FIRST DIVISION [A.C. No. 3455. April 14, 1998] ARSENIO A. VILLAFUERTE, complainant, vs. ATTY. DANTE H.

CORTEZ, respondent. RESOLUTION VITUG, J.: Feeling aggrieved by what he perceives to be a neglect in the handling of his cases by respondent lawyer, despite the latter's receipt of P1,750.00 acceptance and retainer fees, complainant Arsenio A. Villafuerte seeks, in the instant proceedings, the disbarment of Atty. Dante H. Cortez. From the records of the case and the Report submitted by the Commission on Bar Discipline ("CBD") of the Integrated Bar of the Philippines ("IBP"), it would appear that sometime in January 1987, complainant, upon the referral of Atty. Rene A. V. Saguisag, went to the office of respondent lawyer to discuss his case for "reconveyance" (Civil Case No. 83-18877). During their initial meeting, complainant tried to reconstruct before respondent lawyer the incidents of the case merely from memory prompting the latter to ask complainant to instead return at another time with the records of the case. On 30 January 1987, complainant again saw respondent but still sans the records. Complainant requested respondent to accept the case, paying to the latter the sum of P1,750.00 representing the acceptance fee of P1,500.00 and P250.00 retainer fee for January 1987. Respondent averred that he accepted the money with much reluctance and only upon the condition that complainant would get the records of the case from, as well as secure the withdrawal of appearance of, Atty. Jose Dizon, the former counsel of complainant. Allegedly, complainant never showed up thereafter until November 1989 when he went to the office of respondent lawyer but only to leave a copy of a writ of execution in Civil Case No. 062160-CV, a case for ejectment, which, according to respondent, was never priorly mentioned to him by complainant. Indeed, said respondent, he had never entered his appearance in the aforenumbered case. In its report, IBP-CBD concluded that the facts established would just the same indicate sufficiently a case of neglect of duty on the part of respondent. The CBD rejected the excuse proffered by respondent that the non-receipt of the records of the case justified his failure to represent complainant. The IBPCBD, through Commissioner Julio C. Elamparo, recommended to the IBP Board of Governors the suspension of respondent from the practice of law for three months with a warning that a repetition of similar acts could be dealt with more severely than a mere 3-month suspension. On 30 August 1996, the IBP Board of Governors passed Resolution No. XII-96-191 which "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, hereinmade part of this Resolution/Decision as Annex `A;' and, finding the recommendation therein to be fully supported by the evidence on record and the applicable laws and rules, Respondent Atty. Dante Cortez is hereby

SUSPENDED from the practice of law for three (3) months with a warning that a repetition of the acts/omission complained of will be dealt with more severely."i[1] Both respondent lawyer and complainant filed with the IBP-CBD their respective motions for the reconsideration of the foregoing resolution. On 23 August 1997, the Board of Governors passed Resolution No. XII-97-66 that "RESOLVED to CONFIRM Resolution NO. XII-96-191 of the Board of Governors Meeting dated August 30, 1996 SUSPENDING Atty. Dante Cortez from the practice of law for three (3) months with a warning that repetition of the acts/omission complained of will be dealt with more severely."ii[2] The Court agrees with the IBP-CBD in its findings and conclusion that respondent lawyer has somehow been remiss in his responsibilities. The Court is convinced that a lawyer-client relationship, given the circumstances, has arisen between respondent and complainant. Respondent lawyer has admitted having received the amount of P1,750.00, including its nature and purpose, from complainant. His acceptance of the payment effectively bars him from altogether disclaiming the existence of an attorney-client relationship between them. It would not matter really whether the money has been intended to pertain only to Civil Case No. 83-18877 or to include Civil Case No. 062160-CV, there being no showing, in any event, that respondent lawyer has attended to either of said cases. It would seem that he hardly has exerted any effort to find out what might have happened to his client's cases. A lawyer's fidelity to the cause of his client requires him to be ever mindful of the responsibilities that should be expected of him.iii[3] He is mandated to exert his best efforts to protect, within the bounds of the law, the interests of his client. The Code of Professional Responsibility cannot be any clearer in its dictum than when it has stated that a "lawyer shall serve his client with competence and diligence,"iv[4] decreeing further that he "shall not neglect a legal matter entrusted to him."v[5] Complainant, nevertheless, is not entirely without fault himself. He cannot expect his case to be properly and intelligently handled without listening to his own counsel and extending full cooperation to him. It is not right for complainant to wait for almost two years and to deal with his lawyer only after receiving an adverse decision. All considered, the Court deems it proper to reduce the recommended period of suspension of the IBP from three months to one month. WHEREFORE, Atty. Dante H. Cortez is hereby SUSPENDED from the practice of law for a period of one month from notice hereof, with a warning that a repetition of similar acts and other administrative lapses will be dealt with more severely than presently. Let a copy of this Resolution be made a part of the personal records of respondent lawyer in the Office of the Bar Confidant, Supreme Court of the Philippines, and let copies thereof be furnished to the Integrated Bar of the Philippines and be circulated to all courts.

SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION A.C. No. 6155 March 14, 2006

MA. GINA L. FRANCISCO, JOSEPHINE S. TAN and CARLOS M. JOAQUIN, Complainants, vs. ATTY. JAIME JUANITO P. PORTUGAL, Respondent. DECISION TINGA, J.: Complainants filed before this Court an affidavit-complaint1 on 15 August 2003 against Atty. Jaime Juanito P. Portugal (respondent) for violation of the Lawyers Oath, gross misconduct, and gross negligence. Complainants are related to petitioners in G.R. No. 152621-23 entitled SPO1 Ernest C. Francisco, SPO1 Donato F. Tan and PO3 Rolando M. Joaquin v. People of the Philippines, in whose behalf respondent filed the Petition for Review on Certiorari (Ad Cautelam) in the case. The complaint against respondent originated from his alleged mishandling of the above-mentioned petition which eventually led to its denial with finality by this Court to the prejudice of petitioners therein. The facts are as follows: On 21 March 1994, SPO1 Ernesto C. Francisco, SPO1 Donato F. Tan and PO3 Rolando M. Joaquin (eventually petitioners in G.R. No. 152621-23, collectively referred to herein as the accused) were involved in a shooting incident which resulted in the death of two individuals and the serious injury of another. As a result, Informations were filed against them before the Sandiganbayan for murder and frustrated murder. The accused pleaded not guilty and trial ensued. After due trial, the Sandiganbayan2 found the accused guilty of two counts of homicide and one count of attempted homicide. At that juncture, complainants engaged the services of herein respondent for the accused. Respondent then filed a Motion for Reconsideration with the Sandiganbayan but it was denied in a Resolution dated 21 August 2001. Unfazed by the denial, respondent filed an Urgent Motion for Leave to File Second Motion for Reconsideration, with the attached Second Motion for Reconsideration.3 Pending resolution by the Sandiganbayan, respondent also filed with this Court a Petition for Review on Certiorari (Ad Cautelam) on 3 May 2002. Thereafter, complainants never heard from respondent again despite the frequent telephone calls they made to his office. When respondent did not return their phone inquiries, complainants went to

respondents last known address only to find out that he had moved out without any forwarding address. More than a year after the petition was filed, complainants were constrained to personally verify the status of the ad cautelam petition as they had neither news from respondent about the case nor knowledge of his whereabouts. They were shocked to discover that the Court had already issued a Resolution4 dated 3 July 2002, denying the petition for late filing and non-payment of docket fees. Complainants also learned that the said Resolution had attained finality and warrants of arrest5 had already been issued against the accused because respondent, whose whereabouts remained unknown, did nothing to prevent the reglementary period for seeking reconsideration from lapsing. In his Comment,6 respondent states that it is of vital significance that the Court notes that he was not the original counsel of the accused. He only met the accused during the promulgation of the Sandiganbayan decision convicting the accused of two counts of homicide and one count of attempted homicide. He was merely requested by the original counsel to be on hand, assist the accused, and be present at the promulgation of the Sandiganbayan decision. Respondent claims that there was no formal engagement undertaken by the parties. But only because of his sincere effort and in true spirit of the Lawyers Oath did he file the Motion for Reconsideration. Though admitting its highly irregular character, respondent also made informal but urgent and personal representation with the members of the Division of the Sandiganbayan who promulgated the decision of conviction. He asserts that because of all the efforts he put into the case of the accused, his other professional obligations were neglected and that all these were done without proper and adequate remuneration. As to the ad cautelam petition, respondent maintains that it was filed on time. He stresses that the last day of filing of the petition was on 3 April 2002 and on that very day, he filed with this Court a Motion for Extension of Time to File Petition for Review,7 seeking an additional thirty (30) days to file the petition. Subsequently, on 3 May 2002, he filed the petition by registered mail and paid the corresponding docket fees. Hence, so he concludes, it was filed within the reglementary period. Soon thereafter, respondent recounted all the "herculean" efforts he made in assisting the accused for almost a year after the promulgation of the Sandiganbayan decision. He considered the fact that it was a case he had just inherited from the original counsel; the effect of his handling the case on his other equally important professional obligations; the lack of adequate financial consideration for handling the case; and his plans to travel to the United States to explore further professional opportunities. He then decided to formally withdraw as counsel for the accused. He wrote a letter to PO3 Rolando Joaquin (PO3 Joaquin), who served as the contact person between respondent and complainants, explaining his decision to withdraw as their counsel, and attaching the Notice to Withdraw which respondent instructed the accused to sign and file with the Court. He sent the letter through registered mail but unfortunately, he could not locate the registry receipt issued for the letter.

Respondent states that he has asked the accused that he be discharged from the case and endorsed the Notice of Withdrawal to PO3 Joaquin for the latter to file with the Court. Unfortunately, PO3 Joaquin did not do so, as he was keenly aware that it would be difficult to find a new counsel who would be as equally accommodating as respondent. Respondent suggests this might have been the reason for the several calls complainants made to his office. On 9 February 2004, the Court resolved to refer the matter to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.1awph!l.net The case was assigned to Investigating Commissioner Leland R. Villadolid, Jr. (Commissioner Villadolid) who sent notices of hearing to the parties but of the three complainants, only complainant Carlos Joaquin appeared. Thus, in the mandatory conference held, the other two complainants were declared as having waived their rights to further participate in the IBP proceedings.8 The parties were directed to file their respective position papers and on 27 May 2005, Commissioner Villadolid submitted his Report and Recommendation finding respondent guilty of violation of the Code of Professional Responsibility9 and recommended the imposition of penalty ranging from reprimand to suspension of six (6) months.1awph!l.net10 On 12 November 2005, the Board of Directors of the IBP resolved to adopt and approve Commissioner Villadolids recommendation to find respondent guilty and specifically to recommend his suspension for six (6) months as penalty. The only issue to be resolved in the case at bar is, considering all the facts presented, whether respondent committed gross negligence or misconduct in handling G.R. No. 152621-23, which eventually led to the ad cautelam petitions dismissal with finality. After careful consideration of the records of the case, the Court finds the suspension recommended by the IBP proper. In a criminal case like that handled by respondent in behalf of the accused, respondent has a higher duty to be circumspect in defending the accused for it is not only the property of the accused which stands to be lost but more importantly, their right to their life and liberty. As held in Regala v. Sandiganbayan:11 Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the fiduciary duty to his client which is of very delicate, exacting and confidential character, requiring a very high degree of fidelity and good faith, that is required by reason of necessity and public interest x x x . It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other profession in society. x x x12 At the onset, the Court takes notice that the ad cautelam petition was actually filed out of time. Though respondent filed with the Sandiganbayan an Urgent Motion for Leave to File Second Motion for Reconsideration with the attached Second Motion for Reconsideration, he should have known that a second motion for reconsideration is a prohibited pleading13 and it rests on the sound discretion of the Sandiganbayan to admit it or not. Thus, in effect, the motion did not toll the reglementary period to

appeal. Having failed to do so, the accused had already lost their right to appeal long before respondent filed his motion for extension. Therefore, respondent cannot now say he filed the ad cautelam petition on time. Also important to note is the allegation of complainants that the Sandiganbayan denied the second motion for reconsideration in its Resolution dated 7 February 2002. This respondent does not dispute. As to respondents conduct in dealing with the accused and complainants, he definitely fell short of the high standard of assiduousness that a counsel must perform to safeguard the rights of his clients. As aptly observed by Commissioner Villadolid, respondent had not been quite candid in his dealings with the accused or complainants. The Court notes that though respondent represented to the accused that he had changed his office address, still, from the examination of the pleadings14 he filed, it can be gleaned that all of the pleadings have the same mailing address as that known to complainants. Presumably, at some point, respondents office would have received the Courts Resolution dismissing the petition. Of course, the prudent step to take in that situation was to at least inform the client of the adverse resolution since they had constantly called respondents office to check the status of the case. Even when he knew that complainants had been calling his office, he opted not to return their calls. Respondent professed an inkling that the several phone calls of complainants may have been about the letter he sent PO3 Joaquin regarding his desire to be discharged as counsel of the case. However, though aware of such likelihood, respondent still did not return their calls. Had he done so, he and complainants could have threshed out all unresolved matters between them. Had respondent truly intended to withdraw his appearance for the accused, he as a lawyer who is presumably steeped in court procedures and practices, should have filed the notice of withdrawal himself instead of the accused. At the very least, he should have informed this Court through the appropriate manifestation that he had already given instructions to his clients on the proper way to go about the filing of the Notice of Withdrawal, as suggested by Commissioner Villadolid. In not so doing, he was negligent in handling the case of the accused. Certainly, respondent ought to know that he was the one who should have filed the Notice to Withdraw and not the accused. His tale that he sent a registered letter to the accused and gave them instructions on how to go about respondents withdrawal from the case defies credulity. It should have been respondent who undertook the appropriate measures for the proper withdrawal of his representation. He should not have relied on his client to do it for him if such was truly the case. Without the presentation of the alleged registry receipt (or the return card, which confirms the receipt of the mail by the recipient) of the letter he allegedly sent to PO3 Joaquin, the Court cannot lend credence to respondents naked claim, especially so that complainants have been resolute in their stand that they did not hear from respondent after the latter had filed the ad cautelam petition. He could relieve himself of his responsibility as counsel only first by securing the written conformity of the accused and filing it with the court pursuant to Rule 138, Section 26 of the Rules of Court.15 The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at anytime with or without cause. The right of an attorney to withdraw or terminate the relation other

than for sufficient cause is, however, considerably restricted. Among the fundamental rules of ethics is the principle that an attorney who undertakes to conduct an action impliedly stipulates to carry it to its conclusion. He is not at liberty to abandon it without reasonable cause. A lawyers right to withdraw from a case before its final adjudication arises only from the clients written consent or from a good cause.16 We agree with Commissioner Villadolid that the dismissal of the ad cautelam petition was primarily due to the gross negligence of respondent. The Court has stressed in Aromin v. Boncavil17 that: Once he agrees to take up the cause of the 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 the 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.18 Respondent has time and again stated that he did all the endeavors he enumerated without adequate or proper remuneration. However, complainants have sufficiently disputed such claim when they attached in their position paper filed before the IBP a machine validated deposit slip in the amount of P15,500.00 for the Metro Bank savings account of one Jaime Portugal with account number 7186509273.19 Respondent has neither admitted nor denied having claimed the deposited amount. The Court also rejects respondents claim that there was no formal engagement between the parties and that he made all his efforts for the case without adequate and proper consideration. In the words of then Justice Panganiban (presently Chief Justice) in Burbe v. Atty. Magulta:20 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 of public service, not money, is the primary consideration.21 Also to the point is another case where this Court ruled, thus: A written contract is not an essential element in the employment of an attorney; the contract may be express or implied. To establish the relation, it is sufficient that the advice and assistance of an attorney is sought and received in any matter pertinent to his profession. x x x 22

Hence, even if respondent felt under-compensated in the case he undertook to defend, his obligation embodied in the Lawyers Oath and the Code of Professional Responsibility still remains unwavering. The zeal and the degree of fervor in handling the case should neither diminish nor cease just because of his perceived insufficiency of remuneration. Lastly, the Court does not appreciate the offensive appellation respondent called the shooting incident that the accused was engaged in. He described the incident, thus: "the accused police officers who had been convicted of [h]omicide for the salvage of Froilan G. Cabiling and Jose M. Chua and [a]ttempted [h]omicide of Mario C. Macato."23 Rule 14.0124 of the Code of Professional Responsibility clearly directs lawyers not to discriminate clients as to their belief of the guilt of the latter. It is ironic that it is the defense counsel that actually branded his own clients as being the culprits that "salvaged" the victims. Though he might think of his clients as that, still it is unprofessional to be labeling an event as such when even the Sandiganbayan had not done so. The IBP Board of Governors recommended the suspension of respondent for six (6) months, the most severe penalty recommended by Commissioner Villadolid, but did not explain why such penalty was justified. In a fairly recent case where the lawyer failed to file an appeal brief which resulted to the dismissal of the appeal of his client in the Court of Appeals, the Court imposed upon the erring lawyer the penalty of three (3) months suspension.25 The Court finds it fit to impose the same in the case at bar. WHEREFORE, premises considered, respondent is hereby SUSPENDED from the practice of law for three (3) months. Let a copy of the Resolution be furnished the Bar Confidant for appropriate annotation in the record of respondent. SO ORDERED.

SECOND DIVISION [A.M. No. 5925. March 11, 2003] RUBY MAE BARNACHEA, complainant, vs. ATTY. EDWIN T. QUIOCHO, respondent. RESOLUTION CALLEJO, SR., J.: On January 3, 2002, Ruby Mae Barnachea filed a verified complaint for breach of lawyer-client relations against respondent Atty. Edwin T. Quiocho. It appears that respondent had not been in the private practice of the law for quite some time. However, in September 2001, he decided to revive his legal practice with some associates. Complainant engaged the legal services of respondent for the latter to cause the transfer under her name of the title over a property covered by Transfer Certificate of Title No. 334411 previously owned by her sister, Lutgarda Amor D. Barnachea. The latter sold said property to complainant under an unnotarized deed of absolute sale. Complainant drew and issued BPI Family Bank Check No. 0052304 in the amount of P11,280.00 and BPI Family Bank Check No. 0052305 in the amount of P30,000.00, both dated September 5, 2001, or the total amount of P41,280.00 for the expenses for said transfer and in payment for respondents legal services. Respondent enchased the checks. However, despite the lapse of almost two months, respondent failed to secure title over the property in favor of complainant. The latter demanded that respondent refund to her the amount of P41,280.00 and return the documents which she earlier entrusted to him. However, respondent failed to comply with said demands. On November 1, 2001, complainant received a letter from respondent informing her that he had failed to cause the transfer of the property under her name and that he was returning the documents and title she had entrusted to him and refunding to her the amount of P41,280.00 through his personal check No. DIL 0317787. Said check was drawn against his account with the Bank of Commerce (Diliman Branch) in the amount of P41,280.00 and was postdated December 1, 2001. Respondent told complainant that he needed more time to fund the check. However, respondent failed to fund the check despite the demands of complainant. In his Answer to the complaint, respondent denied that complainant contracted his legal services. Although respondent admitted having received the two checks from complainant, he claimed that said checks were intended to cover actual and incidental expenses for transportation, communication, representation, necessary services, taxes and fees for the cancellation and transfer of TCT No. 334411 under the name of complainant and not for legal services. He asserted that he acted in good faith as shown by the fact of his return of complainants documents with an explanatory letter and his issuance of a personal check for P41,280.00 dated December 1, 2001. He insisted that he would not compromise for such meager amount his personal standing as well as his membership in the legal profession. His failure to transfer the title of the property under the name of the complainant was caused by his

difficulty in making good the claimed amount, compounded by his affliction with diabetes and the consequent loss of sight of his right eye. Respondent further alleged that he was a licensed real estate and insurance broker and had been a freelance business management consultant. At the same time he engaged in real estate brokering, preneed products marketing for Prudential Life, and life insurance underwriting for Insular Life. In 1999, he gave up the practice of his profession as a lawyer and subsequently managed to put up a business center with fellow insurance underwriters for their common insurance underwriting practice. He further claimed that sometime in August, 2001, an insurance client introduced complainant as an insurance prospect to him. In the course of their dealing, complainant intimated to respondent her willingness to consider respondents insurance proposal provided the latter would help her facilitate the cancellation and eventual transfer to her name the property covered by TCT No. 334411 in the name of complainants sister, Lutgarda Amor D. Barnachea. Respondent agreed to help complainant in the transfer of the title to her name, with the condition that no diligent study or verification of complainants documents, nor preparation of any additional document or any application or petition whatsoever, will be made by respondent. He explained to complainant that his task was merely to go through the regular process of presenting the available documents, paying the taxes and fees, and following up the processing for the cancellation and issuance of the certificate of title. In other words, respondent offered to complainant services which a non-lawyer familiar with the procedure and the related offices can perform and provide to the complainant with respect to the transfer of the title of the property in her name. Respondent asserted that in the latter part of September 2001, he discovered and became aware for the first time that the original copy of TCT No. 334411 with the Register of Deeds of Quezon City was destroyed in a fire in Quezon City Hall several years earlier and that complainants copy of the title needed to be reconstituted before it can be cancelled and transferred. At about the same time, the working relations of respondent in the business center with his non-lawyer associates had become difficult and strained, impelling him to sever his business relations with them and cease from to going to the business center. Consequently, telephone communications between respondent and complainant at the business center was cut. Communications became much more limited when, apart from the fact that respondent did not have a landline at his residence, respondents mobile phone was stolen sometime in October 2001. The Integrated Bar of the Philippines (IBP) designated Atty. Dennis B. Funa as Commissioner to conduct a formal investigation of the complaint. Despite several settings, respondent failed to appear and adduce evidence. On April 26, 2002, Investigating Commissioner Dennis B. Funa submitted his report and recommendation stating in part that: 1. Respondent is not able to meet his financial obligations due to financial difficulties, and that respondent is in good faith in his failure to meet this obligation.

2. It is recommended that respondent be ORDERED TO REPAY HIS CLIENT within ninety (90) days from receipt of this Decision. The principal amount being P41,280.00. Failure to comply with the Order shall be considered as proof of evident bad faith, and shall be considered in the continuing evaluation of the case in view of the continued failure to repay his client. 3. Respondent should also be given a WARNING that a repetition shall be dealt with more severely.1[1] The Investigating Commissioner gave credence to the claim of complainant that she engaged the legal services of respondent and paid him for his services and that respondent failed in his undertaking and refund the amount of P41,280.00 to complainant despite her demands and that respondent appeared to be evading the complainant. On October 19, 2002, the IBP Board of Governors passed Resolution No. XV-2002-550 adopting and approving the Investigating Commissioners recommendation with the additional sanction of reprimand for respondent: 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, with modification. Respondent is hereby reprimanded and ordered to return the Forty One Thousand Two Hundred Eighty (P41,280.00) Pesos to complainant within ninety (90) days from receipt of notice.2[2] While the Court agrees with the Board of Governors that respondent should be meted a disciplinary sanction, it finds that the penalty of reprimand recommended by the Board of Governors is not commensurate to the gravity of the wrong committed by respondent. As found by the Investigating Commissioner, the complainant engaged the legal services of the respondent. As admitted in his letter to the complainant, respondent had just resumed his private practice of law two months before complainant contracted his services for the notarization of the Deed of Absolute Sale, the registration thereof with the Register of Deeds and the transfer of the title over the property to the complainant: NOVEMBER 1, 2002 DEAR RUBY, I AM SORRY I AM RETURNING YOUR DOCUMENTS WITHOUT CHANGES. I HAD A SERIES OF MONEY PROBLEMS RIGHT AFTER YOU GAVE ME THE TWO CHECKS AND COMING WITH THE AMOUNTS WITH PERSONAL FUNDS.

I WAS REVIVING MY LEGAL PRACTICE ONLY FOR TWO MONTHS WHICH WE MET AND HAD JUST SET UP THE OFFICE WITH TWO ASSOCIATES WHICH A FEW WEEKS LATER WE HAD DISAGREEMENTS AND DECIDED TO DISBAND. I WILL HAVE TO REFURBISH MY OFFICE. I AM ISSUING MY PERSONAL CHECK TO GUARANTEE THE AMOUNT I TOOK. I NEED A LITTLE TIME TO COVER THE AMOUNT. THANKS FOR YOUR UNDERSTANDING. (Sgd.) EDWIN.3[3] Respondents claim that complainant did not retain his legal services flies in the face of his letter to complainant. Even if it were true that no attorney-client relationship existed between them, case law has it that an attorney may be removed or otherwise disciplined not only for malpractice and dishonesty in the profession but also for gross misconduct not connected with his professional duties, making him unfit for the office and unworthy of the privileges which his license and the law confer upon him.4[4] In this case, respondent failed to comply with his undertaking for almost two months. Worse, despite demands of complainant, he failed to refund the amount of P41,280.00 and to return to complainant the deed of absolute sale and title over the property. Respondents claim that complainant could not contact him because he did not have any landline at his residence and that his mobile phone was stolen in October 2001, is hard to believe. He failed to adduce a morsel of evidence to prove that his telephone at the business center was cut or that his mobile phone had been stolen. Even then, respondent could have easily contacted the complainant at her residence or could have written her a letter informing her that the original copy of TCT No. 324411 in the custody of the Register of Deeds was burned when the Quezon City Hall was gutted by fire and that there was a need for the reconstitution of said title. Neither did respondent adduce evidence that he was a life insurance underwriter for Insular Life or that he had been sick with diabetes and had lost his sight in his right eye. Respondent simply refused to adduce evidence to prove his allegations in his Answer to the complaint. The Court is led to believe that respondents failure to cause the transfer of the title of the property under the name of complainant was due to a financial problem that beset him shortly after he received the checks from complainant. It can easily be inferred from respondents letter that he used complainants money to alleviate if not solve his financial woes. What compounded respondents unethical conduct was his drawing of a personal check and delivering the same to complainant without sufficient funds in his bank account to cover the check. Even as he promised to fund his account with the drawee bank, respondent failed to do so when the check became due. A lawyer is obliged to hold in trust money or property of his client that may come to his possession. He is a trustee to said funds and property.5[5] He is to keep the funds of his client separate and apart from his own and those of others kept by him. Money entrusted to a lawyer for a specific purpose such as for

the registration of a deed with the Register of Deeds and for expenses and fees for the transfer of title over real property under the name of his client if not utilized, must be returned immediately to his client upon demand therefor. The lawyers failure to return the money of his client upon demand gave rise to a presumption that he has misappropriated said money in violation of the trust reposed on him.6[6] The conversion by a lawyer funds entrusted to him by his client is a gross violation of professional ethics and a betrayal of public confidence in the legal profession.7[7] In this case, respondent intransigeantly refused to return to the complainant the amount of P41,280.00 which he received for the expenses for the transfer to her of the title of the property and for his professional fees. His dishonest conduct was compounded by his interjection of flimsy excuses for his obstinate refusal to refund the amount to complainant. The relation of attorney and client is highly fiduciary in nature and is of a very delicate, exacting and confidential character.8[8] A lawyer is duty-bound to observe candor, fairness and loyalty in all his dealings and transactions with his clients.9[9] The profession, therefore, demands of an attorney an absolute abdication of every personal advantage conflicting in any way, directly or indirectly, with the interest of his client. In this case, respondent miserably failed to measure up to the exacting standard expected of him. IN LIGHT OF ALL THE FOREGOING, Respondent Atty. Edwin T. Quiocho is found guilty of violation of Canons 15 and 16 of the Code of Professional Responsibility. He is SUSPENDED from the practice of law for One (1) Year with a stern warning that a repetition of the same or similar acts shall be dealt with more severely. He is DIRECTED to restitute to the complainant the full amount of P41,280.00 within ten (10) days from notice hereof. Respondent is further DIRECTED to submit to the Court proof of payment of said amount within ten (10) days from said payment. If Respondent fails to restitute the said amount within the aforesaid period, he shall be meted an additional suspension of three (3) months for every month or fraction thereof of delay until he shall have paid the said amount in full. In case a subsidiary penalty of suspension for his failure to restitute the said amount shall be necessary, respondent shall serve successively the penalty of his one year suspension and the subsidiary penalty. This is without prejudice to the right of the complainant to institute the appropriate action for the collection of said amount. SO ORDERED.

FIRST DIVISION [A.C. No. 5804. July 1, 2003] BENEDICTO HORNILLA and ATTY. FEDERICO D. RICAFORT, complainants, vs. ATTY. ERNESTO S. SALUNAT, respondent. RESOLUTION YNARES-SANTIAGO, J.: On November 21, 1997, Benedicto Hornilla and Federico D. Ricafort filed an administrative complaint10[1] with the Integrated Bar of the Philippines (IBP) Commission on Bar Discipline, against respondent Atty. Ernesto S. Salunat for illegal and unethical practice and conflict of interest. They alleged that respondent is a member of the ASSA Law and Associates, which was the retained counsel of the Philippine Public School Teachers Association (PPSTA). Respondents brother, Aurelio S. Salunat, was a member of the PPSTA Board which approved respondents engagement as retained counsel of PPSTA. Complainants, who are members of the PPSTA, filed an intra-corporate case against its members of the Board of Directors for the terms 1992-1995 and 1995-1997 before the Securities and Exchange Commission, which was docketed as SEC Case No. 05-97-5657, and a complaint before the Office of the Ombudsman, docketed as OMB Case No. 0-97-0695, for unlawful spending and the undervalued sale of real property of the PPSTA. Respondent entered his appearance as counsel for the PPSTA Board members in the said cases. Complainants contend that respondent was guilty of conflict of interest because he was engaged by the PPSTA, of which complainants were members, and was being paid out of its corporate funds where complainants have contributed. Despite being told by PPSTA members of the said conflict of interest, respondent refused to withdraw his appearance in the said cases. Moreover, complainants aver that respondent violated Rule 15.0611[2] of the Code of Professional Responsibility when he appeared at the meeting of the PPSTA Board and assured its members that he will win the PPSTA cases. In his Answer,12[3] respondent stressed that he entered his appearance as counsel for the PPSTA Board Members for and in behalf of the ASSA Law and Associates. As a partner in the said law firm, he only filed a Manifestation of Extreme Urgency in OMB Case No. 0-97-0695.13[4] On the other hand, SEC Case No. 05-97-5657 was handled by another partner of the firm, Atty. Agustin V. Agustin. Respondent

claims that it was complainant Atty. Ricafort who instigated, orchestrated and indiscriminately filed the said cases against members of the PPSTA and its Board. Respondent pointed out that his relationship to Aurelio S. Salunat was immaterial; and that when he entered into the retainer contract with the PPSTA Board, he did so, not in his individual capacity, but in representation of the ASSA Law Firm. He denied that he ensured the victory of the PPSTA Board in the case he was handling. He merely assured the Board that the truth will come out and that the case before the Ombudsman will be dismissed for lack of jurisdiction, considering that respondents therein are not public officials, but private employees. Anent the SEC case, respondent alleged that the same was being handled by the law firm of Atty. Eduardo de Mesa, and not ASSA. By way of Special and Affirmative Defenses, respondent averred that complainant Atty. Ricafort was himself guilty of gross violation of his oath of office amounting to gross misconduct, malpractice and unethical conduct for filing trumped-up charges against him and Atty. De Mesa. Thus, he prayed that the complaint against him be dismissed and, instead, complainant Ricafort be disciplined or disbarred. The complainant was docketed as CBD Case No. 97-531 and referred to the IBP Commission on Bar Discipline. After investigation, Commissioner Lydia A. Navarro recommended that respondent be suspended from the practice of law for six (6) months. The Board of Governors thereafter adopted Resolution No. XV-3003-230 dated June 29, 2002, approving the report and recommendation of the Investigating Commissioner. Respondent filed with this Court a Motion for Reconsideration of the above Resolution of the IBP Board of Governors. The pertinent rule of the Code of Professional Responsibility 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. There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test is whether or not in behalf of one client, it is the lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he argues for the other client.14[5] This rule covers not only cases in which confidential communications have been confided, but also those in which no confidence has been bestowed or will be used.15[6] Also, there is conflict of interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously affect his first client in any matter in which he represents him and also whether he will be called upon in his new relation to use against his first client any knowledge acquired through their connection.16[7] Another test of the

inconsistency of interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance thereof.17[8] In this jurisdiction, a corporations board of directors is understood to be that body which (1) exercises all powers provided for under the Corporation Code; (2) conducts all business of the corporation; and (3) controls and holds all property of the corporation.18[9] Its members have been characterized as trustees or directors clothed with a fiduciary character.19[10] It is clearly separate and distinct from the corporate entity itself. Where corporate directors have committed a breach of trust either by their frauds, ultra vires acts, or negligence, and the corporation is unable or unwilling to institute suit to remedy the wrong, a stockholder may sue on behalf of himself and other stockholders and for the benefit of the corporation, to bring about a redress of the wrong done directly to the corporation and indirectly to the stockholders.20[11] This is what is known as a derivative suit, and settled is the doctrine that in a derivative suit, the corporation is the real party in interest while the stockholder filing suit for the corporations behalf is only nominal party. The corporation should be included as a party in the suit.21[12] Having thus laid a suitable foundation of the basic legal principles pertaining to derivative suits, we come now to the threshold question: can a lawyer engaged by a corporation defend members of the board of the same corporation in a derivative suit? On this issue, the following disquisition is enlightening: The possibility for conflict of interest here is universally recognized. Although early cases found joint representation permissible where no conflict of interest was obvious, the emerging rule is against dual representation in all derivative actions. Outside counsel must thus be retained to represent one of the defendants. The cases and ethics opinions differ on whether there must be separate representation from the outset or merely from the time the corporation seeks to take an active role. Furthermore, this restriction on dual representation should not be waivable by consent in the usual way; the corporation should be presumptively incapable of giving valid consent.22[13] (underscoring ours)

In other jurisdictions, the prevailing rule is that a situation wherein a lawyer represents both the corporation and its assailed directors unavoidably gives rise to a conflict of interest. The interest of the corporate client is paramount and should not be influenced by any interest of the individual corporate officials.23[14] The rulings in these cases have persuasive effect upon us. After due deliberation on the wisdom of this doctrine, we are sufficiently convinced that a lawyer engaged as counsel for a corporation cannot represent members of the same corporations board of directors in a derivative suit brought against them. To do so would be tantamount to representing conflicting interests, which is prohibited by the Code of Professional Responsibility. In the case at bar, the records show that SEC Case No. 05-97-5657, entitled Philippine Public School Teachers Assn., Inc., et al. v. 1992-1995 Board of Directors of the Philippine Public School Teachers Assn. (PPSTA), et al., was filed by the PPSTA against its own Board of Directors. Respondent admits that the ASSA Law Firm, of which he is the Managing Partner, was the retained counsel of PPSTA. Yet, he appeared as counsel of record for the respondent Board of Directors in the said case. Clearly, respondent was guilty of conflict of interest when he represented the parties against whom his other client, the PPSTA, filed suit. In his Answer, respondent argues that he only represented the Board of Directors in OMB Case No. 0-970695. In the said case, he filed a Manifestation of Extreme Urgency wherein he prayed for the dismissal of the complaint against his clients, the individual Board Members. By filing the said pleading, he necessarily entered his appearance therein.24[15] Again, this constituted conflict of interests, considering that the complaint in the Ombudsman, albeit in the name of the individual members of the PPSTA, was brought in behalf of and to protect the interest of the corporation. Therefore, respondent is guilty of representing conflicting interests. Considering however, that this is his first offense, we find the penalty of suspension, recommended in IBP Resolution No. XV-2002-230 dated June 29, 2002, to be too harsh. Instead, we resolve to admonish respondent to observe a higher degree of fidelity in the practice of his profession. ACCORDINGLY, respondent Atty. Ernesto Salunat is found GUILTY of representing conflicting interests and is ADMONISHED to observe a higher degree of fidelity in the practice of his profession. He is further WARNED that a repetition of the same or similar acts will be dealt with more severely. SO ORDERED.

[A.C. No. 6424. March 4, 2005] CONSORCIA S. ROLLON, complainant, vs. Atty. CAMILO NARAVAL, respondent. DECISION PANGANIBAN, J.: 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. XVI-2004-64 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 SUSPENDED from 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.

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

A.C. No. 4380 October 13, 1995 NICANOR GONZALES and SALUD B. PANTANOSAS, complainants, vs. ATTY. MIGUEL SABACAJAN, respondent.

REGALADO, J.: This resolves the administrative case filed by Nicanor Gonzales and Salud B. Pantanosas against Atty. Miguel Sabacajan on February 14, 1995, 1 the verified complaint wherefor alleges: xxx xxx xxx 4. That sometime in October, 1994, complainants were informed by the Register of Deeds of Cagayan de Oro City that the complainants' owner's duplicate of title covering their lands, Transfer Certificate of Title Nos. T-91736 and T-91735 were entrusted to the office secretary of the respondent who in torn entrusted the same to respondent; 5. That respondent admitted and confirmed to the complainants that their titles are in his custody and has even shown the same (to) the complainant Salud B. Pantanosas but when demanded (sic) to deliver the said titles to the complainant in a formal demand letter, marked as ANNEX "A," respondent refused and continues to refuse without any justification to give their titles (and) when confronted, respondent challenged the complainants to file any case in any court even in the Honorable Supreme Court; 6. That respondent's dare or challeng(e) is a manifestation of his arrogance taking undue advantage of his legal profession over the simplicity, innocence and ignorance of the complainants, one of whom is his blood relative, his aunt, for which complainants shudder with mental anguish; 7. That due to his challeng(e), the complainants sent a letter to the Honorable Supreme Court for enlightenment, copy of which is attached as ANNEX "B", for which the Honorable Supreme Court required 19 legible copies of a verified complaint; 8. That in spite of repeated demands, request(s) and pleas towards (sic) respondent, respondent still fail(ed) and stubbornly refused without justification to surrender the said titles to the rightful owners, the complainants here(in), which act is tantamount to willful and malicious defiance of legal and moral

obligations emanating from his professional capacity as a lawyer who had sworn to uphold law and justice, to the prejudice and damage of the complainants; 2 xxx xxx xxx On March 22, 1995, the Court required respondent to comment on the foregoing complaint. In his unverified "Answer" thereto, respondent admitted having met Salud Pantanosas but claims that, to his recollection, "Nicanor Gonzales/Serdan" has never been to his office. Respondent likewise denied that he challenged anyone to file a case in any court, much less the Supreme Court. He also claims that he referred complainant Pantanosas to his client, Mr. Samto M. Uy of Iponan, Cagayan de Oro City, for whom he worked out the segregation of the titles, two of which are the subject of the instant case. 3 Respondent likewise denies complainants' allegation that he is arrogant, in contrast to the innocence, simplicity and ignorance of said complainants. He contends that the truth of the matter is that complainants have been charged with a number of criminal and civil complaints before different courts. He also asserts that he was holding the certificates of title in behalf of his client, Samto M. Uy. 4 Atty. Sabacajan stresses, by way of defense, that "the instant action was chosen precisely to browbeat him into delivering the Certificates of Title to them without said certificates passing the hands of Mr. Samto Uy with whom the complainants have some monetary obligations." 5 In its resolution dated June 26, 1995, 6 for internal administrative purposes the Court referred this case to the Office of the Bar Confidant for the corresponding evaluation, report and recommendation. From the foregoing proceedings taken on this matter, the Court finds that respondent admitted having taken possession of the certificates of title of complainants but refused to surrender the same despite demands made by the latter. It follows, therefore, that it was incumbent upon him to show that he was legally justified in doing so. Instead, all he did was to inform this Court that "his obligation to deliver the certificates to Mr. Samto Uy excludes the delivery of said certificates to anyone else." 7 Respondent attached some certifications to his "Answer" to support his contention that complainants are notorious characters. However, the certifications indicate that most of the cases stated therein, especially those involving fraud, have been dismissed. With respect to those still pending, there is no indication as to the identity of the party who instituted the same, aside from the consideration that the remedy thereon is judicial in nature. At any rate, these aspersions on the character of complainants have no bearing on the misconduct of respondent charged in the present case. Respondent likewise submitted xerox copies of certain certificates of title in an effort to explain why he kept the certificates of title of complainants, that is, supposedly for the purpose of subdividing the property. However, an examination of the same does not show any connection thereof to respondent's claim. In fact, the two sets of certificates of title appear to be entirely different from each other. As a lawyer, respondent should know that there are lawful remedies provided by law to protect the interests of his client. The records do not show that he or his client have availed of said remedies, instead of merely resorting to unexplained, if not curt, refusals to accommodate the requests of

complainants. Also, he cannot be unaware of the imposable sanctions on a counsel who resorts to unlawful means that would cause injustice to the adversaries of his client. The Court accordingly finds that respondent has not exercised the good faith and diligence required of lawyers in handling the legal affairs of their clients. If complainants did have the alleged monetary obligations to his client, that does not warrant his summarily confiscating their certificates of title since there is no showing in the records that the same were given as collaterals to secure the payment of a debt. Neither is there any intimation that there is a court order authorizing him to take and retain custody of said certificates of title. Apparently, respondent has disregarded Canon 15, Rule 15.07 of the Code of Professional Responsibility which provides that a lawyer shall impress upon his client the need for compliance with the laws and principles of fairness. Instead, he unjustly refused to give to complainants their certificates of titles supposedly to enforce payment of their alleged financial obligations to his client and presumably to impress the latter of his power to do so. Canon 19, Rule 19.01 ordains that a lawyer shall employ only fair and honest means to attain the lawful objectives of his client and shall not present, participate in presenting, or threaten to present unfounded charges to obtain an improper advantage in any case or proceeding. Respondent has closely skirted this proscription, if he has not in fact transgressed the same. On the foregoing considerations, the Court desires and directs that respondent should forthwith return the certificates of title of complainants. To ensure the same, he should be placed under suspension until he presents to the Court proof of receipt by complainants of their respective copies of Certificates of Title Nos. T-91735 and T-91736 or a judicial order or document authorizing or justifying the retention of possession thereof by respondent or his aforenamed client. WHEREFORE, Atty. Miguel Sabacajan is hereby SUSPENDED from the practice of law until he can duly show to this Court that the disputed certificates of title have been returned to and the receipt thereof duly acknowledged by complainants, or can present a judicial order or appropriate legal authority justifying the possession by him or his client of said certificates. He is further WARNED that a repetition of the same or similar or any other administrative misconduct will be punished more severely. Let a copy of this resolution be spread on the personal records of respondent and have copies thereof furnished to the Integrated Bar of the Philippines and duly circularized to all courts in the country. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION A.C. No. 6651 February 27, 2006

EDUARDO P. MENESES, Complainant, vs. ATTY. RODOLFO P. MACALINO, Respondent. DECISION CARPIO, J.: The Case This is a complaint for disbarment filed by Eduardo P. Meneses ("complainant") against Atty. Rodolfo P. Macalino ("respondent") for violation of the lawyers oath. The Facts Complainant alleged that sometime in March 1993, respondent offered his legal services to complainant to help secure the release of complainants car from the Bureau of Customs. Respondent proposed to handle the case for a "package deal" of P60,000. Complainant agreed and initially gave respondent P10,000 for processing of the papers. In June 1993, respondent asked for P30,000 to expedite the release of the car. In both instances, respondent did not issue a receipt but promised to furnish complainant with a receipt from the Bureau of Customs. Since then, respondent failed to give complainant an update on the matter. Complainant repeatedly went to respondents house to inquire on the status of the release of the car. Complainant was always told that respondent was not around and to just return another day. This went on for more than a year. In April 1994, complainant went to the National Bureau of Investigation ("NBI") to file a complaint for estafa against respondent.1 The NBI set the complaint for investigation on 27 April 1994. Respondent wrote a letter2 to the NBI dated 26 April 1994, requesting for postponement of the investigation to 12 May 1994. Respondent stated in his letter that he would settle the matter amicably with complainant and return the P40,000. Respondent failed to appear for the investigation scheduled on 12 May 1994. Respondent sent another letter3 to the NBI dated 23 May 1994, requesting for the suspension of the proceedings because he had partially settled the case. Respondent attached the acknowledgment receipt4 signed by complainant representing the partial refund of P20,000. Respondent promised to pay

the balance on or before 8 June 1994. However, respondent did not pay the balance. The NBI set the complaint for investigation twice and subpoenaed respondent but he failed to appear. On 22 January 1996, the NBI, through Director Mariano M. Mison, found insufficient evidence to prosecute respondent for estafa. Nevertheless, the NBI advised complainant to file a complaint for disbarment against respondent.5 On 30 April 1996, complainant filed a verified complaint6 for disbarment against respondent with the Commission on Bar Discipline ("Commission") of the Integrated Bar of the Philippines ("IBP"). Complainant charged respondent with failure to render legal services, failure to refund balance of legal fees, and failure to apprise the complainant of the status of the case all in violation of the lawyers oath of office. In an Order7 dated 23 July 1998, Investigating Commissioner Ma. Carmina M. Alejandro-Abbas ("Commissioner Abbas") ordered respondent to submit his answer to the complaint. Respondent was also warned that if he failed to file an answer, the Commission would consider him in default and the case would be heard ex-parte. Although he received the Order, respondent failed to file an answer. The case was set for initial hearing on 7 May 2002. Despite receipt of the notice of hearing, respondent failed to appear. Complainant was present and he informed Commissioner Abbas that he had previously filed a complaint for estafa against respondent with the NBI. Commissioner Abbas then issued a subpoena duces tecum to Mr. Waldo Palattao, or his duly authorized representative, of the Anti-Fraud Action Division of the NBI for the case folder and all the documents pertaining to the complaint.8 Mr. Emil Rejano, a confidential agent of the NBI, submitted all the documents during the hearing on 29 July 2002.9 Further hearings were scheduled for 27 June 2002, 29 July 2002, 9 September 2002, 8 October 2002 and 5 November 2002. Despite due notice, respondent failed to appear on these dates. On 18 August 2004, Investigating Commissioner Dennis A. B. Funa ("Commissioner Funa"), who took over the investigation, issued an order submitting the case for decision based on the evidence on record. Respondents failure to file an answer and to attend the hearings were deemed a waiver of his right to participate in the proceedings and present evidence.10 The IBPs Report and Recommendationlavvph!1.net The IBP Board of Governors issued CBD Resolution No. XVI-2004-414 ("IBP Resolution") dated 7 October 2004 adopting with modification11 Commissioner Funas Report and Recommendation ("Report") finding respondent guilty of violating the Code of Professional Responsibility. The IBP Board of Governors recommended the imposition on respondent of a penalty of one year suspension from the practice of law. The Report reads: From the records of the case, there is clearly a breach of lawyer-client relations. Moreover, [r]espondent has continuously exhibited his adamant refusal to comply with his legal obligations to his client, despite many opportunities to settle the matter amicably. Aggravating this is [r]espondents utter

disregard of the legal process before the NBI, choosing to ignore notices from the NBI in the middle of an investigation. In addition, [r]espondent has continuously disregarded the jurisdiction of this Commission. It is clear from the records of the case that [r]espondent has duly received the orders and notices from this Commission as evidenced by the [r]egistry [r]eturn [r]eceipts. In the absence of any counter-allegations from [r]espondent, which is by his own doing, the allegations of the [c]omplainant shall stand and be given its due credence.12 (Emphasis supplied) The IBP Board of Governors forwarded the instant case to the Court as provided under Section 12(b), Rule 139-B13 of the Rules of Court. The Ruling of the Court The Court finds respondent liable for violation of Canon 16,14 Rule 16.01,15 Rule 16.03,16 and Rule 18.0417 of the Code of Professional Responsibility ("Code"). Respondent Failed to Inform and to Respond to Inquiries of the Complainant Regarding the Status of the Case The relationship of lawyer-client being one of confidence, it is the lawyers duty to keep the client regularly and fully updated on the developments of the clients case.18 The Code provides that "[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."19 The records show that after receiving P40,000, respondent was never heard of again. Respondent kept complainant in the dark about the status of the release of the car. Only after complainant filed a complaint with the NBI did respondent communicate with complainant. Moreover, it appears that respondent failed to render any legal service to facilitate the cars release. In fact, respondent failed to secure the release of the car. Respondents failure to communicate with complainant was an unjustified denial of complainants right to be fully informed of the status of the case.20 Respondent Failed to Account and Return the Money He Received from Complainant The Code mandates that every "lawyer shall hold in trust all moneys and properties of his client that may come into his possession."21 The Code further states that "[a] lawyer shall account for all money or property collected or received for or from the client."22 Furthermore, "[a] lawyer shall deliver the funds and property of his client when due and upon demand."23 When a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an accounting to the client showing that the money was spent for the intended purpose.24 Consequently, if the lawyer does not use the money for the intended purpose, the lawyer must immediately return the money to the client.25

Respondent specifically received the P40,000 for his legal services and for the processing fee to facilitate the release of complainants car. Since respondent failed to render any legal service to complainant and he also failed to secure the cars release, respondent should have promptly accounted for and returned the money to complainant. But even after demand, respondent did not return the money. Again, respondent waited until complainant filed a complaint with the NBI before he refunded the P20,000. Even then, respondent failed to return the balance of P20,000 as he promised. Respondents failure to return the money to complainant upon demand is conduct indicative of lack of integrity and propriety and a violation of the trust reposed on him.26 Respondents unjustified withholding of money belonging to the complainant warrants the imposition of disciplinary action.27 Respondent Failed to File an Answer and Attend the Hearings before the IBP The Court notes that respondents actuation reveals a high degree of irresponsibility28 and shows his lack of respect for the IBP and its proceedings.29 Respondents attitude demonstrates a character which stains the nobility of the legal profession.30 On the Appropriate Penalty to be Imposed on Respondent The Court finds the penalty recommended by the IBP to suspend respondent from the practice of law for one year well-taken. Following the rulings of this Court, those found guilty of the same or similar acts were suspended for not less than six months from the practice of law.31 Considering respondents lack of prior administrative record, suspension from the practice of law for one year, 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.32 WHEREFORE, we find respondent Atty. Rodolfo P. Macalino GUILTY of violation of Canon 16, Rule 16.01, Rule 16.03, and Rule 18.04 of the Code of Professional Responsibility. Accordingly, we SUSPEND respondent Atty. Rodolfo P. Macalino from the practice of law for one year effective upon finality of this decision. Respondent is ORDERED TO RETURN to complainant, within 30 days from notice of this decision, the full amount of P20,000 with interest at 12% per annum from the date of promulgation of this decision until full payment. Respondent is further DIRECTED to submit to the Court proof of payment of the amount within 15 days from payment. Let copies of this decision be furnished the Office of the Bar Confidant, to be appended to respondents personal record as attorney. Likewise, copies shall be furnished to the Integrated Bar of the Philippines and all courts in the country for their information and guidance. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC A.C. No. 8253 March 15, 2011 (Formerly CBD Case No. 03-1067) ERLINDA R. TAROG, Complainant, vs. ATTY. ROMULO L. RICAFORT, Respondent. DECISION PER CURIAM: We resolve a complaint for disbarment for alleged grave misconduct brought against Atty. Romulo L. Ricafort for his failure to account for and to return the sums of money received from his clients for purposes of the civil action to recover their property from a foreclosing banking institution he was handling for them. The original complainant was Arnulfo A. Tarog, but his wife, Erlinda R. Tarog, substituted him upon his intervening death. Antecedents In 1992, the Tarogs sought the advice of Atty. Jaime L. Miralles regarding their bank-foreclosed property located in the Bicol Region. Atty. Miralles advised them to engage a Bicol-based attorney for that purpose. Thus, they went to see Atty. Ricafort accompanied by Vidal Miralles, their friend who was a brother of Atty. Miralles.1 They ultimately engaged Atty. Ricafort as their attorney on account of his being well-known in the community, and being also the Dean of the College of Law of Aquinas University where their son was then studying. Having willingly accepted the engagement, Atty. Ricafort required the Tarogs to pay P7,000.00 as filing fee, which they gave to him.2 He explained the importance of depositing P65,000.00 in court to counter the P60,000.00 deposited by Antonio Tee, the buyer of the foreclosed property. After they informed him that they had only P60,000.00, he required them to add some more amount (dagdagan niyo ng konti).3 To raise the P65,000.00 for the Tarogs, therefore, Vidal solicited a loan from one Sia with the guarantee of his brother Atty. Miralles. Sia issued a check in that amount in the name of Arnulfo.4 On November 7, 1992, the Tarogs and Vidal went to the office of Atty. Ricafort to deliver the P65,000.00. When Arnulfo said that he had first to encash the check at the bank, Atty. Ricafort persuaded him to entrust the check to him instead so that he (Atty. Ricafort) would be the one to encash it and then deposit the amount in court. On that representation, Arnulfo handed the check to Atty. Ricafort.5

After some time, the Tarogs visited Atty. Ricafort to verify the status of the consignation. Atty. Ricafort informed them that he had not deposited the amount in court, but in his own account. He promised to return the money, plus interest. Despite several inquiries about when the amount would be returned, however, the Tarogs received mere assurances from Atty. Ricafort that the money was in good hands. The Tarogs further claimed that the Regional Trial Court, Branch 52, in Sorsogon (RTC), where their complaint for annulment of sale was being heard, had required the parties to file their memoranda. Accordingly, they delivered P15,000.00 to Atty. Ricafort for that purpose, but he did not file the memorandum.6 When it became apparent to the Tarogs that Atty. Ricafort would not make good his promise of returning the P65,000.00, plus interest, Arnulfo demanded by his letter dated December 3, 2002 that Atty. Ricafort return the P65,000.00, plus interest, and the P15,000.00 paid for the filing of the memorandum.7 Yet, they did not receive any reply from Atty. Ricafort. In his defense, Atty. Ricafort denied that the P65,000.00 was intended to be deposited in court, insisting that the amount was payment for his legal services under a "package deal," that is, the amount included his acceptance fee, attorneys fee, and appearance fees from the filing of the complaint for annulment of sale until judgment, but excluding appeal. He claimed that the fees were agreed upon after considering the value of the property, his skill and experience as a lawyer, the labor, time, and trouble involved, and his professional character and social standing; that at the time he delivered the check, Arnulfo read, understood, and agreed to the contents of the complaint, which did not mention anything about any consignation;8 and that Arnulfo, being a retired school principal, was a learned person who would not have easily fallen for any scheme like the one they depicted against him. Findings of the IBP Commissioner Following his investigation, Commissioner Wilfredo E.J.E. Reyes of the Integrated Bar of the PhilippinesCommission on Bar Discipline rendered his Report and Recommendation dated October 7, 2004,9 in which he concluded that: It is respectfully recommended that respondent, Atty. Romulo L. Ricafort be DISBARRED and be ordered to return the amount of P65,000 and P15,000 which he got from his client. RESPECTFULLY SUBMITTED. Commissioner Reyes regarded the testimonies of Erlinda and Vidal more credible than the testimony of Atty. Ricafort, observing: Based on the said testimony, statements and actuations of complainant Erlinda Tarog and his collaborating witness, we find their statements to be credible. Atty. Ricafort in his testimony attempted to show that the amount of P65,000.00 was paid to him by the complainant as acceptance fee on a package deal basis and under said deal, he will answer the filing fee, attorneys fees and other expenses incurred up to the time the judgment is rendered. He presented a

transcript of stenographic notes wherein it was stated that complainant himself did not consign the money in court. The respondent admitted in his testimony that he did not have any retainer agreement nor any memorandum signed or any receipt which would prove that the amount of P65,000.00 was received as an acceptance fee for the handling of the case. Atty. Romulo Ricafort stated that there was no retainer agreement and that he issued only receipt because the late Arnulfo Tarog will not pay unless a receipt is issued. The Undersigned Commissioner asked the respondent "Basically you describe that thing that will happen in the litigation related to the payment of fees. But when you received that P65,000.00 did you not put anything there that you will describe the nature of legal work which you will undertake considering that you have considered this P65,000.00 as your attorneys fees? And Atty. Ricafort stated: Yes I did. I do not know why they were not showing the receipt. That is a big amount, Your Honor. They demanded for me the receipt of P30,000.00 how much more with that P65,000.00. They demanded for the receipt of that P65,000.00 but I cannot explain the reason why During the clarificatory questioning, the Undersigned Commissioner also asked Atty. Ricafort why he did not answer the demand letter sent by Arnulfo Tarog and the proof of service of the said letter was presented by the complainant. Conveniently, Atty. Ricafort stated that he did not receive the letter and it was received by their helper who did not forward the letter to him. He also adopted the position that the complainant was demanding the P65,000.00 wherefore this case was filed. When confronted by the testimony of Mr. Vidal Miralles, the respondent Atty. Ricafort just denied the allegation that he received the P65,000.00 for deposit to the court. He also denied that Mr. Miralles has visited his residence for follow-up the reimbursement. The Undersigned Commissioner asked the respondent if he has personal animosity with Arnuldo Tarog, Erlinda Tarog and Vidal Miralles and if there are any reason why this case was filed against him. In his answer the respondent stated that we have been very good friends for the past ten (10) years and he said that in fact he was surprised when the complaint was filed against him and they even attached the decision of the Supreme Court for his suspension and maybe they are using this case to be able to collect from him. The main defense of the respondent is that the complainant in this case testified that the total amount to redeem his property is P240,000.00 and when asked whether he consigned the money to the court to redeem the property he answered in the negative. The alleged payment of P65,000.00 was made prior to the said testimony sometime in 1992. Hence, it was stated on complainants affidavit that on November 7, 1992, prior to filing said complaint I had given him the sum of Sixty Five Thousand Pesos to be deposited to the Regional Trial Court representing redemption money of the Real Estate Mortgage. The amount of P65,000.00 is very much close to the amount of the principal obligation of the complainant and it is not surprising for a non-lawyer to hold on to the belief that with the filing of the case for annulment of foreclosure his case would be strengthened by making a deposit in court hence, the motivation to produce the deposit was logical and natural insofar as the complainant is concerned. The testimony of the complainant in court that the bank

needed P240,000.00 for the redemption of the property will have no bearing on the actuation of the complainant who has been required to deposit P65,000.00 by his lawyer. The Undersigned Commission has no alternative but to believe in the credibility and truthfulness of complainants narration that of Mrs. Erlinda Tarog and Vidal Miralles.10 Commissioner Reyes concluded that Atty. Ricafort violated Canon 15, and Rules 16.01, 16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility by taking advantage of the vulnerability of his clients and by being dishonest in his dealings with them by refusing to return the amount of P65,000.00 to them. On November 4, 2004, the IBP Board of Governors adopted Resolution No. XVI-2004-473,11 resolving to return the matter to Commissioner Reyes for a clarification of whether or not there was evidence to support the claim that the P65,000.00 had been in payment of attorneys fees and other expenses. On October 11, 2005, Commissioner Reyes issued a second Report and Recommendation,12 in which he declared that Atty. Ricafort did not present any retainer agreement or receipt to prove that the amount of P65,000.00 had been part of his attorneys fees; that Atty. Ricafort had willfully ignored the demand of Arnulfo by not replying to the demand letter; that, instead, Atty. Ricafort had insisted that the househelp who had received the demand letter had not given it to him; and that in his (Commissioner Reyes) presence, Atty. Ricafort had also promised to the complainant that he would settle his liability, but Atty. Ricafort did not make good his promise despite several resettings to allow him to settle his obligation. Action of IBP Board of Governors Through Resolution No. XVII-2006-569,13 therefore, the IBP Board of Governors adopted and approved the Report and Recommendation of Commissioner Reyes and recommended the disbarment of Atty. Ricafort and the order for him to return the amounts of P65,000.00 and P15,000.00 to Erlinda, viz: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case herein made part of this Resolution as Annex "A" and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that Respondent has taken advantage of his client [sic] vulnerability and has been dishonest with his dealings to his client, Atty. Romulo L. Ricafort is hereby DISBARRED and Ordered to Return the amount of P65,000 and P15,000 to complainant. Atty. Ricafort moved for reconsideration,14 maintaining that a retainer agreement was immaterial because he had affirmed having received the P65,000.00 and having issued a receipt for the amount; that he had not kept the receipt because "the practice of lawyers in most instances is that receipt is issued without duplicate as it behooves upon the client to demand for a receipt;"15 that considering that the Tarogs had produced a photocopy of the receipt he had issued for the P30,000.00 in connection with their appeal, it followed that a similar receipt for attorneys fees had been made at the time when the case had been about to be filed in the RTC; that the testimonies of Erlinda and Vidal were inconsistent

with Arnulfos affidavit; and that he did not receive Arnulfos demand letter, which was received by one Gemma Agnote (the name printed on the registry receipt), whom he did not at all know. Acting on Atty. Ricaforts motion for reconsideration, the IBP Board of Governors downgraded the penalty from disbarment to indefinite suspension,16 thus: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED the Recommendation of the Board of Governors First Division of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, the Motion for Reconsideration is hereby DENIED with modification of Resolution No. XVII-2006-509 of the Board of Governors dated 18 November 2006, that in lieu of the Disbarment of Atty. Romulo Ricafort, he is INDEFINITELY SUSPENDED from the practice of law and Ordered to return the amount of P65,000 and P15,000 to complainant. Atty. Ricafort filed a second motion for reconsideration,17 assailing the resolution of the IBP Board of Governors for violating Section 12, Rule 139-B of the Rules of Court requiring the decision of the IBP Board of Governors to be in writing and to clearly and distinctly state the facts and reasons on which the decision was based. Hence, the administrative case is now before the Court for resolution. Ruling We affirm the findings of the Commissioner Reyes, because they were supported by substantial evidence. However, we impose the penalty of disbarment instead of the recommended penalty of indefinite suspension, considering that Atty. Ricafort committed a very serious offense that was aggravated by his having been previously administratively sanctioned for a similar offense on the occasion of which he was warned against committing a similar offense. A. Version of the complainants was more credible than version of Atty. Ricafort Atty. Ricafort admitted receiving the P65,000.00 from the Tarogs. Even so, we have two versions about the transaction. On the one hand, the Tarogs insisted that the amount was to be consigned in court for purposes of their civil case; on the other hand, Atty. Ricafort claimed that the amount was for his fees under a "package deal" arrangement. Commissioner Reyes considered the Tarogs version more credible. We hold that Commissioner Reyes appreciation of the facts was correct and in accord with human experience. Firstly, it is easier to believe that Atty. Ricafort persuaded the Tarogs on the need for that amount to be deposited in court for purposes of their civil case. Being non-lawyers, they had no idea about the requirement for them to consign any amount in court, due to the substantive and procedural

implications of such requirement being ordinarily known only to lawyers. Their ready and full reliance on Atty. Ricaforts representations about the requirement to consign that amount in court was entirely understandable in view of their awareness of Atty. Ricaforts standing in the legal community of the place. Besides, as Commissioner Reyes observed, it was not far-fetched for the Tarogs to believe that an amount close in value to their original obligation was necessary to be deposited in court to boost their chances of recovering their property. Secondly, Atty. Ricaforts denial of receipt of Arnulfos demand letter was incredible. He already initially admitted receiving the letter through a househelp.18 His denial came only subsequently and for the first time through his motion for reconsideration dated December 30, 2006,19 in which he completely turned about to declare that the Gemma Agnote who had received the letter was unknown to him.20 Expectedly, Commissioner Reyes disregarded his denial, because not only was the denial an apparently belated afterthought, it was even contradicted by his earlier admission of receipt. In any event, the fact that Gemma Agnote was even the househelp whom Atty. Ricafort had adverted to becomes very plausible under the established circumstances. Thirdly, Atty. Ricafort explained that he had no copies of the receipts for the P65,000.00 and P15,000.00 issued to the Tarogs because "the practice of lawyers in most instances is that receipt is issued without duplicate as it behooves upon the client to demand for a receipt."21 But such explanation does not persuade us. Ethical and practical considerations made it both natural and imperative for him to issue receipts, even if not demanded, and to keep copies of the receipts for his own records. He was all too aware that he was accountable for the moneys entrusted to him by the clients, and that his only means of ensuring accountability was by issuing and keeping receipts. Rule 16.01 of the Code of Professional Responsibility expressly enjoins such accountability, viz: Rule 16.01 - A lawyer shall account for all money or property collected or received for or from the client. Definitely, Atty. Ricafort had a highly fiduciary and confidential relation with the Tarogs. As such, he was burdened with the legal duty to promptly account for all the funds received from or held by him for them.22 And, fourthly, to buttress his denial that the P65,000.00 was not intended for deposit in court, Atty. Ricafort insisted that Arnulfo did not object to the omission from the complaint in the civil action of any mention of consignation. However, the complaint that he himself had written and filed for the Tarogs contradicted his insistence, specifically in its paragraph 16, which averred the plaintiffs (i.e., Tarogs) readiness and willingness to deposit the amount of P69,345.00 (inclusive of the redemption price and interest) in court, thus: 16. And to show willingness and sincerity of the plaintiffs, they are ready and willing to deposit the amount of P69,345.00 as redemption price plus reasonable accrued interests, if there are any; 23 Nor could the Tarogs have conjured or invented the need for consignation. The consignation was a notion that could have emanated only from him as their lawyer. In fact, Erlinda recalled while testifying before the IBP Commission on Bar Discipline that they had brought to their meeting with Atty. Ricafort

only P60,000.00 for the consignation, but that Atty. Ricafort had to instruct them to raise the amount. The excerpt of her pertinent testimony follows: Comm. Reyes: Madam Witness, in this affidavit you stated that your late husband and Mr. Vidal Miralles went to the office of Atty. Ricafort to advise the latter that we already had the sum of P65,000.00 in the form of check, how did you come to know this fact? Witness: Paano po ba sabi nya na magdeposit ng P65,000.00 tapos may P60,000.00 kami sabi niya dagdagan niyo ng konti. Comm. Reyes: Kinausap ba niya kayo? Witness: Nandoon po ako. Comm. Reyes: Where you present when the check was given? Witness: Yes. Comm. Reyes: So, alam niyo, nakita niyo na binigay yong P65,000.00 na tseke? Witness: Opo. Comm. Reyes: Alam niyo ba kung ano ang nangyari doon sa tseke na idiniposit? Witness: Noong una sinabi niya sa amin na ididiposit niya sa court. Comm. Reyes: Nalaman niyo ba na hindi naman pala idiniposit sa court? Witness: Opo. Comm. Reyes: Kailan niyo nalaman? Witness: Nagsabi siya tapos sinabi pa niya na yong interest sa bank ay ibinigay niya sa amin ang sabi naming salamat.24 B. Atty. Ricaforts acts and actuations constituted serious breach of his fiduciary duties as an attorney The Code of Professional Responsibility demands the utmost degree of fidelity and good faith in dealing with the moneys entrusted to lawyers because of their fiduciary relationship.25 In particular, Rule 16.01 of the Code of Professional Responsibility states: Rule 16.01 - A lawyer shall account for all money or property collected or received for or from the client. Undoubtedly, Atty. Ricafort was required to hold in trust any money and property of his clients that came into his possession,26 and he needed to be always mindful of the trust and confidence his clients reposed in him.27 Thus, having obtained the funds from the Tarogs in the course of his professional

employment, he had the obligation to deliver such funds to his clients (a) when they became due, or (b) upon demand.281avvphi1 Furthermore, Rule 16.02 of the Code of Professional Responsibility, imposes on an attorney the positive obligation to keep all funds of his client separate and apart from his own and from those of others kept by him, to wit: Rule 16.02 - A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Atty. Ricaforts act of obtaining P65,000.00 and P15,000.00 from the Tarogs under the respective pretexts that the amount would be deposited in court and that he would prepare and file the memorandum for the Tarogs erected a responsibility to account for and to use the amounts in accordance with the particular purposes intended. For him to deposit the amount of P65,000.00 in his personal account without the consent of the Tarogs and not return it upon demand, and for him to fail to file the memorandum and yet not return the amount of P15,000.00 upon demand constituted a serious breach of his fiduciary duties as their attorney. He reneged on his duty to render an accounting to his clients showing that he had spent the amounts for the particular purposes intended.29 He was thereby presumed to have misappropriated the moneys for his own use to the prejudice of his clients and in violation of the clients trust reposed in him.30 He could not escape liability, for upon failing to use the moneys for the purposes intended, he should have immediately returned the moneys to his clients.31 Atty. Ricaforts plain abuse of the confidence reposed in him by his clients rendered him liable for violation of Canon 16,32 particularly Rule 16.01, supra, and Canon 17,33 all of the Code of Professional Responsibility. His acts and actuations constituted a gross violation of general morality and of professional ethics that impaired public confidence in the legal profession and deserved punishment.34 Without hesitation, therefore, we consider Atty. Ricaforts acts and conduct as gross misconduct, a serious charge under Rule 140 of the Rules of Court, to wit: Section 8. Serious charges. Serious charges include: xxx 3. Gross misconduct constituting violations of the Code of Judicial Conduct; xxx That this offense was not the first charged and decided against Atty. Ricafort aggravated his liability. In Nuez v. Ricafort,35 decided in 2002, the Court found him to have violated Rules 1.0136 of Canon 1 and Rule 12.0337 and Rule 12.0438 of Canon 12 of the Code of Professional Responsibility in relation to his failure to turn over the proceeds of the sale of realty to the complainant (who had authorized him to sell the realty in her behalf). His failure to turn over the proceeds compelled the complainant to commence in the RTC a civil action to recover the proceeds against him and his wife. The

Court meted on him the penalty of indefinite suspension, and warned him against the commission of similar acts, stating: We concur with the findings of the Investigating Commissioner, as adopted and approved by the Board of Governors of the IBP, that respondent Atty. Romulo Ricafort is guilty of grave misconduct in his dealings with complainant. Indeed, the record shows respondents grave misconduct and notorious dishonesty. There is no need to stretch ones imagination to arrive at an inevitable conclusion that respondent gravely abused the confidence that complainant reposed in him and committed dishonesty when he did not turn over the proceeds of the sale of her property. Worse, with palpable bad faith, he compelled the complainant to go to court for the recovery of the proceeds of the sale and, in the process, to spend money, time and energy therefor. Then, despite his deliberate failure to answer the complaint resulting in his having been declared in default, he appealed from the judgment to the Court of Appeals. Again, bad faith attended such a step because he did not pay the docket fee despite notice. Needless to state, respondent wanted to prolong the travails and agony of the complainant and to enjoy the fruits of what rightfully belongs to the latter. Unsatisfied with what he had already unjustly and unlawfully done to complainant, respondent issued checks to satisfy the alias writ of execution. But, remaining unrepentant of what he had done and in continued pursuit of a clearly malicious plan not to pay complainant of what had been validly and lawfully adjudged by the court against him, respondent closed the account against which the checks were drawn. There was deceit in this. Respondent never had the intention of paying his obligation as proved by the fact that despite the criminal cases for violation of B.P. Blg. 22, he did not pay the obligation. All the foregoing constituted grave and gross misconduct in blatant violation of Rule 1.01 of Canon 1 of the Code of Professional Responsibility which provides: A lawyer shall not engage in unlawful, dishonest and immoral or deceitful conduct. Respondents claim of good faith in closing his account because he thought complainant has already encashed all checks is preposterous. The account was closed on or before 26 February 1996. He knew that there were still other checks due on 29 February 1996 and 15 March 1996 which could not be encashed before their maturity dates. By violating Rule 1.01 of Canon 1 of the Code of Professional Responsibility, respondent diminished public confidence in the law and the lawyers (Busios v. Ricafort, 283 SCRA 407 [1997]; Ducat v. Villalon, 337 SCRA 622 [2000]). Instead of promoting such confidence and respect, he miserably failed to live up to the standards of the legal profession (Gonato v. Adaza, 328 SCRA 694 [2000]; Ducat v. Villalon, supra). Respondents act of issuing bad checks in satisfaction of the alias writ of execution for money judgment rendered by the trial court was a clear attempt to defeat the ends of justice. His failure to make good the checks despite demands and the criminal cases for violation of B.P. Blg. 22 showed his continued

defiance of judicial processes, which he, as an officer of the court, was under continuing duty to uphold.39 Bearing in mind his administrative record, and considering that the penalty for violation of Canon 16 ranges from suspension for six months,40 to suspension for one year,41 to suspension for two years,42 depending on the amount involved and the severity of the lawyers misconduct, we rule that disbarment is the commensurate punishment for Atty. Ricafort, who has shown no reformation in his handling of trust funds for his clients. WHEREFORE, we find and declare Atty. Romulo L. Ricafort guilty of a violation of Canon 16, Rule 16.01 and Canon 17 of the Code of Professional Responsibility and, accordingly, disbar him. The Bar Confidant is directed to strike out his name from the Roll of Attorneys. Atty. Ricafort is ordered to return to Erlinda R. Tarog the sums of P65,000.00 and P15,000.00, plus interest of six percent per annum reckoned from the demand made on December 3, 2002, within twenty days from notice. This decision is effective immediately. Let a copy of this decision be furnished to the Office of the Court Administrator for circulation to all courts, and to the Integrated Bar of the Philippines, for its reference. SO ORDERED.

Manila EN BANC DECISION April 28, 1969 G.R. No. L-24163 REGINO B. ARO, petitioner, vs. THE HON. ARSENIO NAAWA, Presiding Judge of Branch IV, Court of First Instance of Laguna, LUIS MAGTIBAY, PABLO MAGTIBAY, AURELLO MARTINEZ, GREGORIO LONTOK, MARIA MENDOZA, MAXIMO PORTO and ROSARlO ANDAYA, respondents. Regino B. Aro in his own behalf as petitioner. Enrique C. Villanueva for respondents. Barredo, J.: Original petition: (1) for certiorari to annul the order of the Court of First Instance of Laguna, dated November 21, 1964, dismissing its Civil Case No. SC-525 without prejudice to the right of Atty. Regino B. Aro (petitioner herein) to file a separate action against both the plaintiffs and defendants (private respondents herein) with respect to his alleged attorneys fees, as well as its order dated January 9, 1965, denying petitioners motion for reconsideration thereof for lack of merit and (2) for mandamus to compel respondent Judge to take cognizance of petitioners opposition and countermotion or petition dated November 3, 1964 and to resolve the same on the merits. There appears to be no dispute as to the following facts alleged in the petition: 2. That the services of herein petitioner, as practising attorney, was engaged by respondents Luis Magtibay and Pablo Magtibay for the prosecution of their claim, as heirs, in the estate of their deceased uncle Lucio Magtibay, consisting of properties which were in the possession of the respondents Aurelia Martinez,1spouses Gregorio Lontok and Maria Mendoza and spouses Maximo Porto and Rosario Andaya. 3. That being without means to prosecute their claim against the persons concerned, respondents Luis Magtibay and Pablo Magtibay agreed with herein petitioner to avail of his services and entrust the prosecution of their claim on a contingent basis as shown in the agreement, copy of which is hereto attached as Annex A and is made an integral part hereof.2 4. That by virtue of said agreement, herein petitioner took the necessary steps to gather the needed papers and documents for the filing of a petition to litigate as pauper and a complaint in the Court of First Instance of Laguna, in which respondents Luis Magtibay and Pablo Magtibay were the plaintiffs and the other respondents, excepting the respondent Judge, were the defendants, .

5. That said petition to litigate as pauper filed by herein petitioner for respondents Luis Magtibay and Pablo Magtibay was granted by the respondent Judge as per the order dated September 10, 1964, .. 6. That to plaintiffs complaint in Civil Case No. SC-525, the defendants in said case interposed a motion to dismiss dated September 29, 1964.3 7. That to the said motion to dismiss herein petitioner, as attorney for the plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) filed an opposition dated October 5, 1964..4 8. That after the hearing of the motion to dismiss filed by the defendants and the opposition thereto by the plaintiffs, which finally took place on October 24, 1964, the respondent Judge issued its resolution or order dated October 24, 1964, denying the motion to dismiss, .5 9. That on the very day of and after the hearing of the motion to dismiss, or on October 24, 1964, before receipt of a copy of the said order (Annex G), there was a conversation which took place between herein petitioner and the attorney of the defendants, Atty. Rustico de los Reyes, Jr., in the civil case and one who was then acting as a sort of spokesman for the defendants (Ex-Mayor Cordova of Sta. Maria, Laguna) for the amicable settlement of the case between the plaintiffs and the defendants to the effect that a certain property of the spouses Lucio Magtibay (deceased) and respondent Aurelia Martinez, worth P3,000.00, would be given to the plaintiffs in full settlement of their claim, as share in the properties left by their deceased uncle Lucio Magtibay, it having been agreed by herein petitioner and Atty. de los Reyes and the spokesman of the defendants that for the purpose of said amicable settlement, the plaintiffs or one of them and herein petitioner would go to Sta. Maria, Laguna, on October 23, 1964. 10. That having given notice to the plaintiffs (now respondents Luis Magtibay and Pablo Magtibay) at their given address in Calauag, Quezon to come to Candelaria for the purpose of going to Sta. Maria, Laguna on October 23, 1964, petitioner had waited for said plaintiffs to go to his office on or before said date for the engagement mentioned, but due to their (plaintiffs) failure to come to Candelaria, petitioner had to send a telegram to Ex-Mayor Cordova notifying him of his (petitioners) and plaintiffs not being able to go to Sta. Maria because of the failure of any of the plaintiffs to come to Candelria, . 11. That it was only on October 28, 1964, when herein petitioner received a copy of the order dated October 24, 1964 (Annex G) and to his surprise he also received on the said day a second motion to dismiss dated October 26, 1964; together with Annex A of said motion, which is entitled KASULATAN NG PAGHAHATIAN NA LABAS SA HUKUMAN AT PAGPAPALABI, dated October 23, 1964 at Sta. Cruz, Laguna and signed by the plaintiffs and defendant Aurelia Martinez (the three being now respondents in this case), it having been made to appear in said Annex A of the second motion to dismiss, among others, that the plaintiffs and defendant Aurelia Martinez had made an extrajudicial partition of the properties of the deceased Lucio Magtibay and the said Aurelia Martinez adjudicating to the plaintiffs one-fourth () share in the properties of the spouses and three-fourth (3/4) share of the defendant Aurelia Martinez, but making it appear also that said plaintiffs waived their share in favor of Aurelia Martinez, , thru which fraudulent waiver, herein petitioner was deprived of his contingent fees, agreed upon, as evidenced by Annex A of this petition.6

xxxxxxxxx 14. That petitioner filed by registered mail, on November 4, 1964, his OPPOSITION TO THE SECOND MOTION TO DISMISS AND COUNTER-MOTION OR PETITION TO SET ASIDE DEED OF EXTRAJUDICIAL PARTITION AND WAIVER DATED OCTOBER 23, 1964 AND TO RECORD ATTORNEYS LIEN, dated November 3, 1964, wherein he (petitioner) prayed, among others, invoking the provisions of Section 5(d) and Section 6, Rule 135 of the Revised Rules of Court, for the protection of the rights of herein petitioner as an officer of the Court, to wit: (a) to deny the second motion to dismiss and get aside and annul the deed of extrajudicial partition and waiver dated October 23, 1964; (b) to fix the compensation of herein counsel in the proportion of one-third (1/3) of the shares of plaintiffs, if in land, or in the amount of P1,000.00, if in cash, and to record the same and expenses advanced by him for the plaintiffs in the sum of P22.15 as lien in favor of herein claimant-petitioner over the properties in litigation, particularly over the one-fourth (1/4) share of the plaintiffs in all the properties of the spouses; xxxxxxxxx (d) as an alternative to prayer (a) above, to grant the second motion to dismiss, subjecting, however, the properties in litigation and subject-matters of the extrajudicial partition and waiver to the lien for attorneys fees and expenses in favor of herein claimant-petitioner, after fixing said attorneys fees as prayed for in (b) above. xxxxxxxxx 15. That on the day f finally set for the hearing of the second motion to dismiss, as well as of the counter-motion or petition, or on November 21, 1964, because of the inquiries or interpellation made by respondent Judge to herein petitioner as to whether there is a Philippine precedent which allows or directs the protection by the Court of the rights of any of its officers (lawyer) against any collusion perpetrated by the parties in a case to defraud or cheat an attorney of his compensation agreed upon by him and his clients, and his answer that insofar as his researches were concerned, he could not find any, although there are a number of cases to that effect in American jurisdiction, the respondent Judge had opined in open court that the claim for and the fixing of the attorneys fees should better be done in a separate action and, in spite of petitioners memorandum citing American authorities to the effect that, Though a party may without the consent of his attorney money make a bona fide adjustment with the adverse party and dismiss an action or suit before a judgment or a decree has been rendered thereon, if it appears, however, that such settlement was collosive and consummated pursuant to the intent of both parties to defraud the attorney, the court in which the action was pending may interfere to protect him as one of its officers, by setting aside the order of dismissal, . (Jackson vs. Stearns, 48 Ore. 25, 84 Pac. 798).

 the respondent Judge, instead of denying the second motion to dismiss and fixing his attorneys fees in the said case and recording the same as lien, dismissed the case and refused to give herein petitioner any kind of immediate protection to safeguard his rights in said Civil Case No. SC-525 of the Court of First Instance of Laguna. 16. That by the express terms of the agreement, Annex A of this petition, plaintiffs in Civil Case No. SC525 had expressly ceded to herein petitioner one-half () [later verbally reduced to one-third (1/3) or P1,000.00] or whatever share they would get from the estate of their deceased uncle Lucio Magtibay, and the defendants in said Civil Case had full knowledge of said right of herein petitioner in the properties in controversy from and after the time they were served with summons and copies of the complaint in said civil case because of the allegations contained in par. 10 thereof. 7 [Emphasis by the Court] 18. That on December 5, 1964, herein petitioner filed his motion for reconsideration dated December 4, 1664 asking for the reconsideration of the order dated November 21, 1964, . 19. That the motion for reconsideration was denied by the court, thru the respondent Judge, as per the order dated January 9, 1965, . Upon these facts, petitioner tries to make out before this Court a case of certiorari for grave abuse of discretion on the part of respondent Judge in dismissing the case on the basis of the compromise agreement of the parties, entered into at the back of petitioner notwithstanding the reservation made in his favor to file an action against both parties with respect to his alleged attorneys fees, as well as a case of mandamus to order and command the said respondent judge to take cognizance of and resolve his opposition and counter-motion for the court to fix the compensation he should be paid. Unable to find any local precedent to support his position, he cites American authorities thus: In the American jurisdiction, it would seem that, even without the specific provisions of the rules of court cited above, courts had always intervened, in the mere exercise of their inherent powers, to protect attorneys against collusive agreements or fraudulent settlements entered into by the parties in a case to cheat attorneys out of their costs or of their fees. Thus, it was held or had been stated in: (a) Coughlin vs. N.Y. Cont. & H.R.R. Co., 71 N.Y. 443, 27 Am. Rep. 75. But since the time of Lord Mansfield, it has been the practice of courts to intervene to protect attorneys against settlement made to cheat them out of their costs. If an attorney has commenced an action, and his client settles it with the opposite party before judgment, collusively, to deprive him of his costs, the court will permit the attorney to go on with the suit for the purpose of collecting his costs. Swain v. Senate, 5 Bos. & Pul. 99; Cole v. Bennett, 6 Price, 15; Moore v. Cook, 13 Id. 473; Talcott v. Bronson, 4 Paige, 501; Rusquin v. The Knickerbocker Stage Col., 12 Abb. Pr 324; Ward v. Syme, 9 How. Pr. 16; McDonald v. Napier, 14 Ga. 89. There are many cases where this had been allowed to be done. It is impossible to ascertain precisely when this practice commenced, nor how originated, nor upon what principle it was based. It was not

upon the principle of a lien, because an attorney has no lien upon the cause of as it upon the action before judgment for his costs; nor was it upon principle that his services had produced the money paid his client upon the settlement, because that could not be known, and in fact no money may have been paid upon the settlement. So far as I can perceive, it was based upon no principle. It was a mere arbitrary exercise of power by the courts; not arbitrary in the sense that it was unjust or improper, but in the sense that it was not based upon any right or principle recognized in other cases. The parties being in court, and a suit commenced and pending, for the purpose of protecting attorneys who were their officers and subject to their control, the courts invented this practice and assumed this extraordinary power to defeat attempts to cheat the attorneys out of their costs. The attorneys fees were fixed in definite sums, easily determined by taxation and this power was exercised to secure them their fees. (pp. 76-77) (b) Randall v. Van Wagenan et al., 22 N.E. 361, 362. But where such settlement is made collusively for the purpose of defrauding the attorney out of his costs, courts have been accustomed to intervene, and to protect the attorney by permitting him to proceed with the suit, and, if he is able to establish a right to recover on the cause of action as it originally stood, to permit such recovery to the extent of his costs in the action. Coughlin v. Railroad Co., 71 N. Y. 443, and pages cited. And the court will set aside an order of discontinuance if it stands in the way. This is an adequate remedy, and we think the exclusive remedy where the suit has been fraudulently settled by the parties before judgment to cheat the attorney out of his costs. We have found no case of an equitable action to enforce the inchoate right of an attorney, under such circumstances, and no such precedent ought, we think, to be established. (c) Jackson v. Stearns, et al., 43 Ore 25, 84 Pac. 798. Though a party may, without the consent of his attorney, make a bona fide adjustment with the adverse party, and dismiss an action or suit before a judgment or a decree has been rendered therein, if it appears, however, that such settlement was collusive and consummated pursuant to the intent of both parties to defraud the attorney, the court in which the action or suit was pending may interfere to protect him, as one of its officers, by setting aside the order of dismissal and permitting him to proceed in the cause in the name of his client to final determination to ascertain what sum of money, or interest in the subject-matter, if any, is due him for his services when fully performed. Jones v. Morgage 99 Am. Dec. 458; Randall v. Van Wagenen (N.Y.) 22 N.E. 361, 12 Am. St. Rep. 828. (p. 800) Before a court will set aside an order dismissing a suit or an action, made upon stipulation of the parties, without the consent of plaintiffs attorney, and allow the latter to proceed with the cause in the name of his client, to determine the amount of fees due him, it must appear that the defendant participated in the fraudulent intent to deprive the attorney of his compensation. Courtney v. McGavock, 25 Wis. 619. When no adequate consideration is given by the defendant for the settlement and discharge of an action or a suit, the insufficiency of the inducement to the contract affords evidence of his bad faith. Young v. Dearborn, 27 N.E. 324. It will be remembered that the complaint alleges that the value of the real property in question is $3,000.00, and that Stearns executed to Wilson a deed to the premises for a

nominal consideration. This is a sufficient averment of the defendants intent to deprive the plaintiff of his compensation thereby imputing to Wilson bad faith. (p. 800) (d) Desaman v. Butler Bros., 188 Minn. 198, 136 N.W. 747. We have recently held that a client has always the right to settle his cause of action and stop litigation at any stage of the proceeding, subject, however, to the right of the attorney to receive compensation for services rendered. Burho v. Camichael 135 N.W. 386. It is therefore contended by defendant that a litigant retains the unrestricted right to determine for what amount the cause of action may be settled, and, having so done, the lien of his attorney for services is measured by the amount determined on and actually settled for. Conceding, without deciding, that this may be true of any time prior to the rendition of a verdict in the action which the attorney has been employed to bring, we are of opinion that after verdict fixing the amount of a plaintiffs cause of action a secret and collusive compromise between parties litigant does not affect the amount of the attorneys lien; but therein is also clearly indicated by Mr. Justice Brown that, if there be fraud and collusion to deprive the attorney of his lien, the settlement will not be permitted to accomplish such result. (p. 748) To be sure, these authorities are quite persuasive, but contrary to petitioners impression, there is already a precedent setting decision of this Court handed down way back in 1922 in a case very similar to his, that in Rustia vs. the Judge of the Court of First Instance of Batangas, et al., 44 Phil. 62. As it is very brief, it can be quoted in full: This is a petition for a writ of certiorari, the petitioner alleging that the respondent Judge of the Court of First Instance exceeded his jurisdiction in dismissing a pending action at the instance of the parties but without the intervention of the attorney for the plaintiff in the case, the herein petitioner. It appears from the record that on July 31, 1921, the respondent Justo Porcuna, for himself and on behalf of his wife, the respondent Rosa H. de Porcuna, by means of a written contract, retained the petitioner to represent them as their lawyer in case No. 1435 then pending in the Court of First Instance of Batangas and in which Rosa H. de Porcuna was the plaintiff and one Eulalia Magsombol was the defendant. The contract fixed the petitioners fee at P200 in advance with an additional contingent fee of P1,300. It was also provided in the contract that Justo Porcuna should not compromise the claim against the defendant in the case without express consent of his lawyer, the herein petitioner. After trial, the petitioner then being plaintiffs attorney of record, the Court of First Instance, under date of December 24, 1921, rendered judgment in favor of Justo Porcuna and Rosa H. de Porcuna ordering the defendant Eulalia Magsombol to return to them 602 pieces of cloth or in default thereof to pay to them the sum of P3,250. On January 14, 1922, Eulalia Magsombol filed her exception to the judgment and on the following day presented a motion for a new trial, which was denied on the 21st of the same month. She thereupon gave notice of appeal and presented a bill of exceptions which was approved on February 20, 1922. On March 2, 1922, and before the transmission of the bill of exceptions to this court, the plaintiffs presented the following motion in the Court of First Instance:

The plaintiffs, without any further intervention of their attorney, now appear before this Honorable Court and respectfully aver: That, through Mr. Miguel Olgado they already settled this case with the herein defendant. That the basis of the compromise is that we, the plaintiffs, finally agree that we should be paid the amount of eight hundred pesos (P800) in two installments; P300 to be paid on this same date, and the remaining five hundred pesos (P500) at the end of March, 1922. That we, the plaintiffs, recognize not to have any further rights in this case than to the aforesaid amount of eight hundred pesos (P800) and that this is the total amount the defendant Eulalia Magsombol should pay us, and we have no right whatever to any other amount than the aforementioned. That we have not sold to any other person our rights as plaintiffs in this case. Wherefore, the plaintiffs respectfully request the dismissal of this case, without any pronouncement as to costs, and that the appeal interposed by the defendant be further dismissed. Batangas, Batangas, P.I., March 2, 1922. (Sgd) ROSA H. PORCUNA Plaintiff JUSTO M. PORCUNA Plaintiff The defendant, through her attorney, Jose Mayo Librea, having signified her assent to the motion, the Court of First Instance on the same day, March 2, dismissed the action without notice to counsel for the plaintiffs. The petitioner alleges that he did not discover the dismissal of the action until April 4, 1922. After an unsuccessful effort to obtain a reconsideration of the order of dismissal from the trial court, he filed the present petition for a writ of certiorari. By resolution dated October 24, 1922, this court denied the petition and upon motion of the petitioner we shall now briefly state our reasons for such denial. The burden of the petitioners contention is (1) that he, as attorney of record, was entitled to notice of his clients motion to dismiss the case, and (2) that after the approval of the bill of exceptions the lower court had lost jurisdiction of the case and had no power to dismiss it. A moments reflection should make it clear that neither of these propositions is tenable. Both at the common law and under section 32 of the Code of Civil Procedure a client may dismiss his lawyer at any time or at any stage of the proceedings and there is nothing to prevent a litigant from appearing before the court to conduct his own litigation. (Sec. 34, Code of Civil Procedure.) The client has also an undoubted right to compromise a suit without the intervention of his lawyer. Though there is a valid agreement for the payment to the attorney of a large proportion of the sum recovered in case of success this does not give the attorney such an interest in the cause of action that it

prevents plaintiff from compromising the suit. (4 Cyc. 990, and authorities cited in Note 6; see also Louque vs. Dejan 129 La. 519; Price vs. Western Loan & Savings Co., 19 Am. Cas. 589 and Note.) In the present instance the clients did nothing that they did not have a perfect right to do. By appearing personally and presenting a motion they impliedly dismissed their lawyer. The petitioners contingent interests in the judgment rendered did not appear of record. Neither as a party in interest nor as and attorney was he therefore entitled to notice of the motion. As to the second proposition that the court below could not dismiss the case after the bill of exceptions had been approved, it is very true that upon such approval the lower court loses its jurisdiction over all contentious matters connected with the issues in the case. But there is nothing to prevent all of the parties by agreement to withdraw the bill of exceptions with the consent of said court and resubmit the case to the jurisdiction of the court. That was all that was done in this case. A valid agreement between the parties to a case is the law of the case in everything covered by the agreement. (Civil Code, art. 1091; Compania General de Tabacos vs. Obed, 13 Phil. 391.) The petitioner might have protected his interests by entering an attorneys lien under section 37 of the Code of Civil Procedure. The petition for a writ of certiorari was therefore properly denied. So ordered. The difference We perceive, however, between petitioners case, on the one hand, and that of Atty. Rustia, in the above decision, on the other, is that in the latters case, neither the court nor the party adverse to his clients were aware of the exact agreement as to his fees, whereas in the case of petitioner, both the court and the other parties knew the terms of the contract for professional services between petitioner and his clients, the Magtibay brothers, because the written contract therefor, Annex A, was made part of the complaint, and none seriously disputes its authenticity. Besides, the court had already dismissed the case when Atty. Rustia raised the question of his fees before the court; in petitioners instance, he opposed the motion to dismiss and pleaded with the court to protect his rights as officer of the court before the first order in question was issued by respondent judge. Were it not for these differences, We would have inclined towards denying the herein petition in line with the Rustia ruling that, in any event, certiorari is not the appropriate remedy, the American authorities cited by petitioner not withstanding. Withal, there is another Philippine case which Us to sustain petitioner. In the case of Recto vs. Harden, 100 Phil. 440, Atty. Claro M. Recto found himself practically in the same situation as petitioner herein. After Atty. Recto had rendered services to Mrs. Esperanza P. de Harden in a protracted suit against her husband for the purposes of securing an increase of her and her daughters monthly support, (the spouses were separated), to P10,000.00 and of protecting and preserving her rights in the properties of the conjugal partnership, which suit lasted from 1941 to 1949, and after the Court of First Instance of Manila had rendered a judgment favorable to Mrs. Harden acknowledging, inter alia, her rights to the assets of the conjugal partnership, which turned out to be P4,000,000, and awarding her a monthly support of P2,500, practically as prayed for in Atty. Rectos pleadings, while the case was already pending on appeal before this Court, Mrs. Harden and her husband, Mr. Fred Harden, entered into a compromise of their case, without the knowledge of Atty. Recto, whereby said spouses purportedly

agreed to settle their differences in consideration of the sum of P5,000 paid by Mr. Harden to Mrs. Harden, and a monthly pension of $500 to be paid by him to her; (2) Mr. Harden created a trust fund of $20,000 from which said monthly pension of $500 would be taken; and (3) Mr. and Mrs. Harden had mutually released and forever discharged each other from all actions, debts, duties, accounts, demands and claims to the conjugal partnership, in consideration of the sum of $1. (p. 435) Whereupon Atty. Recto filed a motion with this Court praying that: a) Pending the resolution of this motion, the receiver appointed herein be authorized to continue holding the properties above mentioned in his custody in order not to defeat the undersigneds inchoate lien on them; b) A day set aside to receive the evidence of the undersigned and those of the plaintiff and the defendant Fred M. Harden, in order to determine the amount of fees due to the undersigned, by the appointment of a referee or commissioner for the reception of such evidence; c) After due hearing, the undersigned be declared entitled to the sum of P400,000 as his fees for services rendered in behalf of the plaintiff in this case, under paragraph 3 of the contract, Annex A and to that end a charging lien therefore be established upon the properties above-mentioned; d) And the receiver be ordered to pay to the undersigned the full amount of the fees to which the latter is found to be entitled. This motion was objected to by Mr. Hardens counsel, who in turn, moved for the dismissal of the case, to which Atty. Recto objected. Under these circumstances, this Court acceded to Atty. Rectos prayer that the case be not dismissed, that the receivership be maintained except as to certain properties not material to mention here, and that the case be remanded to the lower court so that his fees may be determined and ordered paid. Upon the remand of the case to the lower court, a commissioner was appointed to hear the matter of the amount of the fees in question, and after the commissioner had submitted a report recommending the payment to Atty. Recto of the 20,70 attorneys fees stipulated in the contract for his services, equivalent to P369,410.04, the court rendered judgment as follows: The contingent fee to which the claimant is entitled under paragraph 3 of the contract, Exhibit JJJ or 20, is 20% of P1,920,554.85 or the sum of P384,110.97. WHEREFORE, this Court hereby approves the recommendation of the Commissioner with the abovestated modification, and finds that Attorney Claro M. Recto is entitled to the sum of THREE HUNDRED EIGHTY-FOUR THOUSAND ONE HUNDRED AND TEN PESOS AND NINETY-SEVEN CENTAVOS (P384,110.97), representing 20% of Esperanza P. de Hardens share in the conjugal properties owned by her and her husband, Fred M. Harden, as contingent fee stipulated in paragraph 3 of the Contract of Professional Services, Exhibit JJJ or 20, and the said Esperanza P. de Harden is hereby ordered to pay the said amount above-stated. On appeal from this judgment to this Court, the same was affirmed, the decision stating pertinently in part:

The last objection is based upon principles of equity, but, pursuant thereto, one who seeks equity must come with clean hands (Bastida et al. vs. Dy Buncio & Co., 93 Phil. 195; 30 C.J.S. 475), and appellants have not done so, for the circumstances surrounding the case show, to our satisfaction, that their aforementioned agreements, ostensibly for the settlement of the differences between husband and wife, were made for the purpose of circumventing or defeating the rights of herein appellee, under his above-quoted contract of services with Mrs. Harden. Indeed, having secured a judgment in her favor, acknowledging her rights to the assets of the conjugal partnership, which turned out to be worth almost P4,000,000 in addition to litis expensae in the sum of P175,000, it is inconceivable that Mrs. Harden would have waived such rights, as well as the benefits of all orders and judgments in her favor, in consideration of the paltry sum of $5,000 allegedly paid to her by Mr. Harden and the additional sum of $20,000 to be paid by him in installments, at the rate of $500 a month. In fact, no explanation has been given for this moat unusual avowed settlement between Mr. and Mrs. Harden. One can not even consider the possibility of a reconciliation between the spouses, the same being inconsistent with the monetary consideration for said alleged settlement. What is more, the records show that the relations between said spouses which were bad indeed, not only in July, 1941, when Mrs. Harden engaged the services of the appellee, but, even, before, for Mr. and Mrs. Harden were separated since 1938 had worsened considerably thereafter, as evidenced by an action for divorce filed by Mr. Harden in New Jersey, in July 1948, upon the ground of repeated acts of infidelity allegedly committed by Mrs. Harden in 1940 and 1941. On the same considerations of equity, and for the better protection of lawyers, who, trusting in the good faith of their clients, render professional services on contingent basis, and so that it may not be said that this Court, sanctions in any way the questionable practice of clients of compromising their cases at the back of their counsel with the consequence that the stipulated contingent fees of the lawyer are either unreasonably reduced or even completely rendered without basis, as in this case wherein the clients waived the whole of their rights in favor of their opponent after the latter had acknowledged, in effect, the correctness of said clients contention We have decided to grant the herein petition, in so far as the rights of petitioner have been prejudiced by the questioned compromise agreement. While We here reaffirm the rule that the client has an undoubted right to compromise a suit without the intervention of his lawyer, 8 We hold that when such compromise is entered into in fraud of the lawyer, with intent to deprive him of the fees justly due him, the compromise must be subject to the said fees, and that when it is evident that the said fraud is committed in confabulation with the adverse party who had knowledge of the lawyers contingent interest or such interest appears of record and who would benefit under such compromise, the better practice is to settle the matter of the attorneys fees in the same proceeding, after hearing all the affected parties and without prejudice to the finality of the compromise in so far as it does not adversely affect the rights of the lawyer. Surely, the client cannot, by setting, compromising or dismissing his suit during its pendency, deprive the attorney of his compensation for the agreed amount, unless the lawyer consents to such settlement, compromise or dismissal, (Legal and Judicial Ethics by Martin, 1967 Rev. Ed p. 121) for the, attorney is or Shall be entitled to have and recover from his client a reasonable compensation (not more) 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, (Sec. 24, Rule 138, on Attorney and

Admission to Bar) albeit, under Canon 12 of the Canons of Professional Ethics, in fixing fees, it should not be forgotten that the profession is a branch of the administration of justice and not a mere moneygetting trade. True it is also that a client may, at anytime, dismiss his attorney or substitute another in his place, (Sec. 26, Rule 138) but it must be emphasized that the same provision, which is an incorporation of Republic Act 636 into the Rules of Court, also provides that if the contract between client and attorney had been reduced to writing and the dismissal of the attorney was without justifiable cause, he shall be entitled to recover from the client full compensation In the case at bar, by entering into the compromise agreement in question and even inserting therein a prayer to the court to dismiss their case filed by petitioner, (see footnote 6, ante) petitioners clients impliedly dismissed him. (Rustia vs. the Court, etc., supra.) Such implied dismissal appears to Us to have been made without justifiable cause, none is urged anywhere in the record, and so, the above-quoted provision of Section 26, Rule 138 applies here. The terms of the compromise in question, as spelled out in Annex A of Annex I of the petition, indicate clearly that Aurelia Martinez, the defendant aunt in-law of petitioners clients, acknowledged that the rights of said clients were practically as alleged by petitioner in the complaint he filed for them. In other words, through the services of petitioner, his clients secured, in effect, a recognition, which had been previously denied by their aunt-in-law, that they were entitled to a share in the estate left by their uncle. We hold that under these circumstances, and since it appears that said clients have no other means to pay petitioner, since they instituted their case as paupers, and that their aunt-in-law was aware of the terms of their contract of professional services with petitioner, said clients had no right to waive the portion of their such acknowledged rights in favor of their opponent to the extent that such waiver would prejudice the stipulated contingent interest of their lawyer and their aunt-in-law had no right to accept such waiver unqualified. The Civil Code enjoins that: ART. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Under the circumstance extant in the record, it is clear that the compromise agreement in question falls short of the moral requirements of this quoted article of the Civil Code. If for this reason alone, it should not be allowed to prejudice the rights of petitioner. Accordingly, as all of these circumstances were presented to respondent judge before he issued the challenged order of dismissal and all the parties were heard thereon, it was incumbent upon His Honor, in equity and to avoid multiplicity of suits, particularly, because the amount claimed by petitioner is only P1,000.00, to have directly passed upon petitioners claim, and not having done so, it would appear that the court a quo abused its discretion gravely enough to warrant the writ of certiorari herein prayed for in so far as the questioned orders prejudiced petitioners right to the fees for the professional services which appear to have been creditably rendered by him. Respondents allege that the judgment of dismissal in question is already final because no appeal was taken therefrom, but since We hold that the same was rendered with enough grave abuse of discretion to warrant the certiorari prayed for, such alleged finality could not have materialized; obviously, petitioner could not have appealed, not being a party in the case.

IN VIEW OF THE FOREGOING, the orders of the respondent court dated November 21, 1964 and January 9, 1965 in Civil Case No. SC-525 are hereby set aside in so far as they prejudice the payment of petitioners claim of attorneys fees in the form of either one-third of the share acknowledged as his clients in the compromise in question or P1,000.00, which should constitute as a lien on the said share, in spite of the waiver thereof in favor of respondent Aurelia Martinez. It is unnecessary to consider the petition for mandamus. Costs against, private respondents. Reyes, J.B.L., Dizon,: Makalintal, Zaldivar, Sanchez, Fernando and Teehankee, JJ., concur. Concepcion, C.J. and Castro, J., are on leave. Capistrano, J., took no part. Footnotes 1Widow of the deceased Lucio Magtibay and aunt-in-law of petitioners clients. 2Annex A is the written agreement dated July 10, 1964 by which respondent Luis and Pablo Magtibay contracted the services of petitioner and under which it was stipulated that petitioner would been titled to a contingent fee of one-half of whatever his clients might be awarded either by the court or by extrajudicial agreement. 3The motion to dismiss was based on the ground that the complaint failed to alleged that earnest efforts towards compromise had been made, the suit being one between members of the same family, citing Section 1 (j) of Rule 16. 4Petitioner claimed that the suit was by nephews-in-law against their aunt-in-law and, therefore, not between members of the same family within the contemplation of the rule cited by movants. 5Petitioners contention indicated in footnote 4 was upheld by the court. 6Paragraph 8 of the Kasulatan contains a request to the court to dismiss the case in the following words: 8. Matapos maipaliwanag sa amin ang lahat, ay wala na kaming hangad na maghabol pa sa aming mana kayat hinihiling namin sa Hukuman ng Unang Dulugan ng Laguna, Sangay IV (Court of First Instance of Laguna, Branch IV), na putulin na ang aming sakdal na kaso Civil Blg. 525, sapagkat ang nais namin ay katahimikan at iwasan ang usapin sa hukuman. 7The contract Annex A, for professional services, was also annexed to the complaint as part of Paragraph 10 thereof. 8Laid down in Rustia vs. the Court, etc., et al., supra.

SECOND DIVISION [A.C. No. 5020. December 18, 2001] ROSARIO JUNIO, complainant, vs. ATTY. SALVADOR M. GRUPO, respondent. 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 above-stated purpose. 7. Despite repeated demands made by the complainant and without justifiable cause, respondent has continuously refused to refund the money entrusted to him.vi[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 mortgage-owner 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 second-thoughts 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.vii[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.viii[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 Commissionerix[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.x[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.xi[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.xii[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.xiii[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,xiv[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. Javierxv[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.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION A.C. No. 7023 March 30, 2006

BUN SIONG YAO, Complainant, vs. ATTY. LEONARDO A. AURELIO, Respondent. DECISION YNARES-SANTIAGO, J.: On November 11, 2004, a complaint-affidavit1 was filed against Atty. Leonardo A. Aurelio by Bun Siong Yao before the Integrated Bar of the Philippines (IBP) seeking for his disbarment for alleged violations of the Code of Professional Responsibility. The complainant alleged that since 1987 he retained the services of respondent as his personal lawyer; that respondent is a stockholder and the retained counsel of Solar Farms & Livelihood Corporation and Solar Textile Finishing Corporation of which complainant is a majority stockholder; that complainant purchased several parcels of land using his personal funds but were registered in the name of the corporations upon the advice of respondent; that respondent, who was also the brother in-law of complainants wife, had in 1999 a disagreement with the latter and thereafter respondent demanded the return of his investment in the corporations but when complainant refused to pay, he filed eight charges for estafa and falsification of commercial documents against the complainant and his wife and the other officers of the corporation; that respondent also filed a complaint against complainant for alleged non-compliance with the reportorial requirements of the Securities and Exchange Commission (SEC) with the Office of the City Prosecutor of Mandaluyong City and another complaint with the Office of the City Prosecutor of Malabon City for alleged violation of Section 75 of the Corporation Code; that respondent also filed a similar complaint before the Office of the City Prosecutor of San Jose Del Monte, Bulacan. Complainant alleged that the series of suits filed against him and his wife is a form of harassment and constitutes an abuse of the confidential information which respondent obtained by virtue of his employment as counsel. Complainant argued that respondent is guilty of representing conflicting interests when he filed several suits not only against the complainant and the other officers of the corporation, but also against the two corporations of which he is both a stockholder and retained counsel. Respondent claimed that he handled several labor cases in behalf of Solar Textile Finishing Corporation; that the funds used to purchase several parcels of land were not the personal funds of complainant but pertain to Solar Farms & Livelihood Corporation; that since 1999 he was no longer the counsel for

complainant or Solar Textile Finishing Corporation; that he never used any confidential information in pursuing the criminal cases he filed but only used those information which he obtained by virtue of his being a stockholder. He further alleged that his requests for copies of the financial statements were ignored by the complainant and his wife hence he was constrained to file criminal complaints for estafa thru concealment of documents; that when he was furnished copies of the financial statements, he discovered that several parcels of land were not included in the balance sheet of the corporations; that the financial statements indicated that the corporations suffered losses when in fact it paid cash dividends to its stockholders, hence, he filed additional complaints for falsification of commercial documents and violation of reportorial requirements of the SEC. On July 19, 2005, the Investigating Commissioner2 submitted a Report and Recommendation3 finding that from 1987 up to 1999, respondent had been the personal lawyer of the complainant and incorporator and counsel of Solar Farms & Livelihood Corporation. However, in 1999 complainant discontinued availing of the services of respondent in view of the admission of his (complainants) son to the bar; he also discontinued paying dividends to respondent and even concealed from him the corporations financial statements which compelled the respondent to file the multiple criminal and civil cases in the exercise of his rights as a stockholder. The investigating commissioner further noted that respondent is guilty of forum shopping when he filed identical charges against the complainant before the Office of the City Prosecutor of Malabon City and in the Office of the City Prosecutor of San Jose del Monte, Bulacan. It was also observed that respondent was remiss in his duty as counsel and incorporator of both corporations for failing to advise the officers of the corporation, which he was incidentally a member of the Board of Directors, to comply with the reportorial requirements of the SEC and the Bureau of Internal Revenue. Instead, he filed cases against his clients, thereby representing conflicting interests. The investigating commissioner recommended that respondent be suspended from the practice of law for a period of six months4 which was adopted and approved by the IBP Board of Governors. We agree with the findings and recommendation of the IBP. We find that the professional relationship between the complainant and the respondent is more extensive than his protestations that he only handled isolated labor cases for the complainants corporations. Aside from being the brother-in-law of complainants wife, it appears that even before the inception of the companies, respondent was already providing legal services to the complainant, thus: COMM. NAVARRO: Was there a formal designation or you where only called upon to do so? ATTY. AURELIO:

Well, I understand in order to show to the employees that they have labor lawyer and at that time I went to the office at least half day every week but that was cut short. And so when there are cases that crop-up involving labor then they called me up. xxxx ATTY. OLEDAN: Will counsel deny that he was the personal lawyer of the complainant long before he joined the company? ATTY. AURELIO: Yes, with respect to the boundary dispute between his land and his neighbor but the subject matter of all the cases I filed they all revolved around the Financial Statement of the 2 corporations. I never devolves any information with respect to labor cases and the MERALCO case with respect to boundary dispute, nothing I used. ATTY. OLEDAN: Was he not also the lawyer at that time of complainant when he incorporated the second corporation in 1992? ATTY. AURELIO: Well, I was the one submitted the corporate papers and I think after that I have nothing to do with the SEC requirements regarding this corporation. Just to submit the incorporation papers to the SEC and anyway they have already done that before. They have already created or established the first corporation way back before the second corporation started and there was no instance where I dealt with the Financial Statement of the corporation with respect to its filing with the SEC. ATTY. OLEDAN: My only question is whether he incorporated and therefore was aware of the corporate matters involving Solar Farms? ATTY. AURELIO: As a stockholder Im aware. ATTY. OLEDAN: As a lawyer? ATTY. AURELIO: Well, as a stockholder Im aware.

xxxx ATTY. OLEDAN: You are not the one who filed. ATTY. AURELIO: I was the one who filed the corporate paper but thats all the participation I had with respect to the requirement of the SEC with respect to the corporation. COMM. NAVARRO: So, you acted as legal counsel of the corporation even before the initial stage of the incorporation? ATTY. AURELIO: There are two (2) corporations involving in this case, Your Honor, and the first was I think Solar Textile and this was. COMM. NAVARRO: You were already the legal counsel? ATTY. AURELIO: No, this was created before I became a stockholder. COMM. NAVARRO: Who was then the legal counsel before of Solar? MR. YAO: Siya pa rin pero hindi pa siya stockholder. ATTY. OLEDAN: Because, Your Honor, he happens to be the brother-in-law of the wife of the complainant and he is the husband of the wife of her sister so thats why he was (inaudible) other legal matters even before the corporation that was formed and he became also a stockholder and in fact he charge the corporation certain amounts for professional service rendered it is part of the Resolution of the Office of the City Prosecutor of Malabon as annex to the complaint so he cannot say that he only presented, that he only filed the papers at SEC and aside from that when the corporation, the Solar Farms was already formed and the property which he is now questioning was purchased by complainant. He was the one who negotiated with the buyer, he was always with the complainant and precisely acted as complainants personal lawyer. The truth of the matter he is questioning the boundary and in fact complainant had survey conducted in said parcel of land which he bought with the assistance and legal

advice of respondent and in fact complainant gave him only a copy of that survey. Him alone. And he used this particular copy to insists that this property allegedly belong to the corporation when in truth and in fact he was fully aware that it was the complainants personal funds that were used to pay for the whole area and this was supported by the stockholders who admitted that they were aware that the parcel of land which he claims does not appear in the Financial Statement of the corporation was purchased by the complainant subject to reimbursement by the Board and should the corporation finally have sufficient fund to cover the payment advance by complainant then the property will be transferred to the corporation. All of these facts he was privy to it, Your Honor, so he cannot say that and he is also a stockholder but the fact is, prior to the incorporation and during the negotiation he was the personal counsel of the complainant.5 It appears that the parties relationship was not just professional, but they are also related by affinity. The disagreement between complainants wife and the respondent affected their professional relationship. Complainants refusal to disclose certain financial records prompted respondent to retaliate by filing several suits. It is essential to note that the relationship between an attorney and his client is a fiduciary one.6 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. The protection given to the client is perpetual and does not cease with the termination of the litigation, nor is it affected by the party's 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.7 Notwithstanding the veracity of his allegations, respondents act of filing multiple suits on similar causes of action in different venues constitutes forum-shopping, as correctly found by the investigating commissioner. This highlights his motives rather than his cause of action. Respondent took advantage of his being a lawyer in order to get back at the complainant. In doing so, he has inevitably utilized information he has obtained from his dealings with complainant and complainants companies for his own end. Lawyers must conduct themselves, especially in their dealings with their clients and the public at large, with honesty and integrity in a manner beyond reproach.8 Lawyers cannot be allowed to exploit their profession for the purpose of exacting vengeance or as a tool for instigating hostility against any personmost especially against a client or former client. As we stated in Marcelo v. Javier, Sr.:9 A lawyer shall at all times uphold the integrity and dignity of the legal profession. The trust and confidence necessarily reposed by clients require in the attorney a high standard and appreciation of his duty to his clients, his profession, the courts and the public. The bar should maintain a high standard of legal proficiency as well as of honesty and fair dealing. Generally speaking, a lawyer can do honor to the legal profession by faithfully performing his duties to society, to the bar, to the courts and to his clients.

To this end, nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession.10 (Emphasis supplied) In sum, we find that respondent's actuations amount to a breach of his duty to uphold good faith and fairness, sufficient to warrant the imposition of disciplinary sanction against him. WHEREFORE, respondent Atty. Leonardo A. Aurelio 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.

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-M90-10-050. 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-OD-M-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 judicata by virtue of the final decision of the Med-Arbiter in NCR-OD-M-90-10-050 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 CA-G.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 ex-parte 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. 4 Elsewise 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.

FIRST DIVISION

CARLITO P. CARANDANG, Complainant,

A.C. No. 7813

Present:

PUNO, C.J., Chairperson, CARPIO, CORONA, - versus LEONARDO-DE CASTRO, and BERSAMIN, JJ.

ATTY. GILBERT S. OBMINA, Respondent.

Promulgated: April 21, 2009

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

DECISION

CARPIO, J.:

The Case

This is a complaint filed by Carlito P. Carandang (Carandang) against Atty. Gilbert S. Obmina (Atty. Obmina). Atty. Obmina was counsel for Carandang in Civil Case No. B-5109 entitled Sps. Emilia A. Carandang and Carlito Carandang v. Ernesto Alzona. Carandang brought suit for Atty. Obminas failure to inform Carandang of the adverse decision in Civil Case No. B-5109 and for failure to appeal the decision.

The Facts

The facts of CBD Case No. 06-1869 in the Report and Recommendation of the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP) read as follows:

Complainants Sworn Statement is hereto reproduced as follows: SWORN STATEMENT Ako si CARLITO P. CARANDANG, nasa wastong gulang, may asawat mga anak, at nakatira sa 5450 Alberto Apt., St. Francis Homes, Halang Bian, Laguna. Na ako ay may kasong isinampa kay ERNESTO T. ALSONA tungkol sa aming bahay at lupa, at isinampa sa BIAN RTC BRANCH 25, CIVIL CASE NO. B-5109. Na ang naturang kaso ay natapos at nadisisyunan noong Enero 28, 2000 at ako ay natalo sa naturang kaso. Na ang aking naging abogado ay si ATTY. GILBERT S. OBMINA, tubong Quezon at bilang kababayan ako ay nagtiwala sa kanyang kakayahan upang maipagtanggol sa naturang kaso, ngunit taliwas sa aking pananalig sa kanya ang nasabing kaso ay napabayaan hanggang sa magkaroon ng desisyon ang korte na kunin ang aking lupat bahay, sa madalit sabi kami ay natalo ng hindi ko man lang nalalaman at huli na ang lahat ng malaman ko dahil hindi na kami pwedeng umapila.

Na nalaman ko lang na may desisyon na pala ang korte pagkatapos ng anim na buwan. Ang aking anak na si ROSEMARIE ay nagpunta sa BIAN, sa RTC ay binati at tinatanong kung saan kayo nakatira at ang sagot [ng] aking anak BAKIT? At ang sagot naman [ng] taga RTC, HINDI MO BA ALAM NA ANG INYONG KASO AY TAPOS NA. Nang marinig yon ay umuwi na siya at sinabi agad sa akin. Tapos na daw yung kaso [ng] ating bahay at ako ay pumunta sa opisina ni ATTY. OBMINA at aking tinanong BAKIT DI MO SINABI SA AKIN NA TAPOS NA ANG KASO? At ang sagot niya sa akin AY WALA KANG IBABAYAD SA ABOGADO DAHIL WALA KANG PERA PANG-APILA dahil sa sagot sa akin ay para akong nawalan [ng] pag-asa sa kaso. Lumapit ako sa Malacaang at binigay yung sulat pero doon ay aking nakausap yung isang abogado at akoy kanyang pinakinggan at aking inabot ang papeles at aking pinakita at ang sabi ay hindi na pwede dahil anim na buwan na [nang] lumipas ang kaso. Kaya aking sinabi sa ATTY. ng Malacaang na hindi sinabi sa akin agad ni ATTY. OBMINA na may order na pala ang kaso. Kaya ang ginawang paraan ay binigyan ako ng sulat para ibigay sa IBP, at nang mabasa ang sulat ay sinabi sa akin na doon sa SAN PABLO ang hearing, at tinanong ako kung nasaan ang ATTORNEYS WITHDRAWAL NYO? Ang sagot ko ay WALA HO, kaya inutusan ako na kunin ang ATTORNEYS WITHDRAWAL at agad akong nagpunta sa opisina ni ATTY. OBMINA at tinanong ko sa sekretarya niya kung nasaan si ATTY. OBMINA ang sagot sa akin ay nasa AMERICA NA! Kayat aking tinanong kung sinong pwede magbigay sa akin ng attorneys withdrawal at ang sabi ay yung anak nya na si CARMELITSA OBMINA. Bumalik ako noong araw ng Biyernes at aking nakuha, pero hindi na ako nakabalik sa IBP dahil noong araw na iyon ay hindi ko na kayang maglakad, kaya hindi na natuloy ang hearing sa SAN PABLO. CARLITO P. CARANDANG Affiant CTC No. 21185732 Issued on March 7, 2006 At Bian, Laguna On November 16, 2006, the Commission on Bar Discipline, through Rogelio A. Vinluan, the then Director for Bar Discipline (now the incumbent Executive Vice President of the Integrated Bar of the Philippines), issued an Order directing respondent Atty. Gilbert S. Obmina to submit his Answer, duly verified, in six (6) copies, and furnish the complainant with a copy thereof, within fifteen (15) days from receipt of the Order. On December 12, 2006, this Commission was in receipt of a Manifestation dated December 11, 2006 filed by a certain Atty. Ma. Carmencita C. Obmina-Muaa. Allegedly, she is the daughter of respondent Atty. Gilbert S. Obmina. She further alleged that [her] father is already a permanent resident of the United States of America since March 2001 and had already retired from the practice of law.

That on February 20, 2007, undersigned Commissioner [Jose I. De La Rama, Jr.] scheduled the Mandatory Conference/Hearing of the case on March 20, 2007 at 9:30 a.m. On March 19, 2007, Atty. Ma. Carmencita C. Obmina-Muaa filed a Manifestation and Motion reiterating her earlier Manifestation that the respondent, Atty. Gilbert S. Obmina is already a permanent resident of the United States for the last six (6) years and likewise, she reiterated her request that summons be served on her father thru extraterritorial service. Atty. Muaa likewise requested the cancellation of the mandatory conference and resetting of the same on April 10, 2007. On the scheduled Mandatory Conference on March 20, 2007, complainant Carlito P. Carandang appeared. The undersigned Commissioner directed Atty. Carmelita Muaa to appear before this Commission on May 18, 2007 at 2:00 p.m. and to bring with her the alleged withdrawal of appearance filed by her father and to bring proof that her father is now really a permanent resident of the United States of America. That on May 18, 2007, Atty. Muaa again filed a Manifestation and Motion informing this Honorable Commission that she cannot possibly appear for the reason that she is the legal counsel of a candidate in Muntinlupa City and that the canvassing of the election results is not yet finished. She likewise submitted copies of her fathers Passport and US Permanent Residence Card. That with respect [to] the Withdrawal of Appearance, Atty. Muaa alleged that copies of the same were all given to complainant Carlito P. Carandang. That an Order dated May 18, 2007 was issued by the undersigned Commissioner granting the aforesaid Manifestation and Motion. Atty. Muaa was likewise directed to appear before this Office on June 22, 2007 at 2:00 p.m. On June 22, 2007, in the supposed Mandatory Conference, Atty. Carmencita Obmina Muaa appeared. Likewise presented was Mr. Carlito Carandang who is the complainant against Atty. Gilbert Obmina. In the interest of justice, Atty. Muaa was given a period of ten (10) days within which to file a verified answer. The Mandatory Conference was set on August 3, 2007 at 3:00 oclock in the afternoon. On June 29, 2007, Atty. Muaa filed a Motion for Extension of Time to file Answer. On July 3, 2007, this Commission is in receipt of the verified Answer filed by respondent Atty. Gilbert S. Obmina. On August 3, 2007, during the Mandatory Conference, complainant Carlito Carandang appeared. Atty. Muaa appeared in behalf of [her] father. After making some admissions, stipulations and some clarificatory matters, the parties were directed to submit their verified position papers within ten (10) days. Thereafter, the case will be submitted on report and recommendation. On August 10, 2007, complainant, by himself, filed an Urgent Motion for Extension of Time to File Position Paper. Likewise, respondent, through Atty. Muaa, filed a Motion for Extension of Time to File Position Paper on August 13, 2007.

On September 3, 2007, the Commission on Bar Discipline received copy of the Respondents Memorandum. On September 12, 2007, this Commission received copy of complainants Position Paper.25[1]

The IBPs Report and Recommendation

In a Report26[2] dated 2 October 2007, IBP Commissioner for Bar Discipline Jose I. De La Rama, Jr. (Commissioner De La Rama) found that Atty. Obmina was still counsel of record for complainant at the time the decision was rendered and up to the time of the issuance of the writ of execution. Atty. Obmina received the Decision dated 28 January 2000 on 1 March 2000. Atty. Carmencita ObminaMuaa manifested in Court that her father has been living in the United States of America since 2001. There is nothing on record that will show that Atty. Obmina notified complainant in any manner about the decision.

Although Commissioner De La Rama observed that complainant is partly to blame for his loss for failure to maintain contact with Atty. Obmina and to inform himself of the progress of his case, Commissioner De La Rama nonetheless underscored the duty of Atty. Obmina to notify his client as to what happened to his case. Thus:

One cannot escape the fact that the complainant himself failed to communicate with his counsel for quite sometime. There is nothing in the complainants Sworn Statement that would show that he regularly visited the office of the respondent, Atty. Gilbert S. Obmina. Complainant is partly to blame for his loss and it should not be attributed solely to the respondent. The Supreme Court held that clients should maintain contact with their counsel from time to time and inform themselves of the progress of their case, thereby exercising that standard of care which an ordinary prudent man bestows upon his business (Leonardo vs. S.T. Best, Inc., 422 SCRA 347)

However, the respondent who has in his possession the complete files and address of the complainant, should have exerted efforts to even notify Mr. Carandang as to what happened to his case. Whether the decision is adverse [to] or in favor of his client, respondent is duty bound to notify the clients pursuant to Canon 18 of the Code of Professional Ethics which provides that a lawyer shall serve his client with competence and diligence. Further under Rule 18.03 of Canon 18, a lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable. Lastly, under Rule 18.04, a lawyer shall keep the client informed of the status of his case and shall respond within a reasonable time to clients request for information. That as a result of the respondents failure to notify the complainant, the latter lost the case leading to his eviction. In the case of Mijares vs. Romana 425 SCRA 577, the Supreme Court held that as an officer of the court, it is the duty of an attorney to inform his client of whatever information he may have acquired which it is important that the client should have knowledge of. In another case, the Supreme Court held that respondents failure to perfect an appeal within the prescribed period constitutes negligence and malpractice proscribed by the Code of Professional Responsibility (Cheng vs. Agravante, 426 SCRA 42). WHEREFORE, in view of the foregoing, with head bowed in sadness, it is respectfully recommended that Atty. Gilbert S. Obmina be suspended from the practice of law for a period of one (1) year. Although the said respondent is reportedly in the United States of America and accordingly retired from the practice of law, this Commission will not close its eyes on the negligence that he has committed while in the active practice. SO ORDERED.27[3] (Emphasis in the original)

In a Resolution28[4] dated 19 October 2007, the IBP Board of Governors adopted and approved the Report and Recommendation of Commissioner De La Rama. The Office of the Bar Confidant received the notice of the Resolution and the records of the case on 14 March 2008.

The Ruling of the Court

We sustain the findings of the IBP and adopt its recommendations. Atty. Obmina violated Canon 18, and Rules 18.03 and 18.04 of the Code of Professional Responsibility.

Atty. Obmina Failed to Serve Complainant with Competence and Diligence

Canon 18 states that [a] lawyer shall serve his client with competence and diligence. Rules 18.03 and 18.04 provide that [a] lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith shall render him liable and [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.

In his Memorandum, Atty. Obmina admitted that he was counsel for Carandang in Civil Case No. B-5109. Atty. Obmina blamed Carandang for the adverse decision in Civil Case No. B-5109 because Carandang did not tell him that there was a Compromise Agreement executed prior to Atty. Obminas filing of the complaint in Civil Case No. B-5109. Carandang, on the other hand, stated that Atty. Obmina made him believe that they would win the case. In fact, Carandang engaged the services of Atty. Obmina on a contingent basis. Carandang shall pay Atty. Obmina 40% of the sale proceeds of the property subject matter of the case. Atty. Obmina promised to notify Carandang as soon as the decision of the court was given.

Contrary to Atty. Obminas promise, there is no evidence on record that Atty. Obmina took the initiative to notify Carandang of the trial courts adverse decision. Atty. Obmina again put Carandang at fault for failure to advance the appeal fee. Atty. Obminas version of Carandangs confrontation with him was limited to this narrative: Sometime in the year 2000, complainant went to respondents law office. He was fuming mad and was blaming respondent for having lost his case. He asked for the records of the case because according to him, he will refer the case to a certain Atty. Edgardo Salandanan. Respondent gave

complainant the case file. Complainant did not return to pursue the appeal or at least had given an appeal fee to be paid to Court in order to perfect the appeal.29[5]

Atty. Obminas futile efforts of shifting the blame on Carandang only serve to emphasize his failure to notify Carandang that the trial court already promulgated a decision in Civil Case No. B-5109 that was adverse to Carandangs interests. Atty. Obmina cannot overlook the fact that Carandang learned about the promulgation of the decision not through Atty. Obmina himself, but through a chance visit to the trial court. Instead of letting Carandang know of the adverse decision himself, Atty. Obmina should have immediately contacted Carandang, explained the decision to him, and advised them on further steps that could be taken. It is obvious that Carandang lost his right to file an appeal because of Atty. Obminas inaction. Notwithstanding Atty. Obminas subsequent withdrawal as Carandangs lawyer, Atty. Obmina was still counsel of record at the time the trial court promulgated the decision in Civil Case No. B-5109.

In Tolentino v. Mangapit, we stated that: As an officer of the court, it is the duty of an attorney to inform her client of whatever information she may have acquired which it is important that the client should have knowledge of. She should notify her client of any adverse decision to enable her client to decide whether to seek an appellate review thereof. Keeping the client informed of the developments of the case will minimize misunderstanding and [loss] of trust and confidence in the attorney.30[6]

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.31[7]

The Court finds well-taken the recommendation of the IBP to suspend Atty. Gilbert S. Obmina from the practice of law for one year. In the cases of Credito v. Sabio32[8] and Pineda v.

Macapagal,33[9] we imposed the same penalty upon attorneys who failed to update their clients on the status of their cases. Considering Atty. Obminas advanced age, such penalty serves the purpose of protecting the interest of the public and legal profession.

WHEREFORE, the Court AFFIRMS the resolution of the IBP Board of Governors approving and adopting the report and recommendation of the Investigating Commissioner. Accordingly, Atty. Gilbert S. Obmina is found GUILTY of violation of Canon 18 and of Rules 18.03 and 18.04 of the Code of Professional Responsibility. The Court SUSPENDS Atty. Gilbert S. Obmina from the practice of law for one year, and WARNS him that a repetition of the same or similar offense will be dealt with more severely.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to respondents personal record as attorney. Likewise, copies shall be furnished the Integrated Bar of the Philippines and all courts in the country for their information and guidance.

SO ORDERED.

EN BANC [A.C. No. 5169. November 24, 1999] ELMO S. MOTON, complainant, vs. ATTY. RAYMUNDO D. CADIAO, respondent. RESOLUTION PARDO, J.: The case is a verified letter-complaint for disbarmentxvi[1] against Atty. Raymundo D. Cadiao, for violation of the lawyers oath. The antecedent facts show that on September 29, 1987, complainant Elmo S. Moton filed with the Regional Trial Court, Quezon City, a civil complaint against Pablito M. Castillo and The Philippine Veterans Bank denominated as Right to Use Urban Land and Damages.xvii[2] On August 14, 1990, when the case was scheduled for pre-trial conference, the complainants counsel, Atty. Raymundo D. Cadiao, failed to appear, hence, the court dismissed the case.xviii[3] On August 15, 1990, Atty. Cadiao filed with the trial court an entry of appearance for the complainant and a motion for reconsideration of the dismissal of the case.xix[4] Acting on the motion, the court set aside the August 14, 1990 order of dismissal and reset the pre-trial conference on May 5, 1991.xx[5] On May 5, 1991, upon motion of Atty. Cadiao, the court declared the defendant Castillo in default and allowed plaintiffs to present their evidence ex-parte before a Commissioner.xxi[6] It turned out that the court appointed Commissioner was on official leave. Consequently, plaintiffs filed a motion for appointment of a substitute Commissioner. The court granted the motion in an order dated June 28, 1991. The reception of evidence was set on August 13, 1991.xxii[7] On August 2, 1991, Atty. Cadiao filed a motion to reset the hearing from August 13, 1991 to August 26, 27, 28 or 29, 1991, for the reason that he had to attend a scheduled hearing in Antique.xxiii[8] At the hearing of the motion on August 9, 1991, respondent was absent because he had left for Antique. Therefore, the court denied the motion to reset hearing. A subsequent motion for reconsideration with prayer to set case for reception of evidence was similarly denied.xxiv[9] On November 20, 1991, Atty. Cadiao filed with the Court of Appeals a petition for certiorari alleging that the trial court acted with grave abuse of discretion amounting to lack of jurisdiction when it dismissed the case. On October 23, 1992, the Court of Appeals dismissed the petition for lack of merit.xxv[10] On January 20, 1993, respondent filed with the Court of Appeals a Withdrawal of Appearance.xxvi[11] Hence, this complaint.xxvii[12] After conducting hearings at which respondent was allowed to adduce evidence, on November 28, 1998, the Commission on Bar Discipline, Integrated Bar of the Philippines, submitted its Report finding respondent Atty. Raymundo D. Cadiao liable for negligence in handling the complainants case and

recommended that Atty. Cadiao be fined Two Thousand (P2,000.00) Pesos with a warning that any similar negligence will be dealt with more severely.xxviii[13] In his answer to the complaint filed with the Commission on Bar Discipline,xxix[14] Atty. Raymundo D. Cadiao contended that the main reason for the undue delay in the presentation of evidence in Civil Case No. Q-51909 was the inability of the complainant to furnish him with the original copies of the evidence and that his failure to appear during the scheduled hearing was due to a compelling need to appear in another case in Antique which made it impossible for him to attend both hearings. Canon 18, Rule 18.03 of the Code of Professional Responsibility provides that a lawyer shall not neglect a legal matter entrusted to him and his negligence in connection therewith shall render him liable. In this case, by reason of Atty. Cadiaos negligence, actual loss has been caused to his client Elmo S. Moton. He should give adequate attention, care and time to his cases. This is why a practising lawyer may accept only so many cases that he can efficiently handle. Otherwise, his clients will be prejudiced. Once he agrees to handle a case, he should undertake the task with dedication and care. If he should do any less, then he is not true to his lawyers oath. In light of the foregoing, the Court agrees with the findings of the Commission on Bar Discipline, Integrated Bar of the Philippines, declaring respondent liable for negligence in the handling of complainants case. ACCORDINGLY, the Court resolved to impose on respondent Atty. Raymundo D. Cadiao a fine of P2,000.00 payable to this Court within ten (10) days from notice, with warning that a repetition of similar acts will be dealt with more severely. SO ORDERED.