Judge Angeles v Atty.

Uy

Facts:
The private prosecutor Atty. Thomas C. Uy, Jr. appeared for Mrs. Del Rosario in a certain
case to settle the civil aspect of the case of estafa. In open court, accused Norma Trajano
manifested that she had already settled in full the civil aspect and payed P36500. She further
alleged that she paid P20,000.00 directly to the private complainant and the balance of
P16,500.00 was delivered to Atty. Thomas C. Uy, Jr., and presented a receipt thereof.
However, the private complainant, Primitiva Malansing [Del Rosario] manifested that she did
not receive the amount of P16500.
The court where complainant Judge was presiding then directed Atty. Thomas C. Uy to turn over
the money to the private complainant.
Atty. Uy however argued that his client did not like to accept the money but the assertion of the
lawyer was belied by his own client, the herein private complainant,
who manifested in open court x x x her willingness to accept the money.
The Court suspended the proceedings to enable Atty. Uy to get the money from his law office
which is located only at the second floor of the same building where this court is located. But
Atty. Uy did not show up anymore and not even his shadow appeared in Court.
In his the Comment contends that the respondent kept the money in his office because that was
the alleged wish of both his client and her son. He allegedly informed them of such money and
tried to give it to them, but they insisted that he retain it. He further maintained that it was only
after Judge Angeles issue the February 10, 1999 Order that his client relented and accepted the
money on February 12, 1999.

Issue:
Whether or not the respondent adhered to the ethical standards of the bar

Held:
No.
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."
In the present case, it is clear that respondent failed to promptly report and account for the
P16,500 he had received from Norma Trajano on behalf of his client, Primitiva Del Rosario.
Although the amount had been entrusted to respondent on December 14, 1998, his client
revealed during the February 10, 1999 hearing that she had not yet received it. Worse, she did not
even know where it was.
If it were true that Mrs. Del Rosario was informed about the payment and that she entrusted it to
respondent, she would have known its whereabouts. That she did not know it showed the falsity
of his claim. It is noteworthy that respondent did not dispute the foregoing transcript although it
belied his allegation that Mrs. Del Rosario's express wish was to have the payments in full.
The records do not clearly show whether Attorney Uy had in fact appropriated the said amount
in fact, Mrs, Del Rosario acknowledge that she had received it on February 12, 1999. They do
show, however, that respondent failed to promptly report that amount to her. This is clearly a
violation of his professional responsibility
In the present case, the records merely show that respondent did not promptly report that he
received money on behalf of his client. There is no clear evidence of misappropriation. Under the
circumstances, we rule that he should be suspended for one month.
2. NAKPIL vs VALDES SUSPENDED 1 YEAR

FACTS:

Respondent was a CPA-lawyer and whose relationship with Jose Nakpil dated
back during their school days in De La Salle and the Philippine Law School.
Respondent acted as the accounted, legal counsel, and business consultant
of Jose. Sometime later, Jose became interested in a property, a summer
house, in Baguio City. Because he had no money to buy the same, he asked
respondent to buy it for him and that Jose would pay him back. This,
respondent did, and held the property in trust.

When Jose Nakpil died, respondent offered his services to the formers heirs
for the settlement of Joses estate. Here now comes his widow, Imelda,
alleging that respondent claimed absolute ownership over the summer house
and transferred the same to his family corporation. Not only that, he still
stated as part of the claims against said estate the value of the summer
house. Imelda likewise pointed out respondents alleged conflict of interest
because respondents law firm not only represented Joses estate, but also
the creditors of the same.

ISSUE: WON respondent can be held liable.

HELD:

YES. As a rule, a lawyer is not barred from dealing with his client but the
business transaction must be characterized with utmost honesty and good
faith. The measure of good faith which an attorney is required to exercise in
his dealings with his client is a much higher standard than is required in
business dealings where the parties trade at arms length. Business
transactions between an attorney and his client are disfavoured and
discouraged by the policy of the law.

It ought to follow that respondents act of excluding Moran property from the
estate which his law firm was representing evinces a lack of fidelity to the
cause of his client. If respondent truly believed that the said property
belonged to him, he should have at least informed complainant of his
adverse claim. To make matters worse, respondent, through his accounting
firm, charged the two loans of P65, 000.00 and P75, 000.00 as liability of the
estate, after said loans were obtained by respondent for the purchase and
renovation of the property which he claimed for himself.
In the case at bar, there is no question that the interests of the estate and
that of it creditors are adverse to each other. Respondents accounting firm
prepared the list of assets and liabilities of the estate and, at the same time,
computed the claims of two creditors of the estate. There is clearly a conflict
between the interest of the estate which stands as the debtor, and that of
the two claimants who are creditors of the estate.
LIWAG vs NERI

April 29, 1960

DOCTRINE: ABUSE of CLIENT's confidence

FACTS:

Gervacio Liwag seeks to disbar Atty. Gilberto Neri.

Spouses Pineda requested Liwag to be counter-indemnitor with Manila Surety

& Fidelity Company in a bond in favor of National Rice and Corn
Corporation(NARIC). However, Spouses Pineda failed to liquidated obligation,
the NARIC enfored bond against Manila Surety & Fidelity. In turn, Manila
Surety collected P2,951 from Liwag ( as counter-indemnitor). After Liwag
failed to extrajudicially recover the amount from Pinedas, Liwag engaged the
services of Neri on a contingent fee for 40 % to handle the matter.

Atty. Neri and Spouses Pineda were neighbors, Atty. Neri was slowly acting
and just tried to talk to Spouses who admitted indebtedness and made
assurances to pay. However, when no payment was made Atty. Neri sent
letter of demand threatening to take judicial action against Spouses Pineda.
Meanwhile, Liwag already gave filing fee of 30 pesos to Atty. Neri who
informed his client that he already filed a complaint when in fact he did not
actually file. Later, Liwag discovered the truth and filed this administrative
case.

ISSUE:

WON Atty. Neri abused his client's confidence by making Liwag believed that
he already filed a complaint after it obtain ed money for filing fee.

HELD:
YES. In defense, Atty. Neri asserted that he has full discretion as to the
means of accomplishing the assignment since his services were not engaged
solely for purposes of filing collection complaint but to collect from
Spouses Pinedas the amount owed. This is untenable, the fact that he had
already received filing fee and the fact that he made Liwag believed that he
already filed complaint is violation of his oath; it is a clear misrepresentation.

Disbarment is too harsh, considering that he has not yet received anything
for his service. ONLY REPRIMAND with warning.
VICENTE DIAZ v. RUPERTO KAPUNAN

December 8, 1923

FACTS: In 1917, Vicente Diaz and Secundino de Mendezona formed a

partnership with a capital of P380,000 and entered into extensive business
transactions in Leyte Unfortunately, hothe business failed to prosper, with
the result that on liquidation, it was found to have suffered a loss of P67,000.
When they came to settle up their affairs, they eventually formulated a
document of sale and mortgage in which Mendezona recognized a debt in
favor of Diaz in the sum of P80,000 and an additional sum of P10,000 owing
to Diaz, laid upon the hacienda "Mapuyo," and to be paid within the term of
one year.

At the time fixed for the sale, there appeared Diaz with his lawyer Emilio
Benitez, and Attorney Ruperto Kapunan for the Mendezonas. The deputy
sheriff of Leyte is authority for the statement that Atty. Kapunan told him
that he was ready to bid on the property up to P16,000 in order to assist the
Mendezona family which was in financial straits. The bids stopped on account
of Diaz and Atty. Kapunan entering into the agreement, on the promise of
Diaz to pay him P1,000, to desist from further participation in the sale. Diaz
gave Atty. Kapunan the initial amount of P500.

Thereafter, Diaz brought an action for malpractice against Atty. Kapunan.

ISSUE: Whether or not Atty. Kapunan is guilty of malpractice in alleged

violation of article 1459 of the Civil Code and article 542 of the Penal Code.

HELD: When Kapunan took part in the sale, it must be assumed that he was
bidding in representation of his client and for the benefit of the client.

Article 1459 of the Civil Code:

This provides that the following persons, naming them, "cannot take by
purchase, even at a public or judicial auction, either in person or through the
mediation of another." The provision contained in the last paragraph of said
article is made to include lawyers, with respect to any property or rights
involved in any litigation in which they may take party by virtue of their
profession and office. We do not believe this article has been infringed by the
respondent because he has not purchased property at a public or judicial
auction and because his participation in the auction was in representation of
his client. It has been held that an execution sale to the attorney of the
defendant is not unlawful if made in good faith, with the consent of the
client, and without any purpose of defrauding the latter's creditors.

Article 542 of Penal Code:

This article punishes "any person who shall solicit any gift or promise as a
consideration for agreeing to refrain from taking part in any public auction."
The crime is consummated by the mere act of soliciting a gift or
promise for the purpose of abstaining from taking part in the
auction.

Public policy discountenances combinations or agreements on the part of

bidders at execution sales, the objects and effects of which are to stifle
competition. The courts will consider an agreement between a judgment
creditor and one claiming an interest in the thing about to be sold under an
execution, that neither shall bid against the other, as void, unless all parties
concerned know of the arrangement and consent thereto. Execution sales
should be open to free and full competition, in order to secure the maximum
benefit for the debtor. We conclude that Attorney Kapunan has been

Atty, Ruperto Kapunan was reprimanded.

PATERNO R. CANLAS vs. HON. COURT OF APPEALS, and FRANCISCO
HERRERA,

G.R. No. L-77691 August 8,1988

FACTS:

The private respondent was the registered owner of eight (six, according to
the petitioner) parcels of land located in Quezon City. He obtained various
loans from the L & R Corporation, a financing institution, in various sums
totaling P420,000.00. As security therefor, he executed deeds of mortgage in
favor of the corporation over the parcels aforesaid. For his failure to pay
upon maturity of the said loans, the firm caused an extrajudicial foreclosure
of mortgage and as a consequence of which, the said eight (six, according to
the petitioner) parcels of land were disposed of at public auction, and in
which L & R Corporation was itself the highest bidder.

Pending redemption, the private respondent filed a complaint for injunction

against L & R Corporation, to enjoin consolidation of title in its name, in
which he succeeded in obtaining preliminary injunctive relief. He was
represented by the petitioner. Two years later, the parties entered into a
compromise agreement whereby L & R Corporation accorded the private
respondent another year to redeem the foreclosed properties subject to
payment of P600,000.00, with interest thereon at one per cent per month,
and stipulated that the petitioner shall be entitled to attorney's fees of
P100,000.00, which the court approved.

The private respondent failed to pay the loans in question, and the attorney's
fees demanded by the petitioner. The petitioner moved for execution insofar
as his fees were concemed. The court granted execution, although it does
not appear that the sum was actually collected.
Sometime thereafter, the petitioner and the private respondent met to
discuss relief for the latter with respect to his liability to L & R Corporation on
the one hand, and his obligation to the petitioner on the other. The petitioner
contends that the private respondent "earnestly implored" him to redeem
the said properties; the private respondent maintains that it was the
petitioner himself who 'offered to advance the money," provided that he, the
private respondent, executed a "transfer of mortgage" over the properties in
his favor.

The records further show that the parties, pursuant to their agreement,
executed a "Deed of Sale and Transfer of Rights of Redemption and/or to
Redeem," a document that enabled the petitioner, first, to redeem the
parcels in question, and secondly, to register the same in his name. The
private respondent alleges that he subsequently filed loan applications with
the Family Savings Bank to finance a wet market project upon the subject
premises but to his dismay, the properties were already registered in the
name of the petitioner. He likewise contends that the "Deed of Sale and
Transfer of Rights of Redemption and/or to Redeem" on file with the Register
of Deeds (for Quezon City) had been falsified to reflect transfer of any and
all my rights of the real properties and/or to redeem from the Mortgagee
instead of their agreement which was to transfer only any and all my rights
of equity of redemption and/or to redeem from the Mortgagee.

As a consequence, the private respondent caused the annotation of an

adverse claim upon the respective certificates of title embracing the
properties. Upon learning of the same, the petitioner moved for the
cancellation of the adverse claim and for the issuance of a writ of possession.
The court granted both motions. The private respondent countered with a
motion for a temporary restraining order and later, a motion to recall the writ
of possession.

Finally, he instituted an action for reconveyance and reformation of

document, praying that the certificates of title issued in the name of the
petitioner be cancelled and that "the Deed of Sale and Transfer of Rights of
Equity of Redemption and/or to Redeem dated May 3, 1983 ... be reformed to
reflect the true agreement of Francisco Herrera and Paterno R. Canlas, of a
mortgage." He vehemently maintains that the petitioner's "agreement with
[him] was that the latter would lend the money to the former for a year, so
that [petitioner] would have time to look for a loan for the wet market which
[the petitioner] intended to put up on said property." Predictably, the
petitioner moved for dismissal.

The trial court, however, denied the private respondent's petition. Private
respondent then filed a suit for "Annulment Of Judgment in the respondent
Court of Appeals, praying that the orders: (1). granting execution over the
portion of the compromise agreement obliging the private respondent to pay
the petitioner P100,000.00 as attorney's fees; (2) denying the private
respondent's prayer for a restraining order directed against the execution:
and (3) denying the motion to recall writ of possession, all be set aside.

The petitioner filed a comment on the petition, followed by a motion to

dismiss, which the court denied. MR was filed which the CA also denied
hence, the instant petition.

ISSUES:

1. Whether or not the CA erred in issuing the assailed orders on the

grounds of improper procedure.

2. Whether or not the conveyance in favor of the petitioner is subject to

the ban on acquisition by attorneys of things in litigation.

HELD:

1. The court ruled that on purely technical grounds, the petitioner's

arguments are impressive.

A perusal of the petition reveals no cause of action for annulment of

judgment. In the first place, and as herein petitioner Canlas correctly pointed
out, the judgment itself is not assailed, but rather, the orders merely
implementing it. Secondly, there is no showing that extrinsic fraud indeed
vitiated the proceedings presided over by Judge Castro. On the contrary,
Herrera's petition in the respondent court will show that he was privy to the
incidents he complains of, and in fact, had entered timely oppositions and
motions to defeat Atty. Canlas' claims under the compromise agreement.

However, the court sustained Atty. Canlas' position-on matters of procedure

for the enlightenment solely of the bench and the bar but held that it
cannot overlook the fact that a member of the bar would exploit his mastery
of procedural law to score a "technical knockout" over his own client, of all
people.

By Atty. Canlas' own account, "due to lack of paying capacity of respondent

Herrera, no financing entity was willing to extend him any loan with which to
pay the redemption price of his mortgaged properties and petitioner's
P100,000.00 attorney's fees awarded in the Compromise Judgment," a
development that should have tempered his demand for his fees. For obvious
reasons, he placed his interests over and above those of his client, in
opposition to his oath to "conduct himself as a lawyer ... with all good fidelity
... to [his] clients." The Court finds the occasion fit to stress that lawyering is
not a moneymaking venture and lawyers are not merchants, a fundamental
standard that has, as a matter of judicial notice, eluded not a few law
advocates. The petitioner's efforts partaking of a shakedown" of his own
client are not becoming of a lawyer and certainly, do not speak well of his
fealty to his oath to "delay no man for money."

Further, the court held that it did not find the petitioner's claim of attorney's
fees in the sum of P100,000.00 reasonable. The extent of the services he had
rendered in Civil Case No. 30679, and as far as the records will yield, is not
impressive to justify payment of such a gargantuan amount.

All things considered, the court reduced the petitioner's fees, on a quantum
meruit basis, to P20,000.00.

The Court simply cannot fag for the petitioner's pretensions that he acquired
the properties as a gesture of magnanimity and altruism He denies, of
course, having made money from it, but what he cannot dispute is the fact
that he did resell the properties.

While it cannot hold the petitioner liable for falsification, the court condemn
the petitioner for infidelity to his oath "to do no falsehood"
 2. As to the second issue, the Court observed that the "Deed of Sale and
Transfer of Rights of Equity of Redemption and/or to Redeem" was
executed following the finality of the decision approving the
compromise agreement. It is actually a new contract not one in
pursuance of what had been agreed upon on compromise in which,
as we said, the petitioner purportedly assumed redemption rights over
the disputed properties (but in reality, acquired absolute ownership
thereof). By virtue of such a subsequent agreement, the lands had
ceased to be properties which are "the object of any litigation."

At any rate, the transfer is not subject to the injunction of Article 1491 of the
Civil Code. But like all voidable contracts, it is open to annulment on the
ground of mistake, fraud, or undue influence, which is in turn subject to the
right of innocent purchasers for value.

For this reason, the court invalidated the transfer in question specifically for
undue influence. While respondent Herrera has not specifically prayed for
invalidation, this is the clear tenor of his petition for annulment in the
Appellate Court. It appearing, however, that the properties have been
conveyed to third persons whom the court presumed to be innocent
purchasers for value, the petitioner, Atty. Paterno Canlas, must be held liable,
by way of actual damages, for such a loss of properties.

The court however, did not condone the private respondent's own
shortcomings. The court thus held that the parties must then set off their
obligations against the other such that respondent Francisco Herrera was
held liable to Atty. Paterno Canlas to pay the sum of P654,000.00
representing the redemption price of the properties, in addition to the sum of
P20,000. 00 as for attomey's fees. The court ordered Atty. Canlas, in turn, to
pay the respondent the amount of P1,000,000.00, the sum he earned from
the resale thereof, such that he shall, after proper adjustments, be indebted
to his client in the sum of P326,000.00 as and for damages.

WHEREFORE, judgment was rendered.

1. ORDERING the petitioner, Atty. Patemo Canlas, to pay to the private

respondent, Francisco Herrera, the sum of P326,000.00, as and for damages;

2. ORDERING the petitioner to SHOW CAUSE why no disciplinary action may

be imposed on him for violation of his oath, as a lawyer, within ten (10) days
from notice, after which the same will be consolidated with AC No. 2625;
3. DISMISSING this petition and REMANDING the case to the respondent
Court of Appeals for execution; and

4. ORDERING the petitioner to pay costs.

Capulong vs Alino AM 381 February 10, 1968 Concepcion, CJ:

FACTS:

In 1957, the spouses Emilio and Cirila Capulong lost a civil case. They were represented
by Atty. Manuel Alio. The spouses then gave P298.00 in order for the lawyer to use the money
in paying for fees in appealing the case. However, the appeal was dismissed because Atty. Alio
failed to pay the docket fees and other required fees. The spouses then filed an administrative
case against Atty. Alio. In his answer, respondent alleged that complainants had authorized him
to exercise his judgment and discretion in determining whether or not he should prosecute the
appeal, and to regard said sum of P298.00 as compensation for his services in connection with
said case, should he consider it advisable to desist from said appeal. The investigating fiscal
recommended disciplinary action against Atty. Alio. The Solicitor General agreed with the
fiscal. When the case reached the Supreme Court, Atty. Alio manifested his intent to produce
additional evidence. The SC granted his request but, after four postponements which Atty. Alio
asked for, he still failed to adduce additional evidence within the prescribe period. The SC still
gave him a chance and scheduled an oral argument but again, Atty. Alio asked for
postponement. In lieu of the oral argument, the SC required Alio to submit his memorandum
which he again failed to comply with.

ISSUE:

Whether or not Atty. Alio should be subjected to disciplinary action.

HELD:

Yes. Alio was already negligent when he failed to pay the docket fees. In the first place,
he already filed the appeal, hence, he should have applied the money given to him to pay for the
docket fees. If his failure to pay the docket fees and other fees was to desist from pursuing an
appeal why did he filed a motion for reconsideration of the resolution of the CA dismissing the
appeal in consequence of said failure. It suggests that Atty. Alino misappropriated the funds held
by him in trust for his clients. His later actions in this case shows his high degree of
irresponsibility. He was given all chances by the SC but he continually failed to comply with the
orders of the court. The foregoing acts and omissions indicate the high degree of irresponsibility
of respondent herein and his unworthiness to continue as a member of the legal profession.
ANDREA BALCE CELAJE, complainant, vs. ATTY. SANTIAGO C. SORIANO,
respondent.
A.C. No. 7418 | October 9, 2007
FACTS:

Before this Court is a disbarment case filed against Atty. Santiago C.

Soriano (respondent) for gross misconduct.

In a Complaint filed before the IBP, complainant Andrea Balce Celaje

alleged that respondent asked for money to be put up as an injunction bond,
which complainant found out later, however, to be unnecessary as the
application for the writ was denied by the trial court. Respondent also asked
for money on several occasions allegedly to spend for or to be given to the
judge handling their case, Judge Milagros Quijano. When complainant
approached Judge Quijano and asked whether what respondent was saying
was true, Judge Quijano outrightly denied the allegations and advised her to
file an administrative case against respondent.

In his Answer, respondent denied the charges against him and averred
that the same were merely concocted by complainant to destroy his
character. He also contended that it was complainant who boasted that she
is a professional fixer in administrative agencies as well as in the judiciary;
and that complainant promised to pay him large amounts of attorney's fees
which complainant however did not keep.

In the Report and Recommendation dated January 24, 2006, IBP-

Commission on Bar Discipline Commissioner Dennis A.B. Funa found
respondent guilty of Gross Misconduct in his relations with his client and
recommended that respondent be suspended for three years from the
practice of law.

ISSUE:
Whether or not Atty. Soriano is guilty of gross misconduct for misappropriating his
client's funds.

RULING: Yes.

The Court agrees with the IBP Resolution.

 The Code of Professional Responsibility, particularly Canon 16 thereof,
mandates that a lawyer shall hold in trust all moneys and properties of his
client that may come into his possession. He shall account for all money or
property collected or received from his client and shall deliver the funds and
property of his client when due or upon demand.

As found by Commissioner Funa, it was established that respondent

could not account for P5,800.00 which was part of the sum given by
complainant to him for the purpose of filing an injunctive bond. Respondent
admitted having received from complainant P17,800.00 on April 19, 2002 for
the preliminary injunction and admitted to having a balance of P9,000.00 in
his promissory note to the Manila Insurance Co., Inc. dated April 23, 2002,
which was reduced to P5,800.00 by reason of an additional payment of
P4,000.00, leaving an amount of P5,800.00 unaccounted for. The affidavit of
the insurance agent, Valentina Ramos, dated December 8, 2005 also states
that even up to said date, respondent had not yet paid the balance of
P5,800.00.

Respondent's failure to return the money to complainant upon demand

gave rise to the presumption that he misappropriated it for his own use to
the prejudice of, and in violation of the trust reposed in him by his client. It is
a gross violation of general morality and of professional ethics and impairs
public confidence in the legal profession which deserves punishment.

As the Court has pronounced, when a lawyer receives money from the
client for a particular purpose, the lawyer is bound to render an accounting
to the client showing that the money was spent for 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.

WHEREFORE, respondent Atty. Santiago C. Soriano is found GUILTY of

violating Canon 16 of the Code of Professional Responsibility and is hereby
SUSPENDED from the practice of law for a period of two (2) years from
notice, with a STERN WARNING that a repetition of the same or similar acts
shall be dealt with more severely.

Respondent is further ordered to restitute to his clients through Andrea

Balce Celaje, within 30 days from notice, the amount of P5,800.00.
Respondent is directed to submit to the Court proof of payment within fifteen
days from payment of the full amount.
PENTICOSTES VS. IBAEZ; A.C. CBD No. 167. March 9, 1999.

FACTS: Sometime in 1989, Encarnacion Pascual, the sister-in-law of Atty.

Prudencio S. Penticostes (complainant) was sued for non-remittance of SSS
payments. The complaint was assigned to Prosecutor Diosdado S. Ibanez
(respondent) for preliminary investigation. In the course of the investigation,
Encarnacion Pascual gave P1,804.00 to respondent as payment of her SSS
contribution in arrears. Respondent, however, did not remit the amount to
the system. The fact of non-payment was certified to by the SSS.

Over a year later, complainant filed with the RTC of Tarlac complaint for
professional misconduct against Ibanez due to the latters failure to remit the
SSS contributions. Seven days later, or on November 23, 1990, respondent
paid P1,804.00 to the SSS on behalf of Encarnacion Pascual.

The case was referred to the IBP-Tarlac Chapter, the court observing that it
had no competence to receive evidence on the matter. Upon receipt of the
case, the Tarlac Chapter forwarded the same to IBPs Commission on Bar
Discipline.

Respondent alleged the following defenses:

1. That the act of accommodating Encarnacion was an act of Christian

charity;

2. That the acts complained were not done by him in his capacity as a
practicing lawyer but on account of his office as a prosecutor.

3. That the complaint was moot and academic, since the amount of
P1,804.00 was already paid by him to SSS.

The Commission recommended that the respondent be reprimanded. The

Board of Governors of the IBP adopted and approved its Commissions
recommendation.

ISSUE: Is respondent guilty of professional misconduct?

HELD: YES. Rule 1.01 of the Code of Professional Responsibility provides that
a lawyer shall not engage in unlawful, dishonest, immoral or deceitful
conduct.
It is glaringly clear that respondents non-remittance for over one year of the
funds coming from Encarnacion Pascual constitutes conduct in gross violation
of the above canon. The belated payment of the same to the SSS does not
excuse his misconduct. While Pascual may not strictly be considered a client
of respondent, the rules relating to a lawyers handling of funds of a client is
applicable. In Daroy v. Legaspi, the court held that the relation between an
attorney and his client is highly fiduciary in nature; thus, lawyers are bound
to promptly account for money or property received by them on behalf of
their clients and failure to do so constitutes professional misconduct. The
failure of respondent to immediately remit the amount to the SSS gives rise
to the presumption that he has misappropriated it for his own use. This is a
gross violation of general morality as well as professional ethics; it impairs
public confidence in the legal profession and deserves punishment.
Respondents claim that he may not be held liable because he did not act as
a private lawyer but as a prosecutor is unavailing. Canon 6 of the Code of
Professional Responsibility provides: These canons shall apply to lawyers in
government service in the discharge of their official tasks.
A lawyer does not shed his professional obligations upon assuming public
office. In fact, his public office should make him more sensitive to his
professional obligations because a lawyers disreputable conduct is more
likely to be magnified in the publics eye.

The Court REPRIMANDS respondent with a STERN WARNING that a

commission of the similar offense will be dealt with more severely in the
future.
Daroy vs. Legaspi
A.M. No. 936
25 July 1975

FACTS:

Complainants, Fermina Legaspi-Daroy, Lydia Legaspi-Acha and Agripino

Legaspi, filed a disbarment case against respondent, Atty. Ramon Chaves
Legaspi, for misappropriating Php 4,000 he had collected from them.

Based on the evidence presented by the complainants, they retained the

services of Atty. Legaspi for the intestate settlement of their grandparents
estate.

The land adjudged to the complaints was sold.

Fermina, one of the complainants, only came to know of the sale when Atty.
Legaspi wrote a note to her father, Teofilo Legaspi, stating "that the money
we have deposited may be withdrawn on December 8, 1969 at 9:00 oclock".

Unfortunately, the complainants were not able to withdraw said amount on 8

December.

In the afternoon of 9 December, Fermina received a note from Atty. Legaspi

confessing that he was forced to use the Php 4,000 in his custody to solve his
problem.

Several demands were made upon Atty. Legaspi to pay the amount he
misappropriated. He repeatedly broke his promises to make payment.

Since complainants grew impatient, they filed this disbarment complaint.

ISSUE:

Did Atty. Legaspi violated the fiduciary obligations he owed to the

complainants?

HELD:

YES. Money collected by a lawyer in pursuance of a judgment in favor of his

clients is held in trust and must be immediately turned over to them.

The relation between an attorney and his client is highly fiduciary in its
nature and of a very delicate, exacting and confidential character, requiring
a high degree of fidelity and good faith. In view of that special relationship,
lawyers are bound to promptly account for money or property received by
them on behalf of their clients and failure to do so constitutes professional
misconduct. The fact that a lawyer has a lien for fees or money in his hands
collected for his clients does not relieve him from the duty of promptly
accounting for the funds received.

The conversion of funds entrusted to an attorney is a gross violation of

general morality as well as professional ethics. It impairs public confidence in
the legal profession. It deserves severe punishment

Atty. Legaspi was DISBARRED.

Sotto vs. Samson

G.R. No. L-16917

July 31, 1962

Facts:

Atty. Vicente Sotto was appellee Quintilliana Samson's counsel in several

cases in which the adverse party was her husband, Manuel Carratala, from
whom she was estranged. Atty. Sotto, acting as counsel for appellee, filed a
petition with CFI of Cebu requesting for judicial authority to sell her
paraphernal property without the need of her husband's consent. Manuel
Carratala in turn filed a case asking the same court to annul or prevent any
conveyance of said paraphernal property, and obtained a writ of injunction
forbidding both appellee and Atty. Sotto from carrying out the sale and
registering any conveyance of property with the register of deeds. Although
appellee's petition for judicial authority was still pending, and regardless of
the writ of injunction, appellee Samson executed a deed of sale whereby she
sold and conveyed to her counsel, Atty. Sotto, her paraphernal property with
the improvements existing thereon.

The Cebu Court decided the case in favor of appellee's husband, thereby
declaring null and void the sale of her paraphernal property in favor of her
counsel. Atty. Sotto appealed to the Supreme Court but later withdrew the
appeal after the Philippine Legislature enacted Act No. 3922 authorizing a
married woman to dispose of her paraphernal property without her
husband's consent.

Samson then filed a case to annul sale of a lot executed by her in favor of
defendant Vicente Sotto. She alleges that, as her attorney, Sotto had taken
advantage of her financial difficulties and mental weakness and of the
confidence she had reposed in him.

Issue: WON the sale allegedly made by Samson to Atty. Sotto is null and void.

Held:
Yes. Sotto was Samson's lawyer in a litigation involving the subject of the
contract. Therefore, Sotto was disqualified to buy under Article 1459 of the
Civil Code prohibiting lawyers and solicitors to purchase, even at a public or
judicial auction, either in person or through the mediation of another any
property rights involved in any litigation in which they may take part by
virtue of their profession and office.

Indeed, because of their client-attorney relationship Sotto probably unduly

influences Samson, not only to sell the lot to him but also to accept terms
less favorable to her. Sotto is ordered to return the lot together with rents
due to Samson. However, Samson is to return the purchase price and legal
interest thereon to the attorney, as he may not unjustly enrich himself at the
expense of her counsel.

G.R. No. L-26882 April 5, 1978

ROSARIO VDA. DE LAIG vs. COURT OF APPEALS, CARMEN VERZO,

PETRE GALERO, THE REGISTER OF DEEDS OF CAMARINES NORTE,
THE DIRECTOR OF LANDS, AND THE SECRETARY OF AGRICULTURE
AND NATURAL RESOURCES

FACTS

On March 27, 1939, Petre Galero obtained Homestead Patent No. 53-176 covering
219,949 square meters of land for which Original Certificate of Title No. 1097 was issued
in Galero's name.
On June 25, 1940, Galero sold the land to a certain Mario Escuta for P300.00.
Escuta in turn, sold the same land to Florencio Caramoan in December, 1942.
Later, however, Petre Galero, through proper court action, and with Atty. Benito K. Laig
the deceased husband of herein petitioner Rosario Vda. de Laig as counsel
recovered the land, the court having been convinced that its alienation violated Section
118 of the Public Land Act.
On June 1, 1948, a deed of sale was executed by and between Petre Galero as vendor
and Atty. Benito K. Laig as vendee, whereby the former sold to the latter the land in
question with its improvements, for P1,500.00 plus attorney's fees due Atty. Laig for his
legal services as counsel for Galero in the successful reconveyance case.
(NOTE: This portion of the case could be the one related to PALE since this involves
sale of a property belonging to a client in favor of the lawyer. In the book of Agpalo,
it gave a one-line citation of this case saying that the prohibition for the purchase
of a property belonging to a client will be inapplicable if the same was done AFTER
 the litigation has been terminated. HOWEVER in this case, the Court did not make
any ruling on this matter as the focus of the entire decision only discusses about
DOUBLE SALE--- who between Verzo and the petitioner is entitled of the land in
question. Kaya hindi ko gets bakit yan yung doctrine na naka-cite sa book, hindi ko
naman mahanap na sinabi yan exactly dito sa case. Bad faith kasi dito si Verzo, so
kay petitioner mapupunta ang land, in effect, meaning parang impliedly lang since
di naman ni-rule out dito, in-uphold ng Court yung purchase ni Atty. Benito Laig.)
Original Certificate of Title No. 1097 was delivered by Galero to Atty. Laig.
In 1951, Atty. Benito Laig died.
On March 29, 1952, petitioner Vda. de Laig filed with the Bureau of Lands an affidavit
together with copy of the deed of sale in her husband's favor. Said affidavit stated that she
wanted to have the ownership over the land transferred to her husband's name.
On August 14, 1952, Office of the Secretary of Agriculture and Natural Resources
approved the deed of sale.
However, on July 15, 1952, Petre Galero, with the assistance of Atty. Jose L. Lapak, son
of respondent Register of Deeds Baldomero M. Lapak sought in court the issuance of a
second owner's duplicate copy of OCT No. 1097, claiming that his first duplicate of said
OCT was lost during World War 11.
On July 19, 1952 or in a span of only four days - a second owner's duplicate copy of
OCT No. 1097 was issued by respondent Register of Deeds Baldomero M. Lapak in
favor of Petre Galero.
On September 12, 1952, Acting Secretary of Agriculture Jose S. Camus approved the sale
in favor of Carmen Verzo.
On October 14, 1952, the deed of sale in Verzo's favor was registered, and Transfer
Certificate of Title No. T-1055, in lieu of OCT No. 1097, which was cancelled, was
issued in her name.
Petitioners called the attention of the Director of Lands to the existence of two deeds of
sale.
On March 12, 1953, in reply to the Director of Land's request, Petre Galero denied
having sold the land in issue to Atty. Benito K. Laig.
Petre Galero was charged in Criminal Case No. 533 before the Court of First Instance of
Camarines with estafa thru falsification of public documents in connection with the sale
in favor of Carmen Verzo of the land in point. Galero was convicted.
Petitioner Vda. de Laig filed Civil Case No. 577 against respondents Carmen Verzo, Petre
Galero, the Director of Lands, the Register of Deeds of Camarines Norte and the
Secretary of Agriculture and Natural Resources praying for the annulment of the sale in
favor of Carmen Verzo and the cancellation of the second owner's duplicate of Original
Certificate of Title No. 1097 and Transfer Certificate of Title No. T-1055 by declaring the
first OCT No. 1097 valid and effective.
The trial court, in a decision, dismissed the complaint and declared that the land
described in TCT No. 1055 to be rightfully owned by Carmen Verzo.
ISSUE: Whether or not Verzo should be considered as the rightful owner.

RULING: NO.

To be under the protective umbrella of paragraph 2, Article 1544, of the New Civil Code, it is
essential that the vendee of the immovable must act in good faith in registering his deed of
sale. In other words, good faith must characterize the vendee's act of prior registration. The
records reveal that respondent Carmen Verzo was not in good faith when she facilitated the
registration of her deed of sale.

At the time of the sale of the land in question by Petre Galero to Atty.
Benito K. Laig in 1948, the latter was a boarder of Carmen Verzo in her
house. As a matter of fact, Atty. Laig maintained his law office, and
received his clients (among whom was Petre Galero) therein

One of the witnesses to the deed of sale executed by and between Atty. Laig and Petre Galero
was Rosario Verzo Villarente, Carmen Verzo's very own sister who was at that time living
with her in her house, where Atty. Laig then boarded.

Petre Galero was able to procure another copy of the duplicate of Original Certificate of Title
No. 1097 covering the disputed land through the aid of Atty. Jose Lapak who is the son of the
respondent register of deeds, Baldomero Lapak, under clearly dubious circumstances. For
one, it was done without observing the required formalities of notice and hearing (Sec. 117,
Act No. 496). Secondly, it was an over in a record-setting period of ONLY four [41 days.
Add to this the fact that respondent register of deeds Baldomero Lapak issued said duplicate
of OCT 1097 despite his having received about eight months earlier and taken note on
November 12, 1951 of the letter of petitioner Rosario Vda. de Laig inquiring about the status
of the title to the questioned land which was purchased by her husband from Petre Galero
and the process, indeed, reeks with an unpleasant scent.

Such bad faith on the part of respondent Carmen Verzo and Baldomero Lapak is further
underscored by the fact that Atty. Jose Lapak himself (a) was the notary public before whom
the deed of sale executed by and between Petre Galero and Carmen Verzo was
acknowledged, and (b) was the same lawyer who assisted Carmen Verzo in writing the
Director of Lands and the Secretary of Agriculture and Natural Resources, enclosing
therewith an affidavit also sworn before said Atty. Lapak, praying that the deed of sale be
approved. This conspiracy among Petre Galero, register of deeds Baldomero Lapak, his son
Atty. Jose Lapak, and Carmen Verzo, could not have been known to petitioner Rosario Vda.
de Laig, who was then as now, residing in Manila.

Consequently, she cannot claim the protection accorded to a registrant in good faith by
paragraph 2, Article 1544 of the New Civil Code.
In the present case, the fact of Atty. Benito Laig's having been the first
possessor in good faith of the property in issue was never disputed by
respondent Carmen Verzo.

It is Our view that the offices of the Secretary of Agriculture and Natural
Resources and the Director of Lands should be cleared of any liability. It is
not difficult to see that the reason why separate approvals concerning two
separate sale of the same piece of land were had was the fact that two
sets of officials took charge of both requests. But no malice can be
gleaned from this fact. It should be borne in mind that both officials daily
attend to thousands upon thousands of papers.

As heretofore indicated, the malicious participation of respondent register of deeds

Baldomero Lapak and his son Atty. Lapak is evident.

For his malicious involvement, WE find Baldomero Lapak liable under the
following provision of the Land Registration Act:

Whoever fraudulently procures, or assists in fraudulently procuring or is

privy to the fraudulent procurement of any certificate of title or owner's
duplicate certificate, shall be fined not exceeding five thousand dollars
(ten thousand pesos) or imprisoned not exceeding five years, or both, in
the discretion of the court (Sec. 117, Act No. 496).

Baldomero Lapak likewise stands liable under Article 27 of the New Civil
Code, which states:

Any person suffering material or moral loss because a public servant or

employee refuses or neglects, without just cause, to perform his official
duty may file an action for damages and other relief against the latter,
without prejudice to any disciplinary administrative action that may be
taken.

Moreover, both Baldomero Lapak and his son Atty. Jose Lapak are likewise
civilly liable under Art. 19, Art. 20, Art. 21 of the New Civil Code.

WHEREFORE, THE DECISION APPEALED FROM IS HEREBY REVERSED AND

THE REGISTER OF DEEDS OF CAMARINES NORTE IS HEREBY DIRECTED TO
CANCEL TCT NO. T-1055; AND TO ISSUE IN LIEU THEREOF A NEW
TRANSFER CERTIFICATE OF TITLE IN FAVOR OF THE HEIRS OF THE LATE
BENITO K. LAIG; AND
ALL THE RESPONDENTS HEREIN, EXCEPT THE DIRECTOR OF LANDS AND
THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, ARE
HEREBY ORDERED TO PAY JOINTLY AND SEVERALLY PETITIONERS IN THE
AMOUNT OF TEN THOUSAND (P10,000.00) PESOS AS MORAL DAMAGES;
THE SUM OF FIVE THOUSAND (P5,000.00) PESOS AS ATTORNEY'S FEES;
AND THE COSTS.
GERARDO GO BELTRAN vs. INOCENTES FERNANDEZ

A.M. No. 747 June 27, 1940

FACTS:

Gerardo Go Beltran, filed with this court a complaint for malpractice against respondent
Inocentes Fernandez, a member of the Philippine Bar engaged in the practice of law in Talisayan
Oriental Misamis.

Spouses Honorio Pajaron and Natividad Ypan, conveyed to the complainant Beltran two parcels
of land situated in Talisayan, Oriental Misamis. A misunderstanding between the parties with
respect to the identify of the parcels of land arose. Beltran claiming that lot C was included in
the purchased, while Honorio Pajaron and Natividad Ypan claims the contrary.

As a consequence of their conflicting claims to lot C, a series of suits, civil and criminal were
instituted by and between the parties, in all these suits, respondent Inocentes Fernandez appeared
as counsel for the Pajaron and Ypan. While the criminal case was pending appeal, respondent
purchased from his client, Natividad Ypan, lot C in question.

Respondent initially claimed that the property purchased by him was not the one which
constitutes the object of the series of litigation. However, in a cross- examination conducted by
the provincial fiscal, respondent made self-evident admissions that the land involved in the
criminal cases 6585, 6604, and civil case 4608, in which cases he appeared to be the counsel of
one party was the same land he bought from Natividad Ypan.

ISSUE: Whether or not the lawyers act was a breach of his professional conduct

HELD: YES. Respondent has accordingly violated article 1459 of the Civil Code (now Article
1492 (5) ) which provides: The following persons cannot acquire by purchase, even at a public or
judicial auction, either in person or through the mediation of another:

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the property and rights
in litigation or levied upon an execution before the court within whose jurisdiction or territory
they exercise their respective functions this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the property and rights which may be the
object of any litigation in which they may take part by virtue of their profession.
Respondent herein is hereby ordered suspended from the practice of law for a period of six
months effective as of the date this judgment becomes final.