Republic of the Philippines SUPREME COURT Manila THIRD DIVISION A.C. No. 9390 August 1, 2012 EMILIA O.

DHALIWAL, Complainant, vs. ATTY. ABELARDO B. DUMAGUING, Respondent. RESOLUTION PERLAS-BERNABE, J.: Emilia O. Dhaliwal filed a complaint for violation of Canon 16 of the Code of Professional Responsibility against Atty. Abelardo B. Dumaguing. In her sworn statement, complainant alleged that she engaged the services of respondent in connection with the purchase of a parcel of land from Fil-Estate Development, Inc. (Fil-Estate). On June 13, 2000, upon the instruction of respondent, complainant's daughter and son-in-law withdrew P 342,000.00 from the Philippine National Bank (PNB) and handed the cash over to respondent. They then proceeded to BPI Family Bank Malcolm Square Branch where respondent purchased two manager's checks in the amounts of P 58,631.94 and P 253,188.00 both payable to the order of Fil-Estate Inc. When asked why the manager's checks were not purchased at PNB, respondent explained that he has friends at the BPI Family Bank and that is where he maintains an account. These manager's checks were subsequently consigned with the Housing and Land Use Regulatory Board (HLURB) after complainants request to suspend payments to Fil-Estate had been granted. On September 22, 2000, respondent, on behalf of complainant, filed with the HLURB a complaint for delivery of title and damages against Fil-Estate. A week after or on September 29, 2000, he withdrew the two manager's checks that were previously consigned. On March 3, 2003, complainant informed the HLURB through a letter that respondent was no longer representing her. On March 11, 2003, the HLURB promulgated its Decision, adverse to complainant, finding the case for delivery of title and damages premature as there was no evidence of full payment of the purchase price. Thereafter, complainant made demands upon respondent to return and account to her the amounts previously consigned with the HLURB. Respondent did not comply. Thus, complainant prays that respondent be disbarred. In his answer, respondent admitted substantially all of the allegations in the complaint. In defense, he claims that the amount of P311,819.94 was consigned to the HLURB to cover the full payment of the balance of the purchase price of the lot with Fil-Estate. FilEstate, however, did not accept the same as it wanted complainant to also pay interests and surcharges totalling more than P 800,000.00. Because the amount was formally consigned with the HLURB, he allegedly filed a motion1 to verify if the judgment in the case was already satisfied. He claimed that his motion has not yet been acted upon; hence, he did not deem it proper as yet to return the consigned amount. Following the submission by complainant of her verified position paper and the failure of respondent to submit his, despite having been given ample opportunity to do so, the Commission on Bar Discipline, through Attorney Gerely C. Rico, submitted its Report and Recommendation finding complainant to have sufficiently established that respondent violated Canon 16 of the Code of Professional Responsibility. It also found respondent to have submitted a false and fabricated piece of documentary evidence, as the

January 2004 Motion attached to his answer as Annex A did not bear any proof of service upon the opposing party and proof of filing with the HLURB. The Commission recommended that respondent be suspended from the practice of law for a period of one (1) year. On September 19, 2007, the IBP Board of Governors passed Resolution No. XVIII-2007-93, adopting with modification the Commission's Report and Recommendation, to wit: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering Respondent's violation of Canon 16 of the Code of Professional Responsibility by his failure to return and account to complainant the amount previously consigned with the HLURB despite demand, Atty. Abelardo B. Dumaguing is hereby SUSPENDED from the practice of law for six (6) months and Orderedto Return the amount of P 311,819.94 to complainant within thirty (30) days from receipt of notice. Respondent's motion for reconsideration was denied by the IBP Board of Governors in Resolution No. XX-2012-42. The Court adopts the IBP's findings of fact and conclusions of law. The Code of Professional Responsibility provides: Canon 16-A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01-A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02-A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03-A lawyer shall deliver the funds and property of his client when due or upon demand. Money entrusted to a lawyer for a specific purpose, such as payment for the balance of the purchase price of a parcel of land as in the present case, but not used for the purpose, should be immediately returned.2 "A lawyer's failure to return upon demand the funds held by him on behalf of his client gives rise to the presumption that he has appropriated the same for his own use in violation of the trust reposed in him by his client. Such act is a gross violation of general morality as well as of professional ethics. It impairs public confidence in the legal profession and deserves punishment."3 Since respondent withdrew the consignation of the BPI managers checks in the total amount of P 311,891.94 from the HLURB and the same was not used to settle the balance of the purchase price of the parcel of land purchased by complainant from Fil-Estate, then reimbursement with legal interest4 was properly ordered by the IBP. Respondent's proffered excuse of having to await the HLURB action on his alleged motion-- the filing of which he miserably failed to prove-- as a condition to the return of the sum of P 311 ,891.94 to complainant compounds his liability and even bolstered his attitude to use dishonest means if only to evade his obligation. It underlines his failure to meet the high moral standards required of members of the legal profession. WHEREFORE, Atty. Abelardo B. Dumaguing is adjudged GUILTY of violating Canon 16 of the Code of Professional Responsibility. He is hereby SUSPENDED from the practice of law for a period of six (6) months effective upon receipt of this Resolution. He is also ordered to return to complainant Emilia O. Dhaliwal, the amount of P311,819.94 with

legal interest of six percent (6%) per annum from the time of his receipt of the money on September 29, 2000 up to the finality of this Resolution and twelve percent (12%) per annum from finality thereof until paid. Let copies of this Resolution be furnished the Office of the Bar Confidant to be entered into respondents personal records as attorney. Copies shall likewise be furnished the IBP and the Office of the Court Administrator for circulation to all courts concerned. SO ORDERED.

Republic of the Philippines Supreme Court Manila EN BANC TERESITA T. BAYONLA, Complainant, A.C. No. 4808 Present: CORONA, C.J., CARPIO, VELASCO, JR., LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR., PEREZ, MENDOZA, SERENO, REYES, and PERLAS-BERNABE, JJ.: Promulgated:

-versus-

ATTY. PURITA A. REYES, Respondent.

November 22, 2011 x-----------------------------------------------------------------------------------------x DECISION BERSAMIN, J.: Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. - Code of Professional Responsibility.

This canon of professional responsibility is at the center of this administrative complaint for disbarment for gross dishonesty, deceit, conversion, and breach of trust filed against Atty. Purita A. Reyes by Teresita T. Bayonla, her client.1[1] Antecedents Petra Durban and Paz Durban were sisters who had jointly owned a parcel of land situated in Butuan City in their lifetimes. They died without leaving a will. Their land was thereafter expropriated in connection with the construction of the Bancasi Airport. An expropriation compensation amounting to P2,453,429.00 was to be paid to their heirs. Bayonla and her uncle, Alfredo Tabada (Alfredo), were the compulsory heirs of Paz, being, respectively, Pazs granddaughter and son.2[2] On June 22, 1997, Bayonla charged Atty. Reyes with gross dishonesty, deceit, conversion, and breach of trust. Bayonla alleged that on October 21, 1993, she and Alfredo had engaged the legal services of Atty. Reyes to collect their share in the expropriation compensation from the Air Transportation Office (ATO), Cagayan De Oro City,3[3] agreeing to her attorneys fees of 10% of whatever amount would be collected; that in November 1993, Atty. Reyes had collected P1 million from the ATO; that Bayonlas share, after deducting Atty. Reyes attorneys fees, would be P75,000.00, but Atty. Reyes had delivered to her only P23,000.00, and had failed to deliver the balance of P52,000.00 despite repeated demands; that on June 5, 1995, Atty. Reyes had collected the amount of P121,119.11 from the ATO; that Bayonlas share, after deducting Atty. Reyes attorneys fees, would be P109,007.20, but Atty. Reyes had handed her only P56,500.00, and had failed to deliver the balance of P52,507.20; and that Atty. Reyes should be disbarred for depriving her of her just share.4[4]

In her comment dated February 10, 1998,5[5] Atty. Reyes admitted that Bayonla and Alfredo had engaged her legal services for the purpose of collecting their share in the expropriation compensation; that as consideration for her services, Bayonla and Alfredo had agreed upon a 40% contingent fee for her; that she had given to Bayonla more than what had been due to her; that Alfredo had received from the ATO the check for the second release corresponding to the share of both Bayonla and Alfredo; that Alfredo had gotten more than Bayonla out of the second release; that on June 5, 1995 she had received out of the second release by the ATO only her 40% contingent fee; that Bayonla and Alfredo had agreed to bear the expenses for the collection of their share; that she had incurred travel and other expenses in collecting such share; and that she should be absolved from liability arising from the complaint. On June 29, 1998, the Court referred the complaint to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation.6[6] On April 20, 1999, IBP Commissioner Lydia A. Navarro (Commissioner Navarro) rendered a report,7[7] whereby she found and recommended against Atty. Reyes as follows: In so far as this case of disbarment is concerned, the issue hinges only on the complainants position; one of the heirs of Paz Durban whose legal services of the respondent was not revoked. The parties were required to submit documents relative to their respective defenses (sic) specially the actual amounts released by ATO, actual amount due to the complainant as her share, the remittances made by the respondent to the complainant of her share and receipts to prove the same. Unfortunately, only the respondent filed an answer without the necessary documents required of them and attached only a xerox copy of the computation made by Atty. Ismael Laya for the heir of Pedro Durban which had already been previously attached to the records of this case. In the said computation it appears that for the release on February 17, 1993, the heirs of Durban received P84,852.00 and for the second release each of them as well as the complainant was entitled P121,119.11. It could be inferred from here that complainant was supposed to received (sic) P205,971.11 as her share.

6[6] 7[7]

Id., p. 94. Id., pp. 97-102.

Inasmuch as the attorneys fees of 40% was (sic) supported by evidence instead of (sic) complainants allegation of ten [10%] percent; then respondent was entitled to P82,388.45 as attorneys fees; leaving a balance of P123,582.66 due to the complainant. Respondents allegation that she gave more than what was alleged by the complainant is untenable for she did not submit evidence to prove the same, therefore, as it is complainants allegation that she received only P79,000.00 for her share as a whole shall be considered for the moment until such time that proofs to the contrary shall have been submitted. Considering that complainant was supposed to receive the amount due her which was P123,582.66 and actually received only P79,000.00; then respondent still has to remit to complainant the amount of P44,582.66. From the records of this case respondent alleged that she only collected the 40% attorneys fees for the second release whereby Alfredo Tabada the other heir of Paz Durban received the check from ATO and got a large part of the same. Respondent did not mention how much she got as attorneys fees against complainants share but on the whole amounting to P496,895.00 which is unfair to the complainant. As counsel for the heirs of Paz Durban, complainant herein should have been advised by the respondent and given a breakdown of whatever amount was received or came to her knowledge as complainants counsel. Short of the foregoing, respondent violated Rule 16.01 Canon 16 Chapter III of the Code of Professional Responsibility; to wit: Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. Respondent was given a chance to rectify whatever errors or misgivings (sic) she had done for her client but she unfortunately failed to do so and did not comply with the Order dated October 29, 1998. Wherefore, in view of the foregoing, the Undersigned respectfully recommends that the respondent be required to render an accounting or inventory duly confirmed by the complainant of all the collected shares due the complainant and remit to the latter the said amount of P44.582.66; Until such time that respondent had complied with the aforementioned, she is suspended from the practice of her legal profession. Respectfully submitted.

On June 19, 1999, the IBP Board of Governors adopted and approved the report of Commissioner Navarro through Resolution No. XIII-99-165.8[8] Atty. Reyes moved for reconsideration, but on September 27, 1999 the IBP Board of Governors denied her motion for reconsideration through Resolution No. XIV-99-117.9[9] Atty. Reyes then filed a motion for reinvestigation. However, through its Resolution No. XV-2001-111 adopted on July 28, 2001, the IBP Board of Governors denied the motion for reinvestigation for lack of jurisdiction, stating that the matter had already been endorsed to the Court.10[10] On July 30, 2002, the Court directed the IBP Board of Governors to report on whether Atty. Reyes had already accounted for and remitted the amount of P44,582.66 to Bayonla.11[11] On August 22, 2002, the IBP Board of Governors informed the Court that per the manifestation of Bayonlas counsel Atty. Reyes had not yet rendered an accounting and had not yet remitted the amount of P44,582.66 to Bayonla.12[12] Through her manifestation dated September 4, 2002 to the Court,13[13] Atty. Reyes posed some queries, as follows: (a) whether she could be compelled to pay the amount of P44,582.66 to Bayonla even if the latters claims had been based on perjured statements; (b) whether the payment of the amount would operate to dismiss the estafa case previously filed by Bayonla against her for allegedly failing to deliver the balance of Bayonlas share; and (c) whether she could deposit the amount of P44,582.66 with either the IBP Board of Governors or the Court. Atty. Reyes also stated in the manifestation that the IBP Board of Governors did not accord to her the right to confront Bayonla during the investigation conducted by the IBP Board of Governors; that Bayonlas counsel had induced Bayonla to file the estafa charge against her; and that this had prompted her to initiate a disbarment complaint against Bayonlas counsel.14[14]

8[8] 9[9] 10[10] 11[11] 12[12]

Id., p. 96. Id., p. 105. Id., p. 107. Id., pp. 146-147. Id., pp. 148-149.

13[13] Id., pp. 153-155. 14[14] Id.

On May 24, 2010, the Office of the Bar Confidant (OBC) recommended the final resolution of this case.15[15] The recommendation was noted by the Court on June 29, 2010.16[16] Issue Whether or not the findings and recommendations of the IBP Board of Governors were proper. Ruling We affirm the findings of the IBP Board of Governors, which were supported by the records, but we modify the sanctions to be imposed on Atty. Reyes. I Respondent was guilty of violating the canons of the Code of Professional Responsibility Canon 16 of the Code of Professional Responsibility requires that a lawyer shall hold in trust all moneys and properties of her client that may come into her possession. Rule 16.01 of Canon 16 imposes on the lawyer the duty to account for all money or property collected or received for or from the client. Rule 16.03 of Canon 16 demands that the lawyer shall deliver the funds and property of his client when due or upon demand, subject to the lawyers lien over the funds, or the lawyers option to apply so much of the funds as may be necessary to satisfy the lawful fees and disbursements, giving notice promptly thereafter to the client. The canons are appropriate considering that the relationship between a lawyer and her client is highly fiduciary, and prescribes on a lawyer a great degree of fidelity and good faith. There is no question that the money or property received by a lawyer for her client properly belongs to the latter.17[17] Conformably with these canons of professional responsibility, we have held that a lawyer is obliged to render an accounting of all the property and money she has collected for her client. This obligation includes the prompt reporting and accounting of the money collected by the lawyer by reason of a favorable judgment to his client.18[18]

15[15] 16[16] 17[17]

Id., pp. 190-191. Id., p. 192. Angeles v. Uy, Jr., A.C. No. 5019, April 6, 2000, 330 SCRA 6, 17.

18[18] Id., at p. 20; Marquez v. Meneses, Jr., Adm. Case No. 675, December 17, 1999, 321 SCRA 1, 6.

Based on the records, Bayonla and her uncle would each receive the amount of P84,852.00 out of the first release, and the amount of P121,119.11 out of the second release. Her total share from the two releases was P205,971.11. With Atty. Reyes being entitled to P82,388.44 as attorneys fees, the equivalent of 40% of Bayonlas share, the net share of Bayonla was P123,582.67. Yet, Atty. Reyes actually delivered to her only P79,000.00,19[19] which was short by P44,582.67. Despite demands by Bayonla and despite the orders from the IBP Board of Governors for her to remit the shortage,20[20] Atty. Reyes refused to do so. By not delivering Bayonlas share despite her demand, Atty. Reyes violated the aforestated canons. The money collected by Atty. Reyes as the lawyer of Bayonla was unquestionably money held in trust to be immediately turned over to the client.21[21] The unjustified withholding of money belonging to the client warrants the imposition of disciplinary sanctions on the lawyer.22[22] Without doubt, Atty. Reyes failure to immediately account for and to deliver the money upon demand was deceit, for it signified that she had converted the money to her own use, in violation of the trust Bayonla had reposed in her. It constituted gross misconduct for which the penalty of suspension from the practice of law became justified pursuant to Section 27, Rule 138 of the Rules of Court, to wit: Section 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor . A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a wilful disobedience appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. The disbarment or suspension of a member of the Philippine Bar by a competent court or other disciplinary agency in a foreign jurisdiction where he has also been admitted as an attorney is a ground for his disbarment or suspension if the basis of such action includes any of the acts hereinabove enumerated.

19[19] 20[20] 21[21] 22[22]

Rollo, pp. 61 and 100-101. Id., p. 96. Marquez v. Meneses, Jr., supra, note 18, at p. 5. Macarilay v. Serina, A.C. No. 6591, May 4, 2005, 458 SCRA 12, 25.

The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for disbarment or suspension. (As amended by SC Resolution dated February 13, 1992.) II Pendency of other cases not an obstacle to administrative proceeding against respondent The filing of the perjury charge by Atty. Reyes against Bayonla and of the estafa charge by Bayonla against Atty. Reyes could not halt or excuse the duty of Atty. Reyes to render an accounting and to remit the amount due to Bayonla. Nor did the pendency of such cases inhibit this administrative matter from proceeding on its due course. It is indisputable that the pendency of any criminal charges between the lawyer and her client does not negate the administrative proceedings against the lawyer. We explained why in Suzuki v. Tiamson,23[23] to wit: The settled rule is that criminal and civil cases are different from administrative matters, such that the disposition in the first two will not inevitably govern the third and vice versa. In this light, we refer to this Courts ruling in Berbano vs. Barcelona, citing In re Almacen, where it was held: Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but rather investigations by the Court into the conduct of one of its officers. Not being intended to inflict punishment, [they are] in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor therein. [They] may be initiated by the Court motu proprio. Public interest is [their] primary objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by purging the profession of members who by their misconduct have prove[n] themselves no longer worthy to be entrusted with the duties and responsibilities pertaining to the office of an attorney. Hence, our only concern in the instant case is the determination of respondents administrative liability and our findings herein should not in any way be treated as having any material bearing on any other judicial action which the parties may choose to file against each other. [emphasis supplied]

23[23]

Adm. Case No. 6542, September 30, 2005, 471 SCRA 129, 141.

Relevantly, we have also emphasized in Gatchalian Promotions Talents Pool, Inc. v. Naldoza 24[24] that xxx a finding of guilt in the criminal case will not necessarily result in a finding of liability in the administrative case. Conversely, respondents acquittal does not necessarily exculpate him administratively. In the same vein, the trial courts finding of civil liability against the respondent will not inexorably lead to a similar finding in the administrative action before this Court. Neither will a favorable disposition in the civil action absolve the administrative liability of the lawyer. It serves well to mention, lastly, that the simultaneous pendency of an administrative case and a judicial proceeding related to the cause of the administrative case, even if the charges and the evidence to be adduced in such cases are similar, does not result into or occasion any unfairness, or prejudice, or deprivation of due process to the parties in either of the cases.25[25] III No denial of due process to respondent Atty. Reyes contends that she was denied her right to due process because the IBP Board of Governors did not permit her to personally confront the complainant. We do not consider Atty. Reyess contention valid. She was accorded full due process, for she in fact participated in all stages of the proceedings. It is true that a lawyer shall not be disbarred or suspended from the practice of law until she has had full opportunity upon reasonable notice to answer the charges against her, to produce witnesses in her behalf, and to be heard by herself or counsel.26[26] Contrary to Atty. Reyes insistence, however, the IBP Board of Governors was under no legal obligation to conduct a trial-type proceeding at which she could have personally confronted Bayonla. In other words, the lack of such proceeding neither diminished her right to due process nor deprived her of the right. A formal investigation entailing notice and hearing is required in administrative proceedings for disbarment, but the imperative need of notice and hearing does not always mean the holding of an adversarial trial-type proceeding. Due process is still satisfied when the parties are afforded the reasonable opportunity to be heard and to submit evidence in support of their respective sides.27[27] As the Court said in Samalio v. Court of Appeals:28[28]

24[24] 25[25] 19.

Adm. Case No. 4017, September 29, 1999, 315 SCRA 406, 413. Saludo, Jr. v. Court of Appeals, G.R. No. 121404, May 3, 2006, 489 SCRA 14,

26[26] Section 30, Rule 138, Rules of Court. 27[27] 174. Pormento, Sr. v. Pontevedra, A.C. No. 5128, March 31, 2005, 454 SCRA 167,

Due process in an administrative context does not require trial-type proceedings similar to those in courts of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process. A formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. In other words, it is not legally objectionable for being violative of due process for an administrative agency to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the parties as affidavits of witnesses may take the place of their direct testimony. In this case, petitioner was heard through the various pleadings which he filed with the Board of Discipline of the BID when he filed his answer and two motions to dismiss, as well as other motions and papers. He was also able to participate in all stages of the administrative proceeding. He was able to elevate his case to the Secretary of Justice and, subsequently, to the CSC by way of appeal. We have consistently held that the essence of due process is simply the opportunity to be heard or, as applied to administrative proceedings, the opportunity to explain ones side or the opportunity to seek a reconsideration of the action or ruling complained of. And any seeming defect in its observance is cured by the filing of a motion for reconsideration. Denial of due process cannot be successfully invoked by a party who has had the opportunity to be heard on his motion for reconsideration. [bold emphasis supplied] Nevertheless, the IBP Board of Governors actually conducted a formal investigation of the complaint against Atty. Reyes upon the directive of the Court. In her formal investigation of the complaint, Commissioner Navarro allowed both parties to submit their respective proofs on the actual amounts released by the ATO, the amounts due to Bayonla as her share, Atty. Reyes corresponding contingent fees, the remittances by Atty. Reyes to Bayonla, and the receipts showing such remittances.29[29] In due course, Atty. Reyes submitted her written answer, attaching to the answer the documents supporting her defenses.30[30] Commissioner Navarro took all of Atty. Reyes submissions into good and proper account, as borne out by her report.31[31] And even after the IBP Board of Governors had adopted Commissioner Navarros

28[28] 29[29] 30[30] 31[31]

G.R. No. 140079, March 31, 2005, 454 SCRA 462, 472-473. Rollo, p. 176. Id., pp. 177-186. Id., pp. 99-101.

report (and its recommendation), Atty. Reyes was still afforded the fair opportunity to challenge the adverse findings by filing her motion for reconsideration, although such motion was ultimately resolved against her.32[32] IV Sanction The penalty for gross misconduct consisting in the failure or refusal despite demand of a lawyer to account for and to return money or property belonging to a client has been suspension from the practice of law for two years. In Almendarez, Jr. v. Langit,33[33] the lawyer who withdrew the rentals pertaining to his client totaling P255,000.00 without the knowledge of the client and who ignored the demand of the client to account for and to return the amount was suspended from the practice of law for two years. In Mortera v. Pagatpatan,34[34] the lawyer received P155,000.00 from the adversary of his clients as partial payment of a final and executory decision in favor of the clients pursuant to a secret arrangement between the lawyer and the adversary, and deposited the amount to the lawyers personal bank account without the knowledge of the clients; the lawyer thereafter refused to surrender the money to his clients. The suspension of the lawyer for two years from the practice of law was ordered by the Court. In Small v. Banares,35[35] a similar penalty of suspension for a period of two years from the practice of law was imposed on a lawyer who had failed to file a case for the purpose of which he had received an amount of P80,000.00, and to return the amount upon demand. In Barcenas v. Alvero,36[36] the Court suspended for a period of two years from the practice of law a lawyer who had failed to immediately account for and to return P300,000.00 received from a client for the purpose of depositing it in court, after the lawyer had been found not to have deposited the money in court. Considering that the sin of Atty. Reyes had striking resemblance with the sins thus sanctioned in the aforementioned precedents, the proper penalty for her is suspension from the practice of law for two years, with warning that a similar offense by her will be dealt with more severely. Atty. Reyes is further obliged to pay to Bayonla the amount of P44,582.67, which the IBP Board of Governors found to be still unpaid, by way of restitution. Although the Court renders this decision in an administrative proceeding primarily to exact the ethical responsibility on a member of the Philippine Bar, the Courts silence about the

32[32]

Id., pp. 105 and 107-113.

33[33] A.C. No. 7057, July 25, 2006, 496 SCRA 402. 34[34] A.C. No. 4562, June 15, 2005, 460 SCRA 99. 35[35] A.C. No. 7021, February 21, 2007, 516 SCRA 323. 36[36] A.C. No. 8159, April 23, 2010, 619 SCRA 1.

respondent lawyers legal obligation to restitute the complainant will be both unfair and inequitable. No victim of gross ethical misconduct concerning the clients funds or property should be required to still litigate in another proceeding what the administrative proceeding has already established as the respondents liability. That has been the reason why the Court has required restitution of the amount involved as a concomitant relief in the cited cases of Mortera v. Pagatpatan, supra, Almendarez, Jr. v. Langit, supra, and Small v. Banares, supra. In addition, Atty. Reyes is liable for interest of 12% per annum reckoned from June 22, 1997, the date when she was formally charged with disbarment. This rate of interest was prescribed by the Court in Almendarez, Jr. v. Langit and Small v. Banares. WHEREFORE, the Court FINDS AND PRONOUNCES ATTY. PURITA A. REYES guilty of violating Rule 16.01 and Rule 16.03 of Canon 16 of the Code of Professional Responsibility, and SUSPENDS her from the practice of law for a period of two years effective upon receipt of this Decision, with warning that a similar offense by her will be dealt with more severely. The Court ORDERS Atty. Reyes to pay to complainant Teresita T. Bayonla within 30 days from receipt of this Decision the amount of P44,582.67, with interest of 12% per annum from June 22, 1997, and to render unto the complainant a complete written accounting and inventory of: - (a) the amounts she had collected from the Air Transportation Office as expropriation compensation; (b) the total amount due to the complainant; (c) the total amount she had actually remitted to the complainant; and (d) the amount she had deducted as her contingent fee vis--vis the complainant. Within the same period of compliance, Atty. Reyes shall submit to the Court, through the Office of the Bar Confidant, authentic written proof that her accounting, inventory, and payment were furnished to and received by the complainant in due course. This Decision is without prejudice to any pending or contemplated proceedings against Atty. Reyes. Let this Decision be disseminated to all lower courts and to the Integrated Bar of the Philippines, with a copy of it to be included in Atty. Reyes file in the Office of the Bar Confidant. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC A.C. No. 8253 March 15, 2011 (Formerly CBD Case No. 03-1067) ERLINDA R. TAROG, Complainant, vs. ATTY. ROMULO L. RICAFORT, Respondent. DECISION PER CURIAM: We resolve a complaint for disbarment for alleged grave misconduct brought against Atty. Romulo L. Ricafort for his failure to account for and to return the sums of money received from his clients for purposes of the civil action to recover their property from a foreclosing banking institution he was handling for them. The original complainant was Arnulfo A. Tarog, but his wife, Erlinda R. Tarog, substituted him upon his intervening death. Antecedents In 1992, the Tarogs sought the advice of Atty. Jaime L. Miralles regarding their bankforeclosed property located in the Bicol Region. Atty. Miralles advised them to engage a Bicol-based attorney for that purpose. Thus, they went to see Atty. Ricafort accompanied by Vidal Miralles, their friend who was a brother of Atty. Miralles.1 They ultimately engaged Atty. Ricafort as their attorney on account of his being well-known in the community, and being also the Dean of the College of Law of Aquinas University where their son was then studying. Having willingly accepted the engagement, Atty. Ricafort required the Tarogs to pay P7,000.00 as filing fee, which they gave to him.2 He explained the importance of depositing P65,000.00 in court to counter the P60,000.00 deposited by Antonio Tee, the buyer of the foreclosed property. After they informed him that they had only P60,000.00, he required them to add some more amount (dagdagan niyo ng konti).3 To raise the P65,000.00 for the Tarogs, therefore, Vidal solicited a loan from one Sia with the guarantee of his brother Atty. Miralles. Sia issued a check in that amount in the name of Arnulfo.4 On November 7, 1992, the Tarogs and Vidal went to the office of Atty. Ricafort to deliver the P65,000.00. When Arnulfo said that he had first to encash the check at the bank, Atty. Ricafort persuaded him to entrust the check to him instead so that he (Atty. Ricafort) would be the one to encash it and then deposit the amount in court. On that representation, Arnulfo handed the check to Atty. Ricafort.5 After some time, the Tarogs visited Atty. Ricafort to verify the status of the consignation. Atty. Ricafort informed them that he had not deposited the amount in court, but in his own account. He promised to return the money, plus interest. Despite several inquiries about when the amount would be returned, however, the Tarogs received mere assurances from Atty. Ricafort that the money was in good hands. The Tarogs further claimed that the Regional Trial Court, Branch 52, in Sorsogon (RTC), where their complaint for annulment of sale was being heard, had required the parties to file their memoranda. Accordingly, they delivered P15,000.00 to Atty. Ricafort for that purpose, but he did not file the memorandum.6

When it became apparent to the Tarogs that Atty. Ricafort would not make good his promise of returning the P65,000.00, plus interest, Arnulfo demanded by his letter dated December 3, 2002 that Atty. Ricafort return the P65,000.00, plus interest, and the P15,000.00 paid for the filing of the memorandum.7 Yet, they did not receive any reply from Atty. Ricafort. In his defense, Atty. Ricafort denied that the P65,000.00 was intended to be deposited in court, insisting that the amount was payment for his legal services under a "package deal," that is, the amount included his acceptance fee, attorneys fee, and appearance fees from the filing of the complaint for annulment of sale until judgment, but excluding appeal. He claimed that the fees were agreed upon after considering the value of the property, his skill and experience as a lawyer, the labor, time, and trouble involved, and his professional character and social standing; that at the time he delivered the check, Arnulfo read, understood, and agreed to the contents of the complaint, which did not mention anything about any consignation;8 and that Arnulfo, being a retired school principal, was a learned person who would not have easily fallen for any scheme like the one they depicted against him. Findings of the IBP Commissioner Following his investigation, Commissioner Wilfredo E.J.E. Reyes of the Integrated Bar of the Philippines-Commission on Bar Discipline rendered his Report and Recommendation dated October 7, 2004,9 in which he concluded that: It is respectfully recommended that respondent, Atty. Romulo L. Ricafort be DISBARRED and be ordered to return the amount of P65,000 and P15,000 which he got from his client. RESPECTFULLY SUBMITTED. Commissioner Reyes regarded the testimonies of Erlinda and Vidal more credible than the testimony of Atty. Ricafort, observing: Based on the said testimony, statements and actuations of complainant Erlinda Tarog and his collaborating witness, we find their statements to be credible. Atty. Ricafort in his testimony attempted to show that the amount of P65,000.00 was paid to him by the complainant as acceptance fee on a package deal basis and under said deal, he will answer the filing fee, attorneys fees and other expenses incurred up to the time the judgment is rendered. He presented a transcript of stenographic notes wherein it was stated that complainant himself did not consign the money in court. The respondent admitted in his testimony that he did not have any retainer agreement nor any memorandum signed or any receipt which would prove that the amount of P65,000.00 was received as an acceptance fee for the handling of the case. Atty. Romulo Ricafort stated that there was no retainer agreement and that he issued only receipt because the late Arnulfo Tarog will not pay unless a receipt is issued. The Undersigned Commissioner asked the respondent "Basically you describe that thing that will happen in the litigation related to the payment of fees. But when you received that P65,000.00 did you not put anything there that you will describe the nature of legal work which you will undertake considering that you have considered this P65,000.00 as your attorneys fees? And Atty. Ricafort stated: Yes I did. I do not know why they were not showing the receipt. That is a big amount, Your Honor. They demanded for me the receipt of P30,000.00 how much more with that P65,000.00. They demanded for the receipt of that P65,000.00 but I cannot explain the reason why

During the clarificatory questioning, the Undersigned Commissioner also asked Atty. Ricafort why he did not answer the demand letter sent by Arnulfo Tarog and the proof of service of the said letter was presented by the complainant. Conveniently, Atty. Ricafort stated that he did not receive the letter and it was received by their helper who did not forward the letter to him. He also adopted the position that the complainant was demanding the P65,000.00 wherefore this case was filed. When confronted by the testimony of Mr. Vidal Miralles, the respondent Atty. Ricafort just denied the allegation that he received the P65,000.00 for deposit to the court. He also denied that Mr. Miralles has visited his residence for follow-up the reimbursement. The Undersigned Commissioner asked the respondent if he has personal animosity with Arnuldo Tarog, Erlinda Tarog and Vidal Miralles and if there are any reason why this case was filed against him. In his answer the respondent stated that we have been very good friends for the past ten (10) years and he said that in fact he was surprised when the complaint was filed against him and they even attached the decision of the Supreme Court for his suspension and maybe they are using this case to be able to collect from him. The main defense of the respondent is that the complainant in this case testified that the total amount to redeem his property is P240,000.00 and when asked whether he consigned the money to the court to redeem the property he answered in the negative. The alleged payment of P65,000.00 was made prior to the said testimony sometime in 1992. Hence, it was stated on complainants affidavit that on November 7, 1992, prior to filing said complaint I had given him the sum of Sixty Five Thousand Pesos to be deposited to the Regional Trial Court representing redemption money of the Real Estate Mortgage. The amount of P65,000.00 is very much close to the amount of the principal obligation of the complainant and it is not surprising for a non-lawyer to hold on to the belief that with the filing of the case for annulment of foreclosure his case would be strengthened by making a deposit in court hence, the motivation to produce the deposit was logical and natural insofar as the complainant is concerned. The testimony of the complainant in court that the bank needed P240,000.00 for the redemption of the property will have no bearing on the actuation of the complainant who has been required to deposit P65,000.00 by his lawyer. The Undersigned Commission has no alternative but to believe in the credibility and truthfulness of complainants narration that of Mrs. Erlinda Tarog and Vidal Miralles.10 Commissioner Reyes concluded that Atty. Ricafort violated Canon 15, and Rules 16.01, 16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility by taking advantage of the vulnerability of his clients and by being dishonest in his dealings with them by refusing to return the amount of P65,000.00 to them. On November 4, 2004, the IBP Board of Governors adopted Resolution No. XVI-2004473,11 resolving to return the matter to Commissioner Reyes for a clarification of whether or not there was evidence to support the claim that the P65,000.00 had been in payment of attorneys fees and other expenses. On October 11, 2005, Commissioner Reyes issued a second Report and Recommendation,12 in which he declared that Atty. Ricafort did not present any retainer agreement or receipt to prove that the amount of P65,000.00 had been part of his attorneys fees; that Atty. Ricafort had willfully ignored the demand of Arnulfo by not replying to the demand letter; that, instead, Atty. Ricafort had insisted that the househelp who had received the demand letter had not given it to him; and that in his

(Commissioner Reyes) presence, Atty. Ricafort had also promised to the complainant that he would settle his liability, but Atty. Ricafort did not make good his promise despite several resettings to allow him to settle his obligation. Action of IBP Board of Governors Through Resolution No. XVII-2006-569,13 therefore, the IBP Board of Governors adopted and approved the Report and Recommendation of Commissioner Reyes and recommended the disbarment of Atty. Ricafort and the order for him to return the amounts of P65,000.00 and P15,000.00 to Erlinda, viz: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case herein made part of this Resolution as Annex "A" and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that Respondent has taken advantage of his client [sic] vulnerability and has been dishonest with his dealings to his client, Atty. Romulo L. Ricafort is hereby DISBARRED and Ordered to Return the amount of P65,000 and P15,000 to complainant. Atty. Ricafort moved for reconsideration,14 maintaining that a retainer agreement was immaterial because he had affirmed having received the P65,000.00 and having issued a receipt for the amount; that he had not kept the receipt because "the practice of lawyers in most instances is that receipt is issued without duplicate as it behooves upon the client to demand for a receipt;"15 that considering that the Tarogs had produced a photocopy of the receipt he had issued for the P30,000.00 in connection with their appeal, it followed that a similar receipt for attorneys fees had been made at the time when the case had been about to be filed in the RTC; that the testimonies of Erlinda and Vidal were inconsistent with Arnulfos affidavit; and that he did not receive Arnulfos demand letter, which was received by one Gemma Agnote (the name printed on the registry receipt), whom he did not at all know. Acting on Atty. Ricaforts motion for reconsideration, the IBP Board of Governors downgraded the penalty from disbarment to indefinite suspension,16 thus: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the Recommendation of the Board of Governors First Division of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, the Motion for Reconsideration is hereby DENIED with modification of Resolution No. XVII-2006-509 of the Board of Governors dated 18 November 2006, that in lieu of the Disbarment of Atty. Romulo Ricafort, he is INDEFINITELY SUSPENDED from the practice of law and Ordered to return the amount of P65,000 and P15,000 to complainant. Atty. Ricafort filed a second motion for reconsideration,17 assailing the resolution of the IBP Board of Governors for violating Section 12, Rule 139-B of the Rules of Court requiring the decision of the IBP Board of Governors to be in writing and to clearly and distinctly state the facts and reasons on which the decision was based. Hence, the administrative case is now before the Court for resolution. Ruling We affirm the findings of the Commissioner Reyes, because they were supported by substantial evidence. However, we impose the penalty of disbarment instead of the recommended penalty of indefinite suspension, considering that Atty. Ricafort committed a very serious offense that was aggravated by his having been previously

administratively sanctioned for a similar offense on the occasion of which he was warned against committing a similar offense. A. Version of the complainants was more credible than version of Atty. Ricafort Atty. Ricafort admitted receiving the P65,000.00 from the Tarogs. Even so, we have two versions about the transaction. On the one hand, the Tarogs insisted that the amount was to be consigned in court for purposes of their civil case; on the other hand, Atty. Ricafort claimed that the amount was for his fees under a "package deal" arrangement. Commissioner Reyes considered the Tarogs version more credible. We hold that Commissioner Reyes appreciation of the facts was correct and in accord with human experience. Firstly, it is easier to believe that Atty. Ricafort persuaded the Tarogs on the need for that amount to be deposited in court for purposes of their civil case. Being non-lawyers, they had no idea about the requirement for them to consign any amount in court, due to the substantive and procedural implications of such requirement being ordinarily known only to lawyers. Their ready and full reliance on Atty. Ricaforts representations about the requirement to consign that amount in court was entirely understandable in view of their awareness of Atty. Ricaforts standing in the legal community of the place. Besides, as Commissioner Reyes observed, it was not far-fetched for the Tarogs to believe that an amount close in value to their original obligation was necessary to be deposited in court to boost their chances of recovering their property. Secondly, Atty. Ricaforts denial of receipt of Arnulfos demand letter was incredible. He already initially admitted receiving the letter through a househelp.18 His denial came only subsequently and for the first time through his motion for reconsideration dated December 30, 2006,19 in which he completely turned about to declare that the Gemma Agnote who had received the letter was unknown to him.20 Expectedly, Commissioner Reyes disregarded his denial, because not only was the denial an apparently belated afterthought, it was even contradicted by his earlier admission of receipt. In any event, the fact that Gemma Agnote was even the househelp whom Atty. Ricafort had adverted to becomes very plausible under the established circumstances. Thirdly, Atty. Ricafort explained that he had no copies of the receipts for the P65,000.00 and P15,000.00 issued to the Tarogs because "the practice of lawyers in most instances is that receipt is issued without duplicate as it behooves upon the client to demand for a receipt."21 But such explanation does not persuade us. Ethical and practical considerations made it both natural and imperative for him to issue receipts, even if not demanded, and to keep copies of the receipts for his own records. He was all too aware that he was accountable for the moneys entrusted to him by the clients, and that his only means of ensuring accountability was by issuing and keeping receipts. Rule 16.01 of the Code of Professional Responsibility expressly enjoins such accountability, viz: Rule 16.01 - A lawyer shall account for all money or property collected or received for or from the client. Definitely, Atty. Ricafort had a highly fiduciary and confidential relation with the Tarogs. As such, he was burdened with the legal duty to promptly account for all the funds received from or held by him for them.22 And, fourthly, to buttress his denial that the P65,000.00 was not intended for deposit in court, Atty. Ricafort insisted that Arnulfo did not object to the omission from the complaint in the civil action of any mention of consignation. However, the complaint

that he himself had written and filed for the Tarogs contradicted his insistence, specifically in its paragraph 16, which averred the plaintiffs (i.e., Tarogs) readiness and willingness to deposit the amount of P69,345.00 (inclusive of the redemption price and interest) in court, thus: 16. And to show willingness and sincerity of the plaintiffs, they are ready and willing to deposit the amount of P69,345.00 as redemption price plus reasonable accrued interests, if there are any; 23 Nor could the Tarogs have conjured or invented the need for consignation. The consignation was a notion that could have emanated only from him as their lawyer. In fact, Erlinda recalled while testifying before the IBP Commission on Bar Discipline that they had brought to their meeting with Atty. Ricafort only P60,000.00 for the consignation, but that Atty. Ricafort had to instruct them to raise the amount. The excerpt of her pertinent testimony follows: Comm. Reyes: Madam Witness, in this affidavit you stated that your late husband and Mr. Vidal Miralles went to the office of Atty. Ricafort to advise the latter that we already had the sum of P65,000.00 in the form of check, how did you come to know this fact? Witness: Paano po ba sabi nya na magdeposit ng P65,000.00 tapos may P60,000.00 kami sabi niya dagdagan niyo ng konti. Comm. Reyes: Kinausap ba niya kayo? Witness: Nandoon po ako. Comm. Reyes: Where you present when the check was given? Witness: Yes. Comm. Reyes: So, alam niyo, nakita niyo na binigay yong P65,000.00 na tseke? Witness: Opo. Comm. Reyes: Alam niyo ba kung ano ang nangyari doon sa tseke na idiniposit? Witness: Noong una sinabi niya sa amin na ididiposit niya sa court. Comm. Reyes: Nalaman niyo ba na hindi naman pala idiniposit sa court? Witness: Opo. Comm. Reyes: Kailan niyo nalaman? Witness: Nagsabi siya tapos sinabi pa niya na yong interest sa bank ay ibinigay niya sa amin ang sabi naming salamat.24 B. Atty. Ricaforts acts and actuations constituted serious breach of his fiduciary duties as an attorney The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in dealing with the moneys entrusted to lawyers because of their fiduciary relationship.25 In particular, Rule 16.01 of the Code of Professional Responsibility states: Rule 16.01 - A lawyer shall account for all money or property collected or received for or from the client. Undoubtedly, Atty. Ricafort was required to hold in trust any money and property of his clients that came into his possession,26 and he needed to be always mindful of the trust and confidence his clients reposed in him.27 Thus, having obtained the funds from the Tarogs in the course of his professional employment, he had the obligation to deliver such funds to his clients (a) when they became due, or (b) upon demand.281avvphi1 Furthermore, Rule 16.02 of the Code of Professional Responsibility, imposes on an attorney the positive obligation to keep all funds of his client separate and apart from his own and from those of others kept by him, to wit:

Rule 16.02 - A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Atty. Ricaforts act of obtaining P65,000.00 and P15,000.00 from the Tarogs under the respective pretexts that the amount would be deposited in court and that he would prepare and file the memorandum for the Tarogs erected a responsibility to account for and to use the amounts in accordance with the particular purposes intended. For him to deposit the amount of P65,000.00 in his personal account without the consent of the Tarogs and not return it upon demand, and for him to fail to file the memorandum and yet not return the amount of P15,000.00 upon demand constituted a serious breach of his fiduciary duties as their attorney. He reneged on his duty to render an accounting to his clients showing that he had spent the amounts for the particular purposes intended.29 He was thereby presumed to have misappropriated the moneys for his own use to the prejudice of his clients and in violation of the clients trust reposed in him.30 He could not escape liability, for upon failing to use the moneys for the purposes intended, he should have immediately returned the moneys to his clients.31 Atty. Ricaforts plain abuse of the confidence reposed in him by his clients rendered him liable for violation of Canon 16,32 particularly Rule 16.01, supra, and Canon 17,33 all of the Code of Professional Responsibility. His acts and actuations constituted a gross violation of general morality and of professional ethics that impaired public confidence in the legal profession and deserved punishment.34 Without hesitation, therefore, we consider Atty. Ricaforts acts and conduct as gross misconduct, a serious charge under Rule 140 of the Rules of Court, to wit: Section 8. Serious charges. Serious charges include: xxx 3. Gross misconduct constituting violations of the Code of Judicial Conduct; xxx That this offense was not the first charged and decided against Atty. Ricafort aggravated his liability. In Nuez v. Ricafort,35 decided in 2002, the Court found him to have violated Rules 1.0136 of Canon 1 and Rule 12.0337 and Rule 12.0438 of Canon 12 of the Code of Professional Responsibility in relation to his failure to turn over the proceeds of the sale of realty to the complainant (who had authorized him to sell the realty in her behalf). His failure to turn over the proceeds compelled the complainant to commence in the RTC a civil action to recover the proceeds against him and his wife. The Court meted on him the penalty of indefinite suspension, and warned him against the commission of similar acts, stating: We concur with the findings of the Investigating Commissioner, as adopted and approved by the Board of Governors of the IBP, that respondent Atty. Romulo Ricafort is guilty of grave misconduct in his dealings with complainant. Indeed, the record shows respondents grave misconduct and notorious dishonesty. There is no need to stretch ones imagination to arrive at an inevitable conclusion that respondent gravely abused the confidence that complainant reposed in him and committed dishonesty when he did not turn over the proceeds of the sale of her property. Worse, with palpable bad faith, he compelled the complainant to go to court for the recovery of the proceeds of the sale and, in the process, to spend money, time and energy therefor. Then, despite his deliberate failure to answer the complaint resulting in his having been declared in default, he appealed from the judgment to the Court of Appeals. Again, bad faith attended such a step because he did not pay the docket fee despite notice. Needless to state, respondent wanted to prolong the travails

and agony of the complainant and to enjoy the fruits of what rightfully belongs to the latter. Unsatisfied with what he had already unjustly and unlawfully done to complainant, respondent issued checks to satisfy the alias writ of execution. But, remaining unrepentant of what he had done and in continued pursuit of a clearly malicious plan not to pay complainant of what had been validly and lawfully adjudged by the court against him, respondent closed the account against which the checks were drawn. There was deceit in this. Respondent never had the intention of paying his obligation as proved by the fact that despite the criminal cases for violation of B.P. Blg. 22, he did not pay the obligation. All the foregoing constituted grave and gross misconduct in blatant violation of Rule 1.01 of Canon 1 of the Code of Professional Responsibility which provides: A lawyer shall not engage in unlawful, dishonest and immoral or deceitful conduct. Respondents claim of good faith in closing his account because he thought complainant has already encashed all checks is preposterous. The account was closed on or before 26 February 1996. He knew that there were still other checks due on 29 February 1996 and 15 March 1996 which could not be encashed before their maturity dates. By violating Rule 1.01 of Canon 1 of the Code of Professional Responsibility, respondent diminished public confidence in the law and the lawyers (Busios v. Ricafort, 283 SCRA 407 [1997]; Ducat v. Villalon, 337 SCRA 622 [2000]). Instead of promoting such confidence and respect, he miserably failed to live up to the standards of the legal profession (Gonato v. Adaza, 328 SCRA 694 [2000]; Ducat v. Villalon, supra). Respondents act of issuing bad checks in satisfaction of the alias writ of execution for money judgment rendered by the trial court was a clear attempt to defeat the ends of justice. His failure to make good the checks despite demands and the criminal cases for violation of B.P. Blg. 22 showed his continued defiance of judicial processes, which he, as an officer of the court, was under continuing duty to uphold.39 Bearing in mind his administrative record, and considering that the penalty for violation of Canon 16 ranges from suspension for six months,40 to suspension for one year,41 to suspension for two years,42 depending on the amount involved and the severity of the lawyers misconduct, we rule that disbarment is the commensurate punishment for Atty. Ricafort, who has shown no reformation in his handling of trust funds for his clients. WHEREFORE, we find and declare Atty. Romulo L. Ricafort guilty of a violation of Canon 16, Rule 16.01 and Canon 17 of the Code of Professional Responsibility and, accordingly, disbar him. The Bar Confidant is directed to strike out his name from the Roll of Attorneys. Atty. Ricafort is ordered to return to Erlinda R. Tarog the sums of P65,000.00 and P15,000.00, plus interest of six percent per annum reckoned from the demand made on December 3, 2002, within twenty days from notice. This decision is effective immediately. Let a copy of this decision be furnished to the Office of the Court Administrator for circulation to all courts, and to the Integrated Bar of the Philippines, for its reference. SO ORDERED.

THIRD DIVISION CATHERINE JOIE P. VITUG Complainant, A.C. No. 6313 Present: QUISUMBING, J., - versus TINGA, and VELASCO, JR. ATTY. DIOSDADO M. RONGCAL, Respondent. September 7, 2006 Promulgated: Chairperson, CARPIO, CARPIO MORALES,

x------------------------------------------------------------------------------------x DECISION TINGA, J.: The allegations raised in this complaint for disbarment are more sordid, if not tawdry, from the usual. As such, close scrutiny of these claims is called for. Disbarment and suspension of a lawyer, being the most severe forms of disciplinary sanction, should be imposed with great caution and only in those cases where the misconduct of the lawyer as an officer of the court and a member of the bar is established by clear, convincing and satisfactory proof.37[1] Under consideration is the administrative complaint for disbarment filed by Catherine Joie P. Vitug (complainant) against Atty. Diosdado M. Rongcal (respondent). A classic case of he said, she said, the parties conflicting versions of the facts as culled from the records are hereinafter presented. Complainant narrates that she and respondent met sometime in December 2000 when she was looking for a lawyer to assist her in suing Arnulfo Aquino (Aquino), the biological father of her minor daughter, for support. Her former classmate who was

37[1]Buado v. Layag, A.C. No. 5182, August 12, 2004, 436 SCRA 159; Berbano v. Barcelona, A.C. No. 6084, September 3, 2003, 410 SCRA 258.

then a Barangay Secretary referred her to respondent. After several meetings with complainant, respondent sent a demand letter38[2] in her behalf to Aquino wherein he asked for the continuance of the monthly child support Aquino used to give, plus no less than P300,000.00 for the surgical operation their daughter would need for her congenital heart ailment. At around this point, by complainants own admission, she and respondent started having a sexual relationship. She narrates that this twist in the events began after respondent started calling on her shortly after he had sent the demand letter in her behalf. Respondent allegedly started courting her, giving her financial aid. Soon he had progressed to making sexual advances towards complainant, to the accompaniment of sweet inducements such as the promise of a job, financial security for her daughter, and his services as counsel for the prospective claim for support against Aquino. Complainant acknowledges that she succumbed to these advances, assured by respondents claim that the lawyer was free to marry her, as his own marriage had already been annulled. On 9 February 2001, respondent allegedly convinced complainant to sign an Affidavit of Disclaimer39[3] (Affidavit) categorically stating that even as Aquino was denoted as the father in the birth certificate40[4] of her daughter, he was, in truth, not the real father. She was not allowed to read the contents of the Affidavit, she claims. Respondent supposedly assured her that the document meant nothing, necessary as it was the only way that Aquino would agree to give her daughter medical and educational support. Respondent purportedly assured complainant that despite the Affidavit, she could still pursue a case against Aquino in the future because the Affidavit is not a public document. Because she completely trusted him at this point, she signed the document without even taking a glance at it.41[5]

38[2]Rollo, p. 5; The demand letter is dated 5 January 2000 but both parties admit that the same should read 5 January 2001.

39[3]Id. at 6.

40[4]Id. at 40-41.

41[5]Id. at 2.

On 14 February 2001, respondent allegedly advised complainant that Aquino gave him P150,000.00 cash and P58,000.00 in two (2) postdated checks to answer for the medical expenses of her daughter. Instead of turning them over to her, respondent handed her his personal check42[6] in the amount of P150,000.00 and promised to give her the balance of P58,000.00 soon thereafter. However, sometime in April or May 2001, respondent informed her that he could not give her the said amount because he used it for his political campaign as he was then running for the position of Provincial Board Member of the 2nd District of Pampanga. Complainant maintains that inspite of their sexual relationship and the fact that respondent kept part of the money intended for her daughter, he still failed in his promise to give her a job. Furthermore, he did not file the case against Aquino and referred her instead to Atty. Federico S. Tolentino, Jr. (Atty. Tolentino). Sometime in 2002, assisted by Atty. Tolentino, complainant filed a criminal case for child abuse as well as a civil case against Aquino. While the criminal case was dismissed, the civil case was decided on 30 August 2004 by virtue of a compromise agreement.43[7] It was only when said cases were filed that she finally understood the import of the Affidavit. Complainant avers that respondent failed to protect her interest when he personally prepared the Affidavit and caused her to sign the same, which obviously worked to her disadvantage. In making false promises that all her problems would be solved, aggravated by his assurance that his marriage had already been annulled, respondent allegedly deceived her into yielding to his sexual desires. Taking advantage of the trust and confidence she had in him as her counsel and paramour, her weak emotional state, and dire financial need at that time, respondent was able to appropriate for himself money that rightfully belonged to her daughter. She argues that respondents aforementioned acts constitute a violation of his oath as a lawyer as well as the Code of Professional Responsibility (Code), particularly Rule 1.01, Rule 1.02, Rule 16.01, Rule 16.02, and Canon 7.44[8] Hence, she filed the instant complaint45[9] dated 2 February 2004.

42[6]Id. at 7.

43[7]Id. at 51-52.

44[8]The Complainant charges respondent of violating the following rules of the Code of Conduct of Professional Responsibility:

Expectedly, respondent presents a different version. According to him, complainant needed a lawyer who would file the aforementioned action for support. Complainants former high school classmate Reinilda Bansil Morales, who was also his fellow barangay official, referred her to him. He admits sending a demand letter to her former lover, Aquino, to ask support for the child.46[10] Subsequently, he and Aquino communicated through an emissary. He learned that because of Aquinos infidelity, his relationship with his wife was strained so that in order to settle things the spouses were willing to give complainant a lump sum provided she would execute an affidavit to the effect that Aquino is not the father of her daughter. Respondent relayed this proposal to complainant who asked for his advice. He then advised her to study the proposal thoroughly and with a practical mindset. He also explained to her the pros and cons of pursuing the case. After several days, she requested that he negotiate for an out-of-court settlement of no less than P500,000.00. When Aquino rejected the amount, negotiations ensued until the amount was lowered to P200,000.00. Aquino allegedly offered to issue four postdated checks in equal amounts within four months. Complainant disagreed. Aquino then proposed to rediscount the checks at an interest of 4% a month or a total of P12,000.00. The resulting amount was P188,000.00.

Canon 1, Rule 1.01 A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. Canon 1, Rule 1.02 A lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. 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. Canon 16, Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. Canon 16, Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

45[9]Rollo, pp. 1-7.

46[10]Id. at 12.

Complainant finally agreed to this arrangement and voluntarily signed the Affidavit that respondent prepared, the same Affidavit adverted to by complainant. He denies forcing her to sign the document and strongly refutes her allegation that she did not know what the Affidavit was for and that she signed it without even reading it, as he gave her the draft before the actual payment was made. He notes that complainant is a college graduate and a former bank employee who speaks and understands English. He likewise vehemently denies pocketing P58,000.00 of the settlement proceeds. When complainant allegedly signed the Affidavit, the emissary handed to her the sum of P150,000.00 in cash and she allegedly told respondent that he could keep the remaining P38,000.00, not P58,000.00 as alleged in the complaint. Although she did not say why, he assumed that it was for his attorneys fees. As regards their illicit relationship, respondent admits of his sexual liaison with complainant. He, however, denies luring her with sweet words and empty promises. According to him, it was more of a chemistry of (sic) two consensual (sic) adults,47[11] complainant then being in her thirties. He denies that he tricked her into believing that his marriage was already annulled. Strangely, respondent devotes considerable effort to demonstrate that complainant very well knew he was married when they commenced what was to him, an extra-marital liaison. He points out that, first, they had met through his colleague, Ms. Morales, a friend and former high school classmate of hers. Second, they had allegedly first met at his residence where she was actually introduced to his wife. Subsequently, complainant called his residence several times and actually spoke to his wife, a circumstance so disturbing to respondent that he had to beg complainant not to call him there. Third, he was the Punong Barangay from 1994 to 2002, and was elected President of the Association of Barangay Council (ABC) and as such was an ex-officio member of the Sangguniang Bayan of Guagua, Pampanga. He ran for the position of Provincial Board Member in 2001. Thus, he was known in his locality and it was impossible for complainant not to have known of his marital status especially that she lived no more than three (3) kilometers away from his house and even actively helped him in his campaign. Respondent further alleges that while the demand for support from Aquino was being worked out, complainant moved to a rented house in Olongapo City because a suitor had promised her a job in the Subic Naval Base. But months passed and the promised job never came so that she had to return to Lubao, Pampanga. As the money she received from Aquino was about to be exhausted, she allegedly started to pester respondent for financial assistance and urged him to file the Petition for Support against Aquino. While respondent acceded to her pleas, he also advised her to look for the right man48[12] and to stop depending on him for financial assistance. He also

47[11]Id. at 14.

48[12]Id.

informed her that he could not assist her in filing the case, as he was the one who prepared and notarized the Affidavit. He, however, referred her to Atty. Tolentino. In August 2002, respondent finally ended his relationship with complainant, but still he agreed to give her monthly financial assistance of P6,000.00 for six (6) months. Since then, they have ceased to meet and have communicated only through an emissary or by cellphone. In 2003, complainant begged him to continue the assistance until June when her alleged fianc from the United States would have arrived. Respondent agreed. In July 2003, she again asked for financial assistance for the last time, which he turned down. Since then he had stopped communicating to her. Sometime in January 2004, complainant allegedly went to see a friend of respondent. She told him that she was in need of P5,000.00 for a sari-sari store she was putting up and she wanted him to relay the message to respondent. According to this friend, complainant showed him a prepared complaint against respondent that she would file with the Supreme Court should the latter not accede to her request. Sensing that he was being blackmailed, respondent ignored her demand. True enough, he alleges, she filed the instant complaint. On 21 July 2004, the case was referred to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.49[13] After the parties submitted their respective position papers and supporting documents, the Investigating Commissioner rendered his Report and Recommendation50[14] dated 2 September 2005. After presenting the parties conflicting factual versions, the Investigating Commissioner gave credence to that of complainant and concluded that respondent clearly violated the Code, reporting in this wise, to wit: Respondent, through the above mentioned acts, clearly showed that he is wanting in good moral character, putting in doubt his professional reputation as a member of the BAR and renders him unfit and unworthy of the privileges which the law confers to him. From a lawyer, are (sic) expected those qualities of truth-speaking, high sense of honor, full candor, intellectual honesty and the strictest observance of fiduciary responsibility all of which throughout the passage of time have been compendiously described as MORAL CHARACTER. Respondent, unfortunately took advantage and (sic) every opportunity to entice complainant to his lascivious hungerness (sic). On several occasions[,] respondent kept on calling complainant and dropped by her house and gave P2,000.00 as aid while

49[13]Id. at 25.

50[14]Id. at 77-83.

waiting allegedly for the reply of (sic) their demand letter for support. It signals the numerous visits and regular calls all because of [l]ewd design. He took advantage of her seeming financial woes and emotional dependency. xxxx Without doubt, a violation of the high moral standards of the legal profession justifies the impositions (sic) of the appropriate penalty, including suspension and disbarment. x x x51[15] It was then recommended that respondent be suspended from the practice of law for six (6) months and that he be ordered to return to complainant the amount of P58,000.00 within two months. The IBP Board of Governors adopted and approved the said Report and Recommendation in a Resolution52[16] dated 17 December 2005, finding the same to be fully supported by the evidence on record and the applicable laws and rules, and considering Respondents obviously taking advantage of the lawyer-client relationship and the financial and emotional problem of his client and attempting to mislead the Commission,53[17] respondent was meted out the penalty of suspension for one (1) year with a stern warning that a repetition of similar acts will merit severe sanctions. He was likewise ordered to return P58,000.00 to complainant. Respondent filed a Motion for Reconsideration with Motion to Set Case for Clarificatory Questioning54[18] (Motion) dated 9 March 2006 with the IBP and a Motion to Reopen/Remand Case for Clarificatory Questioning dated 22 March 2006 with the Supreme Court. He reiterates his own version of the facts, giving a more detailed account of the events that transpired between him and complainant. Altogether, he portrays complainant as a shrewd and manipulative woman who depends on men for financial support and who would stop at nothing to get what she wants. Arguing that the IBP based its Resolution solely on complainants bare allegations that she failed to

51[15]Id. at 81-83.

52[16]Id. at 76.

53[17]Id.

54[18]Id. at 99-130.

prove by clear and convincing evidence, he posits the case should be re-opened for clarificatory questioning in order to determine who between them is telling the truth. In a Resolution55[19] dated 27 April 2006, the IBP denied the Motion on the ground that it has no more jurisdiction over the case as the matter had already been endorsed to the Supreme Court. While we find respondent liable, we adjudicate the matter differently from what the IBP has recommended. On the charge of immorality, respondent does not deny that he had an extra-marital affair with complainant, albeit brief and discreet, and which act is not so corrupt and false as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree56[20] in order to merit disciplinary sanction. We disagree. One of the conditions prior to admission to the bar is that an applicant must possess good moral character. Said requirement persists as a continuing condition for the enjoyment of the privilege of law practice, otherwise, the loss thereof is a ground for the revocation of such privilege.57[21] 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.58[22] The Court has held that to justify suspension or disbarment the act complained of must not only be immoral, but grossly immoral.59[23] A grossly immoral act is one that is so corrupt and false as to constitute a criminal act or so unprincipled or disgraceful as to

55[19]IBP Resolution dated 27 April 2006 filed with the Office of the Bar Confidant on 20 June 2006.

56[20]Rollo, p. 56.

57[21]Royong v. Oblena, 117 Phil. 865 (1963).

58[22]Tolosa v. Cargo, A.C. No. 2385, 8 March 1989, 171 SCRA 21, 26.

59[23]Figueroa v. Barranco, Jr., 342 Phil. 408, 412 (1997).

be reprehensible to a high degree.60[24] It is a willful, flagrant, or shameless act that shows a moral indifference to the opinion of the good and respectable members of the community.61[25] While it is has been held in disbarment cases that the mere fact of sexual relations between two unmarried adults is not sufficient to warrant administrative sanction for such illicit behavior,62[26] it is not so with respect to betrayals of the marital vow of fidelity.63[27] Even if not all forms of extra-marital relations are punishable under penal law, sexual relations outside marriage is considered disgraceful and immoral as it manifests deliberate disregard of the sanctity of marriage and the marital vows protected by the Constitution and affirmed by our laws.64[28] By his own admission, respondent is obviously guilty of immorality in violation of Rule 1.01 of the Code which states that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. The next question to consider is whether this act is aggravated by his alleged deceitful conduct in luring complainant who was then in low spirits and in dire financial need in order to satisfy his carnal desires. While the IBP concluded the question in the affirmative, we find otherwise. Complainants allegations that she succumbed to respondents sexual advances due to his promises of financial security and because of her need for legal assistance in filing a case against her former lover, are insufficient to conclude that complainant deceived her into having sexual relations with her. Surely, an educated woman like herself who was of sufficient age and discretion, being at that time in her thirties, would not be easily fooled into sexual congress by promises of a job and of free legal

60[24]Id.

61[25]Id.

62[26]See Ui v. Atty. Bonifacio, 388 Phil. 691 (2000); See also Concerned Employee v. Mayor, A.M. No. P-02-1564, 23 November 2004, 443 SCRA 448, 457.

63[27]Id. at 461.

64[28]Id. at 461-462.

assistance, especially when there is no showing that she is suffering from any mental or physical disability as to justify such recklessness and/or helplessness on her part.65[29] Respondents numerous visits and regular calls to complainant do not necessarily prove that he took advantage of her. At best, it proves that he courted her despite being a married man, precisely the fact on which the finding of immorality is rooted. Moreover, the circumstance that he gave her P2,000.00 as aid does not induce belief that he fueled her financial dependence as she never denied pleading with, if not badgering, him for financial support. Neither does complainants allegation that respondent lied to her about his marital status inspire belief. We find credence in respondents assertion that it was impossible for her not to have known of his subsisting marriage. She herself admitted that they were introduced by her friend and former classmate, Ms. Morales who was a fellow barangay official of respondent. She admitted that she knew his residence phone number and that she had called him there. She also knew that respondent is an active barangay official who even ran as Provincial Board Member in 2001. Curiously, she never refuted respondents allegations that she had met and talked to his wife on several occasions, that she lived near his residence, that she helped him in his campaign, or that she knew a lot of his friends, so as not to have known of his marital status. Considering that she previously had an affair with Aquino, who was also a married man, it would be unnatural for her to have just plunged into a sexual relationship with respondent whom she had known for only a short time without verifying his background, if it were true that she preferred to change [her] life for the better,66[30] as alleged in her complaint. We believe that her aforementioned allegations of deceit were not established by clear preponderant evidence required in disbarment cases.67[31] We are left with the most logical conclusion that she freely and wittingly entered into an illicit and immoral relationship with respondent sans any misrepresentation or deceit on his part. Next, complainant charged respondent of taking advantage of his legal skills and moral control over her to force her to sign the clearly disadvantageous Affidavit without

65[29]The operative circumstances in Cojuangco, Jr. v. Palma, A.C. No. 2474, 15 September 2004, 438 SCRA 306, are markedly different from those obtaining in the present case.

66[30]Rollo, p. 2.

67[31]Concepcion v. Atty. Fandio, Jr., 389 Phil. 474 (2000).

letting her read it and without explaining to her its repercussions. While acting as her counsel, she alleged that he likewise acted as counsel for Aquino. We find complainants assertions dubious. She was clearly in need of financial support from Aquino especially that her daughter was suffering from a heart ailment. We cannot fathom how she could abandon all cares to respondent who she had met for only a couple of months and thereby risk the welfare of her child by signing without even reading a document she knew was related to the support case she intended to file. The Affidavit consists of four short sentences contained in a single page. It is unlikely she was not able to read it before she signed it. Likewise obscure is her assertion that respondent did not fully explain to her the contents of the Affidavit and the consequences of signing it. She alleged that respondent even urged her to use her head as Arnulfo Aquino will not give the money for Alexandras medical and educational support if she will not sign the said Affidavit of Disclaimer.68[32] If her own allegation is to be believed, it shows that she was aware of the on-going negotiation with Aquino for the settlement of her claim for which the latter demanded the execution of the Affidavit. It also goes to show that she was pondering on whether to sign the same. Furthermore, she does not deny being a college graduate or that she knows and understands English. The Affidavit is written in short and simple sentences that are understandable even to a layman. The inevitable conclusion is that she signed the Affidavit voluntarily and without any coercion whatsoever on the part of respondent. The question remains as to whether his act of preparing and notarizing the Affidavit, a document disadvantageous to his client, is a violation of the Code. We rule in the negative. It was not unlawful for respondent to assist his client in entering into a settlement with Aquino after explaining all available options to her. The law encourages the amicable settlement not only of pending cases but also of disputes which might otherwise be filed in court.69[33] Moreover, there is no showing that he knew for sure that Aquino is the father of complainants daughter as paternity remains to be proven. As complainant voluntarily and intelligently agreed to a settlement with Aquino, she cannot later blame her counsel when she experiences a change of heart. Besides, the record is bereft of evidence as to whether respondent also acted as Aquinos counsel in the settlement of the case. Again, we only have complainants bare allegations that cannot be

68[32]Rollo, p. 34.

69[33]De Guzman v. Court of Appeals, 329 Phil. 168, 173 (1996).

considered evidence.70[34] Suspicion, no matter how strong, is not enough. In the absence of contrary evidence, what will prevail is the presumption that the respondent has regularly performed his duty in accordance with his oath.71[35] Complainant further charged respondent of misappropriating part of the money given by Aquino to her daughter. Instead of turning over the whole amount, he allegedly issued to her his personal check in the amount of P150,000.00 and pocketed the remaining P58,000.00 in violation of his fiduciary obligation to her as her counsel. The IBP did not make any categorical finding on this matter but simply ordered respondent to return the amount of P58,000.00 to complainant. We feel a discussion is in order. We note that there is no clear evidence as to how much Aquino actually gave in settlement of complainants claim for support. The parties are in agreement that complainant received the amount of P150,000.00. However, complainant insists that she should have received more as there were two postdated checks amounting to P58,000.00 that respondent never turned over to her. Respondent essentially agrees that the amount is in fact more than P150,000.00 but only P38,000.00 more and complainant said he could have it and he assumed it was for his attorneys fees. We scrutinized the records and found not a single evidence to prove that there existed two postdated checks issued by Aquino in the amount of P58,000.00. On the other hand, respondent admits that there is actually an amount of P38,000.00 but presented no evidence of an agreement for attorneys fees to justify his presumption that he can keep the same. Curiously, there is on record a photocopy of a check issued by respondent in favor of complainant for P150,000.00. It was only in his Motion for Reconsideration where respondent belatedly proffers an explanation. He avers that he cannot recall what the check was for but he supposes that complainant requested for it as she did not want to travel all the way to Olongapo City with a huge sum of money. We find the circumstances rather suspicious but evidence is wanting to sustain a finding in favor of either party in this respect. We cannot and should not rule on mere conjectures. The IBP relied only on the written assertions of the parties, apparently finding no need to subject the veracity of the assertions through the question and answer modality. With the inconclusive state of the evidence, a more in-depth investigation is called for to ascertain in whose favor the

70[34]See Rodriguez v. Valencia and Rodriguez, 81 Phil. 787 (1948).

71[35]In re De Guzman, 154 Phil. 127, 133 (1974).

substantial evidence level tilts. Hence, we are constrained to remand the case to the IBP for further reception of evidence solely on this aspect. We also are unable to grant complainants prayer for respondent to be made liable for the cost of her childs DNA test absent proof that he misappropriated funds exclusively earmarked for the purpose. Neither shall we entertain complainants claim for moral damages and attorneys fees. Suffice it to state that an administrative case against a lawyer is sui generis, one that is distinct from a civil or a criminal action.72[36] It is an investigation by the Court into the fitness of a lawyer to remain in the legal profession and be allowed the privileges as such. Its primary objective is to protect the Court and the public from the misconduct of its officers with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by requiring that those who exercise this important function shall be competent, honorable and reliable men and women in whom courts and clients may repose confidence.73[37] As such, it involves no private interest and affords no redress for private grievance.74[38] The complainant or the person who called the attention of the court to the lawyers alleged misconduct is in no sense a party, and has generally no interest in the outcome except as all good citizens may have in the proper administration of justice.75[39] Respondents misconduct is of considerable gravity. There is a string of cases where the Court meted out the extreme penalty of disbarment on the ground of gross immorality where the respondent contracted a bigamous marriage,76[40] abandoned his family

72[36]In re Almacen, No. L-27654, 18 February 1970, 31 SCRA 562, 600.

73[37]Roldan v. Panganiban, A.C. No. 4552, 14 December 2004, 446 SCRA 249; Rivera v. Atty. Corral, 433 Phil. 331 (2002) ; In re Almacen, supra.

74[38]De Ere v. Rubi, 378 Phil. 377 (1999).

75[39]Tajan v. Cusi, Jr., 156 Phil. 128, 134 (1974).

to cohabit with his paramour,77[41] cohabited with a married woman,78[42] lured an innocent woman into marriage,79[43] or was found to be a womanizer.80[44] The instant case can be easily differentiated from the foregoing cases. We, therefore, heed the stern injunction on decreeing disbarment where any lesser penalty, such as temporary suspension, would accomplish the end desired.81[45] In Zaguirre v. Castillo,82[46] respondent was found to have sired a child with another woman who knew he was married. He therein sought understanding from the Court pointing out the polygamous nature of men and that the illicit relationship was a product of mutual lust and desire. Appalled at his reprehensible and amoral attitude, the Court suspended him indefinitely. However, in Fr. Sinnott v. Judge Barte,83[47] where respondent judge consorted with a woman not his wife, but there was no conclusive evidence that he sired a child with her, he was fined P10,000.00 for his conduct unbecoming a magistrate despite his retirement during the pendency of the case.

76[40]Tucay v. Atty. Tucay, 376 Phil. 336 (1999); Villasanta v. Peralta, 101 Phil. 313 (1957).

77[41]Obusan v. Obusan, Jr., 213 Phil. 437 (1984); Toledo v. Toledo, (1963).

117 SCRA 768

78[42]Royong v. Oblena, supra note 21.

79[43]Cojuangco, Jr. v. Palma, supra note 29; Cabrera v. Agustin, 106 Phil. 256 (1960).

80[44]Dantes v. Dantes, A.C. No. 6486, 22 September 2004, 438 SCRA 582.

81[45]In re Almacen, supra.

82[46]A.C. No. 4921, 6 March 2003, 398 SCRA 658.

83[47]423 Phil. 522 (2001).

We note that from the very beginning of this case, herein respondent had expressed remorse over his indiscretion and had in fact ended the brief illicit relationship years ago. We take these as signs that his is not a character of such severe depravity and thus should be taken as mitigating circumstances in his favor.84[48] Considering further that this is his first offense, we believe that a fine of P15,000.00 would suffice. This, of course, is without prejudice to the outcome of the aspect of this case involving the alleged misappropriation of funds of the client. WHEREFORE, premises considered, we find Atty. Diosdado M. Rongcal GUILTY of immorality and impose on him a FINE of P15,000.00 with a stern warning that a repetition of the same or similar acts in the future will be dealt with more severely. The charge of misappropriation of funds of the client is REMANDED to the IBP for further investigation, report and recommendation within ninety (90) days from receipt of this Decision.

Let a copy of this decision be entered in the personal record of respondent as an attorney and as a member of the Bar, and furnished the Bar Confidant, the Integrated Bar of the Philippines and the Court Administrator for circulation to all courts in the country. SO ORDERED.

84[48]See Alitagtag v. Atty. Garcia, 451 Phil. 420 (2003).

Republic SUPREME Manila EN BANC

of

the

Philippines COURT

A.M. No. 1625 February 12, 1990 ANGEL L. vs. ATTY. RAMON A. GONZALES, respondent. RESOLUTION

BAUTISTA,

complainant,

PER CURIAM: In a verified complaint filed by Angel L. Bautista on May 19, 1976, respondent Ramon A. Gonzales was charged with malpractice, deceit, gross misconduct and violation of lawyer's oath. Required by this Court to answer the charges against him, respondent filed on June 19, 1976 a motion for a bill of particulars asking this Court to order complainant to amend his complaint by making his charges more definite. In a resolution dated June 28, 1976, the Court granted respondent's motion and required complainant to file an amended complaint. On July 15, 1976, complainant submitted an amended complaint for disbarment, alleging that respondent committed the following acts: 1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor Fortunado and Editha Fortunado [hereinafter referred to as the Fortunados] to pay all expenses, including court fees, for a contingent fee of fifty percent (50%) of the value of the property in litigation. 2. Acting as counsel for the Fortunados in Civil Case No. Q-15143, wherein Eusebio Lopez, Jr. is one of the defendants and, without said case being terminated, acting as counsel for Eusebio Lopez, Jr. in Civil Case No. Q-15490; 3. Transferring to himself one-half of the properties of the Fortunados, which properties are the subject of the litigation in Civil Case No. Q-15143, while the case was still pending; 4. Inducing complainant, who was his former client, to enter into a contract with him on August 30, 1971 for the development into a residential subdivision of the land involved in Civil Case No. Q-15143, covered by TCT No. T-1929, claiming that he acquired fifty percent (50%) interest thereof as attorney's fees from the Fortunados, while knowing fully well that the said property was already sold at a public auction on June 30, 1971, by the Provincial Sheriff of Lanao del Norte and registered with the Register of Deeds of Iligan City; 5. Submitting to the Court of First Instance of Quezon City falsified documents purporting to be true copies of "Addendum to the Land Development Agreement dated August 30, 1971" and submitting the same document to the Fiscal's Office of Quezon City, in connection with the complaint for estafa filed by respondent against complainant designated as I.S. No. 7512936; 6. Committing acts of treachery and disloyalty to complainant who was his client; 7. Harassing the complainant by filing several complaints without legal basis before the Court of First Instance and the Fiscal's Office of Quezon City;

8. Deliberately misleading the Court of First Instance and the Fiscal's Office by making false assertion of facts in his pleadings; 9. Filing petitions "cleverly prepared (so) that while he does not intentionally tell a he, he does not tell the truth either." Respondent filed an answer on September 29, 1976 and an amended answer on November 18, 1976, denying the accusations against him. Complainant filed a reply to respondent's answer on December 29, 1976 and on March 24, 1977 respondent filed a rejoinder. In a resolution dated March 16, 1983, the Court referred the case to the Office of the Solicitor General for investigation, report and recommendation. In the investigation conducted by the Solicitor General, complainant presented himself as a witness and submitted Exhibits "A" to "PP", while respondent appeared both as witness and counsel and submitted Exhibits "1" to "11". The parties were required to submit their respective memoranda. On May 16, 1988 respondent filed a motion to dismiss the complaint against him, claiming that the long delay in the resolution of the complaint against him constitutes a violation of his constitutional right to due process and speedy disposition of cases. Upon order of the Court, the Solicitor General filed a comment to the motion to dismiss on August 8, 1988, explaining that the delay in the investigation of the case was due to the numerous requests for postponement of scheduled hearings filed by both parties and the motions for extension of time to file their respective memoranda." [Comment of the Solicitor General, p. 2; Record, p. 365]. Respondent filed a reply to the Solicitor General's comment on October 26, 1988. In a resolution dated January 16, 1989 the Court required the Solicitor General to submit his report and recommendation within thirty (30) days from notice. On April 11, 1989, the Solicitor General submitted his report with the recommendation that Atty. Ramon A. Gonzales be suspended for six (6) months. The Solicitor General found that respondent committed the following acts of misconduct: a. transferring to himself one-half of the properties of his clients during the pendency of the case where the properties were involved; b. concealing from complainant the fact that the property subject of their land development agreement had already been sold at a public auction prior to the execution of said agreement; and c. misleading the court by submitting alleged true copies of a document where two signatories who had not signed the original (or even the xerox copy) were made to appear as having fixed their signatures [Report and Recommendation of the Solicitor General, pp. 17-18; Rollo, pp. 403-404]. Respondent then filed on April 14, 1989 a motion to refer the case to the Integrated Bar of the Philippines (IBP) for investigation and disposition pursuant to Rule 139-B of the Revised Rules of Court. Respondent manifested that he intends to submit more evidence before the IBP. Finally, on November 27, 1989, respondent filed a supplemental motion to refer this case to the IBP, containing additional arguments to bolster his contentions in his previous pleadings. I. Preliminarily, the Court will dispose of the procedural issue raised by respondent. It is respondent's contention that the preliminary investigation conducted by the Solicitor General was limited to the determination of whether or not there is sufficient ground to proceed with the case and that under Rule 139 the Solicitor General still has to file an

administrative complaint against him. Respondent claims that the case should be referred to the IBP since Section 20 of Rule 139-B provides that: This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled DISBARMENT OR SUSPENSION OF ATTORNEYS. All cases pending investigation by the Office of the Solicitor General shall be transferred to the Integrated Bar of the Philippines Board of Governors for investigation and disposition as provided in this Rule except those cases where the investigation has been substantially completed. The above contention of respondent is untenable. In the first place, contrary to respondent's claim, reference to the IBP of complaints against lawyers is not mandatory upon the Court [Zaldivar v. Sandiganbayan, G.R. Nos. 79690-707; Zaldivar v. Gonzales, G.R. No. 80578, October 7, 1988]. Reference of complaints to the IBP is not an exclusive procedure under the terms of Rule 139-B of the Revised Rules of Court [Ibid]. Under Sections 13 and 14 of Rule 139-B, the Supreme Court may conduct disciplinary proceedings without the intervention of the IBP by referring cases for investigation to the Solicitor General or to any officer of the Supreme Court or judge of a lower court. In such a case, the report and recommendation of the investigating official shall be reviewed directly by the Supreme Court. The Court shall base its final action on the case on the report and recommendation submitted by the investigating official and the evidence presented by the parties during the investigation. Secondly, there is no need to refer the case to the IBP since at the time of the effectivity of Rule 139-B [June 1, 1988] the investigation conducted by the Office of the Solicitor General had been substantially completed. Section 20 of Rule 139-B provides that only pending cases, the investigation of which has not been substantially completed by the Office of the Solicitor General, shall be transferred to the IBP. In this case the investigation by the Solicitor General was terminated even before the effectivity of Rule 139-B. Respondent himself admitted in his motion to dismiss that the Solicitor General terminated the investigation on November 26, 1986, the date when respondent submitted his reply memorandum [Motion to Dismiss, p. 1; Record, p. 353]. Thirdly, there is no need for further investigation since the Office of the Solicitor General already made a thorough and comprehensive investigation of the case. To refer the case to the IBP, as prayed for by the respondent, will result not only in duplication of the proceedings conducted by the Solicitor General but also to further delay in the disposition of the present case which has lasted for more than thirteen (13) years. Respondent's assertion that he still has some evidence to present does not warrant the referral of the case to the IBP. Considering that in the investigation conducted by the Solicitor General respondent was given ample opportunity to present evidence, his failure to adduce additional evidence is entirely his own fault. There was therefore no denial of procedural due process. The record shows that respondent appeared as witness for himself and presented no less than eleven (11) documents to support his contentions. He was also allowed to cross-examine the complainant who appeared as a witness against him. II. The Court will now address the substantive issue of whether or not respondent committed the acts of misconduct alleged by complainant Bautista. After a careful review of the record of the case and the report and recommendation of the Solicitor General, the Court finds that respondent committed acts of misconduct which warrant the exercise by this Court of its disciplinary power.

The record shows that respondent prepared a document entitled "Transfer of Rights" which was signed by the Fortunados on August 31, 1971. The document assigned to respondent one-half (1/2) of the properties of the Fortunados covered by TCT No. T1929, with an area of 239.650 sq. mm., and TCT No. T-3041, with an area of 72.907 sq. m., for and in consideration of his legal services to the latter. At the time the document was executed, respondent knew that the abovementioned properties were the subject of a civil case [Civil Case No. Q-15143] pending before the Court of First Instance of Quezon City since he was acting as counsel for the Fortunados in said case [See Annex "B" of Original Complaint, p. 12; Rollo, p. 16]. In executing the document transferring one-half (1/2) of the subject properties to himself, respondent violated the law expressly prohibiting a lawyer from acquiring his client's property or interest involved in any litigation in which he may take part by virtue of his profession [Article 1491, New Civil Code]. This Court has held that the purchase by a lawyer of his client's property or interest in litigation is a breach of professional ethics and constitutes malpractice [Hernandez v. Villanueva, 40 Phil. 774 (1920); Go Beltran v. Fernandez, 70 Phil. 248 (1940)]. However, respondent notes that Canon 10 of the old Canons of Professional Ethics, which states that "[t]he lawyer should not purchase any interests in the subject matter of the litigation which he is conducting," does not appear anymore in the new Code of Professional Responsibility. He therefore concludes that while a purchase by a lawyer of property in litigation is void under Art. 1491 of the Civil Code, such purchase is no longer a ground for disciplinary action under the new Code of Professional Responsibility. This contention is without merit. The very first Canon of the new Code states that "a lawyer shall uphold the Constitution, obey the laws of the land and promote respect for law and legal process" (Emphasis supplied), Moreover, Rule 138, Sec. 3 of the Revised Rules of Court requires every lawyer to take an oath to 44 obey the laws [of the Republic of the Philippines] as well as the legal orders of the duly constituted authorities therein." And for any violation of this oath, a lawyer may be suspended or disbarred by the Supreme Court [Rule 138, Sec. 27, Revised Rules of Court]. All of these underscore the role of the lawyer as the vanguard of our legal system. The transgression of any provision of law by a lawyer is a repulsive and reprehensible act which the Court will not countenance. In the instant case, respondent, having violated Art. 1491 of the Civil Code, must be held accountable both to his client and to society. Parenthetically, it should be noted that the persons mentioned in Art. 1491 of the Civil Code are prohibited from purchasing the property mentioned therein because of their existing trust relationship with the latter. A lawyer is disqualified from acquiring by purchase the property and rights in litigation because of his fiduciary relationship with such property and rights, as well as with the client. And it cannot be claimed that the new Code of Professional Responsibility has failed to emphasize the nature and consequences of such relationship. Canon 17 states that "a lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him." On the other hand, Canon 16 provides that "a lawyer shall hold in trust all moneys and properties of his client that may come into his possession." Hence, notwithstanding the absence of a specific provision on the matter in the new Code, the Court, considering the abovequoted provisions of the new Code in relation to Art. 1491 of the Civil Code, as well as the prevailing jurisprudence, holds that the purchase by a lawyer of his client's property in litigation constitutes a breach of professional ethics for which a disciplinary action may be brought against him.

Respondent's next contention that the transfer of the properties was not really implemented, because the land development agreement on which the transfer depended was later rescinded, is untenable. Nowhere is it provided in the Transfer of Rights that the assignment of the properties of the Fortunados to respondent was subject to the implementation of the land development agreement. The last paragraph of the Transfer of Rights provides that: ... for and in consideration of the legal services of ATTY. RAMON A. GONZALES, Filipino, married to Lilia Yusay, and a resident of 23 Sunrise Hill, New Manila, Quezon City, rendered to our entire satisfaction, we hereby, by these presents, do transfer and convey to the said ATTY. RAMON A. GONZALES, his heirs, successor, and assigns, onehalf (1/2) of our rights and interests in the abovedescribed property, together with all the improvements found therein [Annex D of the Complaint, Record, p. 28; Emphasis supplied]. It is clear from the foregoing that the parties intended the transfer of the properties to respondent to be absolute and unconditional, and irrespective of whether or not the land development agreement was implemented. Another misconduct committed by respondent was his failure to disclose to complainant, at the time the land development agreement was entered into, that the land covered by TCT No. T-1929 had already been sold at a public auction. The land development agreement was executed on August 31, 1977 while the public auction was held on June 30, 1971. Respondent denies that complainant was his former client, claiming that his appearance for the complainant in an anti-graft case filed by the latter against a certain Gilbert Teodoro was upon the request of complainant and was understood to be only provisional. Respondent claims that since complainant was not his client, he had no duty to warn complainant of the fact that the land involved in their land development agreement had been sold at a public auction. Moreover, the sale was duly annotated at the back of TCT No. T-1929 and this, respondent argues, serves as constructive notice to complainant so that there was no concealment on his part. The above contentions are unmeritorious. Even assuming that the certificate of sale was annotated at the back of TCT No. T-1929, the fact remains that respondent failed to inform the complainant of the sale of the land to Samauna during the negotiations for the land development agreement. In so doing, respondent failed to live up to the rigorous standards of ethics of the law profession which place a premium on honesty and condemn duplicitous conduct. The fact that complainant was not a former client of respondent does not exempt respondent from his duty to inform complainant of an important fact pertaining to the land which is subject of their negotiation. Since he was a party to the land development agreement, respondent should have warned the complainant of the sale of the land at a public auction so that the latter could make a proper assessment of the viability of the project they were jointly undertaking. This Court has held that a lawyer should observe honesty and fairness even in his private dealings and failure to do so is a ground for disciplinary action against him [Custodio v. Esto, Adm. Case No. 1113, February 22, 1978, 81 SCRA 517]. Complainant also charges respondent with submitting to the court falsified documents purporting to be true copies of an addendum to the land development agreement. Based on evidence submitted by the parties, the Solicitor General found that in the document filed by respondent with the Court of First Instance of Quezon City, the signatories to the addendum to the land development agreement namely, Ramon A.

Gonzales, Alfaro T. Fortunado, Editha T. Fortunado, Nestor T. Fortunado, and Angel L. Bautistawere made to appear as having signed the original document on December 9, 1972, as indicated by the letters (SGD.) before each of their names. However, it was only respondent Alfaro Fortunado and complainant who signed the original and duplicate original (Exh. 2) and the two other parties, Edith Fortunado and Nestor Fortunado, never did. Even respondent himself admitted that Edith and Nestor Fortunado only signed the xerox copy (Exh. 2-A) after respondent wrote them on May 24, 1973, asking them to sign the said xerox copy attached to the letter and to send it back to him after signing [Rejoinder to Complainant's Reply, pp. 4-6; Rollo, pp. 327-329]. Moreover, respondent acknowledged that Edith and Nestor Fortunado had merely agreed by phone to sign, but had not actually signed, the alleged true copy of the addendum as of May 23, 1973 [Respondent's Supplemental Motion to Refer this Case to the Integrated Bar of the Philippines, p. 16]. Thus, when respondent submitted the alleged true copy of the addendum on May 23, 1973 as Annex "A" of his Manifestation filed with the Court of First Instance of Quezon City, he knowingly misled the Court into believing that the original addendum was signed by Edith Fortunado and Nestor Fortunado. Such conduct constitutes willful disregard of his solemn duty as a lawyer to act at all times in a manner consistent with the truth. A lawyer should never seek to mislead the court by an artifice or false statement of fact or law [Section 20 (d), Rule 138, Revised Rules of Court; Canon 22, Canons of Professional Ethics; Canon 10, Rule 10.01, Code of Professional Responsibility]. Anent the first charge of complainant, the Solicitor General found that no impropriety was committed by respondent in entering into a contingent fee contract with the Fortunados [Report and Recommendation, p. 8; Record, p. 394]. The Court, however, finds that the agreement between the respondent and the Fortunados, which provides in part that: We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales] defray all expenses, for the suit, including court fees. Alfaro T. Fortunado [signed] Editha T. Fortunado [signed] Nestor T. Fortunado [signed] CONFORME Ramon A. Gonzales [signed] [Annex A to the Complaint, Record, p. 4]. is contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not properly agree with a client to pay or bear the expenses of litigation. [See also Rule 16.04, Code of Professional Responsibility]. Although a lawyer may in good faith, advance the expenses of litigation, the same should be subject to reimbursement. The agreement between respondent and the Fortunados, however, does not provide for reimbursement to respondent of litigation expenses paid by him. An agreement whereby an attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous [JBP Holding Corp. v. U.S. 166 F. Supp. 324 (1958)]. Such agreements are against public policy especially where, as in this case, the attorney has agreed to carry on the action at his own expense in consideration of some bargain to have part of the thing in dispute [See Sampliner v. Motion Pictures Patents Co., et al., 255 F. 242 (1918)]. The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for which the former must incur administrative sanctions.

The Solicitor General next concludes that respondent cannot be held liable for acting as counsel for Eusebio Lopez, Jr. in Civil Case No. Q-15490 while acting as counsel for the Fortunados against the same Eusebio Lopez, Jr. in Civil Case No. Q-15143. The Court, after considering the record, agrees with the Solicitor General's findings on the matter. The evidence presented by respondent shows that his acceptance of Civil Case No. Q-15490 was with the knowledge and consent of the Fortunados. The affidavit executed by the Fortunados on June 23, 1976 clearly states that they gave their consent when respondent accepted the case of Eusebio Lopez, Jr. [Affidavit of Fortunados, dated June 23, 1976; Rollo, p. 198]. One of the recognized exceptions to the rule against representation of conflicting interests is where the clients knowingly consent to the dual representation after full disclosure of the facts by counsel [Canon 6, Canons of Professional Ethics; Canon 15, Rule 15.03, Code of Professional Responsibility]. Complainant also claims that respondent filed several complaints against him before the Court of First Instance and the Fiscal's Office of Quezon City for the sole purpose of harassing him. The record shows that at the time of the Solicitor General's investigation of this case, Civil Case No. Q-18060 was still pending before the Court of First Instance of Quezon City, while the complaints for libel (I.S. No. 76-5912) and perjury (I.S. No. 5913) were already dismissed by the City Fiscal for insufficiency of evidence and lack of interest, respectively [Report and Recommendation, pp. 16-17; Rollo, pp. 402-403]. The Solicitor General found no basis for holding that the complaints for libel and perjury were used by respondent to harass complainant. As to Civil Case No. Q-18060, considering that it was still pending resolution, the Solicitor General made no finding on complainants claim that it was a mere ploy by respondent to harass him. The determination of the validity of the complaint in Civil Case No. Q-18060 was left to the Court of First Instance of Quezon City where the case was pending resolution. The Court agrees with the above findings of the Solicitor General, and accordingly holds that there is no basis for holding that the respondent's sole purpose in filing the aforementioned cases was to harass complainant. Grounds 6, 8 and 9 alleged in the complaint need not be discussed separately since the above discussion on the other grounds sufficiently cover these remaining grounds. The Court finds clearly established in this case that on four counts the respondent violated the law and the rules governing the conduct of a member of the legal profession. Sworn to assist in the administration of justice and to uphold the rule of law, he has "miserably failed to live up to the standards expected of a member of the Bar." [Artiaga v. Villanueva, Adm. Matter No. 1892, July 29, 1988, 163 SCRA 638, 647]. The Court agrees with the Solicitor General that, considering the nature of the offenses committed by respondent and the facts and circumstances of the case, respondent lawyer should be suspended from the practice of law for a period of six (6) months. WHEREFORE, finding that respondent Attorney Ramon A. Gonzales committed serious misconduct, the Court Resolved to SUSPEND respondent from the practice of law for SIX (6) months effective from the date of his receipt of this Resolution. Let copies of this Resolution be circulated to all courts of the country for their information and guidance, and spread in the personal record of Atty. Gonzales. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Cortes, JJ., concur. Gutierrez, Jr., Sarmiento, Grio-Aquino, Medialdea, Regalado, JJ., took no part.

Republic of the Philippines Supreme Court Manila THIRD DIVISION AURORA D. CERDAN, Petitioner, A.C. No. 9154 (Formerly CBD No. 07-1965) Present: VELASCO, JR., J., Chairperson, PERALTA, ABAD, MENDOZA, and PERLAS-BERNABE, JJ.

- versus -

Promulgated: ATTY. CARLO GOMEZ, Respondent. March 19, 2012

X -------------------------------------------------------------------------------------- X RESOLUTION MENDOZA, J.: Before the Court is the undated Resolution85[1] of the Board of Governors of the Integrated Bar of the Philippines (IBP) finding Atty. Carlo Gomez (Atty. Gomez) liable for violating Canon 16 of the Code of Professional Responsibility and recommending that he be suspended from the practice of law for six (6) months. The case stemmed from the affidavit-complaint86[2] of Aurora D. Cerdan (complainant), filed before the Committee on Bar Discipline of the IBP on April 16, 2007. The complaint alleged that complainant and widower Benjamin Rufino (Rufino) lived together as husband and wife; that during their cohabitation, they purchased several real properties; that they maintained savings accounts at First Consolidated Bank (FCB), at the Quezon and Narra branches in Palawan, all of which were in the name of Rufino; that when Rufino died on December 28, 2004, complainant sought the legal advice of Atty. Gomez as to what to do with the properties left by Rufino; and that she paid Atty.

85[1] Rollo, p. 433. 86[2] Id. at 2-3.

Gomez attorneys fees in the amount of P152,000.00 but only the amount of P100,000.00 was reflected in the receipt. Complainant claimed that she authorized Atty. Gomez, thru a special power of attorney (SPA), to settle Rufinos savings account in FCB-Quezon branch; that the original agreement of a 50-50 sharing between complainant and the children of Rufino, as proposed by the FCB counsel, was replaced by the Compromise Agreement entered into by Atty. Gomez, wherein the heirs of Rufino got 60% of the share while she only received 40%; that Atty. Gomez included in the Compromise Agreement the savings account in FCB-Narra Branch when the scope of the SPA was only the account in FCB-Quezon branch; that Atty. Gomez took her bank book for the FCB account in Narra Branch containing deposits in the amount of more or less P165,000.00 and never returned it to her; and that Atty. Gomez withdrew from her FCB accounts and thereafter gave the amount of P290,000.00 and uttered, ITO NA LAHAT ANG PERA MO AT ANG SA AKIN NAKUHA KO NA. Complainant also narrated that sometime in 2000, Atty. Gomez was her counsel in a case against a certain Romeo Necio (Necio) and paid him attorneys fees and judicial fee in the amount of P15,000.00, and P8,000.00, respectively; that the parties agreed to settle amicably and decided that Atty. Gomez would collect from Necio the amount agreed upon; and that as of the filing of the complaint, Atty. Gomez has yet to remit to complainant the amount of P12,000.00. On April 16, 2007, the IBP required Atty. Gomez to file his answer.87[3] In his Answer,88[4] Atty. Gomez admitted that Rufino engaged his legal services in various cases. He, however, denied the accusations stated in the complaint-affidavit filed by complainant. Atty. Gomez averred that he was not aware that Rufino and complainant were not legally married because they represented themselves as husband and wife so the cases filed in court were under the names of spouses Benjamin and Aurora Rufino and that he only learned of said fact upon the death of Rufino in December 2004. Atty. Gomez claimed that when he had learned that complainant was not the legal wife, he exerted earnest effort to locate the surviving heirs of Rufino and substitute them in the cases filed in court; that he informed complainant of the consequences of her status and relationship with the late Rufino including her possible denial of any share from his estate; and that he advised complainant that he would make extra effort to persuade the legitimate heirs of Rufino to discuss a possible settlement and share in the estate or ask for compassion if she would be denied her share in the estate.

87[3] Id. at 29. 88[4] Id. at 33-40.

With respect to the uncollected amounts, Atty. Gomez denied the same and said that all the documents relating to the indebtedness were in the name of Rufino and that he could not do anything if the legitimate heirs of Rufino collected the same from the debtors. As to the savings account in FCB-Quezon branch, Atty. Gomez explained that said account was in the name of Rufino; that he negotiated with the legitimate heirs of Rufino for the share of the complainant; and that the proceeds thereof, in the amount of 442,547.88, were properly turned over to complainant as evidenced by an acknowledgment receipt. Thereafter, the Commission of Bar Discipline through Commissioner Jose Dela Rama, Jr. (Commissioner Dela Rama) conducted a mandatory conference and thereafter required the parties to submit their verified position papers. Upon filing of their respective position papers, the case was submitted for resolution. In his Report and Recommendation,89[5] Commissioner Dela Rama wrote his findings as follows: That it appears on record that complainant granted the respondent a Special Power of Attorney the specific powers of which are as follows: 1. To enter into amicable settlement of my account with the First Consolidated Bank, Quezon Branch with Savings Account No. 30-0201-01020-0. (Underlining supplied) 2. To agree to such matters as they may deem fit and proper to be done in connection with the said savings account 3. To withdraw the said amount as agreed on the settlement, receive and sign for and in my behalf. The Special Power of Attorney appears to have been signed and notarized on February 28, 2008 at Puerto Princesa City. It appears further that as alleged, the complainant maintains two accounts at First Consolidated Bank. One is in Quezon, Palawan Branch in the amount of 442,547.88. The other account being maintained at FBC Narra Branch contains an amount equivalent to 165,000.00, more or less. According to the complainant, she did not authorize the respondent to enter into a settlement with respect to the properties left by Benjamin Rufino. Xxxx

89[5] Id. at 434-452.

To begin with, respondent was given a Special Power of Attorney with respect to FCB Quezon account. That as far as the respondent can recall the account with FCB Quezon Branch had 1 million, more or less. COMM. DE LA RAMA: At that time, how much is the amount of deposit in FCB Quezon? Atty. Gomez: I believe, Your Honor, its Php1 million. COMM. DE LA RAMA: How much is the Narra Branch? Atty. Gomez: I am not aware, Your Honor. In fact, I have not even seen the bank account passbook. (TSN pages 30-31, September 7, 2007) Based on the Compromise Agreement marked as Annex F, with respect to Quezon Branch with account No. 3030-0201-0102-0, the same shall be divided as follows: 60 percent goes to the heirs of Benjamin Rufino, Jr. and 40 percent goes to Aurora Cerdan who was then presented by the respondent. This time, it was Atty. Gomez who signed the said agreement by virtue of the Special Power of Attorney dated February 28, 2005. While it is clear that in the Compromise Agreement where the complainant was supposed to receive 40% refers to FCB Quezon Branch, it cannot also be denied that in the same Compromise Agreement it speaks of FCB Narra Branch which, as admitted by the respondent, he has no authority to bind the complainant. But in the said Compromise Agreement, it cannot be denied that the respondent entered into an agreement with respect to FCB Narra Branch. Portion of the agreement reads as follows: Xxxx The first question is, when the respondent entered into a Compromise Agreement on March 1, 2005, was he acting within the powers granted to him in the Special Power of Attorney. The undersigned Commissioner believes that the respondent acted beyond the powers granted to him by virtue of the Special Power of Attorney. It is very specific that the respondent was only authorized to enter into an amicable settlement with respect to FCB Quezon Branch and not with the account in FCB Narra Branch. Xxxx The respondent, despite the fact that he was not armed with a particular document authorizing him to enter into an agreement with respect to Narra account, entered and

signed a compromise agreement to the prejudice and surprise of his client. In effect, he forfeited the lawful share of his client with respect to FCB Narra Branch. Xxxx According to the complainant, the amount of cash that was given to the respondent amounted to 152,000.00 as attorneys fees. The respondent got the money at her house in Quezon, Palawan and the following week, the complainant went to the office of the respondent at Puerto Princesa to get receipt of the 152,000.00. It was at this point when the respondent allegedly stated that he only received 100,000.00 and for this reason, an Acknowledgement Receipt (annex C) was issued by the law office of the respondent. Respondent on the other hand, during the preliminary conference stated the following: COMM. DE LA RAMA, JR.: What I am asking you is did you receive Php100,000.00 from the services rendered from Mrs. Cerdan? Atty. Gomez: Your Honor, please. That is the reason why I likewise fired out my secretary. COMM. DE LA RAMA, JR.: Why, did you not receive Php 100,000.00? Atty. Gomez: I deny that I received Php100,000.00, Your Honor. COMM. DE LA RAMA, JR.: So you are telling us that it was your secretary who received the 100,000.00. Atty. Gomez: Probably, Your Honor. COMM. DE LA RAMA, JR.: Did you file any action against your secretary? Atty. Gomez: I cannot locate her anymore. COMM. DE LA RAMA, JR.: You know what to do, you are a lawyer. And did you file any civil case? Atty. Gomez: None, Your Honor because the family went to my office asking for compassion. (TSN pages 107-109, October 5, 2007) What puzzles the undersigned Commissioner is the complainant even stated that she did not give 100,000.00 to the secretary. COMM. DE LA RAMA, JR.: Maam Cerdan, when you went to the office of Atty. Gomez, did you give 100,000.00 to the secretary? Mrs. Cerdan: No.

(TSN Page 110, October 5, 2007) Further, Mrs. Cerdan did not promise anything to Atty. Gomez by of way of compensation. The complaint stated the following: COMM. DE LA RAMA, JR.: Okay. Liliwanagin ko lang para sa kapakanan ng lahat, meron po ba kayong ipinangako naman kay Atty. Gomez na kung maiaayos niya ang usaping ito ay magkakaroon siya ng attorneys fees? Mrs. Cerdan: Wala po. Likewise, on the part of the respondent, he claims that he has no agreement with respect to his professional fees. COMM. DE LA RAMA, JR.: How about you Atty. Gomez, any agreement with complainant? Atty. Gomez: None, Your Honor. I volunteer myself to assist Mrs. Cerdan. COMM. DE LA RAMA, JR.: Without expecting anything? Atty. Gomez: Yes, Your Honor, in fact, I spent money to assist her. (TSN Page 111, October 5, 2007) Xxxx Although the respondent is denying that he received a compensation for the services rendered, we cannot deny the fact that his own law office issued an acknowledgement receipt on March 9, 2005 in the amount of 100,000.00. Although the respondent is blaming the secretary, the undersigned is not convinced that his law office did not receive certain consideration for the services rendered. Unless this case is really under the IBP Legal Aid Program. There is nothing wrong with a lawyer receiving reasonable compensation for the services rendered. In fact, under Canon 20 of the Code of Professional Responsibility, a lawyer shall charge only fair and reasonable fees. Whether the lawyers services were solicited or they were offered to the client for his assistance, in as much as these services were accepted and made use of the latter, there is a tacit and mutual consent as to the rendition of the services, which gives rise to the obligation upon the person benefited by the services to make compensation therefore. Lawyers are thus as much entitled to judicial protection against injustice on the part of their clients as the clients are against abuses on the part of the counsel. The duty of the court is not only to see that lawyers act in a proper and lawful manner, and

also see that lawyers are paid their just and lawful fees (Camacho vs. Court of Appeals, et. al. G.R. No. 127520, February 9, 2007, 515 SCRA 242).90[6] Commissioner Dela Rama found that Atty. Gomez violated Canon 16 of the Code of Professional Responsibility and recommended that he be suspended from the practice of law for six (6) months. On June 5, 2006, the IBP Board of Governors passed its Resolution91[7] adopting and approving the Report and Recommendation of the Investigating Commissioner. Atty. Gomez moved for reconsideration,92[8] but in its Resolution No. XIX-2011-415 dated June 26, 2011, the IBP Board of Governors denied his motion for reconsideration. The Court agrees with the findings of the IBP. A lawyer-client relationship is highly fiduciary in nature and it requires a high standard of conduct and demands utmost fidelity, candor, fairness, and good faith.93[9] Once a lawyer agrees to handle a case, he is required by the Canons of Professional Responsibility to undertake the task with zeal, care and utmost devotion.94[10] In the case at bench, Atty. Gomez failed to observe the utmost good faith, loyalty, candor, and fidelity required of an attorney in his dealings with complainant. Atty. Gomez exceeded his authority when he entered into a compromise agreement with regard to the FCB account in Quezon Branch, where he agreed that complainant shall receive 40 percent of the proceeds while the heirs of Rufino shall get the 60 percent, which was contrary to the original agreement of 50-50 sharing. Atty. Gomez likewise acted beyond the scope of the SPA when he included in the compromise agreement the FCB account in Narra branch when it was issued only with respect to the FCB account, Quezon branch. Moreover, Atty. Gomez entered into a compromise agreement with respect to the other properties of Rufino without authority from complainant. Furthermore, Atty. Gomez failed to account for the money he received for complainant as a result of the compromise agreement. Worse, he remitted the amount of 290,000.00 only, an amount substantially less than the share of complainant. Records

90[6] Id. at 439-450. 91[7] Id. at 433. 92[8] Id. at 380-388. 93[9] Macarilay v. Seria, 497 Phil. 348, 356 (2005). 94[10] Rollon v. Naraval, 493 Phil. 24, 29 (2005).

reveal that complainants share from the FCB savings accounts amounted to 442,547.88 but only P290,000.00 was remitted by Atty. Gomez after deducting his share. This Court will not tolerate such acts. Atty. Gomez has no right to unilaterally retain his lawyers lien.95[11] Having obtained the funds in the course of his professional employment, Atty. Gomez had the obligation to account and deliver such funds to his client when they became due, or upon demand. Moreover, there was no agreement between him and complainant that he could deduct therefrom his claimed attorneys fees. The Code of Professional Responsibility specifically Section 16, provides: CANON 16 A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01 A lawyer shall account for all money or property collected or received for or from the client. Xxxx The fiduciary nature of the relationship between counsel and client imposes on a lawyer the duty to account for the money or property collected or received for or from the client.96[12] He is obliged to render a prompt accounting of all the property and money he has collected for his client.97[13] Lawyers should always live up to the ethical standards of the legal profession as embodied in the Code of Professional Responsibility. Public confidence in law and in lawyers may be eroded by the irresponsible and improper conduct of a member of the bar. Thus, every lawyer should act and comport himself in a manner that would promote public confidence in the integrity of the legal profession.98[14] The penalty for violation of Canon 16 of the Code of Professional Responsibility usually ranges from suspension for six months,99[15] to suspension for one year,100[16] or two

95[11] Aldovino v. Pujalte, 467 Phil. 556, 561 (2004). 96[12] Belleza v. Macasa, A.C. No. 7815, July 23, 2009, 593 SCRA 549, 560. 97[13] Bayonla v. Reyes, A.C. No. 4808, November 22, 2011. 98[14] Belleza v. Macasa, supra note 12 at 562. 99[15] Espiritu v. Ulep, 497 Phil. 339, (2005). 100[16] Villanueva v. Atty. Ishiwata, 486 Phil. 1 (2004); Aldovino v. Pujalte, supra note 11.

years101[17] and even disbarment102[18] depending on the amount involved and the severity of the lawyers misconduct. Considering that this is Atty. Gomezs first offense, the penalty of suspension for one (1) year is a sufficient sanction. WHEREFORE, respondent Atty. Carlo Gomez is hereby declared GUILTY of violation of Canon 16 of the Code of Professional Responsibility and is SUSPENDED from the practice of law for a period of one (1) year effective upon receipt of this Resolution, with a WARNING that a repetition of the same or similar acts will be dealt with severely. Let a copy of this decision be furnished the Court Administrator for distribution to all courts of the land, the IBP, the Office of the Bar Confidant, and entered into the personal records of Atty. Gomez as an attorney and as a member of the Philippine Bar. SO ORDERED.

101[17] Mortera v. Atty. Pagatpatan, 499 Phil. 93 (2005). 102[18] Hernandez v. Atty. Go, 490 Phil. 420 (2005).

Republic of the Philippines SUPREME COURT Manila EN BANC CORAZON T. NEVADA, Complainant, A.C. No. 7591 Present: - versus CORONA, C.J., CARPIO, VELASCO, JR., LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO,* ABAD, VILLARAMA, JR., PEREZ, MENDOZA, SERENO, REYES, and PERLAS-BERNABE, JJ. Promulgated: March 20, 2012 x-----------------------------------------------------------------------------------------x DECISION VELASCO, JR., J.: Corazon T. Nevada (Nevada) seeks the disbarment of Atty. Rodolfo D. Casuga (Casuga) for alleged violation of his lawyers oath and the 2004 Rules on Notarial Practice (Notarial Rules).

ATTY. RODOLFO D. CASUGA, Respondent.

* On official leave.

The Facts Nevada is the principal stockholder of C.T. Nevada & Sons, Inc., a family corporation which operates the Mt. Crest Hotel located at Legarda Road, Baguio City (the Hotel). In her affidavit-complaint103[1] dated June 28, 2007, with annexes, Nevada alleges that she and Casuga are members of the One in Jesus Christ Church, a religious group which counts the latter as one of its elders. According to Nevada, she has allowed the use of one of the Hotels functions rooms for church services. And in time, Casuga was able to gain her trust and confidence. Nevada further alleges that unbeknownst to her, Casuga, sometime in 2006, started to represent himself as the administrator of the Hotel. In fact, on March 1, 2006, he entered into a contract of lease104[2] with a certain Jung Jong Chul (Chul) covering an office space in the Hotel. Notably, Casuga signed the lease contract over the printed name of one Edwin T. Nevada and notarized the document himself. Annex B105[3] of the affidavit-complaint is a notarized letter dated May 15, 2007, wherein Chul attested that he gave Casuga, upon contract signing, the amount of ninety thousand pesos (PhP 90,000) as rental deposit for the office space. The amount thus deposited, so Nevada claims, was never turned over to her or to C.T. Nevada & Sons, Inc. Nevada adds that, in the course of their acquaintanceship, Casuga was able to acquire from her several pieces of jewelry: a K diamond solitaire ring, earrings with three (3) diamonds each and a ring with three (3) diamonds, with an aggregate value of three hundred thousand pesos (PhP 300,000), and a solid gold Rolex watch with diamond dials valued at twelve thousand US dollars (USD 12,000). Casuga took possession of the valuables purportedly with the obligation of selling them and to remit any proceeds to Nevada. However, despite repeated demands by Nevada for Casuga to return the valuables or otherwise remit the proceeds of the sale, no jewelry or money was ever returned. In compliance with a directive from the Court, Casuga submitted an Affidavit106[4] dated December 5, 2007, as comment on the administrative complaint. In it, Casuga claims that Nevada informally instituted him as the administrator of the Hotel in a limited capacity but denied receiving the PhP 90,000 from Chul. With regard to the pieces of

103[1] Rollo, pp. 16-17. 104[2] Id. at 18-26, Annex A to Complaint. 105[3] Id. at 27. 106[4] Id. at 36-37.

jewelry and the Rolex watch, Casuga stated that Nevada actually pawned them in a pawnshop and that she later asked his wife to redeem them using their own money. Thereafter, Nevada asked Casugas wife to sell the valuables and reimburse herself from the proceeds of the sale. By Resolution of July 2, 2008, the Court, thru the Office of the Bar Confidant, referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation/decision. The case was docketed as CBD Case No. 7591 entitled Corazon T. Nevada v. Atty. Rodolfo D. Casuga. On September 22, 2008, the IBP Commission on Bar Discipline (CBD), thru Commisioner Norberto B. Ruiz, issued and sent out a Notice of Mandatory Conference directing the parties to appear before it on October 23, 2008. On that date, only Nevada showed up, prompting the designated commissioner to reset the conference to November 25, 2008, with a warning that he, Casuga, will be declared in default and the case submitted for resolution should he again fail to appear. November 25, 2008 came, but only Nevada was present at the conference. Thus, CBD Case No. 7591 was submitted for resolution on the basis of Nevadas Position Paper dated December 3, 2008 and the evidence she submitted consisting of, among others, twenty-one (21) official rental receipts Casuga issued to at least two (2) lessors of the Hotel. Results of the Investigation In its Report and Recommendation107[5] dated January 14, 2009, the IBP CBD found Casuga guilty of the charges against him, disposing as follows: WHEREFORE, premises considered it is hereby recommended that Casuga be suspended for one (1) year for gross misconduct, violation of the notarial law and infidelity in the custody of monies, jewelries and a Rolex watch which pertain to the complainant and the family corporation. The IBP Board of Governors later adopted and approved the CBDs Report and Recommendation, with modification, as indicated in Resolution No. XIX-2010-461 dated August 28, 2010, to wit: RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner of the above entitled case x x x; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering Casugas violation of Canon 16 of the Code of Professional Responsibility, for misappropriation of his client[s] funds and jewelries, for violation of the Notarial Law when he signed as a party to a lease contract and notarized the same and also taking into consideration the gravity of the offense committed, Atty. Rodolfo D. Casuga is

107[5] Penned by Commissioner Norberto B. Ruiz.

hereby SUSPENDED from the practice of law for four (4) years. In addition, Atty. Casuga is Suspended or Disqualified from reappointment as Notary Public for two (2) years and Ordered to Return the amount of P90,000.00, jewelries amounting to P300,000.00 and the Rolex watch valued at $12,000.00 or its equivalent to Mr. Jung Jong Chul, otherwise his Suspension shall continue. The CBD Report and Recommendation and a copy of Resolution No. XIX-2010-461 were subsequently forwarded to the Court along with the records of the case. In the meantime, Nevada, upon receipt of a copy of Resolution No. XIX-2010-461, wrote and asked the IBP Board of Governors to rectify said resolution. Instead of the return of the amount of PhP 90,000, the jewelry and the Rolex watch or their monetary value to Chul, as directed in the resolution, Nevada requested the return to be made in her favor. The letter-request of Nevada had remained not acted upon owing obviously to the fact that the records of the case have been transmitted to the Court in the interim. The Issues The principal but simple issues in this case pivot on the guilt of Casuga for the charges detailed or implied in the basic complaint; and the propriety of the return to Nevada of the items, or their money value, and the amount subject of the case. The Courts Ruling We agree with the CBDs inculpatory findings, as endorsed by the IBP Board of Governors, and the recommended upgrading of penalties, as shown in Resolution No. XIX-2010-461, but subject to the modification as shall be discussed. Casuga is guilty of gross misconduct for misrepresenting himself In re Horrilleno108[6] defined gross misconduct in the following wise: The grounds for removal of a judge of first instance under Philippine law are two: (1) Serious misconduct and (2) inefficiency. The latter ground is not involved in these proceedings. As to the first, the law provides that sufficient cause must exist in the judgment of the Supreme Court involving serious misconduct. The adjective is serious; that is, important, weighty, momentous, and not trifling. The noun is misconduct; that is, a transgression of some established and definite rule of action, more particularly, unlawful behavior or gross negligence by the public officer. The word misconduct implies a wrongful intention and not a mere error or judgment. For serious misconduct to exist, there must be reliable evidence showing that the judicial acts complained of were corrupt or inspired by an intention to violate the law, or were in persistent disregard of well-known legal rules. (Lawlor vs. People [1874], 74 Ill., 228; Citizens' Insurance Co. vs. Marsh [1861], 41 Pa., 386; Miller vs. Roby [1880], 9 Neb., 471;

108[6] 43 Phil. 212, 214 (1922).

Smith vs. Cutler [1833], 10 Wend. [N.Y.], 590; U.S. vs. Warner [1848], 28 Fed. Cas. No. 16643; In re Tighe [1904], 89 N.Y. Supra., 719.) (Emphasis supplied.) The above definition was to be reiterated in Ajeno v. Judge Inserto,109[7] where the Court wrote: In the case of In re [Horrilleno], 43 Phil. 212, this Court previously ruled that For serious misconduct to exist, there must be reliable evidence showing that the judicial acts complained of were corrupt or inspired by an intention to violate the law, or were in persistent disregard of well-known legal rules. Of similar tenor is the definition provided in Jamsani-Rodriguez v. Ong:110[8] x x x The respondent Justices were not liable for gross misconduct defined as the transgression of some established or definite rule of action, more particularly, unlawful behavior or gross negligence, or the corrupt or persistent violation of the law or disregard of well-known legal rules x x x. Respondent Casuga represented himself as a duly-authorized representative of Nevada when in fact he was not. Casuga admitted signing the subject contract of lease, but claimed that he was duly authorized to do so by Nevada. However, Casuga failed to adduce an iota of evidence to prove that he was indeed so authorized. One who alleges the existence of an agency relationship must prove such fact. The Court ruled in Yun Kwan Byung v. Philippine Amusement and Gaming Corporation,111[9] The law makes no presumption of agency and proving its existence, nature and extent is incumbent upon the person alleging it. Plainly enough, Casuga is guilty of misrepresentation, when he made it appear that he was authorized to enter into a contract of lease in behalf of Nevada when, in fact, he was not. Furthermore, the records reveal that Casuga received the rentals by virtue of the contract of lease, benefitting from his misrepresentation. Chuls notarized letter of May 15, 2007 sufficiently shows that Casuga indeed received PhP 90,000 as rental deposit from Chul. In his affidavit-comment dated December 5, 2007, Casuga denied having received such amount, alleging that a certain Pastor Oh, who purportedly introduced him to Chul, received the money. However, Casuga again failed to adduce a single piece of evidence to support his contention. A bare denial must fail in light of the positive assertion of Chul, who appears to have no ulterior motive to incriminate Casuga.

109[7] A.M. No. 1098-CFI, May 31, 1976, 71 SCRA 166, 171-172. 110[8] A.M. No. 08-19-SB-J, August 24, 2010, 628 SCRA 626, 648-649; citations omitted. 111[9] G.R. No. 163553, December 11, 2009, 608 SCRA 107, 129.

In Tan v. Gumba,112[10] the respondent lawyer similarly misrepresented herself to have been authorized to sell a parcel of land by virtue of a Special Power of Attorney (SPA). By virtue of the SPA, the lawyer was able to obtain a loan from the complainant, secured by the said parcel of land through an open deed of sale. When the respondent lawyer defaulted in the payment of the loan, it turned out that the SPA only authorized the lawyer to mortgage the property to a bank. Thus, the complainant could not register the deed of sale with the register of deeds and could not recover the amount that he loaned to the lawyer. In that case, the Court ruled: Here, respondents actions clearly show that she deceived complainant into lending money to her through the use of documents and false representations and taking advantage of her education and complainants ignorance in legal matters. As manifested by complainant, he would have never granted the loan to respondent were it not for respondents misrepresentation that she was authorized to sell the property and if respondent had not led him to believe that he could register the open deed of sale if she fails to pay the loan. By her misdeed, respondent has eroded not only complainants perception of the legal profession but the publics perception as well. Her actions constitute gross misconduct for which she may be disciplined, following Section 27, Rule 138 of the Revised Rules of Court, as amended x x x. (Emphasis supplied.) In the instant case, by maintaining an office within the Hotel, taking advantage of his apparent close relationship to Nevada, and through the use of false representations, Casuga led Chul to believe that he was the administrator of the Hotel, when in fact he was not. By doing so, he made it appear that he was duly authorized to enter into contracts for the Hotel and to receive rentals from its occupants. His fraudulent scheme enabled Casuga to collect rentals from the occupants of the Hotel, Chul in particular, which he did not transmit to Nevada. Worse still, Casuga obtained money belonging to the Hotel. Following the principle laid down in Tan, Casugas misrepresentation properly constitutes gross misconduct for which he must be disciplined. Notably, in Tan, the respondent lawyer was held guilty of misconduct and suspended from the practice of law for six (6) months. Casuga also violated Canon 16 of the Code of Professional Responsibility With regard to the jewelry and watch entrusted to him, Casuga alleged that Nevada pawned them and thereafter instructed Casugas wife to redeem them with the latters money. He added that Nevada then instructed his wife to sell the valuables and use the proceeds to reimburse herself for the redemption price. Again, however, Casugas allegations are unsupported by a single shred of evidence. Pawnshop

112[10] A.C. No. 9000, October 5, 2011.

receipts would have provided the best evidence under the circumstances. But they were not presented, too. Moreover, Casugas admission that the valuables are indeed in his possession, without any adequate reason, supports Nevadas version of the story. Casugas failure to return such property or remit the proceeds of the sale is a blatant violation of Canon 16 of the Code of Professional Responsibility (the Code). The Codes Canon 16 and Rule 16.3 state: CANON 16 - A lawyer shall hold in trust all moneys and properties of his client that may come into his profession. Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. Having been tasked to sell such valuables, Casuga was duty-bound to return them upon Nevadas demand. His failure to do so renders him subject to disciplinary action. To be sure, he cannot use, as a defense, the lack of a lawyer-client relationship as an exonerating factor. In Barcenas v. Alvero,113[11] the Court suspended a lawyer from the practice of law for two (2) years after he failed to account for or return PhP 300,000 that was entrusted to him for deposit with the courts. The Court ruled: From the records of the case, there is likewise a clear breach of lawyer-client relations. When a lawyer receives money from a client for a particular purpose, the lawyer is bound to render an accounting to the client showing that the money was spent for a particular purpose. And if he does not use the money for the intended purpose, the lawyer must immediately return the money to his client. x x x Jurisprudence dictates that a lawyer who obtains possession of the funds and properties of his client in the course of his professional employment shall deliver the same to his client (a) when they become due, or (b) upon demand. x x x [Respondent] Atty. Alvero cannot take refuge in his claim that there existed no attorney-client relationship between him and Barcenas. Even if it were true that no attorney-client relationship existed between them, case law has it that an attorney may be removed, or otherwise disciplined, not only for malpractice and dishonesty in the profession, but also for gross misconduct not connected with his professional duties, making him unfit for the office and unworthy of the privileges which his license and the law confer upon him.

113[11] A.C. No. 8159, April 23, 2010, 619 SCRA 1, 9-10.

Atty. Alveros failure to immediately account for and return the money when due and upon demand violated the trust reposed in him, demonstrated his lack of integrity and moral soundness, and warranted the imposition of disciplinary action . It gave rise to the presumption that he converted the money for his own use, and this act constituted a gross violation of professional ethics and a betrayal of public confidence in the legal profession. They constitute gross misconduct and gross unethical behavior for which he may be suspended, following Section 27, Rule 138 of the Rules of Court x x x. (Emphasis supplied.) Having failed to return, upon demand, the items entrusted to him by Nevada or remit the proceeds of the sale, Casuga violated Canon 16 and Rule 16.03 of the Code. In Almendarez, Jr. v. Langit,114[12] the Court suspended a lawyer from the practice of law for two (2) years for failing to account for the money and properties of his client. Similarly, in Small v. Banares,115[13] a lawyer was also suspended from the practice of law for two (2) years, as he failed to return the money of his client that he was holding in trust and for failing to file an answer to the complaint and his refusal to appear at the mandatory conference before the IBP. Thus, the same penalty should be imposed upon Casuga. Casuga violated the Notarial Rules The Notarial Rules, A.M. No. 02-8-13-SC, provides in its Rule IV, Section 1(c) and Sec. 3(a) when a notary public may sign a document in behalf of another person, thus: SEC. 1. Powers. x x x xxxx (c) A notary public is authorized to sign on behalf of a person who is physically unable to sign or make a mark on an instrument or document if: (1) the notary public is directed by the person unable to sign or make a mark to sign on his behalf; (2) the signature of the notary public is affixed in the presence of two disinterested and unaffected witnesses to the instrument or document; (3) both witnesses sign their own names; (4) the notary public writes below his signature: Signature affixed by notary in presence of (names and addresses of person and two (2) witnesses);

114[12] A.C. No. 7057, July 25, 2006, 496 SCRA 402. 115[13] A.C. No. 7021, February 21, 2007, 516 SCRA 323.

(5) the notary public notarizes his signature by acknowledgment or jurat. On the other hand, the succeeding Sec. 3(a) disqualifies a notary public from performing a notarial act if he or she is a party to the instrument or document that is to be notarized. None of the requirements contained in Rule IV, Sec. 1(c), as would justify a notary signing in behalf of a contracting party, was complied with in this case. Moreover, Casugas act of affixing his signature above the printed name Edwin T. Nevada, without any qualification, veritably made him a party to the contract of lease in question. Thus, his act of notarizing a deed to which he is a party is a plain violation of the aforequoted Rule IV, Sec. 3(a) of the Notarial Rules, for which he can be disciplinarily sanctioned provided under Rule XI, Sec. 1(b)(10) of the Notarial Rules, which provides: SECTION 1. Revocation and Administrative Sanctions. x x x. (b) In addition, the Executive Judge may revoke the commission of, or impose appropriate administrative sanctions upon, any notary public who: (10) knowingly performs or fails to perform any other act prohibited or mandated by these Rules; Aside from being a violation of the Notarial Rules, Casugas aforementioned act partakes of malpractice of law and misconduct punishable under the ensuing Sec. 27, Rule 138 of the Rules of Court: SEC. 27. Disbarment or suspension of attorneys by Supreme Court; grounds therefor. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, x x x or for any violation of the oath which he is required to take before admission to practice x x x. (Emphasis supplied.) So it was that in Lanuzo v. Bongon116[14] the Court suspended a notary public from the practice of law for one (1) year for violation of the Notarial Rules. This was on top of the penalty of disqualification from being commissioned as a notary public for two (2) years. In Dela Cruz v. Zabala,117[15] the Court adjudged the respondent notary public guilty of gross negligence for failing to require the parties to be physically present

116[14] A.C. No. 6737, September 23, 2008, 566 SCRA 214, 217-218. 117[15] A.C. No. 6294, November 17, 2004, 442 SCRA 407.

before him. In revoking the erring notarys commission, the Court, in Dela Cruz, stressed the significance of notarization and proceeded to define the heavy burden that goes when a lawyer is commissioned as a notary public. The Court wrote: x x x [N]otarization is not an empty, meaningless routinary act. It is invested with substantive public interest. It must be underscored that x x x notarization x x x converts a private document into a public document making that document admissible in evidence without further proof of authenticity thereof. A notarial document is, by law, entitled to full faith and credit upon its face. For this reason, a notary public must observe with utmost care the basic requirements in the performance of x x x duties; otherwise, the confidence of the public in the integrity of this form of conveyance would be undermined. xxxx A notary public should not notarize a document unless the persons who signed the same are the very same persons who executed and personally appeared before him to attest to the contents and the truth of what are stated therein. These acts of the affiants cannot be delegated because what are stated therein are facts they have personal knowledge of and are personally sworn to. Otherwise, their representatives names should appear in the said documents as the ones who executed the same. The function of a notary public is, among others, to guard against any illegal or immoral arrangements. By affixing his notarial seal on the instrument, he converted the Deed of Absolute Sale, from a private document into a public document. x x x As a lawyer commissioned to be a notary public, respondent is mandated to discharge his sacred duties with faithful observance and utmost respect for the legal solemnity of an oath in an acknowledgment or jurat. Simply put, such responsibility is incumbent upon him, he must now accept the commensurate consequences of his professional indiscretion.118[16] x x x (Emphasis supplied.) The recommended penalty must be modified Considering the various infractions Casuga committed, as discussed above, the aggregate penalty recommended by the IBP Board of Governors of suspension from the practice of law for four (4) years was correct. It hews with prevailing jurisprudence as cited above. However, Casugas disqualification from reappointment as notary public for two (2) years should match his suspension from the practice of law. The disqualification should accordingly be increased to four (4) years, since only a lawyer in good standing can be granted the commission of a notary public. The desired disbarment of Casuga, however, is too severe a sanction to impose under the premises; it cannot be granted. The penalty of disbarment shall be meted out only

118[16] Id. at 412-413.

when the lawyers misconduct borders on the criminal and/or is committed under scandalous circumstance.119[17] The money, jewelry and Rolex watch should be returned to Nevada Nevadas plea that the rental deposit of PhP 90,000, the pieces of jewelry worth PhP 300,000, and the Rolex watch valued at USD 12,000 or its equivalent in Philippine Peso should be ordered returned to her instead of to Jung Jong Chul is well-taken. We need not belabor the fact that Chul has no right whatsoever over the amount or property mentioned above. WHEREFORE, the Court finds Atty. Rodolfo D. Casuga GUILTY of gross misconduct for violation of Canon 16 of the Code of Professional Responsibility and the Notarial Rules. He is hereby SUSPENDED for a period of four (4) years from the practice of law. The notarial commission of Atty. Casuga, if still existing, is hereby REVOKED and he is DISQUALIFIED from being commissioned as Notary Public also for four (4) years. Additionally, he is ordered to return the amount of PhP 90,000, the pieces of jewelry subject of this case or their equivalent of PhP 300,000, and the Rolex watch valued at USD 12,000 or its equivalent in Philippine Peso to Corazon T. Nevada within thirty (30) days from finality of this Decision; otherwise, he shall be cited for contempt. Lastly, Atty. Casuga is warned that a repetition of the same or similar acts will be dealt with more severely. Let a copy of this Decision be furnished the Office of the Bar Confidant, to be appended to the personal record of Atty. Rodolfo D. Casuga as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for dissemination to all trial courts for their information and guidance. SO ORDERED.

119[17] Dantes v. Dantes, A.C. No. 6486, September 22, 2004, 438 SCRA 582, 588, 590.

Republic of the Philippines Supreme Court Manila THIRD DIVISION VALENTIN C. MIRANDA, Complainant, A. C. No. 6281 Present: PERALTA, J., Acting Chairperson, ABAD, PEREZ,* MENDOZA, and PERLAS-BERNABE, JJ. Promulgated: ATTY. MACARIO D. CARPIO, Respondent. September 26, 2011

- versus-

x---------------------------------------------------------------------------------------x DECISION PERALTA, J.: This is a disbarment case against Atty. Macario D. Carpio filed by Valentin C. Miranda.120[1] The facts, as culled from the records, are as follows: Complainant Valentin C. Miranda is one of the owners of a parcel of land consisting of 1,890 square meters located at Barangay Lupang Uno, Las Pias, Metro Manila. In 1994, complainant initiated Land Registration Commission (LRC) Case No. M226 for the registration of the aforesaid property. The case was filed before the Regional Trial Court of Las Pias City, Branch 275. During the course of the proceedings, complainant engaged the services of respondent Atty. Carpio as counsel in the said case when his original counsel, Atty. Samuel Marquez, figured in a vehicular accident. In complainant's Affidavit,121[2] complainant and respondent agreed that complainant was to pay respondent Twenty Thousand Pesos (PhP20,000.00) as

* Designated additional member in lieu of Associate Justice Presbitero J. Velasco, Jr., per Special Order No. 1102 dated September 21, 2011. 120[1] The case was initially referred by this Court to the Integrated Bar of the Philippines for investigation, report and recommendation and docketed as ADM. Case No. 6281; rollo, p. 36.

acceptance fee and Two Thousand Pesos (PhP2,000.00) as appearance fee. Complainant paid respondent the amounts due him, as evidenced by receipts duly signed by the latter. During the last hearing of the case, respondent demanded the additional amount of Ten Thousand Pesos (PhP10,000.00) for the preparation of a memorandum, which he said would further strengthen complainant's position in the case, plus twenty percent (20%) of the total area of the subject property as additional fees for his services. Complainant did not accede to respondent's demand for it was contrary to their agreement. Moreover, complainant co-owned the subject property with his siblings, and he could not have agreed to the amount being demanded by respondent without the knowledge and approval of his co-heirs. As a result of complainant's refusal to satisfy respondent's demands, the latter became furious and their relationship became sore. On January 12, 1998, a Decision was rendered in LRC Case No. M-226, granting the petition for registration, which Decision was declared final and executory in an Order dated June 5, 1998. On March 24, 2000, the Land Registration Authority (LRA) sent complainant a copy of the letter addressed to the Register of Deeds (RD) of Las Pias City, which transmitted the decree of registration and the original and owner's duplicate of the title of the property. On April 3, 2000, complainant went to the RD to get the owner's duplicate of the Original Certificate of Title (OCT) bearing No. 0-94. He was surprised to discover that the same had already been claimed by and released to respondent on March 29, 2000. On May 4, 2000, complainant talked to respondent on the phone and asked him to turn over the owner's duplicate of the OCT, which he had claimed without complainant's knowledge, consent and authority. Respondent insisted that complainant first pay him the PhP10,000.00 and the 20% share in the property equivalent to 378 square meters, in exchange for which, respondent would deliver the owner's duplicate of the OCT. Once again, complainant refused the demand, for not having been agreed upon. In a letter122[3] dated May 24, 2000, complainant reiterated his demand for the return of the owner's duplicate of the OCT. On June 11, 2000, complainant made the same demand on respondent over the telephone. Respondent reiterated his previous demand and angrily told complainant to comply, and threatened to have the OCT cancelled if the latter refused to pay him. On June 26, 2000, complainant learned that on April 6, 2000, respondent registered an adverse claim on the subject OCT wherein he claimed that the agreement on the payment of his legal services was 20% of the property and/or actual market value. To date, respondent has not returned the owner's duplicate of OCT No. 0-94 to complainant and his co-heirs despite repeated demands to effect the same.

121[2] Rollo, pp. 7-10. 122[3] Id. at 24.

In seeking the disbarment or the imposition of the appropriate penalty upon respondent, complainant invokes the following provisions of the Code of Professional Responsibility: Canon 20. A lawyer shall charge only fair and reasonable fees. Canon 16. A lawyer shall hold in trust all moneys and properties of come into his possession. Canon 16.03. A lawyer shall deliver the funds and properties of his upon demand. x x x his client that may client when due or

In defense of his actions, respondent relied on his alleged retaining lien over the owner's duplicate of OCT No. 0-94. Respondent admitted that he did not turn over to complainant the owner's duplicate of OCT No. 0-94 because of complainant's refusal, notwithstanding repeated demands, to complete payment of his agreed professional fee consisting of 20% of the total area of the property covered by the title, i.e., 378 square meters out of 1,890 square meters, or its equivalent market value at the rate of PhP7,000.00 per square meter, thus, yielding a sum of PhP2,646,000.00 for the entire 378square-meter portion and that he was ready and willing to turn over the owner's duplicate of OCT No. 0-94, should complainant pay him completely the aforesaid professional fee. Respondent admitted the receipt of the amount of PhP32,000.00, however, he alleged that the amount earlier paid to him will be deducted from the 20% of the current value of the subject lot. He alleged that the agreement was not reduced into writing, because the parties believed each other based on their mutual trust. He denied that he demanded the payment of PhP10,000.00 for the preparation of a memorandum, since he considered the same unnecessary. In addition to the alleged agreement between him and complainant for the payment of the 20% professional fees, respondent invoked the principle of quantum meruit to justify the amount being demanded by him. In its Report and Recommendation123[4] dated June 9, 2005, the Integrated Bar of the Philippines-Commission on Bar Discipline (IBP-CBD) recommended that respondent be suspended from the practice of law for a period of six (6) months for unjustly withholding from complainant the owner's duplicate of OCT No. 0-94 in the exercise of his so-called attorney's lien. In Resolution No. XVII-2005-173,124[5] dated December 17, 2005, the IBP Board of Governors adopted and approved the Report and Recommendation of the IBP-CBD. Respondent filed a motion for reconsideration of the resolution of the IBP Board

123[4] Id. at 312-323. 124[5] Id. at 311.

of Governors adopting the report and recommendation of the IBP-CBD. Pending the resolution of his motion for reconsideration, respondent filed a petition for review125[6] with this Court. The Court, in a Resolution126[7] dated August 16, 2006, directed that the case be remanded to the IBP for proper disposition, pursuant to this Court's resolution in Noriel J. Ramientas v. Atty. Jocelyn P. Reyala.127[8] In Notice of Resolution No. XVIII-2008-672, dated December 11, 2008, the IBP Board of Governors affirmed Resolution No. XVII-2005-173, dated December 17, 2005, with modification that respondent is ordered to return the complainant's owner's duplicate of OCT No. 0-94 within fifteen days from receipt of notice. Hence, the present petition. The Court sustains the resolution of the IBP Board of Governors, which affirmed with modification the findings and recommendations of the IBP-CBD. Respondent's claim for his unpaid professional fees that would legally give him the right to retain the

125[6] Id. at 273-281. 126[7] Id. at 325. 127[8] A.C. No. 7055, July 31, 2006, 497 SCRA 130, 137-138. In that case, the Court held that: In concurrence with the above, now, therefore, BE IT RESOLVED, as it is hereby resolved, that in accordance with our ruling in Halimao v. Villanueva, pertinent provisions of Rule III of the Rules of Procedure of the Commission on Bar Discipline, as contained in the ByLaws of the IBP, particularly 1 and 2, are hereby deemed amended. Accordingly, 1 of said rules now reads as follows:
SECTION. 1. Pleadings. - The only pleadings allowed are verified complaint, verified answer, verified position papers and motion for reconsideration of a resolution. (Emphasis supplied.) And in 2, a motion for reconsideration is, thus, removed from the purview of the class of prohibited pleadings. Further, the following guidelines shall be observed by the IBP in respect of disciplinary cases against lawyers: 1. The IBP must first afford a chance to either party to file a motion for reconsideration of the IBP resolution containing its findings and recommendations within fifteen (15) days from notice of receipt by the parties thereon; 2. If a motion for reconsideration has been timely filed by an aggrieved party, the IBP must first resolve the same prior to elevating to this Court the subject resolution together with the whole record of the case; xxxx 5. For records of cases already transmitted to this Court where there exist pending motions for reconsideration filed in due time before the IBP, the latter is directed to withdraw from this Court the subject resolutions, together with the whole records of the cases, within 30 days from notice, and, thereafter, to act on said motions with reasonable dispatch.

property of his client until he receives what is allegedly due him has been paid has no basis and, thus, is invalid. Section 37, Rule 138 of the Rules of Court specifically provides: Section 37. Attorneys liens. An attorney shall have a lien upon the funds, documents and papers of his client, which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements. An attorney's retaining lien is fully recognized if the presence of the following elements concur: (1) lawyer-client relationship; (2) lawful possession of the client's funds, documents and papers; and (3) unsatisfied claim for attorney's fees.128[9] Further, the attorney's retaining lien is a general lien for the balance of the account between the attorney and his client, and applies to the documents and funds of the client which may come into the attorney's possession in the course of his employment.129[10] In the present case, complainant claims that there is no such agreement for the payment of professional fee consisting of 20% of the total area of the subject property and submits that their agreement was only for the payment of the acceptance fee and the appearance fees. As correctly found by the IBP-CBD, there was no proof of any agreement between the complainant and the respondent that the latter is entitled to an additional professional fee consisting of 20% of the total area covered by OCT No. 0-94. The agreement between the parties only shows that respondent will be paid the acceptance fee and the appearance fees, which the respondent has duly received. Clearly, there is no unsatisfied claim for attorney's fees that would entitle respondent to retain his client's property. Hence, respondent could not validly withhold the title of his client absence a clear and justifiable claim. Respondent's unjustified act of holding on to complainant's title with the obvious aim of forcing complainant to agree to the amount of attorney's fees sought is an

128[9] Ampil v. Hon. Agrava, 145 Phil. 297, 303 (1970). (Emphasis supplied) 129[10] Id. at 305-306.

alarming abuse by respondent of the exercise of an attorney's retaining lien, which by no means is an absolute right, and cannot at all justify inordinate delay in the delivery of money and property to his client when due or upon demand.130[11] Atty. Carpio failed to live up to his duties as a lawyer by unlawfully withholding and failing to deliver the title of the complainant, despite repeated demands, in the guise of an alleged entitlement to additional professional fees. He has breached Rule 1.01 of Canon 1 and Rule 16.03 of Canon 16 of the Code of Professional Responsibility, which read: CANON 1 - A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESS. Rule 1.01 - A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. CANON 16 - A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION. Rule 16.03 - A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. Further, in collecting from complainant exorbitant fees, respondent violated Canon 20 of the Code of Professional Responsibility, which mandates that a lawyer shall charge only fair and reasonable fees. It is highly improper for a lawyer to impose additional professional fees upon his client which were never mentioned nor agreed upon at the time of the engagement of his services. At the outset, respondent should have informed the complainant of all the fees or possible fees that he would charge before handling the case and not towards the near conclusion of the case. This is essential in order for the complainant to determine if he has the financial capacity to pay respondent before engaging his services. Respondent's further submission that he is entitled to the payment of additional professional fees on the basis of the principle of quantum meruit has no merit. "Quantum meruit, meaning `as much as he deserved' is used as a basis for determining the lawyer's professional fees in the absence of a contract but recoverable by him from his client."131[12] The principle of quantum meruit applies if a lawyer is employed

130[11] Lemoine v. Atty. Balon, Jr., 460 Phil. 702, 714 (2003). 131[12] Rilloroza v. Eastern Telecommunications Phils., Inc., 369 Phil. 1, 11 (1999).

without a price agreed upon for his services. In such a case, he would be entitled to receive what he merits for his services, as much as he has earned.132[13] In the present case, the parties had already entered into an agreement as to the attorney's fees of the respondent, and thus, the principle of quantum meruit does not fully find application because the respondent is already compensated by such agreement. The Court notes that respondent did not inform complainant that he will be the one to secure the owner's duplicate of the OCT from the RD and failed to immediately inform complainant that the title was already in his possession. Complainant, on April 3, 2000, went to the RD of Las Pias City to get the owner's duplicate of OCT No. 0-94, only to be surprised that the said title had already been claimed by, and released to, respondent on March 29, 2000. A lawyer must conduct himself, especially in his dealings with his clients, with integrity in a manner that is beyond reproach. His relationship with his clients should be characterized by the highest degree of good faith and fairness.133[14] By keeping secret with the client his acquisition of the title, respondent was not fair in his dealing with his client. Respondent could have easily informed the complainant immediately of his receipt of the owner's duplicate of the OCT on March 29, 2000, in order to save his client the time and effort in going to the RD to get the title. Respondent's inexcusable act of withholding the property belonging to his client and imposing unwarranted fees in exchange for the release of said title deserve the imposition of disciplinary sanction. Hence, the ruling of the IBP Board of Governors, adopting and approving with modification the report and recommendation of the IBPCBD that respondent be suspended from the practice of law for a period of six (6) months and that respondent be ordered to return the complainant's owner's duplicate of OCT No. 0-94 is hereby affirmed. However, the fifteen-day period from notice given to respondent within which to return the title should be modified and, instead, respondent should return the same immediately upon receipt of the Court's decision. WHEREFORE, Atty. Macario D. Carpio is SUSPENDED from the practice of law for a period of six (6) months, effective upon receipt of this Decision. He is ordered to RETURN to the complainant the owner's duplicate of OCT No. 0-94 immediately upon receipt of this decision. He is WARNED that a repetition of the same or similar act shall be dealt with more severely. Let a copy of this Decision be furnished to the Office of the Bar Confidant, to be appended to the personal record of Atty. Macario D. Carpio as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for circulation to all courts in the country for their information and guidance. SO O

132[13] Lorenzo v. Court of Appeals, G.R. No. 85383, August 30, 1990, 189 SCRA 260, 264. 133[14] Schulz v. Atty. Flores, 462 Phil. 601, 613 (2003).

EN BANC DANIEL MORTERA, TERESITA A.C. No. 4562 MORTERA, FERDINAND MORTERA and LEO MORTERA Complainants, Present : DAVIDE, JR., C.J. PUNO, PANGANIBAN, QUISUMBING, YNARES-SANTIAGO, -versusCORONA, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO and GARCIA, JJ. ATTY. RENATO B. PAGATPATAN, Respondent. June 15, 2005 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x RESOLUTION CORONA, J.: How far may a lawyer go to ensure that he gets paid? The answer to this question is stated clearly in Canon 16 of the Code of Professional Responsibility for Lawyers[1] and in decisions[2] applying the same, but it is apparently not plain enough to the respondent in this case. It therefore behooves us to make an example of him for the improvement of the legal profession. This disbarment case originated from the execution of a judgment in a civil action for rescission of contracts with a prayer for prohibitory mandatory injunction.[3] In brief, the complainants, then the plaintiffs, sued their mother, one Renato C. Aguilar and one Philip Arnold Palmer Bradfield for the rescission of a contract of sale. Promulgated: SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CARPIO MORALES,

They secured judgment under which Aguilar was to pay them P155,000 for the property, which this Court affirmed.[4] On April 15, 1994, respondent did the unthinkable. Under a secret agreement with Aguilar, he accepted P150,000 from the latter as partial payment of the judgment sum, issuing a receipt for the amount.[5] He then deposited the money in his personal bank account without the knowledge of complainants.[6] Until now, respondent adamantly refuses to surrender the money to complainants, despite the successive Orders of the RTC and the Court of Appeals.[7] For his part, respondent, in his comment[8] admits his secret agreement with and receipt of the money from Aguilar, interposing as his defense the fact that the complainants and their mother owed him the money he appropriated for services previously rendered. They would not have paid him his fees had he not done what he did.[9] In support of his argument, the respondent narrated his years of service as counsel for the complainants and their mother. He alleged the amounts they owed him although he presented no evidence of any agreement between him and the complainants for the exact amount of his compensation. Respondents responsibility to the complainants is unequivocally stated in Canons 15 and 16 of the Code of Professional Responsibility. The four rules governing this situation were: he owed candor to his clients;[10] he was bound to account for whatever money he received for and from them;[11] as a lawyer, he was obligated to keep his own money separate from that of his clients;[12] and, although he was entitled to a lien over the funds in order to satisfy his lawful fees,[13] he was also bound to give prompt notice to his clients of such liens and to deliver the funds to them upon demand or when due. Respondent violated each and every one of these rules. Respondent cited the need to protect the money from other persons claiming to be heirs of Eusebio Montera[14] and from the volatile temperament of the complainants[15] but did not present any evidence at all to prove either claim. Thus, these claims should be ignored. Because the respondent admitted concealing his clients money, the only question in our minds is how severe his punishment should be. The Board of Governors of the Integrated Bar of the Philippines resolved[16] to suspend the respondent for one year. We do not agree. In Aldovino v. Pujalte,[17] respondent Atty. Pedro C. Pujalte similarly faced disbarment charges for having withheld his clients money in violation of Canon 16. Pujalte alleged a lien for his fees over the contested amount but adduced no evidence of this supposed lien.

In disposing of that case, we said: Respondent has no right to retain or appropriate unilaterally, as lawyers lien, the sum of P250,000, as attorneys fees. In fact, he did not adduce any proof of such agreement. His mere allegation or claim is not proof. Obviously, his failure to return the money to complainants upon demand gave rise to the presumption that he misappropriated it in violation of the trust reposed on him. His act of holding on to their money without their acquiescence is conduct indicative of lack of integrity and propriety. He was clinging to something not his and to which he had no right.

As a penalty for his infraction, Atty. Pujalte was suspended for a year. However, in the more recent case of de Guzman Buado and Lising v. Layag[18] which involved a violation of Canons 15, 16 and 17, the Court En Banc imposed the much heavier penalty of indefinite suspension. In that case, Atty. Eufracio Layag, the lawyer of the complainants Lising and de Guzman, successfully prosecuted a case against Inland Trailways, Inc. (Inland). Pursuant to the judgment, Inland issued three checks, one payable to Layag, one payable to Lising and one payable to de Guzman who had already passed away by then. Layag received all three checks from the deputy sheriff but did not inform the complainants. He then gave them to one Marie Paz Gonzales for encashment on the strength of a special power of attorney (SPA) purportedly executed by the late de Guzman appointing her as his attorney-in-fact. This SPA authorized Gonzales to encash any check or bill of exchange received in settlement of the case. Even after complainants learned of the issuance of the checks two years later and demanded delivery of the proceeds, Layag refused to do so. In imposing upon Layag the penalty of indefinite suspension, the Court En Banc considered his years of experience as a lawyer, his ignorance of the law, specifically the Civil Code, and his violation of not one but three Canons. Even though, on its face, this case has more in common with Pujalte than with Layag, a one-year suspension seems too lenient for a number of reasons. First, the respondent in this case has been a practicing lawyer since 1974[19] and even runs his own small law firm. For all his vast experience, however, he claims that he has done nothing wrong by concealing and withholding his clients money from them.[20] Coming from a seasoned practitioner of the law, this attitude is inexcusable. Second, the respondent had other means of recovering his fees, having filed a case for that purpose which was, however, dismissed for his failure to properly implead an indispensable party.[21] In short, having botched his own effort to recover his fees, he sought to simply subvert both law and proper procedure by holding on to the money.

Clearly, the respondents actuations were thoroughly tainted with bad faith, deceit and utter contempt of his sworn duty as a lawyer. Thus, a heavier penalty than a mere one-year suspension is definitely called for. WHEREFORE, the IBP Board of Governors Resolution No. XV-2002-223 in Administrative Case No. 4562, finding respondent liable for violation of Canon 16 of the Code of Professional Responsibility is hereby AFFIRMED with the MODIFICATION that instead of a one-year suspension, Atty. Renato B. Pagatpatan is hereby SUSPENDED from the practice of law for two years. Respondent is further directed to turn over to the complainants, within five (5) days from receipt of this resolution, the P150,000 he received in their behalf. Respondent is also ORDERED to report to the Office of the Bar Confidant his compliance herewith within 15 days from such compliance. Let a copy of this Resolution be attached to the personal record of Atty. Renato B. Pagatpatan and copies furnished the Integrated Bar of the Philippines and the Office of the Court Administrator for dissemination to all courts. This Resolution is immediately executory. SO ORDERED. SECOND DIVISION [A.M. No. MTJ-00-1336. December 19, 2000] PETRA M. SEVILLA, complainant, vs. JUDGE ISMAEL L. SALUBRE, respondent. DECISION DE LEON, JR., J.: Before us is a verified complaint for disbarment dated June 24, 1998, earlier docketed as A.C. No. 4970, against Atty. Ismael L. Salubre, presently a Municipal Trial Court Judge of Tagum, Davao del Norte, charging the respondent with violations of Cannons 16 and 17 of the Code of Professional Responsibility.i[1] In the verified complaint, complainant alleges that respondent, prior to his appointment as a Judge, was her legal counsel in Civil Case No. 91-01 entitled Sps. Petra Sevilla and Sancho Sevilla vs. Sps. Shem J. Alfarero, et al., for Repurchase and Damages with Prayer for the Issuance of Preliminary Injunction. On December 26, 1990, upon the advice of respondent, complainant turned-over to the former the amount of P45,000.00 to be consigned with the trial court as repurchase money. Moreover, instead of consigning said amount, the respondent deposited the money in his name with the Family Savings Bank, Panabo, Davao Province. And without the consent of the complainant, the said amount was withdrawn from the said bank, misappropriated and used by respondent for his own purposes and benefit. This was followed by a series of promises and pleas for extension to pay. On April 14, 1994, respondent issued a promissory note promising to pay the amount of P45,000.00 in June 1994 or immediately thereafter.ii[2] On July 8, 1994, respondent asked for an

extension of one month.iii[3] On October 17, 1994, respondent issued another promissory note promising to pay on or before January 31, 1995.iv[4] However, on January 30, 1995, respondent asked for a fifteen-day extension or up to February 15, 1995 within which to pay.v[5] This was followed by a telegram from respondent addressed to complainant and received on February 28, 1995 asking for another extension to pay because his loan with the PNB, Tagum Branch was still being processed.vi[6] Thereafter, on May 9, 1995, respondent executed yet another promissory note promising to pay the total amount of P63,000.00 (P45,000.00 as principal plus P18,000.00 as interest four (4) years and five (5) months at 10% per annum) on or before June 30, 1995 without necessity of demand.vii[7] But on June 28, 1995, respondent through a telegram, asked for an extension on the ground that his loan with PNB, Tagum Branch was still being processed.viii[8] On August 1, 1995, respondent once again asked for an extension based on the same ground and promised to pay before he assumes his post as judge of the Municipal Trial Court.ix[9] The 201 file of respondent shows that he assumed his post on August 1, 1995. On August 15, 1995, respondent promised to turn over to complainant the amount necessary to cover his obligation as soon as his loan with PNB was approved.x[10] On May 23, 1996, respondent asked Sancho, the husband of complainant, to come back on July 3, 1996 by which time the loan not with PNB but this time with Land Bank would allegedly be ready.xi[11] On August 21, 1996, the daughter of complainant, Leonor M. Sevilla, sent a demand letter asking respondent to pay the amount of P77,787.59 (P45,000.00 as principal plus P32,787.59 as 10% interest per annum for five (5) years and eight (8) months) on or before August 25, 1996, otherwise they will resort to court action.xii[12] Subsequently, respondent issued two (2) checks, the first is dated April 30, 1997 for P45,000.00 and the second is dated May 15, 1997 for P31,000.00.xiii[13] However, on November 4, 1997 both checks were dishonored on the ground account closed.xiv[14] Finally, complainant, now through her counsel, sent a demand letter dated November 15, 1997 asking respondent to make good the value of his two (2) checks within five (5) days from receipt of the letter.xv[15] On November 25, 1998, this case was referred to the Office of the Court Administrator (OCA) for evaluation, report and recommendation.xvi[16] On November 25, 1998, the OCA through Deputy Court Administrator Reynaldo Suarez, recommended that respondent be allowed to file his Comment. The OCA opined that although the complaint focuses on acts of respondent prior to his appointment as judge of the Municipal Trial Court, the charges falls as one of the serious charges in Rule 140, Section 6 of the Rules of Court, to wit, willful failure to pay a debt. The obligation was not extinguished by his appointment as a Judge. In his Comment,xvii[17] respondent denied all the allegations of complainant regarding how he handled the repurchase money. He averred that the allegations of the complainant in her complaint were merely the result of a minor misunderstanding and that he and complainant had already resolved the matter. In fact, he said, the complainant had executed an Affidavit of Desistancexviii[18] dated August 9, 1999, wherein complainant alleged, among others, that the filing of the case was a result of a misunderstanding and could not be blamed for any criminal intent on the part of the respondent. Furthermore, in view of the settlement of the civil aspect of the case, she is no longer willing to pursue her complaint against the respondent. Relying in the case of Imbing vs. Tiongson,xix[19] the OCA recommended that respondent be informed that the mere desistance of the complainant is not a ground

for dismissal of the complaint and is not an excuse for delaying the filing of his comment. Accordingly, he should be required to comment anew on the complaint, addressing the facts and issues raised therein. In his subsequent Commentxx[20] (with attachments) dated March 31, 2000, respondent explains that he was then the legal counsel of herein complainant in several cases before the RTC, Branch 4, Panabo, Davao, namely: a. Civil Case No. 91-01, entitled Sps. Petra and Sancho Sevilla vs. Sps. Shem Afarero, et al., for Repurchase of the Land in the amount of P200,000.00; b. Another Civil Case entitled Sps. Petra and Sancho Sevilla vs. Milky Amatong for Repurchase also; c. A case for support filed by Petra Sevilla against her husband Sancho Sevilla. Respondent narrates that the aforecited cases were filed in 1990 and 1991. The case against Shem Alfarero is still pending before the Court of Appeals while the case against Milky Amatong is still pending before the RTC, Panabo, Davao. Sometime in the middle part of 1990, complainant paid him the amount of P45,000.00 for litigation expenses and appearance fee in the above-mentioned cases which he (respondent) deposited in his name with the Family Savings Bank, Panabo, Davao. However, complainant caused him to sign a receipt which stated that the purpose thereof is for the repurchase of the property subject of the case she filed against Shem Alfarero. Respondent claims that this amount is not for the repurchase of the said property considering that the value of the property subject in the said case is P200,000.00. When respondent assumed office as Judge of the Municipal Trial Court in Tagum, Davao on August 1, 1995, complainant demanded for the return of the amount of P45,000.00 plus interest thereon which has reached a total amount of P77,787.50. Respondent then paid the amount of P35,000.00 with a balance of P10,000.00 on the principal but complainant insisted for the payment also of the interest. When respondent failed to pay the full amount and interest, as demanded, complainant filed a criminal case for Estafa against the respondent before the Regional Trial Court of Panabo, Davao, Branch 4. To avoid embarrassment, respondent paid the amount demanded and eventually complainant executed an Affidavit of Desistance on August 9, 1999 with the assistance of her counsel, Atty. Jacinto T. Rubillar. Later, the trial court ordered the dismissal of the said criminal case in its Order dated August 27, 1999.xxi[21] On the basis of its evaluation, report and recommendation, the OCA found the contention of respondent to be without merit. It opined that the contention of respondent that the amount he received from complainant was in payment of his appearance fee and other litigation expenses is belied by the receipt respondent signed on February 15, 1994. And still, in another receipt which respondent had signed, respondent acknowledged having deposited said amount of P45,000.00 with the Family Savings Bank, Panabo Branch. The OCA also found that respondents deliberate refusal to return the said amount despite repeated demands from his client (complainant herein) was a violation of Canon 16 particularly Rule 16.03, Code of Professional Responsibility and that it was of no moment that respondent had eventually settled his obligation. The respondent paid his obligation only after complainant had filed a case for the purpose. From the foregoing, the OCA recommended that respondent Judge Ismael L. Salubre be fined in the amount of P10,000.00 with a stern warning that a repetition of the same and similar acts shall be dealt with more severely. The OCA likewise recommended that the instant complaint be re-docketed as an administrative matter.

We agree with the findings and conclusion of the Office of the Court Administrator. However, taking into consideration the attendant circumstances of this case we believe that the amount of the fine recommended should be increased. The Affidavit of Desistance of herein complainant did not divest this Court of its jurisdiction to impose administrative sanctions upon respondent Judge. In like manner, while it may be true that the complaint for Estafa had been dismissed, the dismissal was on account of the complainants voluntary desistance and not upon a finding of innocence of the respondent. It neither confirms nor denies the respondents nonculpability. It must be emphasized, that the primary object of administrative cases against lawyers is not only to punish and discipline the erring individual lawyers but also to safeguard the administration of justice by protecting the courts and the public from the misconduct of lawyers, and to remove from the legal profession persons whose utter disregard of their lawyers oath have proven them unfit to continue discharging the trust reposed in them as members of the bar. Thus, administrative cases against lawyers can still proceed despite the dismissal of civil and/or criminal cases against them. In Fernando Cruz and Amelia Cruz vs. Atty. Ernesto Jacinto,xxii[22] we held that The practice of law is so intimately affected with public interest that it is both a right and a duty of the State to control and regulate it in order to promote the public welfare. The Constitution vests this power of control and regulation in this Court. Since the practice of law is inseparably connected with the exercise of its judicial power in administration of justice, the Court cannot be divested of its constitutionally ordained prerogative which includes the authority to discipline, suspend or disbar any unfit and unworthy member of the Bar by a mere execution of affidavits of voluntary desistance and quitclaim (par [5], Sec. 5, 1987 Constitution). A lawyer may be disciplined or suspended for any misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, in honesty, in probity and good demeanor, thus rendering unworthy to continue as an officer of the court (Maligsa vs. Cabanting, 272 SCRA 408 [1997]), and the complainants who called the attention of the Court to the attorneys alleged misconduct are in no sense a party, and have generally no interest in the outcome except as all good citizens may have in the proper administration of justice (Rayos-Ombac vs. Rayos, 285 SCRA 93[1998]). We likewise agree with the Office of the Court Administrator that respondent Judge Ismael L. Salubre is liable for violation of Canon 16 of the Code of Professional Responsibility for his failure to return the funds of his client (complainant herein) upon demand. As noted earlier, respondent finally returned the funds to his client but only after the latter sued him for estafa. In Judge Adoracion G. Angeles vs. Atty. Thomas C. Uy, Jr.xxiii[23], we stated that The relationship between a lawyer and a client is highly fiduciary; it requires a high degree of fidelity and good faith. It is designed to remove all such temptation and to prevent everything of that kind from being done for the protection of the client. Thus, Canon 16 of the Code of Professional Responsibility provides that a lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Furthermore, Rule 16.01 of the Code also states that a lawyer shall account for all money or property collected or received for or from the client. The Canons of Professional Ethics is even more explicit:

The lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client. Money of the client collected for the client or other trust property coming into the possession of the lawyer should be reported and accounted for promptly and should not under any circumstances be commingled with his own or be used by him. In the present case, the appointment of the respondent as Judge of the Metropolitan Trial Court is not a valid reason for respondent not to properly address and comply with the demand of complainant, his former client, to pay and settle forthwith the amount he had received in trust from the latter. Respondents contention that the money he received from complainant was actually the latters payment for his appearance fee and other litigation expenses should have been made known to complainant at the earliest time when the demand was made. However, instead of properly saying his piece regarding the matter he bombarded complainant with a long line of promises in the hope that complainant would eventually allow the matter to be left unsettled. Nothing in the numerous communications which respondent judge sent to complainant would indicate that he had really exerted efforts to explain the real story as he claimed it to be. Respondent did not even squarely addressed the veracity of the letters he sent to complainant and offer an explanation why his contention now is different from the contents of those letters. What is evident from the record is the fact that respondent misappropriated the money entrusted to him by his client (complainant herein) while he was still in trial practice. The fact that he was eventually appointed as Judge will not exculpate him from taking responsibility of the consequences of his acts as an officer of the court and, more so, now as Judge. Though the acts complained of were prior to his appointment as a Judge, it is trite to emphasize that the Code of Judicial Ethics no less mandates that a judge should avoid the appearance of impropriety.xxiv[24] Even his personal behavior in his everyday life should be beyond reproach.xxv[25] By issuing the two checks after he was already discharging his duties as a Judge purportedly to settle the obligation, i.e., the first dated April 30, 1997 for P45,000.00 and the second is dated May 15, 1997 for P31,000.00, which later on were both dishonored on the ground account closed,xxvi[26] respondent failed to keep up with the exacting standards of the Canons of Judicial Ethics. Such act tends to show his apparent intention to further delay payment due the complainant, which delay in fact lasted for five (5) years and eight (8) months. Being the visible representation of law, and more importantly, of justice, the people sees in the respondent the intermediary of justice between two conflicting interests. If while still in active litigation practice lawyers do not know how to uphold this kind of justice to their clients previous to their appointment as Judges, how then could people expect them to render just judgments in the cases before them? This is the price that judges should pay for the honor bestowed upon those who occupy an exalted position in the administration of justice. No position exacts a greater demand on the moral righteousness and uprightness of an individual than a seat in the judiciary. A magistrate of the law must comport himself at all times in such a manner that his conduct, official or otherwise, can bear the most searching scrutiny of the public that looks up to him as the epitome of integrity and justice.xxvii[27] With respect to the claim or allegation that the respondent violated Canon 17 of the Code of Professional Responsibility, we find that said allegation was not substantiated in this case.

WHEREFORE, respondent Judge Ismael L. Salubre is hereby found guilty of violation of Canon 16 of the Code of Professional Responsibility for his failure to return and immediately deliver the funds of his former client, Petra M. Sevilla upon demand, and Canon 2 of the Canons of Judicial Ethics for his failure to avoid the appearance of impropriety. The respondent is hereby ordered to pay a fine in the amount of P20,000.00 with a STERN WARNING that a repetition of the same and similar acts shall be dealt with more severely. Let a copy of this Decision be attached to the personal record of Judge Ismael L. Salubre in the Office of the Bar Confidant and copies thereof be furnished the Office of the Court Administrator. SO ORDERED. Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.

Republic of the Philippines Supreme Court Baguio City EN BANC REYNARIA BARCENAS, Complainant, A.C. No. 8159 (formerly CBD 05-1452) Present: PUNO, C.J., CARPIO, CORONA, CARPIO MORALES, VELASCO JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR., MENDOZA and PEREZ, JJ.

- versus -

ATTY. ANORLITO A. ALVERO, Promulgated: Respondent. April 23, 2010 x--------------------------------------------------x DECISION PERALTA, J.: Before us is a Complaint134[1] dated May 17, 2005 for disciplinary action against respondent Atty. Anorlito A. Alvero filed by Reynaria Barcenas with the Integrated Bar of the Philippines-Commission on Bar Discipline (IBP-CBD), docketed as CBD Case No. 05-1452, now Administrative Case (A.C.) No. 8159.

The facts as culled from the records are as follows: On May 7, 2004, Barcenas, through her employee Rodolfo San Antonio (San Antonio), entrusted to Atty. Alvero the amount of P300,000.00, which the latter was supposed to give to a certain Amanda Gasta to redeem the rights of his deceased father as tenant of a ricefield located in Barangay San Benito, Victoria, Laguna. The receipt of the money was evidenced by an acknowledgment receipt135[2] dated May 7, 2004. In the said receipt, Atty. Alvero said that he would deposit the money in court because Amanda Gasta refused to accept the same.136[3] Later, Barcenas found out that Atty. Alvero was losing a lot of money in cockfights. To check if the money they gave Atty. Alvero was still intact, Barcenas pretended to borrow P80,000.00 from the P300,000.00 and promised to return the amount when needed or as soon as the case was set for hearing. However, Atty. Alvero allegedly replied, Akala nyo ba ay madali kunin ang pera pag nasa korte na? Subsequently, Barcenas discovered that Atty. Alvero did not deposit the money in court, but instead converted and used the same for his personal needs. In his letters dated August 18, 2004137[4] and August 25, 2004,138[5] Atty. Atty. Alvero admitted the receipt of the P300,000.00 and promised to return the money. The pertinent portions of said letters are quoted as follows: Dahil sa kagustuhan ng iyong amo na maibalik ko ang perang tinanggap ko sa iyo, lumakad ako agad at pilit kong kinukuha kahit iyon man lang na hiniram sa akin na P80,000.00 pero hindi karakapraka ang lumikom ng gayong halaga. Pero tiniyak sa akin na sa Martes, ika-24 ng buwan ay ibibigay sa akin. Bukas ay tutungo ako sa amin upang lumikom pa ng karagdagang halaga upang maisauli ko ang buong P300,000.00. Nakikiusap ako sa iyo dahil sa ikaw ang nagbigay sa akin ng pera na bigyan mo ako ng kaunting panahon upang malikom ko ang pera na ipinagkatiwala mo sa akin, hanggang ika-25 ng Agosto, 2004. x x x139[6]

Maya-mayang alas nuwebe (9:00) titingnan ang lupang aking ipinagbibili ng Dalawang Milyon. Gustong-gusto ng bibili gusto lang makita ang lupa dahil malayo, nasa Cavinti. Kung ok na sa bibili pinakamatagal na ang Friday ang bayaran. Iyong aking sinisingil na isang P344,000.00 at isang P258,000.00 na utang ng taga-Liliw ay darating sa akin ngayong umaga bago mag alas otso. Kung maydala ng pambayad kahit magkano ay ibibigay ko sa iyo ngayong hapon. xxxx Lahat ng pagkakaperahan ko ay aking ginagawa, pati anak ko ay tinawagan ko na. Pakihintay muna lang ng kauting panahon pa, hindi matatapos ang linggong ito, tapos ang problema ko sa iyo. Pasensiya ka na.140[7] However, as of the filing of the instant complaint, despite repeated demands, Atty. Alvero failed to return the same. Thus, Barcenas prayed that Atty. Alvero be disbarred for being a disgrace to the legal profession. On March 30, 2005, the IBP-CBD ordered Atty. Alvero to submit his Answer to the complaint.141[8] In compliance, in his Answer142[9] dated April 18, 2005, Atty. Alvero claimed that he did not know Barcenas prior to the filing of the instant complaint nor did he know that San Antonio was an employee of Barcenas. He alleged that he came to know Barcenas only when the latter went to him to borrow P60,000.00 from the amount entrusted to Rodolfo San Antonio who entrusted to respondent. At that time, Atty. Alvero claimed that San Antonio was reluctant to grant the request because it might jeopardize the main and principal cause of action of the Department of Agrarian Reform Adjudication Board (DARAB) case. Atty. Alvero, however, admitted that he received an amount of

P300,000.00 from San Antonio, though he claimed that said money was the principal cause of action in the reconveyance action.143[10] Atty. Alvero stressed that there was no lawyer-client relationship between him and Barcenas. He, however, insisted that the lawyer-client relationship between him and San Antonio still subsisted as his service was never severed by the latter. He further emphasized that he had not breached the trust of his client, since he had, in fact, manifested his willingness to return the said amount as long as his lawyer-client relationship with San Antonio subsisted. Finally, Atty. Alvero prayed that the instant complaint be dismissed. On June 20, 2005, the IBP-CBD notified the parties to appear for the mandatory conference.144[11] Meanwhile, in a separate Affidavit145[12] dated September 19, 2005, San Antonio narrated that he indeed sought Atty. Alveros professional services concerning an agricultural land dispute. He claimed that Atty. Alvero made him believe that he needed to provide an amount of P300,000.00 in order to file his complaint, as the same would be deposited in court. San Antonio quoted Atty. Alvero as saying: Hindi pwedeng hindi kasabay ang pera sa pagpa-file ng papel dahil tubusan yan, kung sakaling ipatubos ay nasa korte na ang pera. Believing that it was the truth, San Antonio was forced to borrow money from Barcenas in the amount of P300,000.00. Subsequently, San Antonio gave the said amount to Atty. Alvero, in addition to the professional fees, as shown by an acknowledgment receipt.146[13] San Antonio further corroborated Barcenas allegation that they tried to borrow P80,000.00 from the P300,000.00 they gave to Atty. Alvero after they found out that the latter lost a big amount of money in cockfighting. He reiterated that Atty. Alvero declined and stated, Akala nyo ba ay madali kunin ang pera pag nasa korte na. Later on, they found out that Atty. Atty. Alvero lied to them since the money was never deposited in court but was instead used for his personal needs. For several times, Atty.

Alvero promised to return the money to them, but consistently failed to do so. San Antonio submitted Atty. Atty. Alveros letters dated August 18, 2004147[14] and August 25, 2004148[15] showing the latters promises to return the amount of P300,000.00. During the mandatory conference, Atty. Alvero failed to attend despite notice. Thus, he was deemed to have waived his right to participate in the mandatory conference. In its Report and Recommendation dated May 21, 2008, the IBP-CBD recommended that Atty. Alvero be suspended from the practice of law for a period of one (1) year for gross misconduct. Atty. Alvero was, likewise, ordered to immediately account for and return the amount of P300,000.00 to Barcenas and/or Rodolfo San Antonio. The pertinent portion thereof reads: The record does not show and no evidence was presented by respondent to prove that the amount of P300,000 which was entrusted to him was already returned to complainant or Rodolfo San Antonio, by way of justifying his non-return of the money, respondent claims in his Answer that the P300,000 was the source of the principal cause of action of the petitioner, Rodolfo San Antonio, in the above-cited DARAB Case No. R-0403-0011-04 as shown by a copy of the Amended Petition, copy of which is hereto attached as Annex 1 and made an integral part hereof. A review of Annex 1, which in the Amended Petition dated October 31, 2004 and filed on November 3, 2004, will show that the Petitioner Rodolfo San Antonio is praying that he be allowed to cultivate the land after the P300,000 is consigned by Petitioner to the Honorable Adjudication Board. Up to the time of the filing of the instant complaint, no such deposit or consignment took place and no evidence was presented that respondent deposited the amount in court. The fact is respondent promised to return the amount (Annex B and C of the Complaint), but he failed to do so. The failure therefore of respondent to account for and return the amount of P300,000 entrusted or given to him by his client constitute gross misconduct and would subject him to disciplinary action under the Code.149[16]

In Notice of Resolution No. XVIII-2008-342 dated July 17, 2008, the IBP Board of Governors adopted and approved with modification as to penalty the Report and Recommendation of the IBP-CBD. Instead, it ordered that Atty. Alvero be suspended from the practice of law for two (2) years and, likewise, ordered him to account for and return the amount of P300,000.00 to complainants within thirty (30) days from receipt of notice. The Office of the Bar Confidant redocketed the instant case as a regular administrative complaint against Atty. Alvero and, subsequently, recommended that this Court issue an extended resolution for the final disposition of the case. We sustain the findings and recommendations of the IBP-CBD. Undoubtedly, Atty. Alvero breached Rule 1.01 of Canon 1 and Rules 16.01, 16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility, which read: CANON 1. A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESS. Rule 1.01. A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. CANON 16. A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION. Rule 16.01. A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02. A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03. A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his unlawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. In the instant case, Atty. Alvero admitted to having received the amount of P300,000.00 from San Antonio, specifically for the purpose of depositing it in court. However, as found by the IBP-CBD, Atty. Alvero presented no evidence that he had indeed deposited the amount in or consigned it to the court. Neither was there any evidence that he had returned the amount to Barcenas or San Antonio. From the records of the case, there is likewise a clear breach of lawyer-client relations. When a lawyer receives money from a client for a particular purpose, the lawyer is

bound to render an accounting to the client showing that the money was spent for a particular purpose. And if he does not use the money for the intended purpose, the lawyer must immediately return the money to his client.150[17] These, Atty. Alvero failed to do. Jurisprudence dictates that a lawyer who obtains possession of the funds and properties of his client in the course of his professional employment shall deliver the same to his client (a) when they become due, or (b) upon demand. In the instant case, respondent failed to account for and return the P300,000.00 despite complainants repeated demands.151[18] Atty. Alvero cannot take refuge in his claim that there existed no attorney-client relationship between him and Barcenas. Even if it were true that no attorney-client relationship existed between them, case law has it that an attorney may be removed, or otherwise disciplined, not only for malpractice and dishonesty in the profession, but also for gross misconduct not connected with his professional duties, making him unfit for the office and unworthy of the privileges which his license and the law confer upon him.152[19] Atty. Alveros failure to immediately account for and return the money when due and upon demand violated the trust reposed in him, demonstrated his lack of integrity and moral soundness, and warranted the imposition of disciplinary action. It gave rise to the presumption that he converted the money for his own use, and this act constituted a gross violation of professional ethics and a betrayal of public confidence in the legal profession.153[20] They constitute gross misconduct and gross unethical behavior for which he may be suspended, following Section 27, Rule 138 of the Rules of Court, which provides: Sec. 27. Disbarment or suspension of attorneys by Supreme Court, grounds therefor . - A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office,

grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before the admission to practice, or for a willful disobedience appearing as attorney for a party without authority to do so. We come to the penalty imposable in this case. In Small v. Banares,154[21] the respondent was suspended for two years for violating Canon 16 of the Code of Professional Responsibility, particularly for failing to file a case for which the amount of P80,000.00 was given him by the client, and for failing to return the said amount upon demand. Considering that similar circumstances are attendant in this case, the Court finds the Resolution of the IBP imposing on respondent a two-year suspension to be in order. As a final note, we reiterate: the practice of law is not a right, but a privilege. It is granted only to those of good moral character. The Bar must maintain a high standard of honesty and fair dealing.155[22] For the practice of law is a profession, a form of public trust, the performance of which is entrusted to those who are qualified and who possess good moral character. Those who are unable or unwilling to comply with the responsibilities and meet the standards of the profession are unworthy of the privilege to practice law.156[23] WHEREFORE, Notice of Resolution No. XVIII-2008-342 dated July 17, 2008 of the IBP-CBD Board of Governors, which found respondent Atty. Anorlito A. Alvero GUILTY of gross misconduct, is AFFIRMED. He is hereby SUSPENDED for a period of two (2) years from the practice of law, effective upon the receipt of this Decision. He is warned that a repetition of the same or a similar act will be dealt with more severely. Let a copy of this Decision be furnished to the Office of the Bar Confidant, to be appended to the personal record of Atty. Alvero as a member of the Bar; the Integrated Bar of the Philippines; and the Office of the Court Administrator for circulation to all courts in the country for their information and guidance. This Decision shall be immediately executory.

16 A lawyer shall hold in trust all moneys and properties of his client that may come into his possession.
i[1] Canon

Rule 16.01 - A Lawyer shall account for all money or property collected or received for or from the client. Rule 16.02 A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03 A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. Rule 16.04 A Lawyer shall not borrow money from his client unless th e clients interests are fully protected by the nature of the case or by independent advice. Neither shall a lawyer lend money to a client except, when in the interest of justice, he has to advance necessary expenses in a legal matter he is handling for the client. Canon 17 A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him.
ii[2] Annex iii[3] Annex iv[4] Annex v[5] Annex vi[6] Annex vii[7] Annex viii[8] Annex ix[9] Annex x[10] Annex xi[11] Annex xii[12] Annex

A, Complainants Supplemental Affidavit. B, Complainants Supplemental Affidavit. C, Complainants Supplemental Affidavit. D, Complainants Supplemental Affidavit. F, Complainants Supplemental Affidavit. E, Complainants Supplemental Affidavit. G, Complainants Supplemental Affidavit.

H, Complainants Supplemental Affidavit. I, Complainants Supplemental Affidavit. J, Complainants Supplemental Affidavit. C, of Complainant; Rollo, p. 6.

xiii[13] Annex

E, of Complainant; Rollo, p. 7. F , F-1 and F-2, of Complainant; Rollo, p. 8.

xiv[14] Annexes xv[15] Annex

D, of Complainant. of the Supreme Courts 2nd Division, Rollo, p. 26.

xvi[16] Resolution xvii[17] Rollo,

pp. 32-33. A, of Comment; Rollo, p. 34.

xviii[18] Annex xix[19] 229 xx[20]

SCRA 690 (1994).

Rollo, pp. 43-48. p. 47. Case No. 5235 promulgated March 22, 2000.

xxi[21] Rollo, xxii[22] ADM. xxiii[23] A.C.

No. 5019, promulgated on April 6, 2000. 2, Canons of Judicial Ethics. 3, Canons of Judicial Ethics. p. 7. vs. Agcaoili, 294 SCRA 423, 452 (1998).

xxiv[24] Canon xxv[25] Canon xxvi[26] Rollo,

xxvii[27] Cortes