1)

The Clients a. Availability of service without discrimination i. Services regardless of Persons Status

Cantiller vs. Potenciano, 180 SCRA 246 A.M. Case No. 3195December 18, 1989Ma. Libertad Sj Cantiller vs. Atty. Humberto V. Potenciano Republic of the Philippines SUPREME COURT ManilaEN BANCA.M. Case No. 3195. December 18, 1989MA. LIBERTAD SJ CANTILLER, Complainant, vs. ATTY. HUMBERTO V. POTENCIANO, Respondent.R E S O L U T I O N PER CURIAMP u b l i c i n t e r e s t r e q u i r e s t h a t a n a t t o r n e y e x e r t h i s b e s t e f f o r t s a n d a b i l i t y i n t h e prosecution or def ense of his client's cause. A lawyer who perf orms that duty withdiligence and candor not only protects the interest s of his client; he also serv es theends of justice, does honor to the bar and helps maintain the respect of the communityt o t h e l e g a l p r o f e s s i o n . T h i s i s s o b e c a u s e t h e e n t r u s t e d p r i v i l e g e t o p r a c t i c e l a w carries with it the correlative duties not only to the client but also to the court, to the bar or to the public. That circumstance explains the public concern for the maintenance of an untarnished standard of conduct by every attorney towards his client.1Subject of this administrativ e complaint is Humberto V. Potenciano, a practicing lawyer and a member of thePhilippine Bar under Roll No. 21862. He is charged with deceit, f raud, and misrepresentation, and also withgross misconduct, malpractice and of acts unbecoming of an officer of the court.chanrobles virtual law libraryThe essential facts are as follows: Complainant herein is the sister of Peregrina Cantiller, defendant in an action for "ejectment" docketed as CivilCase No. 6046 bef ore the Metropolitan Trial Court of Manila, Branch 57, San Juan, Metro Manila.chanroblesvirtual law libraryAnother action, likewise involving Peregrina but this time as plaintiff, was then pending before the Regional TrialCourt, Branch 168, Pasig, Metro Manila docketed as Civil Case No. 54117 f or "reconveyance with damages."Both actions involve the apartment unit being rented by complainant and her sister.chanrobles virtual law libraryW h e n t h e t w o c a s e s w e r e c o n c l u d e d , P e r e g r i n a c a m e o u t t h e l o s i n g p a r t y . C i v i l C a s e N o . 5 4 1 1 7 f o r reconveyance was ordered dismissed by the Regional Trial Court on June 8, 1987 while Civil Case No. 6046 for ejectment was decided by the Metropolitan Trial Court against her.chanrobles virtual law libraryOn October 8, 1987 pursuant to the writ of execution issued in Civil Case No. 6046 for ejectment, complainanta n d P e r e g r i n a w e r e s e r v e d a n o t i c e t o v a c a t e t h e r e n t e d p r e m i s e s w i t h i n f o u r ( 4 ) d a y s f r o m r e c e i p t o f notice.chanrobles virtual law libraryDesperate and at a loss on what to do, they consulted a certain Sheriff Pagalunan, on the matter. Pagalunan, int u r n , i n t r o d u c e d t h e m t o h e r e i n r e s p o n d e n t . A f t e r s u c h i n t r o d u c t i o n , t h e p a r t i e s " i m p l i e d l y a g r e e d " t h a t respondent would handle their case. Forthwith, a petition entitled "Annulment of Judgment, Annulment of Saleand Damages with prayer for Preliminary Injunction and/or Status Quo Order, etc." was prepared by respondentto forestall the execution of the order to vacate in Civil Case No. 6046.chanrobles virtual law libraryIn the afternoon of October 9,1987, the complainant was made to sign by respondent what she described as a" [ h ] a s t i l y p r e p a r e d , p o o r l y c o n c e i v e d , a n d h a p h a z a r d l y c o m p o s e d 3p e t i t i o n f o r a n n u l m e n t o f j u d g m e n t . Complainant alleges that respondent promised her that the necessary restraining order would be secured if onlybecause the judge who would hear the matter was his "katsukaran" (close friend).chanrobles virtual law libraryThereupon, the petition was filed with the Regional Trial Court, Branch 153, Pasig, Metro Manila and docketedas Civ il Case No. 55118. Respondent demanded f rom the complainant one thousand pesos (P l,000.00) asattorney's fee which the latter paid that same afternoon.chanrobles virtual law libraryHowev er, when the case was raff led and assigned to Branch 153, the presiding judge asked respondent towithdraw as counsel in the case on the ground of their friendship.chanrobles virtual law libraryO n O c t o b e r 1 1 ,

198 7, re sp on dent went to the hou se of com pl ai nant and a sked her to b e rea dy w i t h t w o thousand pesos (P 2,000.00) to be given to another judge who will issue the restraining order in the ejectmentcase (Civil Case No. 6046). Complainant and her sister were only able to raise the amount of one thousandpesos which they immediately gave to respondent.chanrobles virtual law libraryLater respondent informed the complainant and her sister that he could not locate the judge who would issue therestraining order. The parties, then, instead went to the Max's Restaurant where respondent ordered some food -including two plastic bags of food allegedly to be given to the judge who would issue the restraining order. At this juncture, respondent asked for the remaining balance of the two thousand pesos (P 2,000.00) which he earlier demanded. Complainant gave her last money-a ten dollar ($ 10.00) bill.chanrobles virtual law librarySometime af ter the f iling of Civil Case No. 55118, respondent inf ormed complainant and Peregrina that therew a s a n e e d t o f i l e anot h er c a se wi t h t he R egi o nal T ri al Cou rt t o en abl e t h em t o ret ai n p o sse ssi o n o f t h e apartment. For this purpose, respondent told complainant to prepare the amount of Ten Thousand Pesos (P10,000.00) allegedly to be deposited with the Treasurer's Office of Pasig as purchase price of the apartment anda n o t h e r o n e t h o u s a n d p e s o s ( P 1 , 0 0 0 . 0 0 ) t o c o v e r t h e e x p e n s e s o f t h e s u i t . R e s p o n d e n t s t r e s s e d t o t h e complainant the need and urgency of filing the new complaint.chanrobles virtual law libraryComplainant and Peregrina raised the said amounts through the kindness of some f riends and relatives. OnOctober 26,1987, the money was handed over to the respondent.chanrobles virtual law libraryO n t h e s a m e d a t e , a c o m p l a i n t f or " Speci f i c Perf orm ance, Ann ul m ent of Sim ul at ed or S puri ou s S al e w i t h Damages," later docketed as Civil Case No. 55210, was f iled by respondent with the Regional Trial Court,Branch 165, Pasig, Metro Manila.chanrobles virtual law libraryAt the hearing of the preliminary injunction in Civil Case No. 55118 on October 30, 1987, respondent, contrary tohis promise that he would secure a restraining order, withdrew his appearance as counsel f or complainant.Complainant was not able to get another lawyer as replacement. Thus, no restraining order or preliminaryinjunction was obtained. As a consequence, the order to vacate in Civil Case No. 6046 was eventually enforcedand executed.chanrobles virtual law librarySometime thereafter, it came to complainant's knowledge that there was really no need to make a deposit of tenthousand pesos (P l0,000.00) relative to Civil Case No. 55210. Af ter f urther inquiry, she f ound out that in f actthere was no such deposit made. Thus, on December 23,1987, complainant sent a demand letter to respondentasking for the return of the total amount of eleven thousand pesos (P 11,000.00) which the former earlier gave tothe latter. Howev er, this letter was nev er answered and the money was nev er returned. Hence, complainantlodged this administrative complaint against herein respondent.chanrobles virtual law libraryMeanwhile, on December 29,1987, the Regional Trial Court, Branch 153, dismissed Civil Case No. 55118 f or failure to state a cause of action.4On January 20,1988, Civil Case No. 5521 0 was likewise dismissed for beingidentical with Civil Case No. 55118.5Respondent in his answer contends that the filing of Civil Cases Nos. 55118 and 55210 was done in good faithand that the allegations of complainant relative to the administrative charge against him are all lies, product of one's imagination and only intended to harrass him.6This Court agrees that the petitions in Civ il Cases Nos. 55118 and 55210 appear to be poorly prepared andw r i t t e n . h a v i n g r e p r e s e n t e d h i m s e l f capa bl e of pi cki ng up the cu dg el s f or the app are ntl y l ost cau se of complainant respondent should hav e caref ully prepared the pleadings if only to establish the justness of hisrepresentation. The little time involved is no excuse. Complainant reposed full faith in him. His first duty was tofile the best pleading within his capability. Apparently respondent was more interested in getting the most out of the complainant who was in a hopeless situation. He bragged about his closeness to the judge concerned in onecase and talked about the need to "buy" the restraining order in the other. W orse still he got P 10,000.00 asalleged deposit in court which he nev er deposited. Instead he pocketed the same. The pattern to milk thecomplainant dry is obvious.chanrobles virtual law libraryWhen a lawyer takes a client's cause, he thereby covenants that he will exert all effort for its prosecution until itsfinal conclusion. The failure to exercise due diligence or the abandonment of a client's cause makes such lawyer unworthy of the trust which the client had reposed on him. The acts of respondent in this case violate the mostelementary principles of professional ethics .7The Court finds that respondent failed to exercise due diligence in

protecting his client's interests. Respondenthad knowledge beforehand that he would be asked by the presiding judge in Civil Case No. 55118 to withdrawhis appearance as counsel by reason of their f riendship. Despite such prior knowledge, respondent took nosteps to find a replacement nor did he inform complainant of this fact.chanrobles virtual law libraryEven assuming that respondent had no previous knowledge that he would be asked to withdraw, the record isquite clear that four (4) days prior to the hearing of the preliminary injunction in Civil Case No. 55118 respondentalready filed a motion therein withdrawing as complainant's counsel interposing as reason therefor his frequentattacks of pain due to hemorrhoids. Despite this void, respondent failed to find a replacement. He did not evenask complainant to hire another lawyer in his stead.8His actuation is definitely inconsistent with his duty to protect with utmost dedication the interest of his client andof the fidelity, trust and confidence which he owes his client.9More so in this case, where by reason of his grossnegligence complainant thereby suffered by losing all her cases.chanrobles virtual law libraryThe filing of Civil Case No. 55210 on October 26, 1987, the same day that he had already f iled a motion towithdraw as counsel for complainant in Civil Case No. 55118, reveals his lack of good faith as an advocate. Healso f ailed to appear f or the complainant in said case. It was all a show to get more money f rom her. Thisadversely reflects on his fitness to practice law. When confronted with this evident irregularity, he lamely statedt h a t w h i l e h e d i d n o t p h y s i c a l l y a p p e a r f o r c o m p l a i n a n t h e n e v e r t h e l e s s p r e p a r e d a n d d r a f t e d t h e pleadings.chanrobles virtual law libraryHis services were engaged by complainant hoping that the property subject of the ejectment proceeding wouldbe returned to her. In f act, it was respondent who persuaded complainant that the filing of these t wo casessimultaneously were the means by which this objective can be achiev ed. His duty was not only to prepare thepleadings but to represent complainant until the termination of the cases. This he failed to do.chanrobles virtuallaw libraryHis representation that there was an immediate need to file Civil Case No. 55210 when he already knew that hecould no longer physically handle the same is an act of deception of his client.10It shows lack of fidelity to hisoath of office as a member of the Philippine bar.chanrobles virtual law libraryThe allegation of respondent that the ten thousand pesos (P 10,000.00) was given to him as fee for his services,i s s i m p l y i n c r e d i b l e . I n d e e d , s u c h a m o u n t i s g r o s s l y d i s p r o p o r t i o n a t e w i t h t h e s e r v i c e h e a c t u a l l y rendered.11And hi s f ailure to return ev en a portion of the amount upon demand of complainant all the moreb o l s t e r s t h e prote st ati on of com pl ai nant that re spo nd ent do e s not d e serv e to rem ai n as a n o f f i c e r o f t h e court.chanrobles virtual law libraryLawyers are indispensable part of the whole system of administering justice in this jurisdiction. At a time whenstrong and disturbing criticisms are being hurled at the legal prof ession, strict compliance with one's oath of office and the canons of professional ethics is an imperative.chanrobles virtual law libraryLawyers should be fair, honest, respectable, above suspicion and beyond reproach in dealing with their clients.T h e p r o f e s s i o n i s n o t s y n o n y m o u s w i t h a n o r d i n a r y b u s i n e s s p r o p o s i t i o n . I t i s a m a t t e r o f p u b l i c interest.chanrobles virtual law libraryW HEREFORE, after considering the entirety of the circumstances present in this case, this Court f inds Atty.Humberto V. Potenciano to be guilty of the charges against him and hereby SUSPENDS him from the practice of law for an indefinite period until such time he can demonstrate that he has rehabilitated himself as to deserve toresume the practice of law.chanrobles virtual law libraryF i n a l l y , r e s p o n d e n t i s h e r e b y o r d e r e d t o r e t u r n t o c o m p l a i n a n t h e r e i n t h e s u m o f e l e v e n t h o u s a n d p e s o s (P11,000.00) with legal interest from the date of this resolution until it is actually returned.chanrobles virtual lawlibrarySO ORDERED.Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur. Endnotes:1 Agpalo, Legal Ethics, 3rd ed. (Law Publishing House, 1985), page 153.chanroblesvirtual law library2 Pages 1-13, Rollo.chanrobles virtual law library3 Page 2, Rollo.chanrobles virtual law library4 Pages 26-32, Record.chanrobles virtual law library5 Pages 39-40, Supra.chanrobles virtual law library6 Pages 48-51, Rollo.chanrobles virtual law library7 In re Yeager 56 P 1 691 (1932).chanrobles virtual law library8 Page 11, Report.chanrobles virtual law library9 Canon 17, Code of Professional Responsibility.chanrobles virtual law library10 Sta. Maria vs. Tuason, I I SCRA 562 (1964)11 Canon 22, Code of Professional Responsibility.chanrobles virtual law library

ii. Services as Counsel de Officio L E D E S M A V S . C L I M A C O G.R. No. L-23815June 28, 1974Adelino H. Ledesma vs. Rafael C. ClimacoRepublic of the Philippines SUPREME COURT ManilaSECOND DIVISIONG.R. No. L-23815 June 28, 1974ADELINO H. LEDESMA, Petitioner, vs. HON. RAFAEL C. CLIMACO, Presiding Judge of the Court of FirstInstance of Negros Occidental, Branch I, Silay City, Respondent.FERNANDO, J.:What is assailed in this certiorari proceeding is an order of respondent Judge denying a motion filed by petitioner to be allow ed to w ithdraw as counsel de oficio.1One of the grounds for such a motion was his allegation thatwith his appointment as Election Registrar by the Commission on Elections, he was not in a position to devotefull time to the defense of the two accused. The denial by respondent Judge of such a plea, notwithstanding theconformity of the defendants, was due "its principal effect [being] to delay this case."2It was likewise noted thatthe prosecution had already rested and that petitioner was previously counsel de parte, his designation in theformer category being precisely to protect him in his new position without prejudicing the accused. It cannot beplausibly asserted that such failure to allow withdrawal of de oficio counsel could ordinarily be characterized as agrave abuse of discretion correctible by certiorari. There is, how ever, the overriding concern for the right tocounsel of the accused that must be taken seriously into consideration. In appropriate cases, it should tilt thebalance. This is not one of them. What is easily discernible was the obvious reluctance of petitioner to complywith the responsibilities incumbent on the counsel de oficio. Then, too, even on the assumption that he continuesin his position, his volume of work is likely to be very much less at present. There is not now the slightest pretextfor him to shirk an obligation a member of the bar, w ho expects to remain in good standing, should fulfill. Thepetition is clearly without merit.chanroblesvirtualawlibrary chanrobles virtual law libraryAccording to the undisputed facts, petitioner, on October 13, 1964, was appointed Election Registrar for theMunicipality of Cadiz, Province of Negros Occidental. Then and there, he commenced to discharge its duties. Ashe was counsel de parte for one of the accused in a case pending in the sala of respondent Judge, he filed am o t i o n t o w i t h d r a w a s s u c h . N o t o n l y d i d r e s p o n d e n t J u d g e d e n y s u c h m o t i o n , b u t h e a l s o a p p o i n t e d h i m counsel de oficio for the two defendants. Subsequently, on November 3, 1964, petitioner filed an urgent motionto be allowed to withdraw as counsel de oficio, premised on the policy of the Commission on Elections to requirefull time service as w ell as on the volume or pressure of w ork of petitioner, w hich could prevent him fromhandling adequately the defense. Respondent Judge, in the challenged order of November 6, 1964, denied saidmotion. A motion for reconsideration having proved futile, he instituted this certiorari proceeding.3chanroblesvirtual law libraryAs noted at the outset, the petition must fail.chanroblesvirtualawlibrary chanrobles virtual law library1. The assailed order of November 6, 1964 denying the urgent motion of petitioner to w ithdraw as counsel deoficiospeaks for itself. It began with a reminder that a crime was allegedly committed on February 17, 1962, withthe proceedings having started in the municipal court of Cadiz on July 11, 1962. Then respondent Judge spokeof his order of October 16, 1964 which reads thus: "In view of the objection of the prosecution to the motion

for postponement of October 15, 1964 (alleging that counsel for the accused cannot continue appearing in this casewithout the express authority of the Commission on Elections); and since according to the prosecution there aret w o w i t n e s s e s w h o a r e rea d y t o ta k e t he st a nd, a ft er w hi c h t he governm ent w oul d rest , t he m o t i o n f o r postponement is denied. When counsel for the accused assumed office as Election Registrar on October 13,1964, he knew since October 2, 1964 that the trial would be resumed today. Nevertheless, in order not toprejudice the civil service status of counsel for the accused, he is hereby designated counsel de oficio for theaccused. The defense obtained postponements on May 17, 1963, June 13, 1963, June 14, 1963, October 28,1963, November 27, 1963, February 11, 1964, March 9, 1964, June 8, 1964 July 26, 1964, and September 7,1964."4Reference was then made to another order of February 11, 1964: "Upon petition of Atty. Adelino H.Ledesma, alleging indisposition, the continuation of the trial of this case is hereby transferred to March 9, 1964 at8:30 in the morning. The defense is reminded that at its instance, this case has been postponed at least eight (8)times, and that the government witnesses have to come all the way from Manapala."5After which, it was notedin such order that there was no incompatibility between the duty of petitioner to the accused and to the court andthe performance of his task as an election registrar of the Commission on Elections and that the ends of justice"would be served by allowing and requiring Mr. Ledesma to continue as counsel de oficio, since the prosecutionhas already rested its case."6chanrobles virtual law library2. What is readily apparent therefore, is that petitioner was less than duly mindful of his obligation as counsel deoficio. He ought to have know n that membership in the bar is a privilege burdened with conditions. It could bethat for some law yers, especially the neophytes in the profession, being appointed counsel de oficio is anirksome chore. For those holding such belief, it may come as a surprise that counsel of repute and of eminencewelcome such an opportunity. It makes even more manifest that law is indeed a profession dedicated to the idealof service and not a mere trade. It is understandable then why a high degree of fidelity to duty is required of oneso designated. A recent statement of the doctrine is found in People v. Daban:7"There is need anew in this disciplinary proceeding to lay stress on the fundamentalpostulate that membership in the bar carries with it a responsibility to live up to its exacting standard. The law isa profession, not a trade or a craft. Those enrolled in its ranks are called upon to aid in the performance of one of the basic purposes of the State, the administration of justice. To avoid any frustration thereof, especially in thecase of an indigent defendant, a lawyer may be required to act as counsel de oficio. The fact that his servicesare rendered without remuneration should not occasion a diminution in his zeal. Rather the contrary. This is not,of course, to ignore that other pressing matters do compete for his attention. After all, he has his practice toattend to. That circumstance possesses a high degree of relevance since a lawyer has to live; certainly hecannot afford either to neglect his paying cases. Nonetheless, what is incumbent upon him as counsel de oficiomust be fulfilled."8chanrobles virtual law librarySo it has been from the 1905 decision of In re Robles Lahesa,9where respondent was de oficio counsel, theopinion penned by Justice Carson making clear: "This Court should exact from its officers and subordinates themost scrupulous performance of their official duties, especially w hen negligence in the performance of

thoseduties necessarily results in delays in the prosecution of criminal cases ...."10Justice Sanchez in People v.Estebia11reiterated such a view in these w ords: "It is true that he is a court-appointed counsel. But w e do saythat as such counsel de oficio, he has as high a duty to the accused as one employed and paid by defendanthimself. Because, as in the case of the latter, he must exercise his best efforts and professional ability in behalf of the person assigned to his care. He is to render effective assistance. The accused-defendant expects of himdue diligence, not mere perfunctory representation. For, indeed a law yer w ho is a vanguard in the bastion of justice is expected to have a bigger dose of social conscience and a little less of self-interest."12chanroblesvirtual law libraryThe weakness of the petition is thus quite evident.chanroblesvirtualawlibrary chanrobles virtual law library3. If respondent Judge were required to answer the petition, it was only due to the apprehension that consideringthe frame of mind of a counsel loath and reluctant to fulfill his obligation, the welfare of the accused could beprejudiced. His right to counsel could in effect be rendered nugatory. Its importance was rightfully stressed byChief Justice Moran in People v. Holgado in these words: "In criminal cases there can be no fair hearing unlessthe accused be given an opportunity to be heard by counsel. The right to be heard would be of little avail if itdoes not include the right to be heard by counsel. Even the most intelligent or educated man may have no skill inthe science of law, particularly in the rules of procedure, and; without counsel, he may be convicted not becausehe is guilty but because he does not know how to establish his innocence. And this can happen more easily topersons who are ignorant or uneducated. It is for this reason that the right to be assisted by counsel is deemedso important that it has become a constitutional right and it is so implemented that under rules of procedure it isnot enough for the Court to apprise an accused of his right to have an attorney, it is not enough to ask himwhether he desires the aid of an attorney, but it is essential that the court should assign one de oficio for him if he so desires and he is poor or grant him a reasonable time to procure an attorney of hisown."13So it was under the previous Organic Acts.14The present Constitution is even more emphatic. For, inaddition to reiterating that the accused "shall enjoy the right to be heard by himself and counsel,"15there is thisnew provision: "Any person under investigation for the commission of an offense shall have the right to remainsilent and to counsel, and to be informed of such right. No force, violence, threat, intimidation, or any other means which vitiates the free will shall be used against him. Any confession obtained in violation of this sectionshall be inadmissible in evidence."16chanrobles virtual law libraryThus is made manifest the indispensable role of a member of the Bar in the defense of an accused. Such aconsideration could have sufficed for petitioner not being allowed to withdraw as counsel de oficio. For he didbetray by his moves his lack of enthusiasm for the task entrusted to him, to put matters mildly. He did pointthough to his responsibility as an election registrar. Assuming his good faith, no such excuse could be availednow . There is not likely at present, and in the immediate future, an exorbitant demand on his time. It maylikewise be assumed, considering what has been set forth above, that petitioner would exert himself sufficientlyto perform his task as defense counsel with competence, if not with zeal, if only to erase doubts as to his fitnessto remain a member of the profession in good standing. The admonition is ever timely for those enrolled in theranks of legal practitioners that there are times, and this is one of them, when duty to court and to client takesprecedence over the promptings of self-

interest.chanroblesvirtualawlibrary chanrobles virtual law libraryWHEREFORE, the petition for certiorari is dismissed. Costs against petitioner.Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.chanroblesvirtualawlibrary chanrobles virtuallaw libraryBarredo, J., took no part. Endnotes:1 Petition, Annex B.2 Ibid, Annex C.3 Petition, pars. 3-9.4 Petition, Annex C.5 Ibid.6 Ibid..7 L-31429, January 31, 1972, 43 SCRA 185.8 Ibid, 186. Cf. People v. Apduhan, L-19491, Aug. 30, 1968, 24 SCRA 798; People v.Solacito, L-29209, Aug. 25, 1969, 29 SCRA 61; People v. Serafica, L-29092-93, Aug.28, 1969, 29 SCRA 123; People v. Englatera, L30820, July 31, 1970, 34 SCRA 245;People v. Aguilar, L-30932, Jan. 29, 1971, 37 SCRA 115; People v. Estebia, L-26868,July 29, 1971, 40 SCRA 90; People v. Flores, L-32692, July 30, 1971, 40 SCRA 230;People v. Alincastre, L-29891, Aug. 30, 1971, 40 SCRA 391; People v. Valera, L-30039;Feb. 8, 1972, 43 SCRA 207; People v. Francisco, L-30763, June 29, 1972, 45 SCRA451; People v. Espia, L-33028, June 30, 1972, 45 SCRA 614; People v. Esteves, L-34811, Aug. 18, 1972, 46 SCRA 680; People v. Simeon, L-33730, Sept. 28, 1972, 47SCRA 129; People v. Daeng, L-34091, Jan. 30, 1973, 49 SCRA 221; People v.Ricalde, L34673, Jan. 30, 1973, 49 SCRA 228; People v. Martinez, L-35353, April 30,1973, 50 SCRA 509; People v. Silvestre, L-33821, June 22, 1973, 51 SCRA 286;People v. Busa, L-32047, June 25, 1973, 51 SCRA 317; People v. Alamada, L-34594,July 13, 1973, 52 SCRA 103; People v. Andaya, L-29644, July 25, 1973, 52 SCRA 137;People v. Duque, L-33267, Sept. 27, 1973, 53 SCRA 132; People v. Saligan, L-35792,Nov. 29, 1973, 54 SCRA 190; People v. Bacong, L-36161, Dec. 19, 1973, 54 SCRA288.9 4 Phil. 298.10 Ibid, 300.11 L-26868, February 27, 1969, 27 SCRA 106.12 Ibid, 109-110, Cf. Javellana v. Lutero, L-23956, July 21, 1967, 20 SCRA 717;Blanza v. Arcangel, Adm. Case No. 492, Sept. 5, 1967, 21 SCRA 1.13 85 Phil. 752, 756-757 (1950).14 Cf. United States v. Gimeno, 1 Phil. 236 (1902); United States v. Palisoc, 4 Phil. 207(1905); United States v. Go-Leng, 21 Phil. 426 (1912); United States v. Laranja, 21Phil. 500 (1912); United States v. Ramirez, 26 Phil. 616 (1914); United States v. Labial,27 Phil. 82 (1914); United States v. Custan, 28 Phil. 19 (1914); United States v.Kilayco, 31 Phil. 371 (1915); United States v. Escalante, 36 Phil. 743 (1917); People v.Abuyen, 52 Phil. 722 (1929).15 Cf. Article IV, Section 19.16 Section 20.

iii.

Valid Grounds for Refusal Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

A.C. No. 4103 September 7, 1995 VERONICA S. SANTIAGO, BENJAMIN Q. HONTIVEROS, MR. SOCORRO F. MANAS, and TRINIDAD NORDISTA, complainants, vs. ATTY. AMADO R. FOJAS, respondent. DAVIDE JR., J.: In their letter of 8 September 1993, the complainants, former clients of the respondent, pray that the latter be disbarred for "malpractice, neglect and other offenses which may be discovered during the actual investigation of this complaint." They attached thereto an Affidavit of Merit wherein they specifically allege: 1. That we are Defendants-Appellates [sic] in the Court of Appeals Case No. CA-G.N. CV No. 38153 of which to our surprise lost unnecessarily the aforesaid Petition [sic]. A close perusal of the case reveals the serious misconduct of our attorney on record, Atty. Amado Fojas tantamount to malpractice and negligence in the performance of his duty obligation to us, to defend us in the aforesaid case. That the said attorney without informing us the reason why and riding high on the trust and confidence we repose on him either abandoned, failed to act accordingly, or seriously neglected to answer the civil complaint against us in the sala of Judge Teresita Capulong Case No. 3526-V-91 Val. Metro Manila so that we were deduced [sic] in default. 2. That under false pretenses Atty. Fojas assured us that everything was in order. That he had already answered the complaint so that in spite of the incessant demand for him to give us a copy he continued to deny same to us. Only to disclose later that he never answered it after all because according to him he was a very busy man. Please refer to Court of Appeals decision dated August 17, 1993. 3. That because of Atty. Amado Foja's neglect and malpractice of law we lost the Judge Capulong case and our appeal to the Court of Appeals. So that it is only proper that Atty. Fojas be disciplined and disbarred in the practice of his profession. In his Comment, the respondent admits his "mistake" in failing to file the complainants' answer in Civil Case No. 3526-V-91, but he alleges that it was cured by his filing of a motion for reconsideration, which was unfortunately denied by the court. He asserts that Civil Case No. 3526-V-91 was a "losing cause" for the complainants because it was based on the expulsion of the plaintiff therein from the Far Eastern University Faculty Association (FEUFA) which was declared unlawful in the final decision in NCR-OD-M-90-10-050. Thus, "[t]he unfavorable judgment in the Regional Trial Court is not imputable to [his] mistake but rather imputable to the merits of the case, i.e., the decision in the Expulsion case wherein defendants (complainants herein) illegally removed from the union (FEUFA) membership Mr. Paulino Salvador. . . ." He further claims that the complainants filed this case to harass him because he refused to share his attorney's fees in the main labor case he had handled for them. The respondent then prays for the dismissal of this complaint for utter lack of merit, since his failure to file the answer was cured and, even granting for the sake of argument that such failure amounted to negligence, it cannot warrant his disbarment or suspension from the practice of the law profession. The complainants filed a Reply to the respondent's Comment. Issues having been joined, we required the parties to inform us whether they were willing to submit this case for decision on the basis of the pleadings they have filed. In their separate compliance, both manifested in the affirmative.

The facts in this case are not disputed. Complainants Veronica Santiago, Benjamin Hontiveros, Ma. Socorro Manas, and Trinidad Nordista were the President, Vice-President, Treasurer, and Auditor, respectively, of the FEUFA. They allegedly expelled from the union Paulino Salvador. The latter then commenced with the Department of Labor and Employment (DOLE) a complaint (NCR-ODM-90-10-050) to declare illegal his expulsion from the union. In his resolution of 22 November 1990, Med-Arbiter Tomas Falconitin declared illegal Salvador's expulsion and directed the union and all its officers to reinstate Salvador's name in the roll of union members with all the rights and privileges appurtenant thereto. This resolution was affirmed in toto by the Secretary of Labor and Employment. Subsequently, Paulino Salvador filed with the Regional Trial Court (RTC) of Valenzuela, Metro Manila, Branch 172, a complaint against the complainants herein for actual, moral, and exemplary damages and attorney's fees, under Articles 19, 20, and 21 of the Civil Code. The case was docketed as Civil Case No. 3526-V-91. As the complainants' counsel, the respondent filed a motion to dismiss the said case on grounds of (1) res judicataby virtue of the final decision of the Med-Arbiter in NCR-OD-M-9010-050 and (2) lack of jurisdiction, since what was involved was an intra-union issue cognizable by the DOLE. Later, he filed a supplemental motion to dismiss. The trial court, per Judge Teresita Dizon-Capulong, granted the motion and ordered the dismissal of the case. Upon Salvador's motion for reconsideration, however, it reconsidered the order of dismissal, reinstated the case, and required the complainants herein to file their answer within a nonextendible period of fifteen days from notice. Instead of filing an answer, the respondent filed a motion for reconsideration and dismissal of the case. This motion having been denied, the respondent filed with this Court a petition for certiorari, which was later referred to the Court of Appeals and docketed therein as CAG.R. SP No. 25834. Although that petition and his subsequent motion for reconsideration were both denied, the respondent still did not file the complainants' answer in Civil Case No. 3526-V-91. Hence, upon plaintiff Salvador's motion, the complainants were declared in default, and Salvador was authorized to present his evidence ex-parte. The respondent then filed a motion to set aside the order of default and to stop the exparte reception of evidence before the Clerk of Court, but to no avail. Thereafter, the trial court rendered a decision ordering the complainants herein to pay, jointly and severally, plaintiff Salvador the amounts of P200,000.00 as moral damages; P50,000.00 as exemplary damages or corrective damages; and P65,000.00 as attorney's fees; plus cost of suit. The complainants, still assisted by the respondent, elevated the case to the Court of Appeals, which, however, affirmed in toto the decision of the trial court. The respondent asserts that he was about to appeal the said decision to this Court, but his services as counsel for the complainants and for the union were illegally and unilaterally terminated by complainant Veronica Santiago. The core issue that presents itself is whether the respondent committed culpable negligence, as would warrant disciplinary action, in failing to file for the complainants an answer in Civil Case No. 3526-V-91 for which reason the latter were declared in default and judgment was rendered against them on the basis of the plaintiff's evidence, which was received ex-parte. It is axiomatic that no lawyer is obliged to act either as adviser or advocate for every person who may wish to become his client. He has the right to decline employment, 1 subject, however, to Canon 14 of the Code of Professional Responsibility. Once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him. 2 He must serve the client with competence and diligence, 3 and champion the latter's cause with wholehearted fidelity, care, and devotion. 4Elsewise stated, he owes entire devotion to the interest of the client, warm zeal in the maintenance and defense of his client's rights, and the exertion of his utmost learning

and ability to the end that nothing be taken or withheld from his client, save by the rules of law, legally applied. 5 This simply means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or defense. 6 If much is demanded from an attorney, it is because the entrusted privilege to practice law carries with it the correlative duties not only to the client but also to the court, to the bar, and to the public. A lawyer who performs his duty with diligence and candor not only protects the interest of his client; he also serves the ends of justice, does honor to the bar, and helps maintain the respect of the community to the legal profession. 7 The respondent admits that it was his duty to file an answer in Civil Case No. 3526-V-91. He justifies his failure to do so in this wise: [I]n his overzealousness to question the Denial Order of the trial court, 8 [he] instead, thru honest mistake and excusable neglect, filed a PETITION FOR CERTIORARI with the Honorable Court, docketed as G.R. No. 100983. . . . And, when the Court of Appeals, to which G.R. No. 100983 was referred, dismissed the petition, he again "inadvertently" failed to file an answer "[d]ue to honest mistake and because of his overzealousness as stated earlier. . . . " In their Reply, the complainants allege that his failure to file an answer was not an honest mistake but was "deliberate, malicious and calculated to place them on the legal disadvantage, to their damage and prejudice" for, as admitted by him in his motion to set aside the order of default, his failure to do so was "due to volume and pressure of legal work." 9 In short, the complainants want to impress upon this Court that the respondent has given inconsistent reasons to justify his failure to file an answer. We agree with the complainants. In his motion for reconsideration of the default order, the respondent explained his non-filing of the required answer by impliedly invoking forgetfulness occasioned by a large volume and pressure of legal work, while in his Comment in this case he attributes it to honest mistake and excusable neglect due to his overzealousness to question the denial order of the trial court. Certainly, "overzealousness" on the one hand and "volume and pressure of legal work" on the other are two distinct and separate causes or grounds. The first presupposes the respondent's full and continuing awareness of his duty to file an answer which, nevertheless, he subordinated to his conviction that the trial court had committed a reversible error or grave abuse of discretion in issuing an order reconsidering its previous order of dismissal of Salvador's complaint and in denying the motion to reconsider the said order. The second ground is purely based on forgetfulness because of his other commitments. Whether it be the first or the second ground, the fact remains that the respondent did not comply with his duty to file an answer in Civil Case No. 3526-V-91. His lack of diligence was compounded by his erroneous belief that the trial court committed such error or grave abuse of discretion and by his continued refusal to file an answer even after he received the Court of Appeals' decision in the certiorari case. There is no showing whatsoever that he further assailed the said decision before this Court in a petition for review under Rule 45 of the Rules of Court to prove his claim of overzealousness to challenge the trial court's order. Neither was it shown that he alleged in his motion to lift the order of default that the complainants had a meritorious defense. 10 And, in his appeal from the judgment by default, he did not even raise as one of the errors of the trial court either the impropriety of the order of default or the court's grave abuse of discretion in denying his motion to lift that order. Pressure and large volume of legal work provide no excuse for the respondent's inability to exercise due diligence in the performance of his duty to file an answer. Every case a lawyer accepts deserves his full attention, diligence, skill, and competence, regardless of its importance and whether he accepts it for a fee or for free. All told, the respondent committed a breach of Canon 18 of the Code of Professional Responsibility which requires him to serve his clients, the complainants herein, with diligence

and, more specifically, Rule 18.03 thereof which provides: "A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable." The respondent's negligence is not excused by his claim that Civil Case No. 3526-V-91 was in fact a "losing cause" for the complainants since the claims therein for damages were based on the final decision of the Med-Arbiter declaring the complainants' act of expelling Salvador from the union to be illegal. This claim is a mere afterthought which hardly persuades us. If indeed the respondent was so convinced of the futility of any defense therein, he should have seasonably informed the complainants thereof. Rule 15.05, Canon 15 of the Code of Professional Responsibility expressly provides: A lawyer, when advising his client, shall give a candid and honest opinion on the merits and probable results of the client's case, neither overstating nor understanding the prospects of the case. Then too, if he were unconvinced of any defense, we are unable to understand why he took all the trouble of filing a motion to dismiss on the grounds of res judicata and lack of jurisdiction and of questioning the adverse ruling thereon initially with this Court and then with the Court of Appeals, unless, of course, he meant all of these to simply delay the disposition of the civil case. Finally, the complainants were not entirely without any valid or justifiable defense. They could prove that the plaintiff was not entitled to all the damages sought by him or that if he were so, they could ask for a reduction of the amounts thereof. We do not therefore hesitate to rule that the respondent is not free from any blame for the sad fate of the complainants. He is liable for inexcusable negligence. WHEREFORE, ATTY. AMADO R. FOJAS is hereby REPRIMANDED and ADMONISHED to be, henceforth, more careful in the performance of his duty to his clients. SO ORDERED. Padilla, Bellosillo, Kapunan and Hermosisima Jr., JJ., concur. Footnotes 1 Canon 31, Canons of Professional Ethics. 2 Canon 17, Code of Professional Responsibility. 3 Canon 18, Code of Professional Responsibility. 4 Vda. de Alisbo vs. Jalandoon, 199 SCRA 321 [1991]. 5 Canon 15, Canons of Professional Ethics. 6 Id. 7 Francisco vs. Bosa, 205 SCRA 722 [1992]. 8 Order denying the motion to reconsider the order which set aside the previous orderdismissing the case, reinstated the complaint, and required the complainants to answer the complaint. 9 Appellant's Brief (CA-G.R. No. CV-38153), 3; Annex "12" of the Respondent's Comment. 10 Section 3, Rule 18, Rules of Court. See Circle Financial Corp. vs. Court of Appeals, 196 SCRA 166 [1991]; Golden Country Farms, Inc. vs. Sanwar Development Corp. 214 SCRA 295 [1992].
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b. Candor, Fairtness and Loyalty to Clients i. Confidentiality Rule Republic of the Philippines SUPREME COURT Manila FIRST DIVISION A.C. No. 8242 October 2, 2009 REBECCA J. PALM, Complainant, vs. ATTY. FELIPE ILEDAN, JR., Respondent. 2) D E C I S I O N CARPIO, J.: 3) The Case The case before the Court is a disbarment proceeding filed by Rebecca J. Palm (complainant) against Atty. Felipe Iledan, Jr. (respondent) for revealing information obtained in the course of an attorney-client relationship and for representing an interest which conflicted with that of his former client, Comtech Worldwide Solutions Philippines, Inc. (Comtech). 4) The Antecedent Facts Complainant is the President of Comtech, a corporation engaged in the business of computer software development. From February 2003 to November 2003, respondent served as Comtechs retained corporate counsel for the amount of P6,000 per month as retainer fee. From September to October 2003, complainant personally met with respondent to review corporate matters, including potential amendments to the corporate by-laws. In a meeting held on 1 October 2003, respondent suggested that Comtech amend its corporate by-laws to allow participation during board meetings, through teleconference, of members of the Board of Directors who were outside the Philippines. Prior to the completion of the amendments of the corporate by-laws, complainant became uncomfortable with the close relationship between respondent and Elda Soledad (Soledad), a former officer and director of Comtech, who resigned and who was suspected of releasing unauthorized disbursements of corporate funds. Thus, Comtech decided to terminate its retainer agreement with respondent effective November 2003. In a stockholders meeting held on 10 January 2004, respondent attended as proxy for Gary Harrison (Harrison). Steven C. Palm (Steven) and Deanna L. Palm, members of the Board of Directors, were present through teleconference. When the meeting was called to order, respondent objected to the meeting for lack of quorum. Respondent asserted that Steven and Deanna Palm could not participate in the meeting because the corporate by-laws had not yet been amended to allow teleconferencing. On 24 March 2004, Comtechs new counsel sent a demand letter to Soledad to return or account for the amount of P90,466.10 representing her unauthorized disbursements when she was the Corporate Treasurer of Comtech. On 22 April 2004, Comtech received Soledads reply, signed by respondent. In July 2004, due to Soledads failure to comply with Comtech's written demands, Comtech filed a complaint for Estafa against Soledad before the Makati Prosecutors Office. In the proceedings before the City Prosecution Office of Makati, respondent appeared as Soledads counsel. On 26 January 2005, complainant filed a Complaint1 for disbarment against respondent before the Integrated Bar of the Philippines (IBP). In his Answer,2 respondent alleged that in January 2002, Soledad consulted him on process and procedure in acquiring property. In April 2002, Soledad again consulted him about the legal requirements of putting up a domestic corporation. In February 2003, Soledad engaged his services as consultant for Comtech. Respondent alleged that from February to October 2003, neither Soledad nor Palm consulted him on confidential or privileged matter

concerning the operations of the corporation. Respondent further alleged that he had no access to any record of Comtech. Respondent admitted that during the months of September and October 2003, complainant met with him regarding the procedure in amending the corporate by-laws to allow board members outside the Philippines to participate in board meetings. Respondent further alleged that Harrison, then Comtech President, appointed him as proxy during the 10 January 2004 meeting. Respondent alleged that Harrison instructed him to observe the conduct of the meeting. Respondent admitted that he objected to the participation of Steven and Deanna Palm because the corporate by-laws had not yet been properly amended to allow the participation of board members by teleconferencing. Respondent alleged that there was no conflict of interest when he represented Soledad in the case for Estafa filed by Comtech. He alleged that Soledad was already a client before he became a consultant for Comtech. He alleged that the criminal case was not related to or connected with the limited procedural queries he handled with Comtech. The IBPs Report and Recommendation In a Report and Recommendation dated 28 March 2006,3 the IBP Commission on Bar Discipline (IBP-CBD) found respondent guilty of violation of Canon 21 of the Code of Professional Responsibility and of representing interest in conflict with that of Comtech as his former client. The IBP-CBD ruled that there was no doubt that respondent was Comtechs retained counsel from February 2003 to November 2003. The IBP-CBD found that in the course of the meetings for the intended amendments of Comtechs corporate by-laws, respondent obtained knowledge about the intended amendment to allow members of the Board of Directors who were outside the Philippines to participate in board meetings through teleconferencing. The IBP-CBD noted that respondent knew that the corporate by-laws have not yet been amended to allow the teleconferencing. Hence, when respondent, as representative of Harrison, objected to the participation of Steven and Deanna Palm through teleconferencing on the ground that the corporate by-laws did not allow the participation, he made use of a privileged information he obtained while he was Comtechs retained counsel. The IBP-CBD likewise found that in representing Soledad in a case filed by Comtech, respondent represented an interest in conflict with that of a former client. The IBP-CBD ruled that the fact that respondent represented Soledad after the termination of his professional relationship with Comtech was not an excuse. The IBP-CBD recommended that respondent be suspended from the practice of law for one year, thus: WHEREFORE, premises considered, it is most respectfully recommended that herein respondent be found guilty of the charges preferred against him and be suspended from the practice of law for one (1) year.4 In Resolution No. XVII-2006-5835 passed on 15 December 2006, the IBP Board of Governors adopted and approved the recommendation of the Investigating Commissioner with modification by suspending respondent from the practice of law for two years. Respondent filed a motion for reconsideration.6 In an undated Recommendation, the IBP Board of Governors First Division found that respondents motion for reconsideration did not raise any new issue and was just a rehash of his previous arguments. However, the IBP Board of Governors First Division recommended that respondent be suspended from the practice of law for only one year. In Resolution No. XVIII-2008-703 passed on 11 December 2008, the IBP Board of Governors adopted and approved the recommendation of the IBP Board of Governors First Division. The IBP Board of Governors denied respondents motion for reconsideration but reduced his suspension from two years to one year. The IBP Board of Governors forwarded the present case to this Court as provided under Section 12(b), Rule 139-B7 of the Rules of Court. The Ruling of this Court

We cannot sustain the findings and recommendation of the IBP. Violation of the Confidentiality of Lawyer-Client Relationship Canon 21 of the Code of Professional Responsibility provides: Canon 21. A lawyer shall preserve the confidence and secrets of his client even after the attorney-client relationship is terminated. (Emphasis supplied) We agree with the IBP that in the course of complainants consultations, respondent obtained the information about the need to amend the corporate by-laws to allow board members outside the Philippines to participate in board meetings through teleconferencing. Respondent himself admitted this in his Answer. However, what transpired on 10 January 2004 was not a board meeting but a stockholders meeting. Respondent attended the meeting as proxy for Harrison. The physical presence of a stockholder is not necessary in a stockholders meeting because a member may vote by proxy unless otherwise provided in the articles of incorporation or by-laws.8 Hence, there was no need for Steven and Deanna Palm to participate through teleconferencing as they could just have sent their proxies to the meeting. In addition, although the information about the necessity to amend the corporate by-laws may have been given to respondent, it could not be considered a confidential information. The amendment, repeal or adoption of new by-laws may be effected by "the board of directors or trustees, by a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a majority of members of a non-stock corporation."9 It means the stockholders are aware of the proposed amendments to the by-laws. While the power may be delegated to the board of directors or trustees, there is nothing in the records to show that a delegation was made in the present case. Further, whenever any amendment or adoption of new by-laws is made, copies of the amendments or the new by-laws are filed with the Securities and Exchange Commission (SEC) and attached to the original articles of incorporation and by-laws.10 The documents are public records and could not be considered confidential. It is settled that the mere relation of attorney and client does not raise a presumption of confidentiality.11 The client must intend the communication to be confidential.12 Since the proposed amendments must be approved by at least a majority of the stockholders, and copies of the amended by-laws must be filed with the SEC, the information could not have been intended to be confidential. Thus, the disclosure made by respondent during the stockholders meeting could not be considered a violation of his clients secrets and confidence within the contemplation of Canon 21 of the Code of Professional Responsibility. Representing Interest in Conflict With the Interest of a Former Client The IBP found respondent guilty of representing an interest in conflict with that of a former client, in violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility which provides: Rule 15.03 - A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of the facts. We do not agree with the IBP. In Quiambao v. Bamba,13 the Court enumerated various tests to determine conflict of interests. One test of inconsistency of interests is whether the lawyer will be asked to use against his former client any confidential information acquired through their connection or previous employment.14 The Court has ruled that what a lawyer owes his former client is to maintain inviolate the clients confidence or to refrain from doing anything which will injuriously affect him in any matter in which he previously represented him.15 We find no conflict of interest when respondent represented Soledad in a case filed by Comtech. The case where respondent represents Soledad is an Estafa case filed by Comtech against its former officer. There was nothing in the records that would show that respondent used against Comtech any confidential information acquired while he was still Comtechs retained counsel. Further, respondent made the representation after
1avvp hi1

the termination of his retainer agreement with Comtech. A lawyers immutable duty to a former client does not cover transactions that occurred beyond the lawyers employment with the client.16 The intent of the law is to impose upon the lawyer the duty to protect the clients interests only on matters that he previously handled for the former client and not for matters that arose after the lawyer-client relationship has terminated.17 WHEREFORE, we DISMISS the complaint against Atty. Felipe Iledan, Jr. for lack of merit. SO ORDERED. ANTONIO T. CARPIO Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice Chairperson RENATO C. CORONA Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice LUCAS P. BERSAMIN Associate Justice

Footnotes 1 Rollo, pp. 1-7. 2 Id. at 36-41. 3 IBP Records, Vol. III, pp. 3-10. Penned by Commissioner Acerey C. Pacheco. 4 Id. at 10. 5 Id. at 1. 6 Id. at 11-13. 7 Sec. 12(b). If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action. 8 Section 89, Corporation Code. 9 Section 48, Corporation Code. 10 Id. 11 Mercado v. Atty. Vitriolo, 498 Phil. 49 (2005). 12 Id. 13 A.C. No. 6708, 25 August 2005, 468 SCRA 1. 14 Id. 15 Pormento, Sr. v. Atty. Pontevedra, 494 Phil. 164 (2005). 16 Lim-Santiago v. Sagucio, A.C. No. 6705, 31 March 2006, 486 SCRA 10. 7 Id.

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Candor, fairness and Loyalty to Clients Privileged communications

WILLIAM ONG GENATO, complainant, SILAPAN, respondent. DECISION

PUNO, J.:

vs. ATTY.

ESSEX

L.

In this complaint for disbarment filed by William Ong Genato against respondent Atty. Essex L. Silapan, complainant alleged that in July 1992, respondent asked if he could rent a small office space in complainants building in Quezon City for his law practice. Complainant acceded and introduced respondent to Atty. Benjamin Dacanay, complainants retained lawyer, who accommodated respondent in the building and made him handle some of complainants cases. Hence, the start of the legal relationship between complainant and respondent. The conflict between the parties started when respondent borrowed two hundred thousand pesos (P200,000.00) from complainant which he intended to use as downpayment for the purchase of a new car. In return, respondent issued to complainant a postdated check in the amount of P176,528.00 to answer for the six (6) months interest on the loan. He likewise mortgaged to complainant his house and lot in Quezon City but did not surrender its title claiming that it was the subject of reconstitution proceedings before the Quezon City Register of Deeds. With the money borrowed from complainant, respondent purchased a new car. However, the document of sale of the car was issued in complainants name and financed through City Trust Company. In January 1993, respondent introduced to complainant a certain Emmanuel Romero. Romero likewise wanted to borrow money from complainant. Complainant lent Romero the money and, from this transaction, respondent earned commission in the amount of P52,289.90. Complainant used the commission to pay respondents arrears with the car financing firm. Subsequently, respondent failed to pay the amortization on the car and the financing firm sent demand letters to complainant. Complainant tried to encash respondents postdated check with the drawee bank but it was dishonored as respondents account therein was already closed. Respondent failed to heed complainants repeated demands for payment. Complainant then filed a criminal case against respondent for violation of Batas Pambansa Blg. 22 and a civil case for judicial foreclosure of real estate mortgage. In the foreclosure case, respondent made the following allegation in his Answer:

x x

x xxx

4. That complainant is a businessman who is engaged in the real estate business, trading and buy and sell of deficiency taxed imported cars, shark loans and other shady deals and has many cases pending in court;
x x x x xxx x x

Complainant denied respondents charges and claimed that respondents allegation is libelous and not privilege as it was irrelevant to the foreclosure case. Complainant further pointed to paragraph 12 of respondents Answer, thus:

12. That on January 29, 1993, before paying for the next installment on his car on January 30, 1993, defendant Essex L. Silapan asked the complainant to execute a Deed of Sale transferring ownership of the car to him but the latter said that he will only do so after the termination of his criminal case at Branch 138 of the Regional Trial Court of Makati, Metro Manila, x x x where he (complainant) wanted Essex L. Silapan, his former counsel in that case, to offer bribe money to the members of the review committee of the Department of Justice where a petition for review of the resolution of the Investigating Prosecutor was pending at the time, x x x or, in the event that the said petition for review is denied, he wanted Essex L. Silapan to offer bribe money to the prosecutor assigned at the above-mentioned Court, and even to the presiding Judge, for his eventual acquittal, which defendant Essex L. Silapan all refused to do not only because such acts are immoral and illegal, but also because the complainant confided to him that he was really involved in the commission of the crime that was charged of in the above-mentioned case. (emphasis supplied)
Complainant gripes that the foregoing allegations are false, immaterial to the foreclosure case and maliciously designed to defame him. He charged that in making such allegations, respondent is guilty of breaking their confidential lawyer-client relationship and should be held administratively liable therefor. Consequently, he filed this complaint for disbarment, praying also that an administrative sanction be meted against respondent for his issuance of a bouncing check. When required by the Court to comment, respondent explained[1] that it was complainant who offered him an office space in his building and retained him as counsel as the latter was impressed with the way he handled a B.P. 22 case[2] filed against complainant. Respondent insisted that there was nothing libelous in his imputations of dishonest business practices to complainant and his revelation of complainants desire to bribe government officials in relation to his pending criminal case. He claimed to have made these statements in the course of judicial proceedings to defend his case and discredit complainants credibility by establishing his criminal propensity to commit

fraud, tell lies and violate laws. He argued that he is not guilty of breaking his confidential lawyer-client relationship with complainant as he made the disclosure in defense of his honor and reputation. Secondly, respondent asserted that he executed the real estate mortgage in favor of complainant without consideration and only as a formal requirement so he could obtain theP200,000.00 loan and for this reason, he did not surrender his title over the mortgaged property to complainant. Thirdly, respondent claimed that he issued the postdated check, not for account or for value, but only: (a) to serve as some kind of acknowledgment that he already received in advance a portion of his attorneys fees from the complainant for the legal services he rendered, and (b) as a form of assurance that he will not abandon the cases he was handling for complainant. Lastly, respondent denied that he received a P52,289.90 commission from Romeros loan which he allegedly helped facilitate. He alleged that the amount was paid to him by Romero as attorneys fees, the latter being his client. He used this amount to pay his arrears with the car financing firm. On January 29, 1993, before paying the next amortization on the car, he asked complainant to execute a deed of sale transferring ownership of the car to him. Complainant refused and insisted that he would transfer ownership of the car only after the termination of his criminal case which respondent was handling as his defense lawyer. Consequently, respondent stopped paying the amortization on the car. Respondent also alleged that he filed a perjury case against complainant who, in turn, filed a complaint for libel against him. In a Resolution, dated October 27, 1993, the Court referred the administrative case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. On August 3, 2002, the Board of Governors of the IBP approved the report of the investigating commissioner finding the respondent guilty as charged and recommending his suspension from the practice of law for one (1) year. We affirm the findings and recommendation of the IBP. Prefatorily, we stress that we shall not delve into the merits of the various criminal and civil cases pending between the parties. It is for the trial courts handling these cases to ascertain the truth or falsity of the allegations made therein. For this reason, it is not for us to sanction respondent for his issuance of a bouncing check. His liability has yet to be determined by the trial court where his case is pending. The only issue in this administrative case is whether respondent committed a breach of trust and confidence by imputing to complainant illegal practices and disclosing complainants alleged intention to bribe government officials in connection with a pending case. Canon 17 of the Code of Professional Responsibility provides that a lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed on him. The long-established rule is that an attorney is not permitted to disclose communications made to him in his professional character by a client, unless the latter

consents. This obligation to preserve the confidences and secrets of a client arises at the inception of their relationship.[3] The protection given to the client is perpetual and does not cease with the termination of the litigation, nor is it affected by the partys ceasing to employ the attorney and retaining another, or by any other change of relation between them. It even survives the death of the client.[4] It must be stressed, however, that the privilege against disclosure of confidential communications or information is limited only to communications which are legitimately and properly within the scope of a lawful employment of a lawyer. It does not extend to those made in contemplation of a crime or perpetration of a fraud.[5] If the unlawful purpose is avowed, as in this case, the complainants alleged intention to bribe government officials in relation to his case, the communication is not covered by the privilege as the client does not consult the lawyer professionally. It is not within the profession of a lawyer to advise a client as to how he may commit a crime as a lawyer is not a gun for hire. Thus, the attorney-client privilege does not attach, there being no professional employment in the strict sense. Be that as it may, respondents explanation that it was necessary for him to make the disclosures in his pleadings fails to satisfy us. The disclosures were not indispensable to protect his rights as they were not pertinent to the foreclosure case. It was improper for the respondent to use it against the complainant in the foreclosure case as it was not the subject matter of litigation therein and respondents professional competence and legal advice were not being attacked in said case. A lawyer must conduct himself, especially in his dealings with his clients, with integrity in a manner that is beyond reproach. His relationship with his clients should be characterized by the highest degree of good faith and fairness. Thus, the Court agrees with the evaluation of the IBP and finds that respondents allegations and disclosures in the foreclosure case amount to a breach of fidelity sufficient to warrant the imposition of disciplinary sanction against him. However, the recommended penalty of one (1) year suspension of respondent from the practice of law seems to be disproportionate to his breach of duty considering that a review of the records of this Court reveals that this is the first administrative complaint against him. IN VIEW WHEREOF, respondent Atty. Essex L. Silapan is ordered suspended from the practice of law for a period of six (6) months effective upon receipt of this Decision. Let a copy of this Decision be furnished the Office of the Bar Confidant and the Integrated Bar of the Philippines. The Court Administrator is directed to circulate this order of suspension to all courts in the country. SO ORDERED. Panganiban, Corona, and Carpio-Morales, JJ., concur. Sandoval-Gutierrez, J., on official leave.

[1]

See Answer, Rollo at 23-29.

[2]

It was allegedly in this case that the complainant communicated to respondent his desire to bribe the members of the review committee of the Department of Justice where the case was pending evaluation and eventually also the prosecutor and judge who would handle the case when filed in court. Hoyas vs. State, (Fla App D3) 456 So 2d 1225, 9 FLW 1993. Schwimmer vs. United States (CA8 Mo) 232 F2d 855, 353 US 833, 1 L Ed 2d 52, 77 S Ct 48. People vs. Van Alshine, 23 NW 594 (1885); Regala vs. Sandiganbayan, 262 SCRA 122 (1996).

[3]

[4]

[5]

Candor, Fairness and Loyalty to Clients Conflict of Interest

ATTY. HECTOR NAVA, respondent.

TEODOSIO, petitioner, DECISION

vs.

MERCEDES

MENDOZA, J.:

This is a complaint filed against petitioner Atty. Hector Teodosio for having allegedly represented clients with conflicting interests in violation of Rule 15.01 of the Code of Professional Responsibility. Respondent Mercedes Nava alleged that petitioner acted as counsel for Melanie Batislaong in several cases[1] in various branches of the Iloilo City Regional Trial Court while acting as counsel for Letecia Espinosa and Ma. Gilda Palma in cases[2] filed by them against Melanie Batislaong and herself, respondent Mercedes Nava. In his comment, petitioner admits that Melanie Batislaong, Letecia Espinosa, and Ma. Gilda Palma are indeed his clients with respect to the cases mentioned by respondent. He denies, however, that his clients interests are conflicting and contends that his clients in fact have a common interest against respondent Nava. According to him, Nava used to be the manager of Batislaongs lending business and, in that capacity, dealt with several borrowers, including Espinosa and Palma. Due to acts of mismanagement allegedly committed by Nava, Batislaong, then represented by Atty. Eugenio O. Original, sued Nava for accounting and damages (Civil Case No. 21417). In turn, Nava charged Batislaong (Criminal Case Nos. 79688 and 44181) and Espinosa and Palma (I.S. Nos. 2200-93 and 2068-93) with estafa. While the complaints against them were pending preliminary investigation, Espinosa and Palma hired petitioners services in seeking the annulment of certain trust receipt agreements allegedly falsified by Nava, on the basis of which the criminal complaints against them were filed. As a result, petitioner filed on behalf of Espinosa and Palma Civil Case Nos. 21511 and 21493 against Nava and Batislaong for annulment of contract and damages. Petitioner claims that he impleaded Batislaong as Navas co-defendant because Espinosa and Palma wanted to settle the balance of the amount they had borrowed from Batislaong through Nava but they were unsure whether the payment should be made to Nava or Batislaong as the two had parted ways. Both were, therefore, impleaded so that they could interplead who between them should receive the payment. Petitioner claims that it was only after he had filed these cases that Batislaong offered to hire him as her counsel not only in the civil case she had filed against Nava (Civil Case No. 21417) but also in the two estafa cases, Criminal Case Nos. 79688 and 44181, filed against her by Nava. Petitioner claims that he agreed to represent Batislaong in these cases only after he had explained to her the nature of the complaints filed by Espinosa and Palma against her and Nava in Civil Case Nos. 21511 and 21493.[3]

Petitioner submitted affidavits executed by Batislaong, Espinosa, and Palma stating that they have no complaints in the way petitioner handled their cases and that each of them was aware that the other was represented by petitioner. Petitioner further submitted another set of affidavits executed by Espinosa and Palma stating in detail the extent of their knowledge of petitioners involvement in Batislaongs cases as well as the basis of their consent for him to act as their common counsel.[4] Respondent assails the affidavits of Batislaong, Espinosa, and Palma on the ground that they were notarized by a lawyer from petitioners law firm and that they do not bear the data as to the residence certificates of the affiants. In addition, respondent claims that petitioner failed to ask the court to declare Batislaong in default despite the latters failure to answer the complaints filed by Espinosa and Palma, and contends that this is proof of petitioners bias for her (Batislaong).[5] In response, petitioner claims that there was no need to declare Batislaong in default in Civil Case Nos. 21511 and 21493 because Nava, in her Answer, had disclaimed any interest in the offer of payment of Palma and Espinosa, making the necessity for the defendants to interplead moot and academic as the money would logically be paid to Batislaong.[6] The Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. In a report, dated June 23, 1998, IBP Commissioner Milagros V. San Juan recommended the dismissal of the complaint for lack of merit.[7] However, the IBP Board of Governors, in Resolution XIII-99-23 of February 23, 1999, found petitioner guilty of violation of Rule 15.03 of the Code of Professional Responsibility and ordered him suspended from the practice of law for one year. The Boards resolution reads:

RESOLUTION NO. XIII-99-23 Adm. Case No. 4673 Mercedes Nava vs. Atty. Hector Teodosio RESOLVED to SUSPEND Atty. Hector Teodosio for ONE (1) YEAR from the practice of law for representing litigants with CONFLICTING INTERESTS.[8]
IBP Governor for Eastern Visayas, Kenny A.H. Tantuico, dissenting, adopted the report and recommendation of Commissioner San Juan in view of the consent given by respondents clients. On April 13, 1999, petitioner filed a motion to set aside IBP Resolution XIII-99-23. The Court referred the motion to the IBP which, on December 11, 1999, issued Resolution XIV-99286, affirming the Boards original Resolution XIII-99-23. After receipt of IBP Resolution XIV-99-286, the Court resolved to treat petitioners motion to set aside the questioned IBP resolution as his petition for review thereof and required respondent to file comment. In lieu of comment, respondent filed a manifestation stating that the points raised in petitioners motion were mere reiterations of what he had already stated in his prior pleadings.[9] Petitioner filed a Reply to respondents manifestation.[10] We now deal with the issues raised in the petition for review.

First. Petitioner points out that the IBP Board ordered him suspended from the practice of law without stating the facts and the law on which its decision is based. On the other hand, although the report of the investigating commissioner contains findings, her recommendation was for the dismissal of the complaint against petitioner for lack of merit. Petitioner contends that even the commissioners report is of doubtful validity since she failed to schedule any hearing on the case before she submitted her report to the Board of Governors.[11] The pertinent provisions of Rule 139-B of the Rules of Court on the IBPs investigation of disbarment complaints, the report of its investigator, and the review of the latters findings by the Board of Governors, state:

SEC. 8. Investigation. Upon joinder of issues or upon failure of the respondent to answer, the Investigator shall, with deliberate speed, proceed with the investigation of the case. He shall have the power to issue subpoenas and administer oaths. The respondent shall be given full opportunity to defend himself, to present witnesses on his behalf and be heard by himself and counsel. However, if upon reasonable notice, the respondent fails to appear, the investigation shall proceed ex parte.
....

SEC. 10. Report of Investigator. Not later than thirty (30) days from termination of the investigation, the Investigator shall submit a report containing his findings of fact and recommendations to the IBP Board of Governors, together with the stenographic notes and the transcript thereof, and all the evidence presented during the investigation. The submission of the report need not await the transcription of the stenographic notes, it being sufficient that the report reproduce substantially from the Investigators personal notes any relevant and pertinent testimonies.
....

SEC. 12. Review and decision by the Board of Governors. (a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors upon the record and evidence transmitted to it by the Investigator with his report. The decision of the Board upon such review shall be in writing and shall clearly and distinctly state the facts and the reasons on which it is based. It shall be promulgated within a period not exceeding thirty (30) days from the next meeting of the Board following the submittal of the Investigators report. (b) If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action. (Emphasis added)

The requirement that the IBP investigator afford the respondent in a disbarment complaint full opportunity to present his case cannot be taken lightly for it is meant to ensure that baseless accusations against members of the Bar do not prosper.[12] Similarly, the requirement that the decision of the Board of Governors state the facts and the reasons on which it is based, which is akin to what is required of the decisions of courts of record, serves an important function. For aside from informing the parties the reason for the decision to enable them to point out to the appellate court the findings with which they are not in agreement, in case any of them decides to appeal the decision, it is also an assurance that the judge, or the Board of Governors in this case, reached his judgment through the process of legal reasoning.[13] In the case at bar, the IBP failed to observe these procedural requirements. Commissioner San Juan appear not to have scheduled a hearing on the case nor required the parties to submit their evidence. Similarly, the Board of Governors resolution suspending petitioner from the practice of law does not contain any findings of fact or law upon which it based its ruling. Non-compliance with the foregoing procedural rules would normally result in the remand of the case.[14] Nevertheless, in instances where the controversy has been pending resolution for quite sometime and the issues involved could be resolved on the basis of the records on appeal, the Court has opted to resolve the case in the interest of justice and speedy disposition of cases.[15] In view of the presence of such circumstances in this case, the Court deems it advisable to do so. Second. We now resolve the question whether petitioner is guilty of violation of the Code of Professional Responsibility which in pertinent part provides:

Rule 15.03 A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.
Under Canon 6 of the previous Canons of Professional Ethics, a lawyer is deemed to represent conflicting interests when, in behalf of one client, it is his duty to contend for that which duty to another client requires him to oppose.[16] The rule is designed to remove from attorneys the opportunity to take advantage of the secrets of clients obtained during the existence of the client-attorney relation.[17] Based on the facts of this case, we hold that petitioners conduct does not amount to a violation of the rule. The records bear out petitioners contention that based on the causes of action of the cases involving Melanie Batislaong on one hand and Letecia Espinosa and Ma. Gilda Palma on the other, he could simultaneously represent them without any possible violation of the client-attorney confidentiality. In the cases filed by him for Espinosa and Palma (Civil Case Nos. 21511 and 21493), it is only Nava against whom the former have an adverse interest as it was the latter who allegedly falsified the trust receipt agreements to the prejudice of Palma and Espinosa. Indeed, were it not for the offer of Palma and Espinosa to settle their obligation, there would have been no need to implead Batislaong as a defendant. On the other hand, in the other cases in which Batislaong is a party, either as plaintiff in Civil Case No. 21417 or as an accused in Criminal Case Nos. 78200, 79688, and 44181, neither Palma nor Espinosa are parties. Indeed, it is Nava who is the respondent in the first case and the private complainant in the last two criminal cases. Under the foregoing circumstances, the danger that petitioner may abuse his clients confidences to the detriment of the other is absent.

Respondent contends that petitioners failure to ask the court to have Batislaong declared in default in Civil Case Nos. 21511 and 21493 despite the fact that she failed to file her answer is proof that he was favoring Batislaong over Espinosa and Palma. This contention is untenable. As petitioner explains, with Nava disclaiming any interest in the offer of payment of Espinosa and Palma, petitioner found no need to have Batislaong declared in default as Navas contention meant that it was Batislaong alone who would be entitled to receive payment. In any case, Batislaongs failure to file her answer, coupled with Navas disavowal of interest, could only mean that the money offered in payment will be kept in the custody of the court subject to future claims. Third. Even granting that the interests of Espinosa, Palma, and Batislaong are conflicting, petitioner cannot be held liable for acting as their common counsel in view of the fact that, as stated in their affidavits, petitioner explained to them the consequences of his representation and that they gave their consent to the same. Indeed, Espinosa and Palma stated that it was they themselves who brought Batislaong to petitioners office so that the latter could engage his services.[18] The fact that the first set of affidavits were uniformly notarized by an associate in petitioners law firm and that they did not state certain data relating to the residence certificates of the affiants do not adversely affect their validity absent any proof that the affiants did not execute them of their own volition or that their signature therein are not authentic. WHEREFORE, Resolutions XIII-99-23 and XIV-99-286 of the Integrated Bar of the Philippines are SET ASIDE and the complaint against respondent Atty. Hector Teodosio is DISMISSED for lack of merit. SO ORDERED. Bellosillo, (Chairman), and Buena, JJ., concur. Quisumbing, and De Leon, Jr., JJ., on leave.

[1]

Criminal Case Nos. 78200, 76686, and 44181, all entitled People v. Melanie Batislaong and Civil Case No. 21417, entitled Melanie Batislaong v. Mercedes Nava.
[2]

Civil Case No. 21511, entitled Letecia Espinosa v. Mercedes Nava and Melanie Bastislaong and Civil Case No. 21493, entitled Spouses Jesus Palma, Jr. and Ma. Gilda Palma v. Mercedes Nava and Melanie Batislaong.
[3] [4] [5] [6] [7] [8] [9]

Rollo, pp. 94-110. Id., pp. 148-151, 271-276. Id., pp. 155, 159, 235-237. Id., p. 208. Id., vol. IV, pp. 32-34. Id., vol. IV, p. 31. Id., pp. 284-286. Id., pp. 291-295. Id., vol. IV, pp. 24-28.

[10] [11]

[12] [13] [14] [15] [16] [17] [18]

See Cottam v. Laysa, Adm. Case No. 4834, Feb. 29, 2000. People v. Bugarin, 273 SCRA 389 (1997). See Cottam v. Laysa, supra. See People v. Bugarin, supra. See Buted v. Hernando, 203 SCRA 1 (1991); Alisbo v. Jalandoon, Sr., 199 SCRA 321 (1991). United States v. Laranja, 21 Phil. 500 (1912). Rollo, pp. 269-276.

Candor, Fairness and Loyalty to Clients Candid and Honest advice to Clients

LUTHGARDA F. FERNANDEZ, complainant, vs. ATTY. FIDEL M. CABRERA II, respondent. RESOLUTION
QUISUMBING, J.:

In a verified complaint[1] dated February 15, 2002, filed before the Office of the Bar Confidant of this Court, complainant Luthgarda F. Fernandez sought the disbarment of respondent, Atty. Fidel M. Cabrera II, for malpractice, deceit, and gross misconduct. Complainant alleges that she engaged the services of respondent sometime in July, 2001 to handle the cases of her associates in Baguio City and entrusted to him the records of the said cases. After paying respondents acceptance fee of P20,000 and P2,500 appearance fee, respondent disappeared with the records of the cases. Respondent used to hold office at PO5 Prince Jun Condo, 42 Timog Avenue, Quezon City, but could no longer be located there. Nor did he leave a forwarding address.[2] In a Resolution dated April 3, 2002,[3] this Court required respondent to file his comment within ten (10) days from notice. However, the copy of the said Resolution was returned to the Court unserved with the notation RTS MOVED OUT. Thereafter, this Court required complainant by Resolution dated July 24, 2002[4] to submit the correct and present address of respondent. Complainant, through her counsel, filed a Manifestation[5] dated September 13, 2002, stating that she cannot comply with the Courts July 24, 2002 Resolution requiring her to submit the correct and present address of the respondent. She explained that she filed the complaint for disbarment against respondent precisely because after taking hold of the records of the cases complainant entrusted to him and after getting initially paid for the services he would render, respondent suddenly disappeared and could no longer be located in his given address nor in the addresses that complainant gathered as his former and allegedly present addresses.[6] In view of the aforesaid circumstances, the Court resolved onNovember 20, 2002[7] to refer the case to the Integrated Bar of the Philippines for investigation, report, and recommendation. The notices of hearing dated February 29, 2003 and March 19, 2003 likewise having been returned to the IBP unserved with the notation MOVED, the IBP deemed to consider the notices as served on the respondent by substituted service under Section 8,[8] Rule 13 of the 1997 Rules of Civil Procedure. On June 21, 2003, the IBP Board of Governors passed Resolution No. XV-2003366, the full text of which reads as follows:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that respondent committed gross misconduct which shows him to be unfit for the office and unworthy of the privilege which his license and law confer upon him, Atty. Fidel M. Cabrera II is hereby SUSPENDED from the practice of law for one (1) year.
[9]

This Resolution is now before this Court in view of the conclusion rendered and the penalty recommended by the IBP Board of Governors. Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the clients cause. The canons of professional responsibility require that once an attorney agrees to handle a case, he should undertake the task with zeal, care, and utmost devotion.[10] An attorney is bound to protect his clients interest to the best of his ability and with utmost diligence. It is the duty of a lawyer to serve his client with competence and diligence and he should exert his best efforts to protect within the bounds of law the interest of his client. A lawyer should never neglect a legal matter entrusted to him, otherwise his negligence in fulfilling his duty will render him liable for disciplinary action.[11] As clearly stated in the Code of Professional Responsibility

Canon 18A lawyer shall serve his client with competence and diligence. Rule 18.03A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. Rule 18.04A lawyer shall keep his client informed of the status of his case and shall respond within a reasonable time to the clients request for information.
[12]

The failure to exercise that degree of vigilance and attention expected of an Officer of the Court makes such lawyer unworthy of the trust reposed in him by his clients and makes him answerable not just to his client but also to the legal profession, the courts, and the society. When a lawyer violates his duties to his client, the courts, the legal profession, and the public, he engages in unethical and unprofessional conduct for which he should be held accountable. The circumstances of this case indubitably show respondents failure to live up to his duties as a lawyer in consonance with the strictures of the lawyers oath and the Code of Professional Responsibility, thereby warranting his suspension from the practice of law. Respondents action projects his appalling indifference to his clients cause and a brazen disregard of his duties as a lawyer. Not only did he fail to render service of any kind, he also absconded with the records of the cases with which he was entrusted. Then to top it all, he kept the money complainant paid to him.

Such conduct is unbecoming of a member of the bar, for a lawyers professional and personal conduct must at all times be kept beyond reproach and above suspicion.[13] The duty of a lawyer is to uphold the integrity and dignity of the legal profession at all times. This can only be done by faithfully performing the lawyers duties to society, to the bar, to the courts and to his clients. Given the crucial importance of his role in the administration of justice, we cannot tolerate any misconduct by a lawyer, which tends to besmirch the fair name of an honorable profession.[14] WHEREFORE, finding respondent Atty. Fidel M. Cabrera II guilty of serious neglect of his duties as a lawyer as embodied in Canon 18, Rule 18.03 and 18.04 of the Code of Professional Responsibility, he is SUSPENDED from the practice of law for one (1) year. Let a copy of the Resolution be attached to the personal records of Atty. Fidel M. Cabrera II in the Office of the Bar Confidant and copies be furnished the Integrated Bar of the Philippines (IBP) and all courts in the country for their information and guidance. SO ORDERED. Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

[1]

Rollo, p. 2. Id. at 2, 7. Id. at 3. Id. at 9. Id. at 11. Ibid. Id. at 12. SEC. 8. Substituted service. If service of pleadings, motions, notices, resolutions, orders and other papers cannot be made under the two preceding sections, the office and place of residence of the party or his counsel being unknown, service may be made by delivering the copy to the clerk of court, with proof of failure of both personal service and service by mail. The service is complete at the time of such delivery. Rollo, p. 19. Emiliano Court Townhouses Homeowners Association v. Atty. Dioneda, Adm. Case No. 5162, 20 March 2003, p. 7. Perea v. Atty. Almadro, Adm. Case No. 5246, 20 March 2003, p. 7. Id. at 6. Grande v. Atty. De Silva, Adm.Case No. 4838, 29 July 2003, p. 4. Id. at 5.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

Clients Moneys and Properties Fiduciary Relationship

MARY D. MALECDAN, complainant, vs. ATTY. PERCIVAL L. PEKAS and ATTY. MATTHEW P. KOLLIN, respondents. DECISION
CALLEJO, SR., J.:

The instant case arose when Mary D. Malecdan filed a verified Letter-Complaint dated January 19, 2001 addressed to Atty. Ceasar G. Oracion, then President of the Integrated Bar of the Philippines (IBP), Baguio and Benguet Chapters, charging Atty. Percival L. Pekas and Atty. Matthew P. Kollin, with violation of the lawyers oath, as they committed acts not only prejudicial to [the IBP] but are in themselves in violation of the oath that they have sworn to uphold as [a] condition for their admission to the bar.[1] The undisputed facts as culled from the records are as follows: On November 25, 1999, the complainant entered into a deed of sale with the Spouses Washington and Eliza Fanged over a parcel of land located in Baguio City, covered by Transfer Certificate of Title No. T-71030.[2] The complainant paid P10,000 as earnest money, and P2,600,000 as the full and final payment of the consideration of the sale. The money was received by Eliza Fanged and deposited in the account of Atty. Artemio Bustamante, then counsel for the latter. The complainant later found out, however, that the said lot was the subject of a controversy[3] between the former owners and the Fanged Spouses. When Atty. Bustamante refused to release the proceeds of the sale to Eliza Fanged, the latter, through her new counsel respondent Atty. Kollin, filed a complaint for rescission of contract with prayer for the issuance of a temporary restraining order with damages[4] against the complainant, Atty. Bustamante, Philippine Commercial and Industrial Bank (PCIB) and Washington Fanged on December 2, 1999.[5] Eliza Fanged and the respondents thereafter caused the filing of a Manifestation of Compromise Settlement with Motion dated December 14, 1999.[6] It was prayed, among others, that an order be issued directing defendant PCIB to transfer the amount of P30,000 from the account of Atty. Bustamante to a joint account in the name of respondents Atty.Kollin and Atty. Pekas by way of attorneys fees. The complainant was not a signatory to the compromise settlement, as she was in the United States at the time. The money was then transferred to the respective accounts as prayed for in the compromise settlement. The Complainants Allegations

According to the complainant, respondent Atty. Kollin knew very well that the money entrusted to him did not belong to his client, Eliza Fanged. Yet, when the complainants duly authorized representative Wilfreda Colorado requested that the money be released to her, Atty. Kolin refused to do so, on the pretext that there was no written authorization from the latter. The respondent, however, admitted that the money was in his possession.[7] The complainant further averred that:

11. The said lawyers were aware that the money in the bank which was the subject of Civil Case No. 4580-R was the consideration for a supposed sale between me and Eliza Fanged which did not materialize because it could not be registered aside from the fact that it is void pursuant to the decision in Civil Case No. 4528-R. They knew that the money is not owned by Eliza Fanged. Yet, despite this knowledge, they misled the court by making it appear that all the parties agreed to the settlement by filing the manifestation of compromise settlement with motion (Annex G) knowing that I was abroad and could not have given my consent thereto. 12. Worse, they made it appear that I was copy furnished of the pleading when in truth and in fact I never received the same as I was in the United States of America. My investigation of the matter reveals that the sister of Eliza Fanged, Veronica Buking, received the pleading for me. 13. When confronted, Eliza Fanged admitted to me that the money was actually entrusted to respondent Atty. Matthew Kollin.
[8]

The complainant also alleged that she filed the complaint against the respondents because of the latters connivance in causing the withdrawal of the money in the bank. She pointed out that while the manifestation of compromise settlement does not bear the signature of Atty. Kollin, paragraph (b) of the prayer clearly shows that the amount of P30,000 was appropriated to a joint account belonging to the respondents by way of attorneys fees. The complainant explained that respondent Atty. Kollin, as counsel for Eliza Fanged in Civil Case No. 4580-R, prayed that the sale of the property to her (the complainant) be declared null and void. Proceeding from this premise, then, Eliza Fanged had no right to the money in the bank; the respondents, likewise, had no right to withdraw the amount ofP30,000 to answer for their attorneys fees. She further averred that the respondents made it appear to the trial court that she (the complainant) was duly notified of the purported settlement, when she was, in fact, not a party thereto as evidenced by the records. Thus:

[T]he records reveal that the person who received the copy of the document purporting to cover the settlement intended for me is the very sister of his client, Eliza Fanged, in the person of VeronicaBuking. Veronica Buking is not and was never a

resident of Dagsian, Baguio City, the location of my permanent residence. Eliza Fanged could not have thought of this scheme. 9. But lawyer as he is, Atty. Kollin must have anticipated possible legal repercussion[s] that would ensue as a result of this scheme. In the Manifestation of Compromise Settlement with Motion, he asked his co-respondent, Atty. Pekas, to sign as counsel for Eliza Fanged. Atty. Pekas seem[ed] to be too willing to extend assistance to Eliza Fanged if only to get the money from the bank. However, in the actual release, and the partition of the money, the respondents reportedly actively participated to insure their share of P30,000.00 as attorneys fees. Atty. Pekas did not stop there. As counsel for Eliza Fanged, he signed the Notice of Dismissal dated December 16, 1999 with a misleading statement that the parties have extrajudicially settled this case amicably among themselves, when in truth and in fact, I was never consulted.
[9]

The Respondents Allegations The respondents denied the foregoing allegations in their respective answers. Respondent Atty. Kollin admitted that he knew that the money in the bank was the complainants payment for the land purchased from the Fanged Spouses. He pointed out, however, that it was unfair to state that his client Eliza Fanged was not entitled thereto, since in the first place, she appeared as the vendor in the deed of sale executed between her and the complainant. Furthermore, although Civil Case No. 4528-R had already been decided by the trial court, the same was appealed to the Court of Appeals,[10] and did not become final and executory as erroneously stated by the complainant. Atty. Kollin also pointed out that he was not the original counsel of the Spouses Fanged in the said case, but merely inherited the same from Atty. Artemio Bustamante.[11] The respondent further averred that because Atty. Bustamante and the Fangeds failed to settle the problem, he filed a complaint for the rescission of the sale, and not for the release of the money in Atty. Bustamantes possession. According to the respondent:

To me, this is the gist of the problem. Complainant Mary Malecdan strongly believes that she was swindled because of the said decision. However, the only problem between Dato and Fanged is the determination of the actual balance and the payment thereof. Settle the balance with Mrs. Dato and everything would be settled likewise. As of this time, it is very safe to say that the issue is still SUB JUDICE and complainant could not even be sure of the outcome of said case, although there is a pending proposal for the eventual settlement of the case by the payment of the unpaid balance.

Moreover, the title of the subject land is in the possession of the Complainant and could transfer said title in her name anytime. Perhaps, what the complainant is saying is that the title could be transferred in her name, however, a notice of lis pendens was annotated therein due to the filing of the case between O. Dato and the spouses Fanged. For all intents and purposes, complainant could transfer the title in her name and take possession of the property although the notice of lis pendens will be transferred or be likewise annotated in her title. Complainant knows very well that the problem between O. Dato and Eliza Fanged is the actual balance to be paid as per the first deed of sale;
[12]

Respondent Atty. Pekas, for his part, admitted that the amount of P30,000 was transferred by Atty. Bustamante to their account, but averred that it was done voluntarily. He denied the allegation that they misled the court by making it appear that the parties agreed to the compromise settlement with motion, since, as can be gleaned from the compromise agreement itself, the complainant was not a party thereto.[13] The respondent further alleged that:

20. As best as the respondent can recall, on the late afternoon of December 12, 1999, Atty. Matthew Kollin called up respondent on the telephone. He was requesting for respondent to attend a hearing of his case the following day, December 13, 1999, for the issuance of a temporary restraining order. This was on the pretext that he has another out of town case on the same date and cannot attend the hearing. As it is a common practice among lawyers, respondent acceded to the request; 21. As agreed by the respondent and Atty. Matthew Kollin, respondent shall enter a special appearance for that hearing only. Respondent shall not argue on the matter but shall only manifest submission of the matter for resolution; 27. That after Eliza Fanged and Wilfreda Colorado related the foregoing story, respondent asked about the settlement being proposed by the Honorable Court. Eliza Fanged then expressed her willingness to accept the counter-offer of Atty. Artemio Bustamante to settle the case in the amount of Two Million; 28. With the new development, respondent contacted the office of Atty. Matthew Kollin to refer the matter but was informed that the latter is still out of town. Respondent then advised that if Eliza Fanged is willing, he can assist her in the settlement, to which advice Eliza Fanged acceded;

29. Respondent contacted Atty. Artemio Bustamante who likewise was willing to settle and the details of the settlement were agreed upon. Afterwhich the proper manifestation and motion was submitted to the Honorable Court for consideration and ultimately dismissal of the case; 31. That during the whole time that respondent participated in the resolution of the case, he never committed any act involving deceit and machination. He acted in a way which he thinks is proper
[14]

Respondent Atty. Pekas prayed that the case be dismissed for lack of merit, averring that as a new and young lawyer, there was no reason for him to risk his future for a measly sum, through dishonest conduct.[15] The Proceedings Before the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline On May 7, 2002, Commissioner Milagros V. San Juan issued the following Order:

When this case was called for hearing, Atty. Percival Pekas appeared. Atty. Matthew P. Kollin failed to appear despite the notice duly served on him. Complainant Mary D. Malecdan appeared without counsel. She manifested that she is submitting her case for resolution based on the pleadings on record. The complainant was ordered to present certified true copies of Annex A attached to her complaint, the Agreement of Purchase and Sale and the Deed of Absolute Sale, Annex B of her complaint in favor of Mary Malecdan and the Decision Annex D. Complainant is given ten (10) days from today to present true copies of her documentary evidence. Atty. Percival Pekas is given ten (10) days from today to file his rejoinder. Atty. Pekas likewise manifested that after he shall have filed his rejoinder he submits this case for resolution.
[16]

In his Rejoinder, respondent Atty. Pekas reiterated that he acted in good faith, and did not commit any act of deceit or machination. He also averred that Atty. ArtemioBustamante would have been a great help in determining the truth, but unfortunately, the complainant chose not to implead him.[17] On August 3, 2002, the IBP Board of Governors passed Resolution No. XV-2002395, finding respondent Atty. Kollin guilty of dishonesty to the court, while dismissing the complaint as to respondent Atty. Pekas, thus:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the aboveentitled case, herein made part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering Atty. Matthew P.Kollins dishonesty to the court with resulting damage and prejudice to the complainant, Respondent Atty. Kollins (sic) is hereby SUSPENDED from the practice of law for three (3) years. The complaint against Atty. Pekas is DISMISSED for there is no evidence on record to prove that he was aware of the defect in Eliza Fange[d]s right to claim the sales proceeds with aWARNING that Atty. Pekas should be more circumspect with respect to taking over other lawyers cases and handling sensitive matters such as the compromise settlement in Civil Case No. 4580-R.
According to IBP Commissioner Milagros V. San Juans Report dated May 30, 2002, the main issue to be resolved in the case was factual in nature: whether or not the respondents knowingly caused the withdrawal from the bank of the purchase price of the lot in question, despite their knowledge of a defect in their clients right to claim the said amount. The Commission found that respondent Atty. Kollin knew that his clients title was defective, having represented her in Civil Case No. 4528-R. He should have been mindful that his client had no right over the purchase price as paid by the complainant. Respondent Atty. Pekas was, however, exonerated of the charges against him, thus:

Insofar as respondent Atty. Pekas is concerned, it should be noted that there is no evidence on record to prove that respondent Atty. Pekas was aware of the defect in Eliza Fangeds right to claim [t]he sales proceeds. It is likely that respondent Atty. Pekas unwittingly played into the hands of respondent Atty. Kolin when he signed said Manifestation of Compromise Settlement.
[18]

In his October 12, 2002 Motion for Reconsideration of the foregoing IBP Resolution, respondent Atty. Kollin alleged that contrary to the finding of the Commission, he was unaware of the defect in his clients (Eliza Fangeds) right to claim the sales proceeds. He filed the case for nullification of contract with prayer for the rescission of the sale between the complainant and his client on the ground that the latter would be disadvantaged if Atty. Bustamante succeeded in taking a huge chunk of the money deposited in his name. According to the respondent, if he was, indeed, interested in the money, he could have filed a case to compel Atty. Bustamante to release the money to his client, and not a complaint for rescission of contract. The respondent also reiterated that the reason why he requested respondent Atty. Pekas to attend the hearing of the case as collaborating counsel was that he attended a hearing [19] in Bontoc, Mt. Province on December 14, 2002. According to the respondent, the complainant should have filed the instant case against Atty. Bustamante who was the real architect in the release of the money and the execution of the compromise settlement with motion. The complainant should have

also questioned the order of the RTC judge concerned as to why no notice was issued to her before the money was released. The Ruling of the Court It is a settled principle that the compensation of a lawyer should be but a mere incident of the practice of law, the primary purpose of which is to render public service.[20] The practice of law is a profession and not a money-making trade.[21] As they are an indispensable part of the system of administering justice, attorneys must comply strictly with the oath of office and the canons of professional ethics a duty more than imperative during these critical times when strong and disturbing criticisms are hurled at the practice of law. The process of imbibing ethical standards can begin with the simple act of openness and candor in dealing with clients, which would progress thereafter towards the ideal that a lawyers vocation is not synonymous with an ordinary business proposition but a serious matter of public interest. [22] Respondent Atty. Kollin knew that the money did not belong to his client, Eliza Fanged. He admitted this much in the complaint he himself prepared in Civil Case No. 4580-R, thus:

WHEREFORE, in view of the foregoing premises, it is most respectfully prayed of this Honorable Court: I. BEFORE HEARING: 1. That it orders (sic) the issuance of a temporary restraining order directing the manager of the PCIBank Session Rd., Baguio City branch, through its branch manager, Oscar Aquino, to cease and desist from allowing withdrawal by Atty. Bustamante of the amount of P2,450,000.00 deposit in his account; II. DURING HEARING: 1. That it orders the issuance of a writ of preliminary injunction restraining the defendant PCIBank or its agents from disbursing or allowing withdrawal by Atty. Bustamante of the amount of P2,450,000.00 deposited in his account; III. AFTER HEARING: 1. To order defendants Atty. Artemio Bustamante and the PCIBank, Session Rd., Baguio City branch, to release the amount of P2,450,000.00 in favor of Mary Malicdan (sic);

2. To order defendant Atty. Artemio Bustamante to pay the amount of P30,000.00 as attorneys fees; 3. To order that the deed of sale executed between the Spouses Washington Fanged and Eliza Fanged in favor of Mary Malicdan (sic) be declared null and void; 4. To order Atty. Artemio Bustamante to release the original owners copy of title no. T-71030 of the registry of deeds of Baguio City to the complainant;
[23]

Respondent Atty. Kollin cannot now assert that the reason why the prayer in the complaint included the release of the money in favor of the complainant was that his client realized that P600,000 would be too much to be given to Atty. Bustamante as attorneys fees. The respondent is bound by this assertion in his pleading,[24] which, as can reasonably be inferred, was made because he himself believed that his client was not entitled to the money in question. The respondent cannot, likewise, find refuge in the fact that his signature did not appear in the compromise agreement executed between the parties. As found by the IBP Commission on Bar Discipline:

[A]lthough it was respondent Atty. Pekas who signed the Manifestation of Compromise Settlement with Motion as counsel for Eliza Fanged, it is unbelievable that respondent Atty. Pekas would dare to sign said Manifestation without the approval or consent of respondent Atty. Kollin, the counsel of record of Eliza Fanged. As respondent Atty. Pekas himself stated his authority with respect to Civil Case No. 4580-R was limited as follows: As agreed by the respondent and Atty. Matthew Kollin, respondent shall enter a special appearance for that hearing only. Respondent shall not argue on the matter but shall only manifest submission of the matter for resolution. If as respondent Atty. Pekas claims he was only authorized by respondent Atty. Kollin to attend one hearing of Civil Case No. 4580-R, why did he exceed such authority by executing the Manifestation of Compromise Settlement on behalf of Eliza Fanged, respondent Atty. Kollins client? The most plausible explanation in this matter is that respondent Atty. Kollin in fact authorized respondent Atty. Pekas to execute the Manifestation of Compromise Settlement on behalf of his (respondent Atty.Kollin) client Eliza Fanged in order to pave the way for the release of the sales proceeds. This maneuver was resorted to by the respondent Atty. Kollin in order to avoid any responsibility for securing the release of the sales proceeds to his client despite his knowledge that his client Eliza Fanged had no right thereto. By having respondent Atty. Pekas sign the Manifestation of Compromise Settlement, it was the intention of respondent Atty. Kollin to distance himself from such pleading and claim no responsibility or participation therein so that the same would not be tainted by his apparent knowledge of the defect in Eliza Fangeds right to claim the sales proceeds. In this respect, respondent

Atty. Kollin and his client Eliza [F]anged have succeeded as they have secured the release of the sales proceeds to the detriment and prejudice of herein complainant.

[25]

Contrary to the findings of the IBP, respondent Atty. Pekas cannot validly claim that he acted in good faith as his superior, respondent Atty. Kollin, merely authorized him to attend the December 2, 1999 hearing of Civil Case No. 4580-R. Atty. Pekas, in entering into a compromise agreement, overstepped the authority he was purportedly given. He was only authorized to manifest submission of the matter for resolution. Furthermore, respondent Atty. Pekas himself claimed that the complainant could not question the compromise agreement as she was not a party thereto. Atty. Pekas, thus, knew that there was no valid compromise agreement, as one of the parties in the case was absent at the time it was entered into. He knew that no valid notice was given to the complainant, since the signatory to the notice of the manifestation of compromise agreement was a certain VeronicaBuking.[26] Canon 1 of the Code of Professional Responsibility mandates all members of the bar to obey the laws of the land and promote respect for the law. Rule 1.01 of the Code specifically provides that a lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.[27] A lawyer is expected, at all times, to uphold the integrity of the legal profession. Whenever it is made to appear that a lawyer is no longer worthy of the trust and confidence of the public, it becomes not only the right but the duty of the Court which made him one of its officers and gave him the privilege of ministering within its bar to withdraw the privilege.[28] A lawyer may legally apply a clients funds in his possession to satisfy professional fees which the client owes him, in the absence of any dispute as to the legality of the amount thereof.[29] However, the fact that a lawyer has a lien for his fees on the clients money in his possession or the circumstance that the client owes him more than the clients funds in his hands may not excuse him from making an accounting nor entitle him to unilaterally apply the clients money to satisfy his disputed claims.[30] In this case, the amount of P30,000 which the respondents took for themselves as attorneys fees belonged to a third person, not their client, as admitted by them in their complaint; the owner was, in fact, an adverse party. It was the possession of the money, its entitlement, which was in fact put in issue in the complaint for rescission of contract, and, if respondent Atty. Kollin is to be believed, prompted the filing of the complaint itself. Thus, the respondents could not, without a claiming partys knowledge, apply the amount of P30,000 for themselves as attorneys fees. If there was someone liable for the respondents attorneys fees, it was their client, Eliza Fanged. It cannot be said that there was a real compromise as to the manner in which the amount ofP2,600,000 was to be applied, since the complainant was not present when the said agreement was made. In the recent case of Emiliano Court Townhouses Homeowners Association v. Atty. Michael Dioneda,[31] we had the occasion to state, thus:

The primary objective of administrative cases against lawyers is not only to punish and discipline the erring individual lawyers but also to safeguard the administration of

justice by protecting the courts and the public from the misconduct of lawyers, and to remove from the legal profession persons whose utter disregard of their lawyers oath has proven them unfit to continue discharging the trust reposed in them as members of the bar. A lawyer may be disbarred or suspended for misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, honesty, probity and good demeanor or unworthy to continue as an officer of the court.
[32]

An attorneys only safe guide is high moral principle, as the torch to light his way; his best shield is a clear conscience and an unblemished personal record; and his just reward is to find his highest honor in a deserved reputation for fidelity to private trust and to public duty, as an honest man and as a patriotic and loyal citizen.[33] The fiduciary duty of a lawyer and advocate is what places the law profession in a unique position of trust and confidence, and distinguishes it from any other calling. Once this trust and confidence is betrayed, the faith of the people not only on the individual lawyer but also in the legal profession as a whole is eroded. To this end, all members of the bar are strictly required to, at all times, maintain the highest degree of public confidence in the fidelity, honesty, and integrity of their profession.[34] WHEREFORE, respondent Atty. Matthew P. Kollin is SUSPENDED from the practice of law for a period of three (3) years. Atty. Percival L. Pekas is, likewise, SUSPENDED from the practice of law for a period of six (6) months. Let a copy of this Decision be furnished to the Office of the Court Administrator, the Integrated Bar of the Philippines, and the Office of the Bar Confidant. SO ORDERED. Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, CarpioMorales, Azcuna, and Tinga, JJ.,concur.

[1]

Rollo, p. 2. Annexes A and B, Rollo, pp. 7-10. Docketed as Civil Case No. 4528-R, entitled Olympia O. Dato v. Sps. Washington and Eliza Fanged. Docketed as Civil Case No. 4580-R, entitled Eliza Fanged v. Mary Malecdan, Atty. Artemio Bustamante, The PCIBank Session Rd., Baguio City Branch, represented by its manager, Oscar Aquino and Washington Fanged. Annex E, Rollo, p. 18. Annex G, id. at 29. Complaint, Rollo, p. 5; Annex H, Rollo, p. 35.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

Rollo, pp. 4-5. Memorandum dated May 20, 2002, Rollo, p. 179. Docketed as CA-G.R. CV-No. 68552, Olympia O. Dato v. Sps. Washington and Eliza Fanged. Rollo, p. 39. Id. at 42. Id. at 66. Id. at 69. Id. at 72. Id. at 155. Id. at 189-190. Report and Recommendation in CBD Case No. 01-810, p. 16. Annex A of the Motion for Reconsideration. Rule 2.04, Canon 20, Code of Professional Responsibility; Sections 24 and 32, Rule 138, Revised Rules of Court. Albano v. Coloma, 21 SCRA 411 (1967). Dr. Gil Y. Gamilla v. Atty. Eduardo Marino, Jr., A.C. No. 4763, March 20, 2003. Rollo, pp. 106-107; 141-142. (Italics supplied). Section 26, Rule 130 of the Revised Rules of Court provides that the act, declaration or omission of a party as to a relevant fact may be given in evidence against him. Report and Recommendation, pp. 15-16. Annex G, Rollo, p. 32. Selwyn F. Lao v. Atty. Robert W. Medel, A.C. No. 5916, July 1, 2003. Emiliana M. Eustaquio, et al. v. Atty. Alex C. Rimorin, A.C. No. 5081, March 24, 2003. In Re: Rillaroza, 99 Phil. 1041 (1956). Domingo v. Domingo, 42 SCRA 131 (1971). A.C. No. 5162, March 20, 2003, citing Rivera v. Corral, A.C. No. 3548, July 4, 2002. Id. at 11. Legal Ethics, Agpalo, 6 ed., p. 137. A.C. No. 4724, Goretti Ong v. Atty. Joel M. Grijaldo, April 30, 2003.
th

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[31]

[32]

[33]

[34]

Clients Moneys and Properties Co-Mingling of Funds

CONSORCIA S. ROLLON, complainant, NARAVAL, respondent. DECISION

PANGANIBAN, J.:

vs. Atty.

CAMILO

Lawyers owe fidelity to their clients. The latters money or other property coming into the formers possession should be deemed to be held in trust and should not under any circumstance be commingled with the lawyers own; much less, used by them. Failure to observe these ethical principles constitutes professional misconduct and justifies the imposition of disciplinary sanctions.

The Case and the Facts Before us is a letter-complaint against Atty. Camilo Naraval, filed by Consorcia S. Rollon with the Davao City Chapter of the Integrated Bar of the Philippines (IBP) on November 29, 2001. The Affidavit[1] submitted by complainant alleges the following:

Sometime in October of 2000, I went to the office of Atty. Camilo F. Naraval together with my son, Freddie Rollon, to seek his assistance in a case filed against me before the Municipal Trial Court in Cities Branch 6, Davao City entitled Rosita Julaton vs. Consorcia S. Rollon for Collection of Sum of Money with Prayer for Attachment; After going over the documents I brought with me pertaining to the said case, Atty. Naraval agreed to be my lawyer and I was required to pay the amount of Eight Thousand Pesos (Php 8,000.00) for the filing and partial service fee, which amount was paid by me on October 18, 2000, a copy of the Official Receipt is hereto attached as Annex A to form part hereof; As per the instruction of Atty. Naraval, my son, Freddie, returned to his office the following week to make follow-up on said case. However, I was informed later by my son Freddie that Atty. Naraval was not able to act on my case because the latter was so busy. Even after several follow-ups were made with Atty. Naraval, still there was no action done on our case;

Sometime in November 29, 2001, I decided to withdraw the amount I paid to Atty. Naraval, because of the latters failure to comply with our mutual agreement that he will assist me in the above-mentioned case; My son Freddie Rollon went to Atty. Naravals office that same day to inform Atty. Naraval of our decision to withdraw the amount I have paid and to retrieve my documents pertaining to said case. Unfortunately, despite our several follow-ups, Atty. Naraval always said that he cannot return the documents because they were in their house, and that he could not give us back the amount we paid him (Php 8,000.00) because he has no money; Having failed to obtain any response, I decided to refer the matter to Atty. Ramon Edison Batacan, IBP President of Davao City and to Atty. Pedro Castillo, the Commissioner on Bar D[i]scipline; xxx xxx x x x.

In an Order dated March 12, 2002,[2] the IBP Commission on Bar Discipline (CBD), through Director Victor C. Fernandez, directed respondent to submit his answer to the Complaint. The same directive was reiterated in the CBDs May 31, 2002 Order[3] issued through Commissioner Jovy C. Bernabe. Respondent did not file any answer despite his receipt of the Orders.[4] Not having heard from him despite adequate notice, the CBD proceeded with the investigation ex parte. Its Order[5] dated November 11, 2002, issued through Commissioner Bernabe, required complainant to submit her position paper within ten days from receipt thereof, after which the case was to be deemed submitted for resolution. The CBD received complainants Position Paper[6] on December 10, 2002.

Report of the Investigating Commissioner In his Report and Recommendation dated October 16, 2003, Investigating Commissioner Acerey C. Pacheco recommended that respondent be suspended from the practice of law for one (1) year for neglect of duty and/or violation of Canons 15 and 18 of the Code of Professional Responsibility. The Report reads in part as follows:

Canon 18 of the Code of Professional Responsibility requires every lawyer to serve his client with utmost dedication, competence and diligence. He must not neglect a legal matter entrusted to him, and his negligence in this regard renders him administratively liable x x x.

In the case at bar, the deplorable conduct of the respondent in misrepresenting to the complainant that he will render legal services to her, and after receiving certain amount from the latter as payment for filing fee and service fee did nothing in return, has caused unnecessary dishonor to the bar. By his own conduct the respect of the community to the legal profession, of which he swore to protect, has been tarnished. xxx xxx xxx

In fact, complainant claimed to have been shortchanged by the respondent when he failed to properly appraised her of the status of her case which she later on found to have become final and executory. Apparently, the civil suit between Rosita Julaton and the complainant have been decided against the latter and which judgment has long become final and executory. However, despite full knowledge by the respondent of such finality based on the documents furnished to him, respondent withheld such vital information and did not properly appraise the complainant. Thus, respondent violated the mandate in Canon 15 x x x.
[7]

IBP Board of Governors Resolution On February 27, 2004, the IBP Board of Governors issued Resolution No. XVI2004-64 upholding the above-quoted Report. The Board recommended the suspension of respondent from the practice of law for two (2) years for violation of Rules 15 and 18 of the Code of Professional Responsibility and the restitution of complainants P8,000.

The Courts Ruling We agree with the Resolution of the IBP Board of Governors.

Respondents Administrative Liability Ordinarily, lawyers are not obliged to act either as advisers or as advocates of any person who may wish to become their client.[8] They may decline employment and refuse to accept representation, if they are not in a position to carry it out effectively or competently.[9] But once they agree to handle a case, attorneys are required by the Canons of Professional Responsibility to undertake the task with zeal, care and utmost devotion.[10] Acceptance of money from a client establishes an attorney-client relationship and gives rise to the duty of fidelity to the clients cause.[11] Every case accepted by a lawyer

deserves full attention, diligence, skill and competence, regardless of importance.[12] The Code of Professional Responsibility clearly states:

CANON 17 A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him. CANON 18 - A lawyer shall serve his client with competence and diligence. Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. Rule 18.04 - A lawyer shall keep his client informed of the status of his case and shall respond within a reasonable time to the clients request for information.
Hence, practising lawyers may accept only as many cases as they can efficiently handle.[13] Otherwise, their clients would be prejudiced. Once lawyers agree to handle a case, they should undertake the task with dedication and care. If they do any less, then they fail their lawyers oath.[14] The circumstances of this case indubitably show that after receiving the amount of P8,000 as filing and partial service fee, respondent failed to render any legal service in relation to the case of complainant. His continuous inaction despite repeated followups from her reveals his cavalier attitude and appalling indifference toward his clients cause, in brazen disregard of his duties as a lawyer. Not only that. Despite her repeated demands, he also unjustifiably failed to return to her the files of the case that had been entrusted to him. To top it all, he kept the money she had likewise entrusted to him. Furthermore, after going through her papers, respondent should have given her a candid, honest opinion on the merits and the status of the case. Apparently, the civil suit between Rosita Julaton and complainant had been decided against the latter. In fact, the judgment had long become final and executory. But he withheld such vital information from complainant. Instead, he demanded P8,000 as filing and service fee and thereby gave her hope that her case would be acted upon. Rule 15.05 of the Code of Professional Responsibility requires that lawyers give their candid and best opinion to their clients on the merit or lack of merit of the case, neither overstating nor understating their evaluation thereof. Knowing whether a case would have some prospect of success is not only a function, but also an obligation on the part of lawyers.[15] If they find that their clients cause is defenseless, then it is their bounden duty to advise the latter to acquiesce and submit, rather than to traverse the incontrovertible.[16]The failure of respondent to fulfill this basic undertaking constitutes a violation of his duty to observe candor, fairness and loyalty in all his dealings and transactions with his clients.[17] Likewise, as earlier pointed out, respondent persistently refused to return the money of complainant despite her repeated demands. His conduct was clearly indicative of

lack of integrity and moral soundness; he was clinging to something that did not belong to him, and that he absolutely had no right to keep or use.[18] Lawyers are deemed to hold in trust their clients money and property that may come into their possession.[19] As respondent obviously did nothing on the case of complainant, the amount she had given -- as evidenced by the receipt issued by his law office -- was never applied to the filing fee. His failure to return her money upon demand gave rise to the presumption that he had converted it to his own use and thereby betrayed the trust she had reposed in him.[20] His failure to do so constituted a gross violation of professional ethics and a betrayal of public confidence in the legal profession.[21] The Code exacts from lawyers not only a firm respect for law, legal processes and the courts,[22] but also mandates the utmost degree of fidelity and good faith in dealing with the moneys entrusted to them pursuant to their fiduciary relationship.[23] Respondent clearly fell short of the demands required of him as a member of the bar. His inability to properly discharge his duty to his client makes him answerable not just to her, but also to this Court, to the legal profession, and to the general public.[24] Given the crucial importance of his role in the administration of justice, his misconduct diminished the confidence of the public in the integrity and dignity of the profession.[25] WHEREFORE, Atty. Camilo Naraval is found GUILTY of violating Rule 15.05 and Canons 16, 17 and 18 of the Code of Professional Responsibility and is hereby SUSPENDEDfrom the practice of law for a period of two (2) years, effective upon his receipt of this Decision. Furthermore, he is ORDERED TO RESTITUTE, within thirty (30) days from notice of this Decision, complainants eight thousand pesos (P8,000), plus interest thereon, at the rate of six percent per annum, from October 18, 2000, until fully paid. Let copies of this Decision be furnished all courts, the Office of the Bar Confidant, as well as the National Office and the Davao City Chapter of the Integrated Bar of the Philippines. SO ORDERED. Davide, Jr., C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia, JJ.,concur. Carpio-Morales, J., on leave.

[1]

Rollo, p. 5. Id., p. 15. Id., p. 18. The March 12, 2002 Order was received on March 27, 2002; and the May 31, 2002 Order, on June 6, 2002. See Registry Return Receipt attached to the Orders.

[2]

[3]

[4]

[5]

Rollo, p. 19. Id., pp. 20-24. Report and Recommendation filed on June 3, 2004, pp. 5-7. Cuizon v. Macalino, AC No. 4334, July 7, 2004; De Juan v. Baria III, AC No. 5817, May 27, 2004. See Rule 18.01, Code of Professional Responsibility, which provides in part. A lawyer shall not undertake a legal service which he knows or should know that he is not qualified to render. x x x. Fernandez v. Cabrera II, AC No. 5623, December 11, 2003. Parias v. Paguinto, AC No. 6297, July 13, 2004; Fernandez v. Cabrera II, supra; Emiliano Court Townhouses Homeowners Association v. Dioneda, 399 SCRA 296, March 20, 2003. Schulz v. Flores, AC No. 4219, December 8, 2003 (citing In re: Atty. David Briones, 415 Phil. 203, August 15, 2001; Santiago v. Fojas, 248 SCRA 68, September 7, 1995). Parias v. Paguinto, supra; Moton v. Atty. Cadiao, 377 Phil. 1, November 24, 1999. The Lawyers Oath declares in part: x x x I will delay no man for money or malice, and will conduct myself as a lawyer according to the best of my knowledge and discretion with all good fidelity as well to the courts as to my clients; and I impose upon myself this voluntary obligation without any mental reservation or purpose of evasion. So help me God. See 3, Rule 138, Rules of Court. Agpalo, Legal Ethics (1992, 5th ed.), p. 152. Castaeda v. Ago, 65 SCRA 505, July 30, 1975. Canon 15, Code of Professional Responsibility. See Igual v. Javier, 324 Phil. 698, March 7, 1996. Canon 16, Code of Professional Responsibility; Barnachea v. Quiocho, 399 SCRA 1, March 11, 2003. Schulz v. Flores, supra; Barnachea v. Quiocho, supra; Sipin-Nabor v. Atty. Baterina, 412 Phil. 419, June 28, 2001. Barnachea v. Quiocho, supra; Burbe v. Magulta, 383 SCRA 276, June 10, 2002; Sipin-Nabor v. Atty. Baterina, supra; Gonato v. Adaza, 385 Phil. 426, March 27, 2000. CANON 1 A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and for legal processes. Berbano v. Barcelona, 410 SCRA 258, September 3, 2003; Igual v. Javier, supra. Emiliano Court Townhouses Homeowners Association v. Dioneda, supra. Grande v. De Silva, 407 SCRA 310, July 29, 2003.

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

Clients Moneys and Properties Delivery of Funds

ROSARIO H. MEJARES, complainant, ROMANA, respondent. DECISION

CARPIO, J.:

vs. ATTY.

DANIEL

T.

The Case This is a complaint for disbarment filed by complainant Rosario H. Mejares (complainant) against respondent Atty. Daniel T. Romana (respondent) for gross negligence and gross misconduct.

The Facts In her complaint filed before the Integrated Bar of the Philipppines (IBP), complainant alleged that she was a member of a labor union[1] (Union) in M. Greenfield Corporation Inc. (Greenfield). Some 300 former employees of Greenfield comprise the Union. In 1990, the Union members sued Greenfield for illegal termination. The Union retained respondent as counsel in prosecuting the case against Greenfield. The Union and respondent agreed that respondent would be paid attorneys fees equivalent to 10% of whatever monetary benefits the Union members might recover from Greenfield. In 1994, respondent required each member of the Union to contribute P500. Complainant claimed that although not all Union members contributed, respondent collected not more than P100,000. Complainant alleges that respondent spent a big portion of [this] amount for his own benefit. On 18 August 1997, respondent required the then Union president Elena Tolin (Tolin) to sign a document, entitled Verification and Certification of Service (Verification) of a petition for filing with this Court.[2] The Verification, among others, authorized respondent to deduct automatically x x x his contingent thirty (30) per cent attorneys fees from the individual awards that the [union members] shall win in this case. Complainant claims that it was only later that the Union members learned of the increase of respondents attorneys fees from 10% to 30%. Complainant claims that respondent did not explain to Tolin the Verifications contents.

Complainant claims that the Union members objected to the increase in respondents fees. In retaliation, respondent allegedly abandoned the Unions case then pending in the Court of Appeals.[3] Thus, despite his receipt of the Court of Appeals Decision dated 4 December 2000 (4 December 2000 CA Decision) dismissing the Unions petition, respondent neither sought reconsideration of the ruling nor immediately informed the Union members of its issuance. It was only on 28 December 2000, when complainant and Tolin went to visit respondent in his house, that they learned of the adverse ruling of the Court of Appeals. The Union, through another counsel, filed a motion for reconsideration of the 4 December 2000 CA Decision. However, the Court of Appeals, in its Resolution dated 16 February 2001 (16 February 2001 CA Resolution), denied the motion for being filed late. Respondent subsequently withdrew as the Unions counsel on 23 March 2001.[4] In its Order of 27 May 2002, the IBP required respondent to file his Answer to the complaint. Instead of complying, respondent sought the dismissal of the complaint. Respondent claimed that complainant is not a real party-in-interest because (1) the Union did not authorize complainant to initiate disbarment proceedings against him; (2) the allegations in the complaint were false, fabricated, illegal x x x and libelous; and (3) respondents withdrawal as the Unions counsel was with the conformity of Tolin. Respondent attached to his motion a Sinumpaang Salaysay-Affidavit of Tolin dated 19 June 2002 (19 June 2002 Salaysay) attesting that (1) Tolin voluntarily signed the Verification increasing respondents fees from 10% to 30% as the Union had so far paid respondent only P10,000 for the services he had rendered since 1990; (2) it was the Union which decided to terminate the services of respondent as he had become busy with his other cases; and (3) all the other allegations raised in the complaint are false. Tolin joined respondent in his prayer for the dismissal of the complaint. [5] Complainant opposed respondents motion to dismiss the complaint. Complainant asserted that contrary to respondents allegations, complainant is the attorney-in-fact of theUnion as shown by the special power of attorney the Union members signed authorizing complainant to represent them before the Court of Appeals. Complainant also submitted an Affidavit of Retraction of Tolin dated 4 September 2002 (4 September 2002 Retraction), disclaiming the contents of her 19 June 2002 Salaysay. Tolin claimed that she was unaware of the contents of the 19 June 2002 Salaysay because respondent did not give Tolin a chance to go over the document before Tolin signed it. Tolin confirmed complainants allegations regarding (1) respondents failure to update Union members of the 4 December 2000 CA Decision; (2) his misappropriation of the funds contributed by the Union members; and (3) his failure to account for the same. In addition, complainant also submitted the affidavits of three other individuals,[6] all dated 4 September 2002, confirming Tolins claim that respondent did not give her any chance to read the contents of the 19 June 2002 Salaysay.

The IBPs Findings

The IBP Investigating Commissioner (IBP Commissioner) conducted hearings on the case but respondent failed to appear despite notice. After the parties filed their memoranda, the IBP issued Resolution No. XVI-2003-68 (IBP Resolution) dated 30 August 2003 adopting the Investigating Commissioners Report and Recommendation (Report) finding respondent liable for violation of the lawyers oath, gross misconduct, and gross negligence. The IBP imposed on respondent the penalty of six months suspension from the practice of law. The Report reads:

The Commission finds that respondent violated his lawyers oath and committed gross misconduct and gross negligence. Complainant was able to prove by clear and convincing evidence her charges against respondent. xxxx Respondent filed a motion to dismiss on technical grounds, i.e., complainants lack of legal personality and the purported notice of dismissal of Elena Tolin. He did not attend any of the Commissions hearings, which would have afforded him opportunity to explain his side. Even in his memorandum and other pleadings (where he made general and unsubstantiated attacks on complainants character), he did not meet the charges against him head on. He merely reiterated his technical objections to the complaint. The Supreme Court has pronounced in the case of Radjaie vs. Alovera (337 SCRA 244) that when the integrity of a member of the bar is challenged, it is not enough that he denies the charges against him; he must meet the issue and overcome the evidence against him and that he must show proof that he still maintains that degree of morality and integrity which at all times is expected of him. Respondent having failed to discharge this burden, the charges against him are deemed admitted. Respondents technical objections have no merit. Being one of the employees and a member of SAMAT-MGI wh[ich] retained respondent, complainant was directly and adversely affected by respondents unethical conduct. The special power of attorney executed by h[er] co-employees in CA-G.R. SP No. 57066 (Annex A, Opposition To Motion to Dismiss) shows that she is the authorized representative of [her] cocomplainants in the labor case, not Elena Tolin. Ms. Tolins notice of dismissal does not have any effect on the complaint. Furthermore, Ms.Tolin herself retracted her Sinumpaang Salaysay, saying she was tricked by respondent into signing the same. The Commission gives credit to the allegations in her Retraction of Affidavit, which was supported by affidavits of other witnesses. This retraction compounds respondents misconduct and unprofessionalism. It further proves his propensity to commit fraud, chicanery and other unethical practices. The rules on professional conduct cited by complainant are well-placed. Respondent violated his attorneys oath to do no falsehood, to delay no man for money or malice,

and to conduct himself with all good fidelity to the courts and his clients. His actions fall short of the required ethical standard of his profession. And it is palpable that his shortcomings, culminating in his abrupt withdrawal from the case, were precipitated by his clients refusal to agree to pay more fees than that originally agreed upon (from 10% to 30% of the monetary award).
xxxx

The Commission cannot say whether SAMAT-MGI would have won the labor case in the Court of Appeals (not Supreme Court as stated in the complaint) if it had a more competent representation. It is clear from the records and undisputed facts of this case, however, that respondent lacked the zeal, diligence, honesty, and loyalty required in protecting the interests of complainant and her co-complainants. Respondent is liable under Section 27, Rule 138 of the Rules of Court, which penalizes a member of the bar who commits deceit and gross misconduct in office, and violates his attorneys oath. [7]
Complainant sought reconsideration of the IBP Resolution. Complainant contended that considering the nature of respondents culpability, the penalty of six months suspension from the practice of law is too light. Instead, complainant prayed that the heavier penalty of disbarment be imposed on respondent. The IBP forwarded the instant case to this Court as provided under Rule 139-B, Section 12(b)[8] of the Rules of Court.

The Ruling of the Court The Court finds respondent liable for violation of Rule 16.01 and Rule 18.04 of the Code of Professional Responsibility (Code).

Respondent Failed to Account for the Money he Received from the Union Members A lawyer should be scrupulously careful in handling money entrusted to him in his professional capacity.[9] Consequently, when a lawyer receives money from a client for a particular purpose, the lawyer is bound to render an accounting to his client, showing that he spent the money for the purpose intended.[10] Rule 16.01 of the Code provides:

A lawyer shall account for all money or property collected or received for or from the client.

The Unions Board Resolution dated 17 August 1997 (Board Resolution), signed by its officers,[11] declared that the Union members contributed P100 each for filing fees andpanggastos ng aming abogado.[12] Considering that respondent handled the Union members case for more than ten years (from 1990 to 2001), it is highly likely that the Union members made other contributions to respondent, including the one complainant claims Union members made in 1994. Thus, respondent had the obligation to account for all the funds he received, giving a detailed explanation showing that such funds were spent for the purpose intended. Nothing in the records shows that respondent has done so. Indeed, instead of taking advantage of the opportunity to make an accounting in response to the charges raised in this case, respondent merely chose to deny, in general terms, complainants allegations. As the IBP Commissioner correctly noted, such denial will not suffice. On the other hand, respondents failure to account for his clients funds is no proof that he spent them for purposes other than those intended, which were for filing fees and other litigation expenses. Complainants allegation that respondent misappropriated a big portion of the Union members contributions, without more, does not suffice to hold respondent liable for misappropriation. Without clear proof detailing the complainants claim on this point, the Court cannot give credence to such serious charge. For a charge to warrant a disciplinary action against a lawyer, the complainant must present convincing proof to substantiate the charge.[13] Otherwise, the presumption that the lawyer is innocent of the charge prevails.[14]

Respondent is also Liable for his Failure to Timely and Properly Inform the Union Members of the Status of their Case The Code provides:

CANON 18 A lawyer shall serve his client with competence and diligence. Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the clients request for information.
The lawyers duty to keep his client constantly updated on the developments of his case is crucial in maintaining the clients confidence, thus:

As an officer of the court, it is the duty of an attorney to inform h[is] client of whatever information [he] may have acquired which it is important that the client should have knowledge of. [He] should notify h[is] client of any adverse decision to enable h[is] client to decide whether to seek an appellate review thereof. Keeping the client informed of the developments of the case will minimize misunderstanding and lost of trust and confidence in the attorney.
[15]

Indeed, the relationship of lawyer-client being one of confidence, there is ever present the need for the lawyer to inform timely and adequately the client of important developments affecting the clients case. The lawyer should not leave the client in the dark on how the lawyer is defending the clients interests.[16] The records do not show when respondent received a copy of the 4 December 2000 CA Decision dismissing his clients petition. What is certain is that complainant and Tolin came to know of the ruling only on 28 December 2000, when they visited respondents house. There, respondent left them a note, written on one side of a used envelope, which reads:

To All Members: Sayang lang ang pera at panahon dahil nanggaling na ito sa Supreme Court at ang pinagbasihan na question of law ay ang inyong compromise agreement! Atty. D. Romano.
[17]

Verily, respondent failed to inform timely and adequately his clients of the 4 December 2000 Decision. Instead of simply leaving a note to his clients, respondent should have immediately contacted them, explained the decision to them, and advised them on further steps that could be taken to protect their interest. Had not two of his clients persisted in following-up their case, the Union members would not have known of the 4 December 2000 CA Decision. Without going into the merits of the Union members petition in the Court of Appeals, it is clear that respondents nonchalance contributed to the subsequent denial of his clients motion for reconsideration, filed by another counsel. The Court of Appeals, in its16 February 2001 Resolution, denied the motion for having been filed late. Furthermore, it would seem that respondent even failed to inform his clients that as early as 20 January 2000, this Court had referred their case to the Court of Appeals. By his lackadaisical handling of his clients case, respondent all too clearly indicated his failure to exercise such skill, care, and diligence as men of the legal profession commonly possess and exercise in such matters of the professional employment.[18] Respondent claims that he was no longer the Union members counsel of record when the Court of Appeals issued its 16 February 2001 Resolution. However, the records show that respondent filed in the Court of Appeals his Notice of Withdrawal as the Unions counsel only on 23 March 2001. Thus, while his withdrawal as counsel bore Tolins conformity,[19]he remained, before that date, the Unions counsel of record.

On the Issue of the Increase of Respondents Attorneys Fees The Court, however, finds no merit in complainants claim that respondent secured the increase of his attorneys fees from 10% to 30% fraudulently by making Tolin sign a document stating such fact without first explaining the contents to

Tolin. The Union approved the increase as shown in the 17 August 1997 Board Resolution of the Union, thus:

Board Resolution Kami, mga opisyales at miembro ng SAMAT-MGI-RFI x x x ay kusang loob na unanimous na nagkakasundo at nagaproba ng aming board resolution na bigyan ng thirty (30) percent contingent-kung panalo-attorneys fees ang aming retained legal counsel na si Atty. Daniel T. Romana, na babawasin (automatic deduction) sa anumang halaga ng separation pay at any monetary awards, without any further need of individual check-off authorization from all of us, na babayaran sa amin ng private respondents sa kasong ito, with full authority to our president, Elena Tolin, para lumagda para sa aming lahat x x x.
[20]

Complainant does not deny the authenticity and due execution of this 17 August 1997 Board Resolution. While a contingent attorneys fee of 30% is unusually high, such fact alone does not imply that respondent fraudulently obtained the agreement to pay such amount. Indeed, we have upheld the validity of agreements granting attorneys fees at similar[21] or even higher[22] rates.

The Defense of Lack of Legal Interest not Availing in Disbarment Proceedings The IBP Investigating Commissioner correctly dismissed, for lack of merit, respondents claim that complainant is not a real party-in-interest in this case. Complainant, being a member of the Union that retained respondent as its counsel, possesses the requisite interest to file this complaint as she is directly prejudiced by respondents misconduct. At any rate, the procedural requirement observed in ordinary civil proceedings that only the real party-in-interest must initiate the suit does not apply in disbarment cases, thus:

The argument x x x that [a] complainant [in disbarment proceedings] has no legal personality to sue is unavailing. Section 1, Rule 139-B of the Rules of Court provides that proceedings for the disbarment, suspension, or discipline of attorneys may be taken by the Supreme Court motu proprio or by the Integrated Bar of the Philippines upon the verified complaint of any person. The right to institute a disbarment proceeding is not confined to clients nor is it necessary that the person complaining suffered injury from the alleged wrongdoing. Disbarment proceedings are matters of public interest and the only basis for judgment is the proof or failure of proof of the charges. The evidence submitted by complainant before the Commission on the Bar Discipline sufficed to sustain its resolution and recommended sanctions.
[23]

On the Appropriate Penalty to be Imposed on Respondent The Court finds well-taken the penalty recommended by the IBP to suspend respondent from the practice of law for six months. In Garcia v. Manuel,[24] we imposed the same penalty on an attorney who similarly failed to account for his clients funds and to update his client on the status of her case. Considering respondents lack of prior administrative record, such penalty, and not disbarment as prayed for by complainant, serves the purpose of protecting the interest of the public and the legal profession. This Court will exercise its power to disbar only in clear cases of misconduct that seriously affects the standing and character of the lawyer as an officer of the court and a member of the bar.[25] WHEREFORE, we FIND respondent Atty. Daniel T. Roman GUILTY of violation of Rule 16.01 and Rule 18.04 of the Code of Professional Responsibility. Accordingly, we SUSPEND respondent Atty. Daniel T. Roman from the practice of law for six (6) months and DIRECT him to render an accounting, within thirty (30) days from notice of this Decision, of all the money he received from the Samahan ng Api at Mahihirap na Manggagawang Tinanggal ng M. Greenfield, Inc. [affiliated with Rizal Foundation, Inc.] (SAMAT-MGI-RFI). SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, and Azcuna, JJ., concur. Panganiban, J., on official leave.

[1]

Samahan ng Api at Mahihirap na Manggagawang Tinanggal ng M. Greenfield, Inc. [affiliated with Rizal Foundation, Inc.] (SAMAT-MGI-RFI). It appears that when the union members case was elevated to the National Labor Relations Commission (NLRC), the NLRC ruled against them. The union members, through respondent, filed a petition for certiorari to this Court (G.R. No. 122304). However, in the Resolution of 20 January 2000, the Court referred the petition to the Court of Appeals under the ruling in St. Martin Funeral Homes v. NLRC, G.R. No. 130866, 16 September 1998, 295 SCRA 498. Docketed as CA-G.R. SP No. 57066. Rollo, pp. 1-3. Ibid., pp. 14-17. Carmelita Valeriano, Salvacion P. Cruz, and Adelaida Sy. Report, pp. 5-9. Review and Decision by the Board of Governors. x x x x (b) If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which,

[2]

[3]

[4]

[5]

[6]

[7]

[8]

together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action.
[9]

Medina v. Bautista, 120 Phil. 787 (1964). Garcia v. Manuel, A.C. No. 5811, 20 January 2003, 395 SCRA 386. Elena B. Tolin, President; Cynthia D. Rivera, Vice-President; Carmelita Evero, SecretaryTreasurer; Carmelita Valeriano, 1st Assistant Secretary-Treasurer; Denia G. Gulleban, 2nd Assistant Secretary-Treasurer; Teresita D. Basagre, Auditor; and Enriqueta C. Marciano, Public Relations Officer. Rollo, p. 102. Go v. Candoy, 128 Phil. 461 (1967). In re Tionko, 43 Phil. 191 (1922). Tolentino v. Mangapit, 209 Phil. 607 (1983). Alcala vs. De Vera, 155 Phil. 33 (1974) citing Oparel, Sr. v. Abaria, 148-B Phil. 109 (1971). Rollo, p. 7. Alcala vs. De Vera, 155 Phil. 33 (1974). Rollo, p. 8. Rollo, p. 102. Heirs of Teodolfo Cruz, et al. v. CIR, et al., 141 Phil. 557 (1969). Manila Lumber v. Oro, 64 Phil. 164 (1937). Navarro v. Meneses III, 349 Phil. 516 (1998). Supra note 10. Punla v. Soriano, 209 Phil. 290 (1983).

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

Clients Moneys and Properties Borrowing or Lending

ROSARIO JUNIO, complainant, GRUPO, respondent.

vs. ATTY.

SALVADOR

M.

DECISION
MENDOZA, J.:

This is a complaint for disbarment filed against Atty. Salvador M. Grupo for malpractice and gross misconduct. Complainant Rosario N. Junio alleged that

3. Sometime in 1995, [she] engaged the services of [respondent], then a private practitioner, for the redemption of a parcel of land covered by Transfer Certificate of Title No. 20394 registered in the name of her parents, spouses Rogelio and Rufina Nietes, and located at Concepcion, Loay, Bohol. 4. On 21 August 1995, [complainant] entrusted to [respondent] the amount of P25,000.00 in cash to be used in the redemption of the aforesaid property. Respondent received the said amount as evidenced by an acknowledgment receipt, a copy of which is being hereto attached as Annex A. 5. Notwithstanding the foregoing and for no valid reason, respondent did not redeem the property; as a result of which the right of redemption was lost and the property was eventually forfeited. 6. Because of respondents failure to redeem the property, complainant had demanded [the] return of the money which she entrusted to the former for the abovestated purpose. 7. Despite repeated demands made by the complainant and without justifiable cause, respondent has continuously refused to refund the money entrusted to him.
[1]

In his Answer, petitioner admitted receiving the amount in question for the purpose for which it was given. However, he alleged that

6. The subject land for which the money of complainant was initially intended to be applied could really not be redeemed anymore . . ;

7. Complainant knew the mortgage agreement between her parents and the mortgageowner had already expired, and what respondent was trying to do was a sort of [a] desperate, last-ditch attempt to persuade the said mortgagee to relent and give back the land to the mortgagors with the tender of redemption; but at this point, the mortgagee simply would not budge anymore. For one reason or another, he would no longer accept the sum offered; 8. By the time that complainant was to return to Manila, it was already a foregone matter that respondents efforts did not succeed. And so, when transaction failed, respondent requested the complainant that he be allowed, in the meantime, to avail of the money because he had an urgent need for some money himself to help defray his childrens educational expenses. It was really a personal request, a private matter between respondent and complainant, thus, respondent executed a promissory note for the amount, a copy of which is probably still in the possession of the complainant. 9. . . . [T]he family of the complainant and that of the respondent were very close and intimate with each other. Complainant, as well as two of her sisters, had served respondents family as household helpers for many years when they were still in Manila, and during all those times they were treated with respect, affection, and equality. They were considered practically part of respondents own family. That is why, when complainant requested . . . assistance regarding the problem of the mortgaged property which complainant wanted to redeem, respondent had no secondthoughts in extending a lending hand . . . . Respondent did not ask for any fee. His services were purely gratuitous; his acts [were] on his own and by his own. It was more than pro bono; it was not even for charity; it was simply an act of a friend for a friend. It was just lamentably unfortunate that his efforts failed. .... Of course, respondent accepts his fault, because, indeed, there were occasions when complainants sisters came to respondent to ask for the payment in behalf of complainant, and he could not produce the money because the circumstances somehow, did not allow it. [I]t does not mean that respondent will not pay, or that he is that morally depraved as to wilfully and deliberately re[nege] in his obligation towards the complainant.
[2]

Complainant filed a reply denying that respondent informed her of his failure to redeem the property and that respondent requested her to instead lend the money to him.[3]

The case was thereafter referred to the Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation. However, while two hearings were set for this purpose, both were postponed at the instance of respondent. For this reason, on August 28, 2000, complainant asked the Investigating Commissioner[4] to consider the case submitted for decision on the basis of the pleadings theretofore filed. Respondent was required to comment on complainants motion, but he failed to do so. Consequently, the case was considered submitted for resolution. In his report, dated January 5, 2001, the Investigating Commissioner found respondent liable for violation of Rule 16.04 of the Code of Professional Responsibility which forbids lawyers from borrowing money from their clients unless the latters interests are protected by the nature of the case or by independent advice. The Investigating Commissioner found that respondent failed to pay his clients money. However, in view of respondents admission of liability and plea for magnanimity, the Investigating Commissioner recommended that respondent be simply reprimanded and ordered to pay the amount of P25,000.00 loan plus interest at the legal rate. In its Resolution No. XIV-2001-183, dated April 29, 2001, the IBP Board of Governors adopted and approved the Investigating Commissioners findings. However, it ordered

[R]espondent . . . suspended indefinitely from the practice of law for the commission of an act which falls short of the standard of the norm of conduct required of every attorney and . . . ordered [him] to return to the complainant the amount of P25,000.00 plus interest at the legal rate from the time the said amount was misappropriated, until full payment; provided that the total suspension shall be at least one (1) year from the date of said full payment.
On July 4, 2001, respondent filed a motion for reconsideration alleging that
(a) there was no actual hearing of the case wherein respondent could have fully ventilated and defended his position; (b) the subject Resolution gravely modified the Report and Recommendation of the Trial Commissioner, Hon. Pedro Magpayo, Jr., . . . such that the resultant sanctions that are ordered imposed are too leonine, unjust and cruel; (c) that the factual circumstances attending the matter which gave rise to the complaint were not rightly or fairly appreciated.[5]

He argues that the Court should adopt the report and recommendation of the IBP Investigating Commissioner. In its resolution of August 15, 2001, the Court resolved to treat respondents motion for reconsideration as a petition for review of IBP Resolution No. XIV 2001-183 and required complainant to comment on the petition. In her comment, complainant states that her primary interest is to recover the amount of P25,000.00 with interest and that she is leaving it to the Court to decide whether respondent deserves the penalty recommended by the IBP.[6]

The Court resolves to partially grant the petition. In his report and recommendation, Investigating Commissioner Magpayo, Jr. made the following findings:

In his Answer, the respondent ADMITS all the allegations in paragraph 4 of the complaint which avers: 4. On 21 August 1995, complainant entrusted to respondent the amount of P25,000.00 in cash to be used in the redemption of the aforesaid property (parcel of land covered by TCT No. 20394 registered in the name of complainants parents located at Concepcion, Loay, Bohol). Respondent received the said amount as evidenced by an acknowledgment receipt (Annex A). By way of confession and avoidance, the respondent, . . . however, contended that when the mortgagee refused to accept the sum tendered as the period of redemption had already expired, he requested the complainant to allow him in the meantime to use the money for his childrens educational expenses[,] to which request the complainant allegedly acceded and respondent even executed a promissory note (please see 4th par. of Annex B of complaint). Respondent takes further refuge in the intimate and close relationship existing between himself and the complainants family on the basis of which his legal services were purely gratuitous or simply an act of a friend for a friend with no consideration involved. Unfortunately, his efforts to redeem the foreclosed property, as already stated, did not produce the desired result because the mortgagee would not budge anymore and would not accept the sum offered. Thus, the respondent concluded that there was, strictly speaking, no attorney-client [relationship] existing between them. Rather, right from the start[,] everything was sort of personal, he added. Granting to the respondent the benefit of the doubt, we shall assume that there was in reality a loan in the amount of P25,000.00. This is likewise confirmed by the execution of a promissory note on 12 December 1996 by the respondent who undertook to pay Mrs. Junio on or before January 1997 (Annex B of complaint). Moreover, the demand letter of 12 March 1998 (Annex B) mentions of reimbursement of the sum received and interest of 24% per annum until fully paid giving the impression that the funds previously intended to be used for the repurchase of a certain property (Annex A of complaint) was converted into a loan with the consent of the complainant who gave way to the request of the respondent to help defray his childrens educational expenses (par. 8 of Answer).

Be that as it may, the duty and obligation to repay the loan remains unshaken. Having utilized the sum to fulfill his urgent need for some money, it is but just and proper that he return the amount borrowed together with interest. Five (5) years had already passed since respondent retained the cash for his own personal use. But notwithstanding the same and his firm promise to pay Mrs. Junio on or before January 1997 he has not demonstrated any volition to settle his obligation to his creditor[,] although admittedly there w[ere] occasions when complainants sister came to respondent to ask for the payment in behalf of complainant, worse, the passage of time made respondent somehow forgot about the obligation. A lawyer shall not borrow money from his client unless the clients interests are fully protected by the nature of the case or by independent advice (Rule 16.04, Code of Professional Responsibility). This rule is intended to prevent the lawyer from taking advantage of his influence over the client. This rule is especially significant in the instant case where the respondent enjoys an immense ascendancy over the complainant who, as well as two of his sisters, had served respondents family as household helpers for many years. Having gained dominance over the complainant by virtue of such long relation of master and servant, the respondent took advantage of his influence by not returning the money entrusted to him. Instead, he imposed his will on the complainant and borrowed her funds without giving adequate security therefor and mindless of the interest of the complainant. In the light of the foregoing, . . . respondent has committed an act which falls short of the standard of the norm of conduct required of every attorney. If an ordinary borrower of money is required by the law to repay the loan failing which he may be subjected to court action, it is more so in the case of a lawyer whose conduct serves as an example.
[7]

It would indeed appear from the records of the case that respondent was allowed to borrow the money previously entrusted to him by complainant for the purpose of securing the redemption of the property belonging to complainants parents. Respondent, however, did not give adequate security for the loan and subsequently failed to settle his obligation. Although complainant denied having loaned the money to respondent, the fact is that complainant accepted the promissory note given her by respondent on December 12, 1996. In effect, complainant consented to and ratified respondents use of the money. It is noteworthy that complainant did not attach this promissory note to her complaint nor explain the circumstances surrounding its execution. She only mentioned it in her demand letter of March 12, 1998 (Annex B), in which she referred to respondents undertaking to pay her the P25,000.00 on or before January

1997. Under the circumstances and in view of complainants failure to deny the promissory note, the Court is constrained to give credence to respondents claims that the money previously entrusted to him by complainant was later converted into a loan. Respondents liability is thus not for misappropriation or embezzlement but for violation of Rule 16.04 of the Code of Professional Responsibility which forbids lawyers from borrowing money from their clients unless the latters interests are protected by the nature of the case or by independent advice. In this case, respondents liability is compounded by the fact that not only did he not give any security for the payment of the amount loaned to him but that he has also refused to pay the said amount. His claim that he could not pay the loan because circumstances . . . did not allow it and that, because of the passage of time, he somehow forgot about his obligation only underscores his blatant disregard of his obligation which reflects on his honesty and candor. A lawyer is bound to observe candor, fairness, and loyalty in all his dealings and transactions with his client.[8] Respondent claims that complainant is a close personal friend and that in helping redeem the property of complainants parents, he did not act as a lawyer but as a friend, hence there is no client-attorney relationship between them. This contention has no merit. As explained in Hilado v. David,[9]

To constitute professional employment it is not essential that the client should have employed the attorney professionally on any previous occasion . . . It is not necessary that any retainer should have been paid, promised, or charged for; neither is it material that the attorney consulted did not afterward undertake the case about which the consultation was had. If a person, in respect to his business affairs or troubles of any kind, consults with his attorney in his professional capacity with the view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces in such consultation, then the professional employment must be regarded as established . ...
Considering the foregoing, the Investigating Commissioners recommendation to impose on respondent the penalty of reprimand and restitution of the amount loaned by him is clearly inadequate. On the other hand, the penalty of indefinite suspension with restitution imposed by the IBP Board of Governors is too harsh in view of respondents apparent lack of intent to defraud complainant and of the fact that this appears to be his first administrative transgression. It is the penalty imposed in Igual v. Javier[10] which applies to this case. In that case, this Court ordered the respondent suspended for one month from the practice of law and directed him to pay the amount given him by his clients within 30 days from notice for his failure to return the money in question notwithstanding his admission that he did not use the money for the filing of the appellees brief, as agreed by them, because of an alleged quarrel with his clients. Anent petitioners allegation regarding the lack of hearing during the IBP investigation, suffice it to say that he waived such right when he failed to comment on petitioners motion to submit the case for resolution on the basis of the pleadings theretofore filed despite due notice to him, not to mention the fact that it was he who had requested the postponement of the two hearings scheduled by the Investigating Commissioner.

WHEREFORE, the Court finds petitioner guilty of violation of Rule 16.04 of the Code of Professional Responsibility and orders him suspended from the practice of law for a period of one (1) month and to pay to respondent, within 30 days from notice, the amount of P25,000.00 with interest at the legal rate, computed from December 12, 1996. SO ORDERED. Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur. Buena, J., abroad on official business.

[1]

Comment, pp. 1-2, Rollo, pp. 1-2. Answer, pp. 1-3; Rollo, pp. 32-34. Reply, p. 5; id., p. 50. Pedro A. Magpayo, Jr. Motion For Reconsideration, p. 1. Comment to the Motion for Reconsideration, p. 2. Report and Recommendation, pp. 2-5. CODE OF PROFESSIONAL RESPONSIBILITY, Canon 15. 84 Phil. 569, 576 (1949), citing 5 Jones Commentaries on Evidence 4118-4119 (emphasis added). 254 SCRA 416 (1996).

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

Fidelity to Clients Cause

PABLITO SANTOS, complainant, vs. ATTY. ALVARO BERNABE LAZARO, respondent. RESOLUTION
BELLOSILLO, J.:

ATTY. ALVARO BERNABE LAZARO, a member of the Philippine Bar and respondent herein, is charged administratively with "inexcusable neglect of duties as a lawyer to a client-relative."[1] According to complainant Pablito Santos, the charge arose from respondents failure to file a memorandum/brief resulting in his being deprived of his rights over a parcel of land located at F. Varona St., Tondo, Manila. Complainant also alleged other matters indicative of further misconduct, such as respondents repeated demands for unconscionable amounts of money despite awareness of complainants grinding poverty. Specifically, complainant averred that he was a defendant in an ejectment case filed by a certain Alfredo dela Rosa in representation of his minor children Mila Nelia, Ofelia, Rochelle and Allan, all surnamed dela Rosa, before the Metropolitan Trial Court of Manila.[2] The complaint was for complainants ejectment from a parcel of land at F. Varona St., Tondo, Manila, after he refused to pay rent. Subsequently, respondent entered his appearance as counsel for herein complainant, as defendant in the MeTC, after he paid respondent an acceptance fee of P20,000.00. Complainant further alleged that while the case was pending thereat respondent demanded and was paid another P30,000.00. However, judgment was rendered ordering complainant to vacate the premises and to pay plaintiffs therein P87,000.00 as back rentals. Feeling aggrieved, complainant appealed to the Regional Trial Court of Manila.[3] For the appeal, complainant gave respondent another P30,000.00 for his professional services. After the MeTC rendered judgment ordering complainants immediate eviction from the premises, the National Housing Authority awarded him the property and a transfer certificate of title was issued in his favor.[4] On the part of the plaintiffs in the MeTC, they moved for the immediate execution of the judgment being appealed from. On 17 March 1997 the Regional Trial Court issued anOrder directing defendant-appellant Pablito Santos to file his memorandum/brief within thirty (30) days from receipt thereof. Several months later, respondent was reproached by the RTC for not complying with its 17 March 1997 Order. Respondent had to plead that he be given another chance to file his appellants memorandum as his attention was focused on matters pertaining on (sic) the submission of pleadings thereafter needed to be filed in reply to Plaintiffs manifestation and motion. His arguments however were not sustained.

On 18 August 1997 the RTC granted the motion for a writ of execution upon finding that defendant therein, complainant herein, did not put up a supersedeas bond to stay the execution of the judgment. In its Order, the RTC also disregarded complainants opposition to resolve the motion and considered counsels excuse for not filing his memorandum as a feeble attempt to extricate himself (herein respondent Lazaro) from his blunder which is not excusable.[5] Respondent denied the charges against him. He argued that his failure to file the memorandum/brief was not deliberate as he is morally and legally convinced that he may be able to present his clients valid cause or claim over the disputed property in a hearing called for the purpose. He alleged that he could have orally argued complainants case before the trial court had he been given the opportunity to do so. According to him, complainant rudely terminated his services even before he could explain his legal strategy for winning the appeal. Moreover, complainants allegation that he milked him dry was far from the truth since complainant actually gave him only P10,000.00 contrary to their agreement that he would be remunerated with P30,000.00 for his legal services. Lastly, respondent claimed that complainant tried to extort P200,000.00 from him in exchange for the withdrawal of his disbarment complaint against him.[6] This Court referred the complaint to the Integrated Bar of the Philippines for investigation, report and recommendation.[7] On 5 August 2002 the IBP submitted its Report finding respondent guilty of negligence and recommending that he be suspended from the practice of law for a period of six (6) months.[8] In justifying its recommendation, the IBP completely relied on the findings of the trial court -

From the facts obtaining and the evidence presented, we find the Order dated 18 August 1997 of the Honorable Presiding Judge of the Regional Trial Court of Manila, Branch 31, says it all with regard to the inexcusable negligence committed by respondent in handling the case of complainant, to wit: The record reveals that defendants counsel failed to file any motion for extension to file his memorandum/brief. This being the case, defendants counsel was of the thinking that he could get out of his predicament by pleading that his attention was focused on matters pertaining on the submission of pleadings thereafter needed to be filed in reply to plaintiffs manifestation and motion, thus his failure to file defendants memorandum/brief. However, this is farthest from the truth because he already knew on March 31, 1997 that he was required to file his memorandum/brief not later than thirty (30) days from that date. The foregoing narration does not speak well of the stance taken by defendants counsel.
[9]

A thorough and exhaustive study of the complaint as well as the comment thereto argues strongly for the adoption and approval of the IBP Report. Indeed, complainant would not have undergone the travails of losing his property had respondent exercised the ordinary diligence of a member of the Bar.

Rule 18.03 of the Code of Professional Responsibility explicitly provides that negligence of lawyers in connection with legal matters entrusted to them for handling shall render them liable. It is a basic postulate in legal ethics that when a lawyer takes a clients cause, he covenants that he will exercise due diligence in protecting his rights. The failure to exercise that degree of vigilance and attention expected of a good father of a family makes such lawyer unworthy of the trust reposed upon him by his client and makes him answerable to him, to the courts and to society. The acts of respondent in this case violate the most elementary principles of professional ethics. By neglecting to file the memorandum/brief, respondent set off a chain of events which eventually ended in the demolition of a 34meter structure which complainant and four other families call home.[10] His explanation that his attention was focused on matters pertaining on (sic) the submission of pleadings thereafter needed to be filed in reply to plaintiffs manifestation and motion is too ludicrous to be believed. His stance, to quote the trial court, was but a feeble attempt to extricate himself from his blunder which is not excusable. Respondents failure to exercise due diligence in attending to the interest of complainant caused the latter material prejudice. As a lawyer, respondent was wanting in the exercise of reasonable care demanded of every member of the Bar; his measure of diligence is several notches below the standard required of his office. WHEREFORE, respondent ATTY. ALVARO BERNABE LAZARO is found GUILTY of negligence in protecting the interest of his client, complainant Pablito Santos, in Civil Case No. 97-82452, of the RTC of Manila, and is accordingly SUSPENDED from the practice of law, not for six (6) months as recommended by the Commission on Bar Discipline of the Integrated Bar of the Philippines, but for one (1) year effective from date of his receipt of this Resolution. Let a copy of this Resolution be attached to the personal record of Atty. Alvaro Bernabe Lazaro in the Bar Confidants Office, another copy furnished the Integrated Bar of the Philippines, and copies thereof circulated in all the courts of the country. Respondent Atty. Alvaro Bernabe Lazaro is DIRECTED to inform this Court and the Integrated Bar of the Philippines of the date of his receipt of this Resolution. SO ORDERED. Mendoza, Quisumbing, Austria-Martinez and Callejo, Sr., JJ., concur.

[1]

Rollo, pp.1-11. Docketed as Civil Case No. 147286-CV, MeTC-Br. 3, Manila. Docketed as Civil Case No. 97-82452. Rollo, p. 2. Order penned by Judge Wilfredo D. Reyes, RTC-Br. 31, Manila; Id. at 6-7.

[2]

[3]

[4]

[5]

[6]

Rollo, pp. 14-18. Id at 19. Id. at 83-87. Id. at 86. Id. at 70.

[7]

[8]

[9]

[10]

Competence and Diligence Negligence

EDUARDO T. ABAY, complainant, MONTESINO, respondent. DECISION

PANGANIBAN, J.:

vs. Atty.

RAUL

T.

The failure to file an appellate court brief without any justifiable reason deserves sanction. Lawyers who disagree with the pursuit of an appeal should properly withdraw their appearance and allow their client to retain another counsel.

The Case and the Facts In a Complaint[1] dated June 21, 2002, Eduardo T. Abay charges Atty. Raul T. Montesino with gross negligence, gross incompetence and evident bad faith, in violation of his oath as a member of the Philippine bar. Complainant avers that the Negros Institute of Technology (NIT), of which he is a stockholder, hired respondent as counsel in an action for Cancellation of Title of Ownership, Recovery of Ownership and Possession and Damages with Preliminary Injunction against the estate of Vicente T. Galo. The matter was docketed as Civil Case No. 1329 at the Regional Trial Court (RTC) of Bacolod City (Branch 45). On April 27, 1995, the RTC rendered a Decision dismissing the civil case. Respondents Motion for Reconsideration of the judgment of dismissal was denied by the trial court in its Order dated November 3, 1995. Although respondent filed a Notice of Appeal with the Court of Appeals (CA), he thereafter failed to submit an appellants brief. Consequently, in a Resolution dated March 19, 1999, the CA dismissed the appeal with the following admonition:

We made a warning in our Resolution dated as early as October 20, 1998 that no further extension will be entertained. Precisely because of non-submission of the Brief, we directed, on January 8, 1998, the dismissal of the appeal. This is not to mention the fact that a total of 120 days extension, over and above the 45day reglementary period, had already been granted. This brings us to the February 9, 1999 ruling by the Supreme Court (A.M. No. 99-2-03-SC) giving the Solicitor General a limited time of 60 days and 90 days within which to submit his comment or appellees brief, with a warning that no further extension will be granted. This

precisely applies to a First Motion for Extension. The period can even be shortened, in cases of extreme urgency. We cannot see any reason why the courts admonishing for a limited time to do compliance does not apply to this case now before Us.
[2]

Complainant attributes the failure of respondent to submit the brief to the latters gross negligence and evident bad faith. Respondent allegedly abandoned the appeal without the knowledge and consent of the NIT. Worse, he supposedly never told the Institute that its appeal had already been dismissed. Complainant thus prayed that respondent be duly sanctioned with disbarment.[3] In his Comment[4] dated October 29, 2002, respondent denied that he was negligent in his duty as counsel of NIT. According to him, while Civil Case No. 1329 was pending appeal, he discovered that the property that it was seeking to recover had been the subject of another case, Civil Case No. 6017, which was for Annulment of Sale, Deed of Donation, Cancellation of Titles and Damages. The latter case was a result of the overlapping transfers of rights effected by the heirs of Vicente Galo through (1) a Contract of Sale executed on April 12, 1985[5] in favor of Floserfina Grandea[6] and (2) a Contract of Mortgage executed on September 3, 1985 in favor of Ludovico Hilado.[7] Believing that the heirs of Vicente Galo had already validly transferred to another party the ownership of the property that the NIT was seeking to recover, respondent felt that to pursue the appeal would be dilatory, expensive, frivolous and taxing [to] the precious time of the [CA].[8] Thus, he deemed it wise to advise the stockholders of the NIT to abandon the appeal and instead file appropriate Complaint(s) against x x x Floserfina Grandea of Bacolod City and x x x Ludovico Hilado x x x of Silay City x x x to recover the ownership and possession of the NITs claimed properties.[9] Respondent avers that complainant was unjustly adamant in his demand to continue with [the] appeal despite x x x said legal [advice]. However, because he sincerely felt that the best way to protect the rights of NIT was to file appropriate complaint(s) against [Grandea] and [Hilado], x x x [he] x x x allowed the period to submit NITs Appellants Brief to [lapse].[10] Furthermore, respondent maintains that despite the fact that the NIT did not pay his legal fees or reimburse him for his expenses, he still faithfully performed his duty during the entire time he served as its counsel. In a Resolution[11] dated January 20, 2003, the Court referred this case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.

Report of the Investigating Commissioner In her April 24, 2003 Report,[12] Investigating IBP Commissioner Milagros V. San Juan found respondent guilty of violating the Code of Professional Responsibility.

According to Commissioner San Juan, respondent was not able to justify his failure to file the brief. She explained that if respondent actually believed [that] it was futile to pursue [the appeal], why did he request from the Court of Appeals numerous extensions of time to file x x x the same within the given extension periods? Also, it should be noted that respondent admits that after he advised NIT and herein complainant [about] the futility of pursuing the appeal, the latter expressed the wish to continue with [the appeal]. At the very least, respondent should have given due importance to the decision of his client to avail of a legal remedy available to it under the legal system.[13] She recommended that respondent be suspended from the practice of law for a period of six months, with a warning that a harsher penalty would be meted out for a similar infraction in the future.[14]

Recommendation of the IBP Board of Governors On June 21, 2003, the Board of Governors of the IBP passed Resolution No. XV2003-339[15] adopting the Report and Recommendation of the investigating commissioner.[16]

The Courts Ruling We agree with the findings and recommendation of the IBP.

Administrative Liability of Respondent The legal profession is invested with public trust.[17] Its goal is to render public service and secure justice for those who seek its aid.[18] Thus, the practice of law is considered a privilege, not a right, bestowed by the State on those who show that they possess and continue to possess the legal qualifications required for the conferment of such privilege.[19] Verily, lawyers are expected to maintain at all times a high standard of legal proficiency and of morality -- which includes honesty, integrity and fair dealing.[20] They must perform their four-fold duty to society, the legal profession, the courts and their clients in accordance with the values and norms of the legal profession, as embodied in the Code of Professional Responsibility. Any conduct found wanting in these considerations, whether in their professional or private capacity, shall subject them to disciplinary action. In the present case, the failure of respondent to file the appellants brief was a clear violation of his professional duty to his client. The Code of Professional Responsibility mandates lawyers to serve their clients with competence and diligence.[21] Rules 18.03 and 18.04 specifically provide:

Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. Rule 18.04 A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to the clients request for information.
It must be noted that respondent and complainant disagreed on the legal course to be taken regarding the appealed case. The former strongly advised the latter to abandon the appeal and to consider the other available remedies. Complainant, on the other hand, wanted to pursue it. Feeling that he was unjustly adamant in wanting to do so, respondent -- contrary to the desire of the former -- deemed it wise to abandon the appeal without informing his client. Not filing an appellants brief is prejudicial because, as happened in this case, such failure could result in the dismissal of the appeal.[22] The conduct of respondent shows that he failed to exercise due diligence, and that he had a cavalier attitude towards the cause of his client. The abandonment by the former of the latters cause made him unworthy of the trust that his client reposed in him. Even if respondent was honestly and sincerely protecting the interests of complainant, the former still had no right to waive the appeal without the latters knowledge and consent. If indeed respondent felt unable or unwilling to continue his retainership, he should have properly withdrawn his appearance and allowed the client to appoint another lawyer. Moreover, the appellate court noted that respondent failed to file the appellants brief despite being granted several extensions of time to file it. He therefore violated Rule 12.03 of the Code of Professional Responsibility, which mandates that [a] lawyer shall not, after obtaining extensions of time to file pleadings, memoranda or briefs, let the period lapse without submitting the same or offering an explanation for his failure to do so. We emphasize that all lawyers owe fidelity to their clients cause.[23] Regardless of their personal views, they must present every remedy or defense within the authority of the law in support of that cause.[24] We have said in Ong v. Atty. Grijaldo:[25]

Once [a lawyer] agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him. He must serve the client with competence and diligence, and champion the latters cause with wholehearted fidelity, care, and devotion. [Other]wise stated, he owes entire devotion to the interest of the client, warm zeal in the maintenance and defense of his clients rights, and the exertion of his utmost learning and ability to the end that nothing be taken or withheld from his client, save by the rules of law, legally applied. This simply means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or defense. If much is demanded from an attorney, it is because the entrusted privilege to practice law carries with it the correlative duties not only to the client but also to the court, to the bar, and to the public. A lawyer who

performs his duty with diligence and candor not only protects the interest of his client; he also serves the ends of justice, does honor to the bar, and helps maintain the respect of the community to the legal profession.
[26]

WHEREFORE, Atty. Raul T. Montesino is found guilty of negligence and is hereby SUSPENDED from the practice of law for six months, effective upon receipt of this Decision. He is WARNED that a repetition of the same or a similar act will be dealt with more severely. A copy of this Decision shall be entered in the record of respondent as attorney. Further, let copies of this Decision be served on the IBP as well as on the court administrator, who is directed to circulate these to all the courts in the country for their information and guidance. SO ORDERED. Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

[1]

Rollo, pp. 1-8. Id., p. 13. Complaint, p. 5; rollo, p. 5. Rollo, pp. 33-47. See Annex 4 of respondents Comment; rollo, p. 67. Comment, p. 8; id., p. 40. Ibid. Id., pp. 9 & 41. Id., pp. 8 & 40. Id., pp. 9 & 41. Rollo, p. 84. Id., pp. 119-131. Report and Recommendation dated April 24, 2003, pp. 12-13; rollo, pp. 130-131. Id., pp. 13 & 131. Rollo, p. 118. Ibid. People v. Santocildes Jr., 378 Phil. 943, December 21, 1999; In the Matter of the Petition for Authority to Continue Use of the Firm Name Ozaeta, Romulo, etc., 92 SCRA 1, July 30, 1979. Docena v. Limon, 356 Phil. 570, September 10, 1998.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

Eustaquio v. Atty. Rimorin, AC No. 5081, March 24, 2003; Sebastian v. Atty. Calis, 372 Phil. 673, September 9, 1999; Arrieta v. Llosa, 346 Phil. 932, November 28, 1997. Tapucar v. Atty. Tapucar, 355 Phil. 66, July 30, 1998; Maligsa v. Atty. Cabanting, 338 Phil. 912, May 14, 1997. Canon 18. Torres v. Atty. Orden, 386 Phil. 216, April 6, 2000. Canon 17 of the Code of Professional Responsibility. Reontoy v. Atty. Ibadlit, 285 SCRA 88, January 28, 1998. AC No. 4724, April 30, 2003; citing Ramos v. Atty. Jacoba, 418 Phil. 346, September 27, 2001. Id., p. 8, per curiam, J.; id., p. 351, per Mendoza,

[20]

[21]

[22]

[23]

[24]

[25]

[26]

Competence and Diligence Collaborating Counsel

SECOND DIVISION G. R. No. 130104 - January 31, 2000 ELIZABETH SUBLAY, Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, EURO-SWISS FOOD INC., WERDENBERG INTERNATIONAL CORPORATION and WERNER BERGER, Respondents. BELLOSILLO, J.: This is a special civil action for certiorari to set aside the Decision of the National Labor Relations Commission dated 23 June 19971 dismissing petitioner's appeal from the decision of the Labor Arbiter on the ground that it was filed beyond the ten (10)-day reglementary period. On 16 May 1991 petitioner Elizabeth Sublay was employed by private respondent Euro-Swiss Food Inc. (EURO-SWISS) as its Chief Accountant until her termination from the service on 31 December 1994. On the first day of December 1994 petitioner received a letter from private respondent Werner Berger, President of EURO-SWISS, informing her of his decision to abolish the position of Chief Accountant thus terminating her services effective 31 December 1994. The reason advanced for the abolition of her position and her consequent termination was that the computerization of the accounting system as well as the burning down of its factory significantly reduced the company's operations hence, according to Werner Berger, he could perform his functions with "minimal assistance from the encoder and the accounting clerks."2 Petitioner, in filing a case for illegal dismissal and non-payment of her 13th month pay against EUROSWISS and/or Werner Berger, maintained that she was unjustly dismissed as there was no just and valid cause for her dismissal under Arts. 282, 283 and 284 of the Labor Code. The Labor Arbiter however was of a different opinion 3 The admitted facts and the adduced evidence show that the complainant was justly dismissed for "installation of labor saving devices and redundancy." Respondent Werner Berger informed the complainant that Euro-Swiss Food, Inc. would abolish the position of chief accountant that the complainant held for as much as with the computerization of the Accounting system there was for him only minimal assistance from the encoder and the accounting clerks. Added to this was the burning of the factory building which reduced the respondent company's operations, and the respondents thus did not feel the need anymore of the complainant's services. The complainant conceded that with the computer operational systems that she helped set up for the Accounting Department "only a push of a finger of a knowledgeable employee is needed and the reports needed by management could then be generated" . . . .. It therefore appears that the complainant's dismissal was an accomplished and admitted fact; she made final arrangement as to the payment of her last compensation, benefits, and separation pay; and she turned over documents in her custody to her employer . . . .. The Labor Arbiter ordered private respondent EURO-SWISS to pay petitioner her separation pay equivalent to one (1) month for every year of service or a total of P50,400.00. On 9 December 1996 petitioner appealed the decision of the Labor Arbiter to the National Labor Relations Commission (NLRC).

On the basis of the facts established by the NLRC, petitioner's counsel of record Atty. Gabriel Marquez received the Labor Arbiter's decision on 21 November 1996, hence, she had until 2 December 1996 (1 December 1996 being a Sunday) within which to appeal. However, petitioner through Atty. Raymond Paolo Alikpala filed her appeal only on 9 December 1996 or seven (7) days late; consequently, the NLRC dismissed her appeal.4 Petitioner is now before us ascribing grave abuse of discretion amounting to lack of jurisdiction to the NLRC in denying outright her appeal on a mere "technicality." In her sole assignment of error, she bewailed the NLRC's egregious error when it summarily dismissed her appeal for having been filed out of time, thus totally ignoring the facts and circumstances of the case for the sake of expediency.5 To justify her procedural lapse, petitioner revealed that she received a copy of the Labor Arbiter's decision on 2 December 1996 upon which she immediately called up Atty. Alikpala, a collaborating counsel6 who, she learned, was not sent a copy of the decision. Atty. Alikpala however was horrified to discover that co-counsel Atty. Marquez had already been furnished a copy of the decision on 21 November 1996 so that by 2 December 1996 the ten (10)-day reglementary period had already lapsed, the tenth (10th) day from 21 November 1996 being 1 December 1996, a Sunday. While petitioner acknowledges that "procedural rules are not to be disdained as mere technicalities that may be ignored at will to suit the convenience of a party,"7 she contends that efficiency and order should not be the system's primordial values, taking over the places on the pedestal once occupied by justice and equity. To fortify her stand, she invokes the judicial policy of allowing appeals, although filed late, when the interest of substantial justice so requires. She cites Firestone and Rubber Co. of the Phils. v. Lariosa8 where this Court overlooked the late filing of appeal because the Notice of Decision received by the employee's counsel advised him that the appeal could be filed within ten (10) "working" days which should properly have been ten (10) "calendar" days. In that case we discarded the stringent rule on the perfection of appeal in view of the sheer absence of any culpability on the part of respondent's counsel. The procedural lapse was solely attributable to his mistaken reliance on the notice which wrongly interpreted the ten (10) day reglementary period. Again in City Fair Corporation v. NLRC 9 where the NLRC was brought to task for allowing the appeal of the employees filed a day late, we ruled that a greater injustice would occur if appeal was not given due course than when the reglementary period to appeal was to be strictly followed. Petitioner contends that as in the aforecited cases, the facts and circumstances of her case justify the setting aside of the procedural requirement on the perfection of appeals. She remains steadfast in her belief that the NLRC erred in sending a notice of the Labor Arbiter's decision only to her lead counsel, Atty. Marquez, but failed to furnish Atty. Alikpala, her "active" counsel, with a copy thereof and ignoring the latter's request in his Entry of Appearance filed on 13 May 1996 that they (referring to the law office Saguisag and Associates to which Atty. Alikpala belonged) "be served and furnished with courtesy copies of all motions, orders, judgment, and other papers in the said case."10 It is doctrinally well-entrenched that the perfection of appeal within the statutory or reglementary period is not only mandatory but also jurisdictional and failure to do so renders the questioned decision final and executory, and deprives the appellate court or body of the legal authority to alter the final judgment, much less to entertain, the appeal. As pointed out by petitioner, this Court has time and again sidestepped the rule on the statutory or reglementary period for filing an appeal. We have resorted to this extraordinary measure even at the expense of sacrificing order and efficiency if only to serve the higher ideals of justice and equity. Yet we cannot respond with alacrity to every clamor of injustice and bend the rules to placate a vociferous protestor crying and claiming to be a victim of a wrong. It is only in highly meritorious cases that this Court opts not to strictly apply the rules and thus prevent a grave injustice from being done. Such does not obtain in this case. It is undisputed that petitioner was represented by two (2) lawyers, Atty. Marquez as lead counsel, and Atty. Alikpala as collaborating counsel. She alleged that Atty. Marquez to whom a copy of the Labor Arbiter's decision was given, failed to file the appeal and to notify her of the adverse decision resulting in its late filing and subsequent dismissal by the NLRC. She reasoned that had Atty. Alikpala been likewise served a copy of the decision she would not be in this distressing situation.

The rule is that when a party is represented by two (2) or more lawyers, notice to one (1) suffices as a notice to the party represented by him. Hence, the Labor Arbiter was not in error when he served a copy of the decision only on Atty. Marquez who after all was still the counsel of record when the decision was rendered. Likewise petitioner cannot claim that although Atty. Marquez was not asked to formally withdraw he has for all intents and purposes suit withdrawn because, by failing to actively represent petitioner, he virtually relinquished his responsibility over the case to Atty. Alikpala. The unbroken stream of judicial dicta is that clients are bound by the action of their counsel in the conduct of their case. Otherwise, if the lawyer's mistake or negligence was admitted as a reason for the opening of a case, there would be no end to litigation so long as counsel had not been sufficiently diligent or experienced or learned. Besides, without formally withdrawing his appearance, Atty. Marquez continued to be the counsel of petitioner. Courts may not presume that the counsel of record has been substituted by a second counsel merely from the filing of a formal appearance by the latter. In the absence of compliance with the essential requirements for valid substitution of counsel of record,11 the court can safely presume that he continuously and actively represents his client. Lastly, petitioner's claim for judicial relief in view of her counsel's alleged negligence is incongruous, to say the least, considering that she was represented by more than one (1) lawyer. Although working merely as a collaborating counsel who entered his appearance for petitioner as early as May 1996, i.e., more or less six (6) months before the termination of the proceedings a quo, Atty. Alikpala had the bounden duty to monitor the progress of the case. A lawyer has the responsibility of monitoring and keeping track of the period of time left to file an appeal. He cannot rely on the courts to appraise him of the developments in his case and warn him against any possible procedural blunder. Knowing that the lead counsel was no longer participating actively in the trial of the case several months before its resolution, Atty. Alikpala who alone was left to defend petitioner should have put himself on guard and thus anticipated the release of the Labor Arbiter's decision. Petitioner's lead counsel might have been negligent but she was never really deprived of proper representation. This fact alone militates against the grant of this petition. Once again we remind the members of the legal profession that every case they handle deserves their full and undivided attention, diligence, skill and competence, regardless of its importance and whether they accept it for a fee or for free keeping in mind that not only the property but also the life and liberty of their clients may be at stake. WHEREFORE, the petition is DISMISSED for failure of petitioner Elizabeth Sublay to sufficiently establish that public respondent National Labor Relations Commission, in its assailed Decision committed grave abuse of discretion amounting to lack of jurisdiction in denying the appeal of petitioner for having been filed beyond the ten (10)-day reglementary period. No cost. SO ORDERED. Mendoza, Quisumbing, Buena and De Leon, Jr., JJ., concur.

Endnotes:
1

Decision penned by Commissioner Vicente S.E. Veloso, concurred in by Commissioners Bartolome S. Carale (on official leave) and Alberto R. Quimpo. See Original Records, p. 37.

Decision, dated 18 November 1996, by Labor Arbiter Potenciano Canizares Jr., NLRC NCR Arbitration Branch, Quezon City; Rollo, pp. 45-46.

Rollo, p. 38. Original Records, p. 3.

6 It was before Labor Arbiter Canizares Jr., that Atty. Raymond Paolo A. Alikpala filed his Entry of Appearance dated 13 May 1996 for petitioner in collaboration with Atty. Marquez.

Rollo, p. 18. G.R. No. 70479, 27 February 1987, 148 SCRA 187. G.R. No. 95711, 21 April 1995, 243 SCRA 1995. Rollo, p. 24.

10

11 The essential requisites of valid substitution of counsel are: 1) there must be a written request for substitution; 2) it must be filed with the written consent of the client; 3) it must be with the written consent of the attorney to be substituted; and 4) in case the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution was served on him in the manner prescribed by the Rules of Court. See Nacuray v. NLRC, G.R. Nos. 114924-27, 18 March 1997, 270 SCRA 9.

Competence and Diligence Duty to Apprise Client

DOMINADOR P. BURBE, complainant, MAGULTA, respondent. DECISION

PANGANIBAN, J.:

vs. ATTY.

ALBERTO

C.

After agreeing to take up the cause of a client, a lawyer owes fidelity to both cause and client, even if the client never paid any fee for the attorney-client relationship. Lawyering is not a business; it is a profession in which duty to public service, not money, is the primary consideration.

The Case Before us is a Complaint for the disbarment or suspension or any other disciplinary action against Atty. Alberto C. Magulta. Filed by Dominador P. Burbe with the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) on June 14, 1999, the Complaint is accompanied by a Sworn Statement alleging the following:
x x x xxx xxx

That in connection with my business, I was introduced to Atty. Alberto C. Magulta, sometime in September, 1998, in his office at the Respicio, Magulta and Adan Law Offices at 21-B Otero Building, Juan de la Cruz St., Davao City, who agreed to legally represent me in a money claim and possible civil case against certain parties for breach of contract; That consequent to such agreement, Atty. Alberto C. Magulta prepared for me the demand letter and some other legal papers, for which services I have accordingly paid; inasmuch, however, that I failed to secure a settlement of the dispute, Atty. Magulta suggested that I file the necessary complaint, which he subsequently drafted, copy of which is attached as Annex A, the filing fee whereof will require the amount of Twenty Five Thousand Pesos (P25,000.00); That having the need to legally recover from the parties to be sued I, on January 4, 1999, deposited the amount of P25,000.00 to Atty. Alberto C. Magulta, copy of the Receipt attached as Annex B, upon the instruction that I needed the case filed immediately;

That a week later, I was informed by Atty. Alberto C. Magulta that the complaint had already been filed in court, and that I should receive notice of its progress; That in the months that followed, I waited for such notice from the court or from Atty. Magulta but there seemed to be no progress in my case, such that I frequented his office to inquire, and he would repeatedly tell me just to wait; That I had grown impatient on the case, considering that I am told to wait [every time] I asked; and in my last visit to Atty. Magulta last May 25, 1999, he said that the court personnel had not yet acted on my case and, for my satisfaction, he even brought me to the Hall of Justice Building at Ecoland, Davao City, at about 4:00 p.m., where he left me at the Office of the City Prosecutor at the ground floor of the building and told to wait while he personally follows up the processes with the Clerk of Court; whereupon, within the hour, he came back and told me that the Clerk of Court was absent on that day; That sensing I was being given the run-around by Atty. Magulta, I decided to go to the Office of the Clerk of Court with my draft of Atty. Magultas complaint to personally verify the progress of my case, and there told that there was no record at all of a case filed by Atty. Alberto C. Magulta on my behalf, copy of the Certification dated May 27, 1999, attached as Annex C; That feeling disgusted by the way I was lied to and treated, I confronted Atty. Alberto C. Magulta at his office the following day, May 28, 1999, where he continued to lie to with the excuse that the delay was being caused by the court personnel, and only when shown the certification did he admit that he has not at all filed the complaint because he had spent the money for the filing fee for his own purpose; and to appease my feelings, he offered to reimburse me by issuing two (2) checks, postdated June 1 and June 5, 1999, in the amounts of P12,000.00 and P8,000.00, respectively, copies of which are attached as Annexes D and E; That for the inconvenience, treatment and deception I was made to suffer, I wish to complain Atty. Alberto C. Magulta for misrepresentation, dishonesty and oppressive conduct;
xxx xxx x x x.[1]

On August 6, 1999, pursuant to the July 22, 1999 Order of the IBP Commission on Bar Discipline,[2] respondent filed his Answer[3] vehemently denying the allegations of complainant for being totally outrageous and baseless. The latter had allegedly been introduced as a kumpadre of one of the formers law partners. After their meeting, complainant requested him to draft a demand letter against Regwill Industries, Inc. -- a service for which the former never paid. After Mr. Said Sayre, one of the business partners of complainant, replied to this letter, the

latter requested that another demand letter -- this time addressed to the former -- be drafted by respondent, who reluctantly agreed to do so. Without informing the lawyer, complainant asked the process server of the formers law office to deliver the letter to the addressee. Aside from attending to the Regwill case which had required a three-hour meeting, respondent drafted a complaint (which was only for the purpose of compelling the owner to settle the case) and prepared a compromise agreement. He was also requested by complainant to do the following:
1. Write a demand letter addressed to Mr. Nelson Tan 2. Write a demand letter addressed to ALC Corporation 3. Draft a complaint against ALC Corporation 4. Research on the Mandaue City property claimed by complainants wife

All of these respondent did, but he was never paid for his services by complainant. Respondent likewise said that without telling him why, complainant later on withdrew all the files pertinent to the Regwill case. However, when no settlement was reached, the latter instructed him to draft a complaint for breach of contract. Respondent, whose services had never been paid by complainant until this time, told the latter about his acceptance and legal fees. When told that these fees amounted toP187,742 because the Regwill claim was almost P4 million, complainant promised to pay on installment basis. On January 4, 1999, complainant gave the amount of P25,000 to respondents secretary and told her that it was for the filing fee of the Regwill case. When informed of the payment, the lawyer immediately called the attention of complainant, informing the latter of the need to pay the acceptance and filing fees before the complaint could be filed. Complainant was told that the amount he had paid was a deposit for the acceptance fee, and that he should give the filing fee later. Sometime in February 1999, complainant told respondent to suspend for the meantime the filing of the complaint because the former might be paid by another company, the First Oriental Property Ventures, Inc., which had offered to buy a parcel of land owned by Regwill Industries. The negotiations went on for two months, but the parties never arrived at any agreement. Sometime in May 1999, complainant again relayed to respondent his interest in filing the complaint. Respondent reminded him once more of the acceptance fee. In response, complainant proposed that the complaint be filed first before payment of respondents acceptance and legal fees. When respondent refused, complainant demanded the return of the P25,000. The lawyer returned the amount using his own personal checks because their law office was undergoing extensive renovation at the time, and their office personnel were not reporting regularly. Respondents checks were accepted and encashed by complainant. Respondent averred that he never inconvenienced, mistreated or deceived complainant, and if anyone had been shortchanged by the undesirable events, it was he.

The IBPs Recommendation

In its Report and Recommendation dated March 8, 2000, the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) opined as follows:

x x x [I]t is evident that the P25,000 deposited by complainant with the Respicio Law Office was for the filing fees of the Regwill complaint. With complainants deposit of the filing fees for the Regwill complaint, a corresponding obligation on the part of respondent was created and that was to file the Regwill complaint within the time frame contemplated by his client, the complainant. The failure of respondent to fulfill this obligation due to his misuse of the filing fees deposited by complainant, and his attempts to cover up this misuse of funds of the client, which caused complainant additional damage and prejudice, constitutes highly dishonest conduct on his part, unbecoming a member of the law profession. The subsequent reimbursement by the respondent of part of the money deposited by complainant for filing fees, does not exculpate the respondent for his misappropriation of said funds. Thus, to impress upon the respondent the gravity of his offense, it is recommended that respondent be suspended from the practice of law for a period of one (1) year.[4]
The Courts Ruling We agree with the Commissions recommendation.

Main Issue: Misappropriation of Clients Funds Central to this case are the following alleged acts of respondent lawyer: (a) his non-filing of the Complaint on behalf of his client and (b) his appropriation for himself of the money given for the filing fee. Respondent claims that complainant did not give him the filing fee for the Regwill complaint; hence, the formers failure to file the complaint in court. Also, respondent alleges that the amount delivered by complainant to his office on January 4, 1999 was for attorneys fees and not for the filing fee. We are not persuaded. Lawyers must exert their best efforts and ability in the prosecution or the defense of the clients cause. They who perform that duty with diligence and candor not only protect the interests of the client, but also serve the ends of justice. They do honor to the bar and help maintain the respect of the community for the legal profession.[5] Members of the bar must do nothing that may tend to lessen in any degree the confidence of the public in the fidelity, the honesty, and integrity of the profession.[6] Respondent wants this Court to believe that no lawyer-client relationship existed between him and complainant, because the latter never paid him for services rendered. The former adds

that he only drafted the said documents as a personal favor for the kumpadre of one of his partners. We disagree. A lawyer-client relationship was established from the very first moment complainant asked respondent for legal advice regarding the formers business. To constitute professional employment, it is not essential that the client employed the attorney professionally on any previous occasion. It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney consulted did not afterward handle the case for which his service had been sought. If a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional advice or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the professional employment is established.[7] Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship between the lawyer and the complainant or the nonpayment of the formers fees.[8] Hence, despite the fact that complainant was kumpadre of a law partner of respondent, and that respondent dispensed legal advice to complainant as a personal favor to the kumpadre, the lawyer was duty-bound to file the complaint he had agreed to prepare -- and had actually prepared -- at the soonest possible time, in order to protect the clients interest. Rule 18.03 of the Code of Professional Responsibility provides that lawyers should not neglect legal matters entrusted to them. This Court has likewise constantly held that once lawyers agree to take up the cause of a client, they owe fidelity to such cause and must always be mindful of the trust and confidence reposed in them.[9]They owe entire devotion to the interest of the client, warm zeal in the maintenance and the defense of the clients rights, and the exertion of their utmost learning and abilities to the end that nothing be taken or withheld from the client, save by the rules of law legally applied.[10] Similarly unconvincing is the explanation of respondent that the receipt issued by his office to complainant on January 4, 1999 was erroneous. The IBP Report correctly noted that it was quite incredible for the office personnel of a law firm to be prevailed upon by a client to issue a receipt erroneously indicating payment for something else. Moreover, upon discovering the mistake -- if indeed it was one -- respondent should have immediately taken steps to correct the error. He should have lost no time in calling complainants attention to the matter and should have issued another receipt indicating the correct purpose of the payment.

The Practice of Law -- a Profession, Not a Business In this day and age, members of the bar often forget that the practice of law is a profession and not a business.[11] Lawyering is not primarily meant to be a money-making venture, and law advocacy is not a capital that necessarily yields profits.[12] The gaining of a livelihood is not a professional but a secondary consideration.[13] Duty to public service and to the administration of justice should be the primary consideration of lawyers, who must subordinate their personal interests or what they owe to themselves. The practice of law is a noble calling in which

emolument is a byproduct, and the highest eminence may be attained without making much money.[14] In failing to apply to the filing fee the amount given by complainant -- as evidenced by the receipt issued by the law office of respondent -- the latter also violated the rule that lawyers must be scrupulously careful in handling money entrusted to them in their professional capacity.[15] Rule 16.01 of the Code of Professional Responsibility states that lawyers shall hold in trust all moneys of their clients and properties that may come into their possession. Lawyers who convert the funds entrusted to them are in gross violation of professional ethics and are guilty of betrayal of public confidence in the legal profession.[16] It may be true that they have a lien upon the clients funds, documents and other papers that have lawfully come into their possession; that they may retain them until their lawful fees and disbursements have been paid; and that they may apply such funds to the satisfaction of such fees and disbursements. However, these considerations do not relieve them of their duty to promptly account for the moneys they received. Their failure to do so constitutes professional misconduct.[17] In any event, they must still exert all effort to protect their clients interest within the bounds of law. If much is demanded from an attorney, it is because the entrusted privilege to practice law carries with it correlative duties not only to the client but also to the court, to the bar, and to the public.[18]Respondent fell short of this standard when he converted into his legal fees the filing fee entrusted to him by his client and thus failed to file the complaint promptly. The fact that the former returned the amount does not exculpate him from his breach of duty. On the other hand, we do not agree with complainants plea to disbar respondent from the practice of law. The power to disbar must be exercised with great caution. Only in a clear case of misconduct that seriously affects the standing and the character of the bar will disbarment be imposed as a penalty.[19] WHEREFORE, Atty. Alberto C. Magulta is found guilty of violating Rules 16.01 and 18.03 of the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of one (1) year, effective upon his receipt of this Decision. Let copies be furnished all courts as well as the Office of the Bar Confidant, which is instructed to include a copy in respondents file. SO ORDERED. Sandoval-Gutierrez, and Carpio, JJ., concur. Puno, J., (Chairman), abroad, on official leave.

[1] [2] [3] [4] [5]

Records, pp. 2-3. Ibid., p. 15. Id., at pp. 20-28. Report and Recommendation, pp. 10-11; records, 261-262. R. Agpalo, Legal Ethics, 1997 ed., p. 156.

[6] [7] [8] [9]

Sipin-Nabor v. Baterina, AC No. 4073, June 28, 2001. Hilado v. David, 84 Phil. 569, September 21, 1949. Junio v. Grupo, AC No. 5020, December 18, 2001. Aromin v. Boncavil, 315 SCRA 1, September 22, 1999. Tan v. Lapak, 350 SCRA 74, January 23, 2001. Cantiller v. Potenciano, 180 SCRA 246, December 18, 1989. Canlas v. Court of Appeals, 164 SCRA 160, August 8, 1988. R. Agpalo, supra, p.12. Ibid., p. 13. Medina v. Bautista, 12 SCRA 1, September 26, 1964.

[10] [11] [12] [13] [14] [15] [16]

Sipin-Nabor v. Baterina, supra; Gonato v. Adaza, 328 SCRA 694, March 27, 2000, citing Obia v. Catimbang, 196 SCRA 23, April 19, 1991.
[17] [18]

Tanhueco v. De Dumo, 172 SCRA 760, April 25, 1989. Aromin v. Boncavil, supra. Montano v. Integrated Bar of the Phils. et al., AC No. 4215, May 21, 2001.

[19]

Representation with Zeal Within Legal Bounds

JOSE A. RIVERA, complainant, CORRAL, respondent.

vs. ATTY.

NAPOLEON

RESOLUTION
YNARES-SANTIAGO, J.:

On September 1, 1990,[1] Jose A. Rivera instituted a Complaint for Disbarment[2] charging Atty. Napoleon Corral with Malpractice and Conduct Unbecoming a Member of the Philippine Bar. The complaint alleges, inter alia -

(1) That on February 12, 1990, a Decision was penned by the Honorable Presiding Judge Gorgonio Y. Ybaez on (sic) Civil Case No. 17473 for Ejectment.
[3]

(2) That such decision was received by Annaliza Superio, Secretary of Atty. Napoleon Corral, on February 23, 1990.
[4]

(3) That on March 13, 1990, a NOTICE OF APPEAL was filed in court by Atty. Napoleon Corral, a copy of which was served on plaintiffs counsel.
[5]

(4) That on March 14, 1990, [at] about 1:50 p.m. Atty. Napoleon Corral came to the Office of the Clerk of Court, Branch 7, Bacolod City and changed the date February 23, 1990 to February 29, 1990. Realizing later that there is no 29th in February 1990, he filed a REPLY TO PLAINTIFFS MANIFESTATION claiming therein that he received the Decision not on the 29th in (sic) February 1990 but on the 28 of February 1990.
th [6]

(5) That Atty. Napoleon Corral violated the proper norms/ethics as a lawyer by tampering with particularly by personally and manually changing entries in the courts record without the Courts prior knowledge and permission, conduct unbecoming of a member of the Philippine Bar much more so because in so doing he was found to have been motivated by the desire of suppressing the truth. (6) That on July 13, 1990 Atty. Napoleon Corral filed a MOTION TO DISMISS, among other things he stated that the court is without jurisdiction to try and decide the case at issue.
In his defense, respondent claimed that the correction of the date was done on the paper prepared by him. He also alleged that the correction was initiated and done in the

presence and with the approval of the Clerk of Court and the other court employees. According to respondent, the correction was made because of typographical error he committed. He denied that Annaliza Superio, who received the decision in his behalf, is his secretary. In a Resolution dated January 20, 1993, the Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.[7] Thereafter, Investigating Commissioner Victor C. Fernandez submitted his report on August 21, 1997 finding respondent guilty as charged and recommended his suspension from the practice of law for six (6) months. On October 25, 1997, the IBP Board of Governors passed a Resolution approving and adopting the report and recommendation of the Investigating Commissioner. Respondent thereafter filed a motion for reconsideration of the IBP Boards decision. The Board, however, subsequently issued a Resolution on March 28, 1998 denying the motion for reconsideration and further pointed out that the pleading is improper because his remedy was to file the same with this Court within fifteen (15) days from notice thereof pursuant to Section 2 of Rule 139-B of the Rules of Court. Thus, on May, 19, 1999, respondent filed with the Court a Motion for Reconsideration alleging -

1. THAT THERE WAS NO DUE PROCESS OR HEARING WHICH HAVE BEEN REQUESTED BY RESPONDENT FROM THE BEGINNING; 2. COMPLAINANT RIVERA COMMITTED PERJURY WHEN HE CLAIMED THAT RESPONDENT ALTERED THE COURT RECORDS; 3. THAT THE MUNICIPAL TRIAL COURT IN BACOLOD CITY UNDER JUDGE IBAEZ COMMITTED MISREPRESENTATION OF FACTS.
Respondents claim that he was not afforded due process deserves scant consideration. The essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to seek a reconsideration of the action or ruling complained of. [8] In fact

. . . a respondent in an administrative proceeding is not entitled to be informed of the findings and recommendations of any investigating committee created to inquire into charges filed against him. He is entitled only to the administrative decision based on substantial evidence made of record, and a reasonable opportunity to meet the charges and the evidence presented against him during the hearings of the investigating committee.
[9]

Respondent can not feign he was denied an opportunity to be heard in this case because as borne out by the records, hearings had to be re-scheduled several times by

the investigating commissioner to afford him the chance to present his evidence. The records disclose that when the case was referred to the IBP by Resolution of the Court dated January 30, 1993,[10] Investigating Commissioner Victor C. Fernandez issued a Notice of Hearing dated July 12, 1993 ordering complainant and respondent to appear before the IBP Commission on Bar Discipline on August 19, 1993. In response, complainant, who is based in Sta. Fe, Bacolod City, sent a letter dated August 10, 1993 informing the Commission that owing to his limited finances as a Baptist Pastor he could not afford the expenses involved in attending the hearings and in view thereof, he requested that the hearings be held without his presence and that the case be decided based on the evidence submitted. Nothing was heard from respondent, although the records show that he was furnished a copy of the notice. On the scheduled hearing of August 19, 1993, both complainant and respondent did not appear. The investigator, however, noted the letter of complainant dated August 10, 1993. As there was no showing that respondent received the notice of hearing, the investigator reset the hearing of the case for reception of respondents evidence to September 30, 1993. Both parties, who were duly furnished copies of the order, again did not appear on said date. The hearing was again reset to November 8, 1993. Both parties likewise failed to appear on November 8, 1993 hearing, which was re-scheduled on January 6, 1994. However, complainant sent a letter dated November 4, 1993 addressed to the investigator requesting that the hearings be continued even in his absence for the reasons he stated in his previous letter of August 10, 1993. Again nothing was heard from respondent although he and complainant were furnished copies by registered mail. Neither complainant nor respondent appeared on the January 6, 1994 hearing, for which reason the investigator issued an order re-scheduling the hearing for the last time to February 24, 1994 giving respondent a last chance to present his evidence with the warning that respondents failure to do so will compel the Commission to render a ruling based on the evidence submitted by the complainant. The investigator, however, noted the complainants letter of November 4, 1993 wherein the latter manifested that he was resting his case based on the evidence submitted by him together with the complaint. On February 15, 1994, respondent filed a Motion to Dismiss on the grounds that: 1.] the complaint filed is not verified; 2.] in the hearings set by the Commission, complainant failed to appear; 3.] unless complainant appears personally, be sworn to and questioned personally under oath, the complaint is defective; 4.] the complaint which could be filed by anybody is a form of harassment; 5.] in view of the repeated failure of complainant to appear and be sworn to, the letter-complaint is merely hearsay. On March 3, 1994, the investigator denied the motion to dismiss for lack of merit and set for the last time the hearing on April 21, 1994 for the reception of respondents evidence. On April 4, 1994, respondent filed a Motion for Postponement praying that the hearing be reset on the last week of July 1994. Accompanying said motion was an Answer To The Order Of The Commission Dated March 3, 1994 where he averred, among others, that: 1.] it was his right to cross-examine complainant with respect to the

allegations in the complaint; 2.] the allegations in the complaint are not true and complainants use of the name Reverend was made to deceive the Commission; 3.] what respondent actually did was to correct the date of his pleading which was erroneously typed by his secretary and this was done in the presence of the court employees with their knowledge and consent; complainant made it appear that respondent falsified the records; 4.] the correction of the date in the pleading was done in good faith; 5.] this is not the first time complainant filed complaints to harass people and to misrepresent himself as a Reverend; 6.] in fact, complainant was nearly stabbed to death by families whom he ejected from their lands using donations of the church to buy the properties in his name; 7.] respondent intended to file a complaint with the Bible Baptist Association of America and the Philippines to investigate complainants activities. To accommodate respondent, the Investigating Commissioner reset the hearing on July 28, 1994 with the warning that said setting is intransferable and that the Commission will proceed with its investigation on said date with or without respondents presence. For failure of respondent to appear on said date, the investigator issued an order considering the case submitted for decision on the basis of the evidence presented. Given the foregoing factual backdrop, respondent can not now complain that he was denied due process. On the contrary, the Commission was lenient to a fault in accommodating his numerous requests for continuance. Indeed, the chronology of events shows that the prolonged silence of respondent and the belated filing of his motion to dismiss followed by the Answer to the investigators March 3, 1994 Order, were deliberately resorted to hinder the proceedings. The quintessence of due process is simply that a party be afforded a reasonable opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side and to adduce any evidence he may have in support of his defense.[11] Entrenched is the rule that due process does not necessarily mean or require a hearing but simply a reasonable opportunity or a right to be heard or, as applied to administrative proceedings and opportunity to explain ones side.[12] Where opportunity to be heard either through oral arguments or pleadings is accorded, there is no denial of due process.[13] In his report, the Investigating Commissioner pointed out that the correction introduced by respondent was made not to reflect the truth but to mislead the trial court into believing that the notice of appeal was filed within the reglementary period. The Decision rendered in Civil Case No. 17473 was duly received by a certain Annaliza Superio, the secretary of respondent, on February 22, 1990. Respondent filed the Notice of Appeal on March 13, 1990 which was clearly out of time. To extricate himself from such predicament, respondent altered the date when he allegedly received the Decision from February 23, 1990 to February 29, 1990. Realizing that there was no February 29, 1990 in the calendar, he sought to change the date again to February 28, 1990 by means of a reply to Plaintiffs Manifestation. The Investigating Commissioner further pointed out that respondents claim that the correction was made in the presence of the Clerk of Court and other court employees

was denied by Nilda P. Tronco, the Branch Clerk of the Municipal Trial Court of Bacolod City, who declared that the alteration was surreptitiously made and would have been left unnoticed were it not for the timely discovery thereof.[14] The Court finds the facts as summarized by the investigator fully supported by the evidence. However, the recommended penalty is not commensurate to the misdeed of respondent. The primary objective of administrative cases against lawyers is not only to punish and discipline the erring individual lawyers but also to safeguard the administration of justice by protecting the courts and the public from the misconduct of lawyers, and to remove from the legal profession persons whose utter disregard of their lawyers oath have proven them unfit to continue discharging the trust reposed in them as members of the bar.[15] A lawyer may be disbarred or suspended for misconduct, whether in his professional or private capacity, which shows him to be wanting in moral character, honesty, probity and good demeanor or unworthy to continue as an officer of the court.[16] Section 27, Rule 138 of the Revised Rules of Court provides that a member of the Bar may be disbarred or suspended form his office as attorney on the following grounds, to wit: 1.] deceit; 2.] malpractice or other gross misconduct in office; 3.] grossly immoral conduct; 4.] conviction of a crime involving moral turpitude; 5.] violation of the lawyers oath; 6.] willful disobedience to any lawful order of a superior court; and 7.] willfully appearing as an attorney for a party without authority. While the prevailing facts of the case do not warrant so severe a penalty as disbarment, the inherent power of the Court to discipline an errant member of the Bar must, nonetheless, be exercised because it can not be denied that respondent has violated his solemn oath as a lawyer not to engage in unlawful, dishonest or deceitful conduct.[17] The relevant rules to the case at bar are Rules 1.01 and Rule 19.01 of the Code of Professional Responsibility. Rule 1.01 states in no uncertain terms that: A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. More specifically, Rule 19.01 mandates that a lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate or threaten to present unfounded criminal charges to obtain improper advantage in any case or proceeding. The Court can not overstress the duty of a lawyer to at all times uphold the integrity and dignity of the legal profession. He can do this by faithfully performing his duties to society, to the bar, to the courts and to his clients.[18] Along the same vein, in Ong v. Atty. Elpidio D. Unto,[19] the Court ruled that The ethics of the legal profession rightly enjoin lawyers to act with the highest standards of truthfulness, fair play and nobility in the course of his practice of law. A lawyer may be disciplined or suspended for any misconduct, whether in his professional or private capacity.[20] Public confidence in the law and lawyers may be eroded by the irresponsible and improper conduct of a member of the Bar. Thus, every lawyer should act and comport himself in such a manner that would promote public confidence in the integrity of the legal profession.[21] By altering the material dates to make it appear that the Notice of Appeal was timely filed, respondent committed an act of dishonesty. Under pertinent rules,[22] dishonesty

constitutes grave misconduct upon which the Court, in a recent case,[23] imposed a oneyear suspension on respondent therein for inserting in the records of the case a certification of non-forum shopping and making it appear that the same was already part of such records at the time the complaint was filed. A one-year suspension was similarly imposed on respondent in Reyes v. Atty. Rolando Javier[24] for deceiving his client into believing that he filed the petition on time when in fact it was filed on a much later date. It should be stressed that brazenly resorting to such a legal subterfuge to mislead the court and to cover up for his failings toward his client is not only a disgraceful indictment on respondents moral fiber and personal fitness to his calling as a lawyer. It is also an embarrassment to his brethren in the Bar. Such misconduct warrants a similar penalty for the Court can not tolerate any misconduct that tends to besmirch the fair name of an honorable profession. WHEREFORE, in view of the foregoing, respondent Atty. Napoleon Corral is SUSPENDED from the practice of law for ONE (1) YEAR and STERNLY WARNED that a repetition of the same or similar offense will be dealt with more severely. Let copies of this resolution be entered in the personal record of respondent as a member of the Bar and furnished the Bar Confidant, the Integrated Bar of the Philippines (IBP) and the Court Administrator for circulation to all courts of the country. SO ORDERED. Davide, Jr., C.J., (Chairman), Vitug, Kapunan, and Austria-Martinez, JJ., concur.

[1]

Rollo, p. 1. Ibid., p. 1-3. Id., p. 4; Exhibit A, Complaint. Id., p. 11; Exhibit B, Complaint. Id., p. 12; Exhibit C, Complaint. Id., pp. 15-17.; Exhibits D and E, Complaint. Id., p.35.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

Vda. de Dela Cruz v. Abille, 352 SCRA 691, 698 (2001), citing Sunset View Condominium Corp. v. NLRC, 228 SCRA 466, 472 (1993), citing Bautista v. Secretary of Labor, 196 SCRA 470 (1991). Pefianco v. Moral, 322 SCRA 439, 449 (2000), citing Ruiz v. Drilon, 209 SCRA 695 (1992). Rollo, p. 35. PAL v. NLRC, 337 SCRA 286 (2000); Orola v. Alovera, 335 SCRA 609 (2000).

[9]

[10]

[11]

[12]

Aparente, Sr. v. NLRC, 331 SCRA 82, 89-90 (2000), citing National Semiconductor (HK) Distribution Ltd. v. NLRC, 291 SCRA 348, 354 (1998); Ramoran v. Jardine CMG Life Insurance Company, 326 SCRA 209, 220 (2000).

Gacutana-Fraile v. Domingo, 348 SCRA 414 (2000), citing Alba v. Nitorreda, 254 SCRA 753 (1996), citing Concerned Officials of MWSS v. Hon. Ombudsman Conrado Vazquez, 240 SCRA 502 (1995).
[13] [14]

Exhibit D. Sevilla v. Salubre, 348 SCRA 592, 599 (2000). Calub v. Suller, 323 SCRA 556, 560 (2000).

[15]

[16]

[17]

Alitagtag v. Atty. Virgilio R. Garcia, A.C. No. 4738, 6 February 2002, citing Rule 1.01, Code of Professional Responsibility.
[18]

Reyes v. Atty. Rolando Javier, A.C. No. 5574, 1 February 2002. A.C. No. 2417, 6 February 2002. Ducat, Jr. v. Villalon, Jr., 337 SCRA 622, 628 (2000). Id., p. 629.

[19]

[20]

[21]

[22] Memorandum Circular No. 30, Series of 1989, or the Guidelines in the Application of Penalties in Administrative Cases. [23]

Santos v. Joyce Trinidad Arlegui-Hernandez, et al., 22 February 2002. See note no. 13.

[24]

Attorneys Fees Acceptance Fees

JOSE E. ORIA, complainant, TUPAZ, respondent.

vs.

ATTY.

ANTONIO

K.

DECISION
YNARES-SANTIAGO, J.:

In a Letter-Complaint[1] dated September 1, 1999, respondent Atty. Antonio K. Tupaz was charged with negligence in the performance of his duties as counsel to complainant Jose E. Oria. Complainant Oria avers that his wife, Viola Luna Oria authorized him to institute legal action to recover her unirrigated ricelands located at Barangay Banuyo, Gasan, Marinduque, with an area of 1.2121 hectares, which were transferred, by virtue of the Operation Land Transfer of the Agrarian Reform Program, to the alleged tenants in connivance with Lourdes Argosino and Linda Rey, field personnel of the Marinduque Agrarian Office (MARO). Sometime in 1988, complainant went to the MARO and informed the Chief of the Complaints Section of the illegal transfer. Subsequently, the spouses Oria discovered that Emancipation Patents were issued to the so-called tenants. Mr. Oria sought the assistance of then Agrarian Reform Secretary Miriam Defensor Santiago, who ordered Legal Officer Pablo F. Reyes to investigate the matter. The latter recommended that the Emancipation Patents be cancelled and the property returned to Mrs. Oria. On May 6, 1991, the Provincial Agrarian Reform Officer (PARO), Herminiano C. Echiverri, Jr., sent Mrs. Oria a notice that her children were eligible for Retention. However, she did not file an application for Retention because she was awaiting the Investigation Report of Legal Officer Reyes. On April 21, 1993, the Chief of the Legal Division, Ibra D. Omar Al Haj sent a letter to complainants wife stating that the case had been forwarded to respondent Atty. Antonio K. Tupaz, Chief of the Litigation Division of the Bureau of Agrarian Legal Assistance (BALA) in Quezon City. Thereafter, complainant consulted the respondent regarding the case and he gave the amount of P5,000.00 to the latter, promising a bigger amount after the termination of the case. He also assured the respondent that a fixed amount of P1,000.00 as traveling expenses would be given every time the latter will go to Marinduque. Complainant kept on reminding respondent to follow up the case but the latter was always unavailable. Finally, complainants wife visited respondents office and she was told that additional money was needed for expenses. Hence, Mrs. Oria made a bank-to-

bank deposit of P5,000.00 to the account of respondent. She later learned that he had already retired and was engaged in private practice. Complainant further alleged that when he went to the Litigation Division of the DAR on August 31, 1999, he was told by Atty. Ibra D. Omar Al Haj, that the files of the agrarian case of his wife were missing from the office. Thus, he filed the instant complaint. In his Comment,[2] respondent avers that he met complainant during his tenure as Chief of the Litigation Division of the DAR, in relation to a dispute over the ownership of an agricultural riceland in Marinduque that was covered by the Operation Land Transfer of the Agrarian Reform Program. He also alleged that due to the volume of work and pending cases handled by the legal officers in the office, he did the evaluation and secured the necessary documents to support the first endorsement. It was only sometime in October 1993 when his office received the partial records of the case and a copy of the Investigation Report dated November 14, 1993, recommending the cancellation of the Emancipation Patents issued in favor of the tenant-farmers. Finally, in 1994, he was able to secure the documents relevant to the case, including copies of the Emancipation Patents, by going to Boac, Marinduque on two occasions. Respondent further alleged that he caused the preparation of a possible petition for the cancellation of the Emancipation Patents and recommended its filing to the Office of the BALA, DAR Central Office. Thereafter, he was informed that the matter was referred to the Office of the Assistant Secretary of Legal Affairs because one of the party-defendants would be the Secretary of Agrarian Reform. Respondent avers that he had no discretion over the matter since the filing of the case has to be approved not only by the Director of BALA but also by the Assistant Secretary for Legal Affairs of the DAR. His duty was only to evaluate the legal remedy to be availed of which the BALA then endorses for official action to the department. He further alleged that he informed complainant of these incidents and the action taken regarding the case pending before the DAR. Finally, respondent denies that he received P5,000.00 from complainant during his tenure as Chief of the Litigation Division. He avers that he engaged in private practice upon his retirement and that sometime in December 1997, he was requested by complainant to handle the agrarian case, and they agreed on the amount of P25,000.00 as attorneys fees and P5,000.00 as appearance fee including roundtrip tickets from Manila to Marinduque per hearing. He admits receiving the said amount only in January 1998, which was sent to his account as partial payment of the agreed attorneys fees. Respondent states that he should not be penalized for merely doing his job as a foot soldier of the government and that he should not be blamed for something that was already afait accompli as a result of governments desire to implement social legislation. He promised to help complainant regardless of monetary consideration with the filing of the case for the cancellation of the Emancipation Patents issued to the latters tenants.[3]

Based on the Report and Recommendation of Commissioner Rebecca VillanuevaMaala, the Board of Governors of the Integrated Bar of the Philippines issued Resolution No. XV-2003-349 dated June 21, 2003 which reads:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that the Commission finds respondent negligent in his duties to his client-complainant, Atty. Antonio K. Tupaz is hereby SUSPENDED from the practice of law for six (6) months.
On August 12, 2003, respondent filed a motion for reconsideration reiterating the arguments in his comment. We agree with the recommendation of the IBP. There is no dispute that a lawyer-client relationship existed between the parties. After respondent retired from the government service, he agreed to represent complainant as private counsel. He charged the amount of P25,000.00 as acceptance fee and received P5,000.00 as partial payment. Respondent cannot justify his failure to help complainant by stating that after receipt of part of the acceptance fee he did not hear anymore from complainant or his wife. The persistence displayed by the latter in prosecuting this complaint belies the lack of enthusiasm alleged by respondent. Records show that complainant exhausted all available remedies to recover his property. It was, in fact, the loss of the latters file in the Office of the Litigation Division and the Legal Division of the DAR that prompted him to file this instant petition. As ruled in the case of Rabanal v. Tugade:[4]

Once he agrees to take up the cause of a client, the lawyer owes fidelity to such cause and must always be mindful of the trust and confidence reposed in him. He must serve the client with competence and diligence, and champion the latters cause with wholehearted fidelity, care, and devotion. Elsewise stated, he owes entire devotion to the interest of the client, warm zeal in the maintenance and defense of his clients rights, and the exertion of his utmost learning and ability to the end that nothing be taken or withheld from his client, save by the rules of law, legally applied. This simply means that his client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land and he may expect his lawyer to assert every such remedy or defense. If much is demanded from an attorney, it is because the entrusted privilege to practice law carries with it the correlative duties not only to the client but also to the court, to the bar, and to the public. A lawyer who performs his duty with diligence and candor not only protects the interest of his client;

he also serves the ends of justice, does honor to the bar, and helps maintain the respect of the community to the legal profession.
The records show that respondent handled complainants case since 1993 and there has been no progress in the case since then. Respondent not only deceived his client, but also failed to perform the undertaking to help complainant in filing the case for cancellation of the Emancipation Patents. He pledged to assist complainant in filing a petition for cancellation of the Emancipation Patents even without monetary consideration; yet to this day, complainant has not recovered his property nor was any petition filed by respondent. Respondent is required by his oath to conduct himself as a lawyer according to the best of his knowledge and discretion with all good fidelity to the courts as well as to his clients. The lawyers oath is a source of obligations and violation thereof is a ground for suspension, disbarment, or other disciplinary action.[5] Any departure from the path which a lawyer must follow as demanded by the virtues of his profession shall not be tolerated by this Court as the disciplining authority.[6] WHEREFORE, Resolution No. XV-2003-349 of the Board of Governors of the Integrated Bar of the Philippines finding respondent negligent in his duties to his client is AFFIRMED. Atty. Antonio K. Tupaz is SUSPENDED from the practice of law for six (6) months. He is further warned that a repetition of this or similar acts will be dealt with more severely. SO ORDERED. Davide, Jr., C.J., (Chairman), Quisumbing, Carpio, and Azcuna, JJ., concur.

[1] [2] [3] [4]

Rollo, pp. 1-2. Rollo, pp. 24-33. Rollo, pp. 29-30. Adm. Case No. 1372, 27 June 2002, 383 SCRA 484, 490; citing Ramos v. Jacoba, Adm. Case No. 5505, 27 September 2001, 366 SCRA 91. De Guzman v. De Dios, Adm. Case No. 4943, 26 January 2001, 350 SCRA 320, 325. Ong v. Grijaldo, Adm. Case No. 4724, 30 April 2003, 402 SCRA 1, 11.

[5] [6]

Attorneys Fees Contingency Fee Arrangements

THIRD DIVISION EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD), Petitioner, G.R. No. 183385 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and PERALTA, JJ. Promulgated: February 13, 2009

- versus -

NATIONAL LABOR RELATIONS COMMISSION (First Division) and ATTY. ROLANDO B. GO, JR., Respondents.

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

RESOLUTION

NACHURA, J.:

Before the Court is a petition for review on certiorari[1] assailing the Decision[2] dated October 31, 2007 and the Resolution dated June 6, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96279.

The facts of the case are as follows: On July 9, 2003, Evangelina Masmuds (Evangelina) husband, the late Alexander J. Masmud (Alexander), filed a complaint[3] against First Victory Shipping Services and Angelakos (Hellas) S.A. for non-payment of permanent disability benefits, medical expenses, sickness allowance, moral and exemplary damages, and attorneys fees. Alexander engaged the services of Atty. Rolando B. Go, Jr. (Atty. Go) as his counsel. In consideration of Atty. Gos legal services, Alexander agreed to pay attorneys fees on a contingent basis, as follows: twenty percent (20%) of total monetary claims as settled or paid and an additional ten percent (10%) in case of appeal. It was likewise agreed that any award of attorneys fees shall pertain to respondents law firm as compensation. On November 21, 2003, the Labor Arbiter (LA) rendered a Decision granting the monetary claims of Alexander. The dispositive portion of the decision, as quoted in the CA Decision, reads:
WHEREFORE, foregoing considered, judgment is rendered finding the [First Victory Shipping Services and Angelakos (Hellas) S.A.] jointly and severally liable to pay [Alexanders] total permanent disability benefits in the amount of US$60,000.00 and his sickness allowance of US$2,348.00, both in Philippine currency at the prevailing rate of exchange at the time of payment; and to pay further the amount of P200,000.00 as moral damages, P100,000.00 as exemplary damages and attorneys fees equivalent to ten percent (10%) of the total monetary award. [Alexanders] claim for payment of medical expenses is dismissed for lack of basis. SO ORDERED.[4]

Alexanders employer filed an appeal before the National Labor Relations Commission (NLRC). During the pendency of the proceedings before the NLRC, Alexander died. After explaining the terms of the lawyers fees to Evangelina, Atty. Go caused her substitution as complainant. On April 30, 2004, the NLRC rendered a Decision dismissing the appeal of Alexanders employer. The employer

subsequently filed a motion for reconsideration. The NLRC denied the same in an Order dated October 26, 2004. On appeal before the CA, the decision of the LA was affirmed with modification. The award of moral and exemplary damages was deleted.[5] Alexanders employers filed a petition for certiorari[6] before this Court. On February 6, 2006, the Court issued a Resolution dismissing the case for lack of merit. Eventually, the decision of the NLRC became final and executory. Atty. Go moved for the execution of the NLRC decision, which was later granted by the LA. The surety bond of the employer was garnished. Upon motion of Atty. Go, the surety company delivered to the NLRC Cashier, through the NLRC Sheriff, the check amounting to P3,454,079.20. Thereafter, Atty. Go moved for the release of the said amount to Evangelina. On January 10, 2005, the LA directed the NLRC Cashier to release the amount of P3,454,079.20 to Evangelina. Out of the said amount, Evangelina paid Atty. Go the sum of P680,000.00. Dissatisfied, Atty. Go filed a motion to record and enforce the attorneys lien alleging that Evangelina reneged on their contingent fee agreement. Evangelina paid only the amount of P680,000.00, equivalent to 20% of the award as attorneys fees, thus, leaving a balance of 10%, plus the award pertaining to the counsel as attorneys fees. In response to the motion filed by Atty. Go, Evangelina filed a comment with motion to release the amount deposited with the NLRC Cashier. In her comment, Evangelina manifested that Atty. Gos claim for attorneys fees of 40% of the total monetary award was null and void based on Article 111 of the Labor Code. On February 14, 2005, the LA issued an Order[7] granting Atty. Gos motion, the fallo of which reads:

WHEREFORE, premises considered, and further considering the substitute complainants initial payment of 20% to movant-counsel of the monetary claims as paid, let the balance or unpaid twenty (20%) per cent of attorneys fees due movant-counsel (or the amount of P839,587.39) be recorded as lien upon all the monies that may still be paid to substitute complainant Evangelina Masmud. Accordingly, the NLRC Cashier is directed to pay movant-counsel the amount of P677,589.96 which is currently deposited therein to partially satisfy the lien. SO ORDERED.[8]

Evangelina questioned the February 14, 2005 Order of the LA before the NLRC. On January 31, 2006, the NLRC issued a Resolution[9] dismissing the appeal for lack of merit. Evangelina then elevated the case to the CA via a petition for certiorari.[10] On October 31, 2007, the CA rendered a Decision[11] partially granting the petition. The dispositive portion of the decision reads:
WHEREFORE, the petition is PARTIALLY GRANTED. The Resolutions dated January 31, 2006 and July 18, 2006 are hereby AFFIRMED with MODIFICATION in that the Attorneys fees of respondent Atty. Rolando B. Go, Jr. is declared fully compensated by the amount of P1,347,950.11 that he has already received. SO ORDERED.[12]

Evangelina filed a motion for reconsideration. However, on June 6, 2008, the CA issued a Resolution[13] denying the motion for reconsideration for lack of merit. Hence, the instant petition. Evangelina presented this issue, viz.:
THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR OF LAW IN ITS DECISION DATED 31 OCTOBER 2007 AND RESOLUTION DATED 6 JUNE 2008 INSOFAR AS IT UPHOLDS

RESPONDENT LAWYERS CLAIM OF FORTY PERCENT (40%) OF THE MONETARY AWARD IN A LABOR CASE AS ATTORNEYS FEES.[14]

In effect, petitioner seeks affirmance of her conviction that the legal compensation of a lawyer in a labor proceeding should be based on Article 111 of the Labor Code. There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other hand, in its extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party,[15] such that, in any of the cases provided by law where such award can be made, e.g., those authorized in Article 2208 of the Civil Code, the amount is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.[16] Here, we apply the ordinary concept of attorneys fees, or the compensation that Atty. Go is entitled to receive for representing Evangelina, in substitution of her husband, before the labor tribunals and before the court. Evangelina maintains that Article 111 of the Labor Code is the law that should govern Atty. Gos compensation as her counsel and assiduously opposes their agreed retainer contract. Article 111 of the said Code provides:
ART. 111. Attorney's fees. (a) In cases of unlawful withholding of wages the culpable party may be assessed attorney's fees equivalent to ten percent of the amount of the wages recovered.

Contrary to Evangelinas proposition, Article 111 of the Labor Code deals with the extraordinary concept of attorneys fees. It regulates the amount recoverable as attorney's fees in the nature of damages sustained by and awarded to the prevailing party. It may not be used as the standard in fixing the amount payable to the lawyer by his client for the legal services he rendered.[17]

In this regard, Section 24, Rule 138 of the Rules of Court should be observed in determining Atty. Gos compensation. The said Rule provides:
SEC. 24. Compensation of attorney's; agreement as to fees. An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.[18]

The retainer contract between Atty. Go and Evangelina provides for a contingent fee. The contract shall control in the determination of the amount to be paid, unless found by the court to be unconscionable or unreasonable.[19] Attorney's fees are unconscionable if they affront one's sense of justice, decency or reasonableness.[20] The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract will not preclude recovery. It merely justifies the fixing by the court of a reasonable compensation for the lawyer's services.[21] The criteria found in the Code of Professional Responsibility are also to be considered in assessing the proper amount of compensation that a lawyer should receive. Canon 20, Rule 20.01 of the said Code provides:
CANON 20 A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES. Rule 20.01. A lawyer shall be guided by the following factors in determining his fees: (a) (b) (c) (d) The time spent and the extent of the services rendered or required; The novelty and difficulty of the question involved; The importance of the subject matter; The skill demanded;

(e) The probability of losing other employment as a result of acceptance of the proffered case; (f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) (i) (j) The contingency or certainty of compensation; The character of the employment, whether occasional or established; and The professional standing of the lawyer.

Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients may be protected from unjust charges.[22] The amount of contingent fees agreed upon by the parties is subject to the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much higher compensation is allowed as contingent fees because of the risk that the lawyer may get nothing if the suit fails.[23] The Court finds nothing illegal in the contingent fee contract between Atty. Go and Evangelinas husband. The CA committed no error of law when it awarded the attorneys fees of Atty. Go and allowed him to receive an equivalent of 39% of the monetary award. The issue of the reasonableness of attorney's fees is a question of fact. Wellsettled is the rule that conclusions and findings of fact of the CA are entitled to great weight on appeal and will not be disturbed except for strong and cogent reasons which are absent in the case at bench. The findings of the CA, which are supported by substantial evidence, are almost beyond the power of review by the Supreme Court.[24] Considering that Atty. Go successfully represented his client, it is only proper that he should receive adequate compensation for his efforts. Even as we agree with the reduction of the award of attorney's fees by the CA, the fact that a lawyer plays a vital role in the administration of justice emphasizes the need to secure to him his honorarium lawfully earned as a means to preserve the decorum

and respectability of the legal profession. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part of his client as the client is against abuse on the part of his counsel. The duty of the court is not alone to ensure that a lawyer acts in a proper and lawful manner, but also to see that a lawyer is paid his just fees. With his capital consisting of his brains and with his skill acquired at tremendous cost not only in money but in expenditure of time and energy, he is entitled to the protection of any judicial tribunal against any attempt on the part of his client to escape payment of his just compensation. It would be ironic if after putting forth the best in him to secure justice for his client, he himself would not get his due.[25] WHEREFORE, in view of the foregoing, the Decision dated October 31, 2007 and the Resolution dated June 6, 2008 of the Court of Appeals in CA-G.R. SP No. 96279 are hereby AFFIRMED. SO ORDERED.

ANTONIO EDUARDO B. NACHURA Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

DIOSDADO M. PERALTA

Associate Justice

ATTESTATION
I attest that the conclusions in the above Resolution were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice

RULES OF COURT, Rule 45. Penned by Associate Justice Portia Alio-Hormachuelos, with Associate Justices Lucas P. Bersamin and Estela M. Perlas-Bernabe, concurring; rollo, pp. 16-28. [3] Entitled, Alexander J. Masmud, substituted by Evangelina R. Masmud v. First Victory Shipping Services and Angelakos (Hellas) S.A., and docketed as NLRC-NCR Case No. (M)03-07-1728-00. [4] Rollo, p. 18. [5] The case was docketed as CA-G.R. SP No. 88009. [6] RULES OF COURT, Rule 65.
[2] [7] [8] [9] [10] [11]

[1]

Penned by Labor Arbiter Cresencio G. Ramos, Jr.; rollo, pp. 40-43. Id. at 43. Rollo, pp. 31-37. RULES OF COURT, Rule 65. Supra note 2.

Rollo, p. 27. Id. at 29-30. [14] Id. at 8. [15] Bach v. Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334, September 11, 2006, 501 SCRA 419, 426. [16] Traders Royal Bank Employees Union-Independent v. NLRC, 336 Phil. 705, 712 (1997).
[13]

[12]

Traders Royal Bank Employees Union-Independent v. NLRC, 336 Phil. 705, 724 (1997). Emphasis supplied. [19] Rayos v. Hernandez, G.R. No. 169079, February 12, 2007, 515 SCRA 517, 530-531. [20] Roxas v. De Zuzuarregui, Jr., G.R. Nos. 152072 & 152104, January 31, 2006, 481 SCRA 258, 279. [21] Rayos v. Hernandez, G.R. No. 169079, February 12, 2007, 515 SCRA 517, 530. [22] Id. at 529. [23] Sesbreo v. Court of Appeals, 314 Phil. 884, 893 (1995). [24] The following are the exceptions to the rule that the findings of facts of the CA are deemed conclusive: (1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) When the findings are contrary to those of the trial court; (8) When the findings of fact are conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record. (Aklan College, Inc. v. Perpetuo Enero, Arlyn Castigador, Nuena Sermon and Jocelyn Zolina, G.R. No. 178309, January 27, 2009.) [25] Bach v. Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334, September 11, 2006, 501 SCRA 419, 434.
[18]

[17]

THIRD DIVISION EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD), Petitioner, G.R. No. 183385 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, NACHURA, and PERALTA, JJ. Promulgated: February 13, 2009

- versus -

NATIONAL LABOR RELATIONS COMMISSION (First Division) and ATTY. ROLANDO B. GO, JR., Respondents.

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

RESOLUTION

NACHURA, J.:

Before the Court is a petition for review on certiorari[1] assailing the Decision[2] dated October 31, 2007 and the Resolution dated June 6, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 96279.

The facts of the case are as follows: On July 9, 2003, Evangelina Masmuds (Evangelina) husband, the late Alexander J. Masmud (Alexander), filed a complaint[3] against First Victory Shipping Services and Angelakos (Hellas) S.A. for non-payment of permanent disability benefits, medical expenses, sickness allowance, moral and exemplary damages, and attorneys fees. Alexander engaged the services of Atty. Rolando B. Go, Jr. (Atty. Go) as his counsel. In consideration of Atty. Gos legal services, Alexander agreed to pay attorneys fees on a contingent basis, as follows: twenty percent (20%) of total monetary claims as settled or paid and an additional ten percent (10%) in case of appeal. It was likewise agreed that any award of attorneys fees shall pertain to respondents law firm as compensation. On November 21, 2003, the Labor Arbiter (LA) rendered a Decision granting the monetary claims of Alexander. The dispositive portion of the decision, as quoted in the CA Decision, reads:
WHEREFORE, foregoing considered, judgment is rendered finding the [First Victory Shipping Services and Angelakos (Hellas) S.A.] jointly and severally liable to pay [Alexanders] total permanent disability benefits in the amount of US$60,000.00 and his sickness allowance of US$2,348.00, both in Philippine currency at the prevailing rate of exchange at the time of payment; and to pay further the amount of P200,000.00 as moral damages, P100,000.00 as exemplary damages and attorneys fees equivalent to ten percent (10%) of the total monetary award. [Alexanders] claim for payment of medical expenses is dismissed for lack of basis. SO ORDERED.[4]

Alexanders employer filed an appeal before the National Labor Relations Commission (NLRC). During the pendency of the proceedings before the NLRC, Alexander died. After explaining the terms of the lawyers fees to Evangelina, Atty. Go caused her substitution as complainant. On April 30, 2004, the NLRC rendered a Decision dismissing the appeal of Alexanders employer. The employer

subsequently filed a motion for reconsideration. The NLRC denied the same in an Order dated October 26, 2004. On appeal before the CA, the decision of the LA was affirmed with modification. The award of moral and exemplary damages was deleted.[5] Alexanders employers filed a petition for certiorari[6] before this Court. On February 6, 2006, the Court issued a Resolution dismissing the case for lack of merit. Eventually, the decision of the NLRC became final and executory. Atty. Go moved for the execution of the NLRC decision, which was later granted by the LA. The surety bond of the employer was garnished. Upon motion of Atty. Go, the surety company delivered to the NLRC Cashier, through the NLRC Sheriff, the check amounting to P3,454,079.20. Thereafter, Atty. Go moved for the release of the said amount to Evangelina. On January 10, 2005, the LA directed the NLRC Cashier to release the amount of P3,454,079.20 to Evangelina. Out of the said amount, Evangelina paid Atty. Go the sum of P680,000.00. Dissatisfied, Atty. Go filed a motion to record and enforce the attorneys lien alleging that Evangelina reneged on their contingent fee agreement. Evangelina paid only the amount of P680,000.00, equivalent to 20% of the award as attorneys fees, thus, leaving a balance of 10%, plus the award pertaining to the counsel as attorneys fees. In response to the motion filed by Atty. Go, Evangelina filed a comment with motion to release the amount deposited with the NLRC Cashier. In her comment, Evangelina manifested that Atty. Gos claim for attorneys fees of 40% of the total monetary award was null and void based on Article 111 of the Labor Code. On February 14, 2005, the LA issued an Order[7] granting Atty. Gos motion, the fallo of which reads:

WHEREFORE, premises considered, and further considering the substitute complainants initial payment of 20% to movant-counsel of the monetary claims as paid, let the balance or unpaid twenty (20%) per cent of attorneys fees due movant-counsel (or the amount of P839,587.39) be recorded as lien upon all the monies that may still be paid to substitute complainant Evangelina Masmud. Accordingly, the NLRC Cashier is directed to pay movant-counsel the amount of P677,589.96 which is currently deposited therein to partially satisfy the lien. SO ORDERED.[8]

Evangelina questioned the February 14, 2005 Order of the LA before the NLRC. On January 31, 2006, the NLRC issued a Resolution[9] dismissing the appeal for lack of merit. Evangelina then elevated the case to the CA via a petition for certiorari.[10] On October 31, 2007, the CA rendered a Decision[11] partially granting the petition. The dispositive portion of the decision reads:
WHEREFORE, the petition is PARTIALLY GRANTED. The Resolutions dated January 31, 2006 and July 18, 2006 are hereby AFFIRMED with MODIFICATION in that the Attorneys fees of respondent Atty. Rolando B. Go, Jr. is declared fully compensated by the amount of P1,347,950.11 that he has already received. SO ORDERED.[12]

Evangelina filed a motion for reconsideration. However, on June 6, 2008, the CA issued a Resolution[13] denying the motion for reconsideration for lack of merit. Hence, the instant petition. Evangelina presented this issue, viz.:
THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR OF LAW IN ITS DECISION DATED 31 OCTOBER 2007 AND RESOLUTION DATED 6 JUNE 2008 INSOFAR AS IT UPHOLDS

RESPONDENT LAWYERS CLAIM OF FORTY PERCENT (40%) OF THE MONETARY AWARD IN A LABOR CASE AS ATTORNEYS FEES.[14]

In effect, petitioner seeks affirmance of her conviction that the legal compensation of a lawyer in a labor proceeding should be based on Article 111 of the Labor Code. There are two concepts of attorney's fees. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer by his client for the legal services rendered to the latter. On the other hand, in its extraordinary concept, attorney's fees may be awarded by the court as indemnity for damages to be paid by the losing party to the prevailing party,[15] such that, in any of the cases provided by law where such award can be made, e.g., those authorized in Article 2208 of the Civil Code, the amount is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof.[16] Here, we apply the ordinary concept of attorneys fees, or the compensation that Atty. Go is entitled to receive for representing Evangelina, in substitution of her husband, before the labor tribunals and before the court. Evangelina maintains that Article 111 of the Labor Code is the law that should govern Atty. Gos compensation as her counsel and assiduously opposes their agreed retainer contract. Article 111 of the said Code provides:
ART. 111. Attorney's fees. (a) In cases of unlawful withholding of wages the culpable party may be assessed attorney's fees equivalent to ten percent of the amount of the wages recovered.

Contrary to Evangelinas proposition, Article 111 of the Labor Code deals with the extraordinary concept of attorneys fees. It regulates the amount recoverable as attorney's fees in the nature of damages sustained by and awarded to the prevailing party. It may not be used as the standard in fixing the amount payable to the lawyer by his client for the legal services he rendered.[17]

In this regard, Section 24, Rule 138 of the Rules of Court should be observed in determining Atty. Gos compensation. The said Rule provides:
SEC. 24. Compensation of attorney's; agreement as to fees. An attorney shall be entitled to have and recover from his client no more than a reasonable compensation for his services, with a view to the importance of the subject matter of the controversy, the extent of the services rendered, and the professional standing of the attorney. No court shall be bound by the opinion of attorneys as expert witnesses as to the proper compensation, but may disregard such testimony and base its conclusion on its own professional knowledge. A written contract for services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable.[18]

The retainer contract between Atty. Go and Evangelina provides for a contingent fee. The contract shall control in the determination of the amount to be paid, unless found by the court to be unconscionable or unreasonable.[19] Attorney's fees are unconscionable if they affront one's sense of justice, decency or reasonableness.[20] The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract will not preclude recovery. It merely justifies the fixing by the court of a reasonable compensation for the lawyer's services.[21] The criteria found in the Code of Professional Responsibility are also to be considered in assessing the proper amount of compensation that a lawyer should receive. Canon 20, Rule 20.01 of the said Code provides:
CANON 20 A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES. Rule 20.01. A lawyer shall be guided by the following factors in determining his fees: (a) (b) (c) (d) The time spent and the extent of the services rendered or required; The novelty and difficulty of the question involved; The importance of the subject matter; The skill demanded;

(e) The probability of losing other employment as a result of acceptance of the proffered case; (f) The customary charges for similar services and the schedule of fees of the IBP Chapter to which he belongs; (g) The amount involved in the controversy and the benefits resulting to the client from the service; (h) (i) (j) The contingency or certainty of compensation; The character of the employment, whether occasional or established; and The professional standing of the lawyer.

Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients may be protected from unjust charges.[22] The amount of contingent fees agreed upon by the parties is subject to the stipulation that counsel will be paid for his legal services only if the suit or litigation prospers. A much higher compensation is allowed as contingent fees because of the risk that the lawyer may get nothing if the suit fails.[23] The Court finds nothing illegal in the contingent fee contract between Atty. Go and Evangelinas husband. The CA committed no error of law when it awarded the attorneys fees of Atty. Go and allowed him to receive an equivalent of 39% of the monetary award. The issue of the reasonableness of attorney's fees is a question of fact. Wellsettled is the rule that conclusions and findings of fact of the CA are entitled to great weight on appeal and will not be disturbed except for strong and cogent reasons which are absent in the case at bench. The findings of the CA, which are supported by substantial evidence, are almost beyond the power of review by the Supreme Court.[24] Considering that Atty. Go successfully represented his client, it is only proper that he should receive adequate compensation for his efforts. Even as we agree with the reduction of the award of attorney's fees by the CA, the fact that a lawyer plays a vital role in the administration of justice emphasizes the need to secure to him his honorarium lawfully earned as a means to preserve the decorum

and respectability of the legal profession. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part of his client as the client is against abuse on the part of his counsel. The duty of the court is not alone to ensure that a lawyer acts in a proper and lawful manner, but also to see that a lawyer is paid his just fees. With his capital consisting of his brains and with his skill acquired at tremendous cost not only in money but in expenditure of time and energy, he is entitled to the protection of any judicial tribunal against any attempt on the part of his client to escape payment of his just compensation. It would be ironic if after putting forth the best in him to secure justice for his client, he himself would not get his due.[25] WHEREFORE, in view of the foregoing, the Decision dated October 31, 2007 and the Resolution dated June 6, 2008 of the Court of Appeals in CA-G.R. SP No. 96279 are hereby AFFIRMED. SO ORDERED.

ANTONIO EDUARDO B. NACHURA Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

DIOSDADO M. PERALTA

Associate Justice

ATTESTATION
I attest that the conclusions in the above Resolution were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO Chief Justice

RULES OF COURT, Rule 45. Penned by Associate Justice Portia Alio-Hormachuelos, with Associate Justices Lucas P. Bersamin and Estela M. Perlas-Bernabe, concurring; rollo, pp. 16-28. [3] Entitled, Alexander J. Masmud, substituted by Evangelina R. Masmud v. First Victory Shipping Services and Angelakos (Hellas) S.A., and docketed as NLRC-NCR Case No. (M)03-07-1728-00. [4] Rollo, p. 18. [5] The case was docketed as CA-G.R. SP No. 88009. [6] RULES OF COURT, Rule 65.
[2] [7] [8] [9] [10] [11]

[1]

Penned by Labor Arbiter Cresencio G. Ramos, Jr.; rollo, pp. 40-43. Id. at 43. Rollo, pp. 31-37. RULES OF COURT, Rule 65. Supra note 2.

Rollo, p. 27. Id. at 29-30. [14] Id. at 8. [15] Bach v. Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334, September 11, 2006, 501 SCRA 419, 426. [16] Traders Royal Bank Employees Union-Independent v. NLRC, 336 Phil. 705, 712 (1997).
[13]

[12]

Traders Royal Bank Employees Union-Independent v. NLRC, 336 Phil. 705, 724 (1997). Emphasis supplied. [19] Rayos v. Hernandez, G.R. No. 169079, February 12, 2007, 515 SCRA 517, 530-531. [20] Roxas v. De Zuzuarregui, Jr., G.R. Nos. 152072 & 152104, January 31, 2006, 481 SCRA 258, 279. [21] Rayos v. Hernandez, G.R. No. 169079, February 12, 2007, 515 SCRA 517, 530. [22] Id. at 529. [23] Sesbreo v. Court of Appeals, 314 Phil. 884, 893 (1995). [24] The following are the exceptions to the rule that the findings of facts of the CA are deemed conclusive: (1) When the conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) When the inference made is manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of facts; (5) When the findings of fact are conflicting; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) When the findings are contrary to those of the trial court; (8) When the findings of fact are conclusions without citation of specific evidence on which they are based; (9) When the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents; and (10) When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record. (Aklan College, Inc. v. Perpetuo Enero, Arlyn Castigador, Nuena Sermon and Jocelyn Zolina, G.R. No. 178309, January 27, 2009.) [25] Bach v. Ongkiko Kalaw Manhit & Acorda Law Offices, G.R. No. 160334, September 11, 2006, 501 SCRA 419, 434.
[18]

[17]

Attorneys Fees Attorneys Liens

Republic of the Philippines SUPREME COURT Manila EN BANC A.M. No. 1437 April 25, 1989 HILARIA TANHUECO, complainant, vs. JUSTINIANO G. DE DUMO, respondent. A.M. No. 1683 April 25, 1989 HILARIA TANHUECO, complainant, vs. JUSTINIANO G. DE DUMO, respondent. R E S O L U T I ON

PER CURIAM: On 24 February 1975, complainant Hilaria Tanhueco filed before the Court a Petition for Disbarment (docketed as Administrative Case No. 1437) against respondent Justiniano G. de Dumo for having violated the Canons of Professional Ethics by his (a) refusal to remit to her money collected by him from debtors of the complainant; and (b) refusal to return documents entrusted to him as counsel of complainant in certain collection cases. In his Answer and Counter-Petition 1 filed on 3 April 1975, respondent denied the charges. Complainant filed a Rejoinder [should be Reply] to Answer with Counter-Petition, on 18 April 1975. By a Resolution 2 dated 16 June 1975, the Court referred this case to the Solicitor General for investigation, report and recommendation. A year later, on 25 June 1976, one Jose Florencio N. Tanhueco claiming to be the nephew and representative of the complainant, addressed a sworn letter complaint to Mrs. Imelda R. Marcos against the respondent for (a) refusal to remit the money collected by respondent from debtors of complainant's aunt, Mrs. Hilaria Tanhueco Vda. de David; (b) refusal to return documents entrusted to him in his capacity as counsel in certain cases; and (c) abandonment of cases in respect of which his professional services had been engaged. On 24 August 1976, the letter complaint was forwarded by the then Public Information Assistance Staff, Department of Public Information, to this Court for appropriate action (and docketed as Administrative Case No. 1683). After respondent had filed his Answer, the Court, by a Resolution 3 dated 9 December 1976, referred this case to then Acting Judicial Consultant Ricardo C. Puno for study, report and recommendation.

Since Administrative Case No. 1683 and Administrative Case No. 1437 involved the same parties and the same subject matter, Hon. Ricardo C. Puno referred the former case to the Office of the Solicitor General for consolidation with the latter one. The Office of the Solicitor General held two (2) hearings, one on 3 December 1975 and another on 18 April 1988. In the first hearing, respondent de Dumo was absent although he had been notified thereof. At the end of the first hearing, continuation of the hearing of the case was set for 14 January 1976. The records show that the second hearing took place on 18 April 1988 but do not indicate the reason for the 12-year interregnum. By then, complainant Tanhueco had died. There was no appearance at the second hearing by complainant Jose Florencio Tanhueco but respondent de Dumo was then present. The report of the Solicitor General, dated June 15, 1988 in Administrative Case No. 1437 summarized the evidence for the complainant in the following manner: EVIDENCE FOR COMPLAINANT
Complainant Hilaria Tanhueco testified that she secured the legal services of respondent to collect indebtedness from her different debtors. Although she offered to execute a document evidencing their lawyer-client relationship, respondent told her that it was not necessary. She nonetheless offered to give him 15% of what he may be able to collect from the debtors (pp. 4-7. tsn, Dec. 3, 1975).

Complainant also declared that respondent borrowed from her P2,000.00, Pl,300.00, and P3,000.00 on three separate occasions, but she could not remember when she gave those amounts. Respondent did not pay those loans (pp. 8-9, tsn, Id.). She confirmed that respondent filed cases against her debtors and that one of them, Constancia Maosca paid P12,500.00 to respondent. Informed of such payment by Maosca herself, complainant confronted respondent but the latter denied having received payment from any of her debtors. Complainant then brought the matter to the attention of Malacaang which referred her to Camp Crame. Notwithstanding subsequent demands of complainant for the money, respondent had refused to give her the amount (pp. 11 -15, tsn, Id.). The Solicitor General then summed up the evidence for the respondent in the following terms: EVIDENCE FOR RESPONDENT Respondent Atty. Justiniano G. de Dumo testified that complainant indeed secured his legal services to collect from her debtors, with the agreement that he gets 50% of what he may be able to collect. He thus filed collection cases against Tipace Maosca Morena, Jr., and others, and was able to obtain favorable judgment in the cases against Maosca, Tipace, and Leonila Mendoza. The initial payments made by these judgment-debtors were all given to complainant. With respect to Maosca respondent obtained a judgment for P19,000.00 although the debt was only P12,000.00 (pp. 3-9, tsn, April 18, 1988). Respondent also declared that complainant, who was then already old and sickly, was influenced by her debtors, who were also her friends into distrusting him. Ultimately, because complainant filed a complaint against him with Malacaang which referred the matter to Camp Crame, he terminated his relationship with

complainant and demanded his attorney's fees equivalent to 50% of what he had collected. Complainant refused to pay him, hence, he did not also turn over to her the P12,000.00 initial payment of Maosca which he considered, or applied, as part payment of his attorney's fee (pp. 9-19, tsn., Id.). Respondent estimated his attorney's fee due from complainant in the amount of P17,000.00 (p. 20, tsn, Id.) Respondent denied having borrowed the amounts of P2,000.00, P1,300.00, P3,000.00 and P1,000.00, pointing out that complainant did not even have money to pay him so that he handled the cases for her on contingent basis (p. 17, tsn, Id.) He also denied having received documentary evidence from complainant. What evidence he had were all gathered by him on his initiative (pp. 4-7, tsn, Id.). The Solicitor General then set out the following: FINDINGS
There is in the case at bar clear admissions by both complainant and respondent of an attorney-client relationship between them, specifically in the collection of debts owing complainant. Respondent also admitted, in his answer to the complaint and in his testimony, having received P12,000.00 from indebtor Constancia Manosca without turning over the amount to his client, complainant herein, and applying it instead as part of his attorney's fees. It has been held that the money collected by a lawyer in pursuance of a judgement in favor of his client held in trust (Aya v. Bigonia,57 Phil.8;Daroy v..Legaspi 65 SCRA 304), and that the attorney should promptly account for all funds and property received or held by him for the client's benefit (Daroy v. Legaspi,supra; In re Bamberger, 49 Phil. 962). The circumstance that an attorney has a lien for his attorney's fees on the money in his hands collected for his client does not relieve him from the obligation to make a prompt accounting (Domingo l v. Doming[o] G.R. No. 30573, Oct. 29, 1971; Daroy v. Legaspi, supra). Undoubtedly, respondent's failure to account for the P12,000.00, representing payment of the judgement debt of Maosca constitutes unprofessional conduct and subjects him to disciplinary action. Nonetheless, it has likewise been recognized that a lawyer is as much entitled to judicial protection against injustice, imposition or fraud on the part of his client; and that the attorney is entitled to be paid his just fees. The attorney should be protected against any attempt on the part of his client to escape payment of his just compensation (Fernandez v. Bello, 107 Phil. 1140; Albano v. Coloma, G.R. Adm. Case No. 528, Oct. 11, 1967). This countervailing rule mitigates the actions of respondent.

As regards the charges that respondent received documents evidencing the debts to complainant and had refused to return them to the latter, and that respondent also borrowed some amounts from her, there [is] no competent, conclusive evidence to support them. Perforce, such allegations have no factual basis. (Emphasis supplied) The Solicitor General then recommended that: For failure to turn over the amount of P12,000.00 to the complainant, and applying it as his attorney's fees, respondent Atty. Justiniano G. de Dumo be severely reprimanded and admonished that repetition of the same or similar offense will be dealt with more severely. We find the findings of fact of the Solicitor General supported by the evidence of record. We are, however, unable to accept his recommendation.

Moneys collected by an attorney on a judgment rendered in favor of his client, constitute trust funds and must, be immediately paid over to the client. 4 Canon 11 of the Canons of Professional Ethics 5 then in force, provides as follows: 11. Dealing with trust property. The lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client. Money of the client or collected for the client or other trust property coming into the possession of the lawyer should be reported and accounted for promptly and should not under any circumstance be comingled with his own or be used by him. (Emphasis supplied) When respondent withheld and refused to deliver the money received by him for his client, the deceased complainant Hilaria Tanhueco, he breached the trust reposed upon him.The claim of the respondent that complainant had failed to pay his attorney's fees, is not an excuse for respondent's failure to deliver any amount to the complainants. 6 It is of course true that under Section 37 of Rule 138 of the Revised Rules of Court, an attorney hasa lien upon the funds, documents and papers of his client which have lawfully come into his possession and may retain the same until his lawful fees and disbursements have been paid, and may apply such funds to the satisfaction thereof. He shall also have a lien to the same extent upon all judgments for the payment of money and executions issued in pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall have the same right and power over such judgments and executions as his client would have to enforce his lien and secure the payment of his just fees and disbursements. The fact that a lawyer has a lien for fees on moneys in his hands collected for his client, does not relieve him from his duty promptly to account for the moneys received; his failure to do so constitutes professional misconduct. 7 In the present case, what respondent could have properly done was to make an account with his client, the complainant, deduct his attorney's fees due in respect of the amount actually collected by him, and turn over the remaining balance to the complainant. The Court notes that the services of respondent de Dumo were engaged by the complainant on a number of cases and that these were on differing stages of completion. Respondent was not entitled to hold on to the entire amount of P12,000.00 collected by him until all his fees for the other cases had also been paid and received by him. There was not enough evidence in the record to show how much money, if any, respondent had in fact previously (i.e., other than the P12,000.00 from Maosca) collected for and turned over to complainant (thereby waiving his lien thereon) without deducting therefrom his claimed contingent fees in respect of such collections. The relationship of attorney and client has always been rightly regarded as one of special trust and confidence. An attorney must exercise the utmost good faith and fairness in all his relationships visa-vis his client. Respondent fell far short of this standard when he failed to render an accounting for the amount actually received by him and when he refused to turn over any portion of such amount received by him on behalf of his client upon the pretext that his attorney's fees had not all been paid.

Respondent had in fact placed his private and personal interest above that of his client. Respondent's act constitutes a breach of his lawyer's oath and a mere reprimand is not an adequate sanction. There is another aspect to this case which the Court cannot gloss over. Respondent claimed that he charged complainant, his client, a contingent fee of fifty percent (50%) of the amount collected by him, plus interest and whatever attorney's fees may be awarded by the trial court chargeable to the other party. In this jurisdiction, contingent fees are not per se prohibited by law. 8 But when it is shown that a contract for a contingent fee are obtained by undue influence exercised by the attorney upon his client or by any fraud or imposition, or that the compensation is clearly excessive, the Court must and will protect the aggrieved party. 9 From the Answer of respondent de Dumo it appears that in three (3) collection cases filed by him for the complainant and which were decided in favor of the complainant, the awards totalled P31,390.00. Respondent asserted that he was entitled to attorney's fees amounting to Pl8,840. 00 out of the aggregate total of P31,390.00: 7. That the understanding between Hilaria Tanhueco and me was a fifty- fifty on collected principal and interests. The lawyer has the right to charge attorney's fees to the other party-defendant and that Hilaria Tanhueco shall not interfere nor be included in the computation. That of the cases filed, the following made payments: a. Hilaria Tanhueco vs. Constancia Maosca Amount Collectible (principal)....................................... . P12,000.00 Interest added from May 1972 o Nov/73 at 1% a month.... P 2,280.00 Attorney's fees charged to the defendant and not to be included in the computation................ P 4,720.00 TOTAL and Amount specified in the Compromise Agreement and Subject of the Decision. P19,000.00 b. Hilaria Tanhueco vs. Melchor Tipace et al. Principal amount collectible............ .......... P7,100.00 Interest at 1 % per month starting June/71 to Sept./74........................ 2,840.00 Attorney's fees charged to the defendant and not included in the computation.......................... 1,450.00

TOTAL P ll,390.00. c. Hilaria Tanhueco vs. Estimo Principal Amount collectible...... ............... Pl,000.00 SUMMATION OF THE THREE CASES FILED AND AMOUNTS RECEIVABLE BY THE UNDERSIGNED INCLUDING ATTORNEY'S FEES: MAOSCA CASE: Attorney's fees to be paid by Maosca and not to be included in the computation................... P 4,840.00 Fifty per cent on the principal amount collectible plus interests......................................... . P 7,080.00 TOTAL AMOUNT RECEIVABLE P11,920.00 TIPACES CASE: Attorney's fees to be paid by Tipace and not to be included in the computation............................. Pl,450.00 Fifty per cent on the principal amount collectible from Tipace plus interests.................................. 4,970.00 TOTAL AMOUNT RECEIVABLE ............. P6,420.00 8. The total amount which I ought to receive as attorney's fees under paragraph seven, subparagraph a, b and c is: Pll,920. 00 P6,420.00 P500. 00
P18,840. 00 TOTAL 10

We note that respondent attorney claimed as his contingent fee the following: 1) fifty percent (50%) of the sum of principal and interest collectible from different debtors; and 2) attorney's fees charged to the defendant (presumably under promissory notes or written agreements) and "not to be included in the computation." Under this scheme, respondent was actually collecting as attorney's fees sixty percent (60%) or more than half of the total amount due from defendant debtors; indeed, he was appropriating for himself more than what he was, according to him, to turn over to his client. We believe and so hold that the contingent fee here claimed was, under the facts obtaining in this case, grossly excessive and unconscionable. 11 Such a fee structure, when considered in conjunction with the circumstances of this case, also shows that an unfair advantage was taken of the client and legal fraud and imposition perpetrated upon her. The complainant was an old and sickly woman and, in respondent's own words, "penniless." She was at the time she filed her complaint in 1976, already seventysix (76) years old. In her circumstances, and given her understandable desire to realize upon debts owed to her before death overtook her, she would easily succumb to the demands of respondent attorney regarding his attorney's fees. It must be stressed that the mere fact that an agreement had been reached between attorney and client fixing the amount of the attorney's fees, does not insulate such agreement from review and modification by the Court where the fees clearly appear to be excessive or unreasonable. In Mambulao Lumber Company v. Philippine National Bank, et al., 12 this Court stressed: The principle that courts should reduce stipulated attorney's fees whenever it is found under the circumstances of the case that the same is unreasonable, is now deeply rooted in this jurisdiction to entertain any serious objection to it. Thus, this Court has explained:

But the principle that it may be lawfully stipulated that the legal expenses involved in the collection of a debt shall be defrayed by the debtor does not imply that such stipulations must be enforced in accordance with the terms, no matter how injurious or oppressive they may be. The lawful purpose to be accomplished by such a stipulation is to permit the creditor to receive the amount due him under his contract without a deduction of the expenses caused by the delinquency of the debtor. It should not be permitted for him to convert such a stipulation into a source of speculative profit at the expense of the debtor. xxx xxx xxx Since then this Court has invariably fixed counsel fees on a quantum meruit basis whenever the fees stipulated appear excessive, unconscionable, or unreasonable, because a lawyer is primarily a court officer charged with the duty of assisting the court in administering impartial justice between the parties, and hence, the fees should be subject to judicial control. Nor should it be ignored that sound public policy demands that courts disregard stipulations for counsel fees, whenever they appear to be a source of speculative profit at the expense of the debtor or mortgagor (See, Gorospe, et al. v. Gochangco, supra). And it is not material that the present action is between attorney and client. As courts have power to fix the fee as between attorney and client, it must necessarily have the right to say whether a stipulation like this, inserted in a mortgage contract, is valid (Bachrach vs. Golingco, supra).
xxx xxx xxx 13

This Court has power to guard a client, 14 especially an aged and necessitous client, 15 against such a contract. We hold that on a quantum meruit basis, no circumstances of special difficulty attending the

collection cases having been shown by respondent, respondent attorney's fees should be reduced from sixty percent (60%) to ten percent (15%) of the total amount (including attorney's fees stipulated as chargeable to the debtors) collected by him on behalf of his client. With respect to charges of refusal to return documents entrusted to respondent lawyer and abandonment of cases in which his services had been engaged, we accept the findings of the Solicitor General that the evidence of record is not sufficient to prove these allegations. WHEREFORE, the Court Resolved that: 1. respondent is guilty of violation of the attorneys' oath and of serious professional misconduct and shall be SUSPENDED from the practice law for six (6) months and WARNED that repetition of the same or similar offense will be more severely dealt with; 2. the attorney's fees that respondent is entitled to in respect of the collection cases here involved shall be an amount equivalent to fifteen percent (15%) of the total amount collected by respondent from the debtors in those cases; 3. respondent shall return forthwith to the estate of complainant Hilaria Tanhueco the P12,000.00 respondent received on behalf of his client less attorney's fees due to him in respect of that amount (P l2,000.00 less fifteen percent [15%] thereof) or a net amount of P10,200.00; and 4. respondent shall return to the estate of complainant Hilaria Tanhueco any documents and papers received by him from the deceased complainant in connection with the collection cases for which he was retained. If he has in fact made any other collections from deceased complainant's debtors, he shall promptly account therefor to complainant's estate and shall be

entitled to receive in respect thereof the fifteen percent (15%) attorney's fees provided for herein. Let a copy of this Resolution be furnished each to the Bar Confidant and spread on the personal record of respondent attorney, and to the Integrated Bar of the Philippines. Fernan C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur. Footnotes 1 In said Answer and Counter-Petition, respondent also charged Atty. Jose Beltran Sotto, counsel for complainant, with malpractice, considering that Atty. Sotto allegedly acted as lawyer of the opposing party in a previous litigation against Hilaria Tanhueco. In a Resolution dated 21 May 1978, in Administrative Case No. 1437 (Rollo, p. 28), this Court ruled that the complaint against Atty. Jose Beltran Sotto cannot be the subject of a Counter-Petition but only of a separate complaint in due form. The prayer to prohibit Atty. Sotto from appearing on behalf of the complainant, was likewise denied. 2 Rollo of Adm. Case No. 1437, p. 41. 3 Rollo of Adm. Case No. 1683, p. 33. 4 Aya v. Bigornia, 57 Phil. 8 (1932). 5 Adopted by the Philippine Bar Association in 1917. 6 In In re WH Booram 39 Phil. 247 (1918), this Court ruled that the attorney who received an account of P265.17 for collection, and collects one-half of the amount (PI32.58), and leaves the balance uncollected and present a statement to his client, claiming all the money collected as his fees for the work done in that case, is

guilty of unprofessional conduct and should be suspended from the practice of law. 7 In re Bamberger 49 Phil. 962 (1924); Daroy v. Legaspi, 65 SCRA 304 (1975). 8 See Canon 13, Canons of Professional Ethics, in force at the time here material. Under Canon 20 and Rule 20.01 of the new Code of Professional Responsibility, the contingent character of attorney's fees may be taken into account in assessing the fairness and reasonableness of such fees. 9 Ulanday v. Manila Railroad Co., 45 Phil. 540 (1923); Grey v. Insular Lumber Co., 97 Phil. 833 (1955). 10 Rollo of Adm. Case No. 1437, pp. 15-16; underscoring supplied. 11 Cf. Amalgamated Laborers' Association, et al. v. Court of Industrial Relations, 22 SCRA 1266 (1968); and Quitoriano, et al. v. Centeno et al., 59 Phil. 646 (1934). 12 130 Phil. 366 (1968). 13 130 Phil. at 381, 382; underscoring supplied. 14 Virginia M. Ramos v. Hon. Judge Abdulwahid A. Bidin, etc., G.R. No. 53650, Rosaura P. Jaldon v. Hon. Judge Abdulwahid A. Bidin, etc., et al., G.R. No. 55460, promulgated 28 May 1988. 15 Article 24, Civil Code of the Philippines.
The Lawphil Project - Arellano Law Foundation

Attorneys Fees Fees and Controversies with Clients

ALEX B. CUETO, complainant, vs. ATTY. JR., respondent.

RESOLUTION
CORONA, J.:

JOSE

B.

JIMENEZ,

Before us is a complaint[1] for disciplinary action against Atty. Jose Jimenez, Jr. filed by Engr. Alex B. Cueto with the Integrated Bar of the Philippines (IBP), Commission on Bar Discipline. Engr. Alex Cueto alleged that sometime in October 1999 he engaged the services of respondent as notary public, the latter being the father of the owner of the building subject of the Construction Agreement[2] to be notarized. He was then accompanied by a certain Val Rivera, the building administrator of respondents son Jose Jimenez III. After notarizing the agreement, respondent demanded P50,000 as notarial fee. Despite his surprise as to the cost of the notarial service, complainant informed respondent that he only had P30,000 in cash. Respondent persuaded complainant to pay the P30,000 and to issue a check for the remaining P20,000. Being unfamiliar with the cost of notarial services, complainant paid all his cash[3] and issued a Far East Bank check dated December 28, 1999 for the balance. Before the maturity date of the check, complainant requested respondent not to deposit the same for lack of sufficient funds. He also informed respondent that the latters son Jose Jimenez III had not yet paid his services as general contractor. Still, respondent deposited the check which was consequently dishonored for insufficient funds. Meanwhile, theP2,500,000 check issued by respondents son to complainant as initial payment pursuant to the Construction Agreement was itself dishonored for having been drawn against a closed account. Subsequently, Atty. Jimenez lodged a complaint for violation of BP 22 against Cueto before the City Prosecutors Office in Angeles City. The criminal case was tried in the Metropolitan Trial Court of Angeles City, Branch I. In the meantime, Cueto filed his own administrative complaint against Jimenez on November 16, 2001. He alleged that Jimenez violated the Code of Professional Responsibility and Canons of Professional Ethics when he filed the criminal case against Cueto so he could collect the balance of his notarial fee. Pursuant to Rule 139-B, Section 6 of the Rules of Court, respondent Jimenez was required to answer the complaint filed against him.[4] Despite notice, however, respondent failed to file his answer and to appear before the IBP Commission on Bar

Discipline. After hearing the case ex-parte, the case was deemed submitted for resolution.[5] In its report[6] dated April 21, 2002, the IBP Commission on Bar Discipline found respondent guilty of violating Canon 20, Rule 20.4 of the Code of Professional Responsibility and recommended that Atty. Jose B. Jimenez, Jr. be reprimanded. On June 29, 2002, the Board of Governors passed a resolution[7] adopting and approving the report and recommendation of the Investigating Commissioner:[8]

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and in view of respondents violation of Canon 20, Rule 20.4 of the Code of Professional Responsibility, respondent is hereby reprimanded.
Complainants claim that respondents P50,000 notarial fee was exorbitant is debatable. As confirmed by the IBP, it is a recognized legal practice in real estate transactions and construction projects to base the amount of notarial fees on the contract price. Based on the amount demanded by respondent, the fee represented only 1% of the contract price ofP5,000,000. It cannot be said therefore that respondent notary demanded more than a reasonable recompense for his service. We are also convinced that the two contracting parties implicitly agreed on the cost of Jimenezs notarial service. It was Cuetos responsibility to first inquire how much he was going to be charged for notarization. And once informed, he was free to accept or reject it, or negotiate for a lower amount. In this case, complainants concern that the other party to the construction agreement was the son of respondent notary and that his non-availment of respondents service might jeopardize the agreement, was purely speculative. There was no compulsion to avail of respondents service. Moreover, his failure to negotiate the amount of the fee was an implicit acquiescence to the terms of the notarial service. His subsequent act of paying in cash and in check all the more proved it. However, we agree with the IBP that respondents conduct in filing a criminal case for violation of BP 22 against complainant (when the check representing the P20,000 balance was dishonored for insufficient funds) was highly improper. Canon 20, Rule 20.4 of the Code of Professional Responsibility mandates that [a] lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud. Likewise, in Canon 14 of the Canons of Professional Ethics it states that, [c]ontroversies with clients concerning compensation are to be avoided by the lawyer so far as shall be compatible with his self-respect and with his right to receive reasonable recompense for his service; and lawsuits with the clients should be resorted to only to prevent injustice, imposition or fraud.

There was clearly no imposition, injustice or fraud obtaining in this case to justify the legal action taken by respondent. As borne out by the records, complainant Cueto had already paid more than half of respondents fee. To resort to a suit to recover the balance reveals a certain kind of shameful conduct and inconsiderate behavior that clearly undermines the tenet embodied in Canon 15 that [A] lawyer should observe candor, fairness and loyalty in all his dealings and transactions with his client. And what can we say about the failure of respondents son Jose III to pay his own obligation to complainant Cueto? It in all probability explains why Cueto ran short of funds. Respondent therefore should have been more tolerant of the delay incurred by complainant Cueto. We cannot overstress the duty of a lawyer to uphold the integrity and dignity of the legal profession.[9] He can do this by faithfully performing his duties to society, to the bar, to the courts and to his clients. He should always remind himself that the legal profession is imbued with public service. Remuneration is a mere incident. Although we acknowledge that every lawyer must be paid what is due to him, he must never resort to judicial action to recover his fees, in a manner that detracts from the dignity of the profession. WHEREFORE, Atty. Jose Jimenez, Jr. is hereby SEVERELY REPRIMANDED for violating Canon 20, Rule 20.4 of the Code of Professional Responsibility. SO ORDERED. Panganiban, (Chairman), JJ., concur. Sandoval-Gutierrez, Carpio-Morales, and Garcia,

[1]

Records, pp. 1-3. Id. at 9-15. Id. at 4. Id. at 5. Id. at 7. Id. at 18-20. Id. at 17. Commissioner Dennis B. Funa. Reyes v. Javier, 426 Phil. 243 (2002).

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

Attorneys Fees Concepts of Attorneys Fees Extra-Ordinary Concept

DR. PEDRITO F. REYES, petitioner, vs. COURT OF APPEALS, PHIL. MALAY POULTRY BREEDERS, INC. and LEONG HUP POULTRY FARM SDN, BHD., Mr. Francis T.N. Lau, President and Chairman of the Board and Mr. Chor Tee Lim, Director, respondents. DECISION
YNARES-SANTIAGO, J.:

Assailed in this petition for review under Rule 45 of the Revised Rules of Court are the January 28, 2002[1] and July 22, 2002[2] Resolutions[3] of the Court of Appeals in CAG.R. SP No. 67431, which dismissed the petition for certiorari filed by petitioner for failure to attach to the petition the duplicate original or certified true copy of the Labor Arbiters decision as well as the relevant pleadings. The facts show that on August 24, 1989, respondent Leong Hup Poultry Farms SDN. BHD (Leung Hup) of Malaysia, thru its Managing Director Francis T. Lau, appointed petitioner Pedrito F. Reyes as Technical/Sales Manager with a net salary of US$4,500.00 a month. His duties consisted of selling parent stock day-old chicks and providing technical assistance to clients of the company in Malaysia and other Asian countries.[4] Sometime in 1992, the company formed Philippine Malay Poultry Breeders, Inc., (Philmalay) in the Philippines. Petitioner was appointed General Manager thereof with a monthly salary of US$5,500.00. In 1996-1997, respondents suffered losses which caused them to reduce production and retrench employees in Philmalay. On June 30, 1997, petitioner gave verbal notice to respondent Francis T. Lau that he will serve as General Manager of Philmalay until December 31, 1997 only.[5] In a letter dated January 12, 1998, petitioner confirmed his verbal notice of resignation and requested that he be given the same benefits granted to retrenched and resigned employees of the company, consisting of separation pay equivalent to 1 month salary for every year of service and the monetary equivalent of his sick leave and vacation leave. He likewise requested for the following:
1. payment of underpaid salary for the period December 1989 December 31, 1997 together with the additional one month salary payable in December of every year which was paid at the rate of P26.00 instead of the floating rate; 2. brand new car (Galant Super Saloon) or its equivalent; 3. life insurance policy in the amount of US$100,000.00 from December 1, 1989 to December 31, 1997, or the premiums due thereon;

4. office rentals at the rate of US$300.00 or its peso equivalent for the use of his residence as office of Philmalay for the period December 1, 1989 to July 1996; and 5. retention of the services of the law firm Quasha Ancheta Pena and Nolasco Law Firm, which was hired by respondents to defend him in the illegal recruitment case filed against him in connection with his employment with respondents.[6]

In a letter dated January 19, 1998, respondent Philmalay retrenched petitioner effective January 20, 1998 and promised to pay him separation benefits pursuant to the provisions of the Labor Code.[7] He was, however, offered a separation pay equivalent to four months only, or the total amount of P578,600.00 (P144,650 x 4). The offer was not accepted by petitioner and efforts to settle the impasse proved futile. Petitioner filed with the Arbitration Branch of the National Labor Relations Commission a complaint[8] for underpayment of wages and non-payment of separation pay, sick leave, vacation leave and other benefits against respondents. On December 22, 1999, the Labor Arbiter rendered a decision[9] in favor of petitioner, the dispositive portion of which reads:

PREMISES CONSIDERED, judgment is hereby rendered in favor of the complainant and against the respondents, as follows: 1. To order respondents to pay jointly and severally the complainant, the following: (a) Unpaid salary from January 1, 1998 to January 19, 1998, the same to be computed in the following manner: 19 = days % 31 days of January 98 = 0.613 month x US$5,500.00 = US$3,370.00 (b) Underpayment of salary, the same to be computed at net US$5,500.00 or its peso-equivalent from July 1, 1997 to December 31, 1997, together with the additional one (1) salary payable every year, the same to be paid at the rate of P26.30 instead of the following rate computed as follows: July 1997 August 1997 September October 1997 - P27.66 P1.36 - P7, 480.00 - 29.33 3.02 - 16, 665.00 - 32.39 - 6.09 - 33, 495.00 - 34.46 - 8.16 - 44, 880.00

November 1997 December 1997

- 34.51 - 8.21 - 45, 155.00 - 37.17 - 10.57- 59, 785.00 P207,460.00

(c) 13th month pay for December 1997 computed as follows: December 1997 P37.17 P10.57 P59,785.00. 2. To order respondents to pay jointly and severally the complainant the following: (a) Unused vacation and sick leaves from December 01, 1989 to December 31, 1997 based on the same salary, to be computed as follows: i) Vacation Leave Fifteen (15) days for every year of services x 9 years = 135 days 135 days % 26 working days a month = 5.2 months = US$28,600.00 ii) days Sick Leave Fifteen (15) Days for every [year] of service x 9 years = 135

135 days % 26 working days a month = 5.2 months x US$5,500.00 / month = US$28,600.00 3) To order respondents to pay jointly and severally the complainant his separation pay equivalent to one (1) month pay for very year of service at the rate of US $5,500.00 or its peso equivalent from December 1, 1989 to January 19, 1998, computed as follows: 9 years x US$5,500.00 = US$49,500.00 4) To order respondents to pay jointly and severally the complainants other claims and benefits:

a) A brand new car (Galant super saloon) or its equivalent in the sum of P945,100.00; b) Office rentals for the use of his residence situated at No. 38 Don Wilfredo St., Don Enrique Heights Diliman, Quezon City, [from] 01 December 1989 to July 1996 at the rate of US$300.00 or its peso equivalent to US$23,700.00; c) Life insurance policy for US$100,000.00 from December 1, 1989 to December 31, 1997, or if the same was not secured the premiums due thereon for the above period, the same to be computed as follows: US$2,736.50 x 9 years = US$24,628.50 d) The services of the Law firm of Quasha Ancheta Pea and Nolasco be continued to be retained by the two (2) companies to represent complainant in the illegal recruitment case before the Regional Trial Court of Quezon City, Branch 96, docketed as Crim. Case No. Q-93-46421, entitled People of the Philippines vs. Dr. Antonio B. Mangahas, et al., filed against him in connection with his employment by Leong Hup, or in default thereof to pay the attorneys fees of the new counsel, that may be hired by the complainant to defend him in the said case estimated in the sum of P200,000.00, more or less; 5) To order the respondents to pay jointly and severally the complainant moral damages in the sum of P2.5 million and exemplary damages of P2.5 million; 6) To order the respondents to pay jointly and severally the complainant in the sum equivalent to ten percent (10%) of the total claim as and for attorneys fees. 7) Respondents counterclaims are hereby dismissed for lack of merit.
[10]

SO ORDERED.

On appeal by respondents to the National Labor Relations Commission (NLRC), the Decision of the Labor Arbiter was modified by deleting the awards of (1) US$3,370.00 representing unpaid salary for the period January 1, 1998 to January 19, 1998; (2) US$28,600.00 as vacation leave; (3) brand new car or its equivalent in the sum of P945,100.00; (4) US$23,700.00 as office rentals for the period of December 1, 1989 to July 1996; (5) US$100,000.00 life insurance policy or the equivalent premium in the amount of US$24,628.50; (6) P2.5 million as moral damages; and (7) P2.5 million as exemplary damages. The NLRC likewise reduced the amount of petitioners separation pay to US$44,400.00 after adjusting its computation based on the length of service of petitioner which it lowered from 9 years to 8 years; and by limiting the basis of the 10% attorneys fees to the total of the awards of underpayment of salary (P207,460.00),

13th month pay differential (P59,785.00) and cash equivalent of sick leave (US$28,600.00) only, and excluding therefrom the award of separation pay in the amount of US$44,400.00. The decretal portion of the said decision[11] states:

WHEREORE, premises considered, the Decision dated December 22, 1999 is hereby MODIFIED as follows: Respondents are hereby ordered to pay jointly and severally the complainant, the following: (a) underpayment of salary as computed in the appealed Decision in the amount of P207, 460.00; (b) 13th month pay differential as computed in the appealed Decision in the amount of P59,785.00; (c) monetary equivalent of complainants sick leave as computed in the appealed Decision in the amount of US$28,600.00; (d) separation pay in the amount of US$44,000.00 as earlier computed in this Decision; (e) attorneys fees equivalent to ten (10%) percent of the total award based on the awards representing underpayment of salary, 13th month pay, [and] cash equivalent of sick leave. Respondents are likewise directed to provide legal counsel to complainant as defendant in Criminal Case No. Q-93-46421. The awards of unpaid wages from June 1-19, 1998, vacation leave in the amount of US$28,600, P945,000 for car, US23,700.00, for office rentals, life insurance policy in the amount of US$100,000.00 and moral and exemplary damages in the amount of 2.5 million pesos are hereby DELETED on grounds above-discussed. SO ORDERED.
[12]

Petitioner filed a motion for reconsideration, however, the same was denied.[13] Undaunted, petitioner filed a petition for certiorari with the Court of Appeals, which was dismissed on January 28, 2002 for failure to attach to the petition the following: (1) complainants (petitioner) Position Paper filed before the Labor Arbiter; (2) Decision dated 22 December 1992 penned by Labor Arbiter Ariel Cadiente Santos; and (3) Memorandum of Appeal filed by the petitioner.[14]

On February 21, 2002, petitioner filed a motion for reconsideration, attaching thereto a copy of the Labor Arbiters decision and the pleadings he failed to attach to the petition. The Court of Appeals, however, denied petitioners motion for reconsideration. Hence, the instant petition based on the following grounds:

1. COURT OF APPEALS COMMITTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR IN EXCESS OF JURISDICTION, IN ISSUING THE QUESTIONED RESOLUTION DISMISSING THE PETITION FOR CERTIORARI BASED ON TECHNICALITIES, THAT PETITIONER FAILED TO COMPLY WITH SEC. 1, RULE 65, RULES OF CIVIL PROCEDURE FOR FAILURE TO ATTACH THREE (3) DOCUMENTS CONSISTING OF: Complainants (petitioner) Position Paper filed before the labor arbiter; Decision dated 22 December 1999 penned by Labor Arbiter Ariel Cadiente Santos; and Memorandum of Appeal filed by the petitioner. WHICH RESPONDENT COURT OF APPEALS CONSIDERED AS MATERIAL PORTIONS OF THE RECORD DESPITE THE FACT THAT THE SUBJECT DOCUMENTS SOUGHT TO BE PRODUCED HAVE ACTUALLY BEEN REPRODUCED OR SUBSTANTIALLY COVERED BY THE QUESTIONED JUDGMENT, ORDER OR RESOLUTION FILED/SUBMITTED BEFORE IT. 2. COURT OF APPEALS COMMITTED A GRAVE ABUSE OF DISCRETION IN DISMISSING THE PETITION, AND IN DENYING THE MOTION FOR RECONSIDERATION THEREOF ON THE GROUND THAT THERE IS NO COGENT REASON FOR IT TO OVERTURN ITS DISMISSAL, DESPITE CLEAR AND CONVINCING EVIDENCE, EXTANT ON THE RECORDS SHOWING THAT THE NATIONAL LABOR RELATIONS COMMISSIONS (NLRC) DECISION AND RESOLUTION WERE FLAWED, A PALPABLE OR PATENT ERROR, WHICH MAY BE SUMMARIZED, TO WIT: (A) IN DECLARING THAT PETITIONER HAD RESIGNED FROM HIS EMPLOYMENT, AND NOT RETRENCHED OR TERMINATED DESPITE A DOCUMENTARY EVIDENCE EXTANT ON THE RECORD ISSUED BY PRIVATE RESPONDENTS DATED JANUARY 19, 1998 GIVING FORMAL NOTICE TO YOU (PETITIONER) OF YOUR TERMINATION DUE TO RETRENCHMENT EFFECTIVE JANUARY 20, 1998.

(B)

IN HOLDING AGAIN, AND DENYING PETITIONERS VALID CLAIMS DESPITE DOCUMENTARY EVIDENCE OR THE EXISTENCE OF A CONTRACT OF EMPLOYMENT STATING THAT:

(1) EMPLOYEES (INCLUDING PETITIONER AS GENERAL MANAGER) AS A MATTER OF COMPANY POLICY AND/OR PRACTICE) WHO ARE RETRENCHED ARE ENTITLED TO INCENTIVES INCLUDING 15DAYS VACATION LEAVE AND 15-DAYS SICK LEAVE WITH PAY; A FACT ADMITTED NO LESS BY PRIVATE RESPONDENTS OWN WITNESS, MS. MA. ROWENA LOPEZ (FORMER PERSONNEL MANAGER OR PHILMALAY) WHO EXECUTED AN AFFIDAVIT ADMITTING THE SAME. (2) PETITIONERS ENTITLEMENT AS PER CONTRACT TO A BRAND NEW CAR (OR AT LEAST TO THE CASH EQUIVALENT THEREOF); $100,000.00 LIFE INSURANCE POLICY (OR IN DEFAULT THEREOF AT LEAST TO THE PREMIUMS THEREIN), AND OFFICE RENTALS FOR THE USE OF THE PETITIONERS PRIVATE RESIDENCE AS OFFICE OF RESPONDENTS. (3) PETITIONER IS ENTITLED, TO MORAL AND EXEMPLARY DAMAGES DUE TO PRIVATE RESPONDENTS ACTS OF BAD FAITH IN REQUIRING PETITIONER TO EXECUTE A LETTER OF RESIGNATION, WHEN IN FACT HE WAS ADMITTEDLY TERMINATED THRU RETRENCHMENT, AND ITS REFUSAL TO PAY HIM HIS VALID CLAIMS, DESPITE HIS CONTRACT OF EMPLOYMENT, COMPANY POLICY, AND LETTER OF TERMINATION ISSUED BY PRIVATE RESPONDENTS. (4) PETITIONERS ENTITLEMENT TO 10% OF THE TOTAL AMOUNT OF THE AWARD OF ATTORNEYS FEES AS PROVIDED FOR BY LAW AND AS PER PETITIONERS CONTRACT WITH COUNSEL, AND NOT ONLY 10% OF THE TOTAL AWARD REPRESENTING UNDER PAYMENT OF SALARY, 13TH MONTH PAY, AND CASH EQUIVALENT OF SICK LEAVE AND IN ORDERING PRIVATE RESPONDENT TO PROVIDE LEGAL COUNSEL TO PETITIONER IN CRIM. CASE NO. Q-93-46421, WHEN THE SUBJECT CASE HAD ALREADY BEEN DISMISSED AT THE EXPENSE OF PETITIONER WHO HAD PREVIOUSLY HIRED HIS OWN COUNSEL OF CHOICE FOR THE PURPOSE.
The issues for resolution are: (1) whether or not the Court of Appeals erred in dismissing the petition; and (2) whether or not the decision of the Labor Arbiter should be reinstated.

The allowance of the petition on the ground of substantial compliance with the Rules is not a novel occurrence in our jurisdiction. As consistently held by the Court, rules of procedure should not be applied in a very technical sense, for they are adopted to help secure, not override, substantial justice.[15] In Ramos v. Court of Appeals,[16] the Court of Appeals dismissed a petition for review of the decision of the Regional Trial Court because the petitioner failed to attach to the petition a certified true copy of the Metropolitan Trial Courts decision in addition to the certified true copy of the assailed decision of the RTC. Holding that the Court of Appeals should have given due course to the petition considering that petitioner subsequently submitted a certified true copy of the decision of the MeTC, we held:

Petitioner is right that the MeTCs decision cannot be considered a disputed decision. The phrase is the equivalent of ruling, order or decision appealed from in Rule 32, 2 of the 1964 Rules made applicable to appeals from decisions of the then Courts of First Instance to the Court of Appeals by R.A. No. 296, as amended by R.A. No. 5433. Since petitioner was not appealing from the decision of the MeTC in her favor, she was not required to attach a certified true copy but only a true or plain copy of the aforesaid decision of the MeTC. The reason is that inclusion of the decision is part of the requirement to attach to the petition for review other material portion of the record as would support the allegations of the petition. Indeed, petitioner referred to the MeTC decision in many parts of her petition for review in the Court of Appeals for support of her theory. Nonetheless, the Court of Appeals should have reconsidered its dismissal of petitioners appeal after petitioner submitted a certified true copy of the MeTCs decision. It was clear from the petition for review that the RTC incurred serious errors in awarding damages to private respondents which were made without evidence to support the award and without any explanation
[17]

In Jaro v. Court of Appeals,[18] we applied the rule on substantial compliance because the petitioner amended his defective petition and attached thereto the relevant annexes certified according to the rules. Thus

There is ample jurisprudence holding that the subsequent and substantial compliance of an appellant may call for the relaxation of the rules of procedure. In CusiHernandez vs. Diaz and Piglas-Kamao vs. National Labor Relations Commission, we ruled that the subsequent submission of the missing documents with the motion for reconsideration amounts to substantial compliance. The reasons behind the failure of the petitioners in these two cases to comply with the required attachments were no longer scrutinized. What we found noteworthy in each case was the fact that the petitioners therein substantially complied with the formal requirements
[19]

The same leniency should be applied to the instant case considering that petitioner subsequently submitted with his motion for reconsideration the certified true copy of the Labor Arbiters decision, the complainants position paper and the respondents memorandum of appeal. Clearly, petitioner had demonstrated willingness to comply with the requirements set by the rules. If we are to apply the rules of procedure in a very rigid and technical sense, as the Court of Appeals did in this case, the ends of justice would be defeated. The pleadings and documents filed extensively discussed the issues raised by the parties. Such being the case, there is sufficient basis to resolve the instant controversy.[20] Labor laws mandate the speedy disposition of cases, with the least attention to technicalities but without sacrificing the fundamental requisites of due process.[21] Remanding the case to the Court of Appeals will only frustrate speedy justice and, in any event, would be a futile exercise, as in all probability the case would end up with this Court.[22] We shall thus rule on the substantial claims of the parties. Was the termination of petitioners employment caused by retrenchment or by voluntary resignation? The Court finds that petitioners dismissal from service was due to retrenchment. This is evident from the termination letter sent by Philmalay to petitioner, to wit

We regret to inform you that in view of the prevailing market conditions and the continuous losses being incurred by the company, the management has decided to cut down on expenses and prevent further losses through retrenchment of some of our personnel effective January 19, 1998. In compliance with the requirement of the law, this will serve as a formal notice to you of your termination due to retrenchment effective January 20, 1998. To provide you with sufficient time to seek alternative employment, you need not report for work (unless otherwise requested) starting January 20, 1998. Notwithstanding the above mentioned affectivity date, you may come down to the office and receive your separation benefits pursuant to the Labor Code
[23]

While it is true that petitioner tendered his resignation letter to respondents requesting that he be given the same benefits granted by the company to resigned/retrenched employees, there is no showing that respondents accepted his resignation. Acceptance of a resignation tendered by an employee is necessary to make the resignation effective.[24] No such acceptance, however, was shown in the instant case. What appears in the record is a letter terminating the services of petitioner due to retrenchment effective January 20, 1998. Verily, said letter should be interpreted as a non-acceptance of petitioners resignation effective December 31, 1997. As correctly pointed out by the Labor Arbiter, if respondents considered petitioner resigned as of December 31, 1997, then there would be no need to retrench him.

The length of service of petitioner, which the NLRC correctly reduced to 8 years, as well as the solidary liability of respondent corporations are no longer assailed here. Whether petitioner is considered resigned on December 31, 1997 or retrenched on January 20, 1998, his length of employment reckoned from August 24, 1989 would still be 8 years. Moreover, respondents did not appeal from the decision of the NLRC and in fact sought its affirmance in their Opposition to the motion for reconsideration[25] and Comment to the motion for reconsideration[26] filed before the NLRC and the Court of Appeals, respectively. So also, petitioner is estopped from claiming that he was illegally dismissed and that his retrenchment was without basis. His request for benefits granted to retrenched employees during such time when respondent was in the process of retrenching its employees is tantamount to a recognition of the existence of a valid cause for retrenchment. What remains to be resolved by the Court is the validity of the NLRCs deletion/modification of the awards of (1) unpaid salary; (2) vacation leave; (3) car and insurance policy/premiums; (4) moral and exemplary damages; (5) reimbursement for expenses for legal services; (6) rental payment; and (7) attorneys fees. As regards the award of unpaid salary, the NLRC was correct in holding that petitioner is not entitled to compensation from January 1, 1998 to January 19, 1998, because he was not able to prove that he rendered services during said period. In the same vein, there is no basis in awarding moral and exemplary damages, inasmuch as respondents were not shown to have acted in bad faith in initially refusing to award separation pay equivalent to 1 month salary for every year of service. Respondents even offered to pay petitioner separation pay, albeit in an amount not acceptable to petitioner. Moral damages are recoverable only where the act complained of is tainted by bad faith or fraud, or where it is oppressive to labor, and done in a manner contrary to morals, good customs, or public policy. Exemplary damages may be awarded only if the act was done in a wanton, oppressive, or malevolent manner.[27] None of these circumstances exist in the present case. The NLRC also correctly ruled that the car and insurance benefits are granted only during the course of employment; hence, they should not be part of petitioners separation package. Likewise, petitioners claim for payment of rental for the use of his house as office of Philmalay should be denied for having been ventilated in the wrong forum. Not all money claims that may be asserted by an employee against his employer are within the jurisdiction of the NLRC. Money claims of workers which fall within the jurisdiction of Labor Arbiters are those which arise out of employer-employee relationship. Obviously, the demand for rental payment is not a labor dispute; rather, it is based on contractual relations independent of employer-employee relationship. Hence, the jurisdiction thereon is with the regular courts.[28] Since respondents did not appeal from the decision of the NLRC, it is presumed that they are satisfied with the adjudications therein, including the order of NLRC directing them to provide legal services to petitioner in the illegal recruitment case filed against the latter while he was still employed by respondents. This is in accord with the doctrine that a party who has not appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the appealed decision.[29] Nonetheless, respondents cannot be ordered to reimburse the amount of P200,000.00 for the legal

services of the law firm allegedly hired by petitioner because he failed to establish that he indeed hired the services of a law firm and that he spent P200,000.00 as a consequence thereof. Petitioner is, however, entitled to the award of vacation leave as part of respondents retrenchment incentives. In granting sick leave but deleting vacation leave benefits, the NLRC based its ruling on the affidavit of one Ms. Rowena Lopez, a former personnel of Philmalay, viz:

3. That based on company policy and/or practice the rank-and-file employees are entitled to 15-days vacation leave and 15-days sick leaves. However, the vacation leave must be availed of within the year or applied to the remaining period of employment for those who resigned or go on terminal leave. In case of sick leaves all unused sick leaves are also commutable to cash; 4. That employees who were retrenched are entitled to the following incentives:

(a) One (1) month additional leave with pay effective after their last day of employment to enable them to look for a new job; (b) Plus one (1) month separation pay for every year of service; and

(c) 15-days vacation leave and 15-days sick leave with pay as stated in paragraph 3 hereof.
[30]

The foregoing expressly states that a retrenched employee is entitled to 15-day vacation leave. Paragraph 4 is the retrenchment package granted to retrenched employees, whereas paragraph 3 refers to the feasibility of commutation of unused sick and vacation leaves. Except for the sentence entitling employees to vacation and sick leaves, the last 2 sentences in paragraph 3 have nothing to do with the retrenchment benefits in paragraph 4. Note that the 15-day vacation and sick leave with pay in paragraph 4(c) are not qualified by the word unused. The 15-day vacation and sick leaves are granted to retrenched employees as part of the retrenchment benefits regardless of whether or not they have unused sick and vacation leaves at the time of the retrenchment. Moreover, the applicability of the said provisions to petitioner was not disputed by respondents. They even invoked the same in manifesting conformity to the deletion by the NLRC of the award of 15-day vacation leave for every year of service. At any rate, any ambiguity therein must be resolved strictly against the respondents, who drafted these provisions.[31] Hence, petitioner is entitled not only to 15 days sick leave but also to 15 days vacation leave with pay The Labor Arbiters computation of petitioners 15-day sick leave pay must be modified. The NLRC, which affirmed the Labor Arbiters decision, reduced petitioners number of years of service from 9 to 8 years but it did not make the corresponding adjustment in the determination of petitioners sick leave pay which used 9 years as the basis in the computation thereof. Accordingly, the awards of 15-day sick leave and 15-

day vacation leave for every year of service must be computed using 8 years as its basis. Finally, the award of attorneys fees must also be modified. In Traders Royal Bank Employees Union-Independent v. National Labor Relations Commission,[32] it was held that there are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In its ordinary concept, an attorneys fee is the reasonable compensation paid to a lawyer by his client for the legal services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his agreement with the client. In its extraordinary concept, attorneys fees are deemed indemnity for damages ordered by the court to be paid by the losing party in a litigation. The instances where these may be awarded are those enumerated in Article 2208 of the Civil Code, specifically par. 7 thereof which pertains to actions for recovery of wages, and is payable not to the lawyer but to the client, unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. The extraordinary concept of attorneys fees is the one contemplated in Article 111 of the Labor Code, which provides:

Art. 111. Attorneys fees. (a) In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of wages recovered
The afore-quoted Article 111 is an exception to the declared policy of strict construction in the awarding of attorneys fees. Although an express finding of facts and law is still necessary to prove the merit of the award, there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly, as in this case.[33] In carrying out and interpreting the Labor Code's provisions and its implementing regulations, the employees welfare should be the primordial and paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided in Article 4 of the Labor Code which states that [a]ll doubts in the implementation and interpretation of the provisions of [the Labor] Code including its implementing rules and regulations, shall be resolved in favor of labor, and Article 1702 of the Civil Code which provides that [i]n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.[34] In the case at bar, what was withheld from petitioner was not only his salary, vacation and sick leave pay, and 13th month pay differential, but also his separation pay. Hence, pursuant to current jurisprudence, separation pay must be included in the basis for the computation of attorneys fees. Petitioner is entitled to attorneys fees equivalent to 10% of his total monetary award.[35] WHEREFORE, in view of all the foregoing, the instant petition is GRANTED. The assailed Resolutions dated January 28, 2002 and July 22, 2002 of the Court of Appeals in CA-G.R. SP No. 67431, are REVERSED and SET ASIDE. The Decision of the

National Labor Relations Commission in NLRC NCR CA 023679-2000, is MODIFIED. In addition to the awards of underpayment of salary, 13th month pay differential, sick leave pay and separation pay, respondents are ordered to pay petitioner vacation leave pay and 10% attorneys fees, the basis of which shall be the total monetary award. Petitioners vacation leave and sick leave pay shall be computed on the basis of his 8 years of service with respondents. For this purpose, the case is ordered REMANDED to the Labor Arbiter for the computation of the amounts due petitioner. SO ORDERED. Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ., concur.

[1]

Rollo, p. 42. Rollo, p. 124. Penned by Associate Justice Andres B. Reyes and concurred in by Associate Justices Conrado M. Vasquez, Jr. and Amelita G. Tolentino. Employment Contract, Rollo, p. 73. Letter of petitioner to Philmalay and Leong Hup, Rollo, p. 76. Id. Rollo, p. 72. Docketed as NLRC NCR Case No. 00-06-04519-98. Penned by Labor Arbiter Ariel Cadiente Santos. Rollo, pp. 141-145. Penned by Presiding Commissioner Lourdes C. Javier and concurred in by Commissioners Ireneo B. Bernardo and Tito F. Genilo. Rollo, pp. 211-213. Resolution dated September 28, 2001, Rollo, p. 221. See Rollo, p. 42. Under Article 223 of the Labor Code, on appeal of the decision of the Labor Arbiter to the NLRC, the appellant shall furnish a copy of the memorandum of appeal to the other party who shall file an answer not later than 10 calendar days from receipt thereof. The Court of Appeals must be referring to the Respondents Memorandum of Appeal, as it was the latter who appealed to the NLRC questioning the decision of the Labor Arbiter. At any rate, said Memorandum of Appeal filed by respondents was already submitted by petitioner together with his motion for reconsideration. Piglas-Kamao v. National Labor Relations Commission, G.R. No. 138556, 9 May 2001, 357 SCRA 640, 648-649, citing Pacific Life Assurance Corp. v. Sison, 359 Phil. 333 (1998); Paraaque Kings Enterprises v.Court of Appeals, 335 Phil. 1184 (1997); Empire Insurance Company v. National Labor Relations Commission, 355 Phil. 694 (1998); Peoples Security v. National Labor Relations

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

Commission, G.R. No. 96451, 8 September 1993, 226 SCRA 146; Soriano v. Court of Appeals, G.R. No. 100525, 25 May 1993, 222 SCRA 545.
[16]

341 Phil. 157 (1997). Id., p. 163. G.R. No. 127536, 19 February 2002, citing Cusi-Hernandez v. Diaz, G.R. No. 140436, 18 July 2000, 336 SCRA 113; Piglas-Kamao v. National Labor Relations Commission, supra. Id. Baylon v. Fact-Finding Intelligence Bureau, G.R. No. 150870, 11 December 2002. Caurdanetaan Piece Workers Union v. Undersecretary Laguesma, G.R. No. 113542, 24 February 1998, 286 SCRA 401, 432, citing Domasig v. National Labor Relations Commission, 330 Phil. 518 (1996); Sigma Personnel Services v. National Labor Relations Commission, G.R. No. 108284, 30 June 1993, 224 SCRA 181; Cagampan, et al. v. National Labor Relations Commission, G.R. Nos. 85122-24, 22 March 1991, 195 SCRA 533 (1991). Fernandez v. National Labor Relations Commission, G.R. No. 105892, 28 January 1998, 285 SCRA 149, 170. Rollo, p. 72. Indophil Acrylic MFG Corporation v. National Labor Relations Commission, G.R. No. 96488, 27 September 1993, 226 SCRA 723. Rollo, p. 117. Rollo, p. 102. Permex, Inc. v. National Labor Relations Commission, 380 Phil. 79, 88 (2000), citing Consolidated Rural Bank (Cagayan Valley), Inc. v. National Labor Relations Commission, 301 SCRA 223, 235 (1999); Garcia v.National Labor Relations Commission, G.R. No. 110518, 1 August 1994, 234 SCRA 632. San Miguel Corporation v. National Labor Relations Commission, G.R. No. L-80774, 3 May 1988, 161 SCRA 719, 724 and 727. Filflex Industrial & Manufacturing Corporation v. National Labor Relations Commission, G.R. No. 115395, 12 February 1998, 286 SCRA 245, 256, citing SMI Fish Industries v. National Labor Relations Commission, G.R. Nos. 96952-56, 2 September 1992, 213 SCRA 444; Caliguia v. National Labor Relations Commission, 332 Phil. 128 (1996); Teodoro v. Court of Appeals, 328 Phil. 116 (1996); Spouses Carrion v. Court of Appeals, 329 Phil. 698 (1996). Petition, Rollo, p. 31. Villanueva v. NLRC, G.R. No. 127448, 10 September 1998, 295 SCRA 326, 333, citing BPI Credit Corporation v. Court of Appeals, G.R. No. 96755, 4 December 1991, 204 SCRA 601; Philippine Integrated Labor Assistance Corp. v. National Labor Relations Commission, 332 Phil. 458 (1996). 336 Phil. 705, 712 (1997), citing Pineda E.L., Legal and Judicial Ethics, 1994 ed., 220. CMP Federal Security Agency, Inc. v. National Labor Relations Commission, 367 Phil. 304, 310 (1999), citing Valiant Machinery and Metal Corp. v. National Labor Relations Commission, 322 Phil. 407 (1996). Songco v. National Labor Relations Commission, G.R. Nos. 50999-51000, 23 March 1990, 183 SCRA 611, 619, citing Abella v. National Labor Relations Commission, G.R. No. 71812, 30 July 1987, 152 SCRA 140; Manila Electric Company v. National Labor Relations Commission., G.R. No. 78763, 12 July 1989, 175 SCRA 277.

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[31]

[32]

[33]

[34]

[35]

Permex, Inc. v. National Labor Relations Commission, 380 Phil. 79, 88 (2000); Abasolo v. National Labor Relations Commission, G.R. No. 118475, 29 November 2000, 346 SCRA 293, 307; KAMS, International, Inc. v. National Labor Relations Commission, 373 Phil. 950, 961 (1999); Gonzales v. National Labor Relations Commission, 372 Phil. 39, 46 (1999); Consolidated Rural Bank (Cagayan Valley) v. National Labor Relations Commission, G.R. No. 123810, 20 January 1999, 361 SCRA 172, 185; Surima v. National Labor Relations Commission, 353 Phil. 461, 472 (1998); Damasco v. National Labor Relations Commission, G.R. No. 115755, 4 December 2000, 346 SCRA 714 (2000); Yu v. National Labor Relations Commission

Attornays Fees Preservation of Clients Confidences When Alowed

ROSA F. MERCADO, complainant, VITRIOLO, respondent. DECISION

PUNO, J.:

vs.

ATTY.

JULITO

D.

Rosa F. Mercado filed the instant administrative complaint against Atty. Julito D. Vitriolo, seeking his disbarment from the practice of law. The complainant alleged that respondent maliciously instituted a criminal case for falsification of public document against her, a former client, based on confidential information gained from their attorney-client relationship. Let us first hearken to the facts. Complainant is a Senior Education Program Specialist of the Standards Development Division, Office of Programs and Standards while respondent is a Deputy Executive Director IV of the Commission on Higher Education (CHED).[1] Complainants husband filed Civil Case No. 40537 entitled Ruben G. Mercado v. Rosa C. Francisco, for annulment of their marriage with the Regional Trial Court (RTC) of Pasig City. This annulment case had been dismissed by the trial court, and the dismissal became final and executory on July 15, 1992.[2] In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died. On February 7, 1994, respondent entered his appearance before the trial court as collaborating counsel for complainant.[3] On March 16, 1994, respondent filed his Notice of Substitution of Counsel,[4] informing the RTC of Pasig City that he has been appointed as counsel for the complainant, in substitution of Atty. de Leon. It also appears that on April 13, 1999, respondent filed a criminal action against complainant before the Office of the City Prosecutor, Pasig City, entitled Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado, and docketed as I.S. No. PSG 99-9823, for violation of Articles 171 and 172 (falsification of public document) of the Revised Penal Code.[5] Respondent alleged that complainant made false entries in the Certificates of Live Birth of her children, Angelica and Katelyn Anne. More specifically, complainant allegedly indicated in said Certificates of Live Birth that she is married to a certain Ferdinand Fernandez, and that their marriage was solemnized on April 11, 1979, when in truth, she is legally married to Ruben G. Mercado and their marriage took place on April 11, 1978.

Complainant denied the accusations of respondent against her. She denied using any other name than Rosa F. Mercado. She also insisted that she has gotten married only once, on April 11, 1978, to Ruben G. Mercado. In addition, complainant Mercado cited other charges against respondent that are pending before or decided upon by other tribunals (1) libel suit before the Office of the City Prosecutor, Pasig City;[6] (2) administrative case for dishonesty, grave misconduct, conduct prejudicial to the best interest of the service, pursuit of private business, vocation or profession without the permission required by Civil Service rules and regulations, and violations of the Anti-Graft and Corrupt Practices Act, before the then Presidential Commission Against Graft and Corruption;[7] (3) complaint for dishonesty, grave misconduct, and conduct prejudicial to the best interest of the service before the Office of the Ombudsman, where he was found guilty of misconduct and meted out the penalty of one month suspension without pay;[8] and, (4) the Information for violation of Section 7(b)(2) of Republic Act No. 6713, as amended, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees before the Sandiganbayan.[9] Complainant Mercado alleged that said criminal complaint for falsification of public document (I.S. No. PSG 99-9823) disclosed confidential facts and information relating to the civil case for annulment, then handled by respondent Vitriolo as her counsel. This prompted complainant Mercado to bring this action against respondent. She claims that, in filing the criminal case for falsification, respondent is guilty of breaching their privileged and confidential lawyer-client relationship, and should be disbarred. Respondent filed his Comment/Motion to Dismiss on November 3, 1999 where he alleged that the complaint for disbarment was all hearsay, misleading and irrelevant because all the allegations leveled against him are subject of separate fact-finding bodies. Respondent claimed that the pending cases against him are not grounds for disbarment, and that he is presumed to be innocent until proven otherwise.[10] He also states that the decision of the Ombudsman finding him guilty of misconduct and imposing upon him the penalty of suspension for one month without pay is on appeal with the Court of Appeals. He adds that he was found guilty, only of simple misconduct, which he committed in good faith.[11] In addition, respondent maintains that his filing of the criminal complaint for falsification of public documents against complainant does not violate the rule on privileged communication between attorney and client because the bases of the falsification case are two certificates of live birth which are public documents and in no way connected with the confidence taken during the engagement of respondent as counsel. According to respondent, the complainant confided to him as then counsel only matters of facts relating to the annulment case. Nothing was said about the alleged falsification of the entries in the birth certificates of her two daughters. The birth certificates are filed in the Records Division of CHED and are accessible to anyone.[12] In a Resolution dated February 9, 2000, this Court referred the administrative case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.[13]

The IBP Commission on Bar Discipline set two dates for hearing but complainant failed to appear in both. Investigating Commissioner Rosalina R. Datiles thus granted respondents motion to file his memorandum, and the case was submitted for resolution based on the pleadings submitted by the parties.[14] On June 21, 2003, the IBP Board of Governors approved the report of investigating commissioner Datiles, finding the respondent guilty of violating the rule on privileged communication between attorney and client, and recommending his suspension from the practice of law for one (1) year. On August 6, 2003, complainant, upon receiving a copy of the IBP report and recommendation, wrote Chief Justice Hilario Davide, Jr., a letter of desistance. She stated that after the passage of so many years, she has now found forgiveness for those who have wronged her. At the outset, we stress that we shall not inquire into the merits of the various criminal and administrative cases filed against respondent. It is the duty of the tribunals where these cases are pending to determine the guilt or innocence of the respondent. We also emphasize that the Court is not bound by any withdrawal of the complaint or desistance by the complainant. The letter of complainant to the Chief Justice imparting forgiveness upon respondent is inconsequential in disbarment proceedings. We now resolve whether respondent violated the rule on privileged communication between attorney and client when he filed a criminal case for falsification of public document against his former client. A brief discussion of the nature of the relationship between attorney and client and the rule on attorney-client privilege that is designed to protect such relation is in order. In engaging the services of an attorney, the client reposes on him special powers of trust and confidence. Their relationship is strictly personal and highly confidential and fiduciary. The relation is of such delicate, exacting and confidential nature that is required by necessity and public interest.[15] Only by such confidentiality and protection will a person be encouraged to repose his confidence in an attorney. The hypothesis is that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice.[16] Thus, the preservation and protection of that relation will encourage a client to entrust his legal problems to an attorney, which is of paramount importance to the administration of justice.[17] One rule adopted to serve this purpose is the attorney-client privilege: an attorney is to keep inviolate his clients secrets or confidence and not to abuse them.[18] Thus, the duty of a lawyer to preserve his clients secrets and confidence outlasts the termination of the attorney-client relationship,[19] and continues even after the clients death.[20] It is the glory of the legal profession that its fidelity to its client can be depended on, and that a man may safely go to a lawyer and converse with him upon his rights or supposed rights in any litigation with absolute assurance that the lawyers tongue is tied from ever disclosing it.[21] With full disclosure of the facts of the case by the client to his attorney, adequate legal representation will result in the ascertainment and enforcement of rights or the prosecution or defense of the clients cause.

Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the factors essential to establish the existence of the privilege, viz:
(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected (7) from disclosure by himself or by the legal advisor, (8) except the protection be waived.[22]

In fine, the factors are as follows: (1) There exists an attorney-client relationship, or a prospective attorneyclient relationship, and it is by reason of this relationship that the client made the communication. Matters disclosed by a prospective client to a lawyer are protected by the rule on privileged communication even if the prospective client does not thereafter retain the lawyer or the latter declines the employment.[23] The reason for this is to make the prospective client free to discuss whatever he wishes with the lawyer without fear that what he tells the lawyer will be divulged or used against him, and for the lawyer to be equally free to obtain information from the prospective client.[24] On the other hand, a communication from a (prospective) client to a lawyer for some purpose other than on account of the (prospective) attorney-client relation is not privileged. Instructive is the case of Pfleider v. Palanca,[25] where the client and his wife leased to their attorney a 1,328-hectare agricultural land for a period of ten years. In their contract, the parties agreed, among others, that a specified portion of the lease rentals would be paid to the client-lessors, and the remainder would be delivered by counsel-lessee to client's listed creditors. The client alleged that the list of creditors which he had confidentially supplied counsel for the purpose of carrying out the terms of payment contained in the lease contract was disclosed by counsel, in violation of their lawyer-client relation, to parties whose interests are adverse to those of the client. As the client himself, however, states, in the execution of the terms of the aforesaid lease contract between the parties, he furnished counsel with the confidential list of his creditors. We ruled that this indicates that client delivered the list of his creditors to counsel not because of the professional relation then existing between them, but on account of the lease agreement. We then held that a violation of the confidence that accompanied the delivery of that list would partake more of a private and civil wrong than of a breach of the fidelity owing from a lawyer to his client. (2) The client made the communication in confidence. The mere relation of attorney and client does not raise a presumption of confidentiality.[26] The client must intend the communication to be confidential.[27] A confidential communication refers to information transmitted by voluntary act of disclosure between attorney and client in confidence and by means which, so far as the client is aware, discloses the information to no third person other than one reasonably necessary for the transmission of the information or the accomplishment of the purpose for which it was given.[28]

Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise agreement prepared by a lawyer pursuant to the instruction of his client and delivered to the opposing party,[29] an offer and counter-offer for settlement,[30] or a document given by a client to his counsel not in his professional capacity,[31] are not privileged communications, the element of confidentiality not being present.[32] (3) capacity.[33] The legal advice must be sought from the attorney in his professional

The communication made by a client to his attorney must not be intended for mere information, but for the purpose of seeking legal advice from his attorney as to his rights or obligations. The communication must have been transmitted by a client to his attorney for the purpose of seeking legal advice.[34] If the client seeks an accounting service,[35] or business or personal assistance,[36] and not legal advice, the privilege does not attach to a communication disclosed for such purpose. Applying all these rules to the case at bar, we hold that the evidence on record fails to substantiate complainants allegations. We note that complainant did not even specify the alleged communication in confidence disclosed by respondent. All her claims were couched in general terms and lacked specificity. She contends that respondent violated the rule on privileged communication when he instituted a criminal action against her for falsification of public documents because the criminal complaint disclosed facts relating to the civil case for annulment then handled by respondent. She did not, however, spell out these facts which will determine the merit of her complaint. The Court cannot be involved in a guessing game as to the existence of facts which the complainant must prove. Indeed, complainant failed to attend the hearings at the IBP. Without any testimony from the complainant as to the specific confidential information allegedly divulged by respondent without her consent, it is difficult, if not impossible to determine if there was any violation of the rule on privileged communication. Such confidential information is a crucial link in establishing a breach of the rule on privileged communication between attorney and client. It is not enough to merely assert the attorney-client privilege.[37] The burden of proving that the privilege applies is placed upon the party asserting the privilege.[38] IN VIEW WHEREOF, the complaint against respondent Atty. Julito D. Vitriolo is hereby DISMISSED for lack of merit. SO ORDERED. Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur. Tinga, J., out of the country.

[1]

Rollo, p. 1. Id. at 12. Id. at 10. Id. at 11. Id. at 16-25. Id. at 36-39. Id. at 40-46. Id. at 152-160. Rollo, Vol. IV, pp. 4-5. Rollo, p. 90. Rollo, Vol. III, p. 1. Rollo, pp. 91-92. Id. at 61. Rollo, Vol. IV, p. 21. Regala v. Sandiganbayan, G.R. No. 105938, September 20, 1996, 262 SCRA 122, 138, citing Agpalo, Ruben, Legal Ethics, 1992 ed., p. 136. Hilado v. David, 84 Phil 569, 578 (1949), citing J. Wigmores Evidence 2285, 2290, 2291 (1923). Hilado v. David, 84 Phil 569, 579 (1949). Agpalo, Ruben, Legal and Judicial Ethics, 2002 ed., pp. 177-178. Canon 21, Code of Professional Responsibility. Canon 37 of the Canons of Professional Ethics; In re Miller, 357 N.C. 316 (2003), citing Glover v. Patten, 165 U.S. 394, 407-408 (1897). In re Williams, 57 Ill.2d 63 (1974), citing People v. Gerold, 265 Ill 448 (1914). 8 J.Wigmore, Evidence 2292 (McNaughton rev. 1961). Rule 15.02, Code of Professional Responsibility A lawyer shall be bound by the rule on privileged communication in respect of matters disclosed to him by a prospective client. Agpalo, Legal and Judicial Ethics, 2002 ed., pp. 186-187, citing Comments of IBP Committee that drafted the Code, p. 81. Adm. Case No. 927, September 28, 1970, 35 SCRA 75. Hitpold v. Stern, 82 A2d 123, 26 ALR2d 852 (1951). Uy Chico v. Union Life Assurance Society, 29 Phil 163, 165 (1915); City & County of San Francisco v. Superior Court, 231 P2d 26 (1951). Brown v. Saint Paul City R. Co., 62 NW2d 688, 44 ALR 535 (1954). Uy Chico v. Union Life Assurance Society, 29 Phil 163 (1915). Hiltold v. Stern, 82 A2d 123, 26 ALR2d 852 (1951). Pfleider v. Palanca, Adm. Case No. 927, September 28, 1970, 35 SCRA 75.

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[11]

[12]

[13]

[14]

[15]

[16]

[17]

[18]

[19]

[20]

[21]

[22]

[23]

[24]

[25]

[26]

[27]

[28]

[29]

[30]

[31]

[32]

Agpalo, Legal and Judicial Ethics, 2002 ed., p. 267. Olender v. U.S., 210 F2d 795, 42 ALR2d 736 (1954). Agpalo, Ruben, Legal and Judicial Ethics, 2002 ed., pp. 260-261. U.S. v. Kovel, 296 F2d 918 (1961). Radiant Burners, Inc. v. American Gas Association, 320 F2d 314 (1963). Regala v. Sandiganbayan, First Division, Dissent by Justice R.S. Puno, G.R. No. 105938, September 20, 1996, 262 SCRA 122, 184, citing Hoffman v. U.S., 341 US 479 (1951) also cited in Arredondo v. Ortiz, 365 F.3d 778 (2004). U.S. v. Landof, 591 F.2d 36, 38 (1978).

[33]

[34]

[35]

[36]

[37]

[38]

Attorneys Fees Withdrawal of Services

FELICISIMO M. MONTANO, complainant, vs. INTEGRATED BAR of the PHILIPPINES AND Atty. JUAN S. DEALCA, respondents. RESOLUTION
KAPUNAN, J.:

In a verified complaint filed before this Court on March 9, 1994, complainant Felicisimo M. Montano charged Atty. Juan Dealca with misconduct and prays that he be sternly dealt wit administratively. The complaint[1] is summarized as follows: 1. On November 14, 1992, the complainant hired the services of Atty. Juan S. Dealca as his counsel in collaboration with Atty. Ronando L. Gerona in a case pending before the Court of Appeals docketed as CA-G.R. CV No. 37467 wherein the complainant was the plaintiffappellant. 2. The parties agreed upon attorneys fees in the amount of P15,000.00, fifty percent (50%) of which was payable upon acceptance of the case and the remaining balance upon the termination of the case. Accordingly, complainant paid respondent the amount of P7,500.00 representing 50% of the attorneys fee. 3. Thereafter, even before the respondent counsel had prepared the appellants brief and contrary to their agreement that the remaining balance be payable after the termination of the case, Atty. Dealca demanded an additional payment from complainant. Complainant obliged by paying the amount of P4,000.00. 4. Prior to the filing of the appellants brief, respondent counsel again demand payment of the remaining balance of 3,500.00. When complainant was unable to do so, respondent lawyer withdrew his appearance as complainants counsel without his prior knowledge and/or conformity. Returning the case folder to the complainant, respondent counsel attached a Note dated February 28, 1993,[2] stating:

28 February 1994 Pepe and Del Montano, For breaking your promise, since you do not want to fulfill your end of the bargain, heres your reward: Henceforth, you lawyer for yourselves. Here are your papers. Johnny

Complainant claimed that such conduct by respondent counsel exceeded the ethical standards of the law profession and prays that the latter be sternly dealt with administratively. Complainant later on filed motions praying for the imposition of the maximum penalty of disbarment. After respondent counsel filed his comment on the complaint, the Court in the Resolution of August 1, 1994, referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. The Investigating Commissioner found respondent counsel guilty of unprofessional conduct and recommended that he be severely reprimanded. However, in a Resolution[3] by the IBP Board of Governors on July 26, 1997, it was resolved that the penalty recommended by the Investigating Commissioner meted to respondent by amended to three (3) months suspension from the practice of law for having been found guilty of misconduct, which eroded the public confidence regarding his duty as a lawyer. Respondent counsel sought reconsideration of the aforementioned resolution of the IBP, alleging that the latter misapprehended the facts and that, in any case, he did not deserve the penalty imposed. The true facts, according to him, are the following:
1. Complainant is being represented by Atty. Ronando L. Gerona in his case on appeal; 2. Due to the ailment of Atty. Geronas daughter, he could not prepare and submit complainants appellants brief on time; 3. Complainant went to the respondent to do just that, i.e., prepare and submit his appellants brief on time at the agreed fee of P15,000.00, 50% down and 50% upon its completion; 4. Working overtime, respondent was able to finish the appellants brief ahead of its deadline, so he advised the complainant about its completion with the request that the remaining balance of P7,500.00 be paid. Complainant paid P4,000.00 only, promising to pay the P3,500.00 tomorrow or on later particular date. Please take note that, at this juncture, there was already a breach of the agreement on complainants part. 5. When that tomorrow or on a later particular date came, respondent, thru a messenger, requested the complainant to pay the P3,500.00 as promised but word was sent that he will again pay tomorrow or on later date. This promise-non-payment cycle went on repeatedly until the last day of the filing of the brief. Please take note again that it was not the respondent but the complainant who sets the date when he will pay, yet fails to pay as promised; 6. Even without being paid completely, respondent, of his own free will and accord, filed complainants brief on time; 7. After the brief was filed, respondent tried to collect from the complainant the remaining balance of P3,500.00, but the latter made himself scarce. As the records would show, such P3,500.00 remains unpaid until now; 8. Sensing that something was amiss, respondent sent the February 28, 1993 note and case folder to the complainant, hoping that the latter would see personally the former about it to settle the matter between them; 9. However, instead of seeing the respondent, complainant filed this case;

10. Respondent was constrained to file his withdrawal with the Court of Appeals because of this case to avoid further misunderstanding since he was the one who signed the appellants brief although Atty. Gerona was his counsel of record. Such withdrawal was accordingly granted by the appellate court;

xxx xxx

xxx.[4]

Respondent counsel further averred that complainants refusal to pay the agreed lawyers fees, measly as it was, was deliberate and in bad faith; hence, his withdrawal as counsel was just, ethical and proper. Respondent counsel concluded that not only was the penalty of suspension harsh for his act of merely trying to collect payment for his services rendered, but it indirectly would punish his family since he was the sole breadwinner with children in school and his wife terminally ill with cancer. In its Resolution No. XIII-97-129 dated October 25, 1997, the IBP denied Atty. Dealcas motion for reconsideration, to wit: xxx

RESOLVED TO DENY Atty. Dealcas Motion For Reconsideration of the Boards Decision in the above-entitled case there being no substantive reason to reverse the finding therein. Moreover, the motion is improperly laid the remedy of the respondent is to file the appropriate pleading with the Supreme Court within fifteen (15) days from receipt of notice of said Decision pursuant to Sec. 12 [c] of Rule 139B.[5]
On December 10, 1997, this Court noted the following pleadings filed in the present complaint,
(a) notice and a copy of Resolution No. XII-97-154 dated July 26, 1997 of the Integrated Bar of the Philippines amending the recommendation of the Investigating Commissioner of reprimand to three (3) months suspension of respondent from the practice of law for having been found guilty of misconduct which eroded the public confidence regarding his duty as a lawyer; (b) complainants motion for praying for the imposition of the maximum penalty of disbarment; (c) motion dated September 15, 1997 of respondent for reconsideration of the aforesaid resolution of July 26, 1997; (d) comment/opposition of respondent praying that the motion for the imposition of the maximum penalty be denied; (e) comment of complainant praying that the penalty of three (3) months suspension for the practice of law as recommended by the Integrated Bar of the Philippines pursuant to Resolution No. XII-97-154 be raised to a heavier penalty; (f) comment/manifestation/opposition of complainant praying that the respondent be disbarred; and (g) rejoinder of respondent praying that this case be dismissed for being baseless.[6]

and referred the same to the IBP for evaluation and report. In compliance therewith, on March 28, 1998, the IBP issued Resolution No. XIII-98-42 referring the above-entitled case to Commissioner Vibar for evaluation, report and recommendation in view of the Motion for Reconsideration granted by the Supreme Court. The Investigating Commissioner, after referring the case, recommended that his original recommendation of the imposition of the penalty of reprimand be maintained, noting that respondent counsel had served the IBP well as President of the Sorsogon Chapter.[7] Accordingly, on February 23, 1999, the IBP Board of Governors, issued the following resolution:
RESOLUTION NO. XIII-99-48

xxx

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner in the above-entitled case, herein made part of this Resolution/Decision as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, the Motion for Reconsideration be granted and that the penalty of REPRIMAND earlier recommended by the Investigating Commissioner be imposed on Atty. Juan S. Dealca.[8]
Complainant asked the IBP to reconsider the foregoing resolution but the motion was denied.[9] On April 10, 2000, complainant filed with this Court a petition for review on certiorari in connection with Administrative Case No. 4215 against the IBP and respondent counsel averring that the IBP Board of Governors committed grave abuse of discretion when it overturned its earlier resolution and granted respondent counsels motion for reconsideration on February 23, 1999. He claimed that the earlier resolution denying the motion for reconsideration issued on October 25, 1997 had already become final and executory; hence, any further action or motion subsequent to such final and executory judgment shall be null and void. When the Court issued the resolution of December 10, 1997 treating the several pleadings filed in the present complaint, it should be noted that the IBP resolution denying respondents motion for reconsideration (Resolution No. XIII-97-129) dated October 25, 1997, for some reason, had not yet reached this Court. As of that date, the only IBP resolution attached to the records of the case was Resolution No. XII-97-54 amending the administrative sanction from reprimand to three months suspension. Hence, at the time the pleadings were referred back to the IBP in the same resolution, the Court was not aware that the IBP had already disposed of the motion for reconsideration filed by respondent counsel. Thus, when the IBP was informed of the said Court resolution, it construed the same as granting Atty. Dealcas motion for reconsideration and as an order for IBP to conduct a reevaluation of the case. The IBP assumed that its resolution of October 25, 1997 was already

considered by this Court when it referred the case back to the IBP. It failed to notice that its resolution denying the motion for reconsideration was not among those pleadings and resolution referred back to it. Hence, on the strength of this Courts resolution which it had inadvertently misconstrued, the IBP conducted a re-evaluation of the case and came up with the assailed resolution now sought to be reversed. The Court holds that the error is not attributable to the IBP. It is regrettable that the procedural infirmity alleged by complainant actually arose from a mere oversight which was attributable to neither party. Going into the merits, we affirm the findings made by the IBP that complainant engaged the services of respondent lawyer only for the preparation and submission of the appellants brief and the attorneys fees was payable upon the completion and submission of the appellants brief and not upon the termination of the case. There is sufficient evidence which indicates complainants willingness to pay the attorneys fees. As agreed upon, complainant paid half of the fees in the amount of P7,500.00 upon acceptance of the case. And while the remaining balance was not yet due as it was agreed to be paid only upon the completion and submission of the brief, complainant nonetheless delivered to respondent lawyer P4,000.00 as the latter demanded. This, notwithstanding, Atty. Dealca withdrew his appearance simply because of complainants failure to pay the remaining balance of P3,500.00, which does not appear to be deliberate. The situation was aggravated by respondent counsels note to complainant withdrawing as counsel which was couched in impolite and insulting language.[10] Given the above circumstances, was Atty. Dealcas conduct just and proper? We find Atty. Dealcas conduct unbecoming of a member of the legal profession. Under Canon 22 of the Code of Professional Responsibility, lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances. Although he may withdraw his services when the client deliberately fails to pay the fees for the services,[11] under the circumstances of the present case, Atty. Dealcas withdrawal was unjustified as complainant did not deliberately fail to pay him the attorneys fees. In fact, complainant exerted honest efforts to fulfill his obligation. Respondents contemptuous conduct does not speak well of a member of the bar considering that the amount owing to him was only P3,500.00. Rule 20.4 of Canon 20, mandates that a lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud. Sadly, for not so large a sum owed to him by complainant, respondent lawyer failed to act in accordance with the demands of the Code. The Court, however, does not agree with complainants contention that the maximum penalty of disbarment should be imposed on respondent lawyer. The power to disbar must be exercised with great caution. Only in a clear case of misconduct that seriously affects the standing and character of the lawyer as an officer of the Court and member of the bar will disbarment be imposed as a penalty. It should never be decreed where a lesser penalty, such as temporary suspension, would accomplish the end desired.[12] In the present case, reprimand is deemed sufficient. WHEREFORE, in view of the foregoing, respondent Atty. Juan S. Dealca is REPRIMANDED with a warning that repetition of the same act will be dealt with more severely.

SO ORDERED. Davide, Jr., C.J. (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

[1] [2] [3] [4] [5] [6] [7] [8] [9]

Rollo, pp. 1-3. Id., at 4. Id., at 23. Id., at 53-55. Id., at 143. Id., at 100. Id., at 117-118. Id., at 116. Id., at 150. See Note 2. Canon 22, Rule 22.01, (e); see also Orcino vs. Gaspar, 279 SCRA 379 (1997). Resurreccion vs. Sayson, 300 SCRA 129 (1998).

[10] [11] [12]

Suspension, Disbarment and Discipline of Lawyers Nature and characteristics of Disciplinary Actions Against Lawyers Sul Generis

FIRST DIVISION IMELDA BIDES-ULASO, Complainant, A.C. No. 7297 Present: PUNO, C.J., Chairperson, CORONA, CHICO-NAZARIO,* LEONARDO- DE CASTRO, and BERSAMIN, JJ.

- versus -

ATTY. EDITA NOE-LACSAMANA, Promulgated: Respondent. September 29, 2009 x-----------------------------------------------------------------------------------------x DECISION

BERSAMIN, J.: The decisive question to be resolved in this administrative proceeding is whether or not the notarization of the jurat of the amended verification and affidavit of non-forum shopping attached to the initiatory pleading even before the plaintiff-client has affixed her own signature amounts to censurable conduct on the part of the notary-counsel. The Integrated Bar of the Philippines (IBP) found respondent Atty. Edita Noe-Lacsamana, the notary-counsel, guilty of gross negligence and of a violation of the Notarial Law; and recommended her suspension from the practice of law for six months.[1] She now pleads her cause before us.[2]

Antecedents The respondent was the counsel of Irene Bides (Bides) when the latter filed a civil action in the Regional Trial Court (RTC) in Pasig City against complainant Imelda Bides-Ulaso (Ulaso), her own niece; Alan Ulaso (Ulasos husband); Bartolome Bides (Ulasos father and Bides brother); the Register of Deeds of Region II, Metro Manila; and the Revenue District Office of San Juan, Metro Manila. The action was docketed as Special Civil Action (SCA) No. 2481 and raffled to Branch 167 of the RTC. Bides amended the complaint on June 23, 2003 to demand the declaration of nullity of the deed of sale dated May 27, 1996 pertaining to the parcel of land situated in San Juan, Metro Manila of which Bides was the registered owner. Bides averred that Ulaso had taken her owners certificate of title during her absence from her residence and that Ulaso had then caused the transfer of the property to herself through the fraudulent execution of the deed of sale.[3] The amended complaint of Bides contained a so-called amended verification and affidavit of non-forum shopping dated June 18, 2003, on which was a signature preceded by the word for above the printed name IRENE BIDES. The signature bore a positive resemblance to the respondents signature as the notary on the jurat of the amended verification and affidavit of non-forum shopping.[4] Seeing the defective execution of the amended verification and affidavit of non-forum shopping, Ulaso and her co-defendants filed a motion to dismiss on July 22, 2003,[5] citing the defect as a ground, along with another. Through the respondent as her counsel, Bides opposed the motion to dismiss on August 6, 2003, claiming an inadvertent mistake committed in relation to the signature appearing above the printed name of the affiant, but offering the excuse that the defective amended verification and affidavit of non-forum shopping had actually been only a sample-draft intended to instruct Irene Mallari, the respondents new secretary, on where Bides, as affiant, should sign. Bides also claimed that the respondents signature above the printed name of the affiant had not been intended to replace the signature of Bides as the affiant; that the correct amendedverification and affidavit of non-forum shopping to be

appended to the amended complaint had been executed only on June 23, 2003 due to her (Bides) delayed arrival from her home province of Abra; and that Mallari had failed to replace the defective document with the correct amended verification and affidavit of non-forum shopping.[6] The RTC denied the motion to dismiss and even declared Ulaso and her codefendants in default. The RTC ultimately decided the action in favor of Bides, granting reliefs like the nullification of the deed of sale between Bides, as seller, and Ulaso, as buyer.[7] On appeal, the Court of Appeals affirmed the RTCs judgment.[8] Bides and the respondent brought other proceedings against Ulaso. On September 26, 2003, Bides sued Ulaso and others for ejectment in the Metropolitan Trial Court (MeTC) in San Juan, Metro Manila, to evict them from the premises of Bides property subject of the RTC case.[9] She next formally charged Ulaso and two others with falsification of a public document in the Manila Prosecutors Office for the execution of the nullified deed of sale, resulting in the criminal prosecution of Ulaso and the others before the MeTC, Branch 17, in Manila.[10] The respondent actively prosecuted the criminal charge against Ulaso after being granted by the MeTC the express authority for that purpose pursuant to the Rules of Court.[11] The respondent herself commenced disbarment proceedings in the IBP against Atty. Yolando Busmente, Ulasos counsel; and proceedings for usurpation against Elizabeth de la Rosa, for appearing as Ulasos other counsel although she had not been a member of the Philippine Bar.[12] The disbarment proceedings against Atty. Busmente were docketed as CBD Case No. 05-1462. To counteract the aforestated moves of Bides and the respondent, Ulaso initiated this proceeding against the respondent on March 2, 2005, praying for the latters disbarment due to her act of signing the amended verification and affidavit of non-forum shopping attached to the amended complaint of Bides and notarizing the document sans the signature of Bides and despite the non-appearance of Bides before her.[13] On July 21, 2005, Bides and Ulaso entered into a compromise agreement to settle the criminal case for falsification, whereby Bides agreed to drop the criminal

charge against Ulaso in exchange for, among others, Ulasos withdrawal of the disbarment complaint against the respondent.[14] The MeTC, Branch 17, in Manilaapproved the compromise agreement. The agreement on the dropping of the criminal case notwithstanding, the complaint for disbarment continued against the respondent. The IBP Committee on Bar Discipline designated Atty. Patrick M. Velez as Investigating Commissioner. After due hearing, Atty. Velez submitted his report and recommendation dated December 8, 2005,[15] in which he rendered the following resolution and findings, viz:
IV. RESOLUTION AND FINDINGS We are not impressed with the excuses presented by the respondent. The lapse committed by the respondent is clear based on the facts and pieces of evidence submitted in this case. The respondent admits signing the questioned verification and there is also no dispute that she notarized the same. Even if her tale is true, the fact that she notarized her own signature is inexcusable. It cannot even be pardoned as a simple act of negligence as the standards set by notarial law are stringent enough to require all notaries public to exercise caution in order to protect the integrity and veracity of documents. We also cannot understand the fact that all the pleadings submitted to the court do not bear the corrected verification and certification. It may be easy to convince us that she is really innocent of the charges if at least one of those documents or even that one copy furnished to the other party in that case would bear at least one such corrected verification. But no, there was none at all. This certainly militates against the position that respondent lawyer took. We have already stated earlier that lawyers may be disciplined for misconduct as a notary public, and now emphasize that the respondent can not even hide behind the mantle of good faith or throw blame to her secretary. Even as the Supreme Court stated that: If the document he notarized turned out to have been falsified, without the fact being known to him at the time, he may still be admonished for not taking pains to ascertain the identity of the person who acknowledged the instrument before him. (Cailing vs. Espinoza, 103 Phil. 1165)

Indeed, we may even consider her being grossly negligent in allowing her secretary to commit that error. She gave her secretary blanket authority where she should have exercise sufficient prudence to protect the integrity of her documents. The burden of preparing a complete pleading falls on counsels shoulders, not on the messenger (Tan v. Court of Appeals, 295 SCRA 765 [1998]) and not even on the secretary. Besides, even if the story she tells us is true, it would appear that the document was pre-notarized based on the very averments made in Irene Mallaris Affidavit of Merit when she stated that: 3. Atty. Lacsamana was scheduled for an out-of-town trip on Monday, June 23, 2003, thus she hurriedly notarized another prepared set of Amended Verification dated June 23, 2003, and repeatedly told me to file the amended complaint not later than that afternoon to this Honorable Court after replacing its old June 18, 2003-Amended Verification; 4. Irene Bides arrived only after lunch and after her niece cause her to sign the amended verification, I replaced the last page of the sets of the Amended Complaint without knowing that I missed its original copy and the copy I hurriedly sent to the counsel for the respondent. Respondent was not around when the document was signed by the respondents client. That is a violation of notarial law and deceitful conduct of the part of a lawyer, since he is notarizing a document which he did not actually witness being signed in his presence. Even page 8 of the respondents notarial register will not help her in this case. All that it shows is the alleged document no. 36, but what about document no. 35 which should appear in page 7 of Book no. 1? The second document was notarized on another page and it is incumbent on the respondent to show that the same was really not recorded as such. The failure of respondent to present such evidence should be treated as disputable presumption that the same would be detrimental to his interests if so presented. Thus, when the circumstances in proof tend to fix the liability on a party who has it in his power to offer evidence of all facts as they existed and rebut the inference which the circumstances in proof tend to establish, and he fails to offer such proof, the natural conclusion is that proof if produced, instead of rebutting, would support the inference against him, and the court is justified in acting upon that conclusion (Herrera, Remedial Law, VI, 1999 ed p. 63 citing Worcester vs. Ocampo, 22 Phil. 42). This commission feels that respondent is not being truthful with her defenses. The problem with using such unjustified excuses is that one lie will pile

up over the other. Somewhere along the way, the story will leak out its sordid details exposing the excuse as a mere concocted tale and nothing more. We have the impression that respondent is trying to mislead this Commission, which we cannot allow. The issue in this case is really limited and focused on the signature and the notarization of the verification and certification against forum shopping for Irene Bides. Does it constitute actionable misconduct? The other matters raised by the respondent have little bearing herein because it refers to other cases which she has against the complainant. But the causes of action are different so we will deign to entertain such other matters. The practice of law is a privilege and respondent has gravely abused the same: The practice of law is a privilege burdened with conditions. Adherence to rigid standards of mental fitness, maintenance of the highest degree of morality and faithful compliance with the rules of the legal profession are the conditions required for remaining member of good standing of the bar and for enjoying the privilege to practice law. Any breach by lawyer of any of these conditions makes him unworthy of the trust and confidence which courts and clients must, by necessity, repose in him or unfit to continue in the exercise of his professional privilege. His misconduct justifies disciplinary action against him or the withdrawal of his privilege to practice law. (Agpalo, Legal Ethics, 1989 Ed., 392; citation of cases omitted.) What is far worse is that the respondent has taken a habit of making such excuses for similar mistakes she committed. This Commission notes that the respondent herein is also a complainant in a different case against Atty. Yolando Busmente docketed as CBD case no. 05-1462. In that case, again no certification against non-forum shopping was made in that case, but instead of admitting the lack thereof (as it is not absolutely required in CBD cases) she went on to create a different story that her lawyer was negligent. Unfortunately said lawyer is already dead and cannot answer her accusations. She tried to pass off another set of certification which allegedly was not included with the original documents. What is however telling is that in all the seven (7) copies submitted to the CBD and that one (1) copy furnished to the respondents in that case, no such certification appears. This unacceptable pattern of behavior compels us to recommend stricter measures to ensure that respondent lawyer is reminded of her solemn duty and obligation to be truthful and honest.

WHEREFORE, it is hereby recommended that the respondent lawyer, Atty. Edita Noe-Lacsamana be suspended from the practice of law for a period of not less than two (2) years and that she be required to take three (3) units of MCLE [16] required legal ethics before she may be allowed to practice law again.

In its Resolution No. XVII-2006-272 dated May 26, 2006, the IBP Board of Governors approved the report and recommendation of the Investigating Commissioner with modification,[17] to wit:
RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, with modification, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and for notarizing a verification which she has executed, gross negligence and violation of the notarial law, Atty. Edita Noe-Lacsamana is hereby SUSPENDED from the practice of law for six (6) months.

Respondents Motion for Reconsideration

On August 29, 2006, the respondent came to the Court to seek the overturning of the IBP resolution, contending that:
I. THE METED 6-MONTH SUSPENSION FROM THE LAW PRACTICE OF THE RESPONDENT IS REPUGNANT TO THE FAILURE OF THE COMPLAINANT TO SHOW PROOF OF HER ALLEGED GROSS NEGLIGENCE AND VIOLATION OF THE NOTARIAL LAW, AS EVENTUALLY SELF-MANIFESTED BY THE COMPLAINANT, WHO, ABSENT KNOWLEDGE OR INVOCATION OF THE RESPONDENT, WITHDREW HER INSTANT COMPLAINT, AS EMBODIED IN THE JULY 22, 2005-DECISION OF HON. GERMANO FRANCISCO D. LEGASPI OF BRANCH 17, METROPOLITAN TRIAL COURT OF MANILA. II. THE BLEMISH CAUSED ON THE MORE THAN 26-YEARS OF UNSULLIED REPUTATION OF THE RESPONDENT AS A LAWYER IS COMPELLING HER TO ENTREAT THE HONORABLE BAR CONFIDANT TO ASSESS AND RECONSIDER THE UNJUST AND SPECULATIVE

PORTRAYAL OF INVESTIGATING COMMISSIONER PATRICK M. VELEZ IN HIS DECEMBER 8, 2005-REPORT AND RECOMMENDATION TO THE IBP, THAT RESPONDENT IS GUILTY OF DISHONESTY AND/OR GROSS NEGLIGENCE, WITH AN UNACCEPTABLE PATTERN OF BEHAVIOR, WHICH ALTHOUGH NOT SPECIFIED, IS COMPATIBLE WITH A DEROGATORY CONCLUSION THAT SHE LACKS THE REQUIRED CANDOR, INTEGRITY AND PROFESSIONAL DECORUM OF A MEMBER OF THE BAR, IN REPUGNANCE TO THE MANDATE IN MANUBAY VS. GARCIA, 330 SCRA 237, THAT: The lawyers guilt cannot be presumed. Allegation is never equivalent to proof and a bare charge cannot be equated with liability. III. THE FALLACIES OF THE COMPLAINANT WERE MISSED, DELIBERATELY OR OTHERWISE, IN THE INVESTIGATION OF THIS ADMINISTRATIVE CASE, PARTICULARLY ON THE FACT THAT THE COMPLAINT IS CONFINED ON A REHASH OF THE QUESTIONED AMENDED VERIFICATION AND AFFIDAVIT OF NON-FORUM SHOPPING, TWO (2) YEARS AFTER ITS DISPUTE WAS SETTLED AT THE LOWER COURT AND AT THE COURT OF APPEALS, THUS, FILED OUT OF RANCOR OF THE COMPLAINANT FOR HAVING LOST ALL HER CASES AGAINST THE RESPONDENTS PRO BONO CLIENT, THUS, SHE WAS UNJUSTLY DENIED OF THE RULE IN SANTOS VS. DICHOSO, 84 SCRA 622, THAT: The success of a lawyer in his profession depends almost entirely on his reputation. Anything which will harm his good name is to be deplored. Private persons and particularly disgruntled opponents may not, therefore, be permitted to use the courts as vehicles through which to vent their rancor on members of the bar. (underscoring supplied)

Ruling We affirm the findings against the respondent. A. Preliminary Considerations The respondent argues that this proceeding should be abated by virtue of its withdrawal by Ulaso pursuant to the compromise agreement concluded in the criminal case and approved by the trial court.

The respondents argument is unwarranted. The agreement between Bides and Ulaso stipulating the withdrawal of the disbarment case against the respondent did not terminate or abate the jurisdiction of the IBP and of this Court to continue the present administrative proceeding against the respondent as a member of the Philippine Bar. We explained why in Rayos-Ombac v. Rayos,[18] viz:
The affidavit of withdrawal of the disbarment case allegedly executed by complainant does not, in any way, exonerate the respondent. A case of suspension or disbarment may proceed regardless of interest or lack of interest of the complainant. What matters is whether, on the basis of the facts borne out by the record, the charge of deceit and grossly immoral conduct has been duly proven. xxx. The complainant or the person who called the attention of the court to the attorney's alleged misconduct is in no sense a party, and has generally no interest in the outcome except as all good citizens may have in the proper administration of justice. Hence, if the evidence on record warrants, the respondent may be suspended or disbarred despite the desistance of complainant or his withdrawal of the charges. xxx.

The respondent next contends that we should reject the disbarment complaint because it was filed only after the lapse of two years from the occurrence of the cause; and that personal vendetta impelled its filing. The respondents contention cannot be upheld. Neither the lapse of time from the occurrence of the cause nor the motivation for the filing of the complaint diminished the Courts inherent power to discipline a member of the Bar whenever appropriate. First of all, the ordinary statutes of limitation had no application to disbarment or suspension [19] proceedings against members of the Bar. Indeed, such proceedings are sui generis. They are not akin to the trials of actions or suits in which interests and rights are enforced by the plaintiffs against the defendants, but are rather investigations into the conduct of the members of the Bar made by the Supreme Court within the context of its plenary powers expressly granted by the Constitution to regulate the practice of law.[20] The proceedings, which the Court

may even motu proprio initiate, have neither plaintiffs nor prosecutors. The public interest is their primary objective, the true question for determination being whether or not the respondent members of the Bar are still fit to be allowed to retain their memberships and to enjoy the privileges appurtenant to such memberships.[21] B. Basis for Disciplinary Action Ulaso insists that the respondents act of signing the amended verification and affidavit of non-forum shopping for Bides as plaintiff-affiant violated the penal law, the 1997 Rules of Civil Procedure, the Lawyers Oath, the Code of Professional Responsibility, and the Notarial Law. In contrast, the respondent maintains that her signature was made not to fool the trial court, but only to illustrate to her new secretary how and where Bides should sign the form; and that the amended verification and affidavit of non-forum shopping, merely a sample-draft, was wrongly attached. Investigating Commissioner Velez found that the respondent had deliberately and with malice led the trial court to believe that her signature in the amendedverification and affidavit of non-forum shopping had been that of Bides. We regard the finding of deliberation and malice to be unjustified. The admitted precedence by the word for of the signature on the amended verification and affidavit of non-forum shopping was an indicium that the respondent did not intend to misrepresent the signature as that of Bides. The apparent resemblance of the signature after the word for with the respondents signature as the notary executing the jurat rendered improbable that the respondent had intended to deceive, considering that the respondent would have instead written the name Irene Bides or forged the signature of Bides had she wanted to pass the signature off as that of Bides. The respondent, by notarizing the document sans the signature of Bides, was only anticipating that Bides would subsequently sign, because, after all, Bides had already signed the original verification and affidavit. Ostensibly,

the amended verification and affidavit of non-forum shopping was intended to replace the original one attached to the initiatory pleading of Bides. Thus, bad faith did not motivate the respondent into notarizing the amended verification and affidavit of non-forum shopping. The lack of bad faith notwithstanding, we nonetheless concur with the findings of Investigating Commissioner Velez that the respondents notarizing theamended verification and affidavit of non-forum shopping in the absence of Bides as the affiant constituted a clear breach of the notarial protocol and was highly censurable.[22] The jurat is that end part of the affidavit in which the notary certifies that the instrument is sworn to before her. As such, the notarial certification is essential. Considering that notarization is not an empty, meaningless, routinary act,[23] the faithful observance and utmost respect of the legal solemnity of the oath in the jurat are sacrosanct.[24] Specifically, the notarial certification contained in the jurat of the amended verification and affidavit of non-forum shopping SUBSCRIBED AND SWORN TO BEFORE ME, on this 18th day of June 2003, affiant IRENE BIDES, showing to me her CTC Nos. 11833475 issued on November 21, 2002, in Manila[25] indicated both the necessity for the physical presence of Bides as the affiant and the fact that the signing was done in the presence of the respondent as the notary. The physical presence of Bides was required in order to have her as the affiant swear before the respondent that she was that person and in order to enable the respondent as the notary to ascertain whether Bides had voluntarily and freely executed the affidavit.[26] Thus, the respondent, by signing as notary even before Bides herself could appear before her, failed to give due observance and respect to the solemnity. Being a lawyer commissioned as a notary, the respondent was mandated to discharge with fidelity the sacred duties appertaining to her notarial office. Such duties being dictated by public policy and impressed with public interest, she could not disregard the requirements and solemnities of the Notarial Law.[27] It was emphatically her primary duty as a lawyer-notary to obey the laws of the land and to promote respect for the law and legal processes.[28] She was expected to be in

the forefront in the observance and maintenance of the rule of law. She ought to have remembered that a graver responsibility was placed upon her shoulders by virtue of her being a lawyer.[29] In imposing the penalty upon the respondent, however, we opt to reprimand her instead of suspending her from the practice of law for three months, as the IBP recommended. This we do after we take into account, firstly, the absence of bad faith in her notarizing the unsigned document; secondly, the fact that the infraction was the first lodged against her in her long years of membership in the Bar; and thirdly, her recuperating from the debilitating stroke that had left her unable to perform any work since July 11, 2007.[30] ACCORDINGLY, we modify the recommendation of the Integrated Bar of the Philippines by reprimanding respondent Atty. Edita Noe-Lacsamana, with a warning that a similar infraction in the future will be dealt with more severely. SO ORDERED.

LUCAS P. BERSAMIN Associate Justice

WE CONCUR:

REYNATO S. PUNO Chief Justice Chairperson

RENATO C. CORONA Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

TERESITA J. LEONARDO-DE CASTRO Associate Justice

Additional Member in lieu of Carpio, J., per Special Order No. 698. Rollo, p. 307. [2] Id., pp. 317-357. [3] Id., pp. 4-12. [4] Id., p. 12. [5] Id., pp. 157-161. [6] Id., pp. 162-171. [7] Id., pp. 30-36. [8] Id., pp. 61-71. [9] Id., pp. 217-223. [10] Id., p. 37 [11] Id. p. 38. [12] Id., pp. 257-258 and 265. [13] Id., pp. 1-2. [14] Id., pp. 365-366. [15] Id., pp. 308-316. [16] Id., pp. 313-316. [17] Id., p. 307. [18] A.C. No. 2884, January 28, 1998, 285 SCRA 93, 100-101. [19] Calo, Jr. v. Degamo, A.C. No. 516, August 30, 1967, 20 SCRA 447. [20] Art. VIII, Sec. 5(5), 1987 Constitution, which pertinently provides: SECTION 5. The Supreme Court shall have the following powers: xxx (5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court. xxx
[1] [21] [22] [23]

In re: Almacen, G.R. No. L-27654, February 18, 1970, 31 SCRA 562, 600. National Bureau of Investigation v. Morada, A.C. No. 321, July 31, 1961, 2 SCRA 827, 830. Maligsa v. Atty. Cabanting, A.C. No. 4539, May 14, 1997, 272 SCRA 408; Vda. de Rosales v. Ramos, A.C. No. 5645, July 2, 2002, 383 SCRA 498; Joson v. Baltazar, A.C. No. 575, February 14, 1991, 194 SCRA 114, 119.

[24] [25] [26] [27] [28] [29] [30]

Social Security Commission v. Corral, A.C. No. 6249, October 14, 2004, 440 SCRA 291, 296. Rollo, p. 107. Lopena v. Cabatos, A.C. No. 3441, August 11, 2005, 466 SCRA 419, 426. Soriano v. Basco, A.C. No. 6648, September 21, 2005, 470 SCRA 423, 431. Canon 1, Code of Professional Responsibility. Alitagtag v. Garcia, A.C. No. 4738, June 10, 2003, 403 SCRA 335. See respondents Ex-Parte Motion for Early

Suspension, Disbarment and Discipline of Lawyers Nature and characteristics of Disciplinary Actions Against Lawyers Prescription

BOBIE ROSE V. FRIAS,

EN BANC A.C. No. 6656

(formerly CBD-98-591)

Complainant,

-versus-

Present: PANGANIBAN, C.J. PUNO,* QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO, GARCIA and VELASCO, JJ.

ATTY. CARMELITA S. BAUTISTA-LOZADA,** Respondent. Promulgated:

May 4, 2006 x-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x RESOLUTION CORONA, J.:

Respondent

Atty.

Carmelita

Bautista-Lozada seeks

reconsideration of our December 13, 2005 resolution finding her guilty of violating Rules 15.03 and 16.04 of the Code of Professional Responsibility and of willfully disobeying a final and executory decision of the Court of Appeals and suspending her from the practice of law for two years.

Respondent contends that, pursuant to Rule VIII of the Rules of Procedure of the Commission on Bar Discipline (CBD) of the Integrated Bar of the Philippines (IBP), the complaint against her was already barred by prescription. She also asserts that her December 7, 1990 loan agreement with complainant complied with Rule 16.04 because the interest of complainant was fully protected.

Respondents contentions have no merit.

Respondent anchors her defense of prescription on Rule VIII, Section 1 of the Rules of Procedure of the CBD-IBP which provides:

SECTION 1. Prescription. A complaint for disbarment, suspension or discipline of attorneys prescribes in two (2) years from the date of the professional misconduct.

However, as early as 1967, we have held that the defense of prescription does not lie in administrative proceedings against lawyers.[1] And in the 2004 case of Heck v. Santos,[2] we declared that an administrative complaint against a member of the bar does not prescribe.

If the rule were otherwise, members of the bar would be emboldened to disregard the very oath they took as lawyers, prescinding from the fact that as long as no private complainant would immediately come forward, they stand a chance of being completely exonerated from whatever administrative liability they ought to answer for. It is the duty of this Court to protect the integrity of the practice of law as well as the administration of justice. No matter how much time has elapsed from the time of the commission of the act complained of and the time of the institution of the complaint, erring members of the bench and bar cannot escape the disciplining arm of the Court. This categorical pronouncement is aimed at unscrupulous members of the bench and bar, to deter them from committing acts which violate the Code of Professional Responsibility, the Code of Judicial Conduct, or the Lawyers Oath. x x x Thus, even the lapse of considerable time from the commission of the offending act to the institution of the administrative complaint will not erase the administrative culpability of a lawyer.[3] (emphasis supplied)

The CBD-IBP derives its authority to take cognizance of administrative complaints against lawyers from this

Court which has the inherent power to regulate, supervise and control the practice of law in the Philippines. Hence, in the exercise of its delegated power to entertain administrative complaints against lawyers, the CBD-IBP should be guided by the doctrines and principles laiddown by this Court. Regrettably, Rule VIII, Section 1 of the Rules of Procedure of the CBD-IBP which provides for a prescriptive period for the filing of administrative complaints against lawyers runs afoul of the settled ruling of this Court. It should therefore be struck down as void and of no legal effect for being ultra vires.

Moreover, assuming that prescription is a valid defense, respondent raised it only at this late stage. We presume she was familiar with that rule yet she failed to invoke it at the earliest opportunity. Instead she opted to insist on her innocence.

On

the

other

ground

raised

by

respondent,

we

have

sufficiently discussed the implications of her loan agreement with complainant in relation to Rule 16.04 of the Code of Professional Responsibility in our December 13, 2005 resolution. Considering the fiduciary character of respondents relationship with

complainant, the nature of their agreement and complainants lack

of independent advice when she entered into it, there is neither sufficient ground nor compelling reason to reconsider our earlier resolution.

WHEREFORE, respondents motion for reconsideration is hereby DENIED WITH FINALITY.

Rule VIII, Section 1 of the Rules of Procedure of the Commission on Bar Discipline of the Integrated Bar of the Philippines is hereby declared null and void.

Let copies of this resolution be furnished the Integrated Bar of the Philippines and the Office of the Bar Confidant for their information and guidance.

SO ORDERED.

RENATO C. CORONA Associate Justice

W E C O N C U R:

ARTEMIO V. PANGANIBAN Chief Justice

(on leave) REYNATO S. PUNO Associate Justice

LEONARDO A. QUISUMBING Associate Justice

CONSUELO YNARES-SANTIAGO Associate Justice

ANGELINA SANDOVAL-GUTIERREZ Associate Justice

ANTONIO T. CARPIO Associate Justice

MA. ALICIA M. AUSTRIA-MARTINEZ Associate Justice

CONCHITA CARPIO MORALES Associate Justice

ROMEO J. CALLEJO, SR. Associate Justice

ADOLFO S. AZCUNA Associate Justice

DANTE O. TINGA Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

CANCIO C. GARCIA Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

* **

On leave Also referred to as Carmencita Bautista-Lozada in some parts of the records. Calo v. Degamo, Adm. Case No. 516, 27 June 1967, 20 SCRA 447. A.M. No. RTJ-01-1657, 23 February 2004, 423 SCRA 329. Id.

[1] [2] [3]

Suspension, Disbarment and Discipline of Lawyers Grounds

EN BANC

[A.C. No. 5438. March 10, 2004]

DAN JOEL V. LIM* and RICHARD C. TAN, complainants, vs. ATTY. EDILBERTO BARCELONA, respondent. RESOLUTION PER CURIAM: On May 9, 2001, Dan Joel V. Lim and Richard C. Tan,[1] both businessmen, filed a complaint for alleged robbery or extortion and violation of the AntiGraft and Corrupt Practices Actagainst Atty. Edilberto Barcelona, a lawyer formerly employed with the National Labor Relations Commission (NLRC). The complaint was simultaneously filed with this Court and the Integrated Bar of the Philippines.[2] Complainant Lim alleged that on the first week of August 2000, respondent phoned him and introduced himself as a lawyer and chief of the Public Assistance Center, NLRC. Respondent informed him that his employees filed a labor complaint against him in his office and it was necessary for him to see and talk with respondent. From then on respondent would often call him. Respondent visited him in his office and told him to settle the case or else his business, Top Gun Billiards, would be shut down. Lim recalled that on August 14, 2000, at around 7:30 p.m., respondent again visited his establishment and told him to settle the case for P20,000.00. In support of his allegations, Lim submitted a written complaint of Arnel E. Ditan and Pilipino Ubante; an endorsement letter dated August 2, 2000 of Atty. Jonathan F. Baligod of the Presidential Action Center; handwritten calling cards of the respondent; and an affidavit of desistance executed by Ditan and Ubante. In their joint affidavit, Ditan and Ubante confirmed the filing of their complaint against their employer, Lim, and that after some dialogue, the aforenamed employees executed an affidavit dated August 8, 2000 withdrawing their complaint. According to Ditan and Ubante, they met the respondent in Top Gun Billiards where the latter often played billiards. One

day, respondent gave them a letter and asked them to sign it. Since they were busy at that time, they signed it without reading and understanding its contents. Their employer, Lim, asked what it was about and they told him that they were just made to sign a document without their understanding it. They added, they did not have any complaint against their employer. Despite such withdrawal, respondent still called Lim threatening the latter that he would pursue the case, have his establishment closed and he would be jailed if he did not come up with P20,000.00 as settlement. In the evening of August 14, 2000, respondent reiterated his demand for P20,000.00, again with the threat of closure of the billiard center and putting Lim in jail. Complainant Lim said that after his meeting with respondent, he agreed to give the amount but did not fix any date when payment would be made, whereupon, respondent gave notice that he would drop in at around 7:00 in the evening, on August 16, 2000, to pick up the money. Aurora Cruz y Libunao, owner of the carinderia adjacent to Top Gun Billiards, stated in her sworn statement as well as court testimony that she met respondent when he ate in her carinderia. She recalled that the respondent told her that he would shut down the billiard business if the owner would not talk to him. She also recounted that on August 14, 2000, at around 8:30 p.m., she saw on the second floor of the pool house, the respondent and Lim talking. After a while, the respondent came down and passed by her carinderia. The respondent then informed her that he and Lim talked about theP20,000.00 which respondent would give to his alleged boss in Malacaang. During the hearing, she also recalled seeing Lim hand money to respondent who in turn put the cash in his attach case and immediately thereafter, she saw three men arrest respondent.[3] Notably, almost nine months before the filing of his complaint, or on August 14, 2000, complainant Lim personally submitted a letter to the NBI requesting the NBI to investigate respondent Atty. Edilberto Barcelona.[4] According to the NBI report, after due investigation, it decided to conduct an entrapment operation. On August 15, 2000, Special Investigator Marvin de Jemil, sent nine five hundred peso bills and five one hundred peso bills for fluorescent powder dusting to the NBI Forensic Chemistry Division. Further, the NBI reported that thru the NBI Identification and Records Division, it found no record of such person named Edilberto Barcelona. The NBI report also stated that on August 16, 2000, Lim informed the NBI operatives that at around 7:00 p.m. respondent would drop by his pool house to collect the money. At around 6:30 p.m., the operatives went to the pool house and strategically positioned themselves and posed as pool

players. At about 7:20 p.m., respondent arrived, sat on a plastic chair and talked to complainant Lim. At around 7:30 p.m., Lim handed the marked money to the respondent who, in turn, received it. While respondent was counting the money and about to place it inside his bag, he was immediately arrested. The respondent initially resisted and tried to create scandal but was later pacified. The NBI averred that the respondent was informed of his constitutional rights and was brought to the NBI office where he was booked and fingerprinted. In his fingerprint chart, the respondent indicated that he was a government lawyer and assigned at the office of the Chief, Public Assistance Center, NLRC, Banawe, Quezon City. He showed his identification card. Later he was brought to the Forensic Chemistry Division for ultraviolet examination. The certification issued by Forensic Chemist Loren G. Janobas stated that there were yellow fluorescent specks and smudges on the back and palm of the left and right hand of the respondent. On August 17, 2000, the NBI turned over respondent to the City Prosecutor of Manila who eventually indicted him for robbery/extortion.[5] Complainant Richard Tan, owner of Tai Hing Glass Supply, a co-signee in the herein complaint, executed a sworn statement dated August 16, 2000. In it he alleged that he went to the Criminal Intelligence Division, Intelligence Service of the NBI to complain about respondent Barcelona. He said that sometime during the last week of July, respondent called him, introduced himself and informed him that one of his employees filed an illegal dismissal case against him. He remembered that before respondents call, he had suspended an employee, Bryan Tellen, for leaving his workplace without permission. Tellen received several warning letters from him regarding his misdemeanors. Tan remembered that Tellen once hinted that he knew someone in the Department of Labor, who turned out to be herein respondent, Atty. Barcelona. Before Tan sent his accountant, Ditas Guitierrez, to respondents office to represent him, he told her to bring a copy of Tellens suspension letter and to inform respondent that Tellen had not been dismissed. When Guitierrez returned, she told him that respondent wanted him to pay his employee. She added that respondent did not give her any copy of a formal complaint on the alleged illegal dismissal. After two days, according to Tan, respondent went to his office, showed him an identification card and gave him a handwritten calling card. Respondent told him to pay his employee P20,000.00 to P30,000.00, otherwise respondent would go on with the filing of the illegal dismissal case. When he said he did not have that kind of money, respondent lowered the amount to P15,000.00. Complainant Tan added that when he gave respondent the money, the latter promised to take care of the illegal dismissal complaint. On July 29, 2000, according to Tan, respondent came to see him again.

Respondent appeared drunk and told Tan to go to the respondents office because a problem regarding the case arose. Tan stated that before respondent left, respondent invited his employees to a game of billiards. Tan said he did not consent to the employees playing because they had work. On July 31, 2000, respondent went to him a third time and asked for an additional P10,000.00 allegedly for his employee, Tellen, since the P15,000.00 Tan gave earlier was for respondent only. After a few more visits by respondent, Tan finally told the respondent to show him the formal complaint and he would just get himself a lawyer.[6] The Joint Affidavit of Arrest, signed on August 17, 2000 by Agent Don R. Hernandez, SI Felix O. Senora and SI Marvin de Jemil, cited complainant Tans allegations.[7] Respondent Atty. Barcelona filed his Comment[8] on December 10, 2001, praying for the dismissal of the complaint against him. Respondent, in his defense, alleges that he normally played billiards at the Top Gun Billiard Center where he would drop by from his office before going to his residence; that when certain employees of the billiard center learned that he was a lawyer and Chief of the Public Assistance Center of the NLRC, they confided in him their grievance against their employer, Lim, for alleged violation of labor laws, there respondent gave them assistance; that with the proper complaint and required documentation accomplished, respondents office scheduled the case for a dialogue-conference between the complaining workers and their employer; that on instigation and coercion of complainant Lim, respondent became a victim of theft, billiard hustling, swindling and syndicated gambling on August 9, 2000; that on or about August 9, 2000, respondent filed a complaint for theft of cellphone and pack of cigarettes, billiard hustling, syndicated gambling, and swindling against Lim and his three workers, eventually docketed as I.S. No. 38251 to 53.[9] Respondents Comment narrated his version on how the money allegedly was given to him. According to the respondent, on August 16, 2000, at about 3 p.m., he received a phone call from complainant Lim informing him that Ian Gonvan,[10] one of the accused in I.S. No. 38251, admitted taking his cellphone and was willing and ready to return it at around 7 p.m., at the Top Gun Billiard Center. It was the birthday of his daughter that was why he took the day off from office. At about 7:30 p.m., he arrived at the billiard hall and there found Lim with one of his complaining workers, fixing the lamp of one of the billiard tables. He did not see Gonvan within the premises so he sat and watched the billiard games going on while he waited. After about 15 minutes Lim sat beside him and told him that Gonvan could no longer return the cellphone and instead Gonvan entrusted Lim with the equivalent value in cash. According to respondent, Lim persistently

whispered to him to accept and count the wad of paper money Lim pulled out. According to respondent, he consistently refused to touch the money and he insisted, Gusto ko munang makaharap ang sinasabi mong si Gumban,[11] continuously refusing to accept, much less count, the offered wad of money. Respondent added that when Lim realized that he could not be prevailed upon to accept it, he placed and inserted the wad of money in the open side pocket of respondents shoulder bag that respondent normally carried, again pleading to respondent that he should count the money. Respondent added that Lims behavior was rude and intimidating so much so that respondent protested such rudeness. But respondent said while he was trying to retrieve the wad of money to throw it back to Lim, about five or seven burly men accosted respondent and handcuffed him over his vehement protestations.[12] On Tans complaint, respondent declared that he never demanded nor received money from Tan, and Tans accusations are but a product of the formers fertile imagination as leverage because he actively assisted a complaining worker of Tan.[13] Respondent added that a formal labor complaint has been filed against Tan.[14] Eventually, we referred the complaint against Atty. Barcelona to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. Its report with recommendation is now before us. We shall now proceed to the merits of the complaint. Respondents version seeks to discredit the NBI report to the effect that respondent accepted the marked money which Lim handed to him. His version, however, fails to explain why he was found positive for yellow fluorescent specks and smudges in his dorsal and palmar aspects of the left and right hands by the Forensic Department of the NBI. Respondent claims that he continuously refused to accept, much less count, the offered wad of money. Because of such refusal, according to respondent, Lim inserted the wad of money in respondents shoulder bags open pocket while complainant Lim was still pleading to count the wad of money. Respondent alleges that the alleged bribery or extortion is a mere concoction of complainant and as leverage for the cases against Lim and Tan. Based on the NBI report, this case appears to be an entrapment operation. Notably, Atty. Don Hernandez and his team of arresting officers confirm the entrapment operation against respondent on the basis of complainant Lims call for NBI assistance.

While respondent alleges that complainant Lim merely concocted a charge of extortion against him in retaliation to a complaint for theft which he had filed, it may be noted that the complaint for theft was not directed against Lim but only against his workers who were accused by respondent. Hence, there appears to be no strong reason for Lim to resort to a counter-charge for extortion against respondent. The Commission on Bar Discipline of the IBP concluded that it is highly improbable that the NBI could be misled by complainant Lim into conducting an entrapment operation against respondent, if there was no merit to his complaint against respondent. From a reading of the NBI Report as well as the documents attached to said report, it is evident that the NBI considered the merits of Lims complaint of extortion against respondent. Finding it worth pursuing, the NBI conducted an entrapment operation against respondent. On the basis of the entrapment operation conducted by the NBI, respondent was caught in the act, so to speak, of attempted extortion. Respondent was brought to the City Prosecutor of Manila for inquest and the appropriate complaint for Robbery/Extortion was filed against respondent.[15] Based on its own evaluation and the NBI Report, the Investigating Commissioner of the Commission on Bar Discipline recommended the suspension of respondent from the practice of law for a period of two years.[16] In the final resolution dated September 27, 2003, the Board of Governors of the IBP imposed the penalty of disbarment for the reason that respondent in fact attempted to extort money as Chief of the Public Assistance Center of the NLRC to threaten/coerce Lim and that no less than the NBI caught him in the act of receiving and counting the money extorted from Lim.[17] The grounds for disbarment or suspension of an attorney are: (1) deceit; (2) malpractice or other gross misconduct in office; (3) grossly immoral conduct; (4) conviction of a crime involving moral turpitude; (5) violation of the lawyers oath; (6) willful disobedience of any lawful order of a superior court; and (7) willfully appearing as an attorney for a party without authority.[18] The NBI found that respondents hands had yellow fluorescent specks and smudges with which the money used for the entrapment of the respondent had been powdered. We find no reason to doubt the NBI report. Also, we see no basis to overturn the presumption that the NBI had done its duty regularly.

Respondent would make us believe that the specks and smudges of yellow fluorescent were in his hands because Lim offered him what was allegedly the payment for the stolen cellphone by a certain Gonvan. Regrettably, there is no corroboration from Gonvan nor anyone else on this matter. Thus, respondents story appears to us entirely self-serving. We had held previously that if a lawyers misconduct in the discharge of his official duties as government official is of such a character as to affect his qualification as a lawyer or to show moral delinquency, he may be disciplined as a member of the Bar on such ground.[19] More significantly, lawyers in government service in the discharge of their official tasks have more restrictions than lawyers in private practice. Want of moral integrity is to be more severely condemned in a lawyer who holds a responsible public office. [20] Rule 1.02 of the Code of Professional Responsibility provides that a lawyer shall not counsel or abet activities aimed at defiance of the law or at lessening confidence in the legal system. Extortion by a government lawyer, an outright violation of the law, calls for the corresponding grave sanctions. With the aforesaid rule a high standard of integrity is demanded of a government lawyer as compared to a private practitioner because the delinquency of a government lawyer erodes the peoples trust and confidence in the government. Needless to say, lawyers owe it to the court and to society not to stir up litigations. Employees of the billiards hall, Ditan and Ubante, swore that respondent public officer encouraged complainant Lims workers to file a case against the latter. Rule 1.03 of the same Code states that a lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any mans cause. Noteworthy, as an Attorney IV and Chief of the Public Assistance Center of the NLRC, respondent failed to observe prudence by hanging out and playing in the billiard hall. By so doing, he exposed himself unnecessarily to certain elements and situations which could compromise his official position and his status as a lawyer. Time and again, we have declared that the practice of law is a noble profession. It is a special privilege bestowed only upon those who are competent intellectually, academically and morally. A lawyer must at all times conduct himself, especially in his dealings with his clients and the public at large, with honesty and integrity in a manner beyond reproach. He must faithfully perform his duties to society, to the bar, to the courts and to his clients. A violation of the high standards of the legal profession subjects the lawyer to administrative sanctions which includes suspension and disbarment.[21] More importantly, possession of good moral character must

be continuous as a requirement to the enjoyment of the privilege of law practice; otherwise, the loss thereof is a ground for the revocation of such privilege.[22] Indeed, the primary objective of administrative cases against lawyers is not only to punish and discipline the erring individual lawyers, but also to safeguard the administration of justice by protecting the courts and the public from the misconduct of lawyers and to remove from the legal profession persons whose utter disregard of the lawyers oath has proven them unfit to continue discharging the trust reposed in them as members of the bar.[23] These pronouncements gain practical significance in this case, considering that respondent is a senior lawyer of the NLRC. It bears stressing also that government lawyers who are public servants owe fidelity to the public service, a public trust. As such, government lawyers should be more sensitive to their professional obligations as their disreputable conduct is more likely to be magnified in the public eye.[24] As a lawyer, who was also a public officer, respondent miserably failed to cope with the strict demands and high standards of the legal profession. In Montano v. IBP,[25] this Court said that only in a clear case of misconduct that seriously affects the standing and character of the lawyer may disbarment be imposed as a penalty. In the instant case, the Court is convinced that the evidence against respondent is clear and convincing. He is administratively liable for corrupt activity, deceit, and gross misconduct. As correctly held by the Board of Governors of the Integrated Bar of the Philippines, he should not only be suspended from the practice of law but disbarred. WHEREFORE, respondent Atty. Edilberto Barcelona is found administratively guilty of corrupt activity, deceit, and gross misconduct and is hereby ordered DISBARRED. Let his name be stricken from the Roll of Attorneys effective immediately, and this resolution spread in his record in this Court and circulated to all courts in the Philippines. SO ORDERED. Davide, Jr., C. J., Vitug, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur. Puno, J., on leave. Panganiban, J., on official leave.

* His middle name in the records is Villagracia. His middle initial in the title is L. Joel is also spelled Jowel elsewhere in the records. [1] In the title only Lim was named complainant, however, the complaint was co-signed by Richard C. Tan, owner of an establishment also allegedly a victim of Barcelona. Lim and Tan in most of the records are complainants, except in an Order dated August 20, 2002 of the Commission on Bar Discipline; in a letter dated October 10, 2002 of the Supreme Court Clerk of Court forwarding the case to the IBP and in the resolutions of this Court where only Lim was mentioned as complainant. [2] Rollo, pp. 1, 273. [3] TSN, 27 January 2003, pp. 163-174. [4] Rollo, p. 74. [5] Id. at 148-149, 151. [6] Id. at 105-107. [7] Id. at. 94. [8] Id. at 19-23. [9] Id. at 137. [10] Gumban in some parts of the records. [11] I would like first to meet face to face the one you are calling as Gumban. [12] Rollo, pp. 138-139. [13] Id. at 21. [14] Id. at 145. [15] Id. at 283-284. The quantum of evidence required in a criminal case, however, differs from that of administrative proceedings requiring only substantial evidence.

[16] Id. at 284. [17] Id. at 272. [18] National Bureau of Investigation v. Reyes, A.M. No. MTJ-97-1120, 21 February 2000, 326 SCRA 109, 120. [19] Gonzales-Austria v. Abaya A.M. No. R-705-RTJ, 23 August 1989, 176 SCRA 634, 649; Dinsay v. Cioco, A.C. No. 2995, 27 November 1996, 264 SCRA 703, 706; Collantes v. Renomeron, A.C. No. 3056, 16 August 1991, 200 SCRA 584, 589. [20] Macoco v. Diaz, 70 Phil. 97, 98 (1940). [21] Re: Administrative Case No. 44 of the RTC, Br. IV, Tagbilaran City, Against Atty. Samuel C. Occea, A.C. No. 2841, 3 July 2002, 383 SCRA 636, 651-652. [22] Ui v. Atty. Bonifacio, 388 Phil. 691, 705 (2000). [23] Rivera v. Corral, A.C. No. 3548, 4 July 2002, 384 SCRA 1, 9. [24] Igoy v. Atty. Soriano, 419 Phil. 346, 359 (2001). [25] A.C. No. 4215, 21 May 2001, 358 SCRA 1, 9; Saburnido v.Madroo, A.C. No. 4497, 26 September 2001, 366 SCRA 1, 7.

Suspension, Disbarment and Discipine of Lawyers Proceedings

DISBARMENT & DISCIPLINE OF ATTORNEYS Rule 139-B

Section 1. How instituted. - Proceedings for disbarment, suspension or discipline of attorneys may be taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person. The complaint shall state clearly and concisely the facts complained of and shall be supported by affidavits of persons having personal knowledge of the facts therein alleged and/or by such documents as may substantiate said facts.chanrobles virtua law library . The IBP Board of Governors may, motu proprio or upon referral by the Supreme Court or by a Chapter Board of Officers, or at the instance of any person, initiate and prosecute proper charges against erring attorneys including those in the government service;Provided, however, that all charges against Justices of the Court of Tax Appeals and theSandiganbayan, and Judges of the Court of Tax Appeals and lower courts, even if lawyers are jointly charged with them, shall be filed with the Supreme Court; Provided, further, that charges filed against Justices and Judges before the IBP, including those filed prior to their appointment in the Judiciary, shall immediately be forwarded to the Supreme Court for disposition and adjudication. chanrobles virtua law library Six (6) copies of the verified complaint shall be filed with the Secretary of the IBP or the Secretary of any of its chapters who shall forthwith transmit the same to the IBP Board of Governors for assignment to an investigator. (As amended by Bar Matter No. 1960).

A. PROCEEDINGS IN THE INTEGRATED BAR OF THE PHILIPPINES

Sec. 2. National Grievance Investigator. - The Board of Governors shall appoint from among IBP members an Investigator or, when special circumstances so warrant, a panel of three(3) investigators to investigate the complaint

All Investigators shall take an oath of office in the form prescribed by the Board of Governors. A copy of the Investigator's appointment and oath shall be transmitted to the Supreme Court.

An Investigator may be disqualified by reason of relationship within the fourth degree of consanguinity or affinity to any of the parties or their counsel, pecuniary interest, personal bias, or his having acted as counsel for either party, unless the parties sign and enter upon the record their written consent to his acting as such Investigator. Where the Investigator does not disqualify himself, a party may appeal to the IBP Board of Governors, which by majority vote of the members present, there being a quorum, may order his disqualification.

Any Investigator may also be removed for cause, after due hearing, by the vote of at least six (6) members of the IBP Board Governors. The decision of the Board of Governors in all cases of disqualification or removal shall be final. Sec. 3. Duties of the National Grievance Investigator. - The National Grievance Investigators shall investigate all complaint against members of the Integrated Bar referred to them by the IBP Board of Governors. Sec. 4. Chapter assistance to complainant. - The proper assist the complainant(s) in the preparation and complaint(s). chanrobles virtua law IBP Chapter may filing of his library

Sec. 5. Service or dismissal. - If the complaint appears to be meritorious, the Investigator shall direct that a copy thereof be served upon the respondent, requiring him to answer the same within fifteen (15) days from the date of service. If the complaint does not merit action, or if the answer shows to the satisfaction of the Investigator that the complaint is not meritorious, the same may be dismissed by the Board of Governors upon his recommendation. A copy of the resolution of dismissal shall be furnished the complainant and the Supreme Court which may review the case motu proprio or upon timely appeal of the complainant filed within 15 days from notice of the dismissal of the complainant. No investigation shall be interrupted or terminated by reason of the desistance, settlement, compromise, restitution, withdrawal of the charges, or failure of the complainant to prosecute the same. Sec. 6. Verification and service of answer. - The answer shall be verified. The original and five (5) legible copies of the answer shall be filed with the Investigator, with proof of service of a copy thereof on the complainant or his counsel. Sec. 7. Administrative counsel. - The IBP Board of Governors shall appoint a suitable member of the Integrated Bar as counsel to assist the complainant or the respondent during the investigation in case of need for such assistance.

Sec. 8. Investigation. - Upon joinder of issues or upon failure of the respondent to answer, the Investigator shall, with deliberate speed, proceed with the investigation of the case. He shall have the power to issue subpoenas and administer oaths. The respondent shall be given full opportunity to defend himself, to present witnesses on his behalf and be heard by himself and counsel. However, if upon reasonable notice, the respondent fails to appear, the investigation shall proceed ex parte. The Investigator shall terminate the investigation within three (3) months from the date of its commencement unless extended for good cause by the Board of Governors upon prior application. Willfull failure or refusal to obey a subpoena or any other lawful order issued by the Investigator shall be dealt with as for indirect contempt of court. The corresponding charge shall be filed by the Investigator before the IBP Board of Governors which shall require the alleged contemnor to show cause within ten (10) days from notice. The IBP Board of Governors may thereafter conduct hearings, if necessary, in accordance with the procedure set forth in this Rule for hearings before the Investigator. Such hearing shall, as far as practicable, be terminated within fifteen (15) days from its commencement. Thereafter, the IBP Board of Governors shall within like period fifteen (15) days issue a resolution setting forth its findings and recommendations, which `shall forthwith be transmitted to the Supreme Court for final action and if warranted, the imposition of penalty. Sec. 9. Depositions. - Depositions may be taken in accordance with the Rules of Court with leave of the investigator(s). chanrobles virtua law library Within the Philippines, depositions may be taken before any member of the Board of Governors, the President of any Chapter, or any officer authorized by law to administer oaths. Depositions may be taken outside the Philippines before a diplomatic or consular representative of the Philippine Government or before any person agreed upon by the parties or designated by the Board of Governors. Any suitable members of the Integrated Bar in the place where a deposition shall be taken may be designated by the Investigator to assist the complainant or the respondent in taking a deposition. Sec. 10. Report of Investigator. - Not later than thirty (30) days from the termination of the investigation, the Investigator shall submit a report containing his findings of fact and recommendations to the IBP Board of Governors, together with the stenographic notes and the transcripts thereof and all the evidence presented during the investigation. The submission of the report need not await the transcription of the stenographic notes, it being sufficient that the report reproduce substantially from the Investigator's personal notes any relevant and pertinent testimonies. Sec. 11. Defects. - No defect in a complaint, notice, answer, or in the proceeding or the Investigator's Report shall be considered as substantial unless the Board of Governors, upon considering the whole record, finds that such defect has resulted or may result in a miscarriage of justice, in which event the Board shall take such remedial action as the circumstance may

warrant, including invalidation of the entire proceedings.chanrobles virtua law library Sec. 12. View and decision by the Board of Governors. (a) Every case heard by an investigator shall be reviewed by the IBP Board of Governors upon the record and evidence transmitted to it by the Investigator with his report. The decision of the Board upon such review shall be in writing and shall clearly and distinctly state the facts and the reasons on which it is based. It shall be promulgated within a period not exceeding thirty (30) days from the next meeting of the Board following the submittal of the Investigator's Report (b) If the Board, by the vote of a majority of its total membership, determines that the respondent should be suspended from the practice of law or disbarred, it shall issue a resolution setting forth its findings and recommendations which, together with the whole record of the case, shall forthwith be transmitted to the Supreme Court for final action. (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. (d) Notice of the resolution or decision of the Board shall be given to all parties through their counsel. A copy of the same shall be transmitted to the Supreme Court. . B. PROCEEDINGS IN THE SUPREME COURT

Sec. 13. Supreme Court Investigators. - In proceedings initiated motu proprio by the Supreme Court in other proceedings when the interest of justice so requires, the Supreme Court may refer the case for investigation to the Solicitor General or to any officer of the Supreme Court or judge of a lower court, in which case, the investigation shall proceed in the same manner provided in Sections 6 to 11 hereof, save that the review report of the investigation shall be conducted directly by the Supreme Court. Sec. 14. Report of the Solicitor General or other Court designated investigator. - Based upon the evidence adduced at the investigation, the Solicitor General or other Investigator designated by the Supreme Court shall submit to the Supreme Court a resolution containing his findings of fact and

recommendations together the record and all the evidence presented in the investigation for the final action of the Supreme Court.

C. COMMON PROVISIONS

Sec. 15. Suspension of attorneys by Supreme Court. - After receipt of respondent's answer or lapse of the period therefor, the Supreme Court, motu proprio, or at the instance of the IBP Board of Governors upon the recommendation of the Investigator, may suspend an attorney from the practice of his profession for any of the causes specified in Rule 138, Section 27, during the pendency of the investigation until such suspension is lifted by the Supreme Court.chanrobles virtua law library Sec. 16. Suspension of attorney by the Court of Appeals or Regional Trial Court. - The Court of Appeals or Regional Trial Court may suspend an attorney from practice for any of the causes named in Rule 138, Section 27, until further action of the Supreme Court in the case. Sec. 17. Upon suspension by Court of Appeals or Regional Trial Court, further proceedings in Supreme Court. - Upon such suspension, the Court of Appeals or a Regional Trial Court shall forthwith transmit to the Supreme Court a certified copy of the order of suspension and a full statement of the facts upon which the same was based. Upon receipt of such certified copy and statement, the Supreme Court shall make a full investigation of the case and may revoke, shorten or extend the suspension, or disbar the attorney as the facts may warrant. Sec. 18. Confidentiality. - Proceedings against attorneys shall be private and confidential. However, the final order of the Supreme Court shall be published like its decisions in other cases. Sec. 19. Expenses. - All reasonable and necessary expenses incurred in relation to disciplinary and disbarment proceedings are lawful charges forthwith the parties may be taxed as costs. chanrobles virtua law library Sec. 20. Effectivity and Transitory Provision. - This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled "DISBARMENT OR SUSPENSION OF ATTORNEYS". All cases pending investigation by the Office of the Solicitor General shall be transferred to the Integrated Bar of the Philippines Board of Governors for investigation and disposition as provided in this Rule except those cases where the investigation has been substantially completed. (Bar Matter No. 356, Resolution dated April 13, 1988).

EN BANC [A.M. No. 07-11-13-SC, June 30, 2008] RE: LETTER-COMPLAINT OF CONCERNED CITIZENS AGAINST SOLICITOR GENERAL AGNES VST. DEVANADERA, ATTY. ROLANDO FALLER, AND ATTY. SANTIAGO VARELA. RESOLUTION
CARPIO MORALES, J.: The Office of the Chief Justice (OCJ) received on September 5, 2007 an unverified letter-complaint[1] dated August 26, 2007 written by "Concerned Citizens" and addressed to Chief Justice Reynato S. Puno. In that August 26, 2007 letter-complaint, the "Concerned Citizens" informed that on August 6, 2007, they filed before the Court "through" the Office of the Chief Justice, a complaint for disbarment/disciplinary action against former Government Corporate Counsel (GCC), now Solicitor General Agnes Vst. Devanadera, along with the present GCC Alberto C. Agra and other lawyers of the Office of the Government Corporate Counsel (OGCC), for "engaging directly or indirectly in partisan political activities" during the May 14, 2007 national and local elections, and for violating the Anti-Graft and Corrupt Practices Act." To the August 26, 2007 letter-complaint was attached a copy of the complaint of the "Concerned Citizens" filed on August 6, 2007, with annexes. The "Concerned Citizens" further informed in the August 26, 2007 letter that they filed also on August 6, 2007 a complaint[2] before the Office of the Ombudsman against now Solicitor General Devanadera and Attys. Faller and Varela and that they were "filing [the following] complaints on the basis of the same facts and incidents [they] filed against the above three (3) lawyers in the Ombudsman" for: x x x Violation of the Code of Professional Responsibility. We are not lawyers, however, we believe that these three (3) government lawyers violated the Code of Professional Responsibility namely: Canon 1 (A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law and legal processes) and Canon 6 (These canons shall apply to lawyers in government services in the discharge of their official tasks.) We also believe that as complainants who called the attention of the Supreme Court, the unethical acts of these three (3) lawyers are related to the discharge of their functions (Malversationunder Art. 217 of the Revised Penal Code, Violation of Sec. 3(e),Anti-Graft and Corrupt Practices Act, Dishonesty, grave Misconduct in office and Conduct Prejudicial to the Best Interest of the Service) and can be proceeded independently by the Ombudsman and the disbarment/disciplinary proceedings can be undertaken by separately by the Supreme Court because the sole question for determination in disbarment/disciplinary proceedings is whether the said three (3) government lawyers, as members of the Philippine bar are fit to be allowed the privilege as such or not. x x x x (Emphasis and underscoring supplied) By Resolution of November 20, 2007, [3] the Court required Solicitor General Devanadera, GCC Agra and Attys. Faller and Varela to Comment on the August 26, 2007 letter-complaint within ten days from notice. The Solicitor General et al. filed their separate comments,[4] praying for the outright dismissal of the complaint for being anonymous and contrary to the intent of Section 1, Rule 139-B of the Rules of Court which provides: Section 1. How instituted. Proceedings for the disbarment, suspension, or discipline of attorneys may be taken by the Supreme Court motu proprio, or by the Integrated Bar of the Philippines (IBP) upon the verified complaint of any person. The complaint shall state clearly and concisely the facts complained of and shall be supported by affidavits of persons having personal knowledge of the facts therein alleged and/or by such documents as may substantiate said facts. (Italics in the original; emphasis and underscoring supplied)

Solicitor General Devanadera states in her Comment[5] dated December 17, 2007 that, in any event, since she is holding a cabinet rank, pursuant to Republic Act No. 9417, she is not covered by the prohibition of Section 261 (i) of the Omnibus Election Code, [6] the law that prohibits partisan political activity. She cites "Santos v. Yatco,106 Phil. 745," which held that, so she states, "the ban on prohibited campaigning stated in Section 261(i) of the Omnibus Election Code does not extend to those officers and employees outside of the civil service such as members of the Cabinet."[7] Solicitor General Devanadera and Attys. Faller and Varela later filed a joint Motion for Clarification with Motion to Admit Supplemental Comment[8] manifesting that there might have been a misunderstanding on what this Court wanted them to comment on, hence, their filing of a Supplemental Comment. [9] In their Supplemental Comment, Solicitor General Devenadera et al. inform that they had not received a copy of the above-mentioned August 6, 2007 letter-complaint for disbarment allegedly filed before this Court through the OCJ but that they came to learn about it only because a copy thereof was attached to the August 26, 2007 letter-complaint. They add, however, that there were no annexes attached to that copy of the August 6, 2007 letter-complaint, thus denying them due process as they are prevented from refuting each document-annex and the conclusions drawn therefrom.[10] The Solicitor General et al. just the same moved for the dismissal of the August 26, 2007 letter-complaint for prematurity as the resolution of the complaint filed before the Office of the Ombudsman, if indeed there was, is material in determining whether they committed error in the performance of their duties.[11] Section 1 of Rule 139-B (Disbarment and Discipline of Attorneys) of the Rules of Court requires that the complaint against an attorney must be verified. In Fernandez v. Atty. Novero, Jr.,[12] however, this Court held that failure to verify the complaint constitutes a mere formal defect, and the Court may "order the correction of the unverified pleadings or act on it and waive strict compliance with the rules in order that the ends of justice may be served." Complainant "Concerned Citizens" provided no mailing address or contact information in their lettercomplaint. And they did not proffer any justification for not coming out in the open other than the selfserving reason of "for self-preservation," which is contrary to their claim that they are "not afraid to rock the boat ... so that the proper government authorities will hear the plain and painful truths." Anonymous v. Geverola[13] which the Solicitor General et al. cites is instructive: An anonymous complaint is always received with great caution, originating as it does from an unknown author. However, a complaint of such sort does not always justify its outright dismissal for being baseless or unfounded for such comp[laint] may be easy of verification and may, without much difficulty, be substantiated and established by other competent evidence... [14] (Emphasis and underscoring supplied) A reading of the August 26, 2007 letter-complaint, however, shows that the allegations are vague. And the attachments thereto are mere photocopies, not to mention the plaint of the Solicitor General et al. that they were not furnished copies of the annexes to the August 6, 2007 complaint. The Court is thus inclined to, as it does, dismiss the complaint. The duty of the Court towards members of the bar is not only limited to the administration of discipline to those found culpable of misconduct but also to the protection of the reputation of those frivolously or maliciously charged. [15] The Court will not thus shirk from its responsibility to mete out proper disciplinary punishment to lawyers who are shown to have failed to live up to their sworn duties; but neither will it hesitate to extend its protective arm to those the accusation against whom is not indubitably proven.[16] For a lawyer's good name is, in the ultimate analysis, his most important possession.[17] Indeed, the success of a lawyer in his profession depends almost entirely on his reputation. Anything which will harm his good name is to be deplored as a lawyer's reputation is "a plant of tender growth, and its bloom, once lost, is not easily restored." The eventual dismissal however of the administrative case, as in this case, should more than redeem and maintain petitioner's good name. [18]

A word more. Santos v. Yatco, which was cited by the Solicitor General, is actually entitled "Delos Santos, et al. v. Hon. Yatco, et al." Nowhere, however, in the Decision in said case, a 1959 case, did this Court dwell on Section 261 (i) of the Omnibus Election Code of the Philippines (Batas Pambansa Blg. 881), which was actually enacted into law only on December 3, 1985. The Court thus takes this opportunity to again enjoin lawyers to be more circumspect in the citation of cases or authorities in support of their positions. ...But if inferior courts and members of the bar meticulously discharge their duty to check and recheck their citations of authorities culled not only from this Court's decisions but from other sources..., appellate courts will be precluded from acting on misinformation, as well as be saved precious time in finding out whether the citations are correct. [19] (Emphasis and underscoring supplied) WHEREFORE, the August 26, 2007 complaint against former Government Corporate Counsel, now Solicitor General Agnes Vst. Devanadera, and Attys. Rolando Faller and Santiago Varela[20] of the Office of the Government Corporate Counsel isDISMISSED. SO ORDERED. Puno, C.J., Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, Azcuna, Tinga, Chico-Nazario, Velasco, Jr., Nachura, Reyes, Leonardo-De Castro, and Brion, JJ., concur.

[1]

Rollo, pp. 3-4. Id. at 3. Id. at 62.

[2]

[3]

[4]

The comments of Solicitor General Devanadera, GCC Agra and Atty. Faller are dated December 17, 2007 and were filed on even date (rollo, pp. 72-89). Atty. Varela's Comment is dated December 26, 2007 and was filed on even date (rollo, pp. 65-68).
[5]

Rollo, pp. 72-77. Sec. 261. Prohibited acts. - The following shall be guilty of an election offense:

[6]

xxxx (i) Intervention of public officers and employees. Any officer or employee in the civil service, except those holding political offices; any officer, employee, or member of the Armed Forces of the Philippines, or any police force, special forces, home defense forces, barangay self-defense units and all other para-military units that now exists or which may hereafter be organized who, directly or indirectly, intervenes, in any election campaign or engages in any partisan political activity, except to vote or to preserve public order, if he is a peace officer.
[7]

Rollo, p. 75, underscoring in the original. Id. at 96-101. Id. at 102-109. Id. at 103-104. Id. at 107-108. 441 Phil. 506, 513 (2002).

[8]

[9]

[10]

[11]

[12]

[13]

344 Phil. 688 (1997). Id. at 696-697. Dela Cruz v. Diesmos, A.C. No. 6850, July 27, 2006, 496 SCRA 525, 534. Asturias v. Serrano, A.C. No. 6538, November 25, 2005, 476 SCRA 97, 107. Ibaez v. Via, A.C. No. 1648, September 26, 1981, 107 SCRA 607, 613. Saludo, Jr. v. Court of Appeals, G.R. No. 121404, May 3, 2006, 489 SCRA 14, 20.

[14]

[15]

[16]

[17]

[18]

[19]

Insular Life Assurance Co. Ltd. Employees Association-NATU, et al. v. Insular Life Assurance Co., Ltd., et al., 147 Phil. 194, 229 (1971).
[20]

Since the "Concerned Citizens'" information in their letter-complaint dated August 26, 2007 is that they are filing the complaint "on the basis of the same facts and incidents . . . against the above three lawyers in the Ombudsman Solicitor General Devanadera and Attys. Faller and Varela - GCC Agra appears not to be among the three charged herein.

E-Library Doc. ID: 12162531021892589106

Suspension, Disbarment and Discipline of Lawyers Discipline of Filipino Lawyers Practice in Foreign Jurisdictions

EN BANC

ZOILO ANTONIO VELEZ, Complainant,

A.C. No. 6697

versus -

Bar Matter No. 1227 ATTY. LEONARD S. DE VERA, Respondent. x------------------------ x A.M. No. 05-5-15-SC RE: OATH-TAKING OF ATTY. LEONARD S. DE VERA, INCOMING PRESIDENT OF THE INTEGRATED BAR OF THEPHILIPPINES Present:

PANGANIBAN, C. J., PUNO, QUISUMBING,

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

YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO,

IN THE MATTER OF THE REMOVAL OF ATTY. LEONARD S. DE VERA FROM THE IBP BOARD OF GOVERNORS AS EXECUTIVE VICE PRESIDENT AND GOVERNOR

MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, AZCUNA, TINGA, CHICO-NAZARIO,

IN THE MATTER OF THE LETTER-COMPLAINT OF ATTY. LEONARD S. DE VERA DATEDMAY 18, 2005 TO FORTHWITH DENY/DISAPPROVE THE IBP RESOLUTION UNJUSTLY, ILLEGALLY, ARBITRARILY, AND ABRUPTLY REMOVING HIM FROM THE BOARD OF GOVERNORS OF THE IBP FOR ABSOLUTE LACK OF BASIS AND FOR FLAGRANT DENIAL OF DUE PROCESS.

GARCIA and VELASCO JJ. Promulgated:

July 25, 2006

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

DECISION

Per Curiam:

Before Us are three consolidated cases revolving around Integrated Bar of the Philippines (IBP) Governor and Executive Vice-President (EVP) Atty. Leonard de Vera. The first pertains to a disbarment case questioning Atty. de Vera s moral fitness to remain as a member of the Philippine Bar, the second refers to Atty. de Vera s letter-request to schedule his oath taking as IBP National President, and the third case concerns the validity of his removal as Governor and EVP of the IBP by the IBP Board. The resolution of these cases will determine the national presidency of the IBP for the term 2005-2007. A.C. No. 6697

The Office of the Bar Confidant, which this Court tasked to make an investigation, report and recommendation on subject case,[1] summarized the antecedents thereof as follows:
In a Complaint dated 11 April 2005, complainant Zoilo Antonio Velez moved for the suspension and/or disbarment of respondent Atty. Leonard de Vera based on the following grounds:

1)

2)

respondent s alleged misrepresentation in concealing the suspension order rendered against him by the State Bar of California; and respondent s alleged violation of the so-called rotation rule enunciated in Administrative Matter No. 491 dated 06 October 1989 (in the Matter: 1989 IBP Elections).

Complainant averred that the respondent, in appropriating for his own benefit funds due his client, was found to have performed an act constituting moral turpitude by the Hearing Referee Bill Dozier, Hearing Department San Francisco, State Bar of California in Administrative Case No. 86-0-18429. Complainant alleged that the respondent was then forced to resign or surrender his license to practice law in the said state in order to evade the recommended three (3) year suspension. Complainant asserted that the respondent lacks the moral competence necessary to lead the country s most noble profession. Complainant, likewise, contended that the respondent violated the so-called rotation rule provided for in Administrative Matter No. 491 when he transferred to IBP Agusan del Sur Chapter. He claimed that the respondent failed to meet the requirements outlined in the IBP By-Laws pertaining to transfer of Chapter Membership. He surmised that the respondent s transfer was intended only for the purpose of becoming the next IBP National President. Complainant prayed that the respondent be enjoined from assuming office as IBP National President. Meanwhile, in his Comment dated 2 May 2005, respondent stated that the issues raised in above-mentioned Complaint were the very issues raised in an earlier administrative case filed by the same complainant against him. In fact, according to him, the said issues were already extensively discussed and categorically ruled upon by this Court in its Decision dated 11 December 2005 in Administrative Case No. 6052 (In Re: Petition to Disqualify Atty. Leonard De Vera). Respondent prayed that the instant administrative complaint be dismissed following the principle of res judicata. On 15 June 2005, both parties appeared before the Office of the Bar Confidant for presentation of evidence in support of their respective allegations. Subsequently, in a Memorandum dated 20 June 2005, complainant maintained that there is substantial evidence showing respondent s moral baseness, vileness and depravity, which could be used as a basis for his disbarment. Complainant stressed that the respondent never denied that he used his client s money. Complainant argued that the respondent failed to present evidence that the Supreme Court of California accepted the latter s resignation and even if such was accepted, complainant posited that this should not absolve the respondent from liability.

Moreover, complainant added that the principle of res judicata would not apply in the case at bar. He asserted that the first administrative case filed against the respondent was one for his disqualification. x x x.

Bar Matter No. 1227 A.M. No. 05-5-15-SC

As earlier adverted to, Bar Matter No. 1227 refers to Atty. de Vera s letterrequest to this Court to schedule his oath taking as IBP National President. A.M. No. 05-5-15-SC, on the other hand, is a letter-report dated 19 May 2005 of IBP National President Jose Anselmo I. Cadiz (IBP President Cadiz) furnishing this Court with the IBP s Resolution, dated 13 May 2005, removing Atty. De Vera as member of the IBP Board and as IBP EVP, for committing acts inimical to the IBP Board and the IBP in general.[2] The controversy in Bar Matter No. 1227 and A.M. No. 05-5-15-SC arose from the regular meeting of the IBP Board of Governors held on 14 January 2005. In said meeting, by 2/3 vote (6 voting in favor and 2 against), the IBP Board approved the withdrawal of the Petition filed before this Court docketed as Integrated Bar of the Philippines, Jose Anselmo I. Cadiz, et al. vs. Senate of the Philippines, et al. Petition for Certiorari and Prohibition with Prayer for the Issuance of Temporary Restraining Order or Writ of Preliminary Injunction, SCR165108. The Petition was intended to question the legality and/or constitutionality of Republic Act No. 9227, authorizing the increase in the salaries of judges and justices, and to increase filing fees.[3]

The two IBP Governors who opposed the said Resolution approving the withdrawal of the above-described Petition were herein respondent Governor and EVP de Vera and Governor Carlos L. Valdez.[4]

On 19 January 2005, IBP President Cadiz informed this Court of the decision taken by the IBP Board to withdraw the afore-mentioned Petition. Attached to his letter was a copy of the IBP Board s 14 January 2005 Resolution.[5]

On 15 April 2005, Bar Matter No. 1227, pertaining to Atty. de Vera s request for oathtaking as National President, was filed. The same was subsequently consolidated with A.C. No. 6697, the disbarment case filed against Atty. de Vera.[6]

On 22 April 2005, a plenary session was held at the 10th National IBP Convention at the CAP-Camp John Hay Convention Center, Baguio City. It was at this forum where Atty. de Vera allegedly made some untruthful statements, innuendos and blatant lies in connection with the IBP Board s Resolution to withdraw the Petition questioning the legality of Republic Act No. 9227.[7]

On 10 May 2005, this Court issued a Temporary Restraining Order (TRO) enjoining Atty. de Vera from assuming office as IBP National President.[8]

On 12 May 2005, IBP Gov. Romulo A. Rivera wrote IBP National President Cadiz a letter wherein he prayed for the removal of Atty. de Vera as member of the IBP Board for having committed acts which were inimical to the IBP Board and the IBP.[9] On 13 May 2005, in the 20th Regular Meeting of the Board held at the Waterfront Hotel, Cebu City, the IBP Board, by 2/3 vote, resolved to remove Atty. de Vera as member of the IBP Board of Governors and as IBP Executive Vice President.[10] Quoted hereunder is the dispositive portion of said Resolution:

NOW THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, that Governor Leonard S. de Vera is REMOVED as a member of the IBP Board of Governors and Executive Vice President for committing acts inimical to the IBP Board of Governors and the IBP, to wit: 1. For making untruthful statements, innuendos and blatant lies in public about the Supreme Court and members of the IBP Board of Governors, during the Plenary Session of the IBP 10th National Convention of Lawyers, held at CAP-Camp John Hay Convention Center on 22 April 2005, making it appear that the decision of the IBP Board of Governors to withdraw the PETITION docketed as Integrated Bar of the Philippines, Jose Anselmo I. Cadiz, et al. vs. The Senate of the Philippines, et al., Petition for Certiorari and Prohibition With Prayer for the Issuance of A Temporary Restraining Order or Writ of Preliminary Injunction, S.C.-R. 165108, was due to influence and pressure from the Supreme Court of the Philippines; 2. For making said untruthful statements, innuendos and blatant lies that brought the IBP Board of Governors and the IBP as a whole in public contempt and disrepute; 3. For violating Canon 11 of the Code of Professional Responsibility for Lawyers which mandates that A lawyer shall observe and maintain the respect due to the courts and to judicial officers and should insist on similar conduct by others, by making untruthful statements, innuendos and blatant lies during the Plenary Session of the IBP 10th National Convention of Lawyers in Baguio City; 4. For instigating and provoking some IBP chapters to embarrass and humiliate the IBP Board of Governors in order to coerce and compel the latter to pursue the aforesaid PETITION; 5. For falsely accusing the IBP National President, Jose Anselmo I. Cadiz, during the Plenary Session of the 10th National Convention in Baguio City of withholding from him a copy of Supreme Court Resolution, dated 25 January 2005, granting the withdrawal of the PETITION, thereby creating the wrong impression that the IBP National President deliberately prevented him from taking the appropriate remedies with respect thereto, thus compromising the reputation and integrity of the IBP National President and the IBP as a whole.[11]

On 18 May 2005, Atty. de Vera aired his sentiments to this Court by writing the then Hon. Chief Justice Hilario G. Davide, Jr. a letter captioned as Urgent Plea to Correct a Glaring Injustice of the IBP Board of Governors; Vehement Protest to the Board Resolution Abruptly Removing Atty. Leonard de Vera from the Board of Governors in Patent Violation of Due Process; Petition to Deny/Disapprove the Completely Unjustified and Highly Arbitrary Resolution Precipitately Ousting Atty. de Vera from the Board of Governors in Less Than Twenty Four (24) Hours from Notice and Judgment Without Formal Investigation. [12]

In the said letter, Atty. de Vera strongly and categorically denied having committed acts inimical to the IBP and its Board. He alleged that on the basis of an unverified letter-complaint filed by IBP Governor Rivera, the IBP Board voted to expel him posthaste, without just cause and in complete disregard of even the minimum standards of due process. Pertinent portions of his letter read:

It is evident that the Board of Governors has committed a grave and serious injustice against me especially when, as the incumbent Executive Vice President of the IBP, I am scheduled to assume my position as National President of the IBP on July 1, 2005. x x x

I was denied the very basic rights of due process recognized by the Supreme Court even in administrative cases:

1.

The denial of the right to answer the charges formally or in writing. The complaint against me was in writing.

2.

The denial of the right to answer the charges within a reasonable period of time after receipt of the complaint.

3.

The denial of the right to a fair hearing.

4.

The denial of the right to confront the accuser and the witnesses against me. I challenged Gov. Rivera to testify under oath so I could question him. He refused. I offered to testify under oath so I could be questioned. My request was denied.

5.

The denial of my right to present witnesses on my behalf.

6.

The denial of my right to an impartial judge. Governor Rivera was my accuser, prosecutor, and judge all at the same time.

7.

Gov. Rivera s prejudgment of my case becomes even more evident because when his motion to expel me was lost in a 5-3 votes (due to his inhibition to vote), Gov. Rivera asked for another round of voting so he can vote to support his own complaint and motion to expel me.[13] (Emphasis and underscoring in original.)

On 27 May 2005, the IBP Board responded to the 18 May 2005 letter of Atty. de Vera.[14] In their Reply, the IBP Board explained to this Court that their decision to remove Atty. de Vera was based on valid grounds and was intended to protect itself from a recalcitrant member. Among the grounds cited and elucidated by the IBP Board were the following:

(i)

Atty. de Vera engaged himself in a negative media campaign and solicited resolutions from IBP Chapters to condemn the IBP Board of Governors for its decision to withdraw thePETITION, all with the end in view of compelling or coercing the IBP Board of Governors to reconsider the decision to withdraw the PETITION.

(ii)

Atty. de Vera embarrassed, humiliated and maligned the IBP Board of Governors and the IBP National President in public or during the Plenary Session at the 10th National Convention of Lawyers.

(iii)

Rather than pacify the already agitated solicited speakers (at the plenary session), Atty. de Vera fanned the fire , so to speak, and went to the extent of making untruthful statements, innuendos and blatant lies about the Supreme Court and some members of the IBP Board of Governors. He deliberately and intentionally did so to provoke the members of the IBP Board of Governors to engage him in an acrimonious public debate and expose the IBP Board of Governors to public ridicule.

(iv)

Atty. de Vera uttered untruthful statements, innuendos and blatant lies, e.g., that some of the members of the IBP Board of Governors voted in favor of the withdrawal of the petition (without mentioning names) because nakakahiya kasi sa Supreme Court, nakakaawa kasi ang Supreme Court, kasi may mga kaibigan tayo sa Court. He made it appear that the IBP Board of Governors approved the resolution, withdrawing the petition, due to influence or pressure from the Supreme Court.[15]

The IBP Board explained that Atty. de Vera s actuation during the Plenary Session was the last straw that broke the camel s back. He committed acts inimical to the interest of the IBP Board and the IBP; hence, the IBP Board decided to remove him.

On 3 June 2005, Atty. de Vera furnished the Court with copies of resolutions and a position paper coming from various IBP Chapters all condemning his expulsion from the IBP Board and as IBP EVP.[16] On 15 June 2005, IBP President Cadiz informed Chief Justice Davide that in a special meeting of the IBP Board held at the EDSA Shangri-la Plaza on 13 June

2005, the IBP Board took note of the vacancy in the position of the IBP EVP brought about by Atty. de Veras removal. In his stead, IBP Governor Pura Angelica Y. Santiago was formally elected and declared as IBP EVP.[17] On 17 June 2005, Atty. de Vera protested against the election of Atty. Santiago.[18] On 20 June 2005, Atty. Santiago voluntarily relinquished the EVP position through a letter addressed to the IBP Board.[19] Thus, on 25 June 2005, during its last regular meeting, the IBP Board elected a new EVP in the person of IBP Governor Jose Vicente B. Salazar to replace Atty. Santiago. On 28 June 2005, IBP National President Cadiz, through a letter addressed to Chief Justice Davide, reported to this Court Atty. Salazars election.[20] IBP National President Cadiz also requested, among other things, that Atty. Salazars election be approved and that he be allowed to assume as National President in the event that Atty. de Vera is disbarred or suspended from the practice of law or should his removal from the 2003-2005 Board of Governors and as EVP is approved by this Court.[21] Also on 28 June 2005, Atty. de Vera protested the election of Atty. Salazar.[22] In his Extended Comment[23] dated 25 July 2005, Atty. de Vera maintained that there was absolutely no factual or legal basis to sustain the motion to remove him from the IBP Board because he violated no law. He argued that if the basis for his removal as EVP was based on the same grounds as his removal from the IBP Board, then his removal as EVP was likewise executed without due notice and without the least compliance with the minimum standards of due process of law. Atty. de Vera strongly averred that, contrary to the utterly false and malicious charges filed against him, the speakers at the Plenary Session of the Baguio Convention, although undeniably impassioned and articulate, were respectful in their language and exhortations, not once undermining the stature of the IBP in general and the IBP Board of Governors in particular. He posited that speaking in disagreement with the Resolution of the Board during the Conventions Plenary Session is not a valid cause to remove or expel a dulyelected member of the IBP Board of Governors; and the decision to remove him only shows that the right to freedom of speech or the right to dissent is not recognized by the incumbent IBP Board.

Anent the charges that he accused the National President of withholding a copy of this Courts Resolution granting the withdrawal of the Petition questioning the legality of Republic Act No. 9227, Atty. de Vera avowed that he made no such remarks. As regards the election of a new IBP EVP, Atty. de Vera contended that the said election was illegal as it was contrary to the provisions of the IBP ByLaws concerning national officers, to wit:
Section. 49. Term of office. - The President and the Executive Vice President shall hold office for a term of two years from July 1 following their election until 30 June of their second year in office and until their successors shall have been duly chosen and qualified.

In the event the President is absent or unable to act, his functions and duties shall be performed by the Executive Vice President, and in the event of death, resignation, or removal of the President, the Executive Vice President shall serve as Acting President for the unexpired portion of the term. In the event of death, resignation, removal or disability of both the President and the Executive Vice President, the Board of Governors shall elect an Acting President to hold office for the unexpired portion of the term or during the period of disability.

Unless otherwise provided in these By-Laws, all other officers and employees appointed by the President with the consent of the Board shall hold office at the pleasure of the Board or for such term as the Board may fix.[24]

To bolster his position, Atty. de Vera stressed that when both the President and the EVP die, resign, are removed, or are disabled, the IBP By-Laws only provides for the election of an Acting President and that no mention for an election for EVP was made. Thus, when such election for EVP occurs, such is contrary to the express provision of the IBP By-Laws. Atty. de Vera also argued that even if he were validly removed as IBP EVP, his replacement should come from Eastern Mindanao and not from any other

region, due to the Rotation Rule embodied in par. 2, Section 47, Article VII of the IBP By-Laws. In response to Atty. de Veras averments, the 2003-2005 IBP Board, through its counsel, submitted a Reply dated 27 January 2006 and clarified as follows:
(i) The IBP Board of Governors is vested with sufficient power and authority to protect itself from an intractable member by virtue of Article VI, Section 44 of the IBP By-Laws; Atty. de Vera was removed as a member of the IBP Board and as IBP EVP not because of his disagreement with the IBP Boards position but because of the various acts that he committed which the IBP Board determined to be inimical to the IBP Board and the IBP as a whole; Atty. de Vera cannot exculpate himself from liability by invoking his constitutional right to Free Speech because, as a member of the Bar, it is his sworn duty to observe and maintain the respect due to the courts and to judicial officers and to insist on similar conduct by others; The IBP Board, in effecting the removal of Atty. de Vera, observed the fundamental principles of due process. As the records would bear, Atty. de Vera was duly notified of the Regular Meeting of the IBP Board held on 13 May 2004; was furnished a copy of Governor Riveras Letter-Complaint the day before the said meeting; was furnished a copy of the said Meetings Agenda; and was allowed to personally defend himself and his accuser, Gov. Rivera; Atty. de Vera was validly removed because the required number of votes under Section 44 of the IBP By-Laws to remove Atty. de Vera as a member of the IBP Board and as IBP EVP was duly complied with; Atty. de Veras replacement as IBP EVP need not come from Eastern Mindanao Region because: (a) the rotation rule under Article VII, Section 47, par. 2 of the IBP By-Laws had already been complied with when Atty. de Vera, who hails from Eastern Mindanao, was elected IBP EVP; and (b) the rotation rule need not be enforced if the same will not be practicable, possible, feasible, doable or viable; and, finally, that Atty. Salazar was validly elected as IBP EVP and, thus, should now be allowed to take his oath as IBP National President.[25]

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

The Courts Ruling

AC No. 6697 In his Memorandum[26] dated 20 June 2005, complainant tendered the following issues for the consideration of the Court:
I. WHETHER OR NOT RESPONDENT ATTORNEY LEONARD S. DEVERA (sic) COMMITED MALPRACTICE WHICH AMOUNTED TO MORAL T[U]RPITUDE IN THE STATE BAR OF CALIFORNIA AND IN THE PHILIPPINES, IN THE COURSE OF HIS PRACTICE OF LAW. II. WHETHER OR NOT THE OATH OF OFFICE AS LAWYER IS ATTACHED TO THE PERSON OF ATTORNEY LEONARD S. DEVERA (sic) WHEREVER HE MAY GO AND NOT NECESSARILY BOUND BY THE TERRITORIAL JURISDICTION OF THE PHILIPPINES. III. WHETHER OR NOT THERE IS SUBSTANTIAL EVIDENCE TO PROVE THE MORAL T[U]RPITUDE, AS BASIS FOR DISBARMENT OF RESPONDENT IN AN ADMINISTRATIVE PROCEEDING. IV. WHETHER OR NOT RES JUDICATA APPLIES IN THIS CASE, DUE TO ADMIN. CASE NO. [6052][27]

The disposition of the first three related issues hinges on the resolution of the fourth issue. Consequently, we will start with the last issue. A.C. No. 6052 is not a bar to the filing of the present administrative case.

In disposing of the question of res judicata, the Bar Confidant opined:

To reiterate, the instant case for suspension and/or disbarment against respondent Leonard De Vera is grounded on the following: 1) respondents alleged misrepresentation in concealing the suspension order rendered against him by the State Bar in California; and respondents alleged violation of the so-called rotation rule enunciated in Administrative Matter No. 491 dated 06 October 1989 (In the Matter: 1989 IBP Elections).

2)

It appears that the complainant already raised the said issues in an earlier administrative case against the respondent. Verily, these issues were already argued upon by the parties in their respective pleadings, and discussed and ruled upon by this Court in its Decision dated 11 December 2003 in Administrative Matter No. 6052 (In Re: Petition to Disqualify Atty. Leonard de Vera). As such, with respect to the first issue, this Court held that: As for the administrative complaint filed against him by one of his clients when he was practicing law in California, which in turn compelled him to surrender his California license to practice law, he maintains that it cannot serve as basis for determining his moral qualification (or lack of it) to run for the position he is aspiring for. He explains that there is as yet no final judgment finding him guilty of the administrative charge, as the records relied upon by the petitioners are mere preliminary findings of a hearing referee which are recommendatory findings of an IBP Commissioner on Bar Discipline which are subject to the review of and the final decision of the Supreme Court. He also stresses that the complainant in the California administrative case has retracted the accusation that he misappropriated the complainants money, but unfortunately the retraction was not considered by the investigating officer. xxx On the administrative complaint that was filed against respondent De Vera while he was still practicing law in California, he explained that no final judgment was rendered by the California Supreme Court finding him guilty of the charge. He surrendered his license to protest the discrimination he suffered at the hands of the investigator and he found it impractical to pursue the case to the end. We find these explanations satisfactory in the absence of contrary proof. It is a basic rule on evidence that he who alleges a fact has the burden to prove the same. In this case, the petitioners have not shown how the administrative complaint affects respondent De Vera's moral fitness to run for governor.

On the other hand, as regards the second issue: Petitioners contend that respondent de Vera is disqualified for the post because he is not really from Eastern Mindanao. His place of residence is in Paraaque and he was originally a member of the PPLM IBP Chapter. He only changed his IBP Chapter membership to pave the way for his ultimate goal of attaining the highest IBP post, which is the national presidency. Petitioners aver that in changing his IBP membership, respondent De Vera violated the domicile rule. The contention has no merit. Under the last paragraph of Section 19, Article II, a lawyer included in the Roll of Attorneys of the Supreme Court can register with the particular IBP Chapter of his preference or choice, thus: xxx It is clearly stated in the aforequoted section of the By-Laws that it is not automatic that a lawyer will become a member of the chapter where his place of residence or work is located. He has the discretion to choose the particular chapter where he wishes to gain membership. Only when he does not register his preference that he will become a member of the Chapter of the place where he resides or maintains office. The only proscription in registering one's preference is that a lawyer cannot be a member of more than one chapter at the same time. The same is provided in Section 29-2 of the IBP By-Laws. In fact, under this Section, transfer of IBP membership is allowed as long as the lawyer complies with the conditions set forth therein, thus: xxx The only condition required under the foregoing rule is that the transfer must be made not less than three months prior to the election of officers in the chapter to which the lawyer wishes to transfer. In the case at bar, respondent De Vera requested the transfer of his IBP membership to Agusan del Sur on 1 August 2001. One month thereafter, IBP National Secretary Jaime M. Vibar wrote a letter addressed to Atty. Amador Z. Tolentino, Jr., Secretary of IBP PPLM Chapter and Atty. Lyndon J. Romero, Secretary of IBP Agusan del Sur Chapter, informing them of respondent de Vera's

transfer and advising them to make the necessary notation in their respective records. This letter is a substantial compliance with the certification mentioned in Section 29-2 as aforequoted. Note that de Vera's transfer was made effective sometime between 1 August 2001 and 3 September 2001. On 27 February 2003, the elections of the IBP Chapter Officers were simultaneously held all over the Philippines, as mandated by Section 29.a of the IBP By-Laws which provides that elections of Chapter Officers and Directors shall be held on the last Saturday of February of every other year. Between 3 September 2001 and 27 February 2003, seventeen months had elapsed. This makes respondent de Vera's transfer valid as it was done more than three months ahead of the chapter elections held on 27 February 2003. In the case of Romulo G. Dinsay vs. Atty. Leopoldo D. Cioco (Administrative Case No. 2995, 27 November 1996), this Court declared that: The doctrine of res judicata applies only to judicial or quasi-judicial proceedings and not to the exercise of the [Courts] administrative powers. In the said case, respondent Clerk of Court Cioco was dismissed from service for grave misconduct highly prejudicial to the service for surreptitiously substituting the bid price in a Certificate of Sale from P3,263,182.67 to only P730,000.00. Thereafter a complaint for disbarment was filed against the respondent on the basis of the same incident. Respondent, interposingres judicata, argued that he may no longer be charged on the basis of the same incident. This Court held that while the respondent is in effect being indicted twice for the same misconduct, this does not amount to double jeopardy as both proceedings are admittedly administrative in nature. This Court qualified that, in the first case, the respondent was proceeded against as an erring court personnel under the Courts supervisory power over courts while, in the second case, he was disciplined as a lawyer under the Courts plenary authority over membersof the legal profession. In subsequent decisions of this Court, however, it appears that res judicata still applies in administrative cases. Thus, in the case of Atty. Eduardo C. De Vera vs. Judge William Layague (Administrastive Matter No. RTJ-93-986), this Court ruled that: While double jeopardy does not lie in administrative cases, it would be contrary to equity and substantial justice to penalize respondent judge a second time for an act which he had already answered for.

Likewise, in the recent case of Executive Judge Henry B. Basilia vs. Judge Amado L. Becamon, Lolita Delos Reyes and Eddie Delos Reyes (Administrative Matter No. MTJ-02-1404, 14 December 2004), this Court held that: Applying the principle of res judicata or bar by prior judgment, the present administrative case becomes dismissible. xxx Under the said doctrine, a matter that has been adjudicated by a court of competent jurisdiction must be deemed to have been finally and conclusively settled if it arises in any subsequent litigation between the same parties and for the same cause. It provides that [a] final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand, or cause of action. Res judicata is based on the ground that the party to be affected, or some other with whom he is in privity, has litigated the same matter in the former action in a court of competent jurisdiction, and should not be permitted to litigate it again. This principle frees the parties from undergoing all over again the rigors of unnecessary suits and repetitious trials. At the same time, it prevents the clogging of court dockets. Equally important, res judicata stabilizes rights and promotes the rule of law. In the instant administrative case, it is clear that the issues raised by the complainant had already been resolved by this Court in an earlier administrative case. The complainants contention that the principle of res judicata would not apply in the case at bar as the first administrative case was one for disqualification while the instant administrative complaint is one for suspension and/or disbarment should be given least credence. It is worthy to note that while the instant administrative complaint is denominated as one for suspension and/or disbarment, it prayed neither the suspension nor the disbarment of the respondent but instead merely sought to enjoin the respondent from assuming office as IBP National President.[28]

Contrary to the findings of the Bar Confidant, Adm. Case No. 6052 entitled, In Re: Petition to Disqualify Atty. Leonard de Vera, on Legal and Moral Grounds, From Being Elected IBP Governor for Eastern Mindanao in the May 31 IBP Election and promulgated on 11 December 2003 does not constitute a bar to the filing of Adm. Case No. 6697. Although the parties in the present

administrative case and in Adm. Case No. 6052 are identical, their capacities in these cases and the issues presented therein are not the same, thereby barring the application of res judicata. In order that the principle of res judicata may be made to apply, four essential conditions must concur, namely: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment or order on the merits, and (4) there must be between the first and second action identity of parties, identity of subject matter, and identity of causes of action.[29] In the absence of any one of these elements, Atty. de Vera cannot argue res judicata in his favor.

It is noteworthy that the two administrative cases involve different subject matters and causes of action. In Adm. Case No. 6052, the subject matter was the qualification of Atty. de Vera to run as a candidate for the position of IBP Governor for Eastern Mindanao. In the present administrative complaint, the subject matter is his privilege to practice law. In the first administrative case, complainants cause of action was Atty. de Vera s alleged violation or circumvention of the IBP By-laws. In the present administrative case, the primary cause of action is Atty. de Vera s alleged violation of lawyer s oath and the Code of Professional Responsibility.

Finally, the two administrative cases do not seek the same relief. In the first case, the complainants sought to prevent Atty. de Vera from assuming his post as IBP Governor for Eastern Mindanao. In the present case, as clarified by complainant in his Memorandum, what is being principally sought is Atty. de Vera s suspension or disbarment.

The distinctions between the two cases are far from trivial. The previous case was resolved on the basis of the parties rights and obligations under the IBP By-laws. We held therein that Atty. de Vera cannot be disqualified from running as Regional Governor as there is nothing in the present IBP By-laws that sanctions

the disqualification of candidates for IBP governors. Consequently, we stressed that the petition had no firm ground to stand on. Likewise, we held that the complainants therein were not the proper parties to bring the suit as the IBP Bylaws prescribes that only nominees - which the complainants were not - can file with the IBP President a written protest against the candidate. The Court s statement, therefore, that Atty. de Vera cannot be disqualified on the ground that he was not morally fit was mereobiter dictum. Precisely, the IBP By-laws do not allow for pre-election disqualification proceedings; hence, Atty. de Vera cannot be disqualified on the basis of the administrative findings of a hearing officer of the State Bar of California suspending him from the practice of law for three years. We held in that case that

There is nothing in the By-Laws which explicitly provides that one must be morally fit before he can run for IBP governorship. For one, this is so because the determination of moral fitness of a candidate lies in the individual judgment of the members of the House of Delegates. Indeed, based on each member's standard of morality, he is free to nominate and elect any member, so long as the latter possesses the basic requirements under the law. For another, basically the disqualification of a candidate involving lack of moral fitness should emanate from his disbarment or suspension from the practice of law by this Court, or conviction by final judgment of an offense which involves moral turpitude.[30]

What this simply means is that absent a final judgment by the Supreme Court in a proper case declaring otherwise, every lawyer aspiring to hold the position of IBP Regional Director is presumed morally fit. Any person who begs to disagree will not be able to find a receptive audience in the IBP through a petition for disqualification but must first file the necessary disbarment or suspension proceeding against the lawyer concerned. And this is precisely what complainant has chosen to do in the instant case. As his petition is sufficient in form and substance, we have given it due course pursuant to Rule 138 of the Rules of Court. And, considering that this case

is not barred by the prior judgment in Adm. Case No. 6052, the only issue left for consideration is whether or not Atty. de Vera can be suspended or disbarred under the facts of the case and the evidence submitted by complainant.

The recommendation of the hearing officer of the State Bar of California, standing alone, is not proof of malpractice.

In the case of the Suspension From The Practice of Law In The Territory of Guam of Atty. Leon G. Maquera,[31] we were confronted with the question of whether or not a member of the Philippine Bar, who is concomitantly an attorney in a foreign jurisdiction and who was suspended from the practice of law in said foreign jurisdiction, can be sanctioned as member of the Philippine Bar for the same infraction committed in the foreign jurisdiction. We take the issue in Atty. Maquera one notch higher in the case of Atty. de Vera who was admitted to the practice of law in a foreign jurisdiction (State Bar of California, U.S.A.) and against whom charges were filed in connection with his practice in said jurisdiction. However, unlike the case of Atty. Maquera, no final judgment for suspension or disbarment was meted against Atty. de Vera despite a recommendation of suspension of three years as he surrendered his license to practice law before his case could be taken up by the Supreme Court of California. In Maquera, we emphasized that the judgment of suspension against a Filipino lawyer in a foreign jurisdiction does not automatically result in his suspension or disbarment in the Philippines as the acts giving rise to his suspension are not grounds for disbarment and suspension in this jurisdiction. Judgment of suspension against a Filipino lawyer may transmute into a similar judgment of suspension in the Philippines only if the basis of the foreign

court s action includes any of the grounds for disbarment or suspension in this jurisdiction. We likewise held that the judgment of the foreign court merely constitutes prima facie evidence of unethical acts as lawyer.

The Maquera ruling is consistent with Rule 39, Section 48, of the Rules of Court which provides:

Sec. 48. Effect of foreign judgments or final orders. - The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows:

xxxx

(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title.

In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

In Philippine Aluminum Wheels, Inc. v. Fasgi Enterprises, Inc.,[32] we explained that [a] foreign judgment is presumed to be valid and binding in the country from which it comes, until a contrary showing, on the basis of a presumption of regularity of proceedings and the giving of due notice in the foreign forum.

In herein case, considering that there is technically no foreign judgment to speak of, the recommendation by the hearing officer of the State Bar of California does not constitute prima facie evidence of unethical behavior by Atty. de Vera. Complainant must prove by substantial evidence the facts upon which the recommendation by the hearing officer was based. If he is successful in this, he must then prove that these acts are likewise unethical under Philippine law.

There is substantial evidence of malpractice on the part of Atty. de Vera independent of the recommendation of suspension by the hearing officer of the State Bar of California

Section 27 of Rule 138 of our Rules of Court states:

SEC. 27. Disbarment or suspension of attorneys by Supreme Court; grounds therefor. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a wilful disobedience of any lawful order of a superior court, or for corruptly or wilfully appearing as an attorney for a party to a case without authority so to do. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. The disbarment or suspension of a member of the Philippine Bar by a competent court or other disciplinary agency in a foreign jurisdiction where he has also been admitted as an attorney is a ground for his disbarment or suspension if the basis of such action includes any of the acts hereinabove enumerated. The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for disbarment or suspension.[33]

Disciplinary action against a lawyer is intended to protect the court and the public from the misconduct of officers of the court and to protect the administration of justice by requiring that those who exercise this important function shall be competent, honorable and reliable men in whom courts and clients may repose confidence.[34] The statutory enunciation of the grounds for disbarment on suspension is not to be taken as a limitation on the general power of courts to suspend or disbar a lawyer. The inherent power of the court over its officers cannot be restricted.[35]

Malpractice ordinarily refers to any malfeasance or dereliction of duty committed by a lawyer. Section 27 gives a special and technical meaning to the term Malpractice. [36] That meaning is in consonance with the elementary notion that the practice of law is a profession, not a business.[37]

Unprofessional conduct in an attorney is that which violates the rules on ethical code of his profession or which is unbecoming a member of that profession.[38]

Now, the undisputed facts:

1.

An administrative case against Atty. de Vera was filed before the State Bar of California, docketed then as Adm. Case No. 86-0-18429. It arose from an insurance case Atty. de Vera handled involving Julius Willis, III who figured in an automobile accident in 1986. Atty. de Vera was authorized by the elder Willis (father of Julius who was given authority by the son to control the case because the latter was then studying in San Diego California) for the release of the funds in settlement of the case. Atty. de Vera received a check in settlement of the case which he then deposited to his personal account;[39]

2.

The Hearing referee in the said administrative case recommended that Atty. de Vera be suspended from the practice of law for three years;[40] and

3.

Atty. de Vera resigned from the California Bar which resignation was accepted by the Supreme Court of California.[41]

Atty. de Vera vehemently insists that the foregoing facts do not prove that he misappropriated his client s funds as the latter s father (the elder Willis) gave him authority to use the same and that, unfortunately, the hearing officer did not consider this explanation notwithstanding the fact that the elder Willis testified under oath that he expected de Vera might use the money for a few days.

By insisting that he was authorized by his client s father and attorney-in-fact to use the funds, Atty. de Vera has impliedly admitted the use of the Willis funds for his own personal use.

In fact, Atty. de Vera did not deny complainant s allegation in the latter s memorandum that he (de Vera) received US$12,000.00 intended for his client and that he deposited said amount in his personal account and not in a separate trust account and that, finally, he spent the amount for personal purposes.[42]

At this point, it bears stressing that in cases filed before administrative and quasi-judicial bodies, a fact may be deemed established if it is supported by substantial evidence or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.[43] It means such evidence which affords a substantial basis from which the fact in issue can be reasonably inferred.[44]

Beyond doubt, the unauthorized use by a lawyer of his client s funds is highly unethical. Canon 16 of the Code of Professional Responsibility is emphatic about this, thus:

CANON 16. A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME TO HIS POSSESSION.

Rule 16.01. A lawyer shall account for all money or property collected or received for or from the client.

Rule 16.02. A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

In Espiritu v. Ulep[45] we held that

The relation between attorney and client is highly fiduciary in nature. Being such, it requires utmost good faith, loyalty, fidelity and disinterestedness on the part of the attorney. Its fiduciary nature is intended for the protection of the client.

The Code of Professional Responsibility mandates every lawyer to hold in trust all money and properties of his client that may come into his possession. Accordingly, he shall account for all money or property collected or received for or from the client. Even more specific is the Canon of Professional Ethics:

The lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client.

Money of the client or collected for the client or other trust property coming into the possession of the lawyer should be reported and accounted for promptly and should not under any circumstances be commingled with his own or be used by him.

Consequently, a lawyer's failure to return upon demand the funds or property held by him on behalf of his client gives rise to the presumption that he has appropriated the same for his own use to the prejudice of, and in violation of the trust reposed in him by, his client. It is a gross violation of general morality as well as of professional ethics; it impairs the public confidence in the legal profession and deserves punishment.

Lawyers who misappropriate the funds entrusted to them are in gross violation of professional ethics and are guilty of betrayal of public confidence in the legal profession. Those who are guilty of such infraction may be disbarred or suspended indefinitely from the practice of law. (Emphases supplied.)

In herein case, as it is admitted by Atty. de Vera himself that he used his client s money for personal use, he has unwittingly sealed his own fate since this admission constitutes more than substantial evidence of malpractice. Consequently, Atty. de Vera now has the burden of rebutting the evidence which he himself supplied.

In his defense, Atty. de Vera claims that he was duly authorized by the elder Willis to use the funds intended for the latter s son. Atty. de Vera also points out that he had restituted the full amount of US$12,000.00 even before the filing of the administrative case against him in the State Bar of California.[46]

Aside from these self-serving statements, however, we cannot find anywhere in the records of this case proof that indeed Atty. de Vera was duly

authorized to use the funds of his client. In Radjaie v. Atty. Alovera[47] we declared that

When the integrity of a member of the bar is challenged, it is not enough that he denies the charges against him; he must meet the issue and overcome the evidence against him. He must show proof that he still maintains that degree of morality and integrity which at all times is expected of him.

Atty. de Vera cannot rely on the statement made by the hearing officer that the elder Willis had indeed testified that he expected de Vera might use the money for a few days. As Atty. de Vera had vigorously objected to the admissibility of the document containing this statement, he is now estopped from relying thereon. Besides, that the elder Willis expected de Vera might use the money for a few days was not so much an acknowledgment of consent to the use by Atty. de Vera of his client s funds as it was an acceptance of the probability that Atty. de Vera might, indeed, use his client s funds, which by itself did not speak well of the character of Atty. de Vera or the way such character was perceived.

In the instant case, the act of Atty. de Vera in holding on to his client s money without the latter s acquiescence is conduct indicative of lack of integrity and propriety. It is clear that Atty. de Vera, by depositing the check in his own account and using the same for his own benefit is guilty of deceit, malpractice, gross misconduct and unethical behavior. He caused dishonor, not only to himself but to the noble profession to which he belongs. For, it cannot be denied that the respect of litigants to the profession is inexorably diminished whenever a member of the profession betrays their trust and confidence.[48] Respondent violated his oath to conduct himself with all good fidelity to his client.

Nevertheless, we do not agree with complainant s plea to disbar respondent from the practice of law. The power to disbar must be exercised with great caution.[49] Where any lesser penalty can accomplish the end desired, disbarment should not be decreed.

In Mortera v. Pagatpatan,[50] we imposed upon Atty. Pagatpatan two years suspension from his practice of law for depositing the funds meant for his client to his personal account without the latter s knowledge. In Reyes v. Maglaya;[51] Castillo v. Taguines;[52] Espiritu v. Atty. Cabredo IV,[53] the respondents were meted one year suspension each for failing to remit to their clients monies in the amounts of P1,500.00; P500.00, and P51,161.00, respectively, received by them for their clients without the latter s permission. In Dumadag v. Atty. Lumaya,[54] we indefinitely suspended respondent for failure to remit to his client the amount of the measly sum of P4,344.00 representing the amount received pursuant to a writ of execution. Considering the amount involved here US$12,000.00, we believe that the penalty of suspension for two (2) years is appropriate.

Transferring IBP membership to a chapter where the lawyer is not a resident of is not a ground for his suspension or disbarment

Complainant insists that Atty. de Vera s transfer of membership from the Pasay, Paraaque, Las Pias and Muntinlupa (PPLM) Chapter to the Agusan del Sur IBP Chapter is a circumvention of the rotation rule as it was made for the sole purpose of becoming IBP National President. Complainant stresses that Atty. de Vera is not a resident of Agusan del Sur nor does he hold office therein.

In Adm. Case No. 6052, we held that Atty. de Vera s act of transferring to another IBP Chapter is not a ground for his disqualification for the post of IBP Governor as the same is allowed under Section 19 of the IBP By-Laws with the qualification only that the transfer be made not less than three months immediately preceding any chapter election.

As it was perfectly within Atty. de Vera s right to transfer his membership, it cannot be said that he is guilty of unethical conduct or behavior. And while one may incessantly argue that a legal act may not necessarily be ethical, in herein case, we do not see anything wrong in transferring to an IBP chapter that -- based on the rotation rule will produce the next IBP EVP who will automatically succeed to the National Presidency for the next term. Our Code of Professional Responsibility as well as the Lawyer s Oath do not prohibit nor punish lawyers from aspiring to be IBP National President and from doing perfectly legal acts in accomplishing such goal.

Bar Matter No. 1227 Administrative Matter No. 05-5-15-SC

To resolve Bar Matter No. 1227 and Administrative Matter No. 05-5- 15-SC, the following issues must be addressed: I. Whether the IBP Board of Governors acted with grave abuse of discretion in removing Atty. de Vera as Governor and EVP of the IBP on 13 May 2005.

i. Whether the IBP Board of Governors complied with administrative due process in removing Atty. de Vera. ii. Whether the IBP removed Atty. De Vera for just and valid cause.

II.

Whether Governor Salazar was validly elected as EVP of the IBP on 25 June 2005, and can consequently assume the Presidency of the IBP for the term 2005-2007.

The IBP Board observed due process in its removal of Atty. de Vera as IBP Governor

We start the discussion with the veritable fact that the IBP Board is vested with the power to remove any of its members pursuant to Section 44, Article VI of the IBP By-Laws, which states:

Sec. 44. Removal of members. If the Board of Governors should determine after proper inquiry that any of its members, elective or otherwise, has for any reason become unable to perform his duties, the Board, by resolution of the Majority of the remaining members, may declare his position vacant, subject to the approval of the Supreme Court.

Any member of the Board, elective or otherwise, may be removed for cause, including three consecutive absences from Board meetings without justifiable excuse, by resolution adopted by two-thirds of the remaining members of the Board, subject to the approval of the Supreme Court.

In case of any vacancy in the office of Governor for whatever cause, the delegates from the region shall by majority vote, elect a successor from among the members of the Chapter to which the resigned governor is a member to serve as governor for the unexpired portion of the term. (Emphasis supplied)

Under the aforementioned section, a member of the IBP Board may be removed for cause by resolution adopted by two-thirds (2/3) of the remaining members of the Board, subject to the approval of this Court.

In the main, Atty. de Vera questions his removal from the Board of Governors on procedural and substantive grounds. He argues that he was denied very basic rights of due process recognized by the Honorable Court even in administrative cases like the right to answer formally or in writing and within reasonable time, the right to present witnesses in his behalf, the right to a fair hearing. Atty. de Vera protests the fact that he was not able to cross-examine the complainant, IBP Gov. Romulo H. Rivera (Atty. Rivera) and that Atty. Rivera voted as well for his expulsion which made him accuser, prosecutor and judge at the same time. Atty. de Vera emphasized the fact that Atty. Rivera initially inhibited himself from voting on his own motion. However, when his inhibition resulted in the defeat of his motion as the necessary 2/3 votes could not be mustered, Atty. Rivera asked for another round of voting so he could vote to support his own motion.

The IBP Board counters that since its members were present during the plenary session, and personally witnessed and heard Atty. de Vera s actuations, an evidentiary or formal hearing was no longer necessary. Since they all witnessed and heard Atty. de Vera, it was enough that he was given an opportunity to refute and answer all the charges imputed against him. They emphasized that Atty. de Vera was given a copy of the complaint and that he was present at the Board Meeting on 13 May 2005 wherein the letter-complaint

against him was part of the agenda. Therein, he was given the opportunity to be heard and that, in fact, Atty. de Vera did argue his case.

We are in agreement with the IBP Board.

First, it needs stressing that the constitutional provision on due process safeguards life, liberty and property.[55] It cannot be said that the position of EVP of the IBP is property within the constitutional sense especially since there is no right to security of tenure over said position as, in fact, all that is required to remove any member of the board of governors for cause is a resolution adopted by 2/3 of the remaining members of the board.

Secondly, even if the right of due process could be rightfully invoked, still, in administrative proceedings, the essence of due process is simply the opportunity to explain one s side.[56] At the outset, it is here emphasized that the term due process of law as used in the Constitution has no fixed meaning for all purposes due to the very nature of the doctrine which, asserting a fundamental principle of justice rather than a specific rule of law, is not susceptible of more than one general statement. [57] The phrase is so elusive of exact apprehension,[58] because it depends on circumstances and varies with the subject matter and the necessities of the situation.[59]

Due process of law in administrative cases is not identical with judicial process for a trial in court is not always essential to due process. While a day in court is a matter of right in judicial proceedings, it is otherwise in administrative proceedings since they rest upon different principles. The due process clause guarantees no particular form of procedure and its requirements are not technical. Thus, in certain proceedings of administrative character, the right to a notice or hearing are not essential to due process of law. The constitutional requirement of due process is met by a fair hearing before a regularly established administrative agency or tribunal. It is not essential that hearings be had before

the making of a determination if thereafter, there is available trial and tribunal before which all objections and defenses to the making of such determination may be raised and considered. One adequate hearing is all that due process requires. What is required for hearing may differ as the functions of the administrative bodies differ.[60]

The right to cross-examine is not an indispensable aspect of due process.[61] Nor is an actual hearing always essential[62] especially under the factual milieu of this case where the members of the IBP Board -- upon whose shoulders the determination of the cause for removal of an IBP governor is placed subject to the approval of the Supreme Court all witnessed Atty. de Vera s actuations in the IBP National Convention in question.

It is undisputed that Atty. de Vera received a copy of the complaint against him and that he was present when the matter was taken up. From the transcript of the stenographic notes of the 13 May 2005 meeting wherein Atty. de Vera was removed, it is patent that Atty. de Vera was given fair opportunity to defend himself against the accusations made by Atty. Rivera.

Atty. de Vera, however, additionally questions the fact that Atty. Rivera, who authored the complaint against him, also voted for his expulsion making him accuser, prosecutor and judge at the same time. Atty. de Vera likewise laments the fact that Atty. Rivera initially inhibited himself from voting but when this resulted in the defeat of his motion for lack of the necessary 2/3 vote, he agreed to another round of voting and that, this time, he voted in favor of his motion.

For the record, of the nine governors comprising the IBP Board, six voted for Atty. de Vera s expulsion (including Atty. Rivera) while 3 voted against it (including Atty. de Vera).

Section 44 (second paragraph) of the IBP By-Laws provides:

Any member of the Board, elective or otherwise, may be removed for cause, including three consecutive absences from Board meetings without justifiable excuse, by resolution adopted by two-thirds of the remaining members of the Board, subject to the approval of the Supreme Court. (Emphasis supplied.)

Under the rules, a resolution for expulsion of an IBP Governor is done via a resolution adopted by 2/3 of the remaining members. The phrase remaining members refers to the members exclusive of the complainant member and the respondent member. The reason therefore is that such members are interested parties and are thus presumed to be unable to resolve said motion impartially. This being the case, the votes of Attys. Rivera and de Vera should be stricken-off which means that only the votes of the seven remaining members are to be counted. Of the seven remaining members, five voted for expulsion while two voted against it which still adds up to the 2/3 vote requirement for expulsion.

The IBP Board removed Atty. de Vera as IBP Governor for just and valid cause

All the concerned parties to this case agree that what constitutes cause for the removal of an IBP Governor has not been defined by Section 44 of the IBP ByLaws albeit it includes three consecutive absences from Board meetings without justifiable excuse. Thus, the IBP Board argues that it is vested with sufficient power and authority to protect itself from an intractable member whose removal was caused not by his disagreement with the IBP Board but due to various acts committed by him which the IBP Board considered as inimical to the IBP Board in particular and the IBP in general.

Atty. de Vera, on the other hand, insists that speaking in disagreement with the Resolution of the Board during the Conventions Plenary Session is not a valid cause to remove or expel a duly-elected member of the IBP Board of Governors and the decision to remove him only shows that the right to freedom of speech or the right to dissent is not recognized by the IBP Board. After weighing the arguments of the parties and in keeping with the fundamental objective of the IBP to discharge its public responsibility more effectively, we hereby find that Atty. de Veras removal from the IBP Board was not capricious or arbitrary. Indubitably, conflicts and disagreements of varying degrees of intensity, if not animosity, are inherent in the internal life of an organization, but especially of the IBP since lawyers are said to disagree before they agree.

However, the effectiveness of the IBP, like any other organization, is diluted if the conflicts are brought outside its governing body for then there would be the impression that the IBP, which speaks through the Board of Governors, does not and cannot speak for its members in an authoritative fashion. It would accordingly diminish the IBP s prestige and repute with the lawyers as well as with the general public.

As a means of self-preservation, internecine conflicts must thus be adjusted within the governing board itself so as to free it from the stresses that invariably arise when internal cleavages are made public.

The doctrine of majority rule is almost universally used as a mechanism for adjusting and resolving conflicts and disagreements within the group after the members have been given an opportunity to be heard. While it does not efface conflicts, nonetheless, once a decision on a contentious matter is reached by a

majority vote, the dissenting minority is bound thereby so that the board can speak with one voice, for those elected to the governing board are deemed to implicitly contract that the will of the majority shall govern in matters within the authority of the board.[63]

The IBP Board, therefore, was well within its right in removing Atty. de Vera as the latter s actuations during the 10th National IBP Convention were detrimental to the role of the IBP Board as the governing body of the IBP. When the IBP Board is not seen by the bar and the public as a cohesive unit, it cannot effectively perform its duty of helping the Supreme Court enforce the code of legal ethics and the standards of legal practice as well as improve the administration of justice.

In view of the importance of retaining group cohesiveness and unity, the expulsion of a member of the board who insists on bringing to the public his disagreement with a policy/resolution approved by the majority after due discussion, cannot be faulted. The effectiveness of the board as a governing body will be negated if its pronouncements are resisted in public by a board member.

Indeed, when a member of a governing body cannot accept the voice of the majority, he should resign therefrom so that he could criticize in public the majority opinion/decision to his heart s content; otherwise, he subjects himself to disciplinary action by the body.

The removal of Atty. de Vera as member of the Board of Governors ipso facto meant his removal as EVP as well

The removal of Atty. de Vera as member of the Board of Governors ipso facto meant his removal as EVP as well. Section 47, Article VII of the By-Laws of the IBP provides:

SEC. 47. National Officers. The Integrated Bar of the Philippines shall have a President and Executive Vice President to be chosen by the Board of Governors from among nine (9) regional governors, as much as practicable, on a rotation basis. x x x

Thus, to be EVP of the IBP, one must necessarily be a member of IBP Board of Governors. Atty. de Vera s removal from the Board of Governors, automatically disqualified him from acting as IBP EVP. To insist otherwise would be contrary to Section 47 of the IBP By-Laws.

The Court will not interfere with the Resolution of the IBP Board to remove Atty. de Vera since it was rendered without grave abuse of discretion

While it is true that the Supreme Court has been granted an extensive power of supervision over the IBP,[64] it is axiomatic that such power should be exercised prudently. The power of supervision of the Supreme Court over the IBP should not preclude the IBP from exercising its reasonable discretion especially in the administration of its internal affairs governed by the provisions of its ByLaws. The IBP By-Laws were precisely drafted and promulgated so as to define the powers and functions of the IBP and its officers, establish its organizational structure, and govern relations and transactions among its officers and members. With these By-Laws in place, the Supreme Court could be assured that

the IBP shall be able to carry on its day-to-day affairs, without the Court s interference.

It should be noted that the general charge of the affairs and activities of the IBP has been vested in the Board of Governors. The members of the Board are elective and representative of each of the nine regions of the IBP as delineated in its By-Laws.[65] The Board acts as a collegiate body and decides in accordance with the will of the majority. The foregoing rules serve to negate the possibility of the IBP Board acting on the basis of personal interest or malice of its individual members. Hence, the actions and resolutions of the IBP Board deserve to be accorded the disputable presumption[66] of validity, which shall continue, until and unless it is overcome by substantial evidence and actually declared invalid by the Supreme Court. In the absence of any allegation and substantial proof that the IBP Board has acted without or in excess of its authority or with grave abuse of discretion, we shall not be persuaded to overturn and set aside the Board s action or resolution.

There is no question that the IBP Board has the authority to remove its members as provided in Article VI, Section 44[67] of the IBP By-Laws. Issue arises only as to whether the IBP Board abused its authority and discretion in resolving to remove Atty. de Vera from his post as an IBP Governor and EVP. As has been previously established herein, Atty. de Vera s removal from the IBP Board was in accordance with due process and the IBP Board acted well within the authority and discretion granted to it by its By-Laws. There being no grave abuse of discretion on the part of the IBP Board, we find no reason to interfere in the Board s resolution to remove Atty. de Vera.

The election of Atty. Salazar by the IBP Board as IBP EVP in replacement of Atty. De Vera was conducted in accordance with the authority granted to the Board by the IBP By-Laws

In the same manner, we find no reason to disturb the action taken by the 2003-2005 IBP Board of Governors in holding a special election to fill-in the vacant post resulting from the removal of Atty. de Vera as EVP of the IBP since the same is a purely internal matter, done without grave abuse of discretion, and implemented without violating the Rules and By-Laws of the IBP.

With the removal of Atty. de Vera from the Board, by virtue of the IBP Board Resolution dated 13 May 2005, he was also removed from his post as EVP; thus, there was a resultant vacancy in the position of IBP EVP.

Article VI, Section 41(g) of the IBP By-Laws expressly grants to the Board the authority to fill vacancies, however arising, in the IBP positions, subject to the provisions of Section 8 of the Integration Rule,[68] and Section 11 (Vacancies),[69] Section 44 (Removal of members),[70] Section 47 (National officers),[71] Section 48 (other officers),[72] and Section 49 (Terms of Office)[73] of the By-Laws. The IBP Board has specific and sufficient guidelines in its Rules and By-Laws on how to fill-in the vacancies after the removal of Atty. de Vera. We have faith and confidence in the intellectual, emotional and ethical competencies of the remaining members of the 2005-2007 Board in dealing with the situation within the bounds of the IBP Rules and By-Laws.

The election by the 2003-2005 IBP Board of Governors of a new EVP, who will assume the Presidency for the term 2005-2007, was well within the authority and prerogative granted to the Board by the IBP By-Laws, particularly Article VII, Section 47, which provides that [t]he EVP shall automatically become President for the next succeeding term. The phrase for the next succeeding term necessarily implies that the EVP that should succeed Atty. Cadiz as IBP President for the next succeeding term (i.e., 2005-2007) should come from the members of the 2003-2005 IBP Board of Governors. Hence, in A.M. No. 05-7-19-SC, we

restrained now IBP EVP Feliciano Bautista from assuming the position of Acting President because we have yet to resolve the question as to who shall succeed Atty. Cadiz from the 2003-2005 IBP Board of Governors.

Accordingly, the elections of Governor Santiago on 13 June 2005 as IBP EVP, and thereafter, Governor Salazar on 25 June 2005, as the new IBP EVP, upon the relinquishment of Gov. Santiago of the position, were valid.

Neither can this Court give credence to the argument of Atty. De Vera that, assuming his removal as IBP Governor and EVP was valid, his replacement as IBP EVP should come from Eastern Mindanao Region pursuant to the rotation rule set forth in Article VII, Section 47, of the IBP By-Laws.

According to Article VII, Section 47, of the IBP By-Laws, the EVP shall be chosen by the Board of Governors from among the nine Regional Governors, as much as practicable, on a rotation basis. This is based on our pronouncements in Bar Matter 491, wherein we ruled:

ORDER

xxxx

3. The former system of having the IBP President and Executive Vice-President elected by the Board of Governors (composed of the governors of the nine [9] IBP regions) from among themselves (as provided in Sec. 47, Art. VII, Original IBP By-Laws) should be restored.

The right of automatic succession by the Executive Vice-President to the presidency upon the expiration of their two-year term (which was abolished by this Court's resolution dated July 9, 1985 in Bar Matter No. 287) should be as it is hereby restored.

4. At the end of the President's two-year term, the Executive VicePresident shall automatically succeed to the office of president. The incoming board of governors shall then elect an Executive VicePresident from among themselves. The position of Executive VicePresident shall be rotated among the nine (9) IBP regions. One who has served as president may not run for election as Executive VicePresident in a succeeding election until after the rotation of the presidency among the nine (9) regions shall have been completed; whereupon, the rotation shall begin anew.

xxxx (Emphasis Supplied)

In Bar Matter 491, it is clear that it is the position of IBP EVP which is actually rotated among the nine Regional Governors. The rotation with respect to the Presidency is merely a result of the automatic succession rule of the IBP EVP to the Presidency. Thus, the rotation rule pertains in particular to the position of IBP EVP, while the automatic succession rule pertains to the Presidency. The rotation with respect to the Presidency is but a consequence of the automatic succession rule provided in Section 47 of the IBP By-Laws.

In the case at bar, the rotation rule was duly complied with since upon the election of Atty. De Vera as IBP EVP, each of the nine IBP regions had already produced an EVP and, thus, the rotation was completed. It is only unfortunate that the supervening event of Atty. de Vera s removal as IBP Governor and EVP rendered it impossible for him to assume the IBP Presidency. The fact remains, however, that the rotation rule had been completed despite the non-assumption by Atty. de Vera to the IBP Presidency.

Moreover, the application of the rotation rule is not a license to disregard the spirit and purpose of the automatic succession rule, but should be applied in harmony with the latter. The automatic succession rule affords the IBP leadership transition seamless and enables the new IBP National President to attend to pressing and urgent matters without having to expend valuable time for the usual adjustment and leadership consolidation period. The time that an IBP EVP spends assisting a sitting IBP President on matters national in scope is in fact a valuable and indispensable preparation for the eventual succession. It should also be pointed out that this wisdom is further underscored by the fact that an IBP EVP is elected from among the members of the IBP Board of Governors, who are serving in a national capacity, and not from the members at large. It is intrinsic in the IBP By-Laws that one who is to assume the highest position in the IBP must have been exposed to the demands and responsibilities of national leadership.

It would therefore be consistent with the purpose and spirit of the automatic succession rule for Governor Salazar to assume the post of IBP President. By electing the replacement EVP from among the members of the 2003-2005 Board of Governors, the IBP benefits from the experience of the IBP EVP of 2003-2005 in this case, Governor Salazar who would have served in a national capacity prior to his assumption of the highest position.

It will also be inconsistent with the purpose and spirit of the automatic succession rule if the EVP for the term 2003-2005 will be elected exclusively by the members of the House of Delegates of the Eastern Mindanao region. This Court notes that the removal of Atty. De Vera in 13 May 2005 was about a month before the expiration of the term of office of the 2003-2005 Board of Governors. Hence, the replacement Governor would not have been able to serve in a national capacity for two years prior to assuming the IBP Presidency. In any case, Section 47 of the IBP Rules uses the phrase as much as practicable to clearly indicate that the rotation rule is not a rigid and inflexible rule as to bar exceptions in compelling and exceptional circumstances. It is in view of the foregoing that the argument advanced by Atty. De Vera that the IBP national presidency should be assumed by a nominee from Eastern Mindanao region from where he comes, can not hold water. It would go against the intent of the IBP By-Laws for such a nominee would be bereft of the wealth of experience and the perspective that only one who is honed in service while serving in a national post in the IBP would have. We therefore rule that the IBP Board of Governors acted in accordance with the IBP By-Laws, in electing Atty. Salazar as IBP EVP and in ensuring a succession in the leadership of the IBP. Had the Board of Governors not done so, there would have been no one qualified to assume the Presidency of the IBP on 1 July 2005, pursuant to Section 47 of the IBP By-Laws.

WHEREFORE, in view of the foregoing, we rule as follows:

1)

SUSPEND Atty. Leonard de Vera in A.C. No. 6697 from the practice of law for TWO (2) YEARS, effective from the finality of

this Resolution. Let a copy of this Resolution be attached to the personal record of Atty. Leonard de Vera and copies furnished the Integrated Bar of the Philippinesand the Office of the Court Administrator for dissemination to all courts;

2)

DISMISS the letter-complaint of Atty. Leonard de Vera, dated 18 May 2005, in A.M. No. 05-5-15-SC, praying for the disapproval of the Resolution, dated 13 May 2005, of the Board of Governors of the Integrated Bar of the Philippines removing him from his posts as Governor and Executive Vice President of the Integrated Bar of the Philippines, the said Resolution having been rendered without grave abuse of discretion;

3)

AFFIRM the election by the Board of Governors of Atty. Jose Vicente B. Salazar as Executive Vice President of the Integrated Bar of the Philippines for the remainder of the term 20032005, such having been conducted in accordance with its ByLaws and absent any showing of grave abuse of discretion; and

4)

DIRECT Atty. Jose Vicente B. Salazar to immediately take his oath of office and assume the Presidency of the Integrated Bar of the Philippines for the term 2005-2007 in accordance with the automatic succession rule in Article VII, Section 47 of the IBP By-Laws, upon receipt of this Resolution.

SO ORDERED.

ARTEMIO V. PANGANIBAN Chief Justice

REYNATO S. PUNO Associate Justice

LEONARDO A. QUISUMBING Associate Justice

CONSUELO YNARES-SANTIAGO Associate Justice

ANGELINA SANDOVAL-GUTIERREZ Associate Justice

ANTONIO T. CARPIO Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ Associate Justice

RENATO C. CORONA Associate Justice

CONCHITA CARPIO MORALES Associate Justice

ROMEO J. CALLEJO, SR. Associate Justice

ADOLFO S. AZCUNA Associate Justice

DANTE O. TINGA Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice

CANCIO C. GARCIA Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice

[1] [2]

Records (A.C. No. 6697), Report and Recommendation, pp. 1-3. Rollo (A.M. No. 05-5-15-SC), pp. 1-9.

[3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37]

[38] [39] [40] [41] [42]

[43] [44]

[45]

Id. Id. Id. Records (B.M. No. 1227), p. 3. Rollo (A.M. No. 05-5-15-SC), pp. 1-9. Records (A.C. No. 6697), pp. 177-178. Rollo (A.M. No. 05-5-15-SC), pp. 8-9. Id. at 2. Id. at 5-6. Id. at 16-21. Id. at 19-20. Id. at 35-204. Id. at 36-37. Id. at 205-248. Id. at 307-309. Id. at 281-306. Id. at 344-346. Id. at 356-358. Id. Id. at 393-396. Id. at 489-524. Id. at 516. Id. Reply dated 27 January 2006. Records of A.C. No. 6697, pp. 239-252. Id. at 245. Records, pp. 368-371. Bachrach Corporation v. Court of Appeals, 357 Phil. 483, 491 (1998). Atty. Garcia v. Atty. De Vera, 463 Phil. 385, 413 (2003). B.M. No. 793, 30 July 2004, 435 SCRA 417. G.R. No. 137378, 12 October 2000, 342 SCRA 722, 734. As amended by SC Res. dated 13 February 1992. De Jesus Paras v. Vailoces, 111 Phil. 569, 572 (1961). Royong v. Oblena, 117 Phil. 865, 875 (1963); Quingwa v. Puno, 125 Phil. 831, 838 (1967). Act No. 2828, amending Sec. 21 of Act No. 190. 2 R-CL. 1097 cited in In re Tagorda, 23 March 1929, 53 Phil. 37, 42; Malcolm, J., Jayme v. Bualan, 58 Phil. 422, 425 (1933); Arce v. National Bank, 62 Phil. 569, 571 (1935). Note 14, 7 C.S.S. 743. Records, pp. 38-39. Records (A.E. 6697), pp. 292. Id. at 276. See complainants Memorandum and compare the same with Atty. de Veras Reply Memorandum (Records, pp. 239-240 and pp. 254-255). Ang Tibay v. Court of Industrial Relations, 69 Phil. 635, 640 (1940). Rubberworld (Phils.) Inc. v. National Labor Relations Commission, G.R. No. 75704, 19 July 1989, 175 SCRA 450. A.C. No. 5808, 4 May 2005, 458 SCRA 1, 8-9. Respondents Manifestation, Records, pp. 302-303. 392 Phil. 1, 17 (2000). Busios v. Atty. Ricafort, 347 Phil. 687, 694 (1997). Alitagtag v. Atty. Garcia, 451 Phil. 420, 426 (2003). A.C. No. 4562, 15 June 2005, 460 SCRA 99. 313 Phil. 1 (1995). 325 Phil. 1 (1996). 443 Phil. 24 (2003). 390 Phil. 1 (2000).

[46] [47] [48] [49] [50] [51] [52] [53] [54]

[55]

[56] [57] [58] [59] [60] [61] [62] [63]

[64]

[65] [66]

[67]

Section 1, Article III, Constitution No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the law. See also Lumiqued v. Hon. Exevea, 346 Phil. 807, 828 (1997). Lumiqued v. Hon. Exevea, id. W.W. Willowby, THE CONSTITUTIONAL LAW OF THE UNITED STATES, Sec. 1113. Turning v. New Jersey, 211 U.S. 78. Forbes v. Chuoco Tiaco, 16 Phil. 534, 572 (1910), citing Moyer v. Peabody, 212 U.S. 78. See Juan F. Rivera, LAW OF PUBLIC ADMINISTRATION, p. 822. Guzman v.National University, 226 Phil. 596, 603 (1986). Lumiqued v. Hon. Exevea, supra note 55. Gokongwei, Jr. v. Securites and Exchange Commission, G.R. No. L-45911, 11 April 1979, 89 SCRA 336, applicable by analogy. As recognized in In Re: Petition to Disqualify Atty. Leonard de Vera on Legal and Moral Grounds, From Being Elected IBP Governor for Eastern Mindanao in the May 31 IBP Election, Adm. Case No. 6052, 418 SCRA 27, 39-42. Article VI, Section 37 of the IBP By-Laws. Rule 131, Section 3 defines disputable presumptions as presumptions that are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence. Sec. 44. Removal of members. If the Board of Governors should determine after proper inquiry that any of its members, elective or otherwise, has for any reason become unable to perform his duties, the Board, by resolution of the Majority of the remaining members, may declare his position vacant, subject to the approval of the Supreme Court. Any member of the Board, elective or otherwise, may be removed for cause, including three consecutive absences from Board meetings without justifiable excuse, by resolution adopted by twothirds of the remaining members of the Board, subject to the approval of the Supreme Court.

xxx
[68]

[69]

[70]

Sec. 8. Delegates. The President shall concurrently be the Delegate of the Chapter to the House of Delegates. The Vice President shall be his alternate, unless the chapter is entitled to have more than one Delegate, in which case the Vice President shall also be a Delegate. Additional Delegates and alternates shall in proper cases be elected by the Board. Sec. 11. Vacancies. Except as otherwise provided in these By-Laws, whenever the term of an office or position, whether elective or appointive, is for a fixed period, the person chosen to fill the vacancy therein shall serve only for the unexpired portion of the term. Sec. 44. Removal of members. If the Board of Governors should determine after proper inquiry that any of its members, elective or otherwise, has for any reason become unable to perform his duties, the Board, by resolution of the Majority of the remaining members, may declare his position vacant, subject to the approval of the Supreme Court. Any member of the Board, elective or otherwise, may be removed for cause, including three consecutive absences from Board meetings without justifiable excuse, by resolution adopted by twothirds of the remaining members of the Board, subject to the approval of the Supreme Court. In case of any vacancy in the office of Governor for whatever cause, the delegates from the region shall by majority vote, elect a successor from among the members of the Chapter to which the resigned governor is a member to serve as governor for the unexpired portion of the term. Sec. 47. National Officers. The Integrated Bar of the Philippines shall have a President and Executive Vice President to be chosen by the Board of Governors from among nine (9) regional governors, as much as practicable, on a rotation basis. The governors shall be ex officio Vice President for their respective regions. There shall also be a Secretary and Treasurer of the Board of Governors to be appointed by the President with the consent of the Board.

[71]

[72]

[73]

The Executive Vice President shall automatically become President for the next succeeding term. The Presidency shall rotate among the nine Regions. Sec. 48. Other officers. Other officers and employees as the Board may require shall be appointed by the President with the consent of the Board. Such officers and employees need not be members of the Integrated Bar. Sec. 49. Terms of office. The President and the Executive Vice President shall hold office for a term of two years from July 1 following their election until June 30 of their second year in office and until their successors shall have been duly chosen and qualified. In the event the President is absent or unable to act, his functions and duties shall be performed by the Executive Vice President, and in the event of the death, resignation, or removal of the President, the Executive Vice President shall serve as Acting President for the unexpired portion of the term. In the event of the death, resignation, removal or disability of both the President and the Executive Vice President, the Board of Governors shall elect an Acting President to hold office for the unexpired portion of the term or during the period of disability. Unless otherwise provided in these By-Laws, all other officers and employees appointed by the President with the consent of the Board shall hold office at the pleasure of the Board or for such term as the Board may fix.