12/21/2016 A.M.No.

1625

TodayisWednesday,December21,2016

RepublicofthePhilippines
SUPREMECOURT
Manila

ENBANC

A.M.No.1625February12,1990

ANGELL.BAUTISTA,complainant,
vs.
ATTY.RAMONA.GONZALES,respondent.

RESOLUTION

PERCURIAM:

InaverifiedcomplaintfiledbyAngelL.BautistaonMay19,1976,respondentRamonA.Gonzaleswascharged
with malpractice, deceit, gross misconduct and violation of lawyer's oath. Required by this Court to answer the
chargesagainsthim,respondentfiledonJune19,1976amotionforabillofparticularsaskingthisCourttoorder
complainant to amend his complaint by making his charges more definite. In a resolution dated June 28, 1976,
theCourtgrantedrespondent'smotionandrequiredcomplainanttofileanamendedcomplaint.OnJuly15,1976,
complainant submitted an amended complaint for disbarment, alleging that respondent committed the following
acts:

1.Acceptingacasewhereinheagreedwithhisclients,namely,AlfaroFortunado,Nestor
Fortunado and Editha Fortunado [hereinafter referred to as the Fortunados] to pay all
expenses,includingcourtfees,foracontingentfeeoffiftypercent(50%)ofthevalueof
thepropertyinlitigation.

2. Acting as counsel for the Fortunados in Civil Case No. Q15143, wherein Eusebio
Lopez, Jr. is one of the defendants and, without said case being terminated, acting as
counselforEusebioLopez,Jr.inCivilCaseNo.Q15490

3.TransferringtohimselfonehalfofthepropertiesoftheFortunados,whichproperties
are the subject of the litigation in Civil Case No. Q15143, while the case was still
pending

4.Inducingcomplainant,whowashisformerclient,toenterintoacontractwithhimon
August30,1971forthedevelopmentintoaresidentialsubdivisionofthelandinvolvedin
Civil Case No. Q15143, covered by TCT No. T1929, claiming that he acquired fifty
percent (50%) interest thereof as attorney's fees from the Fortunados, while knowing
fullywellthatthesaidpropertywasalreadysoldatapublicauctiononJune30,1971,by
the Provincial Sheriff of Lanao del Norte and registered with the Register of Deeds of
IliganCity

5. Submitting to the Court of First Instance of Quezon City falsified documents

purportingtobetruecopiesof"AddendumtotheLandDevelopmentAgreementdated
August 30, 1971" and submitting the same document to the Fiscal's Office of Quezon
City,inconnectionwiththecomplaintforestafafiledbyrespondentagainstcomplainant
designatedasI.S.No.7512936

6.Committingactsoftreacheryanddisloyaltytocomplainantwhowashisclient

7.Harassingthecomplainantbyfilingseveralcomplaintswithoutlegalbasisbeforethe
CourtofFirstInstanceandtheFiscal'sOfficeofQuezonCity

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8.DeliberatelymisleadingtheCourtofFirstInstanceandtheFiscal'sOfficebymaking
falseassertionoffactsinhispleadings

9.Filingpetitions"cleverlyprepared(so)thatwhilehedoesnotintentionallytellahe,he
doesnottellthetrutheither."

RespondentfiledanansweronSeptember29,1976andanamendedansweronNovember18,1976,denying
the accusations against him. Complainant filed a reply to respondent's answer on December 29, 1976 and on
March24,1977respondentfiledarejoinder.

In a resolution dated March 16, 1983, the Court referred the case to the Office of the Solicitor General for
investigation, report and recommendation. In the investigation conducted by the Solicitor General, complainant
presented himself as a witness and submitted Exhibits "A" to "PP", while respondent appeared both as witness
andcounselandsubmittedExhibits"1"to"11".Thepartieswererequiredtosubmittheirrespectivememoranda.

OnMay16,1988respondentfiledamotiontodismissthecomplaintagainsthim,claimingthatthelongdelayin
the resolution of the complaint against him constitutes a violation of his constitutional right to due process and
speedy disposition of cases. Upon order of the Court, the Solicitor General filed a comment to the motion to
dismiss on August 8, 1988, explaining that the delay in the investigation of the case was due to the numerous
requestsforpostponementofscheduledhearingsfiledbybothpartiesandthemotionsforextensionoftimetofile
theirrespectivememoranda."[CommentoftheSolicitorGeneral,p.2Record,p.365].Respondentfiledareply
to the Solicitor General's comment on October 26, 1988. In a resolution dated January 16, 1989 the Court
requiredtheSolicitorGeneraltosubmithisreportandrecommendationwithinthirty(30)daysfromnotice.

On April 11, 1989, the Solicitor General submitted his report with the recommendation that Atty. Ramon A.
Gonzalesbesuspendedforsix(6)months.TheSolicitorGeneralfoundthatrespondentcommittedthefollowing
actsofmisconduct:

a. transferring to himself onehalf of the properties of his clients during the pendency of the case
wherethepropertieswereinvolved

b. concealing from complainant the fact that the property subject of their land development
agreementhadalreadybeensoldatapublicauctionpriortotheexecutionofsaidagreementand

c.misleadingthecourtbysubmittingallegedtruecopiesofadocumentwheretwosignatorieswho
had not signed the original (or even the xerox copy) were made to appear as having fixed their
signatures[ReportandRecommendationoftheSolicitorGeneral,pp.1718Rollo,pp.403404].

RespondentthenfiledonApril14,1989amotiontoreferthecasetotheIntegratedBarofthePhilippines(IBP)
for investigation and disposition pursuant to Rule 139B of the Revised Rules of Court. Respondent manifested
that he intends to submit more evidence before the IBP. Finally, on November 27, 1989, respondent filed a
supplementalmotiontoreferthiscasetotheIBP,containingadditionalargumentstobolsterhiscontentionsinhis
previouspleadings.

I.

Preliminarily,theCourtwilldisposeoftheproceduralissueraisedbyrespondent.Itisrespondent'scontentionthat
thepreliminaryinvestigationconductedbytheSolicitorGeneralwaslimitedtothedeterminationofwhetherornot
thereissufficientgroundtoproceedwiththecaseandthatunderRule139theSolicitorGeneralstillhastofilean
administrativecomplaintagainsthim.RespondentclaimsthatthecaseshouldbereferredtotheIBPsinceSection
20ofRule139Bprovidesthat:

This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled
DISBARMENT OR SUSPENSION OF ATTORNEYS. All cases pending investigation by the Office of
theSolicitorGeneralshallbetransferredtotheIntegratedBarofthePhilippinesBoardofGovernors
forinvestigationanddispositionasprovidedinthisRuleexceptthosecaseswheretheinvestigation
hasbeensubstantiallycompleted.

Theabovecontentionofrespondentisuntenable.Inthefirstplace,contrarytorespondent'sclaim,referenceto
the IBP of complaints against lawyers is not mandatory upon the Court [Zaldivar v. Sandiganbayan, G.R. Nos.
79690707Zaldivarv.Gonzales,G.R.No.80578,October7,1988].ReferenceofcomplaintstotheIBPisnotan
exclusiveprocedureunderthetermsofRule139BoftheRevisedRulesofCourt[Ibid].UnderSections13and
14ofRule139B,theSupremeCourtmayconductdisciplinaryproceedingswithouttheinterventionoftheIBPby
referringcasesforinvestigationtotheSolicitorGeneralortoanyofficeroftheSupremeCourtorjudgeofalower
court.Insuchacase,thereportandrecommendationoftheinvestigatingofficialshallberevieweddirectlybythe
SupremeCourt.TheCourtshallbaseitsfinalactiononthecaseonthereportandrecommendationsubmittedby
theinvestigatingofficialandtheevidencepresentedbythepartiesduringtheinvestigation.

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Secondly,thereisnoneedtoreferthecasetotheIBPsinceatthetimeoftheeffectivityofRule139B[June1,
1988]theinvestigationconductedbytheOfficeoftheSolicitorGeneralhadbeensubstantiallycompleted.Section
20 of Rule 139B provides that only pending cases, the investigation of which has not been substantially
completedbytheOfficeoftheSolicitorGeneral,shallbetransferredtotheIBP.Inthiscasetheinvestigationby
theSolicitorGeneralwasterminatedevenbeforetheeffectivityofRule139B.Respondenthimselfadmittedinhis
motion to dismiss that the Solicitor General terminated the investigation on November 26, 1986, the date when
respondentsubmittedhisreplymemorandum[MotiontoDismiss,p.1Record,p.353].

Thirdly,thereisnoneedforfurtherinvestigationsincetheOfficeoftheSolicitorGeneralalreadymadeathorough
andcomprehensiveinvestigationofthecase.ToreferthecasetotheIBP,asprayedforbytherespondent,will
resultnotonlyinduplicationoftheproceedingsconductedbytheSolicitorGeneralbutalsotofurtherdelayinthe
dispositionofthepresentcasewhichhaslastedformorethanthirteen(13)years.

Respondent'sassertionthathestillhassomeevidencetopresentdoesnotwarrantthereferralofthecasetothe
IBP. Considering that in the investigation conducted by the Solicitor General respondent was given ample
opportunity to present evidence, his failure to adduce additional evidence is entirely his own fault. There was
therefore no denial of procedural due process. The record shows that respondent appeared as witness for
himself and presented no less than eleven (11) documents to support his contentions. He was also allowed to
crossexaminethecomplainantwhoappearedasawitnessagainsthim.

II.

TheCourtwillnowaddressthesubstantiveissueofwhetherornotrespondentcommittedtheactsofmisconduct
allegedbycomplainantBautista.

AfteracarefulreviewoftherecordofthecaseandthereportandrecommendationoftheSolicitorGeneral,the
Court finds that respondent committed acts of misconduct which warrant the exercise by this Court of its
disciplinarypower.

The record shows that respondent prepared a document entitled "Transfer of Rights" which was signed by the
Fortunados on August 31, 1971. The document assigned to respondent onehalf (1/2) of the properties of the
FortunadoscoveredbyTCTNo.T1929,withanareaof239.650sq.mm.,andTCTNo.T3041,withanareaof
72.907sq.m.,forandinconsiderationofhislegalservicestothelatter.Atthetimethedocumentwasexecuted,
respondent knew that the abovementioned properties were the subject of a civil case [Civil Case No. Q15143]
pendingbeforetheCourtofFirstInstanceofQuezonCitysincehewasactingascounselfortheFortunadosin
saidcase[SeeAnnex"B"ofOriginalComplaint,p.12Rollo,p.16].Inexecutingthedocumenttransferringone
half (1/2) of the subject properties to himself, respondent violated the law expressly prohibiting a lawyer from
acquiring his client's property or interest involved in any litigation in which he may take part by virtue of his
profession [Article 1491, New Civil Code]. This Court has held that the purchase by a lawyer of his client's
property or interest in litigation is a breach of professional ethics and constitutes malpractice [Hernandez v.
Villanueva,40Phil.774(1920)GoBeltranv.Fernandez,70Phil.248(1940)].

However, respondent notes that Canon 10 of the old Canons of Professional Ethics, which states that "[t]he
lawyershouldnotpurchaseanyinterestsinthesubjectmatterofthelitigationwhichheisconducting,"doesnot
appearanymoreinthenewCodeofProfessionalResponsibility.Hethereforeconcludesthatwhileapurchaseby
alawyerofpropertyinlitigationisvoidunderArt.1491oftheCivilCode,suchpurchaseisnolongeragroundfor
disciplinaryactionunderthenewCodeofProfessionalResponsibility.

This contention is without merit. The very first Canon of the new Code states that "a lawyer shall uphold the
Constitution, obey the laws of the land and promote respect for law and legal process" (Emphasis supplied),
Moreover,Rule138,Sec.3oftheRevisedRulesofCourtrequireseverylawyertotakeanoathto44obeythe
laws[oftheRepublicofthePhilippines]aswellasthelegalordersofthedulyconstitutedauthoritiestherein."And
foranyviolationofthisoath,alawyermaybesuspendedordisbarredbytheSupremeCourt[Rule138,Sec.27,
RevisedRulesofCourt].Alloftheseunderscoretheroleofthelawyerasthevanguardofourlegalsystem.The
transgression of any provision of law by a lawyer is a repulsive and reprehensible act which the Court will not
countenance. In the instant case, respondent, having violated Art. 1491 of the Civil Code, must be held
accountablebothtohisclientandtosociety.

Parenthetically,itshouldbenotedthatthepersonsmentionedinArt.1491oftheCivilCodeareprohibitedfrom
purchasingthepropertymentionedthereinbecauseoftheirexistingtrustrelationshipwiththelatter.Alawyeris
disqualified from acquiring by purchase the property and rights in litigation because of his fiduciary relationship
with such property and rights, as well as with the client. And it cannot be claimed that the new Code of
ProfessionalResponsibilityhasfailedtoemphasizethenatureandconsequencesofsuchrelationship.Canon17
states that "a lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence
reposedinhim."Ontheotherhand,Canon16providesthat"alawyershallholdintrustallmoneysandproperties
ofhisclientthatmaycomeintohispossession."Hence,notwithstandingtheabsenceofaspecificprovisiononthe
matter in the new Code, the Court, considering the abovequoted provisions of the new Code in relation to Art.
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1491oftheCivilCode,aswellastheprevailingjurisprudence,holdsthatthepurchasebyalawyerofhisclient's
property in litigation constitutes a breach of professional ethics for which a disciplinary action may be brought
againsthim.

Respondent's next contention that the transfer of the properties was not really implemented, because the land
development agreement on which the transfer depended was later rescinded, is untenable. Nowhere is it
provided in the Transfer of Rights that the assignment of the properties of the Fortunados to respondent was
subjecttotheimplementationofthelanddevelopmentagreement.ThelastparagraphoftheTransferofRights
providesthat:

...forandinconsiderationofthelegalservicesofATTY.RAMONA.GONZALES,Filipino,marriedto
Lilia Yusay, and a resident of 23 Sunrise Hill, New Manila, Quezon City, rendered to our entire
satisfaction, we hereby, by these presents, do transfer and convey to the said ATTY. RAMON A.
GONZALES, his heirs, successor, and assigns, onehalf (1/2) of our rights and interests in the
abovedescribed property, together with all the improvements found therein [Annex D of the
Complaint,Record,p.28Emphasissupplied].

Itisclearfromtheforegoingthatthepartiesintendedthetransferofthepropertiestorespondenttobeabsolute
andunconditional,andirrespectiveofwhetherornotthelanddevelopmentagreementwasimplemented.

Another misconduct committed by respondent was his failure to disclose to complainant, at the time the land
developmentagreementwasenteredinto,thatthelandcoveredbyTCTNo.T1929hadalreadybeensoldata
publicauction.ThelanddevelopmentagreementwasexecutedonAugust31,1977whilethepublicauctionwas
heldonJune30,1971.

Respondentdeniesthatcomplainantwashisformerclient,claimingthathisappearanceforthecomplainantinan
antigraftcasefiledbythelatteragainstacertainGilbertTeodorowasupontherequestofcomplainantandwas
understoodtobeonlyprovisional.Respondentclaimsthatsincecomplainantwasnothisclient,hehadnodutyto
warncomplainantofthefactthatthelandinvolvedintheirlanddevelopmentagreementhadbeensoldatapublic
auction. Moreover, the sale was duly annotated at the back of TCT No. T1929 and this, respondent argues,
servesasconstructivenoticetocomplainantsothattherewasnoconcealmentonhispart.

Theabovecontentionsareunmeritorious.Evenassumingthatthecertificateofsalewasannotatedatthebackof
TCT No. T1929, the fact remains that respondent failed to inform the complainant of the sale of the land to
Samaunaduringthenegotiationsforthelanddevelopmentagreement.Insodoing,respondentfailedtoliveupto
the rigorous standards of ethics of the law profession which place a premium on honesty and condemn
duplicitousconduct.Thefactthatcomplainantwasnotaformerclientofrespondentdoesnotexemptrespondent
fromhisdutytoinformcomplainantofanimportantfactpertainingtothelandwhichissubjectoftheirnegotiation.
Sincehewasapartytothelanddevelopmentagreement,respondentshouldhavewarnedthecomplainantofthe
saleofthelandatapublicauctionsothatthelattercouldmakeaproperassessmentoftheviabilityoftheproject
theywerejointlyundertaking.ThisCourthasheldthatalawyershouldobservehonestyandfairnesseveninhis
privatedealingsandfailuretodosoisagroundfordisciplinaryactionagainsthim[Custodiov.Esto,Adm.Case
No.1113,February22,1978,81SCRA517].

Complainantalsochargesrespondentwithsubmittingtothecourtfalsifieddocumentspurportingtobetruecopies
ofanaddendumtothelanddevelopmentagreement.

Basedonevidencesubmittedbytheparties,theSolicitorGeneralfoundthatinthedocumentfiledbyrespondent
with the Court of First Instance of Quezon City, the signatories to the addendum to the land development
agreement namely, Ramon A. Gonzales, Alfaro T. Fortunado, Editha T. Fortunado, Nestor T. Fortunado, and
Angel L. Bautistawere made to appear as having signed the original document on December 9, 1972, as
indicatedbytheletters(SGD.)beforeeachoftheirnames.However,itwasonlyrespondentAlfaroFortunadoand
complainantwhosignedtheoriginalandduplicateoriginal(Exh.2)andthetwootherparties,EdithFortunadoand
NestorFortunado,neverdid.EvenrespondenthimselfadmittedthatEdithandNestorFortunadoonlysignedthe
xerox copy (Exh. 2A) after respondent wrote them on May 24, 1973, asking them to sign the said xerox copy
attachedtotheletterandtosenditbacktohimaftersigning[RejoindertoComplainant'sReply,pp.46Rollo,pp.
327329].Moreover,respondentacknowledgedthatEdithandNestorFortunadohadmerelyagreedbyphoneto
sign, but had not actually signed, the alleged true copy of the addendum as of May 23, 1973 [Respondent's
SupplementalMotiontoReferthisCasetotheIntegratedBarofthePhilippines,p.16].Thus,whenrespondent
submittedtheallegedtruecopyoftheaddendumonMay23,1973asAnnex"A"ofhisManifestationfiledwiththe
Court of First Instance of Quezon City, he knowingly misled the Court into believing that the original addendum
was signed by Edith Fortunado and Nestor Fortunado. Such conduct constitutes willful disregard of his solemn
dutyasalawyertoactatalltimesinamannerconsistentwiththetruth.Alawyershouldneverseektomislead
thecourtbyanartificeorfalsestatementoffactorlaw[Section20(d),Rule138,RevisedRulesofCourtCanon
22,CanonsofProfessionalEthicsCanon10,Rule10.01,CodeofProfessionalResponsibility].

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Anent the first charge of complainant, the Solicitor General found that no impropriety was committed by
respondent in entering into a contingent fee contract with the Fortunados [Report and Recommendation, p. 8
Record, p. 394]. The Court, however, finds that the agreement between the respondent and the Fortunados,
whichprovidesinpartthat:

Wethe[Fortunados]agreeonthe50%contingentfee,provided,you[respondentRamonGonzales]
defrayallexpenses,forthesuit,includingcourtfees.

AlfaroT.Fortunado[signed]
EdithaT.Fortunado[signed]
NestorT.Fortunado[signed]

CONFORME

RamonA.Gonzales[signed]

[AnnexAtotheComplaint,Record,p.4].

iscontrarytoCanon42oftheCanonsofProfessionalEthicswhichprovidesthatalawyermaynotproperlyagree
withaclienttopayorbeartheexpensesoflitigation.[SeealsoRule16.04,CodeofProfessionalResponsibility].
Although a lawyer may in good faith, advance the expenses of litigation, the same should be subject to
reimbursement. The agreement between respondent and the Fortunados, however, does not provide for
reimbursement to respondent of litigation expenses paid by him. An agreement whereby an attorney agrees to
payexpensesofproceedingstoenforcetheclient'srightsischampertous[JBPHoldingCorp.v.U.S.166F.Supp.
324(1958)].Suchagreementsareagainstpublicpolicyespeciallywhere,asinthiscase,theattorneyhasagreed
to carry on the action at his own expense in consideration of some bargain to have part of the thing in dispute
[See Sampliner v. Motion Pictures Patents Co., et al., 255 F. 242 (1918)]. The execution of these contracts
violatesthefiduciaryrelationshipbetweenthelawyerandhisclient,forwhichtheformermustincuradministrative
sanctions.

The Solicitor General next concludes that respondent cannot be held liable for acting as counsel for Eusebio
Lopez,Jr.inCivilCaseNo.Q15490whileactingascounselfortheFortunadosagainstthesameEusebioLopez,
Jr.inCivilCaseNo.Q15143.TheCourt,afterconsideringtherecord,agreeswiththeSolicitorGeneral'sfindings
onthematter.TheevidencepresentedbyrespondentshowsthathisacceptanceofCivilCaseNo.Q15490was
withtheknowledgeandconsentoftheFortunados.TheaffidavitexecutedbytheFortunadosonJune23,1976
clearlystatesthattheygavetheirconsentwhenrespondentacceptedthecaseofEusebioLopez,Jr.[Affidavitof
Fortunados, dated June 23, 1976 Rollo, p. 198]. One of the recognized exceptions to the rule against
representation of conflicting interests is where the clients knowingly consent to the dual representation after full
disclosure of the facts by counsel [Canon 6, Canons of Professional Ethics Canon 15, Rule 15.03, Code of
ProfessionalResponsibility].

ComplainantalsoclaimsthatrespondentfiledseveralcomplaintsagainsthimbeforetheCourtofFirstInstance
andtheFiscal'sOfficeofQuezonCityforthesolepurposeofharassinghim.

TherecordshowsthatatthetimeoftheSolicitorGeneral'sinvestigationofthiscase,CivilCaseNo.Q18060was
stillpendingbeforetheCourtofFirstInstanceofQuezonCity,whilethecomplaintsforlibel(I.S.No.765912)and
perjury(I.S.No.5913)werealreadydismissedbytheCityFiscalforinsufficiencyofevidenceandlackofinterest,
respectively[ReportandRecommendation,pp.1617Rollo,pp.402403].TheSolicitorGeneralfoundnobasis
for holding that the complaints for libel and perjury were used by respondent to harass complainant. As to Civil
Case No. Q18060, considering that it was still pending resolution, the Solicitor General made no finding on
complainantsclaimthatitwasamereploybyrespondenttoharasshim.Thedeterminationofthevalidityofthe
complaint in Civil Case No. Q18060 was left to the Court of First Instance of Quezon City where the case was
pendingresolution.

TheCourtagreeswiththeabovefindingsoftheSolicitorGeneral,andaccordinglyholdsthatthereisnobasisfor
holdingthattherespondent'ssolepurposeinfilingtheaforementionedcaseswastoharasscomplainant.

Grounds6,8and9allegedinthecomplaintneednotbediscussedseparatelysincetheabovediscussiononthe
othergroundssufficientlycovertheseremaininggrounds.

TheCourtfindsclearlyestablishedinthiscasethatonfourcountstherespondentviolatedthelawandtherules
governingtheconductofamemberofthelegalprofession.Sworntoassistintheadministrationofjusticeandto
uphold the rule of law, he has "miserably failed to live up to the standards expected of a member of the Bar."
[Artiaga v. Villanueva, Adm. Matter No. 1892, July 29, 1988, 163 SCRA 638, 647]. The Court agrees with the
Solicitor General that, considering the nature of the offenses committed by respondent and the facts and
circumstancesofthecase,respondentlawyershouldbesuspendedfromthepracticeoflawforaperiodofsix(6)
months.

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WHEREFORE, finding that respondent Attorney Ramon A. Gonzales committed serious misconduct, the Court
Resolved to SUSPEND respondent from the practice of law for SIX (6) months effective from the date of his
receipt of this Resolution. Let copies of this Resolution be circulated to all courts of the country for their
informationandguidance,andspreadinthepersonalrecordofAtty.Gonzales.

SOORDERED.

Fernan, C.J., Narvasa, MelencioHerrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin and Cortes, JJ.,
concur.

Gutierrez,Jr.,Sarmiento,GrioAquino,Medialdea,Regalado,JJ.,tooknopart.

TheLawphilProjectArellanoLawFoundation

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