Med- After its motion for reconsideration was denied, the UNION
Arbiter's order mandating the holding of a certification filed the instant petition contending that the respondent
election. This Resolution, inter alia, stated: Director of the Bureau of Labor Relations committed a
palpable error of law and/or grave abuse of discretion
amounting to lack of and/or in excess of jurisdiction in finding
and concluding that employees of an electric cooperative who
are at the same time members of the cooperative are not
The sole issue that confronts Us in the instant case is whether allowed to form or join a labor union in the electric cooperative
or not employees of an electric cooperative who are at the for purposes of collective bargaining, and in revoking and
same time members of the cooperative, may be allowed to setting aside the resolution dated August 20, 1981 of the Med-
form or join a labor union in the electric cooperative for Arbiter directing the holding of a certification election among
purposes of collective bargaining. the rank and file employees of BATELEC.

We rule in the negative. G.R. No. 70880

A cursory analysis of Section 35, Presidential Decree 269, as On September 1, 1982, the Federation of Free Workers
amended, readily shows that employees of an electric (FFW) filed with the Regional Office IN, Ministry of Labor and
cooperative who are themselves members of the cooperative Employment (now Department of Labor and Employment), at
have no right to form or join a labor organization for purposes San Fernando, Pampanga, a petition for certification election.
of collective bargaining. The petition alleged, inter alia, that the FFW is a legitimate
labor organization; that the Bulacan II Electric Cooperative
Inc. BECO II) is engaged in the service and supply of electric
current and, therefore, an employer under the provisions of
the Labor Code; that the FFW seeks to be certified as the sole
In the first instance, a cooperative is established primarily for and exclusive collective bargaining representative of the
the mutual aid and protection of the members thereof. It was regular rank and file employees and workers of BECO II for
never intended to operate like an ordinary company or purposes of collective bargaining; that there are more or less
corporation. A cooperative is a non-profit organization, so that 140 regular rank and file employees and workers of BECO II;
if ever there are gains, income or benefits derived therefrom, that there is no other union existing in BECO II except the
the same are equally divided among its members. For all legal FFW and that there is no certified collective bargaining
intents and purposes, therefore, members of a cooperative agreement in said establishment; and that there has been no
are part-owners thereof. certification election conducted in BECO II during the last
twelve (12) months preceding the filing of the petition.

In the instant case, petitioner strongly contended that they are


not co-owners of the cooperative because the only benefits On September 24, 1982, BECO II filed its answer (pp. 17-18,
that they derive therefrom are in the form of electrical services Rollo) contending that the petition does not comply with the
and that they never exercise the attributes of ownership 30% jurisdictional requirement considering that it has a total of
recognized under Article 428 of the New Civil Code. We do 143 employees, 24 of whom are members of the cooperative,
not concur. The fact that these employees/members enjoy 28 are managerial employees, 3 are confidential employees,
23 are contractual employees and 28 are casual employees,
thereby leaving only 37 employees belonging to the rank and
file; and that to grant the petition would be violative of Article
Considering satisfaction of the 30% subscriptional
244 (now Article 243) of the Labor Code and Section 35 of PD
requirement coupled with the findings that the workers who
269.
aie not members of the cooperative are eligible to uinoii
membership, we have no other-alternative but to affirm the
Order of the MedAibitei to hold a certification election. ... (p.
43, Rollo).
Later, the FFW filed its position paper contending that it has
complied substantially with the 30% jurisdictional requirement
with the 73 signatures it submitted and that there is nothing in
the law that prohibits or restricts cooperative members from
BECO II filed the instant petition contending that the public
joining labor organizations.
respondents acted with grave abuse of discretion in ruling that
under Article 244 (now Article 243) of the Labor Code,
members and part owners of electric cooperatives are eligible
to form, join or assist labor organizations for purposes of
collective bargaining.
On the other hand, BECO II, through its position paper dated
October 4, 1982 (pp. 19-26, Rollo), contended, inter alia, that
it is not among those covered by Article 244 of the Labor
Code, as amended by BP 70, as it is not a commercial,
industrial or agricultural enterprise and neither is it a religious,
On May 29, 1985, a temporary restraining order was issued
charitable, medical or educational institution; that since
by this Court enjoiililig the respondents from enforcing the
electric cooperatives are subject to the supervision and
questioned orders.
control of the National Electrification Administration pursuant
to PD 269, as amended by PD 1645, BECO II in effect is a
government institution; and that there is no representation
issue as there is no other labor organization involved except
the FFW.
G.R. No. 74560

On October 14, 1982, Eliseo A. Peñaflor, Chief Med-Arbiter of


On October 1, 1985, the Federation of Free Workers (FFW)
the Regional Office III, issued an order (pp. 27-28, Rollo)
ALECO I Chapter filed a petition for certification election,
directing the holding of a certification election among the rank
alleging, inter alia, that it is a legitimate labor onganization"
and file employees and workers of BECO II.
that the Albay Electric Cooperative I ALECO 1) is an electric
cooperative servicing electricity in the Province of Albay- that
ALECO I has 160 employees, more or less, majority of whom
are FFW members; that there is no other union existing nor a
collective bargaining agreement existing in the,cooperative"
BECO II appealed from this Order to the Bureau of Labor
that no certification election has been held for the past twelve
Relations. On January 16,1985, Director Cresenciano Trajano
(12) months prior to the filing of the petition.
of the said bureau rendered a decision (pp. 42-43, Rollo)
dismissing the appeal and affirming the questioned order. This
decision, inter alia, stated:

On November 29, 1985, the FFW submitted 63 signatures in


support of the petition for certification election. On the same
date, counsel for ALECO I employees for a "NO-UNION
xxx xxx xxx
STAND" intervened and submitted a copy of the ALECO I
1985 budget showing that the said cooperative has a total of
141 rank and file employees.On December 11, 1985, the FFW
filed its position paper contending, inter alia, that the ALECO I
is covered by the Labor Code: that it has a right to organize
... We dismiss the Appeal.
and be represented by a union; that there is no legal
impediment to the holding of a certification election
considering that out of the 141 rank and file employees, 63
supported the petition.
Our resolution in the case of Batangas I Electric Cooperative
Labor Union dated 27 November 1981 is not applicable in the
case at bar as the facts therein are different. There, the
petition for certification election was supported by workers
On December 18, 1985, ALECO I filed its position paper
who are members of the cooperative. No employer-employee
seeking the dismissal of the petition on the allegation that
relationship exists between the members and the cooperative
FFW failed to comply with 30% requirement considering that
firm. In the case at bai respondent did admit the existence of
112 rank and file employees have manifested in a
employer-employee relationship with workers of the
"declaration" they that do not desire to be represented by any
cooperative who are not cooperative members when it alleced
union.
that of the total 143 employees only 24 are cooperative
members. Thus, even if we deduct the 24 cooperative
members from the numbelof workers supporting the petition,
there still remain 49 signatures which aie more than enough
compliance with the 30% requirement.
On December 24,1985, intervenor ALECO I employees for a
"NO-UNION STAND") filed its position paper (pp. 15- 17,
Rollo) seeking likewise the dismissal of the petition, alleging
that the 30% written consent requirement has not been
complied with. It alleged that of the 63 signatories to the
Going to Presidential Decree No. 269, there is no showing
petition, 51 are not qualified to join the union as they are
that that such prohibits formation of unions between and
members-consumers of the ALECO I and are considered joint
among employees who are members of the cooperative.
owners of the cooperative pursuant to PD 269, and Art. II Sec.
Rather, Section 35 of PD 269 shows that the prohibition
I of the revised by laws of ALECO I.
against formation of a labor organization for purposes of
collective bar-dining extends to employees of an electric
cooperative who ale themselves members of the cooperative.

FFW in its reply (pp. 18-20, Rollo), argued that the 51


disputed signatories to the petition are regular rank and file
employees and workers of ALECO I and are entitled to
Finally, the fact that tlie petition foi cel tificatioll election was
selforganization under Article 244 (now Article 243) of the
filed already gives 1ise to representation issue, irrespective of
Labor Code.
whetheronly one union is involved.
SO ORDERED (pp. 28-29, Rollo).

On February 26, 1986, the Med-Arbiter, finding that there was


compliance with the 30% subscription requirement, issued an
Order (pp. 21-25, Rollo) calling for a certification election.
Hence, ALECO I filed the instant petition contending that the
ALECO I appealed from this order to the Bureau of Labor
public respondent erred in holding that the FFW ALECO I
Relations.
CHAPTER whose members are members/part owners of the
cooperative are eligible to join a labor organization for
collective bargaining.

In the meantime, on April 25, 1986, the Association of


Democratic Labor Organization ADLO moved to intervene in
the petition claiming that it has a legal interest to protect.
On June 6, 1986, a temporary restraining order was issued by
this Court enjoining the respondents from enforcing the
questioned decision.

On May 15, 1986, Cresenciano B. Trajano, Director of the


Bureau of Labor Relations, rendered a decision (pp. 27-29,
Rollo) dismissing ALECO Is appeal for lack of merit, claiming
The Solicitor General who was earlier required to give his
that there was a "clear proof of compliance with the 30%
comment, filed on June 11, 1986, a manifestation and motion
subscription requirement, coupled with the finding that the
to be excused from filing said comment, which was later
subscribers to the petition who are members/owners of the
granted by this Court. In the said manifestation, the Solicitor
respondent cooperative can validly be eligible for union
General stated:
membership." This decision, inter alia, stated:

xxx xxx xxx


The sole issue now for resolution is whether or not the
petitioners who are members/owners of the cooperative are
eligible to join a labor organization for the purpose of
collective bargaining.
2. The issue presented in tlie petition is whether
private respondents most of whom aie members of petitioner
Albay Electric Cooperative I may form or joili a labor union
within said cooperative. The same issue was raised in BLR
We find for petitioner.
Case No. A-0265-81, elevated to this Honorable Court as
G.R. No. 62386, entitled "Batangas Electric Cooperative
Labor Union vs. BLR Officer in Charge Romeo A. Young, et.
al." In that case respondent BLR Officer-in-Chairge Romeo
Young ruled that employees who aie at the same time
While it may be true that the subscribers to the petition are in
members of an electric cooperative are not entitled to form ol
themselves members/owners of the cooperative,
join a labor union. This Office in its comment sustained the
nevertheless, as we have often ruled, that alone does not
decision of BLR OIC Romeo Young, as follows:
militate against their exercise of the right of self-organization.
ln the present petition, they are not acting in the capacity of
part-owners/members but as mere employees of the
cooperative. As such, they do not have direct control and
management of the affairs and operation of the cooperative.
xxx xxx xxx
We thus see no conflict of interest between the organization of
the employees into a union and their being members of the
cooperative.

Petitioner claims that the members of the cooperative may


form or join a labor union within the cooperative for the
purpose of collective bargaining because they fall within the
Moreover, the existence of employer- employee relationship
ambit of Art. 244 of the Labor Code, as amended by BP 70, as
with the workers of the cooperative was not disputed by
follows;
respondent. Like all other workers, the petitioners are entitled
to the exercise of the right to self organization and collective
bargaining as guaranteed by the Constitution. Surely, it is not
the intention of Presidential Decree No. 269 to discourage
unionism of employees. The encouragement of the right to
Coverage and employees right to self-organization. — All
self organization is expected to promote industrial peace
persons employed in commercial, industrial and agricultural
through the promotion of the workers' moral, social and
elitelprises aild in religious, charitable, medical or educational
economic well-being.
institutions whether operating for profit oi not, shall have the
iiht to self-organization and to form, join or assist labor
organization of their own choosin folthe purpose of collective
bargaining. ...
There being clear proof of compliance with the 30%
subscription requirement, coupled with the finding that the
subscribers to the petition who are members/owners of the
respondent cooperative can validly be eligible for union
It is submitted that this provision does not apply to the
membership, we rule to affirm the Order of the Med-Arbiter.
members of the petitioner- union since they are co-owners of
the cooperative. The word 'employed' within the meaning of
the above-cited provisions, eliminates members of
cooperatives who are co-owners of the corporation. Said term
means persons strictly under hire and without any
WHEREFORE, premises considered, the instant appeal is
involvement in the ownership of the firm. This construction is
hereby denied for lack of merit and the Order of the
buttressed by the qualification that the labor union formed was
MedAlbiter dated 26 February 1986 is affirmed with the
for the purpose of collective bargaining. The duty to bargain
modification that the Association of Democratic Labor
exists only between employer and its employees. An
Organizations ADLO shall be included as a contending party
employer has no duty to bargain with its cooperatives of the
in the certification election. Let the records of the case be
corporation.
immediately forwarded to the office of origin for
implementation of this Decision.

xxx xxx xxx


At this point, it may be emphasized that the exclusion from the An employee therefore of such a cooperative who is a
right to self organization is limited only to membersowners of member and co-owner thereof cannot invoke the right to
the electric cooperative. Employees who are not members of collective bargaining for certainly an owner cannot bargain
the cooperative are not prohibited to form, join or assist labor with himself or his co-owners. In the opinion of August 14,
unions because they are not co-owners. However, as already 1981 of the Solicitor General he correctly opined that
discussed, members of petitioner union are necessarily co- employees of cooperatives who are themselves members of
owners of the electric cooperative. Therefore, being co- the cooperative have no right to form orjoin labor
owners of the electric cooperative, members of petitioner organizations for purposes of collective bargaining for being
union are not entitled to the right to self- organization within themselves co-owners of the cooperative.
the electric cooperative.

However, in so far as it involves cooperatives with employees


4. Assuming a position contrary to that taken by BLR OIC who are not members or co-owners thereof, certainly such
Romeo Young in the above case, public respondent BLR employees are entitled to exercise the rights of all workers to
Director Cresenciano B. Trajano in this case ruled that organization, collective bargaining, negotiations and others as
employees most of whom are members of the electric are enshrined in the Constitution and existing laws of the
cooperative may form or join a labor organization in said country.
cooperative.

In the light of the above-stated pronouncement, the assailed


5. For this Office, therefore, to sustain the decision of resolution dated November 27, 1981 of Romeo A. Young,
respondent BLR Director Cresenciano B. Trajano in this case, Officer-in-Charge, Bureau of Labor Relations, in G.R. No.
would be to assume a position directly opposite and in conflict 62386, revoking the Med-Arbiter's order calling for a
with that it had previously taken in G.R. No. 62386, now certification election must be upheld. The records in this case
pending before this Honorable Court (pp. 47-50, Rollo). do not show that minus the rank and file employees (also
members of the respondent BATELEC) who supported the
petition, there was still a sufficient number to constitute 30%
of the bargaining unit as a jurisdictional requirement. On the
contrary, there is sufficient evidence showing that all those
The common issue raised in these three (3) instant petitions is who supported the petition were such members. Petitioner
whether or not employees of electric cooperatives are UNION admitted in its petition that its officers and members
qualified to form or join labor organizations for purposes of are also membersconsumers of the cooperative (p. 6, Rollo).
collective bargaining. Such being the case, the employees belonging to petitioner
UNION are not qualified to form a labor organization and
bargain collectively.

Eligibility to form, join or assist labor organizations for


purposes of collective bargaining is governed by Article 243
(formerly Article 244) of the Labor Code, as amended, which The records in G.R. No. 70880 show that the petitioner BECO
provides: II has 143 employees and that 73 employees of the petitioner
supported the petition for certification election. No clear
evidence was adduced by petitioner to prove that 28 of its
employees are managerial employees. However, 24
employees are members of the cooperative. Thus, even if the
Art. 243. Coverage and employees' right to self-organization. 24 cooperative members, assuming, in gratia arguinenti that
— All persons employed in commercial, industrial and all of them supported the petition, are to be deducted from the
agricultural enterprises and in religious, charitable, medical, or said 73 employees, there still remain forty-nine (49), a
educational institutions whether operating for profit or not, sufficient compliance with the 30% jurisdictional requirement
shall have the right to selforganization and to form, join, or provided in the old Article 258 of the Labor Code, the law then
assist labor organizations of their own choosing for purposes prevailing.
of collective bargaining. Ambulant, intermittent and itinerant
workers, self-employed people, rural workers and those
without any definite employers may form labor organizations
for their mutual aid and protection.
In sustaining the order of the Med-Arbiter, Director Trajano,
inter alia, said:

In Cooperative Rural Bank of Davao City, Inc. vs. Pura Ferrer-


Calleja, Director, Bureau of Labor Relations, et al., G.R. No.
77951, September 26, 1988, it was held that an employee of Considering satisfaction of the 30% subscriptional
a cooperative who is a member and co-owner thereof cannot requirement coupled with the findings that the workers who
invoke the right to collective bargaining. The decision in the are not members of the cooperative are eligible to union
case, inter alia, stated: membership, we have no other alternative but to aff iim the
Order of the Med-Arbiter to hold a certification election. (p. 43,
Rollo).<äre||anº•1àw>

xxx xxx xxx

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


cooperative who are not members thereof are entitled to
exercise the rights of all workers to form, join or assist labor
A cooperative, therefore, is by its nature different from an organizations for purposes of collective bargaining.
ordinary business concern being run either by persons, Compliance with the jurisdictional requirement makes it
partnerships, or corporations. Its owners and/or members are mandatory on the part of the Bureau of Labor Relations to
the ones who run and operate the business while the others order the
are its employees. As above stated, irrespective of the name
of shares owned by its member they are entitled to cast one
vote each in deciding upon the affair of the cooperative. Their
share capital eam limited interests. They enjoy special
privileges as — exemption from income tax and sales taxes, In the present Article 257 of the Labor Code, it is now
preferential right to supply their products to State agencies provided that in any establishment where there is no certified
and even exemption from the minimum wage laws. bargaining agent, the petition for certification election filed by
a legitimate labor organization shall be supported by the
written consent of at least twenty (20%) percent of all the
employees in the bargaining unit holding of a certification
election in order to determine the exclusive bargaining agent
of the employees. With such, the Bureau is left without any
Quijano and Arroyo for petitioners.
discretion but to order the holding of a certification election
Arguelles vs. Young, G.R. No. 59880, September 11,
1987,153 SCRA 690).

Jose M. Luison for respondents.

With respect to G.R. No. 74560, the decision dated May 15,
1986 of the respondent Director of the Bureau of Labor
Relations, affirming the Med-Arbiter's order for the holding of
a certification election, is reversed. It is clear from the records
in this case that the petitioner ALECO I has 141 rank and file
employees. Hence, there are 90 rank and file employees, CASTRO, J.:
nonmembers of the cooperative, who may validly form, join or
assist labor organizations for purposes of collective
bargaining.

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


commuting to this Court for more than a decade.

It is likewise clear that 63 rank and file employees supported


the petition for certification election but 51 of them are
members of the petitioner cooperative, a fact not disputed by
the private respondent union. Hence, only 12 rank and file In 1955 the petitioners Venancio Castañeda and Nicetas
employees who were qualified to form, join or assist labor Henson filed a replevin suit against Pastor Ago in the Court of
organizations for purposes of collective bargaining, signed the First Instance of Manila to recover certain machineries (civil
petition, which definitely is a number short of the 30% case 27251). In 1957 judgment was rendered in favor of the
jurisdictional requirement as provided in Article 258 of the plaintiffs, ordering Ago to return the machineries or pay
Labor Code, the law then prevailing. Thirty (30%) percent of definite sums of money. Ago appealed, and on June 30, 1961
the 90 rank and file employees who are not members of the this Court, in Ago vs. Castañeda, L-14066, affirmed the
cooperative is 27. judgment. After remand, the trial court issued on August 25,
1961 a writ of execution for the sum of P172,923.87. Ago
moved for a stay of execution but his motion was denied, and
levy was made on Ago's house and lots located in Quezon
City. The sheriff then advertised them for auction sale on
ACCORDINGLY, judgment is hereby rendered as follows: October 25, 1961. Ago moved to stop the auction sale, failing
in which he filed a petition for certiorari with the Court of
Appeals. The appellate court dismissed the petition and Ago
appealed. On January 31,1966 this Court, in Ago vs. Court of
Appeals, et al., L-19718, affirmed the dismissal. Ago thrice
1. In G.R. No. 62386, the petition is DISMISSED and the attempted to obtain a writ of preliminary injunction to restrain
challenged decision dated November 27, 1981 of respondent the sheriff from enforcing the writ of execution "to save his
Romeo A. Young, OIC of the Bureau of Labor Relations is family house and lot;" his motions were denied, and the sheriff
AFFIRMED. sold the house and lots on March 9, 1963 to the highest
bidders, the petitioners Castañeda and Henson. Ago failed to
redeem, and on April 17, 1964 the sheriff executed the final
deed of sale in favor of the vendees Castañeda and Henson.
Upon their petition, the Court of First Instance of Manila
2. In G.R. No. 70880, the petition is DISMISSED and the issued a writ of possession to the properties.
decision dated January 16, 1985 of respondent Cresenciano
B. Trajano, Director, Bureau of Labor Relations, ordering the
holding of a certification election is hereby AFFIRMED.
Notwithstanding the inclusion of the 24 members or co-
owners of the cooperative, the 30% subscriptional However, on May 2, 1964 Pastor Ago, now joined by his wife,
requirement for the filing of a petition for certification election Lourdes Yu Ago, as his co-plaintiff, filed a complaint in the
has been satisfied. The temporary restraining order dated Court of First Instance of Quezon City (civil case Q-7986) to
May 29,1985 is LIFMD annul the sheriff's sale on the ground that the obligation of
Pastor Ago upon which judgment was rendered against him in
the replevin suit was his personal obligation, and that Lourdes
Yu Ago's one-half share in their conjugal residential house
and lots which were levied upon and sold by the sheriff could
3. In G.R. No. 74560, the petition is GRANTED and the not legally be reached for the satisfaction of the judgment.
assailed decision dated May 15, 1986 of respondent They alleged in their complaint that wife Lourdes was not a
Cresenciano B. Trajano, Director, Bureau of Labor Relations party in the replevin suit, that the judgment was rendered and
is hereby REVERSED and SET ASIDE. The temporary the writ of execution was issued only against husband Pastor,
restraining order dated June 2, 1986 is LIFTED. and that wife Lourdes was not a party to her husband's
venture in the logging business which failed and resulted in
the replevin suit and which did not benefit the conjugal
partnership.

SO ORDERED.

The Court of First Instance of Quezon City issued an ex parte


writ of preliminary injunction restraining the petitioners, the
G.R. No. L-28546 July 30, 1975 Register of Deeds and the sheriff of Quezon City, from
registering the latter's final deed of sale, from cancelling the
respondents' certificates of title and issuing new ones to the
petitioners and from carrying out any writ of possession. A
situation thus arose where what the Manila court had ordered
VENANCIO CASTANEDA and NICETAS HENSON, to be done, the Quezon City court countermanded. On
petitioners, November 1, 1965, however, the latter court lifted the
preliminary injunction it had previously issued, and the
Register of deeds of Quezon City cancelled the respondents'
vs. certificates of title and issued new ones in favor of the
petitioners. But enforcement of the writ of possession was
PASTOR D. AGO, LOURDES YU AGO and THE COURT OF again thwarted as the Quezon City court again issued a
APPEALS, respondents. temporary restraining order which it later lifted but then re-
restored. On May 3, 1967 the court finally, and for the third
time, lifted the restraining order.
the judicial sale and the issuance of the writ of possession,
the rights of third parties to the property sold have
supervened. The ruling in Omnas is clearly inapplicable in the
While the battle on the matter of the lifting and restoring of the
present case, for, here, there has been no change in the
restraining order was being fought in the Quezon City court,
ownership of the properties or of any interest therein from the
the Agos filed a petition for certiorari and prohibition with this
time the writ of execution was issued up to the time writ of
Court under date of May 26, 1966, docketed as L-26116,
possession was issued, and even up to the present.
praying for a writ of preliminary injunction to enjoin the sheriff
from enforcing the writ of possession. This Court found no
merit in the petition and dismissed it in a minute resolution on
June 3, 1966; reconsideration was denied on July 18, 1966.
The respondents then filed on August 2, 1966 a similar
4. We agree with the trial court (then presided by
petition for certiorari and prohibition with the Court of Appeals
Judge Lourdes P. San Diego) that it is much too late in the
(CA-G.R. 37830-R), praying for the same preliminary
day for the respondents Agos to raise the question that part of
injunction. The Court of Appeals also dismissed the petition.
the property is unleviable because it belongs to Lourdes Yu
The respondents then appealed to this Court (L-
Ago, considering that (1) a wife is normally privy to her
27140).1äwphï1.ñët We dismissed the petition in a minute
husband's activities; (2) the levy was made and the properties
resolution on February 8, 1967.
advertised for auction sale in 1961; (3) she lives in the very
properties in question; (4) her husband had moved to stop the
auction sale; (5) the properties were sold at auction in 1963;
(6) her husband had thrice attempted to obtain a preliminary
injunction to restrain the sheriff from enforcing the writ of
The Ago spouses repaired once more to the Court of Appeals
execution; (7) the sheriff executed the deed of final sale on
where they filed another petition for certiorari and prohibition
April 17, 1964 when Pastor failed to redeem; (8) Pastor had
with preliminary injunction (CA-G.R. 39438-R). The said court
impliedly admitted that the conjugal properties could be levied
gave due course to the petition and granted preliminary
upon by his pleas "to save his family house and lot" in his
injunction. After hearing, it rendered decision, the dispositive
efforts to prevent execution; and (9) it was only on May 2,
portion of which reads:
1964 when he and his wife filed the complaint for annulment
of the sheriff's sale upon the issue that the wife's share in the
properties cannot be levied upon on the ground that she was
not a party to the logging business and not a party to the
replevin suit. The spouses Ago had every opportunity to raise
WHEREFORE, writ of preliminary injunction from enforcement the issue in the various proceedings hereinbefore discussed
of the writ of possession on and ejectment from the one-half but did not; laches now effectively bars them from raising it.
share in the properties involved belonging to Lourdes Yu Ago
dated June 15, 1967 is made permanent pending decision on
the merits in Civil Case No. Q-7986 and ordering respondent
Court to proceed with the trial of Civil Case No. Q-7986 on the
merits without unnecessary delay. No pronouncement as to
Laches, in a general sense, is failure or neglect, for an
costs.
unreasonable and unexplained length of time, to do that
which, by exercising due diligence, could or should have been
done earlier; it is negligence or omission to assert a right
within a reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined
Failing to obtain reconsideration, the petitioners Castañeda to assert it.2
and Henson filed the present petition for review of the
aforesaid decision.

5. The decision of the appellate court under review


suffers from two fatal infirmities.
1. We do not see how the doctrine that a court may
not interfere with the orders of a co-equal court can apply in
the case at bar. The Court of First Instance of Manila, which
issued the writ of possession, ultimately was not interfered
with by its co-equal court, the Court of First Instance of
(a) It enjoined the enforcement of the writ of
Quezon City as the latter lifted the restraining order it had
possession to and ejectment from the one-half share in the
previously issued against the enforcement of the Manila
properties involved belonging to Lourdes Yu Ago. This half-
court's writ of possession; it is the Court of Appeals that
share is not in esse, but is merely an inchoate interest, a mere
enjoined, in part, the enforcement of the writ.
expectancy, constituting neither legal nor equitable estate,
and will ripen into title when only upon liquidation and
settlement there appears to be assets of the community.3 The
decision sets at naught the well-settled rule that injunction
does not issue to protect a right not in esse and which may
2. Invoking Comilang vs. Buendia, et al.,1 where the never arise.4
wife was a party in one case and the husband was a party in
another case and a levy on their conjugal properties was
upheld, the petitioners would have Lourdes Yu Ago similarly
bound by the replevin judgment against her husband for
which their conjugal properties would be answerable. The
(b) The decision did not foresee the absurdity, or even
case invoked is not at par with the present case. In Comilang
the impossibility, of its enforcement. The Ago spouses
the actions were admittedly instituted for the protection of the
admittedly live together in the same house5 which is conjugal
common interest of the spouses; in the present case, the
property. By the Manila court's writ of possession Pastor could
Agos deny that their conjugal partnership benefited from the
be ousted from the house, but the decision under review
husband's business venture.
would prevent the ejectment of Lourdes. Now, which part of
the house would be vacated by Pastor and which part would
Lourdes continue to stay in? The absurdity does not stop
here; the decision would actually separate husband and wife,
prevent them from living together, and in effect divide their
3. Relying upon Omnas vs. Rivera, 67 Phil. 419, the conjugal properties during coverture and before the
Court of Appeals held that a writ of possession may not issue dissolution of the conjugal union.
until the claim of a third person to half-interest in the property
is adversely determined, the said appellate court assuming
that Lourdes Yu Ago was a "stranger" or a "third-party" to her
husband. The assumption is of course obviously wrong, for,
besides living with her husband Pastor, she does not claim
6. Despite the pendency in the trial court of the
ignorance of his business that failed, of the relevant cases in
complaint for the annulment of the sheriff's sale (civil case Q-
which he got embroiled, and of the auction sale made by the
7986), elementary justice demands that the petitioners, long
sheriff of their conjugal properties. Even then, the ruling in
denied the fruits of their victory in the replevin suit, must now
Omnas is not that a writ of possession may not issue until the
enjoy them, for, the respondents Agos, abetted by their lawyer
claim of a third person is adversely determined, but that the
Jose M. Luison, have misused legal remedies and prostituted
writ of possession being a complement of the writ of
the judicial process to thwart the satisfaction of the judgment,
execution, a judge with jurisdiction to issue the latter also has
to the extended prejudice of the petitioners. The respondents,
jurisdiction to issue the former, unless in the interval between
with the assistance of counsel, maneuvered for fourteen (14) (e) the last order of the Court of First Instance, dated
years to doggedly resist execution of the judgment thru April 20, 1974, grants an extension to the suspension of time
manifold tactics in and from one court to another (5 times in to file answer. (Expediente, p. 815)
the Supreme Court).

We also find that the alleged causes of action in the


We condemn the attitude of the respondents and their counsel complaint, supplemental complaint and amended
who, supplemental complaint are all untenable, for the reasons
hereunder stated. The Complaint

far from viewing courts as sanctuaries for those who seek


justice, have tried to use them to subvert the very ends of Upon the first cause of action, it is alleged that the sheriff
justice.6 levied upon conjugal properties of the spouses Ago despite
the fact that the judgment to be satisfied was personal only to
Pastor Ago, and the business venture that he entered into,
which resulted in the replevin suit, did not redound to the
benefit of the conjugal partnership. The issue here, which is
Forgetting his sacred mission as a sworn public servant and whether or not the wife's inchoate share in the conjugal
his exalted position as an officer of the court, Atty. Luison has property is leviable, is the same issue that we have already
allowed himself to become an instigator of controversy and a resolved, as barred by laches, in striking down the decision of
predator of conflict instead of a mediator for concord and a the Court of Appeals granting preliminary injunction, the
conciliator for compromise, a virtuoso of technicality in the dispositive portion of which was herein-before quoted. This
conduct of litigation instead of a true exponent of the primacy ruling applies as well to the first cause of action of the
of truth and moral justice. complaint.

A counsel's assertiveness in espousing with candour and Upon the second cause of action, the Agos allege that on
honesty his client's cause must be encouraged and is to be January 5, 1959 the Castañedas and the sheriff, pursuant to
commended; what we do not and cannot countenance is a an alias writ of seizure, seized and took possession of certain
lawyer's insistence despite the patent futility of his client's machineries, depriving the Agos of the use thereof, to their
position, as in the case at bar. damage in the sum of P256,000 up to May 5, 1964. This
second cause of action fails to state a valid cause of action for
it fails to allege that the order of seizure is invalid or illegal.

It is the duty of a counsel to advise his client, ordinarily a


layman to the intricacies and vagaries of the law, on the merit
or lack of merit of his case. If he finds that his client's cause is It is averred as a third cause of action that the sheriff's sale of
defenseless, then it is his bounden duty to advise the latter to the conjugal properties was irregular, illegal and unlawful
acquiesce and submit, rather than traverse the because the sheriff did not require the Castañeda spouses to
incontrovertible. A lawyer must resist the whims and caprices pay or liquidate the sum of P141,750 (the amount for which
of his client, and temper his clients propensity to litigate. A they bought the properties at the auction sale) despite the fact
lawyer's oath to uphold the cause of justice is superior to his that there was annotated at the back of the certificates of title
duty to his client; its primacy is indisputable.7 a mortgage of P75,000 in favor of the Philippine National
Bank; moreover, the sheriff sold the properties for P141,750
despite the pendency of L-19718 where Pastor Ago contested
the amount of P99,877.08 out of the judgment value of
P172,923.37 in civil case 27251; and because of said acts,
7. In view of the private respondents' propensity to use the Agos suffered P174,877.08 in damages.
the courts for purposes other than to seek justice, and in order
to obviate further delay in the disposition of the case below
which might again come up to the appellate courts but only to
fail in the end, we have motu proprio examined the record of
civil case Q-7986 (the mother case of the present case). We Anent this third cause of action, the sheriff was under no
find that obligation to require payment of the purchase price in the
auction sale because "when the purchaser is the judgment
creditor, and no third-party claim has been filed, he need not
pay the amount of the bid if it does not exceed the amount of
his judgment." (Sec. 23, Rule 39, Rules of Court)
(a) the complaint was filed on May 2, 1964 (more than
11 years ago) but trial on the merits has not even started;

The annotated mortgage in favor of the PNB is the concern of


the vendees Castañedas but did not affect the sheriff's sale;
(b) after the defendants Castañedas had filed their the cancellation of the annotation is of no moment to the
answer with a counterclaim, the plaintiffs Agos filed a Agoo.
supplemental complaint where they impleaded new parties-
defendants;

Case L-19718 where Pastor Ago contested the sum of


P99,877.08 out of the amount of the judgment was dismissed
(c) after the admission of the supplemental complaint, by this Court on January 31, 1966.
the Agos filed a motion to admit an amended supplemental
complaint, which impleads an additional new party-defendant
(no action has yet been taken on this motion);

This third cause of action, therefore, actually states no valid


cause of action and is moreover barred by prior judgment.

(d) the defendants have not filed an answer to the


admitted supplemental complaint; and

The fourth cause of action pertains to moral damages


allegedly suffered by the Agos on account of the acts
complained of in the preceding causes of action. As the fourth
cause of action derives its life from the preceding causes of levy and sale are valid. The reverse is also true: if the sheriff's
action, which, as shown, are baseless, the said fourth cause levy and sale are invalid on the ground that the conjugal
of action must necessarily fail. properties could not be levied upon, then the transactions
would perhaps prejudice the Agos, but, we have already
indicated that the issue in the first cause of action of the
original complaint is barred by laches, and it must therefore
follow that the first cause of action of the supplemental
The Counterclaim complaint and the amended supplemental complaint is also
barred.

As a counterclaim against the Agos, the Castañedas aver that


the action was unfounded and as a consequence of its filing For the same reason, the same holding applies to the
they were compelled to retain the services of counsel for not remaining cause of action in the supplemental complaint and
less than P7,500; that because the Agos obtained a the amended supplemental complaint.
preliminary injunction enjoining the transfer of titles and
possession of the properties to the Castañedas, they were
unlawfully deprived of the use of the properties from April 17,
1964, the value of such deprived use being 20% annually of
their actual value; and that the filing of the unfounded action ACCORDINGLY, the decision of the Court of Appeals under
besmirched their feelings, the pecuniary worth of which is for review is set aside. Civil case Q-7986 of the Court of First
the court to assess. Instance of Rizal is ordered dismissed, without prejudice to
the re-filing of the petitioners' counterclaim in a new and
independent action. Treble costs are assessed against the
spouses Pastor Ago and Lourdes Yu Ago, which shall be paid
by their lawyer, Atty. Jose M. Luison. Let a copy of this
The Supplemental Complaint decision be made a part of the personal file of Atty. Luison in
the custody of the Clerk of Court.

Upon the first cause of action, it is alleged that after the filing
of the complaint, the defendants, taking advantage of the Makasiar, Esguerra, Muñoz Palma and Martin, JJ., concur.
dissolution of the preliminary injunction, in conspiracy and
with gross bad faith and evident intent to cause damage to the
plaintiffs, caused the registration of the sheriff's final deed of
sale; that, to cause more damage, the defendants sold to their
lawyer and his wife two of the parcels of land in question; that Teehankee, J., is on leave.
the purchasers acquired the properties in bad faith; that the
defendants mortgaged the two other parcels to the Rizal
Commercial Banking Corporation while the defendants' lawyer
and his wife also mortgaged the parcels bought by them to
the Rizal Commercial Bank; and that the bank also acted in
bad faith.

A.C. No. 5736 June 18, 2010

The second cause of action consists of an allegation of


additional damages caused by the defendants' bad faith in RURAL BANK OF CALAPE, INC. (RBCI) BOHOL, Complainant,
entering into the aforesaid agreements and transactions.
vs.

ATTY. JAMES BENEDICT FLORIDO, Respondent.

The Amended Supplemental Complaint


DECISION

The amendment made pertains to the first cause of action of CARPIO, J.:
the supplemental complaint, which is, the inclusion of a
paragraph averring that, still to cause damage and prejudice
to the plaintiffs, Atty. & Mrs. Juan Quijano, in bad faith sold the
two parcels of land they had previously bought to Eloy The Case
Ocampo who acquired them also in bad faith, while Venancio
Castañeda and Nicetas Henson in bad faith sold the two other
parcels to Juan Quijano (60%) and Eloy Ocampo (40%) who
acquired them in bad faith and with knowledge that the This is a complaint for disbarment filed by the members of the Board of
properties are the subject of a pending litigation. Directors1 of the Rural Bank of Calape, Inc. (RBCI) Bohol against
respondent Atty. James Benedict Florido (respondent) for "acts
constituting grave coercion and threats when he, as counsel for the
minority stockholders of RBCI, led his clients in physically taking over
the management and operation of the bank through force, violence and
Discussion on The Causes of Action intimidation."

of The Supplemental Complaint And

The Facts
The Amended Supplemental Complaint

On 18 April 2002, RBCI filed a complaint for disbarment against


respondent.2 RBCI alleged that respondent violated his oath and the
Assuming hypothetically as true the allegations in the first Code of Professional Responsibility (Code).
cause of action of the supplemental complaint and the
amended supplemental complaint, the validity of the cause of
action would depend upon the validity of the first cause of
action of the original complaint, for, the Agos would suffer no According to RBCI, on 1 April 2002, respondent and his clients, Dr.
transgression upon their rights of ownership and possession Domeciano Nazareno, Dr. Remedios Relampagos, Dr. Manuel
of the properties by reason of the agreements subsequently Relampagos, and Felix Rengel (Nazareno-Relampagos group), through
entered into by the Castañedas and their lawyer if the sheriff's force and intimidation, with the use of armed men, forcibly took over the
management and the premises of RBCI. They also forcibly evicted Cirilo The Ruling of the Court
A. Garay (Garay), the bank manager, destroyed the bank’s vault, and
installed their own staff to run the bank.

We affirm the IBP Board of Governors’ resolution.

In his comment, respondent denied RBCI’s allegations. Respondent


explained that he acted in accordance with the authority granted upon
him by the Nazareno-Relampagos group, the lawfully and validly elected The first and foremost duty of a lawyer is to maintain allegiance to the
Board of Directors of RBCI. Respondent said he was merely effecting a Republic of the Philippines, uphold the Constitution and obey the laws of
lawful and valid change of management. Respondent alleged that a the land.6 Likewise, it is the lawyer’s duty to promote respect for the law
termination notice was sent to Garay but he refused to comply. On 1 and legal processes and to abstain from activities aimed at defiance of
April 2002, to ensure a smooth transition of managerial operations, the law or lessening confidence in the legal system.7
respondent and the Nazareno-Relampagos group went to the bank to
ask Garay to step down. However, Garay reacted violently and grappled
with the security guard’s long firearm. Respondent then directed the Canon 19 of the Code provides that a lawyer shall represent his client
security guards to prevent entry into the bank premises of individuals with zeal within the bounds of the law. For this reason, Rule 15.07 of the
who had no transaction with the bank. Respondent, through the orders Code requires a lawyer to impress upon his client compliance with the
of the Nazareno-Relampagos group, also changed the locks of the law and principles of fairness. A lawyer must employ only fair and
bank’s vault. honest means to attain the lawful objectives of his client.8 It is his duty
to counsel his clients to use peaceful and lawful methods in seeking
justice and refrain from doing an intentional wrong to their adversaries.9
Respondent added that the criminal complaint for malicious mischief
filed against him by RBCI was already dismissed; while the complaint
for grave coercion was ordered suspended because of the existence of We agree with Commissioner Villadolid, Jr.’s conclusion:
a prejudicial question. Respondent said that the disbarment complaint
was filed against him in retaliation for the administrative cases he filed
against RBCI’s counsel and the trial court judges of Bohol.
Lawyers are indispensable instruments of justice and peace. Upon
taking their professional oath, they become guardians of truth and the
rule of law. Verily, when they appear before a tribunal, they act not
Moreover, respondent claimed that RBCI failed to present any evidence merely as representatives of a party but, first and foremost, as officers of
to prove their allegations. Respondent added that the affidavits attached the court. Thus, their duty to protect their clients’ interests is secondary
to the complaint were never identified, affirmed, or confirmed by the to their obligation to assist in the speedy and efficient administration of
affiants and that none of the documentary exhibits were originals or justice. While they are obliged to present every available legal remedy
certified true copies. or defense, their fidelity to their clients must always be made within the
parameters of law and ethics, never at the expense of truth, the law, and
the fair administration of justice.10
The Ruling of the IBP

A lawyer’s duty is not to his client but to the administration of justice. To


On 28 September 2005, IBP Commissioner Leland R. Villadolid, Jr. that end, his client’s success is wholly subordinate. His conduct ought to
(Commissioner Villadolid, Jr.) submitted his report and declared that and must always be scrupulously observant of the law and ethics.11 Any
respondent failed to live up to the exacting standards expected of him means, not honorable, fair and honest which is resorted to by the
as vanguard of law and justice.3 Commissioner Villadolid, Jr. lawyer, even in the pursuit of his devotion to his client’s cause, is
recommended the imposition on respondent of a penalty of suspension condemnable and unethical.12
from the practice of law for six months to one year with a warning that
the repetition of similar conduct in the future will warrant a more severe
penalty. WHEREFORE, we find respondent Atty. James Benedict Florido
GUILTY of violating Canon 19 and Rules 1.02 and 15.07 of the Code of
Professional Responsibility. Accordingly, we SUSPEND respondent from
According to Commissioner Villadolid, Jr., respondent knew or ought to the practice of law for one year effective upon finality of this Decision.
have known that his clients could not just forcibly take over the
management and premises of RBCI without a valid court order.
Commissioner Villadolid, Jr. noted that the right to manage and gain Let copies of this decision be furnished the Office of the Bar Confidant,
majority control over RBCI was one of the issues pending before the to be appended to respondent’s personal record as attorney. Likewise,
trial court in Civil Case No. 6628. Commissioner Villadolid, Jr. said that copies shall be furnished to the Integrated Bar of the Philippines and in
respondent had no legal basis to implement the take over of RBCI and all courts in the country for their information and guidance.
that it was a "naked power grab without any semblance of legality
whatsoever."

SO ORDERED.

Commissioner Villadolid, Jr. added that the administrative complaint


against respondent before the IBP is independent of the dismissal and
suspension of the criminal cases against respondent. Commissioner A.M. No. 1311 July 18, 1991
Villadolid, Jr. also noted that RBCI complied with the IBP Rules of
Procedure when they filed a verified complaint and submitted duly
notarized affidavits. Moreover, both RBCI and respondent agreed to
dispense with the mandatory conference hearing and, instead, RAMONA L. VDA. DE ALISBO and NORBERTO S. ALISBO, petitioners,
simultaneously submit their position papers.
vs.

ATTY. BENITO JALANDOON, SR., respondent.


On 20 March 2006, the IBP Board of Governors issued Resolution No.
XVII-2006-120 which declared that respondent dismally failed to live up
to the exacting standards of the law profession and suspended
respondent from the practice of law for one year with a warning that
repetition of similar conduct will warrant a more severe penalty.4 GRIÑO-AQUINO, J.:

On 5 July 2006, respondent filed a motion for reconsideration. In its 11 A verified complaint for disbarment was filed with then Secretary of
December 2008 Resolution, the IBP denied respondent’s motion.5 National Defense Juan Ponce Enrile on January 2, 1974, by Ramona L.
Vda. de Alisbo and Norberto S. Alisbo against their former counsel,
Attorney Benito Jalandoon, Sr., charging him with deceit, malpractice,
and professional infidelity. The complaint was referred to this Court on in Civil Case No. 4963 became final on May 30, 1961 yet, and, although
February 5, 1974. a complaint for revival of said judgment was filed by Ramon Alisbo on
September 12, 1970, before the ten-year prescriptive period expired,
that complaint was null and void for Ramon Alisbo was insane, hence,
incompetent and without legal capacity to sue when he instituted the
After the complainants had submitted the required number of copies of action. The subsequent filing of an Amended Complaint on December 8,
their complaint, the respondent was ordered to file his answer thereto 1972, after the statutory limitation period had expired, was too late to
which he did on June 5, 1974. save the plaintiffs right of action. Thereafter, nothing more was done by
any of the parties in the case.

On August 20, 1974, the complainants filed a reply.


On January 2, 1974, the complainants charged respondent Attorney
Benito Jalandoon, Sr. with having deliberately caused the dismissal of
On August 28, 1974, the Court referred the complaint to the Solicitor Civil Case No. 9559 and with having concealed from them the material
General for investigation, report and recommendation. On February 2, fact that he had been the former legal counsel of Carlito Sales, their
1990, or after sixteen (16) years, the Solicitor General submitted his adversary in the probate proceedings. The respondent filed a general
report to the Court, together with the transcripts of stenographic notes denial of the charges against him.
taken at the investigation and folders of exhibits submitted by the
parties.
When Ramon S. Alisbo engaged the services of Attorney Jalandoon to
enforce the decision in Civil Case No. 4963, that decision was already
The facts of the case, as found by the Solicitor General, are the nine (9) years old, hence, it could no longer be executed by mere
following: motion (Sec. 6, Rule 39, Rules of Court). Complainants had only about
a year left within which to enforce the judgment by an independent
action.

On March 16, 1970, Ramon Alisbo engaged respondent Attorney Benito


Jalandoon, Sr., as his counsel to commence an action to recover his
share of the estate of the deceased spouses Catalina Sales and Ramon Alisbo was already insane or incompetent when he hired
Restituto Gozuma which had been adjudicated to him under the Attorney Jalandoon to file Civil Case No. 9559 for him. Attorney
judgment dated April 29, 1961 of the Court of First Instance of Negros Jalandoon concealed from Alisbo the fact that he (Atty. Jalandoon) had
Oriental in Civil Case No. 4963, because Alisbo failed to file a motion for been the former counsel of Carlito Sales in the probate proceedings
execution of the judgment in his favor within the reglementary five-year where Alisbo and Sales had litigated over their shares of the inheritance.
period (Sec. 6, Rule, 39, Rules of Court). The salient provisions of the
Contract for Professional Services (Exhibit A) between Alisbo and
Attorney Jalandoon were the following: However, according to Attorney Jalandoon, it was only on October 6,
1972, when Civil Case No. 9559 was called for pre-trial, that he
discovered his previous professional relationship with Sales. At that
1. That respondent will decide whether or not to file a suit for the time, the ten-year prescriptive period for revival of the judgment in favor
recovery of Ramon Alisbo's share or claim; of Alisbo had already expired. He thereupon asked Alisbo's permission
to allow him (Jalandoon) to withdraw from the case. He also informed
the court about his untenable position and requested that he be allowed
to retire therefrom. His request was granted.
2. That respondent will shoulder all expenses of litigation; and

In his report to the Court, the Solicitor General made the following
3. As attorney's fees, respondent will be paid fifty per cent (50%) observations:
of the value of the property recovered.

Evident from the foregoing is the fact that in handling the case for
On April 18, 1970, respondent prepared a complaint for revival of the Ramon S. Alisbo which eventually led to its dismissal, respondent
judgment in Civil Case No. 4963 but filed it only on September 12, 1970 committed several errors, among which are:
on five (5) months later. It was docketed as Civil Case No. 9559,
entitled: "Ramon S. Alisbo, Teotimo S. Alisbo and Pacifico S. Alisbo vs.
Carlito Sales, in his own capacity and as Judicial Administrator of the
deceased Pedro Sales." The complaint was signed by respondent 1. He did not verify the real status of Ramon Alisbo before filing
alone. However, no sooner had he filed the complaint than he withdrew the case. Otherwise, his lack of capacity to sue would not have been at
it and filed in its stead (on the same day and in the same case) a issue.
second complaint dated August 31, 1970, with Ramon S. Alisbo as the
lone plaintiff, praying for the same relief. Teotimo S. Alisbo and Pacifico
S. Alisbo were excluded as plaintiffs and were impleaded as defendants 2. He postponed the motion to revive judgment and gave way
instead. Attorneys Bernardo B. Pablo and Benito Jalandoon, Sr. (herein instead to a motion to resolve pending incidents in Civil Case 4963. In
respondent) signed as counsel. doing so, he frittered away precious time.

On December 8, 1971, an amended complaint was filed wherein the 3. He dropped Ramon Alisbo's co-plaintiffs and impleaded them
plaintiffs were: Ramon S. Alisbo, assisted by his judicial guardian, as defendants.1âwphi1 Otherwise, the complaint would have been
Norberto S. Alisbo, and eight (8) others, namely: Pacifico S. Alisbo, defective only in part.
Ramona Vda. de Alisbo and Ildefonso, Evangeline, Teotimo, Jr.,
Reynaldo, Elizabeth and Teresita, all surnamed Alisbo. The amended
complaint was signed by Attorney Bernardo B. Pablo alone as counsel
of the plaintiffs. Had not respondent committed the above mistakes, Civil Case No. 9559
in all probability would not have been dismissed on the ground of
prescription. (pp. 9-10, Solicitor General's Report.)

On August 21, 1973, defendant Carlito Sales filed a Motion to Dismiss


the complaint on the ground that the action for revival of judgment in
Civil Case No. 4963 had already prescribed (Exh. 21). Plaintiffs filed an While the Solicitor General does not believe that Attorney Jalandoon's
Opposition to the Motion to Dismiss (Exh. 22). mistakes in handling Alisbo's case were deliberate or made with malice
aforethought because there is no "proof of collusion or conspiracy
between respondent and those who would benefit from the dismissal of
Civil Case No. 9559 . . . and that, on the other hand, respondent stood
On October 3, 1973, the Court of First Instance of Negros Occidental to gain substantially (50% of the amount recovered) if he had
dismissed the complaint on the ground of prescription as the judgment succeeded in having the judgment revived and executed" (pp. 10-11,
Solicitor General's Report), still those errors are so gross and glaring The surrounding circumstances leave us with no other conclusion than
that they could not have resulted from mere negligence or lack of due that Attorney Jalandoon, betrayed his client Ramon Alisbo's trust and did
care. not champion his cause with that wholehearted fidelity, care and
devotion that a lawyer is obligated to give to every case that he accepts
from a client. There is more than simple negligence resulting in the
extinguishment and loss of his client's right of action; there is a hint of
Attorney Jalandoon's pretense that he did not know before the pre-trial duplicity and lack of candor in his dealings with his client, which call for
that the Sales defendants had been his clients in the past, is the exercise of this Court's disciplinary power.
unbelievable because:

The Honorable Solicitor General who conducted the investigation of this


1. Before he filed the complaint for revival of judgment, he had case found respondent Attorney Benito Jalandoon, Sr. guilty of serious
had several interviews with Ramon S. Alisbo and Norberto Alisbo misconduct and infidelity. Although the Solicitor General recommended
regarding Civil Case No. 4963. the suspension of respondent Attorney Benito Jalandoon Sr. from the
practice of law for a period of one (1) year, the Court, after due
deliberation, decided to suspend him for a period of two (2) years from
2. He must have done some research on the court records of the finality of this decision.
Civil Case No. 4963, so he could not have overlooked his own
participation in that case as counsel for Carlito Sales, et al.
IT IS SO ORDERED.

3. To prepare the complaint for revival of judgment (Civil Case


No. 9559), he had to inform himself about the personal circumstances of Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Padilla, Bidin,
the defendants-Carlito Sales, et al. The fact that they had been his Sarmiento, Medialdea, Regalado and Davide, Jr., JJ., concur.
clients could not have eluded him.
Gancayco, J., is on leave.

In view of his former association with the Saleses, Attorney Jalandoon,


as a dutiful lawyer, should have declined the employment proffered by ALFONSO VISITACION, plaintiff-appellee,
Alisbo on the ground of conflict of interest. Had he done that soon
enough, the Alisbos (herein complainants) would have had enough time vs.
to engage the services of another lawyer and they would not have lost
their case through prescription of the action. VICTOR MANIT, substituted by his widow LEONARDA MANIT and
daughters VIRGINIA DUNGOG, VICTORIA BATUCAN and MERLINDA
MANIT, defendants-appellants.

The actuations of respondent attorney violated Paragraphs 1 and 2, No.


6 of the Canons of Professional Ethics which provide:
Amadeo Seno for plaintiff-appellee.

Jesus P. Garcia for defendants-appellants.


6. ADVERSE INFLUENCE AND CONFLICTING INTEREST

TEEHANKEE, J.:
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. Appeal from a decision of the Court of First Instance of Cebu and
certified by the Court of Appeals to this Court, since the issues raised on
appeal are all questions of law.

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 The Court of Appeals in its Resolution of January 17, 1967 certifying
when, in behalf of one client, it is his duty to contend for that which duty the case as falling within the exclusive jurisdiction of this Court points
to another client requires him to oppose. (pp. 14-15, Solicitor General's out that this appeal is "unique" in the sense that the appellant purports
Report.) to be not the original defendant, Victor Manit, now deceased, nor his
heirs, his widow and three daughters of age, substituted for him upon
his death, per the title of this case above, but rather his counsel of
record, Atty. Jesus P. Garcia, who on April 13, 1960, after the trial court's
The impression we gather from the facts is that Attorney Jalandoon adverse decision, filed the Notice of Appeal and cash bond on Appeal as
used his position as Alisbo's counsel precisely to favor his other client, "Attorney for Victor Manit deceased" and on the same date filed the
Carlito Sales, by delaying Alisbo's action to revive the judgment in his Record on Appeal as "Jesus P. Garcia, in his capacity as officer of the
favor and thereby deprive him of the fruits of his judgment which Court and as former counsel of the deceased." 1 The Record on Appeal
Attorney Jalandoon, as Sales' counsel, had vigorously opposed. Thus, and appeal bond were thereafter approved on April 25, 1960 by the trial
although Atty. Jalandoon prepared Alisbo's complaint for revival of court and the case forwarded on appeal to the Court of Appeals, and in
judgment on April 18, 1970, he delayed its filing until September 12, turn certified to this Court.
1970. He postponed filing the action by asking the Court instead to
resolve pending incidents in said Civil Case No. 4963. By doing that, he
frittered away what little time was left before the action would prescribe.
The original complaint which he filed in the names of Ramon Alisbo and The case originated on January 18, 1956 when plaintiff appellee filed
his brothers was only partially defective because of Ramon's this case against defendant Victor Manit to hold him liable subsidiarily as
incompetence. By dropping the other plaintiffs, leaving alone the employer for the death of plaintiff's son, Delano Visitacion, as a result of
incompetent Ramon to prosecute the action, respondent made the injuries sustained in a vehicular collision involving laid defendant's driver
second complaint wholly defective and ineffectual to stop the running of Rudolfo Giron, who was found insolvent after having been convicted
the prescriptive period. and sentenced in a previous criminal case arising out of said death, to
indemnify the victim's heirs in the amount of P3,000.00.lawphi1.ñet

After filing the complaint, Attorney Jalandoon sat on the case. While he
allegedly found out about Ramon Alisbo's insanity on July 17, 1971 only, An Answer to the complaint was filed in due course by Atty. Garcia on
he amended the complaint to implead Alisbo's legal guardian as plaintiff behalf of defendant. On June 1, 1956, the case was heard, without
on December 8, 1971 only, or almost five (5) months later. By that time defendant or his counsel being present, and plaintiff presented his
the prescriptive period had run out. evidence and the case, was submitted for decision. On June 6, 1956,
defendant, however, filed a motion for new trial which was granted by
the trial court on June 9, 1956.2
Plaintiff presented his oral and documentary evidence and was cross- Third Error:
examined by Atty. Garcia. 3 The record further shows that on March 19,
1958, Atty. Garcia commenced the presentation of evidence on behalf of
defendant. He presented defendant's wife, Leonarda Manit who testified
that her husband, Victor Manit "had no business of his own, because he THE LOWER COURT ERRED IN RENDERING A PREMATURE
is sickly" and that she was the one operating and managing their JUDGMENT IN AN UNFINISHED CASE WHERE THE NEW
transportation business of three trucks. 4 DEFENDANTS WERE NOT GIVEN THEIR DAY IN COURT.

On October 14, 1958, when the case was scheduled for continuation of He prayed therein that the appellate Court render judgment:
the trial, Atty. Garcia manifested that the original defendant, Victor Manit
had recently died, and the trial court on the same date directed him to
furnish plaintiff's counsel the names of the said defendant's heirs, so (a). Annulling the decision appealed from;
that plaintiff could amend the complaint accordingly. On August 11,
1959, plaintiff's counsel submitted a Motion to Admit the Amended
Complaint attached thereto, furnishing copy of said pleadings to Atty.
Garcia, who acknowledged receipt thereof as "Attorney for the (b). Remanding the case to the lower court for further proceedings by
defendant." The only amendment in the complaint consisted in serving summons on the defendants and giving them a chance to
impleading the widow and heirs of the deceased original defendant in present their evidence;
substitution for him, pursuant to Rule 3, section 17 of the Rules of Court.
At the hearing of the said motion on the same date, the trial court, after
noting that there was no opposition thereto by Atty. Garcia, admitted the
(c). Relieving the undersigned counsel from all responsibility in
Amended Complaint in its Order of August 11, 1959, wherein "(A)s
connection with this case in view of the death of his client; and
prayed for by counsel for the defendants, defendants are hereby given
fifteen (15) days' time within which to file an answer to said amended
complaint." 5 No answer to the amended complaint having been filed,
the original answer stood as defendants' answer to the amended (d). Granting such other and further reliefs and remedies in accordance
complaint, in accordance with Rule 11, section 3 of the Rules of Court. 6 with law and equity. (Appellants' Brief, p. 10)

The case was again set for hearing on January 28, 1960 with notice to We hold this "unique" appeal by the counsel of record, Atty. Jesus P.
the parties through their counsels of record. One day before the hearing, Garcia, allegedly "in his capacity as officer of the Court and as former
on January 27, 1960, Atty. Garcia filed a "Motion to Withdraw as counsel of the deceased Victor Manit" to be untenable.
Counsel", alleging that "the heirs of Victor Manit have not hired (him) to
represent them and consequently, (his) continued appearance in
representation of a dead client would be illegal" and asking the trial
court "that he be relieved as counsel in the above-entitled case for the There are two fundamental errors on which Atty. Garcia's appeal is
reasons stated herein." 7 premised. First, if he presents this appeal "in his capacity as officer of
the Court and as former counsel of the deceased Victor Manit", his
appeal should be thrown out, as not being a party to the case, much
less a party in interest, he has no legal standing whatsoever to
When the case was called on the next day, neither defendants nor Atty. prosecute this appeal. Second, in filing his Notice of Appeal and Cash
Garcia appeared, and the trial court noting "defendants' apparent lack of Appeal Bond, he represented himself as "Attorney for Victor Manit,
interest as can be gleaned from the records" considered them to have deceased", depositing the sum of P60.00 as appeal bond "to answer or
renounced their right to appear and present evidence to contest respond for the costs which the appellate court may award against the
plaintiff's claim. It did not pass upon Atty. Garcia's Motion to Withdraw as herein defendant-appellant," 9 thus representing anew to the trial Court
Counsel and proceeded to render judgment in favor of plaintiff, the that he was duly authorized to present the appeal on behalf of the estate
dispositive part of which provides as follows: of the original defendant, Victor Manit deceased, who had earlier been
substituted in the case by his heirs, the widow and three daughters of
legal age. The trial Court was perfectly correct in relying upon this
representation in accordance with Rule 138, section 21 of the Rules of
IN VIEW OF ALL THE FOREGOING, the Court pronounces judgment
Court which provides that "(A)n attorney is presumed to be properly
in favor of the plaintiff and against the defendants; and hereby
authorized to represent any case in which he appears ...." This appeal
sentences the defendants, jointly and severally, to pay the plaintiff the
must accordingly be dealt with as an appeal on behalf of said heirs as
amount of P3,000.00 as indemnity for the death of Delano Visitacion,
defendants-appellants and not in the "unique" concept with which Atty.
plus P3,000.00 in concept of moral damages, and the additional sum of
Garcia would circumscribe it.
P2,000.00 as attorney's fees, as well as the costs of this action.8

1. As to the first error assigned, no error was committed by the trial court
Atty. Garcia's Motion for Reconsideration, based on the same grounds
in continuing with the ease and handing down its decision against
hereinafter discussed having been denied by the trial court, he filed the
defendants-appellants. The contention that said defendants-appellants,
present appeal, and assigns the following errors in his "Brief for
as substituted parties-defendants by virtue of their being the heirs of the
Defendant-Appellant":
deceased original defendant pursuant to the trial court's Orders of
October 24, 1958 and August 11, 1959 in accordance with Rule 3,
section 17 of the Rules of Court 10 , should have been brought within
First Error: the Court's jurisdiction by summons is fallacious. For the record shows
that Atty. Garcia at the time acknowledged receipt of the Amended
Complaint substituting said defendants-heirs for the deceased original
defendant as "Attorney for the defendants", presented no opposition
THE LOWER COURT ERRED IN CONTINUING WITH THE CASE thereto, and furthermore prayed for and was granted by the Court a
WITHOUT THE NEW DEFENDANTS BROUGHT TO ITS period of 15 days to file an answer to the Amended Complaint. Having
JURISDICTION BY SUMMONS AND WITHOUT EVEN INFORMING been duly impleaded and having submitted to the Court's jurisdiction
SAID DEFENDANTS THAT THEY HAVE BECOME PARTIES TO THE through their counsel, Atty. Garcia, the issuance of a summons was
CASE. unnecessary. The other contention that "there is oven no record
showing that these defendants were at all informed that they had
become parties to the above-captioned case" 11 is equally fallacious.
Second Error: Nowhere in appellants' brief is there an assertion by Atty. Garcia, that,
he, as their attorney of record, and in compliance with his duty as such
and as an officer of the Court, failed or neglected to inform them of the
admission of the Amended Complaint substituting them for the
THE LOWER COURT ERRED IN IGNORING THE MOTION TO deceased original defendant.
WITHDRAW AS COUNSEL FILED BY A LAWYER WHO HAD LOST
AUTHORITY TO RE PRESENT A DEAD CLIENT.
2. Appellants claim in their second assignment of error that the trial court
erred in ignoring the Motion to Withdraw as Counsel filed by Atty.
Garcia. In the face of Atty. Garcia's previous representations and PERLAS-BERNABE, J.:
appearance as counsel of record for the substituted defendants, his last
hour motion to withdraw as counsel and disclaimer that said defendants
have hired him to represent them — which he filed one day before the
For the Court's resolution is a Complaint-Affidavit[1] filed on February
date set for resumption of the hearing — came too late and was
11, 2005 by complainant Cleo B. Dongga-as (complainant), before the
properly ignored by the Court. The Court could not accept this turn-
Integrated Bar of the Philippines (IBP) – Commission on Bar Discipline
about on his mere "say-so." His motion was not verified. Aside from the
(CBD), against respondents Atty. Rose Beatrix Cruz-Angeles (Atty.
fact that his said motion carried no notice, in violation of the requirement
Cruz-Angeles), Atty. Wylie M. Paler (Atty. Paler), and Atty. Angeles
of Rule 15, section 4 of the Rules of Court, and could therefore be
Grandea (Atty. Grandea; collectively, respondents) of the Angeles,
treated as a "mere scrap of paper", 12 the said motion was likewise
Grandea & Paler Law Office (law firm), charging them of various
fatally defective in that it carried no notice to his clients on record, the
violations of the Code of Professional Responsibility (CPR) for, inter alia,
defendants-appellants, as required by Rule 138, section 26 of the Rules
refusing to return the money given by complainant in exchange for legal
of Court. Furthermore, it is well settled that "(A)n attorney seeking to
services which respondents failed to perform.
withdraw must make an application to the court, for the relation does not
terminate formally until there is a withdrawal of record; at least so far as
the opposite party is concerned, the relation otherwise continues until
the end of the litigation." 13 The trial court's ignoring of the last-hour The Facts
motion and its handing down of its decision on the day of the hearing,
upon the failure of defendants and their counsel to appear, in spite of
their having been duly notified thereof, was in effect a denial of
counsel's application for withdrawal. Atty. Garcia's unexplained failure to Complainant alleged that sometime in May 2004, he engaged the law
appear was unexcusable. He had no right to presume that the Court firm of respondents to handle the annulment of his marriage with his
would grant his withdrawal. If he had then appeared and insisted on his wife, Mutya Filipinas Puno-Dongga-as (Mutya). In his meeting with
withdrawal, the trial court could then have had the opportunity to order Attys. Cruz-Angeles and Paler, complainant was told that: (a) the case
the appearance of defendants-appellants and verify from them the truth would cost him P300,000.00, with the first P100,000.00 payable
of his assertion that they had not "hired him to represent them." immediately and the remaining P200,000.00 payable after the final
hearing of the case; (b) respondents will start working on the case upon
receipt of PI00,000.00, which will cover the acceptance fee,
psychologist fee, and filing fees; and (c) the time-frame for the resolution
3. The trial court, therefore, did not render a "premature judgment in an of the case will be around three (3) to four (4) months from filing.
unfinished case where the defendants were not given their day in court", Accordingly, complainant paid respondents P100,000.00 which was duly
as claimed in the last error assigned by appellants. As stated earlier, the received by Atty. Cruz-Angeles.[2]
record shows that on March 19, 1958, the original defendant's widow,
Leonarda Manit was placed by Atty. Garcia on the witness stand during
the deceased's lifetime and testified that her husband "has no business
of his own, because he is sickly" and that she was the one operating From then on, complainant constantly followed-up his case with Attys.
and managing their transportation business of three trucks since as Cruz-Angeles and Paler. However, despite his constant prodding, Attys.
early as 1952, some years before the filing of the complaint on January Cruz-Angeles and Paler could not present any petition and instead,
18, 1956. 14 In effect, the widow, Leonarda Manit had then submitted offered excuses for the delay, saying that: (a) they still had to look for a
herself to the Court's jurisdiction, asserting as she did that she was the psychologist to examine Mutya; (b) they were still looking for a "friendly"
one operating the business and that her husband had no business of his court and public prosecutor; and (c) they were still deliberating where to
own. The widow and her three children of age as heirs of the deceased file the case.[3] They promised that the petition would be filed on or
cannot therefore claim ignorance of the pendency of the case, and that before the end of June 2004, but such date passed without any petition
notwithstanding that she was the actual operator and manager of the being filed. As an excuse, they reasoned out that the petition could not
business, that she has been kept in complete ignorance of its be filed since they have yet to talk to the judge who they insinuated will
subsequent developments, after her husband's death over 10 years favorably resolve complainant's petition.[4]
ago. Almost 10 years have elapsed since they were substituted in 1959
as defendants for the deceased, and it taxes all credibility for them to
claim now in their brief that "said new defendants did not even know that Sometime in the third week of July 2004, Attys. Cruz-Angeles and Paler
they became parties in the Amended Complaint," 15 and that all this asked for an additional payment of P250,000.00 in order for them to
time not the slightest effort was made by them to find out from Atty. continue working on the case. Hoping that his petition would soon be
Garcia or from the Court for that matter what had happened to the case filed, complainant dutifully paid the said amount on July 23, 2004, which
nor did Atty. Garcia in compliance with his duty as an officer of the Court was again received by Atty. Cruz-Angeles.[5] However, to complainant's
inform them of the decision handed down by the Court Over 9 years dismay, no appreciable progress took place. When complainant inquired
ago. Having failed to appear on the day set for trial without any about the delay in the filing of the case, Atty. Cruz-Angeles attempted to
justifiable explanation to the Court nor having presented an affidavit of ease his worries by saying that the draft petition was already submitted
merits as to the existence of valid and lawful defenses, they cannot now to the judge for editing and that the petition will soon be finalized.[6]
complain of having been deprived of their day in Court.

In the last week of September 2004, complainant received a text


The circumstances of the case and the appeal taken all together lead message from Atty. Cruz-Angeles informing him that the National
to the conclusion that the last-hour withdrawal application of Atty. Garcia Statistics Office bore no record of his marriage. The latter explained
and his appeal "as officer of the Court and then counsel of the then that this development was favorable to complainant's case
deceased" was but a device to prolong this case and delay in the because, instead of the proposed petition for annulment of marriage,
execution of the judgment, which should have been carried out years they would just need to file a petition for declaration of nullity of
ago. The imposition of double costs is therefore in order. marriage. She also informed complainant that they would send
someone to verify the records of his marriage at the Local Civil Registrar
of La Trinidad, Benguet (Civil Registrar) where his marriage was
ACCORDINGLY, the judgment appealed from is hereby affirmed, with celebrated. However, upon complainant's independent verification
double costs to be paid by the attorney for defendants. So ordered. through his friend, he discovered that the records of his marriage in the
Civil Registrar were intact, and that the alleged absence of the records
of his marriage was a mere ruse to cover up the delay in the filing of the
petition.[7]
Concepcion C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Castro, Fernando and Capistrano, JJ., concur.

Barredo, J., concurs in the result. Utterly frustrated with the delay in the filing of his petition for annulment,
complainant went to respondents' law office to terminate their
People vs nadera (see pdf) engagement and to demand for a refund of the aggregate amount of
P350,000.00 he earlier paid them. However, Attys. Cruz-Angeles and
Paler refused to return the said amount, and to complainant's surprise,
sent him two (2) billing statements dated October 5, 2004[8] and
October 10, 2004[9] in the amounts of P258,000.00 and P324,000.00,
respectively. Notably, the October 5, 2004 billing statement included a
fee for "consultants (prosecutors)" amounting to P45,000.00.[10] In view
of the foregoing, complainant filed the instant Complaint-Affidavit before Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him,
the IBP-CBD, docketed as CBD Case No. 05-1426. and his negligence in connection therewith shall render him liable.

Case law exhorts that, "once a lawyer takes up the cause of his client,
he is duty-bound to serve the latter with competence, and to attend to
In her defense,[11] Atty. Cruz-Angeles admitted to have received a total such client's cause with diligence, care, and devotion whether he
of P350,000.00 from complainant,[12] but denied that she was remiss in accepts it for a fee or for free. He owes fidelity to such cause and must
her duties, explaining that the delay in the filing of the petition for always be mindful of the trust and confidence reposed upon him.
annulment of marriage was due to complainant's failure to give the Therefore, a lawyer's neglect of a legal matter entrusted to him by his
current address of Mutya and provide sufficient evidence to support the client constitutes inexcusable negligence for which he must be held
petition.[13] Further, Atty. Cruz-Angeles alleged that it was Atty. Paler administratively liable,"[25] as in this case.
who was tasked to draft and finalize the petition.[14] For his part,[15]
Atty. Paler moved for the dismissal of the case for failure to state a
cause of action, arguing too that complainant filed the present
administrative complaint only to avoid payment of attorney's fees.[16] In this relation, Attys. Cruz-Angeles and Paler also violated Rules 16.01
and 16.03, Canon 16 of the CPR when they failed to return to
complainant the amount of P350,000.00 representing their legal fees,
viz. :
The IBP's Report and Recommendation
CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND
PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS
POSSESSION.
In a Report and Recommendation[17] dated July 10, 2012, the IBP
Investigating Commissioner found Attys. Cruz-Angeles and Paler
administratively liable and, accordingly, recommended that they be
meted the penalty of suspension from the practice of law for four (4) Rule 16.01 – A lawyer shall account for all money or property collected
months. However, Atty. Grandea was exonerated of any liability as his or received for or from the client.
participation in the charges has not been discussed, much less proven.
[18]

Rule 16.03– A lawyer shall deliver the funds and property of his client
when due or upon demand, x x x.
The Investigating Commissioner found that complainant indeed
engaged the services of Attys. Cruz-Angeles and Paler in order to annul It bears stressing that "the relationship between a lawyer and his client
his marriage with his wife, Mutya. Despite receiving the aggregate is highly fiduciary and prescribes on a lawyer a great fidelity and good
amount of P350,000.00 from complainant, Attys. Cruz-Angeles and faith. The highly fiduciary nature of this relationship imposes upon the
Paler neglected the legal matter entrusted to them, as evidenced by lawyer the duty to account for the money or property collected or
their failure to just even draft complainant's petition for annulment received for or from his client. Thus, a lawyer's failure to return upon
despite being engaged for already five (5) long months.[19] Moreover, demand the funds held by him on behalf of his client, as in this case,
as pointed out by the Investigating Commissioner, despite their gives rise to the presumption that he has appropriated the same for his
preliminary assessment that complainant's petition would not likely own use in violation of the trust reposed in him by his client. Such act is
prosper, Attys. Cruz-Angeles and Paler still proceeded to collect an a gross violation of general morality, as well as of professional
additional P250,000.00 from complainant. Worse, they even billed him ethics."[26]
an exorbitant sum of P324,000.00.[20] Thus, the Investigating
Commissioner opined that the amounts respondents had already
collected and would still want to further collect from complainant can
Furthermore, Attys. Cruz-Angeles and Paler misrepresented to
hardly be spent for research in connection with the annulment case that
complainant that the delay in the filing of his petition for annulment was
was not filed at all. Neither can they cover just fees for Attys. Cruz-
due to the fact that they were still looking for a "friendly" court, judge,
Angeles and Paler who did nothing to serve complainant's cause.[21]
and public prosecutor who will not be too much of a hindrance in
achieving success in the annulment case. In fact, in the two (2) billing
statements dated October 5, 2004[27] and October 10, 2004,[28] Attys.
In a Resolution[22] dated September 28, 2013, the IBP Board of Cruz-Angeles and Paler made it appear that they went to various
Governors adopted and approved the aforesaid Report and locations to look for a suitable venue in filing the said petition, and even
Recommendation, with modification increasing the recommended paid various amounts to prosecutors and members of the National
penalty to two (2) years suspension from the practice of law. Atty. Cruz- Bureau of Investigation to act as their "consultants." Such
Angeles moved for reconsideration,[23] which was, however, denied in a misrepresentations and deceits on the part of Attys. Cruz-Angeles and
Resolution[24] dated June 7, 2015. Paler are violations of Rule 1.01, Canon 1 of the CPR, viz.:

CANON 1 – A lawyer shall uphold the constitution, obey the laws of the
land and promote respect for law and legal processes.
The Issue Before the Court

Rule 1.01 – A lawyer shall not engage in unlawful, dishonest, immoral or


The essential issue in this case is whether or not Attys. Cruz-Angeles deceitful conduct.
and Paler should be held administratively liable for violating the CPR.
Rule 1.01, Canon 1 of the CPR instructs that "[a]s officers of the court,
lawyers are bound to maintain not only a high standard of legal
proficiency, but also of morality, honesty, integrity, and fair dealing."[29]
The Court's Ruling Clearly, Attys. Cruz-Angeles and Paler fell short of such standard when
they committed the afore-described acts of misrepresentation and
deception against complainant. Their acts are not only unacceptable,
disgraceful, and dishonorable to the legal profession; they also reveal
A judicious perusal of the records reveals that sometime in May 2004,
basic moral flaws that make Attys. Cruz-Angeles and Paler unfit to
complainant secured the services of Attys. Cruz-Angeles and Paler for
practice law.[30]
the purpose of annulling his marriage with Mutya, and in connection
therewith, paid Attys. Cruz-Angeles and Paler the aggregate sum of
P350,000.00 representing legal fees. However, despite the passage of
more than five (5) months from the engagement, Attys. Cruz-Angeles As members of the Bar, Attys. Cruz-Angeles and Paler should not
and Paler failed to file the appropriate pleading to initiate the case perform acts that would tend to undermine and/or denigrate the integrity
before the proper court; and worse, could not even show a finished draft of the courts, such as insinuating that they can find a "friendly" court and
of such pleading. Such neglect of the legal matter entrusted to them by judge that will ensure a favorable ruling in complainant's annulment
their client constitutes a flagrant violation of Rule 18.03, Canon 18 of the case. It is their sworn duty as lawyers and officers of the court to uphold
CPR, to wit: the dignity and authority of the courts. Respect for the courts guarantees
the stability of the judicial institution. Without this guarantee, the
CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH institution would be resting on very shaky foundations.[31] This is the
COMPETENCE AND DILIGENCE. very thrust of Canon 11 of the CPR, which provides that "[a] lawyer shall
observe and maintain the respect due to the courts and to judicial
officers and should insist on similar conduct by others." Hence, lawyers
who are remiss in performing such sworn duty violate the aforesaid Failure to comply with the foregoing directive will warrant the imposition
Canon 11, and as such, should be held administratively liable and of a more severe penalty.
penalized accordingly, as in this case.[32]

Meanwhile, the complaint as against Atty. Angeles Grandea is


Moreover, Canon 7 of the CPR commands every lawyer to "at all times DISMISSED for lack of merit.
uphold the integrity and dignity of the legal profession" for the strength
of the legal profession lies in the dignity and integrity of its members. It
is every lawyer's duty to maintain the high regard to the profession by
staying true to his oath and keeping his actions beyond reproach. It Let copies of this Decision be served on the Office of the Bar Confidant,
must be reiterated that as an officer of the court, it is a lawyer's sworn the Integrated Bar of the Philippines, and all courts in the country for
and moral duty to help build and not destroy unnecessarily that high their information and guidance and be attached to respondents'
esteem and regard towards the courts so essential to the proper personal records as attorney.
administration of justice; as acts and/or omissions emanating from
lawyers which tend to undermine the judicial edifice is disastrous to the
continuity of the government and to the attainment of the liberties of the SO ORDERED.
people. Thus, all lawyers should be bound not only to safeguard the
good name of the legal profession, but also to keep inviolable the honor,
prestige, and reputation of the judiciary.[33] In this case, Attys. Cruz-
Angeles and Paler compromised the integrity not only of the judiciary,
but also of the national prosecutorial service, by insinuating that they
can influence a court, judge, and prosecutor to cooperate with them to Angeles v. Uy
ensure the annulment of complainant's marriage. Indubitably, Attys.
Cruz-Angeles and Paler also violated Canon 7 of the CPR, and hence, A.C. No. 5019. April 6, 2000
they should be held administratively liable therefor.

Facts:
Anent the proper penalty for Attys. Cruz-Angeles and Paler,
jurisprudence provides that in similar cases where lawyers neglected
their client's affairs, failed to return the latter's money and/or property In a Criminal case, a certain Norma Trajano alleged that she paid 20k to
despite demand, and at the same time committed acts of private complainant Del Rosario and the balance of 16.5k was delivered
misrepresentation and deceit against their clients, the Court imposed to Atty. Uy, the lawyer of private complainant in the said case.
upon them the penalty of suspension from the practice of law for a
period of two (2) years. In Jinon v. Jiz [34] the Court suspended the
lawyer for a period of two (2) years for his failure to return the amount
his client gave him for his legal services which he never performed. Complainant Del Rosario manifested that she did not receive the 16.5k
Also, in Agot v. Rivera, [35] the Court suspended the lawyer for a period pesos that was paid to Atty. Uy.
of two (2) years for his (a) failure to handle the legal matter entrusted to
him and to return the legal fees in connection therewith; and (b)
misrepresentation that he was an immigration lawyer, when in truth, he
Atty. Uy however argued that his client was the one that did not accept
was not. Finally, in Spouses Lopez v. Limos, [36] the Court suspended
the money since they wanted to receive the whole amount. But such an
the erring lawyer for three (3) years for her failure to file a petition for
assertion was belied when Del Rosario manifested her willingness to
adoption on behalf of complainants, return the money she received as
accept the money.
legal fees, and for her commission of deceitful acts in misrepresenting
that she had already filed such petition when nothing was actually filed,
resulting in undue prejudice to therein complainants. In this case, not
only did Attys. Cruz-Angeles and Paler fail to file complainant's petition Atty. Uy alleged that the amount was safely in his office in the same
for annulment of marriage and return what the latter paid them as legal building. As such, the proceedings were suspended in order for Uy to
fees, they likewise misrepresented that they can find a court, judge, and get the money from his office. Yet, Atty. Uy never returned hence the
prosecutor who they can easily influence to ensure a favorable administrative case against him.
resolution of such petition, to the detriment of the judiciary and the
national prosecutorial service. Under these circumstances, the Court
individually imposes upon Attys. Cruz-Angeles and Paler the penalty of
suspension from the practice of law for a period of three (3) years. In his comment, Atty. Uy contends that he kept the money in his office
because it was the wish of his client. He allegedly informed them of
such money and tried to give it to them but they insisted that he retain it
in order for them to not spend it.
Finally, the Court sustains the IBP's recommendation ordering Attys.
Cruz-Angeles and Paler to return the amount of P350,000.00 they
received from complainant as legal fees. It is well to note that "while the
Court has previously held that disciplinary proceedings should only The Office of the Bar Confidant recommended that Atty. Uy be
revolve around the determination of the respondent-lawyer's suspended for one month. It was decided that the complainant’s side of
administrative and not his civil liability, it must be clarified that this rule the story had more merit.
remains applicable only to claimed liabilities which are purely civil in
nature – for instance, when the claim involves moneys received by the
lawyer from his client in a transaction separate and distinct and not Issue: WON Uy is guilty of violating Canon 16 of the CPR
intrinsically linked to his professional engagement."[37] Hence, since
Attys. Cruz-Angeles and Paler received the aforesaid amount as part of
their legal fees, the Court finds the return thereof to be in order.
Held:

WHEREFORE, respondents Atty. Rose Beatrix Cruz-Angeles and Atty.


Wylie M. Paler are found GUILTY of violating Rule 1.01, Canon 1, The Court agreed with the Office of the Bar Confidant.
Canon 7, Canon 11, Rule 18.03, Canon 18, and Rules 16.01 and 16.03,
Canon 16 of the Code of Professional Responsibility. Accordingly, each
of them is hereby SUSPENDED from the practice of law for a period of
The relationship between a lawyer and a client is highly fiduciary. It
three (3) years, effective upon the finality of this Decision, with a STERN
requires a high degree of fidelity and good faith. It is designed to remove
WARNING that a repetition of the same or similar acts will be dealt with
all such temptation and to prevent everything of that kind from being
more severely.
done for the protection of the client.

Likewise, respondents Atty. Rose Beatrix Cruz-Angeles and Atty. Wylie


Canon 16 of the CPR provides that ―a lawyer shall hold in trust all
M. Paler are ORDERED to return to complainant Cleo B. Dongga-as the
moneys and properties of his client that may come into his possession.
legal fees they received from the latter in the aggregate amount of
P350,000.00 within ninety (90) days from the finality of this Decision.
The spouses, believing and trusting the representations of their lawyer
that Padilla was a good risk, authorized him to start preparing all the
Furthermore, Rule 16.01 states that ―a lawyer shall account for all the necessary documents relative to the registration of the Real Estate
money or property collected or received for or from the client. Mortgage to secure the payment of the loan in favor of the Cruz
spouses.

Respondent failed to promptly report and account for the 16.5k he had
received fromTrajano on behalf of his client. On 4 July 1990, the complainants agreed to the request of Atty. Jacinto
and were presented by the latter with a Real Estate Mortgage Contract
and a Transfer Certificate of Title No. 127275 in the name of
Concepcion G. Padilla. The amount of PhP 285,000.00 was given by the
If it were true that Del Rosario was informed about the payment and that
spouses to the respondent in cash (PhP 270,000.00) and a PBCom
she entrusted it to Atty. Uy, she would have known his whereabouts.
check no. 713929 for PhP 15,000.00.
That she did not know it showed falsity of the claim.

Upon maturity of the loan on 15 October 1990, the spouses demanded


In Aya v. Bigornia, the Court ruled that money collected by a lawyer in
payment from Concepcion G. Padilla by going to the address given by
favor of his clients must be immediately turned over to them.
the respondent but there proved to be no person by that name living
therein. When the complainants verified the genuineness of TCT No.
127275 with the Register of Deeds of Quezon City, it was certified by the
In Daroy v. Legaspi, the Court held that ―lawyers are bound to promptly said office to be a fake and spurious title. Further efforts to locate the
account for money or property received by them on behalf of their debtor-mortgagor likewise proved futile.
clients and failure to do so constitutes professional misconduct.

In their sworn affidavits given before the National Bureau of


Verily, the question is not necessarily whether the rights of the clients Investigation (NBI), the spouses claim that they relied much on the
have been prejudiced, but whether the lawyer has adhered to the ethical reassurances made by Atty. Jacinto as to Concepcion G. Padilla’s credit,
standards of the bar. considering that he was their lawyer. It was also their trust and
confidence in Atty. Jacinto that made them decide to forego meeting the
debtor-mortgagor.

In this light, the Court must stress that it has the duty to look into
dealings between attorneys and their clients and to guard the latter from
any undue consequences resulting from a situation in which they may The complainants’ evidence also included the sworn statements of
stand unequal. Estrella Ermino Palipada, the secretary of the respondent at the Neri
Law Office, and Avegail Payos, a housemaid of Atty. Jacinto. Ms.
Palipada stated that:chanrob1es virtual 1aw library

In the present case, the records merely show that respondent did not
promptly report that he received money on behalf of his client. There is
no clear evidence of misappropriation. Under the circumstances, Atty. 1. she was the one who prepared the Real Estate Mortgage
Uy should be suspended for only one month. Contract and the Receipt of the loan upon the instruction of the
respondent;
[Adm. Case No. 5235. March 22, 2000.]

2. she was a witness to the transaction and never once saw the
FERNANDO C. CRUZ AND AMELIA CRUZ, Complainants, v. ATTY. person of Concepcion G. Padilla, the alleged mortgagor; and that
ERNESTO C. JACINTO, Respondent.

3. she was instructed by Atty. Jacinto to notarize the said


RESOLUTION contract by signing the name of one Atty. Ricardo Neri.

Avegail Payos, the housemaid of the respondent, in turn stated that she
was the one who simulated the signature of one Emmanuel Gimarino,
MELO, J.: the Deputy Register of Deeds of Quezon City upon the instruction of
Atty. Jacinto. This was done to make it appear that the real estate
mortgage was registered and the annotation to appear at the back of the
TCT as an encumbrance.

In their sworn complaint, spouses Fernando C. Cruz and Amelia


Manimbo Cruz seek the disbarment of Atty. Ernesto C. Jacinto. The On 14 November 1997, a case for Estafa thru Falsification of Public
Integrated Bar of the Philippines, through Commissioner Jesulito A. documents under Art. 315 was filed against Atty. Jacinto. He was
Manalo of the Commission on Bar Discipline, conducted an arrested and detained by the NBI.
investigation. Thereafter, he submitted his Findings and
Recommendation, thusly:chanrobles.com : chanrobles.com.ph

The defense of the respondent, on the other hand, was embodied in his
Answer with Motion to Dismiss filed with the Commission on Bar
This is a disbarment case filed by the spouses Fernando and Amelia Discipline. Therein, he alleged that the criminal information for estafa
Cruz against Atty. Ernesto C. Jacinto. This case was filed with the thru falsification filed against him had already been dismissed because
Commission on Bar Discipline last 30 January 1991. of the voluntary desistance of the complainants.

The evidence of the complainants show that sometime in June 1990, In his version of the facts, Atty. Jacinto averred that while he indeed
Atty. Ernesto Jacinto, lawyer of the couple in an unrelated case, facilitated the loan agreement between the Cruz spouses and
requested the Cruz spouses for a loan in behalf of a certain Concepcion Concepcion G. Padilla, he had no idea that the latter would give a
G. Padilla, who he claimed to be an old friend as she was allegedly in falsified Certificate of Title and use it to obtain a loan. He claimed that he
need of money. The loan requested was for PhP 285,000.00 payable himself was. a victim under the circumstances.
after 100 days for PhP 360,000 to be secured by a real estate mortgage
on a parcel of land located at Quezon City.
Respondent further alleged that he had not been remiss nor negligent in Since the practice of law is inseparably connected with the exercise of
collecting the proceeds of the loan; that in fact, he had even advanced its judicial power in administration of justice, the Court cannot be
the full payment of the loan due to the complainants from his own divested of its constitutionally ordained prerogative which includes the
savings, even if Concepcion G. Padilla had not yet paid, much less authority to discipline, suspend or disbar any unfit and unworthy
found. member of the Bar by a mere execution of affidavits of voluntary
desistance and quitclaim (par. [5], Sec. 5, 1987 Constitution).

RECOMMENDATIONS
A lawyer may he disciplined or suspended for any misconduct, whether
in his professional or private capacity, which shows him to be wanting in
moral character, in honesty, in probity and good demeanor, thus
It is every lawyer’s sworn duty to obey the laws of the and to promote rendering unworthy to continue as an officer of the court (Maligsa v.
respect for law and legal processes. The Code of Professional Cabanting, 272 SCRA 408 [1997]), and the complainants who called the
Responsibility command that he shall not engage in unlawful, dishonest, attention of the Court to the attorney’s alleged misconduct are in no
immoral or deceitful conduct. (Rule 1.01, Code of Professional sense a party, and have generally no interest in the outcome except as
Responsibility) all good citizens may have in the proper administration of justice
(Rayos-Ombac v. Rayos, 285 SCRA 93 [1998]).

In the instant case, there was a clear yet unrebutted allegation in the
complaint that the Respondent had ordered his secretary and Undeniably, respondent represented complainants in the loan
housemaid to falsify the signatures of the notary public and the Deputy transaction. By his own admission, he was the one who negotiated with
Register of Deeds respectively to make it appear that the real estate the borrower, his long-time friend and a former client. He acted not
mortgage contract was duly registered and thus binding. merely as an agent but as a lawyer of complainants, thus, the execution
of the real estate mortgage contract, as well as its registration and
annotation on the title were entrusted to him In fact, respondent even
While it may be true that the complaint for Estafa thru Falsification filed received his share in the interest earnings which complainants realized
against the Respondent had been dismissed, the dismissal was from the transaction. His refusal to recognize any wrongdoing or
because of the complainant’s voluntary desistance and not a finding of carelessness by claiming that he is likewise a victim when it was shown
innocence. It neither confirms nor denies Respondent’s non-culpability. that the title to the property, the registration of the real estate mortgage
Furthermore, it is well-settled that disciplinary proceedings are "sui contract, and the annotation thereon were all feigned, will not at all
generis", the primary object of which is not so much to punish the exonerate him.
individual attorney himself, as to safeguard the administration of justice
by protecting the court and the public from the misconduct of lawyers
and to remove from the professions persons whose disregard of their As a rule, a lawyer is not barred from dealing with his client but the
oath have proven them unfit to continue discharging the trust reposed in business transaction must be characterized with utmost honesty and
them as members of the bar. Thus, disciplinary cases may still proceed good faith. However, the measure of good faith which an attorney is
despite the dismissal of civil and/or criminal cases against a required to exercise in his dealings with his client is a much higher
lawyer.chanroblesvirtuallawlibrary standard than is required in business dealings where the parties trade at
arms length. Business transactions between an attorney and his client
are disfavored and discouraged by the policy of the law. Hence, courts
A lawyer who does any unlawful fraudulent or dishonest act may and carefully watch these transactions to be sure that no advantage is taken
should be held administratively liable therefor. In the case at bar, the by a lawyer over his client. This rule is founded on public policy for, by
Respondent should not be made an exception. While it may be shown virtue of his office, an attorney is in an easy position to take advantage
that he indeed advanced the payment due to his erstwhile clients, such of the credulity and ignorance of his client. Thus, no presumption of
will not exempt him from administrative liability. At best it can only innocence or improbability of wrongdoing is considered in an attorney’s
mitigate. Respondent is recommended to be suspended for six (6) favor (Nakpit v. Valdes, 286 SCRA 758 [1998]). Further, his fidelity to the
months from the practice of law. cause of his client requires him to be evermindful of the responsibilities
that should be expected of him.

(Findings and Recommendation, pp. 1-4)


Verily, a lawyer may not, without being guilty of professional misconduct,
act as counsel for a person whose interest conflicts with that of his
former client. The reason for the prohibition is found in the relation of
On February 28, 1998, the Board of Governors of the IBP passed attorney and client, which is one of trust and confidence at the highest
Resolution XIII-97-199 adopting and approving the Findings and degree (Maturan v. Gonzales, 287 SCRA 943 [1998]).
Recommendation of the Investigating Commissioner, which
reads:chanrob1es virtual 1aw library

Respondent utterly failed to perform his duties and responsibilities


faithfully as well as to protect the rights and interests of his clients and
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and by his deceitful actuations constituting violations of the Code of
APPROVED, the Report and Recommendation of the Investigating Professional Responsibilities must be subjected to disciplinary
Commissioner in the above-entitled case, herein made part of this measures for his own good, as well as for the good of the entire
Resolution/Decision as Annex "A" and, finding the recommendation fully membership of the Bar as a whole.
supported by the evidence on record and the applicable laws and rules,
respondent Atty. Ernesto C. Jacinto is SUSPENDED from the practice of
law for six (6) months for his unlawful, fraudulent or dishonest act.
WHEREFORE, the Court hereby adopts the resolution of the Board of
Governors of the Integrated Bar of the Philippines and orders
respondent Atty. Ernesto C. Jacinto suspended from the practice of law
(Notice of Resolution [dated Feb. 28, 1998]). for six (6) months with the warning that a repetition of the same or
similar offense will be dealt with more severely.

In his Comment and Answer with Motion to Dismiss, respondent averred


that complainants have no cause of action against him as the same has SO ORDERED.chanrobles virtual lawlibrary
been waived, settled, and extinguished on account of the affidavits of
voluntary desistance and quitclaim executed by them in the criminal
case filed against him.
December 8, 1923

The assertion must necessarily fail. The practice of law is so intimately


affected with public interest that it is both a right and a duty of the State VICENTE DIAZ, complainant,
to control and regulate it in order to promote the public welfare. The
Constitution vests this power of control and regulation in this Court. vs.
RUPERTO KAPUNAN, respondent.

Although it was on December 23, 1922, that Diaz and Kapunan entered
into the agreement, Diaz could only wait until January 4, 1923, following,
Attorney-General Villa-Real for the Government. to lay before this court charges against Attorney Kapunan for alleged
unprofessional conduct. Undoubtedly, before Kapunan had knowledge
Perfecto Gabriel and Rafael Palma for respondent. of the disbarment proceedings, on January 10, 1923, he presented a
motion in the Court of First Instance of Leyte asking that he be permitted
to retain the P500 in question, in part payment of his professional fees.
Later, on February 4, 1923, when Kapunan must have had knowledge of
the disbarment proceedings, he filed another motion, withdrawing his
MALCOLM, J.: former motion and asking the court to permit him to turn over the P500
to Diaz, which Judge Causing refused to do on the ground that it was a
personal matter. Nevertheless, on July 10, 1923, the clerk of the Court
of First Instance of Leyte handed the P500 to Diaz who, in turn,
This action for malpractice brought by Vicente Diaz against Attorney receipted for that amount. lawphil.net
Ruperto Kapunan, has to do with the conduct of Attorney Kapunan
during the legal proceedings which followed the business troubles of
Vicente Diaz and Secundino de Mendezona, and particularly relates to
the conduct of Attorney Kapunan in civil case No. 2098 of the Court of From correspondence, it further is evident that the family of Mendezona
First Instance of Leyte. The ultimate question on which we would was led to believe that the P500 would shortly be sent them. Without
concentrate attention concerns the agreement between Diaz and doubt, the Mendezona family would have been gratified to receive even
Kapunan at the time of the sale of the property of Mendoza, whereby the P500 pittance out of the business wreck in Leyte of the senior
Kapunan, on the promise of Diaz to pay him P1,000, agreed to desist Mendezona.
from further participation in the sale, all in alleged violation of article
1459 of the Civil Code and article 542 of the Penal Code.
During much of the time here mentioned, Kapunan was the attorney of
Mendezona. Kapunan was given extensive authority by the letter of
Omitting the irrelevant matter interjected into this case, the principal Mendezona of April 12, 1919. When Kapunan took part in the sale, it
facts of record are the following: must be assumed that he was bidding in representation of his client and
for the benefit of the client.

In 1917, Vicente Diaz and Secundino de Mendezona formed a


partnership and entered into extensive business transactions in the It remains to be said that following the presentation of the charges
Province of Leyte. The capital of the partnership was P380,000. against Attorney Kapunan in this court, he was given an opportunity to
Unfortunately, however, the business failed to prosper, with the result answer, and the usual investigation of his professional conduct was
that on liquidation, it was found to have suffered a loss of P67,000. made by the provincial fiscal of Leyte acting under the supervision of the
When Diaz and Mendezona came to settle up their affairs, they Attorney-General. From the report of the fiscal, indorsed by the
eventually formulated a document of sale and mortgage in which Attorney-General, three charges seem to have been considered. The
Mendezona recognized a debt in favor of Diaz in the sum of P80,000 first two, relating to Kapunan's attempt to represent both the parties in
and an additional sum of P10,000 owing to Diaz, laid upon the hacienda the case, and to molest and disturb Diaz by frivolous motions, the law
"Mapuyo," and to be paid within the term of one year. When the year officer of the Government finds not substantiated; and with this
had expired Mendezona was not to be found and his family was unable conclusion we fully agree. The third charge is more serious and has to
to meet the payment. There followed the usual proceedings for do with Kapunan having intervened in the manner in which he did in the
foreclosure and sale, which, after considerable delay, resulted in the sale of the property of his client Mendezona. The Attorney-General is of
hacienda's being offered for sale at public auction. the opinion on this point that the facts constitute a flagrant violation of
the provisions of article 1459 of the Civil Code and article 542 of the
Penal Code. "In view thereof, it is recommended that corrective
measures commensurate with the irregularity committed by Attorney
At the time fixed for the sale, December 23, 1922, there appeared Kapunan, be taken against him."
Vicente Diaz, accompanied by his lawyer Emilio Benitez, and Attorney
Ruperto Kapunan. Luis Velarde, the deputy sheriff of Leyte, is authority
for the statement that Kapunan told him that he, Kapunan, was ready to
bid on the property up to P16,000 in order to assist the Mendezona Article 1459 of the Civil Code was held in force in the case of
family which was in financial straits. At any rate, the bidding was opened Hernandez vs. Villanueva ([1920], 40 Phil., 775). It provides that the
by Kapunan offering P12,000 for the property and with Diaz and following persons, naming them, "cannot take by purchase, even at a
Kapunan raising the bids until finally Diaz offered P12,500. There the public or judicial auction, either in person or through the mediation of
bids stopped on account of Diaz and Kapunan entering into the another." The provision contained in the last paragraph of said article is
agreement, of decisive importance, which we next quote in full: made to include lawyers, with respect to any property or rights involved
in any litigation in which they may take party by virtue of their profession
and office. We do not believe this article has been infringed by the
respondent because he has not purchased property at a public or
We, Vicente Diaz and Ruperto Kapunan, both being the bidders at the judicial auction and because his participation in the auction was in
auction held for the sale of the properties of Secundino Mendezona, do representation of his client. It has been held that an execution sale to
hereby agreed that Don Ruperto Kapunan should withdraw his bid and the attorney of the defendant is not unlawful if made in good faith, with
refrain from bidding at the said auction as he does hereby withdraw his the consent of the client, and without any purpose of defrauding the
bid, and in consideration thereof, the said Mr. Diaz offers him a premium latter's creditors. (2 R. C. L., 1011; 1 Thornton on Attorneys at Law, pp.
of one thousand pesos (P1,000) which, out of consideration to said Don 298, 299; Smith vs. Smith [1848], 1 Iowa, 307.)
Vicente Diaz, Mr. Kapunan accepts and has, for this reason, refrained
from bidding in competition with said Mr. Diaz.lawphi1.net

The more puzzling question relates to the alleged violation by Attorney


Kapunan of article 542 of the Penal Code. This article punishes "any
Tacloban, Leyte, December 23, 1922. person who shall solicit any gift or promise as a consideration for
agreeing to refrain from taking part in any public auction." The crime is
consummated by the mere act of soliciting a gift or promise for the
(Sgd.) "V. DIAZ. (Sgd.) RUPERTO purpose of abstaining from taking part in the auction. Not permitting our
KAPUNAN." minds to be confused by the varied explanations of Diaz and Kapunan,
the document formulated by them and hereinbefore quoted,
demonstrates that Kapunan, on the promise of Diaz to pay P1,000,
refrained from further participation in the sale of the property of
Following the termination of the sheriff's sale, Diaz on December 26, Mendezona, which is exactly the situation covered by article 542 of the
1922, gave Kapunan P500 of the P1,000 mentioned in the above Penal Code.
quoted document. Diaz further followed the usual procedure to take over
the property of Mendezona pursuant to his bid of P12,500, which
covered the amount of the mortgage with its accumulated interest and
with the judicial expenses.
Public policy discountenances combinations or agreements on the part 7447868 (Exhibit "D") also dated February 11, 1993, in the amount of
of bidders at execution sales, the objects and effects of which are to P150.00. Dissatisfied, complainant Primrose Gonato personally went to
stifle competition. The courts will consider an agreement between a respondent's law office at least three times, and asked for the original
judgment creditor and one claiming an interest in the thing about to be copies of the receipts, but to no avail. Primrose's suspicion grew
sold under an execution, that neither shall bid against the other, as void, stronger, and this prompted her to verify the authenticity of said receipts
unless all parties concerned know of the arrangement and consent with the office of the Clerk of Court of the Regional Trial Court of
thereto. Execution sales should be open to free and full competition, in Cagayan de Oro City. There, it was discovered that the triplicate original
order to secure the maximum benefit for the debtor. Article 542 of the copies of the receipts did not reflect the same amount contained on the
Penal Code is, therefore, a wise provision even though rarely invoked, photocopies of the receipts given by respondent. Receipt No. 9627143
and should be used to discourage the stifling of bids at judicial sales. in the Clerk of Court's Office showed only the amount of P2,470,00 and
(23 C.J., 647; Packard vs. Bird and Chapman [1870], 40 Cal., 378; 3 was dated May 15, 1992, while that given by respondent bore the
Viada, Codigo Penal, 594.) amount of P15,830,00. On the other hand, Receipt No. 7447868 per
Office of Clerk of Court records revealed the sum of P4,000.00, while
that provided by respondent disclosed the sum of P150.00, presumably
to conform to the amount paid by complainant which was P15,980.00.
We conclude that Attorney Kapunan has been guilty of a technical Complainants demanded the return of P15,980.00 but respondent
violation of article 542 of the Penal Code. But we cannot adopt the refused to do so. Thus, in April, 1993, complainants urged respondent to
vigorous recommendation of the Attorney-General, for we consider withdraw as counsel due to loss of trust and confidence.
present certain mitigating circumstances which exert an influence in
favor of the respondent. In the first place, as disclosed by the judicial
records, no reported prosecution under article 542 has been attempted,
which is eloquent proof of the practical disuse of this article; and the For his part, respondent lawyer admits that he received from Vic
Spanish jurisprudence, while indicative of the meaning of the article, Manzano the amount of P15,980.00 which was initially intended to cover
relies principally on the decisions of the French Court of Cassation. (See the, filing fees, sheriff fees, and U.P. Law Center fees in the filing of
Code of Napoleon, arts. 222, 223; decisions of the French Court of counterclaim on behalf of herein complainants. But according to him,
Cassation of October 16, 1844, May 15, 1857, and January 8, 1863.) In after careful study, he realized that the counter-claim is compulsory and
the next place, the complainant Diaz is equally guilty with the not permissive, and so he applied instead the aforesaid sum of
respondent Kapunan. And lastly, Kapunan appears to have been acting P15,980.00 to his acceptance and appearance fees, which fact was
in good faith for his client, although adopting an irregular procedure, and even communicated to Vic Manzano, who was complainants' contact or
although attempting to make tardy restitution of the money received by liason person with respondent. Respondent also specifically denied that
him. he caused the delivery of the falsified photocopies of O.R. Nos.
9627147 and 7447868 to complainant spouses.

Our judgment is that Attorney Ruperto Kapunan shall stand reprimanded


and that the complainant, Vicente Diaz, shall immediately return to the In its Resolution dated January 28, 1999, the Board of Governors of the
clerk of the Court of First Instance of Leyte the P500 received by Diaz Integrated Bar of the Philippines adopted and approved the
from the clerk and receipted for by Diaz, and the clerk of court shall Investigating Commissioner's report and recommendation with an
transmit the P500 to Secundino de Mendezona or, in case of his amendment that respondent be suspended from the practice of law for
absence, to Miss Carmen de Mendezona. Costs shall be taxed in three (3) months.
accordance with the provisions of the Code of Civil Procedure. So
ordered.

The IBP Commission on Bar Discipline found sufficient evidence to


sustain complainants' claim that respondent charged them the amount
A.C. No. 4083 March 27, 2000 of P15,980.00 for filing fees when in fact no such fees were due. It
rejected respondent's claim that the subject amount was applied to his
attorney's fees as this is belied by the statement of account he issued to
complainants indubitably showing that complainants were charged of
LEONITO GONATO and PRIMROSE GONATO, complainants, said amount for filing fees.
vs.

ATTY. CESILO A. ADAZA, respondent. This Court is in full accord with the findings and recommendation of the
IBP that respondent lawyer has sufficiently demonstrated conduct
showing his unfitness for the confidence and trust which characterize
the attorney-client relationship. His act of requiring complainants to pay
RESOLUTION
an exorbitant amount on the pretext that it was needed for the payment
of court fees which were not even substantiated by proper official
receipts, constitutes malpractice which is a serious breach of
MELO, J.: professional duty toward complainants whose trust respondent
disregarded and violated. Respondent expressly admitted having
received the money, but he persistently refused to return the same
despite repeated demands by the complainants. This conduct of the
At bar is an administrative complaint for disbarment filed by the respondent is clearly indicative of lack of integrity and moral soundness,
complainant spouses Leonito and Primrose Gonato against their former as he was clinging to something which was not his and to which he
counsel, Atty. Cesilo A. Adaza, charging him with malpractice and absolutely had no right. Respondent's shallow excuse that he applied
violation of trust. Pursuant to Rule 139-B of the Rules of Court and the said money to his attorney's fees is merely all afterthought and cannot
Resolution of the Court dated December 1, 1993, the present justify his refusal to return the same, as this was made without the
administrative case was referred to the Integrated Bar of the Philippines acquiescence of the complainants. It is settled that the conversion by a
(IBP) for investigation, report, and recommendation. lawyer of funds entrusted to him is a gross violation of professional
ethics and a betrayal of public confidence in the legal profession (Obia
vs. Catimbang, 196 SCRA 23 [1991]). Likewise, respondent offered no
It appears that sometime in February, 1993, complainants engaged the solid proof to support his denial that he delivered the two falsified
services of respondent as their counsel in Civil Case No. 92-263 entitled receipts to complainants.
"Goking vs. Yacapin, et al." filed with the Regional Trial Court of Misamis
Oriental, wherein complainants were among the defendants in said
case. Complainants alleged that respondent demanded from them the Canon 7 of the Code of Professional Responsibility mandates that "a
sum of P15,980.00 to be used in paying the docket fee and other court lawyer shall at all times uphold the integrity and dignity of the legal
fees in connection with the aforementioned case. Said amount was profession." The trust and confidence necessarily reposed by clients
loaned to complainants by a friend, Vic Manzano, who delivered the require in the lawyer a high standard and appreciation of his duty to
same to respondent, as evidenced by an acknowledgment receipt dated them. To this end, nothing should be done by any member of the legal
February 10, 1993 and signed by respondent's secretary, Mayette fraternity which might tend to lessen in any degree the confidence of the
Salceda. Thereafter, complainants asked for the official receipts public in the fidelity, honesty, and integrity of the profession. (Marcelo vs.
evidencing the amount of court fees purportedly paid by respondent. Vic Javier, Sr., 214 SCRA 1 [1992]).
Manzano told complainants that respondent only gave him photocopies
of two Republic of the Philippines receipts with numbers 9627143
(Exhibit "C") dated February 11, 1993, in the amount of P15,830.00; and
The facts and evidence obtaining in this case glaringly reveal recommended that respondent be suspended for three years from the
respondent's failure to live up to his duties as a lawyer in consonance practice of law.4
the strictures of his oath and the Code of Professional Responsibility,
particularly Canon 16 which provides that "a lawyer shall hold in trust all
moneys and properties of his client that may come into his possession."
As a member of the Bar, respondent was and is expected to always live In the Report, Commissioner Funa found that:
up to the standards embodied in said Code particularly Canons 15, 16,
17 and 20, for the relationship between an attorney and his client is
highly fiduciary in nature and demands utmost fidelity and good faith During the hearing conducted, Complainant alleged that she has
(Igual vs. Javier, 254 SCRA 416 [1996]). The Court believes that a remitted to Respondent, on various dates, amounts of money totaling to
longer period of suspension than that recommended by the IBP is called more or less P270,000.00.
for under the circumstances.1âwphi1

According to Complainant the amounts given in several instances were


WHEREFORE, respondent Atty. Cesilo A. Adaza is hereby suspended all undocumented and not acknowledged in writing.
from the practice of law for a period of six (6) months from notice, with
the warning that a repetition of the same or similar acts will be dealt with
more severely. Respondent is further ordered to restitute to
complainants the amount of P15,980.00 within 30 days from notice, However, for the alleged amount of P14,000.00 intended for an
without prejudice to whatever judicial action he may take to recover his injunction bond, some documents in writing were made.
unsatisfied attorney's fees, if any. Let copies of this resolution be
furnished all courts in the land, the Integrated Bar of the Philippines, the
Office of the Bar Confidant, and let it be spread in respondent's personal
xxxx
record.1âwphi1.nêt

While the amounts remitted by Complainant to Respondent were never


SO ORDERED.
acknowledged in writing and were not documented, due credence must
be given to Complainant's allegations especially over the amount of
P14,800.00 intended for the injunction. Indeed, there is no ill-motive at
all on the part of Complainant to fabricate charges against Respondent.
Unfortunately, none of the P270,000.00 given by Complainant to
A.C. No. 7418 October 9, 2007 Respondent was ever documented and therefore accuracy of the
amounts could not be established and substantiated.

ANDREA BALCE CELAJE, complainant,


What has been documented only pertains to the unpaid P5,800.00
vs. intended for the injunction bond. However, it has been established that
indeed an accumulated amount of P9,000.00 has been remitted by
ATTY. SANTIAGO C. SORIANO, respondent. Respondent to Valentina Ramos and only the unpaid P5,800.00 remains
unaccounted for by the Respondent.

RESOLUTION
During the hearing conducted, Complainant reiterated her accusations
against the Respondent and expressed that she has been aggrieved
AUSTRIA-MARTINEZ, J.: and misled by Respondent. According to Complainant, this was made
possible because she was not aware of or knowledgeable on legal
matters and practices. Respondent has only offered denials to the
charges. However, the circumstances gives credibility to herein
Before this Court is a disbarment case filed against Atty. Santiago C. Complainant in the absence of any evil motive on her part.
Soriano (respondent) for gross misconduct.

Accordingly, Respondent is clearly guilty of misappropriating his client's


In the Complaint dated June 1, 2005 filed before the Integrated Bar of funds in the amount of P5,800.00. While other amounts may have been
the Philippines (IBP), Andrea Balce Celaje (complainant) alleged that misappropriated, Complainant alleges P270,000.00, the exactness of
respondent asked for money to be put up as an injunction bond, which the amounts could not be established.
complainant found out later, however, to be unnecessary as the
application for the writ was denied by the trial court. Respondent also
asked for money on several occasions allegedly to spend for or to be
given to the judge handling their case, Judge Milagros Quijano, of the Respondent is also guilty of deceiving his client and abusing his client's
Regional Trial Court, Iriga City, Branch 36. When complainant confidence in requesting for several amounts of money on the pretense
approached Judge Quijano and asked whether what respondent was that he had to spend for and pay the trial judge.
saying was true, Judge Quijano outrightly denied the allegations and
advised her to file an administrative case against respondent.1
Respondent is hereby ORDERED to immediately deliver the
unaccounted for amount of Five Thousand Eight Hundred Pesos
In his Answer, respondent denied the charges against him and averred (P5,800.00) to Complainant, submitting a Compliance Report thereon.5
that the same were merely concocted by complainant to destroy his
character. He also contended that it was complainant who boasted that
she is a professional fixer in administrative agencies as well as in the On September 8, 2006, the Board of Governors of the IBP passed a
judiciary; and that complainant promised to pay him large amounts of Resolution thus:
attorney's fees which complainant however did not keep.2

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


Both parties appeared in the Mandatory Conference and Hearing on APPROVED, with modification, the Report and Recommendation of the
January 18, 2006. Thereafter, the case was submitted for decision.3 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
In the Report and Recommendation dated January 24, 2006, IBP- rules, and considering that Respondent is guilty of gross misconduct for
Commission on Bar Discipline Commissioner Dennis A.B. Funa found misappropriating his client's funds, Atty. Santiago C. Soriano is hereby
respondent guilty of Gross Misconduct in his relations with his client and SUSPENDED from the practice of law for two (2) years and likewise
Ordered to immediately deliver that unaccounted amount of P5,800.00
to complainant.6
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
The IBP transmitted the Notice of Resolution issued by the IBP Board of Confidant for their information and guidance, and let it be entered in
Governors as well as the records of the case, pursuant to Rule 139-B.7 respondent's record in this Court.
Then in compliance with the Court's Resolution dated February 20,
2007, the IBP through Director for Discipline Rogelio Vinluan informed
the Court that per records of the IBP, no Motion for Reconsideration was
filed by either party. SO ORDERED.

shall not engage in unlawful, dishonest, immoral or deceitful conduct."

The Court agrees with the IBP Resolution.

It is glaringly clear that respondent's non-remittance for over one year of


the funds coming from Encarnacion Pascual constitutes conduct in
The Code of Professional Responsibility (CPR), particularly Canon 16 gross violation of the above canon. The belated payment of the same to
thereof, mandates that a lawyer shall hold in trust all moneys and the SSS does not excuse his misconduct. While Pascual may not strictly
properties of his client that may come into his possession. He shall be considered a client of respondent, the rules relating to a lawyer's
account for all money or property collected or received from his client8 handling of funds of a client is applicable. In Daroy v. Legaspi, 1 this
and shall deliver the funds and property of his client when due or upon court held that "(t)he relation between an attorney and his client is highly
demand.9 fiduciary in nature... [thus] lawyers are bound to promptly account for
money or property received by them on behalf of their clients and failure
to do so constitutes professional misconduct." The failure of respondent
to immediately remit the amount to the SSS gives rise to the
As found by Commissioner Funa, it was established that respondent
presumption that he has misappropriated it for his own use. This is a
could not account for P5,800.00 which was part of the sum given by
gross violation of general morality as well as professional ethics; it
complainant to him for the purpose of filing an injunctive bond.
impairs public confidence in the legal profession and deserves
Respondent admitted having received from complainant P17,800.00 on
punishment.2
April 19, 2002 for the preliminary injunction10 and admitted to having a
balance of P9,000.00 in his promissory note to the Manila Insurance
Co., Inc. dated April 23, 2002, which was reduced to P5,800.00 by
reason of an additional payment of P4,000.00,11 leaving an amount of Respondent's claim that he may not be held liable because he
P5,800.00 unaccounted for. The affidavit of the insurance agent, committed such acts, not in his capacity as a private lawyer, but as a
Valentina Ramos, dated December 8, 2005 also states that even up to prosecutor is unavailing. Canon 6 of the Code of Professional
said date, respondent had not yet paid the balance of P5,800.00.12 Responsibility provides:

Respondent's failure to return the money to complainant upon demand These canons shall apply to lawyers in government services in the
gave rise to the presumption that he misappropriated it for his own use discharge of their official tasks.
to the prejudice of, and in violation of the trust reposed in him by his
client.13 It is a gross violation of general morality and of professional
ethics and impairs public confidence in the legal profession which
deserves punishment.14 As stated by the IBP Committee that drafted the Code, "a lawyer does
not shed his professional obligations upon assuming public office. In
fact, his public office should make him more sensitive to his professional
obligations because a lawyer's disreputable conduct is more likely to be
As the Court has pronounced, when a lawyer receives money from the magnified in the public's eye. 3 Want of moral integrity is to be more
client for a particular purpose, the lawyer is bound to render an severely condemned in a lawyer who holds a responsible public office. 4
accounting to the client showing that the money was spent for a
particular purpose. And if he does not use the money for the intended
purpose, the lawyer must immediately return the money to his client.15
ACCORDINGLY, this Court REPRIMANDS respondent with a STERN
WARNING that the commission of the same or similar offense will be
dealt with more severely in the future.
The Court has been exacting in its demand for integrity and good moral
character of members of the Bar who are expected at all times to uphold
the integrity and dignity of the legal profession and refrain from any act
or omission which might lessen the trust and confidence reposed by the LET copies of this decision be spread in his records and copies be
public in the fidelity, honesty, and integrity of the legal profession. furnished the Department of Justice and the Office of the Bar Confidant.
Indeed, membership in the legal profession is a privilege.16 The
attorney-client relationship is highly fiduciary in nature. As such, it
requires utmost good faith, loyalty, fidelity and disinterestedness on the
SO ORDERED.
part of the lawyer.17

In Small v. Banares18 the respondent was suspended for two years for
violating Canon 16 of the CPR, particularly for failing to file a case for G.R. No. L-35702 May 29, 1973
which the amount of P80,000.00 was given him by his client, and for
failing to return the said amount upon demand. Considering that similar
circumstances are attendant in this case, the Court finds the Resolution
of the IBP imposing on respondent a two-year suspension to be in order. DOMINGO D. RUBIAS, plaintiff-appellant,

vs.

WHEREFORE, respondent Atty. Santiago C. Soriano is found GUILTY ISAIAS BATILLER, defendant-appellee.
of violating Canon 16 of the Code of Professional Responsibility and is
hereby SUSPENDED from the practice of law for a period of two (2)
years from notice, with a STERN WARNING that a repetition of the
same or similar acts shall be dealt with more severely. Gregorio M. Rubias for plaintiff-appellant.

Respondent is further ordered to restitute to his clients through Andrea Vicente R. Acsay for defendant-appellee.
Balce Celaje, within 30 days from notice, the amount of P5,800.00.
Respondent is directed to submit to the Court proof of payment within
fifteen days from payment of the full amount.

TEEHANKEE, J.:
by the Director of Lands, the Director of Forestry and other oppositors.
However, during the war with Japan, the record of the case was lost
In this appeal certified by the Court of Appeals to this Court as involving before it was heard, so after the war Francisco Militante petitioned this
purely legal questions, we affirm the dismissal order rendered by the court to reconstitute the record of the case. The record was
Iloilo court of first instance after pre-trial and submittal of the pertinent reconstituted on the Court of the First Instance of Iloilo and docketed as
documentary exhibits. Land Case No. R-695, GLRO Rec. No. 54852. The Court of First
Instance heard the land registration case on November 14, 1952, and
after the trial this court dismissed the application for registration. The
appellant, Francisco Militante, appealed from the decision of this Court
Such dismissal was proper, plaintiff having no cause of action, since it
to the Court of Appeals where the case was docketed as CA-GR No.
was duly established in the record that the application for registration of
13497-R..
the land in question filed by Francisco Militante, plaintiff's vendor and
predecessor interest, had been dismissed by decision of 1952 of the
land registration court as affirmed by final judgment in 1958 of the Court
of Appeals and hence, there was no title or right to the land that could 3. Pending the disposal of the appeal in CA-GR No. 13497-R
be transmitted by the purported sale to plaintiff. and more particularly on June 18, 1956, Francisco Militante sold to the
plaintiff, Domingo Rubias the land technically described in psu-99791
(Exh. "A"). The sale was duly recorded in the Office of the Register of
Deeds for the province of Iloilo as Entry No. 13609 on July 11, 1960
As late as 1964, the Iloilo court of first instance had in another case of
(Exh. "A-1").
ejectment likewise upheld by final judgment defendant's "better right to
possess the land in question . having been in the actual possession
thereof under a claim of title many years before Francisco Militante sold
the land to the plaintiff." (NOTE: As per deed of sale, Exh. A, what Militante purportedly sold to
plaintiff-appellant, his son-in-law, for the sum of P2,000.00 was "a parcel
of untitled land having an area Of 144.9072 hectares ... surveyed under
Psu 99791 ... (and) subject to the exclusions made by me, under (case)
Furthermore, even assuming that Militante had anything to sell, the
CA-i3497, Land Registration Case No. R-695, G.L.R.O. No. 54852,
deed of sale executed in 1956 by him in favor of plaintiff at a time when
Court of First Instance of the province of Iloilo. These exclusions
plaintiff was concededly his counsel of record in the land registration
referred to portions of the original area of over 171 hectares originally
case involving the very land in dispute (ultimately decided adversely
claimed by Militante as applicant, but which he expressly recognized
against Militante by the Court of Appeals' 1958 judgment affirming the
during the trial to pertain to some oppositors, such as the Bureau of
lower court's dismissal of Militante's application for registration) was
Public Works and Bureau of Forestry and several other individual
properly declared inexistent and void by the lower court, as decreed by
occupants and accordingly withdrew his application over the same. This
Article 1409 in relation to Article 1491 of the Civil Code.
is expressly made of record in Exh. A, which is the Court of Appeals'
decision of 22 September 1958 confirming the land registration court's
dismissal of Militante's application for registration.)
The appellate court, in its resolution of certification of 25 July 1972, gave
the following backgrounder of the appeal at bar:
4. On September 22,1958 the Court of appeals in CA-G.R. No.
13497-R promulgated its judgment confirming the decision of this Court
On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to in Land Case No. R-695, GLRO Rec. No. 54852 which dismissed the
recover the ownership and possession of certain portions of lot under application for Registration filed by Francisco Militante (Exh. "I").
Psu-99791 located in Barrio General Luna, Barotac Viejo, Iloilo which he
bought from his father-in-law, Francisco Militante in 1956 against its
present occupant defendant, Isaias Batiller, who illegally entered said
5. Domingo Rubias declared the land described in Exh. 'B' for
portions of the lot on two occasions — in 1945 and in 1959. Plaintiff
taxation purposes under Tax Dec. No. 8585 (Exh. "C") for 1957; Tax
prayed also for damages and attorneys fees. (pp. 1-7, Record on
Dec. Nos. 9533 (Exh. "C-1") and 10019 (Exh. "C-3")for the year 1961;
Appeal). In his answer with counter-claim defendant claims the
Tax Dec. No. 9868 (Exh. "C-2") for the year 1964, paying the land taxes
complaint of the plaintiff does not state a cause of action, the truth of the
under Tax Dec. No. 8585 and 9533 (Exh. "D", "D-1", "G-6").
matter being that he and his predecessors-in-interest have always been
in actual, open and continuous possession since time immemorial under
claim of ownership of the portions of the lot in question and for the
alleged malicious institution of the complaint he claims he has suffered 6. Francisco Militante immediate predecessor-in-interest of the
moral damages in the amount of P 2,000.00, as well as the sum of plaintiff, has also declared the land for taxation purposes under Tax Dec.
P500.00 for attorney's fees. ... No. 5172 in 1940 (Exh. "E") for 1945; under Tax Dec. No. T-86 (Exh. "E-
1") for 1948; under Tax Dec. No. 7122 (Exh. "2"), and paid the land
taxes for 1940 (Exhs. "G" and "G-7"), for 1945 46 (Exh. "G-1") for 1947
(Exh. "G-2"), for 1947 & 1948 (Exh. "G-3"), for 1948 (Exh. "G-4"), and
On December 9, 1964, the trial court issued a pre-trial order, after a pre-
for 1948 and 1949 (Exh. "G-5").
trial conference between the parties and their counsel which order reads
as follows..

7. Tax Declaration No. 2434 in the name of Liberato Demontaño


for the land described therein (Exh. "F") was cancelled by Tax. Dec. No.
'When this case was called for a pre-trial conference today, the plaintiff
5172 of Francisco Militante (Exh. "E"). Liberato Demontaño paid the
appeared assisted by himself and Atty. Gregorio M. Rubias. The
land tax under Tax Dec. No. 2434 on Dec. 20, 1939 for the years 1938
defendant also appeared, assisted by his counsel Atty. Vicente R.
(50%) and 1959 (Exh. "H").
Acsay.

8. The defendant had declared for taxation purposes Lot No. 2


A. During the pre-trial conference, the parties have agreed that the
of the Psu-155241 under Tax Dec. Not. 8583 for 1957 and a portion of
following facts are attendant in this case and that they will no longer
Lot No. 2, Psu-155241, for 1945 under Tax Dec. No. 8584 (Exh. "2-A"
introduced any evidence, testimonial or documentary to prove them:
Tax No. 8583 (Exh. "2") was revised by Tax Dec. No. 9498 in the name
of the defendant (Exh. "2-B") and Tax Dec. No. 8584 (Exh. "2-A") was
cancelled by Tax Dec. No. 9584 also in the name of the defendant (Exh.
1. That Francisco Militante claimed ownership of a parcel of land "2-C"). The defendant paid the land taxes for Lot 2, Psu-155241, on
located in the Barrio of General Luna, municipality of Barotac Viejo Nov. 9, 1960 for the years 1945 and 1946, for the year 1950, and for the
province of Iloilo, which he caused to be surveyed on July 18-31, 1934, year 1960 as shown by the certificate of the treasurer (Exh. "3"). The
whereby he was issued a plan Psu-99791 (Exhibit "B"). (The land defendant may present to the Court other land taxes receipts for the
claimed contained an area of 171:3561 hectares.) payment of taxes for this lot.

2. Before the war with Japan, Francisco Militante filed with the 9. The land claimed by the defendant as his own was surveyed
Court of First Instance of Iloilo an application for the registration of the on June 6 and 7,1956, and a plan approved by Director of Land on
title of the land technically described in psu-99791 (Exh. "B") opposed November 15, 1956 was issued, identified as Psu 155241 (Exh. "5").
10. On April 22, 1960, the plaintiff filed forcible Entry and Detainer The appellate court further related the developments of the case, as
case against Isaias Batiller in the Justice of the Peace Court of Barotac follows:
Viejo Province of Iloilo (Exh. "4") to which the defendant Isaias Batiller
riled his answer on August 29, 1960 (Exh. "4-A"). The Municipal Court of
Barotac Viejo after trial, decided the case on May 10, 1961 in favor of
the defendant and against the plaintiff (Exh. "4-B"). The plaintiff On August 17, 1965, defendant's counsel manifested in open court that
appealed from the decision of the Municipal Court of Barotac Viejo before any trial on the merit of the case could proceed he would file a
which was docketed in this Court as Civil Case No. 5750 on June 3, motion to dismiss plaintiff's complaint which he did, alleging that plaintiff
1961, to which the defendant, Isaias Batiller, on June 13, 1961 filed his does not have cause of action against him because the property in
answer (Exh. "4-C"). And this Court after the trial. decided the case on dispute which he (plaintiff) allegedly bought from his father-in-law,
November 26, 1964, in favor of the defendant, Isaias Batiller and Francisco Militante was the subject matter of LRC No. 695 filed in the
against the plaintiff (Exh. "4-D"). CFI of Iloilo, which case was brought on appeal to this Court and
docketed as CA-G.R. No. 13497-R in which aforesaid case plaintiff was
the counsel on record of his father-in-law, Francisco Militante. Invoking
Arts. 1409 and 1491 of the Civil Code which reads:
(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance
decision of 26 November 1964 dismissing plaintiff's therein complaint for
ejectment against defendant, the iloilo court expressly found "that
plaintiff's complaint is unjustified, intended to harass the defendant" and 'Art. 1409. The following contracts are inexistent and void from the
"that the defendant, Isaias Batiller, has a better right to possess the land beginning:
in question described in Psu 155241 (Exh. "3"), Isaias Batiller having
been in the actual physical possession thereof under a claim of title
many years before Francisco Militante sold the land to the plaintiff- xxx xxx xxx
hereby dismissing plaintiff's complaint and ordering the plaintiff to pay
the defendant attorney's fees ....")

(7) Those expressly prohibited by law.

B. During the trial of this case on the merit, the plaintiff will prove
by competent evidence the following:
'ART. 1491. The following persons cannot acquire any
purchase, even at a public auction, either in person of through the
mediation of another: .
1. That the land he purchased from Francisco Militante under
Exh. "A" was formerly owned and possessed by Liberato Demontaño
but that on September 6, 1919 the land was sold at public auction by
virtue of a judgment in a Civil Case entitled "Edw J. Pflieder plaintiff vs. xxx xxx xxx
Liberato Demontaño Francisco Balladeros and Gregorio Yulo,
defendants", of which Yap Pongco was the purchaser (Exh. "1-3"). The
sale was registered in the Office of the Register of Deeds of Iloilo on
(5) Justices, judges, prosecuting attorneys, clerks of superior and
August 4, 1920, under Primary Entry No. 69 (Exh. "1"), and a definite
inferior courts, and other officers and employees connected with the
Deed of Sale was executed by Constantino A. Canto, provincial Sheriff
administration of justice, the property and rights of in litigation or levied
of Iloilo, on Jan. 19, 1934 in favor of Yap Pongco (Exh. "I"), the sale
upon an execution before the court within whose jurisdiction or territory
having been registered in the Office of the Register of Deeds of Iloilo on
they exercise their respective functions; this prohibition includes the act
February 10, 1934 (Exh. "1-1").
of acquiring an assignment and shall apply to lawyers, with respect to
the property and rights which may be the object of any litigation in which
they may take part by virtue of their profession.'
2. On September 22, 1934, Yap Pongco sold this land to
Francisco Militante as evidenced by a notarial deed (Exh. "J") which
was registered in the Registry of Deeds on May 13, 1940 (Exh. "J-1").
defendant claims that plaintiff could not have acquired any interest in the
property in dispute as the contract he (plaintiff) had with Francisco
Militante was inexistent and void. (See pp. 22-31, Record on Appeal).
3. That plaintiff suffered damages alleged in his complaint. Plaintiff strongly opposed defendant's motion to dismiss claiming that
defendant can not invoke Articles 1409 and 1491 of the Civil Code as
Article 1422 of the same Code provides that 'The defense of illegality of
contracts is not available to third persons whose interests are not
C. Defendants, on the other hand will prove by competent directly affected' (See pp. 32-35 Record on Appeal).
evidence during the trial of this case the following facts:

On October 18, 1965, the lower court issued an order disclaiming


1. That lot No. 2 of the Psu-1552 it (Exh. '5') was originally plaintiffs complaint (pp. 42-49, Record on Appeal.) In the aforesaid order
owned and possessed by Felipe Batiller, grandfather of the defendant of dismissal the lower court practically agreed with defendant's
Basilio Batiller, on the death of the former in 1920, as his sole heir. contention that the contract (Exh. A) between plaintiff and Francism
Isaias Batiller succeeded his father , Basilio Batiller, in the ownership Militante was null and void. In due season plaintiff filed a motion for
and possession of the land in the year 1930, and since then up to the reconsideration (pp. 50-56 Record on Appeal) which was denied by the
present, the land remains in the possession of the defendant, his lower court on January 14, 1966 (p. 57, Record on Appeal).
possession being actual, open, public, peaceful and continuous in the
concept of an owner, exclusive of any other rights and adverse to all
other claimants.
Hence, this appeal by plaintiff from the orders of October 18, 1965 and
January 14, 1966.

2. That the alleged predecessors in interest of the plaintiff have


never been in the actual possession of the land and that they never had
any title thereto. Plaintiff-appellant imputes to the lower court the following errors:

3. That Lot No. 2, Psu 155241, the subject of Free Patent '1. The lower court erred in holding that the contract of sale
application of the defendant has been approved. between the plaintiff-appellant and his father-in-law, Francisco Militante,
Sr., now deceased, of the property covered by Plan Psu-99791, (Exh.
"A") was void, not voidable because it was made when plaintiff-appellant
was the counsel of the latter in the Land Registration case.
4. The damages suffered by the defendant, as alleged in his
counterclaim."'1
'2. The lower court erred in holding that the defendant-appellee is Manifestly, then plaintiff's complaint against defendant, to be declared
an interested person to question the validity of the contract of sale absolute owner of the land and to be restored to possession thereof with
between plaintiff-appellant and the deceased, Francisco Militante, Sr. damages was bereft of any factual or legal basis.

'3. The lower court erred in entertaining the motion to dismiss of 2. No error could be attributed either to the lower court's holding
the defendant-appellee after he had already filed his answer, and after that the purchase by a lawyer of the property in litigation from his client
the termination of the pre-trial, when the said motion to dismiss raised a is categorically prohibited by Article 1491, paragraph (5) of the
collateral question. Philippine Civil Code, reproduced supra;6 and that consequently,
plaintiff's purchase of the property in litigation from his client (assuming
that his client could sell the same since as already shown above, his
client's claim to the property was defeated and rejected) was void and
'4. The lower court erred in dismissing the complaint of the could produce no legal effect, by virtue of Article 1409, paragraph (7) of
plaintiff-appellant.' our Civil Code which provides that contracts "expressly prohibited or
declared void by law' are "inexistent and that "(T)hese contracts cannot
be ratified. Neither can the right to set up the defense of illegality be
The appellate court concluded that plaintiffs "assignment of errors gives waived."
rise to two (2) legal posers — (1) whether or not the contract of sale
between appellant and his father-in-law, the late Francisco Militante over
the property subject of Plan Psu-99791 was void because it was made The 1911 case of Wolfson vs. Estate of Martinez7 relied upon by plaintiff
when plaintiff was counsel of his father-in-law in a land registration case as holding that a sale of property in litigation to the party litigant's lawyer
involving the property in dispute; and (2) whether or not the lower court "is not void but voidable at the election of the vendor" was correctly held
was correct in entertaining defendant-appellee's motion to dismiss after by the lower court to have been superseded by the later 1929 case of
the latter had already filed his answer and after he (defendant) and Director of Lands vs. Abagat.8 In this later case of Abagat, the Court
plaintiff-appellant had agreed on some matters in a pre-trial conference. expressly cited two antecedent cases involving the same transaction of
Hence, its elevation of the appeal to this Court as involving pure purchase of property in litigation by the lawyer which was expressly
questions of law. declared invalid under Article 1459 of the Civil Code of Spain (of which
Article 1491 of our Civil Code of the Philippines is the counterpart) upon
challenge thereof not by the vendor-client but by the adverse parties
It is at once evident from the foregoing narration that the pre-trial against whom the lawyer was to enforce his rights as vendee thus
conference held by the trial court at which the parties with their counsel acquired.
agreed and stipulated on the material and relevant facts and submitted
their respective documentary exhibits as referred to in the pre-trial order,
supra,2 practically amounted to a fulldress trial which placed on record These two antecedent cases thus cited in Abagat clearly superseded
all the facts and exhibits necessary for adjudication of the case. (without so expressly stating the previous ruling in Wolfson:

The three points on which plaintiff reserved the presentation of evidence The spouses, Juan Soriano and Vicente Macaraeg, were the owners of
at the-trial dealing with the source of the alleged right and title of twelve parcels of land. Vicenta Macaraeg died in November, 1909,
Francisco Militante's predecessors, supra,3 actually are already made of leaving a large number of collateral heirs but no descendants. Litigation
record in the stipulated facts and admitted exhibits. The chain of between the surviving husband, Juan Soriano, and the heirs of Vicenta
Militante's alleged title and right to the land as supposedly traced back immediately arose, and the herein appellant Sisenando Palarca acted
to Liberato Demontaño was actually asserted by Militante (and his as Soriano's lawyer. On May 2, 1918, Soriano executed a deed for the
vendee, lawyer and son-in-law, herein plaintiff) in the land registration aforesaid twelve parcels of land in favor of Sisenando Palarca and on
case and rejected by the Iloilo land registration court which dismissed the following day, May 3, 1918, Palarca filed an application for the
Militante's application for registration of the land. Such dismissal, as registration of the land in the deed. After hearing, the Court of First
already stated, was affirmed by the final judgment in 1958 of the Court Instance declared that the deed was invalid by virtue of the provisions of
of Appeals.4 article 1459 of the Civil Code, which prohibits lawyers and solicitors from
purchasing property rights involved in any litigation in which they take
part by virtue of their profession. The application for registration was
The four points on which defendant on his part reserved the consequently denied, and upon appeal by Palarca to the Supreme
presentation of evidence at the trial dealing with his and his ancestors' Court, the judgement of the lower court was affirmed by a decision
continuous, open, public and peaceful possession in the concept of promulgated November 16,1925. (G.R. No. 24329, Palarca vs. Director
owner of the land and the Director of Lands' approval of his survey plan of Lands, not reported.)
thereof, supra,5 are likewise already duly established facts of record, in
the land registration case as well as in the ejectment case wherein the
Iloilo court of first instance recognized the superiority of defendant's right In the meantime cadastral case No. 30 of the Province of Tarlac was
to the land as against plaintiff. instituted, and on August 21, 1923, Eleuteria Macaraeg, as
administratrix of the estate of Vicente Macaraeg, filed claims for the
parcels in question. Buenaventura Lavitoria administrator of the estate
No error was therefore committed by the lower court in dismissing of Juan Soriano, did likewise and so did Sisenando Palarca. In a
plaintiff's complaint upon defendant's motion after the pre-trial. decision dated June 21, 1927, the Court of First Instance, Judge
Carballo presiding, rendered judgment in favor of Palarea and ordered
the registration of the land in his name. Upon appeal to this court by the
administration of the estates of Juan Soriano and Vicente Macaraeg, the
1. The stipulated facts and exhibits of record indisputably judgment of the court below was reversed and the land adjudicated to
established plaintiff's lack of cause of action and justified the outright the two estates as conjugal property of the deceased spouses. (G.R.
dismissal of the complaint. Plaintiff's claim of ownership to the land in No. 28226, Director of Lands vs. Abagat, promulgated May 21, 1928,
question was predicated on the sale thereof for P2,000.00 made in 1956 not reported.)9
by his father-in- law, Francisco Militante, in his favor, at a time when
Militante's application for registration thereof had already been
dismissed by the Iloilo land registration court and was pending appeal in
the Court of Appeals. In the very case of Abagat itself, the Court, again affirming the invalidity
and nullity of the lawyer's purchase of the land in litigation from his
client, ordered the issuance of a writ of possession for the return of the
land by the lawyer to the adverse parties without reimbursement of the
With the Court of Appeals' 1958 final judgment affirming the dismissal of price paid by him and other expenses, and ruled that "the appellant
Militante's application for registration, the lack of any rightful claim or title Palarca is a lawyer and is presumed to know the law. He must,
of Militante to the land was conclusively and decisively judicially therefore, from the beginning, have been well aware of the defect in his
determined. Hence, there was no right or title to the land that could be title and is, consequently, a possessor in bad faith."
transferred or sold by Militante's purported sale in 1956 in favor of
plaintiff.

As already stated, Wolfson and Abagat were decided with relation to


Article 1459 of the Civil Code of Spain then adopted here, until it was
superseded on August 30, 1950 by the Civil Code of the Philippines Perez Gonzales in such view, stating that "Dado el caracter prohibitivo
whose counterpart provision is Article 1491. delprecepto, la consequencia de la infraccion es la nulidad radical y ex
lege." 15

Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil
Code) prohibits in its six paragraphs certain persons, by reason of the Castan, quoting Manresa's own observation that.
relation of trust or their peculiar control over the property, from acquiring
such property in their trust or control either directly or indirectly and
"even at a public or judicial auction," as follows: (1) guardians; (2)
agents; (3) administrators; (4) public officers and employees; judicial "El fundamento do esta prohibicion es clarisimo. No sa trata con este
officers and employees, prosecuting attorneys, and lawyers; and (6) precepto tan solo de guitar la ocasion al fraude; persiguese, ademasel
others especially disqualified by law. proposito de rodear a las personas que intervienen en la
administrcionde justicia de todos los retigios que necesitan pora ejercer
su ministerio librandolos de toda suspecha, que aunque fuere in
fundada, redundura endescredito de la institucion." 16 arrives at the
In Wolfson which involved the sale and assignment of a money contrary and now accepted view that "Puede considerace en nuestro
judgment by the client to the lawyer, Wolfson, whose right to so derecho inexistente 'o radicalmente nulo el contrato en los siguentes
purchase the judgment was being challenged by the judgment debtor, cases: a) ...; b) cuando el contrato se ha celebrado en violacion de una
the Court, through Justice Moreland, then expressly reserved decision prescripcion 'o prohibicion legal, fundada sobre motivos de orden
on "whether or not the judgment in question actually falls within the publico (hipotesis del art. 4 del codigo) ..." 17
prohibition of the article" and held only that the sale's "voidability can not
be asserted by one not a party to the transaction or his representative,"
citing from Manresa 10 that "(C)onsidering the question from the point of
view of the civil law, the view taken by the code, we must limit ourselves It is noteworthy that Caltan's rationale for his conclusion that
to classifying as void all acts done contrary to the express prohibition of fundamental consideration of public policy render void and inexistent
the statute. Now then: As the code does not recognize such nullity by such expressly prohibited purchase (e.g. by public officers and
the mere operation of law, the nullity of the acts hereinbefore referred to employees of government property intrusted to them and by justices,
must be asserted by the person having the necessary legal capacity to judges, fiscals and lawyers of property and rights in litigation and
do so and decreed by a competent submitted to or handled by them, under Article 1491, paragraphs (4) and
(5) of our Civil Code) has been adopted in a new article of our Civil
court." 11 Code, viz, Article 1409 declaring such prohibited contracts as "inexistent
and void from the beginning." 18

The reason thus given by Manresa in considering such prohibited


acquisitions under Article 1459 of the Spanish Civil Code as merely Indeed, the nullity of such prohibited contracts is definite and permanent
voidable at the instance and option of the vendor and not void — "that and cannot be cured by ratification. The public interest and public policy
the Code does not recognize such nullity de pleno derecho" — is no remain paramount and do not permit of compromise or ratification. In his
longer true and applicable to our own Philippine Civil Code which does aspect, the permanent disqualification of public and judicial officers and
recognize the absolute nullity of contracts "whose cause, object, or lawyers grounded on public policy differs from the first three cases of
purpose is contrary to law, morals, good customs, public order or public guardians, agents and administrators (Article 1491, Civil Code), as to
policy" or which are "expressly prohibited or declared void by law" and whose transactions it had been opined that they may be "ratified" by
declares such contracts "inexistent and void from the beginning." 12 means of and in "the form of a new contact, in which cases its validity
shall be determined only by the circumstances at the time the execution
of such new contract. The causes of nullity which have ceased to exist
cannot impair the validity of the new contract. Thus, the object which
The Supreme Court of Spain and modern authors have likewise veered was illegal at the time of the first contract, may have already become
from Manresa's view of the Spanish codal provision itself. In its lawful at the time of the ratification or second contract; or the service
sentencia of 11 June 1966, the Supreme Court of Spain ruled that the which was impossible may have become possible; or the intention which
prohibition of Article 1459 of the Spanish Civil Code is based on public could not be ascertained may have been clarified by the parties. The
policy, that violation of the prohibition contract cannot be validated by ratification or second contract would then be valid from its execution;
confirmation or ratification, holding that: however, it does not retroact to the date of the first contract." 19

... la prohibicion que el articulo 1459 del C.C. establece respecto a los As applied to the case at bar, the lower court therefore properly acted
administradores y apoderados, la cual tiene conforme a la doctrina de upon defendant-appellant's motion to dismiss on the ground of nullity of
esta Sala, contendia entre otras, en S. de 27-5-1959, un fundamento de plaintiff's alleged purchase of the land, since its juridical effects and
orden moral lugar la violacion de esta a la nulidad de pleno derecho del plaintiff's alleged cause of action founded thereon were being asserted
acto o negocio celebrado, ... y prohibicion legal, afectante orden against defendant-appellant. The principles governing the nullity of such
publico, no cabe con efecto alguno la aludida retification ... 13 prohibited contracts and judicial declaration of their nullity have been
well restated by Tolentino in his treatise on our Civil Code, as follows:

The criterion of nullity of such prohibited contracts under Article 1459 of


the Spanish Civil Code (Article 1491 of our Civil Code) as a matter of Parties Affected. — Any person may invoke the in existence of the
public order and policy as applied by the Supreme Court of Spain to contract whenever juridical effects founded thereon are asserted against
administrators and agents in its above cited decision should certainly him. Thus, if there has been a void transfer of property, the transferor
apply with greater reason to judges, judicial officers, fiscals and lawyers can recover it by the accion reinvindicatoria; and any prossessor may
under paragraph 5 of the codal article. refuse to deliver it to the transferee, who cannot enforce the contract.
Creditors may attach property of the debtor which has been alienated by
the latter under a void contract; a mortgagee can allege the inexistence
of a prior encumbrance; a debtor can assert the nullity of an assignment
Citing the same decisions of the Supreme Court of Spain, Gullon
of credit as a defense to an action by the assignee.
Ballesteros, his "Curso de Derecho Civil, (Contratos Especiales)"
(Madrid, 1968) p. 18, affirms that, with respect to Article 1459, Spanish
Civil Code:.
Action On Contract. — Even when the contract is void or inexistent, an
action is necessary to declare its inexistence, when it has already been
fulfilled. Nobody can take the law into his own hands; hence, the
Que caracter tendra la compra que se realice por estas personas?
intervention of the competent court is necessary to declare the absolute
Porsupuesto no cabe duda de que el caso (art.) 1459, 40 y 50, la
nullity of the contract and to decree the restitution of what has been
nulidad esabsoluta porque el motivo de la prohibicion es de orden
given under it. The judgment, however, will retroact to the very day when
publico. 14
the contract was entered into.
If the void contract is still fully executory, no party need bring an action
to declare its nullity; but if any party should bring an action to enforce it,
the other party can simply set up the nullity as a defense. 20 On the basis of the pleadings submitted by the parties, and other
pertinent records of the investigation, the Solicitor General submitted his
report dated February 21, 1990, finding that respondent committed a
breach in the performance of his duties as counsel of administrator Felix
ACCORDINGLY, the order of dismissal appealed from is hereby Leong when he allowed the renewal of contracts of lease for properties
affirmed, with costs in all instances against plaintiff-appellant. So involved in the testate proceedings to be undertaken in favor of HIJOS
ordered. DE JOSE VILLEGAS without notifying and securing the approval of the
probate court. However, the Solicitor General opined that there was no
sufficient evidence to warrant a finding that respondent had allowed the
properties to be leased in favor of his family partnership at a very low
Makalintal, Zaldivar, Castro,. Fernando, Barredo, Makasiar, Antonio and
rental or in violation of Articles 1491 and 1646 of the new Civil Code.
Esguerra, JJ., concur.
Thus, the Solicitor General recommended that respondent be
suspended from the practice of law for a period of THREE (3) months
with a warning that future misconduct on respondent's part will be more
severely dealt with [Report and Recommendation of the Solicitor
General, pp. 1-10; Rollo, pp. 37-46. Also, Complaint of the Solicitor
General, pp. 1-3; Rollo, pp. 47-49].

Footnotes
As gleaned from the record of the case and the report and
recommendation of the Solicitor General, the following facts are
A.M. No. 2430 August 30, 1990 uncontroverted:

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

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

That Felix Leong was designated therein as administrator and "owner,


by testamentary disposition, of 5/6 of all said parcels of land";
CORTES, J.:

That, the lifetime of the lease contract was FOUR (4) sugar crop years,
In a verified complaint for disbarment dated July 5, 1982, Mauro P. with a yearly rental of TEN PERCENT (10%) of the value of the sugar
Mananquil charged respondent Atty. Crisostomo C. Villegas with gross produced from the leased parcels of land;
misconduct or malpractice committed while acting as counsel of record
of one Felix Leong in the latter's capacity as administrator of the Testate
Estate of the late Felomina Zerna in Special Proceedings No. 460 That, on April 20, 1965, the formal partnership of HIJOS DE JOSE
before then Court of First Instance of Negros Occidental. The VILLEGAS was formed amongst the heirs of Jose Villegas, of which
complainant was appointed special administrator after Felix Leong died. respondent was a member;

In compliance with a resolution of this Court, respondent filed his That, on October 18, 1965, another lease contract was executed
comment to the complaint on January 20, 1983. After complainant filed between Felix Leong and the partnership HIJOS DE JOSE VILLEGAS,
his reply, the Court resolved to refer the case to the Solicitor General for containing basically the same terms and conditions as the first contract,
investigation, report and recommendation. with Marcelo Pastrano signing once again as representative of the
lessee;

In a hearing conducted on May 15, 1985 by the investigating officer


assigned to the case, counsel for the complainant proposed that the That, on March 14, 1968, after the demise of Marcelo Pastrano,
case be considered on the basis of position papers and memoranda to respondent was appointed manager of HIJOS DE JOSE VILLEGAS by
be submitted by the parties. Respondent agreed. Thus, the investigating the majority of partners;
officer required the parties to submit their respective position papers and
memoranda, with the understanding that with or without the
memoranda, the case will be deemed submitted for resolution after the
expiration of 30 days. In compliance, both parties submitted their That, renewals of the lease contract were executed between Felix
respective position papers; but no memorandum was filed by either Leong and HIJOS DE JOSE VILLEGAS on January 13, 1975 and on
party. Thereafter, the case was deemed submitted. December 4, 1978, with respondent signing therein as representative of
the lessee; and,

In the pleadings submitted before the Court and the Office of the
Solicitor General, complainant alleges that over a period of 20 years, That, in the later part of 1980, respondent was replaced by his nephew
respondent allowed lease contracts to be executed between his client Geronimo H. Villegas as manager of the family partnership.
Felix Leong and a partnership HIJOS DE JOSE VILLEGAS, of which
respondent is one of the partners, covering several parcels of land of
the estate, i.e. Lots Nos. 1124, 1228, 2221, 2402, 3939, 3942 and 3957
Under the above circumstances, the Court finds absolutely no merit to
of the Tanjay Cadastre, under iniquitous terms and conditions.
complainant's charge, and the Solicitor General's finding, that
Moreover, complainant charges that these contracts were made without
respondent committed acts of misconduct in failing to secure the
the approval of the probate court and in violation of Articles 1491 and
approval of the court in Special Proceedings No. 460 to the various
1646 of the new Civil Code.
lease contracts executed between Felix Leong and respondent's family [Article 1491 of the new Civil Code; Emphasis supplied.]
partnership.

The above disqualification imposed on public and judicial officers and


Pursuant to Section 3 of Rule 84 of the Revised Rules of Court, a lawyers is grounded on public policy considerations which disallow the
judicial executor or administrator has the right to the possession and transactions entered into by them, whether directly or indirectly, in view
management of the real as well as the personal estate of the deceased of the fiduciary relationship involved, or the peculiar control exercised by
so long as it is necessary for the payment of the debts and the these individuals over the properties or rights covered [See Rubias v.
expenses of administration. He may, therefore, exercise acts of Batiller, G.R. No. L-35702, May 29, 1973, 51 SCRA 120; Maharlika
administration without special authority from the court having jurisdiction Publishing Corporation v. Tagle, G.R. No. 65594, July 9, 1986, 142
of the estate. For instance, it has long been settled that an administrator SCRA 553; Fornilda v. The Branch 164, RTC Fourth Judicial Region,
has the power to enter into lease contracts involving the properties of Pasig, G.R. No. 72306, October 5, 1988, 166 SCRA 281 and January
the estate even without prior judicial authority and approval [See 24, 1989, 169 SCRA 351].
Ferraris v. Rodas, 65 Phil. 732 (1938); Jocson de Hilado v. Nava, 69
Phil. 1 (1939); San Diego, Sr. v. Hombre, G.R No. L-19265, May 29,
1964, 11 SCRA 165].
Thus, even if the parties designated as lessees in the assailed lease
contracts were the "Heirs of Jose Villegas" and the partnership HIJOS
DE JOSE VILLEGAS, and respondent signed merely as an agent of the
Thus, considering that administrator Felix Leong was not required under latter, the Court rules that the lease contracts are covered by the
the law and prevailing jurisprudence to seek prior authority from the prohibition against any acquisition or lease by a lawyer of properties
probate court in order to validly lease real properties of the estate, involved in litigation in which he takes part. To rule otherwise would be
respondent, as counsel of Felix Leong, cannot be taken to task for to lend a stamp of judicial approval on an arrangement which, in effect,
failing to notify the probate court of the various lease contracts involved circumvents that which is directly prohibited by law. For, piercing through
herein and to secure its judicial approval thereto. the legal fiction of separate juridical personality, the Court cannot ignore
the obvious implication that respondent as one of the heirs of Jose
Villegas and partner, later manager of, in HIJOS DE JOSE VILLEGAS
stands to benefit from the contractual relationship created between his
Nevertheless, contrary to the opinion of the Solicitor General, the Court client Felix Leong and his family partnership over properties involved in
finds sufficient evidence to hold respondent subject to disciplinary the ongoing testate proceedings.
sanction for having, as counsel of record for the administrator in Special
Proceedings No. 460, participated in the execution in 1975 and 1978 of
renewals of the lease agreement involving properties of the estate in
favor of the partnership HIJOS DE JOSE VILLEGAS, of which In his defense, respondent claims that he was neither aware of, nor
respondent is a member and in 1968 was appointed managing partner. participated in, the execution of the original lease contract entered into
between his client and his family partnership, which was then
represented by his brother-in-law Marcelo Pastrano. And although he
admits that he participated in the execution of subsequent renewals of
By virtue of Article 1646 of the new Civil Code, the persons referred to in the lease contract as managing partner of HIJOS DE JOSE VILLEGAS,
Article 1491 are prohibited from leasing, either in person or through the he argues that he acted in good faith considering that the heirs of
mediation of another, the properties or things mentioned in that article, Filomena Zerna consented or acquiesced to the terms and conditions
to wit: stipulated in the original lease contract. He further contends that
pursuant to the ruling of the Court in Tuason v. Tuason [88 Phil. 428
(1951)] the renewal contracts do not fall within the prohibition of Articles
xxx xxx xxx 1491 and 1646 since he signed the same as a mere agent of the
partnership.

(1) The guardian, the property of the person or persons who may
be under his guardianship; Respondent's contentions do not provide sufficient basis to escape
disciplinary action from this Court.

(2) Agents, the property whose administration or sale may have been
intrusted to them, unless the consent of the principal have been given; It taxes this Courts imagination that respondent disclaims any
knowledge in the execution of the original lease contract between his
client and his family partnership represented by his brother-in-law. Be
that as it may, it cannot be denied that respondent himself had
(3) Executors and administrators, the property of the estate under knowledge of and allowed the subsequent renewals of the lease
administration contract. In fact, he actively participated in the lease contracts dated
January 13, 1975 and December 4, 1978 by signing on behalf of the
lessee HIJOS DE JOSE VILLEGAS.
(4) Public officers and employees, the property of the State or of
any subdivision thereof, or of any government owned or controlled
corporation, or institution, the administration of which has been intrusted Moreover, the claim that the heirs of Filomena Zerna have acquiesced
to them; this provision shall apply to judges and government experts and consented to the assailed lease contracts does not militate against
who, in any manner whatsoever, take part in the sale; respondent's liability under the rules of professional ethics. The
prohibition referred to in Articles 1491 and 1646 of the new Civil Code,
as far as lawyers are concerned, is intended to curtail any undue
influence of the lawyer upon his client on account of his fiduciary and
(5) Justices, judges, prosecuting attorneys, clerks of superior and
confidential association [Sotto v. Samson, G.R. No. L-16917, July 31,
inferior courts, and other officers and employees connected with the
1962, 5 SCRA 733]. Thus, the law makes the prohibition absolute and
administration of justice, the property or rights in litigation or levied upon
permanent [Rubias v. Batiller, supra]. And in view of Canon 1 of the new
on execution before the court within whose jurisdiction or territory they
Code of Professional Responsibility and Sections 3 & 27 of Rule 138 of
exercise their respective functions; this prohibition includes the act of
the Revised Rules of Court, whereby lawyers are duty-bound to obey
acquiring by assignment and shall apply to lawyers, with respect to the
and uphold the laws of the land, participation in the execution of the
property and rights which may be the object of any litigation in which
prohibited contracts such as those referred to in Articles 1491 and 1646
they may take part by virtue of their profession.
of the new Civil Code has been held to constitute breach of professional
ethics on the part of the lawyer for which disciplinary action may be
brought against him [See Bautista v. Gonzalez, Adm. Matter No. 1625,
(6) Any others specially disqualified by law February 12, 1990). Accordingly, the Court must reiterate the rule that
the claim of good faith is no defense to a lawyer who has failed to
adhere faithfully to the legal disqualifications imposed upon him,
designed to protect the interests of his client [See In re Ruste, 70 Phil.
xxx xxx xxx 243 (1940); Also, Severino v. Severino, 44 Phil. 343 (1923)].
Neither is there merit in respondent's reliance on the case of Tuason v.
Tuason [supra.] It cannot be inferred from the statements made by the
Court in that case that contracts of sale or lease where the vendee or On April 4, 1988, Dominga Velasco-Ordonio filed this complaint for
lessee is a partnership, of which a lawyer is a member, over a property disbarment against herein respondent on the basis of an affidavit
involved in a litigation in which he takes part by virtue of his profession, executed by her mother Antonia Ulibari on March 2, 1988 stating that
are not covered by the prohibition under Articles 1491 and 1646. affiant never conveyed the subject parcel of land to respondent as her
attorney's fees and that the deeds of absolute sale executed in favor of
her children were not known to her (and that she received no
consideration therefor).
However, the Court sustains the Solicitor General's holding that there is
no sufficient evidence on record to warrant a finding that respondent
allowed the properties of the estate of Filomena Zerna involved herein
to be leased to his family partnership at very low rental payments. At On August 10, 1989, the Investigation Commissioner submitted a report
any rate, it is a matter for the court presiding over Special Proceedings finding the charges to be true and recommending a one-year
No. 460 to determine whether or not the agreed rental payments made suspension of the respondent from the practice of law.
by respondent's family partnership is reasonable compensation for the
use and occupancy of the estate properties.
The first issue to be resolved is whether Antonia Ulibari was defrauded
into signing the Deed of Conveyance transferring to her lawyer (herein
Considering thus the nature of the acts of misconduct committed by respondent) the subject parcel of land containing 298,420 square
respondent, and the facts and circumstances of the case, the Court meters as the latter's attorney's fees. It is clear from Antonia Ulibari's
finds sufficient grounds to suspend respondent from the practice of law affidavit and deposition that she never conveyed the said land to her
for a period of three (3) months. lawyer as attorney's fees.

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

SO ORDERED. In the case at bar, the property (which includes the more than 20
hectares of land allegedly conveyed to the respondent) was already in
actual litigation first in the lower court and then in the Court of Appeals.
Whether the deed of conveyance was executed at the instance of the
client driven by financial necessity or of the lawyers is of no moment (In
re: Atty. Melchor E. Ruste, 70 Phil. 243). "In either case, an attorney
DOMINGA VELASCO ORDONIO, petitioner, occupies a vantage position to press upon or dictate his terms to a
harrased client, in breach of the rule so amply protective of the
vs. confidential relations, which must necessarily exist between attorney
and client, and of the rights of both." The act constitutes malpractice,
ATTY. JOSEPHINE PALOGAN EDUARTE, respondent.
even if the lawyer had purchased the property in litigation. (Hernandez v.
Villanueva, 40 Phil. 775; In re: Calderon, 7 Phil. 427). We agree with the
Investigating Commissioner's opinion that the prohibition applies when
RESOLUTION the lawyer has not paid money for it and the property was merely
assigned to him in consideration of legal services rendered at a time
when the property is still the subject of a pending case.

PER CURIAM: For having improperly acquired the subject property, under the foregoing
circumstances, respondent has violated not only Art. 1491 of the Civil
Code but also Rule 10 of the Canons of Professional Ethics which
provides that "the lawyer should not purchase any interest in the subject
This is a complaint for the disbarment of respondent Atty. Josephine
matter of the litigation which he is conducting."
Palogan-Eduarte originally filed with this Court on April 18, 1988. On
August 10, 1989, the Commission on Bar Discipline of the Integrated
Bar of the Philippines, to which the case was referred for investigation,
submitted a report confirming in substance the charge of violation of Art. The last issue to be resolved is whether respondent violated any law in
1491 of the Civil Code and part of the Oath of Office of a lawyer and preparing and notarizing the deeds of absolute sale in making it appear
recommending the suspension of herein respondent. that there were considerations therefor, when in truth there were none
so received by the seller. In her answer, respondent admitted that
Antonia Ulibari did not actually sell the parcels of land to her children for
the considerations stated in the deeds of sale and that she (respondent)
The evidence discloses that on July 18, 1983, Antonia Ulibari filed with
"utilized the form of deed of sale as the most convenient and
the RTC, Branch XXII, Cabagan, Isabela, Civil Case No. 391 for
appropriate document to effect the transfer of the parcels of land to
annulment of a document (known as Affidavit of Adjudication of the
Antonia Ulibari's children in accordance with her wish that said parcels
Estate of Felicisimo Velasco and Quitclaim Thereof) against her
of land be given to them.
children. The case was handled by Atty. Henedino Eduarte, herein
respondent's husband, until his appointment as RTC judge on October
26, 1984. His wife, Atty. Josephine Palogan-Eduarte, took over. On
August 22, 1985, decision in Civil Case No. 391 was rendered in favor In so doing, respondent has manifestly violated that part of her oath as a
of Antonia Ulibari. Except for Dominga Velasco-Ordonio, one of the lawyer that she shall not do any falsehood. Not only that. In preparing
children of Antonia Ulibari and complainant in the instant case, the rest the documents which do not reflect the true transaction, respondent has
of the defendants did not appeal. On June 13, 1987, while Civil Case likewise violated Rule 10.01 of the Code of Professional Responsibility
No. 391 was pending appeal in the Court of Appeals, Antonia Ulibari which provides:
conveyed some parcels of her land to her children in the form of deeds
of absolute sale, prepared and notarized by herein respondent.
Significantly, on the same day, Antonia Ulibari also conveyed 20
hectares of land to herein respondent and her husband as their Rule 10.01. A lawyer shall not do any falsehood, nor consent to
Attorney's fees for legal services rendered. All the titles of the lands the doing of any in court; nor shall be mislead or allow the court to be
subject of the deeds of absolute sale and the deed of conveyance mislead by any artifice.
however remained in the name of Antonia Ulibari.
suspension from the practice of law meted out by the IBP against the
respondent. Thus, they pray that the respondent be disbarred for
ACCORDINGLY, for having violated Article 1491 of the Civil Code, malpractice and gross misconduct under Section 27,7 Rule 138 of the
respondent is hereby ordered suspended from the practice of law for a Rules of Court.
period of six (6) months, and, for having stated falsehoods in the four (4)
deeds of absolute sale she prepared and notarized, in violation of the
lawyer's oath and Rule 10.01 of the Code of Professional Responsibility,
respondent is also ordered suspended from the practice or law for a In his defense the respondent basically offers a denial of the charges
period of another six (6) months, resulting in a total period on one year, against him.
effective from the date this judgment becomes final.

He denies he has committed barratry by instigating or stirring up George


SUSPENSION ORDERED. Mercado to file lawsuits against the complainants. He insists that the
lawsuits that he and George filed against the complainants were not
harassment suits but were in fact filed in good faith and were based on
strong facts.8
.C. No. 5859 November 23, 2010

(Formerly CBD Case No. 421)


Also, the respondent denies that he has engaged in forum shopping. He
argues that he was merely exhausting the remedies allowed by law and
that he was merely constrained to seek relief elsewhere by reason of
ATTY. CARMEN LEONOR M. ALCANTARA, VICENTE P. MERCADO, the denial of the trial court to reopen the civil case so he could justify his
SEVERINO P. MERCADO AND SPOUSES JESUS AND ROSARIO attorney’s fees.
MERCADO, Complainants,

vs.
Further, he denies that he had exploited the problems of his client’s
ATTY. EDUARDO C. DE VERA, Respondent. family. He argues that the case that he and George Mercado filed
against the complainants arose from their perception of unlawful
transgressions committed by the latter for which they must be held
accountable for the public interest.
RESOLUTION

Finally, the respondent denies using any intemperate, vulgar, or


PER CURIAM:
unprofessional language. On the contrary, he asserts that it was the
complainants who resorted to intemperate and vulgar language in
accusing him of "extorting from Rosario shocking and unconscionable
For our review is the Resolution1 of the Board of Governors of the attorney’s fees."9
Integrated Bar of the Philippines (IBP) finding respondent Atty. Eduardo
C. De Vera liable for professional malpractice and gross misconduct and
recommending his disbarment.
After careful consideration of the records of this case and the parties’
submissions, we find ourselves in agreement with the findings and
recommendation of the IBP Board of Governors.
The facts, as appreciated by the investigating commissioner,2 are
undisputed.
It is worth stressing that the practice of law is not a right but a privilege
bestowed by the State upon those who show that they possess, and
The respondent is a member of the Bar and was the former counsel of continue to possess, the qualifications required by law for the
Rosario P. Mercado in a civil case filed in 1984 with the Regional Trial conferment of such privilege.10 Membership in the bar is a privilege
Court of Davao City and an administrative case filed before the burdened with conditions. A lawyer has the privilege and right to practice
Securities and Exchange Commission, Davao City Extension Office.3 law only during good behavior and can only be deprived of it for
misconduct ascertained and declared by judgment of the court after
opportunity to be heard has been afforded him. Without invading any
constitutional privilege or right, an attorney’s right to practice law may be
Pursuant to a favorable decision, a writ of execution pending appeal resolved by a proceeding to suspend or disbar him, based on conduct
was issued in favor of Rosario P. Mercado. Herein respondent, as her rendering him unfit to hold a license or to exercise the duties and
legal counsel, garnished the bank deposits of the defendant, but did not responsibilities of an attorney. It must be understood that the purpose of
turn over the proceeds to Rosario. Rosario demanded that the suspending or disbarring an attorney is to remove from the profession a
respondent turn over the proceeds of the garnishment, but the latter person whose misconduct has proved him unfit to be entrusted with the
refused claiming that he had paid part of the money to the judge while duties and responsibilities belonging to an office of an attorney, and thus
the balance was his, as attorney’s fees. Such refusal prompted Rosario to protect the public and those charged with the administration of justice,
to file an administrative case for disbarment against the respondent.4 rather than to punish the attorney.11 In Maligsa v. Cabanting,12 we
explained that the bar should maintain a high standard of legal
proficiency as well as of honesty and fair dealing. A lawyer brings honor
On March 23, 1993, the IBP Board of Governors promulgated a to the legal profession by faithfully performing his duties to society, to
Resolution holding the respondent guilty of infidelity in the custody and the bar, to the courts and to his clients. To this end a member of the
handling of client’s funds and recommending to the Court his one-year legal profession should refrain from doing any act which might lessen in
suspension from the practice of law.5 any degree the confidence and trust reposed by the public in the fidelity,
honesty and integrity of the legal profession. An attorney may be
disbarred or suspended for any violation of his oath or of his duties as
an attorney and counselor, which include statutory grounds enumerated
Following the release of the aforesaid IBP Resolution, the respondent in Section 27, Rule 138 of the Rules of Court.
filed a series of lawsuits against the Mercado family except George
Mercado. The respondent also instituted cases against the family
corporation, the corporation’s accountant and the judge who ruled
against the reopening of the case where respondent tried to collect the In the present case, the respondent committed professional malpractice
balance of his alleged fee from Rosario. Later on, the respondent also and gross misconduct particularly in his acts against his former clients
filed cases against the chairman and members of the IBP Board of after the issuance of the IBP Resolution suspending him from the
Governors who voted to recommend his suspension from the practice of practice of law for one year. In summary, the respondent filed against his
law for one year. Complainants allege that the respondent committed former client, her family members, the family corporation of his former
barratry, forum shopping, exploitation of family problems, and use of client, the Chairman and members of the Board of Governors of the IBP
intemperate language when he filed several frivolous and unwarranted who issued the said Resolution, the Regional Trial Court Judge in the
lawsuits against the complainants and their family members, their case where his former client received a favorable judgment, and the
lawyers, and the family corporation.6 They maintain that the primary present counsel of his former client, a total of twelve (12) different cases
purpose of the cases is to harass and to exact revenge for the one-year in various fora which included the Securities and Exchange
Commission; the Provincial Prosecutors Office of Tagum, Davao; the The cases filed by the respondent against his former client involved
Davao City Prosecutors Office; the IBP-Commission on Bar Discipline; matters and information acquired by the respondent during the time
the Department of Agrarian Reform; and the Supreme Court.13 when he was still Rosario’s counsel. Information as to the structure and
operations of the family corporation, private documents, and other
pertinent facts and figures used as basis or in support of the cases filed
by the respondent in pursuit of his malicious motives were all acquired
In addition to the twelve (12) cases filed, the respondent also re-filed through the attorney-client relationship with herein complainants. Such
cases which had previously been dismissed. The respondent filed six act is in direct violation of the Canons and will not be tolerated by the
criminal cases against members of the Mercado family separately Court.
docketed as I.S. Nos. 97-135; 97-136; 97-137; 97-138; 97-139; and 97-
140. With the exception of I.S. No. 97-139, all the aforementioned cases
are re-filing of previously dismissed cases.14
WHEREFORE, respondent Atty. Eduardo C. De Vera is hereby
DISBARRED from the practice of law effective immediately upon his
receipt of this Resolution.
Now, there is nothing ethically remiss in a lawyer who files numerous
cases in different fora, as long as he does so in good faith, in
accordance with the Rules, and without any ill-motive or purpose other
than to achieve justice and fairness. In the present case, however, we Let copies of this Resolution be furnished the Bar Confidant to be
find that the barrage of cases filed by the respondent against his former spread on the records of the respondent; the Integrated Bar of the
client and others close to her was meant to overwhelm said client and to Philippines for distribution to all its chapters; and the Office of the Court
show her that the respondent does not fold easily after he was meted a Administrator for dissemination to all courts throughout the country.
penalty of one year suspension from the practice of law.

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

ATTY. JULITO D. VITRIOLO, respondent.


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

Atty. Marcos V. Prieto must be sanctioned for filing this unfounded


complaint. Although no person should be penalized for the exercise of PUNO, J.:
the right to litigate, however, this right must be exercised in good faith.17

Rosa F. Mercado filed the instant administrative complaint against Atty.


As officers of the court, lawyers have a responsibility to assist in the Julito D. Vitriolo, seeking his disbarment from the practice of law. The
proper administration of justice.1avvphil They do not discharge this duty complainant alleged that respondent maliciously instituted a criminal
by filing frivolous petitions that only add to the workload of the judiciary. case for falsification of public document against her, a former client,
based on confidential information gained from their attorney-client
relationship.

A lawyer is part of the machinery in the administration of justice. Like the


court itself, he is an instrument to advance its ends – the speedy,
efficient, impartial, correct and inexpensive adjudication of cases and Let us first hearken to the facts.
the prompt satisfaction of final judgments. A lawyer should not only help
attain these objectives but should likewise avoid any unethical or
improper practices that impede, obstruct or prevent their realization,
Complainant is a Senior Education Program Specialist of the Standards
charged as he is with the primary task of assisting in the speedy and
Development Division, Office of Programs and Standards while
efficient administration of justice.18 Canon 12 of the Code of
respondent is a Deputy Executive Director IV of the Commission on
Professional Responsibility promulgated on 21 June 1988 is very explicit
Higher Education (CHED).1
that lawyers must exert every effort and consider it their duty to assist in
the speedy and efficient administration of justice.

Complainant's husband filed Civil Case No. 40537 entitled "Ruben G.


Mercado v. Rosa C. Francisco," for annulment of their marriage with the
Further, the respondent not only filed frivolous and unfounded lawsuits
Regional Trial Court (RTC) of Pasig City. This annulment case had been
that violated his duties as an officer of the court in aiding in the proper
dismissed by the trial court, and the dismissal became final and
administration of justice, but he did so against a former client to whom
executory on July 15, 1992.2
he owes loyalty and fidelity. Canon 21 and Rule 21.02 of the Code of
Professional Responsibility19 provides:

In August 1992, Atty. Anastacio P. de Leon, counsel of complainant,


died. On February 7, 1994, respondent entered his appearance before
CANON 21 - A lawyer shall preserve the confidence and secrets of his
the trial court as collaborating counsel for complainant.3
client even after the attorney-client relation is terminated.

On March 16, 1994, respondent filed his Notice of Substitution of


Rule 21.02 – A lawyer shall not, to the disadvantage of his client, use
Counsel,4 informing the RTC of Pasig City that he has been appointed
information acquired in the course of employment, nor shall he use the
as counsel for the complainant, in substitution of Atty. de Leon.
same to his own advantage or that of a third person, unless the client
with full knowledge of the circumstances consents thereto.

It also appears that on April 13, 1999, respondent filed a criminal action
against complainant before the Office of the City Prosecutor, Pasig City,
entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado," and On June 21, 2003, the IBP Board of Governors approved the report of
docketed as I.S. No. PSG 99-9823, for violation of Articles 171 and 172 investigating commissioner Datiles, finding the respondent guilty of
(falsification of public document) of the Revised Penal Code.5 violating the rule on privileged communication between attorney and
Respondent alleged that complainant made false entries in the client, and recommending his suspension from the practice of law for
Certificates of Live Birth of her children, Angelica and Katelyn Anne. one (1) year.
More specifically, complainant allegedly indicated in said Certificates of
Live Birth that she is married to a certain Ferdinand Fernandez, and that
their marriage was solemnized on April 11, 1979, when in truth, she is
legally married to Ruben G. Mercado and their marriage took place on On August 6, 2003, complainant, upon receiving a copy of the IBP
April 11, 1978. report and recommendation, wrote Chief Justice Hilario Davide, Jr., a
letter of desistance. She stated that after the passage of so many years,
she has now found forgiveness for those who have wronged her.

Complainant denied the accusations of respondent against her. She


denied using any other name than "Rosa F. Mercado." She also insisted
that she has gotten married only once, on April 11, 1978, to Ruben G. At the outset, we stress that we shall not inquire into the merits of the
Mercado. various criminal and administrative cases filed against respondent. It is
the duty of the tribunals where these cases are pending to determine
the guilt or innocence of the respondent.

In addition, complainant Mercado cited other charges against


respondent that are pending before or decided upon by other tribunals –
(1) libel suit before the Office of the City Prosecutor, Pasig City;6 (2) We also emphasize that the Court is not bound by any withdrawal of the
administrative case for dishonesty, grave misconduct, conduct complaint or desistance by the complainant. The letter of complainant to
prejudicial to the best interest of the service, pursuit of private business, the Chief Justice imparting forgiveness upon respondent is
vocation or profession without the permission required by Civil Service inconsequential in disbarment proceedings.
rules and regulations, and violations of the "Anti-Graft and Corrupt
Practices Act," before the then Presidential Commission Against Graft
and Corruption;7 (3) complaint for dishonesty, grave misconduct, and We now resolve whether respondent violated the rule on privileged
conduct prejudicial to the best interest of the service before the Office of communication between attorney and client when he filed a criminal
the Ombudsman, where he was found guilty of misconduct and meted case for falsification of public document against his former client.
out the penalty of one month suspension without pay;8 and, (4) the
Information for violation of Section 7(b)(2) of Republic Act No. 6713, as
amended, otherwise known as the Code of Conduct and Ethical
Standards for Public Officials and Employees before the A brief discussion of the nature of the relationship between attorney and
Sandiganbayan.9 client and the rule on attorney-client privilege that is designed to protect
such relation is in order.

Complainant Mercado alleged that said criminal complaint for


falsification of public document (I.S. No. PSG 99-9823) disclosed In engaging the services of an attorney, the client reposes on him
confidential facts and information relating to the civil case for annulment, special powers of trust and confidence. Their relationship is strictly
then handled by respondent Vitriolo as her counsel. This prompted personal and highly confidential and fiduciary. The relation is of such
complainant Mercado to bring this action against respondent. She delicate, exacting and confidential nature that is required by necessity
claims that, in filing the criminal case for falsification, respondent is and public interest.15 Only by such confidentiality and protection will a
guilty of breaching their privileged and confidential lawyer-client person be encouraged to repose his confidence in an attorney. The
relationship, and should be disbarred. hypothesis is that abstinence from seeking legal advice in a good cause
is an evil which is fatal to the administration of justice.16 Thus, the
preservation and protection of that relation will encourage a client to
entrust his legal problems to an attorney, which is of paramount
Respondent filed his Comment/Motion to Dismiss on November 3, 1999 importance to the administration of justice.17 One rule adopted to serve
where he alleged that the complaint for disbarment was all hearsay, this purpose is the attorney-client privilege: an attorney is to keep
misleading and irrelevant because all the allegations leveled against him inviolate his client's secrets or confidence and not to abuse them.18
are subject of separate fact-finding bodies. Respondent claimed that the Thus, the duty of a lawyer to preserve his client's secrets and
pending cases against him are not grounds for disbarment, and that he confidence outlasts the termination of the attorney-client relationship,19
is presumed to be innocent until proven otherwise.10 He also states that and continues even after the client's death.20 It is the glory of the legal
the decision of the Ombudsman finding him guilty of misconduct and profession that its fidelity to its client can be depended on, and that a
imposing upon him the penalty of suspension for one month without pay man may safely go to a lawyer and converse with him upon his rights or
is on appeal with the Court of Appeals. He adds that he was found supposed rights in any litigation with absolute assurance that the
guilty, only of simple misconduct, which he committed in good faith.11 lawyer's tongue is tied from ever disclosing it.21 With full disclosure of
the facts of the case by the client to his attorney, adequate legal
representation will result in the ascertainment and enforcement of rights
In addition, respondent maintains that his filing of the criminal complaint or the prosecution or defense of the client's cause.
for falsification of public documents against complainant does not violate
the rule on privileged communication between attorney and client
because the bases of the falsification case are two certificates of live Now, we go to the rule on attorney-client privilege. Dean Wigmore cites
birth which are public documents and in no way connected with the the factors essential to establish the existence of the privilege, viz:
confidence taken during the engagement of respondent as counsel.
According to respondent, the complainant confided to him as then
counsel only matters of facts relating to the annulment case. Nothing
was said about the alleged falsification of the entries in the birth (1) Where legal advice of any kind is sought (2) from a professional
certificates of her two daughters. The birth certificates are filed in the legal adviser in his capacity as such, (3) the communications relating to
Records Division of CHED and are accessible to anyone.12 that purpose, (4) made in confidence (5) by the client, (6) are at his
instance permanently protected (7) from disclosure by himself or by the
legal advisor, (8) except the protection be waived.22

In a Resolution dated February 9, 2000, this Court referred the


administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.13 In fine, the factors are as follows:

The IBP Commission on Bar Discipline set two dates for hearing but (1) There exists an attorney-client relationship, or a prospective
complainant failed to appear in both. Investigating Commissioner attorney-client relationship, and it is by reason of this relationship that
Rosalina R. Datiles thus granted respondent's motion to file his the client made the communication.
memorandum, and the case was submitted for resolution based on the
pleadings submitted by the parties.14
Matters disclosed by a prospective client to a lawyer are protected by these facts which will determine the merit of her complaint. The Court
the rule on privileged communication even if the prospective client does cannot be involved in a guessing game as to the existence of facts
not thereafter retain the lawyer or the latter declines the employment.23 which the complainant must prove.
The reason for this is to make the prospective client free to discuss
whatever he wishes with the lawyer without fear that what he tells the
lawyer will be divulged or used against him, and for the lawyer to be
equally free to obtain information from the prospective client.24 Indeed, complainant failed to attend the hearings at the IBP. Without any
testimony from the complainant as to the specific confidential
information allegedly divulged by respondent without her consent, it is
difficult, if not impossible to determine if there was any violation of the
On the other hand, a communication from a (prospective) client to a rule on privileged communication. Such confidential information is a
lawyer for some purpose other than on account of the (prospective) crucial link in establishing a breach of the rule on privileged
attorney-client relation is not privileged. Instructive is the case of Pfleider communication between attorney and client. It is not enough to merely
v. Palanca,25 where the client and his wife leased to their attorney a assert the attorney-client privilege.37 The burden of proving that the
1,328-hectare agricultural land for a period of ten years. In their privilege applies is placed upon the party asserting the privilege.38
contract, the parties agreed, among others, that a specified portion of
the lease rentals would be paid to the client-lessors, and the remainder
would be delivered by counsel-lessee to client's listed creditors. The
client alleged that the list of creditors which he had "confidentially" IN VIEW WHEREOF, the complaint against respondent Atty. Julito D.
supplied counsel for the purpose of carrying out the terms of payment Vitriolo is hereby DISMISSED for lack of merit.
contained in the lease contract was disclosed by counsel, in violation of
their lawyer-client relation, to parties whose interests are adverse to
those of the client. As the client himself, however, states, in the SO ORDERED.
execution of the terms of the aforesaid lease contract between the
parties, he furnished counsel with the "confidential" list of his creditors.
We ruled that this indicates that client delivered the list of his creditors to
counsel not because of the professional relation then existing between Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
them, but on account of the lease agreement. We then held that a
violation of the confidence that accompanied the delivery of that list Tinga, J., out of the country.
would partake more of a private and civil wrong than of a breach of the
fidelity owing from a lawyer to his client.
A.C. No. 927 September 28, 1970

(2) The client made the communication in confidence.


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

POTENCIANO A. PALANCA, respondent.

A confidential communication refers to information transmitted by


voluntary act of disclosure between attorney and client in confidence
RESOLUTION
and by means which, so far as the client is aware, discloses the
information to no third person other than one reasonably necessary for
the transmission of the information or the accomplishment of the
purpose for which it was given.28

CASTRO, J.:

Our jurisprudence on the matter rests on quiescent ground. Thus, a


compromise agreement prepared by a lawyer pursuant to the instruction
of his client and delivered to the opposing party,29 an offer and counter- The respondent Atty. Potenciano A. Palanca was for sometime the legal
offer for settlement,30 or a document given by a client to his counsel not counsel of the complainant William C. Pfleider. According to the
in his professional capacity,31 are not privileged communications, the complainant, he retained the legal services of Palanca from January
element of confidentiality not being present.32 1966, whereas the latter insists that the attorney-client relationship
between them began as early as in 1960.

(3) The legal advice must be sought from the attorney in his professional
capacity.33 At all events, the relations between the two must have attained such a
high level of mutual trust that on October 10, 1969, Pfleider and his wife
leased to Palanca a 1,328 hectare agricultural land in Hinobaan, Negros
Occidental, known as the Hacienda Asia, for a period of ten years. In
The communication made by a client to his attorney must not be their contract, the parties agreed, among others, that a specified portion
intended for mere information, but for the purpose of seeking legal of the lease rentals would be paid to Pfleider, and the remainder would
advice from his attorney as to his rights or obligations. The be delivered by Palanca to Pfleider's listed creditors.
communication must have been transmitted by a client to his attorney
for the purpose of seeking legal advice.34

The arrangement worked smoothly until October 14, 1969 when the
rupture came with the filing by Pfleider of a civil suit (civil case 9187 of
If the client seeks an accounting service,35 or business or personal the CFI of Negros Occidental) against Palanca for rescission of the
assistance,36 and not legal advice, the privilege does not attach to a contract of lease on the ground of alleged default in the payment of
communication disclosed for such purpose. rentals. In his answer to the complaint, Palanca averred full satisfaction
of his rental liabilities, and therefore contended that the lease should
continue. He also charged that he had already been dispossessed of
Applying all these rules to the case at bar, we hold that the evidence on the hacienda by Pfleider and the latter's goons at gunpoint and
record fails to substantiate complainant's allegations. We note that consequently had suffered tremendous financial losses.
complainant did not even specify the alleged communication in
confidence disclosed by respondent. All her claims were couched in
general terms and lacked specificity. She contends that respondent With this history in, perspective, we shall now consider the
violated the rule on privileged communication when he instituted a administrative charges of gross misconduct in office brought by Pfleider
criminal action against her for falsification of public documents because against Palanca. The indictment consists of four counts.
the criminal complaint disclosed facts relating to the civil case for
annulment then handled by respondent. She did not, however, spell out
First count. In regard to a criminal case for estafa filed in December
1965 by one Gregorio Uy Matiao against Pfleider, the latter instructed
Palanca to offer in settlement the sum of P10,000, payable in As Pfleider himself, however, in the execution of the terms of the
installments, to Uy Matiao for the dismissal of the case. After sometime, aforesaid lease contract between the parties, complainant furnished
Palanca reported to Pfleider that the offer has been rejected. Finally in respondent with a confidential list of his creditors." This should indicate
October 1969, Palanca supposedly informed Pfleider that he had that Pfleider delivered the list of his creditors to Palanca not because of
succeeded in negotiating the dismissal of the estafa case by leaving the the professional relation then existing between them, but on account of
sum of P5,000 with the Dumaguete City Court where the action was the lease agreement. A violation therefore of the confidence that
then pending. Sometime in December 1969, however, Pfleider was the accompanied the delivery of that list would partake more of a private
object of a warrant of arrest in connection with the same estafa case. It and civil wrong than of a breach of the fidelity owing from a lawyer to his
turned out, charged the complainant Pfleider, that Palanca had not client. Moreover, Pfleider fails to controvert Palanca's claim that there is
deposited the sum of P5,000 with the Dumaguete City Court, let alone no such thing as a "confidential" list of creditors and that the list of
communicated to Uy Matiao his earlier offer of settlement. creditors referred to by Pfleider is the same list which forms part of the
pleadings in civil case 9187 (the action for rescission of the lease
contract) now, pending between the complainant and the respondent
lawyer, and therefore is embraced within the category of public records
We have closely examined all the pleadings filed by the parties in this open to the perusal of persons properly interested therein.
case and the annexes thereto, and it is our view that the first charge is
devoid of merit. In support of his claim of alleged assurance made by
Palanca that the estafa case had already been terminated, Pfleinder
relies on certain letters written to him by Palanca. Our own reading of In sum, we are satisfied, and we so hold, that nothing in written
these letters, however, belies his claim. They contain nothing which complaint for disbarment against Palanca and in his reply to Palanca's
might reasonably induce the complainant to believe that the criminal answer supports a prima facie finding of such misconduct in office by
action against him had been finally settled by his attorney. On the Palanca as would warrant further proceedings in this case.
contrary, the letters merely report a continuing attempt on the part of
Palanca to secure a fair bargain for Pfleider. The letter-report of October
10, 1969, invoke by the complainant, states in no uncertain terms that "I
ACCORDINGLY, the complaint is hereby dismissed.
am bargaining this (referring to the estafa case) even for P8,000.00 and
I think they will agree. I'll finalize this and pay Tingyan on Tuesday. I
have already left in Dumaguete P5,000.00 to show them the color of our
money and I will bring the balance when I go there Tuesday."

G.R. No. L-961 September 21, 1949


Nothing in the above letter indicates that Palanca had deposited the
sum of P5,000 with the Dumaguete City Court. What he did state is that
he had left that sum in that City to enable their adversaries to see "the BLANDINA GAMBOA HILADO, petitioner,
color of our money." In this connection, the veracity of the certification by
Felicisimo T. Hilay, Dumaguete branch manager of RCPI, that he (Hilay) vs.
had been holding the sum of P5,000 during the early part of October in
trust for Pfleider and his lawyer, has not been assailed by Pfleider. JOSE GUTIERREZ DAVID, VICENTE J. FRANCISCO, JACOB ASSAD
and SELIM JACOB ASSAD, respondents.

If Pfleider was the object of a warrant of arrest in December 1969, no


substantial blame can be laid at the door of the respondent Palanca Delgado, Dizon and Flores for petitioner.
inasmuch as the latter's services were implicitly terminated by Pfleider
Vicente J. Francisco for respondents.
when the latter sued his lawyer in October of the same year. While the
object of the suit is the rescission of the contract of lease between the
parties, the conflict of interest which pits one against the other became
incompatible with that mutual confidence and trust essential to every TUASON, J.:
lawyer-client relation. Moreover, Pfleider fails to dispute Palanca's claim
that on October 26, 1968, Pfleider refused to acknowledge receipt of a
certain letter and several motions for withdrawal, including Palanca's
withdrawal as counsel in the estafa case. 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.
Second count. Palanca had fraudulently charged the sum of P5,000
(which he supposedly had left with the City Court in Dumaguete) to his
rental account with Pfleider as part payment of the lease rentals of the
Hacienda Asia. Third count. In the same statement of account, Palanca On May 14, Attorneys Ohnick, Velilla and Balonkita filed an answer on
falsely represented having paid, for the account of Pfleider, one Samuel behalf of the defendant; and on June 15, Attorneys Delgado, Dizon,
Guintos the sum of P866.50 when the latter would swear that he had Flores and Rodrigo registered their appearance as counsel for the
received only the sum of P86.50. plaintiff. On October 5, these attorneys filed an amended complaint by
including Jacob Assad as party defendant.

These two charges are anchored upon the same "Statement of


Disbursements" submitted by Palanca to Pfleider. It is our view that this On January 28, 1946, Attorney Francisco entered his appearance as
statement is but a memorandum or report of the expenses which attorney of record for the defendant in substitution for Attorney Ohnick,
Palanca considered as chargeable to the account of Pfleider. By its very Velilla and Balonkita who had withdrawn from the case.
tentative nature, it is subject to the examination and subsequent
approval or disapproval of Pfleider, and any and every error which it
contains may be brought to the attention of Palanca for rectification or On May 29, Attorney Dizon, in the name of his firm, wrote Attorney
adjustment. Viewed in relation to the contract of lease between Pfleinder Francisco urging him to discontinue representing the defendants on the
and Palanca, this "statement" is but one aspect of the prestation ground that their client had consulted with him about her case, on which
required of Palanca by the contract. Whatever breach he might have occasion, it was alleged, "she turned over the papers" to Attorney
committed in regard to this prestation would be but a civil or contractual Francisco, and the latter sent her a written opinion. Not receiving any
wrong which does not affect his office as a member of the Bar. 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.
Final count. It is charged that the list of creditors which Pfleider had
"confidentially" supplied Palanca for the purpose of carrying out the
terms of payment contained in the lease contract was disclosed by Attorney Francisco's letter to plaintiff, mentioned above and identified as
Palanca, in violation of their lawyer-client relation, to parties whose Exhibit A, is in full as follows:
interests are adverse to those of Pfleider.
VICENTE J. FRANCISCO notes; that this being his opinion, he told his visitor he would have no
objection to defending the Syrian;
Attorney-at-Law

1462 Estrada, Manila


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
July 13, 1945. 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
Mrs. Blandina Gamboa Hilado 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
Manila, Philippines 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,
My dear Mrs. Hilado: 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;
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 That some days afterward, upon arrival at his law office on Estrada
about the controversy between you and the defendant therein are as street, he was informed by Attorney Federico Agrava, his assistant, that
follows: 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
(a) That you were the equitable owner of the property described carrying, and she did; that he told Attorney Agrava that the firm should
in the complaint, as the same was purchased and/or built with funds not handle Mrs. Hilado's case and he should return the papers, calling
exclusively belonging to you, that is to say, the houses and lot pertained Agrava's attention to what he (Francisco) already had said to Mrs.
to your paraphernal estate; Hilado;

(b) That on May 3, 1943, the legal title to the property was with That several days later, the stenographer in his law office, Teofilo
your husband, Mr. Serafin P. Hilado; and 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
(c) That the property was sold by Mr. Hilado without your case was rejected; that he forthwith signed the letter without reading it
knowledge on the aforesaid date of May 3, 1943. 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;
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 That in January, 1946, Assad was in his office to request him to handle
transfer certificate of title was in his name. Moreover, the price of his case stating that his American lawyer had gone to the States and left
P110,000 in Japanese military notes, as of May 3, 1943, does not quite the case in the hands of other attorneys; that he accepted the retainer
strike me as so grossly inadequate as to warrant the annulment of the and on January 28, 1946, entered his appearance.
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 Attorney Francisco filed an affidavit of stenographer Ragodon in
great difficulty in proving that the real purchaser was other than Mr. corroboration of his answer.
Assad, considering that death has already sealed your husband's lips
and he cannot now testify as to the circumstances of the sale.
The judge trying the case, Honorable Jose Gutierrez David, later
promoted to the Court of Appeals, dismissed the complaint. His Honor
For the foregoing reasons, I regret to advise you that I cannot appear in believed that no information other than that already alleged in plaintiff's
the proceedings in your behalf. The records of the case you loaned to complaint in the main cause was conveyed to Attorney Francisco, and
me are herewith returned. concluded that the intercourse between the plaintiff and the respondent
did not attain the point of creating the relation of attorney and client.

Yours very truly,


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
(Sgd.) VICENTE J. FRANCISCO 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
VJF/Rag.
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 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
In order to constitute the relation (of attorney and client) a professional
deserted by her husband, and also told him (Francisco) that there was a
one and not merely one of principal and agent, the attorneys must be
pending suit brought by Mrs. Hilado against a certain Syrian to annul the
employed either to give advice upon a legal point, to prosecute or
sale of a real estate which the deceased Serafin Hilado had made to the
defend an action in court of justice, or to prepare and draft, in legal form
Syrian during the Japanese occupation; that this woman asked him if he
such papers as deeds, bills, contracts and the like. (Atkinson vs.
was willing to accept the case if the Syrian should give it to him; that he
Howlett, 11 Ky. Law Rep. (abstract), 364; cited in Vol. 88, A. L. R., p. 6.)
told the woman that the sales of real property during the Japanese
regime were valid even though it was paid for in Japanese military
To constitute professional employment it is not essential that the client This rule has been so strictly that it has been held an attorney, on
should have employed the attorney professionally on any previous terminating his employment, cannot thereafter act as counsel against
occasion. . . . It is not necessary that any retainer should have been his client in the same general matter, even though, while acting for his
paid, promised, or charged for; neither is it material that the attorney former client, he acquired no knowledge which could operate to his
consulted did not afterward undertake the case about which the client's disadvantage in the subsequent adverse employment. (Pierce
consultation was had. If a person, in respect to his business affairs or vs. Palmer [1910], 31 R. I., 432; 77 Atl., 201, Ann. Cas., 1912S, 181.)
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. . . . Communications between attorney and client are, in a great number of
(5 Jones Commentaries on Evidence, pp. 4118-4119.) 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
An attorney is employed-that is, he is engaged in his professional trial, of other matters that might only further prejudice the complainant's
capacity as a lawyer or counselor-when he is listening to his client's cause. And the theory would be productive of other un salutary results.
preliminary statement of his case, or when he is giving advice thereon, To make the passing of confidential communication a condition
just as truly as when he is drawing his client's pleadings, or advocating precedent; i.e., to make the employment conditioned on the scope and
his client's cause in open court. (Denver Tramway Co. vs. Owens, 20 character of the knowledge acquired by an attorney in determining his
Colo., 107; 36 P., 848.) 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
Formality is not an essential element of the employment of an attorney. what way it is or it is not in conflict with his new position. Litigants would
The contract may be express or implied and it is sufficient that the in consequence be wary in going to an attorney, lest by an unfortunate
advice and assistance of the attorney is sought and received, in matters turn of the proceedings, if an investigation be held, the court should
pertinent to his profession. An acceptance of the relation is implied on accept the attorney's inaccurate version of the facts that came to him.
the part of the attorney from his acting in behalf of his client in "Now the abstinence from seeking legal advice in a good cause is by
pursuance of a request by the latter. (7 C. J. S., 848-849; see Hirach hypothesis an evil which is fatal to the administration of justice." (John
Bros. and Co. vs. R. E. Kennington Co., 88 A. L. R., 1.) H. Wigmore's Evidence, 1923, Section 2285, 2290, 2291.)

Section 26 (e), Rule 123 of the Rules of Court provides that "an attorney Hence the necessity of setting down the existence of the bare
cannot, without the consent of his client, be examined as to any relationship of attorney and client as the yardstick for testing
communication made by the client to him, or his advice given thereon in incompatibility of interests. This stern rule is designed not alone to
the course of professional employment;" and section 19 (e) of Rule 127 prevent the dishonest practitioner from fraudulent conduct, but as well to
imposes upon an attorney the duty "to maintain inviolate the confidence, protect the honest lawyer from unfounded suspicion of unprofessional
and at every peril to himself, to preserve the secrets of his client." There practice. (Strong vs. Int. Bldg., etc.; Ass'n, 183 Ill., 97; 47 L.R.A., 792.) It
is no law or provision in the Rules of Court prohibiting attorneys in is founded on principles of public policy, on good taste. As has been
express terms from acting on behalf of both parties to a controversy said in another case, the question is not necessarily one of the rights of
whose interests are opposed to each other, but such prohibition is the parties, but as to whether the attorney has adhered to proper
necessarily implied in the injunctions above quoted. (In re De la Rosa, professional standard. With these thoughts in mind, it behooves
27 Phil., 258.) In fact the prohibition derives validity from sources higher attorneys, like Caesar's wife, not only to keep inviolate the client's
than written laws and rules. As has been aptly said in In re Merron, 22 confidence, but also to avoid the appearance of treachery and double-
N. M., 252, L.R.A., 1917B, 378, "information so received is sacred to the dealing. Only thus can litigants be encouraged to entrust their secrets to
employment to which it pertains," and "to permit it to be used in the their attorneys which is of paramount importance in the administration of
interest of another, or, worse still, in the interest of the adverse party, is justice.
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."

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
That only copies of pleadings already filed in court were furnished to sought and obtained legal advice from his firm; this, not necessarily to
Attorney Agrava and that, this being so, no secret communication was prevent any injustice to the plaintiff but to keep above reproach the
transmitted to him by the plaintiff, would not vary the situation even if we honor and integrity of the courts and of the bar. Without condemning the
should discard Mrs. Hilado's statement that other papers, personal and respondents conduct as dishonest, corrupt, or fraudulent, we do believe
private in character, were turned in by her. Precedents are at hand to that upon the admitted facts it is highly in expedient. It had the tendency
support the doctrine that the mere relation of attorney and client ought to to bring the profession, of which he is a distinguished member, "into
preclude the attorney from accepting the opposite party's retainer in the public disrepute and suspicion and undermine the integrity of justice."
same litigation regardless of what information was received by him from
his first client.

There is in legal practice what called "retaining fee," the purpose of


which stems from the realization that the attorney is disabled from acting
The principle which forbids an attorney who has been engaged to as counsel for the other side after he has given professional advice to
represent a client from thereafter appearing on behalf of the client's the opposite party, even if he should decline to perform the
opponent applies equally even though during the continuance of the contemplated services on behalf of the latter. It is to prevent undue
employment nothing of a confidential nature was revealed to the hardship on the attorney resulting from the rigid observance of the rule
attorney by the client. (Christian vs. Waialua Agricultural Co., 30 Hawaii, that a separate and independent fee for consultation and advice was
553, Footnote 7, C. J. S., 828.) 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
Where it appeared that an attorney, representing one party in litigation, being deprived, by being retained by one party, of the opportunity of
had formerly represented the adverse party with respect to the same rendering services to the other and of receiving pay from him, and the
matter involved in the litigation, the court need not inquire as to how payment of such fee, in the absence of an express understanding to the
much knowledge the attorney acquired from his former during that contrary, is neither made nor received in payment of the services
relationship, before refusing to permit the attorney to represent the contemplated; its payment has no relation to the obligation of the client
adverse party. (Brown vs. Miller, 52 App. D. C. 330; 286, F. 994.) to pay his attorney for the services which he has retained him to
perform." (7 C.J.S., 1019.)

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 The defense that Attorney Agrava wrote the letter Exhibit A and that
which the former client's affairs might have a bearing on the matters Attorney Francisco did not take the trouble of reading it, would not take
involved in the subsequent litigation on the attorney's knowledge the case out of the interdiction. If this letter was written under the
thereof. (Boyd vs. Second Judicial Dist. Court, 274 P., 7; 51 Nev., 264.) 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 numerous cases in exchange for nonpayment of rental fees; and (d)
same manner and to the same degree as if he personally had written it. having a reputation of being immoral by siring illegitimate children.
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 After respondent filed his Comment, the Court, in its Resolution of
firm, but his information, by the nature of his connection with the firm is October 24, 2001, referred the case to the Integrated Bar of the
available to his associates or employers. The rule is all the more to be Philippines (IBP) for investigation, report and recommendation. 2
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 The investigation was conducted by Commissioner Demaree Jesus B.
be hoped for in "the public policy that the client in consulting his legal Raval. After a series of hearings, the parties filed their respective
adviser ought to be free from apprehension of disclosure of his memoranda 3 and the case was deemed submitted for resolution.
confidence," if the prohibition were not extended to the attorney's
partners, employers or assistants.

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


Recommendation 4 dated January 12, 2006. He found respondent guilty
The fact that petitioner did not object until after four months had passed of violating Canons 15 and 21 of the Code of Professional Responsibility
from the date Attorney Francisco first appeared for the defendants does and recommended the penalty of suspension for six months.
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 In a minute Resolution 5 passed on May 26, 2006, the IBP Board of
been suffered so to act without objection, the court said: "We are all of Governors adopted and approved the report and recommendation of
the one mind, that the right of the appellee to make his objection has not Commissioner Reyes but increased the penalty of suspension from six
lapsed by reason of failure to make it sooner; that professional months to one year.
confidence once reposed can never be divested by expiration of
professional employment." (Nickels vs. Griffin, 1 Wash. Terr., 374, 321
A. L. R. 1316.)
We adopt the report of the IBP Board of Governors except as to the
issue on immorality and as to the recommended penalty.

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


deserves scant attention. The courts have summary jurisdiction to
On serving as counsel for contending parties.
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 Records show that in Civil Case No. 95-105-MK, filed in the Regional
them to do whatever specific acts may be incumbent upon them in their Trial Court (RTC), Branch 272, Marikina City, entitled "Leonora M. Aville
capacity of attorneys to perform. The courts from the general principles v. Editha Valdez" for nonpayment of rentals, herein respondent, while
of equity and policy, will always look into the dealings between attorneys being the counsel for defendant Valdez, also acted as counsel for the
and clients and guard the latter from any undue consequences resulting tenants Lagmay, Valencia, Bustamante and Bayuga 6 by filing an
from a situation in which they may stand unequal. The courts acts on the Explanation and Compliance before the RTC. 7
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 In Civil Case No. 98-6804 filed in the Metropolitan Trial Court (MTC),
machinery of the law for the administration of justice and as such Branch 75, Marikina City, entitled "Editha S. Valdez and Joseph J. Alba,
subject to the disciplinary authority of the courts and to its orders and Jr. v. Salve Bustamante and her husband" for ejectment, respondent
directions with respect to their relations to the court as well as to their represented Valdez against Bustamante - one of the tenants in the
clients. (Charest vs. Bishop, 137 Minn., 102; 162, N.W., 1062, Note 26, property subject of the controversy. Defendants appealed to the RTC,
7 C. J. S., 1007.) Attorney stand on the same footing as sheriffs and Branch 272, Marikina City docketed as SCA Case No. 99-341-MK. In his
other court officers in respect of matters just mentioned. 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.

We conclude therefore that the motion for disqualification should be


allowed. It is so ordered, without costs.
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,
A.C. No. 5439 January 22, 2007 respondent's former client in Civil Case No. 98-6804 and SCA Case No.
99-341-MK.

CLARITA J. SAMALA, Complainant,


Records further reveal that at the hearing of November 14, 2003,
vs. 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
ATTY. LUCIANO D. VALENCIA, Respondent.
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
RESOLUTION Bustamante and her husband but denied being the counsel for Alba
although the case is entitled "Valdez and Alba v. Bustamante and her
husband," because Valdez told him to include Alba as the two were the
owners of the property 12 and it was only Valdez who signed the
AUSTRIA-MARTINEZ, J.: 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.
Before us is a complaint1 dated May 2, 2001 filed by Clarita J. Samala 14 Thus, the filing of Civil Case No. 2000-657-MK against Alba.
(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 Rule 15.03, Canon 15 of the Code of Professional Responsibility
the court by submitting false documentary evidence; (c) initiating provides that a lawyer shall not represent conflicting interests except by
written consent of all concerned given after a full disclosure of the facts.
Respondent is bound to comply with Canon 21 of the Code of
Professional Responsibility which states that "a lawyer shall preserve
A lawyer may not, without being guilty of professional misconduct, act as the confidences and secrets of his client even after the attorney-client
counsel for a person whose interest conflicts with that of his present or relation is terminated."
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 The reason for the prohibition is found in the relation of attorney and
confidence. Lawyers are expected not only to keep inviolate the client's client, which is one of trust and confidence of the highest degree. A
confidence, but also to avoid the appearance of treachery and double- lawyer becomes familiar with all the facts connected with his client's
dealing for only then can litigants be encouraged to entrust their secrets case. He learns from his client the weak points of the action as well as
to their lawyers, which is of paramount importance in the administration the strong ones. Such knowledge must be considered sacred and
of justice. 17 guarded with care. 30

One of the tests of inconsistency of interests is whether the acceptance From the foregoing, it is evident that respondent's representation of
of a new relation would prevent the full discharge of the lawyer's duty of Valdez and Alba against Bustamante and her husband, in one case, and
undivided fidelity and loyalty to the client or invite suspicion of Valdez against Alba, in another case, is a clear case of conflict of
unfaithfulness or double-dealing in the performance of that duty. 18 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
The stern rule against representation of conflicting interests is founded representation in Civil Case No. 2000-657-MK.
on principles of public policy and good taste. It springs from the
attorney's duty to represent his client with undivided fidelity and to
maintain inviolate the client's confidence as well as from the injunction
forbidding the examination of an attorney as to any of the privileged Respondent is reminded to be more cautious in accepting professional
communications of his client. 19 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
An attorney owes loyalty to his client not only in the case in which he with his clients. 32
has represented him but also after the relation of attorney and client has
terminated. 20 The bare attorney-client relationship with a client
precludes an attorney from accepting professional employment from the
client's adversary either in the same case 21 or in a different but related On knowingly misleading the court by submitting false documentary
action. 22 A lawyer is forbidden from representing a subsequent client evidence.
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
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.
We held in Nombrado v. Hernandez 24 that the termination of the 275500 was already issued in the name of Alba on February 2, 1995.
relation of attorney and client provides no justification for a lawyer to
represent an interest adverse to or in conflict with that of the former
client. The reason for the rule is that the client's confidence once
Records reveal that respondent filed Civil Case No. 00-7137 on
reposed cannot be divested by the expiration of the professional
November 27, 2000 and presented TCT No. 273020 as evidence of
employment. 25 Consequently, a lawyer should not, even after the
Valdez's ownership of the subject property. 33 During the hearing before
severance of the relation with his client, do anything which will
Commissioner Raval, respondent avers that when the Answer was filed
injuriously affect his former client in any matter in which he previously
in the said case, that was the time that he came to know that the title
represented him nor should he disclose or use any of the client's
was already in the name of Alba; so that when the court dismissed the
confidences acquired in the previous relation. 26
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.
In this case, respondent's averment that his relationship with Alba has
long been severed by the act of the latter of not turning over the
proceeds collected in Civil Case No. 98-6804, in connivance with the
Upon examination of the record, it was noted that Civil Case No. 2000-
complainant, is unavailing. Termination of the attorney-client relationship
657-MK for rescission of contract and cancellation of TCT No. 275500
precludes an attorney from representing a new client whose interest is
was also filed on November 27, 2000, 35 before RTC, Branch 273,
adverse to his former client. Alba may not be his original client but the
Marikina City, thus belying the averment of respondent that he came to
fact that he filed a case entitled "Valdez and Alba v. Bustamante and her
know of Alba's title only in 2002 when the case for rescission was filed. It
husband," is a clear indication that respondent is protecting the interests
was revealed during the hearing before Commissioner Raval that Civil
of both Valdez and Alba in the said case. Respondent cannot just claim
Case Nos. 00-7137 and 2000-657-MK were filed on the same date,
that the lawyer-client relationship between him and Alba has long been
although in different courts and at different times.
severed without observing Section 26, Rule 138 of the Rules of Court
wherein the written consent of his client is required.

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
In Gonzales v. Cabucana, Jr., 27 citing the case of Quiambao v. Bamba,
of Alba in 1995 yet, as proof of the latter's ownership.
28 we held that:

Respondent failed to comply with Canon 10 of the Code of Professional


The proscription against representation of conflicting interests applies to
Responsibility which provides that a lawyer shall not do any falsehood,
a situation where the opposing parties are present clients in the same
nor consent to the doing of any in court; nor shall he mislead, or allow
action or in an unrelated action. It is of no moment that the lawyer would
the Court to be mislead by any artifice. It matters not that the trial court
not be called upon to contend for one client that which the lawyer has to
was not misled by respondent's submission of TCT No. 273020 in the
oppose for the other client, or that there would be no occasion to use
name of Valdez, as shown by its decision dated January 8, 2002 36
the confidential information acquired from one to the disadvantage of
dismissing the complaint for ejectment. What is decisive in this case is
the other as the two actions are wholly unrelated. It is enough that the
respondent's intent in trying to mislead the court by presenting TCT No.
opposing parties in one case, one of whom would lose the suit, are
273020 despite the fact that said title was already cancelled and a new
present clients and the nature or conditions of the lawyer's respective
one, TCT No. 275500, was already issued in the name of Alba.
retainers with each of them would affect the performance of the duty of
undivided fidelity to both clients. 29
In Young v. Batuegas,37 we held that a lawyer must be a disciple of In this case, the admissions made by respondent are more than enough
truth. He swore upon his admission to the Bar that he will "do no to hold him liable on the charge of immorality. During the hearing,
falsehood nor consent to the doing of any in court" and he shall respondent did not show any remorse. He even justified his
"conduct himself as a lawyer according to the best of his knowledge and transgression by saying that he does not have any relationship with
discretion with all good fidelity as well to the courts as to his clients." 38 Lagmay and despite the fact that he sired three children by the latter, he
He should bear in mind that as an officer of the court his high vocation is does not consider them as his second family. It is noted that during the
to correctly inform the court upon the law and the facts of the case and hearing, respondent boasts in telling the commissioner that he has two
to aid it in doing justice and arriving at correct conclusion. 39 The courts, houses - in Muntinlupa, where his first wife lived, and in Marikina, where
on the other hand, are entitled to expect only complete honesty from Lagmay lives. 53 It is of no moment that respondent eventually married
lawyers appearing and pleading before them. While a lawyer has the Lagmay after the death of his first wife. The fact still remains that
solemn duty to defend his client's rights and is expected to display the respondent did not live up to the exacting standard of morality and
utmost zeal in defense of his client's cause, his conduct must never be decorum required of the legal profession.
at the expense of truth.

Under Canon 1, Rule 1.01 of the Code of Professional Responsibility, a


A lawyer is the servant of the law and belongs to a profession to which lawyer shall not engage in unlawful, dishonest, immoral or deceitful
society has entrusted the administration of law and the dispensation of conduct. It may be difficult to specify the degree of moral delinquency
justice. 40 As such, he should make himself more an exemplar for that may qualify an act as immoral, yet, for purposes of disciplining a
others to emulate. 41 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
>On initiating numerous cases in exchange for nonpayment of rental keeping a mistress in defiance of the mores and sense of morality of the
fees. 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.
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 ACCORDINGLY, the Court finds respondent Atty. Luciano D. Valencia
both entitled "Valencia v. Samala" for estafa and grave coercion, GUILTY of misconduct and violation of Canons 21, 10 and 1 of the Code
respectively, before the Marikina City Prosecutor. Complainant claims of Professional Responsibility. He is SUSPENDED from the practice of
that the two criminal cases were filed in retaliation for the cases she filed law for three (3) years, effective immediately upon receipt of herein
against Lagmay docketed as I.S. No. 00-4306 for estafa and I.S. No. 00- Resolution.
4318 against Alvin Valencia (son of respondent) for trespass to dwelling.

Let copies of this Resolution be furnished all courts of the land, the
As culled from the records, Valdez entered into a retainer agreement Integrated Bar of the Philippines as well as the Office of the Bar
with respondent. As payment for his services, he was allowed to occupy Confidant for their information and guidance, and let it be entered in
the property for free and utilize the same as his office pursuant to their respondent's personal records.
retainer agreement. 42

SO ORDERED.
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.
REBECCA J. PALM, Complainant, v. ATTY. FELIPE ILEDAN, JR.,
Respondent.

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 DECISION
administrative charge unless it can be clearly shown that the same was
being done to abuse judicial processes to commit injustice.
CARPIO, J.:

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 The Case
his client.

The case before the Court is a disbarment proceeding filed by Rebecca


On having a reputation for being immoral by siring illegitimate children. J. Palm (complainant) against Atty. Felipe Iledan, Jr. (respondent) for
revealing information obtained in the course of an attorney-client
relationship and for representing an interest which conflicted with that of
his former client, Comtech Worldwide Solutions Philippines, Inc.
We find respondent liable for being immoral by siring illegitimate (Comtech).
children.

The Antecedent Facts


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 Complainant is the President of Comtech, a corporation engaged in the
died in 1997, he married Lagmay in 1998. 49 Respondent further business of computer software development. From February 2003 to
admitted that Lagmay was staying in one of the apartments being November 2003, respondent served as Comtech's retained corporate
claimed by complainant. However, he does not consider his affair with counsel for the amount of P6,000 per month as retainer fee. From
Lagmay as a relationship 50 and does not consider the latter as his September to October 2003, complainant personally met with
second family. 51 He reasoned that he was not staying with Lagmay respondent to review corporate matters, including potential amendments
because he has two houses, one in Muntinlupa and another in Marikina. to the corporate by-laws. In a meeting held on 1 October 2003,
52 respondent suggested that Comtech amend its corporate by-laws to
allow participation during board meetings, through teleconference, of
members of the Board of Directors who were outside the Philippines.
amendments of Comtech's corporate by-laws, respondent obtained
knowledge about the intended amendment to allow members of the
Prior to the completion of the amendments of the corporate by-laws, Board of Directors who were outside the Philippines to participate in
complainant became uncomfortable with the close relationship between board meetings through teleconferencing. The IBP-CBD noted that
respondent and Elda Soledad (Soledad), a former officer and director of respondent knew that the corporate by-laws have not yet been
Comtech, who resigned and who was suspected of releasing amended to allow the teleconferencing. Hence, when respondent, as
unauthorized disbursements of corporate funds. Thus, Comtech decided representative of Harrison, objected to the participation of Steven and
to terminate its retainer agreement with respondent effective November Deanna Palm through teleconferencing on the ground that the corporate
2003. by-laws did not allow the participation, he made use of a privileged
information he obtained while he was Comtech's retained counsel.

In a stockholders' meeting held on 10 January 2004, respondent


attended as proxy for Gary Harrison (Harrison). Steven C. Palm The IBP-CBD likewise found that in representing Soledad in a case filed
(Steven) and Deanna L. Palm, members of the Board of Directors, were by Comtech, respondent represented an interest in conflict with that of a
present through teleconference. When the meeting was called to order, former client. The IBP-CBD ruled that the fact that respondent
respondent objected to the meeting for lack of quorum. Respondent represented Soledad after the termination of his professional
asserted that Steven and Deanna Palm could not participate in the relationship with Comtech was not an excuse.
meeting because the corporate by-laws had not yet been amended to
allow teleconferencing.

The IBP-CBD recommended that respondent be suspended from the


practice of law for one year, thus:
On 24 March 2004, Comtech's new counsel sent a demand letter to
Soledad to return or account for the amount of P90,466.10 representing
her unauthorized disbursements when she was the Corporate Treasurer
of Comtech. On 22 April 2004, Comtech received Soledad's reply, WHEREFORE, premises considered, it is most respectfully
signed by respondent. In July 2004, due to Soledad's failure to comply recommended that herein respondent be found guilty of the charges
with Comtech's written demands, Comtech filed a complaint for Estafa preferred against him and be suspended from the practice of law for one
against Soledad before the Makati Prosecutor's Office. In the (1) year.4
proceedings before the City Prosecution Office of Makati, respondent
appeared as Soledad's counsel.
In Resolution No. XVII-2006-5835 passed on 15 December 2006, the
IBP Board of Governors adopted and approved the recommendation of
On 26 January 2005, complainant filed a Complaint1 for disbarment the Investigating Commissioner with modification by suspending
against respondent before the Integrated Bar of the Philippines (IBP). respondent from the practice of law for two years.

In his Answer,2 respondent alleged that in January 2002, Soledad Respondent filed a motion for reconsideration.6
consulted him on process and procedure in acquiring property. In April
2002, Soledad again consulted him about the legal requirements of
putting up a domestic corporation. In February 2003, Soledad engaged
In an undated Recommendation, the IBP Board of Governors First
his services as consultant for Comtech. Respondent alleged that from
Division found that respondent's motion for reconsideration did not raise
February to October 2003, neither Soledad nor Palm consulted him on
any new issue and was just a rehash of his previous arguments.
confidential or privileged matter concerning the operations of the
However, the IBP Board of Governors First Division recommended that
corporation. Respondent further alleged that he had no access to any
respondent be suspended from the practice of law for only one year.
record of Comtech.

In Resolution No. XVIII-2008-703 passed on 11 December 2008, the


Respondent admitted that during the months of September and October
IBP Board of Governors adopted and approved the recommendation of
2003, complainant met with him regarding the procedure in amending
the IBP Board of Governors First Division. The IBP Board of Governors
the corporate by-laws to allow board members outside the Philippines to
denied respondent's motion for reconsideration but reduced his
participate in board meetings.
suspension from two years to one year.

Respondent further alleged that Harrison, then Comtech President,


The IBP Board of Governors forwarded the present case to this Court as
appointed him as proxy during the 10 January 2004 meeting.
provided under Section 12(b), Rule 139-B7 of the Rules of Court.
Respondent alleged that Harrison instructed him to observe the conduct
of the meeting. Respondent admitted that he objected to the
participation of Steven and Deanna Palm because the corporate by-
laws had not yet been properly amended to allow the participation of The Ruling of this Court
board members by teleconferencing.

We cannot sustain the findings and recommendation of the IBP.


Respondent alleged that there was no conflict of interest when he
represented Soledad in the case for Estafa filed by Comtech. He alleged
that Soledad was already a client before he became a consultant for
Comtech. He alleged that the criminal case was not related to or Violation of the Confidentiality of Lawyer-Client Relationship
connected with the limited procedural queries he handled with Comtech.

Canon 21 of the Code of Professional Responsibility provides:


The IBP's Report and Recommendation

Canon 21. A lawyer shall preserve the confidence and secrets of his
In a Report and Recommendation dated 28 March 2006,3 the IBP client even after the attorney-client relationship is terminated. (Emphasis
Commission on Bar Discipline (IBP-CBD) found respondent guilty of supplied)cralawlibrary
violation of Canon 21 of the Code of Professional Responsibility and of
representing interest in conflict with that of Comtech as his former client.
We agree with the IBP that in the course of complainant's consultations,
respondent obtained the information about the need to amend the
The IBP-CBD ruled that there was no doubt that respondent was corporate by-laws to allow board members outside the Philippines to
Comtech's retained counsel from February 2003 to November 2003. participate in board meetings through teleconferencing. Respondent
The IBP-CBD found that in the course of the meetings for the intended himself admitted this in his Answer.
WHEREFORE, we DISMISS the complaint against Atty. Felipe Iledan,
Jr. for lack of merit.
However, what transpired on 10 January 2004 was not a board meeting
but a stockholders' meeting. Respondent attended the meeting as proxy
for Harrison. The physical presence of a stockholder is not necessary in
a stockholders' meeting because a member may vote by proxy unless SO ORDERED.
otherwise provided in the articles of incorporation or by-laws.8 Hence,
there was no need for Steven and Deanna Palm to participate through
teleconferencing as they could just have sent their proxies to the
meeting. Orcino v Gaspar AC 3773

03

In addition, although the information about the necessity to amend the Thursday
corporate by-laws may have been given to respondent, it could not be
Apr 2014
considered a confidential information. The amendment, repeal or
adoption of new by-laws may be effected by "the board of directors or Posted by reylangarcia in Uncategorized ≈ Leave a comment
trustees, by a majority vote thereof, and the owners of at least a majority
of the outstanding capital stock, or at least a majority of members of a TagsAC 3773, Legal Ethics, Orcino v Gaspar, Orcino v Gaspar AC 3773,
non-stock corporation."9 It means the stockholders are aware of the Orcino v Gaspar case digest
proposed amendments to the by-laws. While the power may be
delegated to the board of directors or trustees, there is nothing in the TOPIC: Legal Ethics, termination of attorney-client relationship
records to show that a delegation was made in the present case.
Further, whenever any amendment or adoption of new by-laws is made,
copies of the amendments or the new by-laws are filed with the
FACTS:
Securities and Exchange Commission (SEC) and attached to the
original articles of incorporation and by-laws.10 The documents are
public records and could not be considered confidential.ςηαñrοblεš
νιr†υαl lαω lιbrαrÿ Orcino engaged the services of Atty. Gaspar to prosecute a criminal
case she intended to file against several suspects in the slaying of her
husband. Orcino bound herself to pay respondent legal fees
ofP20,000.00 — P10,000.00 to be paid upon signing of the contract and
It is settled that the mere relation of attorney and client does not raise a
the balance to be paid on or before the conclusion of the case. She was
presumption of confidentiality.11 The client must intend the
also to pay P500.00 per appearance of respondent before the court and
communication to be confidential.12 Since the proposed amendments
fiscal. This agreement was embodied in a contract executed on
must be approved by at least a majority of the stockholders, and copies
February 22, 1991. Orcino complied with the contract and Atty. Gaspar
of the amended by-laws must be filed with the SEC, the information
entered into his duties. Atty. Gaspar, however failed to attend the
could not have been intended to be confidential. Thus, the disclosure
hearing scheduled in August 1991. It was at this hearing that the court,
made by respondent during the stockholders' meeting could not be
over complainant’s objections, granted bail to all the accused. Orcino
considered a violation of his client's secrets and confidence within the
immediately went to respondent’s residence and confronted him with his
contemplation of Canon 21 of the Code of Professional Responsibility.
absence. Gaspar explained that he did not receive formal notice of the
hearing. She asked for the records of the case saying that she could
refer them to another lawyer. Gaspar then gave her the records. Orcino
Representing Interest in Conflict With the Interest of a Former Client never returned the records nor did she see Gaspar. On September 18,
1991, Atty. Gaspar filed before the trial court a Motion to Withdraw as
Counsel without the consent of Orcino. The court issued an order
directing Gaspar to secure complainant’s consent to the motion and his
The IBP found respondent guilty of representing an interest in conflict appearance as private prosecutor shall continue until he has secured
with that of a former client, in violation of Rule 15.03, Canon 15 of the this consent. Oricno refused to sign her conformity. Atty. Gaspar did not
Code of Professional Responsibility which provides: appear at the hearings nor did he contact Orcino, thus she was
compelled to engage the services of another lawyer.

Rule 15.03 - A lawyer shall not represent conflicting interest except by


written consent of all concerned given after a full disclosure of the facts. ISSUE:

We do not agree with the IBP. Whether or not Atty. Gaspar had the right to terminate the attorney-client
relation

In Quiambao v. Bamba,13 the Court enumerated various tests to


determine conflict of interests. One test of inconsistency of interests is HELD:
whether the lawyer will be asked to use against his former client any
confidential information acquired through their connection or previous
employment.14 The Court has ruled that what a lawyer owes his former
client is to maintain inviolate the client's confidence or to refrain from The client has the absolute right to terminate the attorney-client relation
doing anything which will injuriously affect him in any matter in which he at any time with or without cause. The right of an attorney to withdraw or
previously represented him.15 terminate the relation other than for sufficient cause is, however,
considerably restricted. An attorney who undertakes to conduct an
action impliedly stipulates to carry it to its conclusion. He cannot
abandon it without reasonable cause. A lawyer’s right to withdraw from a
We find no conflict of interest when respondent represented Soledad in case before its final adjudication arises only from the client’s written
a case filed by Comtech. The case where respondent represents consent or from a good cause. Section 26 of Rule 138 of the Revised
Soledad is an Estafa case filed by Comtech against its former officer. Rules of Court provides: “Sec. 26. Change of attorneys — An attorney
There was nothing in the records that would show that respondent used may retire at any time from any action or special proceeding, by the
against Comtech any confidential information acquired while he was still written consent of his client filed in court. He may also retire at any time
Comtech's retained counsel. Further, respondent made the from an action or special proceeding, without the consent of his client,
representation after the termination of his retainer agreement with should the court, on notice to the client and attorney, and on hearing,
Comtech. A lawyer's immutable duty to a former client does not cover determine that he ought to be allowed to retire. In case of substitution,
transactions that occurred beyond the lawyer's employment with the the name of the attorney newly employed shall be entered on the docket
client.16 The intent of the law is to impose upon the lawyer the duty to of the court in place of the former one, and written notice of the change
protect the client's interests only on matters that he previously handled shall be given to the adverse party.” In the present case, Orcina did not
for the former client and not for matters that arose after the lawyer-client give her written consent to Gaspar’s withdrawal. He did not even file an
relationship has terminated.17 application with the court for it to determine whether he should be
allowed to withdraw.
But granting that respondent’s motion without complainant’s consent the respondents Aurelia Martinez,1spouses Gregorio Lontok and Maria
was an application for withdrawal with the court, the Supreme Court Mendoza and spouses Maximo Porto and Rosario Andaya.
found this reason insufficient to justify the withdrawal. Atty. Gaspar’s
withdrawal was made on the ground that “there no longer exists the xxx
confidence” between them and that there had been “serious differences
between them relating to the manner of private prosecution. Rule 22.01 3. That being without means to prosecute their claim against the
of Canon 22 of the Code of Professional Responsibility provides: persons concerned, respondents Luis Magtibay and Pablo Magtibay
agreed with herein petitioner to avail of his services and entrust the
prosecution of their claim on a contingent basis as shown in the
agreement, copy of which is hereto attached as Annex 'A' and is made
“CANON 22 — A LAWYER SHALL WITHDRAW HIS SERVICES ONLY an integral part hereof.2
FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE
CIRCUMSTANCES. Rule 22.01– A lawyer may withdraw his services in
any of the following cases: a) When the client pursues an illegal or
immoral course of conduct in connection with the matter he is handling; 4. That by virtue of said agreement, herein petitioner took the necessary
b) When the client insists that the lawyer pursue conduct violative of steps to gather the needed papers and documents for the filing of a
these canons and rules; c) When his inability to work with co-counsel petition to litigate as pauper and a complaint in the Court of First
will not promote the best interest of the client; d) When the mental or Instance of Laguna, in which respondents Luis Magtibay and Pablo
physical condition of the lawyer renders it difficult for him to carry out the Magtibay were the plaintiffs and the other respondents, excepting the
employment effectively; e) When the client deliberately fails to pay the respondent Judge, were the defendants, ....
fees for the services or fails to comply with the retainer agreement; f)
When the lawyer is elected or appointed to public office; and g) Other
similar cases.” The instant case does not fall under any of the grounds 5. That said petition to litigate as pauper filed by herein petitioner for
mentioned. Neither can this be considered similar or analogous to any. respondents Luis Magtibay and Pablo Magtibay was granted by the
Orcina was upset by Atty. Gaspar’s absence at the hearing where bail respondent Judge as per the order dated September 10, 1964, .....
was granted to the suspected killers of her husband and it was thus
natural for her to react by confrontation. Her words were uttered in a
burst of passion and cannot be construed to have intended to terminate
Atty. Gaspar’s services. She made this clear when she refused to sign 6. That to plaintiffs' complaint in Civil Case No. SC-525, the defendants
his “Motion to Withdraw as Counsel.” Even if Atty. Gaspar was justified in said case interposed a motion to dismiss dated September 29,
in terminating his services, he, however, cannot just do so and leave 1964....3
complainant in the cold unprotected. The lawyer has no right to
presume that his petition for withdrawal will be granted by the court.
Until his withdrawal shall have been approved, the lawyer remains
7. That to the said motion to dismiss herein petitioner, as attorney for the
counsel of record.
plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) filed an
opposition dated October 5, 1964.....4

Return the amount owed to Orcina. Admonished to exercise prudence.


8. That after the hearing of the motion to dismiss filed by the defendants
and the opposition thereto by the plaintiffs, which finally took place on
October 24, 1964, the respondent Judge issued its resolution or order
dated October 24, 1964, denying the motion to dismiss, ....5
G.R. No. L-24163 April 28, 1969

9. That on the very day of and after the hearing of the motion to dismiss,
REGINO B. ARO, petitioner, or on October 24, 1964, before receipt of a copy of the said order
(Annex 'G'), there was a conversation which took place between herein
vs. petitioner and the attorney of the defendants, Atty. Rustico de los Reyes,
Jr., in the civil case and one who was then acting as a sort of
THE HON. ARSENIO NAÑAWA, Presiding Judge of Branch IV, Court of spokesman for the defendants (Ex-Mayor Cordova of Sta. Maria,
First Instance of Laguna, LUIS MAGTIBAY, PABLO MAGTIBAY, Laguna) for the amicable settlement of the case between the plaintiffs
AURELLO MARTINEZ, GREGORIO LONTOK, MARIA MENDOZA, and the defendants to the effect that a certain property of the spouses
MAXIMO PORTO and ROSARlO ANDAYA, respondents. Lucio Magtibay (deceased) and respondent Aurelia Martinez, worth
P3,000.00, would be given to the plaintiffs in full settlement of their
claim, as share in the properties left by their deceased uncle Lucio
Regino B. Aro in his own behalf as petitioner. Magtibay, it having been agreed by herein petitioner and Atty. de los
Reyes and the spokesman of the defendants that for the purpose of said
Enrique C. Villanueva for respondents. amicable settlement, the plaintiffs or one of them and herein petitioner
would go to Sta. Maria, Laguna, on October 23, 1964.

BARREDO, J.:
10. That having given notice to the plaintiffs (now respondents Luis
Magtibay and Pablo Magtibay) at their given address in Calauag,
Quezon to come to Candelaria for the purpose of going to Sta. Maria,
Original petition: (1) for certiorari to annul the order of the Court of First Laguna on October 23, 1964, petitioner had waited for said plaintiffs to
Instance of Laguna, dated November 21, 1964, dismissing its Civil Case go to his office on or before said date for the engagement mentioned,
No. SC-525 "without prejudice to the right of Atty. Regino B. Aro but due to their (plaintiffs') failure to come to Candelaria, petitioner had
(petitioner herein) to file a separate action against both the plaintiffs and to send a telegram to Ex-Mayor Cordova notifying him of his
defendants (private respondents herein) with respect to his alleged (petitioner's) and plaintiffs' not being able to go to Sta. Maria because of
attorney's fees", as well as its order dated January 9, 1965, denying the failure of any of the plaintiffs to come to Candelria, ....
petitioner's motion for reconsideration thereof for lack of merit and (2) for
mandamus to compel respondent Judge to take cognizance of
petitioner's opposition and countermotion or petition dated November 3,
1964 and to resolve the same on the merits. 11. That it was only on October 28, 1964, when herein petitioner
received a copy of the order dated October 24, 1964 (Annex "G") and to
his surprise he also received on the said day a second motion to
dismiss dated October 26, 1964; together with Annex "A" of said motion,
There appears to be no dispute as to the following facts alleged in the which is entitled KASULATAN NG PAGHAHATIAN NA LABAS SA
petition: HUKUMAN AT PAGPAPALABI, dated October 23, 1964 at Sta. Cruz,
Laguna and signed by the plaintiffs and defendant Aurelia Martinez (the
three being now respondents in this case), it having been made to
appear in said Annex "A" of the second motion to dismiss, among
2. That the services of herein petitioner, as practising attorney, was
others, that the plaintiffs and defendant Aurelia Martinez had made an
engaged by respondents Luis Magtibay and Pablo Magtibay for the
extrajudicial partition of the properties of the deceased Lucio Magtibay
prosecution of their claim, as heirs, in the estate of their deceased uncle
and the said Aurelia Martinez adjudicating to the plaintiffs one-fourth (¼)
Lucio Magtibay, consisting of properties which were in the possession of
share in the properties of the spouses and three-fourth (3/4) share of the 16. That by the express terms of the agreement, Annex "A" of this
defendant Aurelia Martinez, but making it appear also that said plaintiffs petition, plaintiffs in Civil Case No. SC-525 had expressly ceded to
waived their share in favor of Aurelia Martinez, ..., thru which fraudulent herein petitioner one-half (½) [later verbally reduced to one-third (1/3) or
waiver, herein petitioner was deprived of his contingent fees, agreed P1,000.00] or whatever share they would get from the estate of their
upon, as evidenced by Annex "A" of this petition.6 deceased uncle Lucio Magtibay, and the defendants in said Civil Case
had full knowledge of said right of herein petitioner in the properties in
controversy from and after the time they were served with summons and
copies of the complaint in said civil case — because of the allegations
xxx xxx xxx contained in par. 10 thereof. 7 [Emphasis by the Court]

14. That petitioner filed by registered mail, on November 4, 1964, his 18. That on December 5, 1964, herein petitioner filed his motion for
"OPPOSITION TO THE SECOND MOTION TO DISMISS AND reconsideration dated December 4, 1664 asking for the reconsideration
COUNTER-MOTION OR PETITION TO SET ASIDE DEED OF of the order dated November 21, 1964, ....
EXTRAJUDICIAL PARTITION AND WAIVER DATED OCTOBER 23,
1964 AND TO RECORD ATTORNEY'S LIEN", dated November 3, 1964,
wherein he (petitioner) prayed, among others, invoking the provisions of
Section 5(d) and Section 6, Rule 135 of the Revised Rules of Court, for 19. That the motion for reconsideration was denied by the court, thru the
the protection of the rights of herein petitioner as an officer of the Court, respondent Judge, as per the order dated January 9, 1965, ....
to wit:

Upon these facts, petitioner tries to make out before this Court a case of
(a) to deny the second motion to dismiss and get aside and annul the certiorari for grave abuse of discretion on the part of respondent Judge
deed of extrajudicial partition and waiver dated October 23, 1964; in dismissing the case on the basis of the compromise agreement of the
parties, entered into at the back of petitioner notwithstanding the
reservation made in his favor to file an action against both parties "with
respect to his alleged attorney's fees", as well as a case of mandamus
(b) to fix the compensation of herein counsel in the proportion of one- "to order and command the said respondent judge" to take cognizance
third (1/3) of the shares of plaintiffs, if in land, or in the amount of of and resolve his opposition and counter-motion for the court to fix the
P1,000.00, if in cash, and to record the same and expenses advanced compensation he should be paid. Unable to find any local precedent to
by him for the plaintiffs in the sum of P22.15 as lien in favor of herein support his position, he cites American authorities thus:
claimant-petitioner over the properties in litigation, particularly over the
one-fourth (1/4) share of the plaintiffs in all the properties of the
spouses;
In the American jurisdiction, it would seem that, even without the specific
provisions of the rules of court cited above, courts had always
intervened, in the mere exercise of their inherent powers, to protect
xxx xxx xxx attorneys against collusive agreements or fraudulent settlements
entered into by the parties in a case to cheat attorneys out of their costs
or of their fees. Thus, it was held or had been stated in:
(d) as an alternative to prayer (a) above, to grant the second motion to
dismiss, subjecting, however, the properties in litigation and subject-
matters of the extrajudicial partition and waiver to the lien for attorney's (a) Coughlin vs. N.Y. Cont. & H.R.R. Co., 71 N.Y. 443, 27 Am. Rep. 75.
fees and expenses in favor of herein claimant-petitioner, after fixing said
attorney's fees as prayed for in (b) above.

... But since the time of Lord Mansfield, it has been the practice of courts
to intervene to protect attorneys against settlement made to cheat them
xxx xxx xxx out of their costs. If an attorney has commenced an action, and his
client settles it with the opposite party before judgment, collusively, to
deprive him of his costs, the court will permit the attorney to go on with
15. That on the day f finally set for the hearing of the second motion to the suit for the purpose of collecting his costs. Swain v. Senate, 5 Bos. &
dismiss, as well as of the counter-motion or petition, or on November Pul. 99; Cole v. Bennett, 6 Price, 15; Moore v. Cook, 13 Id. 473; Talcott
21, 1964, because of the inquiries or interpellation made by respondent v. Bronson, 4 Paige, 501; Rusquin v. The Knickerbocker Stage Col., 12
Judge to herein petitioner as to whether there is a Philippine precedent Abb. Pr 324; Ward v. Syme, 9 How. Pr. 16; McDonald v. Napier, 14 Ga.
which allows or directs the protection by the Court of the rights of any of 89.
its officers (lawyer) against any collusion perpetrated by the parties in a
case to defraud or cheat an attorney of his compensation agreed upon
by him and his clients, and his answer that insofar as his researches There are many cases where this had been allowed to be done. It is
were concerned, he could not find any, although there are a number of impossible to ascertain precisely when this practice commenced, nor
cases to that effect in American jurisdiction, the respondent Judge had how originated, nor upon what principle it was based. It was not upon
opined in open court that the claim for and the fixing of the attorney's the principle of a lien, because an attorney has no lien upon the cause
fees should better be done in a separate action and, in spite of of as it upon the action before judgment for his costs; nor was it upon
petitioner's memorandum citing American authorities to the effect that, principle that his services had produced the money paid his client upon
the settlement, because that could not be known, and in fact no money
may have been paid upon the settlement. So far as I can perceive, it
Though a party may without the consent of his attorney money make a was based upon no principle. It was a mere arbitrary exercise of power
bona fide adjustment with the adverse party and dismiss an action or by the courts; not arbitrary in the sense that it was unjust or improper,
suit before a judgment or a decree has been rendered thereon, if it but in the sense that it was not based upon any right or principle
appears, however, that such settlement was collosive and recognized in other cases. The parties being in court, and a suit
consummated pursuant to the intent of both parties to defraud the commenced and pending, for the purpose of protecting attorneys who
attorney, the court in which the action was pending may interfere to were their officers and subject to their control, the courts invented this
protect him as one of its officers, by setting aside the order of practice and assumed this extraordinary power to defeat attempts to
dismissal, .... (Jackson vs. Stearns, 48 Ore. 25, 84 Pac. 798). cheat the attorneys out of their costs. The attorney's fees were fixed in
definite sums, easily determined by taxation and this power was
exercised to secure them their fees. (pp. 76-77)

... the respondent Judge, instead of denying the second motion to


dismiss and fixing his attorney's fees in the said case and recording the
same as lien, ... dismissed the case and refused to give herein petitioner (b) Randall v. Van Wagenan et al., 22 N.E. 361, 362.lawphi1.nêt
any kind of immediate protection to safeguard his rights ... in said Civil
Case No. SC-525 of the Court of First Instance of Laguna.
... But where such settlement is made collusively for the purpose of
defrauding the attorney out of his costs, courts have been accustomed
to intervene, and to protect the attorney by permitting him to proceed
with the suit, and, if he is able to establish a right to recover on the de Porcuna, by means of a written contract, retained the petitioner to
cause of action as it originally stood, to permit such recovery to the represent them as their lawyer in case No. 1435 then pending in the
extent of his costs in the action. Coughlin v. Railroad Co., 71 N. Y. 443, Court of First Instance of Batangas and in which Rosa H. de Porcuna
and pages cited. And the court will set aside an order of discontinuance was the plaintiff and one Eulalia Magsombol was the defendant. The
if it stands in the way. This is an adequate remedy, and we think the contract fixed the petitioner's fee at P200 in advance with an additional
exclusive remedy where the suit has been fraudulently settled by the contingent fee of P1,300. It was also provided in the contract that Justo
parties before judgment to cheat the attorney out of his costs. We have Porcuna should not compromise the claim against the defendant in the
found no case of an equitable action to enforce the inchoate right of an case without express consent of his lawyer, the herein petitioner.
attorney, under such circumstances, and no such precedent ought, we
think, to be established.

After trial, the petitioner then being plaintiff's attorney of record, the
Court of First Instance, under date of December 24, 1921, rendered
(c) Jackson v. Stearns, et al., 43 Ore 25, 84 Pac. 798. judgment in favor of Justo Porcuna and Rosa H. de Porcuna ordering
the defendant Eulalia Magsombol to return to them 602 pieces of cloth
or in default thereof to pay to them the sum of P3,250. On January 14,
1922, Eulalia Magsombol filed her exception to the judgment and on the
... Though a party may, without the consent of his attorney, make a bona following day presented a motion for a new trial, which was denied on
fide adjustment with the adverse party, and dismiss an action or suit the 21st of the same month. She thereupon gave notice of appeal and
before a judgment or a decree has been rendered therein, if it appears, presented a bill of exceptions which was approved on February 20,
however, that such settlement was collusive and consummated 1922. On March 2, 1922, and before the transmission of the bill of
pursuant to the intent of both parties to defraud the attorney, the court in exceptions to this court, the plaintiffs presented the following motion in
which the action or suit was pending may interfere to protect him, as the Court of First Instance:
one of its officers, by setting aside the order of dismissal and permitting
him to proceed in the cause in the name of his client to final
determination to ascertain what sum of money, or interest in the subject-
matter, if any, is due him for his services when fully performed. Jones v. The plaintiffs, without any further intervention of their attorney, now
Morgage 99 Am. Dec. 458; Randall v. Van Wagenen (N.Y.) 22 N.E. 361, appear before this Honorable Court and respectfully aver:
12 Am. St. Rep. 828. (p. 800)

That, through Mr. Miguel Olgado they already settled this case with the
Before a court will set aside an order dismissing a suit or an action, herein defendant.
made upon stipulation of the parties, without the consent of plaintiff's
attorney, and allow the latter to proceed with the cause in the name of
his client, to determine the amount of fees due him, it must appear that
the defendant participated in the fraudulent intent to deprive the attorney That the basis of the compromise is that we, the plaintiffs, finally agree
of his compensation. Courtney v. McGavock, 25 Wis. 619. When no that we should be paid the amount of eight hundred pesos (P800) in two
adequate consideration is given by the defendant for the settlement and installments; P300 to be paid on this same date, and the remaining five
discharge of an action or a suit, the insufficiency of the inducement to hundred pesos (P500) at the end of March, 1922.
the contract affords evidence of his bad faith. Young v. Dearborn, 27
N.E. 324. It will be remembered that the complaint alleges that the value
of the real property in question is $3,000.00, and that Stearns executed That we, the plaintiffs, recognize not to have any further rights in this
to Wilson a deed to the premises for a nominal consideration. This is a case than to the aforesaid amount of eight hundred pesos (P800) and
sufficient averment of the defendant's intent to deprive the plaintiff of his that this is the total amount the defendant Eulalia Magsombol should
compensation thereby imputing to Wilson bad faith. (p. 800) pay us, and we have no right whatever to any other amount than the
aforementioned.

(d) Desaman v. Butler Bros., 188 Minn. 198, 136 N.W. 747.
That we have not sold to any other person our rights as plaintiffs in this
case.
We have recently held that a client has always the right to settle his
cause of action and stop litigation at any stage of the proceeding,
subject, however, to the right of the attorney to receive compensation for Wherefore, the plaintiffs respectfully request the dismissal of this case,
services rendered. Burho v. Camichael 135 N.W. 386. It is therefore without any pronouncement as to costs, and that the appeal interposed
contended by defendant that a litigant retains the unrestricted right to by the defendant be further dismissed.
determine for what amount the cause of action may be settled, and,
having so done, the lien of his attorney for services is measured by the
amount determined on and actually settled for. Conceding, without
deciding, that this may be true of any time prior to the rendition of a Batangas, Batangas, P.I., March 2, 1922.
verdict in the action which the attorney has been employed to bring, we
are of opinion that after verdict fixing the amount of a plaintiff's cause of
action a secret and collusive compromise between parties litigant does
not affect the amount of the attorney's lien...; but therein is also clearly
indicated by Mr. Justice Brown that, if there be fraud and collusion to (Sgd) ROSA H. PORCUNA
deprive the attorney of his lien, the settlement will not be permitted to
accomplish such result. (p. 748) Plaintiff

To be sure, these authorities are quite persuasive, but contrary to


petitioner's impression, there is already a precedent setting decision of
this Court handed down way back in 1922 in a case very similar to his, JUSTO M. PORCUNA
that in Rustia vs. the Judge of the Court of First Instance of Batangas, et
al., 44 Phil. 62. As it is very brief, it can be quoted in full: Plaintiff

This is a petition for a writ of certiorari, the petitioner alleging that the The defendant, through her attorney, Jose Mayo Librea, having signified
respondent Judge of the Court of First Instance exceeded his her assent to the motion, the Court of First Instance on the same day,
jurisdiction in dismissing a pending action at the instance of the parties March 2, dismissed the action without notice to counsel for the plaintiffs.
but without the intervention of the attorney for the plaintiff in the case,
the herein petitioner.
The petitioner alleges that he did not discover the dismissal of the action
until April 4, 1922. After an unsuccessful effort to obtain a
It appears from the record that on July 31, 1921, the respondent Justo reconsideration of the order of dismissal from the trial court, he filed the
Porcuna, for himself and on behalf of his wife, the respondent Rosa H. present petition for a writ of certiorari. By resolution dated October 24,
1922, this court denied the petition and upon motion of the petitioner we judgment favorable to Mrs. Harden acknowledging, inter alia, her rights
shall now briefly state our reasons for such denial. to the assets of the conjugal partnership, which turned out to be
P4,000,000, and awarding her a monthly support of P2,500, practically
as prayed for in Atty. Recto's pleadings, while the case was already
pending on appeal before this Court, Mrs. Harden and her husband, Mr.
The burden of the petitioner's contention is (1) that he, as attorney of Fred Harden, entered into a compromise of their case, without the
record, was entitled to notice of his client's motion to dismiss the case, knowledge of Atty. Recto, whereby said spouses "purportedly agreed to
and (2) that after the approval of the bill of exceptions the lower court settle their differences in consideration of the sum of P5,000 paid by Mr.
had lost jurisdiction of the case and had no power to dismiss it. A Harden to Mrs. Harden, and a monthly pension of $500 to be paid by
moment's reflection should make it clear that neither of these him to her; (2) Mr. Harden created a trust fund of $20,000 from which
propositions is tenable. said monthly pension of $500 would be taken; and (3) Mr. and Mrs.
Harden had mutually released and forever discharged each other from
all actions, debts, duties, accounts, demands and claims to the conjugal
Both at the common law and under section 32 of the Code of Civil partnership, in consideration of the sum of $1." (p. 435)
Procedure a client may dismiss his lawyer at any time or at any stage of
the proceedings and there is nothing to prevent a litigant from appearing
before the court to conduct his own litigation. (Sec. 34, Code of Civil Whereupon Atty. Recto filed a motion with this Court praying that:
Procedure.) The client has also an undoubted right to compromise a suit
without the intervention of his lawyer.

a) Pending the resolution of this motion, the receiver appointed herein


be authorized to continue holding the properties above mentioned in his
Though there is a valid agreement for the payment to the attorney of a custody in order not to defeat the undersigned's inchoate lien on them;
large proportion of the sum recovered in case of success this does not
give the attorney such an interest in the cause of action that it prevents
plaintiff from compromising the suit. (4 Cyc. 990, and authorities cited in
Note 6; see also Louque vs. Dejan 129 La. 519; Price vs. Western Loan b) A day set aside to receive the evidence of the undersigned and those
& Savings Co., 19 Am. Cas. 589 and Note.) of the plaintiff and the defendant Fred M. Harden, in order to determine
the amount of fees due to the undersigned, by the appointment of a
referee or commissioner for the reception of such evidence;

In the present instance the clients did nothing that they did not have a
perfect right to do. By appearing personally and presenting a motion
they impliedly dismissed their lawyer. The petitioner's contingent c) After due hearing, the undersigned be declared entitled to the sum of
interests in the judgment rendered did not appear of record. Neither as a P400,000 as his fees for services rendered in behalf of the plaintiff in
party in interest nor as and attorney was he therefore entitled to notice this case, under paragraph 3 of the contract, Annex "A" and to that end
of the motion. a charging lien therefore be established upon the properties above-
mentioned;

As to the second proposition that the court below could not dismiss the
case after the bill of exceptions had been approved, it is very true that d) And the receiver be ordered to pay to the undersigned the full amount
upon such approval the lower court loses its jurisdiction over all of the fees to which the latter is found to be entitled.
contentious matters connected with the issues in the case. But there is
nothing to prevent all of the parties by agreement to withdraw the bill of
exceptions with the consent of said court and resubmit the case to the
jurisdiction of the court. That was all that was done in this case. A valid This motion was objected to by Mr. Hardens counsel, who in turn,
agreement between the parties to a case is the law of the case in moved for the dismissal of the case, to which Atty. Recto objected.
everything covered by the agreement. (Civil Code, art. 1091; Compania Under these circumstances, this Court acceded to Atty. Recto's prayer
General de Tabacos vs. Obed, 13 Phil. 391.) The petitioner might have that the case be not dismissed, that the receivership be maintained
protected his interests by entering an attorney's lien under section 37 of except as to certain properties not material to mention here, and that the
the Code of Civil Procedure. case be remanded to the lower court so that his fees may be
determined and ordered paid. Upon the remand of the case to the lower
court, a commissioner was appointed to hear the matter of the amount
of the fees in question, and after the commissioner had submitted a
The petition for a writ of certiorari was therefore properly denied. So report recommending the payment to Atty. Recto of the 20,70 attorney's
ordered. fees stipulated in the contract for his services, equivalent to
P369,410.04, the court rendered judgment as follows:

The difference We perceive, however, between petitioner's case, on the


one hand, and that of Atty. Rustia, in the above decision, on the other, is The contingent fee to which the claimant is entitled under paragraph 3 of
that in the latter's case, neither the court nor the party adverse to his the contract, Exhibit JJJ or 20, is 20% of P1,920,554.85 or the sum of
clients were aware of the exact agreement as to his fees, whereas in the P384,110.97.
case of petitioner, both the court and the other parties knew the terms of
the contract for professional services between petitioner and his clients,
the Magtibay brothers, because the written contract therefor, Annex A,
was made part of the complaint, and none seriously disputes its WHEREFORE, this Court hereby approves the recommendation of the
authenticity. Besides, the court had already dismissed the case when Commissioner with the above-stated modification, and finds that
Atty. Rustia raised the question of his fees before the court; in Attorney Claro M. Recto is entitled to the sum of THREE HUNDRED
petitioner's instance, he opposed the motion to dismiss and pleaded EIGHTY-FOUR THOUSAND ONE HUNDRED AND TEN PESOS AND
with the court to protect his rights as officer of the court before the first NINETY-SEVEN CENTAVOS (P384,110.97), representing 20% of
order in question was issued by respondent judge. Were it not for these Esperanza P. de Harden's share in the conjugal properties owned by her
differences, We would have inclined towards denying the herein petition and her husband, Fred M. Harden, as contingent fee stipulated in
in line with the Rustia ruling that, in any event, certiorari is not the paragraph 3 of the Contract of Professional Services, Exhibit JJJ or 20,
appropriate remedy, the American authorities cited by petitioner not and the said Esperanza P. de Harden is hereby ordered to pay the said
withstanding. amount above-stated.

Withal, there is another Philippine case which Us to sustain petitioner. In On appeal from this judgment to this Court, the same was affirmed, the
the case of Recto vs. Harden, 100 Phil. 440, Atty. Claro M. Recto found decision stating pertinently in part:
himself practically in the same situation as petitioner herein. After Atty.
Recto had rendered services to Mrs. Esperanza P. de Harden in a
protracted suit against her husband for the purposes of securing an The last objection is based upon principles of equity, but, pursuant
increase of her and her daughter's monthly support, (the spouses were thereto, one who seeks equity must come with clean hands (Bastida et
separated), to P10,000.00 and of protecting and preserving her rights in al. vs. Dy Buncio & Co., 93 Phil. 195; 30 C.J.S. 475), and appellants
the properties of the conjugal partnership, which suit lasted from 1941 to have not done so, for the circumstances surrounding the case show, to
1949, and after the Court of First Instance of Manila had rendered a our satisfaction, that their aforementioned agreements, ostensibly for
the settlement of the differences between husband and wife, were made to waive the portion of their such acknowledged rights in favor of their
for the purpose of circumventing or defeating the rights of herein opponent to the extent that such waiver would prejudice the stipulated
appellee, under his above-quoted contract of services with Mrs. Harden. contingent interest of their lawyer and their aunt-in-law had no right to
Indeed, having secured a judgment in her favor, acknowledging her accept such waiver unqualified. The Civil Code enjoins that:
rights to the assets of the conjugal partnership, which turned out to be
worth almost P4,000,000 in addition to litis expensae in the sum of
P175,000, it is inconceivable that Mrs. Harden would have waived such
rights, as well as the benefits of all orders and judgments in her favor, in ART. 19. Every person must, in the exercise of his rights and in the
consideration of the paltry sum of $5,000 allegedly paid to her by Mr. performance of his duties, act with justice, give everyone his due, and
Harden and the additional sum of $20,000 to be paid by him in observe honesty and good faith.
installments, at the rate of $500 a month. In fact, no explanation has
been given for this moat unusual avowed settlement between Mr. and
Mrs. Harden. One can not even consider the possibility of a Under the circumstance extant in the record, it is clear that the
reconciliation between the spouses, the same being inconsistent with compromise agreement in question falls short of the moral requirements
the monetary consideration for said alleged settlement. What is more, of this quoted article of the Civil Code. If for this reason alone, it should
the records show that the relations between said spouses — which were not be allowed to prejudice the rights of petitioner. Accordingly, as all of
bad indeed, not only in July, 1941, when Mrs. Harden engaged the these circumstances were presented to respondent judge before he
services of the appellee, but, even, before, for Mr. and Mrs. Harden issued the challenged order of dismissal and all the parties were heard
were separated since 1938 — had worsened considerably thereafter, as thereon, it was incumbent upon His Honor, in equity and to avoid
evidenced by an action for divorce filed by Mr. Harden in New Jersey, in multiplicity of suits, particularly, because the amount claimed by
July 1948, upon the ground of repeated acts of infidelity allegedly petitioner is only P1,000.00, to have directly passed upon petitioner's
committed by Mrs. Harden in 1940 and 1941. claim, and not having done so, it would appear that the court a quo
abused its discretion gravely enough to warrant the writ of certiorari
herein prayed for in so far as the questioned orders prejudiced
On the same considerations of equity, and for the better protection of petitioner's right to the fees for the professional services which appear to
lawyers, who, trusting in the good faith of their clients, render have been creditably rendered by him. Respondents allege that the
professional services on contingent basis, and so that it may not be said judgment of dismissal in question is already final because no appeal
that this Court, sanctions in any way the questionable practice of clients was taken therefrom, but since We hold that the same was rendered
of compromising their cases at the back of their counsel with the with enough grave abuse of discretion to warrant the certiorari prayed
consequence that the stipulated contingent fees of the lawyer are either for, such alleged finality could not have materialized; obviously,
unreasonably reduced or even completely rendered without basis, as in petitioner could not have appealed, not being a party in the case.
this case — wherein the clients waived the whole of their rights in favor
of their opponent after the latter had acknowledged, in effect, the
correctness of said clients' contention — We have decided to grant the IN VIEW OF THE FOREGOING, the orders of the respondent court
herein petition, in so far as the rights of petitioner have been prejudiced dated November 21, 1964 and January 9, 1965 in Civil Case No. SC-
by the questioned compromise agreement. While We here reaffirm the 525 are hereby set aside in so far as they prejudice the payment of
rule that "the client has an undoubted right to compromise a suit without petitioner's claim of attorney's fees in the form of either one-third of the
the intervention of his lawyer", 8 We hold that when such compromise is ¼ share acknowledged as his clients in the compromise in question or
entered into in fraud of the lawyer, with intent to deprive him of the fees P1,000.00, which should constitute as a lien on the said share, in spite
justly due him, the compromise must be subject to the said fees, and of the waiver thereof in favor of respondent Aurelia Martinez. It is
that when it is evident that the said fraud is committed in confabulation unnecessary to consider the petition for mandamus. Costs against,
with the adverse party who had knowledge of the lawyer's contingent private respondents.
interest or such interest appears of record and who would benefit under
such compromise, the better practice is to settle the matter of the
attorney's fees in the same proceeding, after hearing all the affected
parties and without prejudice to the finality of the compromise in so far Reyes, J.B.L., Dizon,: Makalintal, Zaldivar, Sanchez, Fernando and
as it does not adversely affect the rights of the lawyer. Surely, "the client Teehankee, JJ., concur.
cannot, by setting, compromising or dismissing his suit during its
pendency, deprive the attorney of his compensation for the agreed Concepcion, C.J. and Castro, J., are on leave.
amount, unless the lawyer consents to such settlement, compromise or
Capistrano, J., took no part.
dismissal", (Legal and Judicial Ethics by Martin, 1967 Rev. Ed p. 121)
for the, attorney is or "Shall be entitled to have and recover from his
client - a reasonable compensation (not more) for his services, with a
view to the importance of the subject-matter of the controversy, the Footnotes
extent of the services rendered, and the professional standing of the
attorney", (Sec. 24, Rule 138, on Attorney and Admission to Bar) albeit,
under Canon 12 of the Canons of Professional Ethics, "in fixing fees, it
should not be forgotten that the profession is a branch of the A.M. No. 219 September 29, 1962
administration of justice and not a mere money-getting trade."

CASIANO U. LAPUT, petitioner,


True it is also that "a client may, at anytime, dismiss his attorney or
substitute another in his place", (Sec. 26, Rule 138) but it must be vs.
emphasized that the same provision, which is an incorporation of
ATTY. FRANCISCO E.F. REMOTIGUE and ATTY. FORTUNATO P.
Republic Act 636 into the Rules of Court, also provides that "if the
PATALINGHUG, respondents.
contract between client and attorney had been reduced to writing and
the dismissal of the attorney was without justifiable cause, he shall be
entitled to recover from the client full compensation ..." In the case at
bar, by entering into the compromise agreement in question and even
inserting therein a prayer to the court to dismiss their case filed by
petitioner, (see footnote 6, ante) petitioner's clients impliedly dismissed LABRADOR, J.:
him. (Rustia vs. the Court, etc., supra.) Such implied dismissal appears
to Us to have been made without justifiable cause, none is urged
anywhere in the record, and so, the above-quoted provision of Section
This is an original complaint filed with this Court charging respondents
26, Rule 138 applies here. The terms of the compromise in question, as
with unprofessional and unethical conduct in soliciting cases and
spelled out in Annex A of Annex I of the petition, indicate clearly that
intriguing against a brother lawyer, and praying that respondents be
Aurelia Martinez, the defendant aunt in-law of petitioner's clients,
dealt with accordingly.
acknowledged that the rights of said clients were practically as alleged
by petitioner in the complaint he filed for them. In other words, through
the services of petitioner, his clients secured, in effect, a recognition,
which had been previously denied by their aunt-in-law, that they were The facts which led to the filing of this complaint are as follow: In May,
entitled to a ¼ share in the estate left by their uncle. We hold that under 1952, petitioner was retained by Nieves Rillas Vda. de Barrera to handle
these circumstances, and since it appears that said clients have no her case (Sp. Proc. No. 2-J) in the Court of First Instance of Cebu,
other means to pay petitioner, since they instituted their case as entitled "Testate Estate of Macario Barrera". By January, 1955, petitioner
paupers, and that their aunt-in-law was aware of the terms of their had contemplated the closing of the said administration proceedings
contract of professional services with petitioner', said clients had no right
and prepared two pleadings: one, to close the proceedings and declare of his attorney's fees, amounted to an acquiescence to the appearance
Nieves Rillas Vda. de Barrera as universal heir and order the delivery to of respondent Atty. Patalinghug as counsel for the widow. This should
her of the residue of the estate and, second, a notice for the rendition of estop petitioner from now complaining that the appearance of Atty.
final accounting and partition of estate. At this point, however, the Patalinghug was unprofessional.
administratrix Nieves Rillas Vda. de Barrera refused to countersign
these two pleadings and instead advised petitioner not to file them.
Some weeks later, petitioner found in the records of said proceedings
that respondent Atty. Fortunato Patalinghug had filed on January 11, Much less could we hold respondent Atty. Remotigue guilty of
1955 a written appearance as the new counsel for Nieves Rillas Vda. de unprofessional conduct inasmuch as he entered his appearance, dated
Barrera. On February 5, 1955 petitioner voluntarily asked the court to be February 5, 1955, only on February 7, same year, after Mrs. Barrera had
relieved as counsel for Mrs. Barrera. On February 7, 1955, the other dispensed with petitioner's professional services on January 11, 1955,
respondent, Atty. Francisco E. F. Remotigue, entered his appearance, and after petitioner had voluntarily withdrawn his appearance on
dated February 5, 1955. February 5, 1955.

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

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


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

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


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

After separate answers were filed by the respondents, the Supreme


Court referred the case to the Solicitor General for investigation, report
and recommendation. The Solicitor General recommended the complete
exoneration of respondents.

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


respondent Atty. Fortunato Patalinghug entered his appearance, the
widow administratrix had already filed with the court a pleading
discharging the petitioner Atty. Casiano Laput. If she did not furnish Atty.
Laput with a copy of the said pleading, it was not the fault of Atty.
Patalinghug but that of the said widow. It appears that the reason why
Mrs. Barrera dismissed petitioner as her lawyer was that she did not
trust him any longer, for one time she found out that some dividend
checks which should have been sent to her were sent instead to
petitioner, making her feel that she was being cheated by petitioner.
Moreover, she found that withdrawals from the Philippine National Bank
and Bank of the Philippine Islands have been made by petitioner without
her prior authority.

We see no irregularity in the appearance of respondent Atty. Fortunato


Patalinghug as counsel for the widow; much less can we consider it as
an actual grabbing of a case from petitioner. The evidence as found by
the Solicitor General shows that Atty. Patalinghug's professional
services were contracted by the widow, a written contract having been
made as to the amount to be given him for his professional services.

Petitioner's voluntary withdrawal on February 5, 1955, as counsel for


Mrs. Barrera after Atty. Patalinghug had entered his appearance, and
his (petitioner's) filing almost simultaneously of a motion for the payment

You might also like