Cojuangco vs Palma A.C. No. 2474 June 30, 2005 Facts: On June 22, 1982, respondent Atty.

Leo J. Palma, despite his subsisting marriage, wed Maria Luisa Cojuangco, the daughter of complainant Eduardo M. Cojuangco, Jr. Thus, the latter filed on November 1982, a complaint disbarment against respondent. Palma moved to dismiss the complaint. On March 2, 1983, the court referred the case to OSG for investigation and recommendation. The Assistant Solicitor General heard the testimonies of the complainant and h is witness in the presence of respondents counsel. On March 19, 1984 respondent filed with the OSG an urgent motion to suspend proceedings on the ground that the final actions of his civil case for the declaration of nullity of marriage between him and his wife Lisa, poses a prejudicial question to the disbarment proceeding, but it was denied. The OSG transferred the disbarment case to the IBP, the latter found respondent guilty of gross immoral conduct and violation of his oath as a lawyer, hence, was suspended from the practice of law for a period of three years. In his motion for reconsideration, respondent alleged that he acted under a firm factual and legal conviction in declaring before the Hong Kong Marriage Registry that he is a bachelor because his first marriage is void even if there is judicial declaration of nullity. Issue: Whether or not a subsequent void marriage still needs a judicial declaration of nullity for the purpose of remarriage. Held: Respondents arguments that he was of the firm factual and legal conviction when he declared before the HIC authorities that he was a bachelor since his first marriage is void and does not need judicial declaration of nullity cannot exonerate him. In Terre vs Terre, the same defense was raised by resp ondent lawyer whose disbarment was also sought. We held: xxx respondent Jordan Terre, being a lawyer, knew or should have known that such an argument ran counter to the prevailing case law of this court which holds that purposes of determining whether a person is legally free to contract a second marriage, a judicial declaration that the first marriage was null and void an initio is essential. Even if we were to assume, arguendo merely, that Jordan Terre held that mistaken belief in good faith, the same result will follow. For if we are to hold Jordan Terre to his own argument, his frist marriage to complainant Dorothy Terre must be deemed valid, with the result that his second marriage must be regarded as bigamous and criminal. [A.C. No. 6486. September 22, 2004] EMMA T. DANTES, complainant, vs. ATTY. CRISPIN G. DANTES, respondent. DECISION PER CURIAM: Despite variations in the specific standards and provisions, one requirement remains constant in all the jurisdictions where the practice of law is regulated: the candidate must demonstrate that he or she has good moral character, and once he becomes a lawyer he should always behave in accordance with the standard. In this jurisdiction too, good moral character is not only a condition precedent [1] to the practice of law, but an unending requirement for all the members of the bar. Hence, when a lawyer is found guilty of grossly immoral conduct, he may be suspended or disbarred.[2] In an Affidavit-Complaint[3] dated June 6, 2001, filed with the Integrated Bar of the Philippines (IBP), Emma T. Dantes, sought the disbarment of her husband, Atty. Crispin G. Dantes on the ground of immorality, abandonment, and violation of professional ethics and law. The case was docketed as CBD Case No. 01-851. Complainant alleged that respondent is a philanderer. Respondent purportedly engaged in illicit relationships with two women, one after the other, and had illegitimate children with them. From the time respondents illicit affairs started, he failed to give regular support to complainant and their children, thus forcing

complainant to work abroad to provide for their childrens needs. Complainant pointed out that these acts of respondent constitute a violation of his lawyers oath and his moral and legal obligation to be a role model to the community. On July 4, 2001, the IBP Commission on Bar Discipline issued an Order[4] requiring respondent to submit his answer to the Affidavit-Complaint. Respondent submitted his Answer[5] on November 19, 2001. Though admitting the fact of marriage with the complainant and the birth of their children, respondent alleged that they have mutually agreed to separate eighteen (18) years before after complainant had abandoned him in their Balintawak residence and fled to San Fernando, Pampanga. Respondent claimed that when complainant returned after eighteen years, she insisted that she be accommodated in the place where he and their children were residing. Thus, he was forced to live alone in a rented apartment. Respondent further alleged that he sent their children to the best school he could afford and provided for their needs. He even bought two lots in Pampanga for his sons, Dandelo and Dante, and gave complainant adequate financial support even after she had abandoned him in 1983. Respondent asserted that complainant filed this case in order to force him to remit seventy percent (70%) of his monthly salary to her. Subsequently, the IBP conducted its investigation and hearings on the complaint. Complainant presented her evidence, both oral and documentary,[6] to support the allegations in herAffidavit-Complaint. From the evidence presented by the complainant, it was established that on January 19, 1979, complainant and respondent were married[7] and lived with the latters mother in Balintawak. At that time, respondent was just a fourth year law student. To make ends meet, complainant engaged in the buy and sell business and relied on dole-outs from the respondents mother. Three children were born to the couple, namely, Dandelo, Dante and Daisy, who were born on February 20, 1980,[8] October 14, 1981[9] and August 11, 1983,[10] respectively. Complainant narrated that their relationship was marred by frequent quarrels because of respondents extra-marital affairs.[11] Sometime in 1983, she brought their children to her mother in Pampanga to enable her to work because respondent had failed to provide adequate support. From 1986 to 2001, complainant worked abroad as a domestic helper. Denying that there was a mutual agreement between her and respondent to live separately, complainant asseverated that she was just compelled to work abroad to support their children. When she returned to the Philippines, she learned that respondent was living with another woman. Respondent, then bluntly told her, that he did not want to live with her anymore and that he preferred his mistresses. Complainant presented documentary evidence consisting of the birth certificates of Ray Darwin, Darling, and Christian Dave,[12] all surnamed Dantes, and the affidavits of respondent and his paramour [13] to prove the fact that respondent sired three illegitimate children out of his illicit affairs with two different women. Letters of complainants legitimate children likewise support the allegation that respondent is a womanizer.[14] In an Order dated April 17, 2002, respondent was deemed to have waived his right to cross-examine complainant, after he failed to appear during the scheduled hearings despite due notice. He, however, submitted his Comment/Opposition to the Complainants Formal Offer of Evidence with Motion to Exclude the Evidence from the Records of the Proceedings[15] onAugust 1, 2002. Subsequently, on May 29, 2003, respondent submitted a Motion to Adopt Alternative Dispute Resolution Mechanism. Respondents motion was denied because it was filed after the complainant had already presented her evidence.[16] Respondent was given a final chance to present his evidence on July 11, 2003. Instead of presenting evidence, respondent filed a Motion for Reconsideration with Motion to Dismiss, which was likewise denied for being a prohibited pleading under the Rules of Procedure of the Commission on Bar Discipline. Respondent submitted his Position Paper on August 4, 2003. In respondents Position Paper,[17] he reiterated the allegations in his Answer except that this time, he argued that in view of the resolution of the complaint for support with alimonypendente lite[18] filed against him by the complainant before the Regional Trial Court (RTC) of Quezon City,[19] the instant administrative case should be dismissed for lack of merit.

On July 7, 2004, the IBP submitted to us through the Office of the Bar Confidant its Report[20] and Resolution No. XVI-2004-230 involving CBD Case No. 01-851.[21] The IBP recommended that the respondent be suspended indefinitely from the practice of law. Except for the penalty, we find the above recommendation well-taken. The Code of Professional Responsibility provides: Rule 1.01- A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. Canon 7- A lawyer shall at all times uphold the integrity and dignity of the legal profession, and support the activities of the Integrated Bar. Rule 7.03- A lawyer shall not engage in conduct that adversely reflects on his fitness to practice law, nor should he, whether in public or private life, behave in a scandalous manner to the discredit of the legal profession. The Code of Professional Responsibility forbids lawyers from engaging in unlawful, dishonest, immoral or deceitful conduct. Immoral conduct has been defined as that conduct which is so willful, flagrant, or shameless as to show indifference to the opinion of good and respectable members of the community.[22] To be the basis of disciplinary action, the lawyers conduct must not only be immoral, but grossly immoral. That is, it must be so corrupt as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree[23] or committed under such scandalous or revolting circumstances as to shock the common sense of decency.[24] In Barrientos vs. Daarol,[25] we ruled that as officers of the court, lawyers must not only in fact be of good moral character but must also be seen to be of good moral character and leading lives in accordance with the highest moral standards of the community. More specifically, a member of the Bar and officer of the court is not only required to refrain from adulterous relationships or keeping mistresses but must also so behave himself as to avoid scandalizing the public by creating the belief that he is flouting those moral standards. If the practice of law is to remain an honorable profession and attain its basic ideals, those enrolled in its ranks should not only master its tenets and principles but should also, in their lives, accord continuing fidelity to them. The requirement of good moral character is of much greater import, as far as the general public is concerned, than the possession of legal learning. It should be noted that the requirement of good moral character has three ostensible purposes, namely: (i) to protect the public; (ii) to protect the public image of lawyers; and (iii) to protect prospective clients. A writer added a fourth: to protect errant lawyers from themselves.[26] Lawyers are expected to abide by the tenets of morality, not only upon admission to the Bar but also throughout their legal career, in order to maintain their good standing in this exclusive and honored fraternity.[27] They may be suspended from the practice of law or disbarred for any misconduct, even if it pertains to his private activities, as long as it shows him to be wanting in moral character, honesty, probity or good demeanor.[28] Undoubtedly, respondents acts of engaging in illicit relationships with two different women duri ng the subsistence of his marriage to the complainant constitutes grossly immoral conduct warranting the imposition appropriate sanctions. Complainants testimony, taken in conjunction with the documentary evidence, sufficiently established respondents commission of marital infidelity and immorality. Evidently, respondent had breached the high and exacting moral standards set for members of the law profession. He has made a mockery of marriage which is a sacred institution demanding respect and dignity. [29] In Toledo vs. Toledo,[30] we disbarred respondent for abandoning his lawful wife and cohabiting with another woman who had borne him a child. Likewise, in Obusan vs. Obusan,[31] we ruled that abandoning ones wife and resuming carnal relations with a paramour fall within that conduct which is willful, flagrant, or shameless, and which shows moral indifference to the opinion of the good and respectable members of the community. We reiterate our ruling in Cordova vs. Cordova,[32] that moral delinquency which affects the fitness of a member of the bar to continue as such, includes conduct that outrages the generally accepted moral standards of the community as exemplified by behavior which makes a mockery of the inviolable social institution of marriage.

The power to disbar must be exercised with great caution, and only in a clear case of misconduct that seriously affects the standing and character of the lawyer as an officer of the Court and as a member of the bar.[33] Where a lesser penalty, such as temporary suspension, could accomplish the end desired, disbarment should never be decreed.[34] However, in the present case, the seriousness of the offense compels the Court to wield its power to disbar as it appears to be the most appropriate penalty. WHEREFORE, in view of the foregoing Atty. Crispin G. Dantes is hereby DISBARRED and his name is ORDERED STRICKEN from the Roll of Attorneys. 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. Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, AustriaMartinez, Corona, Callejo, Sr., Azcuna, and Tinga, JJ., concur. Carpio-Morales, J., on official leave. Chico-Nazario, J., on leave. VICTORIA LEGARDA vs. CA, NEW CATHAY HOUSE, INC. Petitioner was the owner of a parcel of land and the improvements thereon. Petitioner enteredinto a leased agreement with the respondent thru its representative, Roberto Cabrera, Jr. of the property for a period of five years that the rental is 25K per month with 5% escalation per year.Respondent deposited the down payment but petitioner failed and refused to execute and sign thesame despite demands of the respondent. Respondent suffered damages due to the delay in therenovation and opening of its restaurant business. Respondent filed a complaint against petitioner for specific performance. Petitioner engaged the services of the counsel to handle her case. Buther counsel failed to take any action for the case. So the property was sold by the sheriff thru public auction. After one year redemption period expired w/out the petitioner redeeming the property and the sheriff issued a final deed of sale.Upon learning of this unfortunate turn of events, petitioner prevailed upon her counsel to seek the appropriate relief. ISSUE: WON the petitioner can recover his property WON the counsel is negligent in handlingthe case of her client HELD: The Court finds that the negligence of the counsel in this case appears to be so gross andinexcusable. This was compounded by the fact , that after petitioner gave said counsel another chance to make up for his omissions by asking him to file a petition for annulment of the judgment in the appellate court, again counsel abandoned the case of petitioner in that after hereceived a copy of adverse judgment of appellate court, he did not do anything to save thesituation or inform his client of the judgment. He allowed the judgment to lapse and becomefinal. Such reckless and gross negligence should not be allowed to bind the petitioner. Petitioner was thereby effectively deprived of her day in court.Because of the gross negligence of the counsel for the petitioner, she lost the case as well as thetitle and ownership of the property, which is worth millions. The mere lessee then now becamethe owner of the property. The Court cannot allow such a grave injustice to prevail. It cannottolerate such unjust enrichment of the respondent at the expense of the petitioner.As member of the Phil Bar he owes complete fidelity to the cause of his client. He should giveadequate attention, care and time to his cases. This is the reason why a practicing lawyer shouldaccept only so many cases he can afford to handle. And once he agrees to handle a case, heshould undertake the task with dedication and care. If he should do any less, then he is not true tohis oath as a lawyer.In this case, the Sheriffs Cert of Sale and the subsequent final deed of sale covering the same property are null and void. Respondent is directed to reconvey said property to the petitioner andthe register of Deeds is ordered to cancel the registration of the said property in the name of respondent and issue a new one in the name of the petitioner. The said counsel for petitioner isrequired to show cause w/in ten days from notice why he should not be held administrativelyliable for his acts and omissions. THIRD DIVISION FELIX CAMITAN, FRANCISCO G.R. No. 128099

CAMITAN, SEVERO CAMITAN and VICTORIA CAMITAN, Petitioners,

Present: QUISUMBING, J.,

Chairperson, - versus TINGA, and VELASCO, JR., JJ. THE HONORABLE COURT OF APPEALS and THE FIDELITY INVESTMENT CORPORATION, Respondents. CARPIO, CARPIO MORALES,

Promulgated: December 20, 2006

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

DECISION TINGA, J.:

On 13 December 1967, the spouses Mateo Camitan and Lorenza Alcazar (spouses Camitan) sold to Fidelity Investment Corporation (respondent) a parcel of land covered by Transfer Certificate of Title (TCT) No. T-(11982)T-3188 located in Barangay Maunong, Calamba, Laguna. Upon the execution of the Deed of Absolute Sale, the spouses Camitan delivered to respondent corporation (respondent) the owners duplicate certificate of title (Owners Copy). From then on, respondent has been paying the real estate taxes due on the property and has remained in actual physical possession thereof.[1] On 29 December 1993, after the death of the spouses Camitan, without the knowledge of respondent, the heirs of the spouses-petitioners herein - filed a petition for the issuance of a new Owners Copy,[2] However, it appears that respondent was not given notice of such proceedings. The trial court issued an order of general default.[3] After an ex parte presentation of evidence by the petitioners, the trial court granted the petition and directed the Register of Deeds of Laguna to issue a new Owners Copy, while at the same time declaring void the first Owners Copy, per its Order dated 08 March 1995.[4] When respondent learned of the petition and order for the first time in March 1995, it caused the annotation of a notice of sale on the title of the property. Thereafter, on26 April 1995, it filed a Notice of Adverse Claim with the Register of Deeds of Calamba, Laguna.[5] In a Petition[6] for annulment of judgment and cancellation of title before the Court of Appeals, respondent argued that the Order dated 08 March 1995 is null and void, having been issued by the trial court without jurisdiction since the Owners Copy of TCT No. T-(11982)T-3188 exists and has been in its possession, and not lost as petitioners alleged. Moreover, it claimed that petitioners have no standing to file the petition, not being the registered owners of the property, nor persons in interest, since all the rights and interest of the spouses Camitan had already been transferred to respondent upon the sale of the property. Respondent further accused petitioners of perjury; intentionally suppressing from the trial court the fact that they were

not in possession of the property; and not serving notice on respondent despite knowledge that it was in actual possession of the property.[7] The Court of Appeals granted the petition and ordered the annulment of the impugned Order. [8] It found that the Owners Copy is in the possession of respondent since 1967. Thus, petitioners do not own the property, nor do they have any interest thereon that could have been the subject of succession. Moreover, the Court of Appeals found that petitioners committed perjury in executing their Joint Affidavit of Loss in support of their petition before the trial court as they made it appear that the Owners Copy was still in the possession of the spouses Camitan, when in fact, as early as 1967, the same had already been given to respondent. Finally, citing Demetriou v. Court of Appeals[9]the Court of Appeals concluded that the trial court could not have acquired jurisdiction over the petition because the Owners Copy was never lost in the first place.[10] Petitioners sought reconsideration of the Resolution, but the motion was denied for lack of merit.[11] Petitioners now claim that they have no knowledge of the purported sale and that they were not aware of any claim whatsoever over the property in question for over twenty-seven-(27) years, stressing that property is still registered, declared for taxation, and realty taxes paid thereon in the name of the spouses Camitan.[12] They argue that the Court of Appeals erred in finding that the Owners Copy was not lost but was in fact in the possession of respondent since there was no documentary proof to support such conclusion. According to petitioners, respondent was not able to present even a photocopy of the Owners Copy to prove its possession thereof since 1967 and thus the Court of Appeals did not acquire jurisdiction over the petition for annulment.[13] Petitioners add that respondent is guilty of estoppel and laches in asserting its alleged rights over the property. The unexplained concealment for a long time of itspossession of the purported deed of absolute sale and Owners Copy, and its non-registration of the deed in its name run counter to the natural course of things and are devoid of credence.[14] Lastly, petitioners allege that the property in question could be a portion of the land surrendered to the Presidential Commission on Good Government (PCGG) as part of the ill-gotten wealth of former President Ferdinand Marcos, and that the sole purpose of respondents concealment of the deed of absolute sale is to prevent sequestration thereof.[15] On the other hand, respondent argues that its non-registration of title does not affect its ownership of the property because by the execution of the deed of absolute sale, the spouses Camitan had effectively divested themselves of all the rights, title and interest over the property. Moreover, save for their bare allegations, petitioners have not been able to rebut the presumptive authenticity of the deed of absolute sale. Lastly, respondent posits that there is no basis for the allegation that the property in question is part of the former Presidents ill-gotten wealth.[16] Anent the claim that it failed to attach even a photocopy of the Owners Co py, respondent claims that there is no rule which requires that the such document should be included in a petition for annulment of judgment. Besides, petitioners never disputed respondents possession of the title, but in fact merely categorized such possession as one in bad faith. More importantly, the argument that respondents should have attached the Owners Copy of the title was raised for the first time in petitioners motion for reconsideration of this Courts resolution dated 18 June 1997 dismissing the instant petition.[17] Finally, respondent maintains that petitioners are estopped from questioning the jurisdiction of the Court of Appeals since they actively participated in the proceedings therein.[18]

In a nutshell, the petition presents a very simple question: Whether the Court of Appeals erred when it ordered the annulment of the 08 March 1995 Order of the trial court which directed the Register of Deeds to issue a second Owners Copy of the title. The Court of Appeals did not. The petition must be denied. Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no available or other adequate remedy.[19] An action for annulment of judgment is grounded only on two justifications: (1) extrinsic fraud; and (2) lack of jurisdiction or denial of due process. The purpose of such action is to have the final and executory judgment set aside so that there will be a renewal of litigation.[20]

The annulment of the Order dated 08 March 1995 was premised on the lack of jurisdiction of the trial court, apparently brought about by the fact that, as found by the Court of Appeals, the duplicate certificate of the title was not lost nor destroyed, but has remained in the possession of respondent which purchased the real property from the spouses Camitan in 1967. The Court finds no reason to disturb the finding of the appellate court. The petition for issuance of the new Owners Copy before the trial court was filed pursuant to Presidential Decree No. 1529, otherwise known as the Property Registration Decree, Section No. 109 of which provides: SEC. 109. Notice and replacement of lost duplicate certificate.In case of loss or theft of an owners duplicate certificate of title, due notice under oath shall be sent by the owner or by someone in his behalf to the Register of Deeds of the province or city where the land lies as soon as the loss or theft is discovered. If a duplicate certificate is lost or destroyed, or cannot be produced by a person applying for the entry of a new certificate to him or for the registration of any instrument, a sworn statement of the fact of such loss or destruction may be filed by the registered owner or other person in interest and registered. Upon the petition of the registered owner or other person in interest, the court may, after notice and due hearing, direct the issuance of a new duplicate certificate, which shall contain a memorandum of the fact that it is issued in place of the lost duplicate certificate, but shall in all respects be entitled to like faith and credit as the original duplicate, and shall thereafter be regarded as such for all purposes of this decree.

Thus, before a duplicate certificate of title can be replaced, the petitioner under the foregoing provision must establish that the duplicate certificate was lost or destroyed. This Court has consistently held that a trial court does not acquire jurisdiction over a petition for the issuance of a new owners duplicate certificate of title, if the original is in fact not lost but is in the possession of an alleged buyer.[21] In other words, the fact of loss of the duplicate certificate is jurisdictional. Petitioners question the Court of Appeals Resolution, claiming that respondent failed to attach to its petition for annulment of judgment of the Owners Copy itself, or even a photocopy thereof. Thus, they argue there was no proof that respondent has been in possession of the duplicate certificate. That being the situation, the trial court validly acquired jurisdiction over their petition for issuance of a new Owners Copy, petitioners conclude.

Respondent, so it appears, did not attach to its petition for annulment of judgment the Owners Copy of the title. This lapse, however, does not suffice as basis to set aside the questioned resolutions of the Court of Appeals. A review of the records of the case shows that petitioners never questioned respondents possession of the Owners Copy, its actual and physical possession and occupation of the property, as well as its payment of real estate taxes due on the property. In its petition for annulment before the Court of Appeals, respondent alleged that: 4. On December 13, 1967, the spouses Camitan sold the Property to petitioner, as documented by a Deed of Absolute Sale dated 13 December 1967, a copy of which is attached hereto as annex C. Pursuant to the said Deed of Absolute Sale, petitioner paid the purchase price in full. 5. Upon the execution of the Deed of Absolute Sale, the vendors delivered to petitioner the owners duplicate copy of the Title, which Title has since been in the possession of petitioner. Also, since 1967 and to this day, petitioner has been in actual physical possession and continuous occupation of the above-described Property. Moreover, petitioner has been the one paying the real estate taxes due on the Property. [22]

While for its part, respondent treated the allegations perfunctorily in this wise in its Comment: SPECIFIC DENIALS xxxx 2. Private respondents deny specifically paragraphs 4 and 5 of the said petition for lack of knowledge and information sufficient to form a belief as to the truth of falsity of the allegations contained therein and as heretofore substantiated.[23] The relevant provisions of the Rules of Court are Sections 10 and 11, Rule 8, which read: SEC. 10. Specific denial. A defendant must specify each material allegation of fact the truth of which he does not admit and, whenever practicable, shall set forth the substance of the matters upon which he relies to support his denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as is true and material and shall deny only the remainder. Where a defendant is without knowledge or information sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state, and this shall have the effect of a denial. (Emphasis supplied) SEC.11. Allegation not specifically denied deemed admitted. Material averment in the complaint, other than those as to the amount of unliquidated damages, shall be deemed admitted when not specifically denied. Allegations of usury in a complaint to recover usurious interest are deemed admitted if not denied under oath. (Emphasis supplied) Although petitioners put their unmistakably sparse denial of respondents allegations relative to the execution of the deed of sale in its favor and its possession of the Owners Copy under the heading SPECIFIC DENIALS and anteceding it with the adverb specifically, the same cannot function as an operative denial within the purview of the Rules. A denial is not specific simply because it is so qualified by the defendant. A general denial does not become specific by the use of the word specifically. When the matters of whether the defendant alleges having no knowledge or information sufficient to form a belief, are plainly and necessarily within the defendants knowledge, his alleged ignorance or lack of information

1. VIRGO vs. AMORIN FACTS:complainant filed a disbarment case against respondent for the latter'sfraudulent use of his legal knowledge in convincing complainant to part with her property, the virgo mansion. complainant alleged the existence of an attorney- clientrelationship, hence, respondent should be held liable for issuing postdated checks inpayment for the purchase price of said mansion. respondent denied the same, raising indefense that it was complainant who defrauded him. the commissioner of the ibpcommittee on bar discipline found respondent guilty of misconduct and recommendedhis suspension from the practice of law for six months. the ibp board of governorsapproved the recommendation, with modification, suspending respondent for 1 year instead.ISSUES:*whether or not an attorney-client relationship exists between complainant andrespondent*whether or not respondent is guilty of misconductHELD:*no.an attorney-client relationship is said to exist when a lawyer acquiesces or voluntarily permits the consultation of a person, who, in respect to a business of troubleof any kind, consults a lawyer with a view of obtaining professional advise or assistance.complainant's averment of the existence of lawyer-client relationship, presenting inevidence four letters and a memorandum of agreement drafted and sent to her byrespondent, only strengthened the idea that the relationship between her and therespondent was mainly personal or business in nature, and that whatever legal sevicesthat may have been rendered by respondent for free were only incidental to saidrelationship.*the court cannot ascertain whether respondent indeed committed acts in violation of hisoath as a lawyer concerning the sale and conveyance of the virgo mansion on accountof factual matters that are subject of pending civil cases involving the same property. asa matter of prudence and so as not to preempt the conclusion that will be drawn by thecourts where the same cases are pending, the court deems it wise to dismiss thepresent case without prejudice to the filing of another one, depending on the finaloutcome of said civil cases. will not be considered as a specific denial.[24] In one case, it was held that when a respondent makes a specific denial of a material allegation of the petition without setting forth the substance of the matters relied upon to support its general denial, when such matters were plainly within its knowledge and the defendant could not logically pretend ignorance as to the same, said defendant fails to properly tender an issue.[25] Petitioners specific denial in this case is ineffective and amounts to an admission pursuant to Rule 8, Sec. 11 of the Rules of Court. Petitioners make an issue of the lack of material evidence to support the Court of Appeals conclusion that the Owners Copy was not lost, because respondent failed to attach the said Owners Copy or even a photocopy thereof. The argument is unavailing. Firstly, there is no need of proof because of petitioners implied admission thereof. Secondly, the matter should have been raised in the proceedings before the Court of Appeals and not before this Court. Despite various opportunities, petitioners failed to do so before the Court of Appeals. In fact, it was only in petitioners Motion for Reconsideration of our Resolution dated 18 June 1997 dismissing their petition[26] that they claimed that the Court of Appeals committed grave error tantamount to lack of jurisdiction thereof when it declared annulled the contested Order x x x x for lack of material evidence to support that the said title was lost.[27] We have consistently held that matters, theories or arguments not brought out in the original proceedings cannot be considered on review or appeal where they are raised for the first time.[28] Finally, having actively participated in the proceedings before the Court of Appeals, petitioners can no longer question its authority.[29] Everything considered, the Court of Appeals was satisfied that the Owners Copy of the TCT No. (T-11982) T3188 is not lost, but rather, as admitted by petitioners, it has been in the possession of another person. We find no reason to disturb the said finding.

Petitioners other claims, to wit: (i) respondent is guilty of estoppel and laches in asserting its rights over the property; (ii) respondent is guilty of fraud and bad faith when it concealed the possession of the deed of absolute sale of the property and the Owners Copy, and when it failed to register and have the title of the property transferred to its name; and (iii) the property in question could be a part of ill-gotten wealth surrendered to the PCGG, are immaterial and irrelevant to the case. Thus, there is no need to dwell on them. The instant petition merely questions the propriety of the annulment order on the ground of the trial courts lack of jurisdiction. Any other issues, such as the ownership of the property, or the motives for the nonregistration of the sale or the non-transfer of the title are beyond the ambit of the petition. Besides, the determination of said issues necessitates a factual inquiry which this Court does not perform in a petition for review.[30] WHEREFORE, the petition is DENIED and the challenged resolution of the Court of Appeals is AFFIRMED, with costs against petitioners. SO ORDERED. Barrientos vs. Libiran-Meteoro A.C. No. 6408, August 31, 2004 FACTS: In September 2000, the lawyer issued several Equitable PCIBank Checks in favor of Barrientos and Mercado for thepayment of a pre-existing debt. The checks bounced due to insufficient funds, thus, charges for violation of B.P. 22 were filed. The lawyer asked for deferment of the criminal charges and promised to pay her debt several times, but failed to pay the full amount, even after a complaint for disbarment was filed against her. ISSUE: Whether or not respondent is guilty of gross misconduct HELD: The Supreme Court ruled in the affirmative. The failure to pay just debts and the issuance of worthless checks constitute gross misconduct, for which a lawyer may be sanctioned with suspension from the practice of law. Lawyers are the instruments for the administration of justice and the 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 dealings so that the peoples 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 to their clients, which include prompt payment of financial obligations. They must conduct themselves in a manner that reflect the values and norms of the legal profession as embodied in the Code of Professional Responsibility. The issuance of checks which were later dishonored for having been drawn against a closed account indicates a lawyers unfitness for the trust and confidence reposed on her. It shows a lack of personal honesty and good moral character as to render her unworthy of public confidence. The issuance of a series of worthless checks also shows the remorseless attitude of respondent, unmindful to the deleterious effects of such act to the public interest and public order. It also manifests a lawyers low regard to her commitment to the oath she has taken when she joined her peers, seriously and irreparably tarnishing the image of the profession she should hold in high esteem.

Mere issuance of worthless checks by a lawyer, regardless of whether or not the same were issued in his professional capacity to a client, calls for appropriate disciplinary measures. 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 employees basic pay to all NAPOCOR employees effective 1 October 1978.5 Pursuant 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 Members 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 employees 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 P184 million (which represented 40% of the liquid assets of NAPOCOR Welfare Fund in the total amount of P462 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 ExOfficioChairman of NAPOCOR-WFBT, issued a memorandum on 17 May 2004 to implement the release of P184 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 NAPOCORWFBT, 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 nonliquid). 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 Members Equity Contributions and Earnings using the correct rates of return vis --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 P119.196 Million while for the EPIRA separated members isP173.589 Million or a total of P292.785 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% attorneys 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 attorneys 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 (Attorneys) 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 attorneys fees in conformity with the Compromise Agreement.18 In an Order dated 15 May 2006, the RTC granted petitioners 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 P119,196,000.00 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% attorneys fees. 21 The RTC issued an Order on 25 July 2006 granting petitioners Motion 22 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 CAG.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 respondent s 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 P1,000,000.00 as attorneys fees on the basis of quantum meruit. The Court of Appeals held that the amount of P17,794,572.70 sought to be collected by petitioner as attorneys fees, equivalent to 15% of the P119,196,000.00 estimated corrected earnings differential for nonEPIRA separated members, was excessive based on the following reasons: (1) the corrected earnings differential in the amount of P119,196,000.00 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% attorneys 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 attorneys fees amounting to P3,512,007.32; (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 attorne ys fees; (f) the amount of P17,794,572.70 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 P1,000,000.00 as attorneys fees on the basis of quantum meruit. However, since petitioner already received P3,512,007.32 from respondents as partial payment of his supposed 15% attorneys fees, it ruled that such amount was more than sufficient and petitioner was not entitled to claim anymore the additional amount of P14,282,565.38. 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 P3,512,007.32, 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 P1,000,000.00 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 ATTORNEYS 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 ATTORNEYS 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 petitioners clients to pay only reasonable attorneys 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 attorneys 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 attorneys 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 attorneys 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 attorneys 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 petitioners alleged violation or invasion of respondents right, as petitioners clients, to pay only a reasonable amount of attorneys 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 latters 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 attorneys fees being claimed by petitioner is chargeable to the P119,196,000.00 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 petitioners attorneys fees had been and shall be taken. Hence, if anyone would be injured by petitioners claim for attorneys 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 petitioners claim for attorneys 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.35 For 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 attorneys fees to the petitioner because such right belongs solely to petitioners 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.42 Given 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 attorneys fees equivalent to 15% of the P119,196,000.00 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 attorneys fees. 43 Petitioner also avers that the amount of P17,794,572.70, which is equivalent to 15% of the P119,196,000.00 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 attorneys fees; that the P119,196,000.00 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% attorneys fees is supported by jurisprudence.44 An attorneys 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 attorneys fees only if the suit or litigation ends favorably to the client. This is called a contingency fee contract. The amount of attorneys fees in this contract may be on a percentage basi s, and a much higher compensation is allowed in consideration of the risk that the lawyer may get nothing if the suit fails.46In 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 petitioners 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 lawyers 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 attorneys fees is excessive, the contract may be disregarded even if the client expressed their conformity thereto.49 Attorneys fees are unconscionable if they affront ones 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 attorneys 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 attorneys 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 attorneys 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. Petitioners attorneys 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 nonEPIRA 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 petitioners dedication and persistence as can be gleaned above, respondents finally agreed to settle amicably with the non-EPIRA separated members as regards the latters claim for shares in the NAPOCOR Welfare Fund by virtue of the Compromise Agreement. Undoubtedly, were it not for petitioners 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, petitioners attorneys fees in the amount of P17,794,572.70 or equivalent to 15% of the P119,196,000.00 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 P25,000.00; 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 (Attorneys) Lien pursuant to the legal retainer agreement. Although we granted the said motion, we reduced the amount of attorneys 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 attorneys fees to a maximum of 10% of the recovered amount. Considering by analogy the said limit on attorneys 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 nonEPIRA 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 clients cause and a trustee of his clients 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 lawyers 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 attorneys 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% attorneys fees of petitioner should be reduced to 10%. As such, petitioner is entitled to collect only, as attorneys fees, an amount equivalent to 10% of the P119,196,000.00 or P11,919,600.00. We note, however, that the compromise agreement was partially implemented in the first week of April 2006 with the payment of P23,416,000.00 to some non-EPIRA separated members.59 Petitioner admitted having already received an amount of P3,512,007.32 as his attorneys fees on the said partial payment

of P23,416,000.00.60Accordingly, the amount of P3,512,007.32 received by petitioner as attorneys fees should be deducted from the fixed 10% attorneys fees or the amount of P11,919,600.00. Per computation, petitioner is entitled to recover the amount of P8,407,592.68 as attorneys 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 attorneys fees in the amount of P8,407,592.68 on the corrected earnings differential of the non-EPIRA separated members. No costs. SO ORDERED.

FIRST DIVISION HEIRS OF SPOUSES JOSE and CONCEPCION OLORGA, represented by ILDA OLORGA-CAAL, Complainants, A.M. No. RTJ-08-2137 (Formerly OCA I.P.I. No. 06-2530-RTJ)

Present: PUNO, C.J., Chairperson, CARPIO, CORONA, AZCUNA and LEONARDO-DE CASTRO, JJ.

- versus -

Judge ROLINDO D. BELDIA, JR., and Branch Clerk of Court MARY EMILIE T. VILLANUEVA, Regional Trial Court, San Carlos City, Negros Occidental, Branch 57, Respondents.

Promulgated: February 10, 2009

x---------------------------------------------------x DECISION CORONA, J.:

In a verified complaint dated April 5, 2006, complainant Ilda Olorga-Caal, by herself and as representative of the other heirs of spouses Jose and Concepcion Olorga, charged respondents Judge Rolindo D. Beldia, Jr. and Atty. Mary Emilie T. Villanueva, former presiding judge and branch clerk of court,

respectively, of the Regional Trial Court (RTC), San Carlos City, Negros Occidental, Branch 57, with infidelity in the custody of records in connection with Civil Case No. X-82 entitled Concepcion Olorga, et al. v. Cesar Lopez for specific performance and damages. The complainants made the following allegations: (1) The records of Civil Case No. X-82, which was filed way back in 1982 by their mother, Concepcion Olorga, were lost while in the custody of respondents and could not be found. They found out that the only entry was the name of [Atty. Rudy B. Caal][1] who filed the case, the date of the filing, the title of the complaint and nothing else, up to the present year 2006 or precisely a span of 24 years.

(2)

As a result of said complete loss of the records, they found it extremely difficult, if not impossible, to prove that the property or lot, subject matter of the civil case, had been fully and completely paid for by the spouses. All the documentary evidence had already been submitted to the RTC, Branch 57 in 1993 as supported by the xerox copy of the order of respondent judge. Unfortunately, complainants could not secure a certified true copy of this order but would be able to present the original carbon copy duly signed by the Clerk of Court at that time.[2] Their late father, notwithstanding the distance of their home from the court, the two-hour bus ride and the long hours of waiting in the court, followed up the case after the death of their mother, for almost 10 years, i.e. from 1982 to 1991. On April 19, 1993, they had already rested their case and the lawyer for the defendant had manifested in open court that if the last defense witness could not be presented on the next scheduled hearing, he, too, would be resting his case. Despite this, respondent judge failed to resolve the case within the mandated time of 90 days, from 1994 to 2006.[3] Respondents were trying to cover-up their negligence by blaming the termites for the loss of the records. Complainants had in their possession copies of the orders issued by respondent judge himself indicating that the same had long been submitted for decision.[4]

(3)

(4)

Respondent judge denied the charges against him. He offered these defenses: (1) He was appointed as judge of RTC, San Carlos City, Negros Occidental, Branch 57 only on March 19, 1992 and assumed office in May 1992. Thereafter, he was designated as the acting presiding judge of the RTC, Bacolod City, Branch 45 on June 30, 1993.[5] He went back to Branch 57 only in April 2002.[6] During the interim period or before his return to Branch 57, he was designated as the acting presiding judge in RTC, Bacolod City, Branch 41, Mambusao, Capiz and Marikina.[7] Upon inquiry from the court personnel who had been and still assigned in Branch 57, the records of Civil Case No. X-82 could not be traced or located and that the entry in the docket book did not indicate the status of the case and was haphazardly done. If it would still be possible, reconstruction of the records of the case was the only and

(2)

best way by which complainants could be apprised of the actual status of the case. The Branch 57 personnel under his watch had nothing to do with the loss of the records of Civil Case No. X-82. (3) The case records of Civil Case No. X-82 remained with Branch 57 when he was transferred to RTC, Bacolod City, Branch 45 since the records of the cases assigned to him in Branch 57 did not follow him wherever he was assigned. Furthermore, these records could and should not be brought outside of the courts premises without any court order. The audit team sent by the Supreme Court on March 21, 2000 found that Civil Case No. X-82 was not among the civil cases that remained not acted upon for a long time.[8] When another audit team came on June 16, 2005, the case was never brought up. This team perused the docket books and found everything in order. When he was ordered to return to Branch 57 in 2002, Civil Case No. X-82 was not among the cases in the inventory he signed when he resumed his post. [9]

(4)

(5)

On the other hand, respondent Atty. Mary Emilie T. Villanueva averred that: (1) She assumed as branch clerk of court of Branch 57, on January 10, 2000. When she assumed her position, there was no existing list of cases submitted for decision and she had to conduct and prepare a physical and actual inventory of all the pending cases assigned to Branch 57. Civil Case No. X-82 was not included in the inventory she prepared and signed by former presiding judge Roberto S.A. Javellana. Also, it was not among those civil cases found by the audit team sent by the Supreme Court on March 21, 2000 as not having been resolved within the required period.[10] When she assumed office, she realized that the former clerks of court and officersin-charge of Branch 57 did not keep a proper recording/docketing of the cases assigned to and decided by the said court. So she instructed the clerks-in-charge to properly fill in the docket books the dispositive portions of the courts decisions or final orders before endorsing the records of these cases to the office of the clerk of court. Sometime in March 2006, the complainants (spouses Caal) went to her office to follow-up the status of Civil Case No. X-82 after inquiring by phone. She informed them she had the records of the case searched prior to their arrival but they were not found. In the course of her investigation, she came to know that the records of the case were lost long ago. Even the former clerk of court, Atty. Riah Debulgado, tried to look for them during the latter months of 1995 and early months of 1996 but failed to find them. She showed them the page in the docket book showing the entry relevant to the case. She assured complainants that their office will help them with the reconstruction of the records. Her averments found support in the affidavits of the courts stenographer, sheriff IV, and clerk III (in-charge of the records of all the civil cases).[11]

(2)

(3)

In a resolution dated February 12, 2007, upon the recommendation of the Office of the Court Administrator (OCA), we referred the administrative case to the Court of Appeals, Cebu City, for investigation,

report and recommendation.[12] It was assigned to Justice Francisco P. Acosta who conducted a hearing on the matter. From the testimonies and documentary evidence, Justice Acosta ferreted out the following sequence of events: (1) Civil Case No. X-82 was filed in 1982 in RTC, San Carlos City, Negros Occidental, Branch 57, then presided by Judge Macandog, by Atty. Caal against Cesar Lopez. There were photocopies of the orders issued by then Judge Cesar D. Estampador in Civil Case No. X-82, where one Order stated As agreed by counsel for both parties, let the continuance of the hearing of this case be set on October 29, 1987, at 8:30 in the morning, for counsel for the plaintiff to cross-examine witness Cesar Lopez. SO ORDERED. (3) The other orders issued by Judge Estampador were all postponements/resetting of hearing dates. In a Motion dated May 21, 1084, Atty. Caal withdrew as counsel. Atty. Raymundo Ponteras took over the case from Atty. Caal, and thereafter, Atty. Vic Agravante took over from Atty. Ponteras; Respondent judge was appointed as the presiding judge of Branch 57 on March 19, 1992 and assumed office in May 1992. Respondent judge was designated as acting presiding judge of Branch RTC, Bacolod City, Branch 45, pursuant to Administrative Order No. 104-93 dated June 30, 1993, in lieu of Judge Medina who retired, but at the same time he continued to hear cases in Branch 57 since Judge Roberto S.A. Javellana fully assumed the position of presiding judge of Branch 57 only in January of 1995. The last order issued by the respondent judge in Civil Case No. X-82 was dated November 16, 1994, which read as follows: All exhibits marked, Exhibit I with its sub-markings; Exhibit 5 submarkings; Exhibits 6, 7, 8, and 8-A; Exhibit 9 and 10 are all admitted as part of the testimony of the witnesses for the defendants, for whatever worth it may be and thereafter submitted for DECISION. SO ORDERED. (9) Respondent judge was designated as the presiding judge of RTC, Bacolod City, Branch 41 on December 21, 1994, by virtue of Administrative Order No. 225-93, but assumed office only inJanuary of 1995.

(2)

(4) (5)

(6)

(7)

(8)

(10)

Based on their joint-affidavit dated June 2, 2006, spouses Juanito and Leticia de Guzman[13] averred that sometime in 1994, they went to Branch 57 to follow-up on the case. They were shown the records thereof and someone from the office asked them for P300 as traveling expenses of the courts messenger who would deliver the case records to respondent judge in Bacolod City since the latter was the one to decide the said case. Based on the affidavit of Rudy L. Olorga, he delivered the amount of P300 to the court messenger at his residence and could even recall where the latter lives. The complainants, however, did not present the court messenger or any person who could corroborate the foregoing allegations. Branch 57 clerk-in-charge of civil cases Lilibeth Libutan assumed her duty as such in July 1996. Per her sworn statement, she had no knowledge of Civil Case No. X-82, until she heard the former clerk of court, the late Atty. Riah Debulgado say that she (Atty. Debulgado) had been looking for the said records but could not locate them. Respondent clerk of court assumed office only on January 10, 2000. There was no formal turn-over of all the courts case records since at that time, only the judges were required to make and submit a bi-annual docket inventories and to conduct an inventory upon their assumption of office. On March 21, 2000, the Supreme Court sent an audit team to Branch 57 and found out that there were several cases not acted upon for a long period of time but Civil Case No. X-82 was not one of them as revealed in the resolution of the First Division of the Supreme Court dated August 28, 2000. Per the docket Inventory dated July 11, 2000, for the period January to June 2000, submitted by Judge Javellana, Civil Case No. X-82 was not included in said inventory. Respondent judge returned to Branch 57 in 2002, pursuant to Administrative Order No. 18-2002 dated February 7, 2002. The Supreme Court sent another audit team on June 16, 2005 and found that no active records had been lost and after going over the courts docket books, said team found everything to be in order. Sometime in March of 2006, someone inquired about the status of the case, and thereafter, the respondent clerk of court instructed the clerk in charge to look for the records of Civil Case No. X-82 in all possible places where it may be found, including in the disposed and archived cases section, but the search yielded nothing. In the last week of March 2006, complainant Ilda Olorga-Caal, together with Atty. Rudy Caal and some other companions, went to Branch 57 and asked for the records of Civil Case No. X-82. They were shown the docket book and were informed that neither the respondent clerk of court nor the clerk in charge had seen said records.

(11)

(12)

(13)

(14)

(15)

(16)

(17)

(18)

(19)

(20)

(21)

The Supreme Court directed respondent judge to conduct an investigation/inquiry regarding Civil Case No. X-82. The last entry in the docket book pertaining to Civil Case No. X-82 is the order dated March 5, 1982, terminating the pre-trial. From then on, nothing was entered therein.[14]

(22)

Based on these findings, Justice Acosta recommended that the complaint for infidelity in the custody of records be dismissed against both respondents because these records were not in their custody when they were lost. However, he recommended that respondent judge be held liable for his negligence in maintaining his courts docket book and fined P5,000.[15]

ON THE LIABILITY OF RESPONDENT JUDGE

Civil Case No. X-82 was submitted for decision in an order issued by respondent judge on November 16, 1994. Judges of lower courts have 90 days from the time a case is submitted for decision to decide the same.[16] Respondent judge was designated as presiding judge of RTC, Bacolod City, Branch 41 on December 21, 1994 but assumed office in January 1995. The time for rendering a decision had not lapsed at the time of his transfer and he did not render one before he was transferred and replaced by Judge Javellana. The question now is: who had custody of the records of Civil Case No. X-82 when they were lost? According to affiants Juanito and Leticia de Guzman, the records were still with Branch 57 when they followed up on the case sometime in 1994 after the same was submitted for decision. They were told that they had to give P300 to the courts messenger for the latter to bring the reco rds to Bacolod City so that the respondent judge could decide the case. From this statement, it is safe to assume that when the respondent judge left Branch 57, the records were still there.[17] However, from the sworn affidavit of Lilibeth L. Libutan, clerk in charge of civil cases of Branch 57, the records of Civil Case No. X-82 could not be found when she assumed office in July 1996. She stated that Atty. Riah Debulgado, former branch clerk of court, also looked for the missing records during the latter months of 1995 and early months of 1996 but failed to locate them.[18] In Re: Cases Left Undecided by Judge Sergio D. Mabunay, RTC, Branch 24, Manila,[19] we held that cases which are raffled to a branch belong to that branch unless re-raffled or otherwise transferred to another branch in accordance with established procedure. Judges who are transferred do not take with them cases substantially heard by them and submitted to them for decision unless they are requested to do so by any of the parties and such request is endorsed by the incumbent presiding judge through the OCA: Basically, a case once raffled to a branch belongs to that branch unless reraffled or otherwise transferred to another branch in accordance with established procedure. When the Presiding Judge of that branch to which a case has been raffled or assigned is transferred to another station, he leaves behind all the cases he tried with the branch to which they belong. He does not take these cases with him even if he tried them and the same were submitted to him for decision. The judge who takes over this branch inherits all these cases and assumes full responsibility for them. He may decide them as they are his cases, unless any of the parties moves that his case be decided by the judge who substantially heard the evidence and before

whom the case was submitted for decision. If a party therefore so desires, he may simply address his request or motion to the incumbent Presiding Judge who shall then endorse the request to the [OCA] so that the latter may in turn endorse the matter to the judge who substantially heard the evidence and before whom the case was submitted for decision. This will avoid the "renvoir" of records and the possibility of an irritant between the judges concerned, as one may question the authority of the other to transfer the case to the former. If coursed through the [OCA], the judge who is asked to decide the case is not expected to complain, otherwise, he may be liable for insubordination and his judicial profile may be adversely affected. Upon direction of the Court Administrator, or any of his Deputy Court Administrators acting in his behalf, the judge before whom a particular case was earlier submitted for decision may be compelled to decide the case accordingly. We take this opportunity to remind trial judges that once they act as presiding judges or otherwise designated as acting/assisting judges in branches other than their own, cases substantially heard by them and submitted to them for decision, unless they are promoted to higher positions in the judicial ladder, may be decided by them wherever they may be if so requested by any of the parties and endorsed by the incumbent Presiding Judges through the [OCA]. The following procedure may be followed: First, the Judge who takes over the branch must immediately make an inventory of the cases submitted for decision left behind by the previous judge (unless the latter has in the meantime been promoted to a higher court). Second, the succeeding judge must then inform the parties that the previous judge who heard the case, at least substantially, and before whom it was submitted for decision, may be required to decide the case. In this event, and upon request of any of the parties, the succeeding judge may request the Court Administrator to formally endorse the case for decision to the judge before whom it was previously submitted for decision. Third, after the judge who previously heard the case is through with his decision, he should send back the records together with his decision to the branch to which the case properly belongs, by registered mail or by personal delivery, whichever is more feasible, for recording and promulgation, with notice of such fact to the Court Administrator. Since the primary responsibility over a case belongs to the presiding judge of the branch to which it has been raffled or assigned, he may also decide the case to the exclusion of any other judge provided that all the parties agree in writing that the incumbent presiding judge should decide the same, or unless the judge who substantially heard the case and before whom it was submitted for decision has in the meantime died, retired or for any reason has left the service, or has become disabled, disqualified, or otherwise incapacitated to decide the case. The Presiding Judge who has been transferred to another station cannot, on his own, take with him to his new station any case submitted for decision without first securing formal authority from the Court Administrator. This is to minimize, if not totally avoid, a situation of "case-grabbing." In the same vein, when the Presiding Judge before whom a case was submitted for decision has already retired from the service, the judge assigned to the branch to take over the case submitted for decision must automatically assume the responsibility of deciding the case.[20]

There is no showing that respondent judge was ever ordered by this Court, through the OCA, to decide Civil Case No. X-82. Although there was an allegation that the records of the case were delivered to

respondent judge in Bacolod City, there was no proof whatsoever that he indeed instructed someone from Branch 57 to bring the records to him. Much less was there proof that the records were in fact brought to the respondent judge in Bacolod City so that he could decide the case. Thus, we agree with Justice Acosta that respondent judge could be held liable for infidelity in the custody of public documents since there was no evidence that the records were lost while they were in his possession, that he took them with him to Bacolod City or that he destroyed or concealed them. There was only the self-serving affidavit of Juanito and Leticia de Guzman offered by complainants which was not corroborated by independent or more reliable evidence. This did not constitute substantial evidence that a reasonable mind would accept as adequate to support the conclusion[21] that respondent judge was responsible for the loss of the case records. In administrative proceedings, the complainant bears the onus of establishing, by substantial evidence, the averments of his or her complaint. [22] Furthermore, [any] administrative complaint leveled against a judge must always be examined with a discriminating eye, for its consequential effects are by their nature highly penal, such that the respondent judge stands to face the sanction of dismissal or disbarment. Mere imputation of judicial misconduct in the absence of sufficient proof to sustain the same will never be countenanced. If a judge should be disciplined for misconduct, the evidence against him should be competent.[23]

Be that as it may, while respondent judge should not be held liable for the loss of the records of Civil Case No. X-82, we agree with Justice Acosta that the former failed to demonstrate the requisite care and diligence necessary in the performance of his duty as presiding judge, specifically in ensuring that the entries in the courts docket book were updated. Respondent judge himself admitted that the docket book was filled up haphazardly.[24] Indeed, while it is not the presiding judge who makes the entries in the docket book, still the trial judge is expected to adopt a system of record managemen t and organize his docket in order to bolster the prompt and effective dispatch of business. Proper and efficient court management is the responsibility of the judge. It is incumbent upon judges to devise an efficient recording and filing system in their courts so that no disorderliness can affect the flow of cases and their speedy disposition. xxx xxx xxx

Further evidence of Judge Legaspi's inability to implement an efficient recording and filing system is her failure to maintain her court's civil and criminal docket books since 1983. While it may be so that her predecessors had similarly failed to maintain these books, Judge Legaspi has presided over her sala since 1991. Yet, the entries of her docket book are complete only "from 2000 up." In her defense, it appears that her clerks-in-charge have "confessed to the impossibility of completing the docket book and attending to their current work at the same time." Still, it is incumbent on all trial court judges to duly apprise this Court or the OCA of problems they encounter in the day-to-day administration of their court dockets and records, so they may receive appropriate guidance and assistance. After all, the responsibility for an efficient administration of justice lies not only with the trial court judges, but with the judicial system as a whole.[25] (Emphasis supplied)

Respondent judge assumed office as the presiding judge of Branch 57 in May 1992. He issued orders in Civil Case No. X-82, the last being the order dated November 16, 1994, declaring the case submitted for decision. However, the last entry in the docket book pertaining to the case was dated March 5, 1982. From then on, several orders were issued by the respondent judge but these were never recorded in the docket book as they should have been. Respondent judge was therefore negligent in the discharge of his duties. He failed to observe that degree of care, precaution and vigilance required of his position. Considering his administrative authority over the courts personnel, he should have directed them to be diligent in the performance of their functions. He neglected to properly supervise them, particularly those in charge of the docket books, resulting in incomplete entries therein. These violated Rules 3.08 and 3.09 of the Code of Judicial Conduct: Rule 3.08. A judge should diligently discharge his administrative responsibilities, maintain professional competence in court management, and facilitate the performance of the administrative functions of other judges and court personnel. Rule 3.09. A judge should organize and supervise the court personnel to ensure the prompt and efficient dispatch of business, and require at all times the observance of high standards of public service and fidelity. This constituted simple misconduct,[26] defined as a transgression of some established rule of action, an unlawful behavior or negligence committed by a public officer.[27] It is a less serious offense[28] punishable by suspension from office without salary and other benefits for not less than one month nor more than three months or a fine of more than P10,000 but not exceeding P20,000.[29] Consequently, we fine respondent judge in the amount of P15,000 which is a stiffer penalty than the P5,000 fine recommended by Justice Acosta. We find this amount reasonable, considering that respondent judge had already been administratively sanctioned twice before. [30] Respondent judges compulsory retirement on October 31, 2006 [31] did not render the present administrative case moot and academic. It did not free him from liability. Complainant filed this case on April 5, 2006, before respondent judge retired from office. As such, the Court retained the authority to resolve the administrative complaint against him. Cessation from office because of retirement does not per se justify the dismissal of an administrative complaint against a judge while still in the service. [32] TheP15,000 fine can and shall be deducted from his retirement benefits. Pursuant to A.M. No. 02-9-02-SC,[33] this administrative case against respondent as a judge, based on grounds which are also grounds for the disciplinary action against members of the Bar, shall be considered as disciplinary proceedings against such judge as a member of the Bar.[34] Violation of the fundamental tenets of judicial conduct embodied in the Code of Judicial Conduct constitutes a breach of Canons 1 and 11 of the Code of Professional Responsibility (CPR): Canon 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes. Canon 11 A lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on similar conduct by others.

Certainly, a judge who falls short of the ethics of the judicial office tends to diminish the peoples respect for the law and legal processes. He also fails to observe and maintain the esteem due to the courts and to judicial officers.[35] Respondent judges negligence also ran counter to Canon 12 of the CPR which provides: Canon 12 A lawyer shall exert every effort and consider it his duty to assist in the speedy and efficient administration of justice. For such violation of Canons 1, 11 and 12 of the CPR, he is severely reprimanded.

ON THE LIABILITY OF RESPONDENT CLERK OF COURT Justice Acosta recommended that respondent clerk of court be absolved of the charge filed against her. We agree. Section 7, Rule 136 of the Rules of Court specifically mandates the clerk of court to safely keep all records, papers, files, exhibits and public property committed to his [or her] charge. Considering that the records of Civil Case No. X-82 could no longer be located in Branch 57 since 1995 and respondent clerk of court assumed her post only on January 10, 2000, these records were obviously never committed to her charge. In addition, in the docket inventory of cases dated July 11, 2000 prepared and submitted by Judge Javellana, Civil Case No. X-82 was not included. Likewise, in our resolution dated August 28, 2000, Civil Case No. X-82 was not in the list of cases still left undecided beyond the mandated period. For the same reason, respondent clerk of court cannot be held accountable for the incomplete entries in the docket book with respect to Civil Case No. X-82. Moreover, when complainants followed up the case with respondent clerk of court, the latter conducted an investigation. When the records could not be found, she informed the complainants and assured them that the court could assist them in reconstituting such records. Under the circumstances, she did all that she could. It was not shown that she was remiss in her duties.[36] To conclude, while we sympathize with the plight of complainants for the inconvenience caused by the loss of the records of Civil Case No. X-82, we cannot pin the blame on respondents who did not have custody of such records when they were lost. WHEREFORE, retired Judge Rolindo D. Beldia, Jr. of the Regional Trial Court, San Carlos City, Negros Occidental, Branch 57, is hereby found GUILTY of simple misconduct. He is ordered to pay a FINE in the amount of Fifteen Thousand Pesos (P15,000), to be deducted from his retirement benefits. Respondent judge is further hereby SEVERELY REPRIMANDED for his violation of Canons 1, 11 and 12 of the Code of Professional Responsibility. The complaint against Atty. Mary Emilie T. Villanueva, clerk of court of the Regional Trial Court, San Carlos City, Negros Occidental, Branch 57, is DISMISSED. SO ORDERED.

[G.R. No. 117221. April 13, 1999] IBM PHILIPPINES, INC., VIRGILIO L. PEA, and VICTOR V. REYES, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and ANGEL D. ISRAEL, respondents. DECISION MENDOZA, J.: This is a petition for certiorari to set aside the decision,[1] dated April 15, 1994, of the National Labor Relations Commission (NLRC) finding private respondent to have been illegally dismissed and ordering his reinstatement and the payment of his wages from August 1991 until he is reinstated. Petitioner IBM Philippines, Inc. (IBM) is a domestic corporation engaged in the business of selling computers and computer services. Petitioners Virgilio L. Pea and Victor V. Reyes were ranking officers of IBM during the period pertinent to this case. On April 1, 1975, private respondent Angel D. Israel commenced employment with IBM as Office Products Customer Engineer. For the next sixteen (16) years, he occupied two other positions in the company,[2] received numerous awards,[3] and represented the company in various seminars and conferences in and out of the country.[4] On February 1, 1990, private respondent was assigned to the team supervised by petitioner Reyes. On June 27, 1991, petitioner Reyes handed a letter to private respondent informing the latter that his employment in the company was to be terminated effective July 31, 1991 on the ground of habitual tardiness and absenteeism. The letter states, thus: June 27, 1991 Mr. Angel D. Israel Present Dear Angel, This refers to our previous discussion regarding your habitual absences and tardiness the last of which was on June 26, 1991. Your records will attest to the fact that on several occasions, your attention has been called to your habitual tardiness and non-observance of standing office procedures regarding attendance. Despite several opportunities given to you, you cannot seem to reform your ways and attitude on the matter of attendance. Considering that we are a service-oriented company, you can appreciate that we cannot allow such a situation to continue lest we put the best interest of the Company in jeopardy. Much to our regret, therefore, pleased (sic) be advised that the Company is terminating your employment effective July 31, 1991. You are requested to report to Personnel Department at your earliest convenience for the settlement of any money or benefits due you.

Very truly yours, (Sgd) V.V. REYES Business Manager cc: L.L. Abano Alleging that his dismissal was without just cause and due process, private respondent filed a complaint with the Arbitration Branch of the Department of Labor and Employment (DOLE) on July 18, 1991. In his position paper filed on September 6, 1991, he claimed that he was not given the opportunity to be heard and that he was summarily dismissed from employment based on charges which had not been duly proven.[5] Petitioners denied private respondents claims. It was alleged that several conferences were held by the management with private respondent because of the latte rs unsatisfactory performance in the company and he was given sufficient warning and opportunity to reform and improve his attitude toward attendance,[6] but to their regret, he never did. It was alleged that private respondent was constantly told of his poor attendance record and inefficiency through the companys internal electronic mail (e -mail) system. According to petitioners, this system allows paperle ss or telematic[7] communication among IBM personnel in the company offices here and abroad. An employee is assigned a User ID and the corresponding password is provided by the employee himself and, theoretically, known only to him. Employees are then expected to turn on their computers everyday, log in to the system by keying in their respective IDs and passwords in order to access and read the messages sent to and stored in the computer system. To reply, an employee types in or encodes his message-response and sends the same to the intended recipient, also via the computer system. The system automatically records the time and date each message was sent and received, including the identification of the sender and receiver thereof. All messages are recorded and stored in computer disks.[8] Attached to petitioners position paper were copies of print-outs of alleged computer entries/messages sent by petitioner Reyes to private respondent through IBMs internal computer system. The following is a summary of the contents of the print-outs which mostly came from petitioner Reyes computer: (a) Private respondent was admonished when he would miss out on meetings with clients and failed to attend to important accounts, such as that of Hella Philippines;[9] (b) Petitioner Reyes conducted consultations with private respondent concerning the latters work habits;[10] (c) A new policy of requiring employees to be at the office at 8:30 a.m. every morning was adopted and employees were no longer allowed to sign out of the office by phone; [11] (d) Petitioner Reyes would type into his computer the records of the security guard which reflect private respondents daily tardiness and frequent absences;[12] (e) Private respondent was admonished when he failed to respond to instructions from his superiors;[13] (f) IBM Australia, contacted by Hella Australia, once asked about the reported lack of attention given to Hella Philippines.[14] Private respondent directly answered IBM Australia, through telematic memo, and reported that Hella Philippines was deferring its computer plan and decided to use micros in the meantime;[15]

(g) The said response was denied by Hella Australia which later made it clear that it would be buying anything but IBM;[16] and (h) While private respondent showed some improvement after consultations where he allegedly admitted his shortcomings, petitioner Reyes reported that he (private respondent) would eventually slide back to his old ways despite constant counselling and repeated warnings that he would be terminated if he would not improve his work habits.[17] Through these computer print-outs calling private respondents attention to his alleged tardiness and absenteeism, petitioner sought to prove that private respondent was sufficiently notified of the charges against him and was guilty thereof because of his failure to deny the said charges. On March 13, 1992, the labor arbiter rendered a decision finding private respondent to have been terminated for cause and accordingly dismissing the complaint. Considering, however, the ground for termination as well as private respondents long record of service to the company, the arbiter ordered the award of separation pay at the rate equivalent to one-half (1/2) month salary for every year of service. The dispositive portion of the decision reads WHEREFORE, judgment is hereby rendered in this case declaring respondent IBM Phils., Inc. not guilty of the charge of illegal dismissal. However, respondent company is directed to pay complainant Israel the sum of Two Hundred Forty Eight Thousand (P248,000.00) as separation pay. All other claims are denied for lack of merit. It appears, however, that prior to the release of the labor arbiters decision at 11:21 a.m. on March 26, 1992, private respondent had filed a Manifestation And Motion To Admit Attached New Evidenc e For The Complainant which was received by the Arbitration Branch at 10:58 a.m. of the same day. The evidence consisted of private respondents Daily Time Records (DTRs) for the period June 1, 1990 to August 31, 1990 and pay slips for the period January 1990 to June 1991 showing that private respondent did not incur any unexcused absences, that he was not late on any day within the period and that no deduction was made from his salary on account of tardiness or absences. Private respondent appealed to the NLRC which, on April 15, 1994, reversed the labor arbiters decision and found private respondents dismissal illegal. The NLRC ruled: (1) that the computer print-outs which petitioners presented in evidence to prove that private respondents office at tendance was poor were insufficient to show that the latter was guilty of habitual absences and tardiness; and (2) that private respondent was not heard in his defense before the issuance of the final notice of dismissal. [18] The dispositive portion of the NLRCs decision reads: WHEREFORE, the Decision dated March 13, 1992 is hereby SET ASIDE and a new one entered declaring the dismissal of the complainant as illegal. Respondent (sic) are hereby ordered to reinstate complainant to his former position without loss of his seniority rights and to pay backwages starting August 1991 until reinstated at the rate of P40,516.65 a month including all its benefits and bonuses. Presiding Commissioner Edna Bonto-Perez dissented on the ground she found that petitioners have presented strong and convincing documentary evidence that private respondent was guilty of habitual tardiness and absences. She was also of the opinion that private respondent was sufficiently warned before he was actually dismissed.[19] Petitioners moved for a reconsideration, but their motion was denied in a resolution, dated July 20, 1994. Hence, this petition for certiorari. Petitioners contend that

1. THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OF JURISDICTION IN HOLDING THAT NO JUST CAUSE EXISTS NOR WAS THERE DUE PROCESS OBSERVED IN THE DISMISSAL OF THE PRIVATE RESPONDENT BECAUSE THE COMPUTER PRINTOUTS WHICH PROVE JUST CAUSE AND DUE PROCESS ARE NOT ADMISSIBLE IN EVIDENCE. 2. THE NATIONAL LABOR RELATIONS COMMISSION COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF ITS JURISDICTION IN HOLDING THAT EVEN IF THE COMPUTER PRINTOUTS WERE ADMISSIBLE, PETITIONER FAILED TO SATISFY DUE PROCESS. We find petitioners contention to be without merit. First. Petitioners argue that the computer print-outs submitted by them need not be identified or authenticated according to the rules of procedure in regular courts in order for the same to be admissible in evidence. They contend that technical rules of evidence do not apply to administrative/labor cases[20] and because of a relaxation of the rules of evidence, private respondent was in fact allowed by the labor arbiter to adduce additional evidence even after a decision had been rendered.[21] It is indeed true that administrative agencies, such as the NLRC, are not bound by the technical rules of procedure and evidence in the adjudication of cases.[22] This was the reason private respondent was allowed to submit additional evidence even after the case was deemed submitted for resolution by the labor arbiter. The practice of admitting additional evidence on appeal in labor cases has been sanctioned by this Court.[23] However, the liberality of procedure in administrative actions is subject to limitations imposed by basic requirements of due process. As this Court said in Ang Tibay v. CIR,[24] the provision for flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative value. More specifically, as held in Uichico v. NLRC:[25] It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While the rules of evidence prevailing in the courts of law or equity are not controlling in proceedings before the NLRC, the evidence presented before it must at least have a modicum of admissibility for it to be given some probative value. The Statement of Profit and Losses submitted by Crispa, Inc. to prove its alleged losses, without the accompanying signature of a certified public accountant or audited by an independent auditor, are nothing but self-serving documents which ought to be treated as a mere scrap of paper devoid of any probative value. The computer print-outs, which constitute the only evidence of petitioners, afford no assurance of their authenticity because they are unsigned. The decisions of this Court, while adhering to a liberal view in the conduct of proceedings before administrative agencies, have nonetheless consistently required some proof of authenticity or reliability as condition for the admission of documents. In Rizal Workers Union v. Ferrer-Calleja,[26] this Court struck down the decision of the Director of Labor Relations which was based on an unsigned and unidentified manifesto. It was held: From even a perfunctory assessment, it becomes apparent that the evidence upon which said decision is professedly based does not come up to that standard of substantiality. It is of course also a sound and settled rule that administrative agencies performing quasi-judicial functions are unfettered by the rigid technicalities of procedure observed in the courts of law, and this so that disputes brought before such bodies may be resolved in the most expeditious and inexpensive manner possible. But

what is involved here transcends mere procedural technicality and concerns the more paramount principles and requirements of due process, which may not be sacrificed to speed or expediency...The clear message of [Article 221 of the Labor Code] is that even in the disposition of labor cases, due process must never be subordinated to expediency or dispatch. Upon this principle, the unidentified documents relied upon by respondent Director must be seen and taken for what they are, mere inadmissible hearsay. They cannot, by any stretch of reasoning, be deemed substantial evidence of the election frauds complained of. Likewise, in the case of EMS Manpower & Placement Services v. NLRC,[27] the employer submitted a photocopy of a telex which supposedly shows that the employee was guilty of serious misconduct and which became the basis of her dismissal. This Court ruled that the telex, a single document, totally uncorroborated and easily concocted or fabricated to suit ones personal interest and purpose, [28] was insufficient to uphold the employers defense. In Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, this Court held as incompetent unsigned daily time records presented to prove that the employee was neglectful of his duties: Indeed, the *DTRs+ annexed to the present petition would tend to establish private respondents neglectf ul attitude towards his work duties as shown by repeated and habitual absences and tardiness and propensity for working undertime for the year 1992. But the problem with these DTRs is that they are neither originals nor certified true copies. They are plain photocopies of the originals, if the latter do exist. More importantly, they are not even signed by private respondent nor by any of the employers representatives... [29] In the case at bar, a specimen of the computer print-out submitted by petitioners reads: Date and time 10/12/90 09:23:1 To: From: REYESVV -- MNLVM1 ISRAEL -- MNLRVM Israel, A.D.

SEC: I IBM INTERNAL USE ONLY Subject: Angel, have been trying to pin you down for a talk the past couple of days. Whatever happened to our good discussion 2 weeks ago? I thought you would make an effort to come in on time from then on? If you have problems which prevent you from coming in on time, let me know because I would really like to help if I can. The sum of all your quotas is less than mine so I really need all of you pitching in. Kindly take a look at your proofs in-tray as there are some to dos which are pending. Acts such as St. Louis U. and NEECO should be worth looking into as theyve been inquiring about upgrading their very old boxes. If you are too tied up for these accounts do let me know so I can reassign. By Monday morning please. Lets give it that final push for the branch! ============================================================= Regards from the APPLICATION MNLVM 1 (REYESVV) SYSTEMS MARKETING group T (832)8192-279 Victor V. Reyes - Marketing Manager ============================================================= Not one of the 18 print-out copies submitted by petitioners was ever signed, either by the sender or the receiver. There is thus no guarantee that the message sent was the same message received. As the Solicitor General pointed out, the messages were transmitted to and received not by private respondent himself but his computer.[30]

Neither were the print-outs certified or authenticated by any company official who could properly attest that these came from IBMs computer system or that the data stored in the system were not and/or could not have been tampered with before the same were printed out. It is noteworthy that the computer unit and system in which the contents of the print-outs were stored were in the exclusive possession and control of petitioners since after private respondent was served his termination letter, he had no more access to his computer.[31] Second. Even if the computer print-outs were admissible, they would not suffice to show that private respondents dismissal was justified. Petitioners contention is that private respondent was repeatedly warned through computer messages for coming in late or not reporting at all to the office during the period May 1990 -- June 1991 but he never denied the allegations. Therefore, he must be deemed to have admitted these allegations.[32] But the burden of proving that the dismissal was for just cause is on petitioners. They cannot simply rely on any admission by private respondent implied from his failure to deny the alleged computer messages to him which he denied he had ever received. On the other hand, private respondents additional evidence, consisting of DTRs and pay slips, show that he did not incur unexcused absences or tardiness or that he suffered deduction in pay on account of such absences or tardiness. Indeed, petitioners could have easily proven their allegations by presenting private respondents DTRs. Since these were in petitioners possession, their non-production thereof raises the presumption that if presented they would be adverse to petitioners. This is precisely what the best evidence rule guards against. The purpose of the rule requiring the production of the best evidence is the prevention of fraud, because if a party is in possession of such evidence and withholds it, and seeks to substitute inferior evidence in its place, the presumption naturally arises that the better evidence is withheld for fraudulent purposes which its production would expose and defeat.[33] Private respondents DTRs for the period June 1, 1990 -- August 30, 1990[34] show that while his attendance record may not have been perfect, it was at least satisfactory. The days when private respondent did not report to the office were credited either as vacation or as sick leaves. On days when he was away on business trips, his destination was shown. The DTRs were signed by petitioner Victor Reyes. It is said that the DTRs presented were only for the period when private respondents attendance was excellent; he took care not to submit his DTRs for other months during which he was often late in coming to office.[35] As the Solicitor General has pointed out, however, it was precisely during that period of June 1, 1990 --August 30, 1990 when, according to the print-outs submitted by petitioners, private respondent was often late or absent. Nor is there proof to support petitioners allegation that it was private respondents secretary and not him who often signed the attendance sheet.[36] Indeed, petitioners did not present private respondents secretary or, at the very least, attach an affidavit sworn to by her to prove their allegations and thus dispute the DTRs presented by private respondent. This, notwithstanding ample opportunity to do so. On the other hand, as already stated, the DTRs, showing private respondents good attendance, were signe d by petitioner Victor Reyes himself, and no good reason has been shown why they cannot be relied upon in determining private respondents attendance. Third. Even assuming the charges of habitual tardiness and absenteeism were true, such offenses do not warrant private respondents dismissal. He has not been shown to have ever committed any infraction of company rules during his sixteen-year stint in the company. Although it is alleged that he failed to attend important client meetings and gave false representations to a valued client to cover his tracks, there is no record finding him guilty of such offenses. Dismissal has always been regarded as the ultimate penalty.[37] The

fact that lapses in private respondents attendance record may have occurred only during his final year in the company, after a long period of exemplary performance, makes petitioners contention dubious. While it is true that long years of service is no guarantee against dismissal for wrongdoing, [38] at least the employees record does provide an index to his work. In case doubt exists between the evidence presented by the employer and that presented by the employee, the scales of justice must be tilted in favor of the latter. [39] Fourth. The print-outs likewise failed to show that private respondent was allowed due process before his dismissal. The law requires an employer to furnish the employee two written notices before termination of his employment may be ordered. The first notice must inform him of the particular acts or omissions for which his dismissal is sought, the second of the employers decision to dismiss the employee after he has been given the opportunity to be heard and defend himself.[40] These requirements were not observed in this case. As noted earlier, there is no evidence that there was an exchange of communication between petitioners and private respondent regarding the latters supposed substandard performance. Private respondent has consistently denied, however, that he was ever advised of the charges hurled against him. The so-called one-on-one consultations or personal counsellings mentioned in the print-outs between petitioner Reyes and private respondent concerning the latters work habits do not satisfy the requirements of due process, as we had occasion to say in Pono v. NLRC.[41] Consultations or conferences may not be a substitute for the actual holding of a hearing. Every opportunity and assistance must be accorded to the employee by the management to enable him to prepare adequately for his defense, including legal representation.[42] In Ruffy v. NLRC,[43] this Court held that what would qualify as sufficient or ample opportunity, as required by law, would be every kind of assistance that management must accord to the employee to enable him to prepare adequately for his defense. No such opportunity was given to private respondent in this case. He was simply served his termination notice without being heard in his defense. Fifth. Petitioners allege that the NLRC, after concluding that the evidence submitted by them were not properly identified or authenticated, should have remanded the case to the arbiter for clarificatory hearing. A formal hearing was not de rigueur. The 1994 Rules of Procedure of the NLRC, 4 provides: Immediately after the submission by the parties of their position papers/memorandum, the Labor Arbiter shall, motu proprio, determine whether there is a need for a formal trial or hearing. At this stage, he may, at his discretion and for the purpose of making such determination, ask clarificatory questions to further elicit facts or information, including but not limited to the subpoena of relevant documentary evidence, if any, from any party or witness. As held by the NLRC: Aside from these computer print-outs, respondents have not presented any other evidence to prove that complainant was ever called for investigation nor his side heard prior to receipt of the termination letter dated June 27, 1991. In fact, even if we consider these computer print-outs, respondents still failed to satisfy the requirements of procedural due process. . . . In this particular case, we observe that there is failure on the part of respondents to prove the existence of a legal cause. The evidence presented before the Labor Arbiter did not sufficiently and clearly support the allegation of respondents that complainant committed habitual absences and tardiness resulting into inefficiency.[44] In spite of this finding, petitioners failed to adduce additional evidence when they moved for a reconsideration of the NLRC decision or when they filed the instant petition. Despite the opportunities

afforded them, petitioners failed to substantiate their allegations. Neither have they shown sufficient reasons to convince this Court that, if the case were to be remanded to the arbiter for a formal hearing, they would be able to present evidence which they could not have presented during the initial stages of this case. As we held in Megascope General Services v. NLRC:[45] As regards petitioners contention that a hearing has to be conducted to fully ventilate the issues in the case, . . . [s]uffice it to state that nonverbal devices such as written explanations, affidavits, position papers or other pleadings can establish just as clearly and concisely an aggrieved partys defenses. Petitioner was amply provided with the opportunity to present evidence that private respondents were not its employees. Indeed, it was petitioners failure to present substantial evidence to buttress its claims that worked to its disadvantage and not the absence of a full-blown hearing before the public respondent. WHEREFORE, the petition is DISMISSED and the decision of the NLRC, dated April 15, 1994, is hereby AFFIRMED. SO ORDERED. SYNOPSIS Respondent Israel, who had been in petitioner companys employ for 16 years and who had occupied two other positions, received numerous awards and represented the company in various seminars and conferences in and out of the country. He filed a complaint for illegal dismissal after receipt of a letter from petitioner Reyes terminating his services on grounds of tardiness and absenteeism. Israel claimed that he was not given the opportunity to be heard and was summarily dismissed. Petitioners, on the other hand, claimed that he was given sufficient warning and opportunity to reform his ways in several conferences held between them and through the companys internal electronic main (e-mail) system. Petitioners attached to their position paper as their only evidence 18 print-out copies of computer entries/messages sent by Reyes to Israel through its internal computer system but which mostly came from Reyes computer. These, however, were not identified or authenticated by any official of the company and unsigned neither by the sender or the receiver. The Labor Arbiter, though finding that termination was for just cause, awarded separation pay. However, prior to the release of the decision, Israel presented DTRs signed by Reyes himself for the periods correspondent to the dates of the computer print-outs showing that he did not incur any unexcused absences, that he was not late on any day within the period and that no deduction was made from his salary on account of tardiness or absences. On appeal, the NLRC reversed the Labor Arbiter and ruled that the dismissal were illegal as the computer print-out was inadmissible in evidence. Petitioners motion for reconsideration was denied, hence, this petition contending that technical rules of evidence do not apply to administrative/labor cases. Administrative agencies such as the NLRC are not bound by the technical rules of procedure and evidence in adjudication cases. However, the liberality of procedure is subject to limitations imposed by basic requirements of due process. While adhering to a liberal view in the conduct of proceedings before administrative agencies, this Court has nonetheless required some proof of authenticity or reliability as condition for the admission of documents, which petitioners in this case miserably failed. The burden of proving that the dismissal was for just cause is on the employer and cannot rely on any admission by the employee implied from his failure to deny the charges. Even assuming that the charges of habitual tardiness and absenteeism were true, dismissal is not warranted where it has not been shown that the employee has committed any prior infarction of company rules.