VERONICA S. SANTIAGO, BENJAMIN Q. HONTIVEROS, MR. SOCORRO F. MANAS, and TRINIDAD NORDISTA, complainants, vs. ATTY. AMADO R. FOJAS, respondent.
DAVIDE JR., J .: In their letter of 8 September 1993, the complainants, former clients of the respondent, pray that the latter be disbarred for "malpractice, neglect and other offenses which may be discovered during the actual investigation of this complaint." They attached thereto an Affidavit of Merit wherein they specifically allege: 1. That we are Defendants-Appellates [sic] in the Court of Appeals Case No. CA-G.N. CV No. 38153 of which to our surprise lost unnecessarily the aforesaid Petition [sic]. A close perusal of the case reveals the serious misconduct of our attorney on record, Atty. Amado Fojas tantamount to malpractice and negligence in the performance of his duty obligation to us, to defend us in the aforesaid case. That the said attorney without informing us the reason why and riding high on the trust and confidence we repose on him either abandoned, failed to act accordingly, or seriously neglected to answer the civil complaint against us in the sala of Judge Teresita Capulong Case No. 3526-V- 91 Val. Metro Manila so that we were deduced [sic] in default. 2. That under false pretenses Atty. Fojas assured us that everything was in order. That he had already answered the complaint so that in spite of the incessant demand for him to give us a copy he continued to deny same to us. Only to disclose later that he never answered it after all because according to him he was a very busy man. Please refer to Court of Appeals decision dated August 17, 1993. 3. That because of Atty. Amado Foja's neglect and malpractice of law we lost the Judge Capulong case and our appeal to the Court of Appeals. So that it is only proper that Atty. Fojas be disciplined and disbarred in the practice of his profession. In his Comment, the respondent admits his "mistake" in failing to file the complainants' answer in Civil Case No. 3526-V-91, but he alleges that it was cured by his filing of a motion for reconsideration, which was unfortunately denied by the court. He asserts that Civil Case No. 3526-V-91 was a "losing cause" for the complainants because it was based on the expulsion of the plaintiff therein from the Far Eastern University Faculty Association (FEUFA) which was declared unlawful in the final decision in NCR-OD-M-90-10-050. Thus, "[t]he unfavorable judgment in the Regional Trial Court is not imputable to [his] mistake but rather imputable to the merits of the case, i.e., the decision in the Expulsion case wherein defendants (complainants herein) illegally removed from the union (FEUFA) membership Mr. Paulino Salvador. . . ." He further claims that the complainants filed this case to harass him because he refused to share his attorney's fees in the main labor case he had handled for them. The respondent then prays for the dismissal of this complaint for utter lack of merit, since his failure to file the answer was cured and, even granting for the sake of argument that such failure amounted to negligence, it cannot warrant his disbarment or suspension from the practice of the law profession. The complainants filed a Reply to the respondent's Comment. Issues having been joined, we required the parties to inform us whether they were willing to submit this case for decision on the basis of the pleadings they have filed. In their separate compliance, both manifested in the affirmative. The facts in this case are not disputed. Complainants Veronica Santiago, Benjamin Hontiveros, Ma. Socorro Manas, and Trinidad Nordista were the President, Vice-President, Treasurer, and Auditor, respectively, of the FEUFA. They allegedly expelled from the union Paulino Salvador. The latter then commenced with the Department of Labor and Employment (DOLE) a complaint (NCR-OD-M-90-10-050) to declare illegal his expulsion from the union. In his resolution of 22 November 1990, Med-Arbiter Tomas Falconitin declared illegal Salvador's expulsion and directed the union and all its officers to reinstate Salvador's name in the roll of union members with all the rights and privileges appurtenant thereto. This resolution was affirmed in toto by the Secretary of Labor and Employment. Subsequently, Paulino Salvador filed with the Regional Trial Court (RTC) of Valenzuela, Metro Manila, Branch 172, a complaint against the complainants herein for actual, moral, and exemplary damages and attorney's fees, under Articles 19, 20, and 21 of the Civil Code. The case was docketed as Civil Case No. 3526-V-91. As the complainants' counsel, the respondent filed a motion to dismiss the said case on grounds of (1) res judicataby virtue of the final decision of the Med-Arbiter in NCR-OD-M-90-10-050 and (2) lack of jurisdiction, since what was involved was an intra-union issue cognizable by the DOLE. Later, he filed a supplemental motion to dismiss. The trial court, per Judge Teresita Dizon-Capulong, granted the motion and ordered the dismissal of the case. Upon Salvador's motion for reconsideration, however, it reconsidered the order of dismissal, reinstated the case, and required the complainants herein to file their answer within a nonextendible period of fifteen days from notice. Instead of filing an answer, the respondent filed a motion for reconsideration and dismissal of the case. This motion having been denied, the respondent filed with this Court a petition for certiorari, which was later referred to the Court of Appeals and docketed therein as CA-G.R. SP No. 25834. Although that petition and his subsequent motion for reconsideration were both denied, the respondent still did not file the complainants' answer in Civil Case No. 3526-V-91. Hence, upon plaintiff Salvador's motion, the complainants were declared in default, and Salvador was authorized to present his evidence ex-parte. The respondent then filed a motion to set aside the order of default and to stop the ex-parte reception of evidence before the Clerk of Court, but to no avail. Thereafter, the trial court rendered a decision ordering the complainants herein to pay, jointly and severally, plaintiff Salvador the amounts of P200,000.00 as moral damages; P50,000.00 as exemplary damages or corrective damages; and P65,000.00 as attorney's fees; plus cost of suit. The complainants, still assisted by the respondent, elevated the case to the Court of Appeals, which, however, affirmed in toto the decision of the trial court. The respondent asserts that he was about to appeal the said decision to this Court, but his services as counsel for the complainants and for the union were illegally and unilaterally terminated by complainant Veronica Santiago. The core issue that presents itself is whether the respondent committed culpable negligence, as would warrant disciplinary action, in failing to file for the complainants an answer in Civil Case No. 3526- V-91 for which reason the latter were declared in default and judgment was rendered against them on the basis of the plaintiff's evidence, which was received ex-parte. It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person who may wish to become his client. He has the right to decline employment, 1 subject, however, to Canon 14 of the Code of Professional Responsibility. Once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him. 2 He must serve the client with competence and diligence, 3 and champion the latter's cause with wholehearted fidelity, care, and devotion. 4 Elsewise stated, he owes entire devotion to the interest of the client, warm zeal in the maintenance and defense of his client's rights, and the exertion of his utmost learning and ability to the end that nothing be taken or withheld from his client, save by the rules of law, legally applied. 5 This simply means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or defense. 6 If much is demanded from an attorney, it is because the entrusted privilege to practice law carries with it the correlative duties not only to the client but also to the court, to the bar, and to the public. A lawyer who performs his duty with diligence and candor not only protects the interest of his client; he also serves the ends of justice, does honor to the bar, and helps maintain the respect of the community to the legal profession. 7
The respondent admits that it was his duty to file an answer in Civil Case No. 3526-V-91. He justifies his failure to do so in this wise: [I]n his overzealousness to question the Denial Order of the trial court, 8 [he] instead, thru honest mistake and excusable neglect, filed a PETITION FOR CERTIORARI with the Honorable Court, docketed as G.R. No. 100983. . . . And, when the Court of Appeals, to which G.R. No. 100983 was referred, dismissed the petition, he again "inadvertently" failed to file an answer "[d]ue to honest mistake and because of his overzealousness as stated earlier. . . . " In their Reply, the complainants allege that his failure to file an answer was not an honest mistake but was "deliberate, malicious and calculated to place them on the legal disadvantage, to their damage and prejudice" for, as admitted by him in his motion to set aside the order of default, his failure to do so was "due to volume and pressure of legal work." 9 In short, the complainants want to impress upon this Court that the respondent has given inconsistent reasons to justify his failure to file an answer. We agree with the complainants. In his motion for reconsideration of the default order, the respondent explained his non-filing of the required answer by impliedly invoking forgetfulness occasioned by a large volume and pressure of legal work, while in his Comment in this case he attributes it to honest mistake and excusable neglect due to his overzealousness to question the denial order of the trial court. Certainly, "overzealousness" on the one hand and "volume and pressure of legal work" on the other are two distinct and separate causes or grounds. The first presupposes the respondent's full and continuing awareness of his duty to file an answer which, nevertheless, he subordinated to his conviction that the trial court had committed a reversible error or grave abuse of discretion in issuing an order reconsidering its previous order of dismissal of Salvador's complaint and in denying the motion to reconsider the said order. The second ground is purely based on forgetfulness because of his other commitments. Whether it be the first or the second ground, the fact remains that the respondent did not comply with his duty to file an answer in Civil Case No. 3526-V-91. His lack of diligence was compounded by his erroneous belief that the trial court committed such error or grave abuse of discretion and by his continued refusal to file an answer even after he received the Court of Appeals' decision in the certiorari case. There is no showing whatsoever that he further assailed the said decision before this Court in a petition for review under Rule 45 of the Rules of Court to prove his claim of overzealousness to challenge the trial court's order. Neither was it shown that he alleged in his motion to lift the order of default that the complainants had a meritorious defense. 10 And, in his appeal from the judgment by default, he did not even raise as one of the errors of the trial court either the impropriety of the order of default or the court's grave abuse of discretion in denying his motion to lift that order. Pressure and large volume of legal work provide no excuse for the respondent's inability to exercise due diligence in the performance of his duty to file an answer. Every case a lawyer accepts deserves his full attention, diligence, skill, and competence, regardless of its importance and whether he accepts it for a fee or for free. All told, the respondent committed a breach of Canon 18 of the Code of Professional Responsibility which requires him to serve his clients, the complainants herein, with diligence and, more specifically, Rule 18.03 thereof which provides: "A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable." The respondent's negligence is not excused by his claim that Civil Case No. 3526-V-91 was in fact a "losing cause" for the complainants since the claims therein for damages were based on the final decision of the Med-Arbiter declaring the complainants' act of expelling Salvador from the union to be illegal. This claim is a mere afterthought which hardly persuades us. If indeed the respondent was so convinced of the futility of any defense therein, he should have seasonably informed the complainants thereof. Rule 15.05, Canon 15 of the Code of Professional Responsibility expressly provides: A lawyer, when advising his client, shall give a candid and honest opinion on the merits and probable results of the client's case, neither overstating nor understanding the prospects of the case. Then too, if he were unconvinced of any defense, we are unable to understand why he took all the trouble of filing a motion to dismiss on the grounds of res judicata and lack of jurisdiction and of questioning the adverse ruling thereon initially with this Court and then with the Court of Appeals, unless, of course, he meant all of these to simply delay the disposition of the civil case. Finally, the complainants were not entirely without any valid or justifiable defense. They could prove that the plaintiff was not entitled to all the damages sought by him or that if he were so, they could ask for a reduction of the amounts thereof. We do not therefore hesitate to rule that the respondent is not free from any blame for the sad fate of the complainants. He is liable for inexcusable negligence. WHEREFORE, ATTY. AMADO R. FOJAS is hereby REPRIMANDED and ADMONISHED to be, henceforth, more careful in the performance of his duty to his clients. SO ORDERED.
G.R. No. 77439 August 24, 1989 DONALD DEE petitioner, vs. COURT OF APPEALS and AMELITO MUTUC, respondents. Tanjuatco, Oreta & Tanjuatco for petitioner. Amelito R. Mutuc for and in his own behalf
REGALADO, J .: Petitioner assails the resolution of respondent court, dated February 12,1987, reinstating its decision promulgated on May 9, 1986 in AC- G.R. CV No. 04242 wherein it affirmed the decision of the that court holding that the services rendered by private respondent was on a professional, and not on a gratis et amore basis and ordering petitioner to pay private respondent the sum of P50,000.00 as the balance of the latter's legal fee therefor. The records show that sometime in January, 1981, petitioner and his father went to the residence of private respondent, accompanied by the latter's cousin, to seek his advice regarding the problem of the alleged indebtedness of petitioner's brother, Dewey Dee, to Caesar's Palace, a well-known gambling casino at Las Vegas, Nevada, U.S.A. Petitioner's father was apprehensive over the safety of his son, Dewey, having heard of a link between the mafia and Caesar's Palace and the possibility that his son may be harmed at the instance of the latter. 1
Private respondent assured petitioner and his father that he would inquire into the matter, after which his services were reportedly contracted for P100,000. 00. From his residence, private respondent called up Caesar's Palace and, thereafter, several long distance telephone calls and two trips to Las Vegas by him elicited the information that Dewey Dee's outstanding account was around $1,000,000.00. Further investigations, however, revealed that said account had actually been incurred by Ramon Sy, with Dewey Dee merely signing for the chits. Private respondent communicated said information to petitioner's a father and also assured him that Caesar's Palace was not in any way linked to the mafia. 2
In June, 1981, private respondent personally talked with the president of Caesar's Palace at Las Vegas, Nevada. He advised the president that for the sake and in the interest of the casino it would be better to make Ramon Sy answer for the indebtedness. The president told him that if he could convince Ramon Sy to acknowledge the obligation, Dewey Dee would be exculpated from liability for the account. Upon private respondent's return to Manila, he conferred with Ramon Sy and the latter was convinced to acknowledge the indebtedness. In August, 1981, private respondent brought to Caesar's Palace the letter of Ramon Sy owning the debt and asking for a discount. Thereafter, the account of Dewey Dee was cleared and the casino never bothered him. 3
Having thus settled the account of petitioner's brother, private respondent sent several demand letters to petitioner demanding the balance of P50,000.00 as attorney's fees. Petitioner, however, ignored said letters. On October 4, 1982, private respondent filed a complaint against petitioner in the Regional Trial Court of Makati, Branch CXXXVI, for the collection of attorney's fees and refund of transport fare and other expenses. 4
Private respondent claimed that petitioner formally engaged his services for a fee of P100,000.00 and that the services he rendered were professional services which a lawyer renders to a client. Petitioner, however, denied the existence of any professional relationship of attorney and client between him and private respondent. He admits that he and his father visited private respondent for advice on the matter of Dewey Dee's gambling account. However, he insists that such visit was merely an informal one and that private respondent had not been specifically contracted to handle the problem. On the contrary, respondent Mutuc had allegedly volunteered his services "as a friend of defendant's family" to see what he could do about the situation. As for the P50,000.00 inceptively given to private respondent, petitioner claims that it was not in the nature of attomey's fees but merely "pocket money" solicited by the former for his trips to Las Vegas and the said amount of P50,000.00 was already sufficient remuneration for his strictly voluntary services. After trial, the court a quo rendered judgment ordering herein petitioner to pay private respondent the sum of P50,000.00 with interest thereon at the legal rate from the filing of the complaint on October 4, 1982 and to pay the costs. All other claims therein of private respondent and the counterclaim of petitioner were dismissed. 5 On appeal, said judgment was affirmed by the then Intermediate Appellate Court on May 9, 1986. 6
Petitioner, in due time, filed a motion for reconsideration contending that the Appellate Court overlooked two important and decisive factors, to wit: (1) At the time private respondent was ostensibly rendering services to petitioner and his father, he was actually working "in the interest" and "to the advantage" of Caesar's Palace of which he was an agent and a consultant, hence the interests of the casino and private respondent were united in their objective to collect from the debtor; and (2) Private respondent is not justified in claiming that he rendered legal services to petitioner and his father in view of the conflicting interests involved. In its resolution of July 31, 1986, respondent court reconsidered its decision and held that the sum of P50,000.00 already paid by petitioner to private respondent was commensurate to the services he rendered, considering that at the time he was acting as counsel for petitioner he was also acting as the collecting agent and consultant of, and receiving compensation from, Caesar's Palace. 7 However, upon a motion for reconsideration thereafter filed by private respondent, the present respondent Court of Appeals issued another resolution, dated February 12, 1987, reinstating the aforesaid decision of May 9, 1986. 8
Petitioner is now before us seeking a writ of certiorari to overturn the latter resolution. It is necessary, however, to first clear the air of the questions arising from the change of stand of the First Civil Cases Division of the former Intermediate Appellate Court when, acting on the representations in petitioner's undated motion for reconsideration supposedly filed on May 28,1986, it promulgated its July 31, 1986 resolution reconsidering the decision it had rendered in AC-G.R. CV No. 04242. Said resolution was, as earlier noted, set aside by the Twelfth Division of the reorganized Court of Appeals which, at the same time, reinstated the aforesaid decision. Because of its clarificatory relevance to some issues belatedly raised by petitioner, which issues should have been disregarded 9 but were nevertheless auspiciously discussed therein, at the risk of seeming prolixity we quote hereunder the salient portions of the assailed resolution which demonstrate that it was not conceived in error. The reason for then IAC's action is that it deemed the P50,000.00 plaintiff-appellee had previously received from defendant-appellant as adequate compensation for the services rendered by am for defendant- appellant, considering that at the time plaintiff-appellee was acting as counsel for defendant-appellant, he was also acting as the collecting agent and consultant of, and receiving compensation from Caesar's Palace in Las Vegas, Nevada, the entity with whom defendant- appellant was having a problem and for which he had engaged the services of plaintiff-appellee. The crux of the matter, therefore, is whether or not the evidence on record justifies this finding of the IAC. Plaintiff-appellee maintains that his professional services to defendant-appellant were rendered between the months of July and September of 1981, while his employment as collection agent and consultant of Caesar's Palace covered the period from December 1981 to October 1982. This positive testimony of plaintiff-appellee, however, was disregarded by the IAC for the following reasons: 1. In August l983, plaintiff-appellee testified that he was a representative of Caesar's Palace in the Philippines 'about two or three years ago.' From this the IAC concluded that the period covers the time plaintiff- appellee rendered professional services to defendant- appellant. We do not think that IAC's conclusion is necessarily correct. When plaintiff-appellee gave the period 'about two or three years ago,' he was merely stating an approximation. Considering that plaintiff-appellee was testifying in August 1983, and his employment with Caesar's Palace began in December 1981, the stated difference of two years is relatively correct. . . . 2. The plaintiff appellee had testified that he was working for the sake,' 'in the interest,' and 'to the advantage' of Caesar's Palace. x x x "We detect nothing from the above which would support IAC's conclusion that plaintiff-appellee was then in the employ of Caesar's Palace. What is gathered is that plaintiff-appellee was simply fulfilling a condition which plaintiff-appellee had proposed to, and was accepted by, Caesar's Palace, for the release of Dewey Dee from his obligation to Caesar's Palace. 3. Caesar's Palace would not have listened to, and acted upon, the advice of plaintiff-appellee if he were no longer its consultant and alter ego. Why not? We are witnesses to many successful negotiations between contending parties whose representing lawyers were not and were never in the employ of the opposite party. The art of negotiation is precisely one of the essential tools of a good practitioner, and mastery of the art takes into account the circumstance that one may be negotiating, among others, with a person who may not only be a complete stranger but antagonistic as well. The fact that plaintiff- appellee was able to secure a favorable concession from Caesar's Palace for defendant-appellant does not justify the conclusion that it could have been secured only because of plaintiff-appellee's professional relationship with Caesar's Palace. It could have been attributable more to plaintiff-appellee's stature as a former ambassador of the Philippines to the United States, his personality, and his negotiating technique. Assuming, however, that plaintiff-appellee was employed by Caesar's Palace during the time that he was rendering professional services for defendant- appellant, this would not automatically mean the denial of additional attorney's fees to plaintiff appellee. The main reason why the IAC denied plaintiff-appellee additional compensation was because the latter was allegedly receiving compensation from Caesar's Palace, and, therefore, the amount of P50,000.00 plaintiff-appellee had previously received from defendant-appellant is 'reasonable and commensurate. This conclusion, however, can only be justified if the fact and amount of remuneration had been established. These were not proven at all. No proof was presented as to the nature of plaintiff-appellee's remuneration, and the mode or manner in which it was paid.. . . 10
Both the lower court and the appellate court concur in their findings that there was a lawyer-client relationship between petitioner and private respondent Mutuc. We find no reason to interfere with this factual finding. There may be instances when there is doubt as to whether an attorney-client relationship has been created. The issue may be raised in the trial court, but once the trial court and the Court of Appeals have found that there was such a relationship the Supreme Court cannot disturb such finding of fact, 11 absent cogent reasons therefor. The puerile claim is advanced that there was no attorney-client relationship between petitioner and private respondent for lack of a written contract to that effect. The absence of a written contract will not preclude the finding that there was a professional relationship which merits attorney's fees for professional services rendered. Documentary formalism is not an essential element in the employment of an attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice and assistance of an attorney is sought and received in any matter pertinent to his profession. An acceptance of the relation is implied on the part of the attorney from his acting on behalf of his client in pursuance of a request from the latter. 12
There is no question that professional services were actually rendered by private respondent to petitioner and his family. Through his efforts, the account of petitioner's brother, Dewey Dee, with Caesar's Palace was assumed by Ramon Sy and petitioner and his family were further freed from the apprehension that Dewey might be harmed or even killed by the so-called mafia. For such services, respondent Mutuc is indubitably entitled to receive a reasonable compensation and this right cannot be concluded by petitioner's pretension that at the time private respondent rendered such services to petitioner and his family, the former was also the Philippine consultant of Caesar's Palace. On the first aspect, the evidence of record shows that the services of respondent Mutuc were engaged by the petitioner for the purposes hereinbefore discussed. The previous partial payments totalling P50,000.00 made by petitioner to respondent Mutuc and the tenor of the demand letters sent by said private respondent to petitioner, the receipt thereof being acknowledged by petitioner, ineluctably prove three facts, viz: that petitioner hired the services of private respondent Mutuc; that there was a prior agreement as to the amount of attorney's fees to be given to the latter; and there was still a balance due and payable on said fees. The duplicate original copy of the initial receipt issued and signed in this connection by private respondent reads: RECEIVED from Mr. Donald Dee, for professional services rendered, the sum of THIRTY THOUSAND PESOS (P30,000.00) as partial payment, leaving a balance of SEVENTY THOUSAND PESOS (P70,000.00), payable on demand. Makati, Metro Manila, July 25,1981. 13
Thereafter, several demand letters for payment of his fees, dated August 6, 1981, December 2, 1981, January 29, 1982, March 7, 1982, and September 7, 1982 were sent by private respondent to petitioner, 14 all to no avail. On the second objection, aside from the facts stated in the aforequoted resolution of respondent Court of Appeals, it is also not completely accurate to judge private respondent's position by petitioner's assumption that the interests of Caesar's Palace were adverse to those of Dewey Dee. True, the casino was a creditor but that fact was not contested or opposed by Dewey Dee, since the latter, as verifications revealed, was not the debtor. Hence, private respondent's representations in behalf of petitioner were not in resistance to the casino's claim but were actually geared toward proving that fact by establishing the liability of the true debtor, Ramon Sy, from whom payment was ultimately and correctly exacted. 15
Even assuming that the imputed conflict of interests obtained, private respondent's role therein was not ethically or legally indefensible. Generally, an attorney is prohibited from representing parties with contending positions. However, at a certain stage of the controversy before it reaches the court, a lawyer may represent conflicting interests with the consent of the parties. 16 A common representation may work to the advantage of said parties since a mutual lawyer, with honest motivations and impartially cognizant of the parties' disparate positions, may well be better situated to work out an acceptable settlement of their differences, being free of partisan inclinations and acting with the cooperation and confidence of said parties. Here, even indulging petitioner in his theory that private respondent was during the period in question an agent of Caesar's Palace, petitioner was not unaware thereof, hence he actually consented to and cannot now decry the dual representation that he postulates. This knowledge he admits, thus: It is a fair question to ask why, of all the lawyers in the land, it was the private respondent who was singled out by the petitioner's father for consultation in regard to an apparent problem, then pending in Caesar's Palace. The testimony of Arthur Alejandrino, cousin to private respondent, and the admission of the private respondent himself supply the answer. Alejandrino testified that private respondent was the representative of Caesar's Palace in the Philippines (p. 23, t.s.n., Nov. 29, 1983).lwph1.t Private respondent testified that he was such representative tasked by the casino to collect the gambling losses incurred by Filipinos in Las Vegas. (p. 5, t.s.n., Sept. 21, 1983). 17
A lawyer is entitled to have and receive the just and reasonable compensation for services rendered at the special instance and request of his client and as long as he is honestly and in good faith trying to serve and represent the interests of his client, the latter is bound to pay his just fees. 18
WHEREFORE, the resolution of respondent Court of Appeals, dated February 12,1987, reinstating its original decision of May 9, 1986 is hereby AFFIRMED, with costs against l petitioner. SO ORDERED.
A.C. No. 3745 October 2, 1995 CYNTHIA B. ROSACIA, complainant, vs. ATTY. BENJAMIN B. BULALACAO, respondent. R E S O L U T I O N
FRANCISCO, J .: Complainant Cynthia B. Rosacia, president of Tacma, Phils., Inc., a duly registered corporation, filed a complaint for disbarment dated October 25, 1991, against herein respondent Atty. Benjamin B. Bulalacao. Acting on the complaint, the Court in a resolution dated February 24, 1992, resolved to refer the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. Commissioner Victor C. Fernandez, the IBP investigating commissioner, found that respondent breached his oath of office and accordingly recommended respondent's suspension from the practice of law for three (3) months. 1 In a resolution dated July 30, 1994, the IBP Board of Governors resolved to adopt and approve the commissioner's report and recommendation. 2
As found by the IBP, the undisputed facts are as follows: On June 1, 1990, by virtue of a written Agreement (Exh. "3-a"), respondent Atty. Benjamin B. Bulalacao was hired as retained counsel of a corporation by the name of Tacma Phils., Inc. On October 31, 1990, the lawyer-client relationship between the respondent and Tacma Phils., Inc. was severed as shown by another agreement of even date (Exh. "3-b"). On July, 1991, or after almost nine (9) months from the date respondent's retainer agreement with Tacma, Phils., Inc. was terminated, several employees of the corporation consulted the respondent for the purpose of filing an action for illegal dismissal. Thereafter, he agreed to handle the case for the said employees as against Tacma, Phils., Inc. by filing a complaint before the National Labor Relations Commission, and appearing in their behalf. 3
The sole issue to be addressed is whether or not respondent breached his oath of office for representing the employees of his former client, Tacma, Phils., Inc., after the termination of their attorney-client relationship. We agree with the findings of the IBP that respondent breached his oath of office. Respondent does not now dispute this. In fact, in his motion for reconsideration, respondent admitted that he "did commit an act bordering on grave misconduct, if not outright violation of his attorney's oath". 4 However, respondent is pleading for the Court's compassion and leniency to reduce the IBP recommended three months suspension to either fine or admonition with the following proffered grounds: that he is relatively new in the profession having been admitted to the Philippine Bar on April 10, 1990 at the age of 46 when the complained conduct was committed on August 1991; that he is of humble beginnings and his suspension will deprive his family of its only source of livelihood he being the sole bread winner in the family; that he has fully realized his mistake and the gravity of his offense for which he is fully repentant; that he has severed his attorney-client relationship with the employees of Tacma, Phils., Inc. by inhibiting himself and withdrawing his appearance as counsel in the labor case against Tacma, Phils., Inc.; and that he pledges not to commit the same mistake and to henceforth strictly adhere to the professional standards set forth by the Code of Professional Responsibility. The Court reiterates that an attorney owes loyalty to his client not only in the case in which he has represented him but also after the relation of attorney and client has terminated as it is not good practice to permit him afterwards to defend in another case other person against his former client under the pretext that the case is distinct from, and independent of the former case. 5 It behooves respondent not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double dealing for only then can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice. 6 The relation of attorney and client is one of confidence and trust in the highest degree. 7 A lawyer owes fidelity to the cause of his client and he ought to be mindful of the trust and confidence reposed in him. 8 An attorney not only becomes familiar with all the facts connected with his client's cause, but also learns from his client the weak and strong points of the case. No opportunity must be given attorneys to take advantage of the secrets of clients obtained while the confidential relation of attorney and client exists. Otherwise, the legal profession will suffer by the loss of the confidence of the people. 9
Respondent's plea for leniency cannot be granted. We note that respondent is new in the profession as he was just admitted to the Philippine Bar on April 10, 1990, when the breach of his oath of office occurred more than a year after. Having just hurdled the bar examinations which included an examination in legal ethics, surely the precepts of the Code of Professional Responsibility to keep inviolate the client's trust and confidence even after the attorney-client relation is terminated 10 must have been still fresh in his mind. A lawyer starting to establish his stature in the legal profession must start right and dutifully abide by the norms of conduct of the profession. This will ineluctably redound to his benefit and to the upliftment of the legal profession as well. ACCORDINGLY, respondent is hereby SUSPENDED from the practice of law for three months. Let this resolution be attached to respondent's record in the Office of the Bar Confidant and copies thereof furnished to all courts and to the Integrated Bar of the Philippines.
A.C. No. 2597 March 12, 1998 GLORITO V. MATURAN, petitioner, vs. ATTY. CONRADO S. GONZALES, respondent. R E S O L U T I O N
ROMERO, J .: A complaint for disbarment was filed with this Court on October 25, 1983, by Glorito V. Maturan against his counsel, Atty. Conrado S. Gonzales, charging him with immoral, unethical, and anomalous acts. The respondent filed his comment thereto on February 6, 1984. On November 11, 1997, or after thirteen (13) years, the Board of Governors of the Integrated Bar of the Philippines submitted their report and recommendation on the instant case. The facts, as culled from the records, are as follows: Spouses Antonio and Gloria Casquejo instituted their son-in-law, Glorito V. Maturan (herein petitioner), as their attorney-in-fact, through a Special Power of Attorney (SPA) dated November 6, 1981. Said SPA authorized Maturan to file ejectment cases against squatters occupying Lot 1350-A, Psd-50375, located in General Santos City, as well as criminal cases against the latter for violation of P.D. 772, again in connection with said lot. Respondent, Atty. Conrado Gonzales, prepared and notarized said Special Power of Attorney. Subsequently, Glorito Maturan engaged the services of respondent in ejecting several squatters occupying Lot 1350-A, Psd-50735. While said lot was registered in the name of Celestino Yokingco, Antonio Casquejo had, however, instituted a case for reconveyance of property and declaration of nullity against the former, docketed as Civil Case No. 2067. As a consequence of his engagement by petitioner, respondent Gonzales filed Civil Case No. 1783-11 for Forcible Entry and Damages against several individuals. On February 18, 1983, a judgment was rendered in favor of petitioner. Petitioner, through respondent, filed a motion for issuance of a writ of execution on March 10, 1983. In the interim, the parties to Civil Case No. 2067 entered into a compromise agreement, which was judicially approved in a judgment dated March 28, 1983. On June 22, 1983, while the motion for issuance of a writ of execution was pending, and without withdrawing as counsel for petitioner, respondent filed, on behalf of Celestino Yokingco, et al., Civil Case No. 2746, an action to annul the judgment rendered in Civil Case No. 2067. The action was predicated on the lack of authority on the part of petitioner to represent Antonio and Gloria Casquejo, as no such authorization was shown to be on record in Civil Case No. 2067. On August 24, 1983, respondent, on behalf of Celestino Yokingco, et al., also filed Special Civil Case No. 161 for injunction with a prayer for preliminary injunction, with damages, against petitioner. Aggrieved by respondent's acceptance of professional employment from their adversary in Civil Case No. 2067, and alleging that privileged matters relating to the land in question had been transmitted by petitioner to respondent in Civil Case 1783-11, petitioner filed an administrative complaint against the former for immoral, unethical, and anomalous acts and asked for his disbarment. Respondent, in a comment dated January 25, 1984, denied having committed any malicious, unethical, unbecoming, immoral, or anomalous act against his client. Respondent declared that he was of the belief that filing a motion for issuance of a writ of execution was the last and final act in the lawyer-client relationship between himself and petitioner, and that his formal withdrawal as counsel for the Casquejos was unnecessary in order to sever the lawyer-client relationship between them. Furthermore, he alleged that his acceptance of employment from Yokingco was for him, an opportunity to honestly earn a little more for his children's sustenance. The investigating commissioner of the Integrated Bar of the Philippines, in his report dated August 21, 1997, found respondent guilty of representing conflicting interests and recommended that he be suspended for three (3) years. The Board of Governors of the IBP adopted and approved the report and recommendation of the investigating commissioner but recommended that the suspension be reduced from three (3) years to one (1) year. This Court adopts the findings of the investigating commissioner finding respondent guilty of representing conflicting interests. It is improper for a lawyer to appear as counsel for one party against the adverse party who is his client in a related suit, as a lawyer is prohibited from representing conflicting interests or discharging inconsistent duties. He may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his present or former client. 1 That the representation of conflicting interest is in good faith and with honest intention on the part of the lawyer does not make the prohibition inoperative. The reason for the prohibition is found in the relation of attorney and client, which is one of trust and confidence of the highest degree. A lawyer becomes familiar with all the facts connected with his client's case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge must be considered sacred and guarded with care. No opportunity must be given him to take advantage of the client's secrets. A lawyer must have the fullest confidence of his client. For if the confidence is abused, the profession will suffer by the loss thereof. 2
This Court finds respondent's actuations violative of Canon 6 of the Canons of Professional Ethics which provide in part: It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose. Moreover, respondent's justification for his actions reveal a patent ignorance of the fiduciary obligations which a lawyer owes to his client. A lawyer-client relationship is not terminated by the filing of a motion for a writ of execution. His acceptance of a case implies that he will prosecute the case to its conclusion. He may not be permitted to unilaterally terminate the same to the prejudice of his client. As to the recommendation that the term of suspension be reduced from three years to one year, we find the same to be unwarranted. In similar cases decided by the Supreme Court, the penalty of two or three years suspension has been imposed where respondent was found guilty of representing conflicting interests. In Vda. De Alisbo vs.Jalandoon, Sr., 3 the respondent, who appeared for complainant in a case for revival of judgment, even though he had been the counsel of the adverse party in the case sought to be revived, was suspended for a period of two years. In Bautista vs.Barrios, 4 a suspension of two years was imposed on respondent Barrios, who had drafted a deed of partition for petitioner, but who appeared for the other party therein, when the same was sought to be enforced by petitioner. In PNB vs. Cedo, 5 the Court even suspended the respondent therein for three years, but only because respondent not only represented conflicting interests, but also deliberately intended to attract clients with interests adverse to his former employer. Finally, in Natan vs.Capule, 6 respondent was suspended for two years after he accepted professional employment in the very case in which his former client was the adverse party. ACCORDINGLY, this Court resolves to MODIFY the IBP recommendation to suspend respondent for one year and modifies it to SUSPENSION from the practice of law for TWO (2) YEARS, effective immediately. SO ORDERED.
A.C. No. 4346 April 3, 2002 ERLINDA ABRAGAN, MILA GINA JAVIER, REYNALDO MERCADO, PATERNO TORRES, BENIGNA ANTIBO, ELEISER SALVADOR, EDNA SAPON, JULIANA CUENCA, ESPERANZA BUENAFE, VICENTE BARNAGA, MARTHA SAPON, JOSEFINA OPEA, PUREZA WABE, RONULFO LOPEZ, DOMINADOR HERNANDEZ, FELIPA EMBATE, ROQUE CATIIL, JERRY SAPON, CONCEPCION MATANOG, and PABLO SALOMON,complainants, vs. ATTY. MAXIMO G. RODRIGUEZ, respondent. PANGANIBAN, J .: Lawyers violate their oath of office when they represent conflicting interests. They taint not only their own professional practice, but the entire legal profession itself.1wphi1.nt The Case and the Facts Before us is a verified Petition 1 praying for the disbarment of Atty. Maximo G. Rodriguez because of alleged illegal and unethical acts. The Petition relevantly reads as follows: "2. That sometime in 1986, the petitioners hired the services of the respondent and the latter, represented the former in the case entitled PABLO SALOMON et al vs. RICARDO DACALUZ et al., before the Municipal Trial Court in Cities, Cagayan de Oro City, Branch 3 docketed as Civil Case No. 11204, for Forcible Entry with Petition for a Writ of Preliminary Injunction and Damages, [and] a Certified True and Correct Copy of the COMPLAINT by Clerk of Court III Gerardo B. Ucat of the said Court, is herewith attached to the original of this PETITION, while photocopies of the same are also attached to the duplicate copies of this same Petition and marked as Annex 'A' hereof; "3. That after the Case No. 11204 was finally won, and a Writ of Execution was issued by the Honorable Municipal Trial Court in Cities of Cagayan de Oro City, Branch 3, the same respondent lawyer represented the petitioners herein; "4. That when respondent counsel disturbed the association (Cagayan de Oro Landless Residents Association, Inc.), to which all the complainants belong, by surreptitiously selling some rights to other persons without the consent of the petitioners herein, they decided to sever their client-lawyer relationship; "5. That in fact, the National Bureau of Investigation of Cagayan de Oro City, is presently undertaking an investigation on the illegal activities of Atty. Maximo Rodriguez pertaining to his express involvement in the illegal and unauthorized apportionment, assignment and sale of parcels of land subject to the Case No. 11204, where he represented the poor landless claimants of Cagayan de Oro City, which include your petitioners in this case; "6. That petitioners herein later filed an indirect contempt charge under Civil Case No. 11204 against Sheriff Fernando Loncion et al., on August 2, 1991 engaging the services of Atty. LORETO O. SALVA, SR., an alleged former student of law of Atty. Maximo Rodriguez, [and a] certified true and correct copy of the complaint thereat consisting of four (4) pages is herewith attached and photocopies of which are also attached to the duplicates hereof, and correspondingly marked as their Annex 'B'; "7. That respondent lawyer, Atty. Maximo Rodriguez, (in the Indirect Contempt Case under the same Civil Case No. 11204,) REPRESENTED and actively took up the defense of FERNANDO LONCION et al. much to the dismay, damage and prejudice of the herein petitioners, [and] a copy of Atty. Rodriguez's Answer, which is also certified true and correct by Clerk of Court III Gerardo Ucat of Branch 3 of MTCC Cagayan de Oro City, consisting of three (3) pages, is attached to the original of this Petition, while photocopies of the same are attached to the other copies hereof and accordingly marked as Annex 'C'; "8. That the records will bear the petitioners out that their counsel, Atty. SALVA SR. later on withdrew the case of Indirect Contempt upon the suggestion of Atty. Maximo Rodriguez; and instead, filed the Motion for the Issuance of an Alias Writ of Execution; "9. That on January 12, 1993, the herein respondent, without consulting the herein Petitioners who are all poor and ignorant of court procedures and the law, filed in behalf of the plaintiffs (which include the herein Petitioners) in Civil Case No. 11204, a Motion to Withdraw Plaintiffs' Exhibits, [and] a certified true and correct copy of said Motion by Mr. Gerardo Ucat of MTCC Branch 3, Cagayan de Oro City is herewith attached to the original of this Petition, while photocopies of the same are also attached to the rest of the copies of this same Petition, and are correspondingly marked as their Annex 'D'. "10. That the illegal and unethical actions of Atty. Maximo Rodriguez are most obnoxious, condemnable, and highly immoral, to say the least, more so if we consider his social standing and ascendancy in the community of Cagayan de Oro City; "11. That the records of Civil Case No. 11204 which are voluminous will bear the petitioners' allegations against the herein respondent, who, after representing them initially, then transferring allegiance and services to the adverse parties (Lonchion, Palacio and NHA Manager), came back to represent the herein petitioners without any regard [for] the rules of law and the Canons of Professional Ethics, which is highly contemptible and a clear violation of his oath as a lawyer and an officer of the courts of law; "12. That these acts are only those that records will bear, because outside of the court records, respondent, without regard [for] delicadeza, fair play and the rule of law, has assigned, apportioned and sold parcels of land[,] subject matter in Civil Case No. 11204 which legally have been pronounced and decided to be in the possession of the plaintiffs in Civil Case No. 11204, who are partly the petitioners herein. Thus, they cannot yet enjoy the fruits of the tedious and protracted legal battle because of respondent's illegal acts, which have instilled fear among the plaintiffs and the petitioners herein; "13. That respondent lawyer even represented ERLINDA ABRAGAN, one of the herein petitioners, in a later proceedings in Civil Case No. 11204 wherein the apportionment of parcels of land was erroneously, unprocedurally and illegally submitted to a commissioner, and that ERLINDA ABRAGAN, after winning in the said Civil Case was later on dispossessed of her rights by respondent counsel's maneuver, after the decision (in Civil Case No. 11208) became final executory; "14. That to make matters worse, respondent Atty. Rodriguez eventually fenced an area consisting of about 10, 200 square meters within Lot No. 1982[,] the subject matter in Civil Case No. 11204 without the consent of the herein petitioners. He even openly and publicly proclaimed his possession and ownership thereof, which fact is again and also under NBI investigation; "15. That all the foregoing acts of respondent lawyer plus his continuing and ongoing illegal and unethical maneuvers have deprived the herein petitioners of their vested rights to possess and eventually own the land they have for decades possessed, and declared as such by final judgment in Civil Case No. 11204." In his Comment, 2 respondent flatly denied the accusations of petitioners. He explained that the withdrawal of the exhibits, having been approved by the trial court, was not "illegal, obnoxious, undesirable and highly immoral." He added that he took over the 8,000 square meters of land only after it had been given to him as attorney's fees. In his words: "14. Respondent ADMITS that he fenced an area of about 8,000 sq. [m]. after the association had awarded the same as attorney's fees in Civil Case Number 11204, the dismissal of the appeal by the NHA, the successful handling of three (3) cases in the SUPREME COURT, the pending case of QUIETING OF TITLE filed by the NHA, and for the pending reconveyance case, Civil Case No. 93-573, supra. These area of 8,000 sq. [m]., was awarded as attorney's fees, which [were] supposed to be ten percent of the 22 hectares, Lot No. 1982, the subject matter of Civil Case No. 11204, but the association and its members were able to take actual possession by judgment of the courts only o[f] the twelve (12) hectares. [This] area consisting of 8,000 sq. [m]., and consisting of two (2) lots [was] fenced by the respondent to prevent squatters from entering the area. The rights of possession and ownership o[f] this area by the respondent depends upon the outcome of Civil Case No. 93-573, supra, for reconveyance of title by the association and its members versus the NHA, et. al. If it is true that this is under investigation by the NBI, then why, not wait and submit the investigation of the NHA, instead of filing this unwarranted, false and fabricated charge based on preposterous and ridiculous charges without any proof whatsoever, except the vile [language] of an irresponsible lawyer." 3
Thereafter, petitioners filed a Reply 4 in which they reiterated their allegations against respondent and added that the latter likewise violated Rule 15.03 of the Code of Professional Responsibility. The Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and/or decision. 5
Report of the Investigating Commissioner In her Report and Recommendation dated January 23, 2001, Investigating IBP Commissioner Lydia A. Navarro recommended that respondent be suspended from the practice of law for six (6) months for violation of Rule 15.03 of Canon 15 of the Code of Professional Responsibility. Her report reads in part as follows: "From the facts obtaining, it is apparent that respondent represented conflicting interest considering that the complainants were the same plaintiffs in both cases and were duly specified in the pleadings particularly in the caption of the cases. Under the said predicament even if complainants were excluded as members of the Association represented by the respondent; the latter should have first secured complainants' written consent before representing defendants in the Indirect Contempt case particularly Macario Palacio, president of the Association, or inhibited himself. "It is very unfortunate that in his desire to render service to his client, respondent overlooked the fact that he already violated Rule 15.03 of [C]anon 15 of the Code of Professional Responsibility, to wit: 'Rule 15.03 - A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.' "We have no alternative but to abide by the rules." 6
IBP Board of Governors' Resolution Upholding the above-quoted Report, the Board of Governors of the Integrated Bar of the Philippines recommended via its May 26, 2001 Resolution that respondent be suspended from the practice of law for two (2) months for violation of Rule 15.03 of Canon 15 of the Code of Professional Responsibility. This Court's Ruling We agree with the findings and the recommendation of the IBP Board of Governors, but hold that the penalty should be six-month suspension as recommended by the investigating commissioner. Administrative Liability of Respondent At the outset, we agree with Commissioner Navarro's conclusion that apart from their allegations in their various pleadings, petitioners did not proffer any proof tending to show that respondent had sold to other persons several rights over the land in question; and that he had induced the former counsel for petitioners, Atty. Salva Jr., to withdraw the indirect contempt case that they had filed. Neither did the IBP find anything wrong as regards the 8,000 square meters awarded to respondent as payment for his legal services. Petitioners' bare assertions, without any proof to back them up, would not justify the imposition of a penalty on respondent. Having said that, we find, however, that respondent falls short of the integrity and good moral character required from all lawyers. They are expected to uphold the dignity of the legal profession at all times. The trust and confidence clients repose in them require a high standard and appreciation of the latter's duty to the former, the legal profession, the courts and the public. Indeed, the bar must maintain a high standard of legal proficiency as well as of honesty and fair dealings. To this end, lawyers should refrain from doing anything that might tend to lessen the confidence of the public in the fidelity, honesty and integrity of their profession. 7
In the present case, respondent clearly violated Rule 15.03 of Canon 15 of the Code of Professional Responsibility, which provides that "a lawyer shall not represent conflicting interests except by written consent of all concerned given after full disclosure of the facts." The Court explained in Buted v. Hernando: 8
"[A] lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose. "The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidence forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed." 9 (Italics in the original) In the case at bar, petitioners were the same complainants in the indirect contempt case and in the Complaint for forcible entry in Civil Case No. 11204. 10 Respondent should have evaluated the situation first before agreeing to be counsel for the defendants in the indirect contempt proceedings. Attorneys owe undivided allegiance to their clients, and should at all times weigh their actions, especially in their dealings with the latter and the public at large. They must conduct themselves beyond reproach at all times. The Court will not tolerate any departure from the "straight and narrow" path demanded by the ethics of the legal profession.1wphi1.nt In Hilado v. David, 11 which we quote below, the Court advised lawyers to be like Caesar's wife to be pure and to appear to be so. "This stern rule is designed not alone to prevent the dishonest practitioner from fraudulent conduct, but as well as to protect the honest lawyer from unfounded suspicion of unprofessional practice. It is founded on principles of public policy, on good taste. As has been said in another case, the question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorneys, like Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice." Because of his divided allegiance, respondent has eroded, rather than enhanced, the public perception of the legal profession. His divided loyalty constitutes malpractice for which he may be suspended, following Section 27, Rule 138 of the Rules of Court, which provides: "SEC. 27. Disbarment or suspension of Attorneys by Supreme Court, grounds therefor. Any member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a wilful disobedience appearing as an attorney for a party to a case without authority so to do. x x x." Complainants ask that respondent be disbarred. We find however that suspension of six (6) months from the practice of law, as recommended by Commissioner Navarro, is sufficient to discipline respondent. A survey of cases involving conflicting interests on the part of counsel reveals that the Court has imposed on erring attorneys 12 either a reprimand, or a suspension from the practice of law from five (5) months 13 to as high as two (2) years. 14
WHEREFORE, Maximo G. Rodriguez is found guilty of violating Rule 15.03 of Canon 15 of the Code of Professional Responsibility and is hereby SUSPENDED for six (6) months from the practice of law, effective upon his receipt of this Decision. He is warned that a repetition of the same or similar acts will be dealt with more severely.1wphi1.nt Let copies of this Decision be entered in the record of respondent as attorney and served on the IBP, as well as on the Court Administrator who shall circulate it to all courts for their information and guidance. SO ORDERED.
A.C. No. 4354 April 22, 2002 LOLITA ARTEZUELA, complainant, vs. ATTY. RICARTE B. MADERAZO, respondent. PUNO, J .: For his failure to meet the exacting standards of professional ethics, the Board of Governors of the Integrated Bar of the Philippines (IBP) in its Resolution of May 2, 2000 recommended the suspension from the practice of law of respondent Atty. Ricarte B. Maderazo for the period of six (6) months, with a stern warning that repetition of the same act will be dealt with more severely. Respondent allegedly represented conflicting interests in violation of Canon 6 of the Code of Professional Ethics, and Canon 15 and Rule 15.03 of the Code of Professional Responsibility. 1
By way of a Motion for Reconsideration, 2 respondent now comes before this Court to challenge the basis of the IBP's resolution, and prays for its reversal. The factual antecedents of the case are as follows: On or about 3:00 in the early morning of December 24, 1992, Allan Echavia had a vehicular accident at Caduman St., corner H. Abellana St., Mandaue City. At the time of the accident, Echavia was driving a Ford Telstar car owned by a Japanese national named Hirometsi Kiyami, but was registered in the name of his brother-in-law, Jun Anthony Villapez. The car rammed into a small carinderia owned by complainant Lolita Artezuela. 3
The destruction of the complainant's carinderia caused the cessation of the operation of her small business, resulting to her financial dislocation. She incurred debts from her relatives and due to financial constraints, stopped sending her two children to college. 4
Complainant engaged the services of the respondent in filing a damage suit against Echavia, Villapez and one Bernardo Sia. 5 Docketed as Civil Case No. 13666, the case was assigned to Branch 14 of the Regional Trial Court of Cebu. An Amended Complaint was thereafter filed, impleading Echavia, Kiyami and Villapez, and dropping Sia as a party-defendant. 6 For his services, complainant paid the respondent the amount of Ten Thousand Pesos (P10,000.00) as attorney's fees and Two Thousand Pesos (P2,000.00) as filing fee. 7 However, the case was dismissed on March 22, 1994, allegedly upon the instance of the complainant and her husband. 8
Because of the dismissal of Civil Case No. 13666, complainant filed a civil case for damages against the respondent. It was docketed as CEB-18552 and assigned to Branch 57, Regional Trial Court of Cebu City. The case was dismissed on June 12, 2001. 9
On November 24, 1994, Artezuela filed before this Court a verified complaint for disbarment against the respondent. She alleged that respondent grossly neglected his duties as a lawyer and failed to represent her interests with zeal and enthusiasm. According to her, when Civil Case No. 13666 was scheduled for pre-trial conference on August 20, 1993, respondent asked for its postponement although all the parties were present. Notwithstanding complainant's persistent and repeated follow-up, respondent did not do anything to keep the case moving. He withdrew as counsel without obtaining complainant's consent. 10
Complainant also claimed that respondent engaged in activities inimical to her interests. While acting as her counsel, respondent prepared Echavia's Answer to the Amended Complaint. The said document was even printed in respondent's office. Complainant further averred that it was respondent who sought the dismissal of the case, misleading the trial court into thinking that the dismissal was with her consent. 11
Respondent denied the complainant's allegations and averred that he conscientiously did his part as the complainant's lawyer in Civil Case No. 13666. He withdrew as counsel because the complainant was uncooperative and refused to confer with him. He also gave several notices to the complainant and made known his intention before he filed his Manifestation to withdraw as counsel. Because of the severed relationship, the lower court, after holding a conference, decided to grant respondent's manifestation and advised the complainant to secure the services of a new lawyer. Complainant, however, refused and instead, sought the dismissal of the case. 12
Respondent alleged that he sought the postponement of the Pre-Trial Conference scheduled on August 20, 1993 so that he could file the Amended Complaint. He admitted that Echavia's Answer to the Amended Complaint was printed in his office but denied having prepared the document and having acted as counsel of Echavia. He claimed that complainant requested him to prepare Echavia's Answer but he declined. Echavia, however, went back to his office and asked respondent's secretary to print the document. Respondent intimated that the complainant and Echavia have fabricated the accusations against him to compel him to pay the amount of P500,000.00. 13
This Court referred the complaint to the Integrated Bar of the Philippines (IBP). The IBP-Visayas Regional Committee on Bar Discipline formed an Investigating Committee to hear the disbarment complaint. On October 6, 1999, Commissioner Gabriel T. Ingles issued a Report finding the respondent guilty of representing conflicting interests, in violation of Canon 15 and Rule 15.03 of the Code of Professional Responsibility, as well as, of Canon 6 of the Code of Professional Ethics. He recommended that the respondent be suspended from the practice of law for a period of one (1) year. 14 Commissioner Ingles did not rule on the other issues. As aforesaid, the Board of Governors of the Integrated Bar of the Philippines upheld the findings of the Committee with modification only as to the penalty. Seeking reconsideration of the IBP's resolution, respondent contends that the Investigating Committee did not conduct trial; hence, he was not able to confront and examine the witnesses against him. He argues that the Investigating Committee's finding that he represented Echavia is contrary to court records and the complainant's own testimony in CEB-18552. He also casts doubt on the credibility of the Investigating Committee to render just and fair recommendations considering that the Investigating Commissioner and the respondent are counsel-adversaries in another case, Civil Case No. R-33277. Finally, he questions the imposition of a six-month suspension, which he claims to be harsh considering that his private practice is his only source of income. 15
After carefully examining the records, as well as the applicable laws and jurisprudence on the matter, this Court is inclined to uphold the IBP's resolution.1wphi1.nt In administrative cases, the requirement of notice and hearing does not connote full adversarial proceedings, as "actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies." 16 Due process is fulfilled when the parties were given reasonable opportunity to be heard and to submit evidence in support of their arguments. 17
In the case at bar, records show that respondent repeatedly sought the postponement of the hearings, prompting the Investigating Commissioner to receive complainant's evidence ex parte and to set the case for resolution after the parties have submitted their respective memorandum. Hence: "The records show that this is already the third postponement filed by respondent namely December 12, 1996(sic), January 3, 1996 and April 1, 1996. The Commission for the last time, will cancel today's hearing and can no longer tolerate any further postponement. Notify respondent by telegram for the hearing for (sic) April 22, 1996 at 2:00 P.M. Said hearing is intransferable in character. In the meantime, complainant affirmed her complaint and likewise her witness, Allan Echavia, also affirmed the contents of his affidavit and further stated that he had executed the same and understood the contents thereof." 18
It is by his own negligence that the respondent was deemed to have waived his right to cross-examine the complainant and her witness. He cannot belatedly ask this Court to grant new trial after he has squandered his opportunity to exercise his right. Respondent's contention that the finding of the Investigating Committee was contrary to the records and the complainant's own admission in CEB-18552 is without merit. It is true that Atty. Aviola was Echavia's counsel-of-record in Civil Case No. 13666 as evidenced by the certification from the clerk of court, 19 and as admitted by the complainant in CEB-18552, viz: "ATTY. MADERAZO: (To witness- ON CROSS) Q: Madam witness, you mentioned that the defendant in this case was the counsel of Allan Echavia as early as August 20, 1993, wherein you learned for the first time of this fact when you say he is counsel of Allan Echavia. (sic) You mean he is the counsel of record of Allan Echavia in the Civil Case before Judge Dacudao? Is that what you mean? A: What I learned was that Atty. Alviola was the counsel of Allan Echavia in the case before Judge Dacudao but I heard Atty. Maderazo telling Allan Echavia not to admit that Atty. Maderazo is appearing for me because he will be the one to coordinate with Allan's case. Q: So it is clear that the defendant in this case is not the counsel of record of Allan Echavia. It was Atty. Alviola stated by you now? A: Atty. Maderazo was not Allan Echavia's counsel but it was Atty. Alviola who was the counsel of record of Allan Echavia." 20
Nevertheless, the issue in this case is not whether the respondent also acted as the counsel-of-record of Echavia. Rather, it is whether or not he had a direct hand in the preparation of Echavia's Answer to the Amended Complaint. To be guilty of representing conflicting interests, a counsel-of-record of one party need not also be counsel-of-record of the adverse party. He does not have to publicly hold himself as the counsel of the adverse party, nor make his efforts to advance the adverse party's conflicting interests of record--- although these circumstances are the most obvious and satisfactory proof of the charge. It is enough that the counsel of one party had a hand in the preparation of the pleading of the other party, claiming adverse and conflicting interests with that of his original client. To require that he also be counsel-of-record of the adverse party would punish only the most obvious form of deceit and reward, with impunity, the highest form of disloyalty. Canon 6 of the Code of Professional Ethics states: "It is the duty of a lawyer at the time of the retainer to disclose to the client the circumstances of his relations to the parties and any interest in or in connection with the controversy, which might influence the client in the selection of the counsel. "It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this Canon, a lawyer represents conflicting interests when in behalf of one of the clients, it is his duty to contend for that which duty to another client requires him to oppose." (emphasis supplied) An attorney owes his client undivided allegiance. Because of the highly fiduciary nature of the attorney-client relationship, sound public policy dictates that a lawyer be prohibited from representing conflicting interests or discharging inconsistent duties. He may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his present or former client. Indeed, good faith and honest intention on the part of the erring lawyer does not make this rule inoperative. 21 The lawyer is an officer of the court and his actions are governed by the uncompromising rules of professional ethics. Thus: "The relations of attorney and client is founded on principles of public policy, on good taste. The question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorneys, like Ceasar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice." 22
The professional obligation of the lawyer to give his undivided attention and zeal for his client's cause is likewise demanded in the Code of Professional Responsibility. Inherently disadvantageous to his client's cause, representation by the lawyer of conflicting interests requires disclosure of all facts and consent of all the parties involved. Thus: "CANON 15- All lawyers shall observe candor, fairness and loyalty in all his dealings and transactions with his clients. xxx Rule 15.03- A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts." While the Resolution of the IBP is purely recommendatory, we find no reason to reverse the same. In disciplinary proceedings against members of the bar, only clear preponderance of evidence is required to establish liability. As long as the evidence presented by complainant or that taken judicial notice of by the Court is more convincing and worthy of belief than that which is offered in opposition thereto, the imposition of disciplinary sanction is justified. 23
A perusal of Echavia's Answer to the Amended Complaint shows that it indeed conflicts with the complainant's claims. It reads: "1. The allegations (sic) in Paragraph One (1) of the Complaint is admitted in so far as it pertains to the personal circumstance and residence of the answering defendant. The rest of the allegations in Paragraph One (1), and all the allegations in Paragraph Two (2) , THREE (3), FOUR (4), FIVE (5), SIX (6), ELEVEN (11), TWELVE (12), and FOURTEEN (14), of the Complaint are DENIED for lack of knowledge sufficient to form a belief as to the truth of such allegations." 24
By way of prayer, Echavia states: "WHEREFORE, it is respectfully prayed that after hearing, judgment be rendered dismissing plaintiff's complaint." 25
Anent the authorship by the respondent of the document quoted above, the Investigating Committee found the testimonies of the complainant and Echavia credible as opposed to respondent's bare denial. As pointed out by Echavia, he was approached by Atty. Maderazo, introduced himself as his lawyer and after some sessions in the latter's office, asked him to return and sign a document which he later identified as the Answer to the Amended Complaint. The Investigating Committee found respondent's defense weak. Respondent did not bother to present his secretary as witness, nor obtain her affidavit to prove his allegations. Instead, he offered a convenient excuse--- that he cannot anymore locate his secretary. Respondent argued that it was the complainant who asked him to prepare Echavia's Answer to the Amended Complaint, after reaching an agreement whereby Echavia would testify in favor of the complainant. After he declined the request, he claimed that it was the complainant who prepared the document and asked his secretary to print the same. But as shown, Echavia's Answer to the Amended Complaint was in no way favorable to the complainant. With the dismissal of Civil Case No. 13666, Echavia is practically off the hook. We cannot find any reason why Echavia would commit perjury and entangle himself, once again, with the law. He does not stand to profit at all by accusing the respondent falsely. Furthermore, considering complainant's stature and lack of legal education, we can not see how she could have prepared Echavia's Answer to the Amended Complaint and device a legal maneuver as complicated as the present case. Respondent's attack on the credibility of Investigating Commissioner Ingles to render an impartial decision, having been an adversary in Civil Case No. R-33277, does not convince us to grant new trial. This is the first time that respondent questions the membership of Commissioner Ingles in the Investigating Committee. If respondent really believed in good faith that Commissioner Ingles would be biased and prejudiced, he should have asked for the latter's inhibition at the first instance. Moreover, we could not find any hint of irregularity, bias or prejudice in the conduct of the investigation that would lead us to set it aside. Finally, we remind the respondent that the practice of law is not a property right but a mere privilege, and as such, must bow to the inherent regulatory power of the Court to exact compliance with the lawyer's public responsibilities. 26 The suspension of the respondent's privilege to practice law may result to financial woes. But as the guardian of the legal profession, we are constrained to balance this concern with the injury he caused to the very same profession he vowed to uphold with honesty and fairness.1wphi1.nt IN VIEW WHEREOF, the Resolution of the IBP finding the respondent guilty of violating Canon 6 of the Code of Professional Ethics, and Canon 15 and Rule 15.03 of the Code of Professional Responsibility is affirmed. Respondent is suspended from the practice of law for six (6) months with a stern warning that a similar act in the future shall be dealt with more severely. SO ORDERED.
A.C. No. 5948 January 22, 2003 (Formerly A.M. No. CBD-354) GAMALIEL ABAQUETA, complainant, vs. ATTY. BERNARDITO A. FLORIDO, respondent. R E S O L U T I O N YNARES-SANTIAGO, J .: This is an administrative complaint 1 against Atty. Bernardito A. Florido filed with the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline, praying that appropriate sanctions be imposed on respondent for representing conflicting interests. Complainant is a Filipino by birth who had acquired American citizenship. He resides at 15856 N. 15th Way, Phoenix, Arizona 85022, U.S.A. Respondent is a practicing lawyer based in Cebu City. On November 28, 1983, complainant engaged the professional services of respondent trough his attorney-in-fact, Mrs. Charito Y. Baclig, to represent him in Special Proceedings No. 3971-R, entitled, "In the Matter of the Intestate Estate of Deceased Bonifacia Abaqueta, 2 Susana Uy Trazo, petitioner" before the Regional Trial court of Cebu. 3
Accordingly, respondent entered his appearance in Special Proceedings No. 3971-R as counsel for herein complainant. 4 Subsequently, he filed complainant's "Objections and Comments to Inventory and Accounting," registering complainant's objection . . . to the inclusion of the properties under Items 1 to 5 contained in the inventory of the administratrix dated November 9, 1983. These properties are the sole and exclusive properties of the oppositor per the latest tax declarations already marked as Exhibits "2", "3", "4", "5" and "6" in the Formal Offer of Exhibits by oppositor in writing dated August 17, 1983 x x x . 5
Several years later, Milagros Yap Abaqueta filed an action for sum of money against complainant, docketed as Civil Case No. CEB-11453 and entitled, "Milagros Yap Abaqueta vs. Gamaliel Abaqueta and Casiano Gerona." 6 Respondent signed the Complaint as counsel for plaintiff Milagros Yap Abaqueta, averring, inter alia, that: Plaintiff and defendant Gamaliel Abaqueta are the conjugal owners of those certain parcels of land, more particularly as follows . . . The "parcels of land" referred to as conjugal property of complainant and Milagros Yap-Abaqueta are the very same parcels of land in Special Proceedings No. 3971-R which respondent, as lawyer of complainant, alleged as the "sole and exclusive properties" of complainant. In short, respondent lawyer made allegations in Civil Case No. CEB-11453 which were contrary to and in direct conflict with his averments as counsel for complainant in Special Proceedings No. 3971-R. Complainant further averred that respondent admitted he was never authorized by the former to appear as counsel for complainant's ex- wife in Civil Case No. CEB-11453; that respondent failed to indicate in the Complaint the true and correct address of herein complainant, which respondent knew as far back as August 2, 1990, when he wrote a letter to the complainant at the said address. 7 Consequently, complainant failed to receive summons and was declared in default in Civil Case No. CEB-11453. While the order of default was eventually set aside, complainant incurred expenses to travel to the Philippines, which were conservatively estimated at $10,000.00. He argues that respondent's conduct constitute professional misconduct and malpractice as well as trifling with court processes. In his defense, respondent claims in his Answer 8 that he always acted in good faith in his professional relationship with complainant in spite of the fact that they have not personally met. He based the matters he wrote in the Complaint on information and documents supplied by Mrs. Charito Y. Baclig, complainant's sister-in-law and attorney-in-fact, indicating that he was sole and exclusive owner of the properties. This was sometime in November 1983. No affidavit of adjudication was ever furnished respondent by complainant and this was apparently suppressed because it would show that the properties formed part of the estate. Eight years later, in November 1991, long after Special Proceedings No. 3971-R was settled and the attorney-client relationship between complainant and respondent was terminated, Mrs. Milagros Abaqueta through Mrs. Baclig, engaged his services to file Civil Case No. CEB- 11453. Mrs. Baclig presented to him a deed of absolute sale dated July 7, 1975, 9 showing that the properties subject hereof were not complainant's exclusive property but his conjugal property with his wife, the same having been acquired during the subsistence of their marriage. Thus, in all good faith, respondent alleged in the complaint that said properties were conjugal assets of the spouses. Respondent further pointed out that his law firm handles on the average eighty new court cases annually and personally interviews four or five clients, prospective clients and/or witnesses daily except Saturdays and Sundays. It regularly closes to the public at 7:00 p.m., but work continues sometimes until 8:30 p.m. This has been going on for the last twenty-five years out of respondent's thirty-three years of private practice. The absence of personal contact with complainant and the lapse of eight years resulted in the oversight of the respondent's memory that complainant was a former client. Furthermore, the caption of the Special Proceeding was not in the name of complainant but was entitled, "In the Matter of the Intestate Estate of Bonifacia Payahay Abaqueta." Respondent expressed regret over the oversight and averred that immediately after discovering that the formerly represented complainant in Special Proceeding No. 3971-R, he filed a motion to withdraw as counsel for plaintiff, which was granted by the trial court. 10 He denied any malice in his acts and alleged that it is not in his character to do malice or falsehood particularly in the exercise of his profession. In his Comments/Observations on Respondent's Answer, 11 complainant averred that respondent's conduct was geared towards insuring a court victory for Milagros Yap in Civil Case No. CEB-11453, wherein he deliberately stated that complainant's address was 9203 Riverside Lodge Drive, Houston, Texas 77083, U.S.A., when he knew fully well that complainant's true and correct address was c/o V.A. Hospital, 7th Street & Italian School Road, Phoenix, Arizona, 85013, U.S.A. By falsely stating and concealing his true and correct address, respondent eventually succeeded in obtaining a default judgment in favor of his client. During the pendency of these proceedings before the IBP, it appeared that respondent's son got married to the daughter of IBP National President Arthur D. Lim. Thus, Atty. Lim inhibited himself from participating in the resolution of the case. 12 Subsequently, a Resolution was issued requiring the IBP to elevate the entire records of the case within thirty (30) days from notice. 13
The main issue to be resolved in the case at bar is whether or not respondent violated Rule 15.03 of the Code of Professional Responsibility. The investigating Commissioner found that respondent clearly violated the prohibition against representing conflicting interests and recommended that he be suspended from the practice of law for a period of three (3) months. We find the recommendation well-taken. Rule 15.03 of the Code of Professional Responsibility explicitly provides that RULE 15.03. A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. There is a conflict of interest if there is an inconsistency in the interests of two or more opposing parties. The test is whether or not in behalf of one client, it is the lawyer's duty to fight for an issue or claim but it is his duty to oppose it for the other client. 14 In short, if he argues for one client, this argument will be opposed by him when he argues for the other client. 15
There is a representation of conflicting interests if the acceptance of the new retainer will require the attorney to do anything which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new relation, to use against his first client any knowledge acquired through their connection. 16
As pointed out by the investigating commissioner, respondent does not deny that he represented complainant in Special Proceedings No. 3971-R. He also does not deny that he is the lawyer of Milagros Yap Abaqueta in Civil Case No. CEB-11453, filed against complainant and involving the same properties which were litigated in Special Proceedings No. 3971-R. Respondent also admitted that he did not secure the consent of complainant before he agreed to act as Milagros Yap Abaqueta's lawyer in Civil Case No. CEB-11453. The reasons proffered by respondent are hardly persuasive to excuse his clear representation of conflicting interests in this case. First, the investigating commissioner observed that the name "Gamaliel Abaqueta" is not a common name. Once heard, it will surely ring a bell in one's mind if he came across the name again. In this case, respondent actively prosecuted the cause of complainant in Special Proceedings No. 3971-R, such that it would be impossible for respondent not to have recalled his name. Second, assuming arguendo that respondent's memory was indeed faulty, still it is incredible that he could not recall that complainant was his client, considering that Mrs. Charito Baclig, who was complainant's attorney-in-fact and the go-between of complainant and respondent in Special Proceedings No. 3971-R, was the same person who brought Milagros Yap Abaqueta to him. Even a person of average intelligence would have made the connection between Mrs. Baclig and complainant under such circumstances. Lastly, the fact that the subject matter of Civil Case No. CEB-11453 and Special Proceedings No. 3971-R are thesame properties could not have escaped the attention of respondent. With such an abundance of circumstances to aid respondent's memory, it simply strains credulity for him to have conveniently forgotten his past engagement as complainant's lawyer. What rather appears, given the prevailing facts of this case, is that he chose to ignore them on the assumption that the long period of time spanning his past and present engagement would effectively blur the memories of the parties to such a discrepancy. It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person who may wish to become his client. He has the right to decline such employment, 17 subject, however, to Canon 14 of the Code of Professional Responsibility. 18 Once he agrees to take up the cause of the client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him. 19 He must serve the client with competence and diligence 20 and champion the latter's cause with wholehearted fidelity, care and devotion. 21
A lawyer May not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his former client 22 The reason for the prohibition is found in the relation of attorney and client which is one of trust and confidence of the highest degree. 23 Indeed, as we stated in Sibulo v. Cabrera, 24 "The relation of attorney and client is based on trust, so that double dealing, which could sometimes lead to treachery, should be avoided." 25
Credence cannot, however, be given to the charge that respondent fraudulently and maliciously falsified the true and correct address of the complainant notwithstanding respondent's knowledge thereof. Lawyers normally do not have knowledge of the personal circumstances of a party in a case and usually rely on the information supplied by their clients. The fact that respondent sent a letter to complainant at the latter's correct address 26 sixteen months before the filing of Civil Case No. CEB-11453 does not by itself prove malice on the part of respondent. A new address was furnished by Milagros Yap Abaqueta days before the complaint was filed. Respondent had no reason to doubt the correctness of the address of the complainant given to him by Milagros Yap Abaqueta considering that she was complainant's wife. WHEREFORE, Atty. Bernardito A. Florido is SUSPENDED from the practice of law for Three (3) months. He is further ADMONISHED to exercise greater care and diligence in the performance of his duties towards his clients and the court. He is warned that a repetition of the same or similar offense will be dealt with more severely. SO ORDERED.
A.C. No. 5128 March 31, 2005 ELESIO 1 C. PORMENTO, SR., Complainant, vs. ATTY. ALIAS A. PONTEVEDRA, respondent. R E S O L U T I O N AUSTRIA-MARTINEZ, J .: In a verified Complaint 2 dated August 7, 1999, Elesio C. Pormento, Sr. charged Atty. Elias A. Pontevedra with malpractice and misconduct, praying that on the basis of the facts alleged therein, respondent be disbarred. Complainant alleges that between 1964 and 1994, respondent is his family's legal counsel having represented him and members of his family in all legal proceedings in which they are involved. Complainant also claims that his family's relationship with respondent extends beyond mere lawyer-client relations as they gave respondent moral, spiritual, physical and financial support in his different endeavors. 3
Based on the allegations in the complaint, the rift between complainant and respondent began when complainant's counterclaim in Civil Case No. 1648 filed with the Regional Trial Court of Bacolod City was dismissed. Complainant claims that respondent, who was his lawyer in the said case, deliberately failed to inform him of the dismissal of his counterclaim despite receipt of the order of dismissal by the trial court, as a result of which, complainant was deprived of his right to appeal said order. Complainant asserts that he only came to know of the existence of the trial court's order when the adverse party in the said case extrajudicially foreclosed the mortgage executed over the parcel of land which is the subject matter of the suit. In order to recover his ownership over the said parcel of land, complainant was constrained to hire a new lawyer as Atty. Pontevedra refused to institute an action for the recovery of the subject property. 4
Complainant also claims that in order to further protect his rights and interests over the said parcel of land, he was forced to initiate a criminal case for qualified theft against the relatives of the alleged new owner of the said land. Respondent is the counsel of the accused in said case. Complainant claims that as part of his defense in said criminal case, respondent utilized pieces of confidential information he obtained from complainant while the latter is still his client. 5
In a separate incident, complainant claims that in 1967, he bought a parcel of land located at Escalante, Negros Occidental. The Deed of Declaration of Heirship and Sale of said land was prepared and notarized by respondent. Since there was another person who claims ownership of the property, complainant alleges that he heeded respondent's advice to build a small house on the property and to allow his (complainant's) nephew and his family to occupy the house in order for complainant to establish his possession of the said property. Subsequently, complainant's nephew refused to vacate the property prompting the former to file an ejectment case with the Municipal Trial Court of Escalante, Negros Occidental, docketed as Civil Case No. 528. Respondent acted as the counsel of complainant's nephew. 6
Complainant contends that respondent is guilty of malpractice and misconduct by representing clients with conflicting interests and should be disbarred by reason thereof. 7
In his Comment, 8 respondent contends that he was never a direct recipient of any monetary support coming from the complainant. Respondent denies complainant's allegation that he (respondent) did not inform complainant of the trial court's order dismissing the latter's counterclaim in Civil Case No. 1648. Respondent claims that within two days upon his receipt of the trial court's order of dismissal, he delivered to complainant a copy of the said order, apprising him of its contents. As to his representation of the persons against whom complainant filed criminal cases for theft, 9 respondent argues that he honestly believes that there exists no conflict between his present and former clients' interests as the cases he handled for these clients are separate and distinct from each other. He further contends that he took up the cause of the accused in the criminal cases filed by complainant for humanitarian considerations since said accused are poor and needy and because there is a dearth of lawyers in their community. With respect to the case for ejectment filed by complainant against his nephew, respondent admits that it was he who notarized the deed of sale of the parcel of land sold to complainant. However, he contends that what is being contested in the said case is not the ownership of the subject land but the ownership of the house built on the said land. 10
On December 21, 1999, complainant filed a Reply to respondent's Comment. 11
On January 19, 2000, the Court referred the instant case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. 12
On February 18, 2002, respondent filed a Rejoinder to complainant's Reply adding that the instant complaint was orchestrated by complainant's son who wanted political vengeance because he lost the vice-mayoralty post to respondent during the 1988 local elections. 13
On February 20, 2002, complainant filed a Sur-Rejoinder to respondent's Rejoinder. 14
Thereafter, the parties filed their respective Position Papers, 15 after which the case was deemed submitted for resolution. In his Report and Recommendation dated February 20, 2004, Investigating Commissioner Agustinus V. Gonzaga found respondent guilty of violating Rule 15.03, Canon 15 of the Code of Professional Responsibility. He recommended that respondent be meted the penalty of suspension for one month. In a minute Resolution passed on July 30, 2004, the IBP Board of Governors resolved to annul and set aside the recommendation of the Investigating Commissioner and instead approved the dismissal of the complaint for lack of merit, to wit: RESOLUTION NO. XVI-2004-387 Adm. Case No. 5128 Elesio C. Pormento, Sr., vs. Atty. Elias A. Pontevedra RESOLVED to ANNUL and SET ASIDED [sic], as it is hereby ANNULED and SET ASIDE, the Recommendation of the Investigating Commission, and to APPROVE the DISMISSAL of the above-entitled case for lack of merit of the complaint. We do not agree with the dismissal of the complaint. At the outset, we reiterate the settled rule that in complaints for disbarment, a formal investigation is a mandatory requirement which may not be dispensed with except for valid and compelling reasons. 16 Formal investigations entail notice and hearing. However, the requirements of notice and hearing in administrative cases do not necessarily connote full adversarial proceedings, as actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies. 17 Due process is fulfilled when the parties were given reasonable opportunity to be heard and to submit evidence in support of their arguments. 18
From the records extant in the present case, it appears that the Investigating Commissioner conducted a hearing on January 16, 2002 where it was agreed that the complainant and the respondent shall file their respective position papers, after which the case shall be deemed submitted for resolution. 19 No further hearings were conducted. It is also disturbing to note that the abovementioned Resolution of the IBP Board of Governors, annulling and setting aside the recommendation of the Investigating Commissioner, is bereft of any findings of facts or explanation as to how and why it resolved to set aside the recommendation of the Investigating Commissioner and instead dismissed the complaint against respondent. Section 12(a), Rule 139-B of the Rules of Court provides: SEC. 12. Review and decision by the Board of Governors. (a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors upon the record and evidence transmitted to it by the Investigator with his report. The decision of the Board upon such review shall be in writing and shall clearly and distinctly state the facts and the reasons on which it is based. It shall be promulgated within a period not exceeding thirty (30) days from the next meeting of the Board following the submittal of the Investigator's report. (Emphasis supplied) In Cruz vs. Cabrera, 20 we reiterated the importance of the requirement that the decision of the IBP Board of Governors must state the facts and the reasons on which such decision is based, which is akin to what is required of the decisions of courts of record. We held therein that: [A]side from informing the parties the reason for the decision to enable them to point out to the appellate court the findings with which they are not in agreement, in case any of them decides to appeal the decision, it is also an assurance that the judge, or the Board of Governors in this case, reached his judgment through the process of legal reasoning. Noncompliance with this requirement would normally result in the remand of the case. 21
Moreover, while we may consider the act of the IBP Board of Governors in simply adopting the report of the Investigating Commissioner as substantial compliance with said Rule, in this case, we cannot countenance the act of the IBP Board of Governors in merely stating that it is annulling the Commissioner's recommendation and then dismiss the complaint without stating the facts and the reasons for said dismissal. However, considering that the present controversy has been pending resolution for quite some time, that no further factual determination is required, and the issues being raised may be determined on the basis of the numerous pleadings filed together with the annexes attached thereto, we resolve to proceed and decide the case on the basis of the extensive pleadings on record, in the interest of justice and speedy disposition of the case. 22
Coming to the main issue in the present case, respondent is being accused of malpractice and misconduct on three grounds: first, for representing interests which conflict with those of his former client, herein complainant; second, for taking advantage of the information and knowledge that he obtained from complainant; and, third, for not notifying complainant of the dismissal of his counterclaim in Civil Case No. 1648. We shall concurrently discuss the first and second grounds as they are interrelated. Rule 15.03, Canon 15 of the Code of Professional Responsibility provides: "A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts." Corollary to this, Canon 21 of the same Code enjoins a lawyer to preserve the confidences and secrets of his clients even after the attorney-client relation is terminated. Rule 21.02, Canon 21 specifically requires that: A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto. In addition, Canon 6 of the Canons of Professional Ethics states: It is the duty of a lawyer at the time of retainer to disclose to the client all the circumstances of his relations to the parties and any interest in or connection with the controversy, which might influence the client in the selection of counsel. It is unprofessional to represent conflicting interests, except by express consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose. The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed. Jurisprudence instructs that there is a representation of conflicting interests if the acceptance of the new retainer will require the attorney to do anything which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new relation, to use against his first client any knowledge acquired through their connection. 23 Another test to determine if there is a representation of conflicting interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof. 24
A lawyer is forbidden from representing a subsequent client against a former client when the subject matter of the present controversy is related, directly or indirectly, to the subject matter of the previous litigation in which he appeared for the former client. 25 Conversely, he may properly act as counsel for a new client, with full disclosure to the latter, against a former client in a matter wholly unrelated to that of the previous employment, there being in that instance no conflict of interests. 26 Where, however, the subject matter of the present suit between the lawyer's new client and his former client is in some way connected with that of the former client's action, the lawyer may have to contend for his new client that which he previously opposed as counsel for the former client or to use against the latter information confided to him as his counsel. 27 As we have held in Maturan vs. Gonzales: 28
The reason for the prohibition is found in the relation of attorney and client, which is one of trust and confidence of the highest degree. A lawyer becomes familiar with all the facts connected with his client's case. He learns from his client the weak points of the action as well as the strong ones. Such knowledge must be considered sacred and guarded with care. No opportunity must be given him to take advantage of the client's secrets. A lawyer must have the fullest confidence of his client. For if the confidence is abused, the profession will suffer by the loss thereof. 29
The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter and is applicable however slight such adverse interest may be. 30 In essence, what a lawyer owes his former client is to maintain inviolate the client's confidence or to refrain from doing anything which will injuriously affect him in any matter in which he previously represented him. 31
In the present case, we find no conflict of interests when respondent represented herein complainant's nephew and other members of his family in the ejectment case, docketed as Civil Case No. 528, and in the criminal complaint, denominated as I.S. Case No. 99-188, filed by herein complainant against them. The only established participation respondent had with respect to the parcel of land purchased by complainant, is that he was the one who notarized the deed of sale of the said land. On that basis alone, it does not necessarily follow that respondent obtained any information from herein complainant that can be used to the detriment of the latter in the ejectment case he filed. While complainant alleges that it was respondent who advised him to allow his nephew to temporarily occupy the property in order to establish complainant's possession of said property as against another claimant, no corroborating evidence was presented to prove this allegation. Defendant, in his answer to the complaint for ejectment, raised the issue as to the right of the vendor to sell the said land in favor of complainant. 32 However, we find this immaterial because what is actually in issue in the ejectment case is not the ownership of the subject lot but the ownership of the house built on the said lot. Furthermore, the subject matter of I.S. Case No. 99-188 filed by complainant against his nephew and other members of his family involves several parts of trucks owned by herein complainant. 33 This case is not in any way connected with the controversy involving said parcel of land. In fine, with respect to Civil Case No. 528 and I.S. Case No. 99-188, complainant failed to present substantial evidence to hold respondent liable for violating the prohibition against representation of conflicting interests. However, we find conflict of interests in respondent's representation of herein complainant in Civil Case No. 1648 and his subsequent employment as counsel of the accused in Criminal Case No. 3159. The subject matter in Civil Case No. 1648 is Lot 609 located at Escalante, Negros Occidental, the same parcel of land involved in Criminal Case No. 3159 filed by herein complainant against several persons, accusing them of theft for allegedly cutting and stealing coconut trees within the premises of the said lot. Complainant contends that it is in this criminal case that respondent used confidential information which the latter obtained from the former in Civil Case No. 1648. To prove his contention, complainant submitted in evidence portions of the transcript of stenographic notes taken during his cross- examination in Criminal Case No. 3159. However, after a reading of the said transcript, we find no direct evidence to prove that respondent took advantage of any information that he may have been acquired from complainant and used the same in the defense of his clients in Criminal Case No. 3159. The matter discussed by respondent when he cross-examined complainant is the ownership of Lot 609 in its entirety, only a portion of which was purportedly sold to complainant. Part of the defense raised by his clients is that herein complainant does not have the personality to file the criminal complaint as he is not the owner of the lot where the supposed theft occurred. It is possible that the information as to the ownership of the disputed lot used by respondent in bringing up this issue may have been obtained while he still acted as counsel for complainant. It is also probable that such information may have been taken from other sources, like the Registry of Deeds, the Land Registration Authority or the respondent's clients themselves. Nonetheless, be that as it may, it cannot be denied that when respondent was the counsel of complainant in Civil Case No. 1648, he became privy to the documents and information that complainant possessed with respect to the said parcel of land. Hence, whatever may be said as to whether or not respondent utilized against complainant any information given to him in a professional capacity, the mere fact of their previous relationship should have precluded him from appearing as counsel for the opposing side. As we have previously held: The relations of attorney and client is [are] founded on principles of public policy, on good taste. The question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorneys, like Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing. Only thus can litigants be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice. 34
Moreover, we have held in Hilado vs. David 35 that: Communications between attorney and client are, in a great number of litigations, a complicated affair, consisting of entangled relevant and irrelevant, secret and well known facts. In the complexity of what is said in the course of dealings between an attorney and client, inquiry of the nature suggested would lead to the revelation, in advance of the trial, of other matters that might only further prejudice the complainant's cause. 36
Thus, respondent should have declined employment in Criminal Case No. 3159 so as to avoid suspicion that he used in the criminal action any information he may have acquired in Civil Case No. 1648. Moreover, nothing on record would show that respondent fully apprised complainant and his new clients and secured or at least tried to secure their consent when he took the defense of the accused in Criminal Case No. 3159. Respondent contends that he handled the defense of the accused in the subject criminal case for humanitarian reasons and with the honest belief that there exists no conflict of interests. However, the rule is settled that the prohibition against representation of conflicting interests applies although the attorney's intentions and motives were honest and he acted in good faith. 37 Moreover, the fact that the conflict of interests is remote or merely probable does not make the prohibition inoperative. 38
Respondent also asserts that when he accepted employment in Criminal Case No. 3159, the attorney-client relations between him and complainant in Civil Case No. 1648 had already been terminated. This defense does not hold water because the termination of the relation of attorney and client provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client. 39
Thus, we find respondent guilty of misconduct for representing conflicting interests. As to the third ground, we find that complainant failed to present substantial evidence to prove that respondent did not inform him of the dismissal of his counterclaim in Civil Case No. 1648. On the contrary, we find sufficient evidence to prove that complainant has been properly notified of the trial court's order of dismissal. The only proof presented by complainant to support his claim is the affidavit of his daughter confirming complainant's contention that respondent indeed failed to inform him of the dismissal of his counterclaim. 40 However, in the same affidavit, complainant's daughter admits that it was on December 4, 1989 that respondent received the order of the trial court dismissing complainant's counterclaim. Respondent, presented a "certification" dated December 11, 1989, or one week after his receipt of the trial court's order, where complainant's daughter acknowledged receipt of the entire records of Civil Case No. 1648 from complainant. 41 The same "certification" relieved respondent of his obligation as counsel of complainant. From the foregoing, it can be inferred that respondent duly notified complainant of the dismissal of his counterclaim. Otherwise, complainant could not have ordered his daughter to withdraw the records of his case from respondent at the same time relieving the latter of responsibility arising from his obligation as complainant's counsel in that particular case. As to the penalty to be imposed, considering respondent's honest belief that there is no conflict of interests in handling Civil Case No. 1648 and Criminal Case No. 3159, and it appearing that this is respondent's first infraction of this nature, we find the penalty of suspension to be disproportionate to the offense committed. 42 Moreover, we take into account respondent's undisputed claim that there are only three lawyers who are actually engaged in private practice in Escalante, Negros Occidental, where both complainant and respondent reside. One of the lawyers is already handling complainant's case, while the other lawyer is believed by respondent's clients to be a relative of complainant. Hence, respondent's clients believed that they had no choice but go to him for help. We do not find this situation as an excuse for respondent to accept employment because he could have referred his clients to the resident lawyer of the Public Attorney's Office or to other lawyers in the neighboring towns. Nonetheless, in view of respondent's belief that he simply adhered to his sworn duty to defend the poor and the needy, we consider such situation as a circumstance that mitigates his liability. Considering the foregoing facts and circumstances, we find it proper to impose a fine on respondent. In Sibulo vs. Cabrera, 43 the respondent is fined for having been found guilty of unethical conduct in representing two conflicting interests. Respondent is further reminded to be more cautious in accepting professional employments, to refrain from all appearances and acts of impropriety including circumstances indicating conflict of interests, and to behave at all times with circumspection and dedication befitting a member of the Bar, especially observing candor, fairness and loyalty in all transactions with his clients. 44
WHEREFORE, respondent Atty. Elias A. Pontevedra is found GUILTY of representing conflicting interests and is hereby FINED in the amount of Ten Thousand (P10,000.00) Pesos. He is WARNED that a repetition of the same or similar acts will be dealt with more severely. The Board of Governors of the Integrated Bar of the Philippines is DIRECTED to be heedful of the requirements provided for in Section 12(a), Rule 139-B of the Rules of Court as discussed in the text of herein decision. SO ORDERED.
A.C. No. 8243 July 24, 2009 ROLANDO B. PACANA, JR., Complainant, vs. ATTY. MARICEL PASCUAL-LOPEZ, Respondent. D E C I S I O N PER CURIAM: This case stems from an administrative complaint 1 filed by Rolando Pacana, Jr. against Atty. Maricel Pascual-Lopez charging the latter with flagrant violation of the provisions of the Code of Professional Responsibility. 2 Complainant alleges that respondent committed acts constituting conflict of interest, dishonesty, influence peddling, and failure to render an accounting of all the money and properties received by her from complainant. On January 2, 2002, complainant was the Operations Director for Multitel Communications Corporation (MCC). MCC is an affiliate company of Multitel International Holdings Corporation (Multitel). Sometime in July 2002, MCC changed its name to Precedent Communications Corporation (Precedent). 3
According to complainant, in mid-2002, Multitel was besieged by demand letters from its members and investors because of the failure of its investment schemes. He alleges that he earned the ire of Multitel investors after becoming the assignee of majority of the shares of stock of Precedent and after being appointed as trustee of a fund amounting to Thirty Million Pesos (P30,000,000.00) deposited at Real Bank. Distraught, complainant sought the advice of respondent who also happened to be a member of the Couples for Christ, a religious organization where complainant and his wife were also active members. From then on, complainant and respondent constantly communicated, with the former disclosing all his involvement and interests in Precedent and Precedents relation with Multitel. Respondent gave legal advice to complainant and even helped him prepare standard quitclaims for creditors. In sum, complainant avers that a lawyer-client relationship was established between him and respondent although no formal document was executed by them at that time. A Retainer Agreement 4 dated January 15, 2003 was proposed by respondent. Complainant, however, did not sign the said agreement because respondent verbally asked for One Hundred Thousand Pesos (P100,000.00) as acceptance fee and a 15% contingency fee upon collection of the overpayment made by Multitel to Benefon, 5 a telecommunications company based in Finland. Complainant found the proposed fees to be prohibitive and not within his means. 6 Hence, the retainer agreement remained unsigned. 7
After a few weeks, complainant was surprised to receive a demand letter from respondent 8 asking for the return and immediate settlement of the funds invested by respondents clients in Multitel. When complainant confronted respondent about the demand letter, the latter explained that she had to send it so that her clients defrauded investors of Multitel would know that she was doing something for them and assured complainant that there was nothing to worry about. 9
Both parties continued to communicate and exchange information regarding the persistent demands made by Multitel investors against complainant. On these occasions, respondent impressed upon complainant that she can closely work with officials of the Anti-Money Laundering Council (AMLC), the Department of Justice (DOJ), the National Bureau of Investigation (NBI), the Bureau of Immigration and Deportations (BID), 10 and the Securities and Exchange Commission (SEC) 11 to resolve complainants problems. Respondent also convinced complainant that in order to be absolved from any liability with respect to the investment scam, he must be able to show to the DOJ that he was willing to divest any and all of his interests in Precedent including the funds assigned to him by Multitel. 12
Respondent also asked money from complainant allegedly for safekeeping to be used only for his case whenever necessary. Complainant agreed and gave her an initial amount of P900,000.00 which was received by respondent herself. 13 Sometime thereafter, complainant again gave respondent P1,000,000.00. 14 Said amounts were all part of Precedents collections and sales proceeds which complainant held as assignee of the companys properties. 15
When complainant went to the United States (US), he received several messages from respondent sent through electronic mail (e- mail) and short messaging system (SMS, or text messages) warning him not to return to the Philippines because Rosario Baladjay, president of Multitel, was arrested and that complainant may later on be implicated in Multitels failed investment system. Respondent even said that ten (10) arrest warrants and a hold departure order had been issued against him. Complainant, thereafter, received several e-mail messages from respondent updating him of the status of the case against Multitel and promised that she will settle the matter discreetly with government officials she can closely work with in order to clear complainants name. 16 In two separate e-mail messages, 17 respondent again asked money from complainant, P200,000 of which was handed by complainants wife while respondent was confined in Saint Lukes Hospital after giving birth, 18 and anotherP700,000 allegedly to be given to the NBI. 19
Through respondents persistent promises to settle all complainants legal problems, respondent was able to convince complainant who was still in the US to execute a deed of assignment in favor of respondent allowing the latter to retrieve 178 boxes containing cellular phones and accessories stored in complainants house and inside a warehouse. 20 He also signed a blank deed of sale authorizing respondent to sell his 2002 Isuzu Trooper. 21
Sometime in April 2003, wary that respondent may not be able to handle his legal problems, complainant was advised by his family to hire another lawyer. When respondent knew about this, she wrote to complainant via e-mail, as follows: Dear Butchie, Hi! Ok ka lang? Hope you are fine. Sorry if I shocked you but I had to do it as your friend and lawyer. The charges are all non-bailable but all the same as the SEC report I told you before. The findings are the same, i.e. your company was the front for the fraud of Multitel and that funds were provided you. I anticipated this, that is why I really pushed for a quitclaim. Rolly is willing to return the Crosswind, laptap (sic) and [P]alm [P]ilot. Manny Cancio really helped. Anthony na lang. Then, I will need the accounting of all the funds you received from the sale of the phones, every employees and directors[] quitclaim (including yours), the funds transmitted to the clients through me, the funds you utilized, and whatelse (sic) is still unremitted, every centavo must be accounted for as DOJ and NBI can have the account opened. I will also need the P30 M proof of deposit with Real [B]ank and the trust given [to] you. So we can inform them [that] it was not touched by you. I have been informed by Efie that your family is looking at hiring Coco Pimentel. I know him very well as his sister Gwen is my best friend. I have no problem if you hire him but I will be hands off. I work differently kasi. In this cases (sic), you cannot be highprofile (sic) because it is the clients who will be sacrificed at the expense of the fame of the lawyer. I have to work quietly and discreetly. No funfare. Just like what I did for your guys in the SEC. I have to work with people I am comfortable with. Efren Santos will sign as your lawyer although I will do all the work. He can help with all his connections. Vals friend in the NBI is the one is (sic) charge of organized crime who is the entity (sic) who has your warrant. My law partner was the state prosecutor for financial fraud. Basically we have it covered in all aspects and all departments. I am just trying to liquidate the phones I have allotted for you s ana (sic) for your trooper kasi whether we like it or not, we have to give this agencies (sic) to make our work easier according to Val. The funds with Mickey are already accounted in the quit claims (sic) as attorneys (sic) fees. I hope he will be able to send it so we have funds to work with. As for your kids, legally they can stay here but recently, it is the children who (sic) the irate clients and government officials harass and kidnap to make the individuals they want to come out from hiding (sic). I do not want that to happen. Things will be really easier on my side. Please do not worry. Give me 3 months to make it all disappear. But if you hire Coco, I will give him the free hand to work with your case. Please trust me. I have never let you down, have I? I told you this will happen but we are ready and prepared. The clients who received the phones will stand by you and make you the hero in this scandal. I will stand by you always. This is my expertise. TRUST me! That is all. You have an angel on your side. Always pray though to the best legal mind up there. You will be ok! Candy 22
On July 4, 2003, contrary to respondents advice, complainant returned to the country. On the eve of his departure from the United States, respondent called up complainant and conveniently informed him that he has been cleared by the NBI and the BID. 23
About a month thereafter, respondent personally met with complainant and his wife and told them that she has already accumulated P12,500,000.00 as attorneys fees and was willing to give P2,000,000.00 to complainant in appreciation for his help. Respondent allegedly told complainant that without his help, she would not have earned such amount. Overwhelmed and relieved, complainant accepted respondents offer but respondent, later on, changed her mind and told complainant that she would instead invest the P2,000,000.00 on his behalf in a business venture. Complainant declined and explained to respondent that he and his family needed the money instead to cover their daily expenses as he was no longer employed. Respondent allegedly agreed, but she failed to fulfill her promise. 24
Respondent even publicly announced in their religious organization that she was able to help settle the ten (10) warrants of arrest and hold departure order issued against complainant and narrated how she was able to defend complainant in the said cases. 25
By April 2004, however, complainant noticed that respondent was evading him. Respondent would either refuse to return complainants call or would abruptly terminate their telephone conversation, citing several reasons. This went on for several months. 26 In one instance, when complainant asked respondent for an update on the collection of Benefons obligation to Precedent which respondent had previously taken charge of, respondent arrogantly answered that she was very busy and that she would read Benefons letter only when she found time to do so. On November 9, 2004, fed up and dismayed with respondents arrogance and evasiveness, complainant wrote respondent a letter formally asking for a full accounting of all the money, documents and properties given to the latter. 27 Respondent rendered an accounting through a letter dated December 20, 2004. 28 When complainant found respondents explanation to be inadequate, he wrote a latter expressing his confusion about the accounting. 29 Complainant repeated his request for an audited financial report of all the properties turned over to her; otherwise, he will be constrained to file the appropriate case against respondent. 30 Respondent replied, 31 explaining that all the properties and cash turned over to her by complainant had been returned to her clients who had money claims against Multitel. In exchange for this, she said that she was able to secure quitclaim documents clearing complainant from any liability. 32 Still unsatisfied, complainant decided to file an affidavit- complaint 33 against respondent before the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) seeking the disbarment of respondent. In her Answer-Affidavit, 34 respondent vehemently denied being the lawyer for Precedent. She maintained that no formal engagement was executed between her and complainant. She claimed that she merely helped complainant by providing him with legal advice and assistance because she personally knew him, since they both belonged to the same religious organization. 35 lavvph!1 Respondent insisted that she represented the group of investors of Multitel and that she merely mediated in the settlement of the claims her clients had against the complainant. She also averred that the results of the settlement between both parties were fully documented and accounted for. 36 Respondent believes that her act in helping complainant resolve his legal problem did not violate any ethical standard and was, in fact, in accord with Rule 2.02 of the Code of Professional Responsibility. 37
To bolster her claim that the complaint was without basis, respondent noted that a complaint for estafa was also filed against her by complainant before the Office of the City Prosecutor in Quezon City citing the same grounds. The complaint was, however, dismissed by Assistant City Prosecutor Josephus Joannes H. Asis for insufficiency of evidence. 38 Respondent argued that on this basis alone, the administrative case must also be dismissed. In her Position Paper, 39 respondent also questioned the admissibility of the electronic evidence submitted by complainant to the IBPs Commission on Bar Discipline. Respondent maintained that the e-mail and the text messages allegedly sent by respondent to complainant were of doubtful authenticity and should be excluded as evidence for failure to conform to the Rules on Electronic Evidence (A.M. No. 01-7- 01-SC). After due hearing, IBP Investigating Commissioner Patrick M. Velez issued a Report and Recommendation 40 finding that a lawyer-client relationship was established between respondent and complainant despite the absence of a written contract. The Investigating Commissioner also declared that respondent violated her duty to be candid, fair and loyal to her client when she allowed herself to represent conflicting interests and failed to render a full accounting of all the cash and properties entrusted to her. Based on these grounds, the Investigating Commissioner recommended her disbarment. Respondent moved for reconsideration, 41 but the IBP Board of Governors issued a Recommendation 42 denying the motion and adopting the findings of the Investigating Commissioner. The case now comes before this Court for final action. We affirm the findings of the IBP. Rule 15.03, Canon 15 of the Code of Professional responsibility provides: Rule 15.03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after full disclosure of the facts. This prohibition is founded on principles of public policy, good taste 43 and, more importantly, upon necessity. In the course of a lawyer-client relationship, the lawyer learns all the facts connected with the clients case, including its weak and strong points. Such knowledge must be considered sacred and guarded with care. No opportunity must be given to him to take advantage of his client; for if the confidence is abused, the profession will suffer by the loss thereof. 44 It behooves lawyers not only to keep inviolate the clients confidence, but also to avoid the appearance of treachery and double dealing for only then can litigants be encouraged to entrust their secrets to their lawyers, which is paramount in the administration of justice. 45 It is for these reasons that we have described the attorney- client relationship as one of trust and confidence of the highest degree. 46
Respondent must have known that her act of constantly and actively communicating with complainant, who, at that time, was beleaguered with demands from investors of Multitel, eventually led to the establishment of a lawyer-client relationship. Respondent cannot shield herself from the inevitable consequences of her actions by simply saying that the assistance she rendered to complainant was only in the form of "friendly accommodations," 47 precisely because at the time she was giving assistance to complainant, she was already privy to the cause of the opposing parties who had been referred to her by the SEC. 48
Respondent also tries to disprove the existence of such relationship by arguing that no written contract for the engagement of her services was ever forged between her and complainant. 49 This argument all the more reveals respondents patent ignorance of fundamental laws on contracts and of basic ethical standards expected from an advocate of justice. The IBP was correct when it said: The absence of a written contract will not preclude the finding that there was a professional relationship between the parties. Documentary formalism is not an essential element in the employment of an attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice and assistance of an attorney is sought and received in any matter pertinent to his profession. 50 (Emphasis supplied.)1awphi1 Given the situation, the most decent and ethical thing which respondent should have done was either to advise complainant to engage the services of another lawyer since she was already representing the opposing parties, or to desist from acting as representative of Multitel investors and stand as counsel for complainant. She cannot be permitted to do both because that would amount to double-dealing and violate our ethical rules on conflict of interest. In Hornilla v. Atty. Salunat, 51 we explained the concept of conflict of interest, thus: There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is "whether or not in behalf of one client, it is the lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other client." This rule covers not only cases in which confidential communications have been confided, but also those in which no confidence has been bestowed or will be used. Also, there is conflict of interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new relation to use against his first client any knowledge acquired through their connection. Another test of the inconsistency of interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof. 52
Indubitably, respondent took advantage of complainants hapless situation, initially, by giving him legal advice and, later on, by soliciting money and properties from him. Thereafter, respondent impressed upon complainant that she had acted with utmost sincerity in helping him divest all the properties entrusted to him in order to absolve him from any liability. But simultaneously, she was also doing the same thing to impress upon her clients, the party claimants against Multitel, that she was doing everything to reclaim the money they invested with Multitel. Respondent herself admitted to complainant that without the latters help, she would not have been able to earn as much and that, as a token of her appreciation, she was willing to share some of her earnings with complainant. 53 Clearly, respondents act is shocking, as it not only violated Rule 9.02, Canon 9 of the Code of Professional Responsibility, 54 but also toyed with decency and good taste. Respondent even had the temerity to boast that no Multitel client had ever complained of respondents unethical behavior. 55 This remark indubitably displays respondents gross ignorance of disciplinary procedure in the Bar. As a member of the Bar, she is expected to know that proceedings for disciplinary actions against any lawyer may be initiated and prosecuted by the IBP Board of Governors, motu proprio or upon referral by this Court or by the Board of Officers of an IBP Chapter 56 even if no private individual files any administrative complaint. Upon review, we find no cogent reason to disturb the findings and recommendations of the IBP Investigating Commissioner, as adopted by the IBP Board of Governors, on the admissibility of the electronic evidence submitted by complainant. We, accordingly, adopt the same in toto. Finally, respondent argues that the recommendation of the IBP Board of Governors to disbar her on the grounds of deceit, malpractice and other gross misconduct, aside from violation of the Lawyers Oath, has been rendered moot and academic by voluntary termination of her IBP membership, allegedly after she had been placed under the Department of Justices Witness Protection Program. 57 Convenient as it may be for respondent to sever her membership in the integrated bar, this Court cannot allow her to do so without resolving first this administrative case against her. The resolution of the administrative case filed against respondent is necessary in order to determine the degree of her culpability and liability to complainant. The case may not be dismissed or rendered moot and academic by respondents act of voluntarily terminating her membership in the Bar regardless of the reason for doing so. This is because membership in the Bar is a privilege burdened with conditions. 58 The conduct of a lawyer may make him or her civilly, if not criminally, liable to his client or to third parties, and such liability may be conveniently avoided if this Court were to allow voluntary termination of membership. Hence, to terminate ones membership in the Bar voluntarily, it is imperative that the lawyer first prove that the voluntary withdrawal of membership is not a ploy to further prejudice the public or to evade liability. No such proof exists in the present case. WHEREFORE, respondent Attorney Maricel Pascual-Lopez is hereby DISBARRED for representing conflicting interests and for engaging in unlawful, dishonest and deceitful conduct in violation of her Lawyers Oath and the Code of Professional Responsibility. Let a copy of this Decision be entered in the respondents record as a member of the Bar, and notice of the same be served on the Integrated Bar of the Philippines, and on the Office of the Court Administrator for circulation to all courts in the country. SO ORDERED.
A.C. No. 9094 August 15, 2012 SANTOS VENTURA HOCORMA FOUNDATION, INC., represented by GABRIEL H. ABAD, Complainant, vs. ATTY. RICHARD V. FUNK, Respondent. D E C I S I O N ABAD, J .: This is a disbarment case against a lawyer who sued a former client in representation of a new one. The Facts and the Case Complainant Santos Ventura Hocorma Foundation, Inc. (Hocorma Foundation) filed a complaint for disbarment against respondent Atty. Richard Funk. It alleged that Atty. Funk used to work as corporate secretary, counsel, chief executive officer, and trustee of the foundation from 1983 to 1985. 1 He also served as its counsel in several criminal and civil cases. Hocorma Foundation further alleged that on November 25, 2006 Atty. Funk filed an action for quieting of title and damages against Hocorma Foundation on behalf of Mabalacat Institute, Inc. (Mabalacat Institute). Atty. Funk did so, according to the foundation, using information that he acquired while serving as its counsel in violation of the Code of Professional Responsibility (CPR) and in breach of attorney-client relationship. 2
In his answer, Atty. Funk averred that Don Teodoro V. Santos (Santos) organized Mabalacat Institute in 1950 and Hocorma Foundation in 1979. Santos hired him in January 1982 to assist Santos and the organizations he established, including the Mabalacat Institute, in its legal problems. In 1983 the Mabalacat Institute made Atty. Funk serve as a director and legal counsel. 3
Subsequently, according to Atty. Funk, when Santos got involved in various litigations, he sold or donated substantial portions of his real and personal properties to the Hocorma Foundation. Santos hired Atty. Funk for this purpose. The latter emphasized that, in all these, the attorney-client relationship was always between Santos and him. He was more of Santos' personal lawyer than the lawyer of Hocorma Foundation. 4
Atty. Funk claimed that before Santos left for America in August 1983 for medical treatment, he entered into a retainer agreement with him. They agreed that Atty. Funk would be paid for his legal services out of the properties that he donated or sold to the Hocorma Foundation. The foundation approved that compensation agreement on December 13, 1983. But it reneged and would not pay Atty. Funk's legal fees. 5
Atty. Funk also claimed that Santos executed a Special Power of Attorney (SPA) in his favor on August 13, 1983. The SPA authorized him to advise Hocorma Foundation and follow up with it Santos' sale or donation of a 5-hectare land in Pampanga to Mabalacat Institute, covered by TCT 19989-R. Out of these, two hectares already comprised its school site. The remaining three hectares were for campus expansion. Atty. Funk was to collect all expenses for the property transfer from Hocorma Foundation out of funds that Santos provided. It was Santos' intention since 1950 to give the land to Mabalacat Institute free of rent and expenses. The SPA also authorized Atty. Funk to register the 5- hectare land in the name of Mabalacat Institute so a new title could be issued to it, separate from the properties of Hocorma Foundation. 6 When Santos issued the SPA, Atty. Funk was Mabalacat Institute's director and counsel. He was not yet Hocorma Foundation's counsel. 7 When Santos executed the deeds of conveyances, Atty. Funk's clients were only Santos and Mabalacat Institute. 8
According to Atty. Funk, on August 15, 1983 Santos suggested to Hocorma Foundation's Board of Trustees the inclusion of Atty. Funk in that board, a suggestion that the foundation followed. 9 After Santos died on September 14, 1983, Atty. Funk was elected President of Mabalacat Institute, a position he had since held. 10
Atty. Funk claims that in 1985 when Hocorma Foundation refused to pay his attorney's fees, he severed his professional relationship with it. On November 9, 1989, four years later, he filed a complaint against the foundation for collection of his attorney's fees. The trial court, the Court of Appeals (CA), and the Supreme Court decided the claim in his favor. 11
After hearing, the Committee on Bar Discipline (CBD) found Atty. Funk to have violated Canon 15, Rule 15.03 12 of the Code of Professional Responsibility (CPR) with the aggravating circumstance of a pattern of misconduct consisting of four court appearances against his former client, the Hocorma Foundation. The CBD recommended Atty. Funk's suspension from the practice of law for one year. 13 On April 16, 2010 the IBP Board of Governors adopted and approved the CBD's report and recommendation. 14 Atty. Funk moved for reconsideration but the IBP Board of Governors denied it on June 26, 2011. The Issue Presented The issue here is whether or not Atty. Funk betrayed the trust and confidence of a former client in violation of the CPR when he filed several actions against such client on behalf of a new one. The Court's Ruling Canon 15, Rule 15.03 of the CPR provides that a lawyer cannot represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts. Here, it is undeniable that Atty. Funk was formerly the legal counsel of Hocorma Foundation. Years after terminating his relationship with the foundation, he filed a complaint against it on behalf of another client, the Mabalacat Institute, without the foundation's written consent. An attorney owes his client undivided allegiance. Because of the highly fiduciary nature of their relationship, sound public policy dictates that he be prohibited from representing conflicting interests or discharging inconsistent duties.1wphi1An attorney may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his present or former client. This rule is so absolute that good faith and honest intention on the erring lawyer's part does not make it inoperative. 15
The reason for this is that a lawyer acquires knowledge of his former client's doings, whether documented or not, that he would ordinarily not have acquired were it not for the trust and confidence that his client placed on him in the light of their relationship. It would simply be impossible for the lawyer to identify and erase such entrusted knowledge with faultless precision or lock the same into an iron box when suing the former client on behalf of a new one. Here, the evidence shows that Hocorma Foundation availed itself of the legal services of Atty. Funk in connection with, among others, the transfer of one of the properties subject of the several suits that the lawyer subsequently filed against the foundation. Indeed, Atty. Funk collected attorney's fees from the foundation for such services. Thus, he had an obligation not to use any knowledge he acquired during that relationship, including the fact that the property under litigation existed at all, when he sued the foundation. The Court finds it fitting ti adopt the CBD's recommendation as well as the IBP Board of Governor's resolution respecting the case. WHEREFORE, the Court AFFIRMS the resolution of the Board of Governors of the Integrated Bar of the Philippines dated April 16, 2010 and June 26, 2011 and SUSPENDS Atty. Richard Funk from the practice of law for one year effective immediately. Serve copies of this decision upon the Office of the Court Administration for dissemination, the Integrated Bar of the Philippines, and the Office of the Bar Confidant so the latter may attach its copy to his record. SO ORDERED.
A.C. No. 2040 March 4, 1998 IMELDA A. NAKPIL, complainant, vs. ATTY. CARLOS J. VALDES, respondent.
PUNO, J .: The friendship of JOSE NAKPIL and respondent CARLOS J. VALDES dates back to the '50s during their school days in De La Salle and the Philippine Law School. Their closeness extended to their families and respondent became the business consultant, lawyer and accountant of the Nakpils. In 1965, Jose Nakpil became interested in purchasing a summer residence in Moran Street, Baguio City. 1 For lack of funds, he requested respondent to purchase the Moran property for him. They agreed that respondent would keep the property in trust for the Nakpils until the latter could buy it back. Pursuant to their agreement, respondent obtained two (2) loans from a bank (in the amounts of P65,000.00 and P75,000.00) which he used to purchase and renovate the property. Title was then issued in respondent's name. It was the Nakpils who occupied the Moran summer house. When Jose Nakpil died on July 8, 1973, respondent acted as the legal counsel and accountant of his widow, complainant IMELDA NAKPIL. On March 9, 1976, respondent's law firm, Carlos J. Valdes & Associates, handled the proceeding for the settlement of Jose's estate. Complainant was appointed as administratrix of the estate. The ownership of the Moran property became an issue in the intestate proceedings. It appears that respondent excluded the Moran property from the inventory of Jose's estate. On February 13, 1978, respondent transferred his title to the Moran property to his company, the Caval Realty Corporation. On March 29, 1979, complainant sought to recover the Moran property by filing with the then Court of First Instance (CFI) of Baguio City an action for reconveyance with damages against respondent and his corporation. In defense, respondent claimed absolute ownership over the property and denied that a trust was created over it. During the pendency of the action for reconveyance, complainant filed this administrative case to disbar the respondent. She charged that respondent violated professional ethics when he: I. Assigned to his family corporation the Moran property (Pulong Maulap) which belonged to the estate he was settling as its lawyer and auditor. II. Excluded the Moran property from the "inventory of real estate properties" he prepared for a client-estate and, at the same time, charged the loan secured to purchase the said excluded property as a liability of the estate, all for the purpose of transferring the title to the said property to his family corporation. III. Prepared and defended monetary claims against the estate that retained him as its counsel and auditor. 2
On the first charge, complainant alleged that she accepted respondent's offer to serve as lawyer and auditor to settle her husband's estate. Respondent's law firm then filed a petition for settlement of the estate of the deceased Nakpil but did not include the Moran property in the estate's inventory. Instead, respondent transferred the property to his corporation, Caval Realty Corporation, and title was issued in its name. Complainant accused respondent of maliciously appropriating the property in trust knowing that it did not belong to him. She claimed that respondent has expressly acknowledged that the said property belonged to the late Nakpil in his correspondences 3 with the Baguio City Treasurer and the complainant. On the second charge, complainant alleged that respondent's auditing firm (C. J. Valdes & Co., CPAs) excluded the Moran property from the inventory of her husband's estate, yet included in the claims against the estate the amounts of P65,000.00 and P75,000.00, which respondent represented as her husband's loans applied "probably for the purchase of a house and lot in Moran Street, Baguio City." As to the third charge, complainant alleged that respondent's law firm (Carlos J. Valdes and Associates) filed the petition for the settlement of her husband's estate in court, while respondent's auditing firm (C.J. Valdes & Co., CPAs) acted as accountant of both the estate and two of its creditors. She claimed that respondent represented conflicting interests when his accounting firm prepared the list of claims of creditors Angel Nakpil and ENORN, Inc. against her husband's estate which was represented by respondent's law firm. Complainant averred that there is no distinction between respondent's law and auditing firms as respondent is the senior and controlling partner of both firms which are housed in the same building. We required respondent to answer the charges against him. In his ANSWER, 4 respondent initially asserted that the resolution of the first and second charges against him depended on the result of the pending action in the CFI for reconveyance which involved the issue of ownership of the Moran property. On the merit of the first charge, respondent reiterated his defense in the reconveyance case that he did not hold the Moran property in trust for the Nakpils as he is its absolute owner. Respondent explained that the Nakpils never bought back the Moran property from him, hence, the property remained to be his and was rightly excluded from the inventory of Nakpil's estate. As to the second charge, respondent denied preparing the list of claims against the estate which included his loans of P65,000.00 and P75,000.00 for the purchase and renovation of the Moran property. In charging his loans against the estate, he stressed that the list drawn up by his accounting firm merely stated that the loans in respondent's name were applied "probably for the purchase of the house and lot in Moran Street, Baguio City." Respondent insisted that this was not an admission that the Nakpils owned the property as the phrase "probably for the purchase" did not imply a consummated transaction but a projected acquisition. Respondent also disclaimed knowledge or privity in the preparation of a letter (Exhibit "H") of his accounting firm to the Baguio City treasurer remitting the real estate taxes for the Moran property on behalf of the Nakpils. He contended that the letter could be a mere error or oversight. Respondent averred that it was complainant who acknowledged that they did not own the Moran property for: (1) complainant's February 1979 Statement of Assets and Liabilities did not include the said property, and; (2) complainant, as administratrix, signed the Balance Sheet of the Estate where the Moran property was not mentioned. Respondent admitted that complainant retained the services of his law and accounting firms in the settlement of her husband's estate. 5 However, he pointed out that he has resigned from his law and accounting firms as early as 1974. He alleged that it was Atty. Percival Cendaa (from the law firm Carlos Valdes & Associates) who filed the intestate proceedings in court in 1976. As to the third charge, respondent denied there was a conflict of interest when his law firm represented the estate in the intestate proceedings while his accounting firm (C.J. Valdes & Co., CPAs) served as accountant of the estate and prepared the claims of creditors Angel Nakpil and ENORN, Inc. against the estate. He proffered the following reasons for his thesis: First, the two claimants were closely related to the late Nakpil. Claimant ENORN, Inc. is a family corporation of the Nakpils of which the late Nakpil was the President. Claimant Angel Nakpil is a brother of the late Nakpil who, upon the latter's death, became the President of ENORN, Inc. These two claimants had been clients of his law and accounting firms even during the lifetime of Jose Nakpil. Second, his alleged representation of conflicting interests was with the knowledge and consent of complainant as administratrix. Third, there was no conflict of interests between the estate and the claimants for they had forged a modus vivendi, i.e., that the subject claims would be satisfied only after full payment of the principal bank creditors. Complainant, as administratrix, did not controvert the claims of Angel Nakpil and ENORN, Inc. Complainant has started paying off the claims of Angel Nakpil and ENORN, Inc. after satisfying the banks' claims. Complainant did not assert that their claims caused prejudice to the estate. Fourth, the work of Carlos J. Valdes & Co. as common auditor redounded to the benefit of the estate for the firm prepared a true and accurate amount of the claim. Fifth, respondent resigned from his law and accounting firms as early as August 15, 1974. 6 He rejoined his accounting firm several years later. He submitted as proof the SEC's certification of the filing of his accounting firm of an Amended Articles of Partnership. Thus, it was not he but Atty. Percival Cendaa, from the firm Carlos J. Valdes & Associates, who filed the intestate proceedings in court. On the other hand, the claimants were represented by their own counsel Atty. Enrique O. Chan. Sixth, respondent alleged that in the remote possibility that he committed a breach of professional ethics, he committed such "misconduct" not as a lawyer but as an accountant who acted as common auditor of the estate and its creditors. Hence, he should be held accountable in another forum. On November 12, 1979, complainant submitted her REPLY. 7 She maintained that the pendency of the reconveyance case is not prejudicial to the investigation of her disbarment complaint against respondent for the issue in the latter is not the ownership of the Moran property but the ethics and morality of respondent's conduct as a CPA-lawyer. Complainant alleged that respondent's Annexes to his Reply (such as the Statement of Assets & Liability of the Nakpils and the Balance Sheet of the Estate) which showed that complainant did not claim ownership of the Moran property were all prepared by C.J. Valdes & Co. as accountant of the estate of Jose Nakpil and filed with the intestate court by C.J. Valdes & Associates as counsel for the estate. She averred that these Annexes were not proofs that respondent owned the Moran property but were part of respondent's scheme to remove the property from the estate and transfer it to his family corporation. Complainant alleged that she signed the documents because of the professional counsel of respondent and his firm that her signature thereon was required. Complainant charged respondent with greed for coveting the Moran property on the basis of defects in the documents he himself prepared.. Complainant urged that respondent cannot disown unfavorable documents (the list of claims against the estate and the letter regarding Nakpil's payment of realty tax on the Moran property) which were prepared by his law and accounting firms and invoke other documents prepared by the same firms which are favorable to him. She averred that respondent must accept responsibility not just for some, but for all the representations and communications of his firms. Complainant refuted respondent's claim that he resigned from his firms from March 9, 1976 to "several years later." She alleged that none of the documents submitted as evidence referred to his resignation from his law firm. The documents merely substantiated his resignation from his accounting firm. In his REJOINDER, 8 respondent insisted that complainant cannot hold him liable for representing the interests of both the estate and the claimants without showing that his action prejudiced the estate. He urged that it is not per se anomalous for respondent's accounting firm to act as accountant for the estate and its creditors. He reiterated that he is not subject to the jurisdiction of this Court for he acted not as lawyer, but as accountant for both the estate and its claimants. He alleged that his accounting firm merely prepared the list of claims of the creditors Angel Nakpil and ENORN, Inc. Their claims were not defended by his accounting or law firm but by Atty. Enrique Chan. He averred that his law firm did not oppose these claims as they were legitimate and not because they were prepared by his accounting firm. He emphasized that there was no allegation that the claims were fraudulent or excessive and that the failure of respondent's law firm to object to these claims damaged the estate. In our January 21, 1980 Resolution, 9 we deferred further action on the disbarment case until after resolution of the action for reconveyance between the parties involving the issue of ownership by the then CFI of Baguio. Complainant moved for reconsideration on the ground that the issue of ownership pending with the CFI was not prejudicial to her complaint which involved an entirely different issue, i.e., the unethical acts of respondent as a CPA-lawyer. We granted her motion and referred the administrative case to the Office of the Solicitor General (OSG) for investigation, report and recommendation. 10
In 1983, the CFI of Baguio dismissed the action for reconveyance. The trial court ruled that respondent held the Moran property in trust for the Nakpils but found that complainant waived her right over it. On appeal, the Court of Appeals reversed the trial court. The appellate court held that respondent was the absolute owner of the Moran property. The Decision was elevated to this Court. On February 18, 1986, during the pendency of complainant's appeal to this Court, the OSG submitted its Report 11 on the disbarment complaint. The OSG relied heavily on the decision of the Court of Appeals then pending review by this Court. The OSG found that respondent was not put on notice of complainant's claim over the property. It opined that there was no trust agreement created over the property and that respondent was the absolute owner thereof. Thus, it upheld respondent's right to transfer title to his family corporation. It also found no conflict of interests as the claimants were related to the late Jose Nakpil. The OSG recommended the dismissal of the administrative case. Prefatorily, we note that the case at bar presents a novel situation as it involves the disbarment of a CPA-lawyer for his demeanor in his accounting profession and law practice in connection with the property of his client. As a rule, a lawyer is not barred from dealing with his client but the business transaction must be characterized with utmost honesty and good faith. 12 The measure of good faith which an attorney is required to exercise in his dealings with his client is a much higher standard than is required in business dealings where the parties trade at "arms length." 13 Business transactions between an attorney and his client are disfavored and discouraged by the policy of the law. Hence, courts carefully watch these transactions to assure that no advantage is taken by a lawyer over his client. This rule is founded on public policy for, by virtue of his office, an attorney is in an easy position to take advantage of the credulity and ignorance of his client. Thus, no presumption of innocence or improbability of wrongdoing is considered in an attorney's favor. 14
In the case at bar, we cannot subscribe to the findings of the OSG in its Report. These findings were based mainly on the decision of the Court of Appeals in the action for reconveyance which was reversed by this Court in 1993. 15
As to the first two charges, we are bound by the factual findings of this Court in the aforementioned reconveyance case. 16 It is well- established that respondent offered to the complainant the services of his law and accounting firms by reason of their close relationship dating as far back as the '50s. She reposed her complete trust in respondent who was the lawyer, accountant and business consultant of her late husband. Respondent and the late Nakpil agreed that the former would purchase the Moran property and keep it in trust for the latter. In violation of the trust agreement, respondent claimed absolute ownership over the property and refused to sell the property to complainant after the death of Jose Nakpil. To place the property beyond the reach of complainant and the intestate court, respondent later transferred it to his corporation. Contrary to the findings of the OSG, respondent initially acknowledged and respected the trust nature of the Moran property. Respondent's bad faith in transferring the property to his family corporation is well discussed in this Court's Decision, 17 thus: . . . Valdes (herein respondent) never repudiated the trust during the lifetime of the late Jose Nakpil. On the contrary, he expressly recognized it. . . . (H)e repudiated the trust when (he) excluded Pulong Maulap from the list of properties of the late Jose Nakpil submitted to the intestate court in 1973. . . . xxx xxx xxx The fact that there was no transfer of ownership intended by the parties . . . can be bolstered by Exh. "I- 2," an annex to the claim filed against the estate proceedings of the late Jose Nakpil by his brother, Angel Nakpil, which was prepared by Carlos J. Valdes & Co., the accounting firm of herein respondent. Exhibit "I-2," which is a list of the application of the proceeds of various FUB loans contracted as of 31 December 1973 by the late Jose Nakpil, . . . contains the two (2) loans contracted in the name of respondent. If ownership of Pulong Maulap was already transferred or ceded to Valdes, these loans should not have been included in the list. Indeed, as we view it, what the parties merely agreed to under the arrangement outlined in Exh. "J" was that respondent Valdes would . . . "take over the total loan of P140,000.00 and pay all of the interests due on the notes" while the heirs of the late Jose Nakpil would continue to live in the disputed property for five (5) years without remuneration save for regular maintenance expenses. This does not mean, however, that if at the end of the five-year period petitioner (Nakpil) failed to reimburse Valdes for his advances, . . . Valdes could already automatically assume ownership of Pulong Maulap. Instead, the remedy of respondents Carlos J. Valdes and Caval Realty Corporation was to proceed against the estate of the late Jose M. Nakpil and/or the property itself." (emphasis supplied) In the said reconveyance case, we further ruled that complainant's documentary evidence (Exhibits "H", "J" and "L"), which she also adduced in this administrative case, should estop respondent from claiming that he bought the Moran property for himself, and not merely in trust for Jose Nakpil. 18
It ought to follow that respondent's act of excluding the Moran property from the estate which his law firm was representing evinces a lack of fidelity to the cause of his client. If respondent truly believed that the said property belonged to him, he should have at least informed complainant of his adverse claim. If they could not agree on its ownership, respondent should have formally presented his claim in the intestate proceedings instead of transferring the property to his own corporation and concealing it from complainant and the judge in the estate proceedings. Respondent's misuse of his legal expertise to deprive his client of the Moran property is clearly unethical. To make matters worse, respondent, through his accounting firm, charged the two loans of P65,000.00 and P75,000.00 as liability of the estate, after said loans were obtained by respondent for the purchase and renovation of the property which he claimed for himself. Respondent seeks to exculpate himself from this charge by disclaiming knowledge or privity in the preparation of the list of the estate's liabilities. He theorizes that the inclusion of the loans must have been a mere error or oversight of his accounting firm. It is clear that the information as to how these two loans should be treated could have only come from respondent himself as the said loans were in his name. Hence, the supposed error of the accounting firm in charging respondent's loans against the estate could not have been committed without respondent's participation. Respondent wanted to "have his cake and eat it too" and subordinated the interest of his client to his own pecuniary gain. Respondent violated Canon 17 of the Code of Professional Responsibility which provides that a lawyer owes fidelity to his client's cause and enjoins him to be mindful of the trust and confidence reposed on him. As regards the third charge, we hold that respondent is guilty of representing conflicting interests. It is generally the rule, based on sound public policy, that an attorney cannot represent adverse interests. It is highly improper to represent both sides of an issue. 19 The proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter 20 and is applicable however slight such adverse interest may be. It applies although the attorney's intentions and motives were honest and he acted in good faith. 21 However, representation of conflicting interests may be allowed where the parties consent to the representation, after full disclosure of facts. Disclosure alone is not enough for the clients must give their informed consent to such representation. The lawyer must explain to his clients the nature and extent of the conflict and the possible adverse effect must be thoroughly understood by his clients. 22
In the case at bar, there is no question that the interests of the estate and that of its creditors are adverse to each other. Respondent's accounting firm prepared the list of assets and liabilities of the estate and, at the same time, computed the claims of two creditors of the estate. There is clearly a conflict between the interest of the estate which stands as the debtor, and that of the two claimants who are creditors of the estate. In fact, at one instance, respondent's law firm questioned the claims of creditor Angel Nakpil against the estate. To exculpate himself, respondent denies that he represented complainant in the intestate proceedings. He points out that it was one Atty. Percival Cendaa, from his law firm Carlos J. Valdes & Associates, who filed the intestate case in court. However, the fact that he did not personally file the case and appear in court is beside the point. As established in the records of this case and in the reconveyance case, 23 respondent acted as counsel and accountant of complainant after the death of Jose Nakpil. Respondent's defense that he resigned from his law and accounting firms as early as 1974 (or two years before the filing of the intestate case) is unworthy of merit. Respondent's claim of resignation from his law firm is not supported by any documentary proof. The documents on record 24 only show respondent's resignation from his accounting firm in 1972 and 1974. Even these documents reveal that respondent returned to his accounting firm on July 1, 1976 and as of 1978, the intestate proceedings for the settlement of Jose's estate had not yet been terminated. It does not escape us that when respondent transferred the Moran property to his corporation on February 13, 1978, the intestate proceedings was still pending in court. Thus, the succession of events shows that respondent could not have been totally ignorant of the proceedings in the intestate case. Respondent claims that complainant knew that his law firm Carlos J. Valdes & Associates was the legal counsel of the estate 25 and his accounting firm, C.J. Valdes & Co., CPAs, was the auditor of both the estate and the two claimants against it. 26 The fact, however, that complainant, as administratrix, did not object to the set-up cannot be taken against her as there is nothing in the records to show that respondent or his law firm explained the legal situation and its consequences to complainant. Thus, her silence regarding the arrangement does not amount to an acquiescence based on an informed consent. We also hold that the relationship of the claimants to the late Nakpil does not negate the conflict of interest. When a creditor files a claim against an estate, his interest is per se adverse to the estate. As correctly pointed out by complainant, if she had a claim against her husband's estate, her claim is still adverse and must be filed in the intestate proceedings. Prescinding from these premises, respondent undoubtedly placed his law firm in a position where his loyalty to his client could be doubted. In the estate proceedings, the duty of respondent's law firm was to contest the claims of these two creditors but which claims were prepared by respondent's accounting firm. Even if the claims were valid and did not prejudice the estate, the set-up is still undesirable. The test to determine whether there is a conflict of interest in the representation is probability, not certainty of conflict. It was respondent's duty to inhibit either of his firms from said proceedings to avoid the probability of conflict of interest. Respondent advances the defense that assuming there was conflict of interest, he could not be charged before this Court as his alleged "misconduct" pertains to his accounting practice. We do not agree. Respondent is a CPA-lawyer who is actively practicing both professions. He is the senior partner of his law and accounting firms which carry his name. In the case at bar, complainant is not charging respondent with breach of ethics for being the common accountant of the estate and the two creditors. He is charged for allowing his accounting firm to represent two creditors of the estate and, at the same time, allowing his law firm to represent the estate in the proceedings where these claims were presented. The act is a breach of professional ethics and undesirable as it placed respondent's and his law firm's loyalty under a cloud of doubt. Even granting that respondent's misconduct refers to his accountancy practice, it would not prevent this Court from disciplining him as a member of the Bar. The rule is settled that a lawyer may be suspended or disbarred for ANY misconduct, even if it pertains to his private activities, as long as it shows him to be wanting in moral character, honesty, probity or good demeanor. 27 Possession of good moral character is not only a prerequisite to admission to the bar but also a continuing requirement to the practice of law. Public confidence in law and lawyers may be eroded by the irresponsible and improper conduct of a member of the bar. Thus, a lawyer should determine his conduct by acting in a manner that would promote public confidence in the integrity of the legal profession. Members of the Bar are expected to always live up to the standards embodied in the Code of Professional Responsibility as the relationship between an attorney and his client is highly fiduciary in nature and demands utmost fidelity and good faith. 28 In the case at bar, respondent exhibited less than full fidelity to his duty to observe candor, fairness and loyalty in his dealings and transactions with his clients. 29
IN VIEW WHEREOF, the Court finds respondent ATTY. CARLOS J. VALDES guilty of misconduct. He is suspended from the practice of law for a period of one (1) year effective from receipt of this Decision, with a warning that a similar infraction shall be dealt with more severely in the future. Let copies of this Decision be furnished all courts, as well as the Integrated Bar of the Philippines and the Office of the Bar Confidant. SO ORDERED.
A.C. No. 3701 March 28, 1995 PHILIPPINE NATIONAL BANK, complainant, vs. ATTY. TELESFORO S. CEDO, respondent. R E S O L U T I O N
BIDIN, J .: In a verified letter-complaint dated August 15, 1991, complainant Philippine National Bank charged respondent Atty. Telesforo S. Cedo, former Asst. Vice-President of the Asset Management Group of complainant bank with violation of Canon 6, Rule 6.03 of the Code of Professional Responsibility, thus: A lawyer shall not, after leaving government service, accept engagement or employment in connection with any matter in which he had intervened while in said service. by appearing as counsel for individuals who had transactions with complainant bank in which respondent during his employment with aforesaid bank, had intervened. Complainant averred that while respondent was still in its employ, he participated in arranging the sale of steel sheets (denominated as Lots 54-M and 55-M) in favor of Milagros Ong Siy for P200,000. He even "noted" the gate passes issued by his subordinate, Mr. Emmanuel Elefan, in favor of Mrs. Ong Siy authorizing the pull-out of the steel sheets from the DMC Man Division Compound. When a civil action arose out of this transaction between Mrs. Ong Siy and complainant bank before the Regional Trial Court of Makati, Branch 146, respondent who had since left the employ of complainant bank, appeared as one of the counsels of Mrs. Ong Siy. Similarly, when the same transaction became the subject of an administrative case filed by complainant bank against his former subordinate Emmanuel Elefan, for grave misconduct and dishonesty, respondent appeared as counsel for Elefan only to be later disqualified by the Civil Service Commission. Moreover, while respondent was still the Asst. Vice President of complainants Asset Management Group, he intervened in the handling of the loan account of the spouses Ponciano and Eufemia Almeda with complainant bank by writing demand letters to the couple. When a civil action ensued between complainant bank and the Almeda spouses as a result of this loan account, the latter were represented by the law firm "Cedo, Ferrer, Maynigo & Associates" of which respondent is one of the Senior Partners. In his Comment on the complaint, respondent admitted that he appeared as counsel for Mrs. Ong Siy but only with respect to the execution pending appeal of the RTC decision. He alleged that he did not participate in the litigation of the case before the trial court. With respect to the case of the Almeda spouses, respondent alleged that he never appeared as counsel for them. He contended that while the law firm "Cedo Ferrer, Maynigo & Associates" is designated as counsel of record, the case is actually handled only by Atty. Pedro Ferrer. Respondent averred that he did not enter into a general partnership with Atty. Pedro Ferrer nor with the other lawyers named therein. They are only using the aforesaid name to designate a law firm maintained by lawyers, who although not partners, maintain one office as well as one clerical and supporting staff. Each one of them handles their own cases independently and individually receives the revenues therefrom which are not shared among them. In the resolution of this Court dated January 27, 1992, this case was referred to the Integrated Bar of the Philippines (IBP), for investigation, report and recommendation. During the investigation conducted by the IBP, it was discovered that respondent was previously fined by this Court in the amount of P1,000.00 in connection with G.R. No. 94456 entitled "Milagros Ong Siy vs. Hon. Salvador Tensuan, et al." for forum shopping, where respondent appeared as counsel for petitioner Milagros Ong Siy "through the law firm of Cedo Ferrer Maynigo and Associates." The IBP further found that the charges herein against respondent were fully substantiated. Respondent's averment that the law firm handling the case of the Almeda spouses is not a partnership deserves scant consideration in the light of the attestation of complainant's counsel, Atty. Pedro Singson, that in one of the hearings of the Almeda spouses' case, respondent attended the same with his partner Atty. Ferrer, and although he did not enter his appearance, he was practically dictating to Atty. Ferrer what to say and argue before the court. Furthermore, during the hearing of the application for a writ of injunction in the same case, respondent impliedly admitted being the partner of Atty. Ferrer, when it was made of record that respondent was working in the same office as Atty. Ferrer. Moreover, the IBP noted that assuming the alleged set-up of the firm is true, it is in itself a violation of the Code of Professional Responsibility (Rule 15.02) since the clients secrets and confidential records and information are exposed to the other lawyers and staff members at all times. From the foregoing, the IBP found a deliberate intent on the part of respondent to devise ways and means to attract as clients former borrowers of complainant bank since he was in the best position to see the legal weaknesses of his former employer, a convincing factor for the said clients to seek his professional service. In sum, the IBP saw a deliberate sacrifice by respondent of his ethics in consideration of the money he expected to earn. The IBP thus recommended the suspension of respondent from the practice of law for 3 years. The records show that after the Board of Governors of the IBP had, on October 4, 1994, submitted to this Court its Report and recommendation in this case, respondent filed a Motion for Reconsideration dated October 25, 1994 of the recommendation contained in the said Report with the IBP Board of Governors. On December 12, 1994, respondent also filed another "Motion to Set Hearing" before this Court, the aforesaid Motion for Reconsideration. In resolving this case, the Court took into consideration the aforesaid pleadings. In addition to the findings of the IBP, this Court finds this occasion appropriate to emphasize the paramount importance of avoiding the representation of conflicting interests. In the similar case of Pasay Law and Conscience Union, Inc. vs. Paz, (95 SCRA 24 [1980]) where a former Legal Officer and Legal Prosecutor of PARGO who participated in the investigation of the Anti-Graft case against Mayor Pablo Cuneta later on acted as counsel for the said Mayor in the same anti-graft case, this Court, citing Nombrado vs. Hernandez (26 SCRA 13 119681) ruled: The Solicitor General is of the opinion, and we find no reason to disagree with him, that even if respondent did not use against his client any information or evidence acquired by him as counsel it cannot be denied that he did become privy to information regarding the ownership of the parcel of land which was later litigated in the forcible entry case, for it was the dispute over the land that triggered the mauling incident which gave rise to the criminal action for physical injuries. This Court's remarks inHilado vs. David, 84 Phil. 571, are apropos: "Communications between attorney and client are, in a great number of litigations, a complicated affair, consisting of entangled relevant and irrelevant, secret and well-known facts. In the complexity of what is said in the course of dealings between an attorney and client, inquiry of the nature suggested would lead to the revelation, in advance of the trial, of other matters that might only further prejudice the complainant's cause." Whatever may be said as to whether or not respondent utilized against his former client information given to him in a professional capacity, the mere fact of their previous relationship should have precluded him from appearing as counsel for the other side in the forcible entry case. In the case ofHilado vs. David, supra, this Tribunal further said: Hence the necessity of setting the existence of the bare relationship of attorney and client as the yardstick for testing incompatibility of interests. This stern rule is designed not alone to prevent the dishonest practitioner from fraudulent conduct, but as well to protect the honest lawyer from unfounded suspicion of unprofessional practice. . . . It is founded on principles of public policy, of good taste. As has been said in another case, the question is not necessarily one of the rights of the parties, but as to whether the attorney has adhered to proper professional standard. With these thoughts in mind, it behooves attorney, like Caesar's wife, not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double dealing. Only thus can litigants. be encouraged to entrust their secrets to their attorneys which is of paramount importance in the administration of justice. The foregoing disquisition on conflicting interest applies with equal force and effect to respondent in the case at bar. Having been an executive of complainant bank, respondent now seeks to litigate as counsel for the opposite side, a case against his former employer involving a transaction which he formerly handled while still an employee of complainant, in violation of Canon 6 of the Canons of Professional Ethics on adverse influence and conflicting interests, to wit: It is unprofessional to represent conflicting interests, except by express conflicting consent of all concerned given after a full disclosure of the facts. Within the meaning of this canon, a lawyer represents conflicting interest when, in behalf on one client, it is his duty to contend for that which duty to another client requires him to oppose. ACCORDINGLY, this Court resolves to SUSPEND respondent ATTY. TELESFORO S. CEDO from the practice of law for THREE (3) YEARS, effective immediately. Let copies of this resolution be furnished the Integrated Bar of the Philippines and all courts in Metro Manila. SO ORDERED.
A.M. No. 632 June 27, 1940 In re Attorney MELCHOR E. RUSTE, respondent, The respondent in his own behalf. Office of the Solicitor-General Hilado for the Government. LAUREL, J .: By virtue of an administrative complaint filed by Mateo San Juan against Melchor E. Ruste on February 27, 1934, to which the respondent made answer on March 15, 1934, this Court, by resolution of December 1, 1934, referred the case to the Solicitor-General for report. The reference brought forth the following formal complaint filed by the Solicitor-General against the respondent on March 26, 1935: Comes now the undersigned Solicitor-General of the Philippine Islands in the above entitled administrative case, and pursuant to the provisions of Rule 5 of the rules concerning disbarment or suspension of attorneys-at-law, to this Honorable Supreme Court, respectively alleges: 1. That in cadastral case No. 6, G. L. R. O. Record No. 483 of the Court of First Instance of Zamboanga, the respondent, Melchor E. Ruste, appeared for and represented, as counsel, Severa Ventura and her husband, Mateo San Juan, the herein complainant, who claimed lot No. 3765; and as a result of said cadastral proceedings, an undivided eleven-twentieth (11/20) share of said lot was adjudicated by said court to said claimants; 2. That there was no agreement the respondent and his said clients as to the amount of his fees; but that they paid to him upon demand on different occasions the sums of (30 and P25 as attorney's fees; 3. That after said payments, the respondent again demanded of the complainant and his wife as additional fees the sum of P25, but they had no money to pay, him, and so he asked them to execute in his favor a contract of lease, and a contract of sale, of their share in said lot No. 3764 in order that he may be able to borrow or raise said sum of P25; 4. That in accordance with said respondent's request, the complainant and his wife executed on September 22, 1930, a contract of lease, whereby in consideration of P100, they leased to him their coconut and banana plantation in said lot No. 3764 for a term of five years, and also a deed of sale, whereby in consideration of P1,000, they sold and transferred to him their undivided eleven-twentieth (11/20) share in said lot No . 3764, although, ,in fact and in truth, neither of the consideration mentioned in said contracts of lease and sale were ever receive by them; 5. That on March 21, 1931, the respondent executed a deed of sale, whereby in consideration of P370 he sold and transferred to Ong Chua said undivided eleven-twentieth (11/20) share in lot No. 3764 excluding the house and its lot, occupied by the complainant and his wife; and on March 28, 1931, the respondent executed another deed of sale, whereby in consideration of the same amount of P370 paid to him by the same Ong Chua, he sold and transferred to the latter the same undivided eleven-twentieth (11/20") share in lot No. 3764, but already including said houses and its lot; 6. That by virtue of the sale to him, Ong Chua has taken possession of said eleven-twentieth share in lot No. 3764; 7. That notwithstanding said second deed of sale, the respondent obtained from Ong Chua to allow the complaint and his wife to continue living house for a period of two years without paying any rent; 8. That on October 10, 1933, however, the respondent notified the complainant and his wife in writing that the said house still belonged to the respondent, and requires said spouses to pay, the sum of P40.50, representing ten months' rental in arrears, and thereafter a monthly rental of P1.50; and 9. That the respondent did not turn over to the complainant and his wife the amount of P370 paid by Ong Chua nor any part thereof. Wherefore, the undersigned prays that disciplinary action be taken against the respondent. To the foregoing complaint, the respondent, on April 23, 1935, interposed the following answer: Comprarece el infrascrito, en su propiarepresentacion y a la Honorable Corte Suprema, alega: Niega, general y especificamente sus alegaciones en dicha demanda, sobretodo en cuanto al pago de cantidades monetarias alli especificadas, y como defensa especial, alega: Que el denunciante Mateo San Juan, y sus testigos Esperato Bucoy y Severa Ventura han infringido la Ley del Perjurio; ademasd el Fiscal Provincial Jose Evangelista es una parte interesada en el resultado de este asunto; Por todo lo expuesto, al Honorable Tribunal pide: (a) Que para la substanciacion de esta causa que actue de Fiscal, el Honorable Enrique Braganza, Fiscal de Jolo, Sulu; (b) Que dicho Honorable Fiscal Enrique Braganza, sea requerido a investigar a los testigos, Esperato Bucoy y Severa, Ventura, y la Ley del Perjirio tal como esta enmendada. Sometido respetuosamente. By resolution of this court of April 24, 1935, the said formal complaint and answer were referred to the judge of First Instance of Zamboanga for investigation, report, and recommendation. After various and postponements, transpiring between August 3, 1935 and October 18, 1939, the Honorable Catalino Buenaventura, then presiding over the Court of First Instance of Zamboanga, elevated the record of the case of this court. On October 31, 1939, the case was included in the January, 1940 calendar, and at the hearing thereof on February 1, 1940, the respondent submitted the case without oral argument, and the memorandum presented by the Solicitor-General, recommending the dismissal of the complaint filed against respondent, was ordered attached to the record. From a perusal of the entire record, particularly of the formal complaint filed by the Solicitor-General against the respondent attorney, we gather the following material charges formulated against the latter, to wit, (1) that he engineered the execution in his favor, by the spouses Mateo San Juan and Severa Ventura, of the contract of lease, Exhibit A, and of the deed of sale, Exhibit B, covering the property in question; (2) that he did turn over the considerations therefor to the said spouses; (3) that he likewise deeded the same property to one Ong Chua, for P370, without paying the spouses the said purchase price, and (4) that he required the spouses to pay (40.50 for ten months' rental in arrears, and thereafter a monthly rental of P1.50 for the house occupied by the said spouses. Sometime in July, 1930, the respondent acted as counsel for the complainant and his wife when the latter laid claim of ownership upon lot No. 3764 in case No. 6, G. L. R. O., Cadastral Record 483 of the Court of First Instance of Zamboanga, eleven-twentieth of said lot having been eventually adjudicated to the wife, Severa Ventura, on December 20, 1933. On September 22, 1930, that is, during pendency of said cadastral case, the spouses purportedly leased a part of said lot to the respondent for P100, which lease was cancelled and superseded by a deed of sale executed on the same date, whereby the said spouses, in consideration of P1,000, conveyed eleven-twentieth of the same land in favor of the respondent. This is also the finding of the Solicitor-General in his report submitted in this case: . . . convinieron cancelar el arrendamiento y otorgar en sustitucion un contrato de compraventa absoluta a favor del recurrido, como en efecto se hizo y es el Exhibito B (pp. 37- 38, Rollo 1), por cuyo documento Severa Ventura con el consentimiento marital correspondiente vendio definitivamente al recurrido su participacion pro indivisa da 11/20 partes en el rferido lote, y estando aun el mismo pendiente de vista u decision el Expediente Catastral No. 6, Record No. 483, del Juzgado de Primera Instancia de Zamboanga. (Pp. 19-20.) The property being thus in suit, which the respondent was waging on behalf of his clients, his acquisition thereof by the deed of sale, Exhibit B, constitutes malpractice. (Hernandez vs. Villanueva, 40 Phil., 775; In re Calderon, 7 Phil. 427.) Whether the deed of sale in question was executed at the instance of the spouses driven by financial necessity, as contended by the respondent, or at the latter's behest, as contended by the complainant, is of no moment. In either case as attorney occupies a vantage position to press upon or dictate his terms to a harassed client, in breach of the "rule so amply protective of the confidential relations, which must necessarily exist between attorney and client, and of the rights of both." (Hernandez vs. Villanueva, supra.) There is evidence to show that the respondent has failed to account to the aggrieved spouses for the various amounts received by him on account of the transactions effected by him pertaining to the portion of lot No. 3764. However, as the evidence is conflicting and the statements of the parties are contradictory on this point, it is believed that the determination of the exact amount due them by the respondent should better elucidated and determined in an appropriate action which the complaint and his spouse may institute against the respondent for this purpose. For having improperly acquired the property referred to in Exhibits A and B, under the above circumstances, which property was then subject matter of a judicial proceedings, in which he was counsel, the respondent is found guilty of malpractice and is hereby suspended for a period of one year, reserving to the complainant and his spouse such action as may by proper for the recovery of such amount or amounts as may be due from the respondent. So ordered.
A.M. No. 2144 April 10, 1989 CELEDONIO QUILBAN, ROMUALDO DALAGAN, FORTUNATO RAMIREZ AMADOR ALARCON and LUIS AGAWAN, complainant, vs. ATTY. SANTIAGO R. ROBINOL, respondent. A.M. No. 2180 April 10, 1989 ATTY. SANTIAGO R. ROBINOL, complainant, vs. ATTY. A. R. MONTEMAYOR, respondent. R E S O L U T I O N
PER CURIAM: Subjected to frustrations were the dreams of thirty-two (32) squatter families to own the land of approximately 50 square meters each on which their respective homes were built. To vindicate their rights they have aired their plight before this Court. Thwarted, too, was the benevolence shown by the original owner of the land which parted with its property at a giveaway price thinking that it was accommodating the landless squatters. The antecedent facts follow: The Colegio de San Jose, a Jesuit corporation, (Colegio, for short) used to own a parcel of land at the Seminary Road, Barrio Bathala, Quezon City. Through its administrator, Father Federico Escaler, it sold said land to the Quezon City Government as the site for the Quezon City General Hospital but reserved an area of 2,743 square meters as a possible development site. Squatters, however, settled in the area since 1965 or 1966. Sometime in 1970, the Colegio, through Father Escaler gave permission to Congressman Luis R. Taruc to build on the reserved site a house for his residence and a training center for the Christian Social Movement. Seeing the crowded shanties of squatters, Congressman Taruc broached to Father Escaler the Idea of donating or selling the land cheap to the squatters. Congressman Taruc then advised the squatters to form an organization and choose a leader authorized to negotiate with Father Escaler. Following that advice, the squatters formed the "Samahang Pagkakaisa ng Barrio Bathala" (Samahan, for brevity), with Bernabe Martin as President (Exhibit "24", Robinol), who was entrusted with the task of negotiating on their behalf for the sale of the land to them. But instead of working for the welfare of the Samahan, Martin went to one Maximo Rivera, a realtor, with whom he connived to obtain the sale to the exclusion of the other Samahan members. On 28 March 1971, the land was ultimately sold to Rivera at P 15 per square meter or a total consideration of P 41,961.65. The prevailing price of the land in the vicinity then was P 100 to P 120 per square meter. It was evident that Father Escaler had been made to believe that Rivera represented the squatters on the property. On the same date, 28 March 1971, Rivera obtained TCT No. 175662 to the property in his name alone. In 1972, thirty-two heads of families of the Samahan filed Civil Case No. Q-16433, Branch IV, Quezon City, entitled "Celedonio Quilban, et al., Plaintiffs, vs. Maximo Rivera, et al., Defendants." with the principal prayer that said defendants be ordered to execute a deed of conveyance in favor of said plaintiffs after reimbursement by the latter of the corresponding amount paid by Rivera to the Colegio. The Court of First Instance of Quezon City, however, dismissed the case. To prosecute the appeal before the Court of Appeals, the Samahan members hired as their counsel Atty. Santiago R. Robinol for which the latter was paid P 2,000.00 as attorney's fees on 8 October 1975 (Exhibit "I"). Atty. Robinol was also to be given by the members a part of the land, subject matter of the case, equal to the portion that would pertain to each of them. What was initially a verbal commitment on the land sharing was confirmed in writing on 10 March 1979 (Exhibit "2"). On 14 November 1978, the Court of Appeals reversed the CFI Decision by: (1) ordering defendant Maximo Rivera and all his co-defendants to execute a deed of conveyance of the land in question in favor of herein plaintiffs after the payment of the corresponding amount paid by the defendants to the Colegio de San Jose, Inc., and in case of refusal or failure on their part to do so, ordering the Clerk of Court to execute the same in favor of plaintiffs and declaring TCT No. 175662 (Annex E) null and void and ordering the Register of Deeds of Quezon City to cancel said certificate and issue a new one in lieu thereof in the name of plaintiffs- appellants, upon presentation of the deed of conveyance to be executed in favor of appellants and (2) ordering appellees jointly and severally to pay appellants the sum of P 2,000.00 as attomey's fees, plus costs." (p. 30, Report and Recommendation) To raise the amount of P 41,961.65 ordered paid by the Court of Appeals, plus expenses for ejectment of the non-plaintiffs occupying the property, conveyance, documentation, transfer of title etc., the five officers of the Samahan collected, little by little, P 2,500.00 from each head of family. The Treasurer, Luis Agawan, issued the proper receipts prepared by Atty. Robinol. On 18 May 1979, the sum of P 68,970.00 was turned over to Atty. Robinol by the officers; on 31 May 1979 the amounts of P l,030.00 and P 2,500.00 respectively; and on 2 June 1979, the sum of P 2,500.00, or a total of P 75,000.00. After almost a year, the five officers discovered that no payment had been made to Rivera. When queried, Atty. Robinol replied that there was an intervention filed in the civil case and that a Writ of Execution had not yet been issued by the Court of First Instance of Quezon City. However, it turned out that the motion for intervention had already been dismissed. After confronting Atty. Robinol with that fact, the latter gave other excuses, which the officers discovered to have no basis at all. On 6 March 1980, 21 out of 32 plaintiffs arrived at a "first consensus" to change their counsel, Atty. Robinol (Exhibit "3"). The officers of the Samahan thereafter approached Atty. Anacleto R. Montemayor, who agreed to be their counsel, after he was shown the document of 6 March 1980 containing the consensus of the Samahan members to change Atty. Robinol as their lawyer. Upon Atty. Montemayor's advice, the officers sent Atty. Robinol a letter dated 17 March 1980 informing the latter of their decision to terminate his services and demanding the return of the P 75,000.00 deposited with him (Exhibit "5"). Atty. Robinol turned deaf ears to the demand. A subsequent letter of the same tenor, dated 31 March 1980 (Exhibit "6"), was similarly disregarded by Atty. Robinol. On 20 March 1980, Atty. Montemayor formally entered his appearance in Civil Case No. Q-16433 as counsel for the plaintiffs (Exhibit "8"), vice Atty. Robinol, on the strength of the authority dated 18 March 1980 given him by plaintiffs in said civil case through the five officers (Exhibit "9"). Atty. Montemayor then filed on 20 March 1980 a Motion for Execution praying that the defendants and/or the Clerk of Court be directed to execute a deed of conveyance in favor of the plaintiffs (Exhibit "10"). At the hearing of the Motion for Execution on 5 June 1980, Atty. Robinol manifested that he had no objection to the appearance of and his substitution by Atty. Montemayor (Exhibits "11" & "11-A"). Because Atty. Robinol, however, still questioned the first consensus dated 6 March 1980, another document labelled the "second consensus" (Exhibit "E") was signed by 21 plaintiffs during a meeting held for the purpose on 24 November 1980 to the effect that they had decided to change Atty. Robinol as their counsel because he had delayed paying for their land notwithstanding the Decision of the Court of Appeals in their favor. Administrative Case No. 2144 On 15 April 1980 the Samahan officers filed this Administrative Complaint before this Court requesting the invention of Atty. Robinol for refusal to return the P 75,000.00 and praying that the Court exercise its power of discipline over members of the Bar unworthy to practice law. The details of their Complaint were embodied in their Joint Affidavit executed on 14 April 1980 describing what had transpired between them and Atty. Robinol. In his defense, Atty. Robinol maintains that he was hired by Complainants to appeal their case to the Court of appeals after they had lost in the lower Court; that their agreement as to attomey's fees was on a contingent basis if he obtains a reversal of the lower Court Decision, they wig give him a portion of the property subject matter of the litigation equal to the portion that will pertain to each of the 32 plaintiffs in Civil Case No. Q-16433; that he did not receive P 70,000.00 from Complainants on 18 May 1979 but only P 56,470.00; that he prepared and signed the receipt dated 18 May 1979 showing that he received P 70,000.00 only to save complainants from embarrassment and shame should their co-plaintiff ask for proof that they (Complainants) have paid their shares, which they have not; that the correct amount in his possession is only P 62,470.00-it would really be P 75,000.00 had the five Complainants paid their shares in the amount of P 12,500.00 at P 2,500.00 each and one Fortunate Ramirez paid his balance of P 30.00; that he had the right to hold the money in his possession as guarantee for the payment of his attomey's fees of get a portion of the property that win pertain to each of the plaintiffs, he wants his portion converted to cash, and the cash equivalent of his portion is P 50,000.00 (2,743 square meters divided by 32 plaintiffs equals 85 square meters for each plaintiff, multiplied by P 500.00 up per square meter); that considering that P 50,000.00 is even less than one-half (1/ 2) per cent of the total value of the property, which is more than a million pesos, such amount is not unreasonable; that he is ready to give back the amount of P 12,470.00, representing the difference between P 50,000.00 and the amount of P 62,470.00 in his possession; that complainants cannot make this Court a collection agency and that while this Court has the exclusive disciplinary power over members of the Bar, it is equally true that the Court cannot pass judgment on Complainants' plea that the amount deposited by respondent be returned to them as this prayer should be ventilated in an ordinary action; that he does not have the slightest intention to appropriate the money in his possession (P 62,470.00) for himself, but he is holding it until his attomey's fees are satisfied there being no guarantee for its satisfaction because of Complainants' adamant refusal to pay him; that there was no previous notice to him of his discharge; and that Atty. Montemayor accepted the case without his Robinols formal withdrawal and conformity. Administrative Case No. 2180 Pursuing that tack on 29 July 1980, Atty. Robinol filed a complaint for Disbarment against Atty. Anacleto R. Montemayor for alleged gross unethical conduct unbecoming of a lawyer in that Atty. Montemayor readily accepted the case without his Robinols formal withdrawal and conformity and knowing fully well that there was no consensus of all the plaintiffs to discharge him as their counsel. For his part, Atty. Montemayor denied that the attomey's fees agreed upon by plaintiffs and Atty. Robinol were purely on a contingent basis, the truth being that the attomey's fees were payable on a cash basis of P 2,000.00 retainer fee, as evidenced by the receipt signed by Atty. Robinol (Annex "I"), plus whatever amount is adjudicated as attomey's fees by the Court of Appeals; that the contingent fee referred to by Atty. Robinol was the result of his insistent demand after the Court of Appeals Decision in Civil Case No. Q-16433 was already final, as shown by the date of the agreement (Annex "2"); that twenty [20] out of thirty-two [32] members of the Samahan signed the agreement to discharge Atty. Robinol and hire a substitute counsel as shown by Annex "3", which is a majority of the membership and, therefore, a valid consensus; that he agreed to act as counsel if only to arrest the growing belief of the Samahan that most members of the Philippine Bar are unprincipled; that although there was no formal Motion for substitution, there was substantial compliance with Sec. 26, Rule 138 of the Rules of Court, as shown by the formal entry of appearance in Civil Case No. Q-1 6433 (Annex "8"), the written consent of the clients (Annex "9"), notice to Atty. Robinol of his discharge and substitution (Annexes "10' and "11"), non-objection by Robinol of his appearance as counsel (Annex "l 2"), and implied consent of the Court to the substitution as shown by its Order of 29 May 1980 (Annex "l 3"); that his professional and personal actuations as counsel for the plaintiffs in Civil Case No. Q-16433, CFI-Quezon City, do not cause dishonor either to himself or to the Philippine Bar; and that the Complaint against him should be dismissed. On 1 September 1980 and on 17 December 1980, the Court referred Adm. Case No. 2144 and Adm. Case No. 2180, respectively, to the Office of the Solicitor General for investigation, report and recommendation. On 15 December 1988, the Solicitor General submitted his compliance and recommended: 1. That Atty. Santiago R. Robinol be suspended for three months for refusing to deliver the funds of the plaintiffs in his possession, with the warning that a more severe penalty will be imposed for a repetition of the same or similar act, and that he be ordered to return to the plaintiffs, through the complainants in Adm. Case No. 2134, the sum of P 75,000.00. 2. That the case against Atty. Anacleto R. Montemayor, Adm. Case No. 2180, be dismissed, since he has not committed any misconduct imputed to him by Atty. Robinol. (pp. 59-60, Rollo) Except for the disciplinary sanction suggested for Atty. Robinol, we concur with the recommendations. Re: Atty. Santiago R. Robinol Atty. Robinol has, in fact, been guilty of ethical infractions and grave misconduct that make him unworthy to continue in the practice of the profession. After the Court of Appeals had rendered a Decision favorable to his clients and he had received the latter's funds, suddenly, he had a change of mind and decided to convert the payment of his fees from a portion of land equivalent to that of each of the plaintiffs to P 50,000.00, which he alleges to be the monetary value of that area. Certainly, Atty. Robinol had no right to unilaterally appropriate his clients' money not only because he is bound by a written agreement but also because, under the circumstances, it was highly unjust for him to have done so. His clients were mere squatters who could barely eke out an existence They had painstakingly raised their respective quotas of P 2,500.00 per family with which to pay for the land only to be deprived of the same by one who, after having seen the color of money, heart lessly took advantage of them. Atty. Robinol has no basis to claim that since he was unjustly dismissed by his clients he had the legal right to retain the money in his possession. Firstly, there was justifiable ground for his discharge as counsel. His clients had lost confidence in him for he had obviously engaged in dilatory tactics to the detriment of their interests, which he was duty-bound to protect. Secondly, even if there were no valid ground, he is bereft of any legal right to retain his clients' funds intended for a specific purpose the purchase of land. He stands obliged to return the money immediately to their rightful owners. The principle of quantum meruit applies if a lawyer is employed without a price agreed upon for his services in which case he would be entitled to receive what he merits for his services, as much as he has earned. In this case, however, there was an express contract and a stipulated mode of compensation. The implied assumpsit onquantum meruit therefore, is inapplicable. But Atty. Robinol seeks to impress upon the Court that he had received only the sum of P 62,470.00 and not P 75,000.00 claiming that five (5) officers of the Samahan had not yet paid their shares to P 12,500.00. We agree with the Solicitor General that complainants' evidence on this score is the more credible and that he had, in fact, received the total sum of P 75,000.00 inclusive of the share of P 12,500.00 of the five (5) officers of the Somalian For, in the pleadings filed by Atty. Robinol himself in the civil case below, namely, the Motion for Execution on 5 June 1979; the Motion for Postponement on 31 August 1979; and the Motion to Set Hearing of Motion for Execution on 10 March 1980, he made mention of seven (7) persons, who, as of that time, had not yet submitted their corresponding shares which list, however, did not include any of the five (5) officers of the Samahan. Inevitable, therefore, is the conclusion that Atty. Robinol has rendered himself unfit to continue in the practice of law. He has not only violated his oath not to delay any man for money and to conduct himself with all good fidelity to his clients. He has also brought the profession into disrepute with people who had reposed in it full faith and reliance for the fulfillment of a life-time ambition to acquire a homelot they could call their own. Re: Atty. Anacleto R. Montemayor In so far as Atty. Montemayor is concerned, we agree with the findings of the Solicitor General that he has not exposed himself to any plausible charge of unethical conduct in the exercise of his profession when he agreed to serve as counsel for the plaintiffs in Civil Case No. Q-16433. Of the thirty-two (32) plaintiffs in said civil case, twenty-one (21) had signed the first consensus of 6 March 1980 expressing their resolve to change their lawyer. In as much as Atty. Robinol sought to exclude seven (7) of the plaintiffs (out of 32) for non-payment of their shares, only twenty five (25) of them should be considered in determining the majority. Consequently, twenty-one (21) out of twenty-five (25) is sufficient to make the said consensus binding. It is more than a simple majority. Moreover, the following developments estop Atty. Robinol from questioning his discharge as counsel: On 17 March 1980 he was informed in writing by plaintiffs of the termination of his services (Exhibit "5"). That was followed by another letter of 31 March 1980 of the same tenor (Exhibit "6"). In his Memorandum of 12 December 1985 and during the proceedings before the lower Court on 5 June 1980 he had stated that he had no objection to Atty. Montemayor's appearance in Civil Case Q-16433. When the latter did enter his appearance, therefore, on 20 March 1980 it was only after assuring himself that Atty. Robinol's services had been formally terminated. He had in no way encroached upon the professional employment of a colleague. There is no gainsaying that clients are free to change their counsel in a pending case at any time (Section 26, Rule 138, Rules of Court) and thereafter employ another lawyer who may then enter his appearance. In this case, the plaintiffs in the civil suit below decided to change their lawyer, Atty. Robinol, for loss of trust and confidence. That act was well within their prerogative. In so far as the complaint for disbarment filed by Atty. Robinol against Atty. Montemayor is concerned, therefore, we find the same absolutely without merit. ACCORDINGLY, 1) In Administrative Case No. 2144, Atty. Santiago R. Robinol is hereby DISBARRED for having violated his lawyer's oath to delay no man for money, broken the fiduciary relation between lawyer and client, and proven himself unworthy to continue in the practice of law. By reason of his unethical actuations, he is hereby declared to have forfeited his rights to attomey's fees and is ordered to return the amount of P 75,000.00 to the plaintiffs in Civil Case No. Q-16433 through the complainant in the aforementioned Administrative Case. 2) Administrative Case No. 2180 against Atty. Anacleto R. Montemayor for disbarment is hereby DISMISSED for lack of merit. Let copies of this Resolution be entered in the respective personal records of Attys. Santiago R. Robinol and Anacleto R. Montemayor. This Resolution is immediately executory. SO ORDERED.
A.C. No. 2614 May 21, 1991 MAXIMO DUMADAG, petitioner, vs. ERNESTO L. LUMAYA, respondent. R E S O L U T I O N
PER CURLAM:p Respondent Atty. Ernesto L. Lumaya of Banganga, Davao Oriental is administratively charged with unethical practices, conflict of interest and disloyalty to client by Maximo Dumadag in a sworn letter- complaint dated 22 December 1983. Respondent was complainant's counsel in Civil Case No. 148 before the RTC of Banganga, Davao Oriental, filed against spouses Jose and Jesusa Avellanosa, involving the sale of a parcel of land. Civil Case No. 148 was terminated via a compromise agreement which provided, inter alia, that not later than 1 October 1979, the Avellanosas would pay Dumadag the amount of P4,644.00 and in turn Dumadag would execute in favor of the Avellanosas a deed of reconveyance of the land. However, in case of failure of the Avellanosas to make full payment of the P4,644.00 within the stipulated period, Dumadag would be entitled to obtain possession of the land. The compromise agreement, prepared by respondent, was approved by the trial court. The Avellanosas failed to comply with their undertaking under the compromise agreement to pay complainant the amount of P4,644.00 not later than 1 October 1979, which necessitated the filing by Dumadag of a motion for execution. According to complainant, he asked his then counsel, herein respondent, to prepare and file the appropriate motion for execution; however, the latter failed to do so. It was through the assistance of the court stenographer, Mr. Eleuterio Catubig, that complainant himself signed and filed the motion and later obtained the writ of execution. When the writ of execution was issued, Deputy Sheriff Rogelio Dongiapon, according to the complainant, instead of serving the same on the Avellanosas, connived with respondent attorney by selling a one (1) hectare portion of the land subject of Civil Case No. 148 to one Eleonora Astudillo to satisfy complainant's claim out of the proceeds of the sale, without however Dumadag's knowledge and consent. The Deed of Sale between the Avellanosas and Astudillo, dated 14 September 1981, was notarized by respondent attorney and stated that the "parcel of land, together with all the improvements found and existing thereon, (is) free from liens and encumbrances, whatsoever. "It expressly stated on its face "That this Deed of Sale is executed also to satisfy finally the claim of Maximo Dumadag in Civil Case No. 148 of the CFI of Banganga, Davao Oriental." After the sale to Astudillo, or on 16 June 1983, Deputy Sheriff Rogelio Dongiapon made a Sheriff's Return of Service which stated: Respectfully returned to MR. JAIME B. TOROBA, Officer-in-Charge, Office of the Clerk of Court, this Court, the original copy of the Writ of Execution in Civil Case No. 148, with the information that said Writ of execution was partially satisfied the defendants Jose R. Avellanosa and Jesusa N. Avellanosa having paid the amount of FOUR THOUSAND THREE HUNDRED FORTY FOUR (P4,344. 00) Philippine Currency to Atty. Ernesto L. Lumaya, plaintiff's counsel in the above entitled case in November, 1981, with the balance of P300.00 which the defendants Jose R. Avellanosa and Jesusa N.Avellanosa have not paid up to this moment. (Emphasis ours) The said amount of P4,344.00, according to complainant, was not delivered to him by respondent attorney, even after the former made a demand on the latter. After respondent's comment and complainant's reply had been filed, the case was referred to the Office of the Solicitor General for investigation, report and recommendation. Actual investigation and hearings were conducted by Provincial Fiscal Arnulfo M. Agleron of Mati, Davao Oriental, who submitted a report to the Office of the Solicitor General (OSG). Based on said report, the OSG prepared and submitted its own report, including therewith a complaint for disbarment against respondent attorney, pursuant to Sec. 4, Rule 139 of the Rules of Court. While respondent later filed an answer to the OSG prepared complaint against him, he however, did not appear at the earlier investigation despite due notice. We will nonetheless consider his answer as well as comment prior to the referral of the case to the OSG. Respondent claims that it was the presiding judge in Civil Case No. 148 who played an active role in the settlement proceedings between Dumadag and the Avellanosas, and that it is unfortunate, according to respondent, that there are no written records to prove this fact, but that it was agreed that Jose Avellanosa would pay Dumadag the amount of P4,644.00 in installments, which he did, and that complainant Dumadag claimed and received the money each time payment was made by Jose Avellanosa; thru herein respondent. His (respondent's) mistake according to him, was that he merely noted at the back of his own copy of the judgment by compromise the sums paid, all in the total amount of P3,000.00, and all taken by complainant Dumadag, without any receipts. All his (respondent's) records of the case, according to respondent, were also taken by Dumadag from his office when he became a provincial board member. Respondent also denies having been asked by Dumadag to file a motion for execution in Civil Case No. 148 or having received from him a cow or P700.00; however he was promised one cow since he paid the expenses in Civil Case No. 148. Anent the sale by the Avellanosas to Eleonora Astudillo, the same, according to respondent, was a private sale, Dumadag was not a party thereto. Respondent also claims that he was not aware that a motion for execution had been filed in Civil Case No. 148 by Dumadag when the Deed of Sale between the Avellanosas and Astudillo was presented to him for notarization, and that he did not see any cash change hands as he was informed that it was just a ratification of an earlier verbal sale. He notarized the deed of sale without intention to cause any damage. Respondent however admits that in a later case, Civil Case No. 283 (where the validity of the sale from the Avellanosas to Astudillo was assailed by Dumadag), it was disclosed that from the P7,000.00 actually realized from the sale of the land to Astudillo, the sheriff deducted P1,605.00 for his expenses, with the balance being given to the vendors (Avellanosas), because Dumadag had already been paid by the Avellanosas thru their lawyer, herein respondent. In the Court's resolution of 16 April 1990, respondent was required to answer the OSG complaint. Respondent's answer merely reiterates his earlier explanation and further states: The truth of the matter was that the DEED OF SALE WAS ALREADY Prepared when SHERIFF Dongiapon, the spouses Avellanosa and Maxima Astudillo came to my Office for the Notarization of that DEED OF SALE. What respondent did was only to ask whether the signatures are their and that the consideration was paid but did not go over the contents. All of the parties affirmed their signature and informed respondent that the consideration was paid in installments. At that time respondent never was informed that the proceeds was for the final satisfaction of Mr. Dumadag's claim. Respondent knew it only when Mr. Dumadag came to claim the money of course I have to tell the truth and I told him, Maximo Dumadag, that I have never received any money from Sheriff ROGELIO DONGIAPON and I did not even know that there was a petition for the issuance of a writ of execution that he filed because I was never asked by him. Mr. Maximo Dumadag told me that he will file a case against me if I will not give the money . . . For the reasons that respondent's acts constitute lack of fidelity, loyalty and devotion to his client's cause, unethical practice and a violation of his lawyer's oath, the OSG recommends respondent's suspension from the practice of law for not less than five (5) years. In the case of Licuanan vs. Melo (Adm. Case No. 2361 February 9, 1989) a lawyer was disbarred for retaining for his personal benefit for over a one (1) year period, the amount of P5,220.00 received by him in behalf of his client, thereby compelling the latter to file a groundless collection suit which exposed said client to a damage countersuit. While not exactly identical with the Licuanan case, herein complainant Dumadag had to file a separate civil case (No. 283 for annulment of sale, damages and attorney's fees) to recover the amount of P4,344.00 from his previous counsel, herein respondent, Atty. Lumaya. Under the Code of Professional Responsibility, Canon 16 Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03 A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. Both parties failed to apprise this Court of the final disposition of Civil Case No. 283, even as the Court took note of the RTC decision in said case where a finding was made that the land earlier sold by the Avellanosas to Dumadag is separate and distinct from the one (1) hectare portion sold by the Avellanosas to Astudillo. However, the RTC in its decision also ordered co-defendant (herein respondent) Atty. Lumaya to pay the plaintiff (herein complainant) the sum of P4,344.00 he (Atty. Lumaya) had received from Deputy Sheriff Rogelio Dongiapon for herein complainant. Therefore, even a respondent consistently denied liability to Dumadag, his former client, the records abundantly point to his receipt of and failure to deliver the amount of P4,344.00 to his client, the herein complainant, a clear breach of the canons of professional responsibility. ACCORDINGLY, the Court hereby SUSPENDS Atty. Ernesto Lumaya INDEFINITELY from the practice of law effective from date of his receipt of this resolution. Let this resolution be served personally on the respondent at his given address of record and entered in his record as attorney. Let the IBP and the Court Administrator be furnished also a copy of this resolution for their information and guidance as well as for circularization to all courts in the country. SO ORDERED.
A.M. No. 3216 March 16, 1992 DOMINGA VELASCO ORDONIO, petitioner, vs. ATTY. JOSEPHINE PALOGAN EDUARTE, respondent. R E S O L U T I O N
PER CURIAM: This is a complaint for the disbarment of respondent Atty. Josephine Palogan-Eduarte originally filed with this Court on April 18, 1988. On August 10, 1989, the Commission on Bar Discipline of the Integrated Bar of the Philippines, to which the case was referred for investigation, submitted a report confirming in substance the charge of violation of Art. 1491 of the Civil Code and part of the Oath of Office of a lawyer and recommending the suspension of herein respondent. The evidence discloses that on July 18, 1983, Antonia Ulibari filed with the RTC, Branch XXII, Cabagan, Isabela, Civil Case No. 391 for annulment of a document (known as Affidavit of Adjudication of the Estate of Felicisimo Velasco and Quitclaim Thereof) against her children. The case was handled by Atty. Henedino Eduarte, herein respondent's husband, until his appointment as RTC judge on October 26, 1984. His wife, Atty. Josephine Palogan-Eduarte, took over. On August 22, 1985, decision in Civil Case No. 391 was rendered in favor of Antonia Ulibari. Except for Dominga Velasco- Ordonio, one of the children of Antonia Ulibari and complainant in the instant case, the rest of the defendants did not appeal. On June 13, 1987, while Civil Case No. 391 was pending appeal in the Court of Appeals, Antonia Ulibari conveyed some parcels of her land to her children in the form of deeds of absolute sale, prepared and notarized by herein respondent. Significantly, on the same day, Antonia Ulibari also conveyed 20 hectares of land to herein respondent and her husband as their Attorney's fees for legal services rendered. All the titles of the lands subject of the deeds of absolute sale and the deed of conveyance however remained in the name of Antonia Ulibari. On April 4, 1988, Dominga Velasco-Ordonio filed this complaint for disbarment against herein respondent on the basis of an affidavit executed by her mother Antonia Ulibari on March 2, 1988 stating that affiant never conveyed the subject parcel of land to respondent as her attorney's fees and that the deeds of absolute sale executed in favor of her children were not known to her (and that she received no consideration therefor). On August 10, 1989, the Investigation Commissioner submitted a report finding the charges to be true and recommending a one-year suspension of the respondent from the practice of law. The first issue to be resolved is whether Antonia Ulibari was defrauded into signing the Deed of Conveyance transferring to her lawyer (herein respondent) the subject parcel of land containing 298,420 square meters as the latter's attorney's fees. It is clear from Antonia Ulibari's affidavit and deposition that she never conveyed the said land to her lawyer as attorney's fees. Even granting for the sake argument that Antonia Ulibari knowingly and voluntarily conveyed the subject property in favor of the respondent and her husband, the respondent, in causing the execution of the Deed of Conveyance during the pendency of the appeal of the case involving the said property, has violated Art. 1491 of the Civil Code which prohibits lawyers from "acquiring by assignment property and rights which may be the object of any litigation in which they may take part by virtue of their profession." In the case at bar, the property (which includes the more than 20 hectares of land allegedly conveyed to the respondent) was already in actual litigation first in the lower court and then in the Court of Appeals. Whether the deed of conveyance was executed at the instance of the client driven by financial necessity or of the lawyers is of no moment (In re: Atty. Melchor E. Ruste, 70 Phil. 243). "In either case, an attorney occupies a vantage position to press upon or dictate his terms to a harrased client, in breach of the rule so amply protective of the confidential relations, which must necessarily exist between attorney and client, and of the rights of both." The act constitutes malpractice, even if the lawyer had purchased the property in litigation. (Hernandez v. Villanueva, 40 Phil. 775; In re: Calderon, 7 Phil. 427). We agree with the Investigating Commissioner's opinion that the prohibition applies when the lawyer has not paid money for it and the property was merely assigned to him in consideration of legal services rendered at a time when the property is still the subject of a pending case. For having improperly acquired the subject property, under the foregoing circumstances, respondent has violated not only Art. 1491 of the Civil Code but also Rule 10 of the Canons of Professional Ethics which provides that "the lawyer should not purchase any interest in the subject matter of the litigation which he is conducting." The last issue to be resolved is whether respondent violated any law in preparing and notarizing the deeds of absolute sale in making it appear that there were considerations therefor, when in truth there were none so received by the seller. In her answer, respondent admitted that Antonia Ulibari did not actually sell the parcels of land to her children for the considerations stated in the deeds of sale and that she (respondent) "utilized the form of deed of sale as the most convenient and appropriate document to effect the transfer of the parcels of land to Antonia Ulibari's children in accordance with her wish that said parcels of land be given to them. In so doing, respondent has manifestly violated that part of her oath as a lawyer that she shall not do any falsehood. Not only that. In preparing the documents which do not reflect the true transaction, respondent has likewise violated Rule 10.01 of the Code of Professional Responsibility which provides: Rule 10.01. A lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall be mislead or allow the court to be mislead by any artifice. ACCORDINGLY, for having violated Article 1491 of the Civil Code, respondent is hereby ordered suspended from the practice of law for a period of six (6) months, and, for having stated falsehoods in the four (4) deeds of absolute sale she prepared and notarized, in violation of the lawyer's oath and Rule 10.01 of the Code of Professional Responsibility, respondent is also ordered suspended from the practice or law for a period of another six (6) months, resulting in a total period on one year, effective from the date this judgment becomes final. SUSPENSION ORDERED.