LEGPROF CASE LIST IV questions become res judicata and may not again be litigated in a

subsequent action between the same parties or their privies

regardless of the form of the latter. This is the essence of res
THE LAWYER AND THE COURTS (CANONS 10-13) judicata or bar by prior judgment.

275 SCRA 110 182 SCRA 151

CARLET V. CA BAUTISTA V. GONZALES
FACTS:
FACTS:
In a verified complaint filed by Angel L. Bautista, respondent Ramon
Carlet who is the Special Administrator of the Estate of Sevillo
A. Gonzales was charged with malpractice, deceit, gross misconduct
through Atty. Jimenez files before the Trial Court an action for
and violation of lawyers oath. Required by this Court to answer the
reconvenyance of property of Sevillo. Zarate then moved to dismiss
charges against him, respondent filed a motion for a bill of particulars
such action invoking res judicata since it was the same facts that had
asking this Court to order complainant to amend his complaint by
been settled by the trial court, CA and SC. The action was then
making his charges more definite. In a resolution the Court granted
dismissed by the Trial Court and ordered Atty. Jimenez regarding
respondents motion and required complainant to file an amended
forum-shopping. Atty. Jimenez then appealed it before the CA, but to
complaint. Complainant submitted an amended complaint for
no avail.
disbarment, alleging that respondent committed the following acts:
ISSUE:
1. Accepting a case wherein he agreed with his clients, namely,
Alfaro Fortunado, Nestor Fortunado and Editha Fortunado
WON the action of Atty. Jimenez is proper.
[hereinafter referred to as the Fortunados] to pay all expenses,
including court fees, for a contingent fee of fifty percent (50%) of
HELD:
the value of the property in litigation.
No. The action of Atty. Jimenez is not proper.
xxx
Canon 10 of the Code of Professional Responsibility provides that A
4. Inducing complainant, who was his former client, to enter into a
lawyer owes candor, fairness and good faith to the court.
contract with him on August 30, 1971 for the development into a
residential subdivision of the land involved in Civil Case No. Q-
In the case at bar, the action of Atty Jimenez of filing a reconveyance
15143, covered by TCT No. T-1929, claiming that he acquired fifty
case despite his knowledge that there is finality of the case shows
percent (50%) interest thereof as attorneys fees from the
that he does not have good faith towards the court.
Fortunados, while knowing fully well that the said property was
already sold at a public auction on June 30, 1971, by the
Hence, his conduct is not proper.
Provincial Sheriff of Lanao del Norte and registered with the
Register of Deeds of Iligan City;
**When material facts or questions which were in issue in a former
action and were admitted or judicially determined there are
xxx
conclusively settled by a judgment rendered therein, such facts or
1
Pertinent to No. 4 above, the contract, in No. 1 above, reads:
We the [Fortunados] agree on the 50% contingent fee, provided, you
[respondent Ramon Gonzales] defray all expenses, for the suit,
including court fees.
ISSUE:
Whether or not respondent committed serious misconduct involving a
champertous contract. (specifically in entering into a contingent fee
contract with the Fortunados)
HELD:
YES. Respondent was suspended from practice of law for six (6)
months.
RATIO:
The Court finds that the agreement between the respondent and the
Fortunados 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 clients rights is champertous [citation omitted]. 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 [citation omitted]. The execution of these contracts violates
the fiduciary relationship between the lawyer and his client, for which
the former must incur administrative sanctions.
2
37 SCRA 244
THE INSULAR LIFE ASSURANCE CO.
EMPLOYEES' ASSOCIATION V. INSULAR LIFE
ASSURANCE CO.
FACTS:
The Employees Assoc. Files before the CIR a complaint for unfair
labor practice against the Company. The CIR then dismissed such
complaint. In its decision, CIR Judge Martinez misquoted a SC
decision in the case of Lopez Sr v. Chronicle Publication Employees
Assn:
(1) 60 words of the paragraph quoted by Martinez do NOT appear in
the original;
(2) Martinez used For it is settled that...; the original reads, For it
must be remembered...
(3) Last sentence in the quoted paragraph of Martinez is actually part
of the immediately succeeding paragraph in the SC decision.
In the respondents brief, counsels for respondents quoted the CIRs
decision
ISSUE:
Whether or not the Judge and the respondents counsel are liable for
contempt.
HELD:
No. The Judge and the respondents counsel are not liable for
contempt.
In citing SCs decisions and rulings, it is the bounden duty of courts,
judges and lawyers to reproduce or copy the same word-for-word and
punctuation mark-for-punctuation mark. This
is because only the decisions of this Honorable Court establish
jurisprudence or doctrines in this jurisdiction. (Miranda v. Imperial).
However, there was good faith in both the Judge and the
respondents counsel, hence their action is not liable for contempt.
Judge, RTC, Quezon City; Judge Teodoro P. Regino, RTC-Br. 84,
Quezon City; Judge Antonio P. Solano, RTC-Br. 86, Quezon City;
and Judge Gregorio D. Dayrit, MTC-Br. 35, Quezon City
ISSUE:

G.R. No. 100643 Should the disbarment be lifted?

ADEZ REALTY, INC. V. CA
HELD:
FACTS:
3 YEARS- ENOUGH TO REDEEM HIMSELF AND PROOF HIS
WORTH IN PRACTICE
ALTERATION OF FACTUAL FINDINGS: DISBARRED
The disbarment of movant Benjamin M. Dacanay for three (3) years
On 30 October 1992 the Court found movant, Atty. Benjamin M.
has, quite apparently, given him sufficient time and occasion to soul-
Dacanay, guilty of intercalating a material fact in a decision of the
search and reflect on his professional conduct, redeem himself and
Court of Appeals, which he appealed to this Court on certiorari,
prove once more that he is worthy to practice law and be capable of
thereby altering the factual findings of the Court of Appeals with the
upholding the dignity of the legal profession. His admission of guilt
apparent purpose of misleading this Court in order to obtain a
and repeated pleas for compassion and reinstatement show that he is
favorable judgment. Consequently, Atty. Dacanay was disbarred from
ready once more to meet the exacting standards the legal profession
the practice of law.
demands from its practitioners. Accordingly, the Court lifts the
disbarment of Benjamin M. Dacanay. However he should be sternly
He claimed that the inserted words were written by his client, the
warned that
President of Adez Realty, Inc., in the draft of the petition to be filed
before the Supreme Court and unwittingly adopted by movant's
THE WARNING: ADHERENCE TO RIGID STANDARDS
secretary when the latter formalized the petition. He manifested that
[T]he practice of law is a privilege burdened with conditions.
he would not risk committing the act for which he was found guilty
Adherence to the rigid standards of mental fitness, maintenance of
considering that he was a nominee of the Judicial and Bar Council to
the highest degree of morality and faithful compliance with the rules
the President for appointment as regional trial judge.
of the legal profession are the conditions required for remaining a
member of good standing of the bar and for enjoying the privilege to
MOTION TO LIFT DISBARMENT: LEARNED HIS LESSON WELL
practice law. The Supreme Court, as guardian of the legal profession,
Dacanay filed a Motion to Lift (Disbarment) stating that he was
has ultimate disciplinary power over attorneys. This authority to
already 62 years old, has learned his lesson from his mistake, was
discipline its members is not only a right, but a bounden duty as well .
terribly sorry for what he had done, and in all candor promised that if
. . That is why respect and fidelity to the Court is demanded of its
given another chance he would live up to the exacting demands of
members . . .
the legal profession. He appended to his motion certifications of good
moral character from: Fr. Celso Fernando, Parochial Vicar, Parish of
WHEREFORE, the disbarment of BENJAMIN M. DACANAY from the
St. Michael Archangel, Marilao, Bulacan; Fr. Lauro V. Larlar, OAR,
practice of law is LIFTED and he is therefore allowed to resume the
Rector, San Sebastian College-Recoletos; Sis. Aniceta B. Abion,
practice of law upon payment of the required legal fees. This
EMM, Chairperson, Center for Housing and Ecology Development
resolution is effective immediately.
Foundation, Inc.; Dean Rufus B. Rodriquez, College of Law, San
Sebastian College-Recoletos; Judge Pedro T. Santiago, Executive
3
 G.R. No. 123698
ETERNAL GARDNES MEMORIAL PARK CORP. V.
CA AND SEELIN
FACTS:
Seelin spouses filed a case against Central Dyeing for
quieting of title. The spouses won and the decision in their
favor became final an executory.
When the spouses filed a Motion for an Immediate Writ of
Possession, Eternal Gardens Memorial Park Corp opposed
claiming that it is the true and registered owner of the
propertyhaving bought the same from Central Dyeing in
good faith. It also argued that it was not bound by the decision
since it was not impleaded in the case.
But the trial court favored the spouses and dismissed Eternal
Gardens claim since the judgment (in the queting of title
case) was binding upon the latter, being the successor-in-
interest of Central Dyeing. The CA, on the same grounds,
denied Eternal Gardens appeal.
So Seelin spouses filed for a second writ of execution. Dahil
sa makulit (not to mention optimistic) si Eternal Gardens, nag-
file pa ito ulit ng motion reconsideration. It further contended
that since there is a pending issue on possession (a different
case), such should first be resolved before a writ of
possession be issued to the spouses.
Said motion was initially granted but was later denied. So nag-
file ng certiorari si Eternal sa CA. And of course, they filed the
case to the SC, essentially with the same arguments.
ISSUE:
Is Eternal Gardens bound by the decision in the quieting of title case?
4
HELD:
Yes. Having admitted that they bought the property from Central
Dyeing, Eternal Gardens is the formers successor-in-interest who will
be bound by the judgment. Moreover, being a transferee, it does not
have to be included or impleaded by name in an action against the
transferoraccording to the Rules of Court.
As to the fear that owners of the grave lots will be disturbed by the
writ, the order of the court shows that it took into account the interests
of such lot ownersin fact certain limits were provided. Hence, the
execution of the judgment need not necessarily desecrate these
properties.
*whats relevant to ethics:
The case has delayed the execution of a final judgment for 17 years.
While lawyers owe entire devotion to the interests of their clients
rights, they should not forget that they are officers of the court, bound
to exert every effort to assist in the speedy and efficient
administration of justice. They should not misuse the rules of
procedure to defeat the ends of justice or unduly delay a case, or
impede the execution of a judgment.
31 SCRA 581
IN RE ALMACEN
DOCTRINE:
For his intestiture into the legal profession places upon his shoulders
no burden more basic, more exacting and
more imperative than that of respectful behavior toward the courts.
The decisions of the judge must be obeyed because he is the tribunal
appointed to decide, and the bar should at all
times be the foremost in rendering respectful submission.
FACTS:
Atty. Almacen is the counsel of Calero in the case of Yaptinchay
v. Calero. The trial court after hearing the rendered judgment against
Calero. Atty Almacen moved for reconsideration and served copy of
the motion to Yaptinchay (the adverse party) but failed to notify the
latter of the date and place of the hearing. In the CA, the court moved
to also dismiss the case because the MR does not contain a notice of
time and place of hearing. Atty. Almacen filed another motion for
reconsideration but the SC refused to take the case and in a minute
resolution denied the appeal.
It was at this point that Atty. Almacen filed his Petition to
Surrender Lawyers Certificate of Title. The pleading filed by
Atty. Almacen is interspersed from beginning to end with
insolent, contemptuous, grossly disrespectful and derogatory
remarks against the court, as well as its individual members.
Atty. Almacen described the court as a tribunal peopled by men who
are calloused to our pleas of justice, who ignore without reason their
own applicable decisions and commit culpable violations of the
Constitution with impunity. He also referred to his client as one who
was deeply aggrieved by the courts unjust judgment and has
become one of the sacrificial victims before the altar of hypocrisy.
He also mentioned justice as administered by the present members
of the Supreme Court is not only blind, but also deaf and dumb.
The Court decided by resolution to withhold action on his petition until
he shall have actually surrendered his certificate. Patiently, the Court
waited for him to make good his proffer. No word came from him. So
he was reminded to turn over his certificate, which he had earlier
vociferously offered to surrender, so that the Court could act on his
petition.
To said reminder he manifested that he has no pending petition in
connection with Case G.R. No. L-27654, Calero v. Yaptinchay, said
case is now final and executory; that the Courts resolution did not
require him to do either a positive or negative act; and that since his
offer was not accepted, he chose to pursue the negative act.
The court asked Atty Almacen to show cause why no
disciplinary actions must be taken against him. Atty. Almacen
asked that he be given permission to give his answer in an open and
public hearing. He reasoned that since the court is the complainant,
prosecutor and judge, he preferred that he answer and be heard in an
5
open and public hearing so that the court could observe its sincerity
and candor. The court allowed Atty. Almacen to file a written
answer and thereafter be heard in an oral argument but his
written answer offers no apology but is full of sarcasm and
innuendo.
ISSUE:
W/N Atty. Almacens actions are ground for disciplinary action.
HELD/RATIO:
YES. If Atty. Almacen failed to move the appellate court to
review the lower courts judgment, he has only himself to
blame. His own negligence caused the forfeiture of the remedy
of appeal, which, incidentally, is not a matter of right. To shift
away from himself the consequences of his carelessness, he looked
for a whipping boy. But he made sure that he assumed the posture
of a martyr, and, in offering to surrender his professional certificate,
he took the liberty of vilifying the Court and inflicting his exacerbating
rancor on the members thereof. It would thus appear that there is
no justification for his scurrilous and scandalous outbursts.
Nonetheless the Court gave the unprecedented act of Atty. Almacen
the most circumspect consideration. It is natural for a lawyer to
express his dissatisfaction each time he loses what he sanguinely
believes to be a meritorious case. That is why lawyers are given
wide latitude to differ with, and voice their disapproval of, not only the
courts rulings but, also the manner in which they are handed down.
However, the proffered surrender of his lawyers certificate is, of
course, purely potestative on Atty. Almacens part.
Unorthodox though it may seem, no statute, no law stands in its way.
Beyond making the mere offer, however, he went farther. In
haughty and coarse language, he actually availed of the said
move as a vehicle for his vicious tirade against this Court.
The virulence so blatantly evident in Atty. Almacens petition, answer
and oral argumentation speaks for itself. The vicious language used
and the scurrilous innuendoes they carried far transcend the
permissible bounds of legitimate criticism. They could never
serve any purpose but to gratify the spite of an irate attorney, attract
public attention to himself and, more important of all, bring the Court
and its members into disrepute and destroy public confidence in them
to the detriment of the orderly administration of justice.
Because of this, Atty. Almacen is suspended indefinitely, until
further orders.
166 SCRA 316
ZALDIVAR V. GONZALES
NATURE
Petition to review the decision of the Sandiganbayan
FACTS
Enrique A. Zaldivar had a pending case for graft and corruption in the
Sandiganbayan initiated by Tanodbayan Gonzalez. Zaldivar filed a
petition in the SC alleging that Gonzalez, as Tanodbayan and under
the provisions of the 1987 Constitution, was no longer vested with
power and authority independently to investigate and to institute
criminal cases for graft and corruption against public officials and
employees, and hence the information filed in his criminal cases were
all null and void. The SC issued a temporary restraining order.
Petitioner later filed another petition because Gonzalez filed
additional criminal charges against petitioner and five other
individuals. Gonzalez instituted another criminal case in the
Sandiganbayan. Four days later, the SC issued another TRO.
Zaldivar then filed a petition to cite in contempt Special Prosecutor
Gonzalez for filing new information before the Sandiganbayan and for
making contemptuous statements to the media. In a news art in the
Phil Daily Globe, Gonzalez made the ff. statements: (1) while the rich
and influential persons get favorable actions from the SC, its difficult
for an ordinary litigant to get his petition to be given due course, (2)
while Pres. Aquino had been prodding him to prosecute graft cases
even if they involve the high and mighty, the SC had been restraining
6
him, (3) while he doesnt wish to discuss the merits of the Zaldivar
petition before the SC, He was disturbed that the order can aggravate
the thinking of some people that affluent persons can prevent the
progress of a trial. The SC ordered the nullification of the criminal
cases and for Gonzalez to cease and desist from further acting on
Zaldivars case In the motion for reconsideration, Gonzales claimed
that 3 handwritten notes, sent by some members of the SC
interceding for cases pending before his office, were in his
possession. He said that he doubts whether the judges will remain
impartial to him, there being at least 4 members who definitely wont,
and prayed that these 4 inhibit themselves in the deliberation. When
this was denied, he filed a motion to transfer administrative
proceedings to the IBP. He also released statements to the press
saying, in effect, that the SC deliberately rendered an erroneous
decision, that members of the SC have improperly pressured him to
render decisions favorable to their friends and colleagues, and that
the Sc dismisses judges without rhyme or reason and disbars lawyers
without due process. Gonzalez didnt deny he said/wrote those
statements. His defense is that he was just exercising his freedom of
speech.
ISSUES
1. WON the SC should punish Gonzalez for contempt of court and
give administrative sanctions
2. WON Gonzales is not liable because he was just using his
constitutional right of freedom of speech.
HELD
1. YES
Ratio Statements which constitute gross disrespect of the Court, and
degrade the SC and the entire system of justice are clearly
contemptuous. The SC should exercise its disciplinary authority over
the source.
Reasoning The SC cited several cases wherein the Court held that
the statements were contemptuous and warranting the exercise of
the courts authority. These are:
(1). Monteciollo v. Gica Atty del Mar moved to reconsider a decision
of the CA with a veiled threat that he should interpose his next appeal
to the President. He said the court knowingly rendered an unjust
judgment thru negotiations. He was convicted of contempt of court.
(2) Surigao Mineral Reservation Board v. Cloribel counsel asked CJ
Concepcion and J Castro to inhibit themselves from judging the case
since the brother of Castro was the VP of favored party and CJs son
was the Secretary of the Board of Investments. He even threatened
that if he didnt get a favorable decision, hed bring the case to the
World Court and invoke the Hickenlooper Amendment requiring the
cutting off of all aid to the Philippines.
3. In re Almacen the SC committed a great unjust to his client;
justice administered by the SC wasnt only blind, but also deaf and
dumb; hell argue the cause of his client in the peoples forum
(published in Manilla Times). Almacen was suspended from the
practice of law because he exceeded the boundaries of fair criticism.
4. Paragas v. Cruz counsel alleged that the SC violated the
Constitution, which was a ground for impeachment; hoped that an
incident wherein 2 SC employees were killed wouldnt happen again
(covert threat upon the members of the Court)
5. In re Sotto a newspaper reporter refused to divulge his source
and was sent to jail. Atty. Sotto published in a newspaper that the SC
erroneously interpreted the law, theyre narrow-minded, and that the
members of the SC should be changed. He was held in contempt of
Court.
6. Salcedo v. Hernandez Atty Francisco: the Courts resolution is
erroneous and is a mockery of the popular will expressed at the polls.
7
2. NO
Ratio A lawyers right of free expression may have to be more limited
than that of a layman.
Reasoning The freedom of speech and of expression, like all
constitutional freedoms, is not absolute and that the freedom of
expression needs on occasion to be adjusted and accommodated
with the requirements of equally important public interests. One of the
fundamental public interests is the maintenance of the integrity and
orderly functioning of the administration of justice. The lawyers duty
to render respectful subordination to the courts is essential to the
orderly administration of justice.
[Discussion on the SCs power to discipline its lawyers]
The SC, as the regulator and guardian of the legal profession, has
plenary disciplinary auth over attorneys. This stems from the Courts
Constitutional mandate to regulate admission to the practice of law,
which includes as well authority to regulate the practice itself. This is
an inherent power incidental to the proper administration of justice
and essential to an orderly discharge of judicial functions. It also has
inherent power to punish for contempt, to control in the furtherance of
justice the conduct of ministerial officers of the court including lawyers
and all other persons connected in any manner with a case before
the Court. This is necessary for its own protection against improper
interference with the due administration of justice and not dependent
upon the complaint of the litigant. There are two related powers here:
(1) Courts inherent power to discipline attorneys broader than
contempt power; lawyer doesnt need to be in contempt of court to be
punished under this; (2) contempt power - may be committed by both
lawyers and non-lawyers, in and out of court; if this is done by a
lawyer, its usually accompanied with professional misconduct.
A lawyer is not just a professional but also an officer of the court and
as such, is called upon to share in the task and responsibility of
dispensing justice and resolving disputes in society. Any act which
tends to obstruct the administration of justice constitutes both
professional misconduct calling for the exercise of disciplinary action
against him and conduct warranting application of the contempt
power.
Disposition Atty. Raul M. Gonzales was found guilty of contempt of
court in facie curiae and of gross misconduct as an officer of the court
and member of the Bar. He was suspended from the practice of law
indefinitely.
60 SCRA 235
MONTECILLO V. GICA
FACTS
Jorge Montecillo was accused by Francisco Gica of slander. Atty.
Quirico del Mar represented Montecillo and he successfully defended
Monteceillo in the lower court. Del Mar was even able to win their
counterclaim thus the lower court ordered Gica to pay Montecillo the
adjudged moral damages.
Gica appealed the award of damages to the Court of Appeals where
the latter court reversed the same. Atty. Del Mar then filed a motion
for reconsideration where he made a veiled threat against the Court
of Appeals judges intimating that he thinks the CA justices knowingly
rendered an unjust decision and judgment has been rendered
through negligence and that the CA allowed itself to be deceived.
The CA denied the MFR and it admonished Atty. Del Mar from using
such tone with the court. Del Mar then filed a second MFR where he
again made threats. The CA then ordered del Mar to show cause as
to why he should not be punished for contempt.
Thereafter, del Mar sent the three CA justices a copy of a letter which
he sent to the President of the Philippines asking the said justices to
consider the CA judgment. But the CA did not reverse its judgment.
Del Mar then filed a civil case against the three justices of the CA
before a Cebu lower court but the civil case was eventually dismissed
8
by reason of a compromise agreement where del Mar agreed to pay
damages to the justices. Eventually, the CA suspended Atty. Del Mar
from practice.
The issue reached the Supreme Court. Del Mar asked the SC to
reverse his suspension as well as the CA decision as to the
Montecillo case. The SC denied both and this earned the ire of del
Mar as he demanded from the Clerk of the Supreme Court as to who
were the judges who voted against him.
The Supreme Court then directed del Mar to submit an explanation
as to why he should not be disciplined. Del Mar in his explanation
instead tried to justify his actions even stating that had he not been
convinced that human efforts in [pursuing the case] will be fruitless
he would have continued with the civil case against the CA justices.
In his explanation, del Mar also intimated that even the Supreme
Court is part among the corrupt, the grafters and those allegedly
committing injustice.
Del Mar even filed a civil case against some Supreme Court justices
but the judge who handled the case dismissed the same.
ISSUE:
Whether or not Atty. Del Mar should be suspended.
HELD:
Yes. Atty. Del Mar, by his contemptuous acts is in violation of his
duties to the courts. As an officer of the court, it is his sworn and
moral duty to help build and not destroy unnecessarily the high
esteem and regard towards the court so essential to the proper
administration of justice.
It is manifest that del Mar has scant respect for the two highest
Courts of the land when on the flimsy ground of alleged error in
deciding a case, he proceeded to challenge the integrity of both
Courts by claiming that they knowingly rendered unjust judgment. In
short, his allegation is that they acted with intent and malice, if not
with gross ignorance of the law, in disposing of the case of his client.
Del Mar was then suspended indefinitely.

124 SCRA 167
PEOPLE V. JARDIN
CANON 12
FACTS:
The criminal prosecutions originated from a letter-complaint of the
Provincial Auditor of Quezon requesting the Provincial Fiscal to file
the necessary criminal action under Article 217 of the Revised Penal
Code against Demetrio Jardin for malversation of public funds thru
falsification of public documents on six counts. The cases were
assigned to Assistant Fiscal Meliton V. Angeles who set them for
preliminary investigation. The accused moved to postpone the
investigation four times but the accused and his counsel failed to
appear every time. Inspire of their absence, the preliminary
investigation was conducted and shortly afterwards, the six
informations were filed against the accused before the Court of First
Instance of Quezon City. The arraignment was set for May 9, 1967.
On the records it was show that from May 9, 1967, the arraignment
was re-set for June 6; then re-set for June 26; then from August 16,
the same was re-set for September 5, all because of the motions for
postponement filed at the instance of the accused. When the
arraignment of the accused was called on September 5, 1967,
counsel for the accused verbally moved for reinvestigation on the
ground that the accused was not given the opportunity to present his
defense during the preliminary investigation. This was granted by the
court and the first reinvestigation was set on November 24, 1967.
Accused moved to postpone many times, failed still to appear. When
he finally appeared with his counsel, they asked for 15 days to file
memorandum. The memorandum was never filed, so the
investigating fiscal filed a manifestation before the court that the
records of these cases be returned and the trial on the merits of the
same be set. The court transferred the case to new branch of CFI
Quezon without acting on manifestation. Arraignment date was set
but more postponements was filed at the instance of accused; moved
for reinvestigation again. Arraignment finally happened on Sept 8,
1970. Accused pleaded NOT GUILTY and asked for trial to be
9
postponed. On postponed date, accused asked for another
postponement.
ISSUE:
Whether the acts of the accused and his counsel obstruct the
administration of justice.
HELD:
The Supreme Court ruled that the dilatory tactics of the defense
counsel and the failure of both judge and the fiscal to take effective
counter measures to obviate the delaying acts constitute obstruction
of justice. An attorney as an officer of the court is called upon to
assist in the due administration of justice. Like the court itself, he is
an instrument to advance its cause. For this reason, any act on the
part of a lawyer that obstructs perverts or impedes the administration
of justice constitutes misconduct and justifies disciplinary action
against him.
Acts which amount to obstruction in the administration of justice may
take many forms. They include such acts as instructing a complaining
witness in a criminal action not to appear at the scheduled hearing so
that the case against the client, the accused, would be dismissed,
asking a client to plead guilty to a crime which the lawyer knows his
client did not commit, advising a client who is detained for a crime to
escape from prison prosecuting clearly frivolous cases or appeals to
drain the resources of the other party and compel him to submit out of
exhaustion and filing multiple petitions or complaints for a cause that
has been previously rejected in the false expectation of getting
favorable action.
 74 SCRA
92 BUMANLANG V. BUMANLANG
FACTS
Atty Bumanlag filed his petition with the President by the fact that his
motions for reconsideration "were only denied by the Clerk of Court
without any comment whatsoever".
The petition is about promulgating a decree that the order of
suspension by the Supreme Court to be set aside and allow him to
become an active member of the New Society.
The Court per its Resolution of June 16, 1975 directed the Clerk of
Court "to furnish the Office of the President through Assistant
Executive Secretary Zamora with copies of the Court's decision of
September 24, 1973 wherein the Court in a spirit of liberality by
majority vote imposed a lesser penalty of two-year suspension
instead of disbarment (as voted by a minority composed of Justices
Castro and Makasiar) and of the Court's resolutions of November 20,
1973 and December 19, 1973 denying for lack of merit respondent's
two motions for reconsideration dated October 18, 1973 and
December 12, 1973and further resolved "to require respondent to
show cause within ten (10) days from notice why he should not be
subjected to further disciplinary action for making false statements
and misrepresentations in his petition to the President that he has
been allegedly deprived of due process of law contrary to the facts of
record as stated in the Court's decision, and for gross ignorance of
the law and of the Constitution in asking the President to set aside by
decree this Court's decision imposing upon him two-year suspension
from the practice of law".
ISSUE
Whether or not the Atty. Bumanlag should not be subjected to further
disciplinary action for making false statements and
misrepresentations in his petition to the President that he has been
allegedly
10
HELD
The respondent is hereby administered a reprimand for gross
ignorance of the law and of the Constitution in having asked the
President to set aside by decree the Court's decision which
suspended him for two years from the practice of law, with warning
that the commission of any transgression in the future of his oath and
duties as a member of the bar will be severely dealt with.
Rule 13.03- A lawyer shall not brook or invite interference by
another branch or agency of the government in the normal
course of judicial proccedings.
AM No. 05--3--04--SC
ATTY. NOEL SORREDA
FACTS:
Atty. Noel S. Sorreda wrote a letter addressed to the Chief Justice
over his frustrations of the outcome of his cases decided by the
Supreme Court. The letter contained derogatory and malignant
remarks which are highly insulting. The Court accorded Atty. Sorreda
to explain, however, instead of appearing before the court, he wrote
another letter with insulting remarks as the first one. The court was
thus offended with his remarks.
ISSUE:
Whether or not Atty. Sorreda can be held guilty of contempt due to
the remarks he has made in his letters addressed to the court.
HELD:
Unfounded accusations or allegations or words tending to embarrass
the court or to bring it into disrepute have no place in a pleading.
Their employment serves no useful purpose. On the contrary, they
constitute direct contempt of court or contempt in facie curiae and a
violation of the lawyers oath and a transgression of the Code of
Professional Responsibility. As officer of the court, Atty. Sorreda has
the duty to uphold the dignity and authority of the courts and to
promote confidence in the fair administration of justice.[24] No less
must this be and with greater reasons in the case of the countrys
highest court, the Supreme Court, as the last bulwark of justice and
democracy
Atty. Sorreda must be reminded that his first duty is not to his client
but to the administration of justice, to which his clients success is
wholly subordinate. His conduct ought to and must always be
scrupulously observant of law and ethics. The use of intemperate
language and unkind ascription can hardly be justified nor can it have
a place in the dignity of judicial forum. Civility among members of the
legal profession is a treasured tradition that must at no time be lost to
it. Hence, Atty. Sorreda has transcended the permissible bounds of
fair comment and constructive criticism to the detriment of the orderly
administration of justice. Free expression, after all, must not be used
as a vehicle to satisfy ones irrational obsession to demean, ridicule,
degrade and even destroy this Court and its magistrates. Thus,
ATTY. NOEL S. SORREDA is found guilty both of contempt of court
and violation of the Code of Professional Responsibility amounting to
gross misconduct as an officer of the court and member of the Bar.
AC No. 9881
ATTY. ALLAN APGUIA
Attorney; Quantum of proof in administrative cases. An
administrative complaint for dishonesty was filed against Atty. Molina
for having advised his clients to enforce a contract on complainants
client who was never a party to the agreement. The Supreme Court in
dismissing the complaint held that when it comes to administrative
cases against lawyers, two things are to be considered: quantum of
proof, which requires clearly preponderant evidence; and burden of
proof, which is on the complainant. Here, the complaint was without
factual basis. The allegation of giving legal advice was not
substantiated in this case, either in the complaint or in the
corresponding hearings. Bare allegations are not proof. Even if Atty.
Molina did provide his clients legal advice, he still cannot be held
administratively liable without any showing that his act was attended
11
with bad faith or malice. The default rule is presumption of good faith.
Atty. Alan F. Paguia v. Atty. Manuel T. Molina, A.C. No. 9881, June 4,
2014.
FACTS:
Neighbors spouses Abreu, clients of Atty. Alan Paguia, and spouses
Lim, client of Atty. Manuel Molina, are residents of a 4-unit compound
named as Times Square. Along with Mrs. Yan and Dr. San Juan.
The neighbors, except the Abreus, executed aTimes Square
Preamble as a set of internal rules on matters such as parking, use
of the common right or way and assignments of parking areas. In his
Complaint for Dishonesty against Atty. Molina, Atty. Paguia accuses
him of giving legal advice to his (Molinas) clients to the effect that
the Times Preamble was binding on Mr. Abreau who was never a
party to the contract. In his answer, Atty. Molina averred that the
matter was a simple quarrel among neighbours, and Mr. Abreu file
two cases against his clients before the HLURB and the RTC, one to
declare the Preamble as invalid, and one for declaratory relief, both of
which were dismissed. Another case was filed in court by is client
against Mr. Abreu when he allegedly took matters in his own hand by
placing two vehicles directly in front of the gate of the Lims, blocking
their egress to Times St., A TRO was in fact issued to his client by
the RTC. According to Atty. Molina, the facts adverted to sufficiently
serve as his answer.
The Investigating Commissioner of the IBP recommended dismissal
of the complaint, based on lack of evidence, and lack of malice and
bad faith on the part of Atty. Molina, assuming he gave erroneous
legal advice. The IBP Board adopted the recommendation.
ISSUE:
Whether or not Atty. Molina may be held liable for allegedly giving
erroneous legal advice to his clients.
HELD:
No petition for review has been filed with this Court.
It is worth noting that a case is deemed terminated if the complainant
does not file a petition with the Supreme Court within fifteen (15) days
from notice of the Boards resolution. This rule is derived from Section
12(c) of Rule 139-B, which states:
(c) If the respondent is exonerated by the Board or the disciplinary
sanction imposed by it is less than suspension or disbarment (such
as admonition, reprimand, or fine) it shall issue a decision
exonerating respondent or imposing such sanction. The case shall be
deemed terminated unless upon petition of the complainant or other
interested party filed with the Supreme Court within fifteen (15) days
from notice of the Boards resolution, the Supreme Court orders
otherwise. (Underscoring supplied)
In this case, Atty. Paguia received notice of the Boards resolution on
21 March 2013, as evidenced by a registry return receipt. To this
date, this Court has yet to receive a petition for review from Atty.
Paguia. Thus, for his failure to file a petition for review with the Court
within 15 days, this case is deemed terminated pursuant to the above
mentioned Section 12(c).
Nevertheless, we have gone over the records but we have no reason
to deviate from the findings of the IBP Board of Governors.
When it comes to administrative cases against lawyers, two things
are to be considered: quantum of proof, which requires clearly
preponderant evidence; and burden of proof, which is on the
complainant.1
Even if we assume that Atty. Molina did provide his clients legal
advice, he still cannot be held administratively liable without any
showing that his act was attended with bad faith or malice. The rule
on mistakes committed by lawyers in the exercise of their profession
is as follows:
An attorney-at-law is not expected to know all the law. For an honest
mistake or error, an attorney is not liable. Chief Justice Abbott said
that, no attorney is bound to know all the law; God forbid that it
should be imagined that an attorney or a counsel, or even a judge, is
bound to know all the law. x x x.3
The default rule is presumption of good faith. On the other hand, bad
faith is never presumed. It is a conclusion to be drawn from facts. Its
determination is thus a question of fact and is evidentiary.4 There
is no evidence, though, to show that the legal advice, assuming it was
indeed given, was coupled with bad faith, malice, or ill-will. The
presumption of good faith, therefore, stands in this case.
The foregoing considered, complainant failed to prove his case by
clear preponderance of evidence.
WHEREFORE, the Resolution of the IBP Board of Governors
adopting and approving the Decision of the Investigating
Commissioner is hereby AFFIRMED.
SO ORDERED.

In the present case, we find that the Complaint is without factual

basis. Complainant Atty. Paguia charges Atty. Molina with providing
legal advice to the latters clients to the effect that the Times Square
Preamble is binding on complainants client, Mr. Abreu, who was not
a signatory to the agreement. The allegation of giving legal advice,
however, was not substantiated in this case, either in the complaint or
in the corresponding hearings. Nowhere do the records state that
Atty. Paguia saw respondent giving the legal advice to the clients of
the latter. Bare allegations are not proof2.

12
 AM No. RTJ--00--1530
DR. EDGARDO ALDAY, MERCEDES FAVIS,
MARNA VILLAFUERTE, AND CHRISTOPHER
GARCIA V. JUDGE ESCOLASTICO U. CRUZ, JR.
RTC, MAKATI CITY, BRANCH 58
RESOLUTION
PER CURIAM:
On March 14, 2001, this Court promulgated a decision suspending
respondent judge Escolastico U. Cruz, Jr., for a period of one year and
imposing on him a P50,000 fine, after finding him guilty of conduct
grossly prejudicial to the service, with a warning that commission of a
similar act will be dealt with more severely. The suspension came as a
result of a complaint filed against respondent judge by herein complainants
whom he threatened with a gun during a traffic altercation. On August
28, 2001, we denied with finality respondent judge's motion of
reconsideration of our decision.
Respondent judge's suspension was to have been immediately executory.
He received a copy of our decision on March 22, 2001, and thus should
have begun to serve his suspension on that day. It appeared, however, that
despite our suspension order, respondent judge continued to
discharge the duties and exercise the functions of a judge. This was
relayed to us in a letter dated August 1, 2001 by Executive Judge Leticia P.
Morales of the Regional Trial Court, Makati City. She posed a query as to
the legality and validity of the orders and decisions rendered by respondent
judge during his suspension.
Thus, on September 18, 2001, we issued another resolution voiding the
orders, decisions, and other issuances of respondent judge that were done
during the period of his suspension, i.e. after March 22, 2001, the date when
he received a notice of his suspension. We stressed that when suspension
is "to take effect immediately", this Court means that the period of
suspension should commence on the day respondent judge receives notice
of the decision suspending him from office.
In the same resolution, we likewise ordered respondent judge to show cause
why he should not be cited for contempt or otherwise penalized for
disobedience in disregarding our decision dated March 14, 2001. We also
directed Judge Morales to submit to this Court an inventory of cases acted
13
upon by respondent judge after March 22, 2001. We received said inventory
on October 15, 2001.
In an explanation submitted to this Court on September 26, 2001,
respondent judge stated that he thought he did not have to serve
suspension immediately since doing so would have rendered the
decision final, thus foreclosing any other recourse to this Court. He
also argued that had he immediately served his suspension, he would
have been deemed to have abandoned his office as judge. He pointed
out that he had to act on matters pending in his sala lest his docket
reach "unmanageable limits". [1] He averred that he intended to abide by
this Court's decision, and pointed out that he promptly relinquished his office
when his motion for reconsideration was denied.
We referred this matter to the Office of the Court Administrator for
investigation, report , and recommendation on October 23, 2001, after we
received the inventory of cases submitted by Judge Morales. The OCA
submitted its report on December 7, 2001, with the recommendation that
respondent judge be dismissed from the service for his disobedience to our
suspension order.
In explaining its recommendation, the OCA cited respondent judge's
obstinate refusal to heed the directive of this Court, which constitutes
grave misconduct. The order of suspension clearly stated that it was "to
take effect immediately", but respondent judge chose to disregard it.
The OCA pointed out that respondent judge could not have been unaware of
our pronouncement in Development Bank of the Philippines v. Judge Angel
S. Malaya (deceased) and Sheriff Roque Angeles, both of the RTC, Branch
22, Naga City, P-98-1277 (formerly OCA-IPI No. 95-45 RTJ), July 27, 1999,
to the effect that administrative penalties are to take effect immediately.
After a thorough evaluation of the records of this case, we agree with the
OCA that respondent judge's deliberate refusal to obey our order dated
March 14, 2001, suspending him from office is a grave misconduct that
merits the supreme penalty of dismissal from the service. This is
consistent with Civil Service Memorandum Circular No. 30, s. 1989, which
imposes the penalty of dismissal for grave misconduct even for the first
offense.
Indeed, we clarified in Development Bank that:
As penalties imposed in administrative cases are immediately
executory, suspension of respondent should have begun at the time
respondent received the resolution of August 31, 1998 on October 19,
1998. [2]
While this does not preclude the filing by respondent judge of a motion for
reconsideration, the filing and pendency of such a motion does not
have the effect of staying the suspension order. Contrary to respondent
judge's contention, our decision suspending him was not "in suspense"
during the time his motion for reconsideration was pending. Otherwise, as
we stressed in our resolution dated September 18, 2001, the phrase "to take
effect immediately" would be for naught. Respondent judge, however, chose
to disregard our decision suspending him, explaining that he was impelled
"by an honest misappreciation of the legal import of the adjudication's
decretal clause." [3] We fail to see, however, how respondent judge could
misappreciate, as he claims, the legal import of our order, given our ruling in
Development Bank. Judges are expected to have more than a cursory
acquaintance with law and jurisprudence, and respondent judge is no
exception to this rule.
We are not persuaded by respondent judge's rationalization that he would
not have any other recourse if he had desisted from performing his duties as
judge upon receipt of our decision, or that it would "operate as an actionable
abandonment of his office".[4] The language of our decision is clear as to
leave no doubt in the mind of respondent judge.
Directives issued by this Court are not to be treated lightly, certainly not on
the pretext that one has misapprehended the meaning of said directives.
Effective and efficient administration of justice demands nothing less than a
faithful adherence to the rules and orders laid down by this Court, and in this
regard, respondent judge failed to show such adherence. Instead, he
demonstrated his defiance of the Court's clear order that should have been
obeyed by him without delay.
WHEREFORE, respondent Judge Escolastico U. Cruz, Jr., of the Regional
Trial Court of Makati City, Branch 58, is found GUILTY of grave misconduct
prejudicial to the administration of justice and is hereby ordered DISMISSED
from the service, with forfeiture of all retirement benefits, except for his
accrued leaves, if any; and with prejudice to reemployment in any branch or
instrumentality of the government, including government-owned and
controlled corporations. This order of dismissal is immediately executory.
14
THE LAWYER AND THE CLIENT (CANONS 14-22)
G.R. No. 141617
FRANCISCO AND MERRYLAND DEVELOPMENT
CORP. V. RITA MEJIA
Business Organization Corporation Law Piercing the Veil of
Corporate Fiction Fraud Test vs Alter Ego Test
FACTS:
Adalia Francisco was the Treasurer of Cardale Financing and Realty
Corporation (Cardale). Cardale, through Francisco, contracted with
Andrea Gutierrez for the latter to execute a deed of sale over certain
parcels of land in favor of Cardale. It was agreed that Gutierrez shall
hand over the titles to Cardale but Cardale shall only give a
downpayment, and later on full payment in installment. As security,
Gutierrez shall retain a lien over the properties by way of mortgage.
Nonetheless, Cardale defaulted in its payment. Gutierrez then filed a
petition with the trial court to have the Deed rescinded.
While the case was pending, Gutierrez died, and Rita Mejia, being
the executrix of the will of Gutierrez took over the affairs of the estate.
The case dragged on for 14 years because Francisco lost interest in
presenting evidence. And while the case was pending, Cardale failed
to pay real estate taxes over the properties in litigation hence, the
local government subjected said properties to an auction sale to
satisfy the tax arrears. The highest bidder in the auction sale was
Merryland Development Corporation (Merryland).
Apparently, Merryland is a corporation in which Francisco was the
President and majority stockholder. Mejia then sought to nullify the
auction sale on the ground that Francisco used the two corporations
as dummies to defraud the estate of Gutierrez especially so that
these circumstances are present:
Francisco did not inform the lower court that the properties were
delinquent in taxes;
That there was notice for an auction sale and Francisco did not
inform the Gutierrez estate and as such, the estate was not able to
perform appropriate acts to remedy the same;
That without knowledge of the auction, the Gutierrez estate cannot
exercise their right of redemption;
That Francisco failed to inform the court that the highest bidder in the
auction sale was Merryland, her other company;
That thereafter, Cardale was dissolved and the subject properties
were divided and sold to other people.
ISSUE:
Whether or not Merryland and Francisco shall be held solidarily liable.
HELD:
No. Only Francisco shall be held liable to pay the indebtedness to the
Gutierrez estate. What was only proven was that Francisco
defrauded the Gutierrez estate as clearly shown by the dubious
circumstances which caused the encumbered properties to be
auctioned. By not disclosing the tax delinquency, Francisco left
Gutierrez in the dark. She obviously acted in bad faith. Franciscos
elaborate act of defaulting payment, disregarding the case, not
paying realty taxes (since as treasurer of Cardale, shes responsible
for paying the real estate taxes for Cardale), and failure to advise
Gutierrez of the tax delinquencies all constitute bad faith. The
attendant fraud and bad faith on the part of Francisco necessitates
the piercing of the veil of corporate fiction in so far as Cardale and
Francisco are concerned. Cardale and Francisco cannot escape
liability now that Cardale has been dissolved. Francisco shall then
pay Guttierez estate the outstanding balance with interest (total of
P4.3 + million).
As regards Merryland however, there was no proof that it is merely an
alter ego or a business conduit of Francisco. Merryland merely
bought the properties from the auction sale and such per se is not a
wrongful act or a fraudulent act. Time and again it has been reiterated
15
that mere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stock of a corporation is
not of itself sufficient ground for disregarding the separate corporate
personality. Hence, Merryland cant be held solidarily liable with
Francisco.
SCRA 562
STA. MARIA V. TUASON
FACTS:
This is a petition for the disbarment of Atty. Eduardo M. Tuason,
instituted by Emilio Sta. Maria.
Sometime in June 1955, Atty. Tuason represented the partnership of
Sta. Maria, Guanzon and Chincuanco in a collection case against
Enriqueta de Hidalgo, involving a promissory note of P50,000.00.
Defendant Hidalgo in this case was declared in default and was
ordered to pay. By virtue of a writ of execution, the provincial sheriff
of Pampanga was able to obtain the amount of P22,930.64.
Respondent Tuason got the whole amount from the sheriff and
applied it in the following manner : P10,000 attorneys fees, P1,648
supposed expenses of litigation which he claimed to have advanced
during the prosecution and the balance of P11,282.64 to Fausto
Chincuanco, his uncle.
Despite demands from Sta. Maria to turn over the money to him or to
the sheriff, respondent failed to comply and contempt proceedings
were instituted against Tuason. The matter was referred to the Office
of the Solicitor General who made the findings and recommendation
that: respondent Tuason was not in connivance with his uncle
Chincuanco in depriving petitioner of his lawful share in the liquidation
of partnership assets, however, the collection of P10,000 as
attorneys fees after the case was terminated after one brief hearing
is unreasonable. There was also no evidence presented to show that
Tuason actually spent P1,648 for the expenses.
The Sol. Gen. recommended that instead of a more severe penalty
which he would otherwise deserve, respondent be reprimanded for
professional indiscretion, with a warning that a more severe penalty
be imposed for the repetition of the same of similar acts.
ISSUE :
Whether respondent committed acts that would merit his disbarment.
RULING:
The fact that the respondent placed his private and personal interest
over and above that of his clients constitutes a breach of the lawyers
oath, to say the least. Call it professional indiscretion or any other
name, but the cold fact remains that the act is not conducive to the
health growth of the legal profession. Respondent is hereby
admonished that a repetition of similar acts will merit more drastic
action.
G.R. No. L--9231
UY CHICO V. THE UNION LIFE ASSURANCE
OSOCIETY LTD, ET.AL.
FACTS:
In 1897 petitioners father died. He continued the business still in the
name of his father after buying the share of his brother in the said
business. Petitioner filed a case seeking the recovery of the proceeds
of 2 insurance policies on stock of dry goods that was destroyed in a
fire. These policies were surrendered by the petitioners lawyer to the
administrator of his fathers estate, who had compromised with the
defendant for of the face value of the insurance that was paid to
the court. He alleged that said policies belong to him and that hewas
not bound by the compromised agreement made by the
administrator. The company introduced evidence showing that the
petitioner had agreed to the settlement of the policies when his
lawyer surrendered the same to the estates administrator. Petitioner,
on the witness stand had been asked if he had any objection as to his
lawyer testifying concerning the surrender of the policies to which he
negatively replied. Whereupon, the lawyer of the petitioner formally
16
withdraw the waiver given by the petitioner and objected to the
testimony on the ground of privileged communication.
ISSUE:
Whether or not instruction of the client to be delivered to a third
person is considered privilege
HELD:
No. A similar provision is inserted in section 383, No. 4, of the same
Act. It will be noted that the evidence in question concerned the
dealings of the plaintiff's attorney with a third person. Of the very
essence of the veil of secrecy which surrounds communications
made between attorney and client, is that such communications are
not intended for the information of third persons or to be acted upon
by them, put of the purpose of advising the client as to his rights. It is
evident that a communication made by a client to his attorney for the
express purpose of its being communicated to a third person is
essentially inconsistent with the confidential relation. When the
attorney has faithfully carried out his instructions be delivering the
communication to the third person for whom it was intended and the
latter acts upon it, it cannot, by any reasoning whatever, be classified
in a legal sense as a privileged communication between the attorney
and his client. It is plain that such a communication, after reaching the
party for whom it was intended at least, is a communication between
the client and a third person, and that the attorney simply occupies
the role of intermediary or agent.
When will not Privileged Communication will not apply between the
lawyer and his client?
When the client transmitted information to the client to a third person,
this is contrary to the nature of privileged communication wherein it
should be only between the lawyer and the client.
Not exempted: WHEN IS THERE NO PRIVILEGED
COMMUNICATION:
1. After pleading has been filed once filed, the pleading ceases to
be a privileged communication; it becomes part of public records.
2. Communication intended by the client to be sent to a third person
through his counsel it loses its confidential character as soon as it
reaches the hands of third person3. When communication sought by
client is intended to aid future crime4. When communication between
attorney and client is heard by a third party third party testimony is
admissible as evidence
G.R. No. 105938
REGALA, ET.AL. V. SANDIGANBAYAN
FACTS:
The Republic of the Philippines instituted a Complaint before the
Sandiganbayan (SB), through the Presidential Commission on Good
Govt (PCGG) against Eduardo M. Cojuangco, Jr., as one of the
principal defendants, for the recovery of alleged ill-gotten wealth,
which includes shares of stocks in the named corps. in PCGG Case
No. 33 (CC No. 0033) entitled "RP vs. Eduardo Cojuangco, et al."
Among the defendants named in the case are herein petitioners and
herein private respondent Raul S. Roco, who all were then partners
of the law firm Angara, Abello, Concepcion, Regala and Cruz
(ACCRA) Law Offices. ACCRA Law Firm performed legal services for
its clients and in the performance of these services, the members of
the law firm delivered to its client documents which substantiate the
client's equity holdings.
In the course of their dealings with their clients, the members of the
law firm acquire information relative to the assets of clients as well as
their personal and business circumstances. As members of the
ACCRA Law Firm, petitioners and private respondent Raul Roco
admit that they assisted in the organization and acquisition of the
companies included in CC No. 0033, and in keeping with the office
17
practice, ACCRA lawyers acted as nominees-stockholders of the said
corporations involved in sequestration proceedings.
PCGG filed a "Motion to Admit 3rd Amended Complaint" & "3rd
Amended Complaint" w/c excluded Roco from the complaint in PCGG
Case No. 33 as partydefendant, Roco having promised hell reveal
the identity of the principal/s for whom he acted as
nominee/stockholder in the companies involved in PCGG Case # 33.
Petitioners were included in 3rd Amended Complaint for having
plotted, devised, schemed, conspired & confederated w/each other in
setting up, through the use of coconut levy funds, the financial &
corporate framework & structures that led to establishment of UCPB,
UNICOM, COCOLIFE, COCOMARK, CIC, & more than 20 other
coconut levy funded corps, including the acquisition of San Miguel
Corp. shares & its institutionalization through presidential directives of
the coconut monopoly. Through insidious means & machinations,
ACCRA Investments Corp., became the holder of roughly 3.3% of
the total outstanding capital stock of UCPB.
In their answer to the Expanded Amended Complaint, petitioners
alleged that their participation in the acts w/ w/c their co-defendants
are charged, was in furtherance of legitimate lawyering
Petitioner Paraja Hayudini, who had separated from ACCRA law firm,
filed a separate answer denying the allegations in the complaint
implicating him in the alleged ill-gotten wealth.
Petitioners then filed their "Comment &/or Opposition" w/ Counter-
Motion that PCGG exclude them as parties-defendants like Roco.
PCGG set the ff. precedent for the exclusion of petitioners:
(a) the disclosure of the identity of its clients;
(b) submission of documents substantiating the lawyer-client
relationship; and
(c) the submission of the deeds of assignments petitioners executed
in favor of its clients covering their respective shareholdings.
Consequently, PCGG presented supposed proof to substantiate
compliance by Roco of the same conditions precedent. However,
during said proceedings, Roco didnt refute petitioners' contention
that he did actually not reveal the identity of the client involved in
PCGG Case No. 33, nor had he undertaken to reveal the identity of
the client for whom he acted as nominee-stockholder.
In a Resolution, SB denied the exclusion of petitioners, for their
refusal to comply w/ the conditions required by PCGG. It held,
ACCRA lawyers cannot excuse themselves from the consequences
of their acts until they have begun to establish the basis for
recognizing the privilege; the existence and identity of the client.
ACCRA lawyers filed MFR w/c was denied. Hence, ACCRA lawyers
filed the petition for certiorari. Petitioner Hayudini, likewise, filed his
own MFR w/c was also denied thus, he filed a separate petition for
certiorari, assailing SBs resolution on essentially same grounds
averred by petitioners, namely:
SB gravely abused its discretion in subjecting petitioners to the strict
application of the law of agency.
SB gravely abused its discretion in not considering petitioners & Roco
similarly situated &, thus, deserving equal treatment
SB gravely abused its discretion in not holding that, under the facts of
this case, the attorney-client privilege prohibits petitioners from
revealing the identity of their client(s) and the other information
requested by the PCGG.
SB gravely abused its discretion in not requiring that dropping of party
defendants be based on reasonable & just grounds, w/ due
consideration to constitutional rts of petitioners
PCGG, through its counsel, refutes petitioners' contention, alleging
that the revelation of the identity of the client is not w/in the ambit of
the lawyer-client confidentiality privilege, nor are the documents it
required (deeds of assignment) protected, because they are evidence
of nominee status.
18
ISSUE:
WON ATTORNEY-CLIENT PRIVILEGE PROHIBITS PETITIONERS
FROM REVEALING THE IDENTITY OF THEIR CLIENT(S) & THE
OTHER INFORMATION REQUESTED BY THE PCGG
RULING:
YES. Nature of lawyer-client relationship is premised on the Roman
Law concepts of locatio conductio operarum (contract of lease of
services) where one person lets his services and another hires them
without reference to the object of which the services are to be
performed, wherein lawyers' services may be compensated by
honorarium or for hire, and mandato (contract of agency) wherein a
friend on whom reliance could be placed makes a contract in his
name, but gives up all that he gained by the contract to the person
who requested him. But the lawyer-client relationship is more than
that of the principal-agent and lessor-lessee
An attorney is more than a mere agent or servant, because he
possesses special powers of trust and confidence reposed on
him by his client. An attorney occupies a "quasi-judicial office" since
he is in fact an officer of the Court & exercises his judgment in the
choice of courses of action to be taken favorable to his client.
Thus, in the creation of lawyer-client relationship, there are rules,
ethical conduct and duties that breathe life into it, among those, the
fiduciary duty to his client which is of a very delicate, exacting and
confidential character, requiring a very high degree of fidelity and
good faith, that is required by reason of necessity and public interest
based on the hypothesis that abstinence from seeking legal advice in
a good cause is an evil which is fatal to the administration of justice.
Attorney-client privilege, is worded in Rules of Court, Rule 130:
Sec. 24. Disqualification by reason of privileged communication. The
following persons cannot testify as to matters learned in confidence in
the following cases: xxx An attorney cannot, without the consent of
his client, be examined as to any communication made by the client
to him, or his advice given thereon in the course of, or with a view to,
professional employment, can an attorney's secretary, stenographer,
or clerk be examined, without the consent of the client and his
employer, concerning any fact the knowledge of which has been
acquired in such capacity.
Further, Rule 138 of the Rules of Court states: Sec. 20. It is the duty
of an attorney: (e) to maintain inviolate the confidence, and at every
peril to himself, to preserve the secrets of his client, and to accept no
compensation in connection with his client's business except from
him or with his knowledge and approval.
This duty is explicitly mandated in Canon 17, CPR (A lawyer
owes fidelity to the cause of his client and he shall be mindful of
the trust and confidence reposed in him.) Canon 15, CPE also
demands a lawyer's fidelity to client.
An effective lawyer-client relationship is largely dependent upon the
degree of confidence which exists between lawyer and client which in
turn requires a situation which encourages a dynamic and fruitful
exchange and flow of information. Thus, the Court held that this duty
may be asserted in refusing to disclose the name of petitioners'
client(s) in the case at bar.
The general rule is that a lawyer may not invoke the privilege and
refuse to divulge the name or identity of his client.
Reasons advanced for the general rule:
Court has a right to know that the client whose privileged
information is sought to be protected is flesh and blood.
Privilege begins to exist only after the attorney-client
relationship has been established.
Privilege generally pertains to subject matter of relationship
Due process considerations require that the opposing party
should, as a general rule, know his adversary.
19
Exceptions to the gen. rule:
Client identity is privileged where a strong probability exists that
revealing the client's name would implicate that client in the very
activity for which he sought the lawyer's advice.
Ex-Parte Enzor and U.S. v. Hodge and Zweig: The subject matter of
the relationship was so closely related to the issue of the client's
identity that the privilege actually attached to both.
Where disclosure would open the client to civil liability, his identity is
privileged.
Neugass v. Terminal Cab Corp.: couldnt reveal name of his client as
this would expose the latter to civil litigation.
Matter of Shawmut Mining Company: We feel sure that under such
conditions no case has ever gone to the length of compelling an
attorney, at the instance of a hostile litigant, to disclose not only his
retainer, but the nature of the transactions to w/c it related, when
such information could be made the basis of a suit against his client.
Where the government's lawyers have no case against an attorney's
client unless, by revealing the client's name, the said name would
furnish the only link that would form the chain of testimony necessary
to convict an individual of a crime, the client's name is privileged.
Baird vs. Korner: a lawyer could not be forced to reveal the names of
clients who employed him to pay sums of money to govt voluntarily in
settlement of undetermined income taxes, unsued on, & w/ no govt
audit or investigation into that client's income tax liability pending
Apart from these principal exceptions, there exist other situations
which could qualify as exceptions to the general rule:
if the content of any client communication to a lawyer is
relevant to the subject matter of the legal problem on which
the client seeks legal assistance
where the nature of the attorney-client relationship has been
previously disclosed & it is the identity w/c is intended to be
confidential, the identity of the client has been held to be
 privileged, since such revelation would otherwise result in
disclosure of the entire transaction.
Summarizing these exceptions, information relating to the identity of a
client may fall within the ambit of the privilege when the client's name
itself has an independent significance, such that disclosure would
then reveal client confidences.
Instant case falls under at least 2 exceptions to the general rule. First,
disclosure of the alleged client's name would lead to establish said
client's connection with the very fact in issue of the case, which is
privileged information, because the privilege, as stated earlier,
protects the subject matter or the substance (without which there
would be no attorney-client relationship).
The link between the alleged criminal offense and the legal advice or
legal service sought was duly established in the case at bar, by no
less than the PCGG itself as can be seen in the 3 specific conditions
laid down by the PCGG which constitutes petitioners' ticket to non-
prosecution should they accede thereto.
From these conditions, particularly the third, we can readily deduce
that the clients indeed consulted the petitioners, in their capacity as
lawyers, regarding the financial and corporate structure, framework
and set-up of the corporations in question. In turn, petitioners gave
their professional advice in the form of, among others, the
aforementioned deeds of assignment covering their client's
shareholdings.
Petitioners have a legitimate fear that identifying their clients would
implicate them in the very activity for which legal advice had been
sought, i.e., the alleged accumulation of ill-gotten wealth in the
aforementioned corporations.
Secondly, under the third main exception, revelation of the client's
name would obviously provide the necessary link for the prosecution
to build its case, where none otherwise exists.
While the privilege may not be invoked for illegal purposes such as in
a case where a client takes on the services of an attorney, for illicit
20
purposes, it may be invoked in a case where a client thinks he might
have previously committed something illegal and consults his
attorney. Whether or not the act for which the client sought advice
turns out to be illegal, his name cannot be used or disclosed if the
disclosure leads to evidence, not yet in the hands of the prosecution,
which might lead to possible action against him.
The Baird exception, applicable to the instant case, is consonant with
the principal policy behind the privilege, i.e., that for the purpose of
promoting freedom of consultation of legal advisors by clients,
apprehension of compelled disclosure from attorneys must be
eliminated. What is sought to be avoided then is the exploitation of
the general rule in what may amount to a fishing expedition by the
prosecution.
In fine, the crux of petitioner's objections ultimately hinges on their
expectation that if the prosecution has a case against their clients, the
latter's case should be built upon evidence painstakingly gathered by
them from their own sources and not from compelled testimony
requiring them to reveal the name of their clients, information which
unavoidably reveals much about the nature of the transaction which
may or may not be illegal.
The utmost zeal given by Courts to the protection of the lawyer-client
confidentiality privilege and lawyer's loyalty to his client is evident in
the duration of the protection, which exists not only during the
relationship, but extends even after the termination of the
relationship.
We have no choice but to uphold petitioners' right not to reveal the
identity of their clients under pain of the breach of fiduciary duty
owing to their clients, as the facts of the instant case clearly fall w/in
recognized exceptions to the rule that the client's name is not
privileged information. Otherwise, it would expose the lawyers
themselves to possible litigation by their clients in view of the strict
fiduciary responsibility imposed on them in exercise of their duties.
 275 SCRA 505
PEOPLE V. SANDIGANBAYAN
FACTS:
Paredes, was the Provincial Attorney of Agusan del Sur, then
Governor of the same province and is at present a Congressman.
Atty. Sansaet is a practicing attorney who served as counsel for
Paredes in several instances. In 1976, Paredes applied for a free
patent over a piece of land and it was granted to him. But later, the
Director of Lands found out that Paredes obtained the same through
fraudulent misrepresentations in his application. A civil case was filed
and Sansaet served as counsel of Paredes. A criminal case for
perjury was subsequently filed against Paredes and Sansaet also
served as counsel.
Later, TeofiloGelacio, a taxpayer, initiated perjury and graft charges
against Paredes and Sansaet, claiming that they acted in conspiracy,
by not filing an arraignment in the criminal case. To evade
responsibility for his own participation, he claimed that he did so upon
the instigation and inducement of Paredes, and to discharge himself
as a government witness. The Sandiganbayan claimed that there was
an attorney-client privilege and resolved to deny the discharge.
ISSUES:
Whether or not the testimony of Atty. Sanset is barred by the
attorney-client privilege
HELD :
Statements and communications regarding the commission of a
crime already committed, made by a party who committed it, to an
attorney, consulted as such, are privileged communications.
However, the communication between an attorney and client having
to do with the client's contemplated criminal acts, or in aid or
furtherance thereof, are not covered by the cloak of privilege
ordinarily existing in reference to communications between an
attorney and a client. The falsification not having been committed yet,
21
these communications are outside the pale of the attorney client
privilege.
Moreover, Sansaet himself was a conspirator in the commission of
the falsification. For the communication to be privileged, it must be for
a lawful purpose or in furtherance of a lawful end. The existence of an
unlawful purpose prevents the privilege from attaching.
G.R. No. L--961
HILADO V. DAVID, ET.AL.
FACTS:
- Mrs. Hilado filed an action against Assad to annul the sale of
several house & lot between Assad and her now deceased
husband, during the Japanese occupation
- Assads counsel is Atty. Francisco
- Mrs. Hilados counsels are the following: Delgado, Dizon, Flores
and Rodrigo
- Atty. Dizon wrote Atty. Francisco to discontinue representing Assad
because Mrs. Hilado consulted her about the case and even turned
over some documents to Atty. Francisco
- Atty. Francisco even wrote a legal opinion/letter addressed to Mrs.
Hilado regarding the same case, which states that Atty. Francisco
will not represent Mrs. Hilado in the case and he thinks that the
action against Assad will not prosper
- Mrs. Hilados counsel filed a motion to DISQUALIFY Atty. Francisco
- Atty. Franciscos version of the story:
o Mrs. Hilado came to see Atty. Francisco about the case, but
he refused to become her counsel because he thinks that the
action will not prosper
o Days later, Atty. Franciscos assistant, Atty. Agrava, informed
him that Mrs. Hilado left some expediente in the firm. Atty.
Francisco instructed Atty. Agrava to return the expediente
because they will not handle the case of Mrs. Hilado
o Later, the firms stenographer showed Atty. Francisco a letter
allegedly dictated by Atty. Agrava which explains to Mrs.
Hilado why they refuse to take the case
o Atty. Francisco allegedly signed the letter without reading it
 o Later on, Assad went to Atty. Franciscos office. Afterwards,
Atty. Francisco accepted the retainer fee
- Lower Court Held: no other information was transmitted to Atty.
Francisco other than those in plaintiffs complaint and there was no
attorney-client relationship between Atty. Francisco and Mrs.
Hilado. Hence, motion to disqualify is denied.
ISSUE
W/N there was an attorney-client relationship between Atty. Francisco
and Mrs. Hilado
HELD
Yes, there was an attorney-client relationship because the purpose of
Mrs. Hilado was to obtain Atty. Franciscos personal service as a
lawyer
- Retainer and frequency of consultation is not needed , so long
as the purpose is to obtain professional advice or assistance
and the attorney permits, then an attorney-client relationship
is established
- Formality is not essential
- Even is no secret communication was given, as long as there
is an attorney-client relationship which precludes accepting
opposite partys retainer in the same litigation regardless of
what type of information was received
- Only thus can litigants be encouraged to entrust their secrets
to their attorneys which is of paramount importance to
administration of justice
- Even if the information was only received by an assistant, it is
still considered as professional service, besides an
information imparted to a member of a firm is made available
to the entire firm
- Hence, Atty. Francisco is disqualified as Assads counsel
RATIO:
Rule 15.02 a lawyer shall be bound by the rule on privileged
communication in respect of matters disclosed to him by a
prospective client
22
AC No. 2040
NAKPIL V. VALDES
FACTS
Valdes is Jose Nakpils accountant, consultant and lawyer.
Nakpil got interested in the purchase of a summer residence in
Baguio but due to lack of funds, he asked Valdes to buy it for him
and hold it in trust.
Valdes obtained 2 loans (65k and 75k), then he bought the land
and had the title issued in his name.
When Jose Nakpil died, Imelda, his wife, became the
administratrix of Joses estate. And, Valdes law firm filed for the
settlement of Joses estate.
Baguio property became an issue because the property was not
included in Joses inventory of estate, but the loans used to
purchase the property were charged under his name.
The title to the property was transferred from Valdes to Caval
Realty, Valdes family realty corp.
Valdes accounting firm handled the inventory of Joses estate but
also, handled the claims of Joses creditors- Angel Nakpil and
ENORN, INC.
ISSUE
w/n Valdes is guilty of representing conflicting interests in violation of
the code of professional ethics
HELD
Yes. The proscription applies no matter how slight the adverse
interest is.
Representation of conflicting interests may be allowed only upon full
disclosure of the facts among all concerned parties, as to the extent
of conflict and probable adverse outcome.
The preparation of claims of the creditors against the estate is
obviously improper because he had to fight for one side, the claims
he was defending against for the other side.
The defense that he had already resigned from the law firm was not
supported by evidence. His resignation from the accounting firm only
shows that he was absent for quite some time but returned to work
during the tenure of the litigation of claims. Thus, he cannot claim
ignorance of the case.
The test of impropriety of representation of conflicting interests is not
the certainty of such existence but mere probability for it to exist.
Even though he could have committed such misconduct not as a
lawyer but as an accountant, the court is not divested of jurisdiction to
punish a lawyer for misconduct committed outside the legal field, as
the good moral character requirement is not only a requisite for
entrance to the bar but a continuing requirement for the practice of
law.
A lawyer should always act to promote public confidence to the legal
profession.
G.R. No. L--28546
CASTAEDA, ET.AL. V. AGO, ET.AL.
NATURE
Petition for review of the decision of the Court of Appeals
FACTS
1955 Castaneda and Henson filed a replevin suit against Ago in the
CFI of Manila to recover certain machineries.
1957 judgment in favor of Castaneda and Henson
1961 SC affirmed the judgment; trial court issued writ of execution;
Agos motion denied, levy was made on Agos house and lots; sheriff
advertised the sale, Ago moved to stop the auction; CA dismissed the
petition; SC affirmed dismissal
23
Ago thrice attempted to obtain writ of preliminary injunction to restrain
sheriff from enforcing the writ of execution; his motions were denied
1963 sheriff sold the house and lots to Castaneda and Henson; Ago
failed to redeem
1964 sheriff executed final deed of sale; CFI issued writ of
possession to the properties
1964 Ago filed a complaint upon the judgment rendered against him
in the replevin suit saying it was his personal obligation and that his
wife share in their conjugal house could not legally be reached by
the levy made; CFI of QC issued writ of preliminary injunction
restraining Castaneda the Registed of Deeds and the sheriff from
registering the final deed of sale; the battle on the matter of lifting and
restoring the restraining order continued
1966 Agos filed a petition for certiorari and prohibition to enjoin
sheriff from enforcing writ of possession; SC dismissed it; Agos filed a
similar petition with the CA which also dismissed the petition; Agos
appealed to SC which dismissed the petition
Agos filed another petition for certiorari and prohibition with the CA
which gave due course to the petition and granted preliminary
injunction.
ISSUE
WON the Agos lawyer, encourage his clients to avoid controversy
HELD
No. Despite the pendency in the trial court of the complaint for the
annulment of the sheriffs sale, justice demands that the petitioners,
long denied the fruits of their victory in the replevin suit, must now
enjoy them, for, the respondents Agos abetted by their lawyer Atty.
Luison, have misused legal remedies and prostituted the judicial
process to thwart the satisfaction of the judgment, to the extended
prejudice of the petitioners.
Forgetting his sacred mission as a sworn public servant and his
exalted position as an officer of the court, Atty. Luison has allowed
himself to become an instigator of controversy and a predator of
conflict instead of a mediator for concord and a conciliator for
compromise, a virtuoso of technicality in the conduct of litigation
instead of a true exponent of the primacy of truth and moral justice.
A counsels assertiveness in espousing with candor and honesty his
clients cause must be encouraged and is to be commended; what
the SC does not and cannot countenance is a lawyers insistence
despite the patent futility of his clients position.
It is the duty of the counsel to advice his client on the merit or lack of
his case. If he finds his clients cause as defenseless, then he is his
duty to advice the latter to acquiesce and submit rather than traverse
the incontrovertible. A lawyer must resist the whims and caprices of
his client, and temper his clients propensity to litigate.
G.R. No. L--22018
GALOFA V. NEE BON SING
FACTS:
In this case a recovery of possession the defendant denied parts of
the complaint of the plaintiff. The defendant denied all the facts that
could lead for his right of possession of the property and had denied
that he deprive the plaintiff of the possession of the property. And
defendant still filed a motion of reconsideration.
ISSUE:
Despite the denial is there still an issue?
RULING:
No. The defendant's motion for reconsideration and/or new trial
furnished no justification to the lower court to set aside or reconsider
its judgment. Said motion prayed that the defendant be allowed to
amend his answer, but annexed to it is the defendant's own affidavit
(Annex A, Rec. on Appeal, p. 57) reiterating that he had "no real right
or interest whatsoever not having been involved in any way with any
24
transaction affecting the title or possession of the same. Definitely,
therefore, there was no issue to be tried and the court's denial of the
motion was proper. And why should the defendant resist the
judgment when he simultaneously asserts that he has no right to the
land?
It is to be noted that, to the plaintiff's allegation of his inability to take
actual possession of the parcel of land due to "an unwarranted
adverse claim of rights of ownership and possession by the
defendant . . .", followed by an allegation of how such claim was
exercised, the defendant's denial is as to "the materials averments
contained in paragraph 4 of the Complaint, . . ." conjoined with his
disclaimer or dominical or possessory rights in the manner alleged in
the complaint. The defendant's denial is, therefore, a negative
pregnant, which is equivalent to an admission.
As to the plaintiff's allegations of his having contracted a lawyer for a
fee, the defendant does not deny the alleged fact; what he denies in
his liability therefor, which is an issue of law. Since the defendant
neither denies nor admits the material allegation about the services of
plaintiff's counsel, judgment on the pleadings is proper. (Alemany vs.
Sweeney, 3 Phil. 114)
The defendant, however, had specifically denied the plaintiff's
allegations in paragraphs 5, 6 and 7 of the complaint. He traversed
these allegations in his answer by stating that he "does not possess
any knowledge or information sufficient to form a belief as to the truth
of the allegations contained in paragraphs 5, 6 and 7 of the (original)
Complaint and therefore, denies the same." But paragraphs 6 and 7
of the Complaint referred to damages, while paragraph 5 of the
complaint merely alleged a conclusion (that by defendant's acts a
cloud over plaintiff's title had been raised) so that the defendant's
specific denials served no purpose at all. As to the amount of
damages, alleged in paragraph 6 of the complaint (P2,000.00 per
agricultural year) and specifically denied by the defendant, as
aforesaid, a specific denial is not required by the Rules. (Sec. 1, Rule
9, Rules of Court) At any rate, the appealed judgment did not
condemn the defendant-appellant to pay damages.
A denial in the form of a negative pregnant is an ambiguous pleading, adverse claim on TCT No. 32996 became the subject of cancellation
since it cannot be ascertained whether it is the fact or only the proceedings filed by herein petitioner-spouses. The adverse claimant,
qualification that is intended to be denied. Atty. Alberto B. Fernandez, filed his opposition to the petition for
cancellation. The trial court resolved the issue when it declared that
the petition to cancel the adverse claim should be denied. The
G.R. No. L--26069 admission by the petitioners that the lawyers (Attys. Fernandez and
THE DIRECTOR OF LANDS V. ABABA, ET.AL. Batiguin) are entitled to only one-third of the lot described in Transfer
Certificate of Title No. 32966 is the best proof of the authority to
maintain said adverse claim
FACTS
Petitioner-spouses decided to appeal the order of dismissal to this
The adverse claimant, Atty. Alberto B. Fernandez was retained as
Court. They contend that a contract for a contingent fee violates
counsel by petitioner, Maximo Abarquez, for the annulment of a
Article 1491 because it involves an assignment of a property subject
contract of sale with right of repurchase and for the recovery of the
of litigation.
land. Litigating as a pauper in the lower court and engaging the
services of his lawyer on a contingent basis, petitioner, liable to
ISSUE
compensate his lawyer whom he also retained for his appeal
executed a document in the Cebuano-Visayan dialect whereby he
Whether the registration of the adverse claim of Atty. Fernandez is
obliged himself to give to his lawyer one-half (1/2) of whatever he
valid in the contract for a contingent fee as basis of his interest.
might recover from Lots 5600 and 5602 should the appeal prosper.
RULING
The case having been resolved and title having been issued to
petitioner, adverse claimant waited for petitioner to comply with ha
The registration of adverse claim is valid. For the prohibition in
obligation under the document executed by him on June 10, 1961 by
Article 1941 to operate, the sale or transfer of the property must take
delivering the one-half () portion of the said parcels of land.
place during the pendency of the litigation involving the property
Petitioner refused to comply with his obligation and instead offered to
A contract for a contingent fee is not covered by Article 1491 because
sell the whole parcels of land covered by TCT No. 31841 to
the transfer or assignment of the property in litigation takes effect only
petitioner-spouses Juan Larrazabal and Marta C. de Larrazabal.
after the finality of a favorable judgment. In the instant case, the
Upon being informed of the intention of the petitioner, adverse
attorney's fees of Atty. Fernandez, consisting of one-half (1/2) of
claimant immediately took steps to protect his interest. By virtue of
whatever Maximo Abarquez might recover from his share in the lots
the petition of mid affidavit the adverse claim for one-half () of the
in question, is contingent upon the success of the appeal. Hence, the
lots covered the document was annotated on TCT No. 31841.
payment of the attorney's fees, that is, the transfer or assignment of
one-half (1/2) of the property in litigation will take place only if the
Notwithstanding the annotation of the adverse claim, petitioner-
appeal prospers. Therefore, the transfer actually takes effect after the
spouse Maximo Abarquez and Anastacia Cabigas conveyed by deed
finality of a favorable judgment rendered on appeal and not during the
of absolute sale two-thirds (2/3) of the lands covered by TCT No.
pendency of the litigation involving the property in question.
31841 to petitioner-spouses Juan Larrazabal and Marta C. de
Consequently, the contract for a contingent fee is not covered by
Larrazabal. When the new transfer certificate of title No. 32996 was
Article 1491.
issued, the annotation of adverse claim on TCT No. 31841
necessarily had to appear on the new transfer certificate of title. This
25
The one-half () interest of Atty. Fernandez in the lots in question
should therefore be respected. Indeed, he has a better right than
petitioner-spouses, Juan Larrazabal and Marta C. de Larrazabal.
They purchased their two-thirds (2/3) interest in the lots in question
with the knowledge of the adverse claim of Atty. Fernandez. The
adverse claim was annotated on the old transfer certificate of title and
was later annotated on the new transfer certificate of title issued to
them. As held by this Court:
The annotation of an adverse claim is a measure designed to protect
the interest of a person over a piece of real property where the
registration of such interest or right is not otherwise provided for by
the Land Registration Act, and serves as a notice and warning to third
parties dealing with said property that someone is claiming an interest
on the same or a better right than the registered owner thereof.
Having purchased the property with the knowledge of the adverse
claim, they are therefore in bad faith. Consequently, they are
estopped from questioning the validity of the adverse claim.
LEGPROF PART:
Petitioners her contend that a contract for a contingent fee violates the
Canons of Professional Ethics this is likewise without merit This
posture of petitioners overlooked Canon 13 of the Canons which expressly
contingent fees by way of exception to Canon 10 upon which petitioners
relied. For while Canon 10 prohibits a lawyer from purchasing ...any interest
in the subject matter of the litigation which he is conducting", Canon 13, on
the other hand, allowed a reasonable contingent fee contract, thus: "A
contract for a con. tangent fee where sanctioned by law, should be
reasonable under all the circumstances of the ca including the risk and
uncertainty of the compensation, but should always be subject to the
supervision of a court, as to its reasonableness." As pointed out by an
authority on Legal Ethics:
Every lawyer is intensely interested in the successful outcome of his
case, not only as affecting his reputation, but also his
compensation. Canon 13 specifically permits the lawyer to contract
for a con tangent fee which of itself, negatives the thought that the
Canons preclude the lawyer's having a stake in his litigation. As
pointed out by Professor Cheatham on page 170 n. of his Case
Book, there is an inescapable conflict of interest between lawyer and
26
client in the matter of fees. Nor despite some statements to the con
in Committee opinions, is it believed that, particularly in view of
Canon 13, Canon 10 precludes in every case an arrangement to
make the lawyer's fee payable only out of the results of the litigation.
The distinction is between buying an interest in the litigation as a
speculation which Canon 10 condemns and agreeing, in a case
which the lawyer undertakes primarily in his professional capacity, to
accept his compensation contingent on the outcome (Drinker, Henry
S Legal Ethics, p. 99, [1953], Emphasis supplied).
These Canons of Professional Ethics have already received "judicial
recognition by being cited and applied by the Supreme Court of the
Philippines in its opinion" Malcolm, Legal and Judicial Ethics, p. 9 [1949]).
And they have likewise been considered sources of Legal Ethics. More
importantly, the American Bar Association, through Chairman Howe of the
Ethics Committee, opined that "The Canons of Professional Ethics are
legislative expressions of professional opinion ABA Op. 37 [1912])" [See
footnote 25, Drinker, Legal Ethics, p. 27]. Therefore, the Canons have some
binding effect
G.R. No. L--49241--42
RINCONADA TELEPHONE COMPANY, INC. V.
HON. BUENVIAJE, ET.AL.
FACTS:
Respondent Francisco Imperial, on July 30, 1971, orally conveyed to
petitioner, a certificate of public convenience and necessity to operate
a telephone company in Iriga City issued to him by the defunct Public
Service Commission. After the agreement, petitioner started to
operate under the strength of said certificate. It was only on October
14, 1971 that petitioner and respondent Imperial, executed the deed
of sale pursuant to their earlier agreement. On September 21, 1972,
respondent Imperial again sold the same certificate to herein
respondent Iriga Telephone Company, Inc. This second sale was
approved by the then Public Service Commission. By reason of the
second sale, petitioner charged respondent Imperial of Estafa before
the then CFI of Manila.
Because his guilt was not proven beyond reasonable doubt,
respondent Imperial was absolved in the criminal case. He then
moved for the dismissal of the civil cases pending before respondent
judge on the ground of res judicata.

Petitioner, thru Atty. Benjamin Santos sought reconsideration, but

respondent judge refused to reconsider the orders of dismissal. Thus
petitioner, thru the same counsel, filed a notice of appeal and appeal
bond. Respondent Imperial opposed the appeal because the same
was filed out of time. Petitioner now contends that the respondent
judge gravely abused his discretion in denying it the right to appeal.

ISSUE:

Whether or not there was a grave abuse of discretion on the part of

the respondent judge in denying the petitioners right to appeal

Ruling:

Yes. Clearly, respondent judge committed grave abuse of discretion,

amounting to lack of jurisdiction in denying petitioner's notice of
appeal. While it is desirable that the Rules of Court be faithfully and
even meticulously observed, courts should not be so strict about
procedural lapses that do not really impair the administration of
justice especially when such strict compliance was apparently relaxed
by the trial court itself. If the rules are intended to insure the orderly
conduct of litigation it is because of the higher objective they seek
which is the protection of substantive right of the parties

27