SECOND DIVISION [A.C. No. 4552. December 14, 2004] JOSE A. ROLDAN, complainant, vs. ATTY.

NATALIO PANGANIBAN and ATTY. JUANITO P. NOEL, respondents. RESOLUTION AUSTRIA-MARTINEZ, J.: Before us is an administrative case for disbarment filed by complainant Jose A. Roldan against respondents Atty. Natalio M. Panganiban and Atty. Juanito P. Noel. Complainant charges that respondent lawyers reneged in their duties and obligations towards him as their client, especially in the complainants right to appeal to the higher court after losing his case in the lower courts. The allegations in the complaint dated February 12, 1996[1] in support of the accusations are as follows: 1. Na ako ang plaintiff sa Civil Case No. 144860-CV M.I.T. Branch 25 Jose A. Roldan vs. Ramon Montano & Robert Montano, na ang Judge ay si Honorable Severino De Castro, Jr. na ang kaso ay Recovery of possession with damages. Itoy iniapila ko sa RTC Branch 43 with Civil Case No. 95-73739 na ang Judge naman dito ay si Honorable Manuel F. Lorenzo ng RTC. Si Atty. Panganiban at Atty. Noel ang abogado ko. ... 4. Na noong February 6, 1995 bago kami pumasok sa court room ay nagtanong sa akin si Atty. Noel, ng ganito: Mr. Roldan nasaan nga pala yung resibo na ibinigay ni Tessie sa iyo na nagbigay ka ng down payment na Ten Thousand Pesos (P10,000.00) noong March 1, 1986. Agad akong sumagot at sinabi ko sa kaniya, Atty. Noel lahat po ng original ay hiningi ninyo sa akin, lahat po ay binigay ko sa inyo kasama iyong resibo ni Tessie Dalusong, na akoy magbigay ng Ten Thousand Pesos bilang downpayment sa ipinagbili niyang bahay sa akin. Agad siyang sumagot Wala kang ibinibigay sa akin! 5. Na kaya nga sinabi ko kay Atty. Noel na: Ibigay ninyo sa akin ang folder at ako ang hahanap ng resibo ni Tessie Dalusong. Tumulong din si Atty. Noel, at nakita din namin. Sinabi ni Atty. Noel Sayang hindi na natin maipasok ito, hindi na kasi pwedeng magpasok pa ng mga ibidensya. Di ko alam kung bakit hindi niya ipinasok noon pa man. (Ang resibo na nagpapatunay na ako ang unang nakabili ng bahay sa 1723 Pedro Gil St., Paco, Maynila). 6. Na noong nasa loob na kami ng court room ay handa na ako sa sinasabi ni Atty. Noel no Rebuttal pero nagtaka ako kinumbinsi ako na diumano ay malinaw na ang aking deklarasyon at malinaw ang mga ebidensya kaya hindi na raw dapat mag rebuttal i-waive na lang daw sa Memorandum kaya nga sinabi ng Judge na: Gumawa kayo ng Memoranda within fifteen days submitted for decision. Noong March 8, 1995 ang memorandum ay submitted for decision; 7. Na noong Abril 7, 1995 sinabi ko kay Atty. Noel, Bakit may ibinigay na zerox copies ng decision si Robert Montano na aking kalaban sumagot si Atty. Noel, at sinabi sa akin Tsekin mo sa court. Gayon nga ang aking ginawa. At bumalik ako kay Atty. Noel, at sinabi ko: Totoo nga na may decision na. Sinabi ni Atty. Noel na: Ginapang nila yun, sapalagay mo, magkano ang inilagay nila? Sa palagay ko ay hindi lang trenta mil (P30,000.00) pesos ang magagastos nila sa kasong ito, yun ang isinagot ko; 8. Na iminungkahi ko kay Atty. Noel na magpayl ng motion for reconsideration, sinagat ako ni Atty. Noel na: Ginapang na nila yun kaya dapat umapila na lang tayo. Sinabi ko kay Atty. Noel na: Kung matalo pa rin ako dito, ay dalhin natin sa Supreme Court para parehas ang laban; Na bilang bahagi nito inilakip ko dito ang decision ng MTC; at ang apilasyon sa RTC, at ang petsa ng decision ng RTC na tinaggap ni Atty. Noel.

9. Na noong Abril 24, 1995 umapila ako sa Court of Appeal makaraan ang ilang buwan ay dumating sa office ni Atty. Noel at Atty. Panganiban, noong November 13, 1995 ang decision subalit tinawagan ako ng sekretarya nila Atty. Noel at Atty. Panganiban noon lang November 24, 1995. Tinanong ko ang sekretarya ni Atty. Panganiban kung nasaan si Atty. Noel, ang sagot ng sekretarya ay Nasa probinsiya maraming inaasikaso doon. Agad kong sinabi: Hindi ba fifteen days lang para maka-apila sa Supreme Court. Sumagot si Zeny at sinabi Isang buwan daw yun para sagutin. 10. Na madalas kong tawagan si Zeny (ang sekretarya ni Atty. Panganiban) na sinasabi kong nakahanda na ang pangbayad gawin na ninyo ang apilasyon sa Supreme Court, itoy madalas kong sabihin sa sekretarya (si Zeny) kayat ibinigay niya ang bagong office ni Atty. Noel sa Gedisco Centre Rm. 134, 1564 Mabini St., Ermita, Manila. 11. Na madalas akong magpunta sa bagong office ni Atty. Noel gaya noong Dec. 1, 1995, Dec. 4, 1995, Dec. 5, 1995, Dec. 7, 1995, Dec. 8, 1995 at noon pang huling linggo ng November ay sisimulan ko ng sabihin sa dalawang sekretarya (si Zeny at Marie Cris) na gawin na ang aking apilasyon sabihin kay Atty. Noel sa Supreme Court. 12. Na noong December 12, 1995 maaga pa ay nagpunta ako sa office ni Atty. Noel sa Gedisco 3rd Flr. Mabini St., Ermita, Manila. Tinanong ko ang kaniyang sekretarya kung nakausap si Atty. Noel, sinagot ako ng sekretarya at sinabing Tinanong ko si Atty. Noel kung yari na yung apilasyong ipinagagawa ninyo (Jose Roldan) hindi po niya ako sinasagot. 13. Na kaya agad akong magpunta sa RTC Branch 43 upang alamin ang katotohanan nabatid ko noon lang, na akoy natalo ng walang kalaban-laban, pagkat nag-laps na o lampas na ang panahong ibinibigay ng batas para makapag-payl ng apilasyon sa Supreme Court. 14. Na dahil dito sa mga panloloko, at pagwawalang bahala sa aking kaso ni Atty. Noel, at Atty. Panganiban ay idinidimanda ko sila ng Damages na halagang one hundred fifty thousand (P150,000.00) pesos at dapat silang alisan ng karapatan na makapag-practice sa kanilang propesyon. In his Comment dated August 8, 1996, Atty. Panganiban avers that he was neither aware nor did he participate in the prosecution of Civil Case No. 144860-CV M.I.T. Branch 25 Jose A. Roldan vs. Ramon Montano & Robert Montano and in the appeal of said case to the Regional Trial Court (RTC), Branch 43; they do not have a lawyer-client relationship because he is on leave in the practice of law since October 18, 1993 when he was designated Acting Mayor of Laurel, Batangas, and during his incumbency as such, and up to the filing of this administrative complaint in 1996, he is still on leave as law practitioner because he was elected Mayor of Laurel, Batangas in the last 1995 election; probably, complainant included him as respondent because he thought that he is practicing law and is still an associate of Atty. Juanito P. Noel, due to the fact that on some occasions complainant might have seen him or they might have talked casually in the law office from which he was on leave in his practice of law because he drops there from time to time to meet visitors from Laurel who are living and who have problems in Metro Manila; and he has not received any single centavo from the complainant. In his Comment, dated August 29, 1996, Atty. Noel alleges: Sometime in 1994, he agreed to represent complainant in recovering a one-half portion of the ground floor of a house located at 1723 Pedro Gil St., Paco, Manila which complainant bought from one Simplicia Villanueva represented by her daughter Teresita Dalusong on November 28, 1986. A civil complaint for recovery of ownership and possession was filed on February 8, 1994 with the RTC but upon the effectivity of the law expanding the jurisdiction of the Metropolitan Trial Court (MTC) the case was transferred to the MTC. From the evidence of the defendant, he honestly saw no need to present a rebuttal evidence. The MTC rendered a decision dismissing the case on the alleged ground that the identity of the subject matter of the action was not clearly established. He filed an appeal in due time to the RTC of Manila (Branch 43) and not with the Court of Appeals as stated in paragraph 9 of the complaint. On November 13, 1995, he received a copy of the RTC decision dated October 10, 1995, affirming the decision of the MTC.

Through the telephone, he informed the complainant about the decision of the RTC. Complainant instructed him to prepare an appeal to the higher court which actually refers to the Court of Appeals and not with the Supreme Court as complainant claims. He advised the complainant that he could find no error in the said decision and a further appeal would be frivolous and without merit and requested the complainant to come over so that he could discuss the matter with him. Whenever the complainant went to the law office, he failed to see him because the latter was still attending court hearings. The complainant asked for the records of the case which was given by his secretary. Complainant never returned the case folder to him, neither did he call up by phone, or see him personally. He then assumed that the complainant had hired another lawyer to handle the appeal. He was surprised when he received on July 18, 1996 a copy of the resolution of this Honorable Court dated June 19, 1996, requiring them to file their comment on the complaint of Jose A. Roldan. We referred the matter to the Integrated Bar of the Philippines (IBP) for investigation. After hearing, IBP Investigating Commissioner Manuel A. Quiambao submitted his Report and Recommendation dismissing the complaint against Atty. Panganiban and imposing censure to Atty. Noel. In a Resolution dated February 27, 2004, the IBP adopted and approved the said Report and Recommendation. We shall first resolve the issue of the existence or non-existence of lawyer-client relationship between Atty. Panganiban and the complainant. From a careful reading of the records of this case, it appears that Atty. Panganiban and Atty. Noel used to be law associates. However, Atty. Panganiban went on leave from the practice of law since October 18, 1993 when he was designated as acting mayor of Laurel, Batangas[2] due to the indefinite leave of absence filed by the mayor and by reason of his election as mayor of the said municipality in 1995. The complainant claims that he secured the services of Atty. Panganiban on January 6, 1994.[3] It is thus clear that Atty. Panganiban was not an active associate of the law firm, since at that time, he was already on leave from the practice of law. Moreover, the complaint filed in 1996 before the RTC for Recovery of Possession and Ownership with Damages was prepared and signed by Atty. Noel alone and not in any representation of any law firm. In fact from the filing of the said civil case in the RTC, it was Atty. Noel who represented the complainant. Not once did Atty. Panganiban appear for the complainant nor did he sign any document pertaining with the aforesaid case. Necessarily, the complaint against Atty. Panganiban must be dismissed. As to the complaint against Atty. Noel. The main issues to be resolved are: (1) whether there was a deliberate attempt to suppress evidence on the part of Atty. Noel, to the prejudice of complainant and (2) whether it was correct for Atty. Noel to refuse to file a further appeal of the case to the Court of Appeals by way of petition for review despite the manifest desire of the complainant to do so. Anent the first issue. Complainant insists that Atty. Noels failure to present in evidence the receipt dated March 1, 1986 was fatal to his cause. The receipt shows that complainant made a partial payment of P10,000.00 of the P40,000.00 price of the subject property. Complainant claims that this piece of document proves that complainant bought the subject property ahead of the defendants who bought it only on July 30, 1986. Thus, to the mind of the complainant, the non-presentation of the subject receipt is suppression of evidence. Atty. Noel denied receiving the subject receipt and asserts that the same was mere fabrication of the complainant. He insists that said receipt did not exist during the preparation and filing of the complaint and even during the presentation of evidence. Otherwise, he argues that such fact should have been alleged in the complaint to show that complainant bought the subject property ahead of the other buyer. Atty. Noel also claims that assuming that the receipt was given to him, the same cannot

be used as evidence because the receipt shows that it was signed by one Romeo Dalusong who is not a party to the sale; neither does it appear in the receipt that Romeo was acting in a representative capacity. A short historical backdrop is necessary for a clearer insight of this issue. It appears that the subject property was subjected to a double sale by the same seller. The Deed of Sale of the complainant is dated November 28, 1986 while that of the other buyer is dated July 30, 1986. But complainant claims that actually the sale as to him took place on March 1, 1986 as evidenced by the subject receipt. Complainant however failed to take possession of the subject property as the same is already in the possession of the other buyer. Complainant filed an ejectment case[4] against the tenant of the other buyer but the same was dismissed for the reason that complainant failed to show that he had proprietary right over the property in question. Unable to take possession of the subject property, complainant filed a case against the seller for the annulment of the contract of sale, the Deed of Sale dated November 28, 1986. Complainant won and the court awarded him damages of P80,000.00. Subsequently, the seller and the complainant entered into a Compromise Agreement.[5] The seller, agreed to sell one-half of her duplex house which is the same property that was previously sold to complainant on November 28, 1986, including all her proprietary rights over the land, in the amount of P80,000.00. Since the Court awarded damages to the complainant in the same amount, this was setoff against the price of the property. Pursuant to the said compromise agreement, a Deed of Absolute Sale and Transfer of Right[6] in favor of the complainant was executed on December 22, 1990 by the seller over the said property. Even with the sale on December 22, 1990 over the subject property as a result of the compromise agreement, complainant still failed to take possession of the subject property, hence he filed a complaint for Recovery of Possession and Ownership with Damages against the other buyer. It is in this case that complainant claims that Atty. Noel failed to present the subject receipt. The MTC dismissed the complaint and the RTC on appeal, dismissed it again. Upon failure of Atty. Noel to file a petition for review with the Court of Appeals, complainant filed the present administrative complaint against him. We find credence to the allegation of Atty. Noel that the subject receipt was not in existence at the time he prepared the complaint or even at the time of presentation of evidence. The complaint was verified by the complainant stating the fact that he caused its preparation, that he read the same and attested that the contents thereof are true and correct. If complainants allegation that he gave the receipt to Atty. Noel at that time, and considering the importance of the subject receipt to his case, he should have called the attention of Atty. Noel that there was no allegation of the existence of the subject receipt. We thus hold that Atty. Noel is not guilty of suppressing evidence. As to the second issue, that is, the issue of propriety of Atty. Noels refusal or failure to file a petition for review before the Court of Appeals. It is the contention of the complainant that he lost the right to file a further appeal because he was not informed immediately of the result of the appeal to the RTC. Complainant insists that Atty. Noel, through his secretary, called the complainant only on November 24, 1995 or 11 days after the receipt of the adverse RTC decision and was given the impression that he has still one month within which to file an appeal. The complainant also said that he paid the respondents visits on December 1, 4, 5, 7 and 8, 1995, to follow up the filing of the appeal to the higher court but that he was not able to talk to Atty. Noel; that it was only when he went to the RTC that he learned that he lost the case because the period of the appeal has lapsed.

Atty. Noel contends that he received the RTC decision on November 13, 1995 and on the following day, he instructed his secretary to contact the complainant to inform him of the adverse RTC decision with the directive for the complainant to call up Atty. Noel; that when complainant called, he was instructed by the complainant to prepare an appeal to the higher court; that he told the complainant that there is no need to appeal the case because, first, the decision of the court is correct, and second, he is obligated by the code of professional responsibilities to refrain from filing a frivolous and unmeritorious appeal; that thereafter, complainant went to his office twice, the last of this instance was when complainant took all the records of the case and never came back which led him to believe that complainant will not appeal the adverse RTC decision. Atty. Noel further states that, in any event, his relationship with the complainant ended upon the issuance of the decision and that the complainant should not expect that he would still appeal the case. We find for the complainant. It is noted that the complainant has been very diligent in following up the status of the case. From the time, complainant filed the case with the MTC up to the time he appealed with the RTC, complainant was vigilant with his rights constantly in contact with Atty. Noel. We find it strange therefore that upon receipt of the adverse RTC decision, it would seem, if Atty. Noels version is to be given credence, the complainant had lost his zeal and just allowed the time to appeal to lapse. As correctly observed by the Investigating Commissioner in his Report: Here was a complainant who went through several litigations over the same subject matter, including a case of ejectment, a case of annulment of contract of sale with damages, a case of action for recovery of ownership and possession, an appeal to the Regional Trial Court, and he did not seem perturb that he lost it (the appeal) and did not find it essential to discuss the matter with his lawyer for possible remedial action? That is, as claimed by his lawyer? ... As opposed to the general denial given by the respondent about the claim that the complainant followed up his case several times with his office (outside of the two occasions that he conceded the complainant did so), the complainant was precise in detailing the circumstances which described how he tried his best to seek the presence of Atty. Noel to no avail. There were dates, detailed circumstances, and specific places. Given the character which had characterized the effort of the complainant to seek appropriate legal remedies for his complaints, the assertions would be consistent, that is, that he made great efforts to find Atty. Noel. We note that the complainant was informed about the adverse RTC decision within the 15-day prescriptive period to appeal. As stated elsewhere, Atty. Noel received the adverse RTC decision on November 13, 1995 and the complainant was informed about the adverse RTC decision on November 24, 1995. Hence, complainant has still four days to file an appeal. However, Atty. Noel failed to ensure that the client was advised appropriately. Atty. Noel entrusted entirely with his secretary the duty to inform the complainant about the adverse decision. And the secretary informed the complainant rather late and worse with the wrong information that the complainant has still a month within which to file an appeal. This resulted to the lapse of the prescriptive period to appeal without complainant having availed of the said remedy. A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable.[7] If only Atty. Noels position of not filing an appeal because it would only be frivolous has been properly communicated to the complainant at the earliest possible time so that the complainant would be able to seek the services of another lawyer for help, it would have been commendable. A lawyers duty is not to his client but to the administration of justice; to that end, his clients success is wholly subordinate; and his conduct ought to and must always be scrupulously observant of law and ethics.[8] But as it was, Atty. Noels negligence as afore-discussed robbed the

complainant of the opportunity to at least look for another lawyer for professional help and file an appeal, after all, it is the client who finally decides whether to appeal or not an adverse decision. We cannot also accept the reasoning of Atty. Noel that he should not be expected to file an appeal for the complainant because their lawyer-client relationship ended with the RTC decision. First, a lawyer continues to be a counsel of record until the lawyer-client relationship is terminated either by the act of his client or his own act, with permission of the court. Until such time, the lawyer is expected to do his best for the interest of his client.[9] Second, Atty. Noel admitted that complainant instructed him to file an appeal with the higher court. Even assuming that their contract does not include filing of an appeal with the higher courts, it is still the duty of Atty. Noel to protect the interest of the complainant by informing and discussing with the complainant of the said decision and his assessment of the same. A lawyer shall represent his client with zeal within the bounds of the law.[10] It is the obligation of counsel to comply with his clients lawful request. Counsel should exert all effort to protect the interest of his client. The determination of the appropriate penalty to be imposed on an errant lawyer involves the exercise of sound judicial discretion based on the facts of the case.[11] In cases of similar nature, the penalty imposed by the Court consisted of reprimand,[12] fine of five hundred pesos with warning,[13] suspension of three months,[14] six months[15] and even disbarment[16] in aggravated case. The facts of the case show that Atty. Noel failed to live up to his duties as a lawyer pursuant to the Code of Professional Responsibility. We conclude that a suspension from the practice of law for one month is just penalty under the circumstances. Complainants claim for damages cannot be entertained in the present disbarment case as it is not the proper forum. It is not an ordinary civil case where damages could be awarded.[17] A disbarment case is a proceeding that is intended to protect the Court and the public from the misconduct of its officers; to protect the administration of justice by requiring that those who exercise this important function shall be competent, honorable and reliable, men in whom courts and clients may repose confidence.[18] It has been emphasized in a number of cases that disbarment proceedings belong to a class of their own, distinct from that of a civil or a criminal action.[19] Wherefore, the complaint against Atty. Natalio M. Panganiban is DISMISSED. Atty. Juanito P. Noel is SUSPENDED for one month with a warning that a repetition of the same would be meted a more severe penalty. Let a copy of this decision be attached to respondents personal record in the Office of the Bar Confidant and copies be furnished to all chapters of the Integrated Bar of the Philippines and to all courts of the land. SO ORDERED. [A.C. No. 511. August 31, 1971.] JOVITO SAPALO, Complainant, v. RAYFRANDO DIAZ, Respondent.

SYLLABUS

LEGAL ETHICS; ATTORNEYS; DISMISSAL OF ADMINISTRATIVE COMPLAINT IN VIEW OF COMPLAINANTS MOTION TO WITHDRAW. An administrative complaint was filed against respondent alleging that despite complainants reminder to the former to fulfill his promise of marriage, he failed to do. Later on, complainant sought that the complaint be withdrawn. Pursuant to this Courts resolution, the Assistant Provincial Fiscal of Negros Occidental, submitted stenographic notes of investigation conducted by him where it was made clear that petitioner personally appeared before the Judge of the City Court of Bacolod, to verify her petition to withdraw complaint. She was

asked as to whether the allegations were true and correct and she answered in the affirmative. She expressly affirmed that she was neither threatened not forced into signing such petition. In the light of the foregoing, this complaint against respondent is dismissed.

RESOLUTION

FERNANDO, J.:

On September 28, 1970, an administrative complaint was filed by Jovita Sapalo against respondent Rayfrando Diaz, who passed the bar in 1970. While the facts were not stated with precision, it was therein alleged that complainant and respondent, while students at the University of Negros Occidental had amorous relations as a result of which she became pregnant. There was an assertion that respondent had promised to marry her, an application for marriage license actually having been filed with the Civil Registrar of Kabankalan, Negros Occidental on June 15, 1968, which application was subsequently withdrawn without the knowledge of the complainant. Nonetheless, notwithstanding her reminder that he should fulfill his promise of marriage, he failed to do so. Then on December 19, 1968, complainant gave birth to a child who was named Ma. Teresa Sapalo Diaz. Respondent did acknowledge the child as his own, consenting likewise that in the record of birth as well as in the baptismal certificate, he should be named as the father. Mention is likewise made of complainant all the while pressing her plea that respondent marry her, but he was adamant in his refusal. Thereafter, it came to her knowledge that it was not legally possible for him to do so as he was already married. Hence this complaint. This Court, in a resolution dated February 19, 1971, required an answer from Respondent. It was filed on May 14, 1971. There was no denial of the amorous relationship that existed between complainant and respondent as a result of which a child was born. It was therein made clear, however, that at such time respondent was still single, then 24 years of age and a third year law student at the University of Negros Occidental, while petitioner was likewise of the same age, taking courses in commerce at West Negros College, also in Bacolod City. Then came this allegation: "That sometime in March 1968, the frequent association as officemates between the herein petitioner and respondent resulted in intimate relations brought about by mutual desire and passion, which was voluntarily and mutually entered into by both parties and without misrepresentation or any other consideration on the part of one or the other. Both were still single and 24 years of age." 1 Respondent thereafter declared that he did, on April 15, 1968, resign from his employment in Bacolod and went home to his hometown in Binalbagan, Negros Occidental, precisely "in order to put an end to the intimate relations with the petitioner, . . ." 2 It was not until May 10, 1968 that, according to him, he was advised about her pregnancy, and it was then that she asked him to marry her. He pleaded for time as he wanted to get the consent of his mother, which was not forthcoming. After which, he proceeded thus: "That sometime in the first week of June 1968, the herein petitioner [did press the matter of marriage] on the herein respondent and, with the intercession of other persons, he was prevailed upon to sign blank forms of the application for marriage license and he likewise signed the marriage contract itself, which papers petitioner filed with the local Civil Registrar of Kabankalan, Negros Occidental on June 15, 1968. After days and nights of deliberation, respondent realized that his efforts to force upon himself the marriage were of no avail as it would end up in a lifetime of misery and bring about a family where the shadows would never be lifted, for it would not be founded upon love which is the basic foundation of a good marriage. In the third week of June 1968, respondent withdrew all the papers from the Office of the Local Civil Registrar of Kabankalan, Negros Occidental, in the presence of the petitioner." 3 There was an admission of petitioner having given birth to Ma. Teresa Sapalo Diaz on December 19, 1968. He borrowed the sum of P200.00 from his sister and gave it to petitioner to help defray the hospital bills. On December 25 of that year, respondent married his childhood sweetheart. He stressed

that from April 15, 1968, he never had further "carnal relations with the herein petitioner because he precisely wanted to put an end to the [affair]." 4 He included, as part of his answer, a decision by Judge Nestor B. Alampay of the Court of First Instance of Negros declaring that Ma. Teresa Sapalo Diaz is the acknowledged natural child of respondent who was likewise ordered to support said child in the amount of P100.00 monthly beginning the month of April 1971. Such a decision was rendered on a stipulation of facts wherein complainant admitted that the intimate relationship between her and respondent "was voluntary, mutual and without any misrepresentation or other consideration on the part of either of them." 5 Subsequently on May 14, 1971, Petitioner, in a pleading before this Court, sought that the complaint be withdrawn, stating therein that the circumstances pertinent to the intimate relationship between her and respondent were truthfully set forth in the stipulation of facts submitted by them in the above action for recognition and support of the child, Ma. Teresa Sapalo Diaz. Then came this portion of her petition to withdraw complaint: "That from the foregoing, it is obvious that both parties are to be blamed for any transgression that they may have committed, and that it would be unfair to lay the blame exclusively on the respondent; and [that] petitioner is making this verified admission of the circumstances that led to the intimate relations between herself and respondent in order that she may be able to live in peace with her conscience." 6 There was a resolution by this Court on May 25, 1971 of the following tenor: "Considering (a) the answers of the respondent to the complaint filed against him; and (b) the motion of the complainant praying that her complaint against the herein respondent be withdrawn and dismissed, [the Court resolved] to require the Provincial Fiscal of Negros Occidental to verify the authenticity and voluntariness of the withdrawal by the complainant of her complaint in this case, within 15 days from notice hereof." 7 Thereafter, on July 3, 1971, the 1st Assistant Provincial Fiscal of Negros Occidental, Jose A. Encarnacion, forwarded to this Court the original of the transcript of the stenographic notes of the investigation conducted by him "wherein the complainant testified to the authenticity and voluntariness of the withdrawal of her complaint against Rayfrando Diaz, Respondent." 8 In the stenographic notes submitted by such fiscal, it was made clear that petitioner personally appeared before the Judge of the City Court of Bacolod, Alejandro Dinsay, to verify her petition to withdraw complaint. She was asked as to whether the allegations were true and correct and she answered in the affirmative. She expressly affirmed that she was neither threatened nor forced into signing such petition. In the light of the foregoing, this complaint against respondent Rayfrando Diaz is dismissed. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Castro, Zaldivar, Teehankee, Barredo, Villamor and Makasiar, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-23815

June 28, 1974

ADELINO H. LEDESMA, petitioner, vs. HON. RAFAEL C. CLIMACO, Presiding Judge of the Court of First Instance of Negros Occidental, Branch I, Silay City, respondent. Adelino H. Ledesma in his own behalf.

Hon. Rafael C. Climaco in his own behalf.

FERNANDO, J.:p What is assailed in this certiorari proceeding is an order of respondent Judge denying a motion filed by petitioner to be allowed to withdraw as counsel de oficio. 1 One of the grounds for such a motion was his allegation that with his appointment as Election Registrar by the Commission on Elections, he was not in a position to devote full time to the defense of the two accused. The denial by respondent Judge of such a plea, notwithstanding the conformity of the defendants, was due "its principal effect [being] to delay this case." 2 It was likewise noted that the prosecution had already rested and that petitioner was previously counsel de parte, his designation in the former category being precisely to protect him in his new position without prejudicing the accused. It cannot be plausibly asserted that such failure to allow withdrawal of de oficio counsel could ordinarily be characterized as a grave abuse of discretion correctible by certiorari. There is, however, the overriding concern for the right to counsel of the accused that must be taken seriously into consideration. In appropriate cases, it should tilt the balance. This is not one of them. What is easily discernible was the obvious reluctance of petitioner to comply with the responsibilities incumbent on the counsel de oficio. Then, too, even on the assumption that he continues in his position, his volume of work is likely to be very much less at present. There is not now the slightest pretext for him to shirk an obligation a member of the bar, who expects to remain in good standing, should fulfill. The petition is clearly without merit. According to the undisputed facts, petitioner, on October 13, 1964, was appointed Election Registrar for the Municipality of Cadiz, Province of Negros Occidental. Then and there, he commenced to discharge its duties. As he was counsel de parte for one of the accused in a case pending in the sala of respondent Judge, he filed a motion to withdraw as such. Not only did respondent Judge deny such motion, but he also appointed him counsel de oficio for the two defendants. Subsequently, on November 3, 1964, petitioner filed an urgent motion to be allowed to withdraw as counsel de oficio, premised on the policy of the Commission on Elections to require full time service as well as on the volume or pressure of work of petitioner, which could prevent him from handling adequately the defense. Respondent Judge, in the challenged order of November 6, 1964, denied said motion. A motion for reconsideration having proved futile, he instituted this certiorari proceeding. 3 As noted at the outset, the petition must fail. 1. The assailed order of November 6, 1964 denying the urgent motion of petitioner to withdraw as counsel de oficio speaks for itself. It began with a reminder that a crime was allegedly committed on February 17, 1962, with the proceedings having started in the municipal court of Cadiz on July 11, 1962. Then respondent Judge spoke of his order of October 16, 1964 which reads thus: "In view of the objection of the prosecution to the motion for postponement of October 15, 1964 (alleging that counsel for the accused cannot continue appearing in this case without the express authority of the Commission on Elections); and since according to the prosecution there are two witnesses who are ready to take the stand, after which the government would rest, the motion for postponement is denied. When counsel for the accused assumed office as Election Registrar on October 13, 1964, he knew since October 2, 1964 that the trial would be resumed today. Nevertheless, in order not to prejudice the civil service status of counsel for the accused, he is hereby designated counsel de oficio for the accused. The defense obtained postponements on May 17, 1963, June 13, 1963, June 14, 1963, October 28, 1963, November 27, 1963, February 11, 1964, March 9, 1964, June 8, 1964 July 26, 1964, and September 7, 1964." 4 Reference was then made to another order of February 11, 1964: "Upon petition of Atty. Adelino H. Ledesma, alleging indisposition, the continuation of the trial of this case is hereby transferred to March 9, 1964 at 8:30 in the morning. The defense is reminded that at its instance, this case has been postponed at least eight (8) times, and that the government witnesses have to come all the way from Manapala." 5 After which, it was noted in such order that there was no incompatibility between the duty of petitioner to the accused and to the court and the performance of

his task as an election registrar of the Commission on Elections and that the ends of justice "would be served by allowing and requiring Mr. Ledesma to continue as counsel de oficio, since the prosecution has already rested its case." 6 2. What is readily apparent therefore, is that petitioner was less than duly mindful of his obligation as counsel de oficio. He ought to have known that membership in the bar is a privilege burdened with conditions. It could be that for some lawyers, especially the neophytes in the profession, being appointed counsel de oficio is an irksome chore. For those holding such belief, it may come as a surprise that counsel of repute and of eminence welcome such an opportunity. It makes even more manifest that law is indeed a profession dedicated to the ideal of service and not a mere trade. It is understandable then why a high degree of fidelity to duty is required of one so designated. A recent statement of the doctrine is found in People v. Daban: 7 "There is need anew in this disciplinary proceeding to lay stress on the fundamental postulate that membership in the bar carries with it a responsibility to live up to its exacting standard. The law is a profession, not a trade or a craft. Those enrolled in its ranks are called upon to aid in the performance of one of the basic purposes of the State, the administration of justice. To avoid any frustration thereof, especially in the case of an indigent defendant, a lawyer may be required to act as counsel de oficio. The fact that his services are rendered without remuneration should not occasion a diminution in his zeal. Rather the contrary. This is not, of course, to ignore that other pressing matters do compete for his attention. After all, he has his practice to attend to. That circumstance possesses a high degree of relevance since a lawyer has to live; certainly he cannot afford either to neglect his paying cases. Nonetheless, what is incumbent upon him as counsel de oficio must be fulfilled." 8 So it has been from the 1905 decision of In re Robles Lahesa, 9 where respondent was de oficio counsel, the opinion penned by Justice Carson making clear: "This Court should exact from its officers and subordinates the most scrupulous performance of their official duties, especially when negligence in the performance of those duties necessarily results in delays in the prosecution of criminal cases ...." 10 Justice Sanchez in People v. Estebia 11 reiterated such a view in these words: "It is true that he is a court-appointed counsel. But we do say that as such counsel de oficio, he has as high a duty to the accused as one employed and paid by defendant himself. Because, as in the case of the latter, he must exercise his best efforts and professional ability in behalf of the person assigned to his care. He is to render effective assistance. The accused-defendant expects of him due diligence, not mere perfunctory representation. For, indeed a lawyer who is a vanguard in the bastion of justice is expected to have a bigger dose of social conscience and a little less of self-interest." 12 The weakness of the petition is thus quite evident. 3. If respondent Judge were required to answer the petition, it was only due to the apprehension that considering the frame of mind of a counsel loath and reluctant to fulfill his obligation, the welfare of the accused could be prejudiced. His right to counsel could in effect be rendered nugatory. Its importance was rightfully stressed by Chief Justice Moran in People v. Holgado in these words: "In criminal cases there can be no fair hearing unless the accused be given an opportunity to be heard by counsel. The right to be heard would be of little avail if it does not include the right to be heard by counsel. Even the most intelligent or educated man may have no skill in the science of law, particularly in the rules of procedure, and; without counsel, he may be convicted not because he is guilty but because he does not know how to establish his innocence. And this can happen more easily to persons who are ignorant or uneducated. It is for this reason that the right to be assisted by counsel is deemed so important that it has become a constitutional right and it is so implemented that under rules of procedure it is not enough for the Court to apprise an accused of his right to have an attorney, it is not enough to ask him whether he desires the aid of an attorney, but it is essential that the court should assign one de oficio for him if he so desires and he is poor or grant him a reasonable time to procure an attorney of his own." 13 So it was under the previous Organic Acts. 14 The present Constitution is even more emphatic. For, in addition to reiterating that the accused "shall enjoy the right to be heard by himself and counsel," 15 there is this new provision: "Any person under investigation for the commission of an

offense shall have the right to remain silent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this section shall be inadmissible in evidence." 16 Thus is made manifest the indispensable role of a member of the Bar in the defense of an accused. Such a consideration could have sufficed for petitioner not being allowed to withdraw as counsel de oficio. For he did betray by his moves his lack of enthusiasm for the task entrusted to him, to put matters mildly. He did point though to his responsibility as an election registrar. Assuming his good faith, no such excuse could be availed now. There is not likely at present, and in the immediate future, an exorbitant demand on his time. It may likewise be assumed, considering what has been set forth above, that petitioner would exert himself sufficiently to perform his task as defense counsel with competence, if not with zeal, if only to erase doubts as to his fitness to remain a member of the profession in good standing. The admonition is ever timely for those enrolled in the ranks of legal practitioners that there are times, and this is one of them, when duty to court and to client takes precedence over the promptings of self-interest. WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner. Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur. Barredo, J., took no part. FIRST DIVISION ERNESTO B. FRANCISCO, JR., Petitioner, Present: G.R. Nos. 135688-89

PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, -versusCORONA, AZCUNA and GARCIA, JJ. UEM-MARA PHILIPPINES CORPORATION, TOLL REGULATORY BOARD and PUBLIC ESTATES AUTHORITY, Respondents. October 18, 2007 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

Promulgated:

DECISION CORONA, J.:

This is a petition for review on certiorari[1] of a decision[2] and resolution[3] of the Court of Appeals (CA) dated July 28, 1998 and September 23, 1998, respectively, in the consolidated cases of CA-G.R. SP Nos. 48111 and 48145 which set aside the order[4] and writ of preliminary injunction[5] issued by the Regional Trial Court, Makati City, Branch 147 (RTC) dated June 23, 1998 and June 24, 1998, respectively, in Civil Case No. 98-1159.

Petitioner Ernesto B. Francisco, Jr. alleged that he is a taxpayer and resident of Cavite. He claimed that he instituted this suit in the RTC in his behalf and in behalf of the other users of the Coastal Road which is the principal road connecting Metro Manila and Cavite.[6] Private respondent UEM-MARA Philippines Corporation (UMPC) is a corporation duly organized and validly existing under Philippine laws. It was incorporated by two Malaysian entities, namely, United Engineers (Malaysia) Berhad (UEM) and Majlis Amanah Rakyat (MARA).[7] Public respondents are the Toll Regulatory Board (TRB), created under PD 1112[8] and the Public Estates Authority (PEA), a government owned and controlled corporation organized pursuant to PD 1084.[9] On July 26, 1996,[10] UMPC entered into a Toll Operation Agreement (TOA) with the Republic of the Philippines, through the TRB and PEA, for the design, construction, operation and maintenance of the R-1 Expressway (Airport Road Junction to Zapote), the C-5 Link Expressway (link between the R-1 Expressway and the South Luzon Expressway) and the R-1 Expressway Extension (Zapote to Noveleta, Cavite), all three (3) expressways being components of the Manila-Cavite Toll Expressway Project (MCTEP). Pursuant to the TOA, UMPC was exclusively responsible for the design, construction and financing aspect of the expressways, while the PEA was exclusively responsible for the operation and maintenance thereof.[11] Under the MCTEP, PEA was to operate the R-1 Expressway (also known as the Coastal Road)[12] as a toll facility and collect toll fees from its users. Part of these fees would be used to compensate UMPC for its investment and participation in the project. Toll collection commenced on May 24, 1998.[13] On May 22, 1998, petitioner filed a petition for prohibition, injunction and declaration of nullity of the TOA, with prayer for the issuance of a temporary restraining order (TRO) and writ of preliminary injunction in the RTC praying that respondents be ordered to cease and desist from collecting the announced toll fees for the use of the MCTEP on the following grounds: (1) that the toll fees as fixed in the TOA were grossly exorbitant, unconscionable and violative of the allowable reasonable rate of return on investment and (2) that there was absence of notice and public hearing in the fixing of the rate of toll fees in contravention of public interest.[14] On May 25, 1998, Judge Napoleon E. Inoturan, Vice-Executive Judge of the RTC, Makati City, Branch 133, issued an ex parte TRO effective for 72 hours enjoining respondents from charging and collecting the toll fees. The case was raffled to Judge Zeus C. Abrogar of Branch 150 who subsequently inhibited himself from hearing the case.[15] The case was re-raffled to Judge Teofilo L. Guadiz, Jr. of Branch 147.[16] On May 27, 1998, Judge Guadiz, Jr. issued an order extending the TRO to 20 days. On June 9, 1998, he issued an order setting aside his May 27, 1998 order and set the case for summary hearing pursuant to Section 5, Rule 58 of the Rules of Court.[17] On June 23, 1998, Judge Guadiz, Jr. issued an order granting petitioner's application for a writ of preliminary injunction, which writ was issued on June 24, 1998 after petitioner posted a surety bond in the amount of P100,000.[18] On June 26, 1998, UMPC filed a petition for certiorari with application for TRO and/or writ of preliminary injunction in the CA. This was docketed as CA-G.R. SP No. 48111. On July 1, 1998, PEA and TRB likewise filed a petition for certiorari and this was docketed as CA-G.R. SP No. 48145. The cases were consolidated.[19] In a decision promulgated on July 28, 1998, the CA nullified and set aside the writ of preliminary injunction issued by the RTC. It ruled that the writ was issued in contravention of PD 1818[20] and

petitioner failed to prove that it satisfied the requisites for its issuance.[21] It denied reconsideration in a resolution dated September 23, 1998.[22] Hence this petition. In a manifestation and motion (in compliance with the Honorable Court's resolution dated August 2, 2000 requiring submission of memorandum) with motion to cite in contempt of court dated August 15, 2001, petitioner prayed that private respondent UMPC and its counsel be cited in contempt for misrepresenting to the Court that UEM and MARA were still the stockholders of UMPC. First, we shall resolve the sole substantive issue raised: should the prayer for a writ of preliminary injunction be granted? We need to determine if PD 1818 is applicable to this case. This law, dated January 16, 1981, states: WHEREAS, Presidential Decree No. 605[23] prohibits the issuance by the courts of restraining orders or injunctions in cases involving concessions, licenses, and other permits issued by administrative officials or bodies for the exploitation, development and utilization of natural resources of the country; WHEREAS, it is in the public interest to adopt a similar prohibition against the issuance of such restraining orders or injunctions in other areas of activity equally critical to the economic development effort of the nation, in order not to disrupt or hamper the pursuit of essential government projects; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order as follows: Section 1. No court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute or controversy involving an infrastructure project, or a mining, fishery, forest or other natural resource development project of the government, or any public utility operated by the government, including among others[,] public utilities for the transport of goods or commodities, stevedoring and arrastre contracts, to prohibit any person or persons, entity or governmental official from proceeding with, or continuing the execution or implementation of any such project, or the operation of such public utility, or pursuing any lawful activity necessary for such execution, implementation or operation. xxx xxx xxx

(Emphasis supplied)

PD 1818 proscribes the issuance of a writ of preliminary injunction in any case involving an infrastructure project of the government.[24] The aim of the prohibition, as expressed in its second whereas clause, is to prevent delay in the implementation or execution of government infrastructure projects (particularly through the use of provisional remedies) to the detriment of the greater good since it disrupts the pursuit of essential government projects and frustrates the economic development effort of the nation.[25] Petitioner argues that the collection of toll fees is not an infrastructure project of the government. He cites the definition of infrastructure projects we used in Republic v. Silerio:[26] The term infrastructure projects means construction, improvement and rehabilitation of roads, and bridges, railways, airports, seaports, communication facilities, irrigation, flood control and drainage, water supply and sewage systems, shore protection, power facilities, national buildings, school buildings, hospital buildings, and other related construction projects that form part of the government capital investment.[27]

He contends that the MCTEP does not involve the construction of a road since the Coastal Road already existed since the early 1980s and UMPC merely upgraded it.[28] He also asserts that since the project was financed by a foreign group, it does not form part of the government capital investment that makes it a government infrastructure project as contemplated by PD 1818. Respondents counter that the Coastal Road was repaired, rehabilitated and upgraded by UMPC, and thus falls under infrastructure projects as defined. Furthermore, the collection of toll fees is necessary to the execution and implementation of the MCTEP because part of the fees collected, after meeting the operation and maintenance expenses of the expressway, is used by UMPC to pay the commercial loans it incurred to finance the project. Therefore, if collection is enjoined, not only will the operation and maintenance of the Coastal Road be affected but the construction and completion of the other components of the project will also be disrupted.[29] According to UMPC, the obligations of public respondents under the TOA undeniably show that the MCTEP is an infrastructure project that forms part of the governments capital investment. They are obliged to finance the acquisition of lands needed for the project.[30] The TOA also provides that the government of the Philippines owns the toll expressways comprising the project.[31] The CA held that the MCTEP is a government project considering that the government, through the TRB, is one of the contracting parties of the TOA. It is an infrastructure project because it involves the construction, design, operation and maintenance of the expressways. The collection of toll fees is an activity necessary for the execution, implementation or operation of this infrastructure project of the government.[32] We agree. The definition of infrastructure projects specifically includes the improvement and rehabilitation of roads and not just its construction. Accordingly, even if the Coastal Road was merely upgraded and not constructed from scratch, it is still covered by the definition. Moreover, PD 1818 itself states that any person, entity or governmental official cannot be prohibited from continuing the execution or implementation of such project or pursuing any lawful activity necessary for such execution or implementation. Undeniably, the collection of toll fees is part of the execution or implementation of the MCTEP as agreed upon in the TOA.[33] The TOA is valid since it has not been nullified. Thus it is a legitimate source of rights and obligations. It has the force and effect of law between the contracting parties[34] and is entitled to recognition by this Court. The MCTEP is an infrastructure project of the government forming part of the government capital investment considering that under the TOA, the government owns the expressways comprising the project.[35] Next, petitioner argues that PD 1818 does not extend to injunctions or restraining orders against administrative acts in controversies involving facts or the exercise of discretion in technical cases. In a spate of cases, this Court declared that although [PD 1818] prohibits any court from issuing injunctions in cases involving infrastructure projects, the prohibition extends only to the issuance of injunctions or restraining orders against administrative acts in controversies involving facts or the exercise of discretion in technical cases. On issues clearly outside this dimension and involving questions of law, this Court declared that courts could not be prevented from exercising their power to restrain or prohibit administrative acts.[36] It is founded on the principle that to allow the courts to determine such matters would disturb the smooth functioning of the administrative machinery.[37] Considering the co-equal status of the three branches of government, courts may not tread into matters requiring the exercise of discretion of a functionary or office in the executive and legislative branches,

unless it is clearly shown that the government official or office concerned abused his or its discretion.[38] Grave abuse of discretion implies a capricious, arbitrary and whimsical exercise of power. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, as not to act at all in contemplation of law or where power is exercised in an arbitrary and despotic manner by reason of passion or hostility.[39] Futhermore, xxx courts, as a rule, refuse to interfere with proceedings undertaken by administrative bodies or officials in the exercise of administrative functions. This is so because such bodies are generally better equipped technically to decide administrative questions and that non-legal factors, such as government policy on the matter, are usually involved in the decisions.[40]

The imposition of toll fees, fixing the amount thereof and its proper collection are technical matters public respondents are surely more knowledgeable about than the courts. This is clear from the powers and duties conferred on them by their charters. Under Section 5 (k), PD 1084, PEA is authorized to collect tolls: Sec. 5. Powers and functions of [PEA]. [PEA] shall, in carrying out the purposes for which it is created, have the following powers and functions: xxx xxx xxx

k. To issue such regulations as may be necessary for the proper use by private parties of any or all of the highways, roads, utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their use provided that all receipts by [PEA] from fees, tolls and other charges are automatically appropriated for its use. Under Section 3 of PD 1112, the TRB was tasked to supervise the collection of toll fees: Sec. 3. Powers and Duties of the [TRB]. The [TRB] shall have in addition to its general powers of administration the following powers and duties: xxx xxx xxx

d. Issue, modify and promulgate from time to time the rates of toll that will be charged the direct users of toll facilities and upon notice and hearing, to approve or disapprove petitions for the increase thereof. xxxx In Padua v. Hon. Ranada,[41] we stated: The TRB, as the agency assigned to supervise the collection of toll fees and the operation of toll facilities, has the necessary expertise, training and skills to judiciously decide matters of this kind. As may be gleaned from the petition, the main thrust of petitioner Zialcita's argument is that the provisional toll rate adjustments are exorbitant, oppressive, onerous and unconscionable. This is obviously a question of fact requiring knowledge of the formula used and the factors considered in determining the assailed rates. Definitely, this task is within the province of the TRB.[42] The arguments petitioner advances to show that public respondents committed grave abuse of discretion already go into the validity of the TOA itself or its terms, which was the subject of the main case in the court below.[43] The issue that we are tackling here the propriety of the issuance of an injunction merely involves the collection of toll fees in the Coastal Road. Petitioner also claims that there were irregularities committed by the respondents. While it is true that PD 1818 was not intended

to shield irregularities committed by administrative agencies from judicial scrutiny,[44] petitioner has not proven the supposed anomalies and they remain as mere unsubstantiated claims. These factual issues were not passed upon by the courts below and we decline to resolve them now considering that we are not a trier of facts. In any event, as a rule, only questions of law may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court. Consequently, there is no showing that public respondents abused their discretion in imposing and collecting the toll fees. These are provided for in the TOA which, as mentioned earlier, remains valid since it has not been declared invalid by any court. Also, the presumption that official duty was performed regularly has not been overturned. We now rule on the motion to cite in contempt filed by petitioner against UMPC and its counsel, Castillo and Poblador Law Offices, particularly Atty. Napoleon J. Poblador and Atty. Manuel Joseph R. Bretaa III. Petitioner alleges that they should be cited for contempt for misrepresenting to the Court in their memorandum dated November 17, 2000 that UEM and MARA were still the stockholders of UMPC when in fact the Coastal Road Corporation (CRC) had already bought their shares.[45] UMPC stated: 87. Contrary to petitioner's malicious assertions, the Republic of the Philippines and public respondent PEA selected private respondent (then represented by its stockholders MARA and UEM) based on established guidelines of the national government on joint venture agreements between government agencies and the private sector. xxx Private respondent, therefore, could only assume, as it reasonably assumed, that these government agencies performed their functions in accordance with law and only after scrutinizing the qualifications of private respondent's stockholders UEM and MARA. 88. Private respondent is more than qualified to be the joint venture partner of public respondent PEA based on the track record of its aforementioned stockholders. 88.1 MARA is an instrumentality or corporate agency of the Malaysian government. The Malaysian government specifically designated MARA to realize its agreement with the Philippine government to pursue and enter into joint and cooperative development undertakings. (cf., Annex D, supra). 88.2 On the other hand, UEM is a Malaysian company publicly listed on the Kuala Lumpur Stock Exchange (KLSE) since 1975. It has an authorized capital stock of RM500,000,000 or approximately P5,000,000,000.00. It is one of Malaysia's largest engineering, design and construction groups with direct and indirect interests in five (5) publicly listed companies on the KLSE. xxxx[46] (Emphasis supplied) In their comment on the motion, Attys. Poblador and Bretaa stated that they had nothing to do with the sale of UEM and MARA of their 283,744 shares in UMPC as other law firms, namely, Castillo Laman Tan Pantaleon & San Jose Law Offices representing UEM and Sycip Salazar Hernandez & Gatmaitan Law Offices representing CRC were involved. The sale was approved by the TRB on November 18, 1999.[47] We do not think that UMPC and its counsels should be sanctioned for contempt. Counsels can be held in contempt of court[48] for making false statements in the pleadings they file[49] tending to mislead the Court and to degrade the administration of justice. We cannot see any deliberate falsehood or misrepresentation in the aforequoted statements of Attys. Poblador and Bretaa. On the contrary, they truthfully indicated that UEM and MARA were the former stockholders of UMPC. This is the clear import of the phrase then represented by its stockholders MARA and UEM. This also implied that they had been replaced as such. Besides, the ownership structure of UMPC as a party in this case was never material to the issue for resolution which is the issuance of a writ of injunction for the collection of toll fees. Hence, the Court was not deceived in any way.

Petitioner also insists that they be cited in contempt for showing disrespect and resorting to offensive language against RTC Judge Guadiz, Jr. when they stated: Despite the obvious legality of the project, petitioner, either by sheer arrogance or a malicious refusal to acknowledge the truth that the [MCTEP] and the imposition of toll fees for the use of the Coastal Road are legal and above board initiated what is no more than a nuisance suit and secured from an insufficiently-informed judge an illegal writ of preliminary injunction which public respondent, the Honorable [CA], subsequently reversed.[50] Attys. Poblador and Bretaa, in their defense, countered that there was nothing insulting or disparaging in describing someone as insufficiently informed. This was not intemperate language amounting to vilification.[51] They are correct. In criticizing a judge's decision, the test is whether it is done in good faith: While the Court recognizes a litigant's right to criticize judges and justices in the performance of their functions, it is the cardinal condition of all such criticism that it shall be bona fide and shall not spill over the walls of decency and propriety. A wide chasm exists between fair criticism, on the one hand, and abuse and slander of courts and the judges (or justices) thereof, on the other. Intemperate and unfair criticism is a gross violation of the duty of respect to courts.[52] We cannot say that the use of the adjective insufficiently-informed is disrespectful, abusive or slanderous. Besides, [it] is well settled that the power to punish a person in contempt of court is inherent in all courts to preserve order in judicial proceedings and to uphold the due administration of justice. Judges however are enjoined to exercise such power judiciously and sparingly, with utmost restraint, and with the end in view of utilizing the same for correction and preservation of the dignity of the court, and not for retaliation or vindictiveness.[53] Therefore, we deny petitioners motion to cite in contempt for lack of merit. In sum, PD 1818 prohibits the issuance of a writ of preliminary injunction to enjoin the collection of toll fees for the use of the Coastal Road. None of the exceptions to this proscription is applicable here. The collection of toll fees for R-1 Expressway, one of the components of the MCTEP, is an activity necessary for the execution of a government infrastructure project covered by the protective mantle of PD 1818. It is noteworthy that the MCTEP was identified by the government as an urgent necessity to support the rapid development of the Calabarzon[54] area, particularly the province of Cavite.[55] Accordingly, no preliminary injunction can be issued enjoining or preventing its implementation. We need not go into a discussion of whether petitioner was able to prove the requisites for its issuance.[56] To emphasize, we have limited ourselves to the issue of propriety of the issuance of a writ of preliminary injunction. We are not resolving the substantive issues presented such as the validity of the TOA. We leave this to the RTC for resolution after trial on the merits.[57] WHEREFORE, the petition is hereby DENIED. The July 28, 1998 decision and September 23, 1998 resolution of the Court of Appeals in CA-G.R. SP Nos. 48111 and 48145 are AFFIRMED. Petitioner's motion to cite Attys. Napoleon J. Poblador and Manuel Joseph R. Bretaa III in contempt of court is likewise DENIED for lack of merit. Costs against petitioner. SO ORDERED. Republic of the Philippines SUPREME COURT Manila

THIRD DIVISION A. C. No. 7421 October 10, 2007

ELISA V. VENTEREZ, GENARO DE VERA, INOCENCIA V. RAMIREZ, PACITA V. MILLS, ANTONINA V. PALMA and RAMON DE VERA, Complainants, vs. ATTY. RODRIGO R. COSME, Respondent. RESOLUTION CHICO-NAZARIO, J.: Before Us is a Complaint filed by complainants Eliza V. Venterez, Genaro de Vera, Inocencia V. Ramirez, Pacita V. Mills, Antonina V. Palma and Ramon de Vera against respondent Atty. Rodrigo R. Cosme, charging the latter with Abandonment, Gross Negligence and Dereliction of Duty. Complainants contracted the legal services of respondent in Civil Case No. 981 entitled, "Sps. Daniel and Lolita Oviedo, et al. v. Eliza de Vera, et al.," for Declaration of Ownership with Damages filed before the Municipal Trial Court (MTC) of Calasiao, Pangasinan. Respondent represented the complainants, who were defendants in said case, until a Decision thereon was rendered by the MTC on 25 February 2004. The MTC ruled against the complainants. Respondent received a copy of the said Decision on 3 March 2004. Complainants alleged that they directed the respondent to either file a Motion for Reconsideration or a Notice of Appeal, but respondent failed or refused to do so. The 15-day period within which to file an appeal or a motion for reconsideration of the MTC Decision expired on 18 March 2004. Complainant Elisa V. Venterez was constrained to contract another lawyer to prepare the Motion for Reconsideration which was filed on 19 March 2004. It must be stressed that the said motion was signed by complainant Elisa V. Venterez herself as the said lawyer did not enter his appearance. On 23 March 2004, the said Motion for Reconsideration was denied1 by the MTC. Respondent was not furnished a copy of the denial of the motion per a Certification2 issued by Clerk of Court II Zenaida C. de Vera. On 31 March 2004, a Motion for Issuance of Writ of Execution3 was filed by the plaintiffs in Civil Case No. 981 but respondent never bothered to file an opposition to or any comment on the said motion despite receipt thereof. The motion was eventually granted4 by the MTC on 23 April 2004. On 28 April 2004, a Writ of Execution5 was issued and on 26 April 2004, an Entry of Judgment6 was made in the said case. Two months after respondent received a copy of the Decision, the respondent filed his Notice of Retirement of Counsel with the MTC on 3 May 2004. Feeling aggrieved by respondents actuations, complainants filed the instant administrative complaint against him.7 In his Answer,8 respondent denied the claim of complainants that soon after the Decision was rendered by the MTC, they (complainants) directed him to file an appeal or a motion for reconsideration thereof. For his defense, respondent averred that Salvador Ramirez (the son of one of the complainants, Inocencia V. Ramirez), informed him that "he [was] withdrawing the case from the respondent because he already engaged another lawyer to take over the case, so respondent gave the records of the case to him." Respondent explained that "after Salvador Ramirez withdrew the case from the respondent, and engaged another lawyer, the respondent turned over the records of the case to him and the respondent ceased as the counsel of the complainants." Respondent further alleged that the said Motion for Reconsideration was already prepared by another lawyer. He denied being furnished a

copy of the Motion for Reconsideration allegedly prepared and filed by another lawyer engaged by complainant Elisa V. Venterez and that he was served with a copy of the denial of the said Motion by the MTC. Respondent also clarified that the "last day of the 15-day period for the perfection of the appeal is 19 March 2004 since a copy of the decision was served on the respondent on 4 March 2004." Finally, respondent argued that "when the respondent was served a copy of the Motion for Writ of Execution, he immediately notified Salvador Ramirez about said Motion but Salvador Ramirez came to see the respondent only on 3 May 2005, when the respondent asked him to sign a Notice of Retirement of Counsel signed by Salvador Ramirez which respondent immediately filed in court." Pursuant to the complaint, a hearing was conducted by the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) at the IBP Building, Ortigas Center, Pasig City, on 15 February 2006. On 11 April 2006, Investigating Commissioner Dennis A. B. Funa submitted his Report and Recommendation,9 finding respondent liable for gross negligence and recommending the imposition upon him of the penalty of three months suspension, to wit: PREMISES CONSIDERED, it is submitted that Respondent is GUILTY of Gross Negligence and should be given the penalty of THREE (3) MONTHS SUSPENSION. Thereafter, the IBP Board of Governors passed Resolution10 No. XVII-2006-457 dated 8 September 2006, approving and adopting the recommendation of the Investigating Commissioner, thus:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that Respondent is guilty of gross negligence, Atty. Rodrigo Cosme is hereby SUSPENDED from the practice of law for three (3) months.11 We sustain the findings and recommendation of the IBP Board of Governors. The core issue is whether the respondent committed culpable negligence in handling complainant s case, as

would warrant disciplinary action. No lawyer is obliged to advocate for every person who may wish to become his client, but once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must be mindful of the trust and confidence reposed in him.12 Among the fundamental rules of ethics is the principle that an attorney who undertakes an action impliedly stipulates to carry it to its termination, that is, until the case becomes final and executory. A lawyer is not at liberty to abandon his client and withdraw his services without reasonable cause and only upon notice appropriate in the circumstances.13 Any dereliction of duty by a counsel affects the client.14 This means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law and he may expect his lawyer to assert every such remedy or defense.15 The Decision in Civil Case No. 981 was rendered by the MTC of Calasaio, Pangasinan, on 25 February 2004. Respondent admitted16 that he was served a copy of the said Decision on 4 March 2004. After having received a copy of the MTC Decision, respondent did not bother to file a Motion for Reconsideration or a notice of appeal with the proper courts. Thus, complainants were compelled to engage the services of a new counsel to file a Motion for Reconsideration with the MTC who did not, however, enter his appearance as new counsel. It bears stressing that during this time, respondent had not yet filed any notice of withdrawal as counsel for the complainants in Civil Case No. 981. Respondent only formally withdrew as counsel for complainant in Civil Case No. 981 when he filed with the MTC his Notice17 of Retirement as Counsel on 5 May 2004, on the ground that "he was also retired as Counsel for the [complainants] two days after he received copy of the decision rendered in this case when SALVADOR RAMIREZ, a representative of the [complainants], withdrew all the records of the case from [respondent] to be given to his new counsel."

We cannot accept respondents defense that he had already withdrawn from the case two days after his receipt of the MTC Decision and that he had allegedly communicated this withdrawal to Salvador Ramirez, son of one of the herein complainants, Inocencia Ramirez. It is an apparent attempt on the part of respondent to wash his hands of any liability for failing to pursue any of the available remedies to complainants from the adverse MTC Decision. The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at any time with or without cause.18 The right of an attorney to withdraw or terminate the relation other than for sufficient cause is, however, considerably restricted.19 Among the fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion.20 He is not at liberty to abandon it without reasonable cause.21 A lawyer's right to withdraw from a case before its final adjudication arises only from the client's written consent or from a good cause.22 Section 26, Rule 138 of the Revised Rules of Court provides: Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party. A lawyer may retire at any time from any action or special proceeding with the written consent of his client filed in court and with a copy thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court. The court, on notice to the client and adverse party, shall determine whether the lawyer ought to be allowed to retire. The application for withdrawal must be based on a good cause.23 What constitute good cause for the withdrawal of services by the counsel are identified under Rule 22.01, Canon 22 of the Code of Professional Responsibility, which provides: CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE CIRCUMSTANCES. Rule 22.01-- A lawyer may WITHDRAW his services in any of the following cases: a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling; b) When the client insists that the lawyer pursue conduct violative of these canons and rules; c) When his inability to work with co-counsel will not promote the best interest of the client; d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively; e) When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement; f) When the lawyer is elected or appointed to public office; and g) Other similar cases.

The instant case does not fall under any of the grounds aforementioned. Neither can the circumstances of this case be considered analogous to the grounds thus explicitly enumerated. Contrary to respondents contention, his professional relations as a lawyer with his clients are not terminated by the simple turnover of the records of the case to his clients. Respondents defense completely crumbles in face of the fact that Salvador Ramirez is not even a party in Civil Case No. 981 and, hence, had no authority to withdraw the records of the said case from respondent or to terminate the latters services. Assuming, nevertheless, that respondent was justified in withdrawing his services, he, however, cannot just do so and leave complainants in the cold, unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the court.24 Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his clients, as well as by the court, to do what the interests of his clients require.25 He must still appear before the court to protect the interest of his clients by availing himself of the proper remedy, for the attorney-client relations are not terminated formally until there is a withdrawal of record. Without a proper revocation of his authority and withdrawal as counsel, respondent remains counsel of record for the complainants in Civil Case No. 981; and whether he has a valid cause to withdraw from the case, he cannot immediately do so and leave his clients without representation. An attorney may only retire from the case either by a written consent of his client or by permission of the court after due notice and hearing, in which event, the attorney should see to it that the name of the new attorney is recorded in the case.26 Respondent did not comply with these obligations. Therefore, he remains the counsel of record for the complainants in Civil Case No. 981 with the duty to protect complainants interest. Had he made the necessary inquiries as to the status of the case, he would have known that he was still the counsel of record as no entry of appearance was ever made by another counsel. It would have been easily discernible on his part that there was no change in his status as complainants lawyer. As of that time, their client-lawyer relationship was still subsisting. Therefore, he would have known that the Motion for Reconsideration was denied; and a writ of execution had been issued under the circumstances. All told, we rule and so hold that on account of respondents failure to protect the interest of complainants, respondent indeed violated Rule 18.03, Canon 18 of the Code of Professional Responsibility, which states that "a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable." Respondent is reminded that the practice of law is a special privilege bestowed only upon those who are competent intellectually, academically and morally. This Court has been exacting in its expectations for the members of the Bar to always uphold the integrity and dignity of the legal profession and refrain from any act or omission which might lessen the trust and confidence of the public.1wphi1 The determination of the appropriate penalty to be imposed on an errant lawyer involves the exercise of sound judicial discretion based on the facts of the case.27 In cases of similar nature, the penalty imposed by the Court consisted of reprimand,28 fine of five hundred pesos with warning,29 suspension of three months,30 six months31 and even disbarment32 in an aggravated case. The facts of the case show that respondent failed to live up to his duties as a lawyer pursuant to the Code of Professional Responsibility. We conclude that a 3-month suspension from the practice of law is a just penalty under the circumstances. WHEREFORE, the resolution of the IBP Board of Governors approving and adopting the report and recommendation of the Investigating Commissioner is hereby AFFIRMED. Accordingly, ATTY. RODRIGO R. COSME is hereby SUSPENDED from the practice of law for a period of THREE (3) MONTHS, with a stern warning that a repetition of the same or similar wrongdoing will be dealt with more severely.

Let a copy of this decision be attached to respondents personal record with the Office of the Bar Confidant and copies be furnished to all chapters of the Integrated Bar of the Philippines and to all courts of the land. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION A.C. No. 6711 July 3, 2007

MA. LUISA HADJULA, complainant, vs. ATTY. ROCELES F. MADIANDA, respondent. DECISION GARCIA, J.: Under consideration is Resolution No. XVI-2004-472 of the Board of Governors, Integrated Bar of the Philippines (IBP), relative to the complaint for disbarment filed by herein complainant Ma. Luisa Hadjula against respondent Atty. Roceles F. Madianda. The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date September 7, 2002 and filed with the IBP Commission on Bar Discipline, complainant charged Atty. Roceles F. Madianda with violation of Article 2092 of the Revised Penal Code and Canon Nos. 15.02 and 21.02 of the Code of Professional Responsibility. In said affidavit-complaint, complainant alleged that she and respondent used to be friends as they both worked at the Bureau of Fire Protection (BFP) whereat respondent was the Chief Legal Officer while she was the Chief Nurse of the Medical, Dental and Nursing Services. Complainant claimed that, sometime in 1998, she approached respondent for some legal advice. Complainant further alleged that, in the course of their conversation which was supposed to be kept confidential, she disclosed personal secrets and produced copies of a marriage contract, a birth certificate and a baptismal certificate, only to be informed later by the respondent that she (respondent) would refer the matter to a lawyer friend. It was malicious, so complainant states, of respondent to have refused handling her case only after she had already heard her secrets. Continuing, complainant averred that her friendship with respondent soured after her filing, in the later part of 2000, of criminal and disciplinary actions against the latter. What, per complainant's account, precipitated the filing was when respondent, then a member of the BFP promotion board, demanded a cellular phone in exchange for the complainant's promotion. According to complainant, respondent, in retaliation to the filing of the aforesaid actions, filed a COUNTER COMPLAINT3 with the Ombudsman charging her (complainant) with violation of Section 3(a) of Republic Act No. 3019,4 falsification of public documents and immorality, the last two charges being based on the disclosures complainant earlier made to respondent. And also on the basis of the same disclosures, complainant further stated, a disciplinary case was also instituted against her before the Professional Regulation Commission. Complainant seeks the suspension and/or disbarment of respondent for the latter's act of disclosing personal secrets and confidential information she revealed in the course of seeking respondent's legal advice.

In an order dated October 2, 2002, the IBP Commission on Bar Discipline required respondent to file her answer to the complaint. In her answer, styled as COUNTER-AFFIDAVIT,5 respondent denied giving legal advice to the complainant and dismissed any suggestion about the existence of a lawyer-client relationship between them. Respondent also stated the observation that the supposed confidential data and sensitive documents adverted to are in fact matters of common knowledge in the BFP. The relevant portions of the answer read: 5. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for reason that she never WAS MY CLIENT nor we ever had any LAWYER-CLIENT RELATIONSHIP that ever existed ever since and that never obtained any legal advice from me regarding her PERSONAL PROBLEMS or PERSONAL SECRETS. She likewise never delivered to me legal documents much more told me some confidential information or secrets. That is because I never entertain LEGAL QUERIES or CONSULTATION regarding PERSONAL MATTERS since I know as a LAWYER of the Bureau of Fire Protection that I am not allowed to privately practice law and it might also result to CONFLICT OF INTEREST. As a matter of fact, whenever there will be PERSONAL MATTERS referred to me, I just referred them to private law practitioners and never entertain the same, NOR listen to their stories or examine or accept any document. 9. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the truth of the matter is that her ILLICIT RELATIONSHIP and her illegal and unlawful activities are known in the Bureau of Fire Protection since she also filed CHILD SUPPORT case against her lover where she has a child . Moreover, the alleged DOCUMENTS she purportedly have shown to me sometime in 1998, are all part of public records . Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant case just to get even with me or to force me to settle and withdraw the CASES I FILED AGAINST HER since she knows that she will certainly be DISMISSED FROM SERVICE, REMOVED FROM THE PRC ROLL and CRIMINALLY CONVICTED of her ILLICIT, IMMORAL, ILLEGAL and UNLAWFUL ACTS. On October 7, 2004, the Investigating Commissioner of the IBP Commission on Bar Discipline came out with a Report and Recommendation, stating that the information related by complainant to the respondent is "protected under the attorney-client privilege communication." Prescinding from this postulate, the Investigating Commissioner found the respondent to have violated legal ethics when she "[revealed] information given to her during a legal consultation," and accordingly recommended that respondent be reprimanded therefor, thus: WHEREFORE, premises considered, it is respectfully recommended that respondent Atty. Roceles Madianda be reprimanded for revealing the secrets of the complainant. On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-2004-472 reading as follows: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and , finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering the actuation of revealing information given to respondent during a legal consultation, Atty. Roceles Madianda is hereby REPRIMANDED. We AGREE with the recommendation and the premises holding it together.

As it were, complainant went to respondent, a lawyer who incidentally was also then a friend, to bare what she considered personal secrets and sensitive documents for the purpose of obtaining legal advice and assistance. The moment complainant approached the then receptive respondent to seek legal advice, a veritable lawyer-client relationship evolved between the two. Such relationship imposes upon the lawyer certain restrictions circumscribed by the ethics of the profession. Among the burdens of the relationship is that which enjoins the lawyer, respondent in this instance, to keep inviolate confidential information acquired or revealed during legal consultations. The fact that one is, at the end of the day, not inclined to handle the client's case is hardly of consequence. Of little moment, too, is the fact that no formal professional engagement follows the consultation. Nor will it make any difference that no contract whatsoever was executed by the parties to memorialize the relationship. As we said in Burbe v. Magulta,6 A lawyer-client relationship was established from the very first moment complainant asked respondent for legal advise regarding the former's business. To constitute professional employment, it is not essential that the client employed the attorney professionally on any previous occasion. It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney consulted did not afterward handle the case for which his service had been sought. It a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the professional employments is established. Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship between the lawyer and the complainant or the non-payment of the former's fees. Dean Wigmore lists the essential factors to establish the existence of the attorney-client privilege communication, viz: (1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be waived.7 With the view we take of this case, respondent indeed breached his duty of preserving the confidence of a client. As found by the IBP Investigating Commissioner, the documents shown and the information revealed in confidence to the respondent in the course of the legal consultation in question, were used as bases in the criminal and administrative complaints lodged against the complainant. The purpose of the rule of confidentiality is actually to protect the client from possible breach of confidence as a result of a consultation with a lawyer. The seriousness of the respondent's offense notwithstanding, the Court feels that there is room for compassion, absent compelling evidence that the respondent acted with ill-will. Without meaning to condone the error of respondent's ways, what at bottom is before the Court is two former friends becoming bitter enemies and filing charges and counter-charges against each other using whatever convenient tools and data were readily available. Unfortunately, the personal information respondent gathered from her conversation with complainant became handy in her quest to even the score. At the end of the day, it appears clear to us that respondent was actuated by the urge to retaliate without perhaps realizing that, in the process of giving vent to a negative sentiment, she was violating the rule on confidentiality.

IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is hereby REPRIMANDED and admonished to be circumspect in her handling of information acquired as a result of a lawyer-client relationship. She is also STERNLY WARNED against a repetition of the same or similar act complained of. SO ORDERED. G.R. No. L-24163, Aro v. Hon. Nanawa et al., 27 SCRA 1090 Republic of the Philippines SUPREME COURT Manila EN BANC April 28, 1969 G.R. No. L-24163 REGINO B. ARO, petitioner, vs. THE HON. ARSENIO NAAWA, Presiding Judge of Branch IV, Court of First Instance of Laguna, LUIS MAGTIBAY, PABLO MAGTIBAY, AURELLO MARTINEZ, GREGORIO LONTOK, MARIA MENDOZA, MAXIMO PORTO and ROSARlO ANDAYA, respondents. Regino B. Aro in his own behalf as petitioner. Enrique C. Villanueva for respondents. BARREDO, J.: Original petition: (1) for certiorari to annul the order of the Court of First Instance of Laguna, dated November 21, 1964, dismissing its Civil Case No. SC-525 "without prejudice to the right of Atty. Regino B. Aro (petitioner herein) to file a separate action against both the plaintiffs and defendants (private respondents herein) with respect to his alleged attorney's fees", as well as its order dated January 9, 1965, denying petitioner's motion for reconsideration thereof for lack of merit and (2) for mandamus to compel respondent Judge to take cognizance of petitioner's opposition and countermotion or petition dated November 3, 1964 and to resolve the same on the merits. There appears to be no dispute as to the following facts alleged in the petition: 2. That the services of herein petitioner, as practising attorney, was engaged by respondents Luis Magtibay and Pablo Magtibay for the prosecution of their claim, as heirs, in the estate of their deceased uncle Lucio Magtibay, consisting of properties which were in the possession of the respondents Aurelia Martinez,[[1]] spouses Gregorio Lontok and Maria Mendoza and spouses Maximo Porto and Rosario Andaya. 3. That being without means to prosecute their claim against the persons concerned, respondents Luis Magtibay and Pablo Magtibay agreed with herein petitioner to avail of his services and entrust the prosecution of their claim on a contingent basis as shown in the agreement, copy of which is hereto attached as Annex 'A' and is made an integral part hereof.[[2]] 4. That by virtue of said agreement, herein petitioner took the necessary steps to gather the needed papers and documents for the filing of a petition to litigate as pauper and a complaint in the Court of First Instance of Laguna, in which respondents Luis Magtibay and Pablo Magtibay were the plaintiffs and the other respondents, excepting the respondent Judge, were the defendants, .. 5. That said petition to litigate as pauper filed by herein petitioner for respondents Luis Magtibay and Pablo Magtibay was granted by the respondent Judge as per the order dated September 10, 1964, ...

6. That to plaintiffs' complaint in Civil Case No. SC-525, the defendants in said case interposed a motion to dismiss dated September 29, 1964....[[3]] 7. That to the said motion to dismiss herein petitioner, as attorney for the plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) filed an opposition dated October 5, 1964.....[[4]] 8. That after the hearing of the motion to dismiss filed by the defendants and the opposition thereto by the plaintiffs, which finally took place on October 24, 1964, the respondent Judge issued its resolution or order dated October 24, 1964, denying the motion to dismiss, ....[[5]] 9. That on the very day of and after the hearing of the motion to dismiss, or on October 24, 1964, before receipt of a copy of the said order (Annex 'G'), there was a conversation which took place between herein petitioner and the attorney of the defendants, Atty. Rustico de los Reyes, Jr., in the civil case and one who was then acting as a sort of spokesman for the defendants (Ex-Mayor Cordova of Sta. Maria, Laguna) for the amicable settlement of the case between the plaintiffs and the defendants to the effect that a certain property of the spouses Lucio Magtibay (deceased) and respondent Aurelia Martinez, worth P3,000.00, would be given to the plaintiffs in full settlement of their claim, as share in the properties left by their deceased uncle Lucio Magtibay, it having been agreed by herein petitioner and Atty. de los Reyes and the spokesman of the defendants that for the purpose of said amicable settlement, the plaintiffs or one of them and herein petitioner would go to Sta. Maria, Laguna, on October 23, 1964. 10. That having given notice to the plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) at their given address in Calauag, Quezon to come to Candelaria for the purpose of going to Sta. Maria, Laguna on October 23, 1964, petitioner had waited for said plaintiffs to go to his office on or before said date for the engagement mentioned, but due to their (plaintiffs') failure to come to Candelaria, petitioner had to send a telegram to Ex-Mayor Cordova notifying him of his (petitioner's) and plaintiffs' not being able to go to Sta. Maria because of the failure of any of the plaintiffs to come to Candelria, .. 11. That it was only on October 28, 1964, when herein petitioner received a copy of the order dated October 24, 1964 (Annex "G") and to his surprise he also received on the said day a second motion to dismiss dated October 26, 1964; together with Annex "A" of said motion, which is entitled KASULATAN NG PAGHAHATIAN NA LABAS SA HUKUMAN AT PAGPAPALABI, dated October 23, 1964 at Sta. Cruz, Laguna and signed by the plaintiffs and defendant Aurelia Martinez (the three being now respondents in this case), it having been made to appear in said Annex "A" of the second motion to dismiss, among others, that the plaintiffs and defendant Aurelia Martinez had made an extrajudicial partition of the properties of the deceased Lucio Magtibay and the said Aurelia Martinez adjudicating to the plaintiffs one-fourth () share in the properties of the spouses and threefourth (3/4) share of the defendant Aurelia Martinez, but making it appear also that said plaintiffs waived their share in favor of Aurelia Martinez, ..., thru which fraudulent waiver, herein petitioner was deprived of his contingent fees, agreed upon, as evidenced by Annex "A" of this petition.[[6]] xxxxxxxxx 14. That petitioner filed by registered mail, on November 4, 1964, his "OPPOSITION TO THE SECOND MOTION TO DISMISS AND COUNTER-MOTION OR PETITION TO SET ASIDE DEED OF EXTRAJUDICIAL PARTITION AND WAIVER DATED OCTOBER 23, 1964 AND TO RECORD ATTORNEY'S LIEN", dated November 3, 1964, wherein he (petitioner) prayed, among others, invoking the provisions of Section 5(d) and Section 6, Rule 135 of the Revised Rules of Court, for the protection of the rights of herein petitioner as an officer of the Court, to wit: (a) to deny the second motion to dismiss and get aside and annul the deed of extrajudicial partition and waiver dated October 23, 1964;

(b) to fix the compensation of herein counsel in the proportion of one-third (1/3) of the shares of plaintiffs, if in land, or in the amount of P1,000.00, if in cash, and to record the same and expenses advanced by him for the plaintiffs in the sum of P22.15 as lien in favor of herein claimant-petitioner over the properties in litigation, particularly over the one-fourth (1/4) share of the plaintiffs in all the properties of the spouses; xxxxxxxxx (d) as an alternative to prayer (a) above, to grant the second motion to dismiss, subjecting, however, the properties in litigation and subject-matters of the extrajudicial partition and waiver to the lien for attorney's fees and expenses in favor of herein claimant-petitioner, after fixing said attorney's fees as prayed for in (b) above. xxxxxxxxx 15. That on the day f finally set for the hearing of the second motion to dismiss, as well as of the counter-motion or petition, or on November 21, 1964, because of the inquiries or interpellation made by respondent Judge to herein petitioner as to whether there is a Philippine precedent which allows or directs the protection by the Court of the rights of any of its officers (lawyer) against any collusion perpetrated by the parties in a case to defraud or cheat an attorney of his compensation agreed upon by him and his clients, and his answer that insofar as his researches were concerned, he could not find any, although there are a number of cases to that effect in American jurisdiction, the respondent Judge had opined in open court that the claim for and the fixing of the attorney's fees should better be done in a separate action and, in spite of petitioner's memorandum citing American authorities to the effect that, Though a party may without the consent of his attorney money make a bona fide adjustment with the adverse party and dismiss an action or suit before a judgment or a decree has been rendered thereon, if it appears, however, that such settlement was collosive and consummated pursuant to the intent of both parties to defraud the attorney, the court in which the action was pending may interfere to protect him as one of its officers, by setting aside the order of dismissal, .... (Jackson vs. Stearns, 48 Ore. 25, 84 Pac. 798). ... the respondent Judge, instead of denying the second motion to dismiss and fixing his attorney's fees in the said case and recording the same as lien, ... dismissed the case and refused to give herein petitioner any kind of immediate protection to safeguard his rights ... in said Civil Case No. SC-525 of the Court of First Instance of Laguna. 16. That by the express terms of the agreement, Annex "A" of this petition, plaintiffs in Civil Case No. SC-525 had expressly ceded to herein petitioner one-half () [later verbally reduced to one-third (1/3) or P1,000.00] or whatever share they would get from the estate of their deceased uncle Lucio Magtibay, and the defendants in said Civil Case had full knowledge of said right of herein petitioner in the properties in controversy from and after the time they were served with summons and copies of the complaint in said civil case because of the allegations contained in par. 10 thereof. 7 [Emphasis by the Court] 18. That on December 5, 1964, herein petitioner filed his motion for reconsideration dated December 4, 1664 asking for the reconsideration of the order dated November 21, 1964, .. 19. That the motion for reconsideration was denied by the court, thru the respondent Judge, as per the order dated January 9, 1965, .. Upon these facts, petitioner tries to make out before this Court a case of certiorari for grave abuse of discretion on the part of respondent Judge in dismissing the case on the basis of the compromise

agreement of the parties, entered into at the back of petitioner notwithstanding the reservation made in his favor to file an action against both parties "with respect to his alleged attorney's fees", as well as a case of mandamus "to order and command the said respondent judge" to take cognizance of and resolve his opposition and counter-motion for the court to fix the compensation he should be paid. Unable to find any local precedent to support his position, he cites American authorities thus: In the American jurisdiction, it would seem that, even without the specific provisions of the rules of court cited above, courts had always intervened, in the mere exercise of their inherent powers, to protect attorneys against collusive agreements or fraudulent settlements entered into by the parties in a case to cheat attorneys out of their costs or of their fees. Thus, it was held or had been stated in: (a) Coughlin vs. N.Y. Cont. & H.R.R. Co., 71 N.Y. 443, 27 Am. Rep. 75. ... But since the time of Lord Mansfield, it has been the practice of courts to intervene to protect attorneys against settlement made to cheat them out of their costs. If an attorney has commenced an action, and his client settles it with the opposite party before judgment, collusively, to deprive him of his costs, the court will permit the attorney to go on with the suit for the purpose of collecting his costs. Swain v. Senate, 5 Bos. & Pul. 99; Cole v. Bennett, 6 Price, 15; Moore v. Cook, 13 Id. 473; Talcott v. Bronson, 4 Paige, 501; Rusquin v. The Knickerbocker Stage Col., 12 Abb. Pr 324; Ward v. Syme, 9 How. Pr. 16; McDonald v. Napier, 14 Ga. 89. There are many cases where this had been allowed to be done. It is impossible to ascertain precisely when this practice commenced, nor how originated, nor upon what principle it was based. It was not upon the principle of a lien, because an attorney has no lien upon the cause of as it upon the action before judgment for his costs; nor was it upon principle that his services had produced the money paid his client upon the settlement, because that could not be known, and in fact no money may have been paid upon the settlement. So far as I can perceive, it was based upon no principle. It was a mere arbitrary exercise of power by the courts; not arbitrary in the sense that it was unjust or improper, but in the sense that it was not based upon any right or principle recognized in other cases. The parties being in court, and a suit commenced and pending, for the purpose of protecting attorneys who were their officers and subject to their control, the courts invented this practice and assumed this extraordinary power to defeat attempts to cheat the attorneys out of their costs. The attorney's fees were fixed in definite sums, easily determined by taxation and this power was exercised to secure them their fees. (pp. 76-77) (b) Randall v. Van Wagenan et al., 22 N.E. 361, 362. ... But where such settlement is made collusively for the purpose of defrauding the attorney out of his costs, courts have been accustomed to intervene, and to protect the attorney by permitting him to proceed with the suit, and, if he is able to establish a right to recover on the cause of action as it originally stood, to permit such recovery to the extent of his costs in the action. Coughlin v. Railroad Co., 71 N. Y. 443, and pages cited. And the court will set aside an order of discontinuance if it stands in the way. This is an adequate remedy, and we think the exclusive remedy where the suit has been fraudulently settled by the parties before judgment to cheat the attorney out of his costs. We have found no case of an equitable action to enforce the inchoate right of an attorney, under such circumstances, and no such precedent ought, we think, to be established. (c) Jackson v. Stearns, et al., 43 Ore 25, 84 Pac. 798. ... Though a party may, without the consent of his attorney, make a bona fide adjustment with the adverse party, and dismiss an action or suit before a judgment or a decree has been rendered therein, if it appears, however, that such settlement was collusive and consummated pursuant to the intent of both parties to defraud the attorney, the court in which the action or suit was pending may interfere to protect him, as one of its officers, by setting aside the order of dismissal and permitting him to proceed in the cause in the name of his client to final determination to ascertain what sum of money, or interest

in the subject-matter, if any, is due him for his services when fully performed. Jones v. Morgage 99 Am. Dec. 458; Randall v. Van Wagenen (N.Y.) 22 N.E. 361, 12 Am. St. Rep. 828. (p. 800) Before a court will set aside an order dismissing a suit or an action, made upon stipulation of the parties, without the consent of plaintiff's attorney, and allow the latter to proceed with the cause in the name of his client, to determine the amount of fees due him, it must appear that the defendant participated in the fraudulent intent to deprive the attorney of his compensation. Courtney v. McGavock, 25 Wis. 619. When no adequate consideration is given by the defendant for the settlement and discharge of an action or a suit, the insufficiency of the inducement to the contract affords evidence of his bad faith. Young v. Dearborn, 27 N.E. 324. It will be remembered that the complaint alleges that the value of the real property in question is $3,000.00, and that Stearns executed to Wilson a deed to the premises for a nominal consideration. This is a sufficient averment of the defendant's intent to deprive the plaintiff of his compensation thereby imputing to Wilson bad faith. (p. 800) (d) Desaman v. Butler Bros., 188 Minn. 198, 136 N.W. 747. We have recently held that a client has always the right to settle his cause of action and stop litigation at any stage of the proceeding, subject, however, to the right of the attorney to receive compensation for services rendered. Burho v. Camichael 135 N.W. 386. It is therefore contended by defendant that a litigant retains the unrestricted right to determine for what amount the cause of action may be settled, and, having so done, the lien of his attorney for services is measured by the amount determined on and actually settled for. Conceding, without deciding, that this may be true of any time prior to the rendition of a verdict in the action which the attorney has been employed to bring, we are of opinion that after verdict fixing the amount of a plaintiff's cause of action a secret and collusive compromise between parties litigant does not affect the amount of the attorney's lien...; but therein is also clearly indicated by Mr. Justice Brown that, if there be fraud and collusion to deprive the attorney of his lien, the settlement will not be permitted to accomplish such result. (p. 748) To be sure, these authorities are quite persuasive, but contrary to petitioner's impression, there is already a precedent setting decision of this Court handed down way back in 1922 in a case very similar to his, that in Rustia vs. the Judge of the Court of First Instance of Batangas, et al., 44 Phil. 62. As it is very brief, it can be quoted in full: This is a petition for a writ of certiorari, the petitioner alleging that the respondent Judge of the Court of First Instance exceeded his jurisdiction in dismissing a pending action at the instance of the parties but without the intervention of the attorney for the plaintiff in the case, the herein petitioner. It appears from the record that on July 31, 1921, the respondent Justo Porcuna, for himself and on behalf of his wife, the respondent Rosa H. de Porcuna, by means of a written contract, retained the petitioner to represent them as their lawyer in case No. 1435 then pending in the Court of First Instance of Batangas and in which Rosa H. de Porcuna was the plaintiff and one Eulalia Magsombol was the defendant. The contract fixed the petitioner's fee at P200 in advance with an additional contingent fee of P1,300. It was also provided in the contract that Justo Porcuna should not compromise the claim against the defendant in the case without express consent of his lawyer, the herein petitioner. After trial, the petitioner then being plaintiff's attorney of record, the Court of First Instance, under date of December 24, 1921, rendered judgment in favor of Justo Porcuna and Rosa H. de Porcuna ordering the defendant Eulalia Magsombol to return to them 602 pieces of cloth or in default thereof to pay to them the sum of P3,250. On January 14, 1922, Eulalia Magsombol filed her exception to the judgment and on the following day presented a motion for a new trial, which was denied on the 21st of the same month. She thereupon gave notice of appeal and presented a bill of exceptions which was approved on February 20, 1922. On March 2, 1922, and before the transmission of the bill of exceptions to this court, the plaintiffs presented the following motion in the Court of First Instance:

The plaintiffs, without any further intervention of their attorney, now appear before this Honorable Court and respectfully aver: That, through Mr. Miguel Olgado they already settled this case with the herein defendant. That the basis of the compromise is that we, the plaintiffs, finally agree that we should be paid the amount of eight hundred pesos (P800) in two installments; P300 to be paid on this same date, and the remaining five hundred pesos (P500) at the end of March, 1922. That we, the plaintiffs, recognize not to have any further rights in this case than to the aforesaid amount of eight hundred pesos (P800) and that this is the total amount the defendant Eulalia Magsombol should pay us, and we have no right whatever to any other amount than the aforementioned. That we have not sold to any other person our rights as plaintiffs in this case. Wherefore, the plaintiffs respectfully request the dismissal of this case, without any pronouncement as to costs, and that the appeal interposed by the defendant be further dismissed. Batangas, Batangas, P.I., March 2, 1922. (Sgd) ROSA H. PORCUNA Plaintiff JUSTO M. PORCUNA Plaintiff The defendant, through her attorney, Jose Mayo Librea, having signified her assent to the motion, the Court of First Instance on the same day, March 2, dismissed the action without notice to counsel for the plaintiffs. The petitioner alleges that he did not discover the dismissal of the action until April 4, 1922. After an unsuccessful effort to obtain a reconsideration of the order of dismissal from the trial court, he filed the present petition for a writ of certiorari. By resolution dated October 24, 1922, this court denied the petition and upon motion of the petitioner we shall now briefly state our reasons for such denial. The burden of the petitioner's contention is (1) that he, as attorney of record, was entitled to notice of his client's motion to dismiss the case, and (2) that after the approval of the bill of exceptions the lower court had lost jurisdiction of the case and had no power to dismiss it. A moment's reflection should make it clear that neither of these propositions is tenable. Both at the common law and under section 32 of the Code of Civil Procedure a client may dismiss his lawyer at any time or at any stage of the proceedings and there is nothing to prevent a litigant from appearing before the court to conduct his own litigation. (Sec. 34, Code of Civil Procedure.) The client has also an undoubted right to compromise a suit without the intervention of his lawyer. Though there is a valid agreement for the payment to the attorney of a large proportion of the sum recovered in case of success this does not give the attorney such an interest in the cause of action that it prevents plaintiff from compromising the suit. (4 Cyc. 990, and authorities cited in Note 6; see also Louque vs. Dejan 129 La. 519; Price vs. Western Loan & Savings Co., 19 Am. Cas. 589 and Note.) In the present instance the clients did nothing that they did not have a perfect right to do. By appearing personally and presenting a motion they impliedly dismissed their lawyer. The petitioner's contingent interests in the judgment rendered did not appear of record. Neither as a party in interest nor as and attorney was he therefore entitled to notice of the motion.

As to the second proposition that the court below could not dismiss the case after the bill of exceptions had been approved, it is very true that upon such approval the lower court loses its jurisdiction over all contentious matters connected with the issues in the case. But there is nothing to prevent all of the parties by agreement to withdraw the bill of exceptions with the consent of said court and resubmit the case to the jurisdiction of the court. That was all that was done in this case. A valid agreement between the parties to a case is the law of the case in everything covered by the agreement. (Civil Code, art. 1091; Compania General de Tabacos vs. Obed, 13 Phil. 391.) The petitioner might have protected his interests by entering an attorney's lien under section 37 of the Code of Civil Procedure. The petition for a writ of certiorari was therefore properly denied. So ordered. The difference We perceive, however, between petitioner's case, on the one hand, and that of Atty. Rustia, in the above decision, on the other, is that in the latter's case, neither the court nor the party adverse to his clients were aware of the exact agreement as to his fees, whereas in the case of petitioner, both the court and the other parties knew the terms of the contract for professional services between petitioner and his clients, the Magtibay brothers, because the written contract therefor, Annex A, was made part of the complaint, and none seriously disputes its authenticity. Besides, the court had already dismissed the case when Atty. Rustia raised the question of his fees before the court; in petitioner's instance, he opposed the motion to dismiss and pleaded with the court to protect his rights as officer of the court before the first order in question was issued by respondent judge. Were it not for these differences, We would have inclined towards denying the herein petition in line with the Rustia ruling that, in any event, certiorari is not the appropriate remedy, the American authorities cited by petitioner not withstanding. Withal, there is another Philippine case which Us to sustain petitioner. In the case of Recto vs. Harden, 100 Phil. 440, Atty. Claro M. Recto found himself practically in the same situation as petitioner herein. After Atty. Recto had rendered services to Mrs. Esperanza P. de Harden in a protracted suit against her husband for the purposes of securing an increase of her and her daughter's monthly support, (the spouses were separated), to P10,000.00 and of protecting and preserving her rights in the properties of the conjugal partnership, which suit lasted from 1941 to 1949, and after the Court of First Instance of Manila had rendered a judgment favorable to Mrs. Harden acknowledging, inter alia, her rights to the assets of the conjugal partnership, which turned out to be P4,000,000, and awarding her a monthly support of P2,500, practically as prayed for in Atty. Recto's pleadings, while the case was already pending on appeal before this Court, Mrs. Harden and her husband, Mr. Fred Harden, entered into a compromise of their case, without the knowledge of Atty. Recto, whereby said spouses "purportedly agreed to settle their differences in consideration of the sum of P5,000 paid by Mr. Harden to Mrs. Harden, and a monthly pension of $500 to be paid by him to her; (2) Mr. Harden created a trust fund of $20,000 from which said monthly pension of $500 would be taken; and (3) Mr. and Mrs. Harden had mutually released and forever discharged each other from all actions, debts, duties, accounts, demands and claims to the conjugal partnership, in consideration of the sum of $1." (p. 435) Whereupon Atty. Recto filed a motion with this Court praying that: a) Pending the resolution of this motion, the receiver appointed herein be authorized to continue holding the properties above mentioned in his custody in order not to defeat the undersigned's inchoate lien on them; b) A day set aside to receive the evidence of the undersigned and those of the plaintiff and the defendant Fred M. Harden, in order to determine the amount of fees due to the undersigned, by the appointment of a referee or commissioner for the reception of such evidence;

c) After due hearing, the undersigned be declared entitled to the sum of P400,000 as his fees for services rendered in behalf of the plaintiff in this case, under paragraph 3 of the contract, Annex "A" and to that end a charging lien therefore be established upon the properties above-mentioned; d) And the receiver be ordered to pay to the undersigned the full amount of the fees to which the latter is found to be entitled. This motion was objected to by Mr. Hardens counsel, who in turn, moved for the dismissal of the case, to which Atty. Recto objected. Under these circumstances, this Court acceded to Atty. Recto's prayer that the case be not dismissed, that the receivership be maintained except as to certain properties not material to mention here, and that the case be remanded to the lower court so that his fees may be determined and ordered paid. Upon the remand of the case to the lower court, a commissioner was appointed to hear the matter of the amount of the fees in question, and after the commissioner had submitted a report recommending the payment to Atty. Recto of the 20,70 attorney's fees stipulated in the contract for his services, equivalent to P369,410.04, the court rendered judgment as follows: The contingent fee to which the claimant is entitled under paragraph 3 of the contract, Exhibit JJJ or 20, is 20% of P1,920,554.85 or the sum of P384,110.97. WHEREFORE, this Court hereby approves the recommendation of the Commissioner with the abovestated modification, and finds that Attorney Claro M. Recto is entitled to the sum of THREE HUNDRED EIGHTY-FOUR THOUSAND ONE HUNDRED AND TEN PESOS AND NINETYSEVEN CENTAVOS (P384,110.97), representing 20% of Esperanza P. de Harden's share in the conjugal properties owned by her and her husband, Fred M. Harden, as contingent fee stipulated in paragraph 3 of the Contract of Professional Services, Exhibit JJJ or 20, and the said Esperanza P. de Harden is hereby ordered to pay the said amount above-stated. On appeal from this judgment to this Court, the same was affirmed, the decision stating pertinently in part: The last objection is based upon principles of equity, but, pursuant thereto, one who seeks equity must come with clean hands (Bastida et al. vs. Dy Buncio & Co., 93 Phil. 195; 30 C.J.S. 475), and appellants have not done so, for the circumstances surrounding the case show, to our satisfaction, that their aforementioned agreements, ostensibly for the settlement of the differences between husband and wife, were made for the purpose of circumventing or defeating the rights of herein appellee, under his above-quoted contract of services with Mrs. Harden. Indeed, having secured a judgment in her favor, acknowledging her rights to the assets of the conjugal partnership, which turned out to be worth almost P4,000,000 in addition to litis expensae in the sum of P175,000, it is inconceivable that Mrs. Harden would have waived such rights, as well as the benefits of all orders and judgments in her favor, in consideration of the paltry sum of $5,000 allegedly paid to her by Mr. Harden and the additional sum of $20,000 to be paid by him in installments, at the rate of $500 a month. In fact, no explanation has been given for this moat unusual avowed settlement between Mr. and Mrs. Harden. One can not even consider the possibility of a reconciliation between the spouses, the same being inconsistent with the monetary consideration for said alleged settlement. What is more, the records show that the relations between said spouses which were bad indeed, not only in July, 1941, when Mrs. Harden engaged the services of the appellee, but, even, before, for Mr. and Mrs. Harden were separated since 1938 had worsened considerably thereafter, as evidenced by an action for divorce filed by Mr. Harden in New Jersey, in July 1948, upon the ground of repeated acts of infidelity allegedly committed by Mrs. Harden in 1940 and 1941. On the same considerations of equity, and for the better protection of lawyers, who, trusting in the good faith of their clients, render professional services on contingent basis, and so that it may not be said that this Court, sanctions in any way the questionable practice of clients of compromising their cases at the back of their counsel with the consequence that the stipulated contingent fees of the lawyer are either unreasonably reduced or even completely rendered without basis, as in this case wherein

the clients waived the whole of their rights in favor of their opponent after the latter had acknowledged, in effect, the correctness of said clients' contention We have decided to grant the herein petition, in so far as the rights of petitioner have been prejudiced by the questioned compromise agreement. While We here reaffirm the rule that "the client has an undoubted right to compromise a suit without the intervention of his lawyer",[[8]] We hold that when such compromise is entered into in fraud of the lawyer, with intent to deprive him of the fees justly due him, the compromise must be subject to the said fees, and that when it is evident that the said fraud is committed in confabulation with the adverse party who had knowledge of the lawyer's contingent interest or such interest appears of record and who would benefit under such compromise, the better practice is to settle the matter of the attorney's fees in the same proceeding, after hearing all the affected parties and without prejudice to the finality of the compromise in so far as it does not adversely affect the rights of the lawyer. Surely, "the client cannot, by setting, compromising or dismissing his suit during its pendency, deprive the attorney of his compensation for the agreed amount, unless the lawyer consents to such settlement, compromise or dismissal", (Legal and Judicial Ethics by Martin, 1967 Rev. Ed p. 121) for the, attorney is or "Shall be entitled to have and recover from his client - a reasonable compensation (not more) for his services, with a view to the importance of the subject-matter of the controversy, the extent of the services rendered, and the professional standing of the attorney", (Sec. 24, Rule 138, on Attorney and Admission to Bar) albeit, under Canon 12 of the Canons of Professional Ethics, "in fixing fees, it should not be forgotten that the profession is a branch of the administration of justice and not a mere money-getting trade." True it is also that "a client may, at anytime, dismiss his attorney or substitute another in his place", (Sec. 26, Rule 138) but it must be emphasized that the same provision, which is an incorporation of Republic Act 636 into the Rules of Court, also provides that "if the contract between client and attorney had been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client full compensation ..." In the case at bar, by entering into the compromise agreement in question and even inserting therein a prayer to the court to dismiss their case filed by petitioner, (see footnote 6, ante) petitioner's clients impliedly dismissed him. (Rustia vs. the Court, etc., supra.) Such implied dismissal appears to Us to have been made without justifiable cause, none is urged anywhere in the record, and so, the above-quoted provision of Section 26, Rule 138 applies here. The terms of the compromise in question, as spelled out in Annex A of Annex I of the petition, indicate clearly that Aurelia Martinez, the defendant aunt in-law of petitioner's clients, acknowledged that the rights of said clients were practically as alleged by petitioner in the complaint he filed for them. In other words, through the services of petitioner, his clients secured, in effect, a recognition, which had been previously denied by their aunt-in-law, that they were entitled to a share in the estate left by their uncle. We hold that under these circumstances, and since it appears that said clients have no other means to pay petitioner, since they instituted their case as paupers, and that their aunt-in-law was aware of the terms of their contract of professional services with petitioner', said clients had no right to waive the portion of their such acknowledged rights in favor of their opponent to the extent that such waiver would prejudice the stipulated contingent interest of their lawyer and their aunt-in-law had no right to accept such waiver unqualified. The Civil Code enjoins that: ART. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Under the circumstance extant in the record, it is clear that the compromise agreement in question falls short of the moral requirements of this quoted article of the Civil Code. If for this reason alone, it should not be allowed to prejudice the rights of petitioner. Accordingly, as all of these circumstances were presented to respondent judge before he issued the challenged order of dismissal and all the parties were heard thereon, it was incumbent upon His Honor, in equity and to avoid multiplicity of suits, particularly, because the amount claimed by petitioner is only P1,000.00, to have directly passed upon petitioner's claim, and not having done so, it would appear that the court a quo abused its discretion gravely enough to warrant the writ of certiorari herein prayed for in so far as the questioned orders prejudiced petitioner's right to the fees for the professional services which appear to have been creditably rendered by him. Respondents allege that the judgment of dismissal in question is already

final because no appeal was taken therefrom, but since We hold that the same was rendered with enough grave abuse of discretion to warrant the certiorari prayed for, such alleged finality could not have materialized; obviously, petitioner could not have appealed, not being a party in the case. IN VIEW OF THE FOREGOING, the orders of the respondent court dated November 21, 1964 and January 9, 1965 in Civil Case No. SC-525 are hereby set aside in so far as they prejudice the payment of petitioner's claim of attorney's fees in the form of either one-third of the share acknowledged as his clients in the compromise in question or P1,000.00, which should constitute as a lien on the said share, in spite of the waiver thereof in favor of respondent Aurelia Martinez. It is unnecessary to consider the petition for mandamus. Costs against, private respondents. Reyes, J.B.L., Dizon,: Makalintal, Zaldivar, Sanchez, Fernando and Teehankee, JJ., concur. Concepcion, C.J. and Castro, J., are on leave. Capistrano, J., took no part. Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. L-27832

May 28, 1970

TESTATE ESTATE OF AMADEO MATUTE OLAVE, Deceased, CARLOS V. MATUTE, general administrator-appellant, MATIAS S. MATUTE, co-administrative-appellant, PATERNO R. CANLAS, appellant, vs. JOSE S. MATUTE, ANUNCIACION CANDELARIO, ELENA MATUTE Y CANDELARIO and AMADEO MATUTE Y CANDELARIO, JR., appellees. Paterno R. Canlas in his own behalf and for all other appellants. Antonio Enrile Inton, Jose W. Diokno and Ledesma & Associates for appellees.

REYES, J.B.L., J.: Perfected prior to the effectivity of Republic Act No. 5440, this appeal by Carlos V. Matute and Matias V. Matute, co-administrators of the Testate Estate of the late Amadeo Matute Olave (Special Proceedings No. 25876 of the Court of First Instance of Manila), and by their attorney-at-law, Paterno Canlas, was interposed to seek reversal, on points of law, of the probate court's order of 22 April 1967 requiring these appellants to surrender seventeen (17) titles to diverse properties of the estate to the assistant clerk of court for safekeeping. The incident originated in a motion filed by respondents Jose S. Matute, Anunciacion Candelario, and Elena and Amadeo, both surnamed Matute y Candelario, praying that the former administrator, Matias S. Matute, be ordered to surrender 17 titles to various properties of the Estate to the assistant clerk of court, from whom said Matias had received them on 28 September 1966. The motion was vigorously resisted by the co-administrators Matias and Carlos Matute and several other heirs (through counsel Paterno Canlas), who pleaded that the removal of Matias as administrator and his replacement by Jose S. Matute were still under appeal; that the titles aforesaid had been delivered to both Matias and Carlos Matute; that the latter "is at present and from time to time in possession of the said seventeen (17) titles", and "the co-administrator Matias S. Matute is no longer in possession of said titles" (Record on

Appeal, page 6); that Attorney Paterno Canlas had a pending claim for P261,000.00, on account of legal services rendered to the estate for the study, preparation, drafting, due execution and probate of the 1952 testament of the deceased; that the claim was later compromised for P2,000,000.00; that the undersigned who is from time to time also in possession of the seventeen (17) titles belonging to the Estate in his capacity as counsel for the Estate is also retaining said titles in the exercise of his retention lien for services rendered to the estate (not to the Administrators) ...; (Record on Appeal, pages 7-8) and invoked Rule 138, Section 37, of the Rules of Court. As aforesaid, the probate court granted the motion to surrender the documents to the clerk of court for safekeeping, "in order to prevent any possible controversy regarding any transaction involving the remaining properties of the estate" (Record on Appeal, page 18). Reconsideration of the order was sought and denied 29 May 1967, the Court ordering Attorney Paterno S. Canlas to surrender said documents "immediately ... upon receipt hereof." Wherefore, the oppositors duly perfected the present appeal, insisting that it was error for the court below to have granted the motion to surrender the titles in question in view of Rule 138, Section 37, of the Rules of Court, specifically prescribing that SEC. 37. Attorneys' liens. An attorney shall have a lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. ... The explicit terms of this section afford no alternative but to uphold the claim of appellant Paterno Canlas with respect to the seventeen documents in his possession. His right, as counsel for the deceased and his estate, "to retain the same until his lawful fees and disbursements have been paid "is incontestable, and under the rule and section aforesaid, the attorney can not be compelled to surrender the muniments of title mentioned without prior proof that his fees have been duly satisfied. 1 The courts, in the exercise of their supervisory authority over attorneys as officers of the court, are bound to respect and protect the attorney's lien as a necessary means to preserve the decorum and respectability of the profession. 2 But if it be entirely indispensable for the court to gain possession of the documents that have come to the attorney and are held by him in the course of his employment as counsel, it can require surrender thereof by requiring the client or claimant to first file proper and adequate security for the lawyers' compensation (Rustia vs. Abeto 72 Phil. 139). We are aware of the inconvenience that may accrue to the client because of the retention of important papers by an attorney claiming fees for services rendered, but this is the reason and essence of the lien. Withal, the courts may require the attorney to deliver up the papers in his possession which may serve to embarrass his client, provided the client files proper security for the attorney's compensation. This proceeds from the power of the courts to control its own officers and to compel attorneys to act equitably and fairly towards their clients. (Chitton v. Pardon, Turner & Russel's Reports, 301; Richards v. Platel Craig & Philipps Report, 79; Matter of Jewitt, 34 Beav. 22; Matter of Galland, 31 Chancery Division, 296; Robinson v. Rogers, 237 N. Y. 467, 472- 473.) In so far as the court below required surrender of the documents here in question without first providing for satisfaction of his fees or, at least, proper security for their payment, the appealed order is plainly in error. Whatever doubt may have arisen on account of the lawyer's ambiguous expression that he "is from time to time also in possession of the seventeen (17) titles belonging to the Estate" (Record on Appeal,

page 7) is set at rest by the finding of the probate court, in its order of 29 May 1967, that Attorney Paterno Canlas "has admitted the fact that he is in possession of the 17 titles of the properties of the estate" (Record on Appeal, page 30). In the light of this order, it is patent that the stated possession "from time to time" of the documents in question should be construed to mean that the attorney came into possession thereof at different times, a circumstance that does not impair his right of retention until payment. Our ruling in Inton vs. Matute, L-21283, 31 August 1966, 17 SCRA 1010, is not in conflict with the present decision. In that case, the retention of documents belonging to the estate was denied because the counsel had served not the estate but the administrator in his individual capacity. IN VIEW OF THE FOREGOING, the orders of the probate court dated 22 April 1967 and 29 May 1967, in so far as denying appellant Attorney Paterno Canlas' right to retain the seventeen (17) documents in his hands, as counsel for the estate, and requiring him to surrender the same without his claim for fees being first satisfied, are hereby reversed and set aside. Costs against appellees. Concepcion, C.J., Dizon, Makalintal, Zaldivar, Fernando, Teehankee, Barredo and Villamor, JJ., concur. Castro, J., took no part. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

A.M. No. 2430 August 30, 1990 MAURO P. MANANQUIL, complainant, vs. ATTY. CRISOSTOMO C. VILLEGAS, respondent. Geminiano M. Eleccion for complainant. RESOLUTION

CORTES, J.: In a verified complaint for disbarment dated July 5, 1982, Mauro P. Mananquil charged respondent Atty. Crisostomo C. Villegas with gross 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 before then Court of First Instance of Negros Occidental. The complainant was appointed special administrator after Felix Leong died. In compliance with a resolution of this Court, respondent filed his comment to the complaint on January 20, 1983. After complainant filed his reply, the Court resolved to refer the case to the Solicitor General for investigation, report and recommendation. In a hearing conducted on May 15, 1985 by the investigating officer assigned to the case, counsel for the complainant proposed that the case be considered on the basis of position papers and memoranda to be submitted by the parties. Respondent agreed. Thus, the investigating officer required the parties

to submit their respective position papers and 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 respective position papers; but no memorandum was filed by either party. Thereafter, the case was deemed submitted. In the pleadings submitted before the Court and the Office of the Solicitor General, complainant alleges that over a period of 20 years, respondent allowed lease contracts to be executed between his client Felix Leong and a partnership HIJOS DE JOSE VILLEGAS, of which respondent is one of the partners, covering several parcels of land of the estate, i.e. Lots Nos. 1124, 1228, 2221, 2402, 3939, 3942 and 3957 of the Tanjay Cadastre, under iniquitous terms and conditions. Moreover, complainant charges that these contracts were made without the approval of the probate court and in violation of Articles 1491 and 1646 of the new Civil Code. On the basis of the pleadings submitted by the parties, and other pertinent records of the investigation, the Solicitor General submitted his report dated February 21, 1990, finding that respondent committed a breach in the performance of his duties as counsel of administrator Felix Leong when he allowed the renewal of contracts of lease for properties involved in the testate proceedings to be undertaken in favor of HIJOS DE JOSE VILLEGAS without notifying and securing the approval of the probate court. However, the Solicitor General opined that there was no sufficient evidence to warrant a finding that respondent had allowed the properties to be leased in favor of his family partnership at a very low rental or in violation of Articles 1491 and 1646 of the new Civil Code. Thus, the Solicitor General recommended that respondent be suspended from the practice of law for a period of THREE (3) months with a warning that future misconduct on respondent's part will be more severely dealt with [Report and Recommendation of the Solicitor General, pp. 1-10; Rollo, pp. 37-46. Also, Complaint of the Solicitor General, pp. 1-3; Rollo, pp. 47-49]. As gleaned from the record of the case and the report and recommendation of the Solicitor General, the following facts are uncontroverted: 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 was appointed as administrator of the Testate Estate of the Felomina Zerna in Special No. 460 on May 22, 1961; That, a lease contract dated August 13, 1963 was executed between Felix Leong and the "Heirs of Jose Villegas" represented by respondent's brother-in-law Marcelo Pastrano involving, among others, sugar lands of the estate designated as Lot Nos. 1124, 1228, 2221, 2402, 3939, 3942 and 3957 of the Tanjay Cadastre; That Felix Leong was designated therein as administrator and "owner, by testamentary disposition, of 5/6 of all said parcels of land"; That, the lifetime of the lease contract was FOUR (4) sugar crop years, with a yearly rental of TEN PERCENT (10%) of the value of the sugar produced from the leased parcels of land; That, on April 20, 1965, the formal partnership of HIJOS DE JOSE VILLEGAS was formed amongst the heirs of Jose Villegas, of which respondent was a member; That, on October 18, 1965, another lease contract was executed between Felix Leong and the partnership HIJOS DE JOSE VILLEGAS, containing basically the same terms and conditions as the first contract, with Marcelo Pastrano signing once again as representative of the lessee; That, on March 14, 1968, after the demise of Marcelo Pastrano, respondent was appointed manager of HIJOS DE JOSE VILLEGAS by the majority of partners;

That, renewals of the lease contract were executed between Felix Leong and HIJOS DE JOSE VILLEGAS on January 13, 1975 and on December 4, 1978, with respondent signing therein as representative of the lessee; and, That, in the later part of 1980, respondent was replaced by his nephew Geronimo H. Villegas as manager of the family partnership. Under the above circumstances, the Court finds absolutely no merit to complainant's charge, and the Solicitor General's finding, that respondent committed acts of misconduct in failing to secure the approval of the court in Special Proceedings No. 460 to the various lease contracts executed between Felix Leong and respondent's family partnership. Pursuant to Section 3 of Rule 84 of the Revised Rules of Court, a judicial executor or administrator has the right to the possession and management of the real as well as the personal estate of the deceased so long as it is necessary for the payment of the debts and the expenses of administration. He may, therefore, exercise acts of administration without special authority from the court having jurisdiction of the estate. For instance, it has long been settled that an administrator has the power to enter into lease contracts involving the properties of the estate even without prior judicial authority and approval [See Ferraris v. Rodas, 65 Phil. 732 (1938); Jocson de Hilado v. Nava, 69 Phil. 1 (1939); San Diego, Sr. v. Hombre, G.R No. L-19265, May 29, 1964, 11 SCRA 165]. Thus, considering that administrator Felix Leong was not required under the law and prevailing jurisprudence to seek prior authority from the probate court in order to validly lease real properties of the estate, respondent, as counsel of Felix Leong, cannot be taken to task for failing to notify the probate court of the various lease contracts involved herein and to secure its judicial approval thereto. Nevertheless, contrary to the opinion of the Solicitor General, the Court finds sufficient evidence to hold respondent subject to disciplinary sanction for having, as counsel of record for the administrator in Special Proceedings No. 460, participated in the execution in 1975 and 1978 of renewals of the lease agreement involving properties of the estate in favor of the partnership HIJOS DE JOSE VILLEGAS, of which respondent is a member and in 1968 was appointed managing partner. By virtue of Article 1646 of the new Civil Code, the persons referred to in Article 1491 are prohibited from leasing, either in person or through the mediation of another, the properties or things mentioned in that article, to wit: xxx (1) xxx xxx

The guardian, the property of the person or persons who may be under his guardianship;

(2) Agents, the property whose administration or sale may have been intrusted to them, unless the consent of the principal have been given; (3) Executors and administrators, the property of the estate under administration (4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government owned or controlled corporation, or institution, the administration of which has been intrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale; (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property or rights in litigation or levied upon on execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with

respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. (6) Any others specially disqualified by law xxx xxx xxx

[Article 1491 of the new Civil Code; Emphasis supplied.] The above disqualification imposed on public and judicial officers and lawyers is grounded on public policy considerations which disallow the transactions entered into by them, whether directly or indirectly, in view of the fiduciary relationship involved, or the peculiar control exercised by these individuals over the properties or rights covered [See Rubias v. Batiller, G.R. No. L-35702, May 29, 1973, 51 SCRA 120; Maharlika Publishing Corporation v. Tagle, G.R. No. 65594, July 9, 1986, 142 SCRA 553; Fornilda v. The Branch 164, RTC Fourth Judicial Region, Pasig, G.R. No. 72306, October 5, 1988, 166 SCRA 281 and January 24, 1989, 169 SCRA 351]. Thus, even if the parties designated as lessees in the assailed lease contracts were the "Heirs of Jose Villegas" and the partnership HIJOS DE JOSE VILLEGAS, and respondent signed merely as an agent of the latter, the Court rules that the lease contracts are covered by the prohibition against any acquisition or lease by a lawyer of properties involved in litigation in which he takes part. To rule otherwise would be to lend a stamp of judicial approval on an arrangement which, in effect, circumvents that which is directly prohibited by law. For, piercing through the legal fiction of separate juridical personality, the Court cannot ignore the obvious implication that respondent as one of the heirs of Jose Villegas and partner, later manager of, in HIJOS DE JOSE VILLEGAS stands to benefit from the contractual relationship created between his client Felix Leong and his family partnership over properties involved in the ongoing testate proceedings. In his defense, respondent claims that he was neither aware of, nor participated in, the execution of the original lease contract entered into between his client and his family partnership, which was then represented by his brother-in-law Marcelo Pastrano. And although he admits that he participated in the execution of subsequent renewals of the lease contract as managing partner of HIJOS DE JOSE VILLEGAS, he argues that he acted in good faith considering that the heirs of Filomena Zerna consented or acquiesced to the terms and conditions stipulated in the original lease contract. He further contends that pursuant to the ruling of the Court in Tuason v. Tuason [88 Phil. 428 (1951)] the renewal contracts do not fall within the prohibition of Articles 1491 and 1646 since he signed the same as a mere agent of the partnership. Respondent's contentions do not provide sufficient basis to escape disciplinary action from this Court. It taxes this Courts imagination that respondent disclaims any knowledge in the execution of the original lease contract between his client and his family partnership represented by his brother-in-law. Be that as it may, it cannot be denied that respondent himself had knowledge of and allowed the subsequent renewals of the lease contract. In fact, he actively participated in the lease contracts dated January 13, 1975 and December 4, 1978 by signing on behalf of the lessee HIJOS DE JOSE VILLEGAS. Moreover, the claim that the heirs of Filomena Zerna have acquiesced and consented to the assailed lease contracts does not militate against 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 confidential association [Sotto v. Samson, G.R. No. L-16917, July 31, 1962, 5 SCRA 733]. Thus, the law makes the prohibition absolute and permanent [Rubias v. Batiller, supra]. And in view of Canon 1 of the new Code of Professional Responsibility and Sections 3 & 27 of Rule 138 of the Revised Rules of Court, whereby lawyers are duty-bound to obey and uphold the laws of the land,

participation in the execution of the prohibited contracts such as those referred to in Articles 1491 and 1646 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, 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. 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 lessee is a partnership, of which a lawyer is a member, over a property involved in a litigation in which he takes part by virtue of his profession, are not covered by the prohibition under Articles 1491 and 1646. 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 any rate, it is a matter for the court presiding over Special Proceedings No. 460 to determine whether or not the agreed rental payments made by respondent's family partnership is reasonable compensation for the use and occupancy of the estate properties. Considering thus the nature of the acts of misconduct committed by respondent, and the facts and circumstances of the case, the Court finds sufficient grounds to suspend respondent from the practice of law for a period of three (3) months. WHEREFORE, finding that respondent Atty. Crisostomo C. Villegas committed acts of gross misconduct, the Court Resolved to SUSPEND respondent from the practice of law for four (4) months effective from the date of his receipt of this Resolution, with a warning that future misconduct on respondent's part will be more severely dealt with. Let copies of this Resolution be circulated to all courts of the country for their information and guidance, and spread in the personal record of Atty. Villegas. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC

A.C. No. 620

March 21, 1974

JOSE ALCALA and AVELINA IMPERIAL, petitioners, vs. HONESTO DE VERA, respondent.

MUOZ PALMA, J.:p On May 19, 1964, Jose Alcala (now deceased) and his wife, Avelina Imperial, filed this present petition for disbarment against respondent Honesto de Vera, a practicing attorney of Locsin, Albay, who was retained by them as their counsel in civil case 2478 of the Court of First Instance of Albay, entitled: "Ray Semenchuk vs. Jose Alcala".

Complainants charge Atty. Honesto de Vera with gross negligence and malpractice: 1) for having maliciously and deliberately omitted to notify them of the decision in civil case 2478 resulting in the deprivation of their right to appeal from the adverse judgment rendered against them; and 2) for respondent's indifference, disloyalty and lack of interest in petitioners' cause resulting to their damage and prejudice. Respondent attorney, in his answer to these charges, asserted that he notified his clients of the decision in question and that he defended complainants' case to the best of his ability as demanded by the circumstances and that he never showed indifference, lack of interest or disloyalty to their cause. The Solicitor General, to whom this Court referred this case for investigation, report and recommendation, substantially found the following: Civil case 2478 was an action for annulment of a sale of two parcels of land (lots Nos. 1880 and 1883 covered by TCT Nos. T-12392 and 12393 respectively) filed by the vendee, Ray Semenchuk, against the vendors, spouses Alcala, on the ground that lot 1880 "could not be located or did not exist", and for the recovery of damages and attorney's fees. Respondent attorney, whose legal services were engaged by complainants, filed an answer denying the material allegations of the above-mentioned complaint and setting up a counterclaim for the balance of the purchase price of the lots sold, the expenses of notarials, internal revenue, registration, etc. plus damages and attorney's fees. On April 17, 1963, the trial court rendered judgment rescinding the contract of sale, on the ground that the vendee Semenchuk was not able to take material possession of lot 1880 it being in the possession of a certain Ruperto Ludovice and his brothers who have been occupying the land for a number of years. The dispositive portion of the judgment reads: WHEREFORE, judgment is hereby rendered: (a) (b) Declaring the deed of sale (Exhibit A) rescinded; Directing the plaintiff to deliver to the defendants the possession of lot No. 1883.

(c) Ordering the defendants to return to the plaintiff the sum of P1,000.00 after deducting the amount of P250.00 which is the consideration in the deed of sale of Lot No. 185; and (d) Without pronouncement as to costs. (p. 11, rollo)

On April 19, 1963, respondent Atty. de Vera received a copy of the decision but he failed to inform his clients of the judgment against them. On July 17, 1963, a sheriff came to complainants' house to serve a writ of execution issued in said case. Totally caught by surprise, Jose Alcala immediately wrote to the trial court and inquired for the status of case 2478. The deputy Clerk of Court, in his reply dated July 22, 1963, informed Alcala that the case was decided on April 17, 1963, that a copy of the decision was received by respondent attorney on April 19, 1963, and that since no appeal was taken, a writ of execution was issued by the trial court on motion of the plaintiff Semenchuk. On September 12, 1963, spouses Alcala instituted civil case 2723 for damages against Atty. Honesto de Vera for having failed to inform them of the decision in case 2478 as a result of which they lost their right to appeal from said decision. The trial court that heard case 2723 found for a fact that respondent did not inform his clients of the decision rendered in case 2478; however, it denied damages for lack of proof that the spouses Alcala suffered any damage as a result of respondent's failure to notify them of the aforesaid decision. The judgment in case 2723 was appealed to the Court of Appeals 1 by respondent herein but the same was affirmed by said appellate court.

Not content with having filed case 2723, complainants instituted this complaint for disbarment against their former counsel. 1. "Indifference, loyalty, and lack of interest" of respondent in the handling of complainants' defense in civil case 2478. The basis of this particular charge is the alleged failure of Atty. de Vera to present at the trial of case 2478 certain documents which according to the complainants could have proven that lot 1880 actually existed, to wit: a sketch of lot 1880 prepared by the vendee, Semenchuk, himself (Exh. L-Adm. Case); technical description of lot 1880 taken from complainants' certificate of title (Exh. M-Adm. Case); sketch plan of lot 1880 in relation to the adjoining lots prepared by surveyor Miguel N. Romero (Exh. N-Adm Case); a receipt for P10.00 issued by surveyor Romero for the preparation of the sketch, Exh. N (Exh. O-Adm. Case) all of which documents were turned over by Jose Alcala to respondent before the trial of case 2478. We agree with the Solicitor General that there is no merit to this particular charge. The records of case 2478 show that upon agreement of the parties and their attorneys, the trial court appointed a commissioner to relocate lot 1880 and after conducting such relocation, the commissioner reported to the Court that the lot existed, but that the same was in the possession of other persons. Inasmuch as the existence of lot 1880 had already been verified by the commissioner, it was therefore unnecessary for respondent attorney to introduce in evidence Exhibits "L", "M", "N", and "O", the purpose of which was merely to prove the existence of said lot. If the complaint for rescission prospered it was because of complainant Alcala's failure to comply with his obligation of transferring the material or physical possession of lot 1880 to the vendee and for no other reason; hence, complainants had nobody to blame but themselves. The fact that the plaintiff, Semenchuk, was not awarded any damages, attorney's fees, and costs shows that respondent attorney exerted his utmost to resist plaintiff's complaint. 2. Gross negligence and malpractice committed by respondent for failure to inform his clients of the decision in case 2478: The matter in dispute with respect to this specific charge is whether or not respondent notified his clients, the complainants herein, about the decision in case 2478. Respondent claims that he did inform his clients of the decision; complainants insist the contrary. We agree with the Solicitor General that there is sufficient evidence on hand to prove that respondent neglected to acquaint his clients of the decision in case 2478. As stated in the Solicitor General's report, the reaction of complainant Jose Alcala when the writ of execution in said civil case was served upon him and his wife by a sheriff was such that it betrayed a total unawareness of the adverse decision. The evidence shows that when he was told about the sheriff's visit, Jose Alcala immediately inquired from the trial Court the reason for the writ of execution and it was only then that he was informed that a decision had been rendered, that his lawyer received a copy thereof since April 19, 1963, and because no appeal was taken the judgment became final and executory. Alcala then sought the help of his brother, Atty. Ernesto Alcala, in Manila and the latter wrote to respondent inquiring as to what steps were taken, if any, to prosecute an appeal from the decision in question but respondent chose not to answer the letter. Thereafter, Alcala instituted an action for damages and filed the instant complaint for disbarment. As aptly observed by the Solicitor General: Again, we do not think petitioner Alcala would have felt so aggrieved and embittered by the loss of his right to appeal the decision in Civil Case No. 2478 so as to take all these legal steps against

respondent, with all the attendant trouble and expense in doing so, if it is not true, as he alleged, that the latter indeed did not notify him of said decision. We believe and so submit, therefore, that respondent really failed to inform petitioners of the decision in Civil Case No. 2478, and this was also the finding made by the Court of First Instance of Albay in its decision in Civil Case No. 2723 for damages filed by petitioners against respondent, and by the Court of Appeals in the appeal taken by respondent from said decision. (pp. 38-39, rollo) Is respondent's failure to notify his clients of the decision sufficient cause for his disbarment? Complainants answer the question in the affirmative, while on the other hand, respondent prays that he be exonerated because, according to him, granting arguendo that he failed to inform the complainants about the decision, the truth is that said decision was fair and just and no damage was caused to complainants by reason thereof. On this point, We agree with the following appraisal of the evidence by the Solicitor General: In this connection, it is indeed true that although both the Court of First Instance of Albay, in Civil Case No. 2723 for damages filed by petitioners against respondent Atty. De Vera (pp. 30-34, Exh. "D", id.), and the Court of Appeals, in C.A.-G.R. No. 35267-R (the appeal taken by respondent from the decision of the trial court in C.C. No. 2723), found that respondent actually did not inform petitioners of the decision in Civil Case No. 2478, still both courts also held that petitioners did not sustain any damages as a result of said decision, for which reason the trial court dismissed petitioners' action for damages against respondent, which dismissal was affirmed by the Court of Appeals. We quote the finding of the Court of First Instance of Albay in its decision in Civil Case No. 2723 in this regard: The second issue that has to be passed upon by the Court is neither the plaintiffs are entitled to damages. On this issue, the Court finds that the plaintiffs cannot recover damages from defendant Atty. Honesto de Vera. No evidence has been presented that they sustained damages of the decision. Neither it has been shown that the decision is not supported by the facts and the law applicable to the case. Consequently, the plaintiffs are not entitled to damages because of the failure of Atty. Honesto de Vera to inform them of the decision. "An attorney is not bound to exercise extraordinary diligence, but only a reasonable degree of care and skill, having reference to the character of the business he undertakes to do. Fallible like any other human being, he is answerable to every error or mistake, and will be protected as long as he acts honestly and in good faith to the best of his skill and knowledge. Moreover, a party seeking damages resulting from a judgment adverse to him which became final by reason of the alleged fault or negligence of his lawyer must prove his loss due to the injustice of the decision. He cannot base his action on the unsubstantiated and arbitrary supposition of the injustice of the decision. (Tuzon vs. Donato, 58 O.G. 6480)." (Exh. "D", id.; pp. 33-34) Significantly, petitioners did not appeal from the above decision, which is an implied acceptance by them of the correctness of the findings therein. Instead, it was respondent Atty. De Vera who appealed said decision to the Court of Appeals (C.A.-G.R. No. 35267-R), and the latter Court, although agreeing with the finding of the trial court that respondent really did not inform petitioners of the decision in Civil Case No. 2478 (Exh. "T"), affirmed, however, the lower court's finding that petitioners were not entitled to the damages claimed by them by reason of respondent's failure to notify them of the decision in Civil Case No. 2478. ... While the rule of res judicata in civil or criminal cases is not, strictly speaking, applicable in disbarment proceedings, which is neither a civil or a criminal proceeding intended to punish a lawyer or afford redress to private grievances but is a proceeding sui generis intended to safeguard the administration of justice by removing from the legal profession a person who has proved himself unfit to exercise such trust (p. 207, Martin, Legal and Judicial Ethics; Re Keenan, 86 ALR 679; De Jesus-Paras vs. Vailoces, Adm. Case No. 439, April 12,

1961; In re Montague & Dominguez, 3 Phil. 577, 588), still we consider the findings of the trial court as well as of the Court of Appeals in the damage, suit filed by petitioners against respondent Atty. De Vera based on the same grounds now invoked in this disbarment case relevant and highly persuasive in this case, especially as petitioners themselves have, as already observed, accepted and admitted the correctness of said findings. And we may add that we ourselves agree with respondent that petitioners had not been prejudiced or damaged in any way by the decision in Civil Case No. 2478, but that said decision appears in fact to be more favorable to them than could have been the case if the trial court had applied the law strictly against them in said case, ... (pp. 17-19, Report. pp. 39-41, rollo; emphasis supplied). The Solicitor General's Report continues and says: True it is that petitioners do not appear to have suffered any material or pecuniary damage by the failure of respondent Atty. De Vera to notify them of the decision in Civil Case No. 2478. It is no less true, however, that in failing to inform his clients, the petitioners, of the decision in said civil case, respondent failed to exercise "such skill, care, and diligence as men of the legal profession commonly possess and exercise in such matters of professional employment" (7 C.J.S. 979). The relationship of lawyer-client being one of confidence, there is ever present the need for the client's being adequately and fully informed and should not be left in the dark as to the mode and manner in which his interests are being defended. It is only thus that their faith in counsel may remain unimpaired (Oparel, Sr. vs. Aberia Adm. Case No. 595, July 30, 1971). As it happened in this case, because of respondent's failure to notify petitioners of the decision in Civil Case No. 2478, the latter were entirely caught by surprise, resulting in shock and mental and emotional disturbance to them, when the sheriff suddenly showed up in their home with a writ of execution of a judgment that they never knew had been rendered in the case, since their lawyer, the respondent, had totally failed to inform them about the same. ... (pp. 2324, Report, pp. 45-46, rollo; emphasis supplied). We concur with the above-quoted observations and add that the correctness of the decision in case 2478 is no ground for exonerating respondent of the charge but at most will serve only to mitigate his liability. While there is no finding of malice, deceit, or deliberate intent to cause damage to his clients, there is, nonetheless, proof of negligence, inattention, and carelessness on the part of respondent in his failure to give timely notice of the decision in question. Fortunately for respondent, his negligence did not result in any material or pecuniary damage to the herein complainants and for this reason We are not disposed to impose upon him what may be considered in a lawyer's career as the extreme penalty of disbarment. As stated in the very early case of In Re Macdougall: The disbarment of an attorney is not intended as a punishment, but is rather intended to protect the administration of justice by requiring that those who exercise this important function shall be competent, honorable, and reliable; men in whom courts and clients may repose confidence. This purpose should be borne in mind in the exercise of disbarment, and the power should be exercised with that caution which the serious consequences of the action involves. The profession of an attorney is acquired after long and laborious study. It is a lifetime profession. By years of patience, zeal, and ability, the attorney may have acquired a fixed means of support for himself and family of great pecuniary value, and the deprivation of which would result in irreparable injury. (3 Phil. 70, 77-78) In the words of former Chief Justice Marshall of the United States Court: On one hand, the profession of an attorney is of great importance to an individual and the prosperity of his whole life may depend on its exercise. The right to exercise it ought not to be lightly or capriciously taken from him. On the other, it is extremely that the respectability of the bar should be maintained and that its harmony with the bench should be preserved. For these objects, some controlling power, some discretion, ought to reside in the Court. This discretion, ought to be exercised

with great moderation and judgment; but it must be exercised. (Ex parte Burr. 9 Wheat 529; Martin, Legal & Judicial Ethics 1972 Ed. p. 213.) Although respondent's negligence does not warrant disbarment or suspension under the circumstances of the case, nonetheless it cannot escape a rebuke from Us as we hereby rebuke and censure him, considering that his failure to notify his clients of the decision in question manifests a lack of total dedication or devotion to their interest expected of him under his lawyer's oath and the Canons of Professional Ethics. Respondent's inaction merits a severe censure from the Court. WHEREFORE, on the basis of the evidence, the report and recommendation of the Solicitor General, and the fact that this appears to be the first misconduct of respondent in the exercise of his legal profession, We hereby hold said respondent GUILTY only of simple negligence in the performance of his duties as a lawyer of complainants, and We hereby SEVERELY CENSURE him. Let this decision be noted in respondent's record as a member of the Bar in this Court. SO ORDERED. Makalintal, C.J., Zaldivar, Castro, Fernando, Teehankee, Barredo, Makasiar, Antonio, Esguerra, Fernandez and Aquino, JJ., concur.