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EN BANC

EDUARDO M. COJUANGCO, JR., Complainant,

Adm. Case No. 2474

Present:

DAVIDE, JR., C.J., PUNO, PANGANIBAN, QUISUMBING, YNARES-SANTIAGO, versus SANDOVAL-GUTIERREZ, CARPIO, *AUSTRIA-MARTINEZ, CORONA, *CARPIO MORALES, CALLEJO, SR., AZCUNA,

TINGA, and **CHICO-NAZARIO, JJ.

ATTY. LEO J. PALMA, Respondent. Promulgated:

September 15, 2004

X --------------------------------------------------------------------------------------x

DECISION

PER CURIAM:

The practice of law is a privilege accorded only to those who measure up to certain rigid standards of mental and moral fitness. For the admission of a candidate to the bar, the Rules of Court not only prescribe a test of academic preparation but require satisfactory testimonials of good moral character. These standards are neither dispensed with nor lowered after admission: the lawyer must continue to adhere to them or else incur the risk of suspension or removal.1[1]

Eduardo M. Cojuangco, Jr. filed with this Court the instant complaint for disbarment against Atty. Leo J. Palma, alleging as grounds deceit, malpractice, gross misconduct in office, violation of his oath as a lawyer and grossly immoral conduct. The facts are undisputed:

Complainant and respondent met sometime in the 70s. Complainant was a client of Angara Concepcion Regala & Cruz Law Offices (ACCRA) and respondent was the lawyer assigned to handle his cases. Owing to his growing business concerns, complainant decided to hire respondent as his personal counsel. Consequently, respondents relationship with complainants family became intimate. He traveled and dined with them abroad.2[2] He frequented their house and even tutored complainants 22-year old daughter Maria Luisa Cojuangco (Lisa), then a student of Assumption Convent. On June 22, 1982, without the knowledge of complainants family, respondent married Lisa in Hongkong. It was only the next day that respondent informed complainant and assured him that everything is legal. Complainant was shocked, knowing fully well that respondent is a married man and has three children. Upon investigation, complainant found that respondent courted Lisa during their tutoring sessions. Immediately, complainant sent his two sons to Hongkong to convince Lisa to go home to Manila and discuss the matter with the family. Lisa was persuaded. Complainant also came to know that: (a) on the date of the supposed marriage, respondent requested from his (complainants) office an airplane ticket to and from Australia, with stop-over in Hong Kong; (b) respondent misrepresented himself as bachelor before the Hong Kong authorities to facilitate his marriage with Lisa; and (c) respondent was married to Elizabeth Hermosisima and has three children, namely: Eugene Philippe, Elias Anton and Eduardo Lorenzo. On August 24, 1982, complainant filed with the Court of First Instance, Branch XXVII, Pasay City a petition3[3] for declaration of

nullity of the marriage between respondent and Lisa, docketed as Civil Case No. Pq-0401-P. In the Decision4[4] dated November 2, 1982, the CFI declared the marriage null and void

ab initio.

Thereafter, complainant filed with this Court the instant complaint5[5] for disbarment, imputing to respondent the following acts: a. In grave abuse and betrayal of the trust and confidence reposed in him by complainant and his family and taking undue advantage of his tutoring sessions with Maria Luisa, respondent secretly courted her. The great disparity in intelligence, education, age, experience and maturity between Maria Luisa and respondent gave the latter an overwhelming moral ascendancy over Maria Luisa as to overcome her scruples and apprehensions about respondents courtship and advances, considering that he is a married man with three (3) children;

b. Respondent courted Maria Luisa with persistence and determination and even pursued her in her travels abroad under false pretenses that he was traveling on official business for complainant. To break down the final resistance of Maria Luisa and assuage her pangs of guilt, he made representations that there was no legal impediment whatsoever to his marrying;

c. With his moral ascendancy over Maria Luisa and his misrepresentation that there was no legal impediment or prohibition to his contracting a second marriage, respondent succeeded in inducing and beguiling her into marrying him. Without complying with the requirements of Philippine law that he should first obtain a judicial declaration of nullity of his marriage to Elizabeth H. Palma and that the advice of Maria

Luisas parents should first be obtained she being only twenty-two (22) years of age, respondent succeeded in contracting marriage with her in Hongkong on June 22, 1982 by falsely representing himself before the Hongkong authorities that he is a bachelor. x x x.

Respondent filed a motion to dismiss6[6] on the ground of lack of cause of action. He contended that the complaint fails to allege acts constituting deceit, malpractice, gross misconduct or violation of his lawyers oath. There is no allegation that he acted with wanton recklessness, lack of skill or ignorance of the law in serving complainants interest. Anent the charge of grossly immoral conduct, he stressed that he married complainants daughter with utmost sincerity and good faith and that it is contrary to the natural course of things for an immoral man to marry the woman he sincerely loves. In the Resolution7[7] dated March 2, 1983, we referred the case to the Office of the Solicitor General (OSG) for investigation, report and recommendation. Former Assistant Solicitor General Oswaldo D. Agcaoili conducted the investigation. Meanwhile, on December 28, 1983, the First Division of this Court issued in G.R. No. 645388[8] a Resolution9[9] (a) setting aside the CFI Decision dated November 2, 1982 in Civil Case No. Pq0401-P declaring the marriage between respondent and Lisa null and void ab initio; and (b) remanding the case to the CFI for proper proceeding and determination. To this date, the records fail to disclose the outcome of this case.

On March 19, 1984, respondent filed with the OSG an Urgent Motion to Suspend Proceedings10[10] on the ground that the final outcome of Civil Case No. Pq0401-P poses a prejudicial question to the disbarment proceeding. It was denied. Respondent sought refuge in this Court through an Urgent Motion for Issuance of a Restraining Order.11[11] In the Resolution dated December 19, 1984, we enjoined the OSG from continuing the investigation of the disbarment proceedings.12[12] Thereafter, the case was referred to the Integrated Bar of the Philippines Commission on Bar Discipline. On October 19, 1998, Commissioner Julio C. Elamparo issued the following order: Considering the length of time that this case has remained pending and as a practical measure to ease the backlog of this Commission, the parties shall within ten (10) days from notice, manifest whether or not they are still interested in prosecuting this case or supervening events have transpired which render this case moot and academic or otherwise, this case shall be deemed closed and terminated.13[13] In his Manifestation,14[14] complainant manifested and confirmed his continuing interest in prosecuting his complaint for disbarment against respondent. On the other hand, respondent sought several postponements of hearing on the ground that he needed more time to locate vital documents in support of his defense. The scheduled hearing of December 4, 2001 was reset for the last time on January 24, 2002, with a warning that should he fail to appear or present deposition, the case will be deemed

submitted for resolution.15[15] Respondent again failed to appear on January 24, 2002; hence, the case was considered submitted for resolution.16[16] On March 20, 2003, Investigating Commissioner Milagros V. San Juan submitted a Report and Recommendation finding respondent guilty of grossly immoral conduct and violation of his oath as a lawyer. She recommended that respondent be suspended from the practice of law for a period of three (3) years. Thus: The main issue to be resolved in this case is whether or not respondent committed the following acts which warrant his disbarment:

a)

Grave abuse and betrayal of the trust and confidence reposed in him by complainant;

b)

His misrepresentation that there was no legal impediment or prohibition to his contracting a second marriage;

c)

The acts of respondent constitute deceit, malpractice, gross misconduct in office, grossly immoral conduct and violation of his oath as a lawyer.

Respondent admits that he married Maria Luisa in Hongkong representing himself as a bachelor, however, he claimed that the marriage certificate stated a condition no different from term spinster with respect to Luisa.

There is no question that respondent as a lawyer well versed in the law knew fully well that in marrying Maria Luisa he was entering into a bigamous marriage defined

and penalized under Article 349 of the Revised Penal Code. The respondent betrayed the trust reposed in him by complainant. He was treated as part of the family and was allowed to tutor Maria Luisa.

For the foregoing reasons, it is submitted that respondent committed grossly immoral conduct and violation of his oath as a lawyer, and it is recommended that respondent be suspended from the practice of law for a period of three (3) years.

SO ORDERED.

The IBP Board of Governors adopted and approved the above Report and Recommendation, but it reduced respondents penalty to only one (1) year suspension. Except for the penalty, we affirm the IBPs Report and Recommendation. At the outset, it must be stressed that the law profession does not prescribe a dichotomy of standards among its members. There is no distinction as to whether the transgression is committed in the lawyers professional capacity or in his private life. This is because a lawyer may not divide his personality so as to be an attorney at one time and a mere citizen at another.17[17] Thus, not only his professional activities but even his private life, insofar as the latter may reflect unfavorably upon the good name and prestige of the profession and the courts, may at any time be the subject of inquiry on the part of the proper authorities.18[18] Respondent claims that he had served complainant to the best of his ability. In fact, the complaint does not allege that he acted with wanton recklessness, lack of skill and ignorance of the law.

While, complainant himself admitted that respondent was a good lawyer,19[19] however, professional competency alone does not make a lawyer a worthy member of the Bar. Good moral character is always an indispensable requirement. The ringing truth in this case is that respondent married Lisa while he has a subsisting marriage with Elizabeth Hermosisima. The Certification20[20] from the Local Civil Registrar of Cebu City shows that he married Elizabeth on December 19, 1971 at Cardials Private Chapel, Cebu City. On the other hand, the Certificate of Marriage21[21] from the Deputy Registrar of Marriages, Hong Kong, proves respondents subsequent marriage with Lisa on July 9, 1982. That Elizabeth was alive at the time of respondents second marriage was confirmed on the witness stand by Atty. Victor P. Lazatin, Elizabeths classmate and family friend.22[22]

Undoubtedly, respondents act constitutes grossly immoral conduct, a ground for disbarment under Section 27, Rule 138 of the Revised Rules of Court. He exhibited a deplorable lack of that degree of morality required of him as a member of the Bar. In particular, he made a mockery of marriage which is a sacred institution demanding respect and dignity. His act of contracting a second marriage is contrary to honesty, justice, decency and morality.23[23] This is not the first occasion that we censure immorality. Thus, we have somehow come up with a common definition of what constitutes immoral conduct, i.e., that conduct which is willful, flagrant, or shameless, and which shows a moral indifference to the opinion

of the good and respectable members of the community.24[24] Measured against this definition, respondents act is manifestly immoral. First, he abandoned his lawful wife and three children. Second, he lured an innocent young woman into marrying him. And third, he misrepresented himself as a bachelor so he could contract marriage in a foreign land. Our rulings in the following cases are relevant: 1) In Macarrubo vs. Macarrubo,25[25] respondent entered into multiple marriages and then resorted to legal remedies to sever them. There, we ruled that [S]uch pattern of misconduct by respondent undermines the institutions of marriage and family, institutions that this society looks to for the rearing of our children, for the development of values essential to the survival and well-being of our communities, and for the strengthening of our nation as a whole. As such, there can be no other fate that awaits respondent than to be disbarred.

(2) In Tucay vs. Tucay,26[26] respondent contracted marriage with another married woman and left complainant with whom he has been married for thirty years. We ruled that such acts constitute a grossly immoral conduct and only indicative of an extremely low regard for the fundamental ethics of his profession, warranting respondents disbarment. (3) In Villasanta vs. Peralta,27[27] respondent married complainant while his first wife was still alive, their marriage still valid and subsisting. We held that the act of respondent of contracting the second marriage is contrary to honesty, justice, decency and morality. Thus, lacking the good moral character required by the Rules of Court, respondent was disqualified from being admitted to the bar.

(4) In Cabrera vs. Agustin,28[28] respondent lured an innocent woman into a simulated marriage and thereafter satisfied his lust. We held that respondent failed to maintain that degree of morality and integrity, which at all times is expected of members of the bar. He is, therefore, disbarred from the practice of law. (5) In Toledo vs. Toledo,29[29] respondent abandoned his wife, who supported him and spent for his law education, and thereafter cohabited with another woman. We ruled that he failed to maintain the highest degree of morality expected and required of a member of the bar. For this, respondent was disbarred. (6) In Obusan vs. Obusan, Jr.,30[30] respondent abandoned his lawful wife and child and resumed cohabitation with his former paramour. Here, we ruled that abandoning ones wife and resuming carnal relations with a former paramour, a married woman, constitute grossly immoral conduct warranting disbarment. The circumstances here speak of a clear case of betrayal of trust and abuse of confidence. It was respondents closeness to the complainants family as well as the latters complete trust in him that made possible his intimate relationship with Lisa. When his concern was supposed to be complainants legal affairs only, he sneaked at the latters back and courted his daughter. Like the proverbial thief in the night, he attacked when nobody was looking. Moreover, he availed of complainants resources by securing a plane ticket from complainants office in order to marry the latters daughter in Hongkong. He did this without complainants knowledge. Afterwards, he even had the temerity to assure complainant that everything is legal. Clearly, respondent had crossed the limits of propriety and decency. Respondent justified his conduct by professing he really loved Lisa and since he married her, he cannot be charged with immorality. His reasoning shows a distorted mind and a brazen regard on the sanctity of marriage. In such relationship, the man and the woman are obliged to live together, observe mutual respect and fidelity.31[31] How

could respondent perform these obligations to Lisa when he was previously married to Elizabeth? If he really loved her, then the noblest thing he could have done was to walk away. Respondents culpability is aggravated by the fact that Lisa was just a 22-year old college student of Assumption Convent and was under psychological treatment for emotional immaturity.32[32] Naturally, she was an easy prey.

Anent respondents argument that since the validity of his marriage to Lisa has not yet been determined by the court with finality, the same poses a prejudicial question to the present disbarment proceeding. Suffice it to say that a subsequent judgment of annulment of marriage has no bearing to the instant disbarment proceeding. As we held in In re Almacen,33[33] a disbarment case is sui generis for it is neither purely civil nor purely criminal but is rather an investigation by the court into the conduct of its officers. Thus, if the acquittal of a lawyer in a criminal action is not determinative of an administrative case against him,34[34] or if an affidavit of withdrawal of a disbarment case does not affect its course,35[35] then the judgment of annulment of respondents marriage does not also exonerate him from a wrongdoing actually committed. So long as the quantum of proof --clear preponderance of evidence --- in disciplinary proceedings against members of the bar is met, then liability attaches.36[36]

The interdict upon lawyers, as inscribed in Rule 1.01 of the Code of Professional Responsibility, is that they shall not engage in unlawful, dishonest, immoral or deceitful

conduct. This is founded on the lawyers primordial duty to society as spelled out in Canon 1 which states:

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

It is not by coincidence that the drafters of our Code of Professional Responsibility ranked the above responsibility first in the enumeration. They knew then that more than anybody else, it is the lawyers -- the disciples of law -- who are most obliged to venerate the law. As stated in Ex Parte Wall:37[37]

Of all classes and professions, the lawyer is most sacredly bound to uphold the laws. He is their sworn servant; and for him, of all men in the world, to repudiate and override the laws, to trample them underfoot and to ignore the very bonds of society, argues recreancy to his position and office and sets a pernicious example to the insubordinate and dangerous elements of the body politic.

Corollarily, the above responsibility is enshrined in the Attorneys Oath which every lawyer in the country has to take before he is allowed to practice.

In sum, respondent committed grossly immoral conduct and violation of his oath as a lawyer. The penalty of one (1) year suspension recommended by the IBP is not commensurate to the gravity of his offense. The bulk of jurisprudence supports the imposition of the extreme penalty of disbarment.

WHEREFORE, respondent Leo J. Palma is found GUILTY of grossly immoral conduct and violation of his oath as a lawyer, and is hereby DISBARRED from the practice of law. Let respondents name be stricken from the Roll of Attorneys immediately. Furnish the Bar Confidant, the Integrated Bar of the Philippines and all courts throughout the country with copies of this Decision. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC 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 precedent1 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-Complaint3 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 Order4 requiring respondent to submit his answer to the Affidavit-Complaint. Respondent submitted his Answer5 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 her AffidavitComplaint. From the evidence presented by the complainant, it was established that on January 19, 1979, complainant and respondent were married7 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, 19819 and August 11, 1983,10 respectively. Complainant narrated that their relationship was marred by frequent quarrels because of respondents extramarital 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 paramour13 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 crossexamine 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 Proceedings15 on August 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 alimony pendente lite18 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 Report20 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 degree23 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 during 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.

EN BANC [G.R. No. 94457. October 16, 1997] VICTORIA LEGARDA, petitioner, vs. THE HONORABLE COURT OF APPEALS, NEW CATHAY HOUSE, INC., THE HONORABLE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 94, respondents. RESOLUTION ROMERO, J.: For our resolution is the motion for reconsideration of the March 18, 1991, decision of the Courts's First Division, filed by private respondents New Cathay House, Inc. (Cathay). A brief narration of facts is in order. The parties hereto entered into a lease agreement over a certain Quezon City property owned by petitioner Victoria Legarda. For some reason or another, she refused to sign the contract although respondent lessee, Cathay, made a deposit and a down payment of rentals, prompting the latter to file before the Regional Trial Court of Quezon City, Branch 94 a complainti[1] against the former for specific performance with preliminary injunction and damages. The court a quo issued the injunction. In the meantime, Legardas counsel, noted lawyer Dean Antonio Coronel, requested a 10-day extension of time to file an answer which the court granted. Atty. Coronel, however, failed to file an answer within the extended period. His client was eventually declared in default, Cathay was allowed to present evidence ex-parte, and on March 25, 1985, a judgment by default was reached by the trial court ordering Legarda to execute the lease contract in favor of, and to pay damages to, Cathay. On April 9, 1985, a copy of said decision was served on Atty. Coronel but he took no action until the judgment became final and executory. A month later, the trial court issued a writ of execution and a public auction was held where Cathays manager, Roberto V. Cabrera, Jr., as highest bidder, was awarded the property for P376,500.00 in satisfaction of the judgment debt. Consequently, a Certificate of Sale was issued by the sheriff on June 27, 1985. Upon failure of Legarda to redeem her property within the one-year redemption period, a Final Deed of Sale was issued by the sheriff on July 8, 1986, which was registered by Cabrera with the Register of Deeds three days later. Hence, Legardas Transfer Certificate of Title (TCT) No. 270814 was cancelled with the issuance of TCT No. 350892 in the name of Cabrera. Despite the lapse of over a year since the judgment by default became final and executory, Atty. Coronel made no move on behalf of his client. He did not even inform her of all these developments. When Legarda did learn of the adverse decision, she nevertheless did not lose faith in her counselii[2] and prevailed upon him to seek appropriate relief. Thus, on October 23, 1986, he filed a petition for annulment of judgment with prayer for the issuance of a writ of preliminary mandatory injunction before the Court of Appeals.iii[3]

On November 29, 1989, the appellate court rendered a decision affirming the March 25, 1985, decision of the trial court, dismissing the petition for annulment of judgment, and holding Legarda bound by the negligence of her counsel. It considered her allegation of fraud by Cathay to be improbable, and added that there was pure and simple negligence on the part of petitioners counsel who failed to file an answer and, later, a petition for relief from judgment by default. Upon notice of the Court of Appeals decision, Atty. Coronel again neglected to protect his clients interest by failing to file a motion for reconsideration or to appeal therefrom until said decision became final on December 21, 1989. Sometime in March 1990, Legarda learned of the adverse decision of the Court of Appeals dated November 29, 1989, not from Atty. Coronel but from his secretary. She then hired a new counsel for the purpose of elevating her case to this Court. The new lawyer filed a petition for certiorari praying for the annulment of the decision of the trial and appellate courts and of the sheriffs sale, alleging, among other things, that Legarda lost in the courts below because her previous lawyer was grossly negligent and inefficient, whose omissions cannot possibly bind her because this amounted to a violation of her right to due process of law. She, therefore, asked Cathay (not Cabrera) to reconvey the subject property to her. On March 18, 1991, a decisioniv[4] was rendered in this case by Mr. Justice Gancayco, ruling, inter alia, as follows: (a) granting the petition; (b) nullifying the trial courts decision dated March 25, 1985, the Court of Appeals decision dated November 29, 1989, the Sheriffs Certificate of Sale dated June 27, 1985, of the property in question, and the subsequent final deed of sale covering the same property; and (c) ordering Cathay to reconvey said property to Legarda, and the Register of Deeds to cancel the registration of said property in the name of Cathay (not Cabrera) and to issue a new one in Legardas name. The Court then declared that Atty. Coronel committed, not just ordinary or simple negligence, but reckless, inexcusable and gross negligence, which deprived his client of her property without due process of law. His acts, or the lack of it, should not be allowed to bind Legarda who has been consigned to penury because her lawyer appeared to have abandoned her case not once but repeatedly. Thus, the Court ruled against tolerating such unjust enrichment of Cathay at Legardas expense, and noted that counsels lack of devotion to duty is so gross and palpable that this Court must come to the aid of his distraught client. Aggrieved by this development, Cathay filed the instant motion for reconsideration, alleging, inter alia, that reconveyance is not possible because the subject property had already been sold by its owner, Cabrera, even prior to the promulgation of said decision. By virtue of the Gancayco decision, Cathay was duty bound to return the subject property to Legarda. The impossibility of this directive is immediately apparent, for two reasons: First, Cathay neither possessed nor owned the property so it is in no position to reconvey the same; second, even if it did, ownership over the property had already been validly transferred to innocent third parties at the time of promulgation of said judgment. There is no question that the highest bidder at the public auction was Cathays manager. It has not been shown nor even alleged, however, that Roberto Cabrera had all the time been acting for

or in behalf of Cathay. For all intents and purposes, Cabrera was simply a vendee whose payment effectively extinguished Legardas liability to Cathay as the judgment creditor. No proof was ever presented which would reveal that the sale occurred only on paper, with Cabrera acting as a mere conduit for Cathay. What is clear from the records is that the auction sale was conducted regularly, that a certificate of sale and, subsequently, a final deed of sale were issued to Cabrera which allowed him to consolidate his ownership over the subject property, register it and obtain a title in his own name, and sell it to Nancy Saw, an innocent purchaser for value, at a premium price. Nothing on record would demonstrate that Cathay was the beneficiary of the sale between Cabrera and Saw. Cabrera himself maintained that he was acting in his private (as distinct from his corporate) capacityv[5] when he participated in the bidding. Since the decision of the Court of Appeals gained finality on December 21, 1989, the subject property has been sold and ownership thereof transferred no less than three times, viz.: (a) from Cabrera to Nancy Saw on March 21, 1990, four months after the decision of the Court of Appeals became final and executory and one year before the promulgation of the March 18, 1991, decision under reconsideration; (b) from Nancy Saw to Lily Tanlo Sy Chua on August 7, 1990, more than one year before the Court issued a temporary restraining order in connection with this case; and (c) from the spouses Victor and Lily Sy Chua to Janet Chong Luminlun on April 3, 1992. With these transfers, Cabreras TCT No. 350892 gave way to Saws TCT No. 31672, then to Chuas TCT No. 31673, and finally to Luminluns TCT No. 99143, all issued by the Register of Deeds of Quezon City on April 3, 1990, August 8, 1990, and November 24, 1993, respectively. We do not have to belabor the fact that all the successors-in-interest of Cabrera to the subject lot were transferees for value and in good faith, having relied as they did on the clean titles of their predecessors. The successive owners were each armed with their own indefeasible titles which automatically brought them under the aegis of the Torrens System. As the Court declared in Sandoval v. Court of Appeals,vi[6] (i)t is settled doctrine that one who deals with property registered under the Torrens system need not go beyond the same, but only has to rely on the title. He is charged with notice only of such burdens and claims as are annotated on the title.vii[7] In the case at bar, it is not disputed that no notice of lis pendens was ever annotated on any of the titles of the subsequent owners. And even if there were such a notice, it would not have created a lien over the property because the main office of a lien is to warn prospective buyers that the property they intend to purchase is the subject of a pending litigation. Therefore, since the property is already in the hands of Luminlun, an innocent purchaser for value, it can no longer be returned to its original owner by Cabrera, much less by Cathay itself. Another point to consider, though not raised as an issue in this case, is the fact that Cabrera was impleaded as a party-respondent only on August 12, 1991, after the promulgation of the Gancayco decision.viii[8] The dispositive portion itself ordered Cathay, instead of Cabrera to reconvey the property to Legarda. Cabrera was never a party to this case, either as plaintiffappellee below or as respondent in the present action. Neither did he ever act as Cathays representative. As we held in the recent case of National Power Corporation v. NLRC, et al.,ix[9] (j)urisdiction over a party is acquired by his voluntary appearance or submission to the court or by the coercive process issued by the court to him, generally by service of summons.x[10] In other words, until Cabrera was impleaded as party respondent and ordered to

file a comment in the August 12, 1991, resolution, the Court never obtained jurisdiction over him, and to command his principal to reconvey a piece of property which used to be HIS would not only be inappropriate but would also constitute a real deprivation of ones property without due process of law. Assuming arguendo that reconveyance is possible, that Cathay and Cabrera are one and the same and that Cabreras payment redounded to the benefit of his principal, reconveyance, under the facts and evidence obtaining in this case, would still not address the issues raised herein The application of the sale price to Legardas judgment debt constituted a payment which extinguished her liability to Cathay as the party in whose favor the obligation to pay damages was established.xi[11] It was a payment in the sense that Cathay had to resort to a courtsupervised auction sale in order to execute the judgment.xii[12] With the fulfillment of the judgment debtors obligation, nothing else was required to be done. Under the Gancayco ruling, the order of reconveyance was premised on the alleged gross negligence of Legardas counsel which should not be allowed to bind her as she was deprived of her property without due process of law. It is, however, basic that as long as a party was given the opportunity to defend her interests in due course, she cannot be said to have been denied due process of law, for this opportunity to be heard is the very essence of due process. The chronology of events shows that the case took its regular course in the trial and appellate courts but Legardas counsel failed to act as any ordinary counsel should have acted, his negligence every step of the way amounting to abandonment, in the words of the Gancayco decision. Yet, it cannot be denied that the proceedings which led to the filing of this case were not attended by any irregularity. The judgment by default was valid, so was the ensuing sale at public auction. If Cabrera was adjudged highest bidder in said auction sale, it was not through any machination on his part. All of his actuations that led to the final registration of the title in his name were aboveboard, untainted by any irregularity. The fact that Cabrera is an officer of Cathay does not make him a purchaser in bad faith. His act in representing the company was never questioned nor disputed by Legarda. And while it is true that he won in the bidding, it is likewise true that said bidding was conducted by the book. There is no call to be alarmed that an official of the company emerges as the winning bidder since in some cases, the judgment creditor himself personally participates in the bidding. There is no gainsaying that Legarda is the judgment debtor here. Her property was sold at public auction to satisfy the judgment debt. She cannot claim that she was illegally deprived of her property because such deprivation was done in accordance with the rules on execution of judgments. Whether the money used to pay for said property came from the judgment creditor or its representative is not relevant. What is important is that it was purchased for value. Cabrera parted with real money at the auction. In his Sheriffs Certificate of Sale dated June 27, 1985,xiii[13] Deputy Sheriff Angelito R. Mendoza certified, inter alia, that the highest bidder paid to the Deputy Sheriff the said amount of P376,500.00, the sale price of the levied property. If this does not constitute payment, what then is it? Had there been no real purchase and payment below, the subject property would never have been awarded to Cabrera and

registered in his name, and the judgment debt would never have been satisfied. Thus, to require either Cathay or Cabrera to reconvey the property would be an unlawful intrusion into the lawful exercise of his proprietary rights over the land in question, an act which would constitute an actual denial of property without due process of law. It may be true that the subject lot could have fetched a higher price during the public auction, as Legarda claims, but the fail to betray any hint of a bid higher than Cabreras which was bypassed in his favor. Certainly, he could not help it if his bid of only P376,500.00 was the highest. Moreover, in spite of this allegedly low selling price, Legarda still failed to redeem her property within the one-year redemption period. She could not feign ignorance of said sale on account of her counsels failure to so inform her, because such auction sales comply with requirements of notice and publication under the Rules of Court. In the absence of any clear and convincing proof that such requirements were not followed, the presumption of regularity stands. Legarda also claims that she was in the United States during the redemption period, but she admits that she left the Philippines only on July 13, 1985, or sixteen days after the auction sale of June 27, 1985. Finally, she admits that her mother Ligaya represented her during her absence.xiv[14] In short, she was not totally in the dark as to the fate of her property and she could have exercised her right of redemption if she chose to, but she did not. Neither Cathay nor Cabrera should be made to suffer for the gross negligence of Legardas counsel. If she may be said to be innocent because she was ignorant of the acts of negligence of her counsel, with more reason are respondents truly innocent. As between two parties who may lose due to the negligence or incompetence of the counsel of one, the party who was responsible for making it happen should suffer the consequences. This reflects the basic common law maxim, so succinctly stated by Justice J.B.L. Reyes, that . . . (B)etween two innocent parties, the one who made it possible for the wrong to be done should be the one to bear the resulting loss.xv[15] In this case, it was not respondents, Legarda, who misjudged and hired the services of the lawyer who practically abandoned her case and who continued to retain him even after his proven apathy and negligence. The Gancayco decision makes much of the fact that Legarda is now consigned to penury and, therefore, this Court must come to the aid of the distraught client. It must be remembered that this Court renders decisions, not on the basis of emotions but on its sound judgment, applying the relevant, appropriate law. Much as it may pity Legarda, or any losing litigant for that matter, it cannot play the role of a knight in shining armor coming to the aid of someone, who through her weakness, ignorance or misjudgment may have been bested in a legal joust which complied with all the rules of legal proceedings. In Vales v. Villa,xvi[16] this Court warned against the danger of jumping to the aid of a litigant who commits serious error of judgment resulting in his own loss: x x x Courts operate not because one person has been defeated or overcome by another, but because he has been defeated or overcome illegally. Men may do foolish things, make ridiculous contracts, use miserable judgment, and lose money by them - indeed, all they have in the world; but not for that alone can the law intervene and restore. There must be, in addition, a violation of

law, the commission of what the law knows as an actionable wrong, before the courts are authorized to lay hold of the situation and remedy it." Respondents should not be penalized for Legardas mistake. If the subject property was at all sold, it was only after the decisions of the trial and appellate courts had gained finality. These twin judgments, which were nullified by the Gancayco decision, should be respected and allowed to stand by this Court for having become final and executory. A judgment may be broadly defined as the decision or sentence of the law given by a court or other tribunal as the result of proceedings instituted therein.xvii[17] It is a judicial act which settles the issues, fixes the rights and liabilities of the parties, and determines the proceeding, and it is regarded as the sentence of the law pronounced by the court on the action or question before it.xviii[18] In the case at bar, the trial courts judgment was based on Cathays evidence after Legarda was declared in default. Damages were duly awarded to Cathay, not whimsically, but upon proof of its entitlement thereto. The issue of whether the plaintiff (Cathay) deserved to recover damages because of the defendants (Legardas) refusal to honor their lease agreement was resolved. Consequently, the right of Cathay to be vindicated for such breach and the liability incurred by Legarda in the process were determined. This judgment became final when she failed to avail of remedies available to her, such as filing a motion for reconsideration or appealing the case. At the time, the issues raised in the complaint had already been determined and disposed of by the trial court.xix[19] This is the stage of finality which judgments must at one point or another reach. In our jurisdiction, a judgment becomes ipso facto final when no appeal is perfected or the reglementary period to appeal therefrom expires. The necessity of giving finality to judgments that are not void is selfevident. The interests of society impose it. The opposite view might make litigations more unendurable than the wrongs (they are) intended to redress. It would create doubt, real or imaginary, and controversy would constantly arise as to what the judgment or order was. Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law. The very object for which courts were instituted was to put an end to controversies.xx[20] When judgments of lower courts gain finality, they, too, become inviolable, impervious to modification. They may, then, no longer be reviewed, or in any way modified directly or indirectly, by a higher court, not even by the Supreme Court.xxi[21] In other words, once a judgment becomes final, the only errors that may be corrected are those which are clerical.xxii[22] From the foregoing precedents, it is readily apparent that the real issue that must be resolved in this motion for reconsideration is the alleged illegality of the final judgments of the trial and appellate courts. Void judgments may be classified into two groups: those rendered by a court without jurisdiction to do so and those obtained by fraud or collusion.xxiii[23] This case must be tested in light of the guidelines governing the latter class of judgments. In this regard, an action to annul a judgment on the ground of fraud will not lie unless the fraud is extrinsic or collateral and

facts upon which it is based (have) not been controverted or resolved in the case where (the) judgment was rendered.xxiv[24] Where is the fraud in the case at bar? Was Legarda unlawfully barred from the proceedings below? Did her counsel sell her out to the opponent? It must be noted that, aside from the fact that no extrinsic fraud attended the trial and resolution of this case, the jurisdiction of the court a quo over the parties and the subject matter was never raised as an issue by Legarda. Such being the case, the decision of the trial court cannot be nullified. Errors of judgment, if any, can only be reviewed on appeal, failing which the decision becomes final and executory, valid and binding upon the parties in the case and their successors in interest.xxv[25] At this juncture, it must be pointed out that while Legarda went to the Court of Appeals claiming precisely that the trial courts decision was fraudulently obtained, she grounded her petition before the Supreme Court upon her estranged counsels negligence. This could only imply that at the time she filed her petition for annulment of judgment, she entertained no notion that Atty. Coronel was being remiss in his duties. It was only after the appellate courts decision had become final and executory, a writ of execution issued, the property auctioned off then sold to an innocent purchasers for value, that she began to protest the alleged negligence of her attorney. In most cases, this would have been dismissed outright for being dilatory and appearing as an act of desperation on the part of a vanquished litigant. The Gancayco ruling, unfortunately, ruled otherwise. Fortunately, we now have an opportunity to rectify a grave error of the past. WHEREFORE, the Motion for Reconsideration of respondent New Cathay House, Inc. is hereby GRANTED. Consequently, the decision dated March 18, 1991, of the Courts First Division is VACATED and SET ASIDE. A new judgment is hereby entered DISMISSING the instant petition for review and AFFIRMING the November 29, 1989, decision of the Court of Appeals in CA-G.R. No. SP-10487. Costs against petitioner Victoria Legarda. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 128686 May 28, 2004

HONORATO ESPINOSA, petitioner, vs. COURT OF APPEALS, HON. PRESIDING JUDGE, Branch 23, RTC Iloilo City and Sps. RODOLFO and VIOLETA ALCANTARA, respondents. DECISION Tinga, J.: This is a petition for review of the Decision1 dated October 11, 1996 of the Court of Appeals in CA-G.R. SP No. 39206, dismissing the petition for the annulment of the Decision2 dated May 15, 1990 of the Regional Trial Court of Iloilo City (RTC) in Civil Case No. 18622. The antecedents are recited below. After finding through a relocation survey that a portion of their Lot 933-A-1-A, covered by Transfer Certificate of Title No. T-69242 (Iloilo), was occupied by the petitioner Honorato Espinosas ("Espinosa") restaurant, known as "Tatoys Manokan and Seafoods Restaurant", the private respondents Rodolfo and Violeta Alcantara ("Alcantaras") filed an action for ejectment against Espinosa before the Municipal Trial Court in Cities, Iloilo City (MTC), on November 4, 1985.3 Espinosa denied the encroachment. Also through his counsel then, Atty. Rex Castillon, Espinosa succeeded in having the case tried as in a regular case, instead of a hearing under the Rules on Summary Procedure.4 After trial, the MTC rendered judgment on February 6, 1989 in favor of Espinosa, dismissing the complaint and ordering the Alcantara spouses to pay moral damages, exemplary damages, attorneys fees, litigation expenses, and costs of suit. It found that Espinosa did not encroach on the lot of the Alcantaras as his restaurant was situated on Lot 933-A-18 which he owns.5 The Alcantaras appealed the decision to the RTC.6 Its Presiding Judge, Hon. Tito G. Gustilo, noted that the lot of the Alcantaras and the adjoining lots, including those of Espinosa and the city street, are all titled properties. On that basis and with the concurrence of the parties and their respective lawyers, the Judge issued an Order on October 2, 1989, commissioning the Bureau of Lands to conduct a relocation survey for the purpose of determining whether Espinosas restaurant has indeed encroached on the Alcantaras lot.7

Judge Gustilo presided over the ocular inspection and relocation survey on October 2, 1989. Present were the parties and their lawyers.8 In due time, the Bureau of Lands through its authorized representative submitted to the RTC the result of the relocation survey with the corresponding sketch plan.9 The sketch plan indicates that Espinosas restaurant encroaches on eighty-nine (89) square meters of the Alcantaras Lot 933A-1-A and also on a portion of the city street known as Melo Boulevard and designated as Lot 933-A-1-B.10 Said street lot used to be a part of the bigger property owned by the Alcantaras predecessor-in-interest from whom the City of Iloilo purchased the street lot.11 During the relocation survey, Judge Gustilo proposed a compromise settlement to the parties and their lawyers whereby should the relocation survey attest to the encroachment on the Alcantaras lot Espinosa would buy the encroached area at P250.00 per square meter from the Alcantaras. Espinosa agreed to the proposal at the time. However, when the Judge invited the parties and their counsels to his chambers to explore or pursue the proposed compromise agreement on three (3) occasions, namely: on December 27, 1989, April 2, 1990 and April 5, 1990, Espinosa rejected the proffered settlement.12 On May 15, 1990, the RTC rendered its decision in favor of the Alcantaras, reversing the MTC decision and ordering Espinosa to vacate the lot in question and to pay the Alcantaras moral damages, attorneys fees, litigation expenses and costs of suit.13 Espinosa elevated the RTC decision to the Court of Appeals through a Petition For Review which was docketed as CA-G.R. SP No. 22398.14 On September 6, 1993, the Court of Appeals promulgated its Decision in the case, denying Espinosas Petition For Review.15 Unfazed, Espinosa elevated the CA Decision to this Court and his Petition was docketed as G.R. No. 111752. This Court denied the Petition in a Resolution dated February 27, 1995 for which the corresponding Entry of Judgment was made on August 18, 1995.16 Less than three (3) months later, on December 6, 1995, Espinosa, this time through his present counsel, Atty. Honorio S. Laguilles, Jr., filed a petition for annulment of judgment with the Court of Appeals. He alleged that the promulgation of the RTC decision was attended with extrinsic fraud and denial of due process.17 In his verification and certification of non-forum shopping, however, Espinosa was silent on the petitions he earlier filed with the Court of Appeals (CA-G.R. SP No. 22398) and this Court (G.R. No. 111752) and the decision or resolution on the petitions.18 In the challenged Decision, the Court of Appeals dismissed the petition for annulment of judgment.19 It also declared Espinosa and his present counsel in contempt of court and fined each of them One Thousand Pesos (P1,000.00) for forum-shopping.

Consequently, the issues before this Court are (a) whether the RTC Decision may be annulled on the ground of extrinsic fraud and denial of due process, and (b) whether Espinosa and his present counsel are guilty of forum-shopping. Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no available or other adequate remedy.20 Extrinsic fraud, the ground upon which Espinosa relies upon, is one of the recognized grounds for annulment of judgment.21 However, the mere allegation of extrinsic fraud does not instantly warrant the annulment of a final judgment, as the same has to be definitively established by the claimant. Espinosa has failed to prove extrinsic fraud. Extrinsic fraud exists when there is a fraudulent act of prevailing party committed outside of the trial of the case, whereby the defeated party was prevented from exhibiting fully his side of the case by fraud or deception practiced on him by the prevailing party.22 The extrinsic fraud complained off by Espinosa refers to the act of conducting the relocation survey while the case was on appeal to the RTC. Espinosa suggests that it was highly questionable on the part of the RTC to have ordered such a survey since the case was being heard on appeal, and given the nature of an ejectment action, only the submission of memoranda by the parties are required.23 Clearly, the conduct of the relocation survey was not occasioned at the instigation of the prevailing party (the Alcantaras), but upon lawful order by the RTC. Moreover, the procedure was consented to by all of the parties and their lawyers. The relocation survey was ordered for the purpose of conclusively ascertaining a factual issue, i.e., the exact location of the structure belonging to Espinosa in relation to the lot of the Alcantaras. This is a proper question for the RTC to have inquired into, and well within its competence as it is a trier of facts. Every court has the inherent power to do all things reasonably necessary for the administration of justice within the scope of its jurisdiction.24 Even assuming that the order for the relocation survey is irregular on the premise that RTC may decide the appealed case based only on the records and pleadings before it, such lapse is procedural in character only. The findings would not be ipso facto binding on the parties who consented to the survey, but would only form part of the proofs on which the trial court would base its decision upon. Despite such relocation survey, Espinosa was not prevented from challenging the findings before the RTC. Nor was Espinosa prevented from arguing against the adoption of such findings before the Court of Appeals and the Supreme Court, considering that he had availed of the proper appellate processes before these higher courts. Indeed, Espinosa raised the same issue concerning the alleged impropriety of the relocation survey ordered by the RTC before the CA in CA G.R. SP No. 22398. It was rejected by the appellate court in its decision in the said case. The same issue was raised again in G.R. No. 111752 before this Court, albeit unsuccessfully. A claim of extrinsic fraud would presuppose that the claimant was prevented exhibiting fully his side of the case. On the contrary, Espinosa has had multiple opportunities to raise the same issue on the impropriety of the relocation survey before the courts. His claim has acquired the veneer of a scratchy vinyl record that repeats its hoary tune ad nauseum to the general effect of irritation.

Espinosa claims that he was deprived of due process and blames his former counsel, Atty. Castillon, for having consented to the relocation survey, implicitly suggesting that the lawyer too had an active hand in denying him due process. Indubitably, Espinosa and his former counsel agreed to the relocation survey, were present during the survey and are thus estopped from questioning its very conduct in the first place. When a party retains the services of a lawyer, he is bound by his counsel's decisions regarding the conduct of the case. The general rule is that the client is bound by the mistakes of his counsel, save when the negligence of counsel is so gross, reckless and inexcusable that the client is deprived of his day in court.25 Citing the cases of Legarda v. Court of Appeals26 and Alabanzas v. IAC27, Espinosa invokes the exception to the general rule that a client need not be bound by the actions of counsel who is grossly and palpably negligent. These very cases cited demonstrate why Atty. Castillons acts hardly constitute gross or palpable negligence. Legarda provides a textbook example of gross negligence on the part of the counsel. The Court therein noted the following negligent acts of lawyer Antonio Coronel: Petitioner's counsel is a well-known practicing lawyer and dean of a law school. It is to be expected that he would extend the highest quality of service as a lawyer to the petitioner. Unfortunately, counsel appears to have abandoned the cause of petitioner. After agreeing to defend the petitioner in the civil case filed against her by private respondent, said counsel did nothing more than enter his appearance and seek for an extension of time to file the answer. Nevertheless, he failed to file the answer. Hence, petitioner was declared in default on motion of private respondent's counsel. After the evidence of private respondent was received ex-parte, a judgment, was rendered by the trial court. Said counsel for petitioner received a copy of the judgment but took no steps to have the same set aside or to appeal therefrom. Thus, the judgment became final and executory.28 Gross negligence on the part of the counsel in Legarda is clearly established, characterized by a series of negligent omissions that led to a final executory judgment against the client, who never once got her side aired before the court of law before finality of judgment set in. The actions of Atty. Castillon hardly measure up to this standard of gross negligence exhibited in the Legarda case. On the other hand, in Alabanzas counsel failed to file an appellants brief, thereby causing the dismissal of the appeal before the Court of Appeals.29 Despite such inexcusable and fatal lapse, the Court ruled that it was not sufficient to establish such gross or palpable negligence that justified a deviation from the rule that clients should be bound by the acts and mistakes of their counsel.30 It strikes as odd that Espinosa should cite Alabanzas in the first place, considering that the lapse of the counsel therein was far worse than that imputed to Atty. Castillon, yet the Court anyway still refused to apply the exception to the general rule. Besides, there is nothing in the record that would tend to establish that Atty. Castillon performed less than ably in representing Espinosa. On the contrary, as noted by the Alcantaras in their Comment, Atty. Castillon is a law professor on Property and a distinguished practitioner in the City of Iloilo.31 Moreover, Atty. Castillon served as Espinosas counsel for more than ten years.32

Espinosas defeat is attributable not to the purported incompetence of his former lawyer but to the untenability of his legal position. And even if Atty. Castillon committed a tactical error in consenting to the relocation survey, this was done out of the honest belief that the survey would benefit his clients cause. Just because it did not, Espinosa and his new counsel could not just turn about and pin the blame on the patsy of their convenient choice. Another matter cited by the Court of Appeals is also worth noting. The Petition for Annulment of Judgment is silent as to when Espinosa received a copy of the impugned decision, or when he discovered the alleged extrinsic fraud.33 An action based on extrinsic fraud must be filed within four (4) years from its discovery.34 Since the timeliness of the Petition could not be ascertained, it could have very well been dismissed on that ground alone. Anent the issue of forum-shopping, the Court agrees with the Court of Appeals finding that Espinosa and his present counsel, Atty. Laguilles, Jr., violated the rules on non-forum shopping. Revised Circular No. 28-91 (as amended) was already in force when the petition in CA G.R. SP No. 39206 was filed on October 11, 1996. Under the Circular, which has since been incorporated into the 1997 Rules of Civil Procedure,35 the petitioner has to attest that he has not commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency. If such an action or proceeding has been instituted, the petitioner is obliged to state the status of the same.36 In his Verification, Certification and Affidavit of Merit, which contains the certificate of nonforum shopping in the petition in CA G.R. SP No. 39206, Espinosa and his new counsel did not mention the petitions in CA G.R. SP No. 22398 and G.R. No. 111752 and the decisions or resolutions thereon. In his present petition before this Court, Espinosa does mention the existence of the previous cases in his Verification With Affidavit of Non-Forum Shopping, though with the disclaimer that those cases involved different issues than those addressed in the current petition. The belated compliance, however, is of no moment, as his failure to assert the same before the Court of Appeals is sufficient to warrant liability. Espinosa argues against this finding by noting that the issues of "denial of due process" and "fraud" were raised for the first time in the Petition for Annulment of Judgment. Yet, the proof of such fraud is the alleged improper allowance of the relocation survey. As the Court of Appeals noted, that same question of impropriety was already passed upon by the Court of Appeals and the Supreme Court in two previous petitions filed by Espinosa. The Court of Appeals noted that: "A reading of the petition filed [in CA-G.R. SP No. 22398] vis-a-vis the one filed in this case would readily reveal that not much difference exists between the two except that the first is a petition for review while the present is one for annulment of judgment."37 In the pithy words of the Court of Appeals, "same dog, but with a different collar."38 However, this Court is unable to sustain the Court of Appeals declaration that Espinosa and his counsel are in contempt of court and the corresponding fine of One Thousand Pesos (P1,000.00) imposed upon them. Under Revised Circular No. 28-91, the submission of a false certification constitutes indirect contempt of court, without prejudice to the filing of criminal action against the guilty party and the institution of disciplinary proceedings against the counsel. Unlike in cases of direct contempt, which can be summarily adjudged and punished by a fine39, a finding

of guilt for indirect contempt must be preceded by a charge in writing, an opportunity given to the respondent to comment thereon and to be heard by himself or by counsel in a hearing.40 The Court of Appeals erred in summarily punishing Espinosa and his counsel, considering that the charge against them only constitutes indirect contempt. In cases of indirect contempt, no matter how palpable the errants bad faith might appear to the court, due process as laid down in the rules of procedure must be observed before the penalty is imposed. Finally, the ejectment case against Espinosa was filed way back in 1985, and the judgment therein attained finality in 1995. If the pendency of this case has prevented the Alcantaras from enforcing the long-final judgment in their favor, then such delay is understandably egregious. The immediate execution of this judgment is declared exigent to enable the Alcantaras deservedly to rest secure in the vindication of their rights and the enjoyment of their property. WHEREFORE, the Petition is DENIED for lack of merit. The assailed Decision of the Court of Appeals Sixteenth Division is AFFIRMED, EXCEPT insofar as it imposes a fine of One Thousand Pesos (P1,000.00) on petitioner Honorato Espinosa and Atty. Honorio S. Laguilles, Jr. Instead, the Court of Appeals is DIRECTED to initiate indirect contempt proceedings against Espinosa and Atty. Laguilles, Jr., and RESOLVE the same in conformity with Rule 71 of the 1997 Rules of Civil Procedure. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION A.C. No. 6408 August 31, 2004

ISIDRA BARRIENTOS, complainant, vs. ATTY. ELERIZZA A. LIBIRAN-METEORO, respondent.

RESOLUTION

AUSTRIA-MARTINEZ, J.: Before this Court is a complaint for disbarment filed against Atty. Elerizza A. Libiran-Meteoro for deceit and non-payment of debts. A letter-complaint dated May 21, 2001 was filed with the Integrated Bar of the Philippines (IBP) under the names of Isidra Barrientos and Olivia C. Mercado, which was signed, however, by Isidra only. It states that: sometime in September of 2000, respondent issued several Equitable PCIBank Checks in favor of both Isidra and Olivia, amounting to P67,000.00, and in favor of Olivia, totaling P234,000.00, for the payment of a pre-existing debt; the checks bounced due to insufficient funds thus charges for violation of B.P. 22 were filed by Isidra and Olivia with the City Prosecutor of Cabanatuan; respondent sent text messages to complainants asking for the deferment of the criminal charges with the promise that she will pay her debt; respondent however failed to fulfill said promise; on May 16, 2001, respondent, through her sister-in-law, tried to give complainants a title for a parcel of land in exchange for the bounced checks which were in the possession of complainants; the title covered an area of 5,000 square meters located at Bantug, La Torre, Talavera, Nueva Ecija, registered in the name of Victoria Villamar which was allegedly paid to respondent by a client; complainants checked the property and discovered that the land belonged to a certain Dra. Helen Garcia, the sole heir of Victoria Villamar, who merely entrusted said title to respondent pursuant to a transaction with the Quedancor; complainants tried to get in touch with respondent over the phone but the latter was always unavailable, thus the present complaint.1 On July 13, 2001, in compliance with the Order2 of the IBP-Commission on Bar Discipline (CBD), respondent filed her Answer alleging that: she issued several Equitable PCIBank checks amounting to P234,000.00 in favor of Olivia but not to Isidra; said checks were issued in payment of a pre-existing obligation but said amount had already been paid and replaced with new checks; Isidra signed a document attesting to the fact that the subject of her letter-complaint

no longer exists;3 she also issued in favor of Olivia several Equitable PCIBank checks amounting to P67,000.00 for the payment of a pre-existing obligation; the checks which were the subject of the complaint filed at the City Prosecutors Office in Cabanatuan City are already in the possession of respondent and the criminal case filed by complainants before the Municipal Trial Court of Cabanatuan City Branch 3 was already dismissed; the Informations for Violation of B.P. 22 under I.S. Nos. 01-14090-034 were never filed in court; Olivia already signed an affidavit of desistance; respondent did not send text messages to Isidra and Olivia asking for deferment of the criminal complaints neither did she present any title in exchange for her bounced checks; she never transacted with Isidra since all dealings were made with Olivia; and the present complaint was initiated by Isidra only because she had a misunderstanding with Olivia and she wants to extract money from respondent.5 Attached to said Answer is an affidavit signed by Olivia C. Mercado which states as follows: 1. That I am one of the complainants for the Disbarment of Atty. Elerizza LibiranMeteoro filed before the Integrated Bar of the Philippines National Office in Pasig City, Philippines docketed as CBD case no. 01-840; 2. That the filing of the said complaint before the Integrated Bar of the Philippines was brought about by some misunderstanding and error in the accounting of the records of the account of Atty. Elerizza L. Meteoro; 3. That I was the one who transacted with Atty. Elerizza L. Meteoro and not my cocomplainant Isidra Barrientos; 4. That all the pieces of jewelry were taken from me by Atty. Elerizza L. Meteoro and the corresponding checks were given to Isidra Barrientos through me; 5. That my name was indicated as co-complainant in a letter-complaint filed by Ms. Isidra Barrientos against Atty. Elerizza L. Meteoro but I am not interested in pursuing the complaint against Atty. Elerizza L. Meteoro since the complaint was brought about by a case of some mistakes in the records; 6. That I, together with Isidra Barrientos had already signed an affidavit of desistance and submitted the same before the Municipal Trial Court Branch III of Cabanatuan City w(h)ere Criminal Case Nos. 77851 to 56 for violation of BP 22 were filed against Atty. Meteoro; 7. That with respect to I.S. nos. 03-01-1356 to 1361 the case was not filed in court and I have also executed an affidavit of desistance for said complaint; 8. That I am executing this affidavit to attest to the truth of all the foregoing and to prove that I have no cause of action against Atty. Elerizza L. Meteoro.6

On August 9, 2001, the IBP-CBD issued a Notice of Hearing requiring both parties to appear before it on September 6, 2001. On said date, both parties appeared and agreed to settle their misunderstanding.7 On November 27, 2001, the parties agreed that the balance of P134,000.00 which respondent acknowledged as her indebtedness to complainant will be settled on a staggered basis. Another hearing was then set for February 5, 2002. Respondent failed to appear in said hearing despite due notice. It was then reset to February 28, 2002 with the order that should respondent fail to appear, the case shall already be submitted for resolution.8 Respondent appeared in the next two hearings. However, this time, it was complainant who was unavailable. In the hearing of July 31, 2002, respondent was absent and was warned again that should she fail to appear in the next hearing, the Commissioner shall resolve the case. On said date, respondent did not appear despite due notice.9 On August 1, 2002, respondent filed with the Commission a motion for reconsideration of the July 31 order stating that: she got sick a few days before the scheduled hearing; she had already paid complainant the amount of P64,000.00; in March of 2002, respondents father was admitted to the Intensive Care Unit of the University of Santo Tomas Hospital thus she was not able to settle her remaining balance as planned; and because of said emergency, respondent was not able to fully settle the balance of her debt up to this date. Respondent prayed that she be given another 60 days from August 1,2002 to finally settle her debt with complainant.10 On April 30, 2003, the IBP-CBD issued an order granting respondents motion and setting aside the order dated July 31, 2002. It noted that while respondent claims that she already paid complainant P64,000.00, the photocopies of the receipts she submitted evidencing payment amount only to P45,000.00.11 A hearing was then set for May 28, 2003 at which time respondent was directed to present proof of her payments to the complainant. The hearing was however reset several times until August 20, 2003 at which time, only complainant appeared. Respondent sent somebody to ask for a postponement which the commission denied. The commission gave respondent a last opportunity to settle her accounts with complainant. The hearing was set for October 7, 2003 which the commission said was "intransferrable."12 On October 7, 2003, only complainant appeared. The commission noted that respondent was duly notified and even personally received the notice for that days hearing. The case was thereafter submitted for resolution.13 On October 24, 2003, the Investigating IBP Commissioner Renato G. Cunanan submitted his report pertinent portions of which read as follows: The issue to be resolved is whether or not Atty. Elerizza A. Libiran-Meteoro has committed a violation of the Code of Professional Responsibility. This Office holds that she has. More particularly, the respondent, by initially and vehemently denying her indebtedness to herein complainant and then subsequently admitting liability by proposing a staggered settlement has displayed a glaring flaw in her integrity. She has shown herself to possess poor moral characters. In her motion for reconsideration,

seeking the reopening of this case, the respondent made a false assertion that she had settled up to P64,000.00 of her indebtedness but the receipts she submitted total only P50,000.00. What is more disconcerting is that while she is aware and duly notified of the settings of this Office respondent has seemingly ignored the same deliberately. Finally, the respondent has not offered any satisfactory explanation for, nor has she controverted the complainants charge that she (respondent) had tried to negotiate a transfer certificate of title (TCT) which had been entrusted by a certain Dra. Helen Garcia to her relative to a transaction which the former had with the Quedancor where respondent was formerly employed. Based on all the foregoing findings and the deliberate failure of the respondent to come forward and settle her accountabilities, inspite of several warnings given her by the undersigned, and her failure to attend the scheduled hearings despite due notice, this Office is convinced that Atty. Elerizza Libiran-Meteoro has committed a glaring violation not only of her oath as a lawyer but also the dictates of Canon 1, Rule 1.01 which mandates that a worthy member of the Bar must constantly be of good moral character and unsullied honesty.14 He then recommended that Atty. Elerizza A. Libiran-Meteoro be suspended from the practice of law for two years and meted a fine of twenty thousand pesos.15 On October 29, 2003, respondent filed another motion for reconsideration stating that: she was not able to receive the notice for the October 7 hearing because she was in Bicol attending to pressing personal problems; she only arrived from the province on October 25, 2003 and it was only then that she got hold of the Order dated October 7; from the very beginning, respondent never intended to ignore the Commissions hearings; as much as she wanted to pay complainant in full, the financial crisis which hit her family since 2001 has gravely affected her ability to pay; until that day, the expenses incurred by respondent due to the hospitalization of her father has not been paid in full by her family; the family home of respondent in Cabanatuan has already been foreclosed by the bank; respondents husband has been confined recently due to thyroid problems and respondent herself had sought medical help on several occasions due to her inability to conceive despite being married for more than five years; if not for said reasons, respondent could have already paid the complainant despite respondents knowledge that the amount complainant wanted to collect from her is merely the interest of her debt since she already returned most of the pieces of jewelry she purchased and she already paid for those that she was not able to return. Respondent prays that the resolution of the case be deferred and that she be given another 90 days from said date or until January 19, 2003 to settle whatever balance remains after proper accounting and presentation of receipts.16 On February 27, 2004, the Board of Governors of the IBP passed a resolution as follows: RESOLUTION NO. XVI-2003-67 CBD Case No. 01-840 Isidra Barrientos vs. Atty. Elerizza A. Libiran-Meteoro

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, with modification, and considering respondents glaring violation not only of her oath as a lawyer but of Rule 1.01, Canon 1 of the Code of Professional Responsibility, Atty. Elerizza A. Libiran-Meteoro is hereby SUSPENDED from the practice of law for six (6) months and Restitution of P84,000.00 to complainant.17 We agree with the findings and recommendation of the IBP except as to the alleged matter of respondent offering a transfer certificate of title to complainants in exchange for the bounced checks that were in their possession. We have held that deliberate 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.18 Lawyers are instruments for the administration of justice and vanguards of our legal system. They are expected to maintain not only legal proficiency but also a high standard of morality, honesty, integrity and fair dealing so that the peoples faith and confidence in the judicial system is ensured.19 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.20 Canon 1 and Rule 1.01 explicitly states that: CANON 1 -- A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes. Rule 1.01 -- A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. In this case, respondent in her answer initially tried to deny having any obligation towards Isidra Barrientos. Upon appearing before the IBP-CBD, however, respondent eventually acknowledged her indebtedness to Isidra in the amount of P134,000.00, promising only to pay in a staggered basis. Her attempt to evade her financial obligation runs counter to the precepts of the Code of Professional Responsibility, above quoted, and violates the lawyers oath which imposes upon every member of the bar the duty to delay no man for money or malice.21 After respondent acknowledged her debt to complainant, she committed herself to the payment thereof. Yet she failed many times to fulfill said promise. She did not appear in most of the hearings and merely submitted a motion for reconsideration on August 1, 2002 after the IBPCBD Commissioner had already submitted the case for resolution. She claimed that she got sick days before the hearing and asked for sixty days to finally settle her account. Again, she failed to fulfill her promise and did not appear before the Commission in the succeeding hearings despite due notice. After the case was submitted anew for resolution on October 6, 2003, respondent filed another motion for reconsideration, this time saying that she was in the province attending to personal matters. Again she asked for another ninety days to settle her entire debt. This

repeated failure on her part to fulfill her promise puts in question her integrity and moral character. Her failure to attend most of the hearings called by the commission and her belated pleas for reconsideration also manifest her propensity to delay the resolution of the case and to make full use of the mechanisms of administrative proceedings to her benefit. She also could not deny that she issued several checks without sufficient funds, which prompted Isidra and Olivia to file complaints before the prosecutors office in Cabanatuan City. Her only excuse is that she was able to replace said checks and make arrangements for the payment of her debt, which led to the dismissal of the criminal complaints against her. We have held that 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.22 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.23 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.24 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. As we explained in Co vs. Bernardino:25 The general rule is that a lawyer may not be suspended or disbarred, and the court may not ordinarily assume jurisdiction to discipline him for misconduct in his nonprofessional or private capacity. Where, however, the misconduct outside of the lawyers professional dealings is so gross a character as to show him morally unfit for the office and unworthy of the privilege which his licenses and the law confer on him, the court may be justified in suspending or removing him from the office of attorney. The evidence on record clearly shows respondents propensity to issue bad checks. This gross misconduct on his part, though not related to his professional duties as a member of the bar, puts his moral character in serious doubt26 (Citations omitted). She also claims that her father was hospitalized in March 2002 and that she and her husband also had to seek medical help which greatly affected her ability to pay. She however did not present any proof to substantiate such claims. She also did not appear personally before the complainant and the commission, in spite of the many opportunities given her, to make arrangements for the payment of her debt considering the circumstances that befell her family. Instead, she waited until the case was submitted for resolution to allege such facts, without presenting any proof therefor. We cannot uphold the IBP in finding that since respondent has not offered any explanation for, nor has she controverted the complainants charge that she tried to negotiate with them a transfer certificate of title that had been entrusted to her by a client, she should be held liable therefor. Basic is the principle that if the complainant, upon whom rests the burden of proving her cause

of action, fails to show in a satisfactory manner the facts upon which she bases her claim, the respondent is under no obligation to prove her exception or defense.27 Simply put, the burden is not on the respondent to prove her innocence but on the complainants to prove her guilt. In this case, complainants submitted a photocopy of a TCT in the name of Victoria Villamar together with their letter-complaint, which according to complainants was the title respondent tried, through her sister-in-law, to negotiate with them in exchange for the bounced checks in their possession.28 No other evidence or sworn statement was submitted in support of such allegation. Respondent in her answer, meanwhile, denied having any knowledge regarding such matter and no further discussion was made on the matter, not even in the hearings before the commission.29 For this reason, we hold that respondent should not be held liable for the alleged negotiation of a TCT to complainants for lack of sufficient evidence, but only for the non-payment of debts and the issuance of worthless checks which were sufficiently proved and which respondent herself admitted. We reiterate that membership in the legal profession is a privilege and demands a high degree of good moral character, not only as a condition precedent to admission, but also as a continuing requirement for the practice of law.30 Accordingly, administrative sanction is warranted by respondents misconduct. The IBP Board of Governors recommended that respondent be suspended from the practice of law for six months. In Lao vs. Medel,31 which also involved non-payment of debt and issuance of worthless checks, the Court held that suspension from the practice of law for one year was appropriate. Unlike in the Lao case however, respondent is this case paid a portion of her debt, as evidenced by receipts amounting to P50,000.00. Thus we deem that six months suspension from the practice of law and the restitution of P84,000.00 to complainant Isidra Barrientos would be sufficient in this case. WHEREFORE, Atty. Elerizza A. Libiran-Meteoro is found guilty of gross misconduct and is hereby SUSPENDED for six months from the practice of law, effective upon her receipt of this Decision, and is ordered to pay complainant Isidra Barrientos the amount of P84,000.00, as balance of her debt to the latter, plus 6% interest from date of finality of herein decision. Let copies of this Resolution be entered in the record of respondent and served on the IBP as well as the court administrator who shall circulate herein Resolution to all courts for their information and guidance. SO ORDERED.

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