EN BANC

ROLANDO B. PACANA, JR., A.C. No. 8243

Complainant,
Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
CORONA,
CARPIO MORALES,
CHICO-NAZARIO,
- versus - VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,*
PERALTA, and
BERSAMIN, JJ.

Promulgated:

ATTY. MARICEL PASCUAL-LOPEZ, July 24, 2009

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

DECISION

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 another P700,000 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]

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.)

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.
 Republic of the Philippines
Supreme Court
Manila

SECOND DIVISION

HECTOR TREAS, G. R. No. 195002

Petitioner,
Present:

CARPIO, J.,
Chairperson,
- versus - PEREZ,
SERENO,
REYES, and
PERLAS-BERNABE,* JJ.

Promulgated:
PEOPLE OF THE PHILIPPINES,
Respondent. January 25, 2012

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

DECISION

SERENO, J.:
 Where life or liberty is affected by its proceedings, courts must keep strictly within
the limits of the law authorizing them to take jurisdiction and to try the case and render
judgment thereon.[1]

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules of
Civil Procedure, seeking to annul and set aside the Court of Appeals (CA) Decision dated
9 July 2010[2] and Resolution dated 4 January 2011.

Statement of the Facts and of the Case

The pertinent facts, as found by the CA, are as follows:

Sometime in December 1999, Margarita Alocilja (Margarita) wanted to buy
a house-and-lot in Iloilo City covered by TCT No. 109266. It was then
mortgaged with Maybank. The bank manager Joselito Palma
recommended the appellant Hector Treas (Hector) to private complainant
Elizabeth, who was an employee and niece of Margarita, for advice
regarding the transfer of the title in the latters name. Hector informed
Elizabeth that for the titling of the property in the name of her aunt Margarita,
the following expenses would be incurred:

P20,000.00- Attorneys fees,

P90,000.00- Capital Gains Tax,
P24,000.00- Documentary Stamp,
P10,000.00- Miscellaneous Expenses.

Thereafter, Elizabeth gave P150,000.00 to Hector who issued a

corresponding receipt dated December 22, 1999 and prepared [a] Deed of
Sale with Assumption of Mortgage. Subsequently, Hector gave Elizabeth
Revenue Official Receipt Nos. 00084370 for P96,000.00 and 00084369 for
P24,000.00. However, when she consulted with the BIR, she was informed
that the receipts were fake. When confronted, Hector admitted to her that
the receipts were fake and that he used the P120,000.00 for his other
transactions. Elizabeth demanded the return of the money.

To settle his accounts, appellant Hector issued in favor of Elizabeth a Bank

of Commerce check No. 0042856 dated November 10, 2000 in the amount
of P120,000.00, deducting from P150,000.00 the P30,000.00 as attorneys
fees. When the check was deposited with the PCIBank, Makati Branch, the
same was dishonored for the reason that the account was closed.
Notwithstanding repeated formal and verbal demands, appellant failed to
pay. Thus, the instant case of Estafa was filed against him.[3]
On 29 October 2001, an Information was filed by the Office of the City Prosecutor before
the Regional Trial Court (RTC), both of Makati City. The Information reads as follows:

That on or about the 23rd day of December, 1999, in the City of Makati,
Metro Manila, Philippines and within the jurisdiction of this Honorable Court,
the above-named accused, received in trust from ELIZABETH LUCIAJA the
amount of P150,000.00 which money was given to her by her aunt
Margarita Alocilja, with the express obligation on the part of the accused to
use the said amount for expenses and fees in connection with the purchase
of a parcel of land covered by TCT No. T-109266, but the said accused,
once in possession of the said amount, with the intent to gain and abuse of
confidence, did then and there willfully, unlawfully and feloniously
misappropriate, misapply and convert to his own personal use and benefit
the amount of P130,000.00 less attorneys fees and the said accused failed
and refused and still fails and refuses to do so, to the damage and prejudice
of complainant Elizabeth Luciaja and Margarita Alocilja in the
aforementioned amount of P130,000.00.

CONTRARY TO LAW.[4]

During arraignment on 26 April 2002, petitioner, acting as his own counsel, entered
a plea of Not Guilty. Allegedly due to old age and poor health, and the fact that he lives
in Iloilo City, petitioner was unable to attend the pre-trial and trial of the case.

On 8 January 2007, the RTC rendered a Decision [5] finding petitioner guilty of the crime
of Estafa under section 1, paragraph (b), of Article 315 of the Revised Penal Code (RPC),
with the dispositive portion as follows:
WHEREFORE, in view of the foregoing, judgment is rendered finding
accused Hector Trenas guilty of the crime of Estafa with abuse of
confidence as penalized under Article 315 of the Revised Penal Code, and
which offense was committed in the manner described in the
aforementioned information. As a consequence of this judgment, accused
Hector Trenas is sentenced to suffer a penalty of Ten (10) Years and One
(1) Day of Prision Mayor to Seventeen (17) Years and Four (4) Months
of Reclusion Temporal. Moreover, he is ordered to indemnify private
complainant Elizabeth Luciaja the amount of P130,000.00 with interest at
the legal rate of 12% per annum, reckoned from the date this case was filed
until the amount is fully paid.

SO ORDERED.[6]
We note at this point that petitioner has been variably called Treas and Trenas in
the pleadings and court issuances, but for consistency, we use the name Treas, under
which he was accused in the Information.
 On 24 August 2007, petitioner filed a Motion for Reconsideration, [7] which was
denied by the RTC in a Resolution dated 2 July 2008.[8]

On 25 September 2008, petitioner filed a Notice of Appeal before the RTC. [9] The
appeal was docketed as CA-G.R. CR No. 32177. On 9 July 2010, the CA rendered a
Decision[10] affirming that of the RTC. On 4 August 2010, petitioner filed a Motion for
Reconsideration, which was denied by the CA in a Resolution dated 4 January 2011.[11]

On 25 January 2011, petitioner filed a Motion for Extension of Time to File Petition for
Review on Certiorari[12] before this Court. He asked for a period of 15 days within which
to file a petition for review, and the Court granted his motion in a Resolution dated 9
February 2011.

On 3 February 2011, petitioner filed his Petition for Review on Certiorari before this Court,
with the following assignment of errors:

1. THE COURT OF APPEALS ERRED IN RULING THAT

AN ACCUSED HAS TO PRESENT EVIDENCE IN SUPPORT OF THE
DEFENSE OF LACK OF JURISDICTION EVEN IF SUCH LACK OF
JURISDICTION APPEARS IN THE EVIDENCE OF THE PROSECUTION;

2. THE COURT OF APPEALS ERRED IN RULING THAT

DEMAND MADE BY A PERSON OTHER THAN THE AGGRIEVED PARTY
SATISFIES THE REQUIREMENT OF DEMAND TO CONSTITUTE THE
OFFENSE OF ESTAFA;[13]

On the first issue, petitioner asserts that nowhere in the evidence presented by the
prosecution does it show that ₱150,000 was given to and received by petitioner in Makati
City. Instead, the evidence shows that the Receipt issued by petitioner for the money was
dated 22 December 1999, without any indication of the place where it was issued.
Meanwhile, the Deed of Sale with Assumption of Mortgage prepared by petitioner was
signed and notarized in Iloilo City, also on 22 December 1999. Petitioner claims that the
only logical conclusion is that the money was actually delivered to him in Iloilo City,
especially since his residence and office were situated there as well. Absent any direct
proof as to the place of delivery, one must rely on the disputable presumption that things
happened according to the ordinary course of nature and the ordinary habits of life. The
only time Makati City was mentioned was with respect to the time when the check
provided by petitioner was dishonored by Equitable-PCI Bank in its De la Rosa-Rada
Branch in Makati. Petitioner asserts that the prosecution witness failed to allege that any
of the acts material to the crime of estafa had occurred in Makati City. Thus, the trial court
failed to acquire jurisdiction over the case.

Petitioner thus argues that an accused is not required to present evidence to prove lack
of jurisdiction, when such lack is already indicated in the prosecution evidence.

As to the second issue, petitioner claims that the amount of P150,000 actually belongs to
Margarita. Assuming there was misappropriation, it was actually she not Elizabeth who
was the offended party. Thus, the latters demand does not satisfy the requirement of prior
demand by the offended party in the offense of estafa. Even assuming that the demand
could have been properly made by Elizabeth, the demand referred to the amount of
P120,000, instead of P150,000. Finally, there is no showing that the demand was actually
received by petitioner. The signature on the Registry Return Receipt was not proven to
be that of petitioners.

On 30 May 2011, this Court issued a Resolution directing the Office of the Solicitor
General (OSG) to file the latters Comment on the Petition. On 27 July 2011, the OSG
filed a Motion for Extension, praying for an additional period of 60 days within which to
submit its Comment. This motion was granted in a Resolution dated 12 September 2011.
On 23 September 2011, the OSG filed a Motion for Special Extension, requesting an
additional period of five days. On 29 September 2011, it filed its Comment on the Petition.

In its Comment, the OSG asserts that the RTC did not err in convicting petitioner as
charged. The OSG notes that petitioner does not dispute the factual findings of the trial
court with respect to the delivery of P150,000 to him, and that there was a relationship of
trust and confidence between him and Elizabeth. With respect to his claim that the
Complaint should have been filed in Iloilo City, his claim was not supported by any piece
of evidence, as he did not present any. Further, petitioner is, in effect, asking the Court to
weigh the credibility of the prosecution witness, Elizabeth. However, the trial courts
assessment of the credibility of a witness is entitled to great weight, unless tainted with
arbitrariness or oversight of some fact or circumstance, which is not the case here.

With respect to the second issue, the OSG stresses that the defense of no valid demand
was not raised in the lower court. Nevertheless, the demand letter sent to Elizabeth
suffices, as she is also one of the complainants alleged in the Information, as an agent of
Margarita. Moreover, no proof was adduced as to the genuineness of petitioners
signature in the Registry Return Receipt of the demand letter.

The OSG, however, submits that the Court may recommend petitioner for executive
clemency, in view of his advanced age and failing health.
 The Courts Ruling

The Petition is impressed with merit.

Review of Factual Findings

While the Petition raises questions of law, the resolution of the Petition requires a
review of the factual findings of the lower courts and the evidence upon which they are
based.

As a rule, only questions of law may be raised in a petition for review under Rule
45 of the Rules of Court. In many instances, however, this Court has laid down exceptions
to this general rule, as follows:

(1) When the factual findings of the Court of Appeals and the trial court are
contradictory;
(2) When the conclusion is a finding grounded entirely on speculation,
surmises or conjectures;
(3) When the inference made by the Court of Appeals from its findings of
fact is manifestly mistaken, absurd or impossible;
(4) When there is grave abuse of discretion in the appreciation of facts;
(5) When the appellate court, in making its findings, went beyond the issues
of the case, and such findings are contrary to the admissions of both
appellant and appellee;
(6) When the judgment of the Court of Appeals is premised on
misapprehension of facts;
(7) When the Court of Appeals failed to notice certain relevant facts which,
if properly considered, would justify a different conclusion;
(8) When the findings of fact are themselves conflicting;
(9) When the findings of fact are conclusions without citation of the specific
evidence on which they are based; and
(10) When the findings of fact of the Court of Appeals are premised on the
absence of evidence but such findings are contradicted by the
evidence on record.[14]

In this case, the findings of fact of the trial court and the CA on the issue of the place of
commission of the offense are conclusions without any citation of the specific evidence
on which they are based; they are grounded on conclusions and conjectures.

The trial court, in its Decision, ruled on the commission of the offense without any
finding as to where it was committed:

Based on the evidence presented by the prosecution through private

complainant Elizabeth Luciaja, the Court is convinced that accused Trenas
 had committed the offense of Estafa by taking advantage of her trust so that
he could misappropriate for his own personal benefit the amount entrusted
to him for payment of the capital gains tax and documentary stamp tax.

As clearly narrated by private complainant Luciaja, after accused Trenas

had obtained the amount of P150,000.00 from her, he gave her two receipts
purportedly issued by the Bureau of Internal Revenue, for the fraudulent
purpose of fooling her and making her believe that he had complied with his
duty to pay the aforementioned taxes. Eventually, private complainant
Luciaja discovered that said receipts were fabricated documents.[15]

In his Motion for Reconsideration before the RTC, petitioner raised the argument that it
had no jurisdiction over the offense charged. The trial court denied the motion, without
citing any specific evidence upon which its findings were based, and by relying on
conjecture, thus:

That the said amount was given to [Treas] in Makati City was
incontrovertibly established by the prosecution. Accused Treas, on the
other hand, never appeared in Court to present countervailing evidence. It
is only now that he is suggesting another possible scenario, not based on
the evidence, but on mere what ifs. x x x

Besides, if this Court were to seriously assay his assertions, the same would
still not warrant a reversal of the assailed judgment. Even if the Deed of
Sale with Assumption of Mortgage was executed on 22 December 999 in
Iloilo City, it cannot preclude the fact that the P150,000.00 was delivered to
him by private complainant Luciaja in Makati City the following day. His
reasoning the money must have been delivered to him in Iloilo City because
it was to be used for paying the taxes with the BIR office in that city does
not inspire concurrence. The records show that he did not even pay the
taxes because the BIR receipts he gave to private complainant were fake
documents. Thus, his argumentation in this regard is too specious to
consider favorably.[16]
For its part, the CA ruled on the issue of the trial courts jurisdiction in this wise:

It is a settled jurisprudence that the court will not entertain evidence

unless it is offered in evidence. It bears emphasis that Hector did not
comment on the formal offer of prosecutions evidence nor present any
evidence on his behalf. He failed to substantiate his allegations that he had
received the amount of P150,000.00 in Iloilo City. Hence, Hectors
allegations cannot be given evidentiary weight.

Absent any showing of a fact or circumstance of weight and influence

which would appear to have been overlooked and, if considered, could
affect the outcome of the case, the factual findings and assessment on the
 credibility of a witness made by the trial court remain binding on appellate
tribunal. They are entitled to great weight and respect and will not be
disturbed on review.[17]

The instant case is thus an exception allowing a review of the factual findings of the lower
courts.

Jurisdiction of the Trial Court

The overarching consideration in this case is the principle that, in criminal cases, venue
is jurisdictional. A court cannot exercise jurisdiction over a person charged with an offense
committed outside its limited territory. In Isip v. People,[18] this Court explained:

The place where the crime was committed determines not only
the venue of the action but is an essential element of jurisdiction. It is
a fundamental rule that for jurisdiction to be acquired by courts in criminal
cases, the offense should have been committed or any one of its essential
ingredients should have taken place within the territorial jurisdiction of the
court. Territorial jurisdiction in criminal cases is the territory where the court
has jurisdiction to take cognizance or to try the offense allegedly committed
therein by the accused. Thus, it cannot take jurisdiction over a person
charged with an offense allegedly committed outside of that limited territory.
Furthermore, the jurisdiction of a court over the criminal case is
determined by the allegations in the complaint or information. And
once it is so shown, the court may validly take cognizance of the
case. However, if the evidence adduced during the trial shows that the
offense was committed somewhere else, the court should dismiss the
action for want of jurisdiction. (Emphasis supplied.)

In a criminal case, the prosecution must not only prove that the offense was
committed, it must also prove the identity of the accused and the fact that the offense was
committed within the jurisdiction of the court.

In Fukuzume v. People,[19] this Court dismissed a Complaint for estafa, wherein

the prosecution failed to prove that the essential elements of the offense took place within
the trial courts jurisdiction. The Court ruled:

More importantly, we find nothing in the direct or cross-examination

of Yu to establish that he gave any money to Fukuzume or transacted
business with him with respect to the subject aluminum scrap wires inside
or within the premises of the Intercontinental Hotel in Makati, or anywhere
in Makati for that matter. Venue in criminal cases is an essential element of
jurisdiction. x x x
 In the present case, the criminal information against Fukuzume was
filed with and tried by the RTC of Makati. He was charged with estafa as
defined under Article 315, paragraph 2(a) of the Revised Penal Code, the
elements of which are as follows: x x x

The crime was alleged in the Information as having been

committed in Makati. However, aside from the sworn
statement executed by Yu on April 19, 1994, the prosecution presented
no other evidence, testimonial or documentary, to corroborate Yu's
sworn statement or to prove that any of the above-enumerated
elements of the offense charged was committed in Makati. Indeed, the
prosecution failed to establish that any of the subsequent payments made
by Yu in the amounts of P50,000.00 on July 12, 1991, P20,000.00 on July
22, 1991, P50,000.00 on October 14, 1991 and P170,000.00 on October
18, 1991 was given in Makati. Neither was there proof to show that the
certifications purporting to prove that NAPOCOR has in its custody the
subject aluminum scrap wires and that Fukuzume is authorized by
Furukawa to sell the same were given by Fukuzume to Yu in Makati. On the
contrary, the testimony of Yu established that all the elements of the offense
charged had been committed in Paraaque, to wit: that on July 12, 1991, Yu
went to the house of Fukuzume in Paraaque; that with the intention of selling
the subject aluminum scrap wires, the latter pretended that he is a
representative of Furukawa who is authorized to sell the said scrap wires;
that based on the false pretense of Fukuzume, Yu agreed to buy the subject
aluminum scrap wires; that Yu paid Fukuzume the initial amount of
P50,000.00; that as a result, Yu suffered damage. Stated differently, the
crime of estafa, as defined and penalized under Article 315, paragraph 2(a)
of the Revised Penal Code, was consummated when Yu and Fukuzume
met at the latter's house in Paraaque and, by falsely pretending to sell
aluminum scrap wires, Fukuzume was able to induce Yu to part with his
money.

xxx

From the foregoing, it is evident that the prosecution failed to

prove that Fukuzume committed the crime of estafa in Makati or that
any of the essential ingredients of the offense took place in the said
city. Hence, the judgment of the trial court convicting Fukuzume of the
crime of estafa should be set aside for want of jurisdiction, without
prejudice, however, to the filing of appropriate charges with the court of
competent jurisdiction. (Emphasis supplied)

In this case, the prosecution failed to show that the offense of estafa under Section
1, paragraph (b) of Article 315 of the RPC was committed within the jurisdiction of the
RTC of Makati City.
 That the offense was committed in Makati City was alleged in the information as
follows:

That on or about the 23rd day of December, 1999, in the City of

Makati, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, received in trust from
ELIZABETH LUCIAJA the amount of P150,000.00 x x x. (Emphasis
supplied.)[20]

Ordinarily, this statement would have been sufficient to vest jurisdiction in the RTC
of Makati. However, the Affidavit of Complaint executed by Elizabeth does not contain
any allegation as to where the offense was committed. It provides in part:

4. THAT on 23 December 1999, [Elizabeth] personally entrusted to ATTY.

HECTOR TREAS the sum of P150,000.00 to be expended as agreed
and ATTY. HECTOR TREAS issued to me a receipt, a photo copy of
which is hereto attached as Annex B,

5. THAT despite my several follow-ups with ATTY. HECTOR TREAS, the

latter failed to transfer the title of aforesaid property to MRS.
MARGARITA ALOCILJA. He also failed to pay the capital gains tax,
documentary stamps and BIR-related expenses. What ATTY. HECTOR
TREAS accomplished was only the preparation of the Deed of Sale
covering aforesaid property. A copy of said Deed of Sale is hereto
attached as Annex C,

6. THAT in view of my persistent follow-ups, ATTY. HECTOR

TREAS issued to me a check for refund of the sum given to him less the
attorneys fee of P20,000.00 and the sum of P10,000.00 allegedly paid
to BIR or in the net sum of P120,000.00. x x x

7. THAT when said check was deposited at EQUITABLE PCI BANK dela
Rosa-Rada Branch at Makati City, the same was dishonored by the
drawee bank for the reason: ACCOUNT CLOSED. x x x[21]
Aside from the lone allegation in the Information, no other evidence was presented
by the prosecution to prove that the offense or any of its elements was committed in
Makati City.

Under Article 315, par. 1 (b) of the RPC, the elements of estafa are as follows: (1)
that money, goods or other personal property is received by the offender in trust or on
commission, or for administration, or under any other obligation involving the duty to make
delivery of or to return the same; (2) that there be misappropriation or conversion of such
money or property by the offender, or denial on his part of such receipt; (3) that such
misappropriation or conversion or denial is to the prejudice of another; and (4) there is
demand by the offended party to the offender.[22]

There is nothing in the documentary evidence offered by the prosecution [23] that
points to where the offense, or any of its elements, was committed. A review of the
testimony of Elizabeth also shows that there was no mention of the place where the
offense was allegedly committed:

Q After the manager of Maybank referred Atty. Treas to you, what

happened next?
A We have met and he explained to the expenses and what we will have to
and she will work for the Deed of Sale.
Q And did he quote any amount when you got to the expenses?
A Yes. I gave him ONE HUNDRED FIFTY THOUSAND.

Q What was the amount quoted to you?

A ONE HUNDRED FIFTY THOUSAND.
Q Did he give a breakdown of this ONE HUNDRED FIFTY THOUSAND?
A Yes, sir.
Q And what is the breakdown of this ONE HUNDRED FIFTY THOUSAND?
A TWENTY THOUSAND is for his Attorneys fee, NINETY THOUSAND is
for the capital gain tax TWENTY FOUR THOUSAND is intended for
documentary sum (sic) and TEN THOUSAND PESOS is for other
expenses for BIR.
Q And did you give him this ONE HUNDRED FIFTY THOUSAND?
A Yes, sir.
Q Did he issue a receipt?
A Yes, sir.
Q If shown to you a receipt issued by Atty. Treas for this ONE HUNDRED
FIFTY THOUSAND, will you be able to identify it?
A Yes, sir.
Q I am showing to you a document, madam witness, already identified
during the pre-trial as exhibit B. This appears to be a receipt dated
December 22, 1999. Will you please go over this document and
inform this court what relation has this to the receipt which you said
Atty. Treas issued to you?
A This is the receipt issued by Atty. Hector Treas.
Q Now, after the amount of ONE HUNDRED FIFTY THOUSAND was given
to Atty. Treas by you, what happened next?
A We made several follow-ups but he failed to do his job.[24]
 Although the prosecution alleged that the check issued by petitioner was
dishonored in a bank in Makati, such dishonor is not an element of the offense
of estafa under Article 315, par. 1 (b) of the RPC.

Indeed, other than the lone allegation in the information, there is nothing in the
prosecution evidence which even mentions that any of the elements of the offense were
committed in Makati. The rule is settled that an objection may be raised based on the
ground that the court lacks jurisdiction over the offense charged, or it may be
considered motu proprio by the court at any stage of the proceedings or on
appeal.[25] Moreover, jurisdiction over the subject matter in a criminal case cannot be
conferred upon the court by the accused, by express waiver or otherwise. That jurisdiction
is conferred

by the sovereign authority that organized the court and is given only by law in the manner
and form prescribed by law.[26]

It has been consistently held by this Court that it is unfair to require a defendant or
accused to undergo the ordeal and expense of a trial if the court has no jurisdiction over
the subject matter or offense or it is not the court of proper venue.[27] Section 15 (a) of
Rule 110 of the Revised Rules on Criminal Procedure of 2000 provides that [s]ubject to
existing laws, the criminal action shall be instituted and tried in the court of the municipality
or territory where the offense was committed or where any of its essential ingredients
occurred. This fundamental principle is to ensure that the defendant is not compelled to
move to, and appear in, a different court from that of the province where the crime was
committed as it would cause him great inconvenience in looking for his witnesses and
other evidence in another place.[28] This principle echoes more strongly in this case,
where, due to distance constraints, coupled with his advanced age and failing health,
petitioner was unable to present his defense in the charges against him.

There being no showing that the offense was committed within Makati, the RTC of
that city has no jurisdiction over the case.[29]

As such, there is no more need to discuss the other issue raised by petitioner.

At this juncture, this Court sees it fit to note that the Code of Professional
Responsibility strongly militates against the petitioners conduct in handling the funds of
his client. Rules 16.01 and 16.02 of the Code provides:
 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 others kept by him.

When a lawyer collects or receives money from his client for a particular purpose
(such as for filing fees, registration fees, transportation and office expenses), he should
promptly account to the client how the money was spent.[30] If he does not use the money
for its intended purpose, he must immediately return it to the client. His failure either to
render an accounting or to return the money (if the intended purpose of the money does
not materialize) constitutes a blatant disregard of Rule 16.01 of the Code of Professional
Responsibility.[31]

Moreover, a lawyer has the duty to deliver his client's funds or properties as they
fall due or upon demand.[32] His failure to return the client's money upon demand gives
rise to the presumption that he has misappropriated it for his own use to the prejudice of
and in violation of the trust reposed in him by the client.[33] It is a gross violation of general
morality as well as of professional ethics; it impairs public confidence in the legal
profession and deserves punishment.[34]

In Cuizon v. Macalino,[35] this Court ruled that the issuance of checks which were
later dishonored for having been drawn against a closed account indicates a lawyer's
unfitness for the trust and confidence reposed on him, shows lack of personal honesty
and good moral character as to render him unworthy of public confidence, and constitutes
a ground for disciplinary action.

This case is thus referred to the Integrated Bar of the Philippines (IBP) for the
initiation of disciplinary proceedings against petitioner. In any case, should there be a
finding that petitioner has failed to account for the funds received by him in trust, the
recommendation should include an order to immediately return the amount of ₱130,000
to his client, with the appropriate rate of interest from the time of demand until full
payment.

WHEREFORE, the Petition is GRANTED. The Decision dated 9 July 2010 and the
Resolution dated 4 January 2011 issued by the Court of Appeals in CA-G.R. CR No.
32177 are SET ASIDE on the ground of lack of jurisdiction on the part of the Regional
Trial Court, Branch 137, Makati City. Criminal Case No. 01-2409 is DISMISSED without
prejudice. This case is REFERREDto the IBP Board of Governors for investigation and
recommendation pursuant to Section 1 of Rule 139-B of the Rules of Court.
 SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

A.C. No. 5440 December 10, 2014

SPOUSES NICASIO DONELITA SAN PEDRO, Complainants,

vs.
ATTY. ISAGANI A. MENDOZA, Respondent.

RESOLUTION

LEONEN, J.:

For resolution is a complaint for disbarment filed by Spouses Nicasio and Donelita San
Pedro (complainants) against Atty. Isagani A. Mendoza (respondent).1 This case
involves a determination of whether respondent violated his duty to hold in trust all
moneys and properties of the client; his duty to account for all funds and property
collected or received for or from the client; and his duty to deliver the funds and property
of the client when due or upon demand under the Code of Professional Responsibility.

The facts are summarized as follows:

On or about November 21, 1996, complainants engaged the services of respondent to

facilitate the transfer of title to property, in the name of Isabel Azcarraga Marcaida, to
complainants.2 Complainants then gave respondent a check for ₱68,250.00 for the
payment of transfer taxes.3 They also gave respondent a check for ₱13,800.00 for
respondent’s professional fee.4
Respondent failed to produce the title despite complainants’ repeated follow-ups.5

Several letters were sent by respondent explaining the delay in the transfer of
title.6 However, respondent still failed to produce the title.

Complainants subsequently referred the case to the barangay.7 Respondent refused to

return the amount complainants gave for the transfer taxes.8 Complainants were then
issued a certificate to file action.9 They also sent a letter demanding the refund of the
money intended for the transfer taxes.10 Respondent still did not return the money.

On May 8, 2000, respondent sent another letter to complainants. He promised to settle

the transfer of the land title.11However, respondent reneged on this
promise.12 Complainants were then forced to obtain a loan from Philippine American
Life and General Insurance Company to secure the transfer of the title to the property in
their names.13

Respondent contested the allegations of complainants. According to him, it was

complainants who caused the three-year delay in the transfer of title to complainants’
names. Complainants were not able to furnish respondent several important
documents: (a) original copy of the deed of extrajudicial petition; (b) affidavit of
publication with the clippings of the published item in a newspaper of general
circulation; and (c) a barangay certificate from the barangay where the property is
located as required by the Bureau of Internal Revenue.14

In addition, respondent argued that complainants paid him the measly sum of
₱13,800.00 despite all the work he did for them, including facilitating the sale of the
property. These involved "being-pulled from the office four or five times to discuss . . .
the details of the transaction [with the sellers]; going twice to the Regional Trial Court of
Biñan, Laguna[,] Branch 24, to expedite the . . . issuance of a [n]ew owner’s duplicate
copy of the title; going twice to the office of the Register of Deeds for Calamba, Laguna
to make verification and submit the court [o]rder; [and facilitating the] preparation and
notarization of the Deed of Absolute Sale."15

Respondent also claimed that retention of the money is justified owing to his receivables
from complainants for the services he rendered in various cases:

1) In the case of Spouses Nicasio and Donelita San Pedro versus Severo
Basbas, for Forcible Entry, docketed as Civil Case No. 2004 in the Metropolitan
Trial Court of Santa Rosa, Laguna. This case was dismissed by the Honorable
Court for alleged lack of jurisdiction, the issue of possession being intertwined
with that of ownership;

2) In the case of Spouses Nicasio and Donelita San Pedro versus Severo
Basbas for Accion Publiciana docketed as Civil Case No. B-5386 raffled to the
Regional Trial Court of Biñan, Laguna[,] Branch 25;
 3) In Civil Case No. B-4503 entitled Basbas versus Spouses Nicasio and
Donelita San Pedro et al., for nullity of title, [r]econveyance with prayer for
issuance of writ of preliminary injunction directed specifically to herein
complainant. This case was assigned to the Regional Trial Court of San Pedro,
Laguna[.] Respondent, for and in behalf of herein complainant, submitted an
[a]nswer and [o]pposition to the prayer for issuance of the injunction, which was
favorably acted upon. Consequently[,] the case was dismissed by the Court[;]

4) In Civil Case No. B-688 entitled Basbas versus Spouses Nicasio and Donelita
San Pedro et al., for [r]e-partition and [r]econveyance, which was raffled to the
Regional Trial Court of Biñan, Laguna, Branch 24[;] [and]

5) Likewise, respondent represented herein complainant in [an] ESTAFA case

they [filed] against Greg Ramos and Benjamin Corsino, which case, as per
reliable source, was discontinued by complainant after the civil aspect of the
same was amicably settled.16 Respondent further alleged that complainants
challenged him to prove his worth as a lawyer by doing away with the
requirements and expediting the cancellation of the Marcaidas’ title. 17

The present administrative case was referred to the Integrated Bar of the Philippines
(IBP) for investigation, report and recommendation.18 The parties were then called to a
mandatory conference before the IBP Commission on Bar Discipline. 19 They were
required to submit their position papers.20 Respondent did not submit his position
paper.21

On July 8, 2008, the Investigating Commissioner, Atty. Salvador B. Hababag, submitted

his findings and recommendation. The Investigating Commissioner found that
respondent violated Canon 16, Rules 16.0122 and 16.0323 of the Code of Professional
Responsibility.

The Investigating Commissioner found that both checks issued to respondent were
encashed despite respondent’s failure to facilitate the release of the title in the name of
complainants.24 Complainants had to obtain a loan to facilitate the transfer of title in their
names.25

Moreover, respondent admitted his liability in his letters to complainants. 26 Complainant

Nicasio San Pedro’s affidavit of desistance is immaterial.27

The Investigating Commissioner recommended the disciplinary action of "censure and

warning," hence:

WHEREFORE, premises considered, it is most respectfully recommended that the

disciplinary sanction of CENSURE and WARNING be given the respondent with the
admonition that he be extremely careful of his acts to forego severe penalty in the
future.28
In the Notice of Resolution No. XVIII-2008-399 dated August 14, 2008, the IBP Board of
Governors adopted with modification the findings of the Investigating Commissioner. It
held:

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

APPROVED, with modification, the Report and Recommendation of the Investigating
Commissioner of the above entitled case, herein made part of this Resolution as Annex
"A"; and, finding the recommendation fully supported by the evidence on record and the
applicable laws and rules, and for Respondent’s violation of Canon 16, [Rule] 16.01 and
Rule 16.03 of the Code of Professional Responsibility when he failed to effect the
transfer of property despite encashment of the two checks, Atty. Isagani A. Mendoza is
hereby SUSPENDED from the practice of law for three (3) months and Ordered to
Returnthe amount of Sixty Eight Thousand Two Hundred Fifty (₱68,250.00) Pesos to
complainants within thirty days from receipt of notice.29 (Emphasis, italics, and
underscoring in the original)

On November 14, 2008, respondent filed his motion for reconsideration. 30 The IBP
Board of Governors denied respondent’s motion in the Notice of Resolution No. XX-
2013-839 dated June 22, 2013:

RESOLVED to unanimously DENY Respondent’s Motion for Reconsideration, there

being no cogent reason to reverse the findings of the Commission and it being a mere
reiteration of the matters which had already been threshed out and taken into
consideration. Thus, Resolution No. XVIII-2008-399 dated August 14, 2008 is hereby
AFFIRMED.31 (Emphasis and italics in the original)

On December 11, 2013, this court resolved to note the following: (a) Notice of
Resolution No. XVIII-2008-399 dated August 14, 2008 of the IBP Board of Governors;
(b) Notice of Resolution No. XX-2013-839 dated June 22, 2013 of the IBP Board of
Governors;and (c) IBP’s letter dated October 7, 2013 transmitting the documents
pertaining to the case.32

In the manifestation and motion dated October 25,2013, respondent requested for a
formal hearing, reasoning that he "wants to exercise his right to confront his accusers
[to] cross[-]examine them and that of their witness."33 The manifestation and motion was
denied by this court in the resolution dated September 22, 2014. 34

The main issue in this case is whether respondent is guilty of violating Canon 16 of the
Code of Professional Responsibility for failing to hold in trust the money of his clients.

After considering the parties’ arguments and the records of this case, this court resolves
to adopt and approve the Notice of Resolution No. XX-2013-839 dated June 22, 2013 of
the IBP Board of Governors.

It has been said that "[t]he practice of law is a privilege bestowed on lawyers who meet
the high standards oflegal proficiency and morality. Any conduct that shows a violation
of the norms and values of the legal profession exposes the lawyer to administrative
liability."35

An examination of the records reveals that respondent violated the Code of Professional
Responsibility.

Canon 16 of the Code of Professional Responsibility states:

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

OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.

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

Rule 16.02 – A lawyer shall keep the funds of each client separate and apart from his
own and those of others kept by him.

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

Rule 16.04 – A lawyer shall not borrow money from his client unless the client’s
interests are fully protected by the nature of the case or by independent advice. Neither
shall a lawyer lend money to a client except, when in the interest of justice, he has to
advance necessary expenses in a legal matter he is handling for the client.

Similarly, Rule138, Section 25 of the Rules of Court provides:

Section 25. Unlawful retention of client's funds; contempt. — When an attorney unjustly
retains in his hands money of his client after it has been demanded, he may be
punished for contempt as an officer of the Court who has misbehaved in his official
transactions; but proceedings under this section shall not be a bar to a criminal
prosecution.

A lawyer’s duty under Canon 16 of the Code of Professional Responsibility is clear:

The fiduciary nature of the relationship between counsel and client imposes on a lawyer
the duty to account for the money or property collected or received for or from the
client[,] [thus] . . . [w]hen a lawyer collects or receives money from his client for a
particular purpose (such as for filing fees, registration fees, transportation and office
expenses), he should promptly account to the client how the money was spent. If he
does not use the money for its intended purpose, he must immediately return it to the
client. His failure either to render an accounting or to return the money (if the intended
purpose of the money does not materialize) constitutes a blatant disregard of Rule
16.01 of the Code of Professional Responsibility.

[The lawyer’s] failure to return the client’s money upon demand gives rise to the
presumption that he has misappropriated it for his own use to the prejudice of and in
violation of the trust reposed in him by the client.36(Emphasis supplied)

Respondent admitted that there were delays in the transfer of title of property to
complainants’ name.1âwphi1 He continuously assured complainants that he would still
fulfill his duty. However, after three (3) years and several demands from complainants,
respondent failed to accomplish the task given to him and even refused to return the
money. Complainants’ alleged failure to provide the necessary documents to effect the
transfer does not justify his violation of his duty under the Code of Professional
Responsibility.

Respondent’s assertion of a valid lawyer’s lien is also untenable. A valid retaining lien
has the following elements:

An attorney’s retaining lien is fully recognized if the presence of the following elements
concur: (1) lawyer-client relationship; (2) lawful possession of the client’s funds,
documents and papers; and (3) unsatisfied claim for attorney’s fees. Further, the
attorney’s retaining lien is a general lien for the balance of the account between the
attorney and his client, and applies to the documents and funds of the client which may
come into the attorney’s possession in the course of his employment.37

Respondent did not satisfy all the elements of a valid retaining lien. He did not present
evidence as to an unsatisfied claim for attorney’s fees. The enumeration of cases he
worked on for complainants remains unsubstantiated. When there is no unsatisfied
claim for attorney’s fees, lawyers cannot validly retain their client’s funds or properties.38

Furthermore, assuming that respondent had proven all the requisites for a valid
retaining lien, he cannot appropriate for himself his client's funds without the proper
accounting and notice to the client. The rule is that when there is "a disagreement, or
when the client disputes the amount claimed by the lawyer . . . the lawyer should not
arbitrarily apply the funds in his possession to the payment of his fees .... "39

We also note that despite complainant Nicasio San Pedro's affidavit of desistance dated
March 14, 2008, both complainants signed their comment to respondent's motion for
reconsideration and prayed that the motion be dismissed for lack of merit. 40

WHEREFORE, respondent Atty. Isagani A. Mendoza is SUSPENDED from the practice

of law for three (3) months. He is also ordered to RETURN to complainants the amount
of ₱68,250.00 with 6% legal interest from the date of finality of this judgment until full
payment. Respondent is further DIRECTED to submit to this court proof of payment of
the amount within 10 days from payment. Let a copy of this resolution be entered in
respondent Atty. Isagani A. Mendoza's personal record with the Office of the Bar
Confidant, and a copy be served to the Integrated Bar of the Philippines and the Office
of the Court Administrator for circulation to all the courts in the land.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

A.C. No. 9872 January 28, 2014

NATIVIDAD P. NAVARRO and HILDA S. PRESBITERO, Complainants,

vs.
ATTY. IVAN M. SOLIDUM, JR., Respondent.

DECISION

PER CURIAM:

This case originated from a complaint for disbarment, dated 26 May 2008, filed by
Natividad P. Navarro (Navarro) and Hilda S. Presbitero (Presbitero) against Atty. Ivan
M. Solidum, Jr. (respondent) before the Integrated Bar of the Philippines Commission
on Bar Discipline (IBP-CBD).

From the Report, dated 1July 2009, of the IBP-CBD, we gathered the following facts of
the case:

On 4 April 2006, respondent signed a retainer agreement with Presbitero to follow up

the release of the payment for the latter’s 2.7-hectare property located in Bacolod which
was the subject of a Voluntary Offer to Sell (VOS) to the Department of Agrarian Reform
(DAR). The agreement also included the payment of the debts of Presbitero’s late
husband to the Philippine National Bank (PNB), the sale of the retained areas of the
property, and the collection of the rentals due for the retained areas from their
occupants. It appeared that the DAR was supposed to pay ₱700,000 for the property
but it was mortgaged by Presbitero and her late husband to PNB for ₱1,200,000.
Presbitero alleged that PNB’s claim had already prescribed, and she engaged the
services of respondent to represent her in the matter. Respondent proposed the filing of
a case for quieting of title against PNB. Respondent and Presbitero agreed to an
attorney’s fee of 10% of the proceeds from the VOS or the sale of the property, with the
expenses to be advanced by Presbitero but deductible from respondent’s fees.
Respondent received ₱50,000 from Presbitero, supposedly for the expenses of the
case, but nothing came out of it.

In May 2006, Presbitero’s daughter, Ma. Theresa P. Yulo (Yulo), also engaged
respondent’s services to handle the registration of her 18.85-hectare lot located in
Nasud-ong, Caradio-an, Himamaylan, Negros. Yulo convinced her sister, Navarro, to
finance the expenses for the registration of the property. Respondent undertook to
register the property in consideration of 30% of the value of the property once it is
registered. Respondent obtained ₱200,000 from Navarro for the registration expenses.
Navarro later learned that the registration decree over the property was already issued
in the name of one Teodoro Yulo. Navarro alleged that she would not have spent for the
registration of the property if respondent only apprised her of the real situation of the
property.

On 25 May 2006, respondent obtained a loan of ₱1,000,000 from Navarro to finance his
sugar trading business. Respondent and Navarro executed a Memorandum of
Agreement (MOA) and agreed that the loan (a) shall be for a period of one year; (b)
shall earn interest at the rate of 10% per month; and (c) shall be secured by a real
estate mortgage over a property located in Barangay Alijis, Bacolod City, covered by
Transfer Certificate of Title No. 304688. They also agreed that respondent shall issue
postdated checks to cover the principal amount of the loan as well as the interest
thereon. Respondent delivered the checks to Navarro, drawn against an account in
Metrobank, Bacolod City Branch, and signed them in the presence of Navarro.

In June 2006, respondent obtained an additional loan of ₱1,000,000 from Navarro,

covered by a second MOA with the same terms and conditions as the first MOA.
Respondent sent Navarro, through a messenger, postdated checks drawn against an
account in Bank of Commerce, Bacolod City Branch. Respondent likewise discussed
with Navarro about securing a "Tolling Agreement" with Victorias Milling Company, Inc.
but no agreement was signed.

At the same time, respondent obtained a loan of ₱1,000,000 from Presbitero covered by
a third MOA, except that the real estate mortgage was over a 263-square-meter
property located in Barangay Taculing, Bacolod City. Respondent sent Presbitero
postdated checks drawn against an account in Metrobank, Bacolod City Branch.

Presbitero was dissatisfied with the value of the 263-square-meter property mortgaged
under the third MOA, and respondent promised to execute a real estate mortgage over
a 1,000-square-meter parcel of land adjacent to the 4,000-square-meter property he
mortgaged to Navarro.

However, respondent did not execute a deed for the additional security.
Respondent paid the loan interest for the first few months. He was able to pay
complainants a total of ₱900,000. Thereafter, he failed to pay either the principal
amount or the interest thereon. In September 2006, the checks issued by respondent to
complainants could no longer be negotiated because the accounts against which they
were drawn were already closed. When complainants called respondent’s attention, he
promised to pay the agreed interest for September and October 2006 but asked for a
reduction of the interest to 7% for the succeeding months.

In November 2006, respondent withdrew as counsel for Yulo. On the other hand,
Presbitero terminated the services of respondent as counsel. Complainants then filed
petitions for the judicial foreclosure of the mortgages executed by respondent in their
favor. Respondent countered that the 10% monthly interest on the loan was usurious
and illegal. Complainants also filed cases for estafa and violation of Batas Pambansa
Blg. 22 against respondent.

Complainants alleged that respondent induced them to grant him loans by offering very
high interest rates. He also prepared and signed the checks which turned out to be
drawn against his son’s accounts. Complainants further alleged that respondent
deceived them regarding the identity and value of the property he mortgaged because
he showed them a different property from that which he owned. Presbitero further
alleged that respondent mortgaged his 263-square-meter property to her for ₱1,000,000
but he later sold it for only ₱150,000.

Respondent, for his defense, alleged that he was engaged in sugar and realty business
and that it was Yulo who convinced Presbitero and Navarro to extend him loans. Yulo
also assured him that Presbitero would help him with the refining of raw sugar through
Victorias Milling Company, Inc. Respondent alleged that Navarro fixed the interest rate
and he agreed because he needed the money. He alleged that their business
transactions were secured by real estate mortgages and covered by postdated checks.
Respondent denied that the property he mortgaged to Presbitero was less than the
value of the loan. He also denied that he sold the property because the sale was
actually rescinded. Respondent claimed that the property he mortgaged to Navarro was
valuable and it was actually worth more than ₱8,000,000.

Respondent alleged that he was able to pay complainants when business was good but
he was unable to continue paying when the price of sugar went down and when the
business with Victorias Milling Company, Inc. did not push through because Presbitero
did not help him. Respondent also denied that he was hiding from complainants.

Respondent further alleged that it was Yulo who owed him ₱530,000 as interest due for
September to December 2005. He denied making any false representations. He
claimed that complainants were aware that he could no longer open a current account
and they were the ones who proposed that his wife and son issue the checks.
Respondent further alleged that he already started with the titling of Yulo’s lot but his
services were terminated before it could be completed.
A supplemental complaint was filed charging respondent with accepting cases while
under suspension. In response, respondent alleged that he accepted Presbitero’s case
in February 2006 and learned of his suspension only in May 2006.

After conducting a hearing and considering the position papers submitted by the parties,
the IBP-CBD found that respondent violated the Code of Professional Responsibility.

The IBP-CBD found that respondent borrowed ₱2,000,000 from Navarro and
₱1,000,000 from Presbitero which he failed to pay in accordance with the MOAs he
executed. The IBP-CBD found that based on the documents presented by the parties,
respondent did not act in good faith in obtaining the loans. The IBP-CBD found that
respondent either promised or agreed to pay the very high interest rates of the loans
although he knew them to be exorbitant in accordance with jurisprudence. Respondent
likewise failed to deny that he misled Navarro and her husband regarding the identity of
the property mortgaged to them. Respondent also mortgaged a property to Presbitero
for ₱1,000,000 but documents showed that its value was only ₱300,000. Documents
also showed that he sold that property for only ₱150,000. Respondent conspired with
Yulo to secure loans by promising her a 10% commission and later claimed that they
agreed that Yulo would "ride" on the loan by borrowing ₱300,000 from the amount he
obtained from Navarro and Presbitero. Respondent could not explain how he lost all the
money he borrowed in three months except for his claim that the price of sugar went
down.

The IBP-CBD found that respondent misled Navarro and Presbitero regarding the
issuance of the postdated checks, and there was nothing in the records that would show
that he informed them that it would be his wife or son who would issue the checks. The
IBP-CBD also found that respondent had not been transparent in liquidating the money
he received in connection with Presbitero’s VOS with DAR. He was also negligent in his
accounting regarding the registration of Yulo’s property which was financed by Navarro.

The IBP-CBD found that respondent was guilty of violating Rule 1.01 of the Code of
Professional Responsibility for committing the following acts:

(1) signing drawn checks against the account of his son as if they were from his
own account;

(2) misrepresenting to Navarro the identity of the lot he mortgaged to her;

(3) misrepresenting to Presbitero the true value of the 263-square-meter lot he

mortgaged to her;

(4) conspiring with Yulo to obtain the loans from complainants;

(5) agreeing or promising to pay 10% interest on his loans although he knew that
it was exorbitant; and
 (6) failing to pay his loans because the checks he issued were dishonored as the
accounts were already closed.

The IBP-CBD also found that respondent violated Canon 16 and Rule 16.01 of the
Code of Professional Responsibility when he failed to properly account for the various
funds he received from complainants.

In addition, the IBP-CBD found that respondent violated Rule 16.04 of the Code of
Professional Responsibility which prohibits borrowing money from a client unless the
client’s interest is fully protected or the client is given independent advice.

On the matter of practicing law while under suspension, the IBP-CBD found that the
records were not clear whether the notice of suspension respondent received on 29
May 2006 was the report and recommendation of the IBP-CBD or the final decision of
this Court. The IBP-CBD likewise found that there was insufficient evidence to prove
that respondent mishandled his cases.

The IBP-CBD recommended that respondent be meted the penalty of disbarment.

In Resolution No. XIX-2011-267 dated 14 May 2011, the IBP Board of Governors
adopted and approved the recommendation of the IBP-CBD with modification by
reducing the recommended penalty from disbarment to suspension from the practice of
law for two years. The IBP Board of Governors likewise ordered respondent to return
the amount of his unpaid obligation to complainants.

Complainants filed a motion for reconsideration, praying that the penalty of disbarment
be instead imposed upon respondent.

The only issue in this case is whether respondent violated the Code of Professional
Responsibility.

The records show that respondent violated at least four provisions of the Code of
Professional Responsibility.

Rule 1.01 of the Code of Professional Responsibility provides:

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

With respect to his client, Presbitero, it was established that respondent agreed to pay a
high interest rate on the loan he obtained from her. He drafted the MOA. Yet, when he
could no longer pay his loan, he sought to nullify the same MOA he drafted on the
ground that the interest rate was unconscionable. It was also established that
respondent mortgaged a 263-square-meter property to Presbitero for ₱1,000,000 but he
later sold the property for only ₱150,000, showing that he deceived his client as to the
real value of the mortgaged property. Respondent’s allegation that the sale was
eventually rescinded did not distract from the fact that he did not apprise Presbitero as
to the real value of the property.

Respondent failed to refute that the checks he issued to his client Presbitero and to
Navarro belonged to his son, Ivan Garcia Solidum III whose name is similar to his
name. He only claimed that complainants knew that he could no longer open a current
bank account, and that they even suggested that his wife or son issue the checks for
him. However, we are inclined to agree with the IBP-CBD’s finding that he made
complainants believe that the account belonged to him. In fact, respondent signed in the
presence of Navarro the first batch of checks he issued to Navarro. Respondent sent
the second batch of checks to Navarro and the third batch of checks to Presbitero
through a messenger, and complainants believed that the checks belonged to accounts
in respondent’s name.

It is clear that respondent violated Rule 1.01 of the Code of Professional Responsibility.
We have ruled that conduct, as used in the Rule, is not confined to the performance of a
lawyer’s professional duties.1 A lawyer may be disciplined for misconduct committed
either in his professional or private capacity.2 The test is whether his conduct shows him
to be wanting in moral character, honesty, probity, and good demeanor, or whether it
renders him unworthy to continue as an officer of the court.3

In this case, the loan agreements with Navarro were done in respondent’s private
capacity. Although Navarro financed the registration of Yulo’s lot, respondent and
Navarro had no lawyer-client relationship. However, respondent was Presbitero’s
counsel at the time she granted him a loan. It was established that respondent misled
Presbitero on the value of the property he mortgaged as a collateral for his loan from
her. To appease Presbitero, respondent even made a Deed of Undertaking that he
would give her another 1,000-square-meter lot as additional collateral but he failed to do
so.

Clearly, respondent is guilty of engaging in dishonest and deceitful conduct, both in his
professional capacity with respect to his client, Presbitero, and in his private capacity
with respect to complainant Navarro. Both Presbitero and Navarro allowed respondent
to draft the terms of the loan agreements. Respondent drafted the MOAs knowing that
the interest rates were exorbitant. Later, using his knowledge of the law, he assailed the
validity of the same MOAs he prepared. He issued checks that were drawn from his
son’s account whose name was similar to his without informing complainants. Further,
there is nothing in the records that will show that respondent paid or undertook to pay
the loans he obtained from complainants.

Canon 16 and Rule 16.01 of the Code of Professional Responsibility provide:

CANON 16. - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES
OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION.
Rule 16.01 – A lawyer shall account for all money or property collected or received for
or from the client.

The fiduciary nature of the relationship between the counsel and his client imposes on
the lawyer the duty to account for the money or property collected or received for or
from his client.4 We agree with the IBP-CBD that respondent failed to fulfill this duty. In
this case, the IBP-CBD pointed out that respondent received various amounts from
complainants but he could not account for all of them.

Navarro, who financed the registration of Yulo’s 18.85-hectare lot, claimed that
respondent received ₱265,000 from her. Respondent countered that ₱105,000 was
paid for real estate taxes but he could not present any receipt to prove his claim.
Respondent also claimed that he paid ₱70,000 to the surveyor but the receipt was only
for ₱15,000. Respondent claimed that he paid ₱50,000 for filing fee, publication fee,
and other expenses but again, he could not substantiate his claims with any receipt. As
pointed out by the IBP-CBD, respondent had been less than diligent in accounting for
the funds he received from Navarro for the registration of Yulo’s property.

Unfortunately, the records are not clear whether respondent rendered an accounting to
Yulo who had since passed away.

As regards Presbitero, it was established during the clarificatory hearing that

respondent received ₱50,000 from Presbitero. As the IBP-CBD pointed out, the records
do not show how respondent spent the funds because he was not transparent in
liquidating the money he received from Presbitero.

Clearly, respondent had been negligent in properly accounting for the money he
received from his client, Presbitero.1âwphi1Indeed, his failure to return the excess
money in his possession gives rise to the presumption that he has misappropriated it for
his own use to the prejudice of, and in violation of the trust reposed in him by, the
client.5

Rule 16.04 of the Code of Professional Responsibility provides:

Rule 16.04. - A lawyer shall not borrow money from his client unless the client’s
interests are fully protected by the nature of the case or by independent advice. Neither
shall a lawyer lend money to a client except, when in the interest of justice, he has to
advance necessary expenses in a legal matter he is handling for the client.

Here, respondent does not deny that he borrowed ₱1,000,000 from his client
Presbitero. At the time he secured the loan, respondent was already the retained
counsel of Presbitero.

While respondent’s loan from Presbitero was secured by a MOA, postdated checks and
real estate mortgage, it turned out that respondent misrepresented the value of the
property he mortgaged and that the checks he issued were not drawn from his account
but from that of his son. Respondent eventually questioned the terms of the MOA that
he himself prepared on the ground that the interest rate imposed on his loan was
unconscionable. Finally, the checks issued by respondent to Presbitero were
dishonored because the accounts were already closed. The interest of his client,
Presbitero, as lender in this case, was not fully protected. Respondent violated Rule
16.04 of the Code of Professional Responsibility, which presumes that the client is
disadvantaged by the lawyer’s ability to use all the legal maneuverings to renege on his
obligation.6 In his dealings with his client Presbitero, respondent took advantage of his
knowledge of the law as well as the trust and confidence reposed in him by his client.

We modify the recommendation of the IBP Board of Governors imposing on respondent

the penalty of suspension from the practice of law for two years. Given the facts of the
case, we see no reason to deviate from the recommendation of the IBP-CBD imposing
on respondent the penalty of disbarment. Respondent failed to live up to the high
standard of morality, honesty, integrity, and fair dealing required of him as a member of
the legal profession.7 Instead, respondent employed his knowledge and skill of the law
and took advantage of his client to secure undue gains for himself 8 that warrants his
removal from the practice of law. Likewise, we cannot sustain the IBP Board of
Governors’ recommendation ordering respondent to return his unpaid obligation to
complainants, except for advances for the expenses he received from his client,
Presbitero, that were not accounted at all. In disciplinary proceedings against lawyers,
the only issue is whether the officer of the court is still fit to be allowed to continue as a
member of the Bar.9 Our only concern is the determination of respondent’s
administrative liability.10

Our findings have no material bearing on other judicial action which the parties may
choose to file against each other.11 Nevertheless, when a lawyer receives money from a
client for a particular purpose involving the client-attorney relationship, he is bound to
render an accounting to the client showing that the money was spent for that particular
purpose.12 If the lawyer does not use the money for the intended purpose, he must
immediately return the money to his client.13 Respondent was given an opportunity to
render an accounting, and he failed. He must return the full amount of the advances
given him by Presbitero, amounting to ₱50,000.

WHEREFORE, the Court finds Atty. Ivan M. Solidum, Jr. GUILTY of violating Rule 1.01,
Canon 16, Rule 16.01, and Rule 16.04 of the Code of Professional Responsibility.
Accordingly, the Court DISBARS him from the practice of law effective immediately
upon his receipt of this Decision.

Atty. Solidum is ORDERED to return the advances he received from Hilda S.

Presbitero, amounting to ₱50,000, and to submit to the Office of the Bar Confidant his
compliance with this order within thirty days from finality of this Decision.

Let copies of this Decision be furnished the Office of the Bar Confidant, the Integrated
Bar of the Philippines for distribution to all its chapters, and the Office of the Court
Administrator for dissemination to all courts all over the country. Let a copy of this
Decision be attached to the personal records of respondent.

SO ORDERED.

EN BANC

[ A.C. No. 10579, December 10, 2014 ]

ERLINDA FOSTER, COMPLAINANT, VS. ATTY. JAIME V. AGTANG,

RESPONDENT.

DECISION
PER CURIAM:
This refers to the Resolution[1] of the Board of Governors (BOG), Integrated Bar of the
Philippines (IBP), dated March 23, 2014, affirming with modification the findings of the
Investigating Commissioner, who recommended the suspension of respondent Atty.
Jaime V. Agtang (respondent) from the practice of law for one (1) year for ethical
impropriety and ordered the payment of his unpaid obligations to complainant.

From the records, it appears that the IBP, thru its Commission on Bar Discipline (CBD),
received a complaint[2], dated May 31, 2011, filed by Erlinda Foster (complainant)
against respondent for "unlawful, dishonest, immoral and deceitful"[3] acts as a lawyer.

In its July 1, 2011 Order,[4] the IBP-CBD directed respondent to file his Answer within 15
days from receipt of the order. Respondent failed to do so and complainant sent a query
as to the status of her complaint. On October 10, 2011, the Investigating Commissioner
issued the Order[5] setting the case for mandatory conference/hearing on November 16,
2011. It was only on November 11, 2011, or five (5) days before the scheduled
conference when respondent filed his verified Answer.[6]

During the conference, only the complainant together with her husband appeared. She
submitted a set of documents contained in a folder, copies of which were furnished the
respondent. The Investigating Commissioner[7] indicated that the said documents would
be reviewed and the parties would be informed if there was a need for clarificatory
questioning; otherwise, the case would be submitted for resolution based on the
documents on file. The Minutes[8] of the mandatory conference showed that respondent
arrived at 11:10 o'clock in the morning or after the proceeding was terminated.

On December 12, 2011, the complainant filed her Reply to respondent's Answer.

On April 18, 2012, complainant submitted copies of the January 24, 2012 Decisions [9] of
the Municipal Trial Court in Small Claims Case Nos. 2011-0077 and 2011-0079,
ordering respondent [defendant therein] to pay complainant and her husband the sum of
P100,000.00 and P22,000.00, respectively, with interest at the rate of 12% per annum
from December 8, 2011 until fully paid, plus cost of suit.[10]

Complainant's Position

From the records, it appears that complainant was referred to respondent in connection
with her legal problem regarding a deed of absolute sale she entered into with Tierra
Realty, which respondent had notarized. After their discussion, complainant agreed to
engage his legal services for the filing of the appropriate case in court, for which they
signed a contract. Complainant paid respondent P20,000.00 as acceptance fee and
P5,000.00 for incidental expenses.[11]

On September 28, 2009, respondent wrote a letter[12] to Tropical Villas Subdivision in

relation to the legal problem referred by complainant. He then visited the latter in her
home and asked for a loan of P100,000.00, payable in sixty (60) days, for the repair of
his car. Complainant, having trust and confidence on respondent being her lawyer,
agreed to lend the amount without interest. A promissory note [13] evidenced the loan.

In November 2009, complainant became aware that Tierra Realty was attempting to
transfer to its name a lot she had previously purchased. She referred the matter to
respondent who recommended the immediate filing of a case for reformation of contract
with damages. On November 8, 2009, respondent requested and thereafter received
from complainant the amount of P150,000.00, as filing fee.[14] When asked about the
exorbitant amount, respondent cited the high value of the land and the sheriffs' travel
expenses and accommodations in Manila, for the service of the summons to the
defendant corporation. Later, complainant confirmed that the fees paid for the filing of
Civil Case No. 14791-65, entitled Erlinda Foster v. Tierra Realty and Development
Corporation, only amounted to P22,410.00 per trial court records.[15]

During a conversation with the Registrar of Deeds, complainant also discovered that
respondent was the one who notarized the document being questioned in the civil case
she filed. When asked about this, respondent merely replied that he would take a
collaborating counsel to handle complainant's case. Upon reading a copy of the
complaint filed by respondent with the trial court, complainant noticed that: 1] the major
differences in the documents issued by Tierra Realty were not alleged; 2] the contract to
buy and sell and the deed of conditional sale were not attached thereto; 3] the complaint
discussed the method of payment which was not the point of contention in the case; and
4] the very anomalies she complained of were not mentioned. Respondent, however,
assured her that those matters could be brought up during the hearings.

On April 23, 2010, respondent wrote to complainant, requesting that the latter extend to
him the amount of P70,000.00 or P50,000.00 "in the moment of urgency or
emergency."[16] Complainant obliged the request and gave respondent the sum of
P22,000.00.

On August 31, 2010, respondent came to complainant's house and demanded the sum
of P50,000.00, purportedly to be given to the judge in exchange for a favorable ruling.
Complainant expressed her misgivings on this proposition but she eventually gave the
amount of P25,000.00 which was covered by a receipt,[17] stating that "it is understood
that the balance of P25,000.00 shall be paid later after favorable judgment for plaintiff
Erlinda Foster." On November 2, 2010, respondent insisted that the remaining amount
be given by complainant prior to the next hearing of the case, because the judge was
allegedly asking for the balance. Yet again, complainant handed to respondent the
amount of P25,000.00.[18]

On September 29, 2010, complainant's case was dismissed. Not having been notified
by respondent, complainant learned of the dismissal on December 14, 2010, when she
personally checked the status of the case with the court. She went to the office of
respondent, but he was not there. Instead, one of the office staff gave her a copy of the
order of dismissal.

On December 15, 2010, respondent visited complainant and gave her a copy of the
motion for reconsideration. On January 15, 2011, complainant went to see respondent
and requested him to prepare a reply to the comment filed by Tierra Realty on the
motion for reconsideration; to include additional facts because the Land Registration
Authority would not accept the documents unless these were amended; and to make
the additional averment that the defendant was using false documents.

On January 18, 2011, respondent's driver delivered to complainant a copy of the reply
with a message from him that the matters she requested to be included were mentioned
therein. Upon reading the same, however, complainant discovered that these matters
were not so included. On the same occasion, the driver also asked for P2,500.00 on
respondent's directive for the reimbursement of the value of a bottle of wine given to the
judge as a present. Complainant was also told that oral arguments on the case had
been set the following month.[19]

On February 2, 2011, complainant decided to terminate the services of respondent as

her counsel and wrote him a letter of termination,[20] after her friend gave her copies of
documents showing that respondent had been acquainted with Tierra Realty since
December 2007. Subsequently, complainant wrote to respondent, requesting him to pay
her the amounts he received from her less the contract fee and the actual cost of the
filing fees. Respondent never replied.

Respondent's Position

In his Answer,[21] respondent alleged that he was 72 years old and had been engaged in
the practice of law since March 1972, and was President of the IBP Ilocos Norte
Chapter from 1998 to 1999. He admitted the fact that he notarized the Deed of Absolute
Sale subject of complainant's case, but he qualified that he was not paid his notarial
fees therefor. He likewise admitted acting as counsel for complainant for which he
claimed to have received P10,000.00 as acceptance fee and P5,000.00 for incidental
fees. Anent the loan of P100,000.00, respondent averred that it was complainant, at the
behest of her husband, who willingly offered the amount to him for his patience in
visiting them at home and for his services. The transaction was declared as "no loan"
and he was told not to worry about its payment. As regards the amount of P150,000.00
he received for filing fees, respondent claimed that the said amount was suggested by
the complainant herself who was persistent in covering the incidental expenses in the
handling of the case. He denied having said that the sheriffs of the court would need the
money for their hotel accommodations. Complainant's husband approved of the
amount. In the same vein, respondent denied having asked for a loan of P50,000.00
and having received P22,000.00 from complainant. He also denied having told her that
the case would be discussed with the judge who would rule in their favor at the very
next hearing. Instead, it was complainant who was bothered by the possibility that the
other party would befriend the judge. He never said that he would personally present a
bottle of wine to the judge.

Further, respondent belied the Registrar's comment as to his representation of Tierra

Realty in the past. Respondent saw nothing wrong in this situation since complainant
was fully aware that another counsel was assisting him in the handling of cases. Having
been fully informed of the nature of her cause of action and the consequences of the
suit, complainant was aware of the applicable law on reformation of contracts. Finally,
by way of counterclaim, respondent demanded just compensation for the services he
had rendered in other cases for the complainant.

Reply of Complainant

In her Reply,[22] complainant mainly countered respondent's defenses by making

reference to the receipts in her possession, all evidencing that respondent accepted the
amounts mentioned in the complaint. Complainant also emphasized that respondent
and Tierra Realty had relations long before she met him. While respondent was
employed as Provincial Legal Officer of the Provincial Government of Ilocos Norte, he
was involved in the preparation of several documents involving Flying V, an oil company
owned by Ernest Villavicencio, who likewise owned Tierra Realty. Complainant insisted
that the amount of P100,000.00 she extended to respondent was never considered as
"no loan."

On June 26, 2012, complainant furnished the Investigating Commissioner copies of the
Resolution, dated June 20, 2012, issued by the Office of the City Prosecutor of Laoag
City, finding probable cause against respondent for estafa.[23]

Findings and Recommendation of the IBP

In its July 3, 2012 Report and Recommendation,[24] the Investigating Commissioner

found respondent guilty of ethical impropriety and recommended his suspension from
the practice of law for one (1) year.

In its September 28, 2013 Resolution, the IBP-BOG adopted and approved with
modification the recommendation of suspension by the Investigating Commissioner and
ordered respondent to return to complainant: 1) his loan of P122,000.00; and 2) the
balance of the filing fee amounting to P127,590.00.

Respondent received a copy of the said resolution on January 16, 2014 to which he
filed a motion for reconsideration.[25] Complainant filed her opposition thereto, informing
the IBP-BOG that an information charging respondent for estafa had already been filed
in court and that a corresponding order for his arrest had been issued. [26]

In its March 23, 2014 Resolution, the IBP-BOG denied respondent's motion for
reconsideration but modified the penalty of his suspension from the practice of law by
reducing it from one (1) year to three (3) months. Respondent was likewise ordered to
return the balance of the filing fee received from complainant amounting to
P127,590.00.

No petition for review was filed with the Court.

The only issue in this case is whether respondent violated the Code of Professional
Responsibility (CPR).

The Court's Ruling

The Court sustains the findings and recommendation of the Investigating Commissioner
with respect to respondent's violation of Rules 1 and 16 of the CPR. The Court,
however, modifies the conclusion on his alleged violation of Rule 15, on representing
conflicting interests. The Court also differs on the penalty.

Rule 1.0, Canon 1 of the CPR, provides that "[a] lawyer shall not engage in unlawful,
dishonest, immoral or deceitful conduct." It is well-established that a lawyer's conduct is
"not confined to the performance of his professional duties. A lawyer may be disciplined
for misconduct committed either in his professional or private capacity. The test is
whether his conduct shows him to be wanting in moral character, honesty, probity, and
good demeanor, or whether it renders him unworthy to continue as an officer of the
court."[27]

In this case, respondent is guilty of engaging in dishonest and deceitful conduct, both in
his professional and private capacity. As a lawyer, he clearly misled complainant into
believing that the filing fees for her case were worth more than the prescribed amount in
the rules, due to feigned reasons such as the high value of the land involved and the
extra expenses to be incurred by court employees. In other words, he resorted to
overpricing, an act customarily related to depravity and dishonesty. He demanded the
amount of P150,000.00 as filing fee, when in truth, the same amounted only to
P22,410.00. His defense that it was complainant who suggested that amount deserves
no iota of credence. For one, it is highly improbable that complainant, who was then
plagued with the rigors of litigation, would propose such amount that would further
burden her financial resources. Assuming that the complainant was more than willing to
shell out an exorbitant amount just to initiate her complaint with the trial court, still,
respondent should not have accepted the excessive amount. As a lawyer, he is not only
expected to be knowledgeable in the matter of filing fees, but he is likewise duty-bound
to disclose to his client the actual amount due, consistent with the values of honesty and
good faith expected of all members of the legal profession.

Moreover, the "fiduciary nature of the relationship between the counsel and his client
imposes on the lawyer the duty to account for the money or property collected or
received for or from his client."[28] Money entrusted to a lawyer for a specific purpose but
not used for the purpose should be immediately returned. A lawyer's failure to return
upon demand the funds held by him on behalf of his client gives rise to the presumption
that he has appropriated the same for his own use in violation of the trust reposed in
him by his client. Such act is a gross violation of general morality as well as of
professional ethics. It impairs public confidence in the legal profession and deserves
punishment.[29]

It is clear that respondent failed to fulfill this duty. As pointed out, he received various
amounts from complainant but he could not account for all of them. Worse, he could not
deny the authenticity of the receipts presented by complainant. Upon demand, he failed
to return the excess money from the alleged filing fees and other expenses. His
possession gives rise to the presumption that he has misappropriated it for his own use
to the prejudice of, and in violation of the trust reposed in him by, the client. [30] When a
lawyer receives money from the client for a particular purpose, the lawyer is bound to
render an accounting to the client showing that the money was spent for the intended
purpose. Consequently, if the lawyer does not use the money for the intended purpose,
the lawyer must immediately return the money to the client. [31]

Somewhat showing a propensity to demand excessive and unwarranted amounts from

his client, respondent displayed a reprehensible conduct when he asked for the amount
of P50,000.00 as "representation expenses" allegedly for the benefit of the judge
handling the case, in exchange for a favorable decision. Respondent himself signed a
receipt showing that he initially took the amount of P 25,000.00 and, worse, he
subsequently demanded and received the other half of the amount at the time the case
had already been dismissed. Undoubtedly, this act is tantamount to gross misconduct
that necessarily warrants the supreme penalty of disbarment. The act of demanding a
sum of money from his client, purportedly to be used as a bribe to ensure a positive
outcome of a case, is not only an abuse of his client's trust but an overt act of
undermining the trust and faith of the public in the legal profession and the entire
Judiciary. This is the height of indecency. As officers of the court, lawyers owe their
utmost fidelity to public service and the administration of justice. In no way should a
lawyer indulge in any act that would damage the image of judges, lest the public's
perception of the dispensation of justice be overshadowed by iniquitous doubts. The
denial of respondent and his claim that the amount was given gratuitously would not
excuse him from any liability. The absence of proof that the said amount was indeed
used as a bribe is of no moment. To tolerate respondent's actuations would seriously
erode the public's trust in the courts.

As it turned out, complainant's case was dismissed as early as September 29, 2010. At
this juncture, respondent proved himself to be negligent in his duty as he failed to inform
his client of the status of the case, and left the client to personally inquire with the court.
Surely, respondent was not only guilty of misconduct but was also remiss in his duty to
his client.

Respondent's unbecoming conduct towards complainant did not stop here. Records
reveal that he likewise violated Rule 16.04, Canon 16 of the CPR, which states that "[a]
lawyer shall not borrow money from his client unless the client's interests are fully
protected by the nature of the case or by independent advice. Neither shall a lawyer
lend money to a client except, when in the interest of justice, he has to advance
necessary expenses in a legal matter he is handling for the client." In his private
capacity, he requested from his client, not just one, but two loans of considerable
amounts. The first time, he visited his client in her home and borrowed P100,000.00 for
the repair of his car; and the next time, he implored her to extend to him a loan of
P70,000.00 or P50,000.00 "in the moment of urgency or emergency" but was only given
P22,000.00 by complainant. These transactions were evidenced by promissory notes
and receipts, the authenticity of which was never questioned by respondent. These acts
were committed by respondent in his private capacity, seemingly unrelated to his
relationship with complainant, but were indubitably acquiesced to by complainant
because of the trust and confidence reposed in him as a lawyer. Nowhere in the
records, particularly in the defenses raised by respondent, was it implied that these
loans fell within the exceptions provided by the rules. The loans of P100,000.00 and
P22,000.00 were surely not protected by the nature of the case or by independent
advice. Respondent's assertion that the amounts were given to him out of the liberality
of complainant and were, thus, considered as "no loan," does not justify his
inappropriate behavior. The acts of requesting and receiving money as loans from his
client and thereafter failing to pay the same are indicative of his lack of integrity and
sense of fair dealing. Up to the present, respondent has not yet paid his obligations to
complainant.

Time and again, the Court has consistently held that deliberate failure to pay just debts
constitutes gross misconduct, for which a lawyer may be sanctioned with suspension
from the practice of law. Lawyers are instruments for the administration of justice and
vanguards of our legal system. They are expected to maintain not only legal proficiency,
but also a high standard of morality, honesty, integrity and fair dealing so that the
people's faith and confidence in the judicial system is ensured. They must, at all times,
faithfully perform their duties to society, to the bar, the courts and their clients, which
include prompt payment of financial obligations.[32]

Verily, when the Code or the Rules speaks of "conduct" or "misconduct," the reference
is not confined to one's behavior exhibited in connection with the performance of the
lawyer's professional duties, but also covers any misconduct which, albeit unrelated to
the actual practice of his profession, would show him to be unfit for the office and
unworthy of the privileges which his license and the law vest him with. Unfortunately,
respondent must be found guilty of misconduct on both scores.

With respect to respondent's alleged representation of conflicting interests, the Court

finds it proper to modify the findings of the Investigating Commissioner who concluded
that complainant presented insufficient evidence of respondent's "lawyering" for the
opposing party, Tierra Realty.

Rule 15.03, Canon 15 of the CPR, provides that "[a] lawyer shall not represent
conflicting interest except by written consent of all concerned given after a full
disclosure of the facts." The relationship between a lawyer and his/her client should
ideally be imbued with the highest level of trust and confidence. This is the standard of
confidentiality that must prevail to promote a full disclosure of the client's most
confidential information to his/her lawyer for an unhampered exchange of information
between them. Needless to state, a client can only entrust confidential information to
his/her lawyer based on an expectation from the lawyer of utmost secrecy and
discretion; the lawyer, for his part, is duty-bound to observe candor, fairness and loyalty
in all dealings and transactions with the client. Part of the lawyer's duty in this regard is
to avoid representing conflicting interests."[33] Thus, even if lucrative fees offered by
prospective clients are at stake, a lawyer must decline professional employment if the
same would trigger the violation of the prohibition against conflict of interest. The only
exception provided in the rules is a written consent from all the parties after full
disclosure.

The Court deviates from the findings of the IBP. There is substantial evidence to hold
respondent liable for representing conflicting interests in handling the case of
complainant against Tierra Realty, a corporation to which he had rendered services in
the past. The Court cannot ignore the fact that respondent admitted to having notarized
the deed of sale, which was the very document being questioned in complainant's case.
While the Investigating Commissioner found that the complaint in Civil Case No. 14791-
65 did not question the validity of the said contract, and that only the intentions of the
parties as to some provisions thereof were challenged, the Court still finds that the
purpose for which the proscription was made exists. The Court cannot brush aside the
dissatisfied observations of the complainant as to the allegations lacking in the
complaint against Tierra Realty and the clear admission of respondent that he was the
one who notarized the assailed document. Regardless of whether it was the validity of
the entire document or the intention of the parties as to some of its provisions raised,
respondent fell short of prudence in action when he accepted complainant's case,
knowing fully that he was involved in the execution of the very transaction under
question. Neither his unpaid notarial fees nor the participation of a collaborating counsel
would excuse him from such indiscretion. It is apparent that respondent was retained by
clients who had close dealings with each other. More significantly, there is no record of
any written consent from any of the parties involved.

The representation of conflicting interests is prohibited "not only because the relation of
attorney and client is one of trust and confidence of the highest degree, but also
because of the principles of public policy and good taste. An attorney has the duty to
deserve the fullest confidence of his client and represent him with undivided loyalty.
Once this confidence is abused or violated the entire profession suffers."[34]

Penalties and Pecuniary Liabilities

A member of the Bar may be penalized, even disbarred or suspended from his office as
an attorney, for violation of the lawyer's oath and/or for breach of the ethics of the legal
profession as embodied in the CPR.[35] For the practice of law is "a profession, a form of
public trust, the performance of which is entrusted to those who are qualified and who
possess good moral character."[36] The appropriate penalty for an errant lawyer depends
on the exercise of sound judicial discretion based on the surrounding facts. [37]

Under Section 27, Rule 138 of the Revised Rules of Court, a member of the Bar may be
disbarred or suspended on any of the following grounds: (1) deceit; (2) malpractice or
other gross misconduct in office; (3) grossly immoral conduct; (4) conviction of a crime
involving moral turpitude; (5) violation of the lawyer's oath; (6) willful disobedience of
any lawful order of a superior court; and (7) willful appearance as an attorney for a party
without authority. A lawyer may be disbarred or suspended for misconduct, whether in
his professional or private capacity, which shows him to be wanting in moral character,
honesty, probity and good demeanor, or unworthy to continue as an officer of the court.

Here, respondent demonstrated not just a negligent disregard of his duties as a lawyer
but a wanton betrayal of the trust of his client and, in general, the public. Accordingly,
the Court finds that the suspension for three (3) months recommended by the IBP-BOG
is not sufficient punishment for the unacceptable acts and omissions of respondent. The
acts of the respondent constitute malpractice and gross misconduct in his office as
attorney. His incompetence and appalling indifference to his duty to his client, the courts
and society render him unfit to continue discharging the trust reposed in him as a
member of the Bar.

For taking advantage of the unfortunate situation of the complainant, for engaging in
dishonest and deceitful conduct, for maligning the judge and the Judiciary, for
undermining the trust and faith of the public in the legal profession and the entire
judiciary, and for representing conflicting interests, respondent deserves no less than
the penalty of disbarment.[38]
Notably, the Court cannot order respondent to return the money he borrowed from
complainant in his private capacity. In Tria-Samonte v. Obias,[39] the Court held that it
cannot order the lawyer to return money to complainant if he or she acted in a private
capacity because its findings in administrative cases have no bearing on liabilities which
have no intrinsic link to the lawyer's professional engagement. In disciplinary
proceedings against lawyers, the only issue is whether the officer of the court is still fit to
be allowed to continue as a member of the Bar. The only concern of the Court is the
determination of respondent's administrative liability. Its findings have no material
bearing on other judicial actions which the parties may choose against each other.

To rule otherwise would in effect deprive respondent of his right to appeal since
administrative cases are filed directly with the Court. Furthermore, the quantum of
evidence required in civil cases is different from the quantum of evidence required in
administrative cases. In civil cases, preponderance of evidence is required.
Preponderance of evidence is "a phrase which, in the last analysis, means probability of
the truth. It is evidence which is more convincing to the court as worthier of belief than
that which is offered in opposition thereto."[40]In administrative cases, only substantial
evidence is needed. Substantial evidence, which is more than a mere scintilla but is
such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion, would suffice to hold one administratively liable.[41]Furthermore, the Court
has to consider the prescriptive period applicable to civil cases in contrast to
administrative cases which are, as a rule, imprescriptible.[42]

Thus, the IBP-BOG was correct in ordering respondent to return the amount of
P127,590.00 representing the balance of the filing fees he received from complainant,
as this was intimately related to the lawyer-client relationship between them. Similar to
this is the amount of P50,000.00 which respondent received from complainant, as
representation expenses for the handling of the civil case and for the purported
purchase of a bottle of wine for the judge. These were connected to his professional
relationship with the complainant. While respondent's deplorable act of requesting the
said amount for the benefit of the judge is stained with mendacity, respondent should be
ordered to return the same as it was borne out of their professional relationship. As to
his other obligations, respondent was already adjudged as liable for the personal loans
he contracted with complainant, per the small claims cases filed against him.

All told, in the exercise of its disciplinary powers, "the Court merely calls upon a member
of the Bar to account for his actuations as an officer of the Court with the end in view of
preserving the purity of the legal profession."[43] The Court likewise aims to ensure the
proper and honest administration of justice by "purging the profession of members who,
by their misconduct, have proven themselves no longer worthy to be entrusted with the
duties and responsibilities of an attorney."[44]

WHEREFORE, finding the respondent, Atty. Jaime V. Agtang, GUILTY of gross

misconduct in violation of the Code of Professional Responsibility, the Court
hereby DISBARS him from the practice of law and ORDERS him to pay the
complainant, Erlinda Foster, the amounts of P127,590.00, P50,000.00 and P2,500.00.

Let a copy of this Decision be sent to the Office of the Bar Confidant, the Integrated Bar
of the Philippines and the Office of the Court Administrator to be circulated to all courts.

SO ORDERED.

THIRD DIVISION

G.R. No. 194122 : October 11, 2012

HECTOR HERNANDEZ, Petitioner, v. SUSAN SAN PEDRO

AGONCILLO, Respondent.

DECISION

PERALTA, J.:

Assailed in the present petition for review on certiorari under Rule 45 of the Rules of
Court are the April 29, 2010 Decision1ςrνll and October 12, 2010 Resolution2ςrνll of
the Court of Appeals (CA) in CA-G.R. SP No. 108801.

The instant petition arose from a Complaint for Damages filed with the Metropolitan Trial
Court (MeTC) of Parafiaque City against herein petitioner and one Freddie Apawan
Verwin by herein respondent, alleging as follows:

xxxx

2. x x x Defendant Hector Hernandez is x x x the owner of the delivery van which is the
subject matter of the above-entitled case. He is doing business under the name of
Cargo Solution Innovation and is the employer of Defendant Fredie Apawan Verwin;

3. That on October 5, 2006 at around 12:15 in the afternoon, Defendant Fredie Apawan
Verwin was driving a delivery van belonging to a certain Hector Hernandez, bearing
plate number RBB-510, along Buendia Avenue Flyover, South Super-Highway (Osme
Avenue), and negligently backed against a Honda City model with plate number XMF-
496, owned and driven by the Plaintiff at the time of the incident;
4. That at the time of the incident, the traffic condition at the Buendia Avenue Flyover
was bumper-to-bumper and that Plaintiff's and Defendant's vehicles were in an
ascending position;

5. That Defendant driver alighted from his van and so did the Plaintiff to assess the
damage done. Plaintiff observed that the pedestal of the van totally engaged and
hooked the front bumper of her Honda car;

6. That after a brief discussion of the incident, Defendant driver went back to his van
and stepped on the gas which caused the van to move abruptly forward and resulted to
the disengagement of the bumper of Plaintiff's car and damage to the car radiator, and
as a consequence, the Plaintiff's car was towed. Plaintiff paid P1,700 as towing fee. x x
x

7. Right after the incident, Plaintiff made various demands from Defendants, thru the
secretary of the Cargo Solution Innovation or C.S.I., the company which the driver of the
van was working for, to pay the actual damages sustained, but to Plaintiff's dismay her
demands were unheeded;

8. That defendant Hector Hernandez never talked nor appeared to the Plaintiff despite
several requests made by the latter. Instead, he made a person appear having the
name of Mr. De Ocampo before the Plaintiff in her clinic at Medical Center Manila,
sometime on October 11, 2006 and acted in representation of Hector Hernandez and
made a number of inquiries regarding the accident that transpired;

9. That sometime after, Plaintiff contacted Mr. De Ocampo for feedback regarding
Defendant's position about the incident, and Mr. De Ocampo spoke that the Defendants
are still waiting for the police report and ever since that conversation, no communication
transpired between the parties regarding any agreement or settlement about the
accident;

10. That as a direct consequence of the foregoing, Plaintiff's vehicle sustained heavy
damage and the repair of which amounted to P130,602.53. A copy of the official receipt
given by Honda Makati is hereby attached as Annex "D";

11. Plaintiff was unable to use her vehicle in going to work for five (5) weeks and led her
to commute by means of a taxi every time her duty called her in Medical Center Manila
in United Nations Avenue, Manila costing her P500-1000/day;

12. Considering the character of Defendant driver's negligence, together with the
malicious refusal to pay actual damages of both Defendants and Plaintiff's experience of
sleepless nights and anxiety because of the incident, Defendants should be held liable
for moral damages in an amount of not less than P50,000.00;

13. Forced to litigate, Plaintiff engaged the services of a lawyer and have agreed to pay
attorney's fees in the amount of P30,000.00 plus P2,500.00 per appearance. 3ςrνll
On May 31, 2007, the MeTC issued a Summons Under Summary
Procedure4ςrνll which was served upon and received by petitioner on June 18, 2007.
However, the summons was not served on the other defendant. The case then
proceeded only against petitioner.

On July 6, 2007, petitioner filed an Ex Parte Motion for Extension of Time to File His
Answer claiming that he just engaged the services of his counsel. He prayed that he be
granted an additional period of fifteen (15) days or until July 21, 2007 within which to file
his responsive pleading.5ςrνll

On July 18, 2007, the MeTC issued an Order6ςrνll denying petitioner's Ex Parte Motion
for Extension of Time holding that the said Motion was filed beyond the reglementary
period provided for by the Revised Rules on Summary Procedure and that it is likewise
a prohibited pleading under the said Rule.

Petitioner filed a Motion for Reconsideration7ςrνll on August 17, 2007. Meanwhile,

petitioner, nonetheless, filed his Answer with Affirmative and Negative Defenses and
Compulsory Counterclaims8ςrνll on July 26, 2007.

Respondent opposed petitioner's Motion for Reconsideration.9ςrνll In the meantime,

she filed a Motion to Render Judgment10ςrνll on August 24, 2007, on the ground that
petitioner failed to file his answer within the time prescribed by the Revised Rules on
Summary Procedure.

On September 7, 2007, the MeTC issued an Order11ςrνll ruling that in view of the fact
that the amount being claimed by respondent exceeds P200,000.00, the case shall be
governed by the "Rules on Regular Procedure." In the same Order, the MeTC denied
petitioner's Motion for Reconsideration and directed him to file his Comment/Opposition
to respondent's Motion to Render Judgment.

Petitioner filed his Opposition12ςrνll on September 14, 2007.

On October 23, 2007, the MeTC issued an Order13ςrνll denying respondent's Motion to
Render Judgment reiterating its ruling that the case does not fall under the Revised
Rules on Summary Procedure.

On November 14, 2007, respondent filed a Motion to Declare Defendant (herein

petitioner) Hector Hernandez in Default and to Render Judgment.14ςrνll

Petitioner opposed contending that he has already filed his Answer prior to respondent's
Motion to declare him in default and that he had actively participated in the case by filing
various pleadings.15ςrνll

On December 4, 2007, the MeTC issued an Order16ςrνll declaring petitioner in default

and directing respondent to present evidence ex parte.
Petitioner filed a Motion to Set Aside Order of Default, 17ςrνll but the MeTC denied it in
its Order18ςrνll dated February 8, 2008.

After respondent's evidence ex parte was presented, the MeTC rendered its
Decision19ςrνll dated August 6, 2008, the dispositive portion of which reads as
follows:chanroblesvirtuallawlibrary

WHEREFORE, judgment is hereby rendered in favor of the plaintiff Susan San Pedro
Agoncillo and against the defendant Hector Hernandez, ordering him,

a) To pay the plaintiff the amount of One Hundred Thirty-Two Thousand Three Hundred
Two Pesos and 53/100 (Php 132,302.53) for the actual damages for the repair of the
car and the towing fee;

b) Attorney's fees in the amount of Ten Thousand Pesos (Php 10,000.00)

c) And costs.

The case as against defendant Fredie Apawan Verwin is dismissed without prejudice as
summons was not validly served upon him.

SO ORDERED.20ςrνll

The MeTC held that respondent was able to sufficiently establish her cause of action
against petitioner in accordance with the provisions of Article 2180 of the Civil Code.

Petitioner appealed to the RTC which, however, denied the same in its Decision dated
February 18, 2009. The RTC affirmed the findings and conclusions of the MeTC. As to
the procedural aspect, the RTC ruled that the MeTC correctly denied due course to
petitioner's Answer as the Motion for Extension to file the same was filed out of time and
that the said Answer was, in fact, filed beyond the extended period requested in the
Motion for Extension.

Petitioner then filed a petition for review with the CA. On April 29, 2010, the CA
rendered its assailed Decision denying the petition for lack of merit. Petitioner filed a
Motion for Reconsideration, but the CA denied it in its Resolution dated October 12,
2010.

Hence, the instant petition for review on certiorari raising a sole issue, to
wit:chanroblesvirtuallawlibrary

WHETHER OR NOT THE HONORABLE COURT OF APPEALS DECISION IS IN

ACCORD WITH APPLICABLE DECISIONS OF THE HONORABLE SUPREME
COURT, SPECIFICALLY THE HONORABLE SUPREME COURT'S RULING IN
SABLAS vs. SABLAS (526 SCRA 292 2007ςrνll ).21ςrνll
Petitioner's basic contention is that, pursuant to this Court's ruling in Sablas v.
Sablas,22ςrνll the MeTC should have admitted his Answer as his pleading was filed
before he was declared in default.

The petition is without merit.

It is true that this Court held in Sablas that where the Answer is filed beyond the
reglementary period but before the defendant is declared in default and there is no
showing that defendant intends to delay the case and no prejudice is caused to the
plaintiff, the Answer should be admitted.23ςrνll

It must be emphasized, however, that it is not mandatory on the part of the trial court to
admit an Answer which is belatedly filed where the defendant is not yet declared in
default. Settled is the rule that it is within the discretion of the trial court to permit the
filing of an answer even beyond the reglementary period, provided that there is
justification for the belated action and there is no showing that the defendant intended to
delay the case.24ςrνll

In the instant case, the MeTC found it proper not to admit petitioner's Answer and to
subsequently declare him in default, because petitioner's Ex Parte Motion for Extension
of Time to File His Answer was filed out of time; that petitioner filed his Answer beyond
the period requested in the Motion for Extension; and that petitioner failed to appear
during the scheduled hearing on respondent's Motion to declare him in default.

The Court finds no cogent reason to depart from the above ruling of the MeTC, as
affirmed by the RTC and the CA.

Sablas differs from the instant case on two aspects, to wit: first, in Sablas, the
petitioners' motion for extension to file their answer was seasonably filed while in the
present case, petitioner's Motion for Extension to File His Answer was filed beyond the
15-day period allowed by the Rules of Court; second, in Sablas, since the trial court
admitted the petitioners' Answer, this Court held that the trial court was correct in
denying the subsequent motion of the respondent to declare the petitioners in default
while, in the instant case, the MeTC denied due course to petitioner's Answer on the
ground that the Motion for Extension was not seasonably filed and that the Answer was
filed beyond the period requested in the Motion for Extension, thus, justifying the order
of default. Thus, the principle enunciated in Sablas is not applicable in the present case.

In this respect, the Court agrees with the CA in its ruling that procedural rules are not to
be ignored or disdained at will to suit the convenience of a party.

Procedural rules are designed to facilitate the adjudication of cases.25ςrνll Courts and
litigants alike are enjoined to abide strictly by the rules.26ςrνll While in certain
instances, the Court allows a relaxation in the application of the rules, there is no
intention to forge a weapon for erring litigants to violate the rules with
impunity.27ςrνll The liberal interpretation and application of rules apply only in proper
cases of demonstrable merit and under justifiable causes and
circumstances.28ςrνll While it is true that litigation is not a game of technicalities, it is
equally true that every case must be prosecuted in accordance with the prescribed
procedure to ensure an orderly and speedy administration of justice.29ςrνll Party
litigants and their counsel are well advised to abide by rather than flaunt procedural
rules for these rules illumine the path of the law and rationalize the pursuit of
justice.30ςrνll

Moreover, while the Court frowns upon default judgments, it does not condone gross
transgressions of the rules.31ςrνll The Court is duty-bound to observe its rules and
procedures and uphold the noble purpose behind their issuance. Rules are laid down
for the benefit of all and should not be made dependent upon a suitors sweet time and
own bidding.32ςrνll

Petitioner's negligence in the present case is inexcusable, because aside from the
belated filing of his Motion for Extension to File His Answer, he also failed to file his
Answer within the period requested in his Motion without offering any justifiable excuse.
Moreover, as observed by the MeTC in its Order dated February 8, 2008, petitioner also
failed to appear during the scheduled hearing on respondent's Motion to Declare Him in
Default. Furthermore, petitioner did not deny respondent's allegation that he also failed
to appear during his requested date of hearing of his Motion to Set Aside the Order of
Default. From these circumstances, the Court finds no compelling ground to depart from
the findings of the CA that petitioner is guilty of deliberately employing delay in the
prosecution of the civil case against him.

Aside from petitioner's abovementioned breach of procedural rules, the Court notes that
petitioner and his counsel once again committed another violation when they failed to
comply with this Court's Resolution dated March 16, 2011 requiring petitioner to file his
Reply to respondent's Comment-Opposition to the present petition. It is true that this
Court set aside its Resolution dated July 27, 2011 which dismissed the instant petition
on the basis of this infraction committed by petitioner. However, it cannot be denied that
this infringement affirms petitioner's propensity to ignore at will not only the rules of
procedure but also the lawful order of the Court.

The Court agrees with respondent's observation that in his Memorandum filed with the
RTC, petitioner reasoned out that his failure to seasonably file his Answer was due to
the inadvertence and pressure of work on the part of his counsel.

In their Motion for Reconsideration of this Court's July 27, 2011 Resolution, petitioner,
through his counsel, again used as excuse for their failure to file the required pleading
the allegation that the counsel had voluminous workload. However, petitioner's counsel
cannot hide from this pretense as he himself claimed that they, in fact, had no intention
to file a Reply. Instead, they intended to simply file a Manifestation indicating their
desire to waive their right to reply and that they are adopting the arguments in their
Petition as their Reply to respondent's Comment. If that, indeed, was the case, then the
preparation of the intended manifestation could have taken just a few minutes. In fact, a
perusal of petitioner's Motion for Reconsideration with Manifestation shows that it is a
mere recapitulation of his arguments raised in his petition.33ςrνll Yet, petitioner failed to
file his Manifestation on time, which is within a period of ten (10) days from his receipt of
the Resolution requiring his reply. Indeed, petitioner's counsel admitted that they
received the Resolution requiring petitioner to file his Reply on April 26, 2011. However,
petitioner ignored this Resolution and it was only on September 16, 2011, or almost five
months after, that petitioner filed his Motion for Reconsideration with Manifestation.
Notably, the said Motion for Reconsideration with Manifestation was filed only when this
Court issued another Resolution dismissing the instant petition for petitioner's failure to
comply with the order of this Court directing him to file his reply. This only indicates that
were it not for the dismissal of his petition, petitioner and his counsel would have
continued to ignore this Court's lawful order.

Truly, the conduct of petitioner and his counsel can never be a case of excusable
neglect. On the contrary, it smacks of a blatant disregard of the rules and lawful
directives of the court. Thus, giving in to petitioner's maneuvering is tantamount to
putting premium on a litigant's naked indolence and sanctioning a scheme of prolonging
litigation.

It bears stressing that a lawyer has the responsibility of monitoring and keeping track of
the period of time left to file pleadings, and to see to it that said pleadings are filed
before the lapse of the period.34ςrνll If he fails to do so, his client is bound by his
conduct, negligence and mistakes.35ςrνll In the present case, petitioner and his
counsel knew and should have known of the periods within which they are to file their
pleadings. In fact, with respect to their Answer, they should be aware that they had only
until July 21, 2007 to file the same because they were the ones who requested for an
extension of time to file the said Answer. It was incumbent on petitioners counsel to
arrange his workload and attend to important and pressing matters such that pleadings
are filed within the prescribed period therefor.36ςrνll If the failure of the petitioners
counsel to cope with his heavy workload should be considered a valid justification to
sidestep the reglementary period, there would be no end to litigations so long as
counsel had not been sufficiently diligent or experienced.37ςrνll

Time and again, this Court has cautioned lawyers to handle only as many cases as they
can efficiently handle.38ςrνll The zeal and fidelity demanded of a lawyer to his clients
cause require that not only should he be qualified to handle a legal matter, he must also
prepare adequately and give appropriate attention to his legal work.39ςrνll Since a
client is, as a rule, bound by the acts of his counsel, a lawyer, once he agrees to take a
case, should undertake the task with dedication and care. 40ςrνll This Court frowns
upon a lawyers practice of repeatedly seeking extensions of time to file pleadings and
thereafter simply letting the period lapse without submitting any pleading or even any
explanation or manifestation for his omission.41ςrνllFailure of a lawyer to seasonably
file a pleading constitutes inexcusable negligence on his part.

On the other hand, it would not also be amiss to remind petitioner of the settled rule that
litigants, represented by counsel, should not expect that all they need to do is sit back,
relax and await the outcome of their case.42ςrνll Instead, they should give the
necessary assistance to their counsel and exercise due diligence to monitor the status
of the case for what is at stake is their interest in the case.43ςrνll This petitioner failed
to do.

In any case, respondent was. granted favorable relief only after the MeTC has
ascertained that such relief is warranted by the evidence presented and the facts
proven by the respondent. The Court agrees with the CA in holding that even if he was
declared in default, petitioner was not deprived of his right to appeal. In fact, he
appealed his case to the RTC, which ruled squarely on the merits of respondent's
complaint and found sufficient evidence to sustain the ruling of the MeTC in
respondent's favor.ςηαοblενιrυαllαωlιbrαr

WHEREFORE, the petition for review on certiorari is DENIED. The April 29, 2010
Decision and the October 12, 2010 Resolution of the Court of Appeals are
AFFIRMED.ςrαlαωlιbrαr

SO ORDERED.

THIRD DIVISION

MARIA EARL BEVERLY C. A.C. No. 6166

CENIZA,
Complainant, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Velasco, Jr.,
Nachura, and
Peralta, JJ.
ATTY. VIVIAN G. RUBIA,
Respondent. Promulgated:

October 2, 2009
x ---------------------------------------------------------------------------------------- x

DECISION
YNARES-SANTIAGO, J.:

In a verified complaint[1] dated July 25, 2003 filed with the Office of the Bar Confidant,
Maria Earl Beverly C. Ceniza charged Atty. Vivian G. Rubia with grave misconduct, gross
ignorance of the law and falsification of public documents.

The facts of the case are as follows:

On May 3, 2002, complainant sought the legal services of the respondent in regard to the
share of her mother-in-law in the estate of her husband Carlos Ceniza. As she had no
money to pay for attorneys fees since her mother-in-law would arrive from the United
States only in June 2002, respondent made her sign a promissory note for P32,000.00,
which amount was lent by Domingo Natavio.After her mother-in-law arrived and paid the
loan, respondent furnished them a copy of the complaint for partition and recovery of
ownership/possession representing legitime but with no docket number on it. They kept
on following up the progress of the complaint. However, three months lapsed before
respondent informed them that it was already filed in court. It was then that they received
a copy of the complaint with Civil Case No. 4198 and a rubber stamped RECEIVED
thereon. However, when complainant verified the status of the case with the Clerk of
Court of the Regional Trial Court of Davao del Sur, she was informed that no case with
said title and docket number was filed.[2]

Further, complainant alleged that respondent was guilty of gross ignorance of the law for
intending to file the complaint in Davao del Sur when the properties to be recovered were
located in Koronadal, South Cotabato and Malungon, Sarangani Province, in violation of
the rule on venue that real actions shall be filed in the place where the property is
situated. Complainant also alleged that respondent forged the signature of her
husband, Carlito C. Ceniza, in the Affidavit of Loss attached to a petition for the issuance
of a new owners duplicate certificate of title filed with the Regional Trial Court (RTC) of
Digos City, Branch 20, in Misc. Case No. 114-2202.[3]
In her comment, respondent assailed the personality of the complainant to institute the
administrative complaint for disbarment as she was not a party to the action for partition
and recovery of ownership/possession. As such, her allegations in the administrative
complaint were all hearsay, self-serving and unsubstantiated. Further, the charge of
forgery of the Affidavit of Loss was belied by the March 3, 2003 decision of the trial court,
wherein Carlito C. Ceniza affirmed his statements in the said affidavit when he was called
to testify.[4]

On February 2, 2004, the Court resolved to refer the case to the Integrated Bar of
the Philippines (IBP) for investigation, report and recommendation.

On April 29, 2004, respondent filed a Supplemental Comment explaining the rubber
stamped RECEIVED on the complaint. According to her, when her staff Jan Kirt Lester
Soledad was at the RTCOffice of the Clerk of Court, she called him through cellular phone
and directed him to stop the filing of the complaint as the same lacked certain
attachments. However, one copy thereof was already stamped RECEIVED by the
receiving court personnel, who also assigned a docket number. She kept the copies of
the complaint, including the one with the stamp, to be filed later when the attachments
are complete.

Meanwhile, on November 7, 2005, respondent filed a Manifestation with Urgent Motion

praying that the administrative complaint be likewise dismissed in view of the dismissal
of the criminal case due to complainants apparent lack of interest to prosecute.

On January 19, 2007, the IBP Investigating Commissioner recommended that respondent
be found guilty of falsification of public document and be meted the penalty of suspension
from the practice of law for a period of three years. The report reads in part, as follows:

A proceeding for suspension or disbarment is not in any sense a civil action,

where the complainant is a plaintiff and the respondent lawyer is a
defendant. It involved no private interest. The complainant or person who
called the attention of the court to the attorneys misconduct is in no sense
a party and has generally no interest in its outcome except as all good
citizens may have in the proper administration of justice. It affords no
redress for private grievance. (Tejan v. Cusi, 57 SCRA 154)

Prescinding from the aforequoted ruling, it is therefore irrelevant and

immaterial if herein complainant is not a party to the subject civil complaint
prepared by the respondent. A case of suspension or disbarment may
proceed regardless of interest or lack of interest of the complainant. What
matters is whether on the basis of the facts borne out by the record, the
charge has been proven.

On the payment of the acceptance fee in the amount of P32,000.00,

respondents contention that she acted as guarantor of Carlos Ceniza,
complainants husband, when he borrowed money from a money lender,
Domingo Natavio, the amount representing the acceptance, does not
inspire belief. The promissory note dated May 3, 2002, appended as Annex
A of the complaint-affidavit eloquently shows that consistent with the
complainants allegation, she was made to borrow said amount to be paid
as respondents acceptance fee. It bears stress that the date of the
promissory note is the same date when respondents services were
engaged leading to the preparation of the subject civil
complaint. Complainants allegation is further enhanced by the fact that such
promissory note was even notarized by the respondent.

On the alleged filing of the subject civil complaint, it is undisputed that the
same was not filed before the Office of the Clerk of Court, RTC Davao Del
Sur, as evidenced by a Certification from the said office appended as Annex
A of complainants Manifestation dated October 14, 2005. Thus, the claim
of complainant that respondent falsified or caused it to falsify the stamp
marked received dated May 10, 2002 including the case number 4198, finds
factual and legal bases.

It bears stress that a copy of the subject civil complaint was obtained by
complainant from the respondent herself who tried to impress upon the
former that contrary to her suspicion, the subject civil complaint was already
filed in court. However, inquiry made by the complainant shows otherwise.
Respondents contention that after one copy of the complaint was already
stamped by court personnel in preparation for receiving the same and
entering in the courts docket, she caused it to be withdrawn after realizing
that the same lacked certain attachments, is bereft of merit.

In the first place, respondent miserably failed to mention these lacking

attachments that allegedly caused the withdrawal of the
complaint. Secondly, and assuming arguendo that the withdrawal was due
to lacking attachments, how come the same was not filed in the next office
day complete with attachments. And lastly, the Certification of the Clerk of
Court clearly states that Civil Case No. 4188 is not the case of Mercedes
Callejo vda. De Ceniza, et al. vs. Charlotte Ceniza, et al.

xxxx

The fact that the City Prosecutors Office of Digos, upon motion for
reconsideration of the respondent, dismissed a similar complaint filed by
herein complainant will not in anyway affect the above captioned
administrative complaint.

The pendency of a criminal action against the respondent, from the

facts of which the disciplinary proceeding is predicated, does not pose
prejudicial question to the resolution of the issues in the disbarment
case.(Calo vs. Degano, 20 SCRA 447) His conviction is not necessary to
hold the lawyer administratively liable because the two proceedings and
their objectives are different and it is not sound public policy to await the
final resolution of a criminal case before the court act on a complaint against
a lawyer as it may emasculate the disciplinary power of the court. (In re
Brillantes, 76 SCRA 1) Nor is his acquittal, by this fact alone, a bar to an
administrative complaint against him. (Piatt vs. Abordo, 58 Phil. 350).

The other allegations in the complaint about ignorance of the law are
found to be without basis.

RECOMMENDATION
 WHEREFORE, it is most respectfully recommended that herein respondent
Atty. Vivian C. Rubia, be found guilty of the charge of falsification of public
document and be meted the penalty of suspension from the practice of law
for a period of three (3) years.

On May 31, 2007, the Board of Governors of the IBP issued a Resolution adopting
the Investigating Commissioners recommendation with modification, as follows:

RESOLUTION NO. XVII-2007-237

Adm. Case No. 6166
Maria Earl Beverly C. Ceniza vs.
Atty. Vivian G. Rubia

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

APPROVED, with modification, the Report and Recommendation of the
Investigating Commissioner of the above-entitled case, herein made part of
this Resolution as Annex A; and finding the recommendation fully supported
by the evidence on record and the applicable laws and rules, and
considering Respondents falsification of public document, Atty. Vivian G.
Rubia is hereby DISBARRED.

However, in its December 11, 2008 Resolution, the Board of Governors reconsidered its
May 31, 2007 Resolution by reducing the recommended penalty of disbarment to five
years suspension from the practice of law, thus:

RESOLUTION NO. XVIII-2008-715

Adm. Case No. 6166
Maria Earl Beverly C. Ceniza vs.

Atty. Vivian G. Rubia

 RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and
APPROVED the Recommendation of the Board of Governors First Division
of the above-entitled case, herein made part of this Resolution as Annex A;
and, finding the recommendation fully supported by the evidence on record
and the applicable laws and rules, the Motion for Reconsideration is
hereby DENIED with modification, that Resolution RESOLUTION NO.
XVII-2007-237 of the Board of Governors dated 31 May 2007
recommending the Disbarment of Atty. Vivian G. Rubia is reduced to Five
(5) years Suspension from the practice of law.

On April 20, 2009, the IBP forwarded the instant case to this Court as provided under
Rule 139-B, Section 12(b) of the Rules of Court.

Complainant seeks the disbarment of respondent from the practice of law for gross
misconduct, ignorance of the law and for falsification of public document. In disbarment
proceedings, the burden of proof rests upon the complainant, and for the court to exercise
its disciplinary powers, the case against the respondent must be established by clear,
convincing and satisfactory proof. Considering the serious consequence of the
disbarment or suspension of a member of the Bar, this Court has consistently held that
clear preponderant evidence is necessary to justify the imposition of the administrative
penalty.[5]

The sole issue in this case is whether or not there is preponderant evidence to warrant
the imposition of administrative sanction against the respondent.

In accusing respondent of falsification of public document, complainant alleged that

respondent misrepresented to her that the complaint was already filed in court, when in
fact, upon verification with the RTC Clerk of Court, it was not. Such misrepresentation is
shown by the copy of the complaint with a stamped RECEIVED and docket number
thereon. Apart from said allegations, complainant has not proferred any proof tending to
show that respondent deliberately falsified a public document.

A perusal of the records shows that complainants evidence consists solely of her
Affidavit-Complaint and the annexes attached therewith. She did not appear in all the
mandatory conferences set by the investigating commissioner in order to give respondent
the chance to test the veracity of her assertions. It is one thing to allege gross misconduct,
ignorance of the law or falsification of public document and another to demonstrate by
evidence the specific acts constituting the same.

Indeed, complainant has no way of knowing the surrounding circumstances behind the
filing of the complaint by respondents staff because she was not present when the same
was filed with the trial court. Complainant failed to disprove by preponderant evidence
respondents claim that the case was not filed but was in fact withdrawn after it was
stamped with RECEIVED and assigned with a docket number. We find this explanation
satisfactory and plausible considering that the stamp did not bear the signature of the
receiving court personnel, which is normally done when pleadings are received by the
court.

Further, the certification of the RTC Clerk of Court that the complaint was not filed and
that CIVIL CASE NO. 4198 pertained to another case, did not diminish the truthfulness of
respondents claim, but even tended to bolster it. Necessarily, as the complaint was not
filed, docket number 4198 indicated in the copy of the complaint was assigned to another
case thereafter filed in court.

Thus, for lack of preponderant evidence, the investigating commissioners ruling that
respondent was guilty of falsification of public document, as adopted by the IBP Board of
Governors, has no factual basis to stand on.

However, we find that respondent committed some acts for which she should be
disciplined or administratively sanctioned.

We find nothing illegal or reprehensible in respondents act of charging an

acceptance fee of P32,000.00, which amount appears to be reasonable under the
circumstances. The impropriety lies in the fact that she suggested that complainant
borrow money from Domingo Natavio for the payment thereof. This act impresses upon
the Court that respondent would do nothing to the cause of complainants mother-in-law
unless payment of the acceptance fee is made. Her duty to render legal services to her
client with competence and diligence should not depend on the payment of acceptance
fee, which was in this case promised to be paid upon the arrival of complainants mother-
in-law in June 2002, or barely a month after respondent accepted the case.

Respondents transgression is compounded further when she severed the lawyer-

client relationship due to overwhelming workload demanded by her new employer
Nakayama Group of Companies, which constrained her to return the money received as
well as the records of the case, thereby leaving her client with no representation. Standing
alone, heavy workload is not sufficient reason for the withdrawal of her services.

Moreover, respondent failed to maintain an open line of communication with her

client regarding the status of their complaint.

Clearly, respondent violated the Lawyers Oath which imposes upon every member
of the bar the duty to delay no man for money or malice, Rules 18.03 and 18.04 of Canon
18, and Canon 22 of the Code of Professional Responsibility, thus:

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH

COMPETENCE AND DILIGENCE.

xxxx

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

Rule 18.04 - A lawyer shall keep the client informed of the status of his
case and shall respond within a reasonable time to the clients request for
information.
 CANON 22 - A LAWYER SHALL WITHDRAW HIS SERVICES ONLY
FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN THE
CIRCUMSTANCES.

When a lawyer accepts to handle a case, whether for a fee or gratis et amore, he
undertakes to give his utmost attention, skill and competence to it, regardless of its
significance. Thus, his client, whether rich or poor, has the right to expect that he will
discharge his duties diligently and exert his best efforts, learning and ability to prosecute
or defend his (clients) cause with reasonable dispatch.Failure to fulfill his duties will
subject him to grave administrative liability as a member of the Bar. For the overriding
need to maintain the faith and confidence of the people in the legal profession demands
that an erring lawyer should be sanctioned.[6]

WHEREFORE, in view of the foregoing, respondent Atty. Vivian G. Rubia is

found GUILTY of violation of Rule 18.03 and Canon 22 of the Code of Professional
Responsibility. Accordingly, she is SUSPENDED from the practice of law for six (6)
months effective immediately, with a warning that similar infractions in the future will be
dealt with more severely.

Let all courts, through the Office of the Court Administrator, as well as the Integrated Bar
of the Philippines and the Office of the Bar Confidant, be notified of this Decision, and be
it duly recorded in the personal file of respondent Atty. Vivian G. Rubia.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

Adm. Case No. 5530 January 28, 2013

SPOUSES ARCING AND CRESING BAUTISTA, EDAY RAGADIO and FRANCING
GALGALAN, Complainants,
vs.
ATTY. ARTURO CEFRA, Respondent.

DECISION

BRION, J.:

Before us is a complaint for disbarment filed by spouses Arcing and Cresing Bautista,
Eday Regadio1 and Francing Galgalan (complainants) against Atty. Arturo Cefra for
violating Canon 18 of the Code of Professional Responsibility and Rules 138 and 139 of
the Rules of Court.

The Facts

The complainants were the defendants in Civil Case No. U-6504 an action for quieting
of title, recovery of possession and damages filed in the Regional Trial Court (RTC),
Branch 45, Urdaneta City, Pangasinan.2 The complainants engaged the services of
Atty. Cefra to represent them in the proceedings. According to the complainants, they
lost in Civil Case No. U-6504 because of Atty. Cefra’s negligence in performing his
duties as their counsel. First, Atty. Cefra only presented testimonial evidence and
disregarded two (2) orders of the RTC directing him to submit a formal offer of
documentary exhibits. Second, Atty. Cefra belatedly submitted the formal offer of
documentary exhibits after the complainants had been declared to have waived their
right to make a submission. Third, Atty. Cefra did not file a motion or appeal and neither
did he file any other remedial pleading to contest the RTC’s decision rendered against
them.

The Court ordered Atty. Cefra to comment on the complaint. Despite the extensions of
time given by the Court, Atty. Cefra did not file any comment. He did not also comply
with the Court’s Minute Resolutions,3 dated December 14, 2005 and March 22, 2006,
directing him to pay a ₱2,000.00 fine and to submit the required comment.

On July 16, 2008, we held Atty. Cefra in contempt of court, ordering his detention for
five (5) days. We also reiterated the order for Atty. Cefra to pay a ₱2,000.00 fine and to
submit a comment on the complaint.4

On August 4, 2008, Atty. Cefra filed his Comment,5 denying the allegations in the
complaint. He claimed that the complainants misunderstood the RTC’s decision:

2. That Respondent denies the allegation in Paragraphs (sic) 7 of the complaint

that defendants miserably lost the case because the Decision itself confirmed
and affirmed our stand that defendants do not contest the ownership of x x x
Serlito Evangelista x x x.
 3. That it was defendants (sic) failure to fully understand the Decision which led
to the filing of this administrative case and which subsequent events have proven
that in the implementation of the Writ of Execution the land owned by the
defendants covered by Transfer Certificates of Titles were not affected. 6

In a Minute Resolution7 dated September 24, 2008, we referred the case to the
Integrated Bar of the Philippines (IBP) for investigation, report and
recommendation/decision.

The Report and Recommendation of the IBP

On June 11, 2009, the Investigating Commissioner8 recommended the dismissal of the
complaint. The Investigating Commissioner opined:

The administrative complaint failed to show sufficient evidence to warrant disciplinary

action against respondent. Complainants filed this complaint because they believed that
they lost their case, however, their claim over their properties was not affected by the
Decision of the court.9

In Resolution No. XIX-2010-285 dated April 16, 2010, the IBP Board of Governors
reversed the findings of the Investigating Commissioner. The IBP Board of Governors
found Atty. Cefra negligent in handling the complainants’ case and unanimously
approved his suspension from the practice of law for six (6) months.

Atty. Cefra filed a motion for reconsideration. On January 14, 2012, in Resolution No.
XX-2012-24, the IBP Board of Governors partially granted Atty. Cefra’s motion in this
wise:

RESOLVED to PARTIALLY GRANT Respondent’s Motion for Reconsideration and

unanimously MODIFY Resolution No. XIX-2010-285 dated April 16, 2010 Suspending
Atty. Arturo B. Cefra from the practice of law for six (6) months to REPRIMANDED
considering that the failure was not material to the case and that complainants were not
prejudice. [emphasis supplied]

The Court’s Ruling

Except for the recommended penalty, we agree with the IBP Board of Governors that
Atty. Cefra has been guilty of negligence in handling the complainants’ case. His
actuations in the present administrative case also reveal his lack of diligence in
performing his duties as an officer of the Court.

The Code of Professional Responsibility mandates that "a lawyer shall serve his client
with competence and diligence."10
It further states that "a lawyer shall not neglect a legal matter entrusted to him, and his
negligence in connection therewith shall render him liable."11 In addition, a lawyer has
the corresponding duty to "keep the client informed of the status of his case."12

In Jardin v. Villar, Jr.,13 the Court held:

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 free. Certainly, a
member of the Bar who is worth his title cannot afford to practice the profession in a
lackadaisical fashion. A lawyer’s lethargy from the perspective of the Canons is both
unprofessional and unethical.

Atty. Cefra failed to live up to these standards. Interestingly, he did not deny the
complainants’ allegations and impliedly admitted his actions in the proceedings in Civil
Case No. U-6504.

The records further substantiate clear acts of negligence on Atty. Cefra’s part in
handling the complainants’ case.

First, Atty. Cefra failed to submit a formal offer of documentary evidence within
the period given by the RTC. Atty. Cefra submitted a formal offer of documentary
evidence five (5) months after the RTC’s first order directing him to make a
formal offer. The formal offer of evidence was only made after the complainants
had been declared by the RTC to have waived their right to submit a formal offer
of documentary evidence.

Second, Atty. Cefra failed to comply with the two (2) orders of the RTC directing
him to submit a formal offer of documentary evidence. He made no effort to
submit the required formal offer of documentary evidence within the prescribed
period. Neither did he give his reasons, within the required period, on why he
could not make the required formal offer of documentary evidence. In fact, Atty.
Cefra’s belated explanation for this omission was only done in a motion for
reconsideration (with motion to admit the formal offer of documentary evidence)
that he subsequently filed, which motion the RTC denied for lack of merit.

Third, Atty. Cefra failed to file an appropriate motion or appeal, or avail of any
remedial measure to contest the RTC’s decision. His claim that the complainants
had not been prejudiced by the RTC’s decision is incorrect. The dispositive
portion of the RTC’s decision clearly adjudged the complainants liable to pay
₱30,000.00 moral damages.14 Considering the pecuniary consequence of the
RTC’s decision to his clients, Atty. Cefra should have filed a motion for
reconsideration before the RTC or appealed the RTC’s decision with the Court of
Appeals, or he should have at least immediately explained to his clients his
reasons for not taking remedial action. The failure to avail of available remedial
measures apparently prejudiced his clients. As matter now stands, the
complainants’ liability under the RTC’s decision is already final and executory.
 Fourth, Atty. Cefra’s allegations in his Comment show his failure to effectively
communicate with the complainants. As Atty. Cefra puts it, the administrative
complaint was the result of the complainants’ failure to fully understand the
RTC’s decision. In other words, he admits that the present case would have been
averted had he exerted reasonable efforts to inform the complainants of the legal
implications of the RTC’s decision and to explain to them the material
developments in the case.

We significantly note that even before this Court, Atty. Cefra’s conduct was less than
what is expected of an officer of the Court. He was held in contempt for his cavalier and
indifferent attitude in complying with the Court’s directives.

In sum, the above actuations showing Atty. Cefra’s lack of diligence and inattention to
his duties as a lawyer warrant disciplinary sanction. We have repeatedly held that "[t]he
practice of law is a privilege bestowed by the State on those who show that they
possess the legal qualifications for it.

Lawyers are expected to maintain at all times a high standard of legal proficiency and
morality, including honesty, integrity and fair dealing. They must perform their fourfold
duty to society, the legal profession, the courts and their clients, in accordance with the
values and norms of the legal profession as embodied in the Code of Professional
Responsibility.15

Under the circumstances, the IBP Board of Governors’ recommended penalty of simple
reprimand is not commensurate with the gravity of Atty. Cefra’s infractions. As the
complainants incurred pecuniary damage by reason of Atty. Cefra’s negligence, a
suspension of one (1) year from the practice of law is in order.16

WHEREFORE, premises considered, we find Atty. Arturo Cefra guilty of negligence, in

violation of Rules 18.03 and 18.04 of the Code of Professional Responsibility. He is
hereby SUSPENDED from the practice of law for one (1) year and STERNLY WARNED
that a repetition of the same or similar offense will be dealt with more severely.

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

SO ORDERED.

FIRST DIVISION

A.C. No. 9149, September 04, 2013

JULIAN PENILLA, Complainant, v. ATTY. QUINTIN P. ALCID, JR., Respondent.

DECISION
 VILLARAMA, JR., J.:

Before this Court is an administrative complaint1 filed against respondent Atty. Quintin
P. Alcid, Jr. for violation of the Lawyer’s Oath and the Code of Professional
Responsibility, and for gross misconduct in the performance of his duty as a lawyer.

The antecedent facts follow:nadcralaw

Complainant Julian Penilla entered into an agreement with Spouses Rey and Evelyn
Garin (the spouses) for the repair of his Volkswagen automobile. Despite full payment,
the spouses defaulted in their obligation. Thus, complainant decided to file a case for
breach of contract against the spouses where he engaged the services of respondent
as counsel.

Respondent sent a demand letter to the spouses and asked for the refund of
complainant’s payment. When the spouses failed to return the payment, respondent
advised complainant that he would file a criminal case for estafa against said spouses.
Respondent charged P30,000 as attorney’s fees and P10,000 as filing fees.
Complainant turned over the relevant documents to respondent and paid the fees in
tranches. Respondent then filed the complaint for estafa before Asst. City Prosecutor
Jose C. Fortuno of the Office of the City Prosecutor of Quezon City. Respondent
attended the hearing with complainant but the spouses did not appear. After the
hearing, complainant paid another P1,000 to respondent as appearance fee.
Henceforth, complainant and respondent have conflicting narrations of the subsequent
events and transactions that transpired.

Complainant alleges that when the case was submitted for resolution, respondent told
him that they have to give a bottle of Carlos Primero I to Asst. City Prosecutor Fortuno
to expedite a favorable resolution of the case. Complainant claims that despite initial
reservations, he later acceded to respondent’s suggestion, bought a bottle of Carlos
Primero I for P950 and delivered it to respondent’s office.

Asst. City Prosecutor Fortuno later issued a resolution dismissing the estafa case
against the spouses. Respondent allegedly told complainant that a motion for
reconsideration was “needed to have [the resolution] reversed.”2 Respondent then
prepared the motion and promised complainant that he would fix the problem. On
February 18, 2002, the motion was denied for lack of merit. Respondent then told
complainant that he could not do anything about the adverse decision and presented
the option of filing a civil case for specific performance against the spouses for the
refund of the money plus damages. Complainant paid an additional P10,000 to
respondent which he asked for the payment of filing fees. After complainant signed the
complaint, he was told by respondent to await further notice as to the status of the case.
Complainant claims that respondent never gave him any update thereafter.
Complainant asserts having made numerous and unsuccessful attempts to follow-up
the status of the case and meet with respondent at his office. He admits, however, that
in one instance he was able to talk to respondent who told him that the case was not
progressing because the spouses could not be located. In the same meeting,
respondent asked complainant to determine the whereabouts of the spouses.
Complainant returned to respondent’s office on January 24, 2005, but because
respondent was not around, complainant left with respondent’s secretary a letter
regarding the possible location of the spouses.

Complainant claims not hearing from respondent again despite his several letters
conveying his disappointment and requesting for the return of the money and the
documents in respondent’s possession. Complainant then sought the assistance of the
radio program “Ito ang Batas with Atty. Aga” to solve his predicament. Following the
advice he gathered, complainant went to the Office of the Clerk of Court of the
Caloocan City Metropolitan Trial Court and Regional Trial Court (RTC). Complainant
learned that a civil case for Specific Performance and Damages was filed on June 6,
20023 but was dismissed on June 13, 2002. He also found out that the filing fee was
only P2,440 and not P10,000 as earlier stated by respondent. Atty. Aga of the same
radio program also sent respondent a letter calling his attention to complainant’s
problem. The letter, like all of complainant’s previous letters, was unheeded.

On January 9, 2006, complainant filed before the Integrated Bar of the Philippines-
Commission on Bar Discipline (IBP-CBD) the instant administrative case praying that
respondent be found guilty of gross misconduct for violating the Lawyer’s Oath and
the Code of Professional Responsibility, and for appropriate administrative sanctions to
be imposed.

Respondent harps a different tale.

In an Answer4 filed on January 30, 2006, respondent prayed that the case be dismissed
for lack of merit. He denied charging complainant P10,000 as filing fees for
the estafa case and claimed that he charged and received only P2,000. He also
countered that the payment of P30,000 made by the complainant was his acceptance
fee for both the estafa case and civil case. Respondent likewise denied the following
other allegations of complainant: that he assured the success of the case before the
prosecutor; that he asked complainant to give a bottle of Carlos Primero I to the
prosecutor; that he promised to fix the case; and that he charged P10,000, as he only
charged P5,000, as filing fee for the civil case.

Respondent explained that it was not a matter of indifference on his part when he failed
to inform petitioner of the status of the case. In fact, he was willing to return the money
and the documents of complainant. What allegedly prevented him from communicating
with complainant was the fact that complainant would go to his office during days and
times that he would be attending his daily court hearings.

The IBP-CBD called for a mandatory conference on April 28, 2006. Only complainant
and his counsel attended.5 The conference was reset and terminated on June 9, 2006.
The parties were directed to file their verified position papers within 15 days, 6 to which
complainant and respondent complied.7cralawlibrary

On July 18, 2006, respondent filed a Reply8 praying for the dismissal of the case for
lack of factual and legal bases. He stated that he had performed his duties as
complainant’s counsel when he filed the criminal case before the Office of the City
Prosecutor of Quezon City and the civil case before the RTC of Caloocan City. He
averred that he should not be blamed for the dismissal of both cases as his job was to
ensure that justice is served and not to win the case. It was unethical for him to
guarantee the success of the case and resort to unethical means to win such case for
the client. He continued to deny that he asked complainant to give the prosecutor a
bottle of Carlos Primero I and that the filing fees he collected totalled P20,000.
Respondent argued that it is incredulous that the total sum of all the fees that he had
allegedly collected exceeded P30,000 – the amount being claimed by complainant from
the spouses.

In its Report and Recommendation9 dated September 12, 2008, the IBP-CBD
recommended the suspension of respondent from the practice of law for six months “for
negligence within the meaning of Canon 18 and transgression of Rule 18.04 of the
Code of Professional Responsibility,” viz:nadcralaw
In the case under consideration, there are certain matters which keep sticking out like a
sore thumb rendering them difficult to escape notice.

One is the filing of a criminal complaint for estafa arising out of a violation of the contract
for repair of the Volks Wagon (sic) car. It is basic that when an act or omission
emanates from a contract, oral or written, the consequent result is a breach of the
contract, hence, properly actionable in a civil suit for damages. As correctly pointed out
by the Investigating Prosecutor, the liability of the respondent is purely civil in nature
because the complaint arose from a contract of services and the respondent (spouses
Garin) failed to perform their contractual obligation under the contract.

xxxx

Another one is the filing of a civil complaint for specific performance and damages (after
the dismissal of the criminal complaint for estafa) in the Regional Trial Court of
Caloocan City where the actual damages claimed is P36,000.00.

It is also basic that the civil complaint for P36,000.00 should have been filed with the
MTC [which] has jurisdiction over the same. One of the “firsts” that a lawyer ascertains
in filing an action is the proper forum or court with whom the suit or action shall be filed.
In June 2002 when the civil complaint was filed in court, the jurisdiction of the MTC has
already expanded such that the jurisdictional amount of the RTC is already
P400,000.00.

xxxx
Another thing is the various follow-ups made by respondent’s client as evidenced by the
letters marked as Exhibits “D”, “E”, “F”, “G” and “H” which were all received by
complainant’s secretary, except for Exhibit “H” which was received by Atty. Asong, not
to mention Exhibit “M” which was sent by “Atty. Aga”. These efforts of the complainant
were not reciprocated by the respondent with good faith. Respondent chose to ignore
them and reasoned out that he is willing to meet with the complainant and return the
money and documents received by reason of the legal engagement, but omitted to
communicate with him for the purpose of fixing the time and place for the meeting. This
failure suggests a clear disregard of the client’s demand which was done in bad faith on
the part of respondent.10
On December 11, 2008, the IBP Board of Governors issued Resolution No. XVIII-2008-
646, adopting and approving the recommendation of the IBP-CBD. The
Resolution11 reads:nadcralaw
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the
Report and Recommendation of the Investigating Commissioner of the above-entitled
case, herein made part of this Resolution as Annex “A”; and, finding the
recommendation fully supported by the evidence on record and the applicable laws and
rules, and considering Respondent’s violation of Canon 18 and Rule 18.04 of the Code
of Professional Responsibility for his negligence, Atty. Quintin P. Alcid, Jr. is
hereby SUSPENDED from the practice of law for six (6) months.
On April 24, 2009, respondent sought reconsideration12 and asked that the penalty of
suspension be reduced to warning or reprimand. After three days, or on April 27, 2009,
respondent filed a “Motion to Admit Amended ‘Motion for Reconsideration’ Upon Leave
of Office.”13 Respondent asserted that the failure to inform complainant of the status of
the cases should not be attributed to him alone. He stressed that complainant had
always been informed that he only had time to meet with his clients in the afternoon at
his office in Quezon City. Despite such notice, complainant kept going to his office in
Tandang Sora. He admitted that though he committed lapses which would amount to
negligence in violation of Canon 18 and Rule 18.04, they were done unknowingly and
without malice or bad faith. He also stressed that this was his first infraction.

In its Resolution No. XIX-2011-473 dated June 26, 2011, the IBP Board of Governors
denied respondent’s Motion for Reconsideration for lack of merit.14 On August 15, 2011,
respondent filed a second Motion for Reconsideration15 which was no longer acted upon
due to the transmittal of the records of the case to this Court by the IBP on August 16,
2011.16cralawlibrary

On September 14, 2011, the Court issued a Resolution17 and noted the aforementioned
Notices of Resolution dated December 11, 2008 and June 26, 2011. On December 14,
2011, it issued another Resolution18 noting the Indorsement dated August 16, 2011 of
Director Alicia A. Risos-Vidal and respondent’s second Motion for Reconsideration
dated August 15, 2011.

We sustain the findings of the IBP that respondent committed professional negligence
under Canon 18 and Rule 18.04 of the Code of Professional Responsibility, with a
modification that we also find respondent guilty of violating Canon 17 and Rule 18.03 of
the Code and the Lawyer’s Oath.

A lawyer may be disbarred or suspended for any violation of his oath, a patent disregard
of his duties, or an odious deportment unbecoming an attorney. A lawyer must at no
time be wanting in probity and moral fiber which are not only conditions precedent to his
entrance to the Bar but are likewise essential demands for his continued membership
therein.19cralawlibrary

The Complaint before the IBP-CBD charged respondent with violation of his oath and
the following provisions under the Code of Professional Responsibility:nadcralaw
a) Canon 15 – A lawyer shall observe candor, fairness and loyalty in
all his dealings and transactions with his client;

b) Rule 15.[06, Canon 15] – A lawyer shall not state or imply that he is
able to influence any public official, tribunal or legislative body;

c) Rule 16.01[, Canon 16] – A lawyer shall account for all money or
property collected or received for or from his client;

d) Canon 17 – A lawyer owes fidelity to the cause of his client and he

shall be mindful of the trust and confidence reposed in him;

e) Canon 18 – A lawyer shall serve his client with competence and

diligence;

f) Rule 18.03[, Canon 18] – A lawyer shall not neglect a legal matter
entrusted to him and his negligence in connection therewith shall
render him liable; and

g) Rule 18.04[, Canon 18] – A lawyer shall keep his client informed of
the status of his case and shall respond within a reasonable time to
the client’s request for information.20
A review of the proceedings and the evidence in the case at bar shows that respondent
violated Canon 18 and Rules 18.03 and 18.04 of the Code of Professional
Responsibility. Complainant correctly alleged that respondent violated his oath under
Canon 18 to “serve his client with competence and diligence” when respondent filed a
criminal case for estafa when the facts of the case would have warranted the filing of a
civil case for breach of contract. To be sure, after the complaint for estafa was
dismissed, respondent committed another similar blunder by filing a civil case for
specific performance and damages before the RTC. The complaint, having an
alternative prayer for the payment of damages, should have been filed with the
Municipal Trial Court which has jurisdiction over complainant’s claim which amounts to
only P36,000. As correctly stated in the Report and Recommendation of the IBP-
CBD:nadcralaw
Batas Pambansa Blg. 129[,] as amended by R.A. No. 7691 which took effect on April
15, 1994[,] vests in the MTCs of Metro Manila exclusive original jurisdiction of civil
cases where the amount of demand does not exceed P200,000.00 exclusive of interest,
damages of whatever kind, attorney’s fees, litigation expenses and costs (Sec. 33), and
after five (5) years from the effectivity of the Act, the same shall be adjusted to
P400,000.00 (Sec. 34).21
The errors committed by respondent with respect to the nature of the remedy adopted in
the criminal complaint and the forum selected in the civil complaint were so basic and
could have been easily averted had he been more diligent and circumspect in his role
as counsel for complainant. What aggravates respondent’s offense is the fact that his
previous mistake in filing the estafa case did not motivate him to be more conscientious,
diligent and vigilant in handling the case of complainant. The civil case he subsequently
filed for complainant was dismissed due to what later turned out to be a basic
jurisdictional error.

That is not all. After the criminal and civil cases were dismissed, respondent was plainly
negligent and did not apprise complainant of the status and progress of both cases he
filed for the latter. He paid no attention and showed no importance to complainant’s
cause despite repeated follow-ups. Clearly, respondent is not only guilty of
incompetence in handling the cases. His lack of professionalism in dealing with
complainant is also gross and inexcusable. In what may seem to be a helpless attempt
to solve his predicament, complainant even had to resort to consulting a program in a
radio station to recover his money from respondent, or at the very least, get his
attention.

Respondent’s negligence under Rules 18.03 and 18.04 is also beyond contention. A
client pays his lawyer hard-earned money as professional fees. In return, “[e]very case
a lawyer accepts deserves his full attention, skill and competence, regardless of its
importance and whether he accepts it for a fee or for free. Rule 18.03 of the Code of
Professional Responsibility enjoins a lawyer not to ‘neglect a legal matter entrusted to
him, and his negligence in connection therewith shall render him liable.’ He must
constantly keep in mind that his actions or omissions or nonfeasance would be binding
upon his client. He is expected to be acquainted with the rudiments of law and legal
procedure, and a client who deals with him has the right to expect not just a good
amount of professional learning and competence but also a whole-hearted fealty to the
client’s cause.”22 Similarly, under Rule 18.04, a lawyer has the duty to apprise his client
of the status and developments of the case and all other information relevant thereto.
He must be consistently mindful of his obligation to respond promptly should there be
queries or requests for information from the client.

In the case at bar, respondent explained that he failed to update complainant of the
status of the cases he filed because their time did not always coincide. The excuse
proffered by respondent is too lame and flimsy to be given credit. Respondent himself
admitted that he had notice that complainant had visited his office many times. Yet,
despite the efforts exerted and the vigilance exhibited by complainant, respondent
neglected and failed to fulfill his obligation under Rules 18.03 and 18.04 to keep his
client informed of the status of his case and to respond within a reasonable time to the
client’s request for information.

Finally, respondent also violated Canon 17 of the Code which states that “[a] lawyer
owes fidelity to the cause of his client and he shall be mindful of the trust and
confidence reposed in him.” The legal profession dictates that it is not a mere duty, but
an obligation, of a lawyer to accord the highest degree of fidelity, zeal and fervor in the
protection of the client’s interest. The most thorough groundwork and study must be
undertaken in order to safeguard the interest of the client. The honor bestowed on his
person to carry the title of a lawyer does not end upon taking the Lawyer’s Oath and
signing the Roll of Attorneys. Rather, such honor attaches to him for the entire duration
of his practice of law and carries with it the consequent responsibility of not only
satisfying the basic requirements but also going the extra mile in the protection of the
interests of the client and the pursuit of justice. Respondent has defied and failed to
perform such duty and his omission is tantamount to a desecration of the Lawyer’s
Oath.

All said, in administrative cases for disbarment or suspension against lawyers, it is the
complainant who has the burden to prove by preponderance of evidence 23 the
allegations in the complaint. In the instant case, complainant was only able to prove
respondent’s violation of Canons 17 and 18, and Rules 18.03 and 18.04 of the Code of
Professional Responsibility, and the Lawyer’s Oath. Complainant failed to substantiate
his claim that respondent violated Canon 15 and Rule 15.06 of the Code of Professional
Responsibility when respondent allegedly instructed him to give a bottle of Carlos
Primero I to Asst. City Prosecutor Fortuno in order to get a favorable decision. Similarly,
complainant was not able to present evidence that respondent indeed violated Rule
16.01 of Canon 16 by allegedly collecting money from him in excess of the required
filing fees.

As to respondent’s proven acts and omissions which violate Canons 17 and 18 and
Rules 18.03 and 18.04 of the Code of Professional Responsibility, and the Lawyer’s
Oath, we find the same to constitute gross misconduct for which he may be suspended
under Section 27, Rule 138 of the Rules of Court, viz:nadcralaw
SEC. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor. –
A 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 willful disobedience appearing as an attorney for a party to a case
without authority to do so. x x x.
WHEREFORE, the Resolution of the IBP Board of Governors adopting and approving
the Decision of the Investigating Commissioner is hereby AFFIRMED with
a MODIFICATION that respondent Atty. Quintin P. Alcid, Jr. is hereby found GUILTY of
gross misconduct for violating Canons 17 and 18, and Rules 18.03 and 18.04 of
the Code of Professional Responsibility, as well as the Lawyer’s Oath. This Court
hereby imposes upon respondent the penalty of SUSPENSION from the practice of law
for a period of SIX (6) MONTHS to commence immediately upon receipt of this
Decision. Respondent is further ADMONISHEDto be more circumspect and diligent in
handling the cases of his clients, and STERNLY WARNED that a commission of the
same or similar acts in the future shall be dealt with more severely.

Let copies of this Decision be furnished to the Office of the Court Administrator to be
disseminated to all courts throughout the country, to the Office of the Bar Confidant to
be appended to Atty. Quintin P. Alcid, Jr.’s personal records, and to the Integrated Bar
of the Philippines for its information and guidance.

SO ORDERED.

EN BANC

A.C. No. 7766 August 5, 2014

JOSE ALLAN TAN, Complainant,

vs.
PEDRO S. DIAMANTE, Respondent.

DECISION

PER CURIAM:

For the Court's resolution is an administrative Complaint1 for disbarment dated February
1, 2008 filed by complainant Jose Allan Tan (complainant) against respondent Pedro S.
Diamante (respondent), charging him of violating the Code of Professional
Responsibility (CPR) and the lawyer’s oath for fabricating and using a spurious court
order, and for failing to keep his client informed of the status of the case.

The Facts

On April 2, 2003, complainant, claiming to be a recognized illegitimate son of the late

Luis Tan, secured the services of respondent in order to pursue a case for partition of
property against the heirs of the late spouses Luis and Natividad Valencia-Tan.2 After
accepting the engagement, respondent filed the corresponding complaint 3 before the
Regional Trial Court of Bacolod City, Branch 46 (RTC), docketed as Civil Case No. 03-
11947. The complaint was eventually dismissed by the RTC in an Order4 dated July 25,
2007 for lack of cause of action and insufficiency of evidence.5 While respondent was
notified of such dismissal as early as August 14, 2007,6 complainant learned of the
same only on August 24, 2007 when he visited the former’s office. 7 On such occasion,
respondent allegedly asked for the amount of ₱10,000.00 for the payment of appeal
fees and other costs, but since complainant could not produce the said amount at that
time, respondent, instead, asked and was given the amount of ₱500.00 purportedly as
payment of the reservation fee for the filing of a notice of appeal before the RTC. 8 On
September 12, 2007, Tan handed the amount of ₱10,000.00 to respondent, who on
even date, filed a notice of appeal9 before the RTC.10

In an Order11 dated September 18, 2007, the RTC dismissed complainant’s appeal for
having been filed beyond the reglementary period provided for by law. Respondent,
however, did not disclose such fact and, instead, showed complainant an Order 12 dated
November 9, 2007 purportedly issued by the RTC (November 9, 2007 Order) directing
the submission of the results of a DNA testing to prove his filiation to the late Luis Tan,
within 15 days from receipt of the notice. Considering the technical requirements for
such kind of testing, complainant proceeded to the RTC and requested for an extension
of the deadline for its submission. It was then that he discovered that the November 9,
2007 Order was spurious, as certified by the RTC’s Clerk of Court.13 Complainant also
found out that, contrary to the representations of respondent, his appeal had long been
dismissed.14 Aggrieved, he filed the instant administrative complaint for disbarment
against respondent.

In his Comments/Compliance15 dated September 4, 2009, respondent alleged that it

was complainant’s failure to timely produce the amount of 1,400.00 to pay for the
appeal fees that resulted in the late filing of his appeal. According to him, he informed
complainant of the lapse of the reglementary period to appeal, but the latter insisted in
pursuing the same. He also claimed to have assisted complainant "not for money or
malice" but being a desperate litigant, he was blamed for the court’s unfavorable
decision.16

The IBP’s Report and Recommendation

In a Report and Recommendation17 dated September 21, 2010, the Integrated Bar of
the Philippines (IBP) Investigating Commissioner found respondent administratively
liable, and accordingly recommended that the penalty of suspension for a period of one
(1) year be meted out against him.18

The Investigating Commissioner found complainant’s imputations against respondent to

be well-founded, observing that instead of meeting complainant’s allegations squarely,
particularly, the issue of the nondisclosure of the dismissal of the partition case,
respondent sidestepped and delved on arguments that hardly had an effect on the
issues at hand.19

Moreover, the Investigating Commissioner did not find credence in respondent’s

accusation that the spurious November 9, 2007 Order originated from complainant,
ratiocinating that it was respondent who was motivated to fabricate the same to cover
up his lapses that brought about the dismissal of complainant’s appeal and make it
appear that there is still an available relief left for Tan.20

In a Resolution dated April 16, 2013, the IBP Board of Governors unanimously adopted
and approved the aforesaid report and recommendation.21
 The Issue Before the Court

The essential issue in this case is whether or not respondent should be held
administratively liable for violating the CPR.

The Court’s Ruling

After a judicious perusal of the records, the Court concurs with the IBP’s findings,
subject to the modification of the recommended penalty to be imposed upon
respondent.

Under Rule 18.04, Canon 18 of the CPR, it is the lawyer’s duty to keep his client
constantly updated on the developments of his case as it is crucial in maintaining the
latter’s confidence, to wit:

CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND

DILIGENCE.

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

As an officer of the court, it is the duty of an attorney to inform his client of whatever
important information he may have acquired affecting his client’s case. He should notify
his client of any adverse decision to enable his client to decide whether to seek an
appellate review thereof. Keeping the client informed of the developments of the case
will minimize misunderstanding and loss of trust and confidence in the attorney. The
lawyer should not leave the client in the dark on how the lawyer is defending the client’s
interests.22 In this connection, the lawyer must constantly keep in mind that his actions,
omissions, or nonfeasance would be binding upon his client. Concomitantly, the lawyer
is expected to be acquainted with the rudiments of law and legal procedure, and a client
who deals with him has the right to expect not just a good amount of professional
learning and competence but also a whole-hearted fealty to the client’s cause.23

In the case at bar, records reveal that as of August 14, 2007, respondent already knew
of the dismissal of complainant’s partition case before the RTC. Despite this fact, he
never bothered to inform complainant of such dismissal as the latter only knew of the
same on August 24, 2007 when he visited the former’s office. To add insult to injury,
respondent was inexcusably negligent in filing complainant’s appeal only on September
12, 2007, or way beyond the reglementary period therefor, thus resulting in its outright
dismissal. Clearly, respondent failed to exercise such skill, care, and diligence as men
of the legal profession commonly possess and exercise in such matters of professional
employment.24

Worse, respondent attempted to conceal the dismissal of complainant’s appeal by

fabricating the November 9, 2007 Order which purportedly required a DNA testing to
make it appear that complainant’s appeal had been given due course, when in truth, the
same had long been denied. In so doing, respondent engaged in an unlawful,
dishonest, and deceitful conduct that caused undue prejudice and unnecessary
expenses on the part of complainant. Accordingly, respondent clearly violated Rule
1.01, Canon 1 of the CPR, which provides:

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

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

As officers of the court, lawyers are bound to maintain not only a high standard of legal
proficiency, but also of morality, honesty, integrity, and fair dealing, 25 failing in which
whether in his personal or private capacity, he becomes unworthy to continue his
practice of law.26 A lawyer’s inexcusable neglect to serve his client’s interests with
utmost diligence and competence as well as his engaging in unlawful, dishonest, and
deceitful conduct in order to conceal such neglect should never be countenanced, and
thus, administratively sanctioned.

In view of the foregoing, respondent’s conduct of employing a crooked and deceitful

scheme to keep complainant in the dark and conceal his case’s true status through the
use of a falsified court order evidently constitutes Gross Misconduct.27 His acts should
not just be deemed as unacceptable practices that are disgraceful and dishonorable;
they reveal a basic moral flaw that makes him unfit to practice law.28 In this regard, the
Court’s pronouncement in Sebastian v. Calis29 is instructive, viz.:

Deception and other fraudulent acts by a lawyer are disgraceful and dishonorable. They
reveal moral flaws in a lawyer.1âwphi1 They are unacceptable practices. A lawyer’s
relationship with others should be characterized by the highest degree of good faith,
fairness and candor. This is the essence of the lawyer’s oath. The lawyer’s oath is not
mere facile words, drift and hollow, but a sacred trust that must be upheld and keep
inviolable. The nature of the office of an attorney requires that he should be a person of
good moral character. This requisite is not only a condition precedent to the admission
to the practice of law, its continued possession is also essential for remaining in the
practice of law. We have sternly warned that any gross misconduct of a lawyer, whether
in his professional or private capacity, puts his moral character in serious doubt as a
member of the Bar, and renders him unfit to continue in the practice of
law.30 (Emphases and underscoring supplied)

Jurisprudence reveals that in analogous cases where lawyers failed to inform their
clients of the status of their respective cases, the Court suspended them for a period of
six (6) months. In Mejares v. Romana,31 the Court suspended the lawyer for the same
period for his failure to timely and adequately inform his clients of the dismissal of their
petition. In the same vein, in Penilla v. Alcid, Jr.,32 the same penalty was imposed on the
lawyer who consistently failed to update his client of the status of his cases,
notwithstanding several follow-ups.
However, in cases where lawyers engaged in unlawful, dishonest, and deceitful conduct
by falsifying documents, the Court found them guilty of Gross Misconduct and disbarred
them. In Brennisen v. Contawi,33 the Court disbarred the lawyer who falsified a special
power of attorney in order to mortgage and sell his client’s property. Also, in Embido v.
Pe,34 the penalty of disbarment was meted out against the lawyer who falsified an in
existent court decision for a fee.

As already discussed, respondent committed acts of falsification in order to

misrepresent to his client, i.e., complainant, that he still had an available remedy in his
case, when in reality, his case had long been dismissed for failure to timely file an
appeal, thus, causing undue prejudice to the latter. To the Court, respondent’s acts are
so reprehensible, and his violations of the CPR are so flagrant, exhibiting his moral
unfitness and inability to discharge his duties as a member of the bar. His actions erode
rather than enhance the public perception of the legal profession. Therefore, in view of
the totality of his violations, as well as the damage and prejudice caused to his client,
respondent deserves the ultimate punishment of disbarment.

WHEREFORE, respondent Pedro S. Diamante is hereby DISBARRED for Gross

Misconduct and violations of Rule 1.01, Canon 1, and Rule 18.04, Canon 18 of the
Code of Professional Responsibility, and his name is ordered STRICKEN OFF from the
roll of attorneys.

Let a copy of this Decision be attached to respondent Pedro S. Diamante's record in this
Court. Further, let copies of this Decision be furnished to the Integrated Bar of the
Philippines and the Office of the Court Administrator, which is directed to circulate them
to all the courts in the country for their information and guidance.

SO ORDERED.

SECOND DIVISION

A.C. No. 7337, September 29, 2014

ROLANDO VIRAY, Complainant, v. ATTY. EUGENIO T. SANICAS, Respondent.

RESOLUTION

DEL CASTILLO, J.:

This is a verified Complaint for Disbarment/Gross Immoral Conduct1 filed with this Court
on September 18, 2006 by complainant Rolando Viray (complainant) against
respondent Atty. Eugenio T. Sanicas (respondent).

Factual Antecedents

Complainant alleges that he engaged the services of respondent relative to a labor

case2 he filed against Ester Lopez and Teodoro Lopez III (spouses Lopez). On
February 26, 2001, the Labor Arbiter ruled in favor of complainant and disposed of the
case as follows:ChanRoblesVirtualawlibrary

WHEREFORE, premises considered, judgment is hereby rendered ordering

respondents Ester Lopez and Teodoro Lopez III to pay complainant Rolando Viray of
the following, to wit:
1. Backwages……………….……..P146,726.67
2. Separation Pay………………….…24,000.00
3. Service Incentive Leave Pay……….1,538.46
4. Attorney’s Fees………………...….17,226.51
or a total amount of One Hundred Eighty Nine Thousand Four Hundred Ninety One
Pesos & 64/100 (P189,491.60) [sic] to be deposited with the Cashier of this Office,
within ten (10) days from receipt hereof.

All other claims are hereby denied for lack of merit.

SO ORDERED.3

Subsequently, an Alias Writ of Execution4 was issued relative to aforesaid

decision. During the implementation of said writ, however, complainant discovered that
respondent had already collected the total amount of P95,000.00 from spouses
Lopez. Respondent received said amount in the following
manner:ChanRoblesVirtualawlibrary

Date Voucher No. Amount Purpose

02/05/2004 7802 P 20,000.00 Attorney’s fees
02/13/2004 7833 10,000.00 Partial payment for judgment
02/26/2004 7848 10,000.00 Partial payment for judgment
03/12/2004 7894 20,000.00 Partial payment for judgment
04/02/2004 7932 5,000.00 Partial payment for judgment
04/06/2004 7941 5,000.00 Partial payment for judgment
04/13/2004 7944 5,000.00 Partial payment for judgment
04/16/2004 7954 10,000.00 Partial payment for judgment
04/30/2004 7977 10,000.00 Partial payment for judgment
Total Amount: P 95,000.00

Complainant also discovered that respondent misrepresented to spouses Lopez that he

is authorized to receive payments on his behalf, when in truth and in fact he is
not. Consequently, complainant made several verbal demands to the respondent to
remit to him the amount of P95,000.00, less his attorney’s fees of P20,000.00. But
respondent did not budge. Thus, complainant lodged a complaint before the Office of
the Punong Barangay of Brgy. Felisa, Bacolod City. Respondent, however, ignored the
summons to attend a conference before the barangay to resolve the issues.

In his Comment,5 respondent admits that he received P95,000.00 from spouses Lopez
on installments, but denies that he was not authorized to accept it. He explains that
complainant agreed to pay him additional attorney’s fees equivalent to 25% of the total
monetary award, on top of the attorney’s fees that may be awarded by the labor
tribunal, and to refund all expenses respondent incurred relative to the case. Thus,
from the total award of P189,491.60, the sum of P17,226.57 representing respondent’s
professional fees has to be deducted, leaving a balance of P172,275.13.6 Then from
said amount, complainant proposed that he will get P100,000.00 and the balance of
P72,275.13 shall belong to respondent as and for his additional 25% attorney’s fees and
reimbursement for all expenses he incurred while handling the case. However, after
receiving the amount of P95,000.00 and deducting therefrom the amounts of
P20,000.007 attorney’s fees, P17,000.00 earlier given to complainant, and P2,000.00
paid to the sheriff, what was left to respondent was only P56,000.00. Respondent
whines that this amount is way below the promised 25% attorney’s fees and refund of
expenses in the total amount of P72,275.13.

Respondent asserts that, in any event, complainant will still be receiving a sum greater
than what he expects to receive. He avers that complainant is still entitled to receive
from spouses Lopez the sum of P93,491.60. Adding the P17,000.00 respondent
previously remitted to complainant, the latter will get a total amount of
P110,491.60. This amount, according to respondent, exceeds the amount of
P100,000.00 complainant agreed to and expected to receive.

IBP’s Report and Recommendation

On February 26, 2007,8 we referred this case to the Integrated Bar of the Philippines
(IBP) for investigation, report and recommendation. On January 31, 2011, the
Investigating Commissioner issued his Report and Recommendation9 with the following
recommendation:

In view of the foregoing, it is respectfully recommended that the respondent be meted

the penalty of two (2) years suspension. Respondent is also ordered to return, in
restitution all the amounts in his possession which are due to complainant, less his
rightful attorney’s fees.10

On October 28, 2011, the IBP Board of Governors adopted Resolution No. XX-2011-
139,11 which approved the Report and Recommendation of the Investigating
Commissioner suspending respondent from the practice of law for two years, but with
the modification that respondent should restitute the sum of P85,500.00 12 to the
complainant.

Issue

The essential issue in this case is whether the respondent is guilty of gross misconduct
for his failure to promptly account to his client the funds received in the course of his
professional engagement and return the same upon demand.
 The Court’s Ruling

“The Code of Professional Responsibility demands the utmost degree of fidelity and
good faith in dealing with the moneys entrusted to lawyers because of their fiduciary
relationship.”13 Specifically, Rule 16.01 of the Code imposes upon the lawyer the duty
to “account for all money or property collected or received for or from the client.” Rule
16.03 thereof, on the other hand, mandates that “[a] lawyer shall deliver the funds x x x
of his client when due or upon demand.”

In this case, respondent on nine separate occasions from February 5, 2004 to April 30,
2004 received payments for attorney’s fees and partial payments for monetary awards
on behalf of complainant from spouses Lopez. But despite the number of times over
close to three months he had been receiving payment, respondent neither informed the
complainant of such fact nor rendered an accounting thereon. It was only when an
Alias Writ of Execution was issued and being implemented when complainant
discovered that spouses Lopez had already given respondent the total amount of
P95,000.00 as partial payment for the monetary awards granted to him by the labor
tribunal.

To make matters worse, respondent withheld and refused to deliver to the complainant
said amount, which he merely received on behalf of his client, even after
demand. Complainant brought the matter before the barangay, but respondent simply
ignored the same. Such failure and inordinate refusal on the part of the respondent to
render an accounting and return the money after demand raises the presumption that
he converted it to his own use.14 His unjustified withholding of the funds also warrants
the imposition of disciplinary action against him.15cralawred

Respondent justifies his action by asserting that complainant authorized him to receive
payment. He implies that he is also authorized to apply the sum of money he received
from spouses Lopez to his additional 25% attorney’s fees and reimbursement for all
expenses he incurred for the case, in the total amount of P72,275.13. However, after
deducting from the amount of P95,000.00 the amounts of P20,000.00, P17,000.00, and
P2,000.00, what was left to respondent, to his dismay was only P56,000.00.

The Court is not impressed. As aptly observed by the Investigating Commissioner,

other than his self-serving statements, there is nothing in the records which would
support respondent’s claim that he was authorized to receive the payments. Neither is
there proof that complainant agreed to pay him additional 25% attorney’s fees and
reimburse him for all expenses he allegedly incurred in connection with the
case. Respondent did not present any document, retainer’s agreement, or itemized
breakdown of the amount to be reimbursed to support his claim. In any event, even
assuming that respondent was authorized to receive payments, the same does not
exempt him from his duty of promptly informing his client of the amounts he received in
the course of his professional employment. “The fiduciary nature of the relationship
between counsel and client imposes on a lawyer the duty to account for the money or
property collected or received for or from the client. He is obliged to render a prompt
accounting of all the property and money he has collected for his client.” 16 “The fact
that a lawyer has a lien for his attorney’s fees on the money in his hands collected for
his client does not relieve him from the obligation to make a prompt
accounting.”17 Moreover, a lawyer has no right “to unilaterally appropriate his client’s
money for himself by the mere fact alone that the client owes him attorney’s
fees.”18cralawred

In sum, “[r]espondent’s failure to immediately account for and return the money when
due and upon demand violated the trust reposed in him, demonstrated his lack of
integrity and moral soundness, and warrants the imposition of disciplinary
action.”19cralawred

The Penalty

“The penalty for gross misconduct consisting in the failure or refusal despite demand of
a lawyer to account for and to return money or property belonging to a client has been
suspension from the practice of law for two years.”20 Thus, the IBP Board of Governors
did not err in recommending the imposable penalty. Considering, however, that this is
respondent’s first offense and he is already a nonagenarian,21the Court, in the exercise
of its compassionate judicial discretion, finds that a penalty of one year suspension is
sufficient.

WHEREFORE, the Court finds respondent Atty. Eugenio T. Sanicas GUILTY of gross
misconduct and accordingly SUSPENDS him from the practice of law for one (1) year
upon the finality of this Resolution, with a warning that a repetition of the same or similar
act or offense shall be dealt with more severely.

Atty. Sanicas is ordered to return to complainant, within 90 days from finality of this
Resolution, the net amount of P85,500.00 with interest at the rate of 6% per
annum from finality of this Resolution until the full amount is returned. Failure to comply
with the foregoing directive will warrant the imposition of a more severe penalty.

Let copies of this Resolution be furnished the Office of the Bar Confidant and noted in
Atty. Sanicas’ record as a member of the Bar.

SO ORDERED.cralawlaw library

EN BANC

A.C. No. 9532 October 8, 2013

MARIA CRISTINA ZABALJAUREGUI PITCHER, Complainant,
vs.
ATTY. RUSTICO B. GAGATE, Respondent.

DECISION

PERLAS-BERNABE, J.:

For the Court s resolution is an administrative complaint1 filed by Maria Cristina

Zabaljauregui Pitcher (complainant) against Atty. Rustico B. Gagate (respondent), .
charging him for gross ignorance of the law and unethical practice of law.

The facts

Complainant claimed to be the legal wife of David B. Pitcher (David),2 a British national
who passed away on June 18, 2004.3 Prior to his death, David was engaged in
business in the Philippines and owned, among others, 40% of the shareholdings in
Consulting Edge, Inc.4 (Consulting Edge), a domestic corporation. In order to settle the
affairs of her deceased husband, complainant engaged the services of respondent. 5

On June 22, 2004, complainant and respondent met with Katherine Moscoso Bantegui
Bantegui),6 a major stockholder of Consulting Edge,7 in order to discuss the settlement
of David’s interest in the company.8 They agreed to another meeting which was,
however, postponed by Bantegui. Suspecting that the latter was merely stalling for time
in order to hide something, respondent insisted that the appointment proceed as
scheduled.9

Eventually, the parties agreed to meet at the company premises on June 28, 2004.
However, prior to the scheduled meeting, complainant was prevailed upon by
respondent to put a paper seal on the door of the said premises, assuring her that the
same was legal.10

On the scheduled meeting, Bantegui expressed disappointment over the actions of

complainant and respondent, which impelled her to just leave the matter for the court to
settle. She then asked them to leave, locked the office and refused to give them a
duplicate key.11

Subsequently, however, respondent, without the consent of Bantegui, caused the

change in the lock of the Consulting Edge office door,12 which prevented the employees
thereof from entering and carrying on the operations of the company. This prompted
Bantegui to file before the Office of the City Prosecutor of Makati (Prosecutor’s Office) a
complaint for grave coercion against complainant and respondent. 13 In turn, respondent
advised complainant that criminal and civil cases should be initiated against Bantegui
for the recovery of David's personal records/business interests in Consulting
Edge.14 Thus, on January 17, 2005, the two entered in Memorandum of
Agreement,15 whereby respondent undertook the filing of the cases against Bantegui,
for which complainant paid the amount of ₱150,000.00 as acceptance fee and
committed herself to pay respondent ₱1,000.00 for every court hearing. 16

On November 18, 2004, the Prosecutor’s Office issued a Resolution17 dated October
13, 2004, finding probable cause to charge complainant and respondent for grave
coercion. The corresponding Information was filed before the Metropolitan Trial Court of
Makati City, Branch 63, docketed as Criminal Case No. 337985 (grave coercion case),
and, as a matter of course, warrants of arrest were issued against them.18 Due to the
foregoing, respondent advised complainant to go into hiding until he had filed the
necessary motions in court. Eventually, however, respondent abandoned the grave
coercion case and stopped communicating with complainant.19 Failing to reach
respondent despite diligent efforts,20 complainant filed the instant administrative case
before the Integrated Bar of the Philippines (IBP) - Commission on Bar Discipline
(CBD), docketed as CBD Case No. 06-1689.

Despite a directive21 from the IBP-CBD, respondent failed to file his answer to the
complaint. The case was set for mandatory conference on November 24, 2006,22 which
was reset twice,23 on January 12, 2007 and February 2, 2007, due to the absence of
respondent. The last notice sent to respondent, however, was returned unserved for the
reason "moved out."24 In view thereof, Investigating Commissioner Tranquil S. Salvador
III declared the mandatory conference terminated and required the parties to submit
their position papers, supporting documents, and affidavits.25

The IBP’s Report and Recommendation

On March 18, 2009, Investigating Commissioner Pedro A. Magpayo, Jr. (Commissioner

Magpayo) issued a Report and Recommendation,26 observing that respondent failed to
safeguard complainant's legitimate interest and abandoned her in the grave coercion
case. Commissioner Magpayo pointed out that Bantegui is not legally obliged to honor
complainant as subrogee of David because complainant has yet to establish her kinship
with David and, consequently, her interest in Consulting Edge.27 Hence, the actions
taken by respondent, such as the placing of paper seal on the door of the company
premises and the changing of its lock, were all uncalled for. Worse, when faced with the
counter legal measures to his actions, he abandoned his client's cause. 28 Commissioner
Magpayo found that respondent’s acts evinced a lack of adequate preparation and
mastery of the applicable laws on his part, in violation of Canon 5 29 of the Code of
Professional Responsibity (Code), warranting his suspension from the practice of law
for a period of six months.30

The IBP Board of Governors adopted and approved the aforementioned Report and
Recommendation in Resolution No. XX-2011-261 dated November 19, 2011 (November
19, 2011 Resolution), finding the same to be fully supported by the evidence on record
and the applicable laws and rules.31
In a Resolution32 dated October 8, 2012, the Court noted the Notice of the IBP’s
November 19, 2011 Resolution, and referred the case to the Office of the Bar Confidant
(OBC) for evaluation, report and recommendation.33

The OBC's Report and Recommendation

On February 11, 2013, the OBC submitted a Report and Recommendation 34 dated
February 6, 2013, concluding that respondent grossly neglected his duties to his client
and failed to safeguard the latter's rights and interests in wanton disregard of his duties
as a lawyer.35 It deemed that the six-month suspension from the practice of law as
suggested by the IBP was an insufficient penalty and, in lieu thereof, recommended that
respondent be suspended for three years.36 Likewise, it ordered respondent to return
the ₱150,000.00 he received from complainant as acceptance fee. 37

The Court's Ruling

After a careful perusal of the records, the Court concurs with and adopts the findings
and conclusions of the OBC.

The Court has repeatedly emphasized that the relationship between a lawyer and his
client is one imbued with utmost trust and confidence. In this regard, clients are led to
expect that lawyers would be ever-mindful of their cause and accordingly exercise the
required degree of diligence in handling their affairs. For his part, the lawyer is expected
to maintain at all times a high standard of legal proficiency, and to devote his full
attention, skill, and competence to the case, regardless of its importance and whether
he accepts it for a fee or for free.38 To this end, he is enjoined to employ only fair and
honest means to attain lawful objectives.39 These principles are embodied in Canon 17,
Rule 18.03 of Canon 18, and Rule 19.01 of Canon 19 of the Code which respectively
state:

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

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

xxxx

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

xxxx

CANON 19 – A lawyer shall represent his client with zeal within the bounds of the law.

Rule 19.01 – A lawyer shall employ only fair and honest means to attain the lawful
objectives of his client and shall not present, participate in presenting or threaten to
present unfounded criminal charges to obtain an improper advantage in any case or
proceeding.

xxxx

Keeping with the foregoing rules, the Court finds that respondent failed to exercise the
required diligence in handling complainant’s cause since he: first, failed to represent her
competently and diligently by acting and proffering professional advice beyond the
proper bounds of law; and, second, abandoned his client’s cause while the grave
coercion case against them was pending.

Anent the first infraction, it bears emphasis that complainant's right over the properties
of her deceased husband, David, has yet to be sufficiently established. As such, the
high-handed action taken by respondent to enforce complainant's claim of ownership
over the latter’s interest in Consulting Edge – i.e., causing the change of the office door
lock which thereby prevented the free ingress and egress of the employees of the said
company – was highly improper. Verily, a person cannot take the law into his own
hands, regardless of the merits of his theory. In the same light, respondent's act of
advising complainant to go into hiding in order to evade arrest in the criminal case can
hardly be maintained as proper legal advice since the same constitutes transgression of
the ordinary processes of law. By virtue of the foregoing, respondent clearly violated his
duty to his client to use peaceful and lawful methods in seeking justice, 40 in violation of
Rule 19.01, Canon 19 of the Code as above-quoted. To note further, since such
courses of action were not only improper but also erroneous, respondent equally failed
to serve his client with competence and diligence in violation of Canon 18 of the Code.
In the same regard, he also remained unmindful of his client’s trust in him – in particular,
her trust that respondent would only provide her with the proper legal advice in pursuing
her interests – thereby violating Canon 17 of the Code.

With respect to the second infraction, records definitively bear out that respondent
completely abandoned complainant during the pendency of the grave coercion case
against them; this notwithstanding petitioner’s efforts to reach him as well as his receipt
of the ₱150,000.00 acceptance fee. It is hornbook principle that a lawyer’s duty of
competence and diligence includes not merely reviewing the cases entrusted to his care
or giving sound legal advice, but also consists of properly representing the client before
any court or tribunal, attending scheduled hearings or conferences, preparing and filing
the required pleadings, prosecuting the handled cases with reasonable dispatch, and
urging their termination even without prodding from the client or the court. 41 Hence,
considering respondent’s gross and inexcusable neglect by leaving his client totally
unrepresented in a criminal case, it cannot be doubted that he violated Canon 17, Rule
18.03 of Canon 18, and Rule 19.01 of Canon 19 of the Code.

In addition, it must be pointed out that respondent failed to file his answer to the
complaint despite due notice.1âwphi1 This demonstrates not only his lack of
responsibility but also his lack of interest in clearing his name, which, as case law
directs, is constitutive of an implied admission of the charges leveled against him. 42 In
fine, respondent should be held administratively liable for his infractions as herein
discussed. That said, the Court now proceeds to determine the appropriate penalty to
be imposed against respondent.

Several cases show that lawyers who have been held liable for gross negligence for
infractions similar to those committed by respondent were suspended from the practice
of law for a period of two years. In Jinon v. Jiz,43 a lawyer who neglected his client's
case, misappropriated the client's funds and disobeyed the IBP’s directives to submit his
pleadings and attend the hearings was suspended from the practice of law for two
years. In Small v. Banares,44 the Court meted a similar penalty against a lawyer who
failed to render any legal service even after receiving money from the complainant; to
return the money and documents he received despite demand; to update his client on
the status of her case and respond to her requests for information; and to file an answer
and attend the mandatory conference before the IBP. Also, in Villanueva v.
Gonzales,45 a lawyer who neglected complainant’s cause; refused to immediately
account for his client’s money and to return the documents received; failed to update his
client on the status of her case and to respond to her requests for information; and
failed to submit his answer and to attend the mandatory conference before the IBP was
suspended from the practice of law for two years. However, the Court observes that, in
the present case, complainant was subjected to a graver injury as she was prosecuted
for the crime of grave coercion largely due to the improper and erroneous advice of
respondent. Were it not for respondent’s imprudent counseling, not to mention his act of
abandoning his client during the proceedings, complainant would not have unduly
suffered the harbors of a criminal prosecution. Thus, considering the superior degree of
the prejudice caused to complainant, the Court finds it apt to impose against respondent
a higher penalty of suspension from the practice of law for a period of three years as
recommended by the OBC.

In the same light, the Court sustains the OBC’s recommendation for the return of the
₱150,000.00 acceptance fee received by respondent from complainant since the same
is intrinsically linked to his professional engagement. While the Court has previously
held that disciplinary proceedings should only revolve around the determination of the
respondent-lawyer’s administrative and not his civil liability,46 it must be clarified that this
rule remains applicable only to claimed liabilities which are purely civil in nature – for
instance, when the claim involves moneys received by the lawyer from his client in a
transaction separate and distinct and not intrinsically linked to his professional
engagement (such as the acceptance fee in this case). Hence, considering further that
the fact of respondent’s receipt of the ₱150,000.00 acceptance fee from complainant
remains undisputed,47 the Court finds the return of the said fee, as recommended by the
OBC, to be in order.

WHEREFORE respondent Atty. Rustico B. Gagate is found guilty of violating Canon 17

Rule 18.03 of Canon 18 and Rule 19.01 of Canon 19 of the Code of Professional
Responsibility. Accordingly, he is hereby SUSPENDED from the practice of law for a
period of three 3) years, effective upon the finality of this Decision, with a stem warning
that a repetition of the same or similar acts will be dealt with more severely.
Further, respondent is ORDERED to return to complainant Maria Cristina Zabaljauregui
Pitcher the ₱150,000.00 acceptance fee he received from the latter within ninety (90)
days from the finality of this Decision. Failure to comply with the foregoing directive will
warrant the imposition of a more severe penalty.

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

SO ORDERED.

FIRST DIVISION

MA. LUISA HADJULA, A.C. No. 6711

Present:
Complainant,

PUNO, C.J., Chairperson,

*SANDOVAL-GUTIERREZ,

CORONA,
AZCUNA, and
- versus -
GARCIA, JJ.

Promulgated:

July 3, 2007
ATTY. ROCELES F. MADIANDA,
Respondent.

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

DECISION
GARCIA, J.:

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

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

The case started when, in an AFFIDAVIT-COMPLAINT[1] bearing date September 7,

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

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

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

Continuing, complainant averred that her friendship with respondent soured after her
filing, in the later part of 2000, of criminal and disciplinary actions against the latter. What,
per complainants account, precipitated the filing was when respondent, then a member
of the BFP promotion board, demanded a cellular phone in exchange for the
complainants promotion.
According to complainant, respondent, in retaliation to the filing of the aforesaid actions,
filed a COUNTER COMPLAINT[3] with the Ombudsman charging her (complainant) with
violation of Section 3(a) of Republic Act No. 3019,[4] falsification of public documents and
immorality, the last two charges being based on the disclosures complainant earlier made
to respondent. And also on the basis of the same disclosures, complainant further stated,
a disciplinary case was also instituted against her before the Professional Regulation
Commission.

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

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

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

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

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

HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for reason that

she never WAS MY CLIENT nor we ever had any LAWYER-CLIENT

RELATIONSHIP that ever existed ever since and that never obtained any

legal advice from me regarding her PERSONAL PROBLEMS or

PERSONAL SECRETS. She likewise never delivered to me legal

documents much more told me some confidential information or

secrets. That is because I never entertain LEGAL QUERIES or

CONSULTATION regarding PERSONAL MATTERS since I know as a

LAWYER of the Bureau of Fire Protection that I am not allowed to privately

practice law and it might also result to CONFLICT OF INTEREST. As a

matter of fact, whenever there will be PERSONAL MATTERS referred to

me, I just referred them to private law practitioners and never entertain the

same, NOR listen to their stories or examine or accept any document.

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

HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the truth of the

matter is that her ILLICIT RELATIONSHIP and her illegal and unlawful

activities are known in the Bureau of Fire Protection since she also filed

CHILD SUPPORT case against her lover where she has a child .

Moreover, the alleged DOCUMENTS she purportedly have shown to

me sometime in 1998, are all part of public records .

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

case just to get even with me or to force me to settle and withdraw the

CASES I FILED AGAINST HER since she knows that she will certainly be

DISMISSED FROM SERVICE, REMOVED FROM THE PRC ROLL and

 CRIMINALLY CONVICTED of her ILLICIT, IMMORAL, ILLEGAL and

UNLAWFUL ACTS.

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

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

WHEREFORE, premises considered, it is respectfully recommended that

respondent Atty. Roceles Madianda be reprimanded for revealing the

secrets of the complainant.

On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-2004-472
reading as follows:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED

and APPROVED, the Report and Recommendation of the Investigating

Commissioner of the above-entitled case, herein made part of this

Resolution as Annex A; and , finding the recommendation fully supported

by the evidence on record and the applicable laws and rules, and
 considering the actuation of revealing information given to respondent

during a legal consultation, Atty. Roceles Madianda is

hereby REPRIMANDED.

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

As it were, complainant went to respondent, a lawyer who incidentally was also

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

A lawyer-client relationship was established from the very first

moment complainant asked respondent for legal advise regarding the

formers business. To constitute professional employment, it is not essential

that the client employed the attorney professionally on any previous

occasion.
 It is not necessary that any retainer be paid, promised, or charged;

neither is it material that the attorney consulted did not afterward handle the

case for which his service had been sought.

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

consults a lawyer with a view to obtaining professional advice or assistance,

and the attorney voluntarily permits or acquiesces with the consultation,

then the professional employments is established.

Likewise, a lawyer-client relationship exists notwithstanding the

close personal relationship between the lawyer and the complainant or the

non-payment of the formers fees.

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

(1) Where legal advice of any kind is sought (2) from a professional legal

adviser in his capacity as such, (3) the communications relating to that

purpose, (4) made in confidence (5) by the client, (6) are at his instance

permanently protected (7) from disclosure by himself or by the legal

advisor, (8) except the protection be waived.[7]

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

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

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

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

SO ORDERED.

EN BANC

IPI No. 12–205–CA–J, December 10, 2013

RE: VERIFIED COMPLAINT OF TOMAS S. MERDEGIA AGAINST HON. VICENTE

S.E. VELOSO, ASSOCIATE JUSTICE OF THE COURT OF APPEALS, RELATIVE TO
CA G.R. SP No. 119461.
 [A.C. No. 10300]

RE: RESOLUTION DATED OCTOBER 8, 2013 IN OCA IPI No. 12–205–CA–J

AGAINST ATTY. HOMOBONO ADAZA II.

RESOLUTION

BRION, J.:

On October 8, 2013, we issued a Resolution1 dismissing the administrative complaint of

Tomas S. Merdegia against Court of Appeals Associate Justice Vicente S.E. Veloso. In
this same Resolution, we also directed Atty. Homobono Adaza II, Merdegia’s counsel,
to show cause why he should not be cited for contempt.

After considering Atty. Adaza’s explanation,2 we find his account insufficient, and
find him guilty of indirect contempt.

According to Atty. Adaza, he should not be punished for indirect contempt as he was
merely performing his duty as Merdegia’s counsel when he assisted him in preparing
the administrative complaint against Justice Veloso. Atty. Adaza asserted that both he
and his client observed Justice Veloso’s partiality during the oral arguments, but instead
of immediately filing an administrative complaint against him, he counseled Merdegia to
first file a Motion to Inhibit Justice Veloso from the case. However, upon finding that
Justice Veloso refused to inhibit himself, Merdegia repeated his request to file an
administrative complaint against Justice Veloso, to which Atty. Adaza acceded. Thus,
Atty. Adaza pleaded that he should not be faulted for assisting his client, especially
when he also believes in the merits of his client’s case.

Atty. Adaza’s explanation, read together with the totality of the facts of the case, fails to
convince us of his innocence from the contempt charge.

As Atty. Adaza himself admitted, he prepared the administrative complaint after Justice
Veloso refused to inhibit himself from a case he was handling. The complaint and the
motion for inhibition were both based on the same main cause: the alleged partiality of
Justice Veloso during the oral arguments of Merdegia’s case. The resolution
dismissing the motion for inhibition should have disposed of the issue of Justice
Veloso’s bias. While we do not discount the fact that it was Justice Veloso who penned
the resolution denying the motion for inhibition, we note that he was allowed to do this
under the 2009 Internal Rules of the Court of Appeals.3Had Merdegia and Atty. Adaza
doubted the legality of this resolution, the proper remedy would have been to file
a petition for certiorari assailing the order denying the motion for inhibition. The
settled rule is that administrative complaints against justices cannot and should not
substitute for appeal and other judicial remedies against an assailed decision or ruling. 4

While a lawyer has a duty to represent his client with zeal, he must do so within the
bounds provided by law.5 He is also duty–bound to impress upon his client the propriety
of the legal action the latter wants to undertake, and to encourage compliance with the
law and legal processes.6

A reading of Merdegia’s administrative complaint7 shows an apparent failure to

understand that cases are not always decided in one’s favor, and that an allegation of
bias must stem from an extrajudicial source other than those attendant to the merits and
the developments in the case.8 In this light, we cannot but attribute to Atty. Adaza the
failure to impress upon his client the features of our adversarial system, the substance
of the law on ethics and respect for the judicial system, and his own failure to heed what
his duties as a professional and as an officer of the Court demand of him in acting for
his client before our courts.

To be sure, deciding administrative cases against erring judges is not an easy task. We
have to strike a balance between the need for accountability and integrity in the
Judiciary, on the one hand, with the need to protect the independence and efficiency of
the Judiciary from vindictive and enterprising litigants, on the other. Courts should not
be made to bow down to the wiles of litigants who bully judges into inhibiting from cases
or deciding cases in their favor, but neither should we shut our doors from litigants
brave enough to call out the corrupt practices of people who decide the outcome of their
cases. Indeed, litigants who feel unjustly injured by malicious and corrupt acts of erring
judges and officials should not be punished for filing administrative cases against them;
neither should these litigants be unjustly deterred from doing so by a wrong signal from
this Court that they would be made to explain why they should not be cited for contempt
when the complaints they filed prove to be without sufficient cause.

What tipped the balance against Atty. Adaza, in this case, is the totality of the facts of
the case that, when read together with the administrative complaint he prepared, shows
that his complaint is merely an attempt to malign the administration of justice. We note
Atty. Adaza’s penchant for filing motions for inhibition throughout the case: first, against
Judge Ma. Theresa Dolores C. Gomez Estoesta of the Regional Trial Court of Manila,
who issued an order unfavorable to his client; and second, against all the justices of the
Court of Appeals division hearing his appeal, for alleged bias during the oral arguments
on his case. These indicators, taken together with the baseless administrative complaint
against Justice Veloso after he penned an order adverse to Atty. Adaza’s client,
disclose that there was more to the administrative complaint than the report of legitimate
grievances against members of the Judiciary.

In Re: Verified Complaint of Engr. Oscar L. Ongjoco, etc.,9 we cited a litigant in indirect
contempt of court for his predisposition to indiscriminately file administrative complaints
against members of the Judiciary. We held that this conduct degrades the judicial office,
interferes with the due performance of their work for the Judiciary, and thus constitutes
indirect contempt of court. Applying this principle to the present case, we hold that Atty.
Adaza’s acts constitute an improper conduct that tends to degrade the administration of
justice, and is thus punishable for indirect contempt under Section 3(d), Rule 71 of the
Rules of Court.
As a final note, Atty. Adaza’s contemptuous conduct may also be subject to disciplinary
sanction as a member of the bar.10 If we do not now proceed at all against Atty. Adaza
to discipline him, we are prevented from doing so by our concern for his due process
rights. Our Resolution of October 8, 2013 only asked him to show cause why he should
not be cited in contempt, and not why he should not be administratively penalized. To
our mind, imposing a disciplinary sanction against Atty. Adaza through a contempt
proceeding violates the basic tenets of due process as a disciplinary action is
independent and separate from a proceeding for contempt. A person charged of an
offense, whether in an administrative or criminal proceeding, must be informed of the
nature of the charge against him, and given ample opportunity to explain his
side.11cralawred

While the two proceedings can proceed simultaneously with each other, 12 a contempt
proceeding cannot substitute for a disciplinary proceeding for erring lawyers,13 and vice
versa. There can be no substitution between the two proceedings, as contempt
proceedings against lawyers, as officers of the Court, are different in nature and
purpose from the discipline of lawyers as legal professionals. The two proceedings
spring from two different powers of the Court.

The Court, in exercising its power of contempt, exercises an implied and inherent power
granted to courts in general.14 Its existence is essential to the preservation of order in
judicial proceedings; to the enforcement of judgments, orders and mandates of courts;
and, consequently, in the administration of justice;15 thus, it may be instituted against
any person guilty of acts that constitute contempt of court.16Further, jurisprudence
describes a contempt proceeding as penal and summary in nature; hence, legal
principles applicable to criminal proceedings also apply to contempt proceedings. A
judgment dismissing the charge of contempt, for instance, may no longer be appealed
in the same manner that the prohibition against double jeopardy bars the appeal of an
accused’s acquittal.17

In contrast, a disciplinary proceeding against an erring lawyer is sui generis in nature; it

is neither purely civil nor purely criminal. Unlike a criminal prosecution, a disciplinary
proceeding is not intended to inflict punishment, but to determine whether a lawyer is
still fit to be allowed the privilege of practicing law. It involves an investigation by the
Court of the conduct of its officers, and has, for its primary objective, public
interest.18 Thus, unlike a contempt proceeding, the acquittal of the lawyer from a
disciplinary proceeding cannot bar an interested party from seeking reconsideration of
the ruling. Neither does the imposition of a penalty for contempt operate as res
judicata to a subsequent charge for unprofessional conduct.19

Contempt proceedings and disciplinary actions are also governed by different

procedures. Contempt of court is governed by the procedures under Rule 71 of the
Rules of Court, whereas disciplinary actions in the practice of law are governed by
Rules 138 and 139 thereof.20

IN THESE LIGHTS, the Court finds Atty. Homobomo Adaza II GUILTY OF INDIRECT
CONTEMPT for filing a frivolous suit against Court of Appeals Associate Justice Vicente
S.E. Veloso, and hereby sentences him to pay, within the period of fifteen days from the
promulgation of this judgment, a fine of P5,000.00. The respondent is
also WARNED that further similar misbehavior on his part may be a ground for the
institution of disciplinary proceedings against him.

SO ORDERED.

FIRST DIVISION

GENEROSO SALIGUMBA, G.R. No. 143365

ERNESTO SALIGUMBA, and
HEIRS OF SPOUSES VALERIA Present:
SALIGUMBA AND ELISEO
SALIGUMBA, SR., PUNO, C.J., Chairperson,
Petitioners, CARPIO,
CORONA,
AZCUNA, and
TINGA,* JJ.
- versus -

MONICA PALANOG, Promulgated:

Respondent. December 4, 2008
x--------------------------------------------------x

DECISION
CARPIO, J.:

The Case

This is a petition for review of the Decision dated 24 May 2000 of the Regional Trial Court,
Branch 5, Kalibo, Aklan (RTC-Branch 5) in Civil Case No. 5288 for Revival of Judgment.
The case is an offshoot of the action for Quieting of Title with Damages in Civil Case No.
2570.

The Facts

Monica Palanog, assisted by her husband Avelino Palanog (spouses Palanogs), filed a
complaint dated 28 February 1977 for Quieting of Title with Damages against defendants,
spouses Valeria Saligumba and Eliseo Saligumba, Sr. (spouses Saligumbas), before the
Regional Trial Court, Branch 3, Kalibo, Aklan (RTC-Branch 3). The case was docketed
as Civil Case No. 2570. In the complaint, spouses Palanogs alleged that they have been
in actual, open, adverse and continuous possession as owners for more than 50 years of
a parcel of land located in Solido, Nabas, Aklan. The spouses Saligumbas allegedly
prevented them from entering and residing on the subject premises and had destroyed
the barbed wires enclosing the land. Spouses Palanogs prayed that they be declared the
true and rightful owners of the land in question.

When the case was called for pre-trial on 22 September 1977,

Atty. Edilberto Miralles (Atty. Miralles), counsel for spouses Saligumbas, verbally moved
for the appointment of a commissioner to delimit the land in question. Rizalino Go, Deputy
Sheriff of Aklan, was appointed commissioner and was directed to submit his report and
sketch within 30 days.[1] Present during the delimitation were spouses Palanogs,
spouses Saligumbas, and Ernesto Saligumba, son of spouses Saligumbas.[2]

After submission of the Commissioners Report, spouses Palanogs, upon motion, were
granted 10 days to amend their complaint to conform with the items mentioned in the
report.[3]

Thereafter, trial on the merits ensued. At the hearing on 1 June 1984, only the counsel
for spouses Palanogs appeared. The trial court issued an order resetting the
hearing to 15 August 1984 and likewise directed spouses Saligumbas to secure the
services of another counsel who should be ready on that date. [4] The order sent
to Eliseo Saligumba, Sr. was returned to the court unserved with the notation
PartyDeceased while the order sent to defendant Valeria Saligumba was returned with
the notation Party in Manila.[5]

At the hearing on 15 August 1984, spouses Palanogs direct examination was suspended
and the continuation of the hearing was set on 25 October 1984. The trial court stated
that Atty. Miralles, who had not withdrawn as counsel for spouses Saligumbas despite his
appointment as Municipal Circuit Trial Court judge, would be held responsible for the case
of spouses Saligumbas until he formally withdrew as counsel. The trial court reminded
Atty. Miralles to secure the consent of spouses Saligumbas for his withdrawal.[6] A copy
of this order was sent to Valeria Saligumba but the same was returned unserved with the
notation Party in Manila.[7]

The hearing set on 25 October 1984 was reset to 25 January 1985 and the trial court
directed that a copy of this order be sent to Eliseo Saligumba, Jr. at COA, PNB, Manila.[8]

The presentation of evidence for spouses Palanogs resumed on 25 January

1985 despite the motion of Atty. Miralles for postponement on the ground that his client
was sick. The exhibits were admitted and plaintiffs spouses Palanogs rested their case.
Reception of evidence for the defendants spouses Saligumbas was scheduled on 3, 4,
and 5 June 1985.[9]

On 3 June 1985, only spouses Palanogs and counsel appeared. Upon motion of the
spouses Palanogs, spouses Saligumbas were deemed to have waived the presentation
of their evidence.

On 3 August 1987, after a lapse of more than two years, the trial court considered the
case submitted for decision.

On 7 August 1987, RTC-Branch 3 rendered a judgment in Civil Case No. 2570 declaring
spouses Palanogs the lawful owners of the subject land and ordering
spouses Saligumbas, their agents, representatives and all persons acting in privity with
them to vacate the premises and restore possession to spouses Palanogs.

The trial court, in a separate Order dated 7 August 1987, directed that a copy of the courts
decision be furnished plaintiff Monica Palanog and defendant Valeria Saligumba.

Thereafter, a motion for the issuance of a writ of execution of the said decision was filed
but the trial court, in its Order dated 8 May 1997, ruled that since more than five years
had elapsed after the date of its finality, the decision could no longer be executed by mere
motion.

Thus, on 9 May 1997, Monica Palanog (respondent), now a widow, filed a Complaint
seeking to revive and enforce the Decision dated 7 August 1987 in Civil Case No. 2570
which she claimed has not been barred by the statute of limitations.
She impleaded petitioners Generoso Saligumba and Ernesto Saligumba, the heirs and
children of the spouses Saligumbas, as defendants. The case was docketed as Civil
Case No. 5288 before the RTC-Branch 5.
Petitioner Generoso Saligumba, for himself and in representation of his brother Ernesto
who was out of the country working as a seaman, engaged the services of the Public
Attorneys Office, Kalibo, Aklan which filed a motion for time to allow them to file a
responsive pleading. Petitioner Generoso Saligumba filed his Answer[10] alleging that: (1)
respondent had no cause of action; (2) the spouses Saligumbas died while Civil Case No.
2570 was pending and no order of substitution was issued and hence, the trial was null
and void; and (3) the court did not acquire jurisdiction over the heirs of the
spouses Saligumbas and therefore, the judgment was not binding on them.

Meanwhile, on 19 December 1997, the trial court granted respondents motion

to implead additional defendants namely, Eliseo Saligumba, Jr. and Eduardo Saligumba,
who are also the heirs and children of spouses Saligumbas.[11] They were, however,
declared in default on 1 October 1999 for failure to file any responsive pleading.[12]

The Trial Courts Ruling

On 24 May 2000, the RTC-Branch 5 rendered a decision in favor of respondent ordering

the revival of judgment in Civil Case No. 2570. The trial court ruled that the non-
substitution of the deceased spouses did not have any legal significance. The land subject
of Civil Case No. 2570 was the exclusive property of defendant Valeria Saligumba who
inherited the same from her deceased parents. The death of her
husband, Eliseo Saligumba, Sr., did not change the complexion of the ownership of the
property that would require his substitution. The spouses Saligumbas children, who are
the petitioners in this case, had no right to the property while Valeria Saligumba was still
alive. The trial court further found that when defendant Valeria Saligumba died, her
lawyer, Atty. Miralles, did not inform the court of the death of his client. The trial court thus
ruled that the non-substitution of the deceased defendant was solely due to the
negligence of counsel. Moreover, petitioner Ernesto Saligumba could not feign ignorance
of Civil Case No. 2570 as he was present during the delimitation of the subject land. The
trial court likewise held that the decision in Civil Case No. 2570 could not be the subject
of a collateral attack. There must be a direct action for the annulment of the said decision.
Petitioners elevated the matter directly to this Court. Hence, the present petition.

The Courts Ruling

The instant case is an action for revival of judgment and the judgment sought to be revived
in this case is the decision in the action for quieting of title with damages in Civil Case No.
2570. This is not one for annulment of judgment.

An action for revival of judgment is no more than a procedural means of securing the
execution of a previous judgment which has become dormant after the passage of five
years without it being executed upon motion of the prevailing party. It is not intended to
re-open any issue affecting the merits of the judgment debtors case nor the propriety or
correctness of the first judgment.[13] An action for revival of judgment is a new and
independent action, different and distinct from either the recovery of property case or the
reconstitution case, wherein the cause of action is the decision itself and not the merits
of the action upon which the judgment sought to be enforced is rendered. [14] Revival of
judgment is premised on the assumption that the decision to be revived, either by motion
or by independent action, is already final and executory.[15]

The RTC-Branch 3 Decision dated 7 August 1987 in Civil Case No. 2570 had been
rendered final and executory by the lapse of time with no motion for reconsideration nor
appeal having been filed.While it may be true that the judgment in Civil Case No. 2570
may be revived and its execution may be had, the issue now before us is whether or not
execution of judgment can be issued against petitioners who claim that they are not bound
by the RTC-Branch 3 Decision dated 7 August 1987 in Civil Case No. 2570.

Petitioners contend that the RTC-Branch 3 Decision of 7 August 1987 in Civil Case No.
2570 is null and void since there was no proper substitution of the deceased
spouses Saligumbas despite the trial courts knowledge that the deceased
spouses Saligumbas were no longer represented by counsel. They argue that they were
deprived of due process and justice was not duly served on them.
Petitioners argue that the trial court even acknowledged the fact of death of
spouses Saligumbas but justified the validity of the decision rendered in that case despite
lack of substitution because of the negligence or fault of their counsel. Petitioners contend
that the duty of counsel for the deceased spouses Saligumbas to inform the court of the
death of his clients and to furnish the name and address of the executor, administrator,
heir or legal representative of the decedent under Rule 3 presupposes adequate or active
representation by counsel. However, the relation of attorney and client was already
terminated by the appointment of counsel on record, Atty. Miralles, as Municipal Circuit
Trial Court judge even before the deaths of the spouses Saligumbas were known.
Petitioners invoke the Order of 1 June 1984 directing the spouses Saligumbas to secure
the services of another lawyer to replace Atty. Miralles. The registered mail containing
that order was returned to the trial court with the notation that Eliseo Saligumba, Sr. was
deceased. Petitioners thus question the decision in Civil Case No. 2570 as being void
and of no legal effect because their parents were not duly represented by counsel of
record. Petitioners further argue that they have never taken part in the proceedings in
Civil Case No. 2570 nor did they voluntarily appear or participate in the case. It is unfair
to bind them in a decision rendered against their deceased parents. Therefore, being a
void judgment, it has no legal nor binding effect on petitioners.

Civil Case No. 2570 is an action for quieting of title with damages which is an action
involving real property. It is an action that survives pursuant to Section 1, Rule 87 [16] as
the claim is not extinguished by the death of a party. And when a party dies in an action
that survives, Section 17 of Rule 3 of the Revised Rules of Court[17] provides for the
procedure, thus:
Section 17. Death of Party. - After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal
representative of the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within such time as may be
granted. If the legal representative fails to appear within said time, the court
may order the opposing party to procure the appointment of a legal
representative of the deceased within a time to be specified by the court,
and the representative shall immediately appear for and on behalf of the
interest of the deceased. The court charges involved in procuring such
appointment, if defrayed by the opposing party, may be recovered as costs.
The heirs of the deceased may be allowed to be substituted for the
deceased, without requiring the appointment of an executor or administrator
 and the court may appoint guardian ad litem for the minor heirs. (Emphasis
supplied)

Under the express terms of Section 17, in case of death of a party, and upon proper
notice, it is the duty of the court to order the legal representative or heir of the deceased
to appear for the deceased. In the instant case, it is true that the trial court, after receiving
an informal notice of death by the mere notation in the envelopes, failed to order the
appearance of the legal representative or heir of the deceased. There was no court order
for deceaseds legal representative or heir to appear, nor did any such legal representative
ever appear in court to be substituted for the deceased. Neither did the respondent ever
procure the appointment of such legal representative, nor did the heirs ever ask to be
substituted.

It appears that Eliseo Saligumba, Sr. died on 18 February 1984 while

Valeria Saligumba died on 2 February 1985. No motion for the substitution of the spouses
was filed nor an order issued for the substitution of the deceased spouses Saligumbas in
Civil Case No. 2570. Atty. Miralles and petitioner Eliseo Saligumba, Jr., despite notices
sent to them to appear, never confirmed the death of EliseoSaligumba, Sr. and
Valeria Saligumba. The record is bereft of any evidence proving the death of the spouses,
except the mere notations in the envelopes enclosing the trial courts orders which were
returned unserved.

Section 17 is explicit that the duty of the court to order the legal representative or heir to
appear arises only upon proper notice. The notation Party-Deceased on
the unserved notices could not be the proper notice contemplated by the rule. As the trial
court could not be expected to know or take judicial notice of the death of a party without
the proper manifestation from counsel, the trial court was well within its jurisdiction to
proceed as it did with the case. Moreover, there is no showing that the courts proceedings
were tainted with irregularities.[18]

Likewise, the plaintiff or his attorney or representative could not be expected to know of
the death of the defendant if the attorney for the deceased defendant did not notify the
plaintiff or his attorney of such death as required by the rules.[19] The judge cannot be
blamed for sending copies of the orders and notices to defendants spouses in the
absence of proof of death or manifestation to that effect from counsel.[20]

Section 16, Rule 3 of the Revised Rules of Court likewise expressly provides:

SEC. 16. Duty of attorney upon death, incapacity or incompetency of

party. - Whenever a party to a pending case dies, becomes incapacitated or
incompetent, it shall be the duty of his attorney to inform the court promptly
of such death, incapacity or incompetency, and to give the name and
residence of his executor, administrator, guardian or other legal
representative.

It is the duty of counsel for the deceased to inform the court of the death of his client. The
failure of counsel to comply with his duty under Section 16 to

inform the court of the death of his client and the non-substitution of such party will not
invalidate the proceedings and the judgment thereon if the action survives the death of
such party. The decision rendered shall bind the partys successor-in-interest.[21]

The rules operate on the presumption that the attorney for the deceased party is in a
better position than the attorney for the adverse party to know about the death of his client
and to inform the court of the name and address of his legal representative. [22]

Atty. Miralles continued to represent the deceased spouses even after the latters demise.
Acting on their behalf, Atty. Miralles even asked for postponement of the hearings and
did not even confirm the death of his clients nor his appointment as Municipal Circuit Trial
Court judge. These clearly negate petitioners contention that Atty. Miralles ceased to
be spouses Saligumbas counsel.

Atty. Miralles still remained the counsel of the spouses Saligumbas despite the alleged
appointment as judge. Records show that when Civil Case No. 2570 was called for trial
on 25 October 1984, Atty. Miralles appeared and moved for a postponement. The 25
October 1984 Order reads:
ORDER
Upon petition of Judge Miralles who is still the counsel on record of this case
and who is held responsible for anything that will happen in this case,
postpone the hearing of this case to JANUARY 25, 1985 AT 8:30 in the
morning. x x x[23]

The trial court issued an Order dated 1 June 1984 directing the defendants to secure the
services of another counsel. This order was sent to Eliseo Saligumba, Sr. by registered
mail but the same was returned with the notation Party-Deceased while the notice to
Valeria Saligumba was returned with the notation Party in Manila.[24] Eliseo Saligumba,
Sr. died on 18 February 1984. When Atty. Miralles appeared in court on 25 October 1984,
he did not affirm nor inform the court of the death of his client. There was no formal
substitution. The trial court issued an order resetting the hearing to 25 January 1985 and
directed that a copy of the order be furnished petitioner Eliseo Saligumba, Jr. at COA,
PNB, Manila by registered mail.[25] When the case was called on 25 January 1985,
Atty. Miralles sought for another postponement on the ground that his client was sick and
under medical treatment in Manila.[26] Again, there was no manifestation from counsel
about the death of EliseoSaligumba, Sr. The trial court issued an Order dated 25 January
1985 setting the reception of evidence for the defendants on 3, 4, and 5 June 1985. A
copy of this order was sent to Eliseo Saligumba, Jr. by registered mail. Nonetheless, as
the trial court in Civil Case No. 5288 declared, the non-substitution of Eliseo Saligumba,
Sr. did not have any legal significance as the land subject of Civil Case No. 2570 was the
exclusive property of Valeria Saligumba who inherited it from her deceased parents.

This notwithstanding, when Valeria Saligumba died on 2 February 1985,

Atty. Miralles again did not inform the trial court of the death of Valeria Saligumba. There
was no formal substitution nor submission of proof of death of
Valeria Saligumba. Atty. Miralles was remiss in his duty under Section 16, Rule 3 of the
Revised Rules of Court. The counsel of record is obligated to protect his clients interest
until he is released from his professional relationship with his client. For its part, the court
could recognize no other representation on behalf of the client except such counsel of
record until a formal substitution of attorney is effected.[27]
An attorney must make an application to the court to withdraw as counsel, for the relation
does not terminate formally until there is a withdrawal of record; at least, so far as the
opposite party is concerned, the relation otherwise continues until the end of the
litigation.[28] Unless properly relieved, the counsel is responsible for the conduct of the
case.[29] Until his withdrawal shall have been approved, the lawyer remains counsel of
record who is expected by his client as well as by the court to do what the interests of his
client require. He must still appear on the date of hearing for the attorney-client relation
does not terminate formally until there is a withdrawal of record.[30]

Petitioners should have questioned immediately the validity of the proceedings absent
any formal substitution. Yet, despite the courts alleged lack of jurisdiction over the
persons of petitioners, petitioners never bothered to challenge the same, and in fact
allowed the proceedings to go on until the trial court rendered its decision. There was no
motion for reconsideration, appeal or even an action to annul the judgment in Civil Case
No. 2570. Petitioners themselves could not feign ignorance of the case since during
the pendency of Civil Case No. 2570, petitioner Ernesto Saligumba, son of the deceased
spouses, was among the persons present during the delimitation of the land in question
before the Commissioner held on 5 November 1977.[31] Petitioner Eliseo Saligumba, Jr.
was likewise furnished a copy of the trial courts orders and notices. It was only the Answer
filed by petitioner Generoso Saligumba in Civil Case No. 5288 that confirmed the dates
when the spouses Saligumbas died and named the latters children. Consequently,
Atty. Miralles was responsible for the conduct of the case since he had not been properly
relieved as counsel of record. His acts bind his clients and the latters successors-in-
interest.

In the present case for revival of judgment, the other petitioners have not shown much
interest in the case. Petitioners Eliseo Saligumba, Jr. and Eduardo Saligumba were
declared in default for failure to file their answer. Petitioner Ernesto Saligumba was out of
the country working as a seaman. Only petitioner Generoso Saligumba filed an Answer
to the complaint. The petition filed in this Court was signed only by
petitioner Generoso Saligumba as someone signed on behalf of petitioner
Ernesto Saligumba without the latters authority to do so.
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 24 May 2000 of
the Regional Trial Court, Branch 5, Kalibo, Aklan in Civil Case No. 5288. Costs against
petitioners.

SO ORDERED

THIRD DIVISION

G.R. No. 179892-93 January 30, 2009

ATTY. VICTORIANO V. OROCIO, Petitioner,

vs.
EDMUND P. ANGULUAN, LORNA T. DY and NATIONAL POWER
CORPORATION, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Court
seeking to set aside the Resolution2 dated 31 October 2006, Decision3 dated 29
January 2007, and Resolution4 dated 27 September 2007, of the Court of Appeals in
CA-G.R. SP Nos. 95786 and 95946.

The facts culled from the records are as follows:

On 26 September 1978, the National Power Corporation Board of Directors (NAPOCOR

Board), pursuant to its specific power and duty to fix the compensation, allowance and
benefits of the NAPOCOR employees under Section 6(c) of Republic Act No. 6395, as
amended, passed Resolution No. 78-119 approving the grant of a monthly welfare
allowance equivalent to 10% of an employee’s basic pay to all NAPOCOR employees
effective 1 October 1978.5Pursuant thereto, the NAPOCOR Welfare Plan Committee,
renamed and reconstituted later on as the NAPOCOR Welfare Fund Board of Trustees
(NAPOCOR-WFBT), issued and promulgated a charter for the NAPOCOR Welfare
Fund which includes the following provisions:

ARTICLE VII
TERMINATION/AMENDMENT OF THE PLAN

"Section 1. Termination/Amendment of the Plan – The Board of Directors may amend,

revise, repeal any or all of the provisions herein contained and/or terminate the Plan,
subject to the pertinent provisions of the Trust Agreement.
Section 2. Payment of Member’s share – In the event of termination of the Plan, the
balance to the credit of each member and the General Reserve for Employee Benefits
shall be paid to the members in full. The accumulated amount in the General Reserve
for Employee Benefits shall be distributed among the members in the proportion to the
amount outstanding to their credit as of the time of termination.6

The NAPOCOR Board subsequently passed Resolution No. 82-172 fixing a NAPOCOR
employee’s contribution to the NAPOCOR Welfare Fund in a sum equivalent to 5% of
his basic pay.7

Almost two decades thereafter, on 8 June 2001, Congress passed Republic Act No.
9136, otherwise known as the Electric Power Industry Reform Act (EPIRA). EPIRA
directed the restructuring of the power industry which includes the reorganization of
NAPOCOR. Following the directive of EPIRA, the NAPOCOR Board passed Resolution
No. 2003-43 on 26 March 2003 abolishing the NAPOCOR Welfare Fund Department
and other departments, and dissolving the NAPOCOR Welfare Fund upon the effectivity
of EPIRA on 26 June 2001.8 Consequently, some of the employees in the NAPOCOR
Welfare Fund Department and in other departments (who were also members of the
NAPOCOR Welfare Fund) resigned, retired or separated from service. Thereafter, the
liquidation and dissolution process for the NAPOCOR Welfare Fund commenced.

On 11 May 2004, the NAPOCOR-WFBT, with authority from the Commission on Audit,
approved Resolution No. 2004-001 authorizing the release of ₱184 million (which
represented 40% of the liquid assets of NAPOCOR Welfare Fund in the total amount of
₱462 million as of 16 April 2004) for distribution to the NAPOCOR Welfare Fund
members who resigned, retired, or separated upon the effectivity of EPIRA on 26 June
2001 (EPIRA separated members).9

Pursuant to Resolution No. 2004-001, herein respondent Edmund P. Anguluan

(Anguluan), as Ex-Officio Chairman of NAPOCOR-WFBT, issued a memorandum on 17
May 2004 to implement the release of ₱184 million only to the EPIRA separated
members to the exclusion of the NAPOCOR employees (who were also members of the
NAPOCOR Welfare Fund) who have resigned, retired, or separated prior to the
effectivity of EPIRA (non-EPIRA separated members).10

This prompted Mrs. Perla A. Segovia (Segovia), former Vice-President of Human

Resources and Administration and former Ex-Officio Chairman of the NAPOCOR-
WFBT, in behalf of the 559 non-EPIRA separated members and in her own personal
capacity, to write a letter to Mr. Rogelio M. Murga, then NAPOCOR President,
demanding their equal shares in the remaining assets of the NAPOCOR Welfare Fund
and access to information and records thereof.11

On 13 July 2004, there being no action or response on her letter, Segovia, together with
Mrs. Emma C. Baysic (Baysic), former President of the NAPOCOR Employees
Association and former member of the NAPOCOR-WFBT, in their personal capacities
and on behalf of the 559 non-EPIRA separated members, filed with the Quezon City
Regional Trial Court (RTC), Branch 217, a Petition for Mandamus, Accounting and
Liquidation with a Prayer for the Issuance of Temporary Restraining Order and
Injunction against respondents NAPOCOR, the NAPOCOR Board, Anguluan (as
NAPOCOR Vice-President, Human Resources, Administration and Finance
Department) and Lorna T. Dy (as NAPOCOR Senior Department Manager on
Finance).12 The Petition was docketed as Civil Case No. Q04-53121.

Segovia, Baysic and the 559 non-EPIRA separated members were represented in Civil
Case No. Q04-53121 by petitioner Atty. Victoriano V. Orocio under a "Legal Retainer
Agreement"13 dated 1 September 2004, pertinent portions of which are reproduced
below:

SUBJECT: Petition for Mandamus with Damages Temporary Restraining

Order/Injunction, etc. with the Court "NPC RETIREES versus NPC, NP Board of
Directors, et. al. before the RTC Quezon City for the payment/settlement of their claims
for NPC Welfare Fund (P462 Million assets and other assets liquid or non-liquid).

Dear Ms. Segovia and Ms. Baysic:

In connection with the above-stated subject, hereunder are our terms and conditions, to
wit:

1. No acceptance fee;

2. All costs of litigation ([filing] and docket fees, etc.), miscellaneous and out-of-
pocket expenses the prosecution of said action shall be for the account of the
clients;

3. No appearance/meeting fee;

4. Contingency or success fees of fifteen percent (15%) of whatever

amounts/value of assets (liquid and/or non-liquid) are recovered;

5. This Retainer Agreement serves as Legal Authority for the Law Firm to receive
and/or collect its contingency/success fee without further demand.

On 22 February 2006, the parties in the above-mentioned case, duly assisted by their
respective counsels, executed a Compromise Agreement14 whereby they agreed to
amicably settle their dispute under the following terms and conditions:

COMPROMISE AGREEMENT

xxxx

WHEREAS, the parties have agreed to settle the instant case amicably.
PREMISES CONSIDERED, the parties herein have agreed as follows:

1. Both the NPC EPIRA separated members (those members of the Welfare
Fund affected by the EPIRA law and ceased to be members of the Welfare
Fund anytime from June 26, 2001 [effectivity of the EPIRA LAW] to March 1,
2003 [implementation of the EPIRA law and date of abolition of the Welfare
Fund]) and NPC non-EPIRA separated members (those who ceased to be
members of the Fund prior to June 26, 2001) are entitled to "Earnings
Differential" of the NPC Welfare Fund;

2. "Corrected Earnings Differential" refers to a benefit which is a result of

re-computation of Member’s Equity Contributions and Earnings using the
correct rates of return vis-à-vis what was used when they were separated.
Period covered by the discrepancy is from 1989 to 2003. Hence, affected
are WF members separated anytime within the period 1989 to 2003;

xxxx

4. The Corrected Earnings Differential of all affected WF separated members

shall earn 6% legal interest per annum computed from the separation of the
members from service up to March 31, 2006 for all the non-EPIRA separated
members and May 31, 2006 for the EPIRA separated members;

5. As of March 2006, the estimated Corrected Earnings Differential for the

non-EPIRA separated members is ₱119.196 Million while for the EPIRA
separated members is ₱173.589 Million or a total of ₱292.785 Million,
inclusive of the 6% legal interest;

6. In conformity with the Retainer Agreement dated September 1, 2004

between Mrs. Perla A. Segovia, Mrs. Emma Y. Baysic and Atty. Victoriano
V. Orocio; and Irrevocable Special Power of Attorney dated July 20, 2005
executed by Mrs. Perla A. Segovia and Mrs. Emma Y. Baysic in favor of
Atty. Victoriano V. Orocio, counsel for petitioners, (copies attached as
Annexes "A" and "B" respectively), 15% attorney’s fees shall be deducted
from the corresponding Corrected Earnings Differential of those non-
EPIRA separated members who have already executed the corresponding
Special Power of Attorney/Written Authority for the deduction/payment of
said attorney’s fees, and shall be paid to V.V. Orocio and Associates Law
Office, represented by Atty. Victoriano V. Orocio, as compensation for his
legal services as counsel for the non-EPIRA separated members subject to
deduction of applicable taxes;

xxxx
 15. The parties herein shall exert their best effort in order that the terms and
conditions of this agreement are implemented and complied with in the spirit of
fairness, transparency and equity;

16. This Agreement is not contrary to law, good customs, public order or public
policy and is voluntarily entered into by the parties of their own free will. 15

The parties filed with the RTC the very next day, 23 February 2006, a Joint Motion
before the RTC for the approval of their Compromise Agreement. 16 The RTC rendered a
Decision on 3 April 2006 granting the parties’ Joint Motion and approving the said
Compromise Agreement.17

On 10 April 2006, petitioner filed with the RTC a Motion for Approval of Charging
(Attorney’s) Lien. Petitioner asked the RTC to issue an order declaring him entitled to
collect an amount equivalent to 15% of the monies due the non-EPIRA separated
members as his attorney’s fees in conformity with the Compromise Agreement.18 In an
Order dated 15 May 2006, the RTC granted petitioner’s motion and decreed that he is
entitled to collect the amount so demanded.19

On 20 June 2006, petitioner filed with the RTC a Motion for the Issuance of a Writ of
Execution of the RTC Order dated 15 May 2006.20 Respondents opposed the motion on
the ground that there was no stipulation in the Compromise Agreement to the effect that
petitioner is entitled to collect an amount equivalent to 15% of the monies due the non-
EPIRA separated members. Respondents contended that the amount of
₱119,196,000.00 due the non-EPIRA separated members under the compromise
agreement was a mere estimate and, as such, cannot be validly used by petitioner as
basis for his claim of 15% attorney’s fees.21

The RTC issued an Order on 25 July 2006 granting petitioner’s Motion22 and,
accordingly, a Writ of Execution of the RTC Order dated 15 May 2006 was issued on 26
July 2006. Pursuant to the said Writ of Execution, RTC Branch Sheriff Reynaldo B.
Madoloria (Sheriff Madoloria) issued a Notice of Garnishment to Ms. Aurora Arenas
(Arenas), Assistant Vice-President and Business Manager of the Philippine National
Bank (PNB)-NAPOCOR Extension Office, Diliman, Quezon City, and to Mr. Emmanuel
C. Mendoza (Mendoza), Unit Head of the Landbank of the Philippines-NAPOCOR
Extension Office, Diliman, Quezon City.23

Respondents filed a Motion for Reconsideration of the RTC Order dated 25 July 2006. 24

On 12 August 2006, Sheriff Madoloria served to Arenas an "Order for Delivery of

Money."25

Respondents Anguluan and Dy filed before the Court of Appeals on 22 August 2006 a
Petition for Certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No.
95786, assailing the RTC Order dated 25 July 2006 and praying that a temporary
restraining order and/or a writ of preliminary injunction be issued enjoining the
implementation of the said RTC order.26 Respondent NAPOCOR filed with the Court of
Appeals on the same date another Petition for Certiorari under Rule 65 of the Rules of
Court, docketed as CA-G.R. SP No. 95946, also challenging the RTC Order dated 25
July 2006 and praying that it be set aside and a temporary restraining order and/or a
writ of preliminary injunction be issued prohibiting the RTC from enforcing the said order
and the corresponding writ of execution and notice of garnishment.27 Subsequently,
respondent NAPOCOR filed a Motion to Consolidate CA-G.R. SP No. 95946 with CA-
G.R. SP No. 95786 which was granted by the appellate court.28

On 31 October 2006, the Court of Appeals issued a Resolution granting respondents’

application for a TRO and writ of preliminary injunction. It enjoined the RTC from
implementing its Order dated 25 July 2006 and the corresponding writ of execution and
notice of garnishment during the pendency of CA-G.R. SP No. 95946 and No. 95786.
Petitioner filed a motion for reconsideration of the said resolution. 29

On 29 January 2007, the Court of Appeals promulgated its Decision annulling and
setting aside: (1) the RTC Order dated 25 July 2006; (2) the corresponding Writ of
Execution dated 26 July 2006; (3) the Notice of Garnishment dated 28 July 2006; and
(4) Order for Delivery of Money dated 10 August 2006. It also held that petitioner was
entitled only to an amount of ₱1,000,000.00 as attorney’s fees on the basis of quantum
meruit.

The Court of Appeals held that the amount of ₱17,794,572.70 sought to be collected by
petitioner as attorney’s fees, equivalent to 15% of the ₱119,196,000.00 estimated
corrected earnings differential for non-EPIRA separated members, was excessive
based on the following reasons: (1) the corrected earnings differential in the amount of
₱119,196,000.00 due the non-EPIRA separated members was a mere estimate and
was hypothetical. Thus, petitioner was unjustified in using said amount as basis for his
15% attorney’s fees; (2) there was hardly any work by petitioner since (a) the
compromise agreement was reached without trial or hearing on the merits; (b) there
was no issue regarding the release and distribution of the NAPOCOR Welfare Fund to
the non-EPIRA separated members as the enactment of EPIRA, not the efforts of
petitioner, made such distribution possible; (c) there was no issue on how much each
non-EPIRA separated members would receive because the amount of their respective
contribution was duly recorded by the respondents; (d) respondents have already
distributed the corrected earnings differential to some non-EPIRA separated members,
and have given petitioner his corresponding partial attorney’s fees amounting to
₱3,512,007.32; (e) most of the non-EPIRA separated members have not yet received
their share under the compromise agreement but petitioner, who was merely their
agent, was already given partial payment as attorney’s fees; (f) the amount of
₱17,794,572.70 represents "only less than one fourth partial release of the NAPOCOR
Welfare Fund which means that the equivalent of three-fourths more would be
demanded [by petitioner] in the future;" and (3) the money claim of the non-EPIRA
separated members was settled through a compromise agreement and not won by
petitioner in a trial on the merits.
The Court of Appeals determined that petitioner was entitled only to an amount of
₱1,000,000.00 as attorney’s fees on the basis of quantum meruit. However, since
petitioner already received ₱3,512,007.32 from respondents as partial payment of his
supposed 15% attorney’s fees, it ruled that such amount was more than sufficient and
petitioner was not entitled to claim anymore the additional amount of ₱14,282,565.38.
The fallo of the Decision of the Court of Appeals reads:

WHEREFORE, premises considered, the assailed July 25, 2006 Order, the July 26,
2006 Writ of Execution, the July 28, 2006 Notice of Garnishment, and the August 10,
2006 Order of Delivery of Money are hereby ANNULLED and SET ASIDE, and a new
one is ordered, CAPPING at ₱3,512,007.32, the amount manifested to have already
been received from the welfare fund as attorneys fees, as the maximum amount that
may be billed or collected as attorneys fees from the whole welfare fund – which
amount is NOTED to have already exceeded what this court had fixed at ₱1,000,000.00
as the reasonable amount, on quantum meruit, that may be collected as attorneys’
fees, pursuant to the guidelines codified in Rule 20.01, Canon 20 of the Code of
Professional Responsibility.30

Petitioner filed a motion for reconsideration of the aforementioned Decision but this was
denied by the Court of Appeals in its Resolution dated 27 September 2007. 31

Hence, petitioner brought the instant petition before us assigning the following errors:

I.

THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS EDMUND P.

ANGULUAN, LORNA T. DY AND NATIONAL POWER CORPORATION (NPC) ARE
ENTITLED TO [PRELIMINARY] INJUNCTION AS THEY HAVE MATERIAL AND
SUBSTANTIAL RIGHTS, WHICH ARE CLEAR AND UNMISTAKABLE, i.e. RIGHTS OF
BEING CLIENTS TO QUESTION THE REASONABLENESS OF THE ATTORNEY’S
FEES OF A LAWYER. THIS ALLEGED RIGHT IS NON-EXISTENT AND IN FACT
FABRICATED CONSIDERING THAT THE RESPONDENTS ARE NOT THE CLIENTS
AT ALL OF PETITIONER, ATTY. VICTORIANO V. OROCIO;

II.

THE COURT OF APPEALS ERRED IN RULING THAT THE FIFTEEN PERCENT

(15%) CONTINGENCY/SUCCESS FEE OF PETITIONER VICTORIANO V. OROCIO IS
UNCONSCIONABLE AND UNREASONABLE DESPITE THE UNDISPUTED FACT
THAT THE SAID ATTORNEY’S FEES IS AMONG THE TERMS AND CONDITIONS OF
A JUDICIALLY APPROVED COMPROMISE AGREEMENT AND COURT ORDER
APPROVING HIS CHARGING LIEN, WHICH AGREEMENT AND ORDER HAVE
ALREADY BECOME FINAL AND EXECUTORY.32

In his first assigned error, petitioner assails the Resolution dated 31 October 2006 of the
Court of Appeals granting respondents’ application for a writ of preliminary
injunction.lawphil.net He claims that the Court of Appeals issued a writ of preliminary
injunction in favor of respondents because petitioner allegedly violated respondents’
material and substantial right as petitioner’s clients to pay only reasonable attorney’s
fees. Petitioner asserts that none of the respondents is his client in the present case;
that even respondents themselves have not alleged or claimed that they are his clients;
that the amount of attorney’s fees he claimed was chargeable on a portion of the
NAPOCOR Welfare Fund due his clients, the non-EPIRA separated employees; that if
anyone would be injured by his claim of attorney’s fees, it would be his clients, the non-
EPIRA separated employees, and not respondents; that none of his clients has
questioned or complained about the amount of attorney’s fees he is claiming; that
respondents are not the real parties-in-interest and at most are merely nominal parties-
in-interest; that as mere nominal parties-in-interest, respondents are not entitled to a
writ of preliminary injunction under the Rules of Court; and that the requisites for the
proper issuance of a writ of preliminary injunction are lacking in the instant case. 33

In its Resolution dated 31 October 2006, the Court of Appeals granted respondents’
application for a writ of preliminary injunction based on the following reasons:

This Court finds that [herein respondents] have prima facie established [their]
compliance with strict requirements for issuance of a writ of preliminary injunction in this
case. Under the leading case of Valencia vs. Court of Appeals, 352 SCRA 72 (2001),
the requisites of preliminary injunction are as follows: (a) the invasion of the right of
[herein respondents] is material and substantial; (b) the right of [herein respondents] is
clear and unmistakable; and (c) there is an urgent and paramount necessity for the writ
to prevent serious irreparable damage to [herein respondents].

The right of [herein respondents] alleged to have been invaded is that a client has
the right to pay only a reasonable amount of attorney’s fees and only for services
actually rendered – which is clearly and unmistakably available to all clients. What
[herein respondents] are claiming is a material and substantial right. This Court finds
that [herein respondents] have prima facie established an urgent and paramount
necessity for the issuance of the writ of preliminary injunction prayed for, to avoid
irreparable injury to [herein respondents]. x x x.

As can be gleaned from the foregoing, the basis of the Court of Appeals in granting the
writ was petitioner’s alleged violation or invasion of respondents’ right, as petitioner’s
clients, to pay only a reasonable amount of attorney’s fees to, and only for services
actually rendered by, petitioner.

The Court of Appeals is clearly mistaken.

It should be made clear that petitioner is the counsel for the non-EPIRA separated
members in the latter’s quest to claim their shares in the NAPOCOR Welfare Fund.
Petitioner was never hired or employed by respondents as their counsel in the cases at
bar. Respondents themselves do not claim or allege that they are clients of petitioner. In
fact, petitioner is representing the non-EPIRA separated members, the opposing party
to the respondents in the present cases.

Further, the amount of attorney’s fees being claimed by petitioner is chargeable to the
₱119,196,000.00 corrected earnings differential of his clients, the non-EPIRA separated
members. Respondents have actually partially distributed such amount to some non-
EPIRA separated members pursuant to the Compromise Agreement. In other words,
the non-EPIRA separated members are the lawful owners/beneficiaries of the amount
from which petitioner’s attorney’s fees had been and shall be taken.

Hence, if anyone would be injured by petitioner’s claim for attorney’s fees, it would be
his clients, the non-EPIRA separated members, and not respondents. It appears,
however, that none of the non-EPIRA separated members has questioned or
complained about petitioner’s claim for attorney’s fees.

A preliminary injunction is an order granted at any stage of an action or proceeding prior

to the judgment or final order, requiring a party or a court, agency or a person to refrain
from a particular act or acts.34 A writ of preliminary injunction is a provisional remedy, an
adjunct to a main suit, as well as a preservative remedy issued to preserve the status
quo of the things subject of the action or the relations between the parties during the
pendency of the suit.35For a writ of preliminary injunction to issue, the applicant is
tasked to establish and convincingly show the following: (1) a right in esse or a clear
and unmistakable right to be protected; (2) a violation of that right; and (3) there is an
urgent and permanent act and urgent necessity for the writ to prevent serious
damage.36

A clear legal right means one clearly founded on or granted by law or is enforceable as
a matter of law.37 The existence of a right violated is a prerequisite to the granting of a
writ of preliminary injunction.38 A writ of preliminary injunction will not issue to protect a
right not in esse and which may never arise.39 It may be issued only if the applicant has
clearly shown an actual existing right that should be protected during the pendency of
the principal action.40 In the absence of a clear legal right, or when the applicant’s right
or title is doubtful or disputed, preliminary injunction is not proper.41

It is evident from the foregoing that respondents do not have a clear right or right
in esse to pay only a reasonable amount of attorney’s fees to the petitioner because
such right belongs solely to petitioner’s clients, the non-EPIRA separated members.
There can be no violation of a right which does not exist in the first place. Also, there
was no necessity for the writ of preliminary injunction since the non-EPIRA separated
members do not claim any damage or injury caused by the execution of the RTC Order
dated 15 May 2006. Even assuming that respondents would probably suffer damages
as administrators or custodians of the NAPOCOR Welfare Fund if the writ of preliminary
injunction was not granted, our ruling would still be the same. We have held that the
possibility of irreparable damage without proof of an actual existing right is not a ground
for the issuance of a writ of preliminary injunction.42Given these considerations, we hold
that the issuance by the Court of Appeals of a writ of preliminary injunction in favor of
respondents in its Resolution, dated 31 October 2006, was improper.lawphil.net

With regard to his second assigned error, petitioner maintained that his claim for
attorney’s fees equivalent to 15% of the ₱119,196,000.00 estimated corrected earnings
differential due the non-EPIRA separated members was not unreasonable or
unconscionable because such amount was expressly agreed upon in the Compromise
Agreement between the non-EPIRA separated members and respondents. The
Compromise Agreement was submitted to the RTC for approval through the joint motion
of the non-EPIRA separated members and respondents, and the RTC had rendered a
final and executory decision approving the same. By virtue of res judicata, the Court of
Appeals cannot alter or change the terms of the Compromise Agreement by prohibiting
petitioner from collecting his stipulated amount of attorney’s fees.43

Petitioner also avers that the amount of ₱17,794,572.70, which is equivalent to 15% of
the ₱119,196,000.00 estimated corrected earnings differential due the non-EPIRA
separated members from the NAPOCOR Welfare Fund is already the total, not partial,
amount he is claiming as attorney’s fees; that the ₱119,196,000.00 estimated corrected
earnings differential due the non-EPIRA separated members from the NAPOCOR
Welfare Fund is not hypothetical, such amount having been actually computed and fixed
by respondents themselves without the participation of petitioner and his clients, the
non-EPIRA separated members; that he did a lot of legal work and utilized his legal
skills on discovery procedures to force respondents to enter into the Compromise
Agreement with the non-EPIRA separated members; that the passage of EPIRA merely
paved the way for the distribution of the remaining assets of the NAPOCOR Welfare
Fund; that if not for his legal work and skills, the non-EPIRA separated members would
not have received their lawful shares in the remaining assets of the NAPOCOR Welfare
Fund; and that his claim for 15% attorney’s fees is supported by jurisprudence. 44

An attorney’s fee, in its ordinary concept, refers to the reasonable compensation paid to
a lawyer for the legal services he has rendered to a client.45 The client and his lawyer
may enter into a written contract whereby the latter would be paid attorney’s fees only if
the suit or litigation ends favorably to the client. This is called a contingency fee
contract. The amount of attorney’s fees in this contract may be on a percentage basis,
and a much higher compensation is allowed in consideration of the risk that the lawyer
may get nothing if the suit fails.46 In the case at bar, the non-EPIRA separated members
and petitioner voluntarily entered into a contingency fee contract whereby petitioner did
not receive any acceptance fee or appearance/meeting fee. The non-EPIRA separated
members expressly agreed to pay petitioner "contingency or success fees of fifteen
percent (15%) of whatever amount/value of assets (liquid and/or non-liquid)" recovered;
and authorized petitioner’s law firm "to receive and/or collect its contingency/success
fee without further demand."

Contingent fee contracts are permitted in this jurisdiction because they redound to the
benefit of the poor client and the lawyer "especially in cases where the client has
meritorious cause of action, but no means with which to pay for legal services unless he
can, with the sanction of law, make a contract for a contingent fee to be paid out of the
proceeds of litigation. Oftentimes, the contingent fee arrangement is the only means by
which the poor clients can have their rights vindicated and upheld." Further, such
contracts are sanctioned by Canon 13 of the Canons of Professional Ethics. 47

However, in cases where contingent fees are sanctioned by law, the same should be
reasonable under all the circumstances of the case, and should always be subject to the
supervision of a court, as to its reasonableness, such that under Canon 20 of the Code
of Professional Responsibility, a lawyer is tasked to charge only fair and reasonable
fees.48

A stipulation on a lawyer’s compensation in a written contract for professional services

ordinarily controls the amount of fees that the contracting lawyer may be allowed,
unless the court finds such stipulated amount to be unreasonable or unconscionable. If
the stipulated amount for attorney’s fees is excessive, the contract may be disregarded
even if the client expressed their conformity thereto.49 Attorney’s fees are
unconscionable if they affront one’s sense of justice, decency or reasonableness, or if
they are so disproportionate to the value of the services rendered. In such a case,
courts are empowered to reduce the attorney’s fee or fix a reasonable amount thereof
taking into consideration the surrounding circumstances and the established
parameters.50

The principle of quantum meruit (as much as he deserves) may be a basis for
determining the reasonable amount of attorney’s fees. Quantum meruit is a device to
prevent undue enrichment based on the equitable postulate that it is unjust for a person
to retain benefit without paying for it. It is applicable even if there was a formal written
contract for attorney’s fees as long as the agreed fee was found by the court to be
unconscionable. In fixing a reasonable compensation for the services rendered by a
lawyer on the basis of quantum meruit, factors such as the time spent, and extent of
services rendered; novelty and difficulty of the questions involved; importance of the
subject matter; skill demanded; probability of losing other employment as a result of
acceptance of the proferred case; customary charges for similar services; amount
involved in the controversy and the benefits resulting to the client; certainty of
compensation; character of employment; and professional standing of the lawyer, may
be considered.51

It appears that the non-EPIRA separated members chose petitioner as their counsel
because the latter, as former member of the NAPOCOR-WFBT for two terms or four
years, is familiar and knowledgeable on the operation of the NAPOCOR Welfare
Fund.52 Yet, according to the contingency fee contract agreement between petitioner
and the non-EPIRA separated members, petitioner received no acceptance fee and
appearance/meeting fee when he took on the non-EPIRA separated members’ case.
Petitioner’s attorney’s fees were absolutely dependent on the success of non-EPIRA
separated members’ claim on the NAPOCOR Welfare Fund. Despite these
circumstances, petitioner worked diligently in advocating the claims of the non-EPIRA
separated members against respondents as shown by the following: (1) petitioner took
pains in verifying the identity and claim of each of the 559 non-EPIRA separated
members on the NAPOCOR Welfare Fund; (2) petitioner prepared and filed a well-
researched and well-argued petition with the RTC for the claims of the non-EPIRA
separated members;53 (3) he prepared and presented several witnesses and numerous
pertinent documents before the RTC in support of their application for the issuance of a
temporary restraining order and/or writ of preliminary injunction against respondents’
plan to exclude the non-EPIRA separated members from receiving their shares in the
NAPOCOR Welfare Fund; (4) he participated, as non-EPIRA separated members’
counsel, in the conduct of several hearings regarding the said application for the
issuance of temporary restraining order and/or writ of preliminary injunction;54 (5) he
obtained a temporary restraining order and a writ of preliminary injunction from the RTC
which enjoined/prohibited respondents from excluding the non-EPIRA separated
members from their shares in the NAPOCOR Welfare Fund;55 (6) he held numerous
conferences with the non-EPIRA separated members wherein he apprised the latter of
the status of their claims and his legal strategies pertinent thereto;56 and (7) he exerted
utmost efforts which eventually led to the execution of the Compromise Agreement
between the non-EPIRA separated members and respondents.

By reason of petitioner’s dedication and persistence as can be gleaned above,

respondents finally agreed to settle amicably with the non-EPIRA separated members
as regards the latter’s claim for shares in the NAPOCOR Welfare Fund by virtue of the
Compromise Agreement.

Undoubtedly, were it not for petitioner’s vigilance and zeal, respondents would not have
executed the Compromise Agreement with the non-EPIRA separated members. Hence,
it is fair to conclude that petitioner was entitled to a reasonably high compensation.

However, petitioner’s attorney’s fees in the amount of ₱17,794,572.70 or equivalent to

15% of the ₱ 119,196,000.00 corrected earnings differential of the non-EPIRA
separated members should be equitably reduced.

In NPC Drivers and Mechanics Association (NPC DAMA) v. The National Power
Corporation (NPC),57 we awarded separation pay in lieu of reinstatement plus
backwages to several NPC employees because they were illegally dismissed by the
NPC. The NPC employees were represented by a certain Atty. Cornelio P. Aldon (Atty.
Aldon) and Atty. Victoriano V. Orocio, (the petitioner in the instant cases) under a legal
retainer agreement which provides: (1) no acceptance fee; (2) miscellaneous/out of
pocket expenses in the amount of ₱25,000.00; and (3) twenty-five percent (25%) of
whatever amounts/monies are recovered in favor of said NPC personnel contingent on
the success of the case. Atty. Aldon and Atty. Orocio filed a Motion for Approval of
Charging (Attorney’s) Lien pursuant to the legal retainer agreement. Although we
granted the said motion, we reduced the amount of attorney’s fees which was
chargeable on the monies recoverable by the NPC employees from 25% to 10%
because:
While we duly recognize the right of Atty. Aldon and Atty. Orocio to a charging lien on
the amounts recoverable by petitioners pursuant to our 26 September 2006 Decision,
nevertheless, we deem it proper to reduce the same. Under Section 24, Rule 138 of the
Rules of Court, a written contract for services shall control the amount to be paid
therefor unless found by the court to be unconscionable or unreasonable. The amounts
which petitioners may recover as the logical and necessary consequence of our
Decision of 26 September 2006, i.e., backwages and separation pay (in lieu of
reinstatement), are essentially the same awards which we grant to illegally dismissed
employees in the private sector. In such cases, our Labor Code explicitly limits
attorney’s fees to a maximum of 10% of the recovered amount. Considering by analogy
the said limit on attorney’s fees in this case of illegal dismissal of petitioners by
respondent NPC, a government-owned and controlled corporation; plus the facts that
petitioners have suffered deprivation of their means of livelihood for the last five years;
and the fact that this case was originally filed before us, without any judicial or
administrative proceedings below; as well as the fundamental ethical principle that the
practice of law is a profession and not a commercial enterprise, we approve in favor of
Atty. Aldon and Atty. Orocio a charging lien of 10% (instead of 25%) on the amounts
recoverable by petitioners from NPC pursuant to our Decision dated 26 September
2006.

The abovementioned case may be reasonably applied by analogy in the instant case
since they have substantially similar circumstances. In the case before us, although the
non-EPIRA separated members were not illegally dismissed, they were, nevertheless,
separated from work by reason of EPIRA. In addition, the non-EPIRA separated
members had a legal retainer agreement/contingency fee contract with petitioner as
their counsel.

It should also be emphasized that the practice of law is a profession not a moneymaking
venture. A lawyer is not merely the defender of his client’s cause and a trustee of his
client’s cause of action and assets; he is also, and first and foremost, an officer of the
court and participates in the fundamental function of administering justice in society. It
follows that a lawyer’s compensation for professional services rendered is subject to the
supervision of the court, not just to guarantee that the fees he charges and receives
remain reasonable and commensurate with the services rendered, but also to maintain
the dignity and integrity of the legal profession to which he belongs. Upon taking his
attorney’s oath as an officer of the court, a lawyer submits himself to the authority of the
courts to regulate his right to charge professional fees.58

Thus, taking into account the foregoing circumstances and recognized principles,
the 15% attorney’s fees of petitioner should be reduced to 10%. As such, petitioner is
entitled to collect only, as attorney’s fees, an amount equivalent to 10% of
the ₱119,196,000.00 or ₱11,919,600.00.

We note, however, that the compromise agreement was partially implemented in the
first week of April 2006 with the payment of ₱23,416,000.00 to some non-EPIRA
separated members.59 Petitioner admitted having already received an amount of
₱3,512,007.32 as his attorney’s fees on the said partial payment of
₱23,416,000.00.60 Accordingly, the amount of ₱3,512,007.32 received by petitioner as
attorney’s fees should be deducted from the fixed 10% attorney’s fees or the amount of
₱11,919,600.00. Per computation, petitioner is entitled to recover the amount
of ₱8,407,592.68 as attorney’s fees.

WHEREFORE, premises considered, the Resolution of the Court of Appeals dated 31

October 2006 in CA-G.R. SP Nos. 95786 and 95946 granting the issuance of a writ of
preliminary injunction is hereby ANNULLED and SET ASIDE. The Decision and
Resolution, dated 29 January 2007 and 27 September 2007, respectively, of the Court
of Appeals in CA-G.R. SP Nos. 95786 and 95946 are hereby AFFIRMED with
the MODIFICATION that petitioner is entitled to recover attorney’s fees in the amount
of ₱8,407,592.68 on the corrected earnings differential of the non-EPIRA separated
members. No costs.

SO ORDERED.

FIRST DIVISION

A.C. No. 9091 December 11, 2013

CONCHITA A. BALTAZAR, ROLANDO SAN PEDRO, ALICIA EULALIO-RAMOS,

SOLEDAD A. FAJARDO AND ENCARNACION A. FERNANDEZ, Complainants,
vs.
ATTY. JUAN B. BAÑEZ, Respondent.

RESOLUTION

SERENO, CJ.:

Complainants are the owners of three parcels of land located in Dinalupihan, Bataan. 1 n
4 September 2002, they entered into an agreement, they stood to be paid ₱35,000.000
for all the lots that would be sold in the subdivision.2For that purpose, they executed a
Pecial Power of Attorney authorizing Fevidal to enter into all agreements concerning the
parcels of land and to sign those agreements on their behalf. 3

Fevidal did not update complainants about the status of the subdivision project and
failed to accout for the titles to the subdivided land.4 Complainants also found that he
had sold a number of parcels to third parties, but that he did not turn the proceeds over
to them. Neither were complainants invited to the ceremonial opening of the subdivision
project.5

Thus, on 23 August 2005, they revoked the Special Power of Attorney they had
previously executed in his favor.6
Complainants subsequently agreed to settle with Fevidal for the amount of
₱10,000,000, but the latter again failed to pay them.7

Complainants engaged the professional services of respondent for the purpose of

assisting them in the preparation of a settlement agreement.8

Instead of drafting a written settlement, respondent encouraged them to institute actions

against Fevidal in order to recover their properties. Complainants then signed a contract
of legal services,9 in which it was agreed that they would not pay acceptance and
appearance fees to respondent, but that the docket fees would instead be shared by the
parties. Under the contract, complainants would pay respondent 50% of whatever would
be recovered of the properties. In preparation for the filing of an action against Fevidal,
respondent prepared and notarized an Affidavit of Adverse Claim, seeking to annotate
the claim of complainants to at least 195 titles in the possession of Fevidal. 10

A certain Luzviminda Andrade (Andrade) was tasked to submit the Affidavit of Adverse
Claim to the Register of Deeds of Bataan.11

The costs for the annotation of the adverse claim were paid by respondent. Unknown to
him, the adverse claim was held in abeyance, because Fevidal got wind of it and
convinced complainants to agree to another settlement.12

Meanwhile, on behalf of complainants, and after sending Fevidal a demand letter dated
10 July 2006, respondent filed a complaint for annulment, cancellation and revalidation
of titles, and damages against Fevidal before the Regional Trial Court (RTC) of Bataan
on 13 October 2006.13

Complainants found it hard to wait for the outcome of the action. Thus, they terminated
the services of respondent on 8 June 2007, withdrew their complaint against Fevidal on
9 June 2007, and finalized their amicable settlement with him on 5 July 2007. 14

Respondent filed a Manifestation and Opposition15 dated 20 July 2007 before the RTC,
alleging that the termination of his services and withdrawal of the complaint had been
done with the intent of defrauding counsel. On the same date, he filed a Motion for
Recording of Attorney’s Charging Lien in the Records of the Above-Captioned Cases.16

When the RTC granted the withdrawal of the complaint,17 he filed a Manifestation and
Motion for Reconsideration.18

After an exchange of pleadings between respondent and Fevidal, with the latter denying
the former’s allegation of collusion,19 complainants sought the suspension/disbarment of
respondent through a Complaint20 filed before the Integrated Bar of the Philippines (IBP)
on 14 November 2007. Complainants alleged that they were uneducated and
underprivileged, and could not taste the fruits of their properties because the disposition
thereof was "now clothed with legal problems" brought about by respondent. 21
In their complaint, they alleged that respondent had violated Canons
1.01,22 1.03,23 1.04,24 12.02,25 15.05,26 18.04,27and 20.0428 of the Code of Professional
Responsibility. On 14 August 2008, the IBP Commission on Bar Discipline adopted and
approved the Report and Recommendation29 of the investigating commissioner. It
suspended respondent from the practice of law for a period of one year for entering into
a champertous agreement.30

On 26 June 2011, it denied his motion for reconsideration. On 26 November 2012, this
Court noted the Indorsement of the IBP Commission on Bar Discipline, as well as
respondent’s second motion for reconsideration. We find that respondent did not violate
any of the canons cited by complainants. In fact, we have reason to believe that
complainants only filed the instant complaint against him at the prodding of Fevidal.

Respondent cannot be faulted for advising complainants to file an action against Fevidal
to recover their properties, instead of agreeing to a settlement of ₱10,000,000 – a
measly amount compared to that in the original agreement, under which Fevidal
undertook to pay complainants the amount of ₱35,000,000. Lawyers have a sworn duty
and responsibility to protect the interest of any prospective client and pursue the ends of
justice.31

Any lawyer worth his salt would advise complainants against the abuses of Fevidal
under the circumstances, and we cannot countenance an administrative complaint
against a lawyer only because he performed a duty imposed on him by his oath. The
claim of complainants that they were not informed of the status of the case is more
appropriately laid at their door rather than at that of respondent. He was never informed
that they had held in abeyance the filing of the adverse claim. Neither was he informed
of the brewing amicable settlement between complainants and Fevidal. We also find it
very hard to believe that while complainants received various amounts as loans from
respondent from August 2006 to June 2007,32 they could not spare even a few minutes
to ask about the status of the case. We shall discuss this more below. As regards the
claim that respondent refused to "patch up" with Fevidal despite the pleas of
complainants, we note the latter’s Sinumpaang Salaysay dated 24 September 2007, in
which they admitted that they could not convince Fevidal to meet with respondent to
agree to a settlement.33

Finally, complainants apparently refer to the motion of respondent for the recording of
his attorney’s charging lien as the "legal problem" preventing them from enjoying the
fruits of their property. Section 26, Rule 138 of the Rules of Court allows an attorney to
intervene in a case to protect his rights concerning the payment of his compensation.
According to the discretion of the court, the attorney shall have a lien upon all
judgments for the payment of money rendered in a case in which his services have
been retained by the client. We recently upheld the right of counsel to intervene in
proceedings for the recording of their charging lien. In Malvar v. KFPI,34 we granted
counsel’s motion to intervene in the case after petitioner therein terminated his services
without justifiable cause. Furthermore, after finding that petitioner and respondent had
colluded in order to deprive counsel of his fees, we ordered the parties to jointly and
severally pay counsel the stipulated contingent fees. Thus, the determination of whether
respondent is entitled to the charging lien is based on the discretion of the court before
which the lien is presented. The compensation of lawyers for professional services
rendered is subject to the supervision of the court, not only to guarantee that the fees
they charge remain reasonable and commensurate with the services they have actually
rendered, but to maintain the dignity and integrity of the legal profession as well. 35

In any case, an attorney is entitled to be paid reasonable compensation for his

services.36

That he had pursued its payment in the appropriate venue does not make him liable for
disciplinary action.1âwphi1Notwithstanding the foregoing, respondent is not without
fault. Indeed, we find that the contract for legal services he has executed with
complainants is in the nature of a champertous contract – an agreement whereby an
attorney undertakes to pay the expenses of the proceedings to enforce the client’s
rights in exchange for some bargain to have a part of the thing in dispute. 37

Such contracts are contrary to public policy38 and are thus void or inexistent.39

They are also contrary to Canon 16.04 of the Code of Professional Responsibility, which
states that lawyers shall not lend money to a client, except when in the interest of
justice, they have to advance necessary expenses in a legal matter they are handling
for the client. A reading of the contract for legal services40 shows that respondent
agreed to pay for at least half of the expense for the docket fees. He also paid for the
whole amount needed for the recording of complainants’ adverse claim. While lawyers
may advance the necessary expenses in a legal matter they are handling in order to
safeguard their client’s rights, it is imperative that the advances be subject to
reimbrusement.41 The purpose is to avoid a situation in which a lawyer acquires a
personal stake in the clients cause. Regrettably, nowhere in the contract for legal
services is it stated that the expenses of litigation advanced by respondents shall be
subject to reimbursement by complainants.

In addition, respondent gave various amounts as cash advances (bali), gasoline and
transportation allowance to them for the duration of their attorney-client relationship. In
fact, he admits that the cash advances were in the nature of personal loans that he
extended to complainants.42

Clearly, respondent lost sight of his responsibility as a lawyer in balancing the clients
interests with the ethical standards of his profession. Considering the surrounding
circumstances in this case, an admonition shall suffice to remind him that however dire
the needs of the clients, a lawyer must always avoid any appearance of impropriety to
preserve the integrity of the profession.

WHEREFORE, Attorney Juan B. Bañez, Jr. is hereby ADMONISHED for advancing the
litigation expenses in a legal matter her handled for a client without providing for terms
of reimbursement and lending money to his client, in violation of Canon 16.04 of the
Code of Professional Responsibility. He us sternly warned that a repetition of the same
or similar act would be dealt with more severly.

Let a copy of this Resolution be attached to the personal record of Atty. Bañez, Jr.

SO ORDERED.

SECOND DIVISION

G.R. No. 176425, June 05, 2013

HEIRS OF MANUEL UY EK LIONG, REPRESENTED BY BELEN LIM VDA. DE

UY, Petitioners, v. MAURICIA MEER CASTILLO, HEIRS OF BUENAFLOR C. UMALI,
REPRESENTED BY NANCY UMALI, VICTORIA H. CASTILLO, BERTILLA C. RADA,
MARIETTA C. CAVANEZ, LEOVINA C. JALBUENA AND PHILIP M.
CASTILLO, Respondents.

DECISION

PEREZ, J.:

Assailed in this Petition for Review on Certiorari filed pursuant to Rule 45 of the Rules of
Court is the Decision1 dated 23 January 2007 rendered by the Fifteenth Division of the
Court of Appeals in CA-G.R. CV No. 84687,2 the dispositive portion of which
states:cralavvonlinelawlibrary

WHEREFORE, premises considered, the assailed January 27, 2005 Decision of the
Regional Trial Court of Lucena City, Branch 59, in Civil Case No. 93-176, is hereby
REVERSED and SET ASIDE and a new one entered declaring the AGREEMENT and
the KASUNDUAN void ab initio for being contrary to law and public policy, without
prejudice to the attorney’s filing a proper action for collection of reasonable attorney’s
fees based on quantum meruit and without prejudice also to administrative charges
being filed against counsel for counsel’s openly entering into such an illegal
AGREEMENT in violation of the Canons of Professional Responsibility which action
may be instituted with the Supreme Court which has exclusive jurisdiction to impose
such penalties on members of the bar.

No pronouncement as to costs.

SO ORDERED.3 (Italics and Underscore Ours)

The Facts

Alongside her husband, Felipe Castillo, respondent Mauricia Meer Castillo was the
owner of four parcels of land with an aggregate area of 53,307 square meters, situated
in Silangan Mayao, Lucena City and registered in their names under Transfer Certificate
of Title (TCT) Nos. T-42104, T-32227, T-31752 and T-42103. With the death of
Felipe, a deed of extrajudicial partition over his estate was executed by his heirs,
namely, Mauricia, Buenaflor Umali and respondents
VictoriaCastillo, Bertilla Rada, Marietta Cavanez, Leovina Jalbuena
and Philip Castillo. Utilized as security for the payment of a tractor purchased by
Mauricia’s nephew, Santiago Rivera, from Bormaheco, Inc., it appears, however,
that the subject properties were subsequently sold at a public auction where
Insurance Corporation of the Philippines (ICP) tendered the highest bid. Having
consolidated its title, ICP likewise sold said parcels in favor of Philippine
Machinery Parts Manufacturing Co., Inc. (PMPMCI) which, in turn, caused the
same to be titled in its name.4

On 29 September 1976, respondents and Buenaflor instituted Civil Case No. 8085
before the then Court of First Instance (CFI) of Quezon, for the purpose of
seeking the annulment of the transactions and/or proceedings involving the
subject parcels, as well as the TCTs procured by PMPMCI.5 Encountering
financial difficulties in the prosecution of Civil Case No. 8085, respondents and
Buenaflor entered into an Agreement dated 20 September 1978 whereby they
procured the legal services of Atty. Edmundo Zepeda and the assistance
of Manuel Uy Ek Liong who, as financier, agreed to underwrite the litigation
expenses entailed by the case. In exchange, it was stipulated in the notarized
Agreement that, in the event of a favorable decision in Civil Case No. 8085, Atty.
Zepeda and Manuel would be entitled to “a share of forty (40%) percent of all the
realties and/or monetary benefits, gratuities or damages” which may be
adjudicated in favor of respondents.6

On the same date, respondents and Buenaflor entered into another notarized
agreement denominated as a Kasunduan whereby they agreed to sell their
remaining sixty (60%) percent share in the subject parcels in favor of Manuel for
the sum of P180,000.00. The parties stipulated that Manuel would pay a
downpayment in the sum of P1,000.00 upon the execution of the Kasunduan and
that respondents and Buenaflor would retain and remain the owners of a 1,750-
square meter portion of said real properties. It was likewise agreed that any party
violating the Kasunduan would pay the aggrieved party a penalty fixed in the sum
of P50,000.00, together with the attorney’s fees and litigation expenses incurred
should a case be subsequently filed in court. The parties likewise agreed to
further enter into such other stipulations as would be necessary to ensure that
the sale would push through and/or in the event of illegality or impossibility of
any part of the Kasunduan.7

With his death on 19 August 1989,8 Manuel was survived by petitioners, Heirs of
Manuel Uy Ek Liong, who were later represented in the negotiations regarding the
subject parcels and in this suit by petitioner Belen Lim Vda. de Uy. The record
also shows that the proceedings in Civil Case No. 8085 culminated in this Court’s
rendition of a 13 September 1990 Decision in G.R. No. 895619 in favor of
respondents and Buenaflor.10 Subsequent to the finality of the Court’s
Decision,11 it appears that the subject parcels were subdivided in accordance
with the Agreement, with sixty (60%) percent thereof consisting of 31,983 square
meters equally apportioned among and registered in the names of respondents
and Buenaflor under TCT Nos. T-72027, T-72028, T-72029, T-72030, T-72031, T-
72032 and T-72033.12 Consisting of 21,324 square meters, the remaining forty
(40%) percent was, in turn, registered in the names of petitioners and Atty.
Zepeda under TCT No. T-72026.13

Supposedly acting on the advice of Atty. Zepeda, respondents wrote petitioners a

letter dated 22 March 1993, essentially informing petitioners that respondents
were willing to sell their sixty (60%) percent share in the subject parcels for the
consideration of P500.00 per square meter.14 Insisting on the price agreed upon
in the Kasunduan, however, petitioners sent a letter dated 19 May 1993,
requesting respondents to execute within 15 days from notice the necessary
Deed of Absolute Sale over their 60% share as aforesaid, excluding the 1,750-
square meter portion specified in their agreement with Manuel. Informed that
petitioners were ready to pay the remaining P179,000.00 balance of the agreed
price,15 respondents wrote a 28 May 1993 reply, reminding the former of their
purported refusal of earlier offers to sell the shares of Leovina and of Buenaflor
who had, in the meantime, died.16 In a letter dated 1 June 1993, respondents also
called petitioners’ attention to the fact, among others, that their right to ask for an
additional consideration for the sale was recognized under the Kasunduan.17

On 6 October 1993, petitioners commenced the instant suit with the filing of their
complaint for specific performance and damages against the respondents
and respondent Heirs of Buenaflor, as then represented by Menardo Umali.
Faulting respondents with unjustified refusal to comply with their obligation
under the Kasunduan, petitioners prayed that the former be ordered to execute
the necessary Deed of Absolute Sale over their shares in the subject parcels, with
indemnities for moral and exemplary damages, as well as attorney’s fees,
litigation expenses and the costs of the suit.18 Served with summons,
respondents filed their Answer with Counterclaim and Motion to File Third Party
Complaint on 3 December 1993. Maintaining that the Agreement and
the Kasunduan were illegal for being unconscionable and contrary to public
policy, respondents averred that Atty. Zepeda was an indispensable party to the
case. Together with the dismissal of the complaint and the annulment of said
contracts and TCT No. T-72026, respondents sought the grant of their
counterclaims for moral and exemplary damages, as well as attorney’s fees and
litigation expenses.19

The issues thereby joined, the Regional Trial Court (RTC), Branch 54, Lucena
City, proceeded to conduct the mandatory preliminary conference in the
case.20 After initially granting respondents’ motion to file a third party complaint
against Atty. Zepeda,21 the RTC, upon petitioners’ motion for
reconsideration,22 went on to issue the 18 July 1997 Order disallowing the filing of
said pleading on the ground that the validity of the Agreement and the cause of
action against Atty. Zepeda, whose whereabouts were then unknown, would be
better threshed out in a separate action.23 The denial24 of their motion for
reconsideration of the foregoing order25 prompted respondents to file a notice of
appeal26 which was, however, denied due course by the RTC on the ground that
the orders sought to be appealed were non-appealable.27 On 14 December 1997,
Menardo died28 and was substituted by his daughter Nancy as representative of
respondent Heirs of Buenaflor.29

In the ensuing trial of the case on the merits, petitioners called to the witness
stand Samuel Lim Uy Ek Liong30 whose testimony was refuted by Philip31 and
Leovina32 during the presentation of the defense evidence. On 27 January 2005,
the RTC rendered a decision finding the Kasunduan valid and binding between
respondents and petitioners who had the right to demand its fulfillment as
Manuel’s successors-in-interest. Brushing aside Philip’s testimony that
respondents were forced to sign the Kasunduan, the RTC ruled that said contract
became effective upon the finality of this Court’s 13 September 1990 Decision in
G.R. No. 89561 which served as a suspensive condition therefor. Having
benefited from the legal services rendered by Atty. Zepeda and the financial
assistance extended by Manuel, respondents were also declared estopped from
questioning the validity of the Agreement, Kasunduan and TCT No. T-72026. With
the Kasunduan upheld as the law between the contracting parties and their
privies,33 the RTC disposed of the case in the following
wise:cralavvonlinelawlibrary

WHEREFORE, premises considered, the Court finds for the [petitioners] and
hereby:cralavvonlinelawlibrary

1. Orders the [respondents] to execute and deliver a Deed of Conveyance in favor

of the [petitioners] covering the 60% of the properties formerly covered by
Transfer Certificates of Title Nos. T-3175, 42104, T-42103, T-32227 and T-42104
which are now covered by Transfer Certificates of Title Nos. T-72027, T-72028, T-
72029, T-72030, T-72031, T-72032, T-72033 and T-72026, all of the Registry of
Deeds of Lucena City, for and in consideration of the amount of P180,000.00 in
accordance with the provisions of the KASUNDUAN, and

2. Orders the [petitioners] to pay and deliver to the [respondents] upon the
latter’s execution of the Deed of Conveyance mentioned in the preceding
paragraph, the amount of P179,000.00 representing the balance of the purchase
price as provided in the KASUNDUAN, and

3. Orders the [respondents] to pay the [petitioners] the following

amounts:cralavvonlinelawlibrary
a). P50,000.00 as and for moral damages;chanroblesvirtualawlibrary
b). P50,000.00 as and for exemplary damages; and
c). P50,000.00 as and for attorney’s fees.

and to pay the costs.

SO ORDERED.34nadcralavvonlinelawlibrary

Dissatisfied with the RTC’s decision, both petitioners35 and respondents

perfected their appeals36 which were docketed before the CA as CA-G.R. CV No.
84687. While petitioners prayed for the increase of the monetary awards
adjudicated a quo, as well as the further grant of liquidated damages in their
favor,37 respondents sought the complete reversal of the appealed decision on
the ground that the Agreement and the Kasunduan were null and void.38On 23
January 2007, the CA rendered the herein assailed decision, setting aside the
RTC’s decision, upon the following findings and conclusions, to wit: (a) the
Agreement and Kasunduan are byproducts of the partnership between Atty.
Zepeda and Manuel who, as a non-lawyer, was not authorized to practice law; (b)
the Agreement is void under Article 1491 (5) of the Civil Code of the
Philippines which prohibits lawyers from acquiring properties which are the
objects of the litigation in which they have taken part; (c) jointly designed to
completely deprive respondents of the subject parcels, the Agreement and
the Kasunduan are invalid and unconscionable; and (d) without prejudice to his
liability for violation of the Canons of Professional Responsibility, Atty. Zepeda
can file an action to collect attorney’s fees based on quantum meruit.39

The Issue

Petitioners seek the reversal of the CA’s decision on the following

issue:cralavvonlinelawlibrary

WHETHER [OR NOT] THE HONORABLE COURT OF APPEALS, FIFTEENTH

DIVISION, COMITTED A REVERSIBLE ERROR WHEN IT REVERSED AND SET
ASIDE THE DECISION OF THE RTC BRANCH 59, LUCENA CITY, IN CIVIL CASE
NO. 93-176 DECLARING THE AGREEMENT AND KASUNDUAN VOID AB INITIO
FOR BEING CONTRARY TO LAW AND PUBLIC POLICY FOR BEING VIOLATIVE
OF ART. 1491 OF THE NEW CIVIL CODE AND THE CANONS OF PROFESSIONAL
RESPONSIBILITY.40

The Court’s Ruling

We find the petition impressed with partial merit.

At the outset, it bears pointing out that the complaint for specific performance filed
before the RTC sought only the enforcement of petitioners’ rights and respondents’
obligation under the Kasunduan. Although the answer filed by respondents also
assailed the validity of the Agreement and TCT No. T-72026, the record shows that the
RTC, in its order dated 18 July 1997, disallowed the filing of a third-party complaint
against Atty. Zepeda on the ground that the causes of action in respect to said contract
and title would be better threshed out in a separate action. As Atty. Zepeda’s
whereabouts were then unknown, the RTC also ruled that, far from contributing to the
expeditious settlement of the case, the grant of respondents’ motion to file a third-party
complaint would only delay the proceedings in the case.41 With the 1 October 1998
denial of their motion for reconsideration of the foregoing order, respondents
subsequently filed a notice of appeal which was, however, denied due course on the
ground that the orders denying their motion to file a third-party complaint and their
motion for reconsideration were interlocutory and non-appealable.42

Absent a showing that the RTC’s ruling on the foregoing issues was reversed and set
aside, we find that the CA reversibly erred in ruling on the validity of the Agreement
which respondents executed not only with petitioners’ predecessor-in-interest, Manuel,
but also with Atty. Zepeda. Since it is generally accepted that no man shall be affected
by any proceeding to which he is a stranger,43 the rule is settled that a court must first
acquire jurisdiction over a party – either through valid service of summons or voluntary
appearance – for the latter to be bound by a court decision.44 The fact that Atty. Zepeda
was not properly impleaded in the suit and given a chance to present his side of the
controversy before the RTC should have dissuaded the CA from invalidating the
Agreement and holding that attorney’s fees should, instead, be computed on a quantum
meruit basis. Admittedly, Article 1491 (5)45 of the Civil Code prohibits lawyers from
acquiring by purchase or assignment the property or rights involved which are the object
of the litigation in which they intervene by virtue of their profession. The CA lost sight of
the fact, however, that the prohibition applies only during the pendency of the suit 46 and
generally does not cover contracts for contingent fees where the transfer takes effect
only after the finality of a favorable judgment.47

Although executed on the same day, it cannot likewise be gainsaid that the Agreement
and the Kasunduan are independent contracts, with parties, objects and causes
different from that of the other. Defined as a meeting of the minds between two persons
whereby one binds himself, with respect to the other to give something or to render
some service,48 a contract requires the concurrence of the following requisites: (a)
consent of the contracting parties; (b) object certain which is the subject matter of the
contract; and, (c) cause of the obligation which is established.49 Executed in exchange
for the legal services of Atty. Zepeda and the financial assistance to be extended by
Manuel, the Agreement concerned respondents’ transfer of 40% of the avails of the suit,
in the event of a favorable judgment in Civil Case No. 8085. While concededly subject
to the same suspensive condition, the Kasunduan was, in contrast, concluded by
respondents with Manuel alone, for the purpose of selling in favor of the latter 60% of
their share in the subject parcels for the agreed price of P180,000.00. Given these clear
distinctions, petitioners correctly argue that the CA reversibly erred in not determining
the validity of the Kasunduanindependent from that of the Agreement.

Viewed in the light of the autonomous nature of contracts enunciated under Article
130650 of the Civil Code, on the other hand, we find that the Kasunduan was correctly
found by the RTC to be a valid and binding contract between the parties. Already
partially executed with respondents’ receipt of P1,000.00 from Manuel upon the
execution thereof, the Kasunduan simply concerned the sale of the former’s 60% share
in the subject parcel, less the 1,750-square meter portion to be retained, for the agreed
consideration of P180,000.00. As a notarized document that carries the evidentiary
weight conferred upon it with respect to its due execution,51 the Kasunduan was shown
to have been signed by respondents with full knowledge of its contents, as may be
gleaned from the testimonies elicited from Philip52 and Leovina.53

Although Philip had repeatedly claimed that respondents had been forced to sign the
Agreement and the Kasunduan, his testimony does not show such vitiation of consent
as would warrant the avoidance of the contract. He simply meant that respondents felt
constrained to accede to the stipulations insisted upon by Atty. Zepeda and Manuel who
were not otherwise willing to push through with said contracts. 54

At any rate, our perusal of the record shows that respondents’ main objection to the
enforcement of the Kasunduan was the perceived inadequacy of the P180,000.00 which
the parties had fixed as consideration for 60% of the subject parcels. Rather than
claiming vitiation of their consent in the answer they filed a quo, respondents, in fact,
distinctly averred that the Kasunduan was tantamount to unjust enrichment and “a clear
source of speculative profit” at their expense since their remaining share in said
properties had “a current market value of P9,594,900.00, more or less.” 55 In their 22
March 1993 letter to petitioners, respondents also cited prices then prevailing for the
sale of properties in the area and offered to sell their 60% share for the price of P500.00
per square meter56 or a total of P15,991,500.00. In response to petitioners’ insistence
on the price originally agreed upon by the parties,57 respondents even invoked the last
paragraph58 of the Kasunduan to the effect that the parties agreed to enter into such
other stipulations as would be necessary to ensure the fruition of the sale. 59

In the absence of any showing, however, that the parties were able to agree on new
stipulations that would modify their agreement, we find that petitioners and respondents
are bound by the original terms embodied in the Kasunduan. Obligations arising from
contracts, after all, have the force of law between the contracting parties 60 who are
expected to abide in good faith with their contractual commitments, not weasel out of
them.61 Moreover, when the terms of the contract are clear and leave no doubt as to the
intention of the contracting parties, the rule is settled that the literal meaning of its
stipulations should govern. In such cases, courts have no authority to alter a contract by
construction or to make a new contract for the parties. Since their duty is confined to the
interpretation of the one which the parties have made for themselves without regard to
its wisdom or folly, it has been ruled that courts cannot supply material stipulations or
read into the contract words it does not contain.62 Indeed, courts will not relieve a party
from the adverse effects of an unwise or unfavorable contract freely entered into.63

Our perusal of the Kasunduan also shows that it contains a penal clause64 which
provides that a party who violates any of its provisions shall be liable to pay the
aggrieved party a penalty fixed at P50,000.00, together with the attorney’s fees and
litigation expenses incurred by the latter should judicial resolution of the matter
becomes necessary.65 An accessory undertaking to assume greater liability on the part
of the obligor in case of breach of an obligation, the foregoing stipulation is a penal
clause which serves to strengthen the coercive force of the obligation and provides for
liquidated damages for such breach.66“The obligor would then be bound to pay the
stipulated indemnity without the necessity of proof of the existence and the measure of
damages caused by the breach.”67 Articles 1226 and 1227 of the Civil
Code state:cralavvonlinelawlibrary

Art. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity
for damages and the payment of interests in case of noncompliance, if there is no
stipulation to the contrary. Nevertheless, damages shall be paid if the obligor refuses to
pay the penalty or is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforced only when it is demandable in accordance with the
provisions of this Code.

Art. 1227. The debtor cannot exempt himself from the performance of the obligation by
paying the penalty, save in the case where this right has been expressly reserved for
him. Neither can the creditor demand the fulfilment of the obligation and the satisfaction
of the penalty at the same time, unless this right has been clearly granted to him.
However, if after the creditor has decided to require the fulfilment of the obligation, the
performance thereof should become impossible without his fault, the penalty may be
enforced.“

In the absence of a showing that they expressly reserved the right to pay the penalty in
lieu of the performance of their obligation under the Kasunduan, respondents were
correctly ordered by the RTC to execute and deliver a deed of conveyance over their
60% share in the subject parcels in favor of petitioners. Considering that
the Kasunduan stipulated that respondents would retain a portion of their share
consisting of 1,700 square meters, said disposition should, however, be modified to give
full effect to the intention of the contracting parties. Since the parties also fixed
liquidated damages in the sum of P50,000.00 in case of breach, we find that said
amount should suffice as petitioners’ indemnity, without further need of compensation
for moral and exemplary damages. In obligations with a penal clause, the penalty
generally substitutes the indemnity for damages and the payment of interests in case of
non-compliance.68 Usually incorporated to create an effective deterrent against breach
of the obligation by making the consequences of such breach as onerous as it may be
possible, the rule is settled that a penal clause is not limited to actual and compensatory
damages69

The RTC’s award of attorney’s fees in the sum of P50,000.00 is, however, proper. Aside
from the fact that the penal clause included a liability for said award in the event of
litigation over a breach of the Kasunduan, petitioners were able to prove that they
incurred said sum in engaging the services of their lawyer to pursue their rights and
protect their interests.70

WHEREFORE, premises considered, the Court of Appeals’ assailed 23 January 2007

Decision is REVERSED and SET ASIDE. In lieu thereof, the RTC’s 27 January 2005
Decision is REINSTATEDsubject to the following MODIFICATIONS: (a) the exclusion of
a 1,750-square meter portion from the 60% share in the subject parcel respondents
were ordered to convey in favor of petitioners; and (b) the deletion of the awards of
moral and exemplary damages. The rights of the parties under the Agreement may be
determined in a separate litigation.

SO ORDERED.

EN BANC

Adm. Case No. 8383 December 11, 2012

AMPARO BUENO, Complainant,

vs.
ATTY. RAMON A. RAÑESES, Respondents.

DECISION

PER CURIAM:

Before the Court is the Complaint for Disbarment1 against Atty. Ramon Rañeses filed on
March 3, 1993 by Amparo Bueno with the Integrated Bar of the Philippines-Commission
on Bar Discipline (IBP-CBD). Commissioner Agustinus V. Gonzaga, and subsequently
Commissioner Victoria Gonzalez- de los Reyes, conducted the fact-finding investigation
on the complaint.

Commissioner Rico A. Limpingco submitted a Report and Recommendation 2 dated

September 29, 2008 to the IBP Board of Governors which approved it in a resolution
dated December 11, 2008.

In a letter3 dated August 12, 2009, IBP Director for Bar Discipline Alicia A. Risos-Vidal
transmitted to the Office of Chief Justice Reynato Puno (retired) a Notice of
Resolution4 and the records of the case.

Factual Antecedents

In her complaint,5 Bueno related that she hired Atty. Rañeses to

represent her in Civil Case No. 777. In consideration for his services, Bueno
paid Atty. Rañeses a retainer fee of P3,000.00. She also agreed to pay him

P300.00 for every hearing he attended. No receipt was issued for the retainer

fee paid.

Atty. Rañeses prepared and filed an answer in her behalf. He also attended hearings.
On several occasions, Atty. Rañeses would either be absent or late.

Bueno alleged that on November 14, 1988, Atty. Rañeses asked for P10,000.00. This
amount would allegedly be divided between him and Judge Nidea, the judge hearing
Civil Case No. 777, so that they would not lose the case. Atty. Rañeses told Bueno not
to tell anyone about the matter. She immediately sold a pig and a refrigerator to raise
the demanded amount, and gave it to Atty. Rañeses.

According to Bueno, Atty. Rañeses asked for another P5,000.00 sometime in December
1988, because the amount she had previously given was inadequate. Bueno then sold
her sala set and colored television to raise the demanded amount, which she again
delivered to Atty. Rañeses.

Bueno later discovered that the trial court had required Atty. Rañeses to comment on
the adverse party’s offer of evidence and to submit their memorandum on the case, but
Atty. Rañeses failed to comply with the court’s directive. According to Bueno, Atty.
Rañeses concealed this development from her. In fact, she was shocked when a court
sheriff arrived sometime in May 1991 to execute the decision against them.

Bueno went to Atty. Rañeses’ office to ask him about what happened to the case. Atty.
Rañeses told her that he had not received any decision. Bueno later discovered from
court records that Atty. Rañeses actually received a copy of the decision on December
3, 1990. When she confronted Atty. Rañeses about her discovery and showed him a
court-issued certification, Atty. Rañeses simply denied any knowledge of the decision.

In a separate affidavit,6 Bueno related another instance where Atty. Rañeses asked his
client for money to win a case. Sometime in June 1991, Atty. Rañeses allegedly asked
her to deliver a telegram from Justice Buena of the Court of Appeals to her aunt,
Socorro Bello. He told her to tell Bello to prepare P5,000.00, an amount that Justice
Buena purportedly asked for in relation to Criminal Case No. T-1909 that was then on
appeal with the Court of Appeals.

According to Bueno, Atty. Rañeses went to Bello’s residence two weeks later. In her
(Bueno’s) presence, Bello paid Atty. Rañeses P5,000.00. Bello demanded a receipt but
Atty. Rañeses refused to issue one, telling her that none of his clients ever dared to
demand a receipt for sums received from them.

Atty. Rañeses never filed an answer against Bueno’s complaint. He repeatedly failed to
attend the hearings scheduled by Commissioner Gonzaga on March 20, 2000,[7] on
May 11, 20008 and on October 2, 2000.9 During the hearing on October 2, 2000,
Commissioner Gonzaga issued an Order10 declaring Atty. Rañeses in default. Bueno
presented her evidence and was directed to file a formal offer.

On October 10, 2000, the IBP-CBD received a "Time Motion and Request for Copies of
the Complaint and Supporting Papers"11 (dated September 30, 2000) filed by Atty.
Rañeses. Atty. Rañeses asked in his motion that the hearing on October 2, 2000 be
reset to sometime in December 2000, as he had prior commitments on the scheduled
day. He also asked for copies of the complaint and of the supporting papers, claiming
that he had not been furnished with these. In the interest of substantial justice,
Commissioner Gonzaga scheduled a clarificatory hearing on November 16, 200012

Atty. Rañeses failed to attend the hearing on November 16, 2000. In the same hearing,
Commissioner Gonzaga noted that the registry return card refuted Atty. Rañeses’ claim
that he did not receive a copy of the complaint. Commissioner Gonzaga scheduled
another clarificatory hearing on January 17, 2001. He stated that if Atty. Rañeses failed
to appear, the case would be deemed submitted for resolution after the complainant
submits her memorandum.13

Atty. Rañeses did not attend the January 17, 2001 hearing. On the same day,
Commissioner Gonzaga declared the case deemed submitted for resolution after the
complainant’s submission of her memorandum.14

At some point, the case was reassigned to Commissioner De los Reyes who scheduled
another hearing on March 14, 2003.15 During the hearing, only Bueno and her counsel
were present. The Commissioner noted that the IBP-CBD received a telegram from
Atty. Rañeses asking for the hearing’s resetting because he had prior commitments.
The records, however, showed that Atty. Rañeses never filed an answer and the case
had already been submitted for resolution. Thus, Commissioner De los Reyes issued an
Order16 directing Bueno to submit her formal offer of evidence and her documentary
evidence, together with her memorandum.

The IBP-CBD received Bueno’s Memorandum17 on May 27, 2003, but she did not file
any formal offer, nor did she submit any of the documentary evidence indicated as
attachments to her complaint.

The Investigating Commissioner’s Findings

In his report18 to the IBP Board of Governors, Commissioner Limpingco recommended

that Atty. Rañeses be absolved of the charge of negligence, but found him guilty of
soliciting money to bribe a judge.

Commissioner Limpingco noted that Bueno failed to provide the court records and
certifications that she indicated as attachments to her complaint. These would have
proven that Atty. Rañeses had indeed been negligent in pursuing her case. Without
these documents, which are not difficult to procure from the courts, Commissioner
Limpingco concluded that he would only be left with Bueno’s bare allegations which
could not support a finding of negligence.

Commissioner Limpingco, however, found Bueno’s allegation that Atty. Rañeses

solicited money to bribe judges to be credible. According to Commissioner Limpingco,
the act of soliciting money to bribe a judge is, by its nature, done in secret. He observed
that Bueno had consistently affirmed her statements in her affidavit, while Atty. Rañeses
did nothing to refute them.

Commissioner Limpingco also noted that Atty. Rañeses even made a false claim before
the investigating commissioners, as he alleged in his "Time Motion and Request for
Copies of the Complaint and Supporting Papers" that he did not receive the complaint
against him, a fact belied by the registry receipt card evidencing his receipt.

Thus, Commissioner Limpingco recommended that Atty. Rañeses be disbarred for

failure to maintain his personal integrity and for failure to maintain public trust.

The IBP Board of Governors adopted and approved the Investigating Commissioner’s
Report and Recommendation, but reduced the penalty to indefinite suspension from the
practice of law.19

The Court’s Ruling

The Court approves the IBP’s findings but resolves to disbar Atty. Rañeses from the
practice of law in accordance with Commissioner Limpingco’s recommendation and
based on our own observations and findings in the case.

The charge of negligence

According to Canon 18 of the Code of Professional Responsibility, lawyers should serve

their clients with competence and diligence. Specifically, Rule 18.02 provides that "[a]
lawyer shall not handle any legal matter without adequate preparation." Rule 18.03, on
the other hand, states that "[a] lawyer shall not neglect a legal matter entrusted to him,
and his negligence in connection [therewith] shall render him liable."

"Once lawyers agree to take up the cause of a client, they owe fidelity to the cause and
must always be mindful of the trust and confidence reposed in them." 20 A client is
entitled to the benefit of all remedies and defenses authorized by law, and is expected
to rely on his lawyer to avail of these remedies or defenses.21

In several cases, the Court has consistently held that a counsel’s failure to file an
appellant’s brief amounts to inexcusable negligence.22 In Garcia v. Bala,23 the Court
even found the respondent lawyer guilty of negligence after availing of an erroneous
mode of appeal. To appeal a decision of the Department of Agrarian Reform
Adjudication Board (DARAB), the respondent therein filed a notice of appeal with the
DARAB, instead of filing a verified petition for review with the Court of Appeals.
Because of his error, the prescribed period for filing the petition lapsed, prejudicing his
clients.

In this case, Atty. Rañeses’ alleged failure to file a comment on the adverse party’s offer
of evidence and to submit the required memorandum would have amounted to
negligence. However, as noted by Commissioner Limpingco, Bueno did not support her
allegations with court documents that she could have easily procured. This omission
leaves only Bueno’s bare allegations which are insufficient to prove Atty. Rañeses’
negligence. We support the Board of Governors’ ruling on this point.

The charge of soliciting money

In Bildner v. Ilusorio,24 the respondent lawyer therein attempted to bribe a judge to get a
favorable decision for his client. He visited the judge’s office several times and
persistently called his residence to convince him to inhibit from his client’s case. The
Court found that the respondent lawyer therein violated Canon 13 of the Code of
Professional Responsibility – the rule that instructs lawyers to refrain from any
impropriety tending to influence, or from any act giving the appearance of influencing,
the court. The respondent lawyer therein was suspended from the practice of law for
one year.

In this case, Atty. Rañeses committed an even graver offense. As explained below, he
committed a fraudulent exaction, and at the same time maligned both the judge and the
Judiciary. These are exacerbated by his cavalier attitude towards the IBP during the
investigation of his case; he practically disregarded its processes and even lied to one
of the Investigating Commissioners regarding the notices given him about the case.

While the only evidence to support Bueno’s allegations is her own word, the
Investigating Commissioner found her testimony to be credible. The Court supports the
Investigating Commissioner in his conclusion. As Commissioner Limpingco succinctly
observed:

By its very nature, the act [of] soliciting money for bribery purposes would necessarily
take place in secrecy with only respondent Atty. Rañeses and complainant Bueno privy
to it. Complainant Amparo Bueno has executed sworn statements and had readily
affirmed her allegations in this regard in hearings held before the IBP Investigating
Commissioners. Respondent Atty. Rañeses, for his part, has not even seen it fit to file
any answer to the complaint against him, much less appear in any hearings scheduled
in this investigation.25

Further, the false claim made by Atty. Rañeses to the investigating commissioners
reveals his propensity for lying. It confirms, to some extent, the kind of lawyer that
Bueno’s affidavits depict him to be.

Rather than merely suspend Atty. Rañeses as had been done in Bildner, the Court
believes that Atty. Rañeses merits the ultimate administrative penalty of
disbarment because of the multi-layered impact and implications of what he did; by his
acts he proved himself to be what a lawyer should not be, in a lawyer’s relations to the
client, to the court and to the Integrated Bar.

First, he extracted money from his client for a purpose that is both false and
fraudulent.1âwphi1 It is false because no bribery apparently took place as Atty.
Rañeses in fact lost the case. It is fraudulent because the professed purpose of the
exaction was the crime of bribery. Beyond these, he maligned the judge and the
Judiciary by giving the impression that court cases are won, not on the merits, but
through deceitful means – a decidedly black mark against the Judiciary. Last but not the
least, Atty. Rañeses grossly disrespected the IBP by his cavalier attitude towards its
disciplinary proceedings.

From these perspectives, Atty. Rañeses wronged his client, the judge allegedly on the
"take," the Judiciary as an institution, and the IBP of which he is a member. The Court
cannot and should not allow offenses such as these to pass unredressed. Let this be a
signal to one and all – to all lawyers, their clients and the general public – that the Court
will not hesitate to act decisively and with no quarters given to defend the interest of the
public, of our judicial system and the institutions composing it, and to ensure that these
are not compromised by unscrupulous or misguided members of the Bar.

WHEREFORE, premises considered, respondent Atty. Ramon A. Rañeses is

hereby DISBARRED from the practice of law, effective upon his receipt of this Decision.
The Office of the Bar Confidant is DIRECTED to delete his name from the Roll of
Attorneys. Costs against the respondent.

Let all courts, through the Office of the Court Administrator, as well as the Integrated
Bar of the Philippines, be notified of this Decision.

SO ORDERED.

SECOND DIVISION

A.C. No. 4549 December 2, 2013

NESTOR FELIPE, ALBERTO V. FELIPE, AURORA FELIPE-ORANTE, ASUNCION

FELIPE-DOMINGO, MILAGROS FELIPE CABIGTING, and RODOLFO V.
FELIPE, Complainants,
vs.
ATTY. CIRIACO A. MACAPAGAL, Respondent.

RESOLUTION

DEL CASTILLO, J.:

On March 5, 1996, a Petition1 for disbarment was filed against respondent Atty. Ciriaco
A. Macapagal, docketed as A.C. No. 4549. In A Resolution2 dated June 19, 1996, we
required respondent to comment. Respondent received a copy of the Resolution on July
16, 1996.3 On August 15, 1996, respondent filed an Urgent Ex-Parte Motion For
Extension Of Tme To File Comment.4 He requested for additional period of 30 days
within which to file his comment citing numerous professional commitments. We granted
said request in our October 2, 1996 Resolution.5 The extended deadline passed sans
respondent’s comment. Thus on January 29, 1997, complainants file an Urgent Motion
To Submit The Administrative Case For Resolution Without Comment Of
Respondent6 claiming the respondent is deemed to have waived his right to file
comment.

On February 24, 1997, we referred this administrative case to the Integrated Bar of the
Philippines (IBP) for investigation, report, and recommendation.7

The case was initially assigned to Investigating Commissioner Elizabeth Hermosisima-

Palma who set the hearing on October 22, 1997 at 9:00 a.m. 8

The Minutes of the Hearing9 showed that both parties were present.1âwphi1 The next
hearing was set on November 6, 199710 but was postponed upon request of the
complainants' counsel.11

Noting that more than five months had lapsed after the postponement of the last
hearing, complainants moved to calendar the case.12

The new Investigating Commissioner, Arturo C. Delos Reyes, set the hearing of the
case on January 12, 1999.13

During the scheduled hearing, complainants appeared and were directed to submit their
Position Paper.1âwphi1Respondent failed to attend despite receipt of notice.14

Complainants submitted their Position Paper15 on January 28, 1999.16

It took 11 years, more particularly on February 26, 2010, before the IBP, thru
Investigating Commissioner Agustinus V. Gonzaga, submitted its Report and
Recommendation.17

In his Report, the Investigating Commissioner quoted verbatim the allegations in the
Petition; he then narrated the proceedings undertaken by the IBP. Unfortunately, no
discussion was made regarding the merits of the complaint. However, it was
recommended that respondent be suspended from the practice of law for one (1)
month. In Resolution No. XX-2011-246 dated November 19, 2011, the IBP Board of
Governors adopted the Report and Recommendation of the Investigating Commissioner
with modification that respondent be suspended from the practice of law for one (1)
year. In their Petition, complainants alleged that they are co-plaintiffs in Civil Case No.
A-95-22906 pending before Branch 216 of the Regional Trial Court of Quezon City while
respondent is the counsel for the defendants therein; that respondent committed
dishonesty when he stated in the defendants' Answer in Civil Case No. A-95-22906 that
the parties therein are strangers to each other despite knowing that the defendants are
half-brothers and half-sisters of complainants; and that they filed a criminal case for
Perjury [against the defendants in Civil Case No. A-95-22906] docketed as Criminal
Case No. 41667 pending before Branch 36 of the Metropolitan Trial Court (MeTC) of
Manila. Complainants also alleged that respondent introduced a falsified Certificate of
Marriage as part of his evidence in Civil Case No. A-95-22906; and that they filed
another Perjury charge [against the defendants in Civil Case No. A-95-22906] before
the Office of the City Prosecutor of Quezon City, docketed as I.S. No. 95-15656-A.
Next, complainants averred that respondent knowingly filed a totally baseless pleading
captioned as Urgent Motion to Recall Writ of Execution of the Writ of Preliminary
Injunction; that said pleading is not in accordance with the rules of procedure; that the
said filing delayed the proceedings in Civil Case No. A-95-22906; and that they filed
a Vigorous Opposition to the said pleading. Complainants insisted that by the foregoing
actuations, respondent violated his duty as a lawyer and prayed that he be disbarred
and ordered to pay complainants the amount of ₱500,000 representing the damages
that they suffered. In fine, complainants charged respondent with dishonesty (1) when
he stated in the defendants' Answer in Civil Case No. A-95-22906 that the parties
therein are strangers to each other; (2) when he introduced a falsified Certificate of
Marriage as part of his evidence in Civil Case No. A-95-22906; and (3) when he
knowingly filed a totally baseless pleading captioned as Urgent Motion to Recall Writ of
Execution of the Writ of Preliminary Injunction in the same case. At the outset, we note
that in order to determine whether respondent is guilty of dishonesty, we will have to
delve into the issue of whether the complainants are indeed related to the defendants in
Civil Case No. A-95-22906 being half-brothers and half-sisters. We would also be
tasked to make an assessment on the authenticity of the Certificate of Marriage which
respondent submitted in the proceedings in Civil Case No. A-95-22906. Similarly, we
will have to make a ruling on whether the Urgent Motion to Recall Writ of Execution of
the Writ of Preliminary Injunction which respondent filed was indeed baseless and
irrelevant to the proceedings in Civil Case No. A-95-22906. Clearly, these prerequisites
cannot be accomplished in this administrative case. The resolution of whether the
parties are related to each other appears to be one of the issues brought up in Civil
Case No. A-95-22906 which is a complaint for Partition, Reconveyance, Declaration of
Nullity of Documents and Damages. The complainants claimed that they are the
legitimate children of the late Gregorio V. Felipe, Sr. This was rebutted by the
defendants therein, as represented by the respondent, who denied their filiation with the
complainants. Clearly, the issue of filiation must be settled in those proceedings, and
not in this administrative case. The same is true with regard to the issue of authenticity
of the Marriage Certificate which was submitted in evidence as well as the relevance of
the Urgent Motion to Recall Writ of Execution of the Writ of Preliminary Injunction.

Besides, as complainants have asserted, a criminal case for Perjury had already been
filed against the defendants in Civil Case No. A-95-22906 and docketed as Criminal
Case No. 41667 pending before Branch 36 of the Manila MeTC for their alleged
"untruthful" statement that they are strangers to each other. They had also filed another
Perjury charge against the defendants in Civil Case No. A-95-22906 before the Office of
the City Prosecutor of Quezon City, docketed as I.S. No. 95-15656-A for allegedly
submitting in evidence a falsified Marriage Certificate. Moreover, they already filed
a Vigorous Opposition to the Urgent Motion to Recall Writ of Execution of the Writ of
Preliminary Injunction filed by the respondent. In fine, these issues are proper subjects
of and must be threshed out in a judicial action. We held in Anacta v.
Resurreccion18 that -

x x x it is imperative to first determine whether the matter falls within the disciplinary
authority of the Court or whether the matter is a proper subject of judicial action against
lawyers. If the matter involves violations of the lawyer's oath and code of conduct, then
it falls within the Court's disciplinary authority. However, if the matter arose from acts
which carry civil or criminal liablity, and which do not directly require an inquiry into the
moral fitness of the lawyer, then the matter would be a proper subject of a judicial action
which is understandably outside the purview of the Court's disciplinary authority. x x x19

Similarly, we held in Virgo v. Amorin,20 viz:

While it is true that disbarment proceedings look into the worthiness of a respondent to
remain as a member of the bar, and need not delve into the merits of a related case, the
Court, in this instance, however, cannot ascertain whether Atty. Amorin indeed
committed acts in violation of his oath as a lawyer concerning the sale and conveyance
of the Virgo Mansion without going through the factual matters that are subject of the
aforementioned civil cases, x x x. As a matter of prudence and so as not to preempt the
conclusions that will be drawn by the court where the case is pending, the Court deems
it wise to dismiss the present case without prejudice to the filing of another one,
depending on the final outcome of the civil case.21 Thus, pursuant to the above
pronouncements, the Petition filed by complainants must be dismissed without
prejudice. However, we cannot end our discussion here. It has not escaped our notice
that despite receipt of our directive, respondent did not file his comment. Neither did he
file his Position Paper as ordered by the IBP. And for this, he must be sanctioned.

Respondent's unjustified disregard of the lawful orders of this Court and the IBP is not
only irresponsible, but also constitutes utter disrespect for the judiciary and his fellow
lawyers. His conduct is unbecoming of a lawyer, for lawyers are particularly called upon
to obey court orders and processes and are expected to stand foremost in complying
with court directives being themselves officers of the court. As an officer of the court,
respondent is expected to know that a resolution of this Court is not a mere request but
an order which should be complied with promptly and completely. This is also true of the
orders of the IBP as the investigating arm of the Court in administrative cases against
lawyers.22

Under the circumstances, we deem a reprimand with warning commensurate to the

infraction committed by the respondent.23
ACCORDINGLY , respondent Atty. Ciriaco A. Macapagal is REPRIMANDED for failing
to give due respect to the Court and the Integrated Bar of the Philippines. He is
WARNED that commission of a similar infraction will be dealt with more severely.
Resolution No. XX-2011-246 dated November 19, 2011 of the Integrated Bar of the
Philippines is SET ASIDE. A.C. No. 4549 is DISMISSED without prejudice. Let a copy
of this Resolution be entered in the personal records of respondent as a member of the
Bar, and copies furnished the Office of the Bar Confidant, the Integrated Bar of the
Philippines, and the Office of the Court Administrator for circulation to all courts in the
country.

SO ORDERED.

FIRST DIVISION

G.R. No. 153031 December 14, 2006

PCL SHIPPING PHILIPPINES, INC. and U-MING MARINE TRANSPORT

CORPORATION, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and STEVE RUSEL, respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the Decision1 of the Court of Appeals (CA) dated December 18, 2001 in CA-
G.R. SP No. 59976, which affirmed the Decision of the National Labor Relations
Commission (NLRC) dated March 22, 2000 in NLRC NCR CA No. 018120-99; and the
Resolution of the CA dated April 10, 2002, denying petitioners' motion for
reconsideration.2

The facts of the case, as found by the CA, are as follows:

In April 1996, Rusel was employed as GP/AB seaman by manning agency, PCL
Shipping Philippines, Inc. (PCL Shipping) for and in behalf of its foreign principal,
U-Ming Marine Transport Corporation (U-Ming Marine). Rusel thereby joined the
vessel MV Cemtex General (MV Cemtex) for the contract period of twelve (12)
months with a basic monthly salary of US$400.00, living allowance of
US$140.00, fixed overtime rate of US$120.00 per month, vacation leave with pay
of US$40.00 per month and special allowance of US$175.00.

On July 16, 1996, while Rusel was cleaning the vessel's kitchen, he slipped, and
as a consequence thereof, he suffered a broken and/or sprained ankle on his left
foot. A request for medical examination was flatly denied by the captain of the
vessel. On August 13, 1996, feeling an unbearable pain in his ankle, Rusel
jumped off the vessel using a life jacket and swam to shore. He was brought to a
hospital where he was confined for eight (8) days.

On August 22, 1996, a vessel's agent fetched Rusel from the hospital and was
required to board a plane bound for the Philippines.

On September 26, 1996, Rusel filed a complaint for illegal dismissal, non-
payment of wages, overtime pay, claim for medical benefits, sick leave pay and
damages against PCL Shipping and U-Ming Marine before the arbitration branch
of the NLRC. In their answer, the latter alleged that Rusel deserted his
employment by jumping off the vessel.

On July 21, 1998, the labor arbiter rendered his decision, the dispositive portion
of which reads as follows:

Wherefore, above premises duly considered we find the respondent liable

for unjust repatriation of the complainant.

Accordingly, the following award is hereby adjudged against the

respondent:

1. The amount of $2,625.00 or its peso equivalent at the time of payment

representing three (3) months salary of the complainant due to his illegal
dismissal.

2. The amount of $1,600.00 or its peso equivalent, representing sick wage

benefits.

3. The amount of $550.00 or its peso equivalent, representing living

allowance, overtime pay and special allowance for two (2) months.

4. The amount of $641.66 or its peso equivalent, representing unpaid

wages from August 11 to 22, 1996.

5. Attorney's fees equivalent to 10% of the total monetary award.

The rest of the claims are dismissed for lack of merit.

SO ORDERED.3
Aggrieved by the Decision of the Labor Arbiter, herein petitioners appealed to the
NLRC. In its Decision dated March 22, 2000, the NLRC affirmed the findings of the
Labor Arbiter but modified the appealed Decision, disposing as follows:

WHEREFORE, premises considered, the assailed decision is as it is hereby

ordered MODIFIED in that the amount representing three months salary of the
complainant due to his illegal dismissal is reduced to US$1,620.00. Further the
award of sick wage benefit is deleted.

All other dispositions are AFFIRMED.

SO ORDERED.4

Petitioners filed a Motion for Reconsideration but the NLRC denied the same in its
Decision of May 3, 2000.5

Petitioners filed a petition for certiorari with the CA.6 In its Decision dated December 18,
2001, the CA dismissed the petition and affirmed the NLRC Decision.7

Petitioners filed a Motion for Reconsideration but it was denied by the CA in its
Resolution dated April 10, 2002.8

Hence, the instant petition with the following assignment of errors:

I. The Court of Appeals erred in ruling that private respondent was illegally
dismissed from employment.

xxxx

II. Likewise, the Court of Appeals erred in not upholding petitioners' right to pre-
terminate private respondent's employment.

xxxx

III. The private respondent is not entitled to other money claims, particularly as to
the award of attorney's fees.9

As to their first assigned error, petitioners contend that the CA erred in affirming the
findings of the NLRC that Rusel's act of jumping ship does not establish any intent on
his part to abandon his job and never return. Petitioners argue that Rusel's very act of
jumping from the vessel and swimming to shore is evidence of highest degree that he
has no intention of returning to his job. Petitioners further contend that if Rusel was
indeed suffering from unbearable and unmitigated pain, it is unlikely that he is able to
swim two (2) nautical miles, which is the distance between their ship and the shore,
considering that he needed to use his limbs in swimming. Petitioners further assert that
it is error on the part of the CA to disregard the entries contained in the logbook and in
the Marine Note Protest evidencing Rusels' offense of desertion because while these
pieces of evidence were belatedly presented, the settled rule is that additional evidence
may be admitted on appeal in labor cases. Petitioners also contend that Rusel's act of
desertion is a grave and serious offense and considering the nature and situs of
employment as well as the nationality of the employer, the twin requirements of notice
and hearing before an employee can be validly terminated may be dispensed with.

As to their second assigned error, petitioners contend that assuming, for the sake of
argument, that Rusel is not guilty of desertion, they invoked the alternative defense that
the termination of his employment was validly made pursuant to petitioners' right to
exercise their prerogative to pre-terminate such employment in accordance with Section
19(C) of the Standard Terms and Conditions Governing the Employment of Filipino
Seafarers On-Board Ocean-Going Vessels, which provision was incorporated in Rusel's
Contract of Employment with petitioners. Petitioners assert that despite the fact that this
issue was raised before the CA, the appellate court failed to resolve the same.

Anent the last assigned error, petitioners argue that it is error on the part of the CA to
affirm the award of living allowance, overtime pay, vacation pay and special allowance
for two months because Rusel failed to submit substantial evidence to prove that he is
entitled to these awards. Petitioners further argue that these money claims, particularly
the claim for living allowance, should not be granted because they partake of the nature
of earned benefits for services rendered by a seafarer. Petitioners also contend that the
balance of Rusel's wages from August 11-22, 1996 should be applied for the payment
of the costs of his repatriation, considering that under Section 19(E) of the Standard
Terms and Conditions Governing the Employment of Filipino Seafarers On-Board
Ocean-Going Vessels, when a seafarer is discharged for any just cause, the employer
shall have the right to recover the costs of his replacement and repatriation from the
seafarer's wages and other earnings. Lastly, petitioners argue that the award of
attorney's fees should be deleted because there is nothing in the decision of the Labor
Arbiter or the NLRC which states the reason why attorney's fees are being awarded.

In his Comment, private respondent contends that petitioners are raising issues of fact
which have already been resolved by the Labor Arbiter, NLRC and the CA. Private
respondent argues that, aside from the fact that the issues raised were already decided
by three tribunals against petitioners' favor, it is a settled rule that only questions of law
may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court.
While there are exceptions to this rule, private respondent contends that the instant
case does not fall under any of these exceptions. Private respondent asserts that
petitioners failed to substantiate their claim that the former is guilty of desertion. Private
respondent further contends that the right to due process is available to local and
overseas workers alike, pursuant to the provisions of the Constitution on labor and
equal protection as well as the declared policy contained in the Labor Code. Private
respondent argues that petitioners' act of invoking the provisions of Section 19(C) of the
POEA Contract as an alternative defense is misplaced and is inconsistent with their
primary defense that private respondent was dismissed on the ground of desertion. As
to the award of attorney's fees, private respondent contends that since petitioners' act
compelled the former to incur expenses to protect his interest and enforce his lawful
claims, and because petitioners acted in gross and evident bad faith in refusing to
satisfy private respondent's lawful claims, it is only proper that attorney's fees be
awarded in favor of the latter. Anent the other monetary awards, private respondent
argues that these awards are all premised on the findings of the Labor Arbiter, NLRC
and the CA that private respondent's dismissal was improper and illegal.

The Court finds the petition without merit.

Anent the first assigned error, it is a settled rule that under Rule 45 of the Rules of
Court, only questions of law may be raised in this Court.10 Judicial review by this Court
does not extend to a re-evaluation of the sufficiency of the evidence upon which the
proper labor tribunal has based its determination.11 Firm is the doctrine that this Court is
not a trier of facts, and this applies with greater force in labor cases.12 Factual issues
may be considered and resolved only when the findings of facts and conclusions of law
of the Labor Arbiter are inconsistent with those of the NLRC and the CA.13 The reason
for this is that the quasi-judicial agencies, like the Arbitration Board and the NLRC, have
acquired a unique expertise because their jurisdiction are confined to specific
matters.14 In the present case, the question of whether private respondent is guilty of
desertion is factual. The Labor Arbiter, NLRC and the CA are unanimous in their
findings that private respondent is not guilty of desertion and that he has been illegally
terminated from his employment. After a review of the records of the instant case, this
Court finds no cogent reason to depart from the findings of these tribunals.

Petitioners assert that the entries in the logbook of MV Cemtex General15 and in the
Marine Note Protest16 which they submitted to the NLRC confirm the fact that private
respondent abandoned the vessel in which he was assigned. However, the
genuineness of the Marine Note Protest as well as the entries in the logbook are put in
doubt because aside from the fact that they were presented only during petitioners'
Motion for Reconsideration filed with the NLRC, both the Marine Note Protest and the
entry in the logbook which were prepared by the officers of the vessel were neither
notarized nor authenticated by the proper authorities. Moreover, a reading of these
entries simply shows that private respondent was presumed to have deserted his post
on the sole basis that he was found missing while the MV Cemtex General was
anchored at the port of Takehara, Japan. Hence, without any corroborative evidence,
these documents cannot be used as bases for concluding that private respondent was
guilty of desertion.

Petitioners also question the findings and conclusion of the Labor Arbiter and the NLRC
that what caused private respondent in jumping overboard was the unmitigated pain he
was suffering which was compounded by the inattention of the vessel's captain to
provide him with the necessary treatment inspite of the fact that the ship was moored for
about two weeks at the anchorage of Takehara, Japan; and, that private respondent's
act was a desperate move to protect himself and to seek relief for his physical suffering.
Petitioners contend that the findings and conclusions of the Labor Arbiter and the NLRC
which were affirmed by the CA are based on conjecture because there is no evidence to
prove that, at the time he jumped ship, private respondent was really suffering from an
ankle injury.

It is true that no substantial evidence was presented to prove that the cause of private
respondent's confinement in a hospital in Takehara, Japan was his ankle injury. The
Court may not rely on the letter marked as Annex "B" and attached to private
respondent's Position Paper because it was unsigned and it was not established who
executed the same.17 However, the result of the x-ray examination conducted by the
LLN Medical Services, Inc. on August 26, 1996, right after private respondent was
repatriated to the Philippines, clearly showed that there is a soft-tissue swelling around
his ankle joint.18 This evidence is consistent with private respondent's claim that he was
then suffering from an ankle injury which caused him to jump off the ship.

As to petitioners' contention that private respondent could not have traversed the
distance between the ship and the shore if he was indeed suffering from unbearable
pain by reason of his ankle injury, suffice it to say that private respondent is an able-
bodied seaman and that with the full use of both his arms and the help of a life jacket,
was able to reach the shore.

As correctly defined by petitioners, desertion, in maritime law is:

The act by which a seaman deserts and abandons a ship or vessel, in which he
had engaged to perform a voyage, before the expiration of his time, and without
leave. By desertion, in maritime law, is meant, not a mere unauthorized absence
from the ship, without leave, but an unauthorized absence from the ship with an
intention not to return to her service; or as it is often expressed, animo non
revertendi, that is, with an intention to desert.19 (emphasis supplied)

Hence, for a seaman to be considered as guilty of desertion, it is essential that there be

evidence to prove that if he leaves the ship or vessel in which he had engaged to
perform a voyage, he has the clear intention of abandoning his duty and of not returning
to the ship or vessel. In the present case, however, petitioners failed to present clear
and convincing proof to show that when private respondent jumped ship, he no longer
had the intention of returning. The fact alone that he jumped off the ship where he was
stationed, swam to shore and sought medical assistance for the injury he sustained is
not a sufficient basis for petitioners to conclude that he had the intention of deserting his
post. Settled is the rule that in termination cases, the burden of proof rests upon the
employer to show that the dismissal is for a just and valid cause.20 The case of the
employer must stand or fall on its own merits and not on the weakness of the
employee's defense.21 In the present case, since petitioners failed to discharge their
burden of proving that private respondent is guilty of desertion, the Court finds no
reason to depart from the conclusion of the Labor Arbiter, NLRC and the CA that private
respondent's dismissal is illegal.

In their second assigned error, petitioners cite Section 19(C) of POEA Memorandum
Circular No. 055-9622 known as the Revised Standard Employment Terms and
Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going
Vessels as their alternative basis in terminating the employment of private respondent.
Said Section provides as follows:

Section 19. REPATRIATION

xxxx

C. If the vessel arrives at a convenient port within a period of three months

before the expiration of his contract, the master/ employer may repatriate the
seafarer from such port provided that the seafarer shall be paid all his earned
wages. In addition, the seafarer shall also be paid his leave pay for the entire
contract period plus a termination pay equivalent to one (1) month of his basic
pay, provided, however, that this mode of termination may only be exercised by
the master/employer if the original contract period of the seafarer is at least ten
(10) months; provided, further, that the conditions for this mode of termination
shall not apply to dismissal for cause.

The Court is not persuaded. POEA Memorandum Circular No. 055-96 took effect on
January 1, 1997 while the contract of employment entered into by and between private
respondent and petitioners was executed on April 10, 1996. Hence, it is wrong for
petitioners to cite this particular Memorandum because at the time of petitioners' and
private respondent's execution of their contract of employment Memorandum Circular
No. 055-96 was not yet effective.

What was in effect at the time private respondent's Contract of Employment was
executed was POEA Memorandum Circular No. 41, Series of 1989. It is clearly provided
under the second paragraph of private respondent's Contract of Employment that the
terms and conditions provided under Memorandum Circular No. 41, Series of 1989 shall
be strictly and faithfully observed. Hence, it is Memorandum Circular No. 41, Series of
1989 which governs private respondent's contract of employment.

Section H (6), Part I of Memorandum Circular No. 41, which has almost identical
provisions with Section 19 (C) of Memorandum Circular No. 055-96, provides as
follows:

SECTION H. TERMINATION OF EMPLOYMENT

xxxx

6. If the vessel arrives at a convenient port within a period of three (3) months
before the expiration of the Contract, the master/employer may repatriate the
seaman from such port provided that the seaman shall be paid all his earned
wages. In addition, the seaman shall also be paid his leave pay for the entire
contract period plus a termination pay equivalent to one (1) month of his basic
pay, provided, however, that this mode of termination may only be exercised by
 the master/employer if the original contact period of the seaman is at least ten
(10) months; provided, further, that the conditions for this mode of termination
shall not apply to dismissal for cause.

The Court agrees with private respondent's contention that petitioners' arguments are
misplaced. Petitioners may not use the above-quoted provision as basis for terminating
private respondent's employment because it is incongruent with their primary defense
that the latter's dismissal from employment was for cause. Petitioners may not claim
that they ended private respondent's services because he is guilty of desertion and at
the same time argue that they exercised their option to prematurely terminate his
employment, even without cause, simply because they have the right to do so under
their contract. These grounds for termination are inconsistent with each other such that
the use of one necessarily negates resort to the other. Besides, it appears from the
records that petitioners' alternative defense was pleaded merely as an afterthought
because it was only in their appeal with the NLRC that they raised this defense. The
only defense raised by petitioners in their Answer with Counterclaim filed with the office
of the Labor Arbiter is that private respondent was dismissed from employment by
reason of desertion.23Under the Rules of Court,24 which is applicable in a suppletory
character in labor cases before the Labor Arbiter or the NLRC pursuant to Section 3,
Rule I of the New Rules of Procedure of the NLRC25, defenses which are not raised
either in a motion to dismiss or in the answer are deemed waived. 26

Granting, for the sake of argument, that petitioners may use Section H (6), Part I of
Memorandum Circular No. 41 or Section 19(C) of Memorandum Circular No. 055-96 as
basis for terminating private respondent's employment, it is clear that one of the
conditions before any of these provisions becomes applicable is when the vessel arrives
at a convenient port within a period of three (3) months before the expiration of the
contract of employment. In the present case, private respondent's contract was
executed on April 10, 1996 for a duration of twelve months. He was deployed
aboard MV Cemtex General on June 25, 1996 and repatriated to the Philippines on
August 22, 1996. Hence, it is clear that petitioners did not meet this condition because
private respondent's termination was not within a period of three months before the
expiration of his contract of employment.

Moreover, the Court finds nothing in the records to show that petitioners complied with
the other conditions enumerated therein, such as the payment of all of private
respondent's earned wages together with his leave pay for the entire contract period as
well as termination pay equivalent to his one month salary.

Petitioners admit that they did not inform private respondent in writing of the charges
against him and that they failed to conduct a formal investigation to give him opportunity
to air his side. However, petitioners contend that the twin requirements of notice and
hearing applies strictly only when the employment is within the Philippines and that
these need not be strictly observed in cases of international maritime or overseas
employment.
The Court does not agree. The provisions of the Constitution as well as the Labor Code
which afford protection to labor apply to Filipino employees whether working within the
Philippines or abroad. Moreover, the principle of lex loci contractus (the law of the place
where the contract is made) governs in this jurisdiction.27 In the present case, it is not
disputed that the Contract of Employment entered into by and between petitioners and
private respondent was executed here in the Philippines with the approval of the
Philippine Overseas Employment Administration (POEA). Hence, the Labor Code
together with its implementing rules and regulations and other laws affecting labor apply
in this case.28 Accordingly, as to the requirement of notice and hearing in the case of a
seafarer, the Court has already ruled in a number of cases that before a seaman can be
dismissed and discharged from the vessel, it is required that he be given a written
notice regarding the charges against him and that he be afforded a formal investigation
where he could defend himself personally or through a representative.29 Hence, the
employer should strictly comply with the twin requirements of notice and hearing without
regard to the nature and situs of employment or the nationality of the employer.
Petitioners failed to comply with these twin requirements.

Petitioners also contend that the wages of private respondent from August 11-22, 1996
were applied to the costs of his repatriation. Petitioners argue that the off-setting of the
costs of his repatriation against his wages for the aforementioned period is allowed
under the provisions of Section 19(E) of Memorandum Circular No. 055-96 which
provides that when the seafarer is discharged for any just cause, the employer shall
have the right to recover the costs of his replacement and repatriation from the
seafarer's wages and other earnings.

The Court does not agree. Section 19(E) of Memorandum Circular No. 055-96 has its
counterpart provision under Section H (2), Part II of Memorandum Circular No. 41, to
wit:

SECTION H. REPATRIATION

xxxx

2. When the seaman is discharged for disciplinary reasons, the employer shall
have the right to recover the costs of maintenance and repatriation from the
seaman's balance of wages and other earnings.

xxxx

It is clear under the above-quoted provision that the employer shall have the right to
recover the cost of repatriation from the seaman's wages and other earnings only if the
concerned seaman is validly discharged for disciplinary measures. In the present case,
since petitioners failed to prove that private respondent was validly terminated from
employment on the ground of desertion, it only follows that they do not have the right to
deduct the costs of private respondent's repatriation from his wages and other earnings.
Lastly, the Court is not persuaded by petitioners' contention that the private respondent
is not entitled to his money claims representing his living allowance, overtime pay,
vacation pay and special allowance as well as attorney's fees because he failed to
present any proof to show that he is entitled to these awards.

However, the Court finds that the monetary award representing private respondent's
three months salary as well as the award representing his living allowance, overtime
pay, vacation pay and special allowance should be modified.

The Court finds no basis in the NLRC's act of including private respondent's living
allowance as part of the three months salary to which he is entitled under Section 10 of
Republic Act (RA) No. 8042, otherwise known as the "Migrant Workers and Overseas
Filipinos Act of 1995." The pertinent provisions of the said Act provides:

Sec. 10. Money Claims –

xxxx

In case of termination of overseas employment without just, valid or authorized

cause as defined by law or contract, the worker shall be entitled to the full
reimbursement of his placement fee with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of his employment contract or
for three (3) months for every year of the unexpired term, whichever is less.

xxxx

It is clear from the above-quoted provision that what is included in the computation of
the amount due to the overseas worker are only his salaries. Allowances are excluded.
In the present case, since private respondent received a basic monthly salary of
US$400.00, he is, therefore, entitled to receive a sum of US$1200.00, representing
three months of said salary.

As to the awards of living allowance, overtime pay, vacation pay and special allowance,
it is clearly provided under private respondent's Contract of Employment that he is
entitled to these benefits as follows: living allowance of US$140.00/month; vacation
leave with pay equivalent to US$40.00/month; overtime rate of US$120.00/month; and,
special allowance of US$175.00/month.30

With respect, however, to the award of overtime pay, the correct criterion in determining
whether or not sailors are entitled to overtime pay is not whether they were on board
and can not leave ship beyond the regular eight working hours a day, but whether they
actually rendered service in excess of said number of hours.31 In the present case, the
Court finds that private respondent is not entitled to overtime pay because he failed to
present any evidence to prove that he rendered service in excess of the regular eight
working hours a day.
On the basis of the foregoing, the remaining benefits to which the private respondent is
entitled is the living allowance of US$140.00/month, which was removed in the
computation of private respondent's salary, special allowance of US$175.00/month and
vacation leave with pay amounting to US$40.00/month. Since private respondent
rendered service for two months these benefits should be doubled, giving a total of
US$710.00.

As to the award of attorney's fees, this Court ruled in Reyes v. Court of Appeals,32 as
follows:

x x x [T]here are two commonly accepted concepts of attorney's fees, the so-
called ordinary and extraordinary. In its ordinary concept, an attorney's fee is the
reasonable compensation paid to a lawyer by his client for the legal services he
has rendered to the latter. The basis of this compensation is the fact of his
employment by and his agreement with the client. In its extraordinary concept,
attorney's fees are deemed indemnity for damages ordered by the court to be
paid by the losing party in a litigation. The instances where these may be
awarded are those enumerated in Article 2208 of the Civil Code, specifically par.
7 thereof which pertains to actions for recovery of wages, and is payable not to
the lawyer but to the client, unless they have agreed that the award shall pertain
to the lawyer as additional compensation or as part thereof. The extraordinary
concept of attorney's fees is the one contemplated in Article 111 of the Labor
Code, which provides:

Art. 111. Attorney's fees. – (a) In cases of unlawful withholding of wages,

the culpable party may be assessed attorney's fees equivalent to ten
percent of the amount of wages recovered x x x

The afore-quoted Article 111 is an exception to the declared policy of strict

construction in the awarding of attorney's fees. Although an express
finding of facts and law is still necessary to prove the merit of the award,
there need not be any showing that the employer acted maliciously or in
bad faith when it withheld the wages. There need only be a showing that
the lawful wages were not paid accordingly, as in this case.

In carrying out and interpreting the Labor Code's provisions and its implementing
regulations, the employee's welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning and substance to the
liberal and compassionate spirit of the law as provided in Article 4 of the Labor
Code which states that "[a]ll doubts in the implementation and interpretation of
the provisions of [the Labor] Code including its implementing rules and
regulations, shall be resolved in favor of labor", and Article 1702 of the Civil Code
which provides that "[i]n case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the
laborer."33 (Emphasis supplied)
In the present case, it is true that the Labor Arbiter and the NLRC failed to state the
reasons why attorney's fees are being awarded. However, it is clear that private
respondent was illegally terminated from his employment and that his wages and other
benefits were withheld from him without any valid and legal basis. As a consequence,
he is compelled to file an action for the recovery of his lawful wages and other benefits
and, in the process, incurred expenses. On these bases, the Court finds that he is
entitled to attorney's fees.

WHEREFORE, the petition is PARTLY GRANTED. The Court of Appeals' Decision

dated December 18, 2001 and Resolution dated April 10, 2002
are AFFIRMED with MODIFICATION to the effect that the award of US$1620.00
representing private respondent's three months salary is reduced to US$1200.00. The
award of US$550.00 representing private respondent's living allowance, overtime pay,
vacation pay and special allowance for two months is deleted and in lieu thereof, an
award of US$710.00 is granted representing private respondent's living allowance,
special allowance and vacation leave with pay for the same period.

No costs.

SO ORDERED.

EN BANC

A.M. No. SB-14-21-J September 23, 2014

[Formerly A.M. No. 13-10-06-SB]

RE: ALLEGATIONS MADE UNDER OATH AT THE SENATE BLUE RIBBON

COMMITTEE HEARING HELD ON SEPTEMBER 26, 2013 AGAINST ASSOCIATE
JUSTICE GREGORY S. ONG, SANDIGANBAYAN

DECISION

PER CURIAM:

The character of every act depends upon the circumstances in which it is done.

- Justice Oliver Wendell Holmes

This administrative complaint was filed by the Court En Banc after investigation into
certain allegations that surfaced during the Senate Blue Ribbon Committee Hearing
indicated prima facie violations of the Code of Judicial Conduct by an Associate Justice
of the Sandiganbayan. The investigation was conducted motu proprio pursuant to the
Court's power of administrative supervision over members of the Judiciary. 1

Factual Antecedents
In the middle of 2013, the local media ran an expose involving billions of government
funds channeled through bogus foundations. Dubbed as the "pork barrel scam," as the
money was sourced from the Priority Development Assistance Fund allotted to
members of the House of Representatives and Senate, the controversy spawned
massive protest actions all over the country. In the course of the investigation
conducted by the Senate Committee on Accountability of Public Officers and
Investigations (Blue Ribbon Committee), the names of certain government officials and
other individuals were mentioned by "whistle-blowers" who are former employees of the
alleged mastermind, Janet Lim-Napoles (Mrs. Napoles), wife of an ex-military officer.
These personalities identified by the whistle-blowers allegedly transacted with or
attended Mrs. Napoles' parties and events, among whom is incumbent Sandiganbayan
Associate Justice Gregory S. Ong, herein respondent.

Benhur Luy (Luy), a cousin of Mrs. Napoles who had worked for several years with the
Napoleses, filed illegal detention charges against Mrs. Napoles who accused him of
double-dealing. When Luy went public with his story about Mrs. Napoles' anomalous
transactions and before the warrant of arrest was issued by the court, she reportedly
tried to reach out to the other whistle-blowers for them not to testify against her but
instead point to Luy as the one receiving and distributing the money.

Marina Sula (Sula) executed a Sworn Statement2 before the National Bureau of
Investigation (NBI) on August 29, 2013, part of which reads:

32. In the sixteen (16) years that I worked with Ms. Napoles, I witnessed several
personalities visit our offices and join us as our special guests during our parties
and other special occasions. 33. These personalities who would either visit our
office or join our events and affairs are: Senator Franklin Drilon, Senator Jinggoy
Estrada and family, Senator Bong Revilla, Lani Mercado-Revilla, Bryan Revilla,
Secretary Rene Villa, Congressman Pichay and Wife, Congressman Plaza,
Congressman Ducut, DAR Director Theresita Panlilio, Catherine Mae Canlas
Santos, Pauline Labayen, Jen Corpuz (Staff of Senator Sotto), Mayor Rene
Maglanque, Atty. Dequina, Justice Gregory Ong, x x x.

34. Before the warrant of arrest was issued against Ms. Napoles, she told us that
that case could take four to five years to clear. She said, "Antayin niyo munang
ma-clear pangalan ko para makakilos ako at matulungan ko kayo". Sinabi niya
na meron na siyang kausap sa Ombudsman at sa Sandiganbayan.

35. On 28 August 2013 while me and my companions were at the NBI, Janet Lim
Napoles called me. She was crying and ask[i]ng me not to turn my back on her,
that we should stay together. She said "kahit maubos lahat ng pera ko,
susuportahan ko kayo. Hintay[i]n nyo kasi lalabas na ang TRO ko."

xxxx
 38. Attorney Tan instructed us to implicate Benhur in case we were asked by the
NBI. He said "wala naman ipinakita sa inyong masama si Madam (Janet Lim
Napoles). Siguro wala naman kayong sama ng loob kay madam, kaya nga idiin
ninyo si Benhur na siya ang nag-utos at saka sa kanya ninyo ibinibigay ang
pera."3(Emphasis supplied.)

The following day, the social news network Rappler published an article by Aries Rufo
entitled "Exclusive: Napoles Parties with Anti-Graft Court Justice" showing a photograph
of Senator Jinggoy Estrada (Senator Estrada), one of the main public figures involved in
the pork barrel scam, together with Mrs. Napoles and respondent. The reporter had
interviewed respondent who quickly denied knowing Mrs. Napoles and recalled that the
photograph was probably taken in one of the parties frequently hosted by Senator
Estrada who is his longtime friend. Respondent also supposedly admitted that given the
ongoing pork barrel controversy, the picture gains a different context; nevertheless, he
insisted that he has untainted service in the judiciary, and further denied he was the one
advising Mrs. Napoles on legal strategies in connection with the Kevlar helmet cases
where she was acquitted by a Division of the Sandiganbayan of which respondent is the
Chairman and the then Acting Presiding Justice.4

On September 12, 2013, Sula executed a "Karagdagang Sinumpaang Salaysay

"5 wherein she gave details regarding those persons named in her sworn statement,
alleged to have visited their office or attended their events, thus:

63) T: Ayon sa paragraph Nos. 32 at 33 ng iyong sinumpaang salaysay na may petsang

29 Agosto 2013, nabanggit mo ang mga personalidad na nakikita mong bumibisita sa
inyong opisina o di kaya naman sa tuwing may party o special occacions si JANET
NAPOLES ay may mga special guests kayo na kinabibilangan ng mga malalaking
pulitiko at ang iba naman ay may mga katungkulan sa gobyerno. Maari mo bang ilahad
ang mga pangyayari sa mga bawat pagkakataon na nakita mo sila sa iyong pagkaka-
alala?

S : Opo, iisa-isahin ko po ang mga pangyayari sa mga pagkakataon na nakita ko po

ang mga taong nabanggit ko:

xxxx

w) Justice GREGORY ONG - Isang beses ko po siyang nakitang nagpunta sa office sa

2501 Discovery Centre, Ortigas at nakita ko po silang magkausap ni Madam JANET
NAPOLES sa conference room.

x x x x6

In her testimony before the Senate Blue Ribbon Committee on September 26, 2013,
Sula was asked to confirm her statement regarding Justice Ong, thus:

THE CHAIRMAN. Thank you, Senator Grace.

Isang tanong lang kay Ms. Sula.

Sinabi niyo kanina may tinawagan si Ms. Napoles at sinabi niya, "Malapit na lumabas
yung TRO galing sa korte." May kilala pa ba si Janet Lim Napoles sa ltuwes sa korte sa
Sandiganbayan? MS. SULA. Hindi ko po alam.

THE CHAIRMAN. Your attention is called sa page –

MS. SULA. Sandiganbayan po, sorry. Mayroon po siyang binanggit na ano po –

THE CHAIRMAN. Nandito sa page 20.

MS. SULA. Si Mr. Ong, po, Justice Ong po.

THE CHAIRMAN. Gregory Ong.

MS. SULA Opo.

THE CHAIRMAN. Sa Sandiganbayan?

MS. SULA. Opo.

x x x7 (Emphasis supplied.)

In a letter dated September 26, 2013 addressed to Chief Justice Maria Lourdes P. A.
Sereno, respondent meticulously explained the controversial photograph which raised
questions on his integrity as a magistrate, particularly in connection with the decision
rendered by the Sandiganbayan' s Fourth Division in the Kevlar helmet cases, which
convicted some of the accused but acquitted Mrs. Napoles.

Respondent surmised that the photograph was taken during the birthday of Senator
Estrada in February, either in the year 2012 or 2013, but definitely not in 2010 or earlier.
He explained that he could vaguely remember the circumstances but it would have
been rude for him to prevent any guest from posing with him and Senator Estrada
during the party. On the nature of his association with Mrs. Napoles, respondent
asserted:

(4) I can categorically state, on the other hand, that I have never attended any party or
social event hosted by Mrs. Napoles or her family, either before she had a case with our
court, or while she already had a pending case with our court, or at any time afterwards.
I have never, to use the term of Mr. Rufo in his article, "partied" with the Napoleses.
(Emphasis supplied.)

As to the Kevlar helmet cases, respondent said it was impossible for him to have been
advising Mrs. Napoles, as claimed by Mr. Rufo, as even the article itself noted that Mrs.
Napoles' own brother, Reynald L. Lim, ( a.k.a. Reynaldo L. Francisco), a co-accused in
the case, was convicted by the Sandiganbayan. He stressed that these cases were
decided on the merits by the Sandiganbayan, acting as a collegial body and he was not
even the ponente of the decision. Respondent thus submitted himself to the discretion
of the Chief Justice such that even without being required to submit an explanation, he
voluntarily did so "to defend [his] reputation as a judge and protect the Sandiganbayan
as an institution from unfair and malicious innuendos."

On October 7, 2013, Chief Justice Sereno wrote the Members of this Court, citing the
testimonies of Luy and Sula before the Senate Blue Ribbon Committee "[t]hat the
malversation case involving Mrs. Janet Lim-Napoles, Major Jaime G. Napoles, Jenny
Lim Napoles, Reynaldo L. Francisco and other perpetrators was 'fixed' (inayos) through
the intervention of Justice Gregory S. Ong of the Sandiganbayan", to wit:

SEN. ANGARA. Sa inyo, hindi niyo a/am kung inayos iyong kaso na iyon? Kasi
napakaraming koneksiyon, 'di ba?

xxxx Sige, huwag kang matakot, Benhur.

MR. LUY. Alam ko, inayos ni Ms. Napoles iyon dahil may connect nga siya sa
Sandiganbayan

SEN. ANGARA. Okay.

xxxx

THE CHAIRMAN. xxx Sinabi niyo kanina na may tinawagan si Ms. Napoles at sinabi
niya "Malapit na lumabas yung TRO galing sa korte." May kilala pa ba si Janet Lim
Napoles sa huwes sa korte sa Sandiganbayan?

xxxx

MS. SULA. Si Mr. Ong po, Justice Ong po.

THE CHAIRMAN. Gregory Ong.

MS. SULA. Opo.

THE CHAIRMAN. Sa Sandiganbayan?

MS. SULA. Opo.

Xxxx8
Chief Justice Sereno then requested the Court En Banc to conduct an investigation
motu proprio under this Court's power of administrative supervision over members of
the judiciary and members of the legal profession (referring to notaries public who were
alleged to have purposely left their specimen signatures, dry seals and notarial books
with Mrs. Napoles to facilitate the incorporation of non-governmental organizations
[NGOs] involved in the scam).9

Under our Resolution dated October 17, 2013, the Court En Banc required respondent
to submit his comment and directed the NBI to furnish the Court with certified copies of
the affidavit of Luy. On November 21, 2013, the Court received respondent's
Comment.10 Respondent categorically denied any irregularity in the Kevlar helmet cases
and explained the visit he had made to Mrs. Napoles as testified by Sula.

On Sula's statement, respondent points out that Sula never really had personal
knowledge whether respondent is indeed the alleged "contact" of Mrs. Napoles at the
Sandiganbayan; what she supposedly "knows" was what Mrs. Napoles merely told her.
Hence, Sula's testimony on the matter is based purely on hearsay. Assuming that Mrs.
Napoles actually made the statement, respondent believes it was given in the context of
massive media coverage of the pork barrel scam exploding at the time. With the
consciousness of a looming criminal prosecution before the Office of the Ombudsman
and later before the Sandiganbayan, it was only natural for Mrs. Napoles to assure Sula
and others involved in their business operation that she would not leave or abandon
them and that she would do all that she can to help them just so they would not turn
their backs on her and become whistle-blowers. Thus, even if Mrs. Napoles made
misrepresentations to Sula regarding respondent as her "connection", she only had to
do so in order to convince Sula and her co-employees that the cases to be filed against
them would be "fixed."

As to Sula's statement that she personally witnessed respondent at one time visiting
Mrs. Napoles at her office and having a meeting with her at the conference room,
respondent said that at the birthday party of Senator Estrada where the controversial
photograph was taken, Mrs. Napoles engaged him in a casual conversation during
which the miraculous healing power of the robe or clothing of the Black Nazarene of
Quiapo was mentioned. When Mrs. Napoles told respondent that she is a close friend of
the Quiapo Church's parish priest, he requested her help to gain access to the Black
Nazarene icon. Eventually, respondent, who is himself a Black Nazarene devotee and
was undergoing treatment for his prostate cancer, was given special permission and
was able to drape the Black Nazarene's robe or clothing for a brief moment over his
body and also receive a fragrant ball of cotton taken or exposed to the holy image,
which article he keeps to this day and uses to wipe any ailing part of his body in order to
receive healing. Because of such favor, respondent out of courtesy went to see Mrs.
Napoles and personally thank her. Respondent stressed that that was the single
occasion Sula was talking about in her supplemental affidavit when she said she saw
respondent talking with Mrs. Napoles at the conference room of their office in Discovery
Suites.

Respondent maintains that there was nothing improper or irregular for him to have
personally seen Mrs. Napoles at the time in order to thank her, considering that she no
longer had any pending case with his court, and to his knowledge, with any other
division of the Sandiganbayan at the time and even until the date of the preparation of
his Comment. He thus prays that this Court duly note his Comment and accept the
same as sufficient compliance with the Court's Resolution dated October 17, 2013.

This Court upon evaluation of the factual circumstances found possible transgressions
of the New Code of Judicial Conduct committed by respondent. Accordingly, a
Resolution was issued on January 21, 2014 stating that:

WHEREFORE, the Court hereby resolves to have the instant administrative matter RE-
DOCKETED as A.M. No. SB-14-21-J (Re: Allegations Made Under Oath at tlze Senate
Blue Ribbon Committee Hearing held on September 26, 2013 against Associate Justice
Gregory S. Ong, Sandiganbayan), and ASSIGNS the same to retired Supreme Court
Justice Angelina Sandoval-Gutierrez for investigation, report and recommendation
within a period of sixty (60) days from notice hereof.

The Court further resolves to NOTE the letter dated January 7, 2014 of Atty. Joffre Gil
C. Zapata, Executive Clerk of Court III, Sandiganbayan, Fourth Division, in compliance
with the resolution of the Court En Banc dated December 3, 2013, transmitting the
original records of Criminal Case Nos. 26768 and 26769. Atty. Zapata is INFORMED
that there is no more need to transmit to this Court the post-sentence investigation
reports and other reports on the supervisory history of the accused-probationers in
Criminal Case Nos. 26768 and 26769.

Report and Recommendation of the Investigating Justice

Justice Angelina Sandoval-Gutierrez, a retired Member of this Court, submitted her

report with the following findings and conclusions:

FACTUAL ANTECEDENTS

1. THE KEVLAR CASE

Two criminal cases were filed with the Sandiganbayan sometime in 2001 - Criminal
Case No. 26768 for Falsification of Public Documents and Criminal Case No. 26769 for
Violation of Section 3(e) of the AntiGraft Law. Charged were several members of
Philippine Marine Corps and civilian employees including Ms. Janet L. Napoles
(Napoles), her mother Magdalena Francisco (now deceased), her brother Reynaldo
Francisco and wife Anna Marie Dulguime, and her (Napoles') three employees.

These cases are referred to as the Kevlar case because the issue involved is the same
- the questionable purchase of 500 Kevlar helmets by the Philippine Marine Corps in the
amount of ₱3,865,310.00 from five suppliers or companies owned by Napoles.

The prosecution alleged inter alia that the accused, acting in conspiracy, released the
payment although there was yet no delivery of the Kevlar helmets; that the suppliers are
mere dummies of Napoles; and that the helmets were made in Taiwan, not in the U.S.A.
Napoles' husband, Major Jaime Napoles, was dropped from the two Informations in an
Order issued by the Ombudsman on March 18, 2002.

Napoles' mother, brother, and sister-in-law were among those convicted for the lesser
crime of Falsification of Public Documents and sentenced to suffer the penalty of 4
years and 2 months of prision correccional to 8 years and 1 day of prision mayor and
each to pay PS,000.00. They all underwent probation.

Napoles and six members of the Philippine Marine Corps were acquitted in both cases.

The court ruled that Napoles "was not one of the dealer-payees in the transaction in
question. Even if she owns the bank account where the 14 checks were later deposited,
this does not in itself translate to her conspiracy in the crimes charged x x x."

xxxx

THE INVESTIGATION

xxxx

I. During the investigation, Benhur testified that he and Napoles are second cousins.
After passing the Medical Technology Licensure Examination in 2002, he was employed
in the JLN (Janet Lim Napoles) Corporation as Napoles' personal assistant. As such, he
was in charge of disbursements of her personal funds and those of her office. He was
also in charge of government transactions of the corporation and kept records of its
daily business activities.

In the course of Benhur's employment at the JLN Corporation, Napoles mentioned to

him the Kevlar case, then pending in the Sandiganbayan, saying she has a "connect" in
that court who would help her.

When asked about his testimony before the Senate Blue Ribbon Committee concerning
the Kevlar case, Benhur declared that Napoles' "connect" with the Sandiganbayan is
respondent, thus:

Q The question was, Mr. Witness, this is coming from Senator Angara, and I quote,
"Kailan ho lumabas yung decision ng Court sa Kevlar?" And just to refresh your
memory, Mr. Witness, then Ms. Sula answered, "I think 2010. Yun po yung lumabas
po." And then going forward, Senator Angara referred to both of you this question: "Sa
inyo, hindi ninyo alam kung inayos yung kaso na iyon kasi napakaraming koneksyon, di
ba? Baka alam ng ibang whistleblowers kung nagka-ayusan sa kaso na iyon. Sige,
huwag kang matakot, Benhur." Do you remember that question being asked from you?

xxxx

A Yes po.
Q And now Mr. Witness, about this statement of yours at the Blue Ribbon Committee
that Ms. Napoles has a certain connect sa Sandiganbayan, who was this connect you
were talking about, if you remember?

Witness Luy

A Si Justice Gregory Ong po.

Q How do you know that Justice Gregory Ong was the connect of Ms. Napoles at the
Sandiganbayan?

A Ang sinabi po ... Si Ms. Napoles, pinsan ko po kasi we are second cousins. So
kinuwento talaga sa akin ni Madam kung ano ang mga developments sa mga cases,
kung ano ang mga nangyayari. Tapos po, sinabi niya sa akin mismo na nakakausap
niya si Justice Gregory Ong at ang nagpakilala raw sa kanya po ay si Senator Jinggoy
Estrada.

Benhur further testified that even before the decision in the Kevlar case was
promulgated, Napoles and respondent were already communicating with each other
(nag-uusap na po si!a). Therefore, she was sure the decision would be in her favor:

Q Do you remember the date when the decision (in Kevlar case) was promulgated?

A Ano po, the year 2010 po ma' am.

Q And you met him (Justice Ong) in 2012?

A 2012 po, pero prior to that decision, madam, naririnig ko na po kay madam (Ms.
Napoles) kasi kinukwento na po ni madam sa akin na nag-uusap na po sila ni Justice
Gregory Ong.

Q That was after the decision was promulgated?

A Bago po nailabas yung decision, ikinwento po m Ms. Napoles sa akin na nag-uusap

na po sila ni Justice Gregory Ong. Kaya kampante po si Ms. Napoles. Noong lumabas
po yung decision, alam niya na po. Yung ang sabi sa akin ni Ms. Napoles.

Going back to the hearing before the Blue Ribbon Committee, Benhur told Senator
Angara that Napoles fixed the Kevlar case because she has a "connect" in the
Sandiganbayan:

"Baka alam ng ibang whistle blowers kung nagkaka-ayusan sa kaso na iyon (Kevlar
case). Sige huwag kang matakot Benhur."

Benhur Luy: "Alam ko inayos ni Ms. Napoles iyon dahil may connect nga siya sa
Sandiganbayan."
On how Napoles "inayos" or fixed the Kevlar case, Benhur said that he kept a ledger of
the Sandiganbayan case wherein he listed all her expenses in the sum of P 100 million
pesos. He was surprised why she would spend such amount considering that what was
involved in the Kevlar case was only ₱3.8 million. She explained that she gave various
amounts to different people during the pendency of the case which lasted up to ten
years. And before the decision in the Kevlar case was released, she also gave money
to respondent but she did not mention the amount. Thus, she knew she would be
acquitted.

Q You answered Senator Angara this way which we already quoted a while ago, "Alam
ko inayos ni Ms. Napoles iyon dahil may connect nga siya sa Sandiganbayan." You
stated that the connect is Justice Ong. Can you explain before us what you mean,
"Alam ko inayos ni Ms. Napoles iyon." What do you mean by that "inayos"?

A Kasi po ma' am meron kaming ledger ng Sandiganbayan case sa lahat ng nagastos

ni Ms. Janet Napoles, nilista ko po yon lahat. Kasi naririnig ko po kay Janet Napoles,
parang pinsan ko po si Janet Napoles, "Paano nagkaroon ng kaso ang ate ko? So
nadiscover ko na Jang po na yun pala yung Kevlar. So, mahigit one hundred million na
nagastos po ni Ms. Napoles kasi di Jang naman po si sir Justice Gregory Ong ...

xxx

Q Did you come to know to whom she gave all the money?

A Wala po siyang ... basta ang sabi niya inayos na niya si ... binaggit niya po si ... kasi
si madam hindi kasi nagki-keep kasi ako pinsan niya po kasi ako, nabanggit niya po si
Justice Gregory Ong. Sinabi niya nagbigay daw po siya ng pera kay Justice Ong pero
she never mentioned kung magkano yung amount.

xxx

Q Nagbigay ng pera kay Justice Gregory Ong?

A Opo, yung ang sabi niya (referring to Ms. Napoles).

Q To you?

A Yes, madam.

Q Do you remember when she made that kind of statement?

A Bago po ano madam, bago po lumabas yung decision kaya kampante na po si Ms.
Napoles bago lumabas yung decision na acquitted siya. Alam na niya. Sa Kevlar case.

xxx
Justice Gutierrez

Continue counsel.

Witness Luy

Kasi naikwento po madam ni Ms. Napoles na almost PlOO million na ang nagastos
niya. Tapos ang sabi ko nga po sa kanya: "Madam, P 100 million na sa halagang ₱3.8
lang na PO (purchase order) sa Kevlar helmet, tapos P 100 million na ang nagastos
mo?"

Q Did she tell you or explain to you to whom this P 100 million was paid? How was it
spent?

A Basta ang natatandaan ko ... di ko na po matandaan ang mga dates kasi parang
staggered. May ₱5 million sa ibang tao ang kausap niya. Tapos ito naman tutulong ng
ganito. lba-iba kasi madam, eh.

Q But there was no showing the money was given to Justice Ong?

A Wala po pero nabanggit lang po niya (Ms. Napoles) sa akin na nagbigay po siya kay
Justice Ong, but she never mentioned the amount.

Continuing with his testimony, Benhur declared that in 2012, respondent went twice to
Napoles' office at the Discovery Suites Center, 25 ADB Avenue, Ortigas, Pasig City. On
the first visit, Napoles introduced Justice Ong to Benhur and her other employees.

Benhur narrated what transpired during that visit. According to him, Napoles has so
much money being placed at the Armed Forces of the Philippines and Police Savings
and Loan Association, Inc. (AFPSLAI) which offered 13% interest annually. Napoles
called Benhur telling him that respondent would like to avail of such interest for his BDO
check of ₱25.5 million. To arrange this, Napoles informed Benhur that she would just
deposit respondent's ₱25.5 million in her personal account with Metro bank. Then she
would issue to respondent in advance eleven (11) checks, each amounting to
₱282,000.00 as monthly interest, or a total of ₱3,102,000.00 equivalent to 13% interest.
Upon Justice Ong's suggestion, the checks should be paid to cash. So, Benhur
prepared the corresponding eleven (11) checks, thus:

Q With respect to the Kevlar case, what participation did you have, if there was any?

Witness Luy

A Noon 2012 po kasi si Justice Gregory Ong po nasa unit 2501, yung office (of Ms.
Napoles), so kami ni Janet Napoles, nandito sa 2502 kasi yun po talaga ang office
namin. Si Ms. Napoles po sinabi niya sa akin, Ben, kasi si Ms. Napoles, may pera
siyang madarni na pine-place niya po sa AFPSLAI at yung AFPSLAI po ay nagbibigay
po sa kanya o nagooffer ng 13% interest annually po. So, ang nangyari po <loon, sabi
ni Janet Napoles, si Justice Ong ho raw, gustong magkaroon din ng interest parang
ganoon. So tutulungan niya. So ang ginawa po namin x x x. Q Meaning to say, Justice
Ong would like to deposit money?

A Opo.

Q So he could get 13% interest?

A Opo, kasi tapos madam ang nangyari po pumunta na po si Ms. Napoles sa kanyang
opisina. Tinawag po niya ako kasi pinasulat na niya sa akin ang checke. So, ang
ginawa po ni Ms. Napoles, yung checke ni .. BDO check po kasi yun. Ang sabi sa akin
ni Ms. Napoles, checke daw po yun ni Justice Gregory Ong. Sa, BDO. So, di ko naman
din po nakita Madam yung nakalagay sa ...

Q So it is the check of Justice Ong, not the check of Ms. Napoles?

A Opo, ang amount po ng check madam ay ₱25.5 million ang amount noong BDO
check na inissue ...

Q That belongs to Justice Ong?

A Opo. Tapos madam, so ang ginawa po namin ni Ms. Napoles, dahil po 13% interest
ang ino-offer ng AFPSLAI, sabi ni Madam ganito na lang, Ben, ipasok na lang muna
natin yung check niya sa personal account ko. Ako na lang muna for the meantime,
mag-iissue ng check sa kanya para maavail ni Justice Ong yung interest. So, ang
ginawa nan1in madam, ₱25.5 million times 13% interest, tapos divided by 12,
lumalabas ₱282,000.00 or ₱283,000.00 or ₱281,000.00 po madam kasi naground off
kami sa ₱282,000.00. So, ang ginawa ni Madam, baga monthly. So eleven (11) checks
ang prinepare namin. Kung hindi po ako nagkakamali po, JLN Corporation check ang ...
Ako pa nga po ang nagsulat at saka bago po namin isinulat yung payee, inalam pa po
namin. x x x So, pumunta na naman si madam sa 2501 kasi nandoon si Justice Gregory
Ong. Noong bumalik siya, pay to cash na lang daw. So, makikita po sa records namin ni
Ms. Napoles na pumasok ang ₱25.5 million na amount sa kanyang account at the same
time nag-issue siya ng checke na ₱282,000.00 na eleven checks. Nagstart kami
madam 2012, siguro sometime July or August or mga ganoong buwan po. Basta 11
checks, hindi nalalayo doon. So, siguro tapos na.

Q But what actually turned out was that the money of Justice Ong was deposited at the
bank but the interest was paid in advance by Ms. Napoles, and actually the bank will
pay Ms. Napoles the advanced interest she paid to Justice Ong, is that clear? Is that the
arrangement? Do you understand me?

A Kasi ang nangyari po ma'am ganito e: yung ₱25.5 million ipinasok sa personal
account ni Ms. Napoles dito sa Metrobank. Metrobank kasi po yun e.
On the second visit of respondent to Napoles' office, they just engaged in conversation.
She ordered Chinese food for him which, according to Benhur, is his (respondent's)
favorite.

On cross-examination, Benhur claimed that in his affidavits executed in the NBI, he did
not mention respondent's name. However, in his reply-affidavit filed with the
Sandiganbayan, he alleged that Napoles issued ₱282,000.00 (the amount stated in
each of the 11 checks) but he did not mention the name of the payee upon instruction of
his lawyer, Atty. Baligod. Nonetheless, he knew that the checks were issued to
respondent.

II. Sula, also a whistle blower, testified that she was an employee of JLN Corporation.
Her duties included the formation of corporations by making use of the forms, applying
for business licenses, transfer of properties, purchase of cars, and others.

Sula corroborated Benhur's testimony that respondent visited the office of Napoles twice
sometime in 2012.

Sula was asked to explain her testimony before the Blue Ribbon Committee during the
hearing on September 26, 2013, quoted as follows:

The Chairman (Senator Teofisto Guingona III)

Sinabi ninyo na may tinawagan si Mrs. Napoles at sinabi niya, Malapit nang lumabas
yung TRO galing sa korte. May kilala pa ba si Janet Lim Napoles sa huwes sa korte sa
Sandiganbayan?

xxx

Ms. Sula

Si Mr. Ong po. Justice Ong po.

The Chairman

Gregory Ong?

Ms. Sula

Opo.

The Chairman

Sa Sandiganbayan?

Ms. Sula
Opo.

The Chairman

Okay. With that, I will just have a closing statement before we leave the hearing.

Sula explained that the TRO mentioned by Napoles refers to the TRO to be issued by
the Sandiganbayan in the event the case involving the PIO billion PDAF scam against
her is filed with that court; and that Napoles told Sula and the other employees not to
worry because she has contact with the Sandiganbayan - respondent Justice Ong, thus:

Q Not the illegal detention case?

Witness Sula

A Hindi po, pag nakasuhan na po kami sa Sandiganbayan.

Q Okay, again?

A Sa pagkakaintindi po namin, ang sabi po ni Madam na it takes 4 to 5 years, so

hihintayin niya na maacquit, sabi niyang ganoon, ang pangalan niya para maluwag na
tulungan kami. Ito po ang pagkakaintindi namin na sa Sandiganbayan.

Q Yung PDAF?

A Opo, yung PDAF sa Sandiganbayan.

Q Pagdating ng kaso sa Sandiganbayan?

A Opo, kasi po ina-ano po niya, siya po tinitira na ni Benhur - si Madam tungkol sa PlO
billion scam. So, pinag-uusapan namin sa bahay niya sa South Garden Unit na,
Madam, paano po yan, pag lahat ng kaso na iyan dadaan sa lawmakers, dadaan yon
sa Ombudsman at saka sa Sandiganbayan? Sabi niya, "Huwag kayong mag-alala.
Meron naman akong mga contact doon." Sabi niyang ganoon sa Ombudsman at sa
Sandiganbayan.

Q Is that in your affidavit?

A Wala po. Pero sinabi ko po doon sa part na yon (her testimony before the Senate
Blue Ribbon Committee) na meron na siyang kilala sa Ombudsman, pero hindi niya
nabanggit ang pangalan. Pero sa Sandiganbayan, ang alam namin kilala niya si Justice
Ong.

Q Yun ang sagot niya kay Chairman Guingona. Di ba I read it a while ago?

A Opo, doon sa Sandiganbayan.

Sula also testified that every time Napoles talked to her and the other employees, she
would say that Justice Ong will help her in the Kevlar case. Sula's testimony is as
follows:

Q x x x you told me that somebody will help in the Kevlar case?

A Opo. Sinabi po niya sa amin every time po pag nagkukwento siya, sinasabi niya na si
Justice Ong ang tumulong sa kanya para ma-clear po yung Kevlar case niya.

Sula likewise testified that Napoles told her and the other employees that she will fix
(aayusin) the "PDAF case" in the Sandiganbayan. Then they replied in jest that her
acquaintance in that court is respondent. Napoles retorted, "Ay huag na iyon kasi
masyadong mataas ang talent fee."

xxxx

III. Aries Rufo, a Reporter of Rappler, testified that he cannot reveal who gave him the
photograph [of respondent beside Napoles and Senator Jinggoy Estrada] because he is
shielded by law and he has to protect his source.

When asked about his comment upon seeing the picture, Rufo said:

Initially, when I saw the picture, since I knew that Justice Ong was one of the members
of the division that handled the Kevlar case, it aroused my curiosity why he was in that
picture. Second, because in journalism, we also get to practice ethical standards, I
immediately sensed though that a Justice or a lawyer, that he should not be seen or be
going to a party or be in an event where respondent (Ms. Napoles) was in a case under
his Division. He should not be in a situation that would compromise the integrity of his
office.

Rufo further testified that on August 27, 2013, he faxed a letter to respondent to "get his
side about the photo." The next day, he went to respondent's office and showed it to
him. Respondent was shocked. He explained that it must have been taken during one of
the parties hosted by his friend Senator Jinggoy Estrada; that he did not know that the
woman in the picture is Napoles because she did not appear during the hearing of the
Kevlar case; and that such picture must have been taken in one of those instances
when a guest would like to pose with celebrities or public figures.

xxxx

Respondent, in his defense, vehemently denied the imputations hurled against him.

1. He asserted that he could not be the contact or "connect" of Napoles at the

Sandiganbayan for he never met or came to know her during the pendency of the
Kevlar case;
 2. Challenging Benhur's testimony that he fixed or "inayos" the Kevlar case,
respondent claimed that it was decided based on the merits by the
Sandiganbayan Fourth Division as a collegial body. The two other members of
the court, Justice Jose R. Hernandez (ponente) and Justice Maria Cristina J.
Cornejo, are independent-minded jurists who could not be pressured or
influenced by anybody, not even by their peers;

3. On Benhur's allegation that respondent received an amount of money from

Napoles prior to the promulgation of the decision in the Kevlar case, respondent
deplored the fact that Benhur was attempting to tarnish his reputation without any
proof. And that it is unthinkable for him to have received money from Napoles
considering that her mother, brother, and sister-in-law were convicted;

4. Respondent admitted he went to Napoles' office twice, sometime in March

2012, after the decision in the Kevlar case was promulgated in 2010 and
narrated what prompted him to do so, thus:

At the birthday party of Senator Jinggoy Estrada on February 17, 2012, Napoles
approached him and introduced herself. She engaged him in a casual conversation and
thanked him for her acquittal in the Kevlar case. Respondent replied she should thank
her "evidence" instead, adding that had the court found enough evidence against her,
she would have been convicted. She talked about her charity works like supporting
Chinese priests, building churches and chapels in China, and sponsoring Chinese
Catholic priests. He was not interested though in what she was saying until she
mentioned the name of Msgr. Ramirez, former Parish Priest of Quiapo Church.

Respondent became interested because he has been a devotee of the Holy Black
Nazarene since he was a little boy. Napoles told him that Msgr. Ramirez has with him
the robe of the Holy Black Nazarene which has a healing power if one wears it. Then
respondent asked if he can have access to the robe so he can be cured of his ailment
(prostate cancer) which he keeps only to himself and to the immediate members of his
family. Napoles made arrangement with Msgr. Ramirez until respondent was able to
drape the robe over his body for about one or two minutes in Quiapo Church. He also
received a fragrant ball of cotton which he keeps until now to heal any ailing part of his
body. That was a great deal for him. So out of courtesy, he visited Napoles in her office
and thanked her. That was his first visit.

Thereafter, Napoles kept on calling respondent, inviting him to her office, but he kept on
declining. Then finally after two weeks, he acceded for she might think he is "walang
kwentang tao." They just engaged in a small talk for about 30 minutes and had coffee.

5. Concerning Benhur's testimony that Napoles paid respondent an advanced interest

consisting of eleven (11) checks in the amount of ₱282,000.00 each and that he issued
to her his BDO check of ₱25.5 million which she deposited in her account, he claimed
that "he never issued that check as he did not intend to invest in AFPSLAI. In fact, he
does not have any money deposited there. Inasmuch as he did not issue any BDO
check, it follows that Napoles could not have given him those eleven (11) checks
representing advanced interest. He further explained that he found from the internet that
in AFPSLAI, an investor can only make an initial deposit of ₱30,000.00 every quarter or
Pl20,000.00 per year. The limit or ceiling is ₱3 million with an interest of 15% or 16%
per annum.

6. The whistle blower's testimony are conflicting and therefore lack credibility. While
Sula testified that Napoles told her that she did not want to approach respondent
(should a case involving the pork barrel scam be filed with the Sandiganbayan) because
his talent fee is too high, however, both whistle blowers claimed that he is Napoles'
contact in the Sandiganbayan.

With respect to the Rappler Report, according to respondent, Rufo was insinuating four
things: 1. That there was irregularity in the manner the Kevlar case was decided;

2. That respondent was close to Napoles even during the pendency of the Kevlar case;

3. That respondent was attending parties of the Napoleses; and

4. That respondent was advising Napoles about legal strategies relative to the Kevlar
case. Respondent "dismissed all the above insinuations as false and without factual
basis." As to the last insinuation that he advised Napoles about legal strategies to be
pursued in the Kevlar case, respondent stressed that the case was decided by a
collegial body and that he never interceded on her behalf.

EVALUATION

xxxx

It bears stressing that before the Senate Blue Ribbon Committee, Benhur initially
testified that Napoles fixed or "inayos" the Kevlar case because she has a contact at the
Sandiganbayan, referring to respondent. Sula corroborated Benhur's testimony.

Testifying before the Senate Blue Ribbon Committee is certainly an ordeal. The
witnesses and everything they say are open to the public. They are subjected to difficult
questions propounded by the Senators, supposedly intelligent and knowledgeable of the
subject and issues under inquiry. And they can easily detect whether a person under
investigation is telling the truth or not. Considering this challenging and difficult setting, it
is indubitably improbable that the two whistle blowers would testify false! y against
respondent.

Moreover, during the investigation of this case, Benhur and Sula testified in a candid,
straightforward, and categorical manner. Their testimonies were instantaneous, clear,
unequivocal, and carried with it the ring of truth.
In fact, their answers to the undersigned's probing questions were consistent with their
testimonies before the Senate Blue Ribbon Committee. During cross-examination, they
did not waver or falter. The undersigned found the two whistle blowers as credible
witnesses and their story untainted with bias and contradiction, reflective of honest and
trustworthy witnesses.

The undersigned therefore finds unmeritorious respondent's claim that Benhur and Sula
were lying.

. . . respondent insisted he could not have intervened in the disposition of the Kevlar
case considering that Napoles' mother, brother and sister-in-law were convicted.

Respondent must have forgotten that Napoles' natural instinct was self-preservation.
Hence, she would avail of every possible means to be exonerated. Besides,
respondent's belief that the two members of his Division are independent-minded Jurists
remains to be a mere allegation.

xxxx

With the undersigned's finding that there is credence in the testimonies of Benhur and
Sula, there is no need to stretch one's imagination to arrive at the inevitable conclusion
that in "fixing" Kevlar case, money could be the consideration ... Benhur testified he kept
a ledger (already shredded) of expenses amounting to P 100 million incurred by
Napoles for the Sandiganbayan during the pendency of the Kevlar case which extended
up to ten years; and that Napoles told him she gave respondent an undetermined sum
of money.

Respondent maintains that the testimonies of Benhur and Sula are pure hearsay,
inadmissible in evidence:

Justice Ong

Your honor, since these are all accusations against me by Luy and Sula, and according
to Luy and Sula, these were only told to them by Napoles, always their statements were
... they do not have personal knowledge, it was only told to them by Napoles, is it
possible that we subpoena Napoles so that the truth will come out? If. ..

xxxx

Justice Gutierrez

That is your prerogative.

Justice Ong
I am willing to take the risk although I know I am not an acquaintance of Napoles. Just
to clear my name whether I should be hung or I should not be hung.

xxxx

Atty. Geronilla

I don't think it would be necessary, your honor.

Justice Gutierrez (to Atty. Geronilla)

Discuss this matter with your client, file a motion, then we will see.

However, respondent and his counsel did not take any action on the undersigned's
suggestion. They did not present Napoles to rebut the testimonies of Benhur and Sula.
Significantly, respondent failed to consider that his testimony is likewise hearsay. He
should have presented Msgr. Ramirez and Napoles as witnesses to support his claim
regarding their role which enabled him to wear the robe of the Holy Black Nazarene.

x x xx

Respondent's acts of allowing himself to be Napoles' contact in the Sandiganbayan,

resulting in the fixing of the Kevlar case, and of accepting money from her, constitute
gross misconduct, a violation of the New Code of Judicial Conduct for the Philippine
Judiciary.

xxxx

That Benhur personally prepared the eleven (11) checks which Napoles handed to
respondent led the undersigned to conclude without hesitation that this charge is true. It
is highly inconceivable that Benhur could devise or concoct his story. He gave a
detailed and lucid narration of the events, concluding that actually Napoles gave
respondent ₱3, 102,000.00 as advanced interest.

According to respondent, the purpose of his first visit was to thank Napoles for making it
possible for him to wear the Holy Black Nazarene's robe. Even assuming it is true,
nonetheless it is equally true that during that visit, respondent could have transacted
business with Napoles. Why should Napoles pay respondent an advanced interest of
₱3,102,000.0 with her own money if it were not a consideration for a favor?

Respondent's transgression pertains to his personal life and no direct relation to his
judicial function. It is not misconduct but plain dishonesty. His act is unquestionably
disgraceful and renders him morally unfit as a member of the Judiciary and unworthy of
the privileges the law confers on him. Furthermore, respondent's conduct supports
Benhur's assertion that he received money from Napoles.
Dishonesty likewise violates Canon 2 (1 and 2) on Integrity of the same Code providing
in part that judges must ensure that their conduct is above reproach and must reaffirm
the people's faith in the integrity of the Judiciary.

Indeed, respondent should not stay in his position even for a moment.

xxxx

...From respondent's end, there was nothing wrong when he visited Napoles twice in her
office considering that the visits took place long after the promulgation of the decision in
the Kevlar case.

Contrary to respondent's submission, such acts also constitute gross misconduct in

violation of Canon 4 on Propriety of the same Code. Section 1 provides that judges shall
avoid impropriety and the appearance of impropriety in all of their activities .

. . . respondent's reason for his first visit was to thank Napoles for her help in making it
possible for him to wear the robe of the Holy Black Nazarene. Instead of visiting her,
respondent could have extended his gratitude by simply calling her by phone. Worse,
he visited her again because she may think he is an unworthy person. This is an
extremely frail reason. He was seen by the whistle blowers and their co-workers who,
without doubt, readily confirmed that he was Napoles' contact at the Sandiganbayan
and that he "fixed" the decision in the Kevlar case.

Respondent cannot be excused for his unconcern for the position he holds. Being aptly
perceived as the visible personification of law and justice, his personal behavior, not
only while in the performance of official duties but also outside the court, must be
beyond reproach. A judicial office circumscribes a personal conduct and imposes a
number of inhibitions, whose faithful observance is the price one has to pay for holding
an exalted position.

xxxx

On the photograph showing respondent

with Senator Jinggoy Estrada and Napoles.

xxxx

This incident manifests respondent's disregard of the dictum that propriety and the
appearance of propriety are essential to the performance of all the activities of a judge.
This exacting standard of decorum is demanded from judges to promote public
confidence in the integrity of the Judiciary.

In joining Senator Estrada and Napoles in a picture taking, respondent gave a ground
for reproach by reason of impropriety. It bears reiterating Canon 4 (1) on Propriety of
the same Code which provides that judges shall avoid impropriety and the appearance
of impropriety in all of their activities.

Respondent maintained that he did not know Napoles at that time because she was not
present before the Sandiganbayan during the hearing of the Kevlar case for she must
have waived her appearance. Respondent's explanation lacks merit. That court could
not have acquired jurisdiction over her if she did not appear personally for arraignment.

Of utmost significance is the fact that this is not the first time that respondent has been
charged administratively. In "Assistant Special Prosecutor Ill Rohermina J Jamsani-
Rodriguez v. Justices Gregory S. Ong, Jose R. Hernandez and Rodolfo A. Ponferrada,
Sandiganbayan,'' the Supreme Court found respondent Justice Ong guilty of violation of
PD 1606 and The Revised Internal Rules of the Sandiganbayan for nonobservance of
collegiality in hearing criminal cases in the Hall of Justice, Davao City. Instead of siting
as a collegial body, the members of the Sandiganbayan Fourth Division adopted a
different procedure. The Division was divided into two. As then Chairperson of the
Division, respondent was ordered to pay a fine of ₱15,000.00 with a stern warning that
a repetition of the same or similar offense shall be dealt with more severely.

xxxx

...the undersigned cannot hold back her skepticism regarding the acquittal of Napoles.
The Sandiganbayan Fourth Division, of which respondent was the Chairman, held that
Napoles did not conspire with the suppliers in the questionable purchase of the Kevlar
helmets as she was not one of the "dealer-payees" in the transaction in question and
that there was no proof of an overt act on her part. How could the Fourth Division arrive
at such conclusion? The Decision itself indicates clearly that ( 1) Napoles was following
up the processing of the documents; (2) that she was in charge of the delivery of the
helmets; and (3) the checks amounting to ₱3,864,310.00 as payment for the helmets
were deposited and cleared in only one bank account, Security Bank Account No. 512-
000-2200, in the name of Napoles.

Considering this glaring irregularity, it is safe to conclude that indeed respondent has a
hand in the acquittal of Napoles. All along, the whistle blowers were telling the truth.

xxxx

RECOMMENDATION

IN VIEW OF THE FOREGOING, It is respectfully recommended, for consideration of

the Honorable Court, that respondent Justice Gregory S. Ong be found GUILTY of
gross misconduct, dishonesty, and impropriety, all in violations of the New Code of
Judicial Conduct for the Philippine Judiciary and be meted the penalty of DISMISSAL
from the service WITH FORFEITURE of all retirement benefits, excluding accrued leave
credits, and WITH PREJUDICE to reemployment to any government, including
government-owned or controlled corporations.
 xxxx

The Court's Ruling

This Court adopts the findings, conclusions and recommendations of the Investigating
Justice which are well-supported by the evidence on record.

Based on the testimonies of Luy, Sula and Rufo, the Investigating Justice formulated
the charges against the respondent, as follows:

1. Respondent acted as contact of Napoles in connection with the Kevlar case

while it was pending in the Sandiganbayan Fourth Division wherein he is the
Chairman;

2. Respondent, being Napoles' contact in the Sandiganbayan, fixed the Kevlar

case resulting in her acquittal;

3. Respondent received an undetermined amount of money from Napoles prior to

the promulgation of the decision in the Kevlar case thus, she was sure
("kampante")of her acquittal; 4. Respondent visited Napoles in her office where
she handed to him eleven (ll) checks, each amounting to ₱282,000.00 or a total
of ₱3,102,000.00, as advanced interest for his ₱25.5 million BDO check she
deposited in her personal account; and

5. Respondent attended Napoles' parties and was photographed with Senator

Estrada and Napoles.11

Respondent thus stands accused of gross misconduct, partiality and corruption or

bribery during the pendency of the Kevlar case, and impropriety on account of his
dealing and socializing with Napoles after her acquittal in the said case. Additionally,
respondent failed to disclose in his September 26, 2013 letter to Chief Justice Sereno
that he had actually visited Napoles at her office in 2012, as he vehemently denied
having partied with or attended any social event hosted by her.

Misconduct is a transgression of some established and definite rule of action, a

forbidden act, a dereliction of duty, unlawful behavior, willful in character, improper or
wrong behavior; while ·"gross" has been defined as "out of all measure beyond
allowance; flagrant; shameful; such conduct as is not to be excused." 12 We agree with
Justice Sandoval-Gutierrez that respondent's association with Napoles during the
pendency and after the promulgation of the decision in the Kevlar case resulting in her
acquittal, constitutes gross misconduct notwithstanding the absence of direct evidence
of corruption or bribery in the rendition of the said judgment.

We cannot overemphasize that in administrative proceedings, only substantial

evidence, i.e., that amount of relevant evidence that a reasonable mind might accept as
adequate to support a conclusion, is required. The standard of substantial evidence is
satisfied when there is reasonable ground to believe that respondent is responsible for
the misconduct complained of, even if such evidence might not be overwhelming or
even preponderant.13

The testimonies of Luy and Sula established that Napoles had been in contact with
respondent ("nag-uusap sila") during the pendency of the Kevlar case. As Napoles'
trusted staff, they (especially Luy who is a cousin) were privy to her daily business and
personal activities. Napoles constantly updated them of developments regarding the
case. She revealed to them that she has a "connect" or "contact" in the Sandiganbayan
who will help "fix" the case involving her, her mother, brother and some employees.
Having closely observed and heard Napoles being confident that she will be acquitted
even prior to the promulgation of the decision in the Kevlar case, they were convinced
she was indeed in contact with respondent, whose identity was earlier divulged by
Napoles to Luy. Luy categorically testified that Napoles told him she gave money to
respondent but did not disclose the amount. There was no reason for them to doubt
Napoles' statement as they even keep a ledger detailing her expenses for the
"Sandiganbayan," which reached Pl 00 million. Napoles' information about her
association with respondent was confirmed when she was eventually acquitted in 2010
and when they saw respondent visit her office and given the eleven checks issued by
Napoles in 2012.

Respondent maintains that the testimonies of Luy and Sula were hearsay as they have
no personal knowledge of the matters they were testifying, which were merely told to
them by Napoles. Specifically, he points to portions of Sula's testimony indicating that
Napoles had not just one but "contact persons" in Ombudsman and Sandiganbayan;
hence, it could have been other individuals, not him, who could help Napoles "fix" the
Kevlar case, especially since Napoles never really disclosed to Sula who was her
(Napoles) contact at the Sandiganbayan and at one of their conversations Napoles
even supposedly said that respondent's "talent fee" was too high. Bribery is committed
when a public officer agrees to perform an act in connection with the performance of
official duties in consideration of any offer, promise, gift or present received. 14 Ajudge
who extorts money from a party-litigant who has a case before the court commits a
serious misconduct and this Court has condemned such act in the strongest possible
terms. Particularly because it has been committed by one charged with the
responsibility of administering the law and rendering justice, it quickly and surely
corrodes respect for law and the courts.15

An accusation of bribery is easy to concoct and difficult to disprove. The complainant

must present a panoply of evidence in support of such an accusation. Inasmuch as
what is imputed against the respondent judge connotes a grave misconduct, the
quantum of proof required should be more than substantial.16 Concededly, the evidence
in this case is insufficient to sustain the bribery and corruption charges against the
respondent. Both Luy and Sula have not witnessed respondent actually receiving
money from Napoles in exchange for her acquittal in the Kevlar case. Napoles had
confided to Luy her alleged bribe to respondent.
Notwithstanding the absence of direct evidence of any corrupt act by the respondent,
we find credible evidence of his association with Napoles after the promulgation of the
decision in the Kevlar case. The totality of the circumstances of such association
strongly indicates respondent's corrupt inclinations that only heightened the public's
perception of anomaly in the decision-making process. By his act of going to respondent
at her office on two occasions, respondent exposed himself to the suspicion that he was
partial to Napoles. That respondent was not the ponente of the decision which was
rendered by a collegial body did not forestall such suspicion of partiality, as evident from
the public disgust generated by the publication of a photograph of respondent together
with Napoles and Senator Jinggoy Estrada. Indeed, the context of the declarations
under oath by Luy and Sula before the Senate Blue Ribbon Committee, taking place at
the height of the "Pork Barrel" controversy, made all the difference as respondent
himself acknowledged. Thus, even in the present administrative proceeding, their
declarations are taken in the light of the public revelations of what they know of that
government corruption controversy, and how it has tainted the image of the Judiciary.

The hearsay testimonies of Luy and Sula generated intense public interest because of
their close relationship to Napoles and their crucial participation in her transactions with
government officials, dubbed by media as the "Pork Barrel Queen." But as aptly
observed by Justice SandovalGutierrez, the "challenging and difficult setting" of the
Senate hearings where they first testified, made it highly improbable that these whistle
blowers would testify against the respondent. During the investigation of this case,
Justice Sandoval-Gutierrez described their manner of testifying as "candid,
straightforward and categorical." She likewise found their testimonies as "instantaneous,
clear, unequivocal, and carried with it the ring of truth," and more important, these are
consistent with their previous testimonies before the Senate; they never wavered or
faltered even during cross-examination.

It is a settled rule that the findings of investigating magistrates are generally given great
weight by the Court by reason of their unmatched opportunity to see the deportment of
the witnesses as they testified.17 The rule which concedes due respect, and even
finality, to the assessment of credibility of witnesses by trial judges in civil and criminal
cases applies a fortiori to administrative cases.18 In particular, we concur with Justice
Sandoval-Gutierrez's assessment on the credibility of Luy and Sula, and disagree with
respondent's claim that these witnesses are simply telling lies about his association with
Napoles.

Contrary to respondent's submission, Sula in her testimony said that whenever Napoles
talked about her contacts in the Ombudsman and Sandiganbayan, they knew that
insofar as the Sandiganbayan was concerned, it was understood that she was referring
to respondent even as she may have initially contacted some persons to get to
respondent, and also because they have seen him meeting with Napoles at her office. It
appears that Napoles made statements regarding the Kevlar case not just to Luy but
also to the other employees of JLN Corporation. The following are excerpts from Sula's
testimony on direct examination, where she even hinted at their expected outcome of
the Kevlar case:
Atty. Benipayo

Q So, Ms. Sula, what were the statements being made by Ms. Janet Lim Napoles
regarding her involvement in the Kevlar case, or how she was trying to address the
problem with the Kevlar case pending before the Sandiganbayan?

Witness Sula

A Ang alam ko po kasi marami po siyang kinaka-usap na mga lawyers na binabayaran

niya para tulungan siya kay Gregory Ong sa Kevlar case. Tapos, sa kalaunan po,
nasabi na niya sa amin na mcron na po siyang nakilala sa Sandiganbayan na
nagngangalang Justice Gregory Ong. Tapos, sabi niya, siya po ang tutulong sa amin
para ma-clear kami. Pero hindi niya sinabi na meron din pong ma ... sasagot sa kaso.
Hindi po lahat, kasi po dalawa sa mga empleyado niya, bale apat, dalawang empleyado
niya, isang kapatid niya at sister-in-law ang mag-aano sa kaso pati yung mother niya na
namatay na ay sasagot din sa kaso. Siya Jang at saka yung asawa niya ang bale makli-
clear sa kaso.

Q So, she told you that two (2) employees, one (1) sister-in-law and one brother will
answer for the case and Janet Lim Napoles and her husband will be acquitted, is that
right?

A Yun po ang aking pagkaka-alam kasi po, nag-petition po kasi sila eh, yung mga
officemates ko. Nagkaroon ng probation. Noong lumabas ang hatol, meron silang
probation period.

xxxx

Q Which you told me that somebody will help in the Kevlar case?

A Opo. Sinabi po niya sa amin everytime po pag nagkukwento siya, sinasabi niya na si
Justice Ong ang tutulong sa kanya para ma-clear po yung Kevlar case niya.

x x x x19 (Emphasis supplied.)

As it turned out, Napoles' husband was dropped from the two informations while her
mother, brother and sister-in-law were convicted in the lesser charge of falsification of
public documents. Apparently, after her acquittal, Napoles helped those convicted
secure a probation. But as stated in our earlier resolution, the Court will no longer delve
into the merits of the Kevlar case as the investigation will focus on respondent's
administrative liability.

Respondent's act of voluntarily meeting with Napoles at her office on two occasions was
grossly improper and violated Section 1, Canon 4 (Propriety) of the New Code of
Judicial Conduct, which took effect on June 1, 2004.
SECTION 1. Judges shall avoid impropriety and the appearance of impropriety in all of
their activities.

A judge must not only be impartial but must also appear to be impartial and that
fraternizing with litigants tarnishes this appearance.20 Public confidence in the Judiciary
is eroded by irresponsible or improper conduct of judges. A judge must avoid all
impropriety and the appearance thereof. Being the subject of constant public scrutiny, a
judge should freely and willingly accept restrictions on conduct that might be viewed as
burdensome by the ordinary citizen.21

In Caneda v. Alaan,22 we held that:

Judges are required not only to be impartial but also to appear to be so, for appearance
is an essential manifestation of reality. Canon 2 of the Code of Judicial Conduct enjoins
judges to avoid not just impropriety in their conduct but even the mere appearance of
impropriety.

They must conduct themselves in such a manner that they give no ground for reproach.
[Respondent's] acts have been less than circumspect. He should have kept himself free
from any appearance of impropriety and endeavored to distance himself from any act
liable to create an impression of indecorum.

xxxx

Indeed, respondent must always bear in mind that:

"A judicial office traces a line around his official as well as personal conduct, a price one
has to pay for o ccupying an exalted position in the judiciary, beyond which he may not
freely venture. Canon 2 of the Code of Judicial Conduct enjoins a judge to avoid not just
impropriety in the performance of judicial duties but in all his activities whether in his
public or private life. He must conduct himself in a manner that gives no ground for
reproach." (Emphasis supplied.)

On this score, our previous pronouncements have enjoined judges to avoid association
or socializing with persons who have pending cases before their court. Respondent
cites the case of Abundo v. Mania, Jr.23 where this Court did not find fault with a judge
who was charged with fraternizing with his lawyer-friend. In that case, we said:

Respondent admits that he and Atty. Pajarillo became close friends in 1989 when they
were both RTC judges stationed in Naga City. Since they both resided in Camarines
Norte, Atty. Pajarillo hitched rides with respondent to Daet, Camarines Norte in the
latter's car.

In his Comment, respondent claims that he leaves the door to his chambers open to
lawyers or parties with official court business, whose requests and complaints regarding
their cases he listens to in full view of his staff, who are witnesses to his transparency
and honesty in conducting such dialogues. He also admits that Atty. Pajarillo has been
to his house on several occasions, but only to make emergency long-distance calls to
his children in Metro Manila. He, however, denies that he and Atty. Pajarillo were
frequently seen eating and drinking together in public places.

We agree with Justice Buzon's finding that the evidence against respondent on this
point was insufficient, viz.:

"On the other hand, the admission of respondent that he attended two public functions
where Atty. Pajarillo was also present; that Atty. Pajarillo had been in his house twice or
thrice and used his telephone; and that he receives lawyers, including Atty. Pajarillo,
and litigants inside his chambers, the door to which is always open so that [the] staff
could see that no under the table transactions are taking place, is not proof that he is
fraternizing with Atty. Pajarillo. A judge need not ignore a former colleague and friend
whenever they meet each other or when the latter makes requests which are not in any
manner connected with cases pending in his court. Thus, Canon 30 of the Canons of
Judicial Ethics provides:

'30. Social relations

It is not necessary to the proper performance of judicial duty that judges should live in
retirement or seclusion; it is desirable that, so far as the reasonable attention to the
completion of their work will permit, they continue to mingle in social intercourse, and
that they should not discontinue their interests in or appearance at meetings of
members at the bar. A judge should, however, in pending or prospective litigation before
him be scrupulously careful to avoid such action as may reasonably tend to waken the
suspicion that his social or business relations or friendships constitute an element in
determining his judicial course.'"

The factual setting in Abundo v. Mania, Jr. is not similar to the present case because
Napoles was not a colleague or lawyer-friend but an accused in a former case before
the Sandiganbayan's Fourth Division chaired by respondent and which acquitted her
from malversation charge. What respondent perhaps want to underscore is the caveat
for judges, in pending or prospective litigation before them, to avoid such action as may
raise suspicion on their partiality in resolving or deciding the case. Thus, he emphasized
in his Memorandum that he "never knew Napoles on a personal level while she was still
on trial as an accused in Kevlar helmet case." Respondent even quoted Sula's
testimony expressing her opinion that she finds nothing wrong with respondent going to
Napoles' office because at that time, the Kevlar case had already been terminated.

We do not share the view that the rule on propriety was intended to cover only pending
and prospective litigations.

Judges must, at all times, be beyond reproach and should avoid even the mere
suggestion of partiality and impropriety.24 Canon 4 of the New Code of Judicial Conduct
states that "[p ]ropriety and the appearance of propriety are essential to the
performance of all the activities of a judge." Section 2 further provides:

SEC. 2. As a subject of constant public scrutiny, judges must accept personal

restrictions that might be viewed as burdensome by the ordinary citizen and should do
so freely and willingly. In particular, judges shall conduct themselves in a way that is
consistent with the dignity of the judicial office.

As we held in Sibayan-Joaquin v. Javellana25

... Judges, indeed, should be extra prudent in associating with litigants and counsel
appearing before them so as to avoid even a mere perception of possible bias or
partiality. It is not expected, of course, that judges should live in retirement or seclusion
from any social intercourse. Indeed, it may be desirable, for instance, that they continue,
time and work commitments permitting, to relate to members of the bar in worthwhile
endeavors and in such fields of interest, in general, as are in keeping with the noble
aims and objectives of the legal profession. In pending or prospective litigations before
them, however, judges should be scrupulously careful to avoid anything that may tend
to awaken the suspicion that their personal, social or sundry relations could influence
their objectivity, for not only must judges possess proficiency in law but that also they
must act and behave in such manner that would assure, with great comfort, litigants and
their counsel of the judges' competence, integrity and independence.

In this light, it does not matter that the case is no longer pending when improper acts
were committed by the judge. Because magistrates are under constant public scrutiny,
the termination of a case will not deter public criticisms for acts which may cast
suspicion on its disposition or resolution. As what transpired in this case, respondent's
association with Napoles has unfortunately dragged the Judiciary into the "Pork Barrel"
controversy which initially involved only legislative and executive officials. Worse,
Napoles' much-flaunted "contact" in the judiciary is no less than a Justice of the
Sandiganbayan, our special court tasked with hearing graft cases. We cannot, by any
stretch of indulgence and compassion, consider respondent's transgression as a simple
misconduct.

During his testimony, respondent acknowledged his violation of judicial ethics and its
serious repercussions, as shown by his answers to the questions from the Investigation
Justice, viz: Justice Gutierrez

What I am thinking Justice, as a Justice holding a very high position, could it not be
possible for you to just go to the Church of Quiapo and ask the priest there to help you
or assist you, no longer through Ms. Napoles?

Justice Ong

You cannot do that, your honor. Ever since when I was a small boy, I never got near the
image of the Mahal na Poon. Nobody can do that, your honor.
Justice Gutierrez

No, no. What I mean is that you can just go to the priest in Quiapo and make the proper
request. Why did you not do that?

Justice Ong

I don't know, your honor.

Justice Gutierrez

Because you have been suffering from that ailment, mass or whatever, and that you are
a devotee of the Black Nazarene. You could have gone to the Office of the priest there
and had that request for you to wear that robe of the Black Nazarene?

Justice Ong

Hindi ko po alam na may ganyan, your honor. I was only told by Napoles during that
conversation. Had I known that, siguro po pwede ko pong gawin. Had I known that there
is such a robe, maybe I will do that.

Justice Gutierrez

Okay. It happened already. But just to thank Ms. Napoles, I think Justice you should
have been very, very careful about your actuations. You should not have been seen in
public, you know, with a woman like her who was an accused before. You could have
thanked her simply by calling her. You could have relayed to her your true feelings that
you are so grateful because of her assistance. Were it not for her, you could not have
worn that Holy Robe of the Black Nazarene. You could have simply called her instead of
going to her office; instead of, you know, going to the Church of Santuario de San
Antonio in Forbes Park. And you should have been more careful not to be seen by the
public with her considering that she was a former accused in that case.

Justice Ong

I will heed to that advice, your honor.

Justice Gutierrez

Q And you admitted a while ago, during the interview conducted by Mr. Aries Rufo that.
"That is a lesson for me; that I should not have associated, you know, with a former
respondent or accused in a case before me." You admitted that? You said you learned
you lesson. Was that the first time you learned that kind of lesson, Mr. Justice? Or even
before you took your oath as a member of the Judiciary, you already knew that lesson,
isn't it or was that the first time? That is why you associated yourself with Senator
Jinggoy Estrada who was accused before of plunder?
Justice Ong

Your honor, talking about ....

Justice Gutierrez

Q Do you admit you committed a lapse along that line?

Justice Ong

A Yes, your honor. You have to forgive me for that.26 (Emphasis supplied.)

In her report, Justice Sandoval-Gutierrez noted that respondent's purported reason for
visiting Napoles in her office remains uncorroborated, as Napoles and the Quiapo
parish priest were not presented as witnesses despite her suggestion to respondent and
his counsel. On the other hand, Luy's testimony on what transpired in one of
respondent's meeting with Napoles at her office appears to be the more plausible and
truthful version. Expectedly, respondent denied having issued a BDO check for ₱25 .5
million as claimed by Luy, and asserted he (respondent) did not deposit any money to
AFPSLAI. Unfortunately, Luy is unable to present documentary evidence saying that, as
previously testified by him before the Senate, most of the documents in their office were
shredded upon orders of Napoles when the "Pork Barrel Scam" controversy came out.

Justice Sandoval-Gutierrez stated that the eleven checks of ₱282,000.00 supposed

advance interest for respondent's check deposit to AFPSLAI were given to respondent
as consideration for the favorable ruling in the Kevlar case.1âwphi1 Such finding is
consistent with Luy's testimony that Napoles spent a staggering PlOO million just to "fix"
the said case. Under the circumstances, it is difficult to believe that respondent went to
Napoles office the second time just to have coffee. Respondent's act of again visiting
Napoles at her office, after he had supposedly merely thanked her during the first visit,
tends to support Luy's claim that respondent had a financial deal with Napoles regarding
advance interest for AFPSLAI deposit. The question inevitably arises as to why would
Napoles extend such an accommodation to respondent if not as consideration for her
acquittal in the Kevlar case? Respondent's controversial photograph alone had raised
adverse public opinion, with the media speculating on pay-offs taking place in the
courts.

Regrettably, the conduct of respondent gave cause for the public in general to doubt the
honesty and fairness of his participation in the Kevlar case and the integrity of our
courts of justice. Before this Court, even prior to the commencement of administrative
investigation, respondent was less than candid. In his letter to the Chief Justice where
he vehemently denied having attended parties or social events hosted by Napoles, he
failed to mention that he had in fact visited Napoles at her office. Far from being a plain
omission, we find that respondent deliberately did not disclose his social calls to
Napoles. It was only when Luy and Sula testified before the Senate and named him as
the "contact" of Napoles in the Sandiganbayan, that respondent mentioned of only one
instance he visited Napoles ("This is the single occasion that Sula was talking about in
her supplemental affidavit x x x."27).

The Court finds that respondent, in not being truthful on crucial matters even before the
administrative complaint was filed against him motu proprio, is guilty of Dishonesty, a
violation of Canon 3 (Integrity) of the New Code of Judicial Conduct.

Dishonesty is a "disposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of

integrity; lack of honesty, probity or integrity in principle; lack of fairness and
straightforwardness; disposition to defraud, deceive or betray." 28Dishonesty, being a
grave offense, carries the extreme penalty of dismissal from the service with forfeiture of
retirement benefits except accrued leave credits, and with perpetual disqualification
from reemployment in government service. Indeed, dishonesty is a malevolent act that
has no place in the Judiciary.29

Under Section 11(A), Rule 140 of the Rules of Court, a respondent found guilty of a
serious charge may be penalized as follows:

SEC. 11. Sanctions. - A. If the respondent is guilty of a serious charge, any of the
following sanctions may be imposed:

1. Dismissal from the service, forfeiture of all or part of the benefits as the Court
may determine, and disqualification from reinstatement or appointment to any
public office, including governmentowned or -controlled corporations. Provided,
however, that the forfeiture of benefits shall in no case include accrued leave
credits;

2. Suspension from office without salary and other benefits for more than three
(3) but not exceeding six (6) months; or

3. A fine of more than ₱20,000.00 but not exceeding ₱40,000.00. Considering

that respondent is not a first time offender and the charges of gross misconduct
and dishonesty are both grave offenses showing his unfitness to remain as a
magistrate of the special graft court, we deem it proper to impose the supreme
penalty of dismissal.

WHEREFORE, the Court finds respondent Sandiganbayan Associate Justice Gregory

S. Ong GUILTY of GROSS MISCONDUCT, DISHONESTY and IMPROPRIETY, all in
violations of the New Code of Judicial Conduct for the Philippine Judiciary, for which he
is hereby DISMISSED from the service, with forfeiture of all retirement benefits, except
accrued leave credits, if any, and with prejudice to reemployment in any branch, agency
or instrumentality of the government including government-owned or -controlled
corporations.

This Decision is IMMEDIATELY EXECUTORY.

SO ORDERED.

SECOND DIVISION

LUCILA TAN, A.M. No. MTJ-04-1563

Complainant, (Formerly A.M. OCA
IPI No. 02-1207-MTJ)

Present:

Puno, J.,
Chairman,
- versus - *Austria-Martinez,
Callejo, Sr.,
Tinga, and
Chico-Nazario, JJ.

Promulgated:
Judge MAXWEL S. ROSETE,
Respondent. September 8, 2004

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

DECISION

PUNO, J.:

Lucila Tan filed the instant complaint against Judge Maxwel S. Rosete, former Acting
Presiding Judge, Metropolitan Trial Court, Branch 58, San Juan, Metro Manila,[1] for

violation of Rule 140 of the Revised Rules of Court and the Anti-Graft and Corrupt

Practices Act (Republic Act No. 3019).

The complaint alleged that Lucila Tan was the private complainant in Criminal

Case No. 59440 and Criminal Case No. 66120, both entitled People of the Philippines vs.

Alfonso Pe Sy and pending before Branch 58, Metropolitan Trial Court of San Juan, Metro

Manila, then presided by respondent judge. Before the cases were decided, respondent
judge allegedly sent a member of his staff to talk to complainant. They met at Sangkalan
Restaurant along Scout Albano, near Timog Avenue in Quezon City. The staff member

told her that respondent was asking for P150,000.00 in exchange for the non-dismissal

of the cases. She was shown copies of respondent judges Decisions in Criminal Cases

Nos. 59440 and 66120, both still unsigned, dismissing the complaints against the

accused.She was told that respondent judge would reverse the disposition of the cases

as soon as she remits the amount demanded. The staff member allowed complainant to

keep the copy of the draft decision in Criminal Case No. 59440. Complainant, however,

did not accede to respondents demand because she believed that she had a very strong

case, well supported by evidence. The criminal cases were eventually dismissed by

respondent judge.[2]

Respondent judge, in his Comment, denied the allegations of complainant. He instead

stated that it was complainant who attempted to bribe him in exchange for a favorable

decision. She even tried to delay and to derail the promulgation of the decisions in

Criminal Cases Nos. 59440 and 66120. Complainant also sought the intervention of then

San Juan Mayor, Jinggoy Estrada, to obtain judgment in her favor. Mayor Estrada

allegedly talked to him several times to ask him to help complainant. The former even

called him over the phone when he was in New Zealand, persuading him to hold in

abeyance the promulgation of the Decisions in said cases. But he politely declined, telling

him that there was no sufficient evidence to convict the accused, and moreover, he had

already turned over the Decisions to Judge Quilatan for promulgation. Respondent further

stated that complainant kept bragging about her close relations with Mayor Estrada who

was her neighbor in Greenhills, San Juan, and even insinuated that she could help him

get appointed to a higher position provided he decides the suits in her favor. Respondent

judge also claimed that complainant offered to give cash for the downpayment of a car

he was planning to buy. But he refused the offer. Finally, respondent judge denied that a
member of his staff gave complainant a copy of his draft decision in Criminal Case No.
59440. He said that he had entrusted to Judge Quilatan his Decisions in Criminal Cases

Nos. 59440 and 66120 before he left for New Zealand on study leave. Thus, he asserted

that it was impossible for him to thereafter change the resolution of the cases and it was

likewise impossible for any member of his staff to give complainant copies of said

Decisions.[3]

In a resolution dated December 2, 2002, the Court referred the complaint to the Executive

Judge of the Regional Trial Court of Pasig City for investigation, report and

recommendation.[4]

First Vice Executive Judge Edwin A. Villasor conducted several hearings on the

administrative case. Only complainant Lucila Tan testified for her side. She presented as

documentary evidence the copy of the unsigned Decision in Criminal Case No. 59440

dated February 23, 2001 which was allegedly handed to her by a member of respondent

judges staff.[5] Respondent judge, on the other hand, presented four (4) witnesses:

Josefina Ramos, Rodolfo Cea (Buboy), Fernando B. Espuerta, and Joyce Trinidad

Hernandez. His documentary evidence consists of the affidavits of his witnesses,[6] copy

of the Motion for Reconsideration in Criminal Case No. 59440,[7] and various documents

composed of the machine copy of the Order of Arrest in Criminal Case No. 117219,

machine copy of the letter dated December 29, 1997, machine copy of Certification dated

Nov 13, 2000, front and dorsal sides of Check No. QRH-0211804, Bank Statement dated

March 31, 1998, Stop Payment Order dated April 6, 1998, Current Account Inquiry, and

Transaction Record, which documents were allegedly given by complainant to

respondents witness, Fernando B. Espuerta.[8]

The Investigating Judge summarized the testimonies of the witnesses as follows:

COMPLAINANTS VERSION:

1. LUCILA TAN
Complainant Lucila Tan testified that she knew Respondent Judge because
she had a case in Branch 58, MeTC, San Juan, Metro Manila. She alleged
that, in September 1998, she filed two cases involving B.P. 22 and Other
Deceits with the Prosecutors Office in Pasig. After resolution, the cases
were filed in the MeTC, San Juan. One case went to Branch 57 and the
other one went to Branch 58, where Respondent Judge Rosete was the
Presiding Judge. Judge Quilatan was the Presiding Judge of Branch
57. Upon advise of a friend, she moved for consolidation and the two cases
were transferred to Judge Quilatan in Branch 57. Subsequently, in view of
the Motion for Inhibition filed by Complainants lawyer, Judge Quilatan
inhibited himself and the two cases were transferred to the sala of
Respondent Judge Rosete (TSN, pp. 9-16, Hearing of March 3,
2003). After several hearings, the Clerk of Court, named Joyce, called up
the Complainant and advised her to talk to San Juan Mayor Jinggoy Estrada
to seek for (sic) assistance. Joyce gave her the phone number of the Office
of the Mayor (TSN, pages 17-18, Hearing of March 3, 2003). Complainant
then called up the Office of the Mayor but her call was intercepted by Josie,
the Mayors Secretary. When she told Josie why she called, the latter asked
her if she wanted to meet the Judge and when Complainant answered in
the affirmative, Josie made arrangements for Complainant to meet the
Judge (TSN, pages 19-21, Hearing of March 3, 2003). Complainant called
up the Office of the Mayor sometime in November or late October 2000 and
she met the Judge on November 10. She, Josie and Respondent Judge met
at the Cravings Restaurant in Wilson, San Juan (TSN, page 22, Hearing of
March 3, 2003). During the meeting, Complainant told the Judge regarding
this matter, how this happened and that he will convince the Accused to pay
me as soon as possible (TSN, page 23, Hearing of March 3, 2003). When
she went to the restroom for a few minutes, Respondent Judge and Josie
were left alone. After she came back, they went home. On the way home,
Josie told her to give something to [the] Judge, Sabi niya magbigay tayo ng
kaunti para bumilis iyong kaso mo (TSN, page 24, Hearing of March 3,
2003). At first, Josie did not mention any amount but when the Complainant
asked her how much, the former mentioned Fifty Thousand Pesos
(P50,000.00). Complainant asked for a lesser amount, Twenty Thousand
Pesos (P20,000.00) (TSN, page 25, Hearing of March 3, 2003). When
Josie agreed, she sent the amount of P20,000.00 to Josie through her driver
after two days (TSN, pages 26-27, Hearing of March 3, 2003). When Josie
received the money, the Clerk of Court, Joyce, also called her
(Complainant) on that date. The Clerk of Court asked her if she sent
money. At first, Complainant denied it but the Clerk of Court said that Josie
went there and there was money in the drawer (TSN, pages 28-29, Hearing
of March 3, 2003). After that, several hearings were on-going, and before
the resolution, Joyce called up the Complainant again around February
2001. Complainant was in Baguio when Joyce called saying that she had
an important thing to tell to (sic) the Complainant. After Complainant got
back to Manila, Joyce called her again and said that she will show
Complainant something. When they were in Complainants car in San Juan,
Joyce showed Complainant two unsigned Decisions of the case[s]. After
reading the Decisions, Complainant saw that the cases were dismissed and
that it will be dismissed if she will not accede to Joyces request (TSN, pages
30-33, Hearing of March 3, 2003).Complainant claimed that Joyce asked
for Php 150,000.00 for each case. Sabi niya it [was] for Judge daw,
kailangan daw ni Judge because he is leaving at that time (TSN, page 34,
Hearing of March 3, 2003). Complainant identified the copy of the Decision
in Criminal Case No. 59440 for Other Deceits, dated 23 February 2001,
which was marked as Exhibit A for the Complainant (TSN, pages 35-38,
Hearing of March 3, 2003). Complainant further alleged Sabi niya, if I will
accede to that request of P150,000.00 for each case then they will (sic)
going to reverse the Decision and Si Judge daw will reverse the
Decision. Complainant met with Joyce around February 2001 (TSN, page
39, Hearing of March 3, 2003). Complainant further claimed that Joyce told
her to go to Mayor because he is a friend of the Judge. Complainant went
again to the Office of the Mayor to seek the Mayors help and she met the
Mayor at his Office in San Juan. The Mayor called up the Judge but he was
not around so the Clerk of Court, Joyce, was called. Joyce went to the Office
of the Mayor and when she arrived, she said that the Judge was out of the
country (TSN, pages 40-41, Hearing of March 3, 2003). The Mayor asked
for the phone number of Respondent Judge Rosete, which Joyce
gave. Mayor Estrada was able to get in touch with the Judge. While the
Mayor was talking in (sic) the phone with the Judge, Complainant was in
front of the Mayor (TSN, pages 42-43, Hearing of March 3,
2003). Complainant heard the Mayor because his voice is very loud. He
said, Judge, Saan ka? Sabi niya New Zealand. When were you coming
back? I do not know what is the answer and then he said, you help my friend
naswindler siya, pabilisin mo ang kaso niya para matapos na kasi matagal
na iyan (TSN, page 43, Hearing of March 23, 2003). After that they left the
Office of the Mayor and Complainant was not able to approach Mayor
Estrada again. Since the Complainant was still carrying the Decision, and
being afraid that it will be promulgated already, she sought the advi[c]e of
her friends. The Complainant showed the decision to the Prosecutor in San
Juan at that time (TSN, pages 44-45, Hearing of March 3, 2003). The
Prosecutor told the Complainant that she is going to meet with the Judge
when he comes back from New Zealand. Complainant testified that,
sometime in April, in Sangkalan, Quezon City, a night life restaurant, she
met Respondent Judge Rosete. She was with two (2) Prosecutors. When
she arrived at Sangkalan at about 8:30 in the evening, Judge Rosete was
already in the company of several men whom she got to know as Fernan
and Buboy (TSN, pages 46-48, Hearing of March 3, 2003). After eating
and drinking, the Complainant left at around 10:30 in the evening. While
they were inside, Complainant claimed that she did not say anything at all
and it was the Prosecutor who talked in her behalf. She was the one who
paid all the bills which amounted to Six Thousand Pesos (P6,000.00). When
Complainant left, only they, three (3) girls, left while the Judge and his
company were still there drinking. While Complainant was waiting for her
car outside, a man came over from behind (TSN, pages 49-50, Hearing of
March 3, 2003). Complainant did not know him but she asked the
Prosecutor later after the man left. The Complainant said that the man
asked if he could have an advance, which she understood as a payment,
and she told the Prosecutor. Complainant heard the Prosecutor say that
she already talked to the Judge. The man left and went back inside the
restaurant (TSN, page 51, Hearing of March 3, 2003). Complainant said
that when she did not give the money she was still scared because there
will already be a promulgation and she did not know whether it will be in her
behalf (sic) or not. Complainant did not give anything aside from
the P20,000.00 because her case was very strong and she had all the
papers and evidence and that she promised them that she will give them
after she was (sic) able to collect all the debts. Complainant did not know
the actual date of the promulgation but somebody from the Office of
Respondent Judge called her up in her house and told her not to go to the
promulgation. When Complainant asked why, Sabi niya baka mapaiyak
daw ako kasi alam na daw nila ang decision. Sabi niya ako na lang ang
magdedeliver ng case ng promulgation.She received the decision when she
sent her driver to pick it up. The caller said that the decision was
unfavorable to her (TSN, pages 52-55, Hearing of March 3, 2003).

RESPONDENTS VERSION:

1. JOSEFINA RAMOS

She testified that she was the Private Secretary of Mayor Jinggoy Estrada,
the former Mayor of San Juan, Metro Manila, since he was Vice Mayor of
San Juan. In 2000 and 2001, she was already the Secretary of Mayor
Jinggoy (TSN, page 7, Hearing of September 9, 2003). She met Lucila
Tan when the latter went to the Mayors Office together with Tita Pat, the
sister of President Estrada, but she could no longer remember the
year. Lucila Tan went to the Office, together with Tita Pat, and they were
seeking the help of Mayor Jinggoy because they have a case. She did not
know the case because they were talking to Mayor Jinggoy. She could no
longer remember how many times Lucila Tan went to the Office of Mayor
Jinggoy Estrada. She did not know what Lucila Tan wanted from Mayor
Jinggoy Estrada or how close Lucila Tan was to him (TSN, pages 8-11,
Hearing of September 9, 2003). She denied that she met Lucila Tan at the
Cravings Restaurant and that she suggested to Lucila Tan to give Fifty
Thousand Pesos (P50,000.00) to Judge Rosete to speed up or facilitate her
cases but that Lucila Tan agreed for only Twenty Thousand Pesos
(P20,000.00). She claimed that she did not know what Lucila Tan was
talking about regarding the money. There was no occasion that she
suggested or even intimated to Lucila Tan the idea of giving money to Judge
Rosete. She denied that she met with Lucila Tan and Respondent Judge at
Cravings Restaurant along Wilson Street in San Juan, Metro Manila. She
identified her Sworn Statement, subscribed on February 5, 2003, which was
marked as Exhibit 1 (TSN, pages 12-16, Hearing of September 9,
2003). She denied that Lucila Tan gave anything to her (TSN, page 17,
Hearing of September 9, 2003).

2. RODOLFO CEA

He testified that his acquaintances usually call him Buboy and for about two
years or more he had no occupation. Two years before, he was a Clerk III
at Metropolitan Trial Court, Branch 58, San Juan. He knows Lucila Tan
because, when he was still working as Clerk in San Juan, she approached
me and asked if I can introduce her to Judge Rosete and eventually asked
for a favorable decision against her case. He could not remember anymore
when that was because it was a long time ago (TSN, pages 6-7, Hearing
of September 22, 2003). It was when he was still with the MeTC, Branch
58, San Juan, Metro Manila. He met Lucila Tan at the corridor of the
Metropolitan Trial Court when she approached him and asked if he can
introduce her to Judge Rosete. He agreed to introduce Lucila Tan to Judge
Rosete but he was not able to actually introduce Lucila Tan to Judge Rosete
because aside from the introduction, she wants me to ask Judge Rosete for
a favorable decision against (sic) her case and I told her that Judge Rosete
dont (sic) like his staff (to) indulge on that kind of transaction (TSN, pages
8-9, Hearing of September 22, 2003). As far as he knows, the meeting he
had with Lucila Tan in the corridor of the Court in San Juan was the first and
the last time. When asked about the claim of Lucila Tan that he approached
her and demanded from her a sum of money to represent an advance
payment for a favorable decision in her cases then pending before Judge
Rosete, he answered I dont know about that, sir. (TSN, page 10, Hearing
of September 22, 2003.) He identified the Sworn Statement, subscribed on
February 6, 2003, and confirmed and affirmed the truthfulness of the
contents of the Affidavit, which was marked as Exhibit 2 (TSN, pages 11-
12, Hearing of September 22, 2003). He denied that he met the
Complainant at Sangkalan Restaurant around 8:30 in the evening of an
unspecified date (TSN, page 13, Hearing of September 22, 2003).

3. FERNANDO B. ESPUERTA

He testified that he is a government employee employed at the Supreme

Court with the position Budget Officer III since November 9, 1981. His first
job was Casual and he became Budget Officer in 1997 (TSN, page 46,
Hearing of September 22, 2003). He recalled having met Lucila Tan
sometime just before Christmas in October or November 2000. The first
time he saw Lucila Tan was in a restaurant in Quezon City where she was
introduced to him by Fiscal Reyes. He went to the restaurant alone. He was
invited by Judge Rosete because they had not been together for a long time
and they were long time friends. They ate at the restaurant. When he
arrived, Judge Rosete and Buboy were already there. They stayed in the
restaurant until 11:00 [eleven] oclock in the evening (TSN, pages 47-49,
Hearing of September 22, 2003). He met Lucila Tan in that restaurant
when Fiscal Reyes pointed him to Lucila Tan as Fernan of the Supreme
Court. When he arrived there, Buboy and Judge Rosete were already
there. Later, the three (3) girls arrived, namely: Fiscal Reyes, Lucila Tan
and the sister of the Fiscal (TSN, page 50, Hearing of September 22,
2003). They ordered and ate but they were in a separate table. He recalled
that Judge Rosete paid for their bill because he saw him get a credit card
and sign something. He did not know about Mrs. Tan but he saw Judge
Rosete sign and give to the waiter. The incident where he met Lucila Tan in
the restaurant in Quezon City came before the incident when she went to
his Office (TSN, pages 51-52, Hearing of September 22, 2003). He could
not remember the month when Lucila Tan went to his Office but he
remembers that it was nearing Christmas in 2000. Pumunta siya sa akin
parang may ipinakiusap siya sa akin, katunayan nandito po dala ko. Lucila
Tan asked him to help her in her case with Alfonso Sy. Meron siyang inalok
sa akin. Sabi bibigyan niya ako ng three hundred thousand pesos
(P300,000.00) para iabot kay Judge Rosete. Ang sagot ko nga sa kanya,
hindi ganun ang aking kaibigan. Matagal na kaming magkaibigan niyan
noong nagpapractice pa yan. Iyon ang sagot ko sa kanya. He told Judge
Rosete about that and the latter got mad at him.In their second meeting,
Lucila Tan gave him papers. He presented a Motion for Reconsideration in
Criminal Case No. 59440, which was marked as Exhibit 3 (TSN, pages 53-
56, Hearing of September 22, 2003). He presented the papers actually
given to him by Lucila Tan. He claimed that the xerox copy was the exact
same document given to him by Lucila Tan when she went to his Office. The
other documents that Lucila Tan gave to him when she went to his Office
were marked as Exhibit 4 and submarkings (TSN, pages 57-63, Hearing
of September 22, 2003). Lucila Tan told him the contents of the documents
and how the case against Alfonso Sy came about. When Lucila Tan asked
him, he answered her that his friend (Respondent Judge) was not like that
and they had been together for a long time and it is not possible. When he
told Judge Rosete about that, the latter got mad at him. Lucila Tan also
mentioned to him that she knew the son of the Chief Justice (TSN, pages
64-66, Hearing of September 22, 2003). Lucila Tan was insisting that he
give Judge Rosete so that her case will win but he answered that his friend
was not like that (TSN, pages 67-68, Hearing of September 22, 2003).

4. JOYCE TRINIDAD HERNANDEZ

She testified that she was a government employee connected with the
Judiciary at the Metropolitan Trial Court, Branch 58, San Juan, Metro
Manila. She knew Complainant Lucila Tan because in the year 2000 she
had a case in their court. She first came to know Lucila Tan when the latter
went to their Office with Ellen Sorio, the Branch Clerk of Court of Branch 57,
who introduced Lucila Tan to her. Ellen Sorio said, may kaso ito sa inyo,
pinapasabi ni Mayor kay Judge (TSN, pages 7-11, Hearing of September
29, 2003). She did not say anything but Lucila Tan asked may tumawag
na ba sa Mayors Office? and she said yes, maam. After that there was a
hearing and the sister of former President Estrada went to their Office
looking for Judge Rosete. She told her that Judge Rosete was on a hearing
and the former told her to tell Judge Rosete about the case of Lucila na
pinakikiusap ni Mayor (TSN, page 12, Hearing of September 29,
2003). She told Judge Rosete about the things that the sister of the former
President told her and that Judge Rosete said nothing. She denied the
testimony of Complainant on March 3, 2003 that, sometime in November
2000, she (Joyce Hernandez) called up Lucila Tan by telephone and said
that she saw money stuffed inside the drawer of the Respondent in his
Office and that she asked the Complainant whether the latter was the one
who sent the money stuffed inside the drawer. What she remembers is that
Lucila Tan called her and asked if Josie went to their Office and she told
Lucila Tan that Josie never went to their Office. She also denied that she
called up Lucila Tan sometime in February 2001 and claimed that Lucila
Tan was the one who called her up and told her that she (Lucila Tan) was
going to show her something. Lucila Tan showed her a copy of the Decision
and she was surprised when the former showed her the copy. When she
asked where Lucila Tan got the copy, the latter did not answer and said that
Mayor Jinggoy wanted to talk to her (TSN, pages 13-16, Hearing of
September 29, 2003). She immediately went to the Office of the Mayor with
Lucila Tan and Mayor Jinggoy talked to her. The Mayor asked her where
Judge Rosete was and she answered that he was in New Zealand on study
leave. When the Mayor asked if she knew the telephone number of the
Judge, she gave him the telephone number in New Zealand. She was
present when the Mayor called up Respondent Judge and talked to
him (TSN, page 17, Hearing of September 29, 2003). He said Pare ko,
ano na itong kaso na pinakikiusap ko sa iyo? I dont know what was your
answer(ed) [sic] to him, you were talking and then he said ganun ba? then
Mayor Jinggoy said o sige, okay na and then we left the Office. She denied
that she gave two advance copies of the Decisions in Complainants two
cases inside the latters parked car in San Juan, Metro Manila and claimed
that Complainant was the one who showed her the copy in their Office. She
likewise denied the testimony of the Complainant that she allegedly
demanded Php150,000.00 for each of the two cases then pending before
Branch 58, which were decided by Respondent Judge, in return for a
favorable decision (TSN, pages 18-21, Hearing of September 29,
2003). She claimed that it was the Complainant who offered to her. She
identified her Sworn Statement, subscribed and sworn to on February 5,
2003, which was marked as Exhibit 5, and confirmed and affirmed the
 truthfulness of all the contents thereof (TSN, pages 22-25, Hearing of
September 29, 2003).[9]

The Court is now faced with two opposing versions of the story. Complainant claims that

respondent judge, through his staff, required her to pay the amount of P150,000.00 for

him to render judgment in her favor in the two criminal cases she filed against Alfonso Pe

Sy. Respondent judge, on the other hand, asserts that it was complainant who attempted

to bribe him by offering to pay for the downpayment of the car he was planning to buy,

and she even sought the intervention of then San Juan Mayor Jinggoy Estrada to

persuade him to rule for the complainant in Criminal Cases Nos. 59440 and 66120.

The issue in this administrative case thus boils down to a determination of the credibility

of the parties evidence.

After a thorough evaluation of the testimonies of all the witnesses, as well as the

documentary evidence presented by both parties, we find the complainants version more

trustworthy. Not only did she testify with clarity and in full detail, but she also presented

during the investigation the unsigned copy of the draft decision of respondent judge in

Criminal Case No. 59440 given to her by a member of his staff. Said documentary

evidence supports her allegation that a member of complainants staff met with her,
showed her copies of respondent judges draft decisions in Criminal Cases Nos. 59440

and 66120, and demanded, in behalf of respondent judge, that she pays P150,000.00 for

the reversal of the disposition of said cases. It would be impossible for complainant to

obtain a copy of a judges draft decision, it being highly confidential, if not through the

judge himself or from the people in his office. And an ordinary employee in the court

cannot promise a litigant the reversal of a cases disposition if not assured by the judge

who drafted the decision.

The respondents evidence did not overcome the facts proved by complainant. We note

that the testimonies of two of respondents witnesses contradict each other. Fernando

Espuerta confirmed complainants claim that she met respondent judge and his two

companions, Espuerta himself and Rodolfo Cea (Buboy), at Sangkalan Restaurant in

Quezon City. Rodolfo Cea, on the other hand, denied that he met complainant at

Sangkalan Restaurant and swore that he never went out with respondent judge in non-

office functions. The Investigating Judge observed:

Thus, there is an apparent inconsistency in the testimony of the
Respondent Judges two witnesses, Rodolfo Cea and Fernando B.
Espuerta, regarding the incident at Sangkalan Restaurant in Quezon City
where Complainant claimed that she met Respondent Judge, a certain
Fernan, and Buboy, while she was with two Prosecutors. Fernando B.
Espuerta testified that he was at Sangkalan Restaurant with Respondent
Judge and Buboy (Rodolfo Cea), while the latter (Rodolfo Cea) denied that
he met the Complainant at Sangkalan Restaurant.[10](citations omitted)

Hence, we are more inclined to believe complainants version that she met with

respondent judge and his companions at Sangkalan Restaurant sometime in April 2001.

We have also observed that respondent judge has not been very candid with the Court

as regards the dates when he went to New Zealand and when he came back to the

Philippines. Respondent asserts that he was already in New Zealand at the time when
complainant claims that he met with her. However, the evidence he presented only shows

his New Zealand visa and the dates when he entered said country.[11] He did not show to

the investigating body the dates when he left and returned to the Philippines. Apparently,

he entered New Zealand on two dates: March 4, 2001 and May 1, 2001. We may

therefore infer that complainant was in the Philippines before May 1, 2001, which is

consistent with complainants testimony, as well as that of Fernando Espuerta, that she

met with respondent judge and his companions, Fernando and Buboy in April 2001.
We have repeatedly admonished our judges to adhere to the highest tenets of judicial

conduct. They must be the embodiment of competence, integrity and independence. Like

Caesars wife, a judge must not only be pure but above suspicion. This is not without

reason. The exacting standards of conduct demanded from judges are designed to

promote public confidence in the integrity and impartiality of the judiciary because the

peoples confidence in the judicial system is founded not only on the magnitude of legal

knowledge and the diligence of the members of the bench, but also on the highest

standard of integrity and moral uprightness they are expected to possess. When the judge

himself becomes the transgressor of any law which he is sworn to apply, he places his

office in disrepute, encourages disrespect for the law and impairs public confidence in the

integrity and impartiality of the judiciary itself. It is therefore paramount that a judges

personal behavior both in the performance of his duties and his daily life, be free from any

appearance of impropriety as to be beyond reproach.[12]

Respondents act of sending a member of his staff to talk with complainant and show

copies of his draft decisions, and his act of meeting with litigants outside the office

premises beyond office hours violate the standard of judicial conduct required to be

observed by members of the Bench. They constitute gross misconduct which is

punishable under Rule 140 of the Revised Rules of Court.

IN VIEW WHEREOF, Respondent Judge Maxwel S. Rosete is SUSPENDED from office

without salary and other benefits for FOUR (4) MONTHS.

SO ORDERED.

DAWA VS DE ASA

EN BANC
 [A.M. No. 97-2-53-RTC. July 6, 2001]

RE: COMPLAINT OF MRS. ROTILLA A. MARCOS AND HER CHILDREN AGAINST

JUDGE FERDINAND J. MARCOS, RTC, BR. 20, CEBU CITY

DECISION
PER CURIAM:

In a hand written letter dated December 9, 1996[1] addressed to the Honorable Andres
Narvasa, Chief Justice of the Supreme Court, Mrs. Rotilla A. Marcos, the wife of Judge
Ferdinand J. Marcos, and their children Joshua A. Marcos and Hazel Faith Marcos Barliso
complained against Judge Ferdinand J. Marcos of the Regional Trial Court, Branch 20 at
Cebu City, alleging that ever since Ferdinand J. Marcos was appointed judge of the
Regional Trial Court at Cebu City, Branch 20, his family had never seen nor took hold of
his cheques; that they have only been receiving a minimal amount which was insufficient
for their education and for their sustenance; that they were made to believe that he was
only receiving a small remuneration as an RTC Judge; that it was only in August 1996
when they got hold of his RATA, JDF and basic salary cheques; that these were not even
enough to pay his obligations with the CFI Community Cooperative and other private
persons; that he was enjoying his extra-ordinary allowance, local and city allowances,
bonuses, amelioration pays, and 14th month pays; that he even got his second quincena
of November direct in Manila when he was enjoying his one-week leave of absence with
his mistress.
Mrs. Rotilla A. Marcos and her children Joshua and Hazel prayed that all the
remuneration due Judge Marcos from the Supreme Court be directly released to Mrs.
Marcos at the school where she has been serving for 20 years (the Abellana National
School) to prevent his mistress from getting them. They added that Judge Marcos was
still receiving local and city allowances and a salary from the Southwestern University
where he teaches in the College of Law.They likewise stated that it would be advisable
for him to resign from the bench, as reassigning him to other judicial regions would
eventually deprive them of support for he will definitely take along his ambitious mistress,
or she would follow him and might pressure him to go into graft and corruption.
In the resolution, dated March 18, 1997, the Court required Judge Ferdinand J.
Marcos to file his comment on the complaint.[2]
In his comment, dated May 15, 1997,[3] Judge Marcos denied his failure to support
complainants and alleged that during the first few months of assuming his job on the
bench, he faithfully and regularly gave to his wife the total amount of P15,000.00; that he
alone spent for their daily transportation and for the daily miscellaneous expenses of their
son, Joshua A. Marcos, a medical student at the time, notwithstanding the fact that his
wife also earns a salary as a public school teacher; that the amount he gave to his wife
was sufficient for her and their family's needs; that the loan contracted with the CFI
Community Cooperative did not pose a serious problem to the financial standing of his
family because it was made during his first five (5) months in the judiciary when he had
not yet received his salary; that most of the proceeds of the said loan were for the tuition
fee of their son Joshua; that said loan was payable in affordable monthly installments and
that he hoped it would be fully paid before the end of the year 1997; that he was not
indebted to any private person, not even when he was still a private law practitioner; that
he had no idea why his wife thought that he would be better off resigning from the
judiciary; that even if he were transferred to another sala his regular support to his family
will continue; that the issue of his having a mistress is not true as he has never been
linked extra-maritally with another woman; that his wife and children had already signed
a letter withdrawing their letter/complaint against him; and he had signed a letter of
undertaking to give all the checks due him from the Supreme Court to his wife. He prayed
among other things, for the dismissal of the complaint against him as they were living in
one roof as a family and as this administrative case is becoming a wedge of hostility
between them.
On July 29, 1997, this Court issued a resolution referring the matter to the Office of
the Court Administrator for evaluation, report and recommendation.[4]
In his report dated October 17, 1997,[5] Deputy Court Administrator Bernardo P.
Abesamis recommended that the complaint be considered closed and terminated, it
appearing that the complaint against Judge Ferdinand Marcos was already threshed out
and there being no more compelling reason to proceed against him. He based his report
on the letter-withdrawal dated January 10, 1997 submitted by the complainants and the
letter of undertaking signed by Judge Marcos.
In their letter/withdrawal dated January 10, 1997,[6] the complainants stated that they
wanted to withdraw their letter/complaint against Judge Marcos as he had made an
undertaking that Mrs. Rotilla A. Marcos shall receive all the checks due him from the
Supreme Court; and that the issue of the alleged mistress grew out of unconfirmed reports
and had already been thoroughly discussed by the family council. They requested that
the matter contained in their letter/complaint be treated as a closed matter.
On the other hand, Judge Ferdinand J. Marcos, in his letter of undertaking, offered
no objection to his wife getting all the checks due him from the Supreme Court and gave
her the authority to get them directly from the Supreme Court or from the Clerk of Court
of RTC, Cebu City. He strongly denied having any relationship with any woman when he
talked with his wife and children. His alleged relationship sprung from unconfirmed reports
from the media.[7]
As the report of DCA Abesamis was not approved by the Court Administrator and the
latter did not report the matter to the Court En Banc, the case remained suspended until
the Honorable Chief Justice Hilario G. Davide, Jr. reported to the Court En Banc on
August 14, 2000, the scandalous incident he witnessed at the Fun Run sponsored by the
Philippine Judges Association held on August 11, 2000. Among the RTC judges who
attended and joined the Fun Run was Judge Ferdinand J. Marcos. A woman who was
reported to be his querida accompanied him. Judge Marcos and the querida joined the
Judges at the temporary place reserved for the Judges and during the latter's breakfast
thereat were seated near each other.
 Chief Justice Davide pulled Judge Marcos aside to validate the facts about the latter's
illicit relationship with the woman. Judge Marcos admitted, among other things, that he
had been living with the woman, Mae Tacaldo, for three (3) years already, and that he
was separated from his wife. Judge Marcos was the one who supplied the name of the
woman.
In view of this admission, the Chief Justice recommended the referral of the case for
investigation to OCA Consultant, Justice Pedro Ramirez, and the suspension from office
of Judge Ferdinand J. Marcos.
Adopting the recommendation of the Chief Justice, the Court issued a resolution on
August 15, 2000 ordering the suspension of Judge Marcos from office until further orders
from this Court, in view of the confirmed continuing illicit and scandalous relations
between him and a certain Mae Tacaldo and the referral of the case to Justice Pedro
Ramirez, Consultant, Office of the Court Administrator, for investigation, report and
recommendation. But because Justice Ramirez had to leave for the United States of
America, the matter was referred to Justice Romulo S. Quimbo, Consultant, Office of the
Court Administrator.
Justice Quimbo issued notices to the parties that the case will be heard at the Office
of the Executive Judge in Cebu City from November 13 to 15, 2000.[8]
On November 13, 2000, the case was called in the private chambers of the Executive
Judge of Cebu City. Only the respondent and his counsel appeared because the notices
did not arrive soon enough in Cebu City. For that reason, the Process Server of RTC,
Cebu City, Branch 18, was requested to serve the notices on the complainants.
The next day, November 14, 2000, both parties appeared at the office of the
Executive Judge. Complainant Rotilla Marcos came alone while respondent appeared
with his counsel. Complainant manifested that her counsel was unavailable due to
previous commitments. Counsel for the respondent begged to be excused as he also had
personal commitments. Thus the case was reset for the next day.
On November 15, 2000, complainants presented Judge Meinrado Paredes of Branch
13, RTC, Cebu City. After he was discharged, complainant Rotilla Marcos took the stand
herself. Since her testimony (direct examination) was not completed the hearing was
continued the next day. Her direct testimony was completed on November 16, 2000 but
her cross-examination was deferred to December 5, 6, and 7, 2000.
On December 5, 2000, respondent appeared without his counsel and personally
cross-examined the complainant. After her testimony, complainants introduced four other
witnesses, namely: Maximo Abing, Orencio Tarongoy, Leoncio M. Balangkig, and Lerma
Eguia, all of whom appeared in obedience to subpoenas issued by the hearing officer-
designate. These witnesses were presented principally to identify certain documents that
were marked and later formally offered in writing.
Complainants' documentary evidence consisted of Exhibits "A" -picture of Maydelane
Tacaldo, the alleged mistress of the respondent; "B" -the letter/complaint received by the
Court on December 12, 1996;[9] "C" -RCPI telegram directing respondent to attend a PJA
stay-in seminar on June 20-22, 1996 in Mandaluyong; "D" -Islacom Statement of Account
dated June 3, 1996; "D-1" -address of respondent at 615 ZA P. del Rosario Extension,
Cebu City; "E" -handwritten letter of one Mrs. E. Dandan, dated October 3, 1995
addressed to respondent demanding payment of the account of May in the sum of P11
,400; "E-1" -a portion thereof; "F" -RCPI social telegram addressed to respondent
purportedly from Mae Tacaldo; "F-1" -a portion thereof; "G" -Bankard Statement of
Account dated September 10, 1997 addressed to respondent; "G-1 " -page 2 thereof; "H"
-unsigned Certification of Tenant; "I" -Invoice issued by Paramount General Insurance
Corporation (Paramount, for brevity) for a "Toyota Revo" Model 1999 allegedly owned in
common by respondent and Maydelane Tacaldo; "I-1" -portion showing the names and
addresses of the insured as "Marcos, Ferdinand J. and Tacaldo, Maydelene B. of
Rodriguez St., Zosa Compound, Capitol Site, Cebu City"; "I-2" -particulars of the vehicle
insured; "J" -Order issued by respondent on January 24, 2000, in Civil Case No. CEB-
19070; "J-1", "J-2", "J-3", and "J-4" -portions thereof; "K" -October 28, 2000 issue of "THE
FREEMAN"; "K-1" and "K-2" -portions thereof; "L" -October 20, 2000 issue of the "SUN
STAR CEBU"; "L-1", "L-2", and "L-3" -portions bracketed; "M" -SUN STAR SUPER
BALITA issue of October 20, 1996; "M-1" and "M-2" -portions thereof; "N" -October 28,
1996 issue of SUN STAR SUPER BALITA; "N-1" and "N-2" -portions thereof; "O"-SUN
STAR issue of December 18, 1996; "O-1" and "O-2" -portions thereof; "P" -Affidavit of
Bienvenido O. Marcos; "P-1" -paragraph 7 thereof; "Q" -Affidavit of Anacleta Marcos; "Q-
1 ", "Q-2", and "Q-3" -portions thereof; "R" -Resolution of the Supreme Court En
Banc dated August 15, 2000 in the present administrative matter[10]; "R-1" -portion
thereof; "S" -Petition filed by respondent in Civil Case No. CEB- 25511 for the declaration
of nullity of his marriage to complainant Rotilla C. Ares; "T" -Marriage Contract of
complainant and respondent dated December 31, 1971; "U" -Subpoena Duces Tecum
issued to PCI Leasing and Finance Inc.; "V" -Certificate of Registration No.15676143
issued on August 4,2000 in the name of respondent and Maydelane Tacaldo with address
at Capitol Site, Cebu City; "V-1" -portion thereof; "W" -copy of Certificate of Registration
of a "Toyota Revo" in the name of respondent and Maydelane Tacaldo with address at B.
Rodriguez St., Capitol Site, Cebu City; "W-1 " -portion showing owners' names; "X" -
Motor Vehicle Inspection Report re: "Toyota Revo"; "X-1" -portion regarding ownership;
"Y" -Deed of Sale of one "Toyota Revo" executed by one Leticia Cabanes; "Y-1 " -portion
showing vendees being respondent and Maydelane B. Tacaldo; "Y-2" -date of execution;
"Z" -PNP Motor Vehicle Clearance Certificate; "Z-1 " -portion showing purpose of
certificate; "AA" - Subpoena Duces Tecum issued to Paramount; "BB" -Invoice
No.135580 covering a "Toyota Revo"; "BB-1 " -name and address of respondent as
insured; "CC"-policy schedule; "CC-1" -name and address of respondent; "CC-2" - Private
Car Policy No. CEB-PC-25687; "CC-3" -signature of Paramount's Cebu Service Office
Manager; "DD" -Paramount's Memorandum showing change of mortgagee; "DD-1 ", "DD-
2", and "DD-3" -portions of the same; "EE" -fax message received by Paramount re:
inclusion of Maydelane Tacaldo as one of the insured; "FF" -Chattel Mortgage executed
by respondent and Maydelane B. Tacaldo; "FF-1" -page 2 thereof; "FF-2", "FF-3", "FF-4",
"FF-1-A", and "FF-1-B" - portions thereof; "GG" -Motion for inhibition of respondent in Civil
Case No. CEB-19070; "GG-1", "GG-1-A", and "GG-2", -portions bracketed; "HH" -
Comment of Atty. Francis Zosa on the motion for inhibition; HH-1" and "HH-2" - portions
of the same; II" -Deed of Sale jointly executed by respondent and Maydelane B. Tacaldo
conveying a "Toyota Revo"; II-1" and "II-2" -portions thereof; JJ" -correction made by
Paramount as to who are the assured in CEB- PC-25687; "JJ-1" -the assured were the
respondent and Maydelane B. Tacaldo; "KK" - Counter-Affidavit of complainant on the
charge of adultery filed against her by the respondent; KK-1" to "KK-10" -pages 2 to 11
thereof; "KK-11 " to "KK- 23" -annexes to Exhibit "KK"; "LL" -opposition to motion to
disqualify Atty. Gloria Lastimosa-Dalawampu as counsel for Mrs. Marcos in Civil Case
No. CEB-25511; "LL-1 " -page 2 thereof; "LL-1-A" and "LL-2" -portions of the same.
From the evidence presented it appears that complainant Rotilla A. Marcos is married
to the respondent. Their marriage was celebrated on December 31, 1971 at the First
Baptist Church, Cebu City and was officiated by Asclepiades Curro, a Minister of the
Gospel.[11] When they got married, Judge Marcos was waiting for the results of the Bar
exams and did not have a job. Since she was already working as a teacher in Catmon
she supported Judge Marcos. They stayed in the house of her grandparents. They have
two children: Joshua who is now 28 years old and Hazel Faith who is 26 years old.
When he became a lawyer he did not go into private practice right away so she
supported him and the children. In fact, he stayed home and looked after the children.
Judge Marcos became a member of the Judiciary in June 1993. He was appointed
presiding judge of Branch 20 of the Regional Trial Court at Cebu City. After his
appointment, she noticed a change in his conduct towards her. He became cold and no
longer performed the usual acts of a husband, referring to sexual relations, because he
was very busy. What's more they no longer slept in one room. In March 1996, they were
living in San Jose Village, Lawaan 3, Talisay, Cebu.
In June 1996 she was informed through an anonymous letter written in the Cebuano
dialect, about her husband's infidelity. While she could no longer produce the letter at the
time of the trial, she could still remember its contents.In English it read: "You are a stupid
wife. Until now, you have not learned that your husband has a mistress. If you don't
believe me, go to the office of the RTC, Branch 20, right now. You go there-to Branch
20. Ask the people there if there is a convention in Manila to be participated in by RTC
judges. He already bought two plane tickets."
Immediately she went to Branch 20 to inquire about the judges' convention in
Manila. She found a telegram in Judge Marcos' attache case from a Mario Umali
designating respondent as a participant in a "stay-in" seminar sponsored by PJA to be
held at the Mandaluyong Justice Building on June 20 - 27, 1996.[12]
She inquired from Atty. Monalila Tecson, the Clerk of Court of Branch 20, about the
convention (seminar). Atty. Tecson asked her if she was not informed of the convention
to which she replied in the negative. Atty. Tecson told her to ask her husband if he was
going. She asked Judge Marcos that night. He told her that he was going and that it was
exclusively for the judges. She told him not to go, as she was afraid he was going to take
along another woman.He replied that he would not go. But, at dawn, he told her that he
must leave as he had to get the supplies and equipment that would be distributed in the
Supreme Court.
She never dared to find out if her husband was indeed with a woman when he went
to attend the convention but she was sure there was a woman.
 Complainant found other incriminating documents in the office of
respondent. Somebody in Branch 20 gave her a Statement of Account from Islacom. [13]
The Islacom Statement of Account was dated June 3, 1996. It was addressed to
Ferdinand J. Marcos at 615 ZA P. del Rosario Extension, Cebu City, and not to San Jose
Village, Lawaan 3, Talisay, Cebu, where he and his family lived. They have never resided
at 615 ZA P. del Rosario Extension, Cebu City, nor had they any telecommunication
facility with Islacom. Judge Marcos neither has a cell phone nor a telephone line with
Islacom.
Complainant searched for the address given in the Statement of Account. It took her
two months to find it. She discovered that Maydelane (Mae) Tacaldo and er parents were
living in that house. A Mrs. Jennylind Enriquez gave her the information. Mrs. Enriquez,
one of her co-teachers, lives next door to the Tacaldos.
She confronted her husband in his office over the Islacom bill. He told her to stay for
a while in the office, as he will go out for 20 minutes. She wanted to go with him but he
refused to take her as the place was only near the office.He would consult
somebody. When he came back, he told her that they would go to Islacom and declare
that the cell phone was lost.
She insisted on a confrontation between her, Maydelane Tacaldo and her
parents. The confrontation took place in the Social Hall of the Capitol. Maydelane, her
parents, her brother and his wife, Rotilla Marcos, her mother, her brother Jerry and his
wife, and her sister were all present then. Rotilla Marcos asked Maydelane why the cell
phone was in the name of Ferdinand J. Marcos but the billing address was that of the
Tacaldos, and why she was using the cell phone of Judge Marcos. The latter said that
they were friends. The latter did not reply when asked why Judge Marcos paid P9,000.00
for the cell phone's bill when they were only friends.
Complainant found inside respondent's attache case that was in his office a yellow
sheet of paper, dated October 3, 1995, addressed to respondent. It was a bill for the
payment of P11,400.00 for "May's Acct."
As she and Judge Marcos were still living together at the time, she kept her discovery
a secret because she already had an inkling that he had a relationship with another
woman.
She found a birthday card/social telegram [14] addressed to Judge Marcos inserted
between the pages of a law book on a table in the latter's office. It read, among other
things, "MT cares a lot, you know," and "It's wonderful to share my life with you." She
discovered it two weeks after his birthday, which was July 7, 1996. She kept it with the
other evidences. She did not show him the card, as it would precipitate another quarrel.
Further proof of her husband's infidelity was the Statement of Account issued by
Bankard dated September 10, 1997.[15] One of the credit purchases was made at the
Agencia Nina and Jewelry. She never saw the item purchased in the said shop. Neither
was it given to her daughter. One of the "purchases" reflected in the Statement of Account
was made at Cafe Laguna. There was no occasion when she dined at Cafe Laguna with
her husband. Another item in the Statement of Account was groceries bought at Gaisano
Metro. The groceries purchased at Gaisano Metro were not for their house, as respondent
was no longer going home in 1997. Respondent judge left the conjugal home in 1997 and
has not returned since then.
Rotilla Marcos found out where Judge Marcos was staying: at the Zosa compound
located at Don Pedro Rodriguez St., Capitol Site, Cebu City. She went to the apartment
he was renting. She saw Maydelane Tacaldo there but not Judge Marcos because she
did not go inside. Maydelane Tacaldo left the apartment, in a car. She drove their (the
Marcos) family car and the station wagon, at times.
She suspected that he lives there because she saw outside one of the rooms
respondent's slippers, and empty water dispenser of a brand similar to what they have at
their own place, and the laundered clothes (pants and polo shirts) of Judge Marcos
hanging.
She asked the building administrator if her husband was living in the apartment she
went to, and the latter replied in the affirmative. Judge Marcos and Maydelane were using
aliases as the room was registered in the name of a Victorino Timol. She obtained a
Certification of Tenant from the Zomer Development Company.[16] It was dated May 18,
1998, and showed that a Mr. Victorino Timol was an occupant and tenant of Amville-1
Bldg. located at Zosa Compound, Don Pedro Rodriguez St., Capitol Site, Cebu City from
May 8, 1996 to October 14, 1997. Ma. Theresa Zosa, the General Manager of the said
company, refused to sign it as she wanted to avoid trouble.
The matter of the illicit relationship between Judge Marcos and Maydelane Tacaldo
was even published in the newspapers.
Complainant offered as exhibits certain clippings from local newspapers (Exhibits "K",
"L", "M", "N", and "O") where the affair of respondent with Maydelane Tacaldo was
mentioned. In Exhibit "K" (October 28, 2000 issue of The Freeman) former Executive
Judge Priscila Agana was quoted as saying that respondent was not even discreet about
his alleged illicit relationship and that other Judges were complaining of his behavior. In
Exhibit "L" (October 28, 2000 issue of the Sun Star Cebu) Judge Agana was once more
quoted as having said that she had warned respondent that his affair was going to destroy
him and that the latter never kept his relations with the law student a secret.
After the complainants wrote a letter to the Supreme Court about Judge Marcos
failure to give them support, the latter executed an authority for them to collect his salary
from January 1997 up to January 1998. But he revoked the authority in February
1998. Since then they no longer received any support from him.
Complainant did not know that the reason why Judge Marcos stopped her authority
from getting the checks was because he allegedly discovered that she had a
paramour. She verbally complained to Judge Priscila Agana (former Regional Trial Court
Executive Judge) about the stoppage of the checks. She did not complain to the Supreme
Court because he told her that she was just an ordinary classroom teacher with a small
salary and that he would use his power as a judge against her.
Mrs. Rotilla Marcos no longer lives in their conjugal home. The reason why she left
was because respondent judge threatened to kill her.
 Judge Meinrado Paredes, when called to testify, admitted knowing Maydelane
Tacaldo, upon seeing her picture. He had seen her twice: the first time during the wake
of the late Sandiganbayan Justice German Lee, and the second time at the convention
of the Philippine Judges Association held in a hotel in Manila (Hyatt Regency) sometime
in June, 1999. Both times he did not see her with a companion.
At the hotel lobby of the Hyatt Regency he saw her approaching a gathering of wives
of some RTC judges. He knew her to be a law student. He did not think that she was a
member of the Judiciary, the wife of a judge, or an employee of the court.
Complainants presented other witnesses who appeared and identified copies of
documents, the originals of which were in their possession.
Maximo Abing, an account officer of the PCI Leasing and Finance, Inc. (PCI, for
short), brought a photocopy of the certificate of registration (Exhibit "V") of a Toyota Revo
with Motor No. 7K-0279834 issued by the Land Transportation Office in favor of Judge
Ferdinand J. Marcos and Maydelane Tacaldo, with residence at Capitol Site, Cebu City
as joint owners.
Orencio Goles Tarongoy, an employee of the Land Transportation Office (LTO, for
brevity), Cebu City, brought to the hearing and identified the following documents: (1) the
office copy of Certificate of Registration No.59442704 (Exhibit "W") issued by the LTO in
the names of Judge Ferdinand J. Marcos and Maydelane Tacaldo with address at P.
Rodriguez St., Capitol Site, Cebu City; (2) a Motor Vehicle Inspection Report (Exhibit "X")
regarding a Toyota Revo owned by Judge Ferdinand J. Marcos and Maydelane Tacaldo
of P. Rodriguez St., Capitol Site, Cebu City; (3) a Deed of Sale (Exhibit "Y") executed by
one Leticia R. Cabanes on July 27, 2000 in favor of Judge Ferdinand Javier Marcos and
Maydelane B. Tacaldo conveying a Model 1999 Toyota Revo; (4) a PNP Motor Vehicle
Clearance Certificate (Exhibit "Z") covering a 1999 Toyota Revo owned by Leticia
Cabanes, for the purpose of transferring the ownership thereof to Judge Ferdinand Javier
Marcos and Maydelane B. Tacaldo.
Leoncio M. Balangkig, an employee of Paramount General Insurance Corporation
brought to the investigation copies of certain documents which he identified, to wit: Exhibit
"BB" as the invoice for the insurance coverage of a Toyota Revo issued in favor of
Ferdinand Marcos with residence at P. Rodriguez St., Zosa Comp., Capitol Site, Cebu
City; Exhibit "C" as the Policy Schedule forming part of the policy which was also issued
in favor of the insured Marcos, Ferdinand of P. Rodriguez St., Capitol Site, Cebu City;
Exhibit "DD" as an endorsement (No.2603748 dated October 4, 2000) of the
aforementioned policy No. CEB-PC-25687 that included the name of Maydelane B.
Tacaldo as an insured party. An earlier endorsement (Exhibit "JJ," No. 2603400 dated
July 25, 2000), gave the insured as "Marcos, Ferdinand J., and Tacaldo, Maydelane
B." According to the witness, this change was made upon the advice of PCI Brokers. On
cross-examination the witness reiterated that the change was occasioned by a verbal
order they received from the PCI Brokers. He further admitted that he had no knowledge
as to whether respondent was notified of the change.
 The Chattel Mortgage of the same Toyota Revo (Exhibit "FF") executed and signed
by respondent and Maydelane B. Tacaldo, both residing at Zosa Cmpd., P. Rodriguez
St., Capitol Site, Cebu City, in favor of PCI Leasing was likewise presented as evidence.
Lerma Eguia of PCI Equitable Insurance Broker, formerly PCI Broker, identified the
Deed of Sale (Exhibit II) of the same Toyota Revo in favor of Amina G. Advincula. The
same document appeared to have been signed by the respondent and Miss Tacaldo, and
acknowledged by them before Notary Public Rolando C. Grapa, who entered it in his
Notarial Register as Document No.385, Page No.78, Book No.220, Series of
2000. Another document this witness identified was Exhibit " JJ" which was an
endorsement issued by Paramount indicating therein the assured as "Marcos, Ferdinand
J., and Tacaldo, Maydelene B".
Upon the other hand, respondent offered his oral testimony and identified and marked
Exhibits "1" (affidavit of desistance executed by the complainants); "2" (letter of
respondent directing the Clerk of Court to deliver all his checks to complainant); "3" to "3-
Y" (savings account remittance slips to respondent's son Joshua); "4" (electric bill); "5"
(PLDT bill); "6" (credit application submitted to PCI Leasing); "6-A" (address indicated
therein); "6-B" (stamp of "closed account"); "7" to "7-TT" (postdated checks issued by
Maydelane Tacaldo ); "8" [representative (sic) complaint for adultery together with
affidavits]; "9" (reply-affidavit filed with Provincial Prosecutor); "10" (amended complaint
for declaration of nullity of marriage); "11" (Order dated February 22, 2000); "11-A" and
"11-B" (portions thereof); "12" (promissory note dated August 22, 2000); "12-A" and "12-
B" (portions thereof); "13" (original complaint for declaration of nullity in Civil Case No
CE8-25511 ); "13-A" (portion thereof); "14" (letter/complaint to Provincial Prosecutor);
"14-A", "14-B", and "14-C" (affidavits supporting his complaint) and "15" (certificate issued
by Dr. Manuel Tornilla). These documents, however, were not formally offered nor
transmitted to Justice Quimbo.
Respondent declared that, contrary to complainant's testimony, he was never remiss
in the support of his family. He alleged that he had supported her and their children,
except at the time that she abandoned the conjugal home in March 1998; that he was
giving her P22,000.00, more or less, monthly; that the reason why Mrs. Marcos filed the
letter/complaint against him was because she suspected that he was not giving her the
correct amount since he did not show her the checks from the Supreme Court; that he
revoked his undertaking to give to his wife all the checks due him from the Supreme Court
because he discovered that she had a paramour, his cousin Mariano Marcos; that he
alone supported their children and her daughter's family from 1998 until the time he was
suspended; that he spent for the maintenance of their home by paying their electric and
phone bills.
He presented evidence regarding the transmittal of funds to his son Joshua who was
a medical student (Exhibits "3" to "3- Y"). While assigned in Toledo City, he stated that
he was remitting to Joshua, a medical student, the sum of P12,000.00 monthly. When his
son found a job in the year 2000, he reduced his monthly support to P4,000.00. To his
daughter Hazel Faith, he gave P1,500.00 weekly while he was in Toledo City; but when
he was transferred to Cebu City, he increased her weekly support to P2,000.00.
 He averred that the jewelry he purchased at Agencia Nina in the amount of
P5,000.00 was given to his daughter Hazel Faith Marcos as a birthday gift. The groceries
bought at Gaisano Metro were bought and brought to their house in Talisay, Cebu,
especially for his granddaughter. It was his practice, even when he was still a private
practitioner, to purchase all the groceries for the needs of his family.
He never received any birthday card/social telegram because his Clerk of Court
screened all his communications. As to the birthday card found tucked between the pages
of a law book in his chambers, he denied that it came from Maydelane Tacaldo as her
name did not appear in the card -only the initials M.T. His Clerk of Court, Monalila Tecson
also has the initials M.T. but as his Clerk of Court, he didn't expect Monalila Tecson to
send him a card with the dedication "M.T. cares a lot, you know", and "It's wonderful to
share my life with you."
He disclaimed any knowledge of the note found in his office requesting payment of
May's account by a Mrs. Dandan. He replied that he did not know any Mrs. E. Dandan,
nor the Bebot to whom the payment should be given. He had never incurred any unsettled
account with anybody when he was still with Branch 20. He believed the note to be
spurious and manufactured by his complainant-wife, it being undated and because he
didn't recognize the penmanship. However, he admitted that the note was not in his wife's
handwriting but surmised that it could have been the penmanship of the person who was
asked by complainant-wife to write it.
He denied living in Zosa Compound, Don Pedro Rodriguez St., Capitol Site, Cebu
City, as he has always lived in Talisay, Cebu where his conjugal home was situated. As
to the claim that his slippers and empty plastic water container were found outside one of
the rooms in the Zosa Compound, he contended that he usually didn't wear slippers and,
if he did, his slippers were always left at home and in his chambers. There were many
consumers of mineral water in the province of Cebu: not only in Talisay but also in Cebu
City. He denied having any dealings with Techie (Ma. Teresa) Zosa of the Zosa
Compound and using the alias Victorino Timol.
With regards to the news item [17] wherein Judge Agana was quoted to have said that
he was not even discreet about his alleged illicit relationship, he believed this to be not
true because Judge Agana had never investigated him for any wrongdoing.
He denied that he was the one referred to in the news item that came out in the Sun
Star Super Balita.[18] He likewise denied that he and Maydelane Tacaldo lived together in
Toledo City where he was transferred from July 1997 to September 1999. When he had
to stay overnight in Toledo City he usually stayed in the house of his Process Server, an
Arthur Camonggan.
The Tacaldo family purchased the motor vehicle, Toyota Revo, as they wanted to
have a "for-hire" motor vehicle plying Cebu City and Toledo City. The Tacaldos requested
him, being a close friend, to have his name included in the registration of the motor
vehicle. Since he was a judge in Toledo City, he could help the Tacaldos get a slot in the
Coop Multi-Purpose, a cooperative that accepts motor vehicle units for plying the Toledo,
Balamban, and Cebu City routes.
 As the registered owner of a motor vehicle, he was aware that if the vehicle figured
in an accident or there was a damage caused to a third party, he as the owner would be
held responsible. He averred that he felt safe because the vehicle was insured. Though
the car was insured it did not cover damages to third parties. He was likewise aware that
if there would be a foreclosure of the chattel because the chattel mortgage was not
sufficient, or if the promissory note was not paid, he would be held liable. He put himself
at risk because he wanted to accommodate the Tacaldos because they are very close
family friends.
The down payments for the purchase of the motor vehicle came from the
Tacaldos. The address at P. Rodriguez, Zosa Compound, Cebu City was the address of
Miss Tacaldo. In some of the documents, like the credit application submitted before PCI
Leasing and the promissory note he executed with the same company, he gave his
address as San Jose Village, Lawaan 3, Talisay, Cebu.
The address in the Deed of Sale over the Toyota Revo, Model 1999, was that of Miss
Tacaldo, not his. He and Maydelane Tacaldo did not jointly own the motor vehicle,
although it appears on paper that it was registered in both their names but he had no
hand in the preparation of the insurance policy nor of the policy schedule. Thus, he was
not aware that his address was shown to be at Zosa Compound, Capitol Site, Cebu
City. He did not have it changed as it was only during the hearing that he first saw the
insurance policy.
The name of Miss Tacaldo appeared in the documents as a guarantee that the
Tacaldos have invested in said motor vehicle. In fact, Miss Tacaldo issued several checks
to guarantee payment of the balance of P300,000.00.
The plan to have the motor vehicle unit ply Toledo, Balamban to Cebu City was
aborted because after his suspension, the vehicle was shown on television. The Tacaldo
family was afraid that the motor vehicle might be involved in a case between him and the
complainants.
He denied having an illicit relationship with Miss Tacaldo. He stressed that his wife
had a paramour as early as March 1998 and he had told her that he would file the
corresponding adultery cases once he had sufficient evidence against her and her
paramour. And this he did. He filed 13 counts of adultery cases against his wife with the
Municipal Trial Court of Balamban, Cebu and 21 counts of adultery before the Office of
the Provincial Prosecutor. All these cases, including the Declaration of Nullity of Marriage,
were filed only after the Court suspended him on August 15, 2000.
He denied maltreating his wife. If he had beaten her, she would have been
hospitalized, as he has a bigger build than her.
He was suffering from Diabetes Mellitus, Type II, and he was already insulin-
dependent. He was diagnosed with diabetes in 1992. As a diabetic, most of his vital
organs were affected, especially his sexual capacity. He was already sexually impotent
as early as 1993, when he was first appointed to the Judiciary. His sexual impotency was
complete and he could not have sex anymore. He was being treated for diabetes and
sexual impotency. A medical certificate issued by Dr. Manuel Tornilla, dated December
6, 2000, stated, among others, that Judge Marcos had been under his (Dr. Tornilla)
medical professional care since September 15, 1995 up to that time, and he has been
diabetic since 1992, and was on maintenance medication.
His wife was upset with his physical condition but he could not do anything about it
because his diabetes caused his sexual impotency.
In Civil Case No. CEB-19725, a motion for inhibition was filed which was denied. In
his order dated February 22, 2000, he denied the motion for reconsideration because it
was not true that he was living in the property of Atty. Zosa.
While Maydelane Tacaldo was present during the Fun Run in Cebu City, she was not
with him. Chief Justice Hilario G. Davide, Jr. confronted him and asked him whether
Maydelane Tacaldo had a job and whether he had a child with her. He replied that he
didn't know if she had a job and that he didn't have a child with her. The Chief Justice told
him, "That is bad for the judiciary." Before he was able to explain the Chief Justice had
already left. The Chief Justice did not ask him whether that woman who went there was
with him.
He did not see Maydelane Tacaldo at the convention in June 1996. He first met her
at a seminar of Judges at the penthouse of the San Miguel Corporation in Mandaue
City. She was then the secretary of Judge Vestil.
He was a friend of Maydelane Tacaldo's father. The Tacaldos lived somewhere near
Aznar Coliseum but he had never visited their house.
The Islacom Statement of Account was mistakenly sent to him, as it should have been
sent to a certain Urgello. He didn't have an account with Islacom. Neither did he have a
cell phone although he had, at one point, entertained the idea of buying one. When he
went to the Islacom office regarding the allegedly erroneous billing, he did not ask as to
who the real account holder was. All he did was to execute an Affidavit of Loss, per advice
of Islacom.
Respondent admitted that a confrontation occurred between him. Maydelane
Tacaldo, the parents of Maydelane, his wife, and the brothers and sisters of his wife
because of the Islacom Statement of Account. He didn't know if Maydelane Tacaldo used
the cell phone because during the confrontation, Miss Tacaldo denied she had a cell
phone. The father of Maydelane also said he did not see his daughter with a cell
phone. Miss Tacaldo expressly denied having any relationship with him. He also told the
group during the confrontation that he was not related to her, in any way. Complainant-
wife instigated the confrontation.
He never received the amount of more than P500,000.00 from the sale of the Toyota
Revo. The buyer paid P300,000.00 loan to PCI and P250,000.00 to the Tacaldos.
We agree with and therefore uphold the findings and conclusions of Justice Romulo
Quimbo, as contained in his Report. We find the details of his findings amply supported
by the evidence on record leaving us no doubt in our minds that a very special relationship
existed between Judge Ferdinand J. Marcos and Maydelane Tacaldo (a.k.a. Mae
Tacaldo) -that their illicit relationship started even before he separated from his wife
Rotilla Marcos in 1997.
 Consider the following evidence:
The Islacom Statement of Account dated June 3, 1996 was addressed to Judge
Marcos not in his conjugal dwelling at San Jose village, Lawaan 3, Talisay Cebu, but at
615 ZA P. del Rosario Ext., Cebu City that Mrs. Marcos later discovered to be the
residence of Maydelane Tacaldo. While Judge Marcos denied owning a cell phone there
is an improbability that Islacom would send a phone bill to him if he were not the real
owner thereof.
Service providers like phone companies rely on the information given by the applicant
desirous of its services. Islacom would not have sent Judge Marcos a Statement of
Account if he did not apply for a phone line nor sent it to an address he did not furnish
them.
If he did not really own the cell phone was it not expected of him, being a judge and
all, to have stood his ground and insisted that as he did not own nor lose a cell phone, it
is preposterous of him to execute an Affidavit of Loss.
Moreover, we find it hard to believe that he would have been satisfied with an
explanation that the bill was erroneously sent to him without raising hell, so to speak, in
finding out the identity of the Islacom employee who was at fault, especially so when this
Statement of Account was the catalyst in the confrontation between him, his wife Rotilla
and Ms. Tacaldo.
Someone with the initials M.T. sent Judge Marcos for his birthday on July 7, 1996,
the social telegram/birthday card, but was delivered on July 5, 1996. This person could
be Maydelane Tacaldo or Monalila Tecson. Although Judge Marcos' Branch Clerk of
Court has these initials we, as well as Judge Marcos, do not believe that she would send
Judge Marcos a card with the greeting -"It is wonderful to share my life with you." -and
ending it with -"MT cares a lot, you know." Only a person who is truly intimate with Judge
Marcos would send such a card.
We do not put any trust in Judge Marcos's denials that he had never seen said
card. The book was found tucked between the pages of a law book lying on top of his
office table. He is the most logical person to have inserted said card in the law book.
The Bankard Statement of Account dated September 10, 1997 reflected that Judge
Marcos bought, presumably, jewelry/ies at the Agencia Nina & Jewelry, and groceries at
the Gaisano Metro, and dined at Cafe Laguna.
Mrs. Marcos denied receiving jewelry/ies and dining out with Judge Marcos at the
said restaurant. She testified that her daughter also did not receive jewelry/ies from her
father. They also did not receive any groceries from Judge Marcos, as he was no longer
going home then.
Complainant Mrs. Rotilla Marcos declared that she searched for the apartment where
her husband was staying. When she found it she saw her husband's slippers and
laundered clothes outside the place. Having been married to him for about 26 years she
would have known her husband's preferences as to wearing apparel and personal items,
and would have been able to recognize them upon seeing them.
 In Civil Case No. 19070, a motion for respondent to inhibit himself was filed based on
the fact that he was residing in one of the units in the Zosa Compound that belonged to
Atty. Zosa, counsel for one of the parties. Atty. Zosa, in his comment, did not categorically
deny the allegation. Neither did respondent, in his Order denying the motion, categorically
deny the allegation.
Although the Certification of Tenant was unsigned and did not cite Judge Marcos and
Ms. Tacaldo as one of the tenants at Zosa Compound, the fact that they lived together
was apparent in the different documents they executed pertaining to the Toyota Revo, for
the address they both gave for these documents was Rodriguez St., Capitol Site, Cebu
City. Zosa Compound, by the way, is located at Rodriguez St., Capitol Site, Cebu City.
We are not swayed by the denials made by respondent judge that he and Ms. Tacaldo
were the owners of a Toyota Revo.
Judge Marcos and Ms. Tacaldo jointly bought a motor vehicle -a Toyota Revo -and
had it registered in their names as co-owners. They obtained insurance for the same
vehicle with them as joint beneficiaries. They executed a chattel mortgage over the same
in favor of PCI Leasing and Finance, Inc. and when they finally sold the same vehicle on
September 18, 2000 to Amina Advincula, they both signed the Deed of Sale as joint
owners. These actions clearly indicate that they were the joint owners of the Toyota Revo.
We are likewise not persuaded by the averment made by Judge Marcos that he
accommodated the Tacaldos in their desire to get a slot in the cooperative because they
are very close family friends. If they are indeed close, it is surprising to hear that he had
never been to the house of the Tacaldos. In fact, he was not even sure as to the exact
location of the Tacaldo residence.
Respondent judge wanted us to believe that if his name was put in the motor vehicle's
registration, the Tacaldos' entry in the cooperative's business of running public utility
vehicles would be assured. He went to extraordinary lengths to help the Tacaldos by
having the vehicle registered in his and Ms. Tacaldo's names.
There is nothing in the records to show that it was essential for respondent to be
registered as an owner in order that the motor vehicle could ply the Toledo City -Cebu
City routes. A simple phone call/oral request by Judge Marcos to the cooperative officers
would have been sufficient, to our mind, to allow the Tacaldos' entry to the cooperative
business of transporting passengers.
Respondent's posture that Mrs. Marcos is also guilty of immorality does not excuse
nor even mitigate his actions. It is respondent's private action that is being investigated
not his wife's.
We cannot gloss over the incident that happened during the Fun Run as recounted
by Chief Justice Davide. Judge Marcos candidly and frankly admitted to the Chief Justice
that he had been living with Ms. Tacaldo for the last three years as he was already
separated from his wife. Bringing Ms. Tacaldo to public functions was not in good taste
considering that Judge Marcos was still very much married even if he and his wife Rotilla
were already living separately.He had no right to flaunt Maydelane Tacaldo as if she was
his wife. This conduct is certainly unbecoming of a judge whose conduct must at all times
be beyond reproach.
As held in GALANG VS. SANTOS,[19] the personal behavior of a judge should be free
from the appearance of impropriety, and his personal behavior, not only in the bench and
in the performance of judicial duties, but also in his everyday life, should be beyond
reproach.

"The Code of Judicial Ethics mandates that the conduct of a judge must be free of a
whiff of impropriety not only with respect to his performance of his judicial duties, but
also to his behavior outside his sala and as a private individual.There is no dichotomy of
morality: a public official is also judged by his private morals. The Code dictates that a
judge, in order to promote public confidence in the integrity and impartiality of the
judiciary, must behave with propriety at all times. As we have very recently explained, a
judge's official life cannot simply be detached or separated from his personal
existence. Thus: Being the subject of constant public scrutiny, a judge should freely and
willingly accept restrictions on conduct that might be viewed as burdensome by the
ordinary citizen. A judge should personify judicial integrity and exemplify honest public
service. The personal behavior of a judge, both in the performance of official duties and
in private life should be above suspicion."[20]

In LEYNES VS. VELOSO,[21] it was held that if good moral character is required of a
lawyer, with more reason is the requirement exacted of a member of the judiciary who at
all times is expected to observe irreproachable behavior and is bound not to outrage
public decency.[22]
Keeping a mistress is certainly not an act one would expect of a judge who is
expected to possess the highest standard of morality and decency. If a judge fails to have
high ethical standards, the confidence and high respect for the judiciary diminishes as he
represents the judiciary.
Jurisprudence is rich in cases where the Court has inflicted on judges the punishment
of dismissal for immorality especially when it is committed openly and flagrantly, causing
scandal in the place where his court is situated.
"In Dy Teban Hardware and Auto Supply Co. vs. Tapucar (102 ISCRA 493 [1981]),
the Court laid down the rationale why every judge must possess moral integrity, thusly:

"The personal and official actuations of every member of the judiciary must be beyond
reproach and above suspicion. The faith and confidence of the people in the
administration of justice can not be maintained if a judge who dispenses it is not
equipped with the cardinal judicial virtue of moral integrity and if he obtusely continues
to commit affront to public decency. In fact, moral integrity is more than a virtue; it is a
necessity in the judiciary.[23]

No position exacts a greater demand on the moral righteousness and uprightness of

an individual than a seat in the judiciary. A magistrate of the law must comport himself at
all times in such a manner that his conduct, official or otherwise, can bear the most
searching scrutiny of the public that looks up to him as the epitome of integrity and
justice.[24]
The Court once again reminds all those who don judicial robes to maintain good moral
character and at all times observe irreproachable behavior so as not to outrage public
decency.[25]
Herein respondent cannot find comfort in the "affidavit of desistance" signed by his
wife and children.

"Generally, the Court attaches no persuasive value to affidavits of desistance, especially

when executed as an afterthought xxx. As held in People v. Ubina[26]: It would be a
dangerous rule for courts to reject testimonies solemnly taken before the courts of
justice simply because the witnesses who had given them later on changed their mind
for one reason or another; for such rule would make solemn trials a mockery and place
the investigation of truth at the mercy of unscrupulous witness(es)." [27]

Again, in the case of IMBING VS. TIONGSON,[28] the Court once more held that:

"The fact that complainant has lost interest in prosecuting the administrative case
against herein respondent judge will not necessarily warrant a dismissal thereof. Once
charges have been filed, the Supreme Court may not be divested of its jurisdiction to
investigate and ascertain the truth of the matter alleged in the complaint. The Court has
an interesting the conduct of members of the Judiciary and in improving the delivery of
justice to the people, and its efforts in that direction may not be derailed by the
complainants desistance from further prosecuting the case he or she initiated.

Judge Ferdinand J. Marcos has demonstrated himself to be wanting of moral

integrity. He has violated the code of Judicial Conduct which requires every judge to be
the embodiment of competence, integrity, and independence and to avoid the
appearance of impropriety in all activities as to promote public confidence in the integrity
and impartiality of the judiciary.
The charge of immorality proven against respondent judge demonstrates his
unfitness to remain in office and continue to discharge the functions and duties of a judge.
Having tarnished the image of the Judiciary, respondent must be meted out the
severest form of disciplinary sanction - dismissal from the service.
WHEREFORE, IN VIEW OF THE FOREGOING, respondent judge Ferdinand J.
Marcos of the Regional Trial Court of Cebu City is DISMISSED from the service, with
prejudice to his reinstatement or appointment to any public office including government
owned or controlled corporations, and forfeiture of his retirement benefits, if he is entitled
to any.
This decision is immediately executory.
SO ORDERED.

FIRST DIVISION
 August 30, 2016

A.M. No. P-16-3541

[Formerly OCA IPI No. 12-3915-P]

SYLVIA G. CORPUZ, Complainant

vs.
CEFERINA B. RIVERA, COURT STENOGRAPHER III, REGIONAL TRIAL COURTOF
DAVAO CITY DAVAO DEL SUR, BRANCH 12, Respondent

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

A.M. No. P-16-3542

[Formerly OCA IPI No. 13-4049-P]

PRESIDING JUDGE RUFINO S. FERRARIS, JR., MUNICIPAL TRIAL COURT IN

CITIES OF DAVAO CITY, BRANCH 7, Respondent
vs.
CEFERINA B. RIVERA, COURT STENOGRAPHER III, REGIONAL TRIAL COURT OF
DAVAO CITY, DAV AO DEL SUR, BRANCH 12, Respondent.

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

A.M. No. P-16-3543

[Formerly OCA IPI No. 13-4074-P]

IRINEO F. MARTINEZ, JR., Complainant,

vs.
CIFERINA B. RIVERA, COURT STENOGRAPHER III, REGIONAL TRIAL COURT OF
DAVAO CITY, DAVAO DEL SUR, BRANCH 12, Respondent.

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

OCA IPI No. 14-2731-MTJ

CEFERINA B. RIVERA, COURT STENOGRAPHER III, REGIONAL TRIAL COURT OF

DAV AO CITY, DAV AO DEL SUR, BRANCH 12, Complainant,
vs.
PRESIDING JUDGE RUFINO S. FERRARIS, JR., MUNICIPAL TRIAL COURT IN
CITIES OF DAVAO CITY, BRANCH 7, Respondent.

DECISION

PERLAS-BERNABE, J.:
For the Court's resolution are four (4) consolidated administrative cases, namely: (1)
A.M. No. P-16-3541 (Formerly OCA IPI No. 12-3915-P); (2) A.M. No. P-16-3542
(Formerly OCA IPI No. 13-4049-P); (3) A.M. No. P-16-3543 (Formerly OCA IPI No. 13-
4074-P), respectively initiated by Sylvia G. Corpuz (Corpuz), Presiding Judge Rufino S.
Ferraris, Jr. (Judge Ferraris, Jr.) of the Municipal Trial Court in Cities of Davao City,
Branch 7, and Irineo F. Martinez, Jr. (Martinez, Jr.), against Ceferina B. Rivera (Rivera),
Court Stenographer III of the Regional Trial Court of Davao City (RTC), Branch 12
concerning the latter's money-lending business; and (4) OCA IPI No. 14-2731-MTJ
initiated by Rivera against Judge Ferraris, Jr. regarding his complicity to the said
money-lending business.

The Facts

In the Complaint in A.M. No. P-16-3541 (Formerly OCA IPI No. 12-3915- P), 1 it was
alleged that in February 2011, Rivera convinced Corpuz to invest the aggregate amount
of P252,500.00 in the former's money-lending business with the promise that Corpuz
will earn a monthly interest of two and a half percent (2.5% ), which interest will be
deposited to her account at the end of each month. Rivera never fulfilled her promise,
which prompted Corpuz to verify Rivera's aforesaid business. After discovering that no
such money-lending business existed, Corpuz immediately demanded the return of her
money, and in response, Rivera gave her two (2) checks amounting to P130,000.00
each. However, the checks were dishonored for being drawn against insufficient funds.
After her demands for payment went unheeded, Corpuz filed two (2) counts of Esta/a
and violation of Batas Pambansa Big. 222 against Rivera, 3 as well as the instant
administrative complaint.

Similarly, the affidavit-complaints in A.M. No. P-16-3542 (Formerly OCA IPI No. 13-
4049-P)4 and A.M. No. P-16-3543 (Formerly OCA IPI No. 13-4074-P)5 alleged that
Rivera convinced Judge Ferraris, Jr. and Martinez, Jr. to invest in her money-lending
business the respective amounts of Pl00,000.00 and ₱50,000.00 with the promise that
their money would earn monthly interest of five percent (5%). As guarantee, Rivera
issued checks to Judge Ferraris, Jr. and Martinez, Jr. corresponding to their
investments in her business. After paying Judge Ferraris, Jr. and Martinez, Jr. the
agreed interest for four (4) and three (3) months, respectively, Rivera failed to pay the
succeeding interests and even the principal amounts. Judge Ferraris, Jr. and Martinez,
Jr. then tried to encash their respective checks, but both were dishonored for being
drawn against a closed account. Ultimately, Rivera failed to pay her liabilities despite
demands, thus, constraining Judge Ferraris, Jr. and Martinez, Jr. to file separate
criminal cases against her.6

For her part,7 Rivera openly admitted having engaged in money-lending activities, albeit
offering the excuse that her business was done in good faith and with no intention of
blemishing the good name of her office, as the same was done mainly to augment her
meager salary and accommodate the monetary needs of other court personnel. She
likewise explained that her business took a downward spiral when majority of her
borrowers failed to pay their monthly obligations. Worse, she herself suffered financial
troubles when her family and relatives were hit by the Typhoon Pablo in 2012, which
took much of her time and financial resources in order to support them. 8 As a result,
she defaulted in her obligations to Judge Ferraris, Jr., Martinez, Jr., and Corpuz. Rivera
also averred that Judge Ferraris, Jr. went to her office several times while she was on
leave and threatened to have her killed if she did not pay up. 9 Lastly, she clarified that
she had already amicably settled her obligations with Judge Ferraris, Jr., Martinez, Jr.,
and Corpuz resulting in the provisional dismissal of the criminal case Corpuz filed
against her; 10 and the affidavits of desistance executed by Judge Ferraris, Jr. 11 and
Martinez, Jr. 12 withdrawing their criminal complaints against her. 13

In view of Rivera's claim that she received threats from Judge Ferraris, Jr., the Office of
the Court Administrator (OCA) recommended that: (a) Rivera's counter-affidavits in A.M.
No. P-16-3542 (Formerly OCA IPI No. 13-4049-P) and A.M. No. P-16-3543 (Formerly
OCA IPI No. 13-4074-P) be treated as a separate administrative complaint against
Judge Ferraris, Jr. to determine his involvement in Rivera's money-lending business;
and (b) Judge Ferraris, Jr. be ordered to comment on the administrative case against
him. 14 Said recommendations were approved and adopted by the Court in its
Resolution dated October 8, 201415 and the counter-affidavits were, thereafter,
docketed as OCA IPI No. 14-2731-J.

Pursuant to the Court's directive, Judge Ferraris, Jr. submitted a

CounterAffidavit16 dated September 17, 2015, vehemently denying Rivera's accusation
that he threatened Rivera's life. He then clarified that after finding out that Rivera has
other creditors who were after her, he merely commented that "good that she is not in
the danger of being killed by reason of her non-payment of her account to other
creditors." 17

In view of the similarities in the factual milieu of the complaints, the OCA further
recommended that the four (4) administrative cases be consolidated. 18 Thus, the Court,
in its Resolutions dated October 1, 2014, 19 October 8, 2014,20 and March 18,
2015, 21 ordered, inter alia, the consolidation of the said cases and the referral of the
same to the First Vice Executive Judge of the RTC for a joint investigation, report and
recommendation. 22

In a Report and Recommendation23 dated October 4, 2015, First Vice Executive Judge
Retrina E. Fuentes (Judge Fuentes) found both Rivera and Judge Ferraris, Jr.
administratively liable, and accordingly, recommended that they be meted the penalties
of suspension of six (6) months and reprimand, respectively.

Judge Fuentes found that Rivera was indeed engaged in money-lending activities as
she herself had admitted, and as attested to by various court employees. According to
Judge Fuentes, Rivera's actions constitute conduct prejudicial to the best interest of the
service as her money-lending business put the image of the judiciary in a bad light,
especially in view of the fact that she performs her transactions during office hours and
within the court's premises.24
Anent Judge Ferraris, Jr., Judge Fuentes did not find any evidence that would show his
active participation in Rivera's money-lending activities or that he exploited his position
in order to gain monetary benefit therefrom. These notwithstanding, Judge Fuentes
opined that Judge Ferraris, Jr. should have known that engaging in money-lending
activities is directly prohibited under prevailing Civil Service Rules and, thus, should
have taken steps to prevent Rivera from doing such activities. On the contrary, he even
invested capital therein. Consequently, he should be reprimanded for his lack of
concern in the moneylending activity of Rivera and his act of investing therein.25

The OCA's Report and Recommendation

In a Memorandum26 dated March 30, 2016, the OCA recommended, inter alia, that: (a)
Rivera be held administratively liable for her money-lending activities, and accordingly,
be meted the penalty of one (1)-month suspension without pay with a stem warning that
a repetition of the same or similar acts will be dealt with more severely; and (b) the
complaint against Judge Ferraris, Jr. be dismissed, but he be admonished for tolerating
and not taking steps to prevent Rivera from engaging in such business. 27

The OCA ratiocinated that as a court employee, Rivera is required to serve with
maximum efficiency and with the highest degree of devotion to duty in order to maintain
public confidence in the judiciary. Thus, Rivera's act of engaging in her money-lending
business cannot be countenanced as it tends to distract her from devoting her entire
time to official work so as to ensure the efficient and speedy administration of justice.
However, considering that this was Rivera's first offense in her more than thirty-six (36)
years of government service, the OCA deemed it appropriate to impose upon her the
penalty of one (1)-month suspension without pay.28

As regards Judge Ferraris, Jr., the OCA agreed with the conclusion of Judge Fuentes
that there is not enough evidence to show that he took advantage of his position as a
judge in order to receive any monetary gain from Rivera's money lending business. This
notwithstanding, the OCA recommended that Judge Ferraris, Jr. be admonished for his
lack of concern in taking steps to prevent Rivera from conducting her trade and even
expressly supporting it by investing money therein.

The Issue Before the Court

The issue raised for the Court's resolution is whether or not Rivera and Judge Ferraris,
Jr. may be held administratively liable for Rivera's money-lending activities.

The Court's Ruling

The Court agrees with the findings and conclusions of the OCA, except as to the
penalty to be imposed on Rivera.1âwphi1

Misconduct is a transgression of some established and definite rule of action, more

particularly, unlawful behavior or gross negligence by the public officer. To warrant
dismissal from service, the misconduct must be grave, serious, important, weighty,
momentous, and not trifling. The misconduct must imply wrongful intention and not a
mere error of judgment and must also have a direct relation to and be connected with
the performance of the public officer's official duties amounting either to
maladministration or willful, intentional neglect, or failure to discharge the duties of the
office. In order to differentiate gross misconduct from simple misconduct, the elements
of corruption, clear intent to violate the law, or flagrant disregard of established rule,
must be manifest in the former. 29 Stated differently, if the misconduct does not involve
any of the aforesaid qualifying elements, the person charged is only liable for the lesser
offense of simple misconduct.30

In this case, Rivera ought to have known that as a public servant, she is expected at all
times to exhibit the highest sense of honesty and integrity, as expressly commanded by
no less than Section 1, Article XI31 of the 1987 Constitution.32 Moreover, as an
employee of the Judiciary, she should be well aware that the nature of her work
demands her highest degree of efficiency and responsibility, and that she would only be
able to meet this demand by devoting her undivided time to government service.
Essentially, this is the reason why court employees have been enjoined to strictly
observe official time and to devote every second or moment of such time to serving the
public so as to ensure that undue delays in the administration of justice and in the
disposition of court cases be avoided.33

In admittedly engaging in her unauthorized business, Rivera fell short of the standard
required of Judiciary employees, let alone public servants in general. Her money-
lending activities - which were done even during office hours and within the court
premises - surely put the integrity of her office under suspicion, as it gave the
impression that she took advantage of her position and abused the confidence reposed
in her in doing her business.34 However, absent any showing that her inappropriate acts
were tainted with corruption, clear intent to violate the law, or flagrant disregard of
established rule, Rivera should only be held administratively liable for Simple
Misconduct.

Under Section 46 (D), Rule 10 of the Revised Rules on Administrative Cases in the Civil
Service, 35 simple misconduct is a less grave offense which merits the penalty of
suspension for a period ranging from one (1) month and one (1) day to six (6) months
for the first offense and dismissal from service for the second offense. Considering that
this is Rivera's first offense in her more than thirty-six (36) years of government
service,36 the Court deems it appropriate to impose upon her the penalty of suspension
without pay for a period of one (1) month and one (1) day, with a stem warning that a
repetition of the same or similar acts in the future shall be dealt with more severely.

As regards Judge Ferraris, Jr., suffice it to say that the OCA correctly recommended the
dismissal of the case against him as there is not enough evidence to show that he
exploited his position to receive monetary benefit from Rivera's money-lending activities.
However, he must nevertheless be admonished for his lack of concern in taking steps to
prevent Rivera from conducting her trade and, in fact, condoned it by investing money
into the same.

It is well to reiterate that "those in the Judiciary serve as sentinels of justice, and any act
of impropriety on their part immeasurably affects the honor and dignity of the Judiciary
and the people's confidence in it. The Institution demands the best possi~le individuals
in the service and it had never and will never tolerate nor condone any conduct which
would violate the norms of public accountability, and diminish, or even tend to diminish,
the faith of the people in the justice system. As such, the Court will not hesitate to rid its
ranks of undesirables who undermine its efforts towards an effective and efficient
administration of justice, thus tainting its image in the eyes of the public." 37

WHEREFORE, the Court finds respondent Ceferina B. Rivera, Court Stenographer III of
the Regional Trial Court of Davao City, Davao del Sur, Branch 12 GUILTY of Simple
Misconduct. Accordingly, she is hereby SUSPENDEDwithout pay for a period of one (1)
month and one (1) day, and is STERNLY WARNED that a repetition of the same or
similar acts in the future shall be dealt with more severely.

Further, the Court DISMISSES the administrative case against Presiding Judge Rufino
S. Ferraris, Jr. of the Municipal Trial Court in Cities of Davao City, Branch 7, docketed
as OCA IPI No. 14-2371-MTJ, for lack of sufficient evidence. This notwithstanding, he is
hereby ADMONISHED to be more vigilant in taking steps to prevent officials and
employees of the Judiciary from engaging in prohibited activities.

SO ORDERED.

EN BANC

I.P.I. No. 16-244-CA-J, September 06, 2016

Re: VERIFIED COMPLAINT OF CATALINA Z. ALILING AGAINST ASSOCIATE

JUSTICE MA. LUISA C. QUIJANO-PADILLA, COURT OF APPEALS, MANILA
RELATIVE TO CA-G.R. CV NO. 103042

DECISION

PEREZ, J.:

This resolves the verified complaint1 filed by Catalina Z. Aliling (Complainant) against
Justice Ma. Luisa C. Quijano-Padilla (Justice Padilla) of the Court of Appeals (CA) of
Manila for gross ignorance of the law or procedure and gross misconduct constituting
violations of Rules 1.01 and 3.01 of the Code of Judicial Conduct. The complaint
stemmed from the Decision2 of Justice Padilla in CA-G.R. CV No. 103042.

Antecedent Facts
On 28 October 1997, Asuncion Zamora Jurado (Jurado) and Catalina Zamora Aliling
(Aliling) filed a complaint before the Regional Trial Court (trial court), Santiago City,
Isabela for the determination of the true origin and ownership of a 7,086-square meter
parcel of land, described as Lot No. 4900. Jurado and Aliling alleged that they, together
with their deceased brother Fernando M. Zamora, are the registered owners of Lot No.
4900 covered by TCT No. T-65150 of the Registry of Deeds of Isabela. They claimed to
have inherited the subject land from their father, Dominador Zamora, who holds the
property under the previous title, TCT No. T-2291, after having acquired this from the
previous owners, spouses Antonio Pariñas and Maura Balbin. The case was docketed
as Civil Case No. 36-2438.

Jurado and Aliling alleged that sometime in 1997, they learned that defendants in the
case were able to cause the subdivision of Lot No. 4900 into several titles in the names
of: Vicente Chai, married to Carmen Chai; Eduardo Sarmiento, married to Josefina M.
Sarmiento; Anastacio Pallermo; and Leonora Pariñas and Margarita Pariñas, married to
Melecio Pinto. Claiming absolute and lawful ownership over the subject property,
plaintiffs prayed for the nullification of the aforesaid titles.

After trial on the merits, the trial court rendered judgment holding, among others, that
there was an irregularity in the reconstitution proceedings relative to OCT No. 3429 from
which defendants' titles were derived and that defendants, particularly appellants
Spouses Chai, could not be considered as purchasers in good faith.

The plaintiffs filed their Motion for Partial Reconsideration while the defendants filed
their Motion for Reconsideration of the 25 February 2014 decision. The trial court
denied both of their motions.

On intermediate appellate review, the CA reversed and set aside the trial court's
decision in Civil Case No. 36-2438. It held that while it affirms the trial court's ruling on
the irregularity of the reconstitution of OCT No. 3429, it cannot sustain the finding that
appellants are not purchasers in good faith. The CA concluded that defendant Spouses
Chai exercised the due diligence required of them to be rightfully adjudged as buyers in
good faith. The decision was penned by Justice Padilla and concurred in by Associate
Justices Normandie B. Pizarro and Samuel H. Gaerlan.

On 7 June 2016, plaintiffs-appellees Jurado, Aliling and the heirs of their brother
Fernando M. Zamora, filed a Motion for Reconsideration assailing the CA decision.

Pending resolution of their Motion for Reconsideration, Aliling on 27 June 2016 filed the
instant administrative complaint against Justice Padilla.

Our Ruling

Although complainant asserted that she is not assailing the CA decision in the
administrative complaint, it is evident that the error she is attributing to respondent
Justice Padilla pertains to the latter's ruling in CA-G.R. CV No. 103042. This Court has
maintained that errors committed by a judge in the exercise of his adjudicative functions
cannot be corrected through administrative proceedings, but should instead be assailed
through judicial remedies.3chanrobleslaw

The assailed ruling of Justice Padilla was issued in the proper exercise of her judicial
functions, and as such, should not be subject to administrative disciplinary action. Well
entrenched is the rule that a judge may not be administratively sanctioned from mere
errors of judgment in the absence of showing of any bad faith, fraud, malice, gross
ignorance, corrupt purpose, or a deliberate intent to do an injustice on his or her
part.4 Judicial officers cannot be subjected to administrative disciplinary actions for their
performance of duty in good faith.5 As a matter of public policy, a judge cannot be
subjected to liability for any of his official acts, no matter how erroneous, as long as he
acts in good faith. To hold otherwise would be to render judicial office untenable, for no
one called upon to try the facts or interpret the law in the process of administering
justice can be infallible in his judgment.6chanrobleslaw

To be held liable for gross ignorance of the law, the judge must be shown to have
committed an error that was gross or patent, deliberate or malicious.7 In her ponencia,
Justice Padilla explained, citing evidence and jurisprudence, why she arrived at her
conclusion that defendants were purchasers in good faith. Even assuming that she
erred in her ruling, still complainant failed to establish that she was moved by ill-will or
malicious intention to violate the law or jurisprudence. Moreover, it should be noted that
it was arrived at after deliberation by a collegial body, thus, not solely the ruling of the
respondent justice.

Complainant should be reminded that unfavorable rulings are not necessarily

erroneous. If she disagrees with the ruling, there are judicial remedies to be exhausted
under existing rules. As in fact, it was noted that complainant, together with the other
plaintiffs-appellees, had already filed their motion for reconsideration of the CA decision.
The CA has yet to rule on the motion when complainant filed the instant administrative
complaint.

This Court has settled the rule that administrative complaints against judges cannot be
pursued simultaneously with the judicial remedies accorded to parties aggrieved by the
erroneous orders or judgments of the former. Administrative remedies are neither
alternative to judicial review nor do they cumulate thereto, where such review is still
available to the aggrieved parties and the cases not yet been resolved with finality.8 It is
only after the available judicial remedies have been exhausted and the appellate
tribunals have spoken with finality, that the door to an inquiry into his criminal, civil, or
administrative liability may be said to have opened, or closed.9 Clearly, the subject civil
case has not yet reached its finality and the instant administrative complaint has no leg
to stand on.

WHEREFORE, in the light of the foregoing premises, the instant administrative

complaint filed by Catalina Z. Aliling against Justice Ma. Luisa C. Quijano-Padilla, Court
of Appeals, Manila for ignorance of the law or procedure and gross misconduct
constituting violations of Rules 1.01 and 3.01 of the Code of Judicial Conduct is
hereby DISMISSED for lack of merit.

SO ORDERED.chanRoblesvirtualLawlibrary

SECOND DIVISION

A.M. No. RTJ-09-2200 April 2, 2014

(formerly OCA I.P.I. No. 08-2834-RTJ)

ANTONIO M. LORENZANA, Complainant,

vs.
JUDGE MA. CECILIA I. AUSTRIA, Regional Trial Court, Branch 2, Batangas
City, Respondent.

DECISION

BRION, J.:

We resolve in this Decision the administrative complaints1 filed by Antonio M.

Lorenzana (complainant) against Judge Ma. Cecilia I. Austria (respondent), Regional
Trial Court (RTC), Branch 2, Batangas City.

The records show that the administrative complaints arose from the case "In the Matter
of the Petition to have Steel Corporation of the Philippines Placed under Corporate
Rehabilitation with Prayer for the Approval of the Proposed Rehabilitation Plan,"
docketed as SP. Proc. No. 06-7993, where the respondent was the presiding judge. The
complainant was the Executive Vice President and Chief Operating Officer of Steel
Corporation of the Philippines (SCP), a company then under rehabilitation proceedings.

i. Complaint

In his verified complaint dated January 21, 2008, the complainant alleged that in the
course of SP. Proc. No. 06-7993, the respondent committed Gross Ignorance of the
Law, Grave Abuse of Authority, Gross Misconduct, Grave Incompetence, Irregularity in
the Performance of Duty, Grave Bias and Partiality, Lack of Circumspection, Conduct
Unbecoming of a Judge, Failure to Observe the Reglementary Period and Violation of
the Code of Professional Responsibility, as shown by the following instances:

1. The respondent appointed Atty. Santiago T. Gabionza, Jr. as rehabilitation

receiver over SCP’s objections and despite serious conflict of interest in being
the duly appointed rehabilitation receiver for SCP and, at the same time, the
external legal counsel of most of SCP’s creditors; he is also a partner of the law
firm that he engaged as legal adviser.
2. The respondent conducted informal meetings (which she termed as
"consultative meetings" in her Order2dated May 11, 2007) in places outside her
official jurisdiction (i.e., a first class golf club, a hotel and sports club facilities in
Metro Manila) and where she arbitrarily dictated the terms, parameters and
features of the rehabilitation plan she wanted to approve for SCP. She also
announced in the meetings that she would prepare the rehabilitation plan for
SCP.

3. The modified rehabilitation plan submitted by Atty. Gabionza is a replica of

what the respondent dictated to him. Thus, the respondent exceeded the limits of
her authority and effectively usurped and pre-empted the rehabilitation receiver’s
exercise of functions.

4. The respondent ordered that the proceedings of the informal meetings be off-
record so that there would be no record that she had favored Equitable-PCI Bank
(EPCIB).

5. The respondent had secret meetings and communications with EPCIB to

discuss the case without the knowledge and presence of SCP and its creditors.

6. The respondent appointed Gerardo Anonas (Anonas) as Atty. Gabionza’s

financial adviser and, at the same time, as her financial adviser to guide her in
the formulation and development of the rehabilitation plan, for a fee of ₱3.5M at
SCP’s expense. Anonas is also the cousin-in-law of the managing partner of Atty.
Gabionza’s law firm.

7. The respondent encouraged EPCIB to raise complaints or accusations against

SCP, leading to EPCIB’s filing of a motion to create a management committee.

8. When requested to conduct an evidentiary meeting and to issue a subpoena

(so that SCP could confront EPCIB’s witnesses to prove the allegation that there
was a need for the creation of a management committee), the respondent denied
SCP’s requests and delayed the issuance of the order until the last minute.

9. At the hearing of September 14, 2007, the respondent intimidated SCP’s

counsel, Atty. Ferdinand Topacio; blocked his every attempt to speak; refused to
recognize his appearances in court; and made condescending and snide
remarks.

10. The respondent failed to observe the reglementary period prescribed by the
Interim Rules of Procedure on Corporate Rehabilitation (Rules). She approved
the rehabilitation plan beyond the 180 days given to her in the Rules, without
asking for permission to extend the period from the Supreme Court (SC).
 11. The respondent erroneously interpreted and applied Section 23, Rule 4 of the
Rules (the court’s power to approve the rehabilitation plan) to include the power
to amend, modify and alter it.

12. The respondent took a personal interest and commitment to decide the
matter in EPCIB’s favor and made comments and rulings in the proceedings that
raised concerns regarding her impartiality.

13. The respondent adamantly refused to inhibit herself and showed special
interest and personal involvement in the case.

ii. Supplemental Complaint

The complainant likewise filed a supplemental complaint3 dated April 14, 2008 where he
alleged that the respondent committed an act of impropriety when she displayed her
photographs in a social networking website called "Friendster" and posted her personal
details as an RTC Judge, allegedly for the purpose of finding a compatible partner. She
also posed with her upper body barely covered by a shawl, allegedly suggesting that
nothing was worn underneath except probably a brassiere.

The Office of the Court Administrator (OCA) in its 1st Indorsement4 dated March 18,
2008, referred the complaints to the respondent for comment.

a. Comment to January 21, 2008 Complaint

The respondent vehemently denied the allegations against her. While she admitted that
she crafted a workable, feasible rehabilitation plan best suited for SCP, she maintained
that she did so only to render fairness and equity to all the parties to the rehabilitation
proceedings. She also submitted that if indeed she erred in modifying the rehabilitation
plan, hers was a mere error of judgment that does not call for an administrative
disciplinary action. Accordingly, she claimed that the administrative complaints were
premature because judicial remedies were still available.5

The respondent also argued that the rules do not prohibit informal meetings and
conferences. On the contrary, she argued that informal meetings are even encouraged
in view of the summary and non-adversarial nature of rehabilitation proceedings. Since
Section 21, Rule 4 of the Rules6 gives the rehabilitation receiver the power to meet with
the creditors, then there is all the more reason for the rehabilitation judge, who has the
authority to approve the plan, to call and hold meetings with the parties. She also
pointed out that it was SCP which suggested that informal meetings be called and that
she only agreed to hold these meetings on the condition that all the parties would
attend.

As to her alleged failure to observe the reglementary period, she contended that she
approved the rehabilitation plan within the period prescribed by law. She argued that the
matter of granting extension of time under Section 11, Rule 4 of the Rules 7 pertains not
to the SC, but to the rehabilitation court.

The respondent likewise refuted the allegations of bias and partiality. First, she claimed
that her denial of the complainant’s motion for inhibition was not due to any bias or
prejudice on her part but due to lack of basis. Second, she argued that her decision was
not orchestrated to favor EPCIB, as evidenced by the fact that EPCIP itself (as some
other creditors did) promptly appealed her decision to the Court of Appeals (CA). Third,
she did not remove Atty. Gabionza as SCP’s rehabilitation receiver because she
disagreed that the grounds the complainant raised warranted his removal.

She also found no merit to the allegation of conflict of interest. Lastly, she maintained
that the rest of the complainant’s allegations were not substantiated and corroborated
by evidence.

The respondent further alleged that she did not gravely abuse her authority in not
issuing a subpoena as Section 1, Rule 3 of the Interim Rules on Corporate
Rehabilitation of the Rules specifically states that the court may decide matters on the
basis of affidavits and other documentary evidence.

On the allegation of conflict of interest, she maintained that the allegations were not
proven and substantiated by evidence. Finally, the respondent also believed that there
was nothing improper in expressing her ideas during the informal meetings.

b. Comment to April 14, 2008 Supplemental Complaint

In her comment8 on the supplemental complaint, the respondent submitted that the
photos she posted in the social networking website "Friendster" could hardly be
considered vulgar or lewd. She added that an "off-shouldered" attire is an acceptable
social outfit under contemporary standards and is not forbidden. She further stated that
there is no prohibition against attractive ladies being judges; she is proud of her photo
for having been aesthetically made. Lastly, she submitted that the ruling of the Court in
the case of Impao v. Judge Makilala9 should not be applied to her case since the facts
are different.

On July 4, 2008, the complainant filed a reply,10 insisting that the respondent’s acts of
posting "seductive" pictures and maintaining a "Friendster" account constituted acts of
impropriety, in violation of Rules 2.01,11 2.0212 and 2.03,13 Canon 2 of the Code of
Judicial Conduct.

In a Resolution14 dated September 9, 2009, the Court re-docketed the complaints as

regular administrative matters, and referred them to the CA for investigation, report and
recommendation.

The CA’s Report and Recommendation

On November 13, 2009, Justice Marlene Gonzales-Sison, the Investigating Justice,
conducted a hearing, followed by the submission of memoranda by both parties. In her
January 4, 2010 Report and Recommendation,15 Justice Gonzales-Sison ruled that the
complaints were partly meritorious. She found that the issues raised were judicial in
nature since these involved the respondent’s appreciation of evidence.

She also added that while the CA resolved to set aside the respondent’s decision in the
rehabilitation proceedings, it was not by reason of her ignorance of the law or abuse of
authority, but because the rehabilitation plan could no longer be implemented in view of
SCP’s financial predicament.

On the allegation of grave bias and partiality in handling the rehabilitation proceedings,
Justice Gonzales-Sison ruled that the complainant failed to present any clear and
convincing proof that the respondent intentionally and deliberately acted against SCP’s
interests; the complaint merely relied on his opinions and surmises.

On the matter of the respondent’s inhibition, she noted that in cases not covered by the
rule on mandatory inhibition, the decision to inhibit lies within the discretion of the sitting
judge and is primarily a matter of conscience.

With respect to the respondent’s informal meetings, Justice Gonzales-Sison found

nothing irregular despite the out-of-court meetings as these were agreed upon by all the
parties, including SCP’s creditors. She also found satisfactory the respondent’s
explanation in approving the rehabilitation plan beyond the 180-day period prescribed
by the Rules.

The foregoing notwithstanding, Justice Gonzales-Sison noted the respondent’s

unnecessary bickering with SCP’s legal counsel and ruled that her exchanges and
utterances were reflective of arrogance and superiority. In the words of the Justice
Gonzales-Sison:

Rather than rule on the manifestations of counsels, she instead brushed off the matter
with what would appear to be a conceited show of a prerogative of her office, a conduct
that falls below the standard of decorum expected of a judge. Her statements appear to
be done recklessly and were uncalled for. xxx. Section 6[,] Canon 6 of the New Code of
Judicial Conduct for the Philippine Judiciary states that: judges shall maintain order and
decorum in all proceedings before the court and be patient, dignified and courteous in
relation to litigants, witnesses, lawyers and others whom the judge deals in an official
capacity. Judicial decorum requires judges to be temperate in their language at all
times. Failure on this regard amounts to a conduct unbecoming of a judge, for which
Judge Austria should be held liable.16

On the respondent’s Friendster account, she believes that her act of maintaining a
personal social networking account (displaying photos of herself and disclosing
personal details as a magistrate in the account) – even during these changing times
when social networking websites seem to be the trend – constitutes an act of
impropriety which cannot be legally justified by the public’s acceptance of this type of
conduct. She explained that propriety and the appearance of propriety are essential to
the performance of all the activities of a judge and that judges shall conduct themselves
in a manner consistent with the dignity of the judicial office.

Finally, Justice Gonzales-Sison noted the CA’s May 16, 2006 Decision17 in CA-G.R. SP
No. 100941 finding that the respondent committed grave abuse of discretion in ordering
the creation of a management committee without first conducting an evidentiary hearing
in accordance with the procedures prescribed under the Rules. She ruled that such
professional incompetence was tantamount to gross ignorance of the law and
procedure, and recommended a fine of ₱20,000.00. She also recommended that the
respondent be admonished for failing to observe strict propriety and judicial decorum
required by her office.

The Action and Recommendation of the OCA

In its Memorandum18 dated September 4, 2013, the OCA recommended the following:

RECOMMENDATION: It is respectfully recommended for the consideration of the

Honorable Court that:

1) the Report dated January 4, 2010 of Investigating Justice Marlene Gonzales-

Sison be NOTED;

2) respondent Judge Ma. Cecilia I. Austria, Branch 2, Regional Trial Court,

Batangas City, Batangas, be found GUILTY of conduct unbecoming a judge and
for violation of Section 6, Canon 4 of the New Code of Judicial Conduct;

3) respondent Judge Austria be FINED in the amount of Twenty Thousand Pesos

(Php20,000.00); and

4) respondent Judge Austria be ADMONISHED to refrain from further acts of

impropriety with a stern warning that a repetition of the same or any similar act
will be dealt with more severely.19

In arriving at its recommendation the OCA found that the respondent was not guilty of
gross ignorance of the law as the complainant failed to prove that her orders were
motivated by bad faith, fraud, dishonesty or corruption.

The OCA also found that the charges of bias and partiality in handling the rehabilitation
proceedings were not supported by evidence. It accepted the respondent’s explanation
in the charge of failure to observe the reglementary period.

Lastly, the OCA maintained that the allegations of grave abuse of authority and gross
incompetence are judicial in nature, hence, they should not be the subject of disciplinary
action. On the other hand, on allegations of conduct unbecoming of a judge, violation of
the Code of Professional Responsibility (Code), lack of circumspection and impropriety,
the OCA shared Justice Gonzales-Sison’s observations that the respondent’s act of
posting seductive photos in her Friendster account contravened the standard of
propriety set forth by the Code.

The Court’s Ruling

We agree with the recommendation of both Justice Gonzales-Sison and the OCA for
the imposition of a fine on the respondent but modify the amount as indicated below.
We sustain Justice Gonzales-Sison’s finding of gross ignorance of the law in so far as
the respondent ordered the creation of a management committee without conducting an
evidentiary hearing. The absence of a hearing was a matter of basic due process that
no magistrate should be forgetful or careless about.

On the Charges of Grave Abuse of Authority;

Irregularity in the Performance of Duty; Grave
Bias and Partiality; and Lack of Circumspection

It is well settled that in administrative cases, the complainant bears the onus of proving
the averments of his complaint by substantial evidence.20 In the present case, the
allegations of grave abuse of authority, irregularity in the performance of duty, grave
bias and partiality, and lack of circumspection are devoid of merit because the
complainant failed to establish the respondent’s bad faith, malice or ill will. The
complainant merely pointed to circumstances based on mere conjectures and
suppositions. These, by themselves, however, are not sufficient to prove the
accusations. "[M]ere allegation is not evidence and is not equivalent to proof."21

"[U]nless the acts were committed with fraud, dishonesty, corruption, malice or ill-will,
bad faith, or deliberate intent to do an injustice, [the] respondent judge may not be held
administratively liable for gross misconduct, ignorance of the law or incompetence of
official acts in the exercise of judicial functions and duties, particularly in the
adjudication of cases."22

Even granting that the respondent indeed erred in the exercise of her judicial functions,
these are, at best, legal errors correctible not by a disciplinary action, but by judicial
remedies that are readily available to the complainant. "An administrative complaint is
not the appropriate remedy for every irregular or erroneous order or decision issued by
a judge where a judicial remedy is available, such as a motion for reconsideration or an
appeal."23 Errors committed by him/her in the exercise of adjudicative functions cannot
be corrected through administrative proceedings but should be assailed instead through
judicial remedies.24

On the Charges of Grave Bias and Partiality

We likewise find the allegations of bias and partiality on the part of the respondent
baseless. The truth about the respondent’s alleged partiality cannot be determined by
simply relying on the complainant’s verified complaint. Bias and prejudice cannot be
presumed, in light especially of a judge’s sacred obligation under his oath of office to
administer justice without respect to the person, and to give equal right to the poor and
rich.25 There should be clear and convincing evidence to prove the charge; mere
suspicion of partiality is not enough.26

In the present case, aside from being speculative and judicial in character, the
circumstances cited by the complainant were grounded on mere opinion and surmises.
The complainant, too, failed to adduce proof indicating the respondent’s predisposition
to decide the case in favor of one party. This kind of evidence would have helped its
cause. The bare allegations of the complainant cannot overturn the presumption that
the respondent acted regularly and impartially. We thus conclude that due to the
complainant’s failure to establish with clear, solid, and convincing proof, the allegations
of bias and partiality must fail.

On the Charges of Grave Incompetence

and Gross Ignorance of the Law

We agree with the findings of the OCA that not every error or mistake of a judge in the
performance of his official duties renders him liable.27 "[A]s a matter of policy, in the
absence of fraud, dishonesty or corruption, the acts of a judge in his judicial capacity
are not subject to disciplinary action even though such acts are erroneous." 28

In the present case, what was involved was the respondent’s application of Section 23,
Rule 4 of the Rules, which provides:

Sec. 23. Approval of the Rehabilitation Plan. - The court may approve a rehabilitation
plan even over the opposition of creditors holding a majority of the total liabilities of the
debtor if, in its judgment, the rehabilitation of the debtor is feasible and the opposition of
the creditors is manifestly unreasonable.29

The respondent approved the rehabilitation plan submitted by Atty. Gabionza, subject to
the modifications she found necessary to make the plan viable. The complainant
alleged that in modifying the plan, she exceeded her authority and effectively usurped
the functions of a rehabilitation receiver. We find, however, that in failing to show that
the respondent was motivated by bad faith or ill motives in rendering the assailed
decision, the charge of gross ignorance of the law against her should be dismissed. "To
[rule] otherwise would be to render judicial office untenable, for no one called upon to try
the facts or interpret the law in the process of administering justice can be infallible in
his judgment."30

To constitute gross ignorance of the law, it is not enough that the decision, order or
actuation of the judge in the performance of his official duties is contrary to existing law
and jurisprudence. It must also be proven that he was moved by bad faith, fraud,
dishonesty or corruption31 or had committed an error so egregious that it amounted to
bad faith.
In the present case, nothing in the records suggests that the respondent was motivated
by bad faith, fraud, corruption, dishonesty or egregious error in rendering her decision
approving the modified rehabilitation plan. Besides his bare accusations, the
complainant failed to substantiate his allegations with competent proof. Bad faith cannot
be presumed32 and this Court cannot conclude that bad faith intervened when none was
actually proven.

With respect to the action of the respondent in ordering the creation of a management
committee without first conducting an evidentiary hearing for the purpose, however, we
find the error to be so egregious as to amount to bad faith, leading to the conclusion of
gross ignorance of the law, as charged.

Due process and fair play are basic requirements that no less than the Constitution
demands. In rehabilitation proceedings, the parties must first be given an opportunity to
prove (or disprove) the existence of an imminent danger of dissipation, loss, wastage or
destruction of the debtor-company’s assets and properties that are or may be prejudicial
to the interest of minority stockholders, parties-litigants or the general public.33 The
rehabilitation court should hear both sides, allow them to present proof and
conscientiously deliberate, based on their submissions, on whether the appointment of
a management receiver is justified. This is a very basic requirement in every adversarial
proceeding that no judge or magistrate can disregard.

In SCP’s rehabilitation proceedings, SCP was not given at all the opportunity to present
its evidence, nor to confront the EPCIB witnesses. Significantly, the CA, in its May 16,
2006 decision, found that the respondent’s act of denying SCP the opportunity to
disprove the grounds for the appointment of a management committee was tantamount
to grave abuse of discretion. As aptly observed by Justice Gonzales-Sison:

[T]he acts of the respondent judge (Judge Austria) in creating a MANCOM without
observing the procedures prescribed under the IRPGICC clearly constitute grave abuse
of discretion amounting to excess of jurisdiction.34

Indeed, while a judge may not be held liable for gross ignorance of the law for every
erroneous order that he renders, this does not mean that a judge need not observe due
care in the performance of his/her official functions.35 When a basic principle of law is
involved and when an error is so gross and patent, error can produce an inference of
bad faith, making the judge liable for gross ignorance of the law.36 On this basis, we
conclude that the respondent’s act of promptly ordering the creation of a management
committee, without the benefit of a hearing and despite the demand for one, was
tantamount to punishable professional incompetence and gross ignorance of the law.

On the Ground of Failure to Observe

the Reglementary Period

On the respondent’s failure to observe the reglementary period prescribed by the Rules,
we find the respondent’s explanation to be satisfactory.
Section 11, Rule 4 of the previous Rules provides:

Sec. 11. Period of the Stay Order. – xxx

The petition shall be dismissed if no rehabilitation plan is approved by the court upon
the lapse of one hundred eighty (180) days from the date of the initial hearing. The court
may grant an extension beyond this period only if it appears by convincing and
compelling evidence that the debtor may successfully be rehabilitated. In no instance,
however, shall the period for approving or disapproving a rehabilitation plan exceed
eighteen (18) months from the date of filing of the petition.37

Under this provision, the matter of who would grant the extension beyond the 180-day
period carried a good measure of ambiguity as it did not indicate with particularity
whether the rehabilitation court could act by itself or whether Supreme Court approval
was still required. Only recently was this uncertainty clarified when A.M. No. 00-8-10-
SC, the 2008 Rules of Procedure on Corporate Rehabilitation, took effect.

Section 12, Rule 4 of the Rules provides:

Section 12. Period to Decide Petition. - The court shall decide the petition within one (1)
year from the date of filing of the petition, unless the court, for good cause shown, is
able to secure an extension of the period from the Supreme Court.38

Since the new Rules only took effect on January 16, 2009 (long after the respondent’s
approval of the rehabilitation plan on December 3, 2007), we find no basis to hold the
respondent liable for the extension she granted and for the consequent delay.

On the Ground of Conduct

Unbecoming of a Judge

On the allegation of conduct unbecoming of a judge, Section 6, Canon 6 of the New

Code of Judicial Conduct states that:

SECTION 6. Judges shall maintain order and decorum in all proceedings before the
court and be patient, dignified and courteous in relation to litigants, witnesses, lawyers
and others with whom the judge deals in an official capacity. Judges shall require similar
conduct of legal representatives, court staff and others subject to their influence,
direction or control.39

A judge should always conduct himself in a manner that would preserve the dignity,
independence and respect for himself/herself, the Court and the Judiciary as a whole.
He must exhibit the hallmark judicial temperament of utmost sobriety and self-
restraint.40 He should choose his words and exercise more caution and control in
expressing himself. In other words, a judge should possess the virtue of gravitas.41
As held in De la Cruz (Concerned Citizen of Legazpi City) v. Judge Carretas, 42 a judge
should be considerate, courteous and civil to all persons who come to his court; he
should always keep his passion guarded. He can never allow it to run loose and
overcome his reason. Furthermore, a magistrate should not descend to the level of a
sharp-tongued, ill-mannered petty tyrant by uttering harsh words, snide remarks and
sarcastic comments.

Similarly in Attys. Guanzon and Montesino v. Judge Rufon,43 the Court declared that
"although respondent judge may attribute his intemperate language to human frailty, his
noble position in the bench nevertheless demands from him courteous speech in and
out of court.

Judges are required to always be temperate, patient and courteous, both in conduct and
in language."

Accordingly, the respondent’s unnecessary bickering with SCP’s legal counsel, her
expressions of exasperation over trivial procedural and negligible lapses, her snide
remarks, as well as her condescending attitude, are conduct that the Court cannot
allow. They are displays of arrogance and air of superiority that the Code abhors.

Records and transcripts of the proceedings bear out that the respondent failed to
observe judicial temperament and to conduct herself irreproachably. She also failed to
maintain the decorum required by the Code and to use temperate language befitting a
magistrate. "As a judge, [she] should ensure that [her] conduct is always above
reproach and perceived to be so by a reasonable observer. [She] must never show
conceit or even an appearance thereof, or any kind of impropriety." 44

Section 1, Canon 2 of the New Code of Judicial Conduct states that:

SECTION 1. Judges shall ensure that not only is their conduct above reproach, but that
it is perceived to be so in the view of a reasonable observer.

In these lights, the respondent exhibited conduct unbecoming of a judge and thus
violated Section 6, Canon 6 and Section 1, Canon 2 of the New Code of Judicial
Conduct.

On the Ground of Impropriety

We are not unaware of the increasing prevalence of social networking sites in the
Internet – a new medium through which more and more Filipinos communicate with
each other.45 While judges are not prohibited from becoming members of and from
taking part in social networking activities, we remind them that they do not thereby shed
off their status as judges. They carry with them in cyberspace the same ethical
responsibilities and duties that every judge is expected to follow in his/her everyday
activities. It is in this light that we judge the respondent in the charge of impropriety
when she posted her pictures in a manner viewable by the public.
Lest this rule be misunderstood, the New Code of Judicial Conduct does not prohibit a
judge from joining or maintaining an account in a social networking site such as
Friendster. Section 6, Canon 4 of the New Code of Judicial Conduct recognizes that
judges, like any other citizen, are entitled to freedom of expression. This right "includes
the freedom to hold opinions without interference and impart information and ideas
through any media regardless of frontiers."46 Joining a social networking site is an
exercise of one’s freedom of expression. The respondent judge’s act of joining
Friendster is, therefore, per se not violative of the New Code of Judicial Conduct.

Section 6, Canon 4 of the New Code of Judicial Conduct, however, also imposes a
correlative restriction on judges: in the exercise of their freedom of expression, they
should always conduct themselves in a manner that preserves the dignity of the judicial
office and the impartiality and independence of the Judiciary.

This rule reflects the general principle of propriety expected of judges in all of their
activities, whether it be in the course of their judicial office or in their personal lives. In
particular, Sections 1 and 2 of Canon 4 of the New Code of Judicial Conduct prohibit
impropriety and even the appearance of impropriety in all of their activities:

SECTION 1. Judges shall avoid impropriety and the appearance of impropriety in all of
their activities.

SECTION 2. As a subject of constant public scrutiny, judges must accept personal

restrictions that might be viewed as burdensome by the ordinary citizen and should do
so freely and willingly. In particular, judges shall conduct themselves in a way that is
consistent with the dignity of the judicial office.

Based on this provision, we hold that the respondent disregarded the propriety and
appearance of propriety required of her when she posted Friendster photos of herself
wearing an "off-shouldered" suggestive dress and made this available for public
viewing.

To restate the rule: in communicating and socializing through social networks, judges
must bear in mind that what they communicate – regardless of whether it is a personal
matter or part of his or her judicial duties – creates and contributes to the people’s
opinion not just of the judge but of the entire Judiciary of which he or she is a part. This
is especially true when the posts the judge makes are viewable not only by his or her
family and close friends, but by acquaintances and the general public.

Thus, it may be acceptable for the respondent to show a picture of herself in the attire
she wore to her family and close friends, but when she made this picture available for
public consumption, she placed herself in a situation where she, and the status she
holds as a judge, may be the object of the public’s criticism and ridicule. The nature of
cyber communications, particularly its speedy and wide-scale character, renders this
rule necessary.
We are not also unaware that the respondent’s act of posting her photos would seem
harmless and inoffensive had this act been done by an ordinary member of the public.
As the visible personification of law and justice, however, judges are held to higher
standards of conduct and thus must accordingly comport themselves.47

This exacting standard applies both to acts involving the judicial office and personal
matters.1âwphi1 The very nature of their functions requires behavior under exacting
standards of morality, decency and propriety; both in the performance of their duties
and their daily personal lives, they should be beyond reproach. 48 Judges necessarily
accept this standard of conduct when they take their oath of office as magistrates.

Imposable Penalty

Under Section 8, Rule 140 of the Rules of Court, as amended by A.M. No. 01-8-10-SC,
gross ignorance of the law or procedure is classified as a serious charge. Under Section
11(A) of the same Rule, a serious charge merits any of the following sanctions:

1. Dismissal from the service, forfeiture of all or part of the benefits as the Court
may determine, and disqualification from reinstatement or appointment to any
public office, including government-owned or controlled corporations; provided,
however, that the forfeiture of benefits shall in no case include accrued leave
credits;

2. Suspension from office without salary and other benefits for more than three
(3), but not exceeding six (6), months; or

3. A fine of more than ₱20,000.00, but not exceeding ₱40,000.00.

On the other hand, conduct unbecoming of a judge is classified as a light offense under
Section 10, Rule 140 of the Rules of Court. It is penalized under Section 11(C) thereof
by any of the following: (1) A fine of not less than ₱1,000.00 but not exceeding
₱10,000.00; (2) Censure; (3) Reprimand; and ( 4) Admonition with warning.

Judge Austria's record shows that she had never been administratively charged or
found liable for any wrongdoing in the past. Since this is her first offense, the Court finds
it fair and proper to temper the penalty for her offenses.

WHEREFORE, the Court finds Judge Ma. Cecilia I. Austria guilty of GROSS
IGNORANCE OF THE LAW for which she is FINED Twenty-One Thousand Pesos
(₱21,000,00). Judge Austria is likewise hereby ADMONISHED to refrain from further
acts of IMPROPRIETY and to refrain from CONDUCT UNBECOMING OF A JUDGE,
with the STERN WARNING that a repetition of the same or similar acts shall be dealt
with more severely.

SO ORDERED.
 EN BANC

[A.M. No. MTJ 98-1168. April 21, 1999]

LUALHATI M. LIWANAG, complainant, vs. JUDGE PATERNO H. LUSTRE, Presiding

Judge, Municipal Trial Court, Calamba, Laguna, respondent.

DECISION
QUISUMBING, J.:

On September 19, 1995, complainant Lualhati M. Liwanag sent a letter to the

Court[1] praying that respondent Judge Paterno H. Lustre be dismissed from the service
due to gross immorality and grave misconduct unbecoming of his profession.[2] Attached
to her letter was a sworn statement, reproduced verbatim hereunder, which details how
respondent allegedly molested her sexually.

SWORN STATEMENT

I, LUWALHATI LIWANAG, of legal age, Filipino and a resident of Karunungan Road,

Pamana Homes, Calamba, Laguna, after being duly sworn, according to law, hereby
depose and state:

1. Prior to July, 1994, my husband, Jose B. Zafra filed twelve (12) counts of
violation of B.P. 22 against Oscar Chua, Dante Chua and Rowena Chua for
issuing checks amounting to approximately 3.5 million pesos, that were
dishonored when presented for payment.
2. On July 22, 1994, the Assistant Provincial Prosecutor of Laguna filed twelve
(12) informations for violation of BP 22 against Oscar Chua, Dante Chua and
Rowena Chua, charging each of them with three (3) counts of Violation of
BP 22. Copies of the informations are hereto attached for reference.
3. The said cases were assigned at the Municipal Trial Court of Calamba, Laguna
presided by Judge Paterno Lustre.
4. After the informations were filed, the accused posted bail. However, their
arraignment were (sic) postponed several times at the instance of the accused.
5. The case was set for hearing for November 16, 1994. However, when the date
came, Judge Lustre was not present. Hence, the hearing was reset to
December 15, 1994.
6. On November 17, 1994 at about 8:30 A.M., I went to see Judge Lustre at his
chamber to inquire about the case filed by my husband, why the accused have
not yet been arraigned. At that point, I asked Judge Lustre if it is possible to
 schedule hearings in January and February, 1995 and every month thereafter
and to order the arraignment of the accused. He responded in the affirmative
and told me to come back after the hearing on December 15, 1994, at about
7:00 A.M. in his chamber.
7. The date of the hearing arrived, Dec. 15, 1994 at 1:30 P.M. The representative
of Atty. Buted, counsel for the accused, arrived with a Motion to Transfer the
scheduled hearing. Judge Lustre then reset the hearing on Jan. 17, Feb. 1, 9
and 23, 1995.
8. As requested, on December 16, 1994, one day after the hearing, at about 7:00
A.M., I went to see Judge Lustre at his chamber. There, he told me that he
prepared an order for the accused. I thanked him and I told him that if the
accused will pay us, my husband and I will give him five (5%) percent of it as
token of gratitude. At that point, he stood up and told me he does not need
money. While he was giving me a copy of the order, he touched my shoulder,
down to my breast. I froze and could not do anything. He was telling me that
he acceded to my request. Later, he told me that he is available during
Mondays and Fridays as there are no scheduled hearings and for me to come
back to him before the hearing on January 17, 1995.
9. I did not go back to see Judge Lustre as per his request before the hearing on
Jan. 17, 1995 because of what he did to me, he took advantage of the situation
to molest me.
10. Came the date of the hearing on Jan. 17, 1995. Despite the previous order
setting the case for hearing for Feb. 1, 9 and 23, 1995, he cancelled hearings
on all dates as per request of the counsel for the accused.Instead, he reset
the same on Feb. 22, 28 and March 7, 1995.
11. When the hearing on Feb. 22, 1995 came, Judge Lustre cancelled the one
set on Feb. 28, 1995.
12. By the way things were going, I could sense that Judge Lustre is delaying the
case, granting postponement after postponement, despite objections from our
lawyer. The case was already dragging and nothing was happening. We were
running out of money and we needed to have the case terminated right away
in order to get paid for the money the accused have swindled us. Because of
this dilemma, I decided to see Judge Lustre.
13. On March 6, 1995, Monday, at about 10:00 A.M., I went to see Judge Lustre. I
asked him why he cancelled the hearings. He responded that I fooled him
since I did not come to him as per his request, whereas he acceded to my
earlier request. He then told me that I must obey his wishes if I want our case
to go smoothly since he is the only one who will decide our cases. After that,
he told me that he was already free and for me to wait for him outside the
courtroom. We boarded his white Toyota car, with Plate No. PLN-513 and he
brought me to Canlubang Tollway. While in the car, he kissed me on the lips
and caressed my breast. I was repulsed and disgusted but I could not do
anything since our cases are with him and he was deliberately delaying the
 hearings. At that instant, I told him to set hearings for April and May, 1995
since according to his staff, there would be no hearings in May and in April. He
told me, he will take care of it and ordered me to come to his office on March
13, 1995 at 7:00 A.M. and we will talk about the settings.
14. On March 13, 1995, Monday, as ordered, I went to see Judge Lustre at his
office at around 7:10 A.M. There was no one there except him. I saw him
waiting just outside his chamber. He ushered me inside, but I had barely
entered the room, when he kissed me on the lips and caressed my body,
particularly my breast. He exposed his penis and ordered me to masturbate
him. I could not do anything but obey. There was a fluid that oozed from his
penis, which was somewhat bloody. I felt dirty. While doing that, he told me to
tell my lawyer to file a motion to set hearing for April and May, 1995. He then
asked me to go with him to Laguna de Bay Inn. I refused, he got angry. He
retorted that the fate of our case is on his hands and told me to see him on
March 23, 1995 at 7:00 A.M. at Laguna de Bay Inn in Sucat since his house is
near the area.
15. After that, my lawyer filed a Motion to Set Case for Hearing. But I did not go
and see Judge Lustre at Laguna de Bay Inn. Thus, on March 28, 1995 hearing,
no schedule was set for April and May. Instead, he made the setting in June,
1995.
16. On April 10, 1995 I received a new subpoena for pre-trial and arraignment of
the new cases we filed, scheduling the same for May 3, 1995. The following
day, April 11, Tuesday, I went to see Judge Lustre to inquire why our case was
not scheduled on May 3, at any rate, there is arraignment of our new case filed
on the same date. He responded that he was early at Laguna de Bay Inn on
March 23, and he waited for me at 7:00 A.M. but I did not come. He told me
not to fool him, "masama daw siyang magalit."
17. The June 6 hearing proceeded, that of June 13 was cancelled at the instance
of the accused's lawyer.
18. On June 15, 1995, Thursday, at around 7:00 A.M., I went to Judge Lustre in
his office because I was told that our next hearing would be in September
despite previous settings. I requested Judge Lustre to give us monthly
hearings, in July and August. He told me that he would oblige if I would follow
his wishes. As he was saying that, he was already touching my breast. He
exposed his penis at told me to perform "fellatio." I refused. I was then told to
return the following day, the same time and he will wait for me.
19. I came back on June 16, around 7:00 A.M. As ordered, I proceeded to the
Calamba Church to wait for Judge Lustre. He fetch (sic) me from there on
board his white Toyota car and he brought me to Riverview Resort and Sports
Complex in Crossing, Calamba, Laguna. I could not refuse because of the
threat about our case. Inside the room at Riverview, he told me there will be a
setting for July and August. Then he undressed himself and ordered me to do
the same. I knew I was selling myself to the devil but our blood money is at
 stake. It is for the future of my son and I was willing to do anything for my
family. Perhaps I was too stupid to do it, but at that time, I felt helpless. He
ordered me to perform "fellatio" on him and I obeyed. There was blood that
oozed from his penis. I also saw black rashes on his body, especially on his
legs. Before we left, he told me to see him again on July 10 in his office.
20. On June 23, 1995, the same thing happened. I went to his office at 7:00 A.M.
Judge Lustre brought me to Riverview Resort and Sports Complex and I was
again ordered to perform "fellatio" on him.
21. The June 28 hearing proceeded. But I did not go and see Judge Lustre on
July 10 as requested. I just called him and presented an alibi. He told me to
just come the following day, July 11 at 7:00 A.M. at Jollibee, Calamba and he
will wait for me. As parting words, he told me not to fool him.
22. I did not see him on July 11 because I already felt so dirty and used. I never
realized before I was capable of doing such a thing for my family, until the time
came. But I could not take it anymore.
23. On July 27, the hearing proceeded. But the previous schedules were
cancelled and instead hearing was set in November, 1995.
24. On August 15, 1995 at 7:00 A.M., I went to his office to get an order for the
referral of the specimen signatures of Rowena Chua to the NBI. Again, he
kissed me and touched me. I could not refuse for fear of retaliation.
25. I could see that Judge Paterno H. Lustre is deliberately delaying the
prosecution of our cases to prolong his abusive acts towards me. As can be
seen from the transcript of the hearings, he is not leaning in our favor.What we
are asking only is for the continuous setting of the trial because we cannot
afford a long drawn out proceedings. But instead, he is delaying the trial. He
has even shown hostility towards my husband when he was testifying and
towards my lawyer, allegedly because he was jealous.
26. This kind of judge gives the judiciary a bad name. There must be a stop to
this evil doings. I am not the only victim of Judge Lustre. I know at least two
(2) other women who are similarly situated are being used and abused by
him. But they do not want to complain because of fear and the possible
consequence to their cases. As for me, I am emboldened by disgust and
frustration. I now seek the intervention of the Honorable Supreme Court to give
justice to the victims and rid the judiciary of the likes of Judge Paterno H.
Lustre.
27. I know the shame I have to bear but I have to expose the wrong doings of a
judge who is supposed to uphold the law and morality. But instead, he preys
on hapless and those who are not learned in law as his victims.
28. What I have narrated here are true, which I would never have revealed were
it not for my better sense of judgment. I know I made a mistake by becoming
a willing victim. But I did it for my family as I thought that is the only way I can
help my husband get back his money for our future.[3]
 Apart from the letter and the sworn statement, complainant also sent the Court 11
photographs showing her and respondent together in various places. Five of these were
allegedly taken at the Riverview Resort in Calamba, Laguna. She also submitted a receipt
issued by said resort dated June 23, 1995 and two transcripts of phone conversations
she had with respondent.[4]
Respondents defense is anchored on denial. In a 2nd Indorsement[5] he sent to the
Court, by way of answer to the complaint, he strongly denie(d) [6] the charges leveled
against him and dismissed them as the vile products of (complainant's) malicious and
prejudiced mind.[7] According to him, complainant and her common-law husband thought
of filing charges against him when he refused to bend to, and accommodate, (their)
haughty and arrogant demands to hastily schedule, try continuously, finish and decide
arbitrarily within a very short period of time[8] the B.P. 22 (Bouncing Checks Law) cases
filed by complainants husband.The complaint was, according to respondent, likewise
prompted by respondents refusal to accept complainants offer to reward him with five
percent of the P3.5 million her husband seeks to recover.
Respondent claimed that he could not have been in his chambers as early as 7:00 in
the morning as alleged by complainant since he usually arrives for work some five to ten
minutes before 8:00 in the morning. Moreover, he said the door to his room is never
locked -- thus, the impossibility of him engaging in illicit sexual conduct within its confines
-- since the only comfort room in the courtroom is inside his room and anyone who wants
to use it may enter his room freely.
Respondent further pointed out that at age 67, with a heart ailment and diabetes,
(s)ex is beyond (his) physical capacity.[9] He said he is no longer capable of what ordinary
men indulge in, lest (he) die in the attempt.[10]He sought the dismissal of the complaint
filed against him.
In support of his claims, respondent submitted the following documentary
evidence: (1) affidavit executed by Rodelio A. Alcaraz, a utility worker, stating that
respondent usually arrives at the office at 7:45 in the morning; (2)affidavit executed by
Atty. Benjamin A. Alonzo, Sr., a private practitioner based in Calamba, attesting to
respondents fine work ethics and moral uprightness; and (3) certification from Dr. Elmer
S. Sayoc stating that respondent is being treated for coronary artery diseases, atrial
fibrillation, and diabetes mellitus.[11]
In response to respondents averments, complainant alleged that respondent had set
their meetings at 7:00 in the morning since he knew that nobody from his staff reported
for work that early. She said respondent was very particular about the time she left his
office, which must be before 7:30 in the morning. As for respondents health condition,
complainant pointed out that, indeed, he did not engage in sexual intercourse with her but
only engaged in foreplay and asked her to perform oral sex on him; and while diabetes
might have diminished respondents sexual urge, it did not totally erase the same. [12]
In a resolution dated January 17, 1996, this Court resolved to refer the matter to
Judge Norberto Geraldez, Executive Judge, Regional Trial Court, Calamba, Laguna, for
investigation, report and recommendation. In the same resolution, respondent was
directed to inhibit himself from hearing the B.P. 22 cases filed by complainants husband.
 On January 8, 1997, Judge Geraldez requested that he be allowed to inhibit himself
from hearing the case because complainant raised the matter of his friendship with
respondent.[13] The Court, however, in a Resolution dated June 9, 1997, denied his
request and directed him to resolve the case with dispatch.[14]
In his report dated October 6, 1997, Judge Geraldez recommended dismissal of the
complaint against respondent since complainant failed to establish his guilt beyond
reasonable doubt.
Judge Geraldez observed that:

In the B.P. 22 cases pending before Judge Lustre, Jose Zafra was never assured that
he could recover the amount of P3.5 million even if the sexual demands were
satisfied. Jose Zafra and Ms. Liwanag were aware of this. Consequently, it is surprising
why the complainant, no matter how desperate she may have been, would submit to
oral sex. And, why Jose Zafra allowed it.

The B.P. 22 cases are simply not classic cases where the courts decision would be so
vital, that the judge can demand his price.

There is a rather large disparity in the value of the B.P. 22 cases vis-a-vis the
seriousness and mess of the sexual demand. Ms. Liwanags allegations are beyond
comprehension. It borders on the very credibility of the sexual allegations. This is
specially true with respect to the allegations of oral sex with its blood secretions. And,
according to her she did it more than once. If indeed there were blood secretions the
first time, the claim of a second time is beyond relief (sic).

Ms. Liwanag claimed that Judge Lustre, on August 15, 1995, simply kissed and touched
her. But human nature would demand another oral sex as they had done
before. Moreover, in her complaint dated September 19, 1995, Ms. Liwanag failed to
advance any reason why they stopped at oral sex.[15]

Judge Geraldez concluded that the evidence presented by complainant is not credible
in itself.

Moreover, Judge Geraldez pointed out that complainant merely relied on the
photographs showing her and respondent together, which, however, do not establish
the acts complained of. Despite having the opportunity to do so, according to the report,
complainant failed to testify to substantiate her claims, thereby depriving respondent of
his right to cross-examine her.

Judge Geraldez recommended that the complaint be dismissed for lack of evidence.

The Court thereafter referred the case to the Office of the Court Administrator (OCA) for
evaluation, report, and recommendation.
The OCA, in its Memorandum dated September 1, 1998, took a position directly
opposite that of Judge Geraldez.

The OCA noted that:

xxx we cannot help discerning here an effort to gloss over a charge against respondent
which the investigating judge himself admitted to be serious. His investigative work and
his subsequent report reveal a perfunctory treatment and analysis of the submissions of
the parties, particularly the complainant herein, and an egregious misapplication of the
law and jurisprudence.

xxx

We find credible the allegations of complainant Lualhati M. Liwanag. Her narration

bears the earmarks of truth, for the incidents giving rise to the acts complained of are so
finely etched by her as to preclude any suspicion of wild imagining or other similar fictive
handiwork. It is an essential baring of rage, revulsion and disgust: xxx

The OCA recommended that the case be formally docketed as an administrative

complaint and that respondent be dismissed from the service with forfeiture of all
retirement benefits and with prejudice to reemployment in any branch of the government,
including government-owned and -controlled corporations.
Clearly, we have to review the records of this case for a comprehensive view of the
entire controversy. Moreover, it is essential to lay stress on basic canons of conduct
applicable to judges, in whatever level of the judicial hierarchy they may be.
As a rule, proof beyond reasonable doubt is not necessary in
deciding administrative cases. Only substantial evidence is required,[16] as clearly
provided for under Rule 133 of the Revised Rules of Evidence:[17]

Sec 5. Substantial evidence. -- In cases filed before administrative or quasi-judicial

bodies, a fact may be deemed established if it is supported by substantial evidence, or
that amount of relevant evidence which a reasonable mind might accept as adequate to
justify a conclusion.

Given this requirement, we find that there is enough evidence on record to sufficiently
establish complainants case against respondent.
The photographs submitted by complainant to this Court show her and respondent in
various places. The first two show them talking beside an outlet of Andoks Litson Manok,
another shows respondents car parked by a sidewalk, its front passenger door open. The
car is seen leaving in the next photograph. In the next two photographs, the car is seen
in the driveway of what appears to be one of a row of rooms. On top of this rooms doorway
is the letter "D". Next are five photographs which show complainant and respondent
coming out of the room together and heading towards respondents parked car. [18]
 Complainant claims that the photographs were taken when respondent took her to
the Riverview Resort in Calamba, Laguna.
In a Manifestation dated September 2, 1996, respondent pointed out that nothing
indecent is portrayed in the photographs. They did not show any act constituting
immorality or grave misconduct. He denied that the pictures showing him and
complainant leaving a room together were taken at the Riverview Resort. He added that
the receipt issued by the resort did not indicate that he was with complainant at said
resort.
Respondent took his own set of photographs at the Riverview Resort.[19] On the basis
of his own pictures, he concluded that complainants photographs could not have been
taken at that resort. When he testified on his behalf, he said:

" when I went to the place those letters were not there, I have photographs there
because I personally went there to have these photographs but this (sic) sign boards
were not there, sir."[20]

A sign prohibiting vandalism, noticeable in complainant's pictures, was missing in

respondents pictures.
Respondent avers that the real intention of complainant in filing the complaint -- which
she has denied -- is to extort money from him as she allegedly made an outrageous
demand[21] for P3.5 million to settle the case.
We are not convinced, however, that respondents conduct in this case is entirely
blameless, nor that complainants alleged intent would excuse respondents wrongdoing.
It is true that the pictures do not show respondent and complainant actually engaging
in any form of sexual congress. However, this is understandable since by their very
nature, such acts are not proper subjects of photographs. Often, as in this case, what is
available to us is only the narration of the parties involved.
Respondent denies that the photographs were taken at Riverview. He took pictures
of the resort himself to prove his contention. He said his pictures are different from those
of complainants.
We note, however, that respondent does not deny that he is the one appearing with
complainant in the photographs. He conveniently testified that somebody else had posed
for the photograph,[22] but this is obviously an afterthought. Respondent made this
assertion almost a year after complainant filed her complaint. He could have done it as
early as October 1995 in his comment to complainants charges.
If the pictures were not taken at Riverview, where were they taken and why was
respondent with complainant at that time? If, indeed, there was a legitimate reason for
complainant and respondent to be seen together at the time and place depicted in the
photographs, respondent would have wasted no time explaining where they were taken
and under what circumstances, in order to extricate himself from his present
predicament. This, he failed to do. The reason for this, we believe, is that he could not
simply offer any plausible explanation why he was seen with complainant coming out of
what is apparently a private room.
Respondent claims that the charges hurled against him are products of complainants
vindictiveness. Again, this claim raises more questions than it answers. It opens the door
to undue speculation. Thus, why should she resent his actions? Was it only because of
repeated postponements of the hearing of her cases?
Complainant may have harbored ill feelings towards respondent due to the
unjustifiable delays in the hearing of their B.P. 22 cases. But would she falsely accuse
respondent with sexual molestation only to get back at him? This goes against the grain
of human nature and therefore unlikely. She should know that by revealing her sexual
misadventures with respondent, graphically describing each and every detail, she would
only be exposing herself and her family to shame and ridicule. She would stand to gain
nothing from the exercise, save the hope that her dignity may somehow be vindicated in
the process.
As for complainants failure to testify on her own behalf, this is of no
moment. Complainants affidavit stands in lieu of her testimony; the investigating judge
even had her re-subscribe and re-affirm her sworn statement and let the same be adopted
as part of complainants evidence.[23]
Complainant could have been cross-examined based on her affidavit. That she was
not cross-examined by respondent is not her fault but respondents.
As the records now stand, we are constrained to agree with the Court Administrators
assessment that respondent has failed to live up to the high standard of conduct required
of members of the bench. He grossly violated his duty to uphold the integrity of the
judiciary and to avoid impropriety not only in his public but in his private life as well. [24] All
to the grave prejudice of the administration of justice, indeed.
The Court cannot countenance any act or omission, on the part of the officials at
every level in the administration of justice, which erodes rather than enhances the publics
faith and trust in the judiciary.Respondents disgraceful conduct surely merits sanctions
even if he has already retired as of November 1, 1998.[25] For the serious misconduct of
respondent, the penalty provided for in Rule 140, Section 10, of the Rules of Court, by
way of fine in the maximum amount should be imposed.[26]
We are not in accord with the OCAs recommendation, however, as regards forfeiture
of all retirement benefits due respondent. We note that implementation of this penalty,
while directed at respondent, might adversely affect innocent members of his family, who
are dependent on him and his retirement gratuity. It is our considered view that, given the
circumstances of this case, the maximum fine of P40,000.00 would be sufficient penalty.
WHEREFORE, in view of the foregoing, we hereby find respondent GUILTY of gross
misconduct. As he has already retired from the service and thus could no longer be
dismissed nor suspended, we hereby order that a FINE of P40,000.00 be imposed upon
him, to be deducted from his retirement benefits. Further, he is hereby barred from any
employment in all branches of the government including government-owned and -
controlled corporations.
 SO ORDERED.
THIRD DIVISION

RE: ORDER DATED 21 DECEMBER A.M. No. 07-2-93-RTC

2006 ISSUED BY JUDGE BONIFACIO
SANZ MACEDA, REGIONAL TRIAL
COURT, LAS PIAS CITY, BRANCH 275,
SUSPENDING LOIDA M. GENABE,
LEGAL RESEARCHER, SAME COURT.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - x
JUDGE BONIFACIO SANZ MACEDA,
REGIONAL TRIAL COURT, LAS PIAS
CITY, BRANCH 275,
Complainant,

A.M. No. P-07-2320

Present:
- versus -

CARPIO, J., Chairperson,

QUISUMBING,*
LOIDA M. GENABE, LEGAL
RESEARCHER, SAME COURT. CHICO-NAZARIO,

Respondent. PERALTA, and

ABAD,** JJ.

Promulgated:

October 29, 2009

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
 D E C I S I O N

CARPIO, J.:

This administrative matter against Loida M. Genabe (Genabe), Legal Researcher II of the
Regional Trial Court (trial court), Branch 275, Las Pias City, stemmed from a Letter dated
22 December 2006 addressed to the Office of the Court Administrator (OCA) filed by
Judge Bonifacio Sanz Maceda (Judge Maceda) of the same trial court. Judge Maceda
attached his Order dated 21 December 2006 suspending Genabe for 30 days by reason
of neglect of duty for attending a two-day seminar despite a pending assignment. In the
letter, Judge Maceda requested that the salary of Genabe be withheld for the period 21
December 2006 to 20 January 2007 since the suspension was immediately executory.

The Facts

On 20 November 2006, Atty. Jonna M. Escabarte (Atty. Escabarte), Branch Clerk of Court
of the same trial court, issued an Inter-Office Memorandum to Genabe referring to her
neglect, in leaving for Baguio City on 16 to17 November 2006 to attend a seminar for
legal researchers, without finishing her assigned task. The assigned task required
Genabe to summarize the statement of facts in Criminal Case Nos. 03-0059 to 03-0063
entitled People of the Philippines v. Marvilla, et al., set for promulgation on 21 November
2006. Atty. Escabarte reminded Genabe that such act could not be tolerated and that
similar acts in the future would be meted an appropriate sanction.

On 22 November 2006, Genabe submitted her explanation regarding the unfinished

assigned case. She stated that she was not able to complete the summary due to lack of
transcript of stenographic notes (TSN). Genabe added that she be absolved for humane
considerations.
On 29 November 2006, Judge Maceda called a staff meeting to discuss several matters
in the agenda, including the inter-office memorandum. Allegedly, even before the staff
meeting, Genabe resented the issuance of the memorandum and became disrespectful
to the court staff, including the clerk of court. At the meeting, Genabe allegedly continued
her combative behavior in total disregard of the presence of Judge Maceda.

On 30 November 2006, Judge Maceda ordered Genabe to show cause why she should
not be cited in contempt by the court and why she should not be administratively
sanctioned for conduct unbecoming, neglect of duty and misconduct.

In her Answer dated 11 December 2006, Genabe denied that she neglected her duty and
explained with counter-charges. Genabe stated that Atty. Escabarte did not give her the
opportunity to be heard and that she was not given sufficient lead time to finish the five
consolidated informations of the criminal case assigned to her. Genabe attributed the lack
of stenographers, which was beyond her control, as the cause of the delay in the
transcriptions of the minutes of the meeting. As a counter-charge, Genabe claimed that
Judge Maceda disciplines his staff on a selective basis.

On the same day, Judge Maceda conducted a fact-finding investigation inside his
chambers. The agenda of the investigation focused on the charges of contempt, conduct
unbecoming, neglect of duty, and misconduct against Genabe. Judge Maceda directed
all members of the staff, including Genabe, to attend. However, Genabe did not appear
despite notice. Later, she appeared to say that she was waiving her right to be present in
the investigation.

On 21 December 2006, Judge Maceda issued the Suspension Order against Genabe for
neglect of duty.

In a Letter dated 22 December 2006, Judge Maceda furnished the Office of the Court of
Administrator (OCA) with a copy of the Order dated 21 December 2006. Judge Maceda
suspended Genabe for a period of 30 days, using as authority the power given to
appropriate supervisory officials in disciplining personnel of their respective courts as
provided in Article II, Section A(2)(a) of Circular No. 30-91 dated 30 September
1991. Judge Maceda declared that the suspension was to take effect immediately and
would not be stayed even if appealed to the Supreme Court. Judge Maceda then
requested that following the suspension order, Genabes salary be withheld for the period
21 December 2006 to 20 January 2007.

The OCA received a letter dated 12 January 2007 sent by Atty. Zandro T. Bato, Clerk of
Court VI of the same trial court, returning the salary check of Genabe following the
suspension order issued against her. On 22 January 2007, Genabe reported back to work
after serving the 30-day suspension order of Judge Maceda.

On 18 January 2007, Judge Maceda endorsed his Investigation Report and

Recommendation to the OCA, even without any directive from the latter. The report
mainly focused on the alleged unruly conduct of Genabe during the staff meeting of
Branch 275 on 29 November 2006. Judge Maceda submitted the following
recommendations:

1. Pending determination of the instant matter by the Honorable Supreme

Court, Ms. Loida M. Genabe, Legal Researcher, RTC, Branch 275, Las
Pias City, be immediately placed under preventive suspension, and
thereafter dismiss her from the service; and
2. Allow the undersigned to recommend a replacement to enable RTC
Branch 275 to function normally soonest.[1]

In a Letter dated 18 April 2007, several staff members of the same trial court, headed by
the Branch Clerk of Court, assailed the alleged inaction of the OCA on the Investigation
Report and Recommendation dated 18 January 2007 submitted by Judge Maceda as
well as the request for the detail of Genabe to another post.
In a Resolution dated 23 May 2007, this Court resolved to:

1. NOTE the letter dated 22 December 2006 of Presiding Judge

Bonifacio Sanz Maceda x x x x;
2. TREAT the Order dated 21 December 2006 issued by Judge
Bonifacio [Sanz] Maceda as an administrative complaint against Loida M.
Genabe under a separate docket number, A.M. No. P-07-2320 x x x x;
3. DIRECT Ms. Loida M. Genabe to REPORT BACK TO WORK
pending resolution of the administrative complaint against her, unless
another administrative case directs otherwise; and
4. REQUIRE Judge Bonifacio [Sanz] Maceda to EXPLAIN, within
ten (10) days from notice, why no disciplinary sanction should be imposed
against him for having violated A.M. No. 03-8-02-SC entitled Guidelines on
the Selection and Appointment of Executive Judges and Defining their
Powers, Prerogatives and Duties approved on 27 January 2004 and
became effective on 15 February 2004.[2]

Judge Maceda submitted his Explanation dated 29 June 2007, in compliance with the
Courts Resolution dated 23 May 2007. Judge Maceda reasoned that there were other
charges against Genabe, such as conduct unbecoming and grave misconduct, which
called for the imposition of a higher penalty. Thus, he endorsed the determination of such
other charges to the OCA, including whether the heavier penalty of dismissal or
replacement might be warranted. Judge Maceda prayed that his explanation be
considered as sufficient compliance and that he be absolved of any disciplinary sanction.

On 22 August 2007, the Court resolved to refer to the OCA for evaluation, report and
recommendation the (1) Order dated 21 December 2006 and (2) Explanation dated 29
June 2007, both made by Judge Maceda.

On 29 August 2007, the Court resolved to inform the staff members of the same trial court,
in consideration of the Letter dated 18 April 2007, that until Genabe has been formally
charged with contempt, conduct unbecoming and misconduct, which are not light
offenses, the propriety of suspending Genabe pending investigation of the charges
against her cannot be properly evaluated, and to await the outcome of A.M. No. P-07-
2320.

On 19 November 2007, the staff members of the same trial court, headed by the Branch
Clerk of Court, filed their Manifestation dated 15 October 2007, that Genabe had been
formally charged with contempt, conduct unbecoming and misconduct as contained in
the Investigation Report and Recommendation dated 18 January 2007 submitted by
Judge Maceda to this Court.

In a Resolution dated 16 January 2008, the Court resolved to require the parties to
manifest their willingness to submit the matter for decision on the basis of the pleadings
filed. Judge Maceda and Genabe respectively filed their compliance on separate dates.

In a Resolution dated 4 June 2008, the Court resolved to:

1. APPROVE the previous recommendation of the Office of the

Court Administrator, as contained in its Agenda Report dated 24 January
2007 particularly items no. 5 and 6. Accordingly, (a) the Financial
Management Office is DIRECTED to pay the salary of Ms. Loida M. Genabe
pending resolution of the administrative case against her by the Court; and
(b) the Office of the Administrative Services-Leave Division is DIRECTED
not to deduct the number of absences incurred by Ms. Genabe from her
leave credits since the order of suspension is unauthorized; and
2. GRANT the application of Ms. Loida M. Genabe for leave for
a period of five (5) months starting 1 May to 30 September 2008 for
purposes of taking the bar examination, this, however, is without prejudice
to the action that the Committee of the Education Support Program may
take on her application.[3]

The OCAs Report and Recommendation

In its Report dated 23 October 2007, the OCA found Judge Macedas explanation
unsatisfactory. The OCA stated that Circular No. 30-91 had been impliedly amended by
the Guidelines on the Selection and Appointment of Executive Judges and Defining their
Powers, Prerogatives and Duties as contained in A.M. No. 03-8-02-SC, which became
effective on 15 February 2004. The OCA added that it was clear from the Guidelines that
Judge Maceda had no authority to directly penalize a court employee. As an Executive
Judge, he only had the right to act upon and investigate administrative complaints
involving light offenses. The power to decide and impose a penalty, even for light
offenses, rests with the Supreme Court. Thus, the OCA recommended that Judge
Maceda be fined P12,000 payable immediately and be sternly warned that a repetition of
the same or similar act in the future would merit a severe penalty.

The Courts Ruling

After a careful review of the records of the case, we find reasonable grounds to hold both
Genabe and Judge Maceda administratively liable.

In A.M. No. P-07-2320, we find Genabe guilty for simple neglect of duty. Simple neglect
of duty has been defined as the failure of an employee to give attention to a task expected
of him and signifies a disregard of a duty resulting from carelessness or indifference. [4]

Genabe had been permitted to attend a two-day seminar in Baguio City on the premise
that no work would be left pending. She was assigned to summarize the testimonies of
three defense witnesses for a criminal case set for promulgation. The records reveal that
Genabe was only able to summarize the TSN of one witness consisting of 46 pages and
failed to finish the TSN of the other two witnesses consisting of 67 pages. Before leaving
for Baguio, Genabe had three working days to complete the task. However, the
assignment remained unfinished. When such task was assigned to another court
employee, it only took the other employee two and a half hours to complete the TSN of
the two witnesses.

Further, Judge Maceda stated that this was not the only time Genabe had been remiss in
her duties. In Criminal Case No. 98-926 entitled People of the Philippines v. Russel
Javier, et al., Genabe failed to include in the statement of facts the detail on the
prosecutors waiver of the cross examination and more importantly, neglected to include
the testimony of the accused Russel Javier upon completing his testimony. Also, in
Criminal Case Nos. 02-0713 and 02-0714, entitled People of the Philippines v. Alberto
Ylanan, Genabe included the testimony of an alleged poseur when his testimony, upon
motion, had been stricken off the record per Order dated 29 July 2003.

From these instances, we find that Genabes actuations constitute simple neglect of
duty. As a first offense under civil service law, we impose the penalty of suspension
without pay for a period of one month and one day. [5] The suspension imposed upon
Genabe under the Order dated 21 December 2006 shall be considered as the penalty
imposed. The remaining balance of one day suspension must be served upon finality of
this decision.

With regard to the other charges of contempt, conduct unbecoming and misconduct, we
find no sufficient basis to hold Genabe accountable for these offenses based on her
alleged unruly conduct at the staff meeting held on 29 November 2006. In administrative
proceedings, the burden is on the complainant to prove by substantial evidence the
allegations in his complaint.[6] Substantial evidence is that amount of relevant evidence
which a reasonable mind might accept as adequate to justify a conclusion. The standard
was not met in this case. The Order dated 21 December 2006 and Investigation Report
dated 18 January 2007 submitted by Judge Maceda centered mainly on Genabes neglect
of duty in not completing her assigned task on time. The other charges had been touched
on in a sporadic manner. While the law does not tolerate misconduct by a civil servant,
suspension, replacement or dismissal must not be resorted to unless there is substantial
evidence to merit such penalties. In the absence of substantial evidence to the contrary,
Genabe cannot be held accountable for the other charges against her.

In A.M. No. 07-2-93-RTC, we find that Judge Maceda failed to observe due process in
ordering the suspension of Genabe and withholding her salary from 21 December 2006
to 20 January 2007.
Judge Maceda suspended a court personnel directly under his supervision by relying on
the authority laid down in Article II, Section A(2)(a) of Circular No. 30-91 which provides:

2. Lower Court Personnel

a. Light Offenses
(1) Disciplinary matters involving light offenses as defined under the Civil
Service law (Administrative Code of 1987 and the Code of Conduct
and Ethical Standards for Public Officials and Employees (Rep. Act.
6713) where the penalty is reprimand, suspension for not more than
thirty days, or a fine not exceeding thirty days' salary, and as
classified in Civil Service Resolution No. 30, Series of 1989, shall be
acted upon by the appropriate supervisory official of the lower court
concerned.
(2) The appropriate supervisory officials are the Presiding
Justices/Presiding Judge of the lower collegiate courts and the
Executive Judges of the trial courts with respect to the personnel of
their respective courts, except those directly under the individual
Justices and Judges, in which case, the latter shall be their
appropriate supervisory officials.
(3) The complaint for light offenses whether filed with the Court, the Office
of the Court Administrator, or the lower court shall be heard and
decided by the appropriate supervisory official concerned. x x x

The reliance of Judge Maceda on the provisions of this circular is misplaced. Judge
Maceda found Genabe to have neglected her duty in November 2006. The guidelines in
effect at that time were already those found in A.M. No. 03-8-02-SC, which took effect in
2004 or two years before the administrative charge of neglect of duty was made against
Genabe. Judge Maceda should have applied these new guidelines and not Circular No.
30-91.

Section 1, Chapter VIII of A.M. No. 03-8-02-SC, which provides the guidelines for
administrative discipline of court employees over light offenses, states:
 SECTION. 1. Disciplinary jurisdiction over light offenses. The Executive
Judge shall have authority to act upon and investigate administrative
complaints involving light offenses as defined under the Civil Service Law
and Rules (Administrative Code of 1987), and the Code of Conduct and
Ethical Standards for Public Officials and Employees (Republic Act No.
6713), where the penalty is reprimand, suspension for not more than thirty
(30) days, or a fine not exceeding thirty (30) days salary, and as classified
in pertinent Civil Service resolutions or issuances, filed by (a) a judge
against a court employee, except lawyers, who both work in the same
station within the Executive Judges area of administrative supervision; or
(b) a court employee against another court employee, except lawyers, who
both work in the same station within the Executive Judges area of
administrative supervision.
In the preceding instances, the Executive Judge shall conduct the
necessary inquiry and submit to the Office of the Court Administrator
the results thereof with a recommendation as to the action to be taken
thereon, including the penalty to be imposed, if any, within thirty (30)
days from termination of said inquiry. At his/her discretion, the Executive
Judge may delegate the investigation of complaints involving light offenses
to any of the Presiding Judges or court officials within his/her area of
administrative supervision.

In the case of a complaint (a) filed against court employees who are
lawyers, or (b) filed by private complainants against court employees,
lawyers and non-lawyers alike, the same shall be forwarded by the
Executive Judge to the Office of the Court Administrator for appropriate
action and disposition. x x x (Emphasis supplied)

The guidelines clearly provide that the authority of judges to discipline erring court
personnel, under their supervision and charged with light offenses, is limited to conducting
an inquiry only. After such inquiry, the executive judge is required to submit to the OCA
the results of the investigation and give a recommendation as to what action should be
taken. An executive judge does not have the authority to act upon the results of the inquiry
and thereafter, if the court employee is found guilty, unilaterally impose a penalty, as in
this case. It is only the Supreme Court which has the power to find the court personnel
guilty or not for the offense charged and then impose a penalty.
In the present case, Judge Maceda suspended Genabe for the offense of neglect of
duty. Under Section 52(B), Rule IV of the Revised Uniform Rules on Administrative Cases
in the Civil Service,[7]simple neglect of duty is a less grave offense which carries a penalty
of one month and one day to six months suspension for the first offense. [8] Under A.M.
No. 03-8-02-SC, an executive judge may only conduct an investigation for all
offenses. After the investigation, the executive judge is mandated to refer the necessary
disciplinary action to this Court for appropriate action.[9]

Even under Circular No. 30-91, Judge Maceda should have referred to Section A(2)(b) of
Circular No. 30-91 which provides:
b. Grave or Less Grave Offenses

All administrative complaints for grave or less grave offenses as defined

in the Codes hereinbefore referred to shall be immediately referred to the
Court En Banc for appropriate action within 15 days from receipt by the
Court Administrator if filed directly with him, otherwise, within 15 days
likewise from receipt by him from the appropriate supervisory officials
concerned.

Thus, under Circular No. 30-91, a court employee charged with a less grave offense could
not be directly penalized by an executive judge. Judge Maceda had no authority to
suspend Genabe outright for a less grave offense of simple neglect of duty even under
Circular No. 30-91. Clearly, Judge Maceda exceeded his authority when he issued the 21
December 2006 suspension order against Genabe.

Section 9, Rule 140 of the Rules of Court provides that a violation of Supreme Court rules,
directives, and circulars constitutes a less serious charge in the discipline of judges of
regular courts:

Sec. 9. Less Serious Charges.

xxxx
 4. Violation of Supreme Court rules, directives, and circulars;

xxxx

Accordingly, Section 11, Rule 140 of the Rules of Court provides the sanctions to be
imposed if one is found to be guilty of a less serious charge:

Sec. 11. Sanctions.

xxxx
B. If the respondent is guilty of a less serious charge, any of the following
sanctions may be imposed:
1. Suspension from office without salary and other benefits for not
less than one (1) nor more than three (3) months; or
2. A fine of more than P10,000.00 but not exceeding P20,000.00.

xxxx

We hold that the penalty of fine in the amount of P12,000 is commensurate to Judge
Macedas violation of A.M. No. 03-8-02-SC. We sternly warn him that a repetition of the
same or similar acts will be dealt with more severely.

WHEREFORE, in A.M. No. P-07-2320, we find Loida M. Genabe, Legal Researcher II of

the Regional Trial Court of Las Pias City, Branch 275, GUILTY of simple neglect of
duty. We SUSPENDher for one month and one day without pay. The 30-day suspension
imposed upon Loida M. Genabe under the Order dated 21 December 2006 issued by
Judge Bonifacio Sanz Maceda shall be considered as a partial service of the penalty
imposed. The remaining balance of the penalty of one day suspension shall be
immediately served upon finality of this decision. Respondent Loida M. Genabe is sternly
warned that commission of similar acts in the future will be dealt with more severely.
In A.M No. 07-2-93-RTC, we find Judge Bonifacio Sanz Maceda of the Regional Trial
Court of Las Pias City, Branch 275, GUILTY of violation of A.M. No. 03-8-02-
SC. Accordingly, we FINE him P12,000, with a stern warning that commission of similar
acts in the future will be dealt with more severely.

SO ORDERED.