G.R. No.

117438 June 8, 1995

RAUL SESBREÑO, petitioner,

vs.
HON, COURT OF APPEALS, and PATRICIA GIAN, SOTERO BRANZUELA, ANDRES C. YPIL, SANTIAGO BACAYO, BRIGIDO
COHITMINGAO, VICTORINO DINOY, GUILLERMO MONTEJO and EMILIO RETUBADO, respondents.

ROMERO, J.:

Of interest to all law practitioners is the issue at bench, namely, whether the Court of Appeals had the authority to reduce the amount of
attorney's fees awarded to petitioner Atty. Raul H. Sesbreño, notwithstanding the contract for professional services signed by private
respondents.

The antecedent facts of the case follow.

Fifty-two employees sued the Province of Cebu and then Governor Rene Espina for reinstatement and backwages. 1 Herein petitioner,
Raul H. Sesbreño, replaced the employees' former counsel Atty. Catalino Pacquiao.

Thirty-two of the fifty-two employees signed two documents whereby the former agreed to pay petitioner 30% as attorney's fees and
20% as expenses to be taken from their back salaries.

On September 12, 1974, the trial court rendered a decision ordering the Province of Cebu to reinstate the petitioning employees and
pay them back salaries. Said decision became final and executory after it was affirmed in toto by the Court of Appeals and the petition
to review the appellate decision, denied by this Court in 1978. 2

A compromise agreement was entered into by the parties below in April 1979 whereby the former employees waived their right to
reinstatement among others. Likewise, pursuant to said compromise agreement, the Province of Cebu released P2,300,000.00 to the
petitioning employees through petitioner as "Partial Satisfaction of Judgment." The amount represented back salaries, terminal leave
pay and gratuity pay due to the employees.

Sometime November and December 1979, ten employees, herein private respondents, 3 filed manifestations before the trial court
asserting that they agreed to pay petitioner 40% to be taken only from their back salaries.

The lower court issued two orders, with which petitioner complied, requiring him to release P10,000.00 to each of the ten private
respondents and to retain 40% of the back salaries pertaining to the latter out of the P2,300,000.00 released to him.

On March 28, 1980, the trial court fixed petitioner's attorney's fees at 40% of back salaries, terminal leave, gratuity pay and retirement
benefits and 20% as expenses, or a total of 60% of all monies paid to the employees.

Private respondents' motion for reconsideration was granted and on June 10, 1980, the trial court modified the award after noting that
petitioner's attorney's lien was inadvertently placed as 60% when it should have been only 50%. The dispositive portion of the order
reads:

WHEREFORE, in view of all the foregoing the order of this Court fixing 60% as attorney's fee[s] of Atty. Sesbreño
should be 50% of all monies which the petitioners (Suico, et al.) may receive from the Provincial Government.

Obviously not satisfied with the attorney's fees fixed by the trial court, petitioner appealed to the Court of Appeals claiming additional
fees for legal services before the Supreme Court, reimbursement for expenses and a clear statement that the fee be likewise taken
from retirement pay awarded to his clients. Unfortunately, the respondent appellate court did not agree with him as the generous award
was further reduced. 4

The appellate court noted that in this jurisdiction, attorney 's fees are always subject to judicial control and deemed the award of 20% of
the back salaries awarded to private respondents as a fair, equitable and reasonable amount of attorney's fee. The decretal portion of
the decision reads:

WHEREFORE, the questioned order is MODIFIED. The attorney's fees due Atty. Raul Sesbreño is fixed at an
amount equivalent to 20% of all back salaries which the Province of Cebu has awarded to herein 10 petitioners. 5

Hence this petition for review where he claims that attorney's fees amounting to 50% of all monies awarded to his clients as contingent
fees should be upheld for being consistent with prevailing case law and the contract of professional services between the parties. He
adds that since private respondents did not appeal, they are not entitled to affirmative relief other than that granted in the regional trial
court.

We find no reversible error in the decision of the Court of Appeals and vote to deny the petition.

Respondent court found that the contract of professional services entered into by the parties 6 authorized petitioner to take a total
of 50% from the employees' back salaries only. The trial court, however, fixed the lawyer's fee on the basis of all monies to be awarded
to private respondents.

Fifty per cent of all monies which private respondents may receive from the provincial government, according to the Court of Appeals, is
excessive and unconscionable, not to say, contrary to the contract of professional services. 7After considering the facts and the nature
pg. 1
of the case, as well as the length of time and effort exerted by petitioner, respondent court reduced the amount of attorney's fees due
him.

It is a settled rule that what a lawyer may charge and receive as attorney's fees is always subject to judicial control. 8A lawyer is
primarily an officer of the court charged with the duty of assisting the court in administering impartial justice between the parties. When
he takes his oath, he submits himself to the authority of the court and subjects his professional fees to judicial control. 9

As stated by the Court in the case of Sumaong v. Judge:10

A lawyer is not merely the defender of his client's cause and a trustee of his client in respect of the client's cause of
action and assets; he is also, and first and foremost, an officer of the court and participates in the fundamental
function of administering justice in society. It follows that a lawyer's compensation for professional services rendered
are subject to the supervision of the court, not just to guarantee that the fees he charges and receives remain
reasonable and commensurate with the services rendered, but also to maintain the dignity and integrity of the legal
profession to which he belongs. Upon taking his attorney 's oath as an officer of the court, a lawyer submits himself to
the authority of the courts to regulate his right to professional fees. 11

In the case at bench, the parties entered into a contingent fee contract. The Agreement provides:

WE, the undersigned petitioners in the case of POLICRONIO BELACHO, ET AL., VS. RENE ESPINA ET AL., hereby
agree to pay Atty. Sesbreño, our lawyer, the following to be taken from our back salaries:

30% as attorney's fees

20% as expenses

That we enter into agreement in order to be paid our back salaries as early as possible and so that we may be
reinstated as early as possible.

A stipulation on a lawyer's compensation in a written contract for professional services ordinarily controls the amount of fees that the
contracting lawyer may be allowed, unless the court finds such stipulated amount unreasonable unconscionable. 12

A contingent fee arrangement is valid in this jurisdiction 13 and is generally recognized as valid and binding but must be laid down in an
express contract. 14 The amount of contingent fees agreed upon by the parties is subject to the stipulation that counsel will be paid for
his legal services only if the suit or litigation prospers. A much higher compensation is allowed as contingent fees in consideration of the
risk that the lawyer may get nothing if the suit fails.

Contingent fee contracts are under the supervision and close scrutiny of the court in order that clients may be protected from unjust
charges. 15 Its validity depends in large measure on the reasonableness of the stipulated fees under the circumstances of each case. 16

When the courts find that the stipulated amount is excessive or the contract is unreasonable or unconscionable, or found to have been
marred by fraud, mistake, undue influence or suppression of facts on the part of the attorney, public policy demands that said contract
be disregarded to protect the client from unreasonable exaction. 17

Stipulated attorney's fees are unconscionable whenever the amount is by far so disproportionate compared to the value of the services
rendered as to amount to fraud perpetrated upon the client. This means to say that the amount of the fee contracted for, standing alone
and unexplained would be sufficient to show that an unfair advantage had been taken of the client, or that a legal fraud had been
perpetrated on him. 18

The decree of unconscionability or unreasonableness of a stipulated amount in a contingent fee contract, will not however, preclude
recovery. It merely justifies the court's fixing a reasonable amount for the lawyer's services.

Courts may always ascertain, if the attorney's fees are found to be excessive, what is reasonable under the circumstances. Quantum
meruit, meaning "as much as he deserves," is used as the basis for determining the lawyer's professional fees in the absence of a
contract. Factors such as the time spent and extent of services rendered; novelty and difficulty of the questions involved; importance of
the subject matter; skill demanded; probability of losing other employment as a result of acceptance of the proffered case; customary
charges for similar services; amount involved in the controversy and the benefits resulting to the client; certainty of compensation;
character of employment; and professional standing of the lawyer, are considered in determining his fees. 19

There is nothing irregular about the respondent court's finding that the 50% fee of petitioner is unconscionable As aptly put by the court:

It effectively deprives the appellees of a meaningful victory of the suit they have passionately pursued. Balancing the
allocation of the monetary award, 50% of all monies to the lawyer and the other 50% to be allocated among all his 52
clients, is too lop-sided in favor of the lawyer. The ratio makes the practice of law a commercial venture, rather than a
noble profession.

. . . Also, the 52 employees who are the plaintiffs in the aforementioned civil case were dismissed from employment,
their means of livelihood. All 52 hired claimant-appellant as counsel so that they could be reinstated and their source
of income restored. It would, verily be ironic if the counsel whom they had hired to help would appropriate for himself
50% or even 60% of the total amount collectible by these employees. Here is an instance where the courts should
intervene. 20

Considering the nature of the case, which is a labor case, the amount recovered and petitioner's participation in the case, an award of
50% of back salaries of his 52 clients indeed strikes us as excessive. Under the circumstances, a fee of 20% of back salaries would be

pg. 2
a fair settlement in this case. In any event, this award pertains only to the ten private respondents herein. Petitioner has already been
compensated in the amount of 50% of all monies received, by the rest of his clients in the case below.

WHEREFORE, in view of the foregoing, the petition is DENIED and the appealed decision AFFIRMED.

SO ORDERED.

A.M. No. 1625 February 12, 1990

ANGEL L. BAUTISTA, complainant,

vs.
ATTY. RAMON A. GONZALES, respondent.

RESOLUTION

PER CURIAM:

In a verified complaint filed by Angel L. Bautista on May 19, 1976, respondent Ramon A. Gonzales was charged with malpractice,
deceit, gross misconduct and violation of lawyer's oath. Required by this Court to answer the charges against him, respondent filed on
June 19, 1976 a motion for a bill of particulars asking this Court to order complainant to amend his complaint by making his charges
more definite. In a resolution dated June 28, 1976, the Court granted respondent's motion and required complainant to file an amended
complaint. On July 15, 1976, complainant submitted an amended complaint for disbarment, alleging that respondent committed the
following acts:

1. Accepting a case wherein he agreed with his clients, namely, Alfaro Fortunado, Nestor
Fortunado and Editha Fortunado [hereinafter referred to as the Fortunados] to pay all expenses,
including court fees, for a contingent fee of fifty percent (50%) of the value of the property in
litigation.

2. Acting as counsel for the Fortunados in Civil Case No. Q-15143, wherein Eusebio Lopez, Jr. is
one of the defendants and, without said case being terminated, acting as counsel for Eusebio
Lopez, Jr. in Civil Case No. Q-15490;

3. Transferring to himself one-half of the properties of the Fortunados, which properties are the
subject of the litigation in Civil Case No. Q-15143, while the case was still pending;

4. Inducing complainant, who was his former client, to enter into a contract with him on August 30,
1971 for the development into a residential subdivision of the land involved in Civil Case No. Q-
15143, covered by TCT No. T-1929, claiming that he acquired fifty percent (50%) interest thereof
as attorney's fees from the Fortunados, while knowing fully well that the said property was already
sold at a public auction on June 30, 1971, by the Provincial Sheriff of Lanao del Norte and
registered with the Register of Deeds of Iligan City;

5. Submitting to the Court of First Instance of Quezon City falsified documents purporting to be true
copies of "Addendum to the Land Development Agreement dated August 30, 1971" and submitting
the same document to the Fiscal's Office of Quezon City, in connection with the complaint for
estafa filed by respondent against complainant designated as I.S. No. 7512936;

6. Committing acts of treachery and disloyalty to complainant who was his client;

7. Harassing the complainant by filing several complaints without legal basis before the Court of
First Instance and the Fiscal's Office of Quezon City;

8. Deliberately misleading the Court of First Instance and the Fiscal's Office by making false
assertion of facts in his pleadings;

9. Filing petitions "cleverly prepared (so) that while he does not intentionally tell a he, he does not
tell the truth either."

Respondent filed an answer on September 29, 1976 and an amended answer on November 18, 1976, denying the accusations against
him. Complainant filed a reply to respondent's answer on December 29, 1976 and on March 24, 1977 respondent filed a rejoinder.

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 and counsel and submitted Exhibits "1" to "11". The parties were
required to submit their respective memoranda.

On May 16, 1988 respondent filed a motion to dismiss the complaint against him, claiming that the long delay in 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 requests for postponement of scheduled hearings filed by both parties and the

pg. 3
motions for extension of time to file their respective memoranda." [Comment of the Solicitor General, p. 2; Record, p. 365]. Respondent
filed a reply to the Solicitor General's comment on October 26, 1988. In a resolution dated January 16, 1989 the Court required the
Solicitor General to submit his report and recommendation within thirty (30) days from notice.

On April 11, 1989, the Solicitor General submitted his report with the recommendation that Atty. Ramon A. Gonzales be suspended for
six (6) months. The Solicitor General found that respondent committed the following acts of misconduct:

a. transferring to himself one-half of the properties of his clients during the pendency of the case where the properties
were involved;

b. concealing from complainant the fact that the property subject of their land development agreement had already
been sold at a public auction prior to the execution of said agreement; and

c. misleading the court by submitting alleged true copies of a document where two signatories who had not signed
the original (or even the xerox copy) were made to appear as having fixed their signatures [Report and
Recommendation of the Solicitor General, pp. 17-18; Rollo, pp. 403-404].

Respondent then filed on April 14, 1989 a motion to refer the case to the Integrated Bar of the Philippines (IBP) for investigation and
disposition pursuant to Rule 139-B 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 supplemental motion to refer this case to the IBP, containing
additional arguments to bolster his contentions in his previous pleadings.

I.

Preliminarily, the Court will dispose of the procedural issue raised by respondent. It is respondent's contention that the preliminary
investigation conducted by the Solicitor General was limited to the determination of whether or not there is sufficient ground to proceed
with the case and that under Rule 139 the Solicitor General still has to file an administrative complaint against him. Respondent claims
that the case should be referred to the IBP since Section 20 of Rule 139-B provides that:

This Rule shall take effect on June 1, 1988 and shall supersede the present Rule 139 entitled DISBARMENT OR
SUSPENSION OF ATTORNEYS. All cases pending investigation by the Office of the Solicitor General shall be
transferred to the Integrated Bar of the Philippines Board of Governors for investigation and disposition as provided in
this Rule except those cases where the investigation has been substantially completed.

The above contention of respondent is untenable. In the first place, contrary to respondent's claim, reference to the IBP of complaints
against lawyers is not mandatory upon the Court [Zaldivar v. Sandiganbayan, G.R. Nos. 79690-707; Zaldivar v. Gonzales, G.R. No.
80578, October 7, 1988]. Reference of complaints to the IBP is not an exclusive procedure under the terms of Rule 139-B of the
Revised Rules of Court [Ibid]. Under Sections 13 and 14 of Rule 139-B, the Supreme Court may conduct disciplinary proceedings
without the intervention of the IBP by referring cases for investigation to the Solicitor General or to any officer of the Supreme Court or
judge of a lower court. In such a case, the report and recommendation of the investigating official shall be reviewed directly by the
Supreme Court. The Court shall base its final action on the case on the report and recommendation submitted by the investigating
official and the evidence presented by the parties during the investigation.

Secondly, there is no need to refer the case to the IBP since at the time of the effectivity of Rule 139-B [June 1, 1988] the investigation
conducted by the Office of the Solicitor General had been substantially completed. Section 20 of Rule 139-B provides that only pending
cases, the investigation of which has not been substantially completed by the Office of the Solicitor General, shall be transferred to the
IBP. In this case the investigation by the Solicitor General was terminated even before the effectivity of Rule 139-B. Respondent himself
admitted in his motion to dismiss that the Solicitor General terminated the investigation on November 26, 1986, the date when
respondent submitted his reply memorandum [Motion to Dismiss, p. 1; Record, p. 353].

Thirdly, there is no need for further investigation since the Office of the Solicitor General already made a thorough and comprehensive
investigation of the case. To refer the case to the IBP, as prayed for by the respondent, will result not only in duplication of the
proceedings conducted by the Solicitor General but also to further delay in the disposition of the present case which has lasted for more
than thirteen (13) years.

Respondent's assertion that he still has some evidence to present does not warrant the referral of the case to the 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 cross-examine the complainant who appeared as a witness against him.

II.

The Court will now address the substantive issue of whether or not respondent committed the acts of misconduct alleged by
complainant Bautista.

After a careful review of the record of the case and the report and recommendation of the Solicitor General, the Court finds that
respondent committed acts of misconduct which warrant the exercise by this Court of its disciplinary power.

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 one-half (1/2) of the properties of the Fortunados covered by TCT No. T-1929, with an
area of 239.650 sq. mm., and TCT No. T-3041, with an area of 72.907 sq. m., for and in consideration of his legal services to the latter.
At the time the document was executed, respondent knew that the abovementioned properties were the subject of a civil case [Civil
Case No. Q-15143] pending before the Court of First Instance of Quezon City since he was acting as counsel for the Fortunados in said
case [See Annex "B" of Original Complaint, p. 12; Rollo, p. 16]. In executing the document transferring one-half (1/2) of the subject
pg. 4
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, 40 Phil. 774 (1920); Go Beltran v. Fernandez, 70 Phil. 248 (1940)].

However, respondent notes that Canon 10 of the old Canons of Professional Ethics, which states that "[t]he lawyer should not purchase
any interests in the subject matter of the litigation which he is conducting," does not appear anymore in the new Code of Professional
Responsibility. He therefore concludes that while a purchase by a lawyer of property in litigation is void under Art. 1491 of the Civil
Code, such purchase is no longer a ground for disciplinary action under the new Code of Professional Responsibility.

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, Rule 138, Sec. 3 of the Revised Rules of
Court requires every lawyer to take an oath to 44 obey the laws [of the Republic of the Philippines] as well as the legal orders of the
duly constituted authorities therein." And for any violation of this oath, a lawyer may be suspended or disbarred by the Supreme Court
[Rule 138, Sec. 27, Revised Rules of Court]. All of these underscore the role of the lawyer as the vanguard of our legal system. 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 accountable both to his client and to society.

Parenthetically, it should be noted that the persons mentioned in Art. 1491 of the Civil Code are prohibited from purchasing the property
mentioned therein because of their existing trust relationship with the latter. A lawyer is 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 Professional Responsibility has failed to emphasize the nature and consequences of such
relationship. Canon 17 states that "a lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence
reposed in him." On the other hand, Canon 16 provides that "a lawyer shall hold in trust all moneys and properties of his client that may
come into his possession." Hence, notwithstanding the absence of a specific provision on the matter in the new Code, the Court,
considering the abovequoted provisions of the new Code in relation to Art. 1491 of the Civil Code, as well as the prevailing
jurisprudence, holds that the purchase by a lawyer of his client's property in litigation constitutes a breach of professional ethics for
which a disciplinary action may be brought against him.

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 subject to the implementation of the land development agreement. The last
paragraph of the Transfer of Rights provides that:

... for and in consideration of the legal services of ATTY. RAMON A. GONZALES, Filipino, married to 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, one-
half (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. 28; Emphasis supplied].

It is clear from the foregoing that the parties intended the transfer of the properties to respondent to be absolute and unconditional, and
irrespective of whether or not the land development agreement was implemented.

Another misconduct committed by respondent was his failure to disclose to complainant, at the time the land development agreement
was entered into, that the land covered by TCT No. T-1929 had already been sold at a public auction. The land development
agreement was executed on August 31, 1977 while the public auction was held on June 30, 1971.

Respondent denies that complainant was his former client, claiming that his appearance for the complainant in an anti-graft case filed
by the latter against a certain Gilbert Teodoro was upon the request of complainant and was understood to be only provisional.
Respondent claims that since complainant was not his client, he had no duty to warn complainant of the fact that the land involved in
their land development agreement had been sold at a public auction. Moreover, the sale was duly annotated at the back of TCT No. T-
1929 and this, respondent argues, serves as constructive notice to complainant so that there was no concealment on his part.

The above contentions are unmeritorious. Even assuming that the certificate of sale was annotated at the back of TCT No. T-1929, the
fact remains that respondent failed to inform the complainant of the sale of the land to Samauna during the negotiations for the land
development agreement. In so doing, respondent failed to live up to the rigorous standards of ethics of the law profession which place a
premium on honesty and condemn duplicitous conduct. The fact that complainant was not a former client of respondent does not
exempt respondent from his duty to inform complainant of an important fact pertaining to the land which is subject of their negotiation.
Since he was a party to the land development agreement, respondent should have warned the complainant of the sale of the land at a
public auction so that the latter could make a proper assessment of the viability of the project they were jointly undertaking. This Court
has held that a lawyer should observe honesty and fairness even in his private dealings and failure to do so is a ground for disciplinary
action against him [Custodio v. Esto, Adm. Case No. 1113, February 22, 1978, 81 SCRA 517].

Complainant also charges respondent with submitting to the court falsified documents purporting to be true copies of an addendum to
the land development agreement.

Based on evidence submitted by the parties, the Solicitor General found that in the document filed by respondent 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. Bautista—were made to appear as having signed the original
document on December 9, 1972, as indicated by the letters (SGD.) before each of their names. However, it was only respondent Alfaro
Fortunado and complainant who signed the original and duplicate original (Exh. 2) and the two other parties, Edith Fortunado and
Nestor Fortunado, never did. Even respondent himself admitted that Edith and Nestor Fortunado only signed the xerox copy (Exh. 2-A)
after respondent wrote them on May 24, 1973, asking them to sign the said xerox copy attached to the letter and to send it back to him
after signing [Rejoinder to Complainant's Reply, pp. 4-6; Rollo, pp. 327-329]. Moreover, respondent acknowledged that Edith and
Nestor Fortunado had merely agreed by phone to sign, but had not actually signed, the alleged true copy of the addendum as of May
23, 1973 [Respondent's Supplemental Motion to Refer this Case to the Integrated Bar of the Philippines, p. 16]. Thus, when respondent
submitted the alleged true copy of the addendum on May 23, 1973 as Annex "A" of his Manifestation filed with the Court of First
pg. 5
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 duty as a lawyer to act at all times in a manner consistent
with the truth. A lawyer should never seek to mislead the court by an artifice or false statement of fact or law [Section 20 (d), Rule 138,
Revised Rules of Court; Canon 22, Canons of Professional Ethics; Canon 10, Rule 10.01, Code of Professional Responsibility].

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, which provides in part that:

We the [Fortunados] agree on the 50% contingent fee, provided, you [respondent Ramon Gonzales] defray all
expenses, for the suit, including court fees.

Alfaro T. Fortunado
[signed]
Editha T. Fortunado
[signed]
Nestor T. Fortunado
[signed]

CONFO
RME

Ramon A. Gonzales
[signed]

[Annex A to the Complaint, Record, p. 4].

is contrary to Canon 42 of the Canons of Professional Ethics which provides that a lawyer may not properly agree with a client to pay or
bear the expenses of litigation. [See also Rule 16.04, Code of Professional Responsibility]. Although a lawyer may in good faith,
advance the expenses of litigation, the same should be subject to reimbursement. The agreement between respondent and the
Fortunados, however, does not provide for reimbursement to respondent of litigation expenses paid by him. An agreement whereby an
attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous [JBP Holding Corp. v. U.S. 166 F. Supp.
324 (1958)]. Such agreements are against public policy especially where, as in this case, the attorney has agreed to carry on the action
at his own expense in consideration of some bargain to have part of the thing in dispute [See Sampliner v. Motion Pictures Patents Co.,
et al., 255 F. 242 (1918)]. The execution of these contracts violates the fiduciary relationship between the lawyer and his client, for
which the former must incur administrative sanctions.

The Solicitor General next concludes that respondent cannot be held liable for acting as counsel for Eusebio Lopez, Jr. in Civil Case
No. Q-15490 while acting as counsel for the Fortunados against the same Eusebio Lopez, Jr. in Civil Case No. Q-15143. The Court,
after considering the record, agrees with the Solicitor General's findings on the matter. The evidence presented by respondent shows
that his acceptance of Civil Case No. Q-15490 was with the knowledge and consent of the Fortunados. The affidavit executed by the
Fortunados on June 23, 1976 clearly states that they gave their consent when respondent accepted the case of Eusebio Lopez, Jr.
[Affidavit of 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 Professional Responsibility].

Complainant also claims that respondent filed several complaints against him before the Court of First Instance and the Fiscal's Office
of Quezon City for the sole purpose of harassing him.

The record shows that at the time of the Solicitor General's investigation of this case, Civil Case No. Q-18060 was still pending before
the Court of First Instance of Quezon City, while the complaints for libel (I.S. No. 76-5912) and perjury (I.S. No. 5913) were already
dismissed by the City Fiscal for insufficiency of evidence and lack of interest, respectively [Report and Recommendation, pp. 16-17;
Rollo, pp. 402-403]. The Solicitor General found no basis for holding that the complaints for libel and perjury were used by respondent
to harass complainant. As to Civil Case No. Q-18060, considering that it was still pending resolution, the Solicitor General made no
finding on complainants claim that it was a mere ploy by respondent to harass him. The determination of the validity of the complaint in
Civil Case No. Q-18060 was left to the Court of First Instance of Quezon City where the case was pending resolution.

The Court agrees with the above findings of the Solicitor General, and accordingly holds that there is no basis for holding that the
respondent's sole purpose in filing the aforementioned cases was to harass complainant.

Grounds 6, 8 and 9 alleged in the complaint need not be discussed separately since the above discussion on the other grounds
sufficiently cover these remaining grounds.

The Court finds clearly established in this case that on four counts the respondent violated the law and the rules governing the conduct
of a member of the legal profession. Sworn to assist in the administration of justice and to 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 circumstances of the case, respondent lawyer should be suspended from the practice of law for a period of six (6) months.

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 information and guidance, and spread in the personal record of Atty.
Gonzales.

SO ORDERED.

pg. 6
A.C. No. 4763 March 20, 2003

DR. GIL Y. GAMILLA, NORMA S. CALAGUAS, IRMA E. POTENCIANO, EDITHA OCAMPO, LUZ DE GUZMAN, GLICERIA
BALDRES, FERDINAND LIMOS, MA. LOURDES C. MEDINA, HIDELITA GABO, CORAZON CUI, REMEDIOS T. GARCIA, RENE
ARNEJO, RENE LUIS TADLE, LAURA ABARA, PHILIP AGUINALDO, BENEDICTA ALAVA, LEONCIO CASAL, CARMELITA
ESPINA, ZENAIDA FAMORCA, CELSO NIERA, CESAR REYES, NATIVIDAD SANTOS and MAFEL YSRAEL, complainants,
vs.
ATTY. EDUARDO J. MARIÑO JR., respondent.

BELLOSILLO, J.:

THIS DISBARMENT CASE EMANATED from an intra-union leadership dispute some seventeen (17) years ago that spilled over to the
instant complaint alleging impropriety and double-dealing in the disbursement of sums of money entrusted by the University of Sto.
Tomas to respondent Atty. Eduardo J. Mariño Jr. as president of the UST Faculty Union and his core of officers and directors for
distribution among faculty members of the university. 1

For a sense of history, sometime in 1986 respondent Atty. Mariño Jr. as president of the UST Faculty Union and other union officers
entered into a collective bargaining agreement with the management of UST for the provision of economic benefits amounting to P35
million. Instead of creating a harmonious relationship between the contracting parties, the collective bargaining agreement regrettably
engendered disputes arising from the interpretation and implementation thereof one of which even reached this Court. 2

The 1986 collective bargaining agreement expired in 1988 but efforts to forge a new one unfortunately failed. In 1989 the faculty
members of UST went on strike and as a counter-measure UST terminated the employment of sixteen (16) officers and directors of the
UST Faculty Union including respondent. The dismissal precipitated anew bitter legal battles which were resolved by this Court in favor
of the dismissed employees by ordering their reinstatement with back wages. 3

In 1990 Secretary of Labor Ruben D. Torres prescribed the terms and conditions of a five (5)-year collective bargaining agreement
between UST and the UST Faculty Union retroactive to 1988 when the 1986 collective bargaining agreement expired. In the same year,
the administration of UST and the UST Faculty Union also entered into a compromise agreement for the payment of P7,000,000.00
from which P5,000,000.00 was intended to settle the back wages and other claims of the sixteen (16) union officers and directors of the
UST Faculty Union, including herein respondent, who were earlier ordered reinstated by this Court, and the sum of P2,000,000.00 to
satisfy the remaining obligations of UST under the 1986 collective bargaining agreement. It appears from the record that only
P5,000,000.00 for the back wages and other claims of respondent Atty. Mariño and other concerned union officers and directors was
paid immediately by UST while the satisfaction of the balance of P2,000,000.00 was apparently deferred to some unspecified time.

In 1992 UST and the UST Faculty Union executed a memorandum of agreement to settle the salary increases and other benefits under
the collective bargaining agreement effective 1988 for the period 1 June 1991 to 31 May 1993 for a total of P42,000,000.00. It was
agreed that the benefits accruing from 1 June 1991 to 31 October 1992 were to be taken from the sum of P42,000,000.00 which UST
would release directly to the faculty members, while the remainder of the P42,000,000.00 package would be ceded by UST to the UST
Faculty Union which would then disburse the balance to cover the benefits from 1 November 1992 to 31 May 1993. The memorandum
of agreement also charged the amount of P2,000,000.00 agreed upon in the 1990 compromise agreement as well as the attorney's
fees of Atty. Mariño worth P4,200,000.00 against the P42,000,000.00 outlay.

In accordance with the memorandum of agreement, UST took care of the disbursement of P20,226,221.60 from the total commitment
of P42,000,000.00 to pay for the following expenses: (a) P2,000,000.00 as payment for unpaid obligations to faculty members under
the 1986 collective bargaining agreement; (b) P13,833,597.96 for the salary increases of faculty members from 1 June 1991 to 31
October 1992; (c) P192,623.64 for telephone, electricity and water billings; and, (d) P4,200,000.00 paid to the UST Faculty Union as
attorney's fees. The expenses left a collectible sum of P21,773,778.40 from the obligation of P42,000,000.00. The university however
relinquished only P18,038,939.37 to the UST Faculty Union which was P3,734,839.03 short of the balance of P21,773,778.40. In the
meantime, the UST Faculty Union placed P9,766,570.01 of the amount received from UST in the money market to earn as it did make
P1,146,381.27 in interest.

For benefits corresponding to 1 November 1992 to 31 May 1993, the UST Faculty Union charged against the short-changed amount of
P18,038,939.37 a total of P16,723,638.27 consisting of the following expenses: (a) P10,521,800.64 as the amount paid for salary
increases beginning 1 November 1992 to 31 May 1993; (b) P578,296.31 which was refunded to the faculty members whose salaries
were reduced as a result of their participation in the 1989 strike; (c) P2,045,192.97 as amount paid to the faculty members representing
their December 1992 bonus; and, (d) P3,578,348.35 for reimbursements to the University of Santo Tomas. The expenses left a balance
of P5,050,140.13, i.e., the remainder of P1,315,301.10 out of the P18,038,939.37 earlier turned over by UST to the UST Faculty Union,
plus the deficit amount of P3,734,839.03 which UST later turned over to the UST Faculty Union after previously failing to deliver the
amount. To the sum of P5,050,140.13, the UST Faculty Union added the interest earnings of P1,146,381.27 from money market
investments as well as the amount of P192,632.64 representing the disallowed amount of expenses earlier deducted by UST from the
P42,000,000.00 package. All in all, the money left in the possession of the UST Faculty Union was P6,389,154.04 which it distributed
among the faculty members in 1994.

Complainants as members of the UST Faculty Union questioned the alleged lack of transparency among the officers and directors of
the union in the management and disbursement of the monetary benefits for the faculty members. They initiated two (2) complaints with
the Office of the Regional Director, National Capital Region, Department of Labor and Employment, one on 18 October 1995, docketed
as Case No. NCR-OD-M-9412-022, and another, on 16 November 1996, docketed as Case No. NCR-OD-M-9510-028. In both
pleadings, they prayed for the expulsion of the officers and directors of the union led by respondent Atty. Mariño because of their
alleged failure to account for the balance of the P42,000,000.00 ceded to them by UST and the attorney's fees amounting to
P4,200,000.00 which they deducted from the benefits allotted to faculty members. 4

On 2 July 1997 complainants filed the instant complaint for disbarment against Atty. Mariño accusing him of (a) compromising their
entitlements under the 1986 collective bargaining agreement without the knowledge, consent or ratification of the union members, and
worse, for only P2,000,000.00 when they could have received more than P9,000,000.00; (b) failing to account for the P7,000,000.00
received by him and other officers and directors in the UST Faculty Union under the 1990 compromise agreement; (c) lack of
transparency in the administration and distribution of the remaining balance of the P42,000,000.00 package under the 1992
pg. 7
memorandum of agreement; (d) refusal to remit and account for the P4,200,000.00 in favor of the faculty members although the amount
was denominated as attorney's fees. Complainants asserted that respondent violated Rules 1.01 5 and 1.026 of Canon 1; Rule 15.087 of
Canon 15; Rules 16.01,8 16.029 and 16.0310 of Canon 16; and Rule 20.0411 of Canon 20, of the Code of Professional Responsibility.

On 4 November 1997, after several extensions Atty. Mariño filed his comment on the complaint. He alleged that the issues raised
therein were the same issues involved in the two (2) complaints before the Bureau of Labor Relations and therefore constituted forum-
shopping, and further explained that he had adequately accounted for the disbursement of the money demanded by complainants.

On 18 March 1998 we referred the disbarment complaint and the comment thereon to the Integrated Bar of the Philippines for
investigation, report and recommendation within ninety (90) days from notice thereof.

On 18 May 1999 we received the Report of IBP Commissioner Lydia A. Navarro as well as the Resolution of 30 March 1999 of the IBP
Board of Governors adopting and approving the Report which found the complaint meritorious and suspended respondent Atty. Mariño
from the practice of law "until such time that the required detailed accounting of the questioned remittances made by UST to the UST
[Faculty Union] during his incumbency as President and Legal Counsel has been officially submitted and reported to the UST [Faculty
Union] and to the IBP."

On 7 September 1999 respondent filed his comment on the IBP Report and Resolution and alleged the same contentions he previously
asserted. On 27 October 1999 we referred the case back to the IBP for a more detailed investigation and submission of report and
recommendation within sixty (60) days from notice.

In the meantime, or on 27 May 1999, the Regional Director found merit in the two (2) complaints docketed as Case No. NCR-OD-M-
9412-022 and Case No. NCR-OD-M-9510-028 and ordered the expulsion of respondent and the other officers and directors of the
union led by respondent Atty. Mariño because of their failure to account for the balance of the P42,000,000.00 that had been delivered
to them by the management of UST, and their collection of exorbitant and illegal attorney's fees amounting to P4,200,000.00. 12

On 9 March 2000 the Bureau of Labor Relations in the appeal docketed as BLR-A-TR-52-25-10-99 set aside the Order of the Regional
Director. It found that the balance of the P42,000,000.00 which UST delivered to the UST Faculty Union had been fully and adequately
accounted for by respondent and the other officers and directors of the union.13 Nonetheless, the Bureau of Labor Relations ordered
respondent and the other officers and directors of the union to distribute the attorney's fees of P4,200,000.00 among the faculty
members and to immediately hold the elections for union officers and directors in view of the expiration of their respective terms of
office.

On 16 March 2001 the Decision of the Bureau of Labor Relations was affirmed in toto by the Court of Appeals in CA-G.R. SP No.
60657.14 The Decision of the Court of Appeals was elevated to this Court, docketed G.R. No. 149763, where the case is allegedly still
pending resolution.

On 25 September 2002 we received the detailed Report and Recommendation of IBP Commissioner Lydia A. Navarro and the
IBP Resolution of 3 August 2002 of the Board of Governors adopting and approving the Reportwhich recommended the lifting of Atty.
Mariño's suspension from law practice since he had sufficiently accounted for the funds in question.

For a start, it appears that complainants did not file a petition with this Court to review the IBP Resolutionexonerating respondent from
the accusations against him and lifting his suspension from the practice of law, an action otherwise required under Sec. 12, Rule 139-B
of the Rules of Court if the case against respondent could still proceed in this Court. Nevertheless since the IBP Resolution is merely
recommendatory, and considering further the instructional value of this case to members of the Bench, many of whom are engaged
simultaneously in other businesses or professions, we find it prudent and judicious to decide the instant case once and for all.

In fine, there are ethical lapses on the part of respondent Atty. Eduardo J. Mariño Jr. in the manner by which he secured the
P7,000,000.00 by virtue of the compromise agreement and the P4,200,000.00 attorney's fees under the memorandum of agreement.
Although the record shows that the Bureau of Labor Relations found respondent as having adequately accounted for the disbursement
of the funds which the UST Faculty Union received through the series of agreements with the management of UST, this Court believes
that Atty. Mariño failed to avoid conflict of interests, first, when he negotiated for the compromise agreement wherein he played the
diverse roles of union president, union attorney and interested party being one of the dismissed employees seeking his own restitution,
and thereafter, when he obtained the attorney's fees of P4,200,000.00 without full prior disclosure of the circumstances justifying such
claim to the members of the UST Faculty Union.

As one of the sixteen (16) union officers and directors seeking compensation from the University of Santo Tomas for their illegal
dismissal, respondent was involved in obvious conflict of interests when in addition he chose to act as concurrent lawyer and president
of the UST Faculty Union in forging the compromise agreement. The test of conflict of interest among lawyers 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."15 In the same manner, it is undoubtedly a conflict of
interests for an attorney to put himself in a position where self-interest tempts, or worse, actually impels him to do less than his best for
his client.

Thus it has been held that an attorney or any other person occupying fiduciary relations respecting property or persons is utterly
disabled from acquiring for his own benefit the property committed to his custody for management. 16 This rule is entirely independent of
whether fraud has intervened as in fact no fraud need be shown; no excuse will be heard from an attorney because the rule stands on
the moral obligation to refrain from placing oneself in positions that ordinarily excite conflict between self-interest and integrity.

Necessarily, a lawyer cannot continue representing a client in an action or any proceeding against a party even with the client's consent
after the lawyer brings suit in his own behalf against the same defendant if it is uncertain whether the defendant will be able to satisfy
both judgments.17 No doubt, a lawyer is not authorized to have financial stakes in the subject matter of the suit brought in behalf of his
client.18

In the instant case, quite apart from the issue of validity of the 1990 compromise agreement, this Court finds fault in respondent's
omission of that basic sense of fidelity to steer clear of situations that put his loyalty and devotion to his client, the faculty members of
pg. 8
UST, open to question. Atty. Mariño both as lawyer and president of the union was duty bound to protect and advance the interest of
union members and the bargaining unit above his own. This obligation was jeopardized when his personal interest as one of the
dismissed employees of UST complicated the negotiation process and eventually resulted in the lopsided compromise agreement that
rightly or wrongly brought money to him and the other dismissed union officers and directors, seemingly or otherwise at the expense of
the faculty members.

The facts would affirm this observation. In brokering the compromise agreement, respondent received P5,000,000.00 as compensation
for the dismissed union officials while only P2,000,000.00 apparently settled UST's obligations in favor of the faculty members under
the 1986 collective bargaining agreement when their original claim amounted to at least P9,000,000.00. Worse, the P2,000,000.00
concession for accountabilities demandable long ago in 1986 was paid only in 1992 under the memorandum of agreement, or a period
of more than two (2) years after the execution of the compromise agreement, in contrast to the immediate payment of the
P5,000,000.00 to Atty. Mariño and the other union officers and directors.

Respondent Atty. Mariño ought to have disclosed to the members of the UST Faculty Union, if not the entire bargaining unit of faculty
members, his interest in the compromise agreement as one of the dismissed union officers seeking compensation for the claim of back
wages and other forms of damages, and also the reasons for reducing the claim of the faculty members from more than P9,000,000.00
to only P2,000,000.00. As the record shows, the explanations for respondent's actions were disclosed only years after the
consummation of the compromise agreement, particularly only after the instant complaint for disbarment was filed against him, when
the accounting should have been forthcoming either before or during the settlement of the labor case against the management of UST.

Equally important, since respondent and the other union officers and directors were to get for themselves a lion's share of the
compromise as they ultimately did, Atty. Mariño should have unambiguously divulged and made clear to his client the compelling
probability of conflict of interests. He should have voluntarily turned over the reins of legal representation to another lawyer who could
have acted on the matter with a deep sense of impartiality over the several claims against UST and an unfettered commitment to the
cause of the faculty members.

Furthermore, there was lack of notice and transparency in respondent's dual role as lawyer and president of the UST Faculty Union
when he obtained P4,200,000.00 as attorney's fees. Without ruling on the validity of the collection of attorney's fees so as not to pre-
empt the decision in G.R. No. 149763 on this issue, the record does not show any justification for such huge amount of compensation
nor any clear differentiation between his legal services and his tasks as union president comprising in all probability the same duties for
which he had collected a hefty compensation as attorney for the union.

The situation of Atty. Mariño is not any different from that of an executor or administrator of an estate who may not charge against the
estate any professional fee for legal services rendered by him because his efforts as such are already paid for in his capacity as
executor or administrator.19 Indeed, he could have avoided complaints and perceptions of self-enrichment arising from the levy of
attorney's fees by spelling out the terms and bases for the claim of P4,200,000.00 since the compensation for his services as president
of the union should have otherwise covered his legal services as well.

Regardless of the motivations of respondent in perfecting the compromise agreement or demanding the inexplicable attorney's fees, his
actions were not transparent enough to allow the bargaining unit ample information to decide freely and intelligently. Clearly, he violated
Canon 15 of the Code of Professional Responsibility requiring every lawyer to "observe candor, fairness and loyalty in all his dealings
and transactions with his clients." Lawyers are vanguards in the bastion of justice so they are without doubt expected to have a bigger
dose of service-oriented conscience and a little less of self-interest.

As indispensable part of the system of administering justice, attorneys must comply strictly with the oath of office and the canons of
professional ethics - a duty more than imperative during these critical times when strong and disturbing criticisms are hurled at the
practice of law. The process of imbibing ethical standards can begin with the simple act of openness and candor in dealing with clients,
which would progress thereafter towards the ideal that a lawyer's vocation is not synonymous with an ordinary business proposition but
a serious matter of public interest.

The evidence on record proves that Atty. Mariño failed to disclose at crucial moments significant information about the manner by which
he secured the P7,000,000.00 by virtue of the compromise agreement and the P4,200,000.00 attorney's fees under the memorandum
of agreement. A simple accounting of the money that he and others concerned received from UST, as well as an explanation on the
details of the agreements, would have enlightened the faculty members about the probability of conflict of interests on respondent's part
and guided them to look for alternative actions to protect their own interests.

In light of the irrefragable fact of respondent's misdemeanor, a possible mitigation of his actionable conduct was that the attorney's fees
and the compromise agreement were negotiated and finalized under the most strenuous circumstances where his leadership and that
of his core officers and directors were incessantly challenged by complainants allegedly aided by factions within UST itself. He might
also have believed that the settlement achieved immense benefits for his constituents which would not have been otherwise obtained if
he had chosen to relinquish the rein of legal representation to some other lawyer. Finally, it was not improbable for him to suppose
though wrongly that he could represent and in some manner serve the interests of all of them, including his own, by pushing for and
seeking the approval of the agreements himself. 20

We reiterate that the objective of a disciplinary case is not so much to punish the individual attorney as to protect the dispensation of
justice by sheltering the judiciary and the public from the misconduct or inefficiency of officers of the court. Restorative justice not
retribution is our goal in this type of proceedings. In view of this, instead of taking a more stern measure against respondent, a
reprimand and a warning would be sufficient disciplinary action in accordance with our ruling in Sumangil v. Sta. Romana. 21 Hence,
Atty. Mariño is admonished to refrain from all appearances and acts of impropriety including circumstances indicating conflict of
interests, and to behave at all times with circumspection and dedication befitting a member of the Bar, especially observing candor,
fairness and loyalty in all transactions with his client. 22 WHEREFORE, respondent Atty. Eduardo J. Mariño Jr. is REPRIMANDED for his
misconduct with a warning that a more drastic punishment will be imposed on him upon a repetition of the same act.

SO ORDERED.

G.R. No. 155224 August 23, 2006

pg. 9
VINSON B. PINEDA, Petitioner,
vs.
ATTY. CLODUALDO C. DE JESUS, ATTY. CARLOS AMBROSIO and ATTY. EMMANUEL MARIANO, Respondents.

DECISION

CORONA, J.:

The subject of this petition for review is the April 30, 2002 decision 1 of the Court of Appeals in CA-G.R. CV No. 68080 which modified
the order2 of the Regional Trial Court (RTC) of Pasig City, Branch 151, in JDRC Case No. 2568 entitled Ma. Aurora D. Pineda v. Vinson
B. Pineda.

The facts follow.

On April 6, 1993, Aurora Pineda filed an action for declaration of nullity of marriage against petitioner Vinson Pineda in the RTC of
Pasig City, Branch 151, docketed as JDRC Case No. 2568. Petitioner was represented by respondents Attys. Clodualdo de Jesus,
Carlos Ambrosio and Emmanuel Mariano.

During the pendency of the case, Aurora proposed a settlement to petitioner regarding her visitation rights over their minor child and the
separation of their properties. The proposal was accepted by petitioner and both parties subsequently filed a motion for approval of their
agreement. This was approved by the trial court. On November 25, 1998, the marriage between petitioner and Aurora Pineda was
declared null and void.

Throughout the proceedings, respondent counsels were well-compensated.3 They, including their relatives and friends, even availed of
free products and treatments from petitioner’s dermatology clinic. This notwithstanding, they billed petitioner additional legal fees
amounting to P16.5 million4 which the latter, however, refused to pay. Instead, petitioner issued them several checks totaling P1.12
million5 as "full payment for settlement."6

Still not satisfied, respondents filed in the same trial court 7 a motion

for payment of lawyers’ fees for P50 million.8

On April 14, 2000, the trial court ordered petitioner to pay P5 million to Atty. de Jesus, P2 million to Atty. Ambrosio and P2 million to
Atty. Mariano.

On appeal, the Court of Appeals reduced the amount as follows: P1 million to Atty. de Jesus, P500,000 to Atty. Ambrosio and P500,000
to Atty. Mariano. The motion for reconsideration was denied. Hence, this recourse.

The issues raised in this petition are:

(1) whether the Pasig RTC, Branch 151 had jurisdiction over the claim for additional legal fees and

(2) whether respondents were entitled to additional legal fees.

First, a lawyer may enforce his right to his fees by filing the necessary petition as an incident of the main action in which his services
were rendered or in an independent suit against his client. The former is preferable to avoid multiplicity of suits. 9

The Pasig RTC, Branch 151, where the case for the declaration of nullity of marriage was filed, had jurisdiction over the motion for the
payment of legal fees. Respondents sought to collect P50 million which was equivalent to 10% of the value of the properties awarded to
petitioner in that case. Clearly, what respondents were demanding was additional payment for legal services rendered in the same
case.

Second, the professional engagement between petitioner and respondents was governed by the principle of quantum meruit which
means "as much as the lawyer deserves."10 The recovery of attorney’s fees on this basis is permitted, as in this case, where there is no
express agreement for the payment of attorney’s fees. Basically, it is a legal mechanism which prevents an unscrupulous client from
running away with the fruits of the legal services of counsel without paying for it. In the same vein, it avoids unjust enrichment on the
part of the lawyer himself.

Further, Rule 20.4 of the Code of Professional Responsibility advises lawyers to avoid controversies with clients concerning their
compensation and to resort to judicial action only to prevent imposition, injustice or fraud. Suits to collect fees should be avoided and
should be filed only when circumstances force lawyers to resort to it. 11

In the case at bar, respondents’ motion for payment of their lawyers’ fees was not meant to collect what was justly due them; the fact
was, they had already been adequately paid.

Demanding P50 million on top of the generous sums and perks already given to them was an act of unconscionable greed which is
shocking to this Court.

As lawyers, respondents should be reminded that they are members of an honorable profession, the primary vision of which is justice. It
is respondents’ despicable behavior which gives lawyering a bad name in the minds of some people. The vernacular has a word for
it: nagsasamantala. The practice of law is a decent profession and not a money-making trade. Compensation should be but a mere
incident.12

pg. 10
Respondents’ claim for additional legal fees was not justified. They could not charge petitioner a fee based on percentage, absent an
express agreement to that effect. The payments to them in cash, checks, free products and services from petitioner’s business — all of
which were not denied by respondents — more than sufficed for the work they did. The "full payment for settlement" 13 should have
discharged petitioner’s obligation to them.

The power of this Court to reduce or even delete the award of attorneys’ fees cannot be denied. Lawyers are officers of the Court and
they participate in the fundamental function of administering justice. 14 When they took their oath, they submitted themselves to the
authority of the Court and subjected their professional fees to judicial control. 15

WHEREFORE, the petition is hereby PARTIALLY GRANTED. The decision of the Court of Appeals dated April 30, 2002 in CA–G.R.
CV No. 68080 is hereby MODIFIED. The award of additional attorney’s fees in favor of respondents is hereby DELETED.

SO ORDERED.

G.R. No. 152072 January 31, 2006

ROMEO G. ROXAS and SANTIAGO N. PASTOR, Petitioners,

vs.
ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI, PACITA JAVIER, ELIZABETH R. GONZALES, JOSEFINA R.
DAZA, ELIAS REYES, NATIVIDAD REYES, TERESITA REYES, JOSE REYES and ANTONIO REYES, Respondents.

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

G.R. No. 152104 January 31, 2006

ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI, PACITA JAVIER, ELIZABETH R. GONZALES, JOSEFINA R.
DAZA, ELIAS REYES, NATIVIDAD REYES, TERESITA REYES, JOSE REYES and ANTONIO REYES, Petitioners,
vs.
THE NATIONAL HOUSING AUTHORITY, JOSE B. H. PEDROSA, ROMEO G. ROXAS and SANTIAGO N. PASTOR, Respondents.

DECISION

CHICO-NAZARIO, J.:

Before Us are two petitions for review on certiorari 1 which were consolidated per Resolution2 of this Court dated 27 November 2002.
The petitioners in G.R. No. 152072, Attys. Romeo G. Roxas and Santiago N. Pastor, seek the reversal and annulment of the
Decision3 and Resolution4 of the Court of Appeals dated 25 June 2001 and 06 February 2002, respectively. The petitioners in G.R. No.
152104, the Zuzuarreguis, on the other hand, pray that the said Decision and Resolution of the Court of Appeals be modified. Said
Decision and Resolution reversed and set aside the decision of the Regional Trial Court (RTC), Branch 98, Quezon City, dated 03
January 1994.

THE ANTECEDENTS

The instant cases had their beginnings in 1977 when the National Housing Authority (NHA) filed expropriation proceedings against the
Zuzuarreguis, petitioners in G.R. No. 152104, for parcels of land belonging to the latter situated in Antipolo, Rizal, with a total land area
of 1,790,570.36 square meters, more or less. This case was lodged before the RTC, Branch 141, Municipality of Makati, 5 docketed
therein as Civil Case No. 26804 entitled, "National Housing Authority v. Pilar Ibañez Vda. De Zuzuarregui, et al."

On 25 May 1983, said case was ordered archived 6 by Branch 141.

About a month before the aforecited case was ordered archived, the Zuzuarreguis engaged the legal services of Attys. Romeo G.
Roxas and Santiago N. Pastor, to represent them in Civil Case No. 26804. This was sealed by a Letter-Agreement dated 22 April 1983,
which is partly reproduced hereunder:

April 22, 1983

Mr. Antonio de Zuzuarregui, Jr.

Mrs. Pacita Javier (as heir to the late Jose de Zuzuarregui)
Mr. Antonio de Zuzuarregui ( as heir to the late Pilar Y. vda. De Zuzuarregui)

Dear Sir and Madam:

This is to confirm in writing our verbal negotiations for us to represent you in the expropriation proceedings filed by the
National Housing Authority against your goodselves before the Court of First Instance of Rizal (now the Regional Trial
Court) and docketed as Civil Case No. 26804. Our representation shall also include the areas taken over by the Ministry
of Public Works and Highways which now formed part of the Marcos Highway at Antipolo, Rizal.

The areas affected are the following:

xxxx

pg. 11
 We shall endeavor to secure the just compensation with the National Housing Authority and other governmental
agencies at a price of ELEVEN PESOS (P11.00) or more per square meter. Any lower amount shall not entitle us to any
attorney’s fees. At such price of P11.00 per square meter or more our contingent fee[s] is THIRTY PERCENT (30%) of
the just compensation.

The other terms and conditions of our proposal are:

xxxx

5. You are willing to accept NHA 5-year bonds as part payment up to 75% of the total compensation. In the event of your
desire to discount the bonds, we shall assist to have them discounted at 75% of its face value.

6. Our lawyer’s fees shall be in the proportion of the cash/bonds ratio of the just compensation. Likewise our fees are
subject to 10% withholding tax.

xxxx

Should the above proposal be acceptable to your goodselves, kindly signify your formal acceptance as (sic) the space
hereunder provided.

Very truly yours,

(Sgd.) (Sgd.)
SANTIAGO N. PASTOR ROMEO G. ROXAS
Lawyer Lawyer
CONFORME:
(Sgd.) (Sgd.)
ANTONIO DE ZUZUARREGUI, JR. PACITA JAVIER
In my behalf and
as heir to the late Pilar Y. vda. De Zuzuarregui as heir to the late Jose De Zuzuarregui7

A Motion to Set Case for Hearing,8 dated 14 February 1984, was filed by Attys. Roxas and Pastor in Civil Case No. 26804, praying that
the case be revived and be set for hearing by the court at the earliest date available in its calendar.

The appropriate proceedings thereafter ensued. On 29 October 1984, a Partial Decision was rendered by Branch 141 in Civil Case No.
26804 fixing the just compensation to be paid to the Zuzuarreguis at P30.00 per square meter.

The NHA filed a Motion for Reconsideration9 dated 23 November 1984 praying that the Partial Decision be reconsidered and set aside,
and a new one rendered lowering the amount of just compensation in accordance with applicable laws. Pending resolution thereof, a
Joint Special Power of Attorney was executed by Antonio De Zuzuarregui, Jr., Enrique De Zuzuarregui and Pacita Javier, in favor of
Attys. Roxas and Pastor, viz:

JOINT SPECIAL POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That We, ANTONIO DE ZUZUARREGUI, JR., ENRIQUE DE ZUZUARREGUI and PACITA

JAVIER, all of legal age, …, do hereby appoint, name and constitute ATTYS. ROMEO G.
ROXAS and SANTIAGO PASTOR, to be our true and lawful attorneys to act in our names and
on our behalves to do and execute all or any of the following acts and deeds subject to our
approval:

xxxx

(2) To represent us in the negotiations for a compromise with the National Housing
Authority for our properties subject of the above case;

(3) To negotiate for and in our behalves for the settlement of the just compensation of
our properties payable in cash or in bonds;

(4) To sign and prepare all papers relative to the preparation of a Compromise
Agreement or any papers and communications which shall eventually bear our
signatures; and

(5) That this Special Power of Attorney is enforce (sic) as long as ATTYS. ROMEO G.
ROXAS AND SANTIAGO PASTOR are our lawyers in Civil Case No. 26804 before
the Regional Trial Court, Makati, Branch CXLI.

pg. 12
 HEREBY GIVING AND GRANTING unto our said attorneys full power and authority
whatsoever requisite or necessary or proper to be done in or about the premises, as fully to all
intents and purposes as we might or could lawfully do if personally present, and hereby
ratifying and confirming all that our said attorneys shall do or cause to be done under and by
virtue of these presents.

IN WITNESS WHEREOF, We have hereunto set our hands this 26th day of August, 1985, in
Makati, M. M., Philippines.

(Sgd.)
ANTONIO DE ZUZUARREGUI, JR.1avvph!l.ne+

(Sgd.)
ENRIQUE DE ZUZUARREGUI

(Sgd.)
PACITA JAVIER10

On 22 November 1985, a Special Power of Attorney was executed by Beatriz Zuzuarregui vda. De Reyes in favor of Attys. Romeo G.
Roxas, Santiago Pastor and Basilio H. Toquero, quoted as follows:

SPECIAL POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That I, BEATRIZ ZUZUARREGUI VDA. DE REYES, Filipino, of legal age, widow, and a
resident of E. Rodriguez Ave., Quezon City, Philippines do hereby appoint, name and
constitute ATTYS. ROMEO G. ROXAS, SANTIAGO PASTOR and BASILIO H. TOQUERO, to
be my true and lawful attorneys … :

1. To represent me in the negotiation for a Compromise with the National Housing

Authority for my properties subject to my approval in CIVIL CASE No. 26804, entitled
"National Housing Authority vs. Pilar Ibañez de Zuzuarregui, et al., before the
Regional Trial Court, Makati, Branch CXLI;

2. To negotiate for and in my behalf for the settlement of the just compensation of my
properties payable in cash or in bond, subject to my approval;

3. To sign and prepare all papers relative to the preparation of a Compromise

Agreement or any papers and communications which shall eventually bear my
signature;

4. To accept for and in my behalf payments for my properties after the Compromise
Agreement is duly approved by the Court, the actual receipts of which payments shall
be signed by me.

HEREBY GIVING AND GRANTING unto my said attorneys full power and authority
whatsoever requisite, necessary or proper … to be done under and by virtue of these
presents.

IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of November 1985, in
the City of Manila, Philippines.

(Sgd.)
BEATRIZ ZUZUARREGUI VDA. DE REYES11

On 10 December 1985, a Letter-Agreement was executed by and between Antonio Zuzuarregui, Jr., Pacita Javier and Enrique De
Zuzuarregui, on the one hand, and Attys. Romeo G. Roxas and Santiago Pastor, on the other. The said Letter-Agreement reads:

December 10, 1985

Atty. Romeo G. Roxas

Atty. Santiago Pastor

pg. 13
Makati Executive Center
Salcedo Village, Makati

Dear Atty. Roxas & Atty. Pastor:

This will confirm an amendment to our agreement regarding your attorney’s fees as our lawyers and counsels for the Zuzuarregui’s
properties expropriated by National Housing Authority covering ONE HUNDRED SEVENTY-NINE (179) HECTARES, more or less,
covered by TCT Nos. 138340, 85633 and 85634 and filed as Civil Case No. 26804.

We hereby confirm and agree that we are willing to accept as final and complete settlement for our 179 hectares expropriated by NHA a
price of SEVENTEEN PESOS (P17.00) per square meter, or for a total of THIRTY MILLION FOUR HUNDRED THOUSAND PESOS
(P30.4 Million), all payable in NHA Bonds.

We also agree and confirm that for and in consideration of your services as our lawyers and counsels in the said expropriation case, we
commit and bind ourselves to pay to you, your heirs or assignees-in-interest, as your contingent attorney’s fees any and all amount in
excess of the SEVENTEEN PESOS (P17.00) per square meter payable in NHA bonds as mentioned above.

This Letter Agreement serves also as your authority to collect directly from NHA the amount pertaining to you as your contingent
attorney’s fees.

This Letter Agreement hereby amends and supersedes our previous agreement regarding your attorney’s fees as our lawyers and
counsels in the above-mentioned expropriation case.

Very truly yours,

(Sgd.) ANTONIO DE ZUZUARREGUI, JR.

In my behalf as heir to the late Pilar I. vda. de Zuzuarregui

(Sgd.)PACITA JAVIER
As heir to the late Jose De Zuzuarregui

(Sgd.)
ENRIQUE DE ZUZUARREGUI

CONFORME:

(Sgd.)ATTY. ROMEO G. ROXAS

(Sgd.)ATTY. SANTIAGO PASTOR12

Resolution No. 117413 dated 16 December 1985 was issued by the NHA stating that the Zuzuarregui property would be acquired at a
cost of P19.50 per square meter; that the Zuzuarreguis would be paid in NHA Bonds, subject to the availability of funds; and that the
yield on the bonds to be paid to the Zuzuarreguis shall be based on the Central Bank rate at the time of payment.

As a result of the aforesaid NHA Resolution, a Compromise Agreement was executed between the Zuzuarreguis and the NHA in Civil
Case No. 26804. The Compromise Agreement, stipulated among other things, that the just compensation of the Zuzuarregui properties
would be at P19.50 per square meter payable in NHA Bonds. In a Decision dated 20 December 1985, the RTC, Branch 141, Makati,
approved the Compromise Agreement submitted by the parties.

On 27 December 1985, the NHA Legal Department, through Atty. Jose B. H. Pedrosa, released to Atty. Romeo G. Roxas, in behalf of
the Zuzuarreguis, the amount of P20,000,000.00 in NHA Bearer Bonds as "partial payment for several parcels of land with a total area
of 1,790,570.36 square meters located in Antipolo, Rizal."14 On even date, Atty. Romeo G. Roxas delivered NHA Bonds to Antonio De
Zuzuarregui in the amount of P15,000,000.00.15 On 04 February 1986, the amount of P34,500,000.00 in Bearer Bonds was again
released by the NHA to Atty. Romeo G. Roxas in behalf of the Zuzuarreguis.16 On 14 February 1986, the Zuzuarreguis issued a
receipt17 for receiving the amount of P30,070,000.00. This receipt included the P15,000,000.00 given to them last 27 December 1985.
Again on 17 February 1986, the Zuzuarreguis, through Beatriz Zuzuarregui vda. De Reyes, issued another receipt for the amount
of P450,000.00 in NHA bonds.18 The total amount in NHA bonds released to Atty. Romeo G. Roxas in behalf of the Zuzuarreguis
amounted to P54,500,000.00. Out of this amount, the records show that the amount turned over to the Zuzuarreguis by Atty. Roxas
amounted to P30,520,000.00 in NHA bonds.

Computed at P19.50 per square meter, the 1,790,570.36 square meters property of the Zuzuarreguis was expropriated at a total price
of P34,916,122.00. The total amount released by the NHA was P54,500,000.00. The difference of P19,583,878.00 is, undoubtedly, the
yield on the bonds.

On 25 August 1987, a letter19 was sent by the Zuzuarreguis’ new counsel, Jose F. Gonzalez, to Attys. Roxas and Pastor, demanding
that the latter deliver to the Zuzuarreguis the yield corresponding to bonds paid by the NHA within a period of 10 days from receipt,
under pain of administrative, civil and/or criminal action.

Attys. Roxas and Pastor answered via a letter dated 21 September 1987 explaining their side of the story. They stated therein, among
other things, that the amount that they got seems huge from the surface, but it just actually passed their hands, as it did not really go to
them.20

pg. 14
On 29 September 1987, a letter21 was sent by the Zuzuarreguis through Antonio De Zuzuarregui, Jr., to Attys. Romeo G. Roxas and
Santiago N. Pastor, informing the latter that their services as counsels of the Zuzuarreguis (except Betty) in the expropriation
proceedings filed by the NHA, docketed as Civil Case No. 26804, was being formally terminated.

Apparently unsatisfied with the explanation of Attys. Roxas and Pastor, the Zuzuarreguis filed a civil action for Sum of Money and
Damages on 14 November 1989 before the RTC, Quezon City, Branch 98, docketed as Civil Case No. Q-89-4013, against the NHA,
Jose B. H. Pedrosa, Atty. Romeo G. Roxas and Atty. Santiago N. Pastor. The Zuzuarreguis demanded that the yield on the NHA bonds
be turned over to them.

After due hearing, a Decision22 in Civil Case No. Q-89-4013 was rendered on 03 January 1994, dismissing the Complaint. The
dispositive portion reads:

WHEREFORE, in view of the foregoing consideration[s], judgment is hereby rendered ordering the dismissal of the complaint against
all the defendants; and, further ordering plaintiffs, jointly and solidarily, to:

1. Pay each of the defendants Romeo G. Roxas, Santiago Pastor and Jose B. H. Perdosa, the amount of P200,000.00,
P200,000.00 and P100,000.00, respectively, as moral damages;

2. Pay each of the defendants Roxas, Pastor and Pedrosa, the amount of P50,000.00, P50,000.00, and P25,000.00,
respectively as exemplary damages;

3. Pay attorney’s fees to defendants Roxas and Pastor in the amount of P20,000.00; and

4. Pay the costs of this suit.

A Notice of Appeal23 dated 10 February 1994 was filed by the Zuzuarreguis. Subsequently, on 26 April 1995, the Zuzuarreguis filed
their appeal brief with the Court of Appeals. The case was docketed as CA-G.R. CV No. 45732.

A Decision24 was eventually promulgated by the Fifteenth Division of the Court of Appeals on 25 June 2001, reversing and setting aside
the ruling of Branch 98, viz:

Therefore, We find that the amount of P4,476,426.275 is, in the opinion of this Court, commensurate to the services rendered by
defendants-appellees. This amount has been arrived at by giving to defendants-appellees P2.50 per square meter of the 1,790,570.51
square meter expropriated properties of herein plaintiffs-appellants.

WHEREFORE, IN VIEW OF THE FOREGOING, the decision dated January 3, 1994 of the Regional Trial Court, National Capital
Judicial Region, Branch 98, Quezon City in Civil Case No. 89-4013 entitled "Antonio Zuzuarregui, Jr., et al. versus National Housing
Authority, et al." for "Sum of Money and Damages," is hereby REVERSED and SET ASIDE. Defendants-Appellees Roxas and Pastor
are hereby ordered to return to plaintiffs-appellants the amount of P12,596,696.425, the balance from the P17,073,122.70, received as
yield from NHA bonds after deducting the reasonable attorney’s fees in the amount of P4,476,426.275. 25

Attys. Roxas and Pastor filed a Motion for Reconsideration26 on 25 July 2001. The Zuzuarreguis also filed a Motion for
Reconsideration27 on 30 July 2001, not having been satisfied with the award, while the NHA and Pedrosa filed their Motions for
Reconsideration28 on 03 August 2001.

In a Resolution dated 06 February 2002, the Court of Appeals denied for lack of merit all the Motions for Reconsideration.

On 05 March 2002, Attys. Roxas and Pastor filed a Petition for Review on Certiorari 29 assailing the Decision of the Court of Appeals,
docketed as G.R. No. 152072. Likewise, on 21 March 2002, the Zuzuarreguis filed their own Petition for Review on Certiorari30 assailing
the same Decision, docketed as G.R. No. 152104.1avvph!l.ne+

ASSIGNMENT OF ERRORS

Attys. Roxas and Pastor, petitioners in G.R. No. 152072, assign as errors the following:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED ON A QUESTION OF LAW IN HOLDING THAT THE LETTER-
AGREEMENT DATED DECEMBER 10, 1985 CANNOT BE ALLOWED TO STAND AS THE LAW BETWEEN THE PARTIES; and

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED ON A QUESTION OF LAW IN HOLDING THAT DEFENDANTS-
APPELLANTS, HEREIN PETITIONERS, CONCEALED TO THE PLAINTIFFS-APPELLEES, HEREIN RESPONDENTS, THE YIELD
OF THE NHA BONDS31

The Zuzuarreguis, petitioners in G.R. No. 152101, on the other hand, assign as errors the following:

THE COURT OF APPEALS ERRED IN AWARDING TO PETITIONERS THE PRINCIPAL AMOUNT OF ONLY P12,596,696.425 AND
NOT P17,073,122.70 MAKING A DIFFERENCE OF P4,476,426.28

pg. 15
 II

THE RESPONDENTS SHOULD BE HELD LIABLE FOR INTEREST FROM THE DATE OF THE FILING OF THE COMPLAINT UNTIL
FULLY PAID

III

THE RESPONDENTS SHOULD BE HELD LIABE FOR MORAL AND EXEMPLARY DAMAGES AND ATTORNEY’S FEES

IV

THE RESPONDENTS NHA AND JOSE B.H. PEDROSA ARE JOINTLY AND SEVERALLY LIABLE WITH RESPONDENTS ROXAS
AND PASTOR32

ISSUE FOR RESOLUTION

Drawn from the above assignment of errors, it is patent that the principal issue that must be addressed by this Court is:

WHETHER OR NOT THE LETTER-AGREEMENT DATED 10 DECEMBER 1985, EXECUTED BY THE ZUZUARREGUIS, AND
ATTYS. ROXAS AND PASTOR, FIXING THE EXACT AMOUNT THAT MUST GO TO THE FORMER, SHOULD STAND AS LAW
BETWEEN THE PARTIES.

THE COURT’S RULING

Attys. Roxas and Pastor, petitioners in G.R. No. 152072, contend in the main that the Zuzuarreguis are only entitled to the amount
of P17.00 per square meter for the 1,790,570.36 square meters expropriated by the government. This was, according to them,
embodied in the Letter-Agreement dated 10 December 1985, wherein the Zuzuarreguis agreed to accept the price of P17.00 per
square meter. Besides, Attys. Roxas and Pastor contend that the price of P17.00 was even way above the P11.00 that the
Zuzuarreguis were willing to accept for their properties under the Letter of Engagement executed by the parties earlier on 22 April 1983.
Computed at P17.00 per square meter, they stress that the amount that should go to the Zuzuarreguis for their 1,790,570.36 square
meters property should be P30,439,696.10, and that in fact the Zuzuarreguis have received P30,520,000.00. The Letter-Agreement
dated 10 December 1985 should thus stand as law between the parties. Since this Letter-Agreement, which was "as plain and simple
as can be such that there is no need for any further construction," already fixed the amount that would go to the Zuzuarreguis (P17.00
per square meter), then it should be so.

Attys. Roxas and Pastor further assert that the receipts issued by the Zuzuarreguis dated 14 February 1986 and 17 February 1986
indicated that the amounts received by the latter were in "full and final payment" for the subject properties.

The NHA, for its part, insists that there was no conspiracy between Attys. Roxas and Pastor on the one hand, and the NHA and Atty.
Pedrosa on the other, on the application of yields from NHA bonds. 33 The Zuzuarreguis, according to the NHA, "miserably failed to
substantiate and establish conspiracy" between them.

The Zuzuarreguis, for their part, though they were triumphant in the Court of Appeals, insist that the amounts awarded them were not
enough. According to them, the P12,596,696.425 awarded by the Court of Appeals was not correct. They should have been awarded
the amount of P17,073,122.70. Quoting the Zuzuarreguis:

Respondents Roxas and Pastor retained for themselves the amount of P3,980,000.00 which represented the agreed attorney’s fees of
Roxas and Pastor at P2.50 per square meter. The amount of P20,000,000.00 representing the yield of all the bearer bonds was, in the
words of the Court of Appeals, "deliberately hidden" by respondents Roxas and Pastor from petitioners. By mathematical computation,
the P20,000,000.00 yield should be proportionately divided at the ratio of P17.00 (petitioners’) and P2.50 (share of respondents Roxas
and Pastor). Following this ratio of division, of the P20,000,000.00 yield, P17,073,122.70 should pertain to petitioners and the balance
of P2,926,877.30 to respondents Roxas and Pastor. Add this amount to the total of P3,980,000.00 at the agreed rate of P2.50 per
square meter, the total attorney’s fees of respondents Roxas and Pastor should be P6,906,877.30, not bad, again in the words of the
Court of Appeals, for handling "a simple expropriation case which ended up in a compromise agreement." It was, therefore, in error to
still deduct the amount of P4,476,426.28 from petitioners share in the yield in the amount of P17,073,122.70 leaving then only
P12,596,696.42.

What was done, however, is that the product of 1,790,570.36 sq m. (area of the expropriated land of petitioners) and P2.50 which is
4,476,426.28 was again deducted from the P17,073,122.70 which is the corresponding share of the petitioners out of the total yield
of P20,000,000.00. If this were a criminal case, petitioners were being sentenced twice for the same offense. 34

The Zuzuarreguis further insist that legal interest on the amount of P17,073,122.70 be imposed from the date of the filing of the
complaint, including moral and exemplary damages, and attorney’s fees.

We sustain the Court of Appeals, but with modification in the computation.

A contract is a meeting of the minds between two persons whereby one binds himself, with respect to the other, to give something or to
render some service.35 Contracts shall be obligatory, in whatever form they may have been entered into, provided all the essential
requisites for their validity are present.36

Under Article 1318 of the Civil Code, there are three essential requisites which must concur in order to give rise to a binding contract:
(1) consent of the contracting parties; (2) object certain which is the subject matter of the contract; and (3) cause of the obligation which
is established.37

pg. 16
All these requisites were present in the execution of the Letter-Agreement.

Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the
contract.38 The Zuzuarreguis, in entering into the Letter-Agreement, fully gave their consent thereto. In fact, it was them (the
Zuzuarreguis) who sent the said letter to Attys. Roxas and Pastor, for the purpose of confirming all the matters which they had agreed
upon previously. There is absolutely no evidence to show that anybody was forced into entering into the Letter-Agreement. Verily, its
existence, due execution and contents were admitted by the Zuzuarreguis themselves. 39

The second requisite is the object certain. The objects in this case are twofold. One is the money that will go to the Zuzuarreguis
(P17.00 per square meter), and two, the money that will go to Attys. Roxas and Pastor (any and all amount in excess of P17.00 per
square meter). There was certainty as to the amount that will go to the Zuzuarreguis, and there was likewise certainty as to what
amount will go to Attys. Roxas and Pastor.

The cause is the legal service that was provided by Attys. Roxas and Pastor. In general, cause is the why of the contract or the
essential reason which moves the contracting parties to enter into the contract. 40

It is basic that a contract is the law between the parties. 41 Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good
customs, public order or public policy, the same are binding as between the parties. 42

In Licudan v. Court of Appeals,43 we did not allow the Contract for Professional Services between the counsel and his client to stand as
the law between them as the stipulation for the lawyer’s compensation was unconscionable and unreasonable. We said:

Although the Contract for Professional Services dated August 30, 1979 was apparently voluntarily signed by the late Aurelio Licudan for
himself and on behalf of his daughter, petitioner Cristina Licudan-Campos and by the petitioner Wilfredo Licudan who both manifested
in open court that they gave their free and willing consent to the said contract, we cannot allow the said contract to stand as the law
between the parties involved considering that the rule that in the presence of a contract for professional services duly executed by the
parties thereto, the same becomes the law between the said parties is not absolute but admits an exception – that the stipulations
therein are not contrary to law, good morals, good customs, public policy or public order. 44

Under the contract in question, Attys. Roxas and Pastor are to receive contingent fees 45 for their professional services. It is a deeply-
rooted rule that contingent fees are not per se prohibited by law. They are sanctioned by Canon 13 of the Canons of Professional
Ethics, viz:

13. Contingent Fees. –

A contract for contingent fee, where sanctioned by law, should be reasonable under all the circumstances of the case including the risk
and uncertainty of the compensation, but should always be subject to the supervision of a court, as to its reasonableness.

and Canon 20, Rule 20.01 of the Code of Professional Responsibility, 46 viz:

CANON 20 – A LAWYER SHALL CHARGE ONLY FAIR AND REASONABLE FEES.

Rule 20.01. – A lawyer shall be guided by the following factors in determining his fees:

(a) The time spent and the extent of the services rendered or required;

(b) The novelty and difficulty of the question involved;

(c) The importance of the subject matter;

(d) The skill demanded;

(e) The probability of losing other employment as a result of acceptance of the proffered case;

(f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs;

(g) The amount involved in the controversy and the benefits resulting to the client from the service;

(h) The contingency or certainty of compensation;

(i) The character of the employment, whether occasional or established; and

(j) The professional standing of the lawyer.

However, in cases where contingent fees are sanctioned by law, the same should be reasonable under all the circumstances of the
case, and should always be subject to the supervision of a court, as to its reasonableness, 47such that under Canon 20 of the Code of
Professional Responsibility, a lawyer is tasked to charge only fair and reasonable fees.

Indubitably entwined with the lawyer’s duty to charge only reasonable fees is the power of this Court to reduce the amount of attorney’s
fees if the same is excessive and unconscionable.48 Thus, Section 24, Rule 138 of the Rules of Court partly states:

pg. 17
SEC. 24. Compensation of attorneys; agreement as to fees. – An attorney shall be entitled to have and recover from his client no more
than a reasonable compensation for his services, with a view to the importance of the subject matter of the controversy, the extent of
the services rendered, and the professional standing of the attorney. x x x. A written contract for services shall control the amount to be
paid therefore unless found by the court to be unconscionable or unreasonable.

Attorney’s fees are unconscionable if they affront one’s sense of justice, decency or reasonableness. 49 It becomes axiomatic therefore,
that power to determine the reasonableness or the, unconscionable character of attorney's fees stipulated by the parties is a matter
falling within the regulatory prerogative of the courts.50

In the instant case, Attys. Roxas and Pastor received an amount which was equal to forty-four percent (44%) of the just compensation
paid (including the yield on the bonds) by the NHA to the Zuzuarreguis, or an amount equivalent to P23,980,000.00 of the
P54,500,000.00. Considering that there was no full blown hearing in the expropriation case, ending as it did in a Compromise
Agreement, the 44% is, undeniably, unconscionable and excessive under the circumstances. Its reduction is, therefore, in order. This is
in accordance with our ruling in the earlier case of Tanhueco v. De Dumo 51, where we reduced the amount of attorney’s fees from sixty
percent (60%) to fifteen percent (15%), for being excessive and unreasonable.

It is imperative that the contingent fees received by Attys. Roxas and Pastor must be equitably reduced. In the opinion of this Court, the
yield that corresponds to the percentage share of the Zuzuarreguis in the P19.50 per square meter just compensation paid by the NHA
must be returned by Attys. Roxas and Pastor.1avvph!l.ne+

The yield on the NHA bonds amounted to P19,583,878.00. This amount must therefore be divided between the Zuzuarreguis, on the
one hand, and Attys. Roxas and Pastor, on the other. The division must be pro rata. The amount of P17.00 that should go to the
Zuzuarreguis represents 87.18% of the P19.50 per square meter just compensation, The P2.50 per square meter that was to go to
Attys. Roxas and Pastor, on the other hand, represents 12.82%.

The Zuzuarreguis are entitled to the yield equal to 87.18% of the P19,583,878.00, while Attys. Roxas and Pastor are entitled to 12.82%
of said amount. The amount corresponding to 87.17% of P19,583,878.00 is P17,073,224.84. This is the yield that the Zuzuarreguis are
entitled to. Attys. Roxas and Pastor, on the other hand, are entitled to P2,510,653.16.

Attys. Roxas and Pastor, in the opinion of this Court, were not shortchanged for their efforts for they would still be earning or actually
earned attorney’s fees in the amount of P6,987,078.75 (P4,476,425.59 + P2,510,653.16).

The amount of P17,073,224.84 must therefore be returned by Attys. Roxas and Pastor to the Zuzuarreguis. They can take this out from
the yield in the amount of P19,583,878.00 which they have appropriated for themselves.

On the issue of moral and exemplary damages, we cannot award the same for there was no direct showing of bad faith on the part of
Attys. Roxas and Pastor, for as we said earlier, contingency fees are not per se prohibited by law. It is only necessary that it be reduced
when excessive and unconscionable, which we have already done.

We likewise cannot hold the NHA and Atty. Pedrosa jointly and severally liable to the Zuzuarreguis for there is no evidence to show
conspiracy between them.

WHEREFORE, in view of all the foregoing considerations, the Decision and Resolution of the Court of Appeals dated 25 June 2001 and
06 February 2002, respectively, are AFFIRMED but with the MODIFICATION that Attys. Romeo G. Roxas and Santiago N. Pastor are
hereby ordered to return to the Zuzuarreguis the amount of P17,073,224.84. No costs.

SO ORDERED.

G.R. No. 169298 July 9, 2008

LAW FIRM OF TUNGOL & TIBAYAN, Petitioner,

vs.
COURT OF APPEALS and SPOUSES RENATO M. INGCO & MA. LUISA S. INGCO, Respondents.

DECISION

QUISUMBING, J.:

This petition for review assails the Decision1 dated March 17, 2005 of the Court of Appeals in CA-G.R. SP No. 85540, denying, among
others, the prayer of petitioner Law Firm of Tungol & Tibayan for a greater sum of contingent attorney’s fees. Said Decision had
reversed and set aside the April 30, 2004 Resolution 2 of the Office of the President, granting the law firm additional attorney’s fees.

The facts are as follows:

Private respondents Renato M. Ingco and Ma. Luisa S. Ingco hired the services of petitioner law firm to enforce delivery of a land title
covering a 300-square meter lot in Tivoli Royale Subdivision, Quezon City. Atty. Abelardo M. Tibayan, a partner in said law firm,
specified in a letter to respondent Renato Ingco that the graduated attorney’s fees the firm would charge would depend on the
circumstances of the case. This agreement was embodied in Atty. Tibayan’s "Case Referral and Acceptance
Confirmation,"3 (hereinafter referred to as contract) dated November 9, 1998.

pg. 18
In behalf of the Ingcos, the law firm filed a Complaint4 against Villa Crista Monte Realty and Development Corporation, Inc. (Villa Crista)
before the Housing and Land Use Regulatory Board (HLURB). The complaint alleged that the Ingcos had paid the contract price of
₱5.1 million for the lot, but Villa Crista did not deliver the title to the Ingcos and refused to execute the final deed of sale in their favor.

After a series of negotiations, Villa Crista entered into a compromise agreement 5 with the Ingcos to refund ₱4,845,000 with interest, and
in case of breach, ₱200,000 liquidated damages. The HLURB approved the compromise and rendered a judgment upon compromise
on December 21, 1999. Despite the compromise agreement, however, Villa Crista did not pay the Ingcos. This prompted the HLURB to
issue a writ of execution,6ordering the ex-officio sheriff of the Regional Trial Court (RTC) to execute the judgment. The writ required
Villa Crista to refund to the spouses Ingco ₱5,081,856; to pay them ₱200,000 liquidated damages; and to seize, garnish or levy any
property of Villa Crista to satisfy the judgment.

The ex-officio sheriff levied and auctioned ten lots belonging to Villa Crista.7 The spouses bought three of the ten lots at a bid price of
₱7,193,505.56, which includes the ₱5.1 million contract price for the 300- square meter lot, ₱1,350,000 attorney’s fees and other
expenses. The sheriff issued final deeds of sale8 to the Ingcos after Villa Crista failed to redeem the three lots within the redemption
period.

Thereafter, in a Letter9 dated August 2, 2001, the Ingcos terminated the law firm’s services. They alleged that they had already paid the
law firm ₱1.5 million in attorney’s fees. In a Letter10 dated August 8, 2001, petitioner’s Atty. Danilo N. Tungol wrote the Ingcos and
expressed his surprise at the termination of their firm’s services since, to their knowledge, the spouses were satisfied with its services.
Atty. Tungol contended that the spouses terminated the law firm’s services because they merely wanted to escape paying the firm. Atty.
Tibayan also wrote the Ingcos a similar letter.11

The law firm eventually also filed with the HLURB a Motion and Statement of Claim for Attorney’s Lien 12 on August 20, 2001, and a
Motion to Enforce the Attorney’s Lien13 on November 12, 2001. Both motions sought to recover 25% of the excess of the existing
prevailing selling price or fair market value of the three levied lots over the total bid price and expenses of ₱7,193,505.56.14 It also filed
a damage suit15 against its former clients before the RTC.

According to the law firm, the spouses Ingco still owed attorney’s fees of ₱4,506,500 on top of the advance payment of ₱1.5 million. It
asserted that as agreed upon in their contract, the law firm shall be entitled to additional attorney’s fees equivalent to 25% of the excess
of the price value of the three lots over the total bid price and expenses in case Villa Crista fails to redeem the three lots the spouses
bought in the auction sale. Since the lots were not redeemed, the property was consolidated in the name of the spouses. The additional
attorney’s fees, according to the law firm, were due because of the additional benefit derived by the spouses since the three lots which
Villa Crista failed to redeem were worth more than the bid price and expenses the spouses paid. Allegedly, the three lots measuring
1,378 square meters, were worth ₱17,000 per square meter or ₱23,426,000. Petitioner also claimed that after the consolidation of the
titles, it allegedly prepared a motion for titling of the property in the name of the Ingcos, but the latter allegedly took all original copies of
the final deeds and subsequently terminated its services.

The Ingcos opposed16 the aforementioned motions, contending that it terminated the services of the firm because it demanded ₱70,000
for notarial fees. They explained that the three lots would cost only ₱7,500 and not ₱17,000 per square meter, as claimed by the firm.

In an Order17 dated December 10, 2001, HLURB Arbiter Rowena C. Balasolla, granted the Motion and Statement of Claim for
Attorney’s Lien and ordered the annotation of the said attorney’s lien on Transfer Certificates of Title (TCT) Nos. 162238, 162319 and
162350.

The spouses Ingco sought reconsideration of the order but its motion for reconsideration was denied. In an Order 18dated May 6, 2003,
HLURB Arbiter Balasolla also granted the firm’s Motion to Enforce Attorney’s Lien, and ordered the spouses jointly and severally, to pay
the firm ₱4,506,500.

The HLURB Board,19 on appeal, reversed the arbiter’s order. In a Decision 20 dated October 8, 2003, the HLURB Board declared that a
realized gain of ₱23,426,000 was premature; that the payment of ₱1.5 million was more than sufficient and reasonable compensation;
and that the firm was not entitled to an additional compensation of ₱4,506,500.

The firm appealed to the Office of the President. In a Resolution dated April 30, 2004, the Office of the President set aside the HLURB’s
decision and affirmed the arbiter’s order. It also denied the spouses’ motion for reconsideration. 21

On March 17, 2005, the HLURB Regional Director Jesse A. Obligacion issued a writ of execution, 22 ordering the Ingcos to pay the firm
₱4,506,500.

On appeal, the Court of Appeals reversed and set aside the Resolution of the Office of the President. The appellate court ruled,

WHEREFORE, premises considered, the petition for review with prayer for injunction is GRANTED. The Resolution and Order dated
April 30, 2004 and July 9, 2004, respectively, of the Office of the President in O.P. Case No. 03-J-620 are hereby REVERSED and SET
ASIDE and the decision dated October 8, 2003 of the HLURB Board of Commissioners is REINSTATED. The HLURB arbiter
concerned is hereby permanently ENJOINED from executing or implementing the orders dated December 10, 2001 and May 6, 2003.

SO ORDERED.23

Petitioner’s motion for reconsideration with motion for inhibition 24 was denied. Hence, this petition via Rule 45 of the Rules of Court.

Petitioner law firm contends that the appellate court committed the following errors:

I.

pg. 19
 THE ACT OF RESPONDENT COURT IN INTERPRETING AND MAKING ITS OWN CONSTRUCTION OF THE CLEAR AND
UNAMBIGUOUS TERMS OF THE CONTRACT BETWEEN PETITIONER AND PRIVATE RESPONDENT IS NOT IN
ACCORD WITH LAW AND APPLICABLE DECISIONS OF THE SUPREME COURT.

II.

[THE] ASSAILED DECISION [,] SOLELY BASED ON RESPONDENT COURT’S INTERPRETA[T]ION AND OWN
CONSTRUCTION OF THE CONTRACT, WHICH WAS NEVER RAISED AS AN ISSUE, AMOUNTS TO DEPRIVATION OF
PETITIONER’S FUNDAMENTAL RIGHT TO DUE PROCESS.

III.

THE REFUSAL OF THE HONORABLE JUSTICES OF RESPONDENT COURT TO VOLUNTAR[IL]Y INHIBIT THEMSELVES
DESPITE [THE] JUSTIFICATIONS PETITIONER RAISED, IS NOT IN ACCORD WITH SECTION 1, RULE 137 OF THE
REVISED RULES OF COURT AND DEPARTS FROM THE ACCEPTED AND NORMAL COURSE OF JUDICIAL
DISPOSITIONS.25

Simply, the issues for our resolution are: (1) Did the Court of Appeals commit reversible error when it interpreted the allegedly
unambiguous terms of the contract? (2) Did the Court of Appeals justices err in refusing to inhibit themselves from the case?

Invoking Article 137026 of the Civil Code and citing jurisprudence, petitioner argues that the Court of Appeals erred in interpreting a
clear and unambiguous contract. It insists that a clearly worded contract leaves no doubt on the intention of the parties, and requires no
interpretation but only literal application. It points out that the appellate court and respondents did not even say that the terms of the
contract are unclear and ambiguous.27

According to the law firm, the Court of Appeals erred when it concluded that since the subject of the contract was only the lot worth
₱5.1 million, and it was only the delivery of title or refund of its value which petitioner committed to enforce, these should be the only
basis for attorney’s fees. Petitioner counters that the contract contained no wording to that effect and the parties had no such intention
for otherwise, the contract would have been so worded. Petitioner insists that it is not the province of the courts to amend a contract by
construction, nor to make a new contract for the parties, interject material stipulations, nor even to read into the contract words which it
did not contain.28

The law firm likewise stressed that the compromise, judgment, execution, levy, sale and finally, consolidation of ownership in favor of
private respondents constitute a series of events which petitioner persistently aimed at and worked on. The identification of the three
lots was the result of its continuous and tedious search and verifications of the numerous properties of the erring developer, which were
traced by petitioner. According to the law firm, after the levy, the developer even attempted to defeat the sale of the three lots by
submitting affidavits of adverse claims, but the law firm thwarted the attempt. Petitioner avers there was no truth to the claims of the
Ingcos that it was not through the law firm’s efforts that the three lots were recovered because those were acquired through the
execution sale. To entertain such premise, says petitioner, would allegedly render nugatory every contract for legal services, and then
every counsel, despite his efforts, would not deserve his fees every time execution sale became necessary to enforce judgment.29

In their comment,30 the Ingcos explain that they were in disbelief when petitioner charged them ₱70,000 as notarization fee for the final
deeds. They had the same deeds notarized by another lawyer for only ₱900. Further, the law firm would not let them borrow the case
files such that their relationship turned sour, prompting them to terminate the services of the firm. They deny gaining any extra material
benefit from the auction of the three lots and stress that they even doubt whether any benefit would accrue to them, considering the
numerous claims annotated on the titles. The spouses add that the Court of Appeals did not interpret the contract, but applied its literal
meaning to the facts of the case in accord with law and jurisprudence.

At this juncture, as to the interpretation of contracts, we invite attention to Article 1370, paragraph 1 of the Civil Code which states that:
"If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations
shall control. If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former."

Moreover, as we recently held:

A court’s purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them. The
process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A
contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract
are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to
be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.31

The Court of Appeals, in this case before us, faced a situation where there were opposing interpretations of the parties as to the
meaning and application of the disputed contract.

To the extent here relevant, we find that the contract reads as follows:

Dear Mr. Ingco:

We hereby accept the legal referral you made and confirm our decision and commitment to make legal and/or extrajudicial
representations for and in your behalf. In its professional capacity, the firm shall enforce delivery of title covering a lot you purchased at
P5,100,000.00 or refund of said amount plus interest, in your favor, by Villa Crista Monte Realty and Development Corporation, Inc.
and/or Crisencio Tio.

xxxx

pg. 20
2. In case the firm succeeds to recover upon mere sending of a demand letter, it shall be entitled to five (5%) per cent of the value of
property protected/recovered, amount of claim collected or the total interests (including gains) which actually inure to your benefit, as a
result of filing of the case, whichever is higher, as its attorney’s fee;

xxxx

5. In case recovery/collection is made by virtue of a final judgment, the firm shall be entitled to an attorney’s fee equivalent to TWENTY
FIVE (25%) per cent based on that mentioned above (No. 2) [;]

xxxx

Should you find the foregoing in order, kindly signify your conformity and sign the space herein provided.

Thank you very much for your trust.

Very truly yours,

(SIGNED)
ABELARDO M. TIBAYAN

For the Firm32

In our own perusal of the contract, we find that the contract did not provide for any other basis for the computation of attorney’s fees
other than the value of the property protected/recovered, amount of claim collected, or the total interests including gains which actually
inured to the client’s benefit. Proceeds from levy or garnishment was not mentioned. The contract itself, did not include a situation
where the buyer-client recovers from levy of real properties. The contract is silent in this regard. If the intention of the parties was to
provide for an automatic application of the contract on levy proceeds, both parties could have easily agreed on it.

From the phraseology of its contract with the spouses Ingco, petitioner had only two alternative objectives as their legal tasks, (1)
delivery of title or (2) refund of the purchase price.

Items 2 and 5 of the contract envisioned two scenarios: (1) when the law firm recovers by mere demand letter; and (2) when the
collection is through final judgment. In case of collection effected through a final judgment, the firm shall be entitled to an attorney’s fee
equivalent to 25% of what actually inures to the benefit of the Ingcos, whichever is higher among (a) the value of property protected or
recovered; (b) the amount of claim collected; or (c) the total interests inuring to the Ingco’s benefit including gains. The 25% attorney’s
fees must be based on what was actually realized and received by the Ingcos. Of the three serially enumerated, only the value of the
property sold, bought and recovered actually inured to the benefit of the Ingcos. At this point, however, no money had yet been
collected, nor had any interests and gains been verified and realized.

We are in agreement with the appellate court that what the law firm delivered to its clients was the refund of the amount claimed plus
interest, stated in the compromise agreement with Villa Crista, not the title to the lot and more so, not the three lots purchased by the
spouses at the execution sale.

In our view, the law firm had been adequately paid its lawyer’s fees and is no longer entitled to additional fees on top of the ₱1.5 million
it had received. In fact, the 25% attorney’s fees based on the value of the lot, which is ₱5.1 million, multiplied by 25%, will only amount
to ₱1,275,000. Thus, the firm had a bonus of ₱225,000, since they received ₱1,500,000 from the clients.

We note that the Ingcos acquired the three lots as the highest bidder at the execution sale, since no one else bid higher. On this point, it
can be said that the lots had been acquired not through the recovery efforts of the law firm. Had other persons bidded a higher price,
the matter of the three lots would be entirely impertinent here. It is stretching the firm’s contractual rights to say that the three lots
acquired in the auction by the Ingcos’ was thru the law firm’s contractual services.

The law firm appears to have extended the following services to the Ingcos: (1) sent three demand letters33 to the developer; (2) filed a
complaint34 against the latter on March 29, 1999; (3) appeared for the Ingcos during the July 29, 1999 pre-trial before the HLURB
arbiter;35 (4) filed the joint motion to approve compromise agreement36between the parties dated October 21, 1999; and (5) attended
four preliminary conferences, three of which were reset, and only one called. It took three months from pre-trial to the signing of the
compromise agreement on October 1, 1999. There were no long-drawn trials. It was respondent Renato Ingco who actually negotiated
in person with the developer. There is no positive evidence shown that the law firm battled for its clients against Villa Crista during the
negotiation stage.

As we have ruled previously, courts can fix reasonable compensation which lawyers should receive for their professional
services.37 Nothing precludes the appellate courts from reducing the award when it is deemed unconscionable or excessive. 38 Further,
here we note that when the auction sale of the three lots was made, the attorney-client relationship between petitioner and respondents
no longer existed.39 Thus, we cannot include in the attorney’s fees the 25% of the excess of the market value of the lots over the
₱7,193,505.56 paid by the Ingcos in acquiring them.1avvphi1

Incidentally, while the spouses Ingco might have not raised the issue of the interpretation of contract in the trial court, it cannot be said
also that the Court of Appeals deprived petitioner its right to be heard when it passed upon the issue. When it interpreted the
agreement, the Court of Appeals merely sought to ascertain the meaning attached to the words used in the written
contract,40 undoubtedly to resolve the opposing contentions of the parties themselves.

On the last issue regarding the inhibition of the justices of the appellate court, aside from being moot and academic, we find that the
issue had been adequately addressed by the appellate court. While bias and partiality are recognized as valid reasons for the voluntary
inhibition of a judge under Rule 137, Section 1, par. 2, 41 of the Rules of Court, mere suspicion that a judge is partial is not enough. As

pg. 21
long as the judge’s opinions were formed in the course of judicial proceedings based on the evidence presented, and on the conduct of
the parties as observed by the magistrate in court, such opinions – even if later found to be erroneous – will not prove personal bias or
prejudice on the part of the judge. In this case, the law firm has failed to present concrete proof that any or all members of the Court of
Appeals’ Second Division had a personal interest in the case, or that their opinions on the case have stemmed from an extrajudicial
source. We find no sufficient basis or reason to doubt their fairness and ability to decide this case with the "cold neutrality of an impartial
judge."

As the appellate court pointed out, the present case has already been decided. A motion for inhibition can no longer be granted if a
decision has already been rendered and the justice or judge sought to be disqualified had duly participated and cast his or her vote
without any objection from any source. Clearly, a litigant cannot be permitted to speculate upon the action of the court and to raise
objections only after an unfavorable decision has already been rendered. 42

WHEREFORE, the instant petition is DENIED. The Decision dated March 17, 2005 of the Court of Appeals in CA-G.R. SP No. 85540,
entitled "Spouses Renato M. Ingco and Ma. Luisa S. Ingco v. Law Firm of Tungol and Tibayan," is AFFIRMED. Costs against petitioner.

SO ORDERED

G.R. No. 105938 September 20, 1996

TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P.
LAZATIN and EDUARDO U. ESCUETA, petitioners,
vs.
THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF THE PHILIPPINES, ACTING THROUGH THE
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, and RAUL S. ROCO, respondents.

G.R. No. 108113 September 20, 1996

PARAJA G. HAYUDINI, petitioner,

vs.
THE SANDIGANBAYAN and THE REPUBLIC OF THE PHILIPPINES, respondents.

KAPUNAN, J.:

These case touch the very cornerstone of every State's judicial system, upon which the workings of the contentious and adversarial
system in the Philippine legal process are based — the sanctity of fiduciary duty in the client-lawyer relationship. The fiduciary duty of a
counsel and advocate is also what makes the law profession a unique position of trust and confidence, which distinguishes it from any
other calling. In this instance, we have no recourse but to uphold and strengthen the mantle of protection accorded to the confidentiality
that proceeds from the performance of the lawyer's duty to his client.

The facts of the case are undisputed.

The matters raised herein are an offshoot of the institution of the Complaint on July 31, 1987 before the Sandiganbayan by the Republic
of the Philippines, through the Presidential Commission on Good Government against Eduardo M. Cojuangco, Jr., as one of the
principal defendants, for the recovery of alleged ill-gotten wealth, which includes shares of stocks in the named corporations in PCGG
Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines versus Eduardo Cojuangco, et al." 1

Among the dependants named in the case are herein petitioners Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C.
Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private respondent Raul S.
Roco, who all were then partners of the law firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter referred to as
the ACCRA Law Firm). ACCRA Law Firm performed legal services for its clients, which included, among others, the organization and
acquisition of business associations and/or organizations, with the correlative and incidental services where its members acted as
incorporators, or simply, as stockholders. More specifically, in the performance of these services, the members of the law firm delivered
to its client documents which substantiate the client's equity holdings, i.e., stock certificates endorsed in blank representing the shares
registered in the client's name, and a blank deed of trust or assignment covering said shares. In the course of their dealings with their
clients, the members of the law firm acquire information relative to the assets of clients as well as their personal and business
circumstances. As members of the ACCRA Law Firm, petitioners and private respondent Raul Roco admit that they assisted in the
organization and acquisition of the companies included in Civil Case No. 0033, and in keeping with the office practice, ACCRA lawyers
acted as nominees-stockholders of the said corporations involved in sequestration proceedings. 2

On August 20, 1991, respondent Presidential Commission on Good Government (hereinafter referred to as respondent PCGG) filed a
"Motion to Admit Third Amended Complaint" and "Third Amended Complaint" which excluded private respondent Raul S. Roco from the
complaint in PCGG Case No. 33 as party-defendant.3Respondent PCGG based its exclusion of private respondent Roco as party-
defendant on his undertaking that he will reveal the identity of the principal/s for whom he acted as nominee/stockholder in the
companies involved in PCGG Case No. 33.4

Petitioners were included in the Third Amended Complaint on the strength of the following allegations:

14. Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro Regala, Avelino V. Cruz,
Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul Roco of the Angara Concepcion Cruz Regala
and Abello law offices (ACCRA) plotted, devised, schemed conspired and confederated with each other in setting up,
through the use of the coconut levy funds, the financial and corporate framework and structures that led to the
establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC, and more than twenty other coconut levy funded
corporations, including the acquisition of San Miguel Corporation shares and its institutionalization through
pg. 22
 presidential directives of the coconut monopoly. Through insidious means and machinations, ACCRA, being the
wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million
shares representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This ranks
ACCRA Investments Corporation number 44 among the top 100 biggest stockholders of UCPB which has
approximately 1,400,000 shareholders. On the other hand, corporate books show the name Edgardo J. Angara as
holding approximately 3,744 shares as of February, 1984.5

In their answer to the Expanded Amended Complaint, petitioners ACCRA lawyers alleged that:

4.4 Defendants-ACCRA lawyers' participation in the acts with which their codefendants are charged, was in
furtherance of legitimate lawyering.

4.4.1 In the course of rendering professional and legal services to clients, defendants-ACCRA
lawyers, Jose C. Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and Eduardo U. Escueta,
became holders of shares of stock in the corporations listed under their respective names in Annex
"A" of the expanded Amended Complaint as incorporating or acquiring stockholders only and, as
such, they do not claim any proprietary interest in the said shares of stock.

4.5 Defendant ACCRA-lawyer Avelino V. Cruz was one of the incorporators in 1976 of Mermaid Marketing
Corporation, which was organized for legitimate business purposes not related to the allegations of the expanded
Amended Complaint. However, he has long ago transferred any material interest therein and therefore denies that
the "shares" appearing in his name in Annex "A" of the expanded Amended Complaint are his assets. 6

Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed a separate answer denying the allegations in the complaint
implicating him in the alleged ill-gotten wealth.7

Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion
that respondent PCGG similarly grant the same treatment to them (exclusion as parties-defendants) as accorded private respondent
Roco.8 The Counter-Motion for dropping petitioners from the complaint was duly set for hearing on October 18, 1991 in accordance with
the requirements of Rule 15 of the Rules of Court.

In its "Comment," respondent PCGG set the following conditions precedent for the exclusion of petitioners, namely: (a) the disclosure of
the identity of its clients; (b) submission of documents substantiating the lawyer-client relationship; and (c) the submission of the deeds
of assignments petitioners executed in favor of its client covering their respective
shareholdings.9

Consequently, respondent PCGG presented supposed proof to substantiate compliance by private respondent Roco of the conditions
precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the
counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the PCGG in PCGG Case No. 33;
(b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of
the Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to the respondent PCGG in behalf of private respondent Roco
originally requesting the reinvestigation and/or re-examination of the evidence of the PCGG against Roco in its Complaint in PCGG
Case No. 33. 10

It is noteworthy that during said proceedings, private respondent Roco did not refute petitioners' contention that he did actually not
reveal the identity of the client involved in PCGG Case No. 33, nor had he undertaken to reveal the identity of the client for whom he
acted as nominee-stockholder. 11

On March 18, 1992, respondent Sandiganbayan promulgated the Resolution, herein questioned, denying the exclusion of petitioners in
PCGG Case No. 33, for their refusal to comply with the conditions required by respondent PCGG. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e.
their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the
privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot
excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing
the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified
his principal, which revelation could show the lack of cause against him. This in turn has allowed the PCGG to
exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in
exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991). The ACCRA
lawyers have preferred not to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as party defendants. In the same vein,
they cannot compel the PCGG to be accorded the same treatment accorded to Roco.

Neither can this Court.

pg. 23
 WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja
G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit. 12

ACCRA lawyers moved for a reconsideration of the above resolution but the same was denied by the respondent Sandiganbayan.
Hence, the ACCRA lawyers filed the petition for certiorari, docketed as G.R. No. 105938, invoking the following grounds:

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who
undisputably acted as lawyers in serving as nominee-stockholders, to the strict application of the law of agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering petitioners ACCRA lawyers
and Mr. Roco as similarly situated and, therefore, deserving of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the
identities of the client(s) for whom he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the
client(s), the disclosure does not constitute a substantial distinction as would make the
classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco in
violation of the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case,
the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the
other information requested by the PCGG.

1. Under the peculiar facts of this case, the attorney-client privilege includes the identity of the
client(s).

2. The factual disclosures required by the PCGG are not limited to the identity of petitioners
ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of party-
defendants by the PCGG must be based on reasonable and just grounds and with due consideration to the
constitutional right of petitioners ACCRA lawyers to the equal protection of the law.

Petitioner Paraja G. Hayudini, likewise, filed his own motion for reconsideration of the March 18, 1991 resolution which was denied by
respondent Sandiganbayan. Thus, he filed a separate petition for certiorari, docketed as G.R. No. 108113, assailing respondent
Sandiganbayan's resolution on essentially the same grounds averred by petitioners in G.R. No. 105938.

Petitioners contend that the exclusion of respondent Roco as party-defendant in PCGG Case No. 33 grants him a favorable treatment,
on the pretext of his alleged undertaking to divulge the identity of his client, giving him an advantage over them who are in the same
footing as partners in the ACCRA law firm. Petitioners further argue that even granting that such an undertaking has been assumed by
private respondent Roco, they are prohibited from revealing the identity of their principal under their sworn mandate and fiduciary duty
as lawyers to uphold at all times the confidentiality of information obtained during such lawyer-client relationship.

Respondent PCGG, through its counsel, refutes petitioners' contention, alleging that the revelation of the identity of the client is not
within the ambit of the lawyer-client confidentiality privilege, nor are the documents it required (deeds of assignment) protected,
because they are evidence of nominee status. 13

In his comment, respondent Roco asseverates that respondent PCGG acted correctly in excluding him as party-defendant because he
"(Roco) has not filed an Answer. PCGG had therefore the right to dismiss Civil Case No.0033 as to Roco 'without an order of court by
filing a notice of dismissal'," 14 and he has undertaken to identify his principal. 15

Petitioners' contentions are impressed with merit.

It is quite apparent that petitioners were impleaded by the PCGG as co-defendants to force them to disclose the identity of their clients.
Clearly, respondent PCGG is not after petitioners but the "bigger fish" as they say in street parlance. This ploy is quite clear from the
PCGG's willingness to cut a deal with petitioners — the names of their clients in exchange for exclusion from the complaint. The
statement of the Sandiganbayan in its questioned resolution dated March 18, 1992 is explicit:

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e,
their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the
pg. 24
 privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot
excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing
the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.
(Emphasis ours)

In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third Division, entitled "Primavera Farms, Inc., et al. vs.
Presidential Commission on Good Government" respondent PCGG, through counsel Mario Ongkiko, manifested at the hearing on
December 5, 1991 that the PCGG wanted to establish through the ACCRA that their "so called client is Mr. Eduardo Cojuangco;" that "it
was Mr. Eduardo Cojuangco who furnished all the monies to those subscription payments in corporations included in Annex "A" of the
Third Amended Complaint; that the ACCRA lawyers executed deeds of trust and deeds of assignment, some in the name of particular
persons; some in blank.

We quote Atty. Ongkiko:

ATTY. ONGKIKO:

With the permission of this Hon. Court. I propose to establish through these ACCRA lawyers that, one, their so-called
client is Mr. Eduardo Cojuangco. Second, it was Mr. Eduardo Cojuangco who furnished all the monies to these
subscription payments of these corporations who are now the petitioners in this case. Third, that these lawyers
executed deeds of trust, some in the name of a particular person, some in blank. Now, these blank deeds are
important to our claim that some of the shares are actually being held by the nominees for the late President Marcos.
Fourth, they also executed deeds of assignment and some of these assignments have also blank assignees. Again,
this is important to our claim that some of the shares are for Mr. Conjuangco and some are for Mr. Marcos. Fifth, that
most of thes e corporations are really just paper corporations. Why do we say that? One: There are no really fixed
sets of officers, no fixed sets of directors at the time of incorporation and even up to 1986, which is the crucial year.
And not only that, they have no permits from the municipal authorities in Makati. Next, actually all their addresses
now are care of Villareal Law Office. They really have no address on records. These are some of the principal things
that we would ask of these nominees stockholders, as they called themselves. 16

It would seem that petitioners are merely standing in for their clients as defendants in the complaint. Petitioners are being prosecuted
solely on the basis of activities and services performed in the course of their duties as lawyers. Quite obviously, petitioners' inclusion as
co-defendants in the complaint is merely being used as leverage to compel them to name their clients and consequently to enable the
PCGG to nail these clients. Such being the case, respondent PCGG has no valid cause of action as against petitioners and should
exclude them from the Third Amended Complaint.

II

The nature of lawyer-client relationship is premised on the Roman Law concepts of locatio conductio operarum(contract of lease of
services) where one person lets his services and another hires them without reference to the object of which the services are to be
performed, wherein lawyers' services may be compensated by honorarium or for hire, 17 and mandato (contract of agency) wherein a
friend on whom reliance could be placed makes a contract in his name, but gives up all that he gained by the contract to the person
who requested him. 18 But the lawyer-client relationship is more than that of the principal-agent and lessor-lessee.

In modern day perception of the lawyer-client relationship, an attorney is more than a mere agent or servant, because he possesses
special powers of trust and confidence reposed on him by his client. 19 A lawyer is also as independent as the judge of the court, thus
his powers are entirely different from and superior to those of an ordinary agent. 20 Moreover, an attorney also occupies what may be
considered as a "quasi-judicial office" since he is in fact an officer of the Court 21 and exercises his judgment in the choice of courses of
action to be taken favorable to his client.

Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the
fiduciary duty to his client which is of a very delicate, exacting and confidential character, requiring a very high degree of fidelity and
good faith, 22 that is required by reason of necessity and public interest 23 based on the hypothesis that abstinence from seeking legal
advice in a good cause is an evil which is fatal to the administration of justice. 24

It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other professional in
society. This conception is entrenched and embodies centuries of established and stable tradition. 25 In Stockton
v. Ford,26 the U. S. Supreme Court held:

There are few of the business relations of life involving a higher trust and confidence than that of attorney and client,
or generally speaking, one more honorably and faithfully discharged; few more anxiously guarded by the law, or
governed by the sterner principles of morality and justice; and it is the duty of the court to administer them in a
corresponding spirit, and to be watchful and industrious, to see that confidence thus reposed shall not be used to the
detriment or prejudice of the rights of the party bestowing it. 27

In our jurisdiction, this privilege takes off from the old Code of Civil Procedure enacted by the Philippine Commission on August 7,
1901. Section 383 of the Code specifically "forbids counsel, without authority of his client to reveal any communication made by the
client to him or his advice given thereon in the course of professional employment." 28Passed on into various provisions of the Rules of
Court, the attorney-client privilege, as currently worded provides:

Sec. 24. Disqualification by reason of privileged communication. — The following persons cannot testify as to matters
learned in confidence in the following cases:

xxx xxx xxx

pg. 25
 An attorney cannot, without the consent of his client, be examined as to any communication made by the client to
him, or his advice given thereon in the course of, or with a view to, professional employment, can an attorney's
secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity. 29

Further, Rule 138 of the Rules of Court states:

Sec. 20. It is the duty of an attorney: (e) to maintain inviolate the confidence, and at every peril to himself, to preserve
the secrets of his client, and to accept no compensation in connection with his client's business except from him or
with his knowledge and approval.

This duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility which provides that:

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 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to client:

The lawyers owes "entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights
and the exertion of his utmost learning and ability," to the end that nothing be taken or be withheld from him, save by
the rules of law, legally applied. No fear of judicial disfavor or public popularity should restrain him from the full
discharge of his duty. In the judicial forum the 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. But it
is steadfastly to be borne in mind that the great trust of the lawyer is to be performed within and not without the
bounds of the law. The office of attorney does not permit, much less does it demand of him for any client, violation of
law or any manner of fraud or chicanery. He must obey his own conscience and not that of his client.

Considerations favoring confidentially in lawyer-client relationships are many and serve several constitutional and policy concerns. In
the constitutional sphere, the privilege gives flesh to one of the most sacrosanct rights available to the accused, the right to counsel. If a
client were made to choose between legal representation without effective communication and disclosure and legal representation with
all his secrets revealed then he might be compelled, in some instances, to either opt to stay away from the judicial system or to lose the
right to counsel. If the price of disclosure is too high, or if it amounts to self incrimination, then the flow of information would be curtailed
thereby rendering the right practically nugatory. The threat this represents against another sacrosanct individual right, the right to be
presumed innocent is at once self-evident.

Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spectrum of legal options which would
otherwise be circumscribed by limited information engendered by a fear of disclosure. An effective lawyer-client relationship is largely
dependent upon the degree of confidence which exists between lawyer and client which in turn requires a situation which encourages a
dynamic and fruitful exchange and flow of information. It necessarily follows that in order to attain effective representation, the lawyer
must invoke the privilege not as a matter of option but as a matter of duty and professional responsibility.

The question now arises whether or not this duty may be asserted in refusing to disclose the name of petitioners' client(s) in the case at
bar. Under the facts and circumstances obtaining in the instant case, the answer must be in the affirmative.

As a matter of public policy, a client's identity should not be shrouded in mystery 30 Under this premise, the general rule in our
jurisdiction as well as in the United States is that a lawyer may not invoke the privilege and refuse to divulge the name or identity of this
client. 31

The reasons advanced for the general rule are well established.

First, the court has a right to know that the client whose privileged information is sought to be protected is flesh and blood.

Second, the privilege begins to exist only after the attorney-client relationship has been established. The attorney-client privilege does
not attach until there is a client.

Third, the privilege generally pertains to the subject matter of the relationship.

Finally, due process considerations require that the opposing party should, as a general rule, know his adversary. "A party suing or
sued is entitled to know who his opponent is." 32 He cannot be obliged to grope in the dark against unknown forces. 33

Notwithstanding these considerations, the general rule is however qualified by some important exceptions.

1) Client identity is privileged where a strong probability exists that revealing the client's name would implicate that client in the very
activity for which he sought the lawyer's advice.

In Ex-Parte Enzor, 34 a state supreme court reversed a lower court order requiring a lawyer to divulge the name of her client on the
ground that the subject matter of the relationship was so closely related to the issue of the client's identity that the privilege actually
attached to both. In Enzor, the unidentified client, an election official, informed his attorney in confidence that he had been offered a
bribe to violate election laws or that he had accepted a bribe to that end. In her testimony, the attorney revealed that she had advised
her client to count the votes correctly, but averred that she could not remember whether her client had been, in fact, bribed. The lawyer
was cited for contempt for her refusal to reveal his client's identity before a grand jury. Reversing the lower court's contempt orders, the
state supreme court held that under the circumstances of the case, and under the exceptions described above, even the name of the
client was privileged.

pg. 26
U .S. v. Hodge and Zweig,35 involved the same exception, i.e. that client identity is privileged in those instances where a strong
probability exists that the disclosure of the client's identity would implicate the client in the very criminal activity for which the lawyer's
legal advice was obtained.

The Hodge case involved federal grand jury proceedings inquiring into the activities of the "Sandino Gang," a gang involved in the
illegal importation of drugs in the United States. The respondents, law partners, represented key witnesses and suspects including the
leader of the gang, Joe Sandino.

In connection with a tax investigation in November of 1973, the IRS issued summons to Hodge and Zweig, requiring them to produce
documents and information regarding payment received by Sandino on behalf of any other person, and vice versa. The lawyers refused
to divulge the names. The Ninth Circuit of the United States Court of Appeals, upholding non-disclosure under the facts and
circumstances of the case, held:

A client's identity and the nature of that client's fee arrangements may be privileged where the person invoking the
privilege can show that a strong probability exists that disclosure of such information would implicate that client in the
very criminal activity for which legal advice was sought Baird v. Koerner, 279 F. 2d at 680. While in Baird Owe
enunciated this rule as a matter of California law, the rule also reflects federal law. Appellants contend that
the Baird exception applies to this case.

The Baird exception is entirely consonant with the principal policy behind the attorney-client privilege. "In order to
promote freedom of consultation of legal advisors by clients, the apprehension of compelled disclosure from the legal
advisors must be removed; hence, the law must prohibit such disclosure except on the client's consent." 8 J.
Wigmore, supra sec. 2291, at 545. In furtherance of this policy, the client's identity and the nature of his fee
arrangements are, in exceptional cases, protected as confidential communications. 36

2) Where disclosure would open the client to civil liability; his identity is privileged. For instance, the peculiar facts and circumstances
of Neugass v. Terminal Cab Corporation,37 prompted the New York Supreme Court to allow a lawyer's claim to the effect that he could
not reveal the name of his client because this would expose the latter to civil litigation.

In the said case, Neugass, the plaintiff, suffered injury when the taxicab she was riding, owned by respondent corporation, collided with
a second taxicab, whose owner was unknown. Plaintiff brought action both against defendant corporation and the owner of the second
cab, identified in the information only as John Doe. It turned out that when the attorney of defendant corporation appeared on
preliminary examination, the fact was somehow revealed that the lawyer came to know the name of the owner of the second cab when
a man, a client of the insurance company, prior to the institution of legal action, came to him and reported that he was involved in a car
accident. It was apparent under the circumstances that the man was the owner of the second cab. The state supreme court held that
the reports were clearly made to the lawyer in his professional capacity. The court said:

That his employment came about through the fact that the insurance company had hired him to defend its
policyholders seems immaterial. The attorney is such cases is clearly the attorney for the policyholder when the
policyholder goes to him to report an occurrence contemplating that it would be used in an action or claim against
him. 38

xxx xxx xxx

All communications made by a client to his counsel, for the purpose of professional advice or assistance, are
privileged, whether they relate to a suit pending or contemplated, or to any other matter proper for such advice or aid;
. . . And whenever the communication made, relates to a matter so connected with the employment as attorney or
counsel as to afford presumption that it was the ground of the address by the client, then it is privileged from
disclosure. . .

It appears . . . that the name and address of the owner of the second cab came to the attorney in this case as a
confidential communication. His client is not seeking to use the courts, and his address cannot be disclosed on that
theory, nor is the present action pending against him as service of the summons on him has not been effected. The
objections on which the court reserved decision are sustained. 39

In the case of Matter of Shawmut Mining Company,40 the lawyer involved was required by a lower court to disclose whether he
represented certain clients in a certain transaction. The purpose of the court's request was to determine whether the unnamed persons
as interested parties were connected with the purchase of properties involved in the action. The lawyer refused and brought the
question to the State Supreme Court. Upholding the lawyer's refusal to divulge the names of his clients the court held:

If it can compel the witness to state, as directed by the order appealed from, that he represented certain persons in
the purchase or sale of these mines, it has made progress in establishing by such evidence their version of the
litigation. As already suggested, such testimony by the witness would compel him to disclose not only that he was
attorney for certain people, but that, as the result of communications made to him in the course of such employment
as such attorney, he knew that they were interested in certain transactions. We feel sure that under such conditions
no case has ever gone to the length of compelling an attorney, at the instance of a hostile litigant, to disclose not only
his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a
suit against his client. 41

3) Where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the said name
would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the client's name is
privileged.

In Baird vs. Korner,42 a lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be
taken to place the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the U.S.
Internal Revenue Service (IRS).
pg. 27
It appeared that the taxpayers' returns of previous years were probably incorrect and the taxes understated. The clients themselves
were unsure about whether or not they violated tax laws and sought advice from Baird on the hypothetical possibility that they had. No
investigation was then being undertaken by the IRS of the taxpayers. Subsequently, the attorney of the taxpayers delivered to Baird the
sum of $12, 706.85, which had been previously assessed as the tax due, and another amount of money representing his fee for the
advice given. Baird then sent a check for $12,706.85 to the IRS in Baltimore, Maryland, with a note explaining the payment, but without
naming his clients. The IRS demanded that Baird identify the lawyers, accountants, and other clients involved. Baird refused on the
ground that he did not know their names, and declined to name the attorney and accountants because this constituted privileged
communication. A petition was filed for the enforcement of the IRS summons. For Baird's repeated refusal to name his clients he was
found guilty of civil contempt. The Ninth Circuit Court of Appeals held that, a lawyer could not be forced to reveal the names of clients
who employed him to pay sums of money to the government voluntarily in settlement of undetermined income taxes, unsued on, and
with no government audit or investigation into that client's income tax liability pending. The court emphasized the exception that a
client's name is privileged when so much has been revealed concerning the legal services rendered that the disclosure of the client's
identity exposes him to possible investigation and sanction by government agencies. The Court held:

The facts of the instant case bring it squarely within that exception to the general rule. Here money was received by
the government, paid by persons who thereby admitted they had not paid a sufficient amount in income taxes some
one or more years in the past. The names of the clients are useful to the government for but one purpose — to
ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several
years. The voluntary nature of the payment indicates a belief by the taxpayers that more taxes or interest or penalties
are due than the sum previously paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it
is criminal guilt is undisclosed. But it may well be the link that could form the chain of testimony necessary to convict
an individual of a federal crime. Certainly the payment and the feeling of guilt are the reasons the attorney here
involved was employed — to advise his clients what, under the circumstances, should be done. 43

Apart from these principal exceptions, there exist other situations which could qualify as exceptions to the general rule.

For example, the content of any client communication to a lawyer lies within the privilege if it is relevant to the subject matter of the legal
problem on which the client seeks legal assistance. 44 Moreover, where the nature of the attorney-client relationship has been
previously disclosed and it is the identity which is intended to be confidential, the identity of the client has been held to be privileged,
since such revelation would otherwise result in disclosure of the entire transaction. 45

Summarizing these exceptions, information relating to the identity of a client may fall within the ambit of the privilege when the client's
name itself has an independent significance, such that disclosure would then reveal client confidences. 46

The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly reveal that the instant case falls under
at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to establish said client's connection
with the very fact in issue of the case, which is privileged information, because the privilege, as stated earlier, protects the subject
matter or the substance (without which there would be not attorney-client relationship).

The link between the alleged criminal offense and the legal advice or legal service sought was duly establishes in the case at bar, by no
less than the PCGG itself. The key lies in the three specific conditions laid down by the PCGG which constitutes petitioners' ticket to
non-prosecution should they accede thereto:

(a) the disclosure of the identity of its clients;

(b) submission of documents substantiating the lawyer-client relationship; and

(c) the submission of the deeds of assignment petitioners executed in favor of their clients covering their respective
shareholdings.

From these conditions, particularly the third, we can readily deduce that the clients indeed consulted the petitioners, in their capacity as
lawyers, regarding the financial and corporate structure, framework and set-up of the corporations in question. In turn, petitioners gave
their professional advice in the form of, among others, the aforementioned deeds of assignment covering their client's shareholdings.

There is no question that the preparation of the aforestated documents was part and parcel of petitioners' legal service to their clients.
More important, it constituted an integral part of their duties as lawyers. Petitioners, therefore, have a legitimate fear that identifying
their clients would implicate them in the very activity for which legal advice had been sought, i.e., the alleged accumulation of ill-gotten
wealth in the aforementioned corporations.

Furthermore, under the third main exception, revelation of the client's name would obviously provide the necessary link for the
prosecution to build its case, where none otherwise exists. It is the link, in the words of Baird, "that would inevitably form the chain of
testimony necessary to convict the (client) of a . . . crime." 47

An important distinction must be made between a case where a client takes on the services of an attorney for illicit purposes, seeking
advice about how to go around the law for the purpose of committing illegal activities and a case where a client thinks he might have
previously committed something illegal and consults his attorney about it. The first case clearly does not fall within the privilege because
the same cannot be invoked for purposes illegal. The second case falls within the exception because whether or not the act for which
the client sought advice turns out to be illegal, his name cannot be used or disclosed if the disclosure leads to evidence, not yet in the
hands of the prosecution, which might lead to possible action against him.

These cases may be readily distinguished, because the privilege cannot be invoked or used as a shield for an illegal act, as in the first
example; while the prosecution may not have a case against the client in the second example and cannot use the attorney client
relationship to build up a case against the latter. The reason for the first rule is that it is not within the professional character of a lawyer
to give advice on the commission of a crime. 48 The reason for the second has been stated in the cases above discussed and are
founded on the same policy grounds for which the attorney-client privilege, in general, exists.

pg. 28
In Matter of Shawmut Mining Co., supra, the appellate court therein stated that "under such conditions no case has ever yet gone to the
length of compelling an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the nature of the transactions
to which it related, when such information could be made the basis of a suit against his client." 49 "Communications made to an attorney
in the course of any personal employment, relating to the subject thereof, and which may be supposed to be drawn out in consequence
of the relation in which the parties stand to each other, are under the seal of confidence and entitled to protection as privileged
communications."50 Where the communicated information, which clearly falls within the privilege, would suggest possible criminal
activity but there would be not much in the information known to the prosecution which would sustain a charge except that revealing the
name of the client would open up other privileged information which would substantiate the prosecution's suspicions, then the client's
identity is so inextricably linked to the subject matter itself that it falls within the protection. The Baird exception, applicable to the instant
case, is consonant with the principal policy behind the privilege, i.e., that for the purpose of promoting freedom of consultation of legal
advisors by clients, apprehension of compelled disclosure from attorneys must be eliminated. This exception has likewise been
sustained in In re Grand Jury Proceedings51 and Tillotson v. Boughner.52 What these cases unanimously seek to avoid is the
exploitation of the general rule in what may amount to a fishing expedition by the prosecution.

There are, after all, alternative source of information available to the prosecutor which do not depend on utilizing a defendant's counsel
as a convenient and readily available source of information in the building of a case against the latter. Compelling disclosure of the
client's name in circumstances such as the one which exists in the case at bench amounts to sanctioning fishing expeditions by lazy
prosecutors and litigants which we cannot and will not countenance. When the nature of the transaction would be revealed by
disclosure of an attorney's retainer, such retainer is obviously protected by the privilege. 53 It follows that petitioner attorneys in the
instant case owe their client(s) a duty and an obligation not to disclose the latter's identity which in turn requires them to invoke the
privilege.

In fine, the crux of petitioners' objections ultimately hinges on their expectation that if the prosecution has a case against their clients,
the latter's case should be built upon evidence painstakingly gathered by them from their own sources and not from compelled
testimony requiring them to reveal the name of their clients, information which unavoidably reveals much about the nature of the
transaction which may or may not be illegal. The logical nexus between name and nature of transaction is so intimate in this case the it
would be difficult to simply dissociate one from the other. In this sense, the name is as much "communication" as information revealed
directly about the transaction in question itself, a communication which is clearly and distinctly privileged. A lawyer cannot reveal such
communication without exposing himself to charges of violating a principle which forms the bulwark of the entire attorney-client
relationship.

The uberrimei fidei relationship between a lawyer and his client therefore imposes a strict liability for negligence on the former. The
ethical duties owing to the client, including confidentiality, loyalty, competence, diligence as well as the responsibility to keep clients
informed and protect their rights to make decisions have been zealously sustained. In Milbank, Tweed, Hadley and McCloy
v. Boon,54 the US Second District Court rejected the plea of the petitioner law firm that it breached its fiduciary duty to its client by
helping the latter's former agent in closing a deal for the agent's benefit only after its client hesitated in proceeding with the transaction,
thus causing no harm to its client. The Court instead ruled that breaches of a fiduciary relationship in any context comprise a special
breed of cases that often loosen normally stringent requirements of causation and damages, and found in favor of the client.

To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and Shipley P.A. v. Scheller55 requiring strict obligation of
lawyers vis-a-vis clients. In this case, a contingent fee lawyer was fired shortly before the end of completion of his work, and sought
payment quantum meruit of work done. The court, however, found that the lawyer was fired for cause after he sought to pressure his
client into signing a new fee agreement while settlement negotiations were at a critical stage. While the client found a new lawyer during
the interregnum, events forced the client to settle for less than what was originally offered. Reiterating the principle of fiduciary duty of
lawyers to clients in Meinhard v. Salmon56 famously attributed to Justice Benjamin Cardozo that "Not honesty alone, but the punctilioof
an honor the most sensitive, is then the standard of behavior," the US Court found that the lawyer involved was fired for cause, thus
deserved no attorney's fees at all.

The utmost zeal given by Courts to the protection of the lawyer-client confidentiality privilege and lawyer's loyalty to his client is evident
in the duration of the protection, which exists not only during the relationship, but extends even after the termination of the
relationship. 57

Such are the unrelenting duties required by lawyers vis-a-vis their clients because the law, which the lawyers are sworn to uphold, in
the words of Oliver Wendell Holmes, 58 ". . . is an exacting goddess, demanding of her votaries in intellectual and moral discipline." The
Court, no less, is not prepared to accept respondents' position without denigrating the noble profession that is lawyering, so extolled by
Justice Holmes in this wise:

Every calling is great when greatly pursued. But what other gives such scope to realize the spontaneous energy of
one's soul? In what other does one plunge so deep in the stream of life — so share its passions its battles, its
despair, its triumphs, both as witness and actor? . . . But that is not all. What a subject is this in which we are united
— this abstraction called the Law, wherein as in a magic mirror, we see reflected, not only in our lives, but the lives of
all men that have been. When I think on this majestic theme my eyes dazzle. If we are to speak of the law as our
mistress, we who are here know that she is a mistress only to be won with sustained and lonely passion — only to be
won by straining all the faculties by which man is likened to God.

We have no choice but to uphold petitioners' right not to reveal the identity of their clients under pain of the breach of fiduciary duty
owing to their clients, because the facts of the instant case clearly fall within recognized exceptions to the rule that the client's name is
not privileged information.

If we were to sustain respondent PCGG that the lawyer-client confidential privilege under the circumstances obtaining here does not
cover the identity of the client, then it would expose the lawyers themselves to possible litigation by their clients in view of the strict
fiduciary responsibility imposed on them in the exercise of their duties.

The complaint in Civil Case No. 0033 alleged that the defendants therein, including herein petitioners and Eduardo Cojuangco,
Jr. conspired with each other in setting up through the use of coconut levy funds the financial and corporate framework and
structures that led to the establishment of UCPB, UNICOM and others and that through insidious means and machinations,
ACCRA, using its wholly-owned investment arm, ACCRA Investment Corporation, became the holder of approximately fifteen
pg. 29
million shares representing roughly 3.3% of the total capital stock of UCPB as of 31 March 1987. The PCGG wanted to
establish through the ACCRA lawyers that Mr. Cojuangco is their client and it was Cojuangco who furnished all the monies to
the subscription payment; hence, petitioners acted as dummies, nominees and/or agents by allowing themselves, among
others, to be used as instrument in accumulating ill-gotten wealth through government concessions, etc., which acts constitute
gross abuse of official position and authority, flagrant breach of public trust, unjust enrichment, violation of the Constitution and
laws of the Republic of the Philippines.

By compelling petitioners, not only to reveal the identity of their clients, but worse, to submit to the PCGG documents
substantiating the client-lawyer relationship, as well as deeds of assignment petitioners executed in favor of its clients covering
their respective shareholdings, the PCGG would exact from petitioners a link "that would inevitably form the chain of testimony
necessary to convict the (client) of a crime."

III

In response to petitioners' last assignment of error, respondents alleged that the private respondent was dropped as party
defendant not only because of his admission that he acted merely as a nominee but also because of his undertaking to testify
to such facts and circumstances "as the interest of truth may require, which includes . . . the identity of the principal." 59

First, as to the bare statement that private respondent merely acted as a lawyer and nominee, a statement made in his out-of-
court settlement with the PCGG, it is sufficient to state that petitioners have likewise made the same claim not merely out-of-
court but also in the Answer to plaintiff's Expanded Amended Complaint, signed by counsel, claiming that their acts were made
in furtherance of "legitimate lawyering."60 Being "similarly situated" in this regard, public respondents must show that there
exist other conditions and circumstances which would warrant their treating the private respondent differently from petitioners
in the case at bench in order to evade a violation of the equal protection clause of the Constitution.

To this end, public respondents contend that the primary consideration behind their decision to sustain the PCGG's dropping
of private respondent as a defendant was his promise to disclose the identities of the clients in question. However,
respondents failed to show — and absolute nothing exists in the records of the case at bar — that private respondent actually
revealed the identity of his client(s) to the PCGG. Since the undertaking happens to be the leitmotif of the entire arrangement
between Mr. Roco and the PCGG, an undertaking which is so material as to have justified PCGG's special treatment
exempting the private respondent from prosecution, respondent Sandiganbayan should have required proof of the undertaking
more substantial than a "bare assertion" that private respondent did indeed comply with the undertaking. Instead, as
manifested by the PCGG, only three documents were submitted for the purpose, two of which were mere requests for re-
investigation and one simply disclosed certain clients which petitioners (ACCRA lawyers) were themselves willing to reveal.
These were clients to whom both petitioners and private respondent rendered legal services while all of them were partners at
ACCRA, and were not the clients which the PCGG wanted disclosed for the alleged questioned transactions. 61

To justify the dropping of the private respondent from the case or the filing of the suit in the respondent court without him,
therefore, the PCGG should conclusively show that Mr. Roco was treated as species apart from the rest of the ACCRA
lawyers on the basis of a classification which made substantial distinctions based on real differences. No such substantial
distinctions exist from the records of the case at bench, in violation of the equal protection clause.

The equal protection clause is a guarantee which provides a wall of protection against uneven application of status and
regulations. In the broader sense, the guarantee operates against uneven application of legal norms so
that all persons under similar circumstances would be accorded the same treatment. 62 Those who fall within a particular class
ought to be treated alike not only as to privileges granted but also as to the liabilities imposed.

. . . What is required under this constitutional guarantee is the uniform operation of legal norms so that all persons
under similar circumstances would be accorded the same treatment both in the privileges conferred and the liabilities
imposed. As was noted in a recent decision: "Favoritism and undue preference cannot be allowed. For the principle is
that equal protection and security shall be given to every person under circumstances, which if not identical are
analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the
same fashion, whatever restrictions cast on some in the group equally binding the rest. 63

We find that the condition precedent required by the respondent PCGG of the petitioners for their exclusion as parties-
defendants in PCGG Case No. 33 violates the lawyer-client confidentiality privilege. The condition also constitutes a
transgression by respondents Sandiganbayan and PCGG of the equal protection clause of the Constitution. 64 It is grossly
unfair to exempt one similarly situated litigant from prosecution without allowing the same exemption to the others. Moreover,
the PCGG's demand not only touches upon the question of the identity of their clients but also on documents related to the
suspected transactions, not only in violation of the attorney-client privilege but also of the constitutional right against self-
incrimination. Whichever way one looks at it, this is a fishing expedition, a free ride at the expense of such rights.

An argument is advanced that the invocation by petitioners of the privilege of attorney-client confidentiality at this stage of the
proceedings is premature and that they should wait until they are called to testify and examine as witnesses as to matters
learned in confidence before they can raise their objections. But petitioners are not mere witnesses. They are co-principals in
the case for recovery of alleged ill-gotten wealth. They have made their position clear from the very beginning that they are not
willing to testify and they cannot be compelled to testify in view of their constitutional right against self-incrimination and of their
fundamental legal right to maintain inviolate the privilege of attorney-client confidentiality.

It is clear then that the case against petitioners should never be allowed to take its full course in the Sandiganbayan.
Petitioners should not be made to suffer the effects of further litigation when it is obvious that their inclusion in the complaint
arose from a privileged attorney-client relationship and as a means of coercing them to disclose the identities of their clients.
To allow the case to continue with respect to them when this Court could nip the problem in the bud at this early opportunity
would be to sanction an unjust situation which we should not here countenance. The case hangs as a real and palpable threat,
a proverbial Sword of Damocles over petitioners' heads. It should not be allowed to continue a day longer.

pg. 30
 While we are aware of respondent PCGG's legal mandate to recover ill-gotten wealth, we will not sanction acts which violate
the equal protection guarantee and the right against self-incrimination and subvert the lawyer-client confidentiality privilege.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of respondent Sandiganbayan (First Division) promulgated
on March 18, 1992 and May 21, 1992 are hereby ANNULLED and SET ASIDE. Respondent Sandiganbayan is further ordered
to exclude petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Victor P. Lazatin,
Eduardo U. Escueta and Paraja G. Hayuduni as parties-defendants in SB Civil Case No. 0033 entitled "Republic of the
Philippines v. Eduardo Cojuangco, Jr., et al."

SO ORDERED.

Bellosillo, Melo and Francisco, JJ., concur.

Padilla, Panganiban and Torres, Jr., JJ., concur in the result.

Romero and Hermosisima, Jr., JJ., took no part.

Mendoza, J., is on leave.

Separate Opinions

VITUG, J., concurring:

The legal profession, despite all the unrestrained calumny hurled against it, is still the noblest of professions. It exists upon the
thesis that, in an orderly society that is opposed to all forms of anarchy, it so occupies, as it should, an exalted position in the
proper dispensation of justice. In time, principles have evolved that would help ensure its effective ministration. The protection
of confidentiality of the lawyer-client relationship is one, and it has since been an accepted firmament in the profession. It
allows the lawyer and the client to institutionalize a unique relationship based on full trust and confidence essential in a justice
system that works on the basis of substantive and procedural due process. To be sure, the rule is not without its pitfalls, and
demands against it may be strong, but these problems are, in the ultimate analysis, no more than mere tests of vigor that have
made and will make that rule endure.

I see in the case before us, given the attendant circumstances already detailed in the ponencia, a situation of the Republic
attempting to establish a case not on what it perceives to be the strength of its own evidence but on what it could elicit from a
counsel against his client. I find it unreasonable for the Sandiganbayan to compel petitioners to breach the trust reposed on
them and succumb to a thinly disguised threat of incrimination.

Accordingly, I join my other colleague who vote for the GRANT of the petition.

DAVIDE, JR., J.: dissenting

The impressive presentation of the case in the ponencia of Mr. Justice Kapunan makes difficult the espousal of a dissenting
view. Nevertheless, I do not hesitate to express that view because I strongly feel that this Court must confine itself to the key
issue in this special civil action for certiorari, viz., whether or not the Sandiganbayan acted with grave abuse of discretion in not
excluding the defendants, the petitioners herein, from the Third Amended Complaint in Civil Case No. 0033. That issue,
unfortunately, has been simply buried under the avalanche of authorities upholding the sanctity of lawyer-client relationship
which appears to me to be prematurely invoked.

From the undisputed facts disclosed by the pleadings and summarized in the ponencia, I cannot find my way clear to a
conclusion that the Sandiganbayan committed grave abuse of discretion in not acting favorably on the petitioners' prayer in
their Comment to the PCGG's Motion to Admit Third Amended Complaint.

The prerogative to determine who shall be made defendants in a civil case is initially vested in the plaintiff, or the PCGG in this
case. The control of the Court comes in only when the issue of "interest" (§ 2, Rule 3, Rules of Court) as, e.g., whether an
indispensable party has not been joined, or whether there is a misjoinder of parties (§ 7, 8, and 9, Id.), is raised.

In the case below, the PCGG decided to drop or exclude from the complaint original co-defendant Raul Roco because he had
allegedly complied with the condition prescribed by the PCGG, viz., undertake that he will reveal the identity of the principals
for whom he acted as nominee/stockholder in the companies involved in PCGG Case No. 0033. In short, there was an
agreement or compromise settlement between the PCGG and Roco. Accordingly, the PCGG submitted a Third Amended
Complaint without Roco as a defendant. No obstacle to such an agreement has been insinuated. If Roco's revelation violated
pg. 31
the confidentiality of a lawyer-client relationship, he would be solely answerable therefor to his principals/clients and, probably,
to this Court in an appropriate disciplinary action if warranted. There is at all no showing that Civil Case No. 0033 cannot
further be proceeded upon or that any judgment therein cannot be binding without Roco remaining as a defendant.
Accordingly, the admission of the Third Amended Complaint cannot be validly withheld by the Sandiganbayan.

Are the petitioners, who did not file a formal motion to be excluded but only made the request to that effect as a rider to their
Comment to the Motion to Admit Third Amended Complaint, entitled to be excluded from the Third Amended Complaint such
that denial thereof would constitute grave abuse of discretion on the Sandiganbayan's part? To me, the answer is clearly in the
negative.

The petitioners seek to be accorded the same benefit granted to or to be similarly treated as Roco. Reason and logic dictate
that they cannot, unless they too would make themselves like Roco. Otherwise stated, they must first voluntarily adopt for
themselves the factual milieu created by Roco and must bind themselves to perform certain obligations as Roco. It is precisely
for this that in response to the petitioners' comment on the aforementioned Motion to Admit Third Amended Complaint the
PCGG manifested that it is willing to accord the petitioners the treatment it gave Roco provided they would do what Roco had
done, that is, disclose the identity of their principals/clients and submit documents substantiating their claimed lawyer-client
relationship with the said principals/clients, as well as copies of deeds of assignments the petitioners executed in favor of their
principals/clients. The petitioners did not do so because they believed that compliance thereof would breach the sanctity of
their fiduciary duty in a lawyer-client relationship.

It, indeed, appears that Roco has complied with his obligation as a consideration for his exclusion from the Third Amended
Complaint. The Sandiganbayan found that

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified
his principal, which revelation could show the lack of action against him. This in turn has allowed the PCGG to
exercise its power both under the rules of agency and under Section 5 of E.O. No. 14-1 in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

As a matter of fact, the PCGG presented evidence to substantiate Roco's compliance. The ponencia itself so stated, thus:

. . . respondent PCGG presented evidence to substantiate compliance by private respondent Roco of the conditions
precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent
PCGG of the counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the
PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment
to the letter aforestated in (a); and (c) Letter of Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to
the respondent in behalf of private respondent Roco originally requesting the reinvestigation and/or re-examination of
evidence by the PCGG it Complaint in PCGG Case No. 33. (Id., 5-6).

These are the pieces of evidence upon which the Sandiganbayan founded its conclusion that the PCGG was satisfied with
Roco's compliance. The petitioners have not assailed such finding as arbitrary.

The ponencia's observation then that Roco did not refute the petitioners' contention that he did not comply with his obligation
to disclose the identity of his principals is entirely irrelevant.

In view of their adamantine position, the petitioners did not, therefore, allow themselves to be like Roco. They cannot claim the
same treatment, much less compel the PCGG to drop them as defendants, for nothing whatsoever. They have no right to
make such a demand for until they shall have complied with the conditions imposed for their exclusion, they cannot be
excluded except by way of a motion to dismiss based on the grounds allowed by law (e.g., those enumerated in § 1, Rule 16,
Rules of Court). The rule of confidentiality under the lawyer-client relationship is not a cause to exclude a party. It is merely
aground for disqualification of a witness (§ 24, Rule 130, Rules of Court) and may only be invoked at the appropriate time, i.e.,
when a lawyer is under compulsion to answer as witness, as when, having taken the witness stand, he is questioned as to
such confidential communicator or advice, or is being otherwise judicially coerced to produce, through subpoena duces
tecum or otherwise, letters or other documents containing the same privileged matter. But none of the lawyers in this case is
being required to testify about or otherwise reveal "any [confidential] communication made by the client to him, or his advice
given thereon in the course of, or with a view to, professional employment." What they are being asked to do, in line with their
claim that they had done the acts ascribed to them in pursuance of their professional relation to their clients, is to identify the
latter to the PCGG and the Court; but this, only if they so choose in order to be dropped from the complaint, such identification
being the condition under which the PCGG has expressed willingness to exclude them from the action. The revelation is
entirely optional, discretionary, on their part. The attorney-client privilege is not therefor applicable.

Thus, the Sandiganbayan did not commit any abuse of discretion when it denied the petitioners' prayer for their exclusion as
party-defendants because they did not want to abide with any of the conditions set by the PCGG. There would have been
abuse if the Sandiganbayan granted the prayer because then it would have capriciously, whimsically, arbitrarily, and
oppressively imposed its will on the PCGG.

Again, what the petitioners want is their exclusion from the Third Amended Complaint or the dismissal of the case insofar as
they are concerned because either they are invested with immunity under the principle of confidentiality in a lawyer-client
relationship, or the claims against them in Civil Case No. 0033 are barred by such principle.

Even if we have to accommodate this issue, I still submit that the lawyer-client privilege provides the petitioners no refuge.
They are sued as principal defendants in Civil Case No. 0033, a case of the recovery of alleged ill-gotten wealth. Conspiracy is
imputed to the petitioners therein. In short, they are, allegedly, conspirators in the commission of the acts complained of for
being nominees of certain parties.

Their inclusion as defendants in justified under § 15, Article XI of the Constitution — which provides that the right of the State
to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees,
pg. 32
shall not be barred by prescription, laches or estoppel — and E.O. No. 1 of 28 February 1986, E.O. No. 2 of 12 March 1986,
E.O. No. 14 of 7 May 1986, and the Rules and Regulations of the PCGG. Furthermore, § 2, Rule 110 of the Rules of Court
requires that the complaint or information should be "against all persons who appear to be responsible for the offense
involved."

Hypothetically admitting the allegations in the complaint in Civil Case No. 0033, I find myself unable to agree with the majority
opinion that the petitioners are immune from suit or that they have to be excluded as defendants, or that they cannot be
compelled to reveal or disclose the identity of their principals, all because of the sacred lawyer-client privilege.

This privilege is well put in Rule 130 of the Rules of Court, to wit:

§ 24. Disqualification by reason of privileged communication. — The following persons cannot testify as to matters
learned in confidence in the following cases:

xxx xxx xxx

(b) An attorney cannot, without the consent of his client, be examined as to any communication made by the client to
him, or his advice given thereon in the course of, or with a view to, professional employment, nor can an attorney's
secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity.

The majority seeks to expand the scope of the Philippine rule on the lawyer-client privilege by copious citations of American
jurisprudence which includes in the privilege the identity of the client under the exceptional situations narrated therein. From
the plethora of cases cited, two facts stand out in bold relief. Firstly, the issue of privilege contested therein arose in grand jury
proceedings on different States, which are preliminary proceedings before the filing of the case in court, and we are not even
told what evidentiary rules apply in the said hearings. In the present case, the privilege is invoked in the court where it was
already filed and presently pends, and we have the foregoing specific rules above-quoted. Secondly, and more important, in
the cases cited by the majority, the lawyers concerned were merely advocating the cause of their clients but were not indicted
for the charges against their said clients. Here, the counsel themselves are co-defendants duly charged in court as co-
conspirators in the offenses charged. The cases cited by the majority evidently do not apply to them.

Hence, I wish to repeat and underscore the fact that the lawyer-client privilege is not a shield for the commission of a crime or
against the prosecution of the lawyer therefor. I quote, with emphases supplied, from 81 AM JUR 2d, Witnesses, § 393 to 395,
pages 356-357:

§ 393. Effect of unlawful purpose.

The existence of an unlawful purpose prevents the attorney-client privilege from attaching. The attorney-client
privilege does not generally exist where the representation is sought to further criminal or fraudulent conduct either
past, present, or future. Thus, a confidence received by an attorney in order to advance a criminal or fraudulent
purpose is beyond the scope of the privilege.

Observation: The common-law rule that the privilege protecting confidential communications
between attorney and client is lost if the relation is abused by a client who seeks legal assistance to
perpetrate a crime or fraud has been codified.

§ 394. Attorney participation.

The attorney-client privilege cannot be used to protect a client in the perpetration of a crime in concert with the
attorney, even where the attorney is not aware of his client's purpose. The reason for the rule is that it is not within the
professional character of a lawyer to give advised on the commission of crime. Professional responsibility does not
countenance the use of the attorney-client privilege as a subterfuge, and all conspiracies, either active or passive,
which are calculated to hinder the administration of justice will vitiate the privilege. In some jurisdictions, however, this
exception to the rule of privilege in confined to such intended acts in violation of the law as are mala in se, as
distinguished from those which are merely mala prohibita.

§ 395. Communication in contemplation of crime.

Communications between attorney and client having to do with the client's contemplated criminal acts, or in aid or
furtherance thereof, are not covered by the cloak of privilege ordinarily existing in reference to communications
between attorney and client. But, the mere charge of illegality, not supported by evidence, will not defeat the privilege;
there must be at least prima facie evidence that the illegality has some foundation in fact.

Underhill also states:

There are many other cases to the same effect, for the rule is prostitution of the honorable relation of attorney and
client will not be permitted under the guise of privilege, and every communication made to an attorney by a client for a
criminal purpose is a conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the attorney
under certain circumstances may be bound to disclose at once in the interest of justice. In accordance with this rule,
where a forged will or other false instrument has come into possession of an attorney through the instrumentality of
the accused, with the hope and expectation that the attorney would take some action in reference thereto, and the
attorney does act, in ignorance of the true character of the instrument, there is no privilege, inasmuch as full
confidence has been withheld. The attorney is then compelled to produce a forged writing against the client. The fact
that the attorney is not cognizant of the criminal or wrongful purpose, or, knowing it, attempts to dissuade his client, is
immaterial. The attorney's ignorance of his client's intentions deprives the information of a professional character as
pg. 33
 full confidence has been withheld. (H.C. Underhill, A Treatise on the Law of Criminal Case Evidence, vol. 2, Fifth ed.
(1956), Sec. 332, pp. 836-837; emphasis mine).

125 AMERICAN LAW REPORTS ANNOTATED, 516-519, summarizes the rationale of the rule excepting communications
with respect to contemplated criminal or fraudulent acts, thus:

c. Rationale of rule excepting communications with respect to contemplated criminal or fraudulent act.

Various reasons have been announced as being the foundation for the holdings that communications with respect to
contemplated criminal or fraudulent acts are not privileged.

The reason perhaps most frequently advanced is that in such cases there is no professional employment, properly
speaking. Standard F. Ins. Co v. Smithhart (1919) 183 Ky 679, 211 SW. 441, 5 ALR 972; Cummings v. Com. (1927)
221 Ky 301, 298 SW 943; Strong v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v. Van Alstine (1885) 57 Mich
69, 23 NW 594; Hamil & Co. v. England (1892) 50 Mo App 338; Carney v. United R. Co. (1920) 205 Mo App 495, 226
SW 308; Matthews v. Hoagland(1891) 48 NJ Eq 455, 21 A 1054; Covency v. Tannahill (1841) 1 Hill (NY) 33, 37 AM
Dec 287; People ex rel. Vogelstein v. Warden (1934) 150 Misc 714, 270 NYS 362 (affirmed without opinion in (1934)
242 App Div 611, 271 NYS 1059); Russell v. Jackson (1851) 9 Hare 387, 68 Eng Reprint 558; Charlton
v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751; Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR; Re
Postlethwaite (1887) LR 35 Ch Div (Eng) 722.

In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR, the court said: "In order that the rule may apply, there must
be both professional confidence and professional employment, but if the client has a criminal object in view in his
communications with his solicitor one of these elements must necessarily be absent. The client must either conspire
with his solicitor or deceive him. If his criminal object is avowed, the client does not consult his adviser professionally,
because it cannot be the solicitor's business to further any criminal object. If the client does not avow his object, he
reposes no confidence, for the state of facts which is the foundation of the supposed confidence does not exist. The
solicitor's advice is obtained by a fraud."

So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211 SW 441, 5 ALR 972, the court said: "The reason of
the principle which holds such communications not to be privileged is that it is not within the professional character of
a lawyer to give advice upon such subjects, and that it is no part of the profession of an attorney or counselor at law
to be advising persons as to how they may commit crimes or frauds, or how they may escape the consequences of
contemplated crimes and frauds. If the crime or fraud has already been committed and finished, a client may advise
with an attorney in regard to it, and communicate with him freely, and the communications cannot be divulged as
evidence without the consent of the client, because it is a part of the business and duty of those engaged in the
practice of the profession of law, when employed and relied upon for that purpose, to give advice to those who have
made infractions of the laws; and, to enable the attorney to properly advise and to properly represent the client in
court or when prosecutions are threatened, it is conducive to the administration of justice that the client shall be free
to communicate to his attorney all the facts within his knowledge, and that he may be assured that a communication
made by him shall not be used to his prejudice."

The protection which the law affords to communications between attorney and client has reference to those which are
legitimately and properly within the scope of a lawful employment, and does not extend to communications made in
contemplation of a crime, or perpetration of a fraud. Strong v. Abner (1937) 368 Ky 502, 105 SW (2d) 599.

The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594, in holding not privileged communications to an
attorney having for their object the communication of a crime, said: "They then partake of the nature of a conspiracy,
or attempted conspiracy, and it is not only lawful to divulge such communications, but under certain circumstances it
might become the duty of the attorney to do so.The interests of public justice require that no such shield from merited
exposure shall be interposed to protect a person who takes counsel how he can safely commit a crime. The relation
of attorney and client cannot exist for the purpose of counsel in concocting crimes."

And in Coveney v. Tannahill (1841) 1 Hill (NY) 33, 37 Am Dec 287, the court was of the opinion that there could be
no such relation as that of attorney and client, either in the commission of a crime, or in the doing of a wrong by force
or fraud to an individual, the privileged relation of attorney and client existing only for lawful and honest purposes.

If the client consults the attorney at law with reference to the perpetration of a crime, and they co-operate in effecting
it, there is no privilege, inasmuch as it is no part of the lawyer's duty to aid in crime — he ceases to be counsel and
becomes a criminal. Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054.

The court cannot permit it to be said that the contriving of a fraud forms part of the professional business of an
attorney or solicitor. Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751.

If the client does not frankly and freely reveal his object and intention as well as facts, there is not professional
confidence, and therefore no privilege. Matthews v. Hoagland (NJ) supra. See to the same effect Carney v. United
R. Co. (1920) 205 Mo App 495, 226 SW 308.

There is no valid claim of privilege in regard to the production of documents passing between solicitor and client,
when the transaction impeached is charged to be based upon fraud, that is the matter to be investigated, and it is
thought better that the alleged privilege should suffer than that honestly and fair dealing should appear to be violated
with impunity. Smith v. Hunt (1901) 1 Ont L Rep 334.

In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited in Reg. v. Cox (1884) LR 14 QB Div (Eng) 172 —
CCR), the chief justice said "I believe the law is, and properly is, that if a party consults an attorney, and obtains
advice for what afterwards turns out to be the commission of a crime or a fraud, that party so consulting the attorney
pg. 34
 has no privilege whatever to close the lips of the attorney from stating the truth. Indeed, if any such privilege should
be contended for, or existing, it would work most grievous hardship on an attorney, who, after he had been consulted
upon what subsequently appeared to be a manifest crime and fraud, would have his lips closed, and might place him
in a very serious position of being suspected to be a party to the fraud, and without his having an opportunity of
exculpating himself . . . There is no privilege in the case which I have suggested of a party consulting another, a
professional man, as to what may afterwards turn out to be a crime or fraud, and the best mode of accomplishing it."

In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the question of privilege as to communications between
attorney and client was not involved, the question directly involved being the competency of a clerk in a business
establishment to testify as to certain information which he acquired while working in the establishment, the court
strongly approved of a view as stated arguendo for plaintiff, in Annesley v. Anglesea (1743) 17 How St Tr (Eng) 1229,
as follows: "I shall claim leave to consider whether an attorney may be examined as to any matter which came to his
knowledge as an attorney. If he is employed as an attorney in any unlawful or wicked act, his duty to the public
obliges him to disclose it; no private obligations can dispense with that universal one which lies on every member of
society to discover every design which may be formed, contrary to the laws of society, to destroy the public welfare.
For this reason, I apprehend that if a secret which is contrary to the public good, such as a design to commit treason,
murder, or perjury, comes to the knowledge of an attorney, even in a cause where he is concerned, the obligation to
the public must dispense with the private obligation to the client."

The court in McMannus v. State (1858) 2 Head (Tenn) 213, said; "It would be monstrous to hold that if counsel was
asked and obtained in reference to a contemplated crime that the lips of the attorney would be sealed, when the facts
might become important to the ends of justice in the prosecution of crime. In such a case the relation cannot be taken
to exist. Public policy would forbid it."

And the court in Lanum v. Patterson (1909) 151 Ill App 36, observed that this rule was not in contravention of sound
public policy, but on the contrary, tended to the maintenance of a higher standard of professional ethics by preventing
the relation of attorney and client from operating as a cloak for fraud.

Communications of a client to an attorney are not privileged if they were a request for advice as to how to commit a
fraud, it being in such a case not only the attorney's privilege, but his duty, to disclose the facts to the court. Will
v. Tornabells & Co. (1907) 3 Porto Rico Fed Rep 125. The court said: "We say this notwithstanding the comments of
opposing counsel as to the indelicacy of his position because of his being now on the opposite side of the issue that
arose as a consequence of the communication he testifies about, and is interested in the cause to the extent of a
large contingent fee, as he confesses."

The object of prohibiting the disclosure of confidential communications is to protect the client, and not to make the
attorney an accomplice or permit him to aid in the commission of a crime. People vs. Petersen (1901) 60 App Div
118, NYS 941.

The seal of personal confidence can never be used to cover a transaction which is in itself a crime. People
v. Farmer (1909) 194 NY 251, 87 NE 457.

As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, § 410 and 411, pages 366-368, states:

§ 410. Name or identity of client.

Disclosure of a client's identity is necessary proof of the existence of the attorney-client relationship and is not
privileged information. Thus, the attorney-client privilege is inapplicable even though the information was
communicated confidentially to the attorney in his professional capacity and, in some cases, in spite of the fact that
the attorney may have been sworn to secrecy, where an inquiry is directed to an attorney as to the name or identity of
his client. This general rule applies in criminal cases, as well as in civil actions. Where an undisclosed client is a party
to an action, the opposing party has a right to know with whom he is contending or who the real party in interest is, if
not the nominal adversary.

§ 411. Disclosure of identity of client as breach of confidentiality.

The revelation of the identification of a client is not usually considered privileged, except where so much has been
divulged with regard to to legal services rendered or the advice sought, that to reveal the client's name would be to
disclose the whole relationship and confidential communications. However, even where the subject matter of the
attorney-client relationship has already been revealed, the client's name has been deemed privileged.

Where disclosure of the identity of a client might harm the client by being used against him under
circumstances where there are no countervailing factors, then the identity is protected by the attorney-client privilege.

In criminal proceedings, a client's name may be privileged if information already obtained by the tribunal, combined
with the client's identity, might expose him to criminal prosecution for acts subsequent to, and because of, which he
had sought the advice of his attorney.

Although as a general rule, the identity of a defendant in a criminal prosecution is a matter of public record and, thus,
not covered by the attorney-client privilege, where the attorney has surrendered to the authorities physical evidence
in his possession by way of the attorney-client relationship, the state must prove the connection between the piece of
physical evidence and the defendant without in any way relying on the testimony of the client's attorney who initially
received the evidence and, thus, the attorney may not be called to the stand and asked to disclose the identity of the
client. However, an attorney cannot refuse to reveal the identity of a person who asked him to deliver stolen property
to the police department, whether a bona fide attorney-client relationship exists between them, inasmuch as the
transaction was not a legal service or done in the attorney's professional capacity.
pg. 35
 Distinction: Where an attorney was informed by a male client that his female acquaintance was
possibly involved in [a] his-and-run accident, the identity of the female did not come within scope of
attorney-client privilege although the identity of the male client was protected. (emphases supplied)

WIGMORE explains why the identity of a client is not within the lawyer-client privilege in this manner:

§ 2313. Identity of client or purpose of suit. — The identity of the attorney's client or the name of the real party in
interest will seldom be a matter communicated in confidence because the procedure of litigation ordinarily
presupposes a disclosure of these facts. Furthermore, so far as a client may in fact desire secrecy and may be able
to secure action without appearing as a party to the proceedings, it would be improper to sanction such a wish. Every
litigant is in justice entitled to know the identity of his opponents. He cannot be obliged to struggle in the dark against
unknown forces. He has by anticipation the right, in later proceedings, if desired, to enforce the legal responsibility of
those who may have maliciously sued or prosecuted him or fraudulently evaded his claim. He has as much right to
ask the attorney "Who fees your fee?" as to ask the witness (966 supra). "Who maintains you during this trial?" upon
the analogy of the principle already examined (2298 supra), the privilege cannot be used to evade a client's
responsibility for the use of legal process. And if it is necessary for the purpose to make a plain exception to the rule
of confidence, then it must be made. (Wigmore on Evidence, vol. 8, (1961), p. 609; emphases supplied).

In 114 ALR, 1322, we also find the following statement:

1. Name or identity.

As is indicated in 28 R.C.L. p. 563, it appears that the rule making communications between attorney and client
privileged from disclosure ordinarily does not apply where the inquiry is confined to the fact of the attorney's
employment and the name of the person employing him, since the privilege presupposes the relationship of client and
attorney, and therefore does not attach to its creation.

At the present stage of the proceedings below, the petitioners have not shown that they are so situated with respect to their
principals as to bring them within any of the exceptions established by American jurisprudence. There will be full opportunity
for them to establish that fact at the trial where the broader perspectives of the case shall have been presented and can be
better appreciated by the court. The insistence for their exclusion from the case is understandable, but the reasons for the
hasty resolution desired is naturally suspect.

We do not even have to go beyond our shores for an authority that the lawyer-client privilege cannot be invoked to prevent the
disclosure of a client's identity where the lawyer and the client are conspirators in the commission of a crime or a fraud. Under
our jurisdiction, lawyers are mandated not to counsel or abet activities aimed at defiance of the law or at lessening confidence
in the legal system (Rule 1.02, Canon 1, Code of Professional Responsibility) and to employ only fair and honest means to
attain the lawful objectives of his client (Rule 19.01, Canon 19, Id.). And under the Canons of Professional Ethics, a lawyer
must steadfastly bear in mind that his great trust is to be performed within and not without the bounds of the law (Canon
15, Id.), that he advances the honor of his profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact compliance with the strictest principles of moral law
(Canon 32, Id.). These canons strip a lawyer of the lawyer-client privilege whenever he conspires with the client in the
commission of a crime or a fraud.

I then vote to DENY, for want of merit, the instant petition.

Narvasa, C.J. and Regalado, J., concur.

PUNO, J., dissenting:

This is an important petition for certiorari to annul the resolutions of the respondent Sandiganbayan denying petitioners' motion
to be excluded from the Complaint for recovery of alleged ill-gotten wealth on the principal ground that as lawyers they cannot
be ordered to reveal the identity of their client.

First, we fast forward the facts. The Presidential Commission on Good Government (PCGG) filed Civil Case No. 33 before
the Sandiganbayan against Eduardo M. Cojuangco, Jr., for the recovery of alleged ill-gotten wealth. Sued as co-defendants
are the petitioners in the cases at bar — lawyers Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose Concepcion,
Rogelio A. Vinluan, Victor P. Lazatin, Eduardo Escueta and Paraja Hayudini. Also included as a co-defendant is lawyer Raul
Roco, now a duly elected senator of the Republic. All co-defendants were then partners of the law firm, Angara, Abello,
Concepcion, Regala and Cruz Law Offices, better known as the ACCRA Law Firm. The Complaint against Cojuangco, Jr., and
the petitioners alleged, inter alia, viz:

xxx xxx xxx

The wrongs committed by defendants acting singly or collectively and in unlawful concert with one another, include
the misappropriation and theft of public funds, plunder of the nation's wealth, extortion, blackmail, bribery,
embezzlement and other acts of corruption, betrayal of public trust and brazen abuse of power as more fully
described (in the subsequent paragraphs of the complaint), all at the expense and to the grave and irreparable
damage of Plaintiff and the Filipino people.

Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro D. Regala, Avelino V. Cruz,
Regalio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul S. Roco of Angara, Concepcion, Cruz, Regala,
and Abello law offices (ACCRA) plotted, devised, schemed, conspired and confederated with each other in setting up,
through the use of the coconut levy funds, the financial and corporate framework and structures that led to the
establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC and more than twenty other coconut levy funded

pg. 36
 corporations, including the acquisition of the San Miguel Corporation shares and the institutionalization through
presidential directives of the coconut monopoly. through insidious means and machinations, ACCRA, using its wholly-
owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares
representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This ranks ACCRA
Investments Corporation number 44 among the top 100 biggest stockholders of UCPB which has approximately
1,400,000 shareholders. On the other hand, corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of 7 June 1984.

In their Answer, petitioners alleged that the legal services offered and made available by their firm to its clients include: (a)
organizing and acquiring business organizations, (b) acting as incorporators or stockholders thereof, and (c) delivering to
clients the corresponding documents of their equity holdings (i.e., certificates of stock endorsed in blank or blank deeds of trust
or assignment). They claimed that their activities were "in furtherance of legitimate lawyering."

In the course of the proceedings in the Sandiganbayan, the PCGG filed a Motion to Admit Third Amended Complaint and the
Third Amended Complaint excluding lawyer Roco as party defendant. Lawyer Roco was excluded on the basis of his promise
to reveal the identity of the principals for whom he acted as nominee/stockholder in the companies involved in the case.

The Sandiganbayan ordered petitioners to comment on the motion. In their Comment, petitioners demanded that they be
extended the same privilege as their co-defendant Roco. They prayed for their exclusion from the complaint. PCGG agreed
but set the following conditions: (1) disclosure of the identity of their client; (2) submission of documents substantiating their
lawyer-client relationship; and (3) submission of the deeds of assignment petitioners executed in favor of their client covering
their respective shareholdings. The same conditions were imposed on lawyer Roco.

Petitioners refused to comply with the PCGG conditions contending that the attorney-client privilege gives them the right not to
reveal the identity of their client. They also alleged that lawyer Roco was excluded though he did not in fact reveal the identity
of his clients. On March 18, 1992, the Sandiganbayan denied the exclusion of petitioners in Case No. 33. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e.,
their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the
privilege claimed by the ACCRA lawyers exists cannot even begin to the debated. The ACCRA lawyers cannot
excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing
the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified
his principal, which revelation could show the lack of course against him. This in turn has allowed the PCGG to
exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in
exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991). The ACCRA
lawyers have preferred not to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as a party defendants. In the same
vein, they cannot compel the PCGG to be accorded the same treatment accorded to Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja
G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit.

Sandiganbayan later denied petitioners' motions for reconsideration in its resolutions dated May 21, 1988 and September 3,
1992.

In this petition for certiorari, petitioners contend:

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who
indisputably acted as lawyers in serving as nominee-stockholders, to the strict application of the law agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering petitioners ACCRA lawyers
and Mr. Roco as similarly situated and, therefore, deserving of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the
identities of the client(s) for whom he acted as nominee-stockholder.

pg. 37
 2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the
client(s), the disclosure does not constitute a substantial distinction as would make the
classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco
and violation of the equal protection clause.

III

The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case,
the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the
other information requested by the PCGG.

1. Under the peculiar facts of this case, the attorney-client privilege includes the identity of the
client(s).

2. The factual disclosures required by the PCGG are not limited to the identity of petitioners
ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of party-
defendants by the PCGG must be based on reasonable and just grounds and with due consideration to the
constitutional right of petitioners ACCRA lawyers to the equal protection of the law.

The petition at bar is atypical of the usual case where the hinge issue involves the applicability of attorney-client privilege. It
ought to be noted that petitioners were included as defendants in Civil Case No. 33 as conspirators. Together with Mr.
Cojuangco, Jr., they are charged with having ". . . conspired and confederated with each other in setting up, through the use of
the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM,
COCOLIFE, COCOMARK, CICI and more than twenty other coconut levy funded corporations, including the acquisition of San
Miguel Corporation shares and the institutionalization through presidential directives of the coconut monopoly." To stress,
petitioners are charged with having conspired in the commission of crimes. The issue of attorney-client privilege arose when
PCGG agreed to exclude petitioners from the complaint on condition they reveal the identity of their client. Petitioners refused
to comply and assailed the condition on the ground that to reveal the identity of their client will violate the attorney-client
privilege.

It is thus necessary to resolve whether the Sandiganbayan committed grave abuse of discretion when it rejected petitioners'
thesis that to reveal the identity of their client would violate the attorney-client privilege. The attorney-client privilege is the
oldest of the privileges for confidential communications known to the common law. 1 For the first time in this jurisdiction, we are
asked to rule whether the attorney-client privilege includes the right not to disclose the identity of client. The issue poses a
trilemma for its resolution requires the delicate balancing of three opposing policy considerations. One overriding policy
consideration is the need for courts to discover the truth for truth alone is the true touchstone of justice. 2 Equally compelling is
the need to protect the adversary system of justice where truth is best extracted by giving a client broad privilege to confide
facts to his counsel.3 Similarly deserving of sedulous concern is the need to keep inviolate the constitutional right against self-
incrimination and the right to effective counsel in criminal litigations. To bridle at center the centrifugal forces of these policy
considerations, courts have followed to prudential principle that the attorney-client privilege must not be expansively construed
as it is in derogation of the search for truth.4Accordingly, a narrow construction has been given to the privilege and it has been
consistently held that "these competing societal interests demand that application of the privilege not exceed that which is
necessary to effect the policy considerations underlying the privilege, i.e., the privilege must be upheld only in those
circumstances for which it was created.'"5

Prescinding from these premises, our initial task is to define in clear strokes the substantive content of the attorney-client
privilege within the context of the distinct issues posed by the petition at bar. With due respect, I like to start by stressing the
irreducible principle that the attorney-client privilege can never be used as a shield to commit a crime or a fraud.
Communications to an attorney having for their object the commission of a crime ". . . partake the nature of a conspiracy, and it
is not only lawful to divulge such communications, but under certain circumstances it might become the duty of the attorney to
do so. The interests of public justice require that no such shield from merited exposure shall be interposed to protect a person
who takes counsel how he can safely commit a crime. The relation of attorney and client cannot exist for the purpose of
counsel in concocting crimes."6 In the well chosen words of retired Justice Quiason, a lawyer is not a gun for hire.7 I hasten to
add, however, that a mere allegation that a lawyer conspired with his client to commit a crime or a fraud will not defeat the
privilege.8 As early as 1933, no less than the Mr. Justice Cardozo held in Clark v. United States9 that: "there are early cases
apparently to the effect that a mere charge of illegality, not supported by any evidence, will set the confidences free . . . But
this conception of the privilege is without support . . . To drive the privilege away, there must be 'something to give colour to
the charge;' there must beprima facie evidence that it has foundation in fact." In the petition at bar, however, the PCGG
appears to have relented on its original stance as spelled out in its Complaint that petitioners are co-conspirators in crimes and
cannot invoke the attorney-client privilege. The PCGG has agreed to exclude petitioners from the Complaint provided they
reveal the identity of their client. In fine, PCGG has conceded that petitioner are entitled to invoke the attorney-client privilege if
they reveal their client's identity.

Assuming then that petitioners can invoke the attorney-client privilege since the PCGG is no longer proceeding against them
as co-conspirators in crimes, we should focus on the more specific issue of whether the attorney-client privilege includes the
right not to divulge the identity of a client as contended by the petitioners. As a general rule, the attorney-client privilege does
not include the right of non-disclosure of client identity. The general rule, however, admits of well-etched exceptions which the
Sandiganbayan failed to recognize. The general rule and its exceptions are accurately summarized in In re Grand Jury
Investigation,10viz:

pg. 38
 The federal forum is unanimously in accord with the general rule that the identity of a client is, with limited exceptions,
not within the protective ambit of the attorney-client privilege. See: In re Grand Jury Proceedings (Pavlick), 680 F.2d
1026, 1027 (5th Cir. 1982) (en banc); In re Grand Jury Proceedings (Jones), 517 F. 2d 666, 670-71 (5th Cir. 1975); In
re Grand Jury Proceedings (Fine), 651 F. 2d 199, 204 (5th Cir. 1981); Frank v. Tomlinson, 351 F.2d 384 (5th Cir.
1965), cert. denied, 382 U.S. 1082, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966); In re Grand Jury Witness (Salas), 695 F.2d
359, 361 (9th Cir. 1982); In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979).

The Circuits have embraced various "exceptions" to the general rule that the identity of a client is not within the
protective ambit of the attorney-client privilege. All such exceptions appear to be firmly grounded in the Ninth Circuit's
seminal decision in Baird v. Koerner, 279 F.2d 633 (9th Cir. 1960). In Baird the IRS received a letter from an attorney
stating that an enclosed check in the amount of $12,706 was being tendered for additional amounts due from
undisclosed taxpayers. When the IRS summoned the attorney to ascertain the identity of the delinquent taxpayers the
attorney refused identification assertion the attorney-client privilege. The Ninth Circuit, applying California law,
adjudged that the "exception" to the general rule as pronounced in Ex parte McDonough, 170 Cal. 230, 149 P. 566
(1915) controlled:

The name of the client will be considered privileged matter where the circumstances of the case
are such that the name of the client is material only for the purpose of showing an acknowledgment
of guilt on the part of such client of the very offenses on account of which the attorney was
employed.

Baird, supra, 279 F.2d at 633. The identity of the Baird taxpayer was adjudged within this exception to the general
rule. The Ninth Circuit has continued to acknowledge this exception.

A significant exception to this principle of non-confidentiality holds that such information may be
privileged when the person invoking the privilege is able to show that a strong possibility exists that
disclosure of the information would implicate the client in the very matter for which legal advice was
sought in the first case.

In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th Cir. 1982). Accord: United
States v. Hodge and Zweig, 548 F.2d 1347, 1353 (9th Cir. 1977); In re Grand Jury Proceedings (Lawson), 600 F.2d
215, 218 (9th Cir. 1979); United States v. Sherman, 627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand Jury Witness
(Salas), 695 F.2d 359, 361 (9th Cir. 1982). This exception, which can perhaps be most succinctly characterized as
the "legal advice" exception, has also been recognized by other circuits. See: In re Walsh, 623 F.2d 489, 495 (7th
Cir.), cert. denied, 449 U.S. 994, 101 S. Ct. 531, 66 L.Ed.2d 291 (1980); In re Grand Jury Investigation (Tinari), 631
F.2d 17, 19 (3d Cir 1980), cert. denied, 449 U.S.1083, 101 S.Ct. 869-70, 66 L.Ed.2d 808 (1981). Since the legal
advice exception is firmly grounded in the policy of protecting confidential communications, this Court adopts and
applies its principles herein. See: In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), supra.

It should be observed, however that the legal advice exception may be defeated through a prima facieshowing that
the legal representation was secured in furtherance of present or intended continuing illegality, as where the legal
representation itself is part of a larger conspiracy. See: In re Grand Jury Subpoenas Decus Tecum
(Marger/Merenbach), supra, 695 F.2d at 365 n. 1; In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449, U.S.
994, 101 S.Ct. 531, 66 L.Ed. 2d 291 (1980); In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d Cir 1980);
cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66 L.Ed. 2d 808 (1981); In re Grand Jury Proceedings (Lawson), 600
F.2d 215, 218 (9th Cir. 1979); United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971). See also: Clark
v. United States, 289 U.S. 1, 15, 53, S.Ct. 465, 469, 77, L.Ed. 993 (1933); In re Grand Jury Proceedings (Pavlick),
680 F.2d 1026, 1028-29 (5th Cir. 1982 (en banc).

Another exception to the general rule that the identity of a client is not privileged arises where disclosure of the
identity would be tantamount to disclosing an otherwise protected confidential communication. In Baird, supra, the
Ninth Circuit observed:

If the identification of the client conveys information which ordinarily would be conceded to be part
of the usual privileged communication between attorney and client, then the privilege should extend
to such identification in the absence of another factors.

Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated the following exception:

To the general rule is an exception, firmly embedded as the rule itself. The privilege may be
recognized where so much of the actual communication has already been disclosed that
identification of the client amounts to disclosure of a confidential communication.

NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965). Accord: United States v. Tratner, 511 F.2d 248, 252 (7th Cir.
1975); Colton v. United States, 306 F.2d 633, 637 (2d Cir. 1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d
499 1963); Tillotson v. Boughner, 350 F.2d 663, 666 (7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d
Cir. 1944). See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6 L.Ed. 474 (1826). The Seventh Circuit has
added to the Harvey exception the following emphasized caveat:

The privilege may be recognized where so much of the actual communication has already been
disclosed [not necessarily by the attorney, but by independent sources as well] that identification of
the client [or of fees paid] amounts to disclosure of a confidential communication.

United States vs. Jeffers, 532 F.2d 1101, 1115 (7th Cir. 1976 (emphasis added). The Third Circuit, applying this
exception, has emphasized that it is the link between the client and the communication, rather than the link between
pg. 39
 the client and the possibility of potential criminal prosecution, which serves to bring the client's identity within the
protective ambit of the attorney-client privilege. See: In re Grand Jury Empanelled February 14, 1978 (Markowitz),
603 F.2d 469, 473 n. 4 (3d Cir. 1979). Like the "legal advice" exception, this exception is also firmly rooted in
principles of confidentiality.

Another exception, articulated in the Fifth Circuit's en banc decision of In re Grand Jury Proceedings (Pavlick), 680
F.2d 1026 (5th Cir. 1982 (en banc), is recognized when disclosure of the identity of the client would provide the "last
link" of evidence:

We have long recognized the general rule that matters involving the payment of fees and the
identity of clients are not generally privileged. In re Grand Jury Proceedings, (United States v.
Jones), 517 F.2d 666 (5th Cir. 1975); see cases collected id. at 670 n. 2. There we also
recognized, however, a limited and narrow exception to the general rule, one that obtains when the
disclosure of the client's identity by his attorney would have supplied the last link in an existing
chain of incriminating evidence likely to lead to the client's indictment.

I join the majority in holding that the Sandiganbayan committed grave abuse of discretion when it misdelineated the metes and
bounds of the attorney-client privilege by failing to recognize the exceptions discussed above.

Be that as it may, I part ways with the majority when it ruled that petitioners need not prove they fall within the exceptions to
the general rule. I respectfully submit that the attorney-client privilege is not a magic mantra whose invocation will ipso
facto and ipso jure drape he who invokes it with its protection. Plainly put, it is not enough to assert the privilege. 11 The person
claiming the privilege or its exceptions has the obligation to present the underlying facts demonstrating the existence of the
privilege.12 When these facts can be presented only by revealing the very information sought to be protected by the privilege,
the procedure is for the lawyer to move for an inspection of the evidence in an in camera hearing.13 The hearing can even be
in camera and ex-parte. Thus, it has been held that "a well-recognized means for an attorney to demonstrate the existence of
an exception to the general rule, while simultaneously preserving confidentiality of the identity of his client, is to move the court
for an in camera ex-parte hearing.14 Without the proofs adduced in these in camera hearings, the Court has no factual basis to
determine whether petitioners fall within any of the exceptions to the general rule.

In the case at bar, it cannot be gainsaid that petitioners have not adduced evidence that they fall within any of the above
mentioned exceptions for as aforestated, the Sandiganbayan did not recognize the exceptions, hence, the order compelling
them to reveal the identity of their client. In ruling that petitioners need not further establish the factual basis of their claim that
they fall within the exceptions to the general rule, the majority held:

The circumstances involving the engagement of lawyers in the case at bench therefore clearly reveal that the instant
case falls under at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to
establish said client's connection with the very fact in issue of the case, which is privileged information, because the
privilege, as stated earlier, protects the subject matter or the substance (without which there would be no attorney-
client relationship). Furthermore, under the third main exception, revelation of the client's name would obviously
provide the necessary link for the prosecution to build its case, where none otherwise exists. It is the link, in the word
of Baird, "that would inevitably form the chain of testimony necessary to convict the (client) of a . . . crime.

I respectfully submit that the first and third exceptions relied upon by the majority are not self-executory but need factual basis
for their successful invocation. The first exception as cited by the majority is ". . . where a strong probability exists that
revealing the clients' name would implicate that client in the very activity for which he sought the lawyer's advice." It seems to
me evident that "the very activity for which he sought the lawyer's advice" is a question of fact which must first be established
before there can be any ruling that the exception can be invoked. The majority cites Ex Parte Enzor, 15 and
U S v. Hodge and Zweig,16 but these cases leave no doubt that the "very activity" for which the client sought the advice of
counsel was properly proved. In both cases, the "very activity" of the clients reveal they sought advice on their criminal
activities. Thus, in Enzor, the majority opinion states that the "unidentified client, an election official, informed his attorney in
confidence that he had been offered a bribe to violate election laws or that he had accepted a bribe to that end." 17 In Hodge,
the "very activity" of the clients deals with illegal importation of drugs. In the case at bar, there is no inkling whatsoever about
the "very activity" for which the clients of petitioners sought their professional advice as lawyers. There is nothing in the
records that petitioners were consulted on the "criminal activities" of their client. The complaint did allege that petitioners and
their client conspired to commit crimes but allegations are not evidence.

So it is with the third exception which as related by the majority is "where the government's lawyers have no case against an
attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of
testimony necessary to convict an individual of a crime." 18 Again, the rhetorical questions that answer themselves are: (1) how
can we determine that PCGG has "no case" against petitioners without presentation of evidence? and (2) how can we
determine that the name of the client is the only link without presentation of evidence as to the other links? The case of Baird
vs. Koerner19 does not support the "no need for evidence" ruling of the majority. In Baird, as related by the majority itself, "a
lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken to place
the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the US Internal
Revenue Service (IRS). It appeared that the taxpayers' returns of previous years were probably incorrect and the taxes
understated.20 Once more, it is clear that the Baird court was informed of the activity of the client for which the lawyer was
consulted and the activity involved probable violation of the tax laws. Thus, the Court held:

The facts of the instant case bring it squarely within that exception to the general rule. Here money was received by
the government, paid by persons who thereby admitted they had not paid a sufficient amount in income taxes some
one or more years in the past. The names of the clients are useful to the government for but one purpose — to
ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several
years. The voluntary nature of the payment indicates a belief by the taxpayers that more tax or interest or penalties
are due than the sum previously paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it
is criminal guilt is undisclosed. But it may well be the link that could form the chain of testimony necessary to convict

pg. 40
 an individual of a federal crime. Certainly the payment and the feeling of guilt are the reasons the attorney here
involved was employed — to advise his clients what, under the circumstances, should be done.

In fine, the factual basis for the ruling in Baird was properly established by the parties. In the case at bar, there is no evidence
about the subject matter of the consultation made by petitioners' client. Again, the records do not show that the subject matter
is criminal in character except for the raw allegations in the Complaint. Yet, this is the unstated predicate of the majority ruling
that revealing the identity of the client ". . . would furnish the only link that would form the chain of testimony necessary to
convict an individual of a crime." The silent implication is unflattering and unfair to petitioners who are marquee names in the
legal profession and unjust to their undisclosed client.

Finally, it ought to be obvious that petitioners' right to claim the attorney-client privilege is resolutory of the Complaint against
them, and hence should be decided ahead and independently of their claim to equal protection of the law. Pursuant to the rule
in legal hermeneutics that courts should not decide constitutional issues unless unavoidable, I also respectfully submit that
there is no immediate necessity to resolve petitioners' claim to equal protection of the law at this stage of the proceedings.

IN VIEW WHEREOF, I respectfully register a qualified dissent from the majority opinion.

Separate Opinions

VITUG, J., concurring:

The legal profession, despite all the unrestrained calumny hurled against it, is still the noblest of professions. It exists upon the
thesis that, in an orderly society that is opposed to all forms of anarchy, it so occupies, as it should, an exalted position in the
proper dispensation of justice. In time, principles have evolved that would help ensure its effective ministration. The protection
of confidentiality of the lawyer-client relationship is one, and it has since been an accepted firmament in the profession. It
allows the lawyer and the client to institutionalize a unique relationship based on full trust and confidence essential in a justice
system that works on the basis of substantive and procedural due process. To be sure, the rule is not without its pitfalls, and
demands against it may be strong, but these problems are, in the ultimate analysis, no more than mere tests of vigor that have
made and will make that rule endure.

I see in the case before us, given the attendant circumstances already detailed in the ponencia, a situation of the Republic
attempting to establish a case not on what it perceives to be the strength of its own evidence but on what it could elicit from a
counsel against his client. I find it unreasonable for the Sandiganbayan to compel petitioners to breach the trust reposed on
them and succumb to a thinly disguised threat of incrimination.

Accordingly, I join my other colleague who vote for the GRANT of the petition.

DAVIDE, JR., J.: dissenting

The impressive presentation of the case in the ponencia of Mr. Justice Kapunan makes difficult the espousal of a dissenting
view. Nevertheless, I do not hesitate to express that view because I strongly feel that this Court must confine itself to the key
issue in this special civil action for certiorari, viz., whether or not the Sandiganbayan acted with grave abuse of discretion in not
excluding the defendants, the petitioners herein, from the Third Amended Complaint in Civil Case No. 0033. That issue,
unfortunately, has been simply buried under the avalanche of authorities upholding the sanctity of lawyer-client relationship
which appears to me to be prematurely invoked.

From the undisputed facts disclosed by the pleadings and summarized in the ponencia, I cannot find my way clear to a
conclusion that the Sandiganbayan committed grave abuse of discretion in not acting favorably on the petitioners' prayer in
their Comment to the PCGG's Motion to Admit Third Amended Complaint.

The prerogative to determine who shall be made defendants in a civil case is initially vested in the plaintiff, or the PCGG in this
case. The control of the Court comes in only when the issue of "interest" (§ 2, Rule 3, Rules of Court) as, e.g., whether an
indispensable party has not been joined, or whether there is a misjoinder of parties (§ 7, 8, and 9, Id.), is raised.

In the case below, the PCGG decided to drop or exclude from the complaint original co-defendant Raul Roco because he had
allegedly complied with the condition prescribed by the PCGG, viz., undertake that he will reveal the identity of the principals
for whom he acted as nominee/stockholder in the companies involved in PCGG Case No. 0033. In short, there was an
agreement or compromise settlement between the PCGG and Roco. Accordingly, the PCGG submitted a Third Amended
Complaint without Roco as a defendant. No obstacle to such an agreement has been insinuated. If Roco's revelation violated
the confidentiality of a lawyer-client relationship, he would be solely answerable therefor to his principals/clients and, probably,
to this Court in an appropriate disciplinary action if warranted. There is at all no showing that Civil Case No. 0033 cannot
further be proceeded upon or that any judgment therein cannot be binding without Roco remaining as a defendant.
Accordingly, the admission of the Third Amended Complaint cannot be validly withheld by the Sandiganbayan.

Are the petitioners, who did not file a formal motion to be excluded but only made the request to that effect as a rider to their
Comment to the Motion to Admit Third Amended Complaint, entitled to be excluded from the Third Amended Complaint such
that denial thereof would constitute grave abuse of discretion on the Sandiganbayan's part? To me, the answer is clearly in the
negative.

The petitioners seek to be accorded the same benefit granted to or to be similarly treated as Roco. Reason and logic dictate
that they cannot, unless they too would make themselves like Roco. Otherwise stated, they must first voluntarily adopt for
pg. 41
themselves the factual milieu created by Roco and must bind themselves to perform certain obligations as Roco. It is precisely
for this that in response to the petitioners' comment on the aforementioned Motion to Admit Third Amended Complaint the
PCGG manifested that it is willing to accord the petitioners the treatment it gave Roco provided they would do what Roco had
done, that is, disclose the identity of their principals/clients and submit documents substantiating their claimed lawyer-client
relationship with the said principals/clients, as well as copies of deeds of assignments the petitioners executed in favor of their
principals/clients. The petitioners did not do so because they believed that compliance thereof would breach the sanctity of
their fiduciary duty in a lawyer-client relationship.

It, indeed, appears that Roco has complied with his obligation as a consideration for his exclusion from the Third Amended
Complaint. The Sandiganbayan found that

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified
his principal, which revelation could show the lack of action against him. This in turn has allowed the PCGG to
exercise its power both under the rules of agency and under Section 5 of E.O. No. 14-1 in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

As a matter of fact, the PCGG presented evidence to substantiate Roco's compliance. The ponencia itself so stated, thus:

. . . respondent PCGG presented evidence to substantiate compliance by private respondent Roco of the conditions
precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent
PCGG of the counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the
PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment
to the letter aforestated in (a); and (c) Letter of Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to
the respondent in behalf of private respondent Roco originally requesting the reinvestigation and/or re-examination of
evidence by the PCGG it Complaint in PCGG Case No. 33. (Id., 5-6).

These are the pieces of evidence upon which the Sandiganbayan founded its conclusion that the PCGG was satisfied with
Roco's compliance. The petitioners have not assailed such finding as arbitrary.

The ponencia's observation then that Roco did not refute the petitioners' contention that he did not comply with his obligation
to disclose the identity of his principals is entirely irrelevant.

In view of their adamantine position, the petitioners did not, therefore, allow themselves to be like Roco. They cannot claim the
same treatment, much less compel the PCGG to drop them as defendants, for nothing whatsoever. They have no right to
make such a demand for until they shall have complied with the conditions imposed for their exclusion, they cannot be
excluded except by way of a motion to dismiss based on the grounds allowed by law (e.g., those enumerated in § 1, Rule 16,
Rules of Court). The rule of confidentiality under the lawyer-client relationship is not a cause to exclude a party. It is merely
aground for disqualification of a witness (§ 24, Rule 130, Rules of Court) and may only be invoked at the appropriate time, i.e.,
when a lawyer is under compulsion to answer as witness, as when, having taken the witness stand, he is questioned as to
such confidential communicator or advice, or is being otherwise judicially coerced to produce, through subpoena duces
tecum or otherwise, letters or other documents containing the same privileged matter. But none of the lawyers in this case is
being required to testify about or otherwise reveal "any [confidential] communication made by the client to him, or his advice
given thereon in the course of, or with a view to, professional employment." What they are being asked to do, in line with their
claim that they had done the acts ascribed to them in pursuance of their professional relation to their clients, is to identify the
latter to the PCGG and the Court; but this, only if they so choose in order to be dropped from the complaint, such identification
being the condition under which the PCGG has expressed willingness to exclude them from the action. The revelation is
entirely optional, discretionary, on their part. The attorney-client privilege is not therefor applicable.

Thus, the Sandiganbayan did not commit any abuse of discretion when it denied the petitioners' prayer for their exclusion as
party-defendants because they did not want to abide with any of the conditions set by the PCGG. There would have been
abuse if the Sandiganbayan granted the prayer because then it would have capriciously, whimsically, arbitrarily, and
oppressively imposed its will on the PCGG.

Again, what the petitioners want is their exclusion from the Third Amended Complaint or the dismissal of the case insofar as
they are concerned because either they are invested with immunity under the principle of confidentiality in a lawyer-client
relationship, or the claims against them in Civil Case No. 0033 are barred by such principle.

Even if we have to accommodate this issue, I still submit that the lawyer-client privilege provides the petitioners no refuge.
They are sued as principal defendants in Civil Case No. 0033, a case of the recovery of alleged ill-gotten wealth. Conspiracy is
imputed to the petitioners therein. In short, they are, allegedly, conspirators in the commission of the acts complained of for
being nominees of certain parties.

Their inclusion as defendants in justified under § 15, Article XI of the Constitution — which provides that the right of the State
to recover properties unlawfully acquired by public officials or employees, from them or from their nominees or transferees,
shall not be barred by prescription, laches or estoppel — and E.O. No. 1 of 28 February 1986, E.O. No. 2 of 12 March 1986,
E.O. No. 14 of 7 May 1986, and the Rules and Regulations of the PCGG. Furthermore, § 2, Rule 110 of the Rules of Court
requires that the complaint or information should be "against all persons who appear to be responsible for the offense
involved."

Hypothetically admitting the allegations in the complaint in Civil Case No. 0033, I find myself unable to agree with the majority
opinion that the petitioners are immune from suit or that they have to be excluded as defendants, or that they cannot be
compelled to reveal or disclose the identity of their principals, all because of the sacred lawyer-client privilege.

This privilege is well put in Rule 130 of the Rules of Court, to wit:

pg. 42
 § 24. Disqualification by reason of privileged communication. — The following persons cannot testify as to matters
learned in confidence in the following cases:

xxx xxx xxx

(b) An attorney cannot, without the consent of his client, be examined as to any communication made by the client to
him, or his advice given thereon in the course of, or with a view to, professional employment, nor can an attorney's
secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any
fact the knowledge of which has been acquired in such capacity.

The majority seeks to expand the scope of the Philippine rule on the lawyer-client privilege by copious citations of American
jurisprudence which includes in the privilege the identity of the client under the exceptional situations narrated therein. From
the plethora of cases cited, two facts stand out in bold relief. Firstly, the issue of privilege contested therein arose in grand jury
proceedings on different States, which are preliminary proceedings before the filing of the case in court, and we are not even
told what evidentiary rules apply in the said hearings. In the present case, the privilege is invoked in the court where it was
already filed and presently pends, and we have the foregoing specific rules above-quoted. Secondly, and more important, in
the cases cited by the majority, the lawyers concerned were merely advocating the cause of their clients but were not indicted
for the charges against their said clients. Here, the counsel themselves are co-defendants duly charged in court as co-
conspirators in the offenses charged. The cases cited by the majority evidently do not apply to them.

Hence, I wish to repeat and underscore the fact that the lawyer-client privilege is not a shield for the commission of a crime or
against the prosecution of the lawyer therefor. I quote, with emphases supplied, from 81 AM JUR 2d, Witnesses, § 393 to 395,
pages 356-357:

§ 393. Effect of unlawful purpose.

The existence of an unlawful purpose prevents the attorney-client privilege from attaching. The attorney-client
privilege does not generally exist where the representation is sought to further criminal or fraudulent conduct either
past, present, or future. Thus, a confidence received by an attorney in order to advance a criminal or fraudulent
purpose is beyond the scope of the privilege.

Observation: The common-law rule that the privilege protecting confidential communications
between attorney and client is lost if the relation is abused by a client who seeks legal assistance to
perpetrate a crime or fraud has been codified.

§ 394. Attorney participation.

The attorney-client privilege cannot be used to protect a client in the perpetration of a crime in concert with the
attorney, even where the attorney is not aware of his client's purpose. The reason for the rule is that it is not within the
professional character of a lawyer to give advised on the commission of crime. Professional responsibility does not
countenance the use of the attorney-client privilege as a subterfuge, and all conspiracies, either active or passive,
which are calculated to hinder the administration of justice will vitiate the privilege. In some jurisdictions, however, this
exception to the rule of privilege in confined to such intended acts in violation of the law as are mala in se, as
distinguished from those which are merely mala prohibita.

§ 395. Communication in contemplation of crime.

Communications between attorney and client having to do with the client's contemplated criminal acts, or in aid or
furtherance thereof, are not covered by the cloak of privilege ordinarily existing in reference to communications
between attorney and client. But, the mere charge of illegality, not supported by evidence, will not defeat the privilege;
there must be at least prima facie evidence that the illegality has some foundation in fact.

Underhill also states:

There are many other cases to the same effect, for the rule is prostitution of the honorable relation of attorney and
client will not be permitted under the guise of privilege, and every communication made to an attorney by a client for a
criminal purpose is a conspiracy or attempt at a conspiracy which is not only lawful to divulge, but which the attorney
under certain circumstances may be bound to disclose at once in the interest of justice. In accordance with this rule,
where a forged will or other false instrument has come into possession of an attorney through the instrumentality of
the accused, with the hope and expectation that the attorney would take some action in reference thereto, and the
attorney does act, in ignorance of the true character of the instrument, there is no privilege, inasmuch as full
confidence has been withheld. The attorney is then compelled to produce a forged writing against the client. The fact
that the attorney is not cognizant of the criminal or wrongful purpose, or, knowing it, attempts to dissuade his client, is
immaterial. The attorney's ignorance of his client's intentions deprives the information of a professional character as
full confidence has been withheld. (H.C. Underhill, A Treatise on the Law of Criminal Case Evidence, vol. 2, Fifth ed.
(1956), Sec. 332, pp. 836-837; emphasis mine).

125 AMERICAN LAW REPORTS ANNOTATED, 516-519, summarizes the rationale of the rule excepting communications
with respect to contemplated criminal or fraudulent acts, thus:

c. Rationale of rule excepting communications with respect to contemplated criminal or fraudulent act.

Various reasons have been announced as being the foundation for the holdings that communications with respect to
contemplated criminal or fraudulent acts are not privileged.

pg. 43
The reason perhaps most frequently advanced is that in such cases there is no professional employment, properly
speaking. Standard F. Ins. Co v. Smithhart (1919) 183 Ky 679, 211 SW. 441, 5 ALR 972; Cummings v. Com. (1927)
221 Ky 301, 298 SW 943; Strong v. Abner (1937) 268 Ky 502, 105 SW(2d) 599; People v. Van Alstine (1885) 57 Mich
69, 23 NW 594; Hamil & Co. v. England (1892) 50 Mo App 338; Carney v. United R. Co. (1920) 205 Mo App 495, 226
SW 308; Matthews v. Hoagland(1891) 48 NJ Eq 455, 21 A 1054; Covency v. Tannahill (1841) 1 Hill (NY) 33, 37 AM
Dec 287; People ex rel. Vogelstein v. Warden (1934) 150 Misc 714, 270 NYS 362 (affirmed without opinion in (1934)
242 App Div 611, 271 NYS 1059); Russell v. Jackson (1851) 9 Hare 387, 68 Eng Reprint 558; Charlton
v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751; Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR; Re
Postlethwaite (1887) LR 35 Ch Div (Eng) 722.

In Reg. v. Cox (1884) LR 14 QB Div (Eng) 153 — CCR, the court said: "In order that the rule may apply, there must
be both professional confidence and professional employment, but if the client has a criminal object in view in his
communications with his solicitor one of these elements must necessarily be absent. The client must either conspire
with his solicitor or deceive him. If his criminal object is avowed, the client does not consult his adviser professionally,
because it cannot be the solicitor's business to further any criminal object. If the client does not avow his object, he
reposes no confidence, for the state of facts which is the foundation of the supposed confidence does not exist. The
solicitor's advice is obtained by a fraud."

So, in Standard F. Ins. Co. v. Smithhart (1919) 183 Ky 679, 211 SW 441, 5 ALR 972, the court said: "The reason of
the principle which holds such communications not to be privileged is that it is not within the professional character of
a lawyer to give advice upon such subjects, and that it is no part of the profession of an attorney or counselor at law
to be advising persons as to how they may commit crimes or frauds, or how they may escape the consequences of
contemplated crimes and frauds. If the crime or fraud has already been committed and finished, a client may advise
with an attorney in regard to it, and communicate with him freely, and the communications cannot be divulged as
evidence without the consent of the client, because it is a part of the business and duty of those engaged in the
practice of the profession of law, when employed and relied upon for that purpose, to give advice to those who have
made infractions of the laws; and, to enable the attorney to properly advise and to properly represent the client in
court or when prosecutions are threatened, it is conducive to the administration of justice that the client shall be free
to communicate to his attorney all the facts within his knowledge, and that he may be assured that a communication
made by him shall not be used to his prejudice."

The protection which the law affords to communications between attorney and client has reference to those which are
legitimately and properly within the scope of a lawful employment, and does not extend to communications made in
contemplation of a crime, or perpetration of a fraud. Strong v. Abner (1937) 368 Ky 502, 105 SW (2d) 599.

The court in People v. Van Alstine (1885) 57 Mich 69, 23 NW 594, in holding not privileged communications to an
attorney having for their object the communication of a crime, said: "They then partake of the nature of a conspiracy,
or attempted conspiracy, and it is not only lawful to divulge such communications, but under certain circumstances it
might become the duty of the attorney to do so.The interests of public justice require that no such shield from merited
exposure shall be interposed to protect a person who takes counsel how he can safely commit a crime. The relation
of attorney and client cannot exist for the purpose of counsel in concocting crimes."

And in Coveney v. Tannahill (1841) 1 Hill (NY) 33, 37 Am Dec 287, the court was of the opinion that there could be
no such relation as that of attorney and client, either in the commission of a crime, or in the doing of a wrong by force
or fraud to an individual, the privileged relation of attorney and client existing only for lawful and honest purposes.

If the client consults the attorney at law with reference to the perpetration of a crime, and they co-operate in effecting
it, there is no privilege, inasmuch as it is no part of the lawyer's duty to aid in crime — he ceases to be counsel and
becomes a criminal. Matthews v. Hoagland (1891) 48 NJ Eq 455, 21 A 1054.

The court cannot permit it to be said that the contriving of a fraud forms part of the professional business of an
attorney or solicitor. Charlton v. Coombes (1863) 4 Giff 372, 66 Eng Reprint 751.

If the client does not frankly and freely reveal his object and intention as well as facts, there is not professional
confidence, and therefore no privilege. Matthews v. Hoagland (NJ) supra. See to the same effect Carney v. United
R. Co. (1920) 205 Mo App 495, 226 SW 308.

There is no valid claim of privilege in regard to the production of documents passing between solicitor and client,
when the transaction impeached is charged to be based upon fraud, that is the matter to be investigated, and it is
thought better that the alleged privilege should suffer than that honestly and fair dealing should appear to be violated
with impunity. Smith v. Hunt (1901) 1 Ont L Rep 334.

In Tichborne v. Lushington, shorthand Notes (Eng) p. 5211 (cited in Reg. v. Cox (1884) LR 14 QB Div (Eng) 172 —
CCR), the chief justice said "I believe the law is, and properly is, that if a party consults an attorney, and obtains
advice for what afterwards turns out to be the commission of a crime or a fraud, that party so consulting the attorney
has no privilege whatever to close the lips of the attorney from stating the truth. Indeed, if any such privilege should
be contended for, or existing, it would work most grievous hardship on an attorney, who, after he had been consulted
upon what subsequently appeared to be a manifest crime and fraud, would have his lips closed, and might place him
in a very serious position of being suspected to be a party to the fraud, and without his having an opportunity of
exculpating himself . . . There is no privilege in the case which I have suggested of a party consulting another, a
professional man, as to what may afterwards turn out to be a crime or fraud, and the best mode of accomplishing it."

In Garside v. Outram (1856) 3 Jur NS (Eng) 39, although the question of privilege as to communications between
attorney and client was not involved, the question directly involved being the competency of a clerk in a business
establishment to testify as to certain information which he acquired while working in the establishment, the court
strongly approved of a view as stated arguendo for plaintiff, in Annesley v. Anglesea (1743) 17 How St Tr (Eng) 1229,
as follows: "I shall claim leave to consider whether an attorney may be examined as to any matter which came to his
pg. 44
 knowledge as an attorney. If he is employed as an attorney in any unlawful or wicked act, his duty to the public
obliges him to disclose it; no private obligations can dispense with that universal one which lies on every member of
society to discover every design which may be formed, contrary to the laws of society, to destroy the public welfare.
For this reason, I apprehend that if a secret which is contrary to the public good, such as a design to commit treason,
murder, or perjury, comes to the knowledge of an attorney, even in a cause where he is concerned, the obligation to
the public must dispense with the private obligation to the client."

The court in McMannus v. State (1858) 2 Head (Tenn) 213, said; "It would be monstrous to hold that if counsel was
asked and obtained in reference to a contemplated crime that the lips of the attorney would be sealed, when the facts
might become important to the ends of justice in the prosecution of crime. In such a case the relation cannot be taken
to exist. Public policy would forbid it."

And the court in Lanum v. Patterson (1909) 151 Ill App 36, observed that this rule was not in contravention of sound
public policy, but on the contrary, tended to the maintenance of a higher standard of professional ethics by preventing
the relation of attorney and client from operating as a cloak for fraud.

Communications of a client to an attorney are not privileged if they were a request for advice as to how to commit a
fraud, it being in such a case not only the attorney's privilege, but his duty, to disclose the facts to the court. Will
v. Tornabells & Co. (1907) 3 Porto Rico Fed Rep 125. The court said: "We say this notwithstanding the comments of
opposing counsel as to the indelicacy of his position because of his being now on the opposite side of the issue that
arose as a consequence of the communication he testifies about, and is interested in the cause to the extent of a
large contingent fee, as he confesses."

The object of prohibiting the disclosure of confidential communications is to protect the client, and not to make the
attorney an accomplice or permit him to aid in the commission of a crime. People vs. Petersen (1901) 60 App Div
118, NYS 941.

The seal of personal confidence can never be used to cover a transaction which is in itself a crime. People
v. Farmer (1909) 194 NY 251, 87 NE 457.

As to disclosing the identity of a client, 81 AM JUR 2d, Witnesses, § 410 and 411, pages 366-368, states:

§ 410. Name or identity of client.

Disclosure of a client's identity is necessary proof of the existence of the attorney-client relationship and is not
privileged information. Thus, the attorney-client privilege is inapplicable even though the information was
communicated confidentially to the attorney in his professional capacity and, in some cases, in spite of the fact that
the attorney may have been sworn to secrecy, where an inquiry is directed to an attorney as to the name or identity of
his client. This general rule applies in criminal cases, as well as in civil actions. Where an undisclosed client is a party
to an action, the opposing party has a right to know with whom he is contending or who the real party in interest is, if
not the nominal adversary.

§ 411. Disclosure of identity of client as breach of confidentiality.

The revelation of the identification of a client is not usually considered privileged, except where so much has been
divulged with regard to to legal services rendered or the advice sought, that to reveal the client's name would be to
disclose the whole relationship and confidential communications. However, even where the subject matter of the
attorney-client relationship has already been revealed, the client's name has been deemed privileged.

Where disclosure of the identity of a client might harm the client by being used against him under
circumstances where there are no countervailing factors, then the identity is protected by the attorney-client privilege.

In criminal proceedings, a client's name may be privileged if information already obtained by the tribunal, combined
with the client's identity, might expose him to criminal prosecution for acts subsequent to, and because of, which he
had sought the advice of his attorney.

Although as a general rule, the identity of a defendant in a criminal prosecution is a matter of public record and, thus,
not covered by the attorney-client privilege, where the attorney has surrendered to the authorities physical evidence
in his possession by way of the attorney-client relationship, the state must prove the connection between the piece of
physical evidence and the defendant without in any way relying on the testimony of the client's attorney who initially
received the evidence and, thus, the attorney may not be called to the stand and asked to disclose the identity of the
client. However, an attorney cannot refuse to reveal the identity of a person who asked him to deliver stolen property
to the police department, whether a bona fide attorney-client relationship exists between them, inasmuch as the
transaction was not a legal service or done in the attorney's professional capacity.

Distinction: Where an attorney was informed by a male client that his female acquaintance was
possibly involved in [a] his-and-run accident, the identity of the female did not come within scope of
attorney-client privilege although the identity of the male client was protected. (emphases supplied)

WIGMORE explains why the identity of a client is not within the lawyer-client privilege in this manner:

§ 2313. Identity of client or purpose of suit. — The identity of the attorney's client or the name of the real party in
interest will seldom be a matter communicated in confidence because the procedure of litigation ordinarily
presupposes a disclosure of these facts. Furthermore, so far as a client may in fact desire secrecy and may be able
to secure action without appearing as a party to the proceedings, it would be improper to sanction such a wish. Every
pg. 45
 litigant is in justice entitled to know the identity of his opponents. He cannot be obliged to struggle in the dark against
unknown forces. He has by anticipation the right, in later proceedings, if desired, to enforce the legal responsibility of
those who may have maliciously sued or prosecuted him or fraudulently evaded his claim. He has as much right to
ask the attorney "Who fees your fee?" as to ask the witness (966 supra). "Who maintains you during this trial?" upon
the analogy of the principle already examined (2298 supra), the privilege cannot be used to evade a client's
responsibility for the use of legal process. And if it is necessary for the purpose to make a plain exception to the rule
of confidence, then it must be made. (Wigmore on Evidence, vol. 8, (1961), p. 609; emphases supplied).

In 114 ALR, 1322, we also find the following statement:

1. Name or identity.

As is indicated in 28 R.C.L. p. 563, it appears that the rule making communications between attorney and client
privileged from disclosure ordinarily does not apply where the inquiry is confined to the fact of the attorney's
employment and the name of the person employing him, since the privilege presupposes the relationship of client and
attorney, and therefore does not attach to its creation.

At the present stage of the proceedings below, the petitioners have not shown that they are so situated with respect to their
principals as to bring them within any of the exceptions established by American jurisprudence. There will be full opportunity
for them to establish that fact at the trial where the broader perspectives of the case shall have been presented and can be
better appreciated by the court. The insistence for their exclusion from the case is understandable, but the reasons for the
hasty resolution desired is naturally suspect.

We do not even have to go beyond our shores for an authority that the lawyer-client privilege cannot be invoked to prevent the
disclosure of a client's identity where the lawyer and the client are conspirators in the commission of a crime or a fraud. Under
our jurisdiction, lawyers are mandated not to counsel or abet activities aimed at defiance of the law or at lessening confidence
in the legal system (Rule 1.02, Canon 1, Code of Professional Responsibility) and to employ only fair and honest means to
attain the lawful objectives of his client (Rule 19.01, Canon 19, Id.). And under the Canons of Professional Ethics, a lawyer
must steadfastly bear in mind that his great trust is to be performed within and not without the bounds of the law (Canon
15, Id.), that he advances the honor of his profession and the best interest of his client when he renders service or gives
advice tending to impress upon the client and his undertaking exact compliance with the strictest principles of moral law
(Canon 32, Id.). These canons strip a lawyer of the lawyer-client privilege whenever he conspires with the client in the
commission of a crime or a fraud.

I then vote to DENY, for want of merit, the instant petition.

Narvasa, C.J. and Regalado, J., concur.

PUNO, J., dissenting:

This is an important petition for certiorari to annul the resolutions of the respondent Sandiganbayan denying petitioners' motion
to be excluded from the Complaint for recovery of alleged ill-gotten wealth on the principal ground that as lawyers they cannot
be ordered to reveal the identity of their client.

First, we fast forward the facts. The Presidential Commission on Good Government (PCGG) filed Civil Case No. 33 before
the Sandiganbayan against Eduardo M. Cojuangco, Jr., for the recovery of alleged ill-gotten wealth. Sued as co-defendants
are the petitioners in the cases at bar — lawyers Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose Concepcion,
Rogelio A. Vinluan, Victor P. Lazatin, Eduardo Escueta and Paraja Hayudini. Also included as a co-defendant is lawyer Raul
Roco, now a duly elected senator of the Republic. All co-defendants were then partners of the law firm, Angara, Abello,
Concepcion, Regala and Cruz Law Offices, better known as the ACCRA Law Firm. The Complaint against Cojuangco, Jr., and
the petitioners alleged, inter alia, viz:

xxx xxx xxx

The wrongs committed by defendants acting singly or collectively and in unlawful concert with one another, include
the misappropriation and theft of public funds, plunder of the nation's wealth, extortion, blackmail, bribery,
embezzlement and other acts of corruption, betrayal of public trust and brazen abuse of power as more fully
described (in the subsequent paragraphs of the complaint), all at the expense and to the grave and irreparable
damage of Plaintiff and the Filipino people.

Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro D. Regala, Avelino V. Cruz,
Regalio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul S. Roco of Angara, Concepcion, Cruz, Regala,
and Abello law offices (ACCRA) plotted, devised, schemed, conspired and confederated with each other in setting up,
through the use of the coconut levy funds, the financial and corporate framework and structures that led to the
establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC and more than twenty other coconut levy funded
corporations, including the acquisition of the San Miguel Corporation shares and the institutionalization through
presidential directives of the coconut monopoly. through insidious means and machinations, ACCRA, using its wholly-
owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares
representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This ranks ACCRA
Investments Corporation number 44 among the top 100 biggest stockholders of UCPB which has approximately
1,400,000 shareholders. On the other hand, corporate books show the name Edgardo J. Angara as holding
approximately 3,744 shares as of 7 June 1984.

In their Answer, petitioners alleged that the legal services offered and made available by their firm to its clients include: (a)
organizing and acquiring business organizations, (b) acting as incorporators or stockholders thereof, and (c) delivering to

pg. 46
clients the corresponding documents of their equity holdings (i.e., certificates of stock endorsed in blank or blank deeds of trust
or assignment). They claimed that their activities were "in furtherance of legitimate lawyering."

In the course of the proceedings in the Sandiganbayan, the PCGG filed a Motion to Admit Third Amended Complaint and the
Third Amended Complaint excluding lawyer Roco as party defendant. Lawyer Roco was excluded on the basis of his promise
to reveal the identity of the principals for whom he acted as nominee/stockholder in the companies involved in the case.

The Sandiganbayan ordered petitioners to comment on the motion. In their Comment, petitioners demanded that they be
extended the same privilege as their co-defendant Roco. They prayed for their exclusion from the complaint. PCGG agreed
but set the following conditions: (1) disclosure of the identity of their client; (2) submission of documents substantiating their
lawyer-client relationship; and (3) submission of the deeds of assignment petitioners executed in favor of their client covering
their respective shareholdings. The same conditions were imposed on lawyer Roco.

Petitioners refused to comply with the PCGG conditions contending that the attorney-client privilege gives them the right not to
reveal the identity of their client. They also alleged that lawyer Roco was excluded though he did not in fact reveal the identity
of his clients. On March 18, 1992, the Sandiganbayan denied the exclusion of petitioners in Case No. 33. It held:

xxx xxx xxx

ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e.,
their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the
privilege claimed by the ACCRA lawyers exists cannot even begin to the debated. The ACCRA lawyers cannot
excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing
the privilege; the existence and identity of the client.

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified
his principal, which revelation could show the lack of course against him. This in turn has allowed the PCGG to
exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme
Court's ruling in Republic v. Sandiganbayan (173 SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in
exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991). The ACCRA
lawyers have preferred not to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as a party defendants. In the same
vein, they cannot compel the PCGG to be accorded the same treatment accorded to Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja
G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit.

Sandiganbayan later denied petitioners' motions for reconsideration in its resolutions dated May 21, 1988 and September 3,
1992.

In this petition for certiorari, petitioners contend:

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who
indisputably acted as lawyers in serving as nominee-stockholders, to the strict application of the law agency.

II

The Honorable Sandiganbayan committed grave abuse of discretion in not considering petitioners ACCRA lawyers
and Mr. Roco as similarly situated and, therefore, deserving of equal treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the
identities of the client(s) for whom he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the
client(s), the disclosure does not constitute a substantial distinction as would make the
classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco
and violation of the equal protection clause.

III

pg. 47
 The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case,
the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the
other information requested by the PCGG.

1. Under the peculiar facts of this case, the attorney-client privilege includes the identity of the
client(s).

2. The factual disclosures required by the PCGG are not limited to the identity of petitioners
ACCRA lawyers' alleged client(s) but extend to other privileged matters.

IV

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of party-
defendants by the PCGG must be based on reasonable and just grounds and with due consideration to the
constitutional right of petitioners ACCRA lawyers to the equal protection of the law.

The petition at bar is atypical of the usual case where the hinge issue involves the applicability of attorney-client privilege. It
ought to be noted that petitioners were included as defendants in Civil Case No. 33 as conspirators. Together with Mr.
Cojuangco, Jr., they are charged with having ". . . conspired and confederated with each other in setting up, through the use of
the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM,
COCOLIFE, COCOMARK, CICI and more than twenty other coconut levy funded corporations, including the acquisition of San
Miguel Corporation shares and the institutionalization through presidential directives of the coconut monopoly." To stress,
petitioners are charged with having conspired in the commission of crimes. The issue of attorney-client privilege arose when
PCGG agreed to exclude petitioners from the complaint on condition they reveal the identity of their client. Petitioners refused
to comply and assailed the condition on the ground that to reveal the identity of their client will violate the attorney-client
privilege.

It is thus necessary to resolve whether the Sandiganbayan committed grave abuse of discretion when it rejected petitioners'
thesis that to reveal the identity of their client would violate the attorney-client privilege. The attorney-client privilege is the
oldest of the privileges for confidential communications known to the common law. 1 For the first time in this jurisdiction, we are
asked to rule whether the attorney-client privilege includes the right not to disclose the identity of client. The issue poses a
trilemma for its resolution requires the delicate balancing of three opposing policy considerations. One overriding policy
consideration is the need for courts to discover the truth for truth alone is the true touchstone of justice. 2 Equally compelling is
the need to protect the adversary system of justice where truth is best extracted by giving a client broad privilege to confide
facts to his counsel.3 Similarly deserving of sedulous concern is the need to keep inviolate the constitutional right against self-
incrimination and the right to effective counsel in criminal litigations. To bridle at center the centrifugal forces of these policy
considerations, courts have followed to prudential principle that the attorney-client privilege must not be expansively construed
as it is in derogation of the search for truth.4Accordingly, a narrow construction has been given to the privilege and it has been
consistently held that "these competing societal interests demand that application of the privilege not exceed that which is
necessary to effect the policy considerations underlying the privilege, i.e., the privilege must be upheld only in those
circumstances for which it was created.'"5

Prescinding from these premises, our initial task is to define in clear strokes the substantive content of the attorney-client
privilege within the context of the distinct issues posed by the petition at bar. With due respect, I like to start by stressing the
irreducible principle that the attorney-client privilege can never be used as a shield to commit a crime or a fraud.
Communications to an attorney having for their object the commission of a crime ". . . partake the nature of a conspiracy, and it
is not only lawful to divulge such communications, but under certain circumstances it might become the duty of the attorney to
do so. The interests of public justice require that no such shield from merited exposure shall be interposed to protect a person
who takes counsel how he can safely commit a crime. The relation of attorney and client cannot exist for the purpose of
counsel in concocting crimes."6 In the well chosen words of retired Justice Quiason, a lawyer is not a gun for hire. 7 I hasten to
add, however, that a mere allegation that a lawyer conspired with his client to commit a crime or a fraud will not defeat the
privilege.8 As early as 1933, no less than the Mr. Justice Cardozo held in Clark v. United States9 that: "there are early cases
apparently to the effect that a mere charge of illegality, not supported by any evidence, will set the confidences free . . . But
this conception of the privilege is without support . . . To drive the privilege away, there must be 'something to give colour to
the charge;' there must beprima facie evidence that it has foundation in fact." In the petition at bar, however, the PCGG
appears to have relented on its original stance as spelled out in its Complaint that petitioners are co-conspirators in crimes and
cannot invoke the attorney-client privilege. The PCGG has agreed to exclude petitioners from the Complaint provided they
reveal the identity of their client. In fine, PCGG has conceded that petitioner are entitled to invoke the attorney-client privilege if
they reveal their client's identity.

Assuming then that petitioners can invoke the attorney-client privilege since the PCGG is no longer proceeding against them
as co-conspirators in crimes, we should focus on the more specific issue of whether the attorney-client privilege includes the
right not to divulge the identity of a client as contended by the petitioners. As a general rule, the attorney-client privilege does
not include the right of non-disclosure of client identity. The general rule, however, admits of well-etched exceptions which the
Sandiganbayan failed to recognize. The general rule and its exceptions are accurately summarized in In re Grand Jury
Investigation,10viz:

The federal forum is unanimously in accord with the general rule that the identity of a client is, with limited exceptions,
not within the protective ambit of the attorney-client privilege. See: In re Grand Jury Proceedings (Pavlick), 680 F.2d
1026, 1027 (5th Cir. 1982) (en banc); In re Grand Jury Proceedings (Jones), 517 F. 2d 666, 670-71 (5th Cir. 1975); In
re Grand Jury Proceedings (Fine), 651 F. 2d 199, 204 (5th Cir. 1981); Frank v. Tomlinson, 351 F.2d 384 (5th Cir.
1965), cert. denied, 382 U.S. 1082, 86 S.Ct. 648, 15 L.Ed.2d 540 (1966); In re Grand Jury Witness (Salas), 695 F.2d
359, 361 (9th Cir. 1982); In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th
Cir. 1982); In re Grand Jury Proceedings (Lawson), 600 F.2d 215, 218 (9th Cir. 1979).

The Circuits have embraced various "exceptions" to the general rule that the identity of a client is not within the
protective ambit of the attorney-client privilege. All such exceptions appear to be firmly grounded in the Ninth Circuit's
pg. 48
 seminal decision in Baird v. Koerner, 279 F.2d 633 (9th Cir. 1960). In Baird the IRS received a letter from an attorney
stating that an enclosed check in the amount of $12,706 was being tendered for additional amounts due from
undisclosed taxpayers. When the IRS summoned the attorney to ascertain the identity of the delinquent taxpayers the
attorney refused identification assertion the attorney-client privilege. The Ninth Circuit, applying California law,
adjudged that the "exception" to the general rule as pronounced in Ex parte McDonough, 170 Cal. 230, 149 P. 566
(1915) controlled:

The name of the client will be considered privileged matter where the circumstances of the case
are such that the name of the client is material only for the purpose of showing an acknowledgment
of guilt on the part of such client of the very offenses on account of which the attorney was
employed.

Baird, supra, 279 F.2d at 633. The identity of the Baird taxpayer was adjudged within this exception to the general
rule. The Ninth Circuit has continued to acknowledge this exception.

A significant exception to this principle of non-confidentiality holds that such information may be
privileged when the person invoking the privilege is able to show that a strong possibility exists that
disclosure of the information would implicate the client in the very matter for which legal advice was
sought in the first case.

In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), 695 F.2d 363, 365 (9th Cir. 1982). Accord: United
States v. Hodge and Zweig, 548 F.2d 1347, 1353 (9th Cir. 1977); In re Grand Jury Proceedings (Lawson), 600 F.2d
215, 218 (9th Cir. 1979); United States v. Sherman, 627 F.2d 189, 190-91 (9th Cir. 1980); In re Grand Jury Witness
(Salas), 695 F.2d 359, 361 (9th Cir. 1982). This exception, which can perhaps be most succinctly characterized as
the "legal advice" exception, has also been recognized by other circuits. See: In re Walsh, 623 F.2d 489, 495 (7th
Cir.), cert. denied, 449 U.S. 994, 101 S. Ct. 531, 66 L.Ed.2d 291 (1980); In re Grand Jury Investigation (Tinari), 631
F.2d 17, 19 (3d Cir 1980), cert. denied, 449 U.S.1083, 101 S.Ct. 869-70, 66 L.Ed.2d 808 (1981). Since the legal
advice exception is firmly grounded in the policy of protecting confidential communications, this Court adopts and
applies its principles herein. See: In re Grand Jury Subpoenas Duces Tecum (Marger/Merenbach), supra.

It should be observed, however that the legal advice exception may be defeated through a prima facieshowing that
the legal representation was secured in furtherance of present or intended continuing illegality, as where the legal
representation itself is part of a larger conspiracy. See: In re Grand Jury Subpoenas Decus Tecum
(Marger/Merenbach), supra, 695 F.2d at 365 n. 1; In re Walsh, 623 F.2d 489, 495 (7th Cir.), cert. denied, 449, U.S.
994, 101 S.Ct. 531, 66 L.Ed. 2d 291 (1980); In re Grand Jury Investigation (Tinari), 631 F.2d 17, 19 (3d Cir 1980);
cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66 L.Ed. 2d 808 (1981); In re Grand Jury Proceedings (Lawson), 600
F.2d 215, 218 (9th Cir. 1979); United States v. Friedman, 445 F.2d 1076, 1086 (9th Cir. 1971). See also: Clark
v. United States, 289 U.S. 1, 15, 53, S.Ct. 465, 469, 77, L.Ed. 993 (1933); In re Grand Jury Proceedings (Pavlick),
680 F.2d 1026, 1028-29 (5th Cir. 1982 (en banc).

Another exception to the general rule that the identity of a client is not privileged arises where disclosure of the
identity would be tantamount to disclosing an otherwise protected confidential communication. In Baird, supra, the
Ninth Circuit observed:

If the identification of the client conveys information which ordinarily would be conceded to be part
of the usual privileged communication between attorney and client, then the privilege should extend
to such identification in the absence of another factors.

Id., 279 F.2d at 632. Citing Baird, the Fourth Circuit promulgated the following exception:

To the general rule is an exception, firmly embedded as the rule itself. The privilege may be
recognized where so much of the actual communication has already been disclosed that
identification of the client amounts to disclosure of a confidential communication.

NLRB v. Harvey, 349 F.2d 900, 905 (4th Cir. 1965). Accord: United States v. Tratner, 511 F.2d 248, 252 (7th Cir.
1975); Colton v. United States, 306 F.2d 633, 637 (2d Cir. 1962), cert. denied, 371 U.S. 951, 83 S.Ct. 505, 9 L.Ed.2d
499 1963); Tillotson v. Boughner, 350 F.2d 663, 666 (7th Cir. 1965); United States v. Pape, 144 F.2d 778, 783 (2d
Cir. 1944). See also: Chirac v. Reinecker, 24 U.S. (11 Wheat) 280, 6 L.Ed. 474 (1826). The Seventh Circuit has
added to the Harvey exception the following emphasized caveat:

The privilege may be recognized where so much of the actual communication has already been
disclosed [not necessarily by the attorney, but by independent sources as well] that identification of
the client [or of fees paid] amounts to disclosure of a confidential communication.

United States vs. Jeffers, 532 F.2d 1101, 1115 (7th Cir. 1976 (emphasis added). The Third Circuit, applying this
exception, has emphasized that it is the link between the client and the communication, rather than the link between
the client and the possibility of potential criminal prosecution, which serves to bring the client's identity within the
protective ambit of the attorney-client privilege. See: In re Grand Jury Empanelled February 14, 1978 (Markowitz),
603 F.2d 469, 473 n. 4 (3d Cir. 1979). Like the "legal advice" exception, this exception is also firmly rooted in
principles of confidentiality.

Another exception, articulated in the Fifth Circuit's en banc decision of In re Grand Jury Proceedings (Pavlick), 680
F.2d 1026 (5th Cir. 1982 (en banc), is recognized when disclosure of the identity of the client would provide the "last
link" of evidence:

pg. 49
 We have long recognized the general rule that matters involving the payment of fees and the
identity of clients are not generally privileged. In re Grand Jury Proceedings, (United States v.
Jones), 517 F.2d 666 (5th Cir. 1975); see cases collected id. at 670 n. 2. There we also
recognized, however, a limited and narrow exception to the general rule, one that obtains when the
disclosure of the client's identity by his attorney would have supplied the last link in an existing
chain of incriminating evidence likely to lead to the client's indictment.

I join the majority in holding that the Sandiganbayan committed grave abuse of discretion when it misdelineated the metes and
bounds of the attorney-client privilege by failing to recognize the exceptions discussed above.

Be that as it may, I part ways with the majority when it ruled that petitioners need not prove they fall within the exceptions to
the general rule. I respectfully submit that the attorney-client privilege is not a magic mantra whose invocation will ipso
facto and ipso jure drape he who invokes it with its protection. Plainly put, it is not enough to assert the privilege. 11 The person
claiming the privilege or its exceptions has the obligation to present the underlying facts demonstrating the existence of the
privilege.12 When these facts can be presented only by revealing the very information sought to be protected by the privilege,
the procedure is for the lawyer to move for an inspection of the evidence in an in camera hearing. 13 The hearing can even be
in camera and ex-parte. Thus, it has been held that "a well-recognized means for an attorney to demonstrate the existence of
an exception to the general rule, while simultaneously preserving confidentiality of the identity of his client, is to move the court
for an in camera ex-parte hearing.14 Without the proofs adduced in these in camera hearings, the Court has no factual basis to
determine whether petitioners fall within any of the exceptions to the general rule.

In the case at bar, it cannot be gainsaid that petitioners have not adduced evidence that they fall within any of the above
mentioned exceptions for as aforestated, the Sandiganbayan did not recognize the exceptions, hence, the order compelling
them to reveal the identity of their client. In ruling that petitioners need not further establish the factual basis of their claim that
they fall within the exceptions to the general rule, the majority held:

The circumstances involving the engagement of lawyers in the case at bench therefore clearly reveal that the instant
case falls under at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to
establish said client's connection with the very fact in issue of the case, which is privileged information, because the
privilege, as stated earlier, protects the subject matter or the substance (without which there would be no attorney-
client relationship). Furthermore, under the third main exception, revelation of the client's name would obviously
provide the necessary link for the prosecution to build its case, where none otherwise exists. It is the link, in the word
of Baird, "that would inevitably form the chain of testimony necessary to convict the (client) of a . . . crime.

I respectfully submit that the first and third exceptions relied upon by the majority are not self-executory but need factual basis
for their successful invocation. The first exception as cited by the majority is ". . . where a strong probability exists that
revealing the clients' name would implicate that client in the very activity for which he sought the lawyer's advice." It seems to
me evident that "the very activity for which he sought the lawyer's advice" is a question of fact which must first be established
before there can be any ruling that the exception can be invoked. The majority cites Ex Parte Enzor, 15 and
U S v. Hodge and Zweig,16 but these cases leave no doubt that the "very activity" for which the client sought the advice of
counsel was properly proved. In both cases, the "very activity" of the clients reveal they sought advice on their criminal
activities. Thus, in Enzor, the majority opinion states that the "unidentified client, an election official, informed his attorney in
confidence that he had been offered a bribe to violate election laws or that he had accepted a bribe to that end." 17 In Hodge,
the "very activity" of the clients deals with illegal importation of drugs. In the case at bar, there is no inkling whatsoever about
the "very activity" for which the clients of petitioners sought their professional advice as lawyers. There is nothing in the
records that petitioners were consulted on the "criminal activities" of their client. The complaint did allege that petitioners and
their client conspired to commit crimes but allegations are not evidence.

So it is with the third exception which as related by the majority is "where the government's lawyers have no case against an
attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of
testimony necessary to convict an individual of a crime." 18 Again, the rhetorical questions that answer themselves are: (1) how
can we determine that PCGG has "no case" against petitioners without presentation of evidence? and (2) how can we
determine that the name of the client is the only link without presentation of evidence as to the other links? The case of Baird
vs. Koerner19 does not support the "no need for evidence" ruling of the majority. In Baird, as related by the majority itself, "a
lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken to place
the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the US Internal
Revenue Service (IRS). It appeared that the taxpayers' returns of previous years were probably incorrect and the taxes
understated.20 Once more, it is clear that the Baird court was informed of the activity of the client for which the lawyer was
consulted and the activity involved probable violation of the tax laws. Thus, the Court held:

The facts of the instant case bring it squarely within that exception to the general rule. Here money was received by
the government, paid by persons who thereby admitted they had not paid a sufficient amount in income taxes some
one or more years in the past. The names of the clients are useful to the government for but one purpose — to
ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several
years. The voluntary nature of the payment indicates a belief by the taxpayers that more tax or interest or penalties
are due than the sum previously paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it
is criminal guilt is undisclosed. But it may well be the link that could form the chain of testimony necessary to convict
an individual of a federal crime. Certainly the payment and the feeling of guilt are the reasons the attorney here
involved was employed — to advise his clients what, under the circumstances, should be done.

In fine, the factual basis for the ruling in Baird was properly established by the parties. In the case at bar, there is no evidence
about the subject matter of the consultation made by petitioners' client. Again, the records do not show that the subject matter
is criminal in character except for the raw allegations in the Complaint. Yet, this is the unstated predicate of the majority ruling
that revealing the identity of the client ". . . would furnish the only link that would form the chain of testimony necessary to
convict an individual of a crime." The silent implication is unflattering and unfair to petitioners who are marquee names in the
legal profession and unjust to their undisclosed client.

pg. 50
 Finally, it ought to be obvious that petitioners' right to claim the attorney-client privilege is resolutory of the Complaint against
them, and hence should be decided ahead and independently of their claim to equal protection of the law. Pursuant to the rule
in legal hermeneutics that courts should not decide constitutional issues unless unavoidable, I also respectfully submit that
there is no immediate necessity to resolve petitioners' claim to equal protection of the law at this stage of the proceedings.

IN VIEW WHEREOF, I respectfully register a qualified dissent from the majority opinion.

A.C. No. 927 September 28, 1970

IN THE MATTER OF THE COMPLAINT FOR DISBARMENT OF ATTORNEY POTENCIANO A. PALANCA. WILLIAM C.
PFLEIDER, complainant,
vs.
POTENCIANO A. PALANCA, respondent.

RESOLUTION

CASTRO, J.:

The respondent Atty. Potenciano A. Palanca was for sometime the legal counsel of the complainant William C. Pfleider. According to
the complainant, he retained the legal services of Palanca from January 1966, whereas the latter insists that the attorney-client
relationship between them began as early as in 1960.

At all events, the relations between the two must have attained such a high level of mutual trust that on October 10, 1969, Pfleider and
his wife leased to Palanca a 1,328 hectare agricultural land in Hinobaan, Negros Occidental, known as the Hacienda Asia, for a period
of ten years. In their contract, the parties agreed, among others, that a specified portion of the lease rentals would be paid to Pfleider,
and the remainder would be delivered by Palanca to Pfleider's listed creditors.

The arrangement worked smoothly until October 14, 1969 when the rupture came with the filing by Pfleider of a civil suit (civil case
9187 of the CFI of Negros Occidental) against Palanca for rescission of the contract of lease on the ground of alleged default in the
payment of rentals. In his answer to the complaint, Palanca averred full satisfaction of his rental liabilities, and therefore contended that
the lease should continue. He also charged that he had already been dispossessed of the hacienda by Pfleider and the latter's goons at
gunpoint and consequently had suffered tremendous financial losses.

With this history in, perspective, we shall now consider the administrative charges of gross misconduct in office brought by Pfleider
against Palanca. The indictment consists of four counts.

First count. In regard to a criminal case for estafa filed in December 1965 by one Gregorio Uy Matiao against Pfleider, the latter
instructed Palanca to offer in settlement the sum of P10,000, payable in installments, to Uy Matiao for the dismissal of the case. After
sometime, Palanca reported to Pfleider that the offer has been rejected. Finally in October 1969, Palanca supposedly informed Pfleider
that he had succeeded in negotiating the dismissal of the estafa case by leaving the sum of P5,000 with the Dumaguete City Court
where the action was then pending. Sometime in December 1969, however, Pfleider was the object of a warrant of arrest in connection
with the same estafa case. It turned out, charged the complainant Pfleider, that Palanca had not deposited the sum of P5,000 with the
Dumaguete City Court, let alone communicated to Uy Matiao his earlier offer of settlement.

We have closely examined all the pleadings filed by the parties in this case and the annexes thereto, and it is our view that the first
charge is devoid of merit. In support of his claim of alleged assurance made by Palanca that the estafa case had already been
terminated, Pfleinder relies on certain letters written to him by Palanca. Our own reading of these letters, however, belies his claim.
They contain nothing which might reasonably induce the complainant to believe that the criminal action against him had been finally
settled by his attorney. On the contrary, the letters merely report a continuing attempt on the part of Palanca to secure a fair bargain for
Pfleider. The letter-report of October 10, 1969, invoke by the complainant, states in no uncertain terms that "I am bargaining this
(referring to the estafa case) even for P8,000.00 and I think they will agree. I'll finalize this and pay Tingyan on Tuesday. I have already
left in Dumaguete P5,000.00 to show them the color of our money and I will bring the balance when I go there Tuesday."

Nothing in the above letter indicates that Palanca had deposited the sum of P5,000 with the Dumaguete City Court. What he did state is
that he had left that sum in that City to enable their adversaries to see "the color of our money." In this connection, the veracity of the
certification by Felicisimo T. Hilay, Dumaguete branch manager of RCPI, that he (Hilay) had been holding the sum of P5,000 during the
early part of October in trust for Pfleider and his lawyer, has not been assailed by Pfleider.

If Pfleider was the object of a warrant of arrest in December 1969, no substantial blame can be laid at the door of the respondent
Palanca inasmuch as the latter's services were implicitly terminated by Pfleider when the latter sued his lawyer in October of the same
year. While the object of the suit is the rescission of the contract of lease between the parties, the conflict of interest which pits one
against the other became incompatible with that mutual confidence and trust essential to every lawyer-client relation. Moreover, Pfleider
fails to dispute Palanca's claim that on October 26, 1968, Pfleider refused to acknowledge receipt of a certain letter and several motions
for withdrawal, including Palanca's withdrawal as counsel in the estafa case.

pg. 51
Second count. Palanca had fraudulently charged the sum of P5,000 (which he supposedly had left with the City Court in Dumaguete) to
his rental account with Pfleider as part payment of the lease rentals of the Hacienda Asia. Third count. In the same statement of
account, Palanca falsely represented having paid, for the account of Pfleider, one Samuel Guintos the sum of P866.50 when the latter
would swear that he had received only the sum of P86.50.

These two charges are anchored upon the same "Statement of Disbursements" submitted by Palanca to Pfleider. It is our view that this
statement is but a memorandum or report of the expenses which Palanca considered as chargeable to the account of Pfleider. By its
very tentative nature, it is subject to the examination and subsequent approval or disapproval of Pfleider, and any and every error which
it contains may be brought to the attention of Palanca for rectification or adjustment. Viewed in relation to the contract of lease between
Pfleinder and Palanca, this "statement" is but one aspect of the prestation required of Palanca by the contract. Whatever breach he
might have committed in regard to this prestation would be but a civil or contractual wrong which does not affect his office as a member
of the Bar.

Final count. It is charged that the list of creditors which Pfleider had "confidentially" supplied Palanca for the purpose of carrying out the
terms of payment contained in the lease contract was disclosed by Palanca, in violation of their lawyer-client relation, to parties whose
interests are adverse to those of Pfleider.

As Pfleider himself, however, in the execution of the terms of the aforesaid lease contract between the parties, complainant furnished
respondent with a confidential list of his creditors." This should indicate that Pfleider delivered the list of his creditors to Palanca not
because of the professional relation then existing between them, but on account of the lease agreement. A violation therefore of the
confidence that accompanied the delivery of that list would partake more of a private and civil wrong than of a breach of the fidelity
owing from a lawyer to his client. Moreover, Pfleider fails to controvert Palanca's claim that there is no such thing as a "confidential" list
of creditors and that the list of creditors referred to by Pfleider is the same list which forms part of the pleadings in civil case 9187 (the
action for rescission of the lease contract) now, pending between the complainant and the respondent lawyer, and therefore is
embraced within the category of public records open to the perusal of persons properly interested therein.

In sum, we are satisfied, and we so hold, that nothing in written complaint for disbarment against Palanca and in his reply to Palanca's
answer supports a prima facie finding of such misconduct in office by Palanca as would warrant further proceedings in this case.

ACCORDINGLY, the complaint is hereby dismissed.

A.C. No. 5108 May 26, 2005

ROSA F. MERCADO, complainant,

vs.
ATTY. JULITO D. VITRIOLO, respondent.

DECISION

PUNO, J.:

Rosa F. Mercado filed the instant administrative complaint against Atty. Julito D. Vitriolo, seeking his disbarment from the practice of
law. The complainant alleged that respondent maliciously instituted a criminal case for falsification of public document against her, a
former client, based on confidential information gained from their attorney-client relationship.

Let us first hearken to the facts.

Complainant is a Senior Education Program Specialist of the Standards Development Division, Office of Programs and Standards while
respondent is a Deputy Executive Director IV of the Commission on Higher Education (CHED). 1

Complainant's husband filed Civil Case No. 40537 entitled "Ruben G. Mercado v. Rosa C. Francisco," for annulment of their marriage
with the Regional Trial Court (RTC) of Pasig City. This annulment case had been dismissed by the trial court, and the dismissal became
final and executory on July 15, 1992.2

In August 1992, Atty. Anastacio P. de Leon, counsel of complainant, died. On February 7, 1994, respondent entered his appearance
before the trial court as collaborating counsel for complainant.3

On March 16, 1994, respondent filed his Notice of Substitution of Counsel, 4 informing the RTC of Pasig City that he has been appointed
as counsel for the complainant, in substitution of Atty. de Leon.

It also appears that on April 13, 1999, respondent filed a criminal action against complainant before the Office of the City Prosecutor,
Pasig City, entitled "Atty. Julito Vitriolo, et al. v. Rose Dela Cruz F. Mercado," and docketed as I.S. No. PSG 99-9823, for violation of
Articles 171 and 172 (falsification of public document) of the Revised Penal Code.5 Respondent alleged that complainant made false
entries in the Certificates of Live Birth of her children, Angelica and Katelyn Anne. More specifically, complainant allegedly indicated in
said Certificates of Live Birth that she is married to a certain Ferdinand Fernandez, and that their marriage was solemnized on April 11,
1979, when in truth, she is legally married to Ruben G. Mercado and their marriage took place on April 11, 1978.

Complainant denied the accusations of respondent against her. She denied using any other name than "Rosa F. Mercado." She also
insisted that she has gotten married only once, on April 11, 1978, to Ruben G. Mercado.

In addition, complainant Mercado cited other charges against respondent that are pending before or decided upon by other tribunals –
(1) libel suit before the Office of the City Prosecutor, Pasig City; 6 (2) administrative case for dishonesty, grave misconduct, conduct
pg. 52
prejudicial to the best interest of the service, pursuit of private business, vocation or profession without the permission required by Civil
Service rules and regulations, and violations of the "Anti-Graft and Corrupt Practices Act," before the then Presidential Commission
Against Graft and Corruption;7 (3) complaint for dishonesty, grave misconduct, and conduct prejudicial to the best interest of the service
before the Office of the Ombudsman, where he was found guilty of misconduct and meted out the penalty of one month suspension
without pay;8 and, (4) the Information for violation of Section 7(b)(2) of Republic Act No. 6713, as amended, otherwise known as the
Code of Conduct and Ethical Standards for Public Officials and Employees before the Sandiganbayan.9

Complainant Mercado alleged that said criminal complaint for falsification of public document (I.S. No. PSG 99-9823) disclosed
confidential facts and information relating to the civil case for annulment, then handled by respondent Vitriolo as her counsel. This
prompted complainant Mercado to bring this action against respondent. She claims that, in filing the criminal case for falsification,
respondent is guilty of breaching their privileged and confidential lawyer-client relationship, and should be disbarred.

Respondent filed his Comment/Motion to Dismiss on November 3, 1999 where he alleged that the complaint for disbarment was all
hearsay, misleading and irrelevant because all the allegations leveled against him are subject of separate fact-finding bodies.
Respondent claimed that the pending cases against him are not grounds for disbarment, and that he is presumed to be innocent until
proven otherwise.10 He also states that the decision of the Ombudsman finding him guilty of misconduct and imposing upon him the
penalty of suspension for one month without pay is on appeal with the Court of Appeals. He adds that he was found guilty, only of
simple misconduct, which he committed in good faith. 11

In addition, respondent maintains that his filing of the criminal complaint for falsification of public documents against complainant does
not violate the rule on privileged communication between attorney and client because the bases of the falsification case are two
certificates of live birth which are public documents and in no way connected with the confidence taken during the engagement of
respondent as counsel. According to respondent, the complainant confided to him as then counsel only matters of facts relating to the
annulment case. Nothing was said about the alleged falsification of the entries in the birth certificates of her two daughters. The birth
certificates are filed in the Records Division of CHED and are accessible to anyone. 12

In a Resolution dated February 9, 2000, this Court referred the administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.13

The IBP Commission on Bar Discipline set two dates for hearing but complainant failed to appear in both. Investigating Commissioner
Rosalina R. Datiles thus granted respondent's motion to file his memorandum, and the case was submitted for resolution based on the
pleadings submitted by the parties.14

On June 21, 2003, the IBP Board of Governors approved the report of investigating commissioner Datiles, finding the respondent guilty
of violating the rule on privileged communication between attorney and client, and recommending his suspension from the practice of
law for one (1) year.

On August 6, 2003, complainant, upon receiving a copy of the IBP report and recommendation, wrote Chief Justice Hilario Davide, Jr.,
a letter of desistance. She stated that after the passage of so many years, she has now found forgiveness for those who have wronged
her.

At the outset, we stress that we shall not inquire into the merits of the various criminal and administrative cases filed against
respondent. It is the duty of the tribunals where these cases are pending to determine the guilt or innocence of the respondent.

We also emphasize that the Court is not bound by any withdrawal of the complaint or desistance by the complainant. The letter of
complainant to the Chief Justice imparting forgiveness upon respondent is inconsequential in disbarment proceedings.

We now resolve whether respondent violated the rule on privileged communication between attorney and client when he filed a criminal
case for falsification of public document against his former client.

A brief discussion of the nature of the relationship between attorney and client and the rule on attorney-client privilege that is designed
to protect such relation is in order.

In engaging the services of an attorney, the client reposes on him special powers of trust and confidence. Their relationship is strictly
personal and highly confidential and fiduciary. The relation is of such delicate, exacting and confidential nature that is required by
necessity and public interest.15 Only by such confidentiality and protection will a person be encouraged to repose his confidence in an
attorney. The hypothesis is that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of
justice.16 Thus, the preservation and protection of that relation will encourage a client to entrust his legal problems to an attorney, which
is of paramount importance to the administration of justice. 17 One rule adopted to serve this purpose is the attorney-client privilege: an
attorney is to keep inviolate his client's secrets or confidence and not to abuse them. 18 Thus, the duty of a lawyer to preserve his client's
secrets and confidence outlasts the termination of the attorney-client relationship,19 and continues even after the client's death.20 It is
the glory of the legal profession that its fidelity to its client can be depended on, and that a man may safely go to a lawyer and converse
with him upon his rights or supposed rights in any litigation with absolute assurance that the lawyer's tongue is tied from ever disclosing
it.21 With full disclosure of the facts of the case by the client to his attorney, adequate legal representation will result in the
ascertainment and enforcement of rights or the prosecution or defense of the client's cause.

Now, we go to the rule on attorney-client privilege. Dean Wigmore cites the factors essential to establish the existence of the
privilege, viz:

(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected
(7) from disclosure by himself or by the legal advisor, (8) except the protection be waived. 22

In fine, the factors are as follows:

pg. 53
(1) There exists an attorney-client relationship, or a prospective attorney-client relationship, and it is by reason of this relationship that
the client made the communication.

Matters disclosed by a prospective client to a lawyer are protected by the rule on privileged communication even if the prospective
client does not thereafter retain the lawyer or the latter declines the employment. 23 The reason for this is to make the prospective client
free to discuss whatever he wishes with the lawyer without fear that what he tells the lawyer will be divulged or used against him, and
for the lawyer to be equally free to obtain information from the prospective client. 24

On the other hand, a communication from a (prospective) client to a lawyer for some purpose other than on account of the (prospective)
attorney-client relation is not privileged. Instructive is the case of Pfleider v. Palanca,25 where the client and his wife leased to their
attorney a 1,328-hectare agricultural land for a period of ten years. In their contract, the parties agreed, among others, that a specified
portion of the lease rentals would be paid to the client-lessors, and the remainder would be delivered by counsel-lessee to client's listed
creditors. The client alleged that the list of creditors which he had "confidentially" supplied counsel for the purpose of carrying out the
terms of payment contained in the lease contract was disclosed by counsel, in violation of their lawyer-client relation, to parties whose
interests are adverse to those of the client. As the client himself, however, states, in the execution of the terms of the aforesaid lease
contract between the parties, he furnished counsel with the "confidential" list of his creditors. We ruled that this indicates that client
delivered the list of his creditors to counsel not because of the professional relation then existing between them, but on account of the
lease agreement. We then held that a violation of the confidence that accompanied the delivery of that list would partake more of a
private and civil wrong than of a breach of the fidelity owing from a lawyer to his client.

(2) The client made the communication in confidence.

The mere relation of attorney and client does not raise a presumption of confidentiality. 26 The client must intend the communication to
be confidential.27

A confidential communication refers to information transmitted by voluntary act of disclosure between attorney and client in confidence
and by means which, so far as the client is aware, discloses the information to no third person other than one reasonably necessary for
the transmission of the information or the accomplishment of the purpose for which it was given. 28

Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise agreement prepared by a lawyer pursuant to the
instruction of his client and delivered to the opposing party, 29 an offer and counter-offer for settlement,30 or a document given by a client
to his counsel not in his professional capacity,31 are not privileged communications, the element of confidentiality not being present. 32

(3) The legal advice must be sought from the attorney in his professional capacity.33

The communication made by a client to his attorney must not be intended for mere information, but for the purpose of seeking legal
advice from his attorney as to his rights or obligations. The communication must have been transmitted by a client to his attorney for the
purpose of seeking legal advice.34

If the client seeks an accounting service,35 or business or personal assistance,36 and not legal advice, the privilege does not attach to a
communication disclosed for such purpose.

Applying all these rules to the case at bar, we hold that the evidence on record fails to substantiate complainant's allegations. We note
that complainant did not even specify the alleged communication in confidence disclosed by respondent. All her claims were couched in
general terms and lacked specificity. She contends that respondent violated the rule on privileged communication when he instituted a
criminal action against her for falsification of public documents because the criminal complaint disclosed facts relating to the civil case
for annulment then handled by respondent. She did not, however, spell out these facts which will determine the merit of her complaint.
The Court cannot be involved in a guessing game as to the existence of facts which the complainant must prove.

Indeed, complainant failed to attend the hearings at the IBP. Without any testimony from the complainant as to the specific confidential
information allegedly divulged by respondent without her consent, it is difficult, if not impossible to determine if there was any violation
of the rule on privileged communication. Such confidential information is a crucial link in establishing a breach of the rule on privileged
communication between attorney and client. It is not enough to merely assert the attorney-client privilege.37 The burden of proving that
the privilege applies is placed upon the party asserting the privilege. 38

IN VIEW WHEREOF, the complaint against respondent Atty. Julito D. Vitriolo is hereby DISMISSED for lack of merit.

SO ORDERED.

A.C. No. 4078 July 14, 2003

WILLIAM ONG GENATO, complainant,

vs.
ATTY. ESSEX L. SILAPAN, respondent.

PUNO, J.:

In this complaint for disbarment filed by William Ong Genato against respondent Atty. Essex L. Silapan, complainant alleged that in July
1992, respondent asked if he could rent a small office space in complainant's building in Quezon City for his law practice. Complainant
acceded and introduced respondent to Atty. Benjamin Dacanay, complainant's retained lawyer, who accommodated respondent in the
building and made him handle some of complainant's cases. Hence, the start of the legal relationship between complainant and
respondent.

pg. 54
The conflict between the parties started when respondent borrowed two hundred thousand pesos (P200,000.00) from complainant
which he intended to use as downpayment for the purchase of a new car. In return, respondent issued to complainant a postdated
check in the amount of P176,528.00 to answer for the six (6) months interest on the loan. He likewise mortgaged to complainant his
house and lot in Quezon City but did not surrender its title claiming that it was the subject of reconstitution proceedings before the
Quezon City Register of Deeds.

With the money borrowed from complainant, respondent purchased a new car. However, the document of sale of the car was issued in
complainant's name and financed through City Trust Company.

In January 1993, respondent introduced to complainant a certain Emmanuel Romero. Romero likewise wanted to borrow money from
complainant. Complainant lent Romero the money and, from this transaction, respondent earned commission in the amount
of P52,289.90. Complainant used the commission to pay respondent's arrears with the car financing firm.

Subsequently, respondent failed to pay the amortization on the car and the financing firm sent demand letters to complainant.
Complainant tried to encash respondent's postdated check with the drawee bank but it was dishonored as respondent's account therein
was already closed.

Respondent failed to heed complainant's repeated demands for payment. Complainant then filed a criminal case against respondent for
violation of Batas Pambansa Blg. 22 and a civil case for judicial foreclosure of real estate mortgage.

In the foreclosure case, respondent made the following allegation in his Answer:

xxx xxx xxx

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

xxx xxx xxx

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

12. That on January 29, 1993, before paying for the next installment on his car on January 30, 1993, defendant Essex L.
Silapan asked the complainant to execute a Deed of Sale transferring ownership of the car to him but the latter said that he will
only do so after the termination of his criminal case at Branch 138 of the Regional Trial Court of Makati, Metro Manila, x x x
where he (complainant) wanted Essex L. Silapan, his former counsel in that case, to offer bribe money to the members of the
review committee of the Department of Justice where a petition for review of the resolution of the Investigating Prosecutor was
pending at the time, x x x or, in the event that the said petition for review is denied, he wanted Essex L. Silapan to offer bribe
money to the prosecutor assigned at the above-mentioned Court, and even to the presiding Judge, for his eventual acquittal,
which defendant Essex L. Silapan all refused to do not only because such acts are immoral and illegal, but also because the
complainant confided to him that he was really involved in the commission of the crime that was charged of in the above-
mentioned case. (emphasis supplied)

Complainant gripes that the foregoing allegations are false, immaterial to the foreclosure case and maliciously designed to defame him.
He charged that in making such allegations, respondent is guilty of breaking their confidential lawyer-client relationship and should be
held administratively liable therefor. Consequently, he filed this complaint for disbarment, praying also that an administrative sanction
be meted against respondent for his issuance of a bouncing check.

When required by the Court to comment, respondent explained 1 that it was complainant who offered him an office space in his building
and retained him as counsel as the latter was impressed with the way he handled a B.P. 22 case 2 filed against complainant.
Respondent insisted that there was nothing libelous in his imputations of dishonest business practices to complainant and his revelation
of complainant's desire to bribe government officials in relation to his pending criminal case. He claimed to have made these statements
in the course of judicial proceedings to defend his case and discredit complainant's credibility by establishing his criminal propensity to
commit fraud, tell lies and violate laws. He argued that he is not guilty of breaking his confidential lawyer-client relationship with
complainant as he made the disclosure in defense of his honor and reputation.

Secondly, respondent asserted that he executed the real estate mortgage in favor of complainant without consideration and only as a
"formal requirement" so he could obtain the P200,000.00 loan and for this reason, he did not surrender his title over the mortgaged
property to complainant.

Thirdly, respondent claimed that he issued the postdated check, not for account or for value, but only: (a) to serve as "some kind of
acknowledgment" that he already received in advance a portion of his attorney's fees from the complainant for the legal services he
rendered, and (b) as a form of assurance that he will not abandon the cases he was handling for complainant.

Lastly, respondent denied that he received a P52,289.90 commission from Romero's loan which he allegedly helped facilitate. He
alleged that the amount was paid to him by Romero as attorney's fees, the latter being his client. He used this amount to pay his
arrears with the car financing firm. On January 29, 1993, before paying the next amortization on the car, he asked complainant to
execute a deed of sale transferring ownership of the car to him. Complainant refused and insisted that he would transfer ownership of
the car only after the termination of his criminal case which respondent was handling as his defense lawyer. Consequently, respondent
stopped paying the amortization on the car. Respondent also alleged that he filed a perjury case against complainant who, in turn, filed
a complaint for libel against him.

In a Resolution, dated October 27, 1993, the Court referred the administrative case to the Integrated Bar of the Philippines (IBP) for
investigation, report and recommendation.

pg. 55
On August 3, 2002, the Board of Governors of the IBP approved the report of the investigating commissioner finding the respondent
guilty as charged and recommending his suspension from the practice of law for one (1) year.

We affirm the findings and recommendation of the IBP.

Prefatorily, we stress that we shall not delve into the merits of the various criminal and civil cases pending between the parties. It is for
the trial courts handling these cases to ascertain the truth or falsity of the allegations made therein. For this reason, it is not for us to
sanction respondent for his issuance of a bouncing check. His liability has yet to be determined by the trial court where his case is
pending.

The only issue in this administrative case is whether respondent committed a breach of trust and confidence by imputing to complainant
illegal practices and disclosing complainant's alleged intention to bribe government officials in connection with a pending case.

Canon 17 of the Code of Professional Responsibility provides that a lawyer owes fidelity to the cause of his client and shall be mindful
of the trust and confidence reposed on him. The long-established rule is that an attorney is not permitted to disclose communications
made to him in his professional character by a client, unless the latter consents. This obligation to preserve the confidences and secrets
of a client arises at the inception of their relationship. 3 The protection given to the client is perpetual and does not cease with the
termination of the litigation, nor is it affected by the 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. 4

It must be stressed, however, that the privilege against disclosure of confidential communications or information is limited only to
communications which are legitimately and properly within the scope of a lawful employment of a lawyer. It does not extend to those
made in contemplation of a crime or perpetration of a fraud. 5 If the unlawful purpose is avowed, as in this case, the complainant's
alleged intention to bribe government officials in relation to his case, the communication is not covered by the privilege as the client
does not consult the lawyer professionally. It is not within the profession of a lawyer to advise a client as to how he may commit a crime
as a lawyer is not a gun for hire. Thus, the attorney-client privilege does not attach, there being no professional employment in the strict
sense.

Be that as it may, respondent's explanation that it was necessary for him to make the disclosures in his pleadings fails to satisfy us. The
disclosures were not indispensable to protect his rights as they were not pertinent to the foreclosure case. It was improper for the
respondent to use it against the complainant in the foreclosure case as it was not the subject matter of litigation therein and
respondent's professional competence and legal advice were not being attacked in said case. A lawyer must conduct himself,
especially in his dealings with his clients, with integrity in a manner that is beyond reproach. His relationship with his clients should be
characterized by the highest degree of good faith and fairness.

Thus, the Court agrees with the evaluation of the IBP and finds that respondent's allegations and disclosures in the foreclosure case
amount to a breach of fidelity sufficient to warrant the imposition of disciplinary sanction against him. However, the recommended
penalty of one (1) year suspension of respondent from the practice of law seems to be disproportionate to his breach of duty
considering that a review of the records of this Court reveals that this is the first administrative complaint against him.

IN VIEW WHEREOF, respondent Atty. Essex L. Silapan is ordered suspended from the practice of law for a period of six (6) months
effective upon receipt of this Decision. Let a copy of this Decision be furnished the Office of the Bar Confidant and the Integrated Bar of
the Philippines. The Court Administrator is directed to circulate this order of suspension to all courts in the country.

SO ORDERED.

A.C. No. 6711 July 3, 2007

MA. LUISA HADJULA, complainant,

vs.
ATTY. ROCELES F. MADIANDA, respondent.

DECISION

GARCIA, J.:

Under consideration is Resolution No. XVI-2004-472 of the Board of Governors, Integrated Bar of the Philippines (IBP), relative to the
complaint for disbarment filed by herein complainant Ma. Luisa Hadjula against respondent Atty. Roceles F. Madianda.

The case started when, in an AFFIDAVIT-COMPLAINT1 bearing date September 7, 2002 and filed with the IBP Commission on Bar
Discipline, complainant charged Atty. Roceles F. Madianda with violation of Article 2092 of the Revised Penal Code and Canon Nos.
15.02 and 21.02 of the Code of Professional Responsibility.

In said affidavit-complaint, complainant alleged that she and respondent used to be friends as they both worked at the Bureau of Fire
Protection (BFP) whereat respondent was the Chief Legal Officer while she was the Chief Nurse of the Medical, Dental and Nursing
Services. Complainant claimed that, sometime in 1998, she approached respondent for some legal advice. Complainant further alleged
that, in the course of their conversation which was supposed to be kept confidential, she disclosed personal secrets and produced
copies of a marriage contract, a birth certificate and a baptismal certificate, only to be informed later by the respondent that she
(respondent) would refer the matter to a lawyer friend. It was malicious, so complainant states, of respondent to have refused handling
her case only after she had already heard her secrets.

pg. 56
Continuing, complainant averred that her friendship with respondent soured after her filing, in the later part of 2000, of criminal and
disciplinary actions against the latter. What, per complainant's account, precipitated the filing was when respondent, then a member of
the BFP promotion board, demanded a cellular phone in exchange for the complainant's promotion.

According to complainant, respondent, in retaliation to the filing of the aforesaid actions, filed a COUNTER COMPLAINT3 with the
Ombudsman charging her (complainant) with violation of Section 3(a) of Republic Act No. 3019, 4 falsification of public documents and
immorality, the last two charges being based on the disclosures complainant earlier made to respondent. And also on the basis of the
same disclosures, complainant further stated, a disciplinary case was also instituted against her before the Professional Regulation
Commission.

Complainant seeks the suspension and/or disbarment of respondent for the latter's act of disclosing personal secrets and confidential
information she revealed in the course of seeking respondent's legal advice.

In an order dated October 2, 2002, the IBP Commission on Bar Discipline required respondent to file her answer to the complaint.

In her answer, styled as COUNTER-AFFIDAVIT,5 respondent denied giving legal advice to the complainant and dismissed any
suggestion about the existence of a lawyer-client relationship between them. Respondent also stated the observation that the supposed
confidential data and sensitive documents adverted to are in fact matters of common knowledge in the BFP. The relevant portions of
the answer read:

5. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for
reason that she never WAS MY CLIENT nor we ever had any LAWYER-CLIENT RELATIONSHIP that ever existed ever since
and that never obtained any legal advice from me regarding her PERSONAL PROBLEMS or PERSONAL SECRETS. She
likewise never delivered to me legal documents much more told me some confidential information or secrets. That is because I
never entertain LEGAL QUERIES or CONSULTATION regarding PERSONAL MATTERS since I know as a LAWYER of the
Bureau of Fire Protection that I am not allowed to privately practice law and it might also result to CONFLICT OF INTEREST.
As a matter of fact, whenever there will be PERSONAL MATTERS referred to me, I just referred them to private law
practitioners and never entertain the same, NOR listen to their stories or examine or accept any document.

9. I specifically deny the allegation of F/SUPT. MA. LUISA C. HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the
truth of the matter is that her ILLICIT RELATIONSHIP and her illegal and unlawful activities are known in the Bureau of Fire
Protection since she also filed CHILD SUPPORT case against her lover … where she has a child ….

Moreover, the alleged DOCUMENTS she purportedly have shown to me sometime in 1998, are all part of public records ….

Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant case just to get even with me or to force me to settle and
withdraw the CASES I FILED AGAINST HER since she knows that she will certainly be DISMISSED FROM SERVICE,
REMOVED FROM THE PRC ROLL and CRIMINALLY CONVICTED of her ILLICIT, IMMORAL, ILLEGAL and UNLAWFUL
ACTS.

On October 7, 2004, the Investigating Commissioner of the IBP Commission on Bar Discipline came out with a Report and
Recommendation, stating that the information related by complainant to the respondent is "protected under the attorney-client privilege
communication." Prescinding from this postulate, the Investigating Commissioner found the respondent to have violated legal ethics
when she "[revealed] information given to her during a legal consultation," and accordingly recommended that respondent be
reprimanded therefor, thus:

WHEREFORE, premises considered, it is respectfully recommended that respondent Atty. Roceles Madianda be reprimanded
for revealing the secrets of the complainant.

On November 4, 2004, the IBP Board of Governors issued Resolution No. XVI-2004-472 reading as follows:

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the
Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and , finding the
recommendation fully supported by the evidence on record and the applicable laws and rules, and considering the actuation of
revealing information given to respondent during a legal consultation, Atty. Roceles Madianda is hereby REPRIMANDED.

We AGREE with the recommendation and the premises holding it together.

As it were, complainant went to respondent, a lawyer who incidentally was also then a friend, to bare what she considered personal
secrets and sensitive documents for the purpose of obtaining legal advice and assistance. The moment complainant approached the
then receptive respondent to seek legal advice, a veritable lawyer-client relationship evolved between the two. Such relationship
imposes upon the lawyer certain restrictions circumscribed by the ethics of the profession. Among the burdens of the relationship is that
which enjoins the lawyer, respondent in this instance, to keep inviolate confidential information acquired or revealed during legal
consultations. The fact that one is, at the end of the day, not inclined to handle the client's case is hardly of consequence. Of little
moment, too, is the fact that no formal professional engagement follows the consultation. Nor will it make any difference that no contract
whatsoever was executed by the parties to memorialize the relationship. As we said in Burbe v. Magulta,6 -

A lawyer-client relationship was established from the very first moment complainant asked respondent for legal advise
regarding the former's business. To constitute professional employment, it is not essential that the client employed the attorney
professionally on any previous occasion.

It is not necessary that any retainer be paid, promised, or charged; neither is it material that the attorney consulted did not
afterward handle the case for which his service had been sought.

pg. 57
 It a person, in respect to business affairs or troubles of any kind, consults a lawyer with a view to obtaining professional advice
or assistance, and the attorney voluntarily permits or acquiesces with the consultation, then the professional employments is
established.

Likewise, a lawyer-client relationship exists notwithstanding the close personal relationship between the lawyer and the
complainant or the non-payment of the former's fees.

Dean Wigmore lists the essential factors to establish the existence of the attorney-client privilege communication, viz:

(1) Where legal advice of any kind is sought (2) from a professional legal adviser in his capacity as such, (3) the
communications relating to that purpose, (4) made in confidence (5) by the client, (6) are at his instance permanently protected
(7) from disclosure by himself or by the legal advisor, (8) except the protection be waived. 7

With the view we take of this case, respondent indeed breached his duty of preserving the confidence of a client. As found by the IBP
Investigating Commissioner, the documents shown and the information revealed in confidence to the respondent in the course of the
legal consultation in question, were used as bases in the criminal and administrative complaints lodged against the complainant.

The purpose of the rule of confidentiality is actually to protect the client from possible breach of confidence as a result of a consultation
with a lawyer.

The seriousness of the respondent's offense notwithstanding, the Court feels that there is room for compassion, absent compelling
evidence that the respondent acted with ill-will. Without meaning to condone the error of respondent's ways, what at bottom is before
the Court is two former friends becoming bitter enemies and filing charges and counter-charges against each other using whatever
convenient tools and data were readily available. Unfortunately, the personal information respondent gathered from her conversation
with complainant became handy in her quest to even the score. At the end of the day, it appears clear to us that respondent was
actuated by the urge to retaliate without perhaps realizing that, in the process of giving vent to a negative sentiment, she was violating
the rule on confidentiality.

IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is hereby REPRIMANDED and admonished to be circumspect in her
handling of information acquired as a result of a lawyer-client relationship. She is also STERNLY WARNED against a repetition of the
same or similar act complained of.

SO ORDERED.

A.C. No. 8242 October 2, 2009

REBECCA J. PALM, Complainant,

vs.
ATTY. FELIPE ILEDAN, JR., Respondent.

DECISION

CARPIO, J.:

The Case

The case before the Court is a disbarment proceeding filed by Rebecca J. Palm (complainant) against Atty. Felipe Iledan, Jr.
(respondent) for revealing information obtained in the course of an attorney-client relationship and for representing an interest which
conflicted with that of his former client, Comtech Worldwide Solutions Philippines, Inc. (Comtech).

The Antecedent Facts

Complainant is the President of Comtech, a corporation engaged in the business of computer software development. From February
2003 to November 2003, respondent served as Comtech’s retained corporate counsel for the amount of ₱6,000 per month as retainer
fee. From September to October 2003, complainant personally met with respondent to review corporate matters, including potential
amendments to the corporate by-laws. In a meeting held on 1 October 2003, respondent suggested that Comtech amend its corporate
by-laws to allow participation during board meetings, through teleconference, of members of the Board of Directors who were outside
the Philippines.

pg. 58
Prior to the completion of the amendments of the corporate by-laws, complainant became uncomfortable with the close relationship
between respondent and Elda Soledad (Soledad), a former officer and director of Comtech, who resigned and who was suspected of
releasing unauthorized disbursements of corporate funds. Thus, Comtech decided to terminate its retainer agreement with respondent
effective November 2003.

In a stockholders’ meeting held on 10 January 2004, respondent attended as proxy for Gary Harrison (Harrison). Steven C. Palm
(Steven) and Deanna L. Palm, members of the Board of Directors, were present through teleconference. When the meeting was called
to order, respondent objected to the meeting for lack of quorum. Respondent asserted that Steven and Deanna Palm could not
participate in the meeting because the corporate by-laws had not yet been amended to allow teleconferencing.

On 24 March 2004, Comtech’s new counsel sent a demand letter to Soledad to return or account for the amount of ₱90,466.10
representing her unauthorized disbursements when she was the Corporate Treasurer of Comtech. On 22 April 2004, Comtech received
Soledad’s reply, signed by respondent. In July 2004, due to Soledad’s failure to comply with Comtech's written demands, Comtech filed
a complaint for Estafa against Soledad before the Makati Prosecutor’s Office. In the proceedings before the City Prosecution Office of
Makati, respondent appeared as Soledad’s counsel.

On 26 January 2005, complainant filed a Complaint 1 for disbarment against respondent before the Integrated Bar of the Philippines
(IBP).

In his Answer,2 respondent alleged that in January 2002, Soledad consulted him on process and procedure in acquiring property. In
April 2002, Soledad again consulted him about the legal requirements of putting up a domestic corporation. In February 2003, Soledad
engaged his services as consultant for Comtech. Respondent alleged that from February to October 2003, neither Soledad nor Palm
consulted him on confidential or privileged matter concerning the operations of the corporation. Respondent further alleged that he had
no access to any record of Comtech.

Respondent admitted that during the months of September and October 2003, complainant met with him regarding the procedure in
amending the corporate by-laws to allow board members outside the Philippines to participate in board meetings.

Respondent further alleged that Harrison, then Comtech President, appointed him as proxy during the 10 January 2004 meeting.
Respondent alleged that Harrison instructed him to observe the conduct of the meeting. Respondent admitted that he objected to the
participation of Steven and Deanna Palm because the corporate by-laws had not yet been properly amended to allow the participation
of board members by teleconferencing.

Respondent alleged that there was no conflict of interest when he represented Soledad in the case for Estafa filed by Comtech. He
alleged that Soledad was already a client before he became a consultant for Comtech. He alleged that the criminal case was not
related to or connected with the limited procedural queries he handled with Comtech.

The IBP’s Report and Recommendation

In a Report and Recommendation dated 28 March 2006,3 the IBP Commission on Bar Discipline (IBP-CBD) found respondent guilty of
violation of Canon 21 of the Code of Professional Responsibility and of representing interest in conflict with that of Comtech as his
former client.

The IBP-CBD ruled that there was no doubt that respondent was Comtech’s retained counsel from February 2003 to November 2003.
The IBP-CBD found that in the course of the meetings for the intended amendments of Comtech’s corporate by-laws, respondent
obtained knowledge about the intended amendment to allow members of the Board of Directors who were outside the Philippines to
participate in board meetings through teleconferencing. The IBP-CBD noted that respondent knew that the corporate by-laws have not
yet been amended to allow the teleconferencing. Hence, when respondent, as representative of Harrison, objected to the participation
of Steven and Deanna Palm through teleconferencing on the ground that the corporate by-laws did not allow the participation, he made
use of a privileged information he obtained while he was Comtech’s retained counsel.

The IBP-CBD likewise found that in representing Soledad in a case filed by Comtech, respondent represented an interest in conflict
with that of a former client. The IBP-CBD ruled that the fact that respondent represented Soledad after the termination of his
professional relationship with Comtech was not an excuse.

The IBP-CBD recommended that respondent be suspended from the practice of law for one year, thus:

WHEREFORE, premises considered, it is most respectfully recommended that herein respondent be found guilty of the charges
preferred against him and be suspended from the practice of law for one (1) year. 4

In Resolution No. XVII-2006-5835 passed on 15 December 2006, the IBP Board of Governors adopted and approved the
recommendation of the Investigating Commissioner with modification by suspending respondent from the practice of law for two years.

Respondent filed a motion for reconsideration.6

In an undated Recommendation, the IBP Board of Governors First Division found that respondent’s motion for reconsideration did not
raise any new issue and was just a rehash of his previous arguments. However, the IBP Board of Governors First Division
recommended that respondent be suspended from the practice of law for only one year.

In Resolution No. XVIII-2008-703 passed on 11 December 2008, the IBP Board of Governors adopted and approved the
recommendation of the IBP Board of Governors First Division. The IBP Board of Governors denied respondent’s motion for
reconsideration but reduced his suspension from two years to one year.

pg. 59
The IBP Board of Governors forwarded the present case to this Court as provided under Section 12(b), Rule 139-B7of the Rules of
Court.

The Ruling of this Court

We cannot sustain the findings and recommendation of the IBP.

Violation of the Confidentiality of Lawyer-Client Relationship

Canon 21 of the Code of Professional Responsibility provides:

Canon 21. A lawyer shall preserve the confidence and secrets of his client even after the attorney-client relationship is terminated.
(Emphasis supplied)

We agree with the IBP that in the course of complainant’s consultations, respondent obtained the information about the need to amend
the corporate by-laws to allow board members outside the Philippines to participate in board meetings through teleconferencing.
Respondent himself admitted this in his Answer.

However, what transpired on 10 January 2004 was not a board meeting but a stockholders’ meeting. Respondent attended the meeting
as proxy for Harrison. The physical presence of a stockholder is not necessary in a stockholders’ meeting because a member may vote
by proxy unless otherwise provided in the articles of incorporation or by-laws.8 Hence, there was no need for Steven and Deanna Palm
to participate through teleconferencing as they could just have sent their proxies to the meeting.

In addition, although the information about the necessity to amend the corporate by-laws may have been given to respondent, it could
not be considered a confidential information. The amendment, repeal or adoption of new by-laws may be effected by "the board of
directors or trustees, by a majority vote thereof, and the owners of at least a majority of the outstanding capital stock, or at least a
majority of members of a non-stock corporation."9 It means the stockholders are aware of the proposed amendments to the by-laws.
While the power may be delegated to the board of directors or trustees, there is nothing in the records to show that a delegation was
made in the present case. Further, whenever any amendment or adoption of new by-laws is made, copies of the amendments or the
new by-laws are filed with the Securities and Exchange Commission (SEC) and attached to the original articles of incorporation and by-
laws.10 The documents are public records and could not be considered confidential.1avvphi1

It is settled that the mere relation of attorney and client does not raise a presumption of confidentiality.11 The client must intend the
communication to be confidential.12 Since the proposed amendments must be approved by at least a majority of the
stockholders, and copies of the amended by-laws must be filed with the SEC, the information could not have been intended to
be confidential. Thus, the disclosure made by respondent during the stockholders’ meeting could not be considered a violation of his
client’s secrets and confidence within the contemplation of Canon 21 of the Code of Professional Responsibility.

Representing Interest in Conflict With the Interest of a Former Client

The IBP found respondent guilty of representing an interest in conflict with that of a former client, in violation of Rule 15.03, Canon 15 of
the Code of Professional Responsibility which provides:

Rule 15.03 - A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of
the facts.

We do not agree with the IBP.

In Quiambao v. Bamba,13 the Court enumerated various tests to determine conflict of interests. One test of inconsistency of interests is
whether the lawyer will be asked to use against his former client any confidential information acquired through their connection or
previous employment.14 The Court has ruled that what a lawyer owes his former client is to maintain inviolate the client’s confidence or
to refrain from doing anything which will injuriously affect him in any matter in which he previously represented him. 15

We find no conflict of interest when respondent represented Soledad in a case filed by Comtech. The case where respondent
represents Soledad is an Estafa case filed by Comtech against its former officer. There was nothing in the records that would show
that respondent used against Comtech any confidential information acquired while he was still Comtech’s retained counsel.
Further, respondent made the representation after the termination of his retainer agreement with Comtech. A lawyer’s immutable duty
to a former client does not cover transactions that occurred beyond the lawyer’s employment with the client. 16 The intent of the law is to
impose upon the lawyer the duty to protect the client’s interests only on matters that he previously handled for the former client and not
for matters that arose after the lawyer-client relationship has terminated.17

WHEREFORE, we DISMISS the complaint against Atty. Felipe Iledan, Jr. for lack of merit.

SO ORDERED.

G.R. No. L-11724 November 23, 1959

WACK WACK GOLF AND COUNTRY CLUB, INC., petitioner,

vs.
COURT OF APPEALS, PETRONILO ARCANGEL and ANTONIO D. BERNARDO, respondents.

pg. 60
Juan T. Chuidian Law Office for petitioner.
Amado A. Yatco for respondent Petronilo Arcangel.
Deogracias T. Reyes, Benjamin C. Yatco and Ernesto Pangalangan for respondent Antonino B. Bernardo.

BARRERA, J.:

These petitions were filed by the Wack Wack Golf and Country Club, Inc., to review the decisions of the Court of Appeals in two cases
involving the same corporation. (CA-G. R. No. 15910-R and CA-G. R. No. 15902-R). As the issues raised in said cases relate to the
same principle of law, we shall take them up jointly and resolve the questions assigned therein in a single decision. G. R. No. L-11724,
(CA-G. R. No. 15910).

Petronilo Arcangel, a former employee of the Wack Wack Golf and Country Club, Inc., filed with the Court of First Instance of Manila a
money claim for overtime services rendered to said employer, for unenjoyed vacation leave, moral damages and attorney's fees. The
employer having filed its answer to the complaint, the case was accordingly set for trial. At the hearing of May 6, 1955, however, neither
the defendant (employer) nor its counsel, Balcoff, Poblador and Angel Cruz appeared notwithstanding the fact that they were duly
notified of the hearing since March 22, 1955; hence, the plaintiff was allowed to continue presenting his evidence without the presence
of defendant.

On May 10, 1955, the lower court rendered judgment for the plaintiff employee, awarding him a total of P7,702.78.

On May 14, 1955, the law firm of Juan Chuidian, on behalf of the defendant employer, filed a petition to set aside the judgment on the
ground of misunderstanding, mistake and excusable neglect, which petition was denied by the lower court in its order of May 31.

The employer appealed from this order — not from the decision on the merits — to the Court of Appeals claiming that the court a
quo committed a grave abuse of discretion in denying its petition for relief. The Court of Appeals, finding no justification for the
employer's failure to appear at the hearing, upheld the order appealed from.

There is no disagreement as to the facts allegedly constituting the mistake, accident, or excusable negligence upon which the
employer's petition for relief was based. As put down in petitioner-appellant's brief filed in the Court of Appeals, and adopted by said
court, they are:

The records of this case show that defendant-appellant (employer) was represented by the law office of Balcoff and Poblador
and Angel Cruz from the inception of this case up to May 14, 1955, when law Office Juan T. Chuidian filed its appearance
upon being referred by law office of Balcoff and Poblador on May 12, 1955 the copy of the decision dated May 10, 1955 of the
trial Court.

"Sometime before May 5, 1955 the defendant-appellant Wack Wack Golf and Country Club Inc., had manifested its desire to
replace their counsel Messrs. Paredes, Balcoff and Poblador in this case with Law Office Juan Chuidian. On May 5, 1955 Atty.
Jesus Sayoc of the undersigned law firm conferred with Atty. Angel Cruz of Messrs. Paredes, Balcoff and Poblador for the
purpose of securing the court file in this case and effect the substitution of attorney. Unfortunately, Mr. Balcoff was not in the
office at the moment and attorney Angel Cruz declared he had no authority to turn over to Law office of Juan T. Chuidian the
court papers and file in this case; besides, there were unpaid bill due Messrs. Paredes, Balcoff and Poblador. Arriving at the
office, Mr. Jesus Sayoc advised Mr. Juan Chuidian of the reluctance of Messrs. Paredes, Balcoff and Poblador to turn over the
court file of the case to the former. In view of this development, Atty. Chuidian called up Atty. Balcoff by telephone and it was
agreed between the two gentlemen that inasmuch as Attys. Paredes, Balcoff and Poblador were still the attorneys of record in
the case, Atty. Balcoff would sent a representative of his law office to appear at the hearing of the case of the following day,
May 6, 1955 in order to ask for postponement of the case. Consequently, nobody in Law Office Juan Chuidian appeared in
behalf of defendant-appellant on May 6, 1955 before the Trial Court. As a matter of fact, the records of the case were turned
over to Law Office Juan T. Chuidian only on May 13, 1955 after Law Office Juan T. Chuidian had received on May 12, 1955
through Messrs. Paredes, Balcoff and Poblador a copy of the decision dated May 10, 1955 of the Trial Court. On the other
hand, Atty. Angel Cruz or any associate lawyer of Messrs. Paredes, Balcoff and Poblador did not appear for defendant-
appellant on May 6, 1955.

We are with the Court of Appeals in the observation that as of May 6, 1955, the law firm of Balcoff and Poblador and Angel Cruz were
still the employer's counsel of record, the law office of Juan Chuidian having entered its appearance in the case only on May 14, 1955.
As such counsel of record, said law firm must have known that, its impending relief as counsel for the defendant notwithstanding, it is
under obligation to protect the client's interest (which includes appearance at the hearing) until its final release from the professional
relationship with such client. For its part, the court could recognize no other representation on behalf of the client except such counsel
of record until a formal substitution of attorney is effected. Thus, any agreement or arrangement such counsel of record and its client
may reach regarding the presentation of the client' case in the court is purely their private concern. Proceedings in the court cannot be
made to depend on them. The lack of coordination or understanding between the two law firms in the instant case cannot be
considered as a legal excuse or falling within the ambit of excusable negligence to justify the granting of relief from the order declaring
the client in default, or as in the case, from a decision entered after presentation of evidence in his absence.

Where the defendants were given every reasonable opportunity to try their case and no legal excuse was presented for a
further adjournment, and order denying defendant's motion to set aside their default and vacate the judgment against them
entered upon such default, was proper. (Centerville Creamy Co. vs. Waxler, 30 N.T.S. 2d. 232, 262 App. Div. 1055.)

G.R. No. L-11724 (CA-G.R. No. 15902-R):.

On February 18, 1953, Antonino Bernardo, former official of appellant, filed with the Court of First Instance of Manila a claim against the
Wack Wack Golf & Country Club, Inc. for overtime pay, unenjoyed vacation and sick leaves from 1946 to 1951 and attorney's fees. As
the employer denied the claim, the case was set for trial.

At the hearing of May 12, 1955, after about 8 previous postponements, nobody appeared for the employer although said defendant was
represented from the commencement of the proceeding by Atty. Angel Cruz and was duly notified of the hearing since March 26, 1955.
pg. 61
Consequently, the plaintiff-employee was permitted to continue presenting his evidence before the Deputy Clerk of Court who was
delegated for this purpose.

On May 14, 1955, the lower court adjudged the plaintiff entitled to the claim, and sentenced defendant-employer to pay the total sum of
P26,422.78.

On the same day, May 14, 1955, the employer represented by the law office of Juan Chuidian, filed a petition for relief from the order
authorizing the Deputy Clerk of Court to receive plaintiff's evidence and for the re-opening of the case. The petition was later
supplemented by another similarly praying for the setting aside of the decision rendered therein, on the ground of accident or excusable
negligence. Upon plaintiff's opposition, these petitions were denied by the court in its order of May 31, 1955. From this order of denial,
defendant employer appealed to the Court of Appeals. On October 30, 1956, the Court of Appeals affirmed the disputed order, for the
reason that under the circumstances, there was no justification for defendant's counsel to anticipate that the justification for defendant's
counsel to anticipate that the Court would grant a motion for postponement of the hearing of May 12, 1955.

The accident or excusable negligence referred to by the new counsel for defendant employer is stated in the petition for relief filed in
the lower court, thus:

1. That defendant heretofore had been represented by attorney Angel Cruz; that for certain reasons the defendant recently
contracted the services of law office of Juan T. Chuidian to handle this case; in substitution of Atty. Angel Cruz, the
appearance of the undersigned law office has been filed with this Honorable Court on May 12, 1955;

2. That it was only in the afternoon of May 11, 1955, that the records of this case were sent to the undersigned Law Office, and
that Atty. Juan T. Chuidian was then out of town and, consequently, nobody knew what action to take in this case;

3. That in the morning of May 12, 1955, Atty. Juan T. Chuidian telephoned the undersigned law office and requested that one
of the assistant attorneys appear at the sala in connection with the scheduled hearing of the above-entitled case, and to move
for the postponement thereof on the obvious reason that the undersigned law firm was not prepared right then and there to
proceed with the trial of the case inasmuch as the facts of the case were not then sufficiently known to any of the associate
attorneys;

4. That when Attorney Suntay of the undersigned law office arrived at the sala of this Honorable Court, he was informed that
the case had been called earlier in the calendar and in view of the failure of any person to appear in behalf of defendant, the
Deputy Clerk of Court was authorized to receive the evidence for the plaintiff;

5. The subsequent efforts of Attorney Suntay to suspend the reception of plaintiff's evidence and postpone the hearing and
proved fruitless; ...

From the foregoing facts, it is evident that Atty. Suntay's appearance (late by some 35 minutes) at the hearing of the case was solely for
the purpose of securing another postponement of the trial; that his delay was brought about by the absence of the principal counsel in
town, and by want of instructions from the latter as to what action his assistants should take on the matter; that the records of the case
were only turned over to the new counsel on May 11, and that there was no time to prepare for the trial. Under these circumstances, the
employer's charge that the trial court abused its discretion in denying its petition for relief from the order authorizing the reception of
plaintiff's evidence in the absence of the defendant and the judgment rendered in the case, is premised on the ground (1) that counsel's
tardiness or delay as well as his unpreparedness to go to trial are accidental or may be considered as excusable negligence, and (2)
that the trial court should have allowed the motion for postponement.

Both points find adequate answer in the Court of Appeals ruling which we quote with approval:

The hearing on May 12, 1955 had been fixed, with the conformity of both parties, as early as March 18, 1955. Not only that,
but the verbal order issued in open court was supplemented by a written order, copy of which was received by defendant's
counsel on March 26, 1955. On the date of the trial defendant was still represented by Atty. Angel Cruz as counsel of record.
Up to then there had been no substitution of attorneys, nor had Attorney Cruz withdrawn his appearance in the case. Indeed
the record does not show that he ever did withdraw his appearance or filed a motion for substitution. The responsibility for
representing defendant at the trial on May 12, 1955 was therefore still his. On the other hand if it is true, as alleged by
appellant, that the services of Attorney Juan Chuidian had been engaged sometime prior to May 11, 1955 then it was the
latter's duty to file his appearance opportunely and prepare for the trial on May 12, 1955. It is to be presumed that in accepting
the case Attorney Chuidian knew that the trial was to be held on that date; and he certainly was not justified in accepting the
case unless he was prepared to go to trial as scheduled. He had no right to take for granted the liberality of the court or
generosity of the plaintiff by appearing, through an assistant of his, after the case had been actually called on the calendar and
while the evidence of the plaintiff was already being received, and then only to ask (verbally) for another postponement.

All motions for postponement should be presented at such time as is practicable to prevent the adverse party from incurring
unnecessary expenses by coming to trial, otherwise postponement shall be denied. And a party moving for the postponement
should be in court on the day for trial if the motion was not acted upon favorably before that day. He has no right to rely either
on the liberality of the court, or on the generosity of the adverse party." (Moran on Rules of Court, 1952 edition, pp. 651-653,
citing Linus vs. Robira, 61 Phil., 907; Macondray & Co. vs. Paredes, G. R. No. 38255, Sept. 5 1933; Sunico vs. Villapando, 14
Phil., 352.)

In addition, the records of these two cases reveal that even prior to May 5, 1955, defendant-appellant had manifested its desire to
replace its former counsel Messrs. Paredes, Balcoff and Poblador with the law office of Atty. Juan Chuidian. If this were so, it was the
bounden duty of both law firms to have made the necessary arrangement for the protection of the interest of their client. Their failure to
do so cannot certainly be considered excusable neglect to the extent of making the action of the trial court, as well as the Court of
Appeals in denying relief based thereon, an abuse of discretion constituting reversible error.

Although no longer necessary in view of the conclusions already reached and expressed, attention may be drawn to the lack of the
required affidavits of merit to support the petitions for relief. While there are sworn statements on the alleged mistake, accident, and/or
pg. 62
excusable negligence, there is in G.R. No. L-11724, total absence of, and in G.R. No. L-11725, insufficient affidavit showing the facts
constituting the valid defense which the movant may prove in case a new trial is granted. Even in the latter case, the only reference
made in the affidavit of the assistant lawyer in the law firm of Atty. Chuidian, who as admitted in the pleadings submitted by them, did
not know the facts of the case, was the statement "that the defendant has genuine and bona fide defenses to the claims interposed by
plaintiff, more particularly set out in its Amended Answer dated August 4, 1954." This amended answer is not under oath.
Consequently, the mere incorporation thereof by reference made by one who had no knowledge of the said defenses does not comply
with the requirements of the rules and decisions on the matter. The affidavits of merit must state facts, and not mere conclusions or
opinions, otherwise they are not valid.1

Anent the question raised by petitioner in both instances regarding the legality of the lower court's order authorizing the Deputy Clerk of
Court to receive plaintiff's evidence, we again make our own the Court of Appeals ruling, thus:

Defendant next contends that the trial court acted contrary to law and gravely abused its discretion when it delegated the
Deputy Clerk of Court to receive plaintiff's evidence. It should be borne in mind that the delegation was made in view of the
absence of defendant and his counsel and that the function thus delegated was merely ministerial, namely, the taking down of
the testimony of the witnesses and the marking down of whatever documentary evidence would be presented. There could be
no occasion for the exercise of judicial discretion such as might have been called for if the other party had been present to
object to questions that were propounded or to the admission of exhibits. It cannot therefore be seriously maintained that any
prejudice was caused to defendant by the action taken by the Court.

Wherefore, finding no error in the decisions of the Court of Appeals sought to be nullified, the petitions filed in these two cases are
hereby dismissed, with costs. It is so ordered.

A. C. No. 7421 October 10, 2007

ELISA V. VENTEREZ, GENARO DE VERA, INOCENCIA V. RAMIREZ, PACITA V. MILLS, ANTONINA V. PALMA and RAMON DE
VERA, Complainants,
vs.
ATTY. RODRIGO R. COSME, Respondent.

RESOLUTION

CHICO-NAZARIO, J.:

Before Us is a Complaint filed by complainants Eliza V. Venterez, Genaro de Vera, Inocencia V. Ramirez, Pacita V. Mills, Antonina V.
Palma and Ramon de Vera against respondent Atty. Rodrigo R. Cosme, charging the latter with Abandonment, Gross Negligence and
Dereliction of Duty.

Complainants contracted the legal services of respondent in Civil Case No. 981 entitled, "Sps. Daniel and Lolita Oviedo, et al. v. Eliza
de Vera, et al.," for Declaration of Ownership with Damages filed before the Municipal Trial Court (MTC) of Calasiao, Pangasinan.
Respondent represented the complainants, who were defendants in said case, until a Decision thereon was rendered by the MTC on
25 February 2004. The MTC ruled against the complainants. Respondent received a copy of the said Decision on 3 March 2004.

Complainants alleged that they directed the respondent to either file a Motion for Reconsideration or a Notice of Appeal, but respondent
failed or refused to do so. The 15-day period within which to file an appeal or a motion for reconsideration of the MTC Decision expired
on 18 March 2004. Complainant Elisa V. Venterez was constrained to contract another lawyer to prepare the Motion for
Reconsideration which was filed on 19 March 2004. It must be stressed that the said motion was signed by complainant Elisa V.
Venterez herself as the said lawyer did not enter his appearance.

On 23 March 2004, the said Motion for Reconsideration was denied 1 by the MTC. Respondent was not furnished a copy of the denial of
the motion per a Certification2 issued by Clerk of Court II Zenaida C. de Vera. On 31 March 2004, a Motion for Issuance of Writ of
Execution3 was filed by the plaintiffs in Civil Case No. 981 but respondent never bothered to file an opposition to or any comment on the
said motion despite receipt thereof. The motion was eventually granted 4 by the MTC on 23 April 2004. On 28 April 2004, a Writ of
Execution5 was issued and on 26 April 2004, an Entry of Judgment6 was made in the said case.

Two months after respondent received a copy of the Decision, the respondent filed his Notice of Retirement of Counsel with the MTC
on 3 May 2004.

Feeling aggrieved by respondent’s actuations, complainants filed the instant administrative complaint against him.7

In his Answer,8 respondent denied the claim of complainants that soon after the Decision was rendered by the MTC, they
(complainants) directed him to file an appeal or a motion for reconsideration thereof. For his defense, respondent averred that Salvador
Ramirez (the son of one of the complainants, Inocencia V. Ramirez), informed him that "he [was] withdrawing the case from the
respondent because he already engaged another lawyer to take over the case, so respondent gave the records of the case to him."
Respondent explained that "after Salvador Ramirez withdrew the case from the respondent, and engaged another lawyer, the
respondent turned over the records of the case to him and the respondent ceased as the counsel of the complainants." Respondent
further alleged that the said Motion for Reconsideration was already prepared by another lawyer. He denied being furnished a copy of
the Motion for Reconsideration allegedly prepared and filed by another lawyer engaged by complainant Elisa V. Venterez and that he
was served with a copy of the denial of the said Motion by the MTC. Respondent also clarified that the "last day of the 15-day period for
the perfection of the appeal is 19 March 2004 since a copy of the decision was served on the respondent on 4 March 2004." Finally,
respondent argued that "when the respondent was served a copy of the Motion for Writ of Execution, he immediately notified Salvador
Ramirez about said Motion but Salvador Ramirez came to see the respondent only on 3 May 2005, when the respondent asked him to
sign a Notice of Retirement of Counsel signed by Salvador Ramirez which respondent immediately filed in court."

pg. 63
Pursuant to the complaint, a hearing was conducted by the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP)
at the IBP Building, Ortigas Center, Pasig City, on 15 February 2006.

On 11 April 2006, Investigating Commissioner Dennis A. B. Funa submitted his Report and Recommendation, 9finding respondent liable
for gross negligence and recommending the imposition upon him of the penalty of three months suspension, to wit:

PREMISES CONSIDERED, it is submitted that Respondent is GUILTY of Gross Negligence and should be given the penalty of THREE
(3) MONTHS SUSPENSION.

Thereafter, the IBP Board of Governors passed Resolution 10 No. XVII-2006-457 dated 8 September 2006, approving and adopting the
recommendation of the Investigating Commissioner, thus:

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 is guilty
of gross negligence, Atty. Rodrigo Cosme is hereby SUSPENDED from the practice of law for three (3) months. 11

We sustain the findings and recommendation of the IBP Board of Governors.

The core issue is whether the respondent committed culpable negligence in handling complainants’ case, as would warrant disciplinary
action.

No lawyer is obliged to advocate for every person who may wish to become his client, but once he agrees to take up the cause of a
client, the lawyer owes fidelity to such cause and must be mindful of the trust and confidence reposed in him.12 Among the fundamental
rules of ethics is the principle that an attorney who undertakes an action impliedly stipulates to carry it to its termination, that is, until the
case becomes final and executory. A lawyer is not at liberty to abandon his client and withdraw his services without reasonable cause
and only upon notice appropriate in the circumstances.13 Any dereliction of duty by a counsel affects the client.14 This means that his
client is entitled to the benefit of any and every remedy and defense that is authorized by the law and he may expect his lawyer to
assert every such remedy or defense.15

The Decision in Civil Case No. 981 was rendered by the MTC of Calasaio, Pangasinan, on 25 February 2004. Respondent
admitted16 that he was served a copy of the said Decision on 4 March 2004. After having received a copy of the MTC Decision,
respondent did not bother to file a Motion for Reconsideration or a notice of appeal with the proper courts. Thus, complainants were
compelled to engage the services of a new counsel to file a Motion for Reconsideration with the MTC who did not, however, enter his
appearance as new counsel. It bears stressing that during this time, respondent had not yet filed any notice of withdrawal as counsel for
the complainants in Civil Case No. 981. Respondent only formally withdrew as counsel for complainant in Civil Case No. 981 when he
filed with the MTC his Notice17 of Retirement as Counsel on 5 May 2004, on the ground that "he was also retired as Counsel for the
[complainants] two days after he received copy of the decision rendered in this case when SALVADOR RAMIREZ, a representative of
the [complainants], withdrew all the records of the case from [respondent] to be given to his new counsel."

We cannot accept respondent’s defense that he had already withdrawn from the case two days after his receipt of the MTC Decision
and that he had allegedly communicated this withdrawal to Salvador Ramirez, son of one of the herein complainants, Inocencia
Ramirez. It is an apparent attempt on the part of respondent to wash his hands of any liability for failing to pursue any of the available
remedies to complainants from the adverse MTC Decision.

The rule in this jurisdiction is that a client has the absolute right to terminate the attorney-client relation at any time with or without
cause.18 The right of an attorney to withdraw or terminate the relation other than for sufficient cause is, however, considerably
restricted.19 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.20 He is not at liberty to abandon it without reasonable cause.21 A lawyer's right to withdraw from a
case before its final adjudication arises only from the client's written consent or from a good cause. 22

Section 26, Rule 138 of the Revised Rules of Court provides:

Sec. 26. Change of attorneys -- An attorney may retire at any time from any action or special proceeding, by the written consent of his
client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the
court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the
name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the
change shall be given to the adverse party.

A lawyer may retire at any time from any action or special proceeding with the written consent of his client filed in court and with a copy
thereof served upon the adverse party. Should the client refuse to give his consent, the lawyer must file an application with the court.
The court, on notice to the client and adverse party, shall determine whether the lawyer ought to be allowed to retire. The application for
withdrawal must be based on a good cause.23

What constitute good cause for the withdrawal of services by the counsel are identified under Rule 22.01, Canon 22 of the Code of
Professional Responsibility, which provides:

CANON 22 -- A LAWYER SHALL WITHDRAW HIS SERVICES ONLY FOR GOOD CAUSE AND UPON NOTICE APPROPRIATE IN
THE CIRCUMSTANCES.

Rule 22.01-- A lawyer may WITHDRAW his services in any of the following cases:

a) When the client pursues an illegal or immoral course of conduct in connection with the matter he is handling;

pg. 64
 b) When the client insists that the lawyer pursue conduct violative of these canons and rules;

c) When his inability to work with co-counsel will not promote the best interest of the client;

d) When the mental or physical condition of the lawyer renders it difficult for him to carry out the employment effectively;

e) When the client deliberately fails to pay the fees for the services or fails to comply with the retainer agreement;

f) When the lawyer is elected or appointed to public office; and

g) Other similar cases.

The instant case does not fall under any of the grounds aforementioned. Neither can the circumstances of this case be considered
analogous to the grounds thus explicitly enumerated. Contrary to respondent’s contention, his professional relations as a lawyer with
his clients are not terminated by the simple turnover of the records of the case to his clients. Respondent’s defense completely
crumbles in face of the fact that Salvador Ramirez is not even a party in Civil Case No. 981 and, hence, had no authority to withdraw
the records of the said case from respondent or to terminate the latter’s services.

Assuming, nevertheless, that respondent was justified in withdrawing his services, he, however, cannot just do so and leave
complainants in the cold, unprotected. The lawyer has no right to presume that his petition for withdrawal will be granted by the
court.24 Until his withdrawal shall have been approved, the lawyer remains counsel of record who is expected by his clients, as well as
by the court, to do what the interests of his clients require. 25 He must still appear before the court to protect the interest of his clients by
availing himself of the proper remedy, for the attorney-client relations are not terminated formally until there is a withdrawal of record.

Without a proper revocation of his authority and withdrawal as counsel, respondent remains counsel of record for the complainants in
Civil Case No. 981; and whether he has a valid cause to withdraw from the case, he cannot immediately do so and leave his clients
without representation. An attorney may only retire from the case either by a written consent of his client or by permission of the court
after due notice and hearing, in which event, the attorney should see to it that the name of the new attorney is recorded in the
case.26 Respondent did not comply with these obligations. Therefore, he remains the counsel of record for the complainants in Civil
Case No. 981 with the duty to protect complainants’ interest. Had he made the necessary inquiries as to the status of the case, he
would have known that he was still the counsel of record as no entry of appearance was ever made by another counsel. It would have
been easily discernible on his part that there was no change in his status as complainants’ lawyer. As of that time, their client-lawyer
relationship was still subsisting. Therefore, he would have known that the Motion for Reconsideration was denied; and a writ of
execution had been issued under the circumstances.

All told, we rule and so hold that on account of respondent’s failure to protect the interest of complainants, respondent indeed violated
Rule 18.03, Canon 18 of the Code of Professional Responsibility, which states that "a lawyer shall not neglect a legal matter entrusted
to him, and his negligence in connection therewith shall render him liable." Respondent is reminded that the practice of law is a special
privilege bestowed only upon those who are competent intellectually, academically and morally. This Court has been exacting in its
expectations for the members of the Bar to always uphold the integrity and dignity of the legal profession and refrain from any act or
omission which might lessen the trust and confidence of the public.1âwphi1

The determination of the appropriate penalty to be imposed on an errant lawyer involves the exercise of sound judicial discretion based
on the facts of the case.27 In cases of similar nature, the penalty imposed by the Court consisted of reprimand,28 fine of five hundred
pesos with warning,29 suspension of three months,30 six months31and even disbarment32 in an aggravated case.

The facts of the case show that respondent failed to live up to his duties as a lawyer pursuant to the Code of Professional
Responsibility. We conclude that a 3-month suspension from the practice of law is a just penalty under the circumstances.

WHEREFORE, the resolution of the IBP Board of Governors approving and adopting the report and recommendation of the
Investigating Commissioner is hereby AFFIRMED. Accordingly, ATTY. RODRIGO R. COSME is hereby SUSPENDED from the practice
of law for a period of THREE (3) MONTHS, with a stern warning that a repetition of the same or similar wrongdoing will be dealt with
more severely.

Let a copy of this decision be attached to respondent’s personal record with the Office of the Bar Confidant and copies be furnished to
all chapters of the Integrated Bar of the Philippines and to all courts of the land.

SO ORDERED.

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 Lawyer’s Oath, gross misconduct, and gross negligence. Complainants are related to petitioners in G.R. No. 152621-23

pg. 65
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 respondent’s 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 arrest 5 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 Lawyer’s 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 Responsibility 9 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 Villadolid’s recommendation to find respondent guilty and specifically
to recommend his suspension for six (6) months as penalty.

pg. 66
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 petition’s 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 pleading 13 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 respondent’s 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, respondent’s office would have
received the Court’s 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 respondent’s 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 respondent’s 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 respondent’s 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 lawyer’s right to withdraw from a case before its final
adjudication arises only from the client’s 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. Boncavil 17 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 latter’s 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 client’s 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

pg. 67
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 respondent’s 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 Lawyer’s 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.25The 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.

G.R. No. 86100-03 January 23, 1990

METROPOLITAN BANK AND TRUST COMPANY, petitioner,

vs.
THE HONORABLE COURT OF APPEALS and ARTURO ALAFRIZ and ASSOCIATES, respondents.

Bautista, Picazo, Buyco, Tan & Fider for petitioner.

Arturo A. Alafriz & Associates for and in their own behalf.

REGALADO, J.:

This petition for review on certiorari impugns the decision of the Court of Appeals in CA-G.R. Nos. 08265-08268 1affirming the order of
Branch 168, Regional Trial Court, National Capital Judicial Region, in Civil Cases Nos. 19123-28, 19136 and 19144, fixing attorney's
fees and directing herein petitioner Metropolitan Bank and Trust Company (Metrobank, for brevity), as defendant in said civil cases, to
pay its attorneys, herein private respondent Arturo Alafriz and Associates, movant therein, the amount of P936,000.00 as attorney's
fees on a quantum meruit basis.

The records show that from March, 1974 to September, 1983, private respondent handled the above-mentioned civil cases before the
then Court of First Instance of Pasig (Branches I, II, VI, X, XIII, XIX, XX AND XXIV) in behalf of petitioner. 2 The civil cases were all for
the declaration of nullity of certain deeds of sale, with damages.

The antecedental facts 3 which spawned the filing of said actions are undisputed and are hereinunder set forth as found by the trial
court and adopted substantially in the decision of respondent court. A certain Celedonio Javier bought seven (7) parcels of land owned
by Eustaquio Alejandro, et al., with a total area of about ten (10) hectares. These properties were thereafter mortgaged by Javier with
pg. 68
the petitioner to secure a loan obligation of one Felix Angelo Bautista and/or International Hotel Corporation. The obligors having
defaulted, petitioner foreclosed the mortgages after which certificates of sale were issued by the provincial sheriff in its favor as
purchaser thereof Subsequently, Alejandro, alleging deceit, fraud and misrepresentation committed against him by Javier in the sale of
the parcels of land, brought suits against Javier et al., and included petitioner as defendant therein.

It was during the pendency of these suits that these parcels of land were sold by petitioner to its sister corporation, Service Leasing
Corporation on March 23, 1983 for the purported price of P600,000.00. On the same day, the properties were resold by the latter to
Herby Commercial and Construction Corporation for the purported price of P2,500,000.00. Three months later, or on June 7, 1983,
Herby mortgaged the same properties with Banco de Oro for P9,200,000.00. The lower court found that private respondent, did not
have knowledge of these transfers and transactions.

As a consequence of the transfer of said parcels of land to Service Leasing Corporation, petitioner filed an urgent motion for
substitution of party on July 28, 1983. Private respondent, on its part, filed on August 16, 1983 a verified motion to enter in the records
of the aforesaid civil cases its charging lien, pursuant to Section 37, Rule 138 of the Rules of Court, equivalent to twenty-five percent
(25%) of the actual and current market values of the litigated properties as its attorney's fees. Despite due notice, petitioner failed to
appear and oppose said motion, as a result of which the lower court granted the same and ordered the, Register of Deeds of Rizal to
annotate the attorney's liens on the certificates of title of the parcels of land.

Meanwhile, the plaintiffs Alejandro, et al. in the aforesaid civil cases, which had been consolidated and were pending before the
Regional Trial Court of Pasig, filed a motion to dismiss their complaints therein, which motion the lower court granted with prejudice in
its order dated September 5, 1983. On December 29, 1983, the same court ordered the Register of Deeds to annotate the attorney's
liens of private respondent on the derivative titles which cancelled Transfer Certificates of Title Nos. 453093 to 453099 of the original
seven (7) parcels of land hereinbefore adverted to.

On May 28,1984, private respondent filed a motion to fix its attorney's fees, based on quantum meruit, which motion precipitated an
exchange of arguments between the parties. On May 30, 1984, petitioner manifested that it had fully paid private respondent; the latter,
in turn, countered that the amount of P50,000.00 given by petitioner could not be considered as full payment but merely a cash
advance, including the amount of P14,000.00 paid to it on December 15, 1980. It further appears that private respondent attempted to
arrange a compromise with petitioner in order to avoid suit, offering a compromise amount of P600,000.00 but the negotiations were
unsuccessful.

Finally, on October 15,1984, the court a quo issued the order assailed on appeal before respondent court, granting payment of
attorney's fees to private respondent, under the following dispositive portion:

PREMISES CONSIDERED, the motion is hereby granted and the Metropolitan Bank and Trust Company (METROBANK) and
Herby Commercial and Construction Corporation 4 are hereby ordered to pay the movant Arturo Alafriz and Associates the
amount of P936,000.00 as its proper, just and reasonable attorney's fees in these cases. 5

On appeal, respondent court affirmed the order of the trial court in its decision promulgated on February 11, 1988. A motion for
reconsideration, dated March 3, 1988, was filed by petitioner but the same was denied in a resolution promulgated on November 19,
1988, hence the present recourse.

The issues raised and submitted for determination in the present petition may be formulated thus: (1) whether or not private respondent
is entitled to the enforcement of its charging lien for payment of its attorney's fees; (2) whether or not a separate civil suit is necessary
for the enforcement of such lien and (3) whether or not private respondent is entitled to twenty-five (25%) of the actual and current
market values of the litigated properties on a quantum meruit basis.

On the first issue, petitioner avers that private respondent has no enforceable attorney's charging lien in the civil cases before the court
below because the dismissal of the complaints therein were not, in the words of Section 37, Rule 138, judgments for the payment of
money or executions issued in pursuance of such judgments. 6

We agree with petitioner.

On the matter of attorney's liens Section 37, Rule 138 provides:

. . . He shall also have a lien to the same extent upon all judgments for the payment of money, and executions issued in
pursuance of such judgments, which he has secured in a litigation of his client, from and after the time when he shall have
caused a statement of his claim of such lien to be entered upon the records of the court rendering such judgment, or issuing
such execution, and shall have caused written notice thereof to be delivered to his client and to the adverse party; and he shall
have the same right and power over such judgments and executions as his client would have to enforce his lien and secure
the payment of his just fees and disbursements.

Consequent to such provision, a charging lien, to be enforceable as security for the payment of attorney's fees, requires as a
condition sine qua non a judgment for money and execution in pursuance of such judgment secured in the main action by the attorney
in favor of his client. A lawyer may enforce his right to fees by filing the necessary petition as an incident in the main action in which his
services were rendered when something is due his client in the action from which the fee is to be paid. 7

In the case at bar, the civil cases below were dismissed upon the initiative of the plaintiffs "in view of the frill satisfaction of their
claims." 8 The dismissal order neither provided for any money judgment nor made any monetary award to any litigant, much less in
favor of petitioner who was a defendant therein. This being so, private respondent's supposed charging lien is, under our rule, without
any legal basis. It is flawed by the fact that there is nothing to generate it and to which it can attach in the same manner as an ordinary
lien arises and attaches to real or personal property.

pg. 69
In point is Morente vs. Firmalino, 9 cited by petitioner in support of its position. In that case, movant-appellant attorney sought the
payment of his fees from his client who was the defendant in a complaint for injunction which was dismissed by the trial court after the
approval of an agreement entered into by the litigants. This Court held:

. . . The defendant having suffered no actual damage by virtue of the issuance of a preliminary injunction, it follows that no
sum can be awarded the defendant for damages. It becomes apparent, too, that no amount having been awarded the
defendant, herein appellant's lien could not be enforced. The appellant, could, by appropriate action, collect his fees as
attorney.

Private respondent would nevertheless insist that the lien attaches to the "proceeds of a judgment of whatever nature," 10 relying on the
case of Bacolod-Murcia Milling Co. Inc. vs. Henares 11 and some American cases holding that the lien attaches to the judgment
recovered by an attorney and the proceeds in whatever form they may be. 12

The contention is without merit just as its reliance is misplaced. It is true that there are some American cases holding that the lien
attaches even to properties in litigation. However, the statutory rules on which they are based and the factual situations involved therein
are neither explained nor may it be said that they are of continuing validity as to be applicable in this jurisdiction. It cannot be gainsaid
that legal concepts of foreign origin undergo a number of variegations or nuances upon adoption by other jurisdictions, especially those
with variant legal systems.

In fact, the same source from which private respondent culled the American cases it cited expressly declares that "in the absence of a
statute or of a special agreement providing otherwise, the general rule is that an attorney has no lien on the land of his client,
notwithstanding such attorney has, with respect to the land in question, successfully prosecuted a suit to establish the title of his client
thereto, recovered title or possession in a suit prosecuted by such client, or defended successfully such client's right and title against an
unjust claim or an unwarranted attack," 13 as is the situation in the case at bar. This is an inescapable recognition that a contrary rule
obtains in other jurisdictions thereby resulting in doctrinal rulings of converse or modulated import.

To repeat, since in our jurisdiction the applicable rule provides that a charging lien attaches only to judgments for money and
executions in pursuance of such judgment, then it must be taken in haec verba. The language of the law is clear and unequivocal and,
therefore, it must be taken to mean exactly what it says, barring any necessity for elaborate interpretation. 14

Notably, the interpretation, literal as it may appear to be, is not without support in Philippine case law despite the dearth of cases on all
fours with the present case. In Caina et al. vs. Victoriano, et al., 15 the Court had the occasion to rule that "the lien of respondent is not
of a nature which attaches to the property in litigation but is at most a personal claim enforceable by a writ of execution." In Ampil
vs. Juliano-Agrava, et al., 16 the Court once again declared that a charging lien "presupposes that the attorney has secured a favorable
money judgment for his client . . ." Further, in Director of Lands vs. Ababa, et al., 17 we held that "(a) charging lien under Section 37,
Rule 138 of the Revised Rules of Court is limited only to money judgments and not to judgments for the annulment of a contract or for
delivery of real property as in the instant case."

Even in the Bacolod-Murcia Milling case, which we previously noted as cited by private respondent, there was an express declaration
that "in this jurisdiction, the lien does not attach to the property in litigation."

Indeed, an attorney may acquire a lien for his compensation upon money due his client from the adverse party in any action or
proceeding in which the attorney is employed, but such lien does not extend to land which is the subject matter of the litigation. 18 More
specifically, an attorney merely defeating recovery against his client as a defendant is not entitled to a lien on the property involved in
litigation for fees and the court has no power to fix the fee of an attorney defending the client's title to property already in the client's
possession. 19

While a client cannot defeat an attorney's right to his charging lien by dismissing the case, terminating the services of his counsel,
waiving his cause or interest in favor of the adverse party or compromising his action, 20 this rule cannot find application here as the
termination of the cases below was not at the instance of private respondent's client but of the opposing party.

The resolution of the second issue is accordingly subsumed in the preceding discussion which amply demonstrates that private
respondent is not entitled to the enforcement of its charging lien.

Nonetheless, it bears mention at this juncture that an enforceable charging lien, duly recorded, is within the jurisdiction of the court
trying the main case and this jurisdiction subsists until the lien is settled. 21 There is certainly no valid reason why the trial court cannot
pass upon a petition to determine attorney's fees if the rule against multiplicity of suits is to be activated. 22 These decisional rules,
however, apply only where the charging lien is valid and enforceable under the rules.

On the last issue, the Court refrains from resolving the same so as not to preempt or interfere with the authority and adjudicative facility
of the proper court to hear and decide the controversy in a proper proceeding which may be brought by private respondent.

A petition for recovery of attorney's fees, either as a separate civil suit or as an incident in the main action, has to be prosecuted and
the allegations therein established as any other money claim. The persons who are entitled to or who must pay attorney's fees have the
right to be heard upon the question of their propriety or amount. 23 Hence, the obvious necessity of a hearing is beyond cavil.

Besides, in fixing a reasonable compensation for the services rendered by a lawyer on the basis of quantum meruit, the elements to be
considered are generally (1) the importance of the subject matter in controversy, (2) the extent of the services rendered, and (3) the
professional standing of the lawyer. 24 These are aside from the several other considerations laid down by this Court in a number of
decisions as pointed out by respondent court. 25 A determination of all these factors would indispensably require nothing less than a full-
blown trial where private respondent can adduce evidence to establish its right to lawful attorney's fees and for petitioner to oppose or
refute the same.

Nothing in this decision should, however, be misconstrued as imposing an unnecessary burden on private respondent in collecting the
fees to which it may rightfully be entitled. But, as in the exercise of any other right conferred by law, the proper legal remedy should be

pg. 70
availed of and the procedural rules duly observed to forestall and obviate the possibility of abuse or prejudice, or what may be
misunderstood to be such, often to the undeserved discredit of the legal profession.

Law advocacy, it has been stressed, is not capital that yields profits. The returns it births are simple rewards for a job done or service
rendered. It is a calling that, unlike mercantile pursuits which enjoy a greater deal of freedom from government interference, is
impressed with public interest, for which it is subject to State regulation. 26

ACCORDINGLY, the instant petition for review is hereby GRANTED and the decision of respondent Court of Appeals of February 11,
1988 affirming the order of the trial court is hereby REVERSED and SET ASIDE, without prejudice to such appropriate proceedings as
may be brought by private respondent to establish its right to attorney's fees and the amount thereof.

SO ORDERED.

A.C. No. 4017 September 29, 1999

GATCHALIAN PROMOTIONS TALENTS POOL, INC., complainant,

vs.
ATTY. PRIMO R. NALDOZA, respondent.

PER CURIAM:

On April 19, 1993, Gatchalian Promotions Talents Pool, Inc., filed before this Court a Petition for disbarment against Attorney Primo R.
Naldoza. The precursor of this Petition was the action of respondent, as counsel for complainant, appealing a Decision of the Philippine
Overseas Employment Agency (POEA). In relation to the appeal, complainant asserts that respondent should be disbarred for the
following acts:

1. Appealing a decision, knowing that the same was already final and executory

2. Deceitfully obtaining two thousand, five hundred and fifty-five US dollars (US$2,555) from complainant,
allegedly for "cash bond" in the appealed case

3. Issuing a spurious receipt to conceal his illegal act 1

In his Answer, 2 respondent denies that he persuaded complainant to file an appeal. On the contrary, he asserts that it was the
complainant who insisted on appealing the case in order to delay the execution of the POEA Decision. 3 He also controverts
complainant's allegation that he asked for a cash bond and that he issued the fake receipt. 4

In a Resolution dated May 17, 1993, this Court referred the case to the Integrated Bar of the Philippines (IBP) for investigation, report
and recommendation.

The pertinent portions of the Complaint were summarized by the IBP in this wise:

Under its petition, complainant alleges that the respondent was given the task to defend the interest of the
complainant corporation in POEA Case No. 8888-06-468, entitled Olano, et al. versus Gatchalian Promotions Talents
Pool, Inc., et al.; that when the said case was resolved in favor of the complainant therein on October 5, 1992, the
respondent Atty. Naldoza knowing fully well that the said decision had already become final and unappealable[,]
through malpractice in [an] apparent desire to collect or to "bleed" his client of several thousand pesos of attorney's
fees, convinced the complainant to appeal the case before the Supreme Court. Thus, on December 14, 1992, the
respondent filed with the Supreme Court a Petition for Review which was docketed as G.R. No. 107984 and that two
(2) days thereafter misrepresented to the complainant corporation that the complainant ha[d] to pay, which it did, [a]
"Cash Bond" in UNITED STATES DOLLAR amounting to TWO THOUSAND FIVE HUNDRED FIFTY FIVE (U.S.
$2,555.00) to the Supreme Court in order that the said appealed case could be heard or acted upon by the Supreme
Court. The said amount was given to the respondent.1âwphi1.nêt

. . . [S]ubsequently the complainant corporation came to know that the fees to be paid to the Supreme Court
consist[ed] only of nominal filing and docket fees for such kind of appeal but in order to cover up respondent's
misrepresentation, Atty. Naldoza presented complainant a fake xerox copy of an alleged Supreme Court receipt
representing payment of U.S. $2,555.00.

Subsequent verification from the Supreme Court made by the complainant corporation revealed that the said receipt
issued by the treasurer's office of the Supreme Court . . . [was] spurious, meaning a fake receipt. The said verification
revealed that what was only paid by the respondent to the Supreme Court was the amount of P622.00 as shown by
the enumerated legal fees of the Supreme Court Docket-Receiving Section showing the handwritten name of the
respondent for purpose of showing that the said computation was requested by and addressed to the
respondent. 5 (citations omitted)

Meanwhile, a criminal case 6 for estafa based on the same facts was filed against herein respondent before the Regional Trial Court
(RTC) of Makati City, Branch 141. Although acquitted on reasonable doubt, he was declared civilly liable in the amount of US$ 2,555.
pg. 71
Thereafter, respondent filed before the IBP a Manifestation with Motion to Dismiss on July 22, 1996, on the ground that he had already
been acquitted in the criminal case for estafa. Complainant opposed the Motion. 7

On February 16, 1998, this Court received the IBP Board of Governors' Resolution, which approved the investigating commissioner's
report 8 and recommendation that respondent be suspended from the practice of law for one (1) year. In his Report, Investigating
Commissioner Plaridel Jose justified his recommendation in this manner:

. . . [R]espondent fails to rebut the position of the complainant that the signature [on the receipt for the amount of
$2,555.00] was his. Hence, respondent anchors his position on a mere denial that it is not his signature. Likewise, the
respondent denies the check voucher dated December 15, 1992, and the encircled signature of the respondent,
which . . . according to him is falsified and irregular. No evidence, however, was presented by the respondent that his
signature therein was falsified and irregular. [As to the altered Supreme Court Official Receipt, the respondent
denied] that he ha[d] anything to do with it because it was the complainant who signed the Petition for Review and
tried to explain that his name appear[ed] to be the payee because he [was] the counsel of record of the petitioner. But
while it is true that the affiant in the said Petition for Review [was] Mr. Rogelio G. Gatchalian, president of the
complainant company, the respondent does not deny that he signed the said petition as counsel of the petitioner
corporation and that he was actually the one who prepared the same and the notary public before whom the affiant
subscribed and [swore] as the one who "caused the preparation" of the said petition.

The legal form (Exh. "G") of the legal fees for the Petition for Review re G.R. 107984 was denied by the respondent
because according to him he was never given a chance to cross-examine the person who issued the [certification] . .
. . However, respondent does not deny that he is the person referred to by the handwritten name P.R. Naldoza who
paid the legal fees of P622.00.

In addition to the said respondent's Formal Offer of Evidence, he submitted to this Commission as his most important
piece of evidence the Decision of acquittal in Criminal Case No. 93-8748 entitled "People of the Philippines versus
Primo R. Naldoza", the copy of which Decision is appended to his Manifestation with Motion to Dismiss dated July 22,
1996 praying for the dismissal of the present administrative case in view of his being exonerated in the said criminal
case based on the same facts and evidence. 9 (citations omitted)

Commissioner Jose brushed aside respondent's contention that his acquittal in the companion criminal case should result in the
dismissal of this administrative complaint. The commissioner emphasized that the criminal case for estafa 10 was completely different
from the proceedings before him; acquittal in the former did not exonerate respondent in the latter. 11 He further noted that the RTC
Decision itself hinted at the administrative liability of respondent, since it found him civilly liable to herein complainant for $2,555. 12

We agree with the IBP Board of Governors that respondent should be sanctioned. However, the recommended penalty is not
commensurate to the gravity of the wrong perpetrated.

At the outset, the Court agrees with the IBP that respondent's Motion to Dismiss should be denied. In that Motion, he maintains that he
should be cleared of administrative liability, because he has been acquitted of estafa which involved the same facts. He argues that the
issue involved there was "the very same issue litigated in this case," 13and that his exoneration "was a result of a full blown trial on the
merits of this case." 14

In a similar case, we have said:

. . . The acquittal of respondent Ramos [of] the criminal charge is not a bar to these [administrative] proceedings. The
standards of legal profession are not satisfied by conduct which merely enables one to escape the penalties of . . .
criminal law. Moreover, this Court in disbarment proceedings is acting in an entirely different capacity from that which
courts assume in trying criminal cases. 15

16
Administrative cases against lawyers belong to a class of their own. They are distinct from and they may proceed independently of
civil and criminal cases.

The burden of proof for these types of cases differ. In a criminal case, proof beyond reasonable doubt is necessary; 17 in an
administrative case for disbarment or suspension, "clearly preponderant evidence" is all that is required. 18 Thus, a criminal prosecution
will not constitute a prejudicial question even if the same facts and circumstances are attendant in the administrative proceedings. 19

It should be emphasized that a finding of guilt in the criminal case will not necessarily result in a finding of liability in the administrative
case. 20 Conversely, respondent's acquittal does not necessarily exculpate him administratively. In the same vein, the trial court's
finding of civil liability against the respondent will not inexorably lead to a similar finding in the administrative action before this Court.
Neither will a favorable disposition in the civil action absolve the administrative liability of the lawyer. 21 The basic premise is that
criminal and civil cases are altogether different from administrative matters, such that the disposition in the first two will not inevitably
govern the third and vice versa. For this reason, it would be well to remember the Court's ruling in In re Almacen, 22 which we quote:

. . . Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not
involve a trial of an action or a suit, but are rather investigations by the Court into the conduct of one of its officers.
Not being intended to inflict punishment, [they are] in no sense a criminal prosecution. Accordingly, there is neither a
plaintiff nor a prosecutor therein. [They] may be initiated by the Court motu proprio. Public interest is [their] primary
objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the
privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar
to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal
profession and the proper and honest administration of justice by purging the profession of members who by their
misconduct have prove[n] themselves no longer worthy to be entrusted with the duties and responsibilities pertaining
to the office of an attorney. . . . (emphasis ours)

We shall now discuss seriatim the specific charges against respondent.

pg. 72
First. Complainant alleges that respondent appealed the POEA Decision, despite knowing that it had already become final and
executory. The IBP investigating commissioner had no explicit finding on this point. Rogelio G. Gatchalian testified that during the
pendency of the appeal, his company had received from the POEA a Writ of Execution which led him to the conclusion that "they [had]
lost the case before the Supreme Court." 23 This, however, does not substantiate the charge.

Complainant has failed to present proof regarding the status of the appeal. Neither has there been any showing that the appeal was
dismissed on the ground that the POEA Decision had become final and executory. Worse, there has been no evidence that respondent
knew that the case was unappealable. Indeed, the records of this Court shows that the Petition for Review was dismissed for
petitioner's failure to submit an Affidavit of Service and a legible duplicate of the assailed Order. Clearly, this charge has no leg to stand
on.

Second. Be that as it may, we agree with the IBP that respondent obtained from complainant the amount of $2,555, on the false
representation that it was needed for the appeal before this Court. According to Gatchalian, 24respondent explained that the amount
would "cover all the expenses to be incurred in the Petition for Review with the Supreme Court and which amount also will answer for
the payment as sort of deposit so that if our case is lost, the money will be given or paid to the complainant in that case so that our
deposit with the bank would not be garnished." 25Corroborating Gatchalian's testimony, Edna Deles declared that respondent received
the amount on the representation that it "would be paid to the Supreme Court in connection with the Olano case." 26

The defense of denial proffered by respondent is not convincing. Quite the contrary, when he paid P10,000 and issued a check to
complainant as his "moral obligation," he indirectly admitted the charge. Normally, this is not the actuation of one who is falsely accused
of appropriating the money of another. This is an admission of misconduct. 27 In his Answer submitted to this Court, he declared:

(8). That I have no knowledge, information or belief as to truthfulness of the allegation of the Petitioner, on his
allegation no. 8 and no. 9, the truth being that in all the cases and assignments made by the Petitioner to me, I was
made to report to him personally and to his Board of Directors the progress of the cases both orally and in writing. I
even [went] to the extent of paying him P10,000.00 as my moral obligation only to find after accounting that he still
owes me P180,000.00 as attorney's fee [to] which I am entitled under rule 130 of the rules of court sec. 24, and under
sec. 37 of the above-cited rules, I have the right to apply the funds received from Gatchalian in satisfaction of my
claim for Professional Services, otherwise known as Attorney's Lien, as shown in my Service Billings and Statement
of Accounts." 28 (emphasis ours)

Contrary to respondent's claim, the amount of $2,555 was not a part of his attorney's lien. He demanded the money from his client on
the pretext that it was needed for the Petition before the Supreme Court, but he actually converted it to his personal gain. This act
clearly constitutes malpractice. 29 The claim that respondent merely applied his lien over the funds of his client is just an afterthought,
the accounting being made after the fact. It is settled that the conversion by a lawyer of funds entrusted to him is a gross violation of
professional ethics and a betrayal of public confidence in the legal profession. 30

Third. In an effort to conceal his misappropriation of the money entrusted to him, respondent gave complainant a photocopy of a receipt
purportedly showing that the Supreme Court had received the sum of $2,555 from him. Again, the testimonies of Gatchalian 31 and
Deles 32 were equally clear on this point. After respondent had presented the false receipt, Gatchalian learned that no such payment
was made. Ms Araceli Bayuga of the Supreme Court Cash Collection and Disbursement Division issued a certification that respondent
had paid the amount of P622 only, not $2,555. In fact, the records of the said case 33 contain no indication at all that the Court has
required the payment of the latter sum, or that it has been paid at all.

Juxtaposed to the complainant's evidence, the bare denials of respondent cannot overturn the IBP's findings that he has indeed
presented a false receipt to conceal his misappropriation of his client's money. We agree with the IBP that "it is unbelievable that the
complainant in the person of Rogelio Gatchalian, being a layman as he is without any knowledge in the procedure of filing a case
before the Supreme Court, could spuriously weave such documents which are denied by the respondent." 34

In view of the foregoing, respondent has clearly failed the standards of his noble profession. As we have stated in Resurrecion
v. Sayson: 35

[L]awyers must at all times conduct themselves, especially in their dealings with their clients and
the public at large, with honesty and integrity in a manner beyond reproach.

Clearly reprehensible are the established facts that he demanded money from his client for a bogus reason, misappropriated the same,
and then issued a fake receipt to hide his deed. In Dumadag v. Lumaya, 36 the Court ordered the indefinite suspension of a lawyer for
not remitting to his client the amount he had received pursuant to an execution, viz.:

[E]ven as respondent consistently denied liability to Dumadag, his former client, the records abundantly point to his
receipt of and failure to deliver the amount of P4,344.00 to his client, the herein complainant, a clear breach of the
canons of professional responsibility.

In Obia v. Catimbang, 37 we meted out the same penalty to a lawyer who had misappropriated the money entrusted to him:

The acts committed by respondent definitely constitute malpractice and gross misconduct in his office as attorney.
These acts are noted with disapproval by the Court; they are in violation of his duty, as a lawyer, to uphold the
integrity and dignity of the legal profession and to engage in no conduct that adversely reflects on his fitness to
practice law. Such misconduct discredits the legal profession.

Respondent's acts are more despicable. Not only did he misappropriate the money entrusted to him; he also faked a reason to cajole
his client to part with his money. Worse, he had the gall to falsify an official receipt of this Court to cover up his misdeeds. Clearly, he
does not deserve to continue being a member of the bar.

pg. 73
WHEREFORE, Primo R. Naldoza is hereby DISBARRED. The Office of the Clerk of Court is directed to strike out his name from the
Roll of Attorneys and to inform all courts of this Decision.1âwphi1.nêt

SO ORDERED.

Adm. Case No. 4749 January 20, 2000

SOLIMAN M. SANTOS, JR., complainant,

vs.
ATTY. FRANCISCO R. LLAMAS, respondent.

MENDOZA, J.:

This is a complaint for misrepresentation and non-payment of bar membership dues filed against respondent Atty. Francisco R. Llamas.

In a letter-complaint to this Court dated February 8, 1997, complainant Soliman M. Santos, Jr., himself a member of the bar, alleged
that:

On my oath as an attorney, I wish to bring to your attention and appropriate sanction the matter of Atty. Francisco R. Llamas who, for a
number of years now, has not indicated the proper PTR and IBP O.R. Nos. and data (date & place of issuance) in his pleadings. If at
all, he only indicates "IBP Rizal 259060" but he has been using this for at least three years already, as shown by the following attached
sample pleadings in various courts in 1995, 1996 and 1997: (originals available).

Annex A — "Ex-Parte Manifestation and Submission" dated December 1, 1995 in Civil Case No. Q-95-25253, RTC, Br. 224,
QC.

Annex B — "Urgent Ex-Parte Manifestation Motion" dated November 13, 1996 in Sp. Proc. No. 95-030, RTC Br. 259 (not 257),
Parañaque, MM.

Annex C — "An Urgent and Respectful Plea for extension of Time to File Required Comment and Opposition" dated January
17, 1997 in CA-G.R. SP (not Civil Case) No. 42286, CA 6th Div.

This matter is being brought in the context of Rule 138, Section 1 which qualifies that only a duly admitted member of the bar "who is in
good and regular standing, is entitled to practice law". There is also Rule 139-A, Section 10 which provides that "default in the payment
of annual dues for six months shall warrant suspension of membership in the Integrated Bar, and default in such payment for one year
shall be a ground for the removal of the name of the delinquent member from the Roll of Attorneys."

Among others, I seek clarification (e.g. a certification) and appropriate action on the bar standing of Atty. Francisco R. Llamas both with
the Bar Confidant and with the IBP, especially its Rizal Chapter of which Atty. Llamas purports to be a member.

Please note that while Atty. Llamas indicates "IBP Rizal 259060" sometimes, he does not indicate any PTR for payment of professional
tax.

Under the Rules, particularly Rule 138, Sections 27 and 28, suspension of an attorney may be done not only by the Supreme Court but
also by the Court of Appeals or a Regional Trial Court (thus, we are also copy furnishing some of these courts).

Finally, it is relevant to note the track record of Atty. Francisco R. Llamas, as shown by:

1. his dismissal as Pasay City Judge per Supreme Court Admin. Matter No. 1037-CJ En Banc Decision on October 28, 1981
(in SCRA).

2. his conviction for estafa per Decision dated June 30, 1994 in Crim. Case No. 11787, RTC Br. 66, Makati, MM (see attached
copy of the Order dated February 14, 1995 denying the motion for reconsideration of the conviction which is purportedly on
appeal in the Court of Appeals).

Attached to the letter-complaint were the pleadings dated December 1, 1995, November 13, 1996, and January 17, 1997 referred to by
complainant, bearing, at the end thereof, what appears to be respondent's signature above his name, address and the receipt number
"IBP Rizal 259060."1 Also attached was a copy of the order,2 dated February 14, 1995, issued by Judge Eriberto U. Rosario, Jr. of the
Regional Trial Court, Branch 66, Makati, denying respondent's motion for reconsideration of his conviction, in Criminal Case No. 11787,
for violation of Art. 316, par. 2 of the Revised Penal Code.

On April 18, 1997, complainant filed a certification 3 dated March 18, 1997, by the then president of the Integrated Bar of the Philippines,
Atty. Ida R. Macalinao-Javier, that respondent's "last payment of his IBP dues was in 1991. Since then he has not paid or remitted any
amount to cover his membership fees up to the present."

pg. 74
On July 7, 1997, respondent was required to comment on the complaint within ten days from receipt of notice, after which the case was
referred to the IBP for investigation, report and recommendation. In his comment-memorandum4 dated June 3, 1998, respondent
alleged:5

3. That with respect to the complainant's absurd claim that for using in 1995, 1996 and 1997 the same O.R. No. 259060 of the
Rizal IBP, respondent is automatically no longer a member in good standing.

Precisely, as cited under the context of Rule 138, only an admitted member of the bar who is in good standing is entitled to
practice law.

The complainant's basis in claiming that the undersigned was no longer in good standing, were as above cited, the October
28, 1981 Supreme Court decision of dismissal and the February 14, 1995 conviction for Violation of Article 316 RPC,
concealment of encumbrances.

As above pointed out also, the Supreme Court dismissal decision was set aside and reversed and respondent was even
promoted from City Judge of Pasay City to Regional Trial Court Judge of Makati, Br. 150.

Also as pointed out, the February 14, 1995 decision in Crim. Case No. 11787 was appealed to the Court of Appeals and is still
pending.

Complainant need not even file this complaint if indeed the decision of dismissal as a Judge was never set aside and
reversed, and also had the decision of conviction for a light felony, been affirmed by the Court of Appeals. Undersigned
himself would surrender his right or privilege to practice law.

4. That complainant capitalizes on the fact that respondent had been delinquent in his dues.

Undersigned since 1992 have publicly made it clear per his Income Tax Return, up to the present, that he had only a limited
practice of law. In fact, in his Income Tax Return, his principal occupation is a farmer of which he is. His 30 hectares orchard
and pineapple farm is located at Calauan, Laguna.

Moreover, and more than anything else, respondent being a Senior Citizen since 1992, is legally exempt under Section 4 of
Rep. Act 7432 which took effect in 1992, in the payment of taxes, income taxes as an example. Being thus exempt, he
honestly believe in view of his detachment from a total practice of law, but only in a limited practice, the subsequent payment
by him of dues with the Integrated Bar is covered by such exemption. In fact, he never exercised his rights as an IBP member
to vote and be voted upon.

Nonetheless, if despite such honest belief of being covered by the exemption and if only to show that he never in any manner
wilfully and deliberately failed and refused compliance with such dues, he is willing at any time to fulfill and pay all past dues
even with interests, charges and surcharges and penalties. He is ready to tender such fulfillment or payment, not for allegedly
saving his skin as again irrelevantly and frustratingly insinuated for vindictive purposes by the complainant, but as an honest
act of accepting reality if indeed it is reality for him to pay such dues despite his candor and honest belief in all food faith, to the
contrary.

On December 4, 1998, the IBP Board of Governors passed a resolution 6 adopting and approving the report and recommendation of the
Investigating Commissioner which found respondent guilty, and recommended his suspension from the practice of law for three months
and until he pays his IBP dues. Respondent moved for a reconsideration of the decision, but this was denied by the IBP in a
resolution,7 dated April 22, 1999. Hence, pursuant to Rule 139-B, §12(b) of the Rules of Court, this case is here for final action on the
decision of the IBP ordering respondent's suspension for three months.

The findings of IBP Commissioner Alfredo Sanz are as follows:

On the first issue, Complainant has shown "respondent's non-indication of the proper IBP O.R. and PTR numbers in his
pleadings (Annexes "A", "B" and "C" of the letter complaint, more particularly his use of "IBP Rizal 259060 for at least three
years."

The records also show a "Certification dated March 24, 1997 from IBP Rizal Chapter President Ida R. Makahinud Javier that
respondent's last payment of his IBP dues was in 1991."

While these allegations are neither denied nor categorically admitted by respondent, he has invoked and cited that "being a
Senior Citizen since 1992, he is legally exempt under Section 4 of Republic Act No. 7432 which took effect in 1992 in the
payment of taxes, income taxes as an example.

xxx xxx xxx

The above cited provision of law is not applicable in the present case. In fact, respondent admitted that he is still in the practice
of law when he alleged that the "undersigned since 1992 have publicly made it clear per his Income tax Return up to the
present time that he had only a limited practice of law." (par. 4 of Respondent's Memorandum).

Therefore respondent is not exempt from paying his yearly dues to the Integrated Bar of the Philippines.

On the second issue, complainant claims that respondent has misled the court about his standing in the IBP by using the
same IBP O.R. number in his pleadings of at least six years and therefore liable for his actions. Respondent in his
memorandum did not discuss this issue.

pg. 75
First. Indeed, respondent admits that since 1992, he has engaged in law practice without having paid his IBP dues. He likewise admits
that, as appearing in the pleadings submitted by complainant to this Court, he indicated "IBP-Rizal 259060" in the pleadings he filed in
court, at least for the years 1995, 1996, and 1997, thus misrepresenting that such was his IBP chapter membership and receipt number
for the years in which those pleadings were filed. He claims, however, that he is only engaged in a "limited" practice and that he
believes in good faith that he is exempt from the payment of taxes, such as income tax, under R.A. No. 7432, §4 as a senior citizen
since 1992.

Rule 139-A provides:

Sec. 9. Membership dues. — Every member of the Integrated Bar shall pay such annual dues as the Board of Governors shall
determine with the approval of the Supreme Court. A fixed sum equivalent to ten percent (10%) of the collections from each
Chapter shall be set aside as a Welfare Fund for disabled members of the Chapter and the compulsory heirs of deceased
members thereof.

Sec. 10. Effect of non-payment of dues. — Subject to the provisions of Section 12 of this Rule, default in the payment of
annual dues for six months shall warrant suspension of membership in the Integrated Bar, and default in such payment for one
year shall be a ground for the removal of the name of the delinquent member from the Roll of Attorneys.

In accordance with these provisions, respondent can engage in the practice of law only by paying his dues, and it does not matter that
his practice is "limited." While it is true that R.A. No. 7432, §4 grants senior citizens "exemption from the payment of individual income
taxes: provided, that their annual taxable income does not exceed the poverty level as determined by the National Economic and
Development Authority (NEDA) for that year," the exemption does not include payment of membership or association dues.

Second. By indicating "IBP-Rizal 259060" in his pleadings and thereby misrepresenting to the public and the courts that he had paid his
IBP dues to the Rizal Chapter, respondent is guilty of violating the Code of Professional Responsibility which provides:

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

CANON 7 — A LAWYER SHALL AT ALL TIMES UPHOLD THE INTEGRITY AND DIGNITY OF THE LEGAL PROFESSION,
AND SUPPORT THE ACTIVITIES OF THE INTEGRATED BAR.

CANON 10 — A LAWYER OWES CANDOR, FAIRNESS AND GOOD FAITH TO THE COURT.

Rule 10.01 — A lawyer shall not do any falsehood, nor consent to the doing of any court; nor shall he mislead or allow the
court to be misled by any artifice.

Respondent's failure to pay his IBP dues and his misrepresentation in the pleadings he filed in court indeed merit the most severe
penalty. However, in view of respondent's advanced age, his express willingness to pay his dues and plea for a more temperate
application of the law,8 we believe the penalty of one year suspension from the practice of law or until he has paid his IBP dues,
whichever is later, is appropriate.

WHEREFORE, respondent Atty. Francisco R. Llamas is SUSPENDED from the practice of law for ONE (1) YEAR, or until he has paid
his IBP dues, whichever is later. Let a copy of this decision be attached to Atty. Llamas' personal record in the Office of the Bar
Confidant and copies be furnished to all chapters of the Integrated Bar of the Philippines and to all courts in the land.1âwphi1.nêt

SO ORDERED.

A.C. No. 1512 January 29, 1993

VICTORIA BARRIENTOS, complainant,

vs.
TRANSFIGURACION DAAROL, respondent.

RESOLUTION

PER CURIAM:

In a sworn complaint filed with this Court on August 20, 1975, complainant Victoria C. Barrientos seeks the disbarment of respondent
Transfiguracion Daarol, ** a member of the Philippine Bar, on grounds of deceit and grossly immoral conduct.

After respondent filed his answer (Rollo, p. 12), the Court Resolved to refer the case to the Solicitor General for investigation, report
and recommendation (Rollo, p. 18).

As per recommendation of the Solicitor General and for the convenience of the parties and their witnesses who were residing in the
province of Zamboanga del Norte, the Provincial Fiscal of said province was authorized to conduct the investigation and to submit a
report, together with transcripts of stenographic notes and exhibits submitted by the parties, if any (Rollo, p. 20).

pg. 76
On November 9, 1987, the Office of the Solicitor General submitted its Report and Recommendation, viz.:

Evidence of the complainant:

. . . complainant Victoria Barrientos was single and a resident of Bonifacio St., Dipolog City; that when she was still a
teenager and first year in college she came to know respondent Transfiguracion Daarol in 1969 as he used to go to
their house being a friend of her sister Norma; that they also became friends, and she knew the respondent as being
single and living alone in Galas, Dipolog City; that he was the General Manager of Zamboanga del Norte Electric
Cooperative, Inc. (ZANECO) and subsequently transferred his residence to the ZANECO compound at Laguna Blvd.
at Del Pilar St., Dipolog City (pp. 109-111, tsn, September 30, 1976).

That on June 27, 1973, respondent came to their house and asked her to be one of the usherettes in the Mason's
convention in Sicayab, Dipolog City, from June 28 to 30, 1973 and, she told respondent to ask the permission of her
parents, which respondent did, and her father consented; that for three whole days she served as usherette in the
convention and respondent picked her up from her residence every morning and took her home from the convention
site at the end of each day (pp. 112-114, tsn, id.).

That in the afternoon of July 1, 1973, respondent came to complainant's house and invited her for a joy ride with the
permission of her mother who was a former classmate of respondent; that respondent took her to Sicayab in his jeep
and then they strolled along the beach, and in the course of which respondent proposed his love to her; that
respondent told her that if she would accept him, he would marry her within six (6) months from her acceptance;
complainant told respondent that she would think it over first; that from then on respondent used to visit her in their
house almost every night, and he kept on courting her and pressed her to make her decision on respondent's
proposal; that on July 7, 1973, she finally accepted respondent's offer of love and respondent continued his usual
visitations almost every night thereafter; they agreed to get married in December 1973 (pp. 115-119, tsn, id.).

That in the morning of August 20, 1973, respondent invited her, with the consent of her father, to a party at the Lopez
Skyroom; that at 7:00 p.m. of that day respondent fetched her from her house and went to the Lopez Skyroom (pp.
119-121, tsn, id); that at about 10:00 p.m. of that evening they left the party at the Lopez Skyroom, but before taking
her home respondent invited her for a joy ride and took her to the airport at Sicayab, Dipolog City; respondent parked
the jeep by the beach where there were no houses around; that in the course of their conversation inside the jeep,
respondent reiterated his promise to marry her and then started caressing her downward and his hand kept on
moving to her panty and down to her private parts (pp. 121-122, tsn. id.); that she then said: "What is this Trans?",
but he answered: "Day, do not be afraid of me. I will marry you" and reminded her also that "anyway, December is
very near, the month we have been waiting for" ([p], 122, tsn, id.), then he pleaded, "Day, just give this to me, do not
be afraid" (ibid), and again reiterated his promise and assurances, at the same time pulling down her panty; that she
told him that she was afraid because they were not yet married, but because she loved him she finally agreed to have
sexual intercourse with him at the back seat of the jeep; that after the intercourse she wept and respondent again
reiterated his promises and assurances not to worry because anyway he would marry her; and at about 12:00
midnight they went home (pp.
122-124, tsn, id.).

After August 20, 1973, respondent continued to invite her to eat outside usually at the Honeycomb Restaurant in
Dipolog City about twice or three times a week, after which he would take her to the airport where they would have
sexual intercourse; that they had this sexual intercourse from August to October 1973 at the frequency of two or three
times a week, and she consented to all these things because she loved him and believed in all his promises (pp. 125-
127, tsn, id.).

Sometime in the middle part of September, 1973 complainant noticed that her menstruation which usually occurred
during the second week of each month did not come; she waited until the end of the month and still there was no
menstruation; she submitted to a pregnancy test and the result was positive; she informed respondent and
respondent suggested to have the fetus aborted but she objected and respondent did not insist; respondent then told
her not to worry because they would get married within one month and he would talk to her parents about their
marriage (pp. 129-132, tsn, id.).

On October 20, 1973, respondent came to complainant's house and talked to her parents about their marriage; it was
agreed that the marriage would be celebrated in Manila so as not to create a scandal as complainant was already
pregnant; complainant and her mother left for Manila by boat on October 22, 1973 while respondent would follow by
plane; and they agreed to meet in Singalong, Manila, in the house of complainant's sister Delia who is married to
Ernesto Serrano (pp. 132-135, tsn, id.).

On October 26, 1973, when respondent came to see complainant and her mother at Singalong, Manila, respondent
told them that he could not marry complainant because he was already married (p. 137, tsn, id.); complainant's
mother got mad and said: "Trans, so you fooled my daughter and why did you let us come here in Manila?" (p. 138,
tsn, id.). Later on, however, respondent reassured complainant not to worry because respondent had been separated
from his wife for 16 years and he would work for the annulment of his marriage and, subsequently marry complainant
(p. 139, tsn, id.); respondent told complainant to deliver their child in Manila and assured her of a monthly support of
P250.00 (p. 140, tsn, id.); respondent returned to Dipolog City and actually sent the promised support; he came back
to Manila in January 1974 and went to see complainant; when asked about the annulment of his previous marriage,
he told complainant that it would soon be approved (pp. 141-142, tsn, id.); he came back in February and in March
1974 and told complainant the same thing (p. 142, tsn, id.); complainant wrote her mother to come to Manila when
she delivers the child, but her mother answered her that she cannot come as nobody would be left in their house in
Dipolog and instead suggested that complainant go to Cebu City which is nearer; complainant went to Cebu City in
April 1974 and, her sister Norma took her to the Good Shepherd Convent at Banawa Hill; she delivered a baby girl on
June 14, 1974 at the Perpetual Succor Hospital in Cebu City; and the child was registered as "Dureza Barrientos"
(pp. 143-148, tsn, id.).

pg. 77
In the last week of June 1974 complainant came to Dipolog City and tried to contact respondent by phone and, thru
her brother, but to no avail; as she was ashamed she just stayed in their house; she got sick and her father sent her
to Zamboanga City for medical treatment; she came back after two weeks but still respondent did not come to see
her (tsn. 48-150, tsn, id.); she consulted a lawyer and filed an administrative case against respondent with the
National Electrification Administration; the case was referred to the Zamboanga del Norte Electric Cooperative
(ZANECO) and it was dismissed and thus she filed the present administrative case (pp. 150-151, tsn, id.).

Evidence for the Respondent

The evidence of the respondent consists of his sole testimony and one exhibit, the birth certificate of the child (Exh.
1). Respondent declared substantially as follows: that he was born on August 6, 1932 in Liloy, Zamboanga del Norte;
that he married Romualda Sumaylo in Liloy in 1955; that he had a son who is now 20 years old; that because of
incompatibility he had been estranged from his wife for 16 years; that in 1953 he was baptized as a moslem and
thereby embraced the Islam Religion (pp.
173-180 tsn, Jan. 13, 1977); that he came to know complainant's father since 1952 because he was his teacher;
likewise he knew complainant's mother because they were former classmates in high school; that he became
acquainted with complainant when he used to visit her sister, Norma, in their house; they gradually became friends
and often talked with each other, and even talked about their personal problems; that he mentioned to her his being
estranged from his wife; that with the consent of her parents he invited her to be one of the usherettes in the Masonic
Convention in Sicayab, Dipolog City held on June 28-30, 1973 (pp. 185-192, tsn, id.); that the arrangement was for
him to fetch her from her residence and take her home from the convention site; that it was during this occasion that
they became close to each other and after the convention, he proposed his love to her on July 7, 1973; that (sic) a
week of courtship, she accepted his proposal and since then he used to invite her (pp. 193-194, tsn, id.).

That in the evening of August 20, 1973, respondent invited complainant to be his partner during the Chamber of
Commerce affair at the Lopez Skyroom; that at about 10:00 p.m. of that evening after the affair, complainant
complained to him of a headache, so he decided to take her home but once inside the jeep, she wanted to have a joy
ride, so he drove around the city and proceeded to the airport; that when they were at the airport, only two of them,
they started the usual kisses and they were carried by their passion; they forgot themselves and they made love; that
before midnight he took her home; that thereafter they indulged in sexual intercourse many times whenever they went
on joy riding in the evening and ended up in the airport which was the only place they could be alone
(p. 195, tsn, id.).

That it was sometime in the later part of October 1973 that complainant told him of her pregnancy; that they agreed
that the child be delivered in Manila to avoid scandal and respondent would take care of expenses; that during
respondent's talk with the parents of complainant regarding the latter's pregnancy, he told him he was married but
estranged from his wife; that when complainant was already in Manila, she asked him if he was willing to marry her,
he answered he could not marry again, otherwise, he would be charged with bigamy but he promised to file an
annulment of his marriage as he had been separated from his wife for 16 years; that complainant consented to have
sexual intercourse with him because of her love to him and he did not resort to force, trickery, deceit or cajolery; and
that the present case was filed against him by complainant because of his failure to give the money to support
complainant while in Cebu waiting for the delivery of the child and, also to meet complainant's medical expenses
when she went to Zamboanga City for medical check-up (pp. 198-207, tsn, id.).

FINDING OF FACTS

From the evidence adduced by the parties, the following facts are not disputed:

1. That the complainant, Victoria Barrientos, is single, a college student, and was about 20 years and 7 months old
during the time (July-October 1975) of her relationship with respondent, having been born on December 23, 1952;
while respondent Transfiguracion Daarol is married, General Manager of Zamboanga del Norte Electric Cooperative,
and 41 years old at the time of the said relationship, having been born on August 6, 1932;

2. That respondent is married to Romualda A. Sumaylo with whom be has a son; that the marriage ceremony was
solemnized on September 24, 1955 at Liloy, Zamboanga del Norte by a catholic priest, Rev. Fr. Anacleto Pellamo,
Parish Priest thereat; and that said respondent had been separated from his wife for about 16 years at the time of his
relationship with complainant;

3. That respondent had been known by the Barrientos family for quite sometime, having been a former student of
complainant's father in 1952 and, a former classmate of complainant's mother at the Andres Bonifacio College in
Dipolog City; that he became acquainted with complainant's sister, Norma in 1963 and eventually with her other
sisters, Baby and Delia and, her brother, Boy, as he used to visit Norma at her residence; that he also befriended
complainant and who became a close friend when he invited her, with her parents' consent, to be one of the
usherettes during the Masonic Convention in Sicayab, Dipolog City from June 28 to 30, 1973, and he used to fetch
her at her residence in the morning and took her home from the convention site after each day's activities;

4. That respondent courted complainant, and after a week of courtship, complainant accepted respondent's love on
July 7, 1973; that in the evening of August 20, 1973, complainant with her parents' permission was respondent's
partner during the Chamber of Commerce affair at the Lopez Skyroom in the Dipolog City, and at about 10:00 o'clock
that evening, they left the place but before going home, they went to the airport at Sicayab, Dipolog City and parked
the jeep at the beach, where there were no houses around; that after the usual preliminaries, they consummated the
sexual act and at about midnight they went home; that after the first sexual act, respondent used to have joy ride with
complainant which usually ended at the airport where they used to make love twice or three times a week; that as a
result of her intimate relations, complainant became pregnant;

5. That after a conference among respondent, complainant and complainant's parents, it was agreed that
complainant would deliver her child in Manila, where she went with her mother on October 22, 1973 by boat, arriving
pg. 78
 in Manila on the 25th and, stayed with her brother-in-law Ernesto Serrano in Singalong, Manila; that respondent
visited her there on the 26th, 27th and 28th of October 1973, and again in February and March 1974; that later on
complainant decided to deliver the child in Cebu City in order to be nearer to Dipolog City, and she went there in April
1974 and her sister took her to the Good Shepherd Convent at Banawa Hill, Cebu City; that on June 14, 1974, she
delivered a baby girl at the Perpetual Succor Hospital in Cebu City and, named her "Dureza Barrientos"; that about
the last week of June 1974 she went home to Dipolog City; that during her stay here in Manila and later in Cebu City,
the respondent defrayed some of her expenses; that she filed an administrative case against respondent with the
National Electrification Administration; which complaint, however, was dismissed; and then she instituted the present
disbarment proceedings against respondent.

xxx xxx xxx

In view of the foregoing, the undersigned respectfully recommend that after hearing, respondent Transfiguracion
Daarol be disbarred as a lawyer. (Rollo, pp. 28-51).

After a thorough review of the case, the Court finds itself in full accord with the findings and recommendation of the Solicitor General.

From the records, it appears indubitable that complainant was never informed by respondent attorney of his real status as a married
individual. The fact of his previous marriage was disclosed by respondent only after the complainant became pregnant. Even then,
respondent misrepresented himself as being eligible to re-marry for having been estranged from his wife for 16 years and dangled a
marriage proposal on the assurance that he would work for the annulment of his first marriage. It was a deception after all as it turned
out that respondent never bothered to annul said marriage. More importantly, respondent knew all along that the mere fact of
separation alone is not a ground for annulment of marriage and does not vest him legal capacity to contract another marriage.

Interestingly enough. respondent lived alone in Dipolog City though his son, who was also studying in Dipolog City, lived separately
from him. He never introduced his son and went around with friends as though he was never married much less had a child in the same
locality. This circumstance alone belies respondent's claim that complainant and her family were aware of his previous marriage at the
very start of his courtship. The Court is therefore inclined to believe that respondent resorted to deceit in the satisfaction of his sexual
desires at the expense of the gullible complainant. It is not in accordance with the nature of the educated, cultured and respectable,
which complainant's family is, her father being the Assistant Principal of the local public high school, to allow a daughter to have an
affair with a married man.

But what surprises this Court even more is the perverted sense of respondent's moral values when he said that: "I see nothing wrong
with this relationship despite my being married." (TSN, p. 209, January 13, 1977; Rollo, p. 47) Worse, he even suggested abortion.
Truly, respondent's moral sense is so seriously impaired that we cannot maintain his membership in the Bar. In Pangan v. Ramos (107
SCRA 1 [1981]), we held that:

(E)ven his act in making love to another woman while his first wife is still alive and their marriage still valid and
existing is contrary to honesty, justice, decency and morality. Respondent made a mockery of marriage which is a
sacred institution demanding respect and dignity.

Finally, respondent even had the temerity to allege that he is a Moslem convert and as such, could enter into multiple marriages and
has inquired into the possibility of marrying complainant (Rollo, p. 15). As records indicate, however, his claim of having embraced the
Islam religion is not supported by any evidence save that of his self-serving testimony. In this regard, we need only to quote the finding
of the Office of the Solicitor General, to wit:

When respondent was asked to marry complainant he said he could not because he was already married and would
open him to a charge of bigamy (p. 200, tsn, January 13, 1977). If he were a moslem convert entitled to four (4)
wives, as he is now claiming, why did he not marry complainant? The answer is supplied by respondent himself. He
said while he was a moslem, but, having been married in a civil ceremony, he could no longer validly enter into
another civil ceremony without committing bigamy because the complainant is a christian (p. 242, tsn, January 13,
1977). Consequently, if respondent knew, that notwithstanding his being a moslem convert, he cannot marry
complainant, then it was grossly immoral for him to have sexual intercourse with complainant because he knew the
existence of a legal impediment. Respondent may not, therefore, escape responsibility thru his dubious claim that he
has embraced the Islam religion. (Rollo,
p. 49).

By his acts of deceit and immoral tendencies to appease his sexual desires, respondent Daarol has amply demonstrated his moral
delinquency. Hence, his removal for conduct unbecoming a member of the Bar on the grounds of deceit and grossly immoral conduct
(Sec. 27, Rule 138, Rules of Court) is in order. Good moral character is a condition which precedes admission to the Bar (Sec. 2, Rule
138, Rules of Court) and is not dispensed with upon admission thereto. It is a continuing qualification which all lawyers must possess
(People v. Tuanda, 181 SCRA 682 [1990]; Delos Reyes v. Aznar, 179 SCRA 653 [1989]), otherwise, a lawyer may either be suspended
or disbarred.

As we have held in Piatt v. Abordo (58 Phil. 350 [1933], cited in Leda v. Tabang, 206 SCRA 395 [1992]):

It cannot be overemphasized that the requirement of good character is not only a condition precedent to admission to
the practice of law; its continued possession is also essential for remaining in the practice of law (People v. Tuanda,
Adm. Case No. 3360, 30 January 1990, 181 SCRA 692). As aptly put by Mr. Justice George A. Malcolm: "As good
character is an essential qualification for admission of an attorney to practice, when the attorney's character is bad in
such respects as to show that he is unsafe and unfit to be entrusted with the powers of an attorney, the court retains
the power to discipline him (Piatt v. Abordo, 58 Phil. 350 [1933]).

Only recently, another disbarment proceeding was resolved by this Court against a lawyer who convinced a woman that her prior
marriage to another man was null and void ab initio and she was still legally single and free to marry him (the lawyer), married her, was

pg. 79
supported by her in his studies, begot a child with her, abandoned her and the child, and married another woman (Terre vs. Terre, Adm.
Case No. 2349, July 3, 1992).

Here, respondent, already a married man and about 41 years old, proposed love and marriage to complainant, then still a 20-year-old
minor, knowing that he did not have the required legal capacity. Respondent then succeeded in having carnal relations with
complainant by deception, made her pregnant, suggested abortion, breached his promise to marry her, and then deserted her and the
child. Respondent is therefore guilty of deceit and grossly immoral conduct.

The practice of law is a privilege accorded only to those who measure up to the exacting standards of mental and moral fitness.
Respondent having exhibited debased morality, the Court is constrained to impose upon him the most severe disciplinary action —
disbarment.

The ancient and learned profession of law exacts from its members the highest standard of morality. The members are, in fact, enjoined
to aid in guarding the Bar against the admission of candidates unfit or unqualified because deficient either moral character or education
(In re Puno, 19 SCRA 439, [1967]; Pangan vs. Ramos, 107 SCRA 1 [1981]).

As officers of the court, lawyers must not only in fact be of good moral character but must also be seen to be of good moral character
and must lead a life in accordance with the highest moral standards of the community. More specifically, a member of the Bar and an
officer of the Court is not only required to refrain from adulterous relationships or the keeping of mistresses but must also behave
himself in such a manner as to avoid scandalizing the public by creating the belief that he is flouting those moral standards (Tolosa vs.
Cargo, 171 SCRA 21, 26 [1989], citing Toledo vs. Toledo, 7 SCRA 757 [1963] and Royong vs. Oblena, 7 SCRA 859 [1963]).

In brief, We find respondent Daarol morally delinquent and as such, should not be allowed continued membership in the ancient and
learned profession of law (Quingwa v. Puno, 19 SCRA 439 [1967]).

ACCORDINGLY, We find respondent Transfiguracion Daarol guilty of grossly immoral conduct unworthy of being a member of the Bar
and is hereby ordered DISBARRED and his name stricken off from the Roll of Attorneys. Let copies of this Resolution be furnished to
all courts of the land, the Integrated Bar of the Philippines, the Office of the Bar Confidant and spread on the personal record of
respondent Daarol.

SO ORDERED.

A.C. No. 1558 March 10, 2003

HONORIO MANALANG and FLORENCIO CIRILLO, complainants,

vs.
ATTY. FRANCISCO F. ANGELES,1 respondent.

RESOLUTION

QUISUMBING, J.:

In this administrative complaint2 filed on November 11, 1975, against Atty. Francisco F. Angeles for grave misconduct as a lawyer,
respondent stands charged with infidelity in the discharge of fiduciary obligations to his clients, herein complainants Honorio Manalang
and Florencio Cirillo.

Manalang and Cirillo alleged that they were the complainants in a case for overtime and separation pay filed against their employer, the
Philippine Racing Club Restaurant, before the National Labor Relations Commission Region IV Office, docketed as NLRC-RO 4 No. 4-
2417-74. Respondent was their counsel. Judgment was rendered in their favor, in the amount of P6,500. After the decision became
final, a writ of execution issued. However, without authority from his clients, respondent compromised the award and was able to collect
P5,500 only.

Complainants said they made several demands upon respondent to turn over to them the amount collected minus the agreed upon
attorney's fees of thirty percent (30%), but Atty. Angeles refused and offered to give them only the sum of P2,650.

Complainants then instituted the instant case, with the assistance of the then Citizens Legal Assistance Office (CLAO) 3 of the
Department of Justice.

In his answer, filed on December 15, 1975, respondent stated that he offered to give complainants their money, but they insisted that
he "deduct from this attorney's fees the amount of P2,000, representing the amount discounted by the counsel of the Philippine Racing
Club Restaurant, together with sheriff legal fees and other administrative expenses." 4 Respondent claimed that to accept complainants'
proposition meant that he "would not be compensated for prosecuting and handling, the case."5

In our resolution6 of January 9, 1976, we referred the case to the Office of Solicitor General (OSG) for investigation, report, and
recommendation.

The OSG conducted several hearings from March-August 1976.7 The complainants' testimonies were received. Respondent appeared
only at three (3) hearings, those of June 21, 1976,8 July 1, 19769 and August 6, 1976.10 On August 24, 1976, the Solicitor General
ordered respondent's testimony stricken from the record and the case deemed submitted for resolution 11 for his failure to appear
despite due notice.

pg. 80
Thereafter, the case was transferred to the Committee on Bar Discipline of the Integrated Bar of the Philippines (IBP). Hearings were
scheduled on September 20 and November 21, 1991, but neither party appeared despite prior due notice. The IBP then subpoenaed
respondent for him to appear at the hearings on February 12-13, 1992, but the notices were returned unserved with the indication that
respondent had changed address. On July 8, 1992, the IBP issued an order stating that respondent had been given ample
opportunities to present his evidence and considered the case submitted for resolution on the basis of the existing evidence.

On January 23, 1997, the IBP Committee on Bar Discipline issued a resolution recommending that respondent be suspended from the
practice of law for two (2) years.12 This was adopted and approved by the IBP Board of Governors in its resolution of July 26, 1997. 13

On September 23, 1997, respondent moved for reconsideration of the resolution of the IBP Board of Governors, dated July 26, 1997.

On October 8, 1997, we resolved to refer this matter to the Office of the Bar Confidant "for recommendation within twenty (20) days
from notice."14 On June 19, 2002, the Bar Confidant recommended that "the IBP Resolution, recommending suspension of the
respondent from the practice of law for two (2) years be affirmed." 15

The sole issue in this case is whether respondent Atty. Francisco F. Angeles should be suspended from the practice of law because of
grave misconduct related to his clients' funds.

Where a member of the bar stands charged with malpractice, the proceedings are not meant solely to rule on his culpability but also to
determine if the lawyer concerned is possessed of that good moral character, which is a condition precedent to the privilege of
practicing law and continuing in the practice thereof. 16 For the bar must not only maintain a high standard of legal proficiency, it must
likewise be exacting in its standards for honesty, integrity, and fair dealing.

In the instant case, there is no dispute that complainants were awarded P6,500.00 in NLRC-RO 4 No. 4-2417-74 for unpaid overtime
and separation pay. Of this amount, thirty percent (30%) or P1,950 was agreed to be paid to respondent as his attorney's fees. In other
words, complainants were to receive from respondent the net sum of P4,550 or P2,275 each. Alleging difficulties in collecting the full
amount awarded, respondent compromised the award on execution and collected only P5,500 from the losing party in NLRC-RO 4 No.
4-2417-74. This compromise was allegedly without authority from his clients. The authority to compromise cannot be lightly presumed
and must be supported by evidence.17 In the instant case, respondent failed to show such authority.

Money claims due to workers cannot, as a rule, be the object of settlement or compromise effected by counsel without the consent of
the workers concerned .18 A client has every right to expect from his counsel that nothing will be taken or withheld from him, save by the
rules of law validly applied. By compromising the judgment without the consent of his clients, respondent not only went against the
stream of judicial dicta, he also exhibited an uncaring lack of devotion to the interest of his clients as well as want of zeal in the
maintenance and defense of their rights. In so doing, he violated Canon 17 of the Code of Professional Responsibility. 19

Worse, as found by the IBP Committee on Bar Discipline, respondent only offered to remit to complainants the amount of P2,650 or
P1,325 each, an amount substantially less than the P2,275 that each complainant was entitled to receive under the judgment. On this
score, respondent failed to establish any credible defense. Moreover, he consistently failed to appear at the hearings scheduled by the
CBD. Hence, his excuse for failing to give the money due his clients merit scant consideration.

A lawyer shall hold in trust all moneys and properties of his client that may come into his possession. 20 In the instant case, the records
clearly and abundantly point to respondent's receipt of and failure to deliver upon demand, the amount of P4,550 intended for his
clients. This is a clear breach of Rule 16.03,21 Canon 16 of the Code of Professional Responsibility. Moreover, his excuse in his answer,
that he should be allowed to deduct sheriff's fees and other administrative expenses before delivering the money due his clients, is
unsatisfactory. Respondent clearly failed to comply with the Rules of Court in the enforcement of an attorney's liens.22 The records of
this case are barren of any statement of respondent's claims for lien or payment of his alleged disbursements. Nor did respondent
present any showing that he caused written notices of his lien on the money judgment to be served upon his clients and to the losing
party in NLRC-RO 4 No. 4-2417-74.

His act of holding on to his clients' money without their acquiescence is conduct indicative of lack of integrity and propriety. He was
clinging to something which was not his, and to which he had no right.23 He appears oblivious of the admonition that a member of the
legal fraternity should refrain from any act or omission which might lessen the trust and confidence reposed by the public in the fidelity,
honesty, and integrity of the legal profession.24

We note that in 1976 at the hearings before the OSG, complainant Manalang declared he was already 58 years old, 25 while
complainant Cirillo stated that he was 64 years of age. 26 A quarter of century has since passed. It is true that a disciplinary action
involves no private interest and affords no redress for private grievance, since it is undertaken solely for the public welfare, and the
attorney-at-law is called to task mainly to answer to this Court for his conduct as an officer of the court.27 Nevertheless, we must stress
that disciplinary action against a member of the bar involves the public interest, and it should be resolved with dispatch. 28 Moreover, we
note that respondent's clients in the instant case were poor working men. They were made to wait long for their money, by their very
own counsel, contrary to the Attorney's Oath and the Code of Professional Responsibility. This is contrary to all ethical principles that
members of the bar are supposed to uphold. Thus, we find no hesitance in imposing on respondent the penalty of suspension.
However, this is the first case on record against him, a fact which could be taken into account by way of mitigation. Considering further
the amount involved, the penalty of six (6) months suspension appears to us in order.

ACCORDINGLY, the Court hereby SUSPENDS Atty. Francisco F. Angeles from the practice of law for a period of six (6) months,
effective immediately upon his receipt of this Resolution. He is also ordered to pay the sum of two thousand two hundred seventy five
pesos (P2,275.00) each to complainants Honorio Manalang and Florencio Cirillo, with interest of six percent (6%) per annum from the
time of filing this complaint until fully paid.

Let a copy of this resolution be served personally on respondent at his last known address and entered in his record as attorney. Let
the IBP, the Bar Confidant, and the Court Administrator be furnished also a copy of this resolution for their information and guidance as
well as for circularization to all courts in the country.

SO ORDERED.
pg. 81
A.C. No. 6691 April 27, 2007

ATTY. GEORGE C. BRIONES, Complainant,

vs.
ATTY. JACINTO D. JIMENEZ, Respondent.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

The root of herein administrative complaint for Disbarment1 dated August 12, 2004 filed by Atty. George S. Briones charging Atty.
Jacinto D. Jimenez with violation of Revised Circular No. 28-91 on forum-shopping and Rule 19.01 and Rule 12.08 of the Code of
Professional Responsibility, is the April 3, 2002 Order of the Regional Trial Court (RTC) of Manila in SP Proc. No. 99-92870, entitled,
"In the Matter of the Petition for the Allowance of the Will of Luz J. Henson", to wit:

IN VIEW OF THE FOREGOING, the court hereby:

1. Reiterates its designation of the accounting firm of Messrs. Alba, Romeo & Co. to immediately conduct an audit of the
administration by Atty. George S. Briones of the estate of the late Luz J. Henson, the expenses of which shall be charged
against the estate.

2. Suspends the approval of the report of the special administrator except the payment of his commission which is hereby
fixed at 1.8% of the value of the estate.

3. Directs the special administrator to deliver the residue to the heirs in proportion to their shares. From the share of Lilia J.
Henson-Cruz, there shall be deducted the advances made to her.

IT IS SO ORDERED.

Complainant Atty. Briones is the Special Administrator of the Estate of Luz J. Henson. Respondent Atty. Jacinto D. Jimenez is the
counsel for the Heirs of the late Luz J. Henson (Heirs).

On April 9, 2002, Atty. Jimenez filed with the RTC a notice of appeal from the Order dated April 3, 2002, questioning the payment of
commission to Atty. Briones.2

On April 29, 2002, Atty. Jimenez filed with the Court of Appeals (CA) a Petition for Certiorari, Prohibition and Mandamus, docketed as
CA-G.R. SP No. 70349 assailing the Order dated March 12, 2002, appointing the firm of Alba, Romeo & Co. to conduct an audit at the
expense of the late Luz J. Henson, as well as the Order dated April 3, 2002, insofar as it denied their motion for recommendation.3

On July 26, 2002, Atty. Jimenez filed with the CA a Petition for Mandamus, docketed as CA-G.R. No. 71844,4alleging that the
respondent Judge therein unlawfully refused to comply with his ministerial duty to approve their appeal which was perfected on time.5

Atty. Briones, in his Comment, contends that the heirs of the late Luz J. Henson, represented by Atty. Jimenez, are guilty of forum
shopping for which reason, the petition should be dismissed. 6

On February 11, 2003, the CA without touching on the forum shopping issue, granted the petition and ordered the respondent Judge to
give due course to the appeal taken by Atty. Jimenez from the Order dated April 3, 2002, insofar as it directed the payment of
commission to Atty. Briones.7

Atty. Briones then filed with this Court a Petition for Review on Certiorari under Rule 45 of the Rules of Court, docketed as G.R. No.
159130, praying for the dismissal of the appeal from the Order dated April 3, 2002, insofar as it ordered the payment of commission to
him, as the Special Administrator of the estate of the deceased Luz J. Henson.8

The Court gave due course to the petition and required the parties to file their respective memoranda.

Atty. Briones (hereinafter referred to as complainant) filed his "Memorandum with Administrative Complaint for Disbarment against Atty.
Jacinto Jimenez, Counsel for Respondents",9 for violation of Rule 19.01 and Rule 12.08 of the Code of Professional Responsibility and
Revised Circular No. 28-91 on forum shopping.

Complainant claims that Atty. Jimenez (hereinafter referred to as respondent) and the Heirs engaged again in forum shopping when
respondent, as counsel for the Heirs, filed a criminal complaint and executed an affidavit against complainant for resisting and seriously
disobeying the RTC Order dated April 3, 2002 which directed complainant to deliver the residue of the estate to the Heirs in proportion
to their shares, punishable under Article 151 of the Revised Penal Code.

Complainant further claims that respondent violated Rules 19.01 and 12.08 of the Code of Professional Responsibility, to wit:

pg. 82
Rule 19.01 - 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 criminal charges to obtain an improper advantage in any case of proceeding.

Rule 12.08 – A lawyer shall avoid testifying in behalf of his client, except:

(a) on formal matters, such as the mailing, authentication or custody of an instrument, and the like; or

b) on substantial matters, in cases where his testimony is essential to the ends of justice, in which event he must, during his testimony,
entrust the trial of the case to another counsel.

by filing the unfounded criminal complaint against him to obtain an improper advantage in Special Proceedings No. 99-92870 before the
RTC, Branch 46, and coerce complainant to deliver to the Heirs the residue of the estate of the late Luz J. Henson without any writ of
execution or any pronouncement from the RTC as to the finality of the Order dated April 3, 2002; 10 and in executing an affidavit in
support of the criminal complaint.

The Court in its Resolution dated January 24, 2005, in G.R. No. 159130, resolved to docket the complaint against Atty. Jimenez as a
regular administrative complaint; referred said Complaint to the Office of the Bar Confidant (OBC); and required Atty. Jimenez to
comment.11

Respondent filed his Comment on April 6, 2005. He contends that when he assisted the Heirs in filing a criminal case against
complainant, he was merely fulfilling his legal duty to take the necessary steps to protect the interests of his clients; that it cannot serve
as basis for filing an administrative case against him.12 Respondent further cites Santiago v. Rafanan13 where the Court absolved the
respondent lawyer from administrative liability in submitting an affidavit in a preliminary investigation in defense of his clients.

On January 31, 2007, the OBC submitted its Report and Recommendation recommending that the administrative complaint against
Atty. Jimenez be dismissed for lack of merit.14

The Court agrees with the OBC that respondent is not guilty of forum shopping. Records show that respondent, as counsel for the heirs
of the late Luz J. Henson, filed a special civil action docketed as CA-G.R. SP No. 70349 assailing the Order of March 12, 2002
appointing the accounting firm of Alba, Romeo and Co. as auditor; and, a regular appeal docketed as CA-G.R. SP No. 71488 assailing
the Order of April 3, 2002, insofar as it directed the payment of commission to complainant. It is evident that there is identity of
parties but different causes of action and reliefs sought. Hence, respondent is not guilty of forum shopping.15 The Court likewise
finds no fault on the part of respondent in executing an affidavit in support of the criminal complaint as held in the Santiago case.

However, there is sufficient ground in support of complainant’s claim that respondent violated Rule 19.01 of the Code of Professional
Responsibility. Records reveal that before respondent assisted the Heirs in filing the criminal complaint against herein complainant, he
sent demand letters to the latter to comply with the Order of Judge Tipon to deliver the residue of the estate to the heirs of the late Luz
J. Henson. Considering that complainant did not reply to the demand letters, respondent opted to file said criminal complaint in behalf of
his clients for refusal to obey the lawful order of the court.

The Order referred to is the third part of the assailed Order dated April 3, 2002 which directs complainant to deliver the residue to the
Heirs in proportion to their shares. As aptly pointed out by complainant, respondent should have first filed the proper motion with the
RTC for execution of the third part of said Order instead of immediately resorting to the filing of criminal complaint against him. A mere
perusal of the rest of the Order dated April 3, 2002 readily discloses that the approval of the report of complainant as Special
Administrator was suspended prior to the audit of the administration of complainant. Consequently, the RTC would still have to
determine and define the residue referred to in the subject Order. The filing of the criminal complaint was evidently premature.

Respondent claims that he acted in good faith and in fact, did not violate Rule 19.01 because he assisted the Heirs in filing the criminal
complaint against herein complainant after the latter ignored the demand letters sent to him; and that a lawyer owes his client the
exercise of utmost prudence and capability. The Court is not convinced. Fair play demands that respondent should have filed the
proper motion with the RTC to attain his goal of having the residue of the estate delivered to his clients and not subject complainant to a
premature criminal prosecution.

As held in Suzuki v. Tiamson:16

Canon 19 of the Code of Professional Responsibility enjoins a lawyer to represent his client with zeal. However, the same Canon
provides that a lawyer’s performance of his duties towards his client must be within the bounds of the law. Rule 19.01 of the same
Canon requires, among others, that a lawyer shall employ only fair and honest means to attain the lawful objectives of his client. Canon
15, Rule 15.07 also obliges lawyers to impress upon their clients compliance with the laws and the principle of fairness. To permit
lawyers to resort to unscrupulous practices for the protection of the supposed rights of their clients is to defeat one of the purposes of
the state – the administration of justice. While lawyers owe their entire devotion to the interest of their clients and zeal in the defense of
their client’s right, they should not forget that they are, first and foremost, officers of the court, bound to exert every effort to assist in the
speedy and efficient administration of justice. 17

Although respondent failed to live up to this expectation, there is no evidence that he acted with malice or bad faith. Consequently, it is
but fit to reprimand respondent for his act of unfair dealing with complainant. It must be stressed that disbarment is the most severe
form of disciplinary sanction, and, as such, the power to disbar must always be exercised with great caution for only the most
imperative reasons and in clear cases of misconduct affecting the standing and moral character of the lawyer as an officer of the court
and a member of the bar. Accordingly, disbarment should not be decreed where any punishment less severe – such as reprimand,
suspension, or fine – would accomplish the end desired.18

WHEREFORE, Atty. Jacinto D. Jimenez is found guilty of and REPRIMANDED for violation of Rule 19.01 of the Code of Professional
Responsibility.

SO ORDERED.
pg. 83
A.C. No. 7298 June 25, 2007
[Formerly CBD Case No. 05-1565]

FERNANDO MARTIN O. PENA, complainant,

vs.
ATTY. LOLITO G. APARICIO, respondent.

RESOLUTION

TINGA, J.:

In this administrative complaint, a lawyer is charged with violation of Rule 19.01 of Canon 19 of the Code of Professional Responsibility
for writing a demand letter the contents of which threatened complainant with the filing of criminal cases for tax evasion and falsification
of documents.

Atty. Lolito G. Aparicio (respondent) appeared as legal counsel for Grace C. Hufana in an illegal dismissal case before the National
Labor Relations Commission (NLRC). Sometime in August 2005, complainant Fernando Martin O. Pena, as President of MOF
Company, Inc. (Subic), received a notice from the Conciliation and Mediation Center of the NLRC for a mediation/conciliation
conference. In the conference, respondent, in behalf of his client, submitted a claim for separation pay arising from her alleged illegal
dismissal. Complainant rejected the claim as being baseless. Complainant thereafter sent notices to Hufana for the latter to explain her
absences and to return to work. In reply to this return to work notice, respondent wrote a letter to complainant reiterating his client's
claim for separation pay. The letter also contained the following threat to the company:

BUT if these are not paid on August 10, 2005, we will be constrained to file and claim bigger amounts including moral
damages to the tune of millions under established precedence of cases and laws. In addition to other multiple charges like:

1. Tax evasion by the millions of pesos of income not reported to the government.

2. Criminal Charges for Tax Evasion

3. Criminal Charges for Falsification of Documents

4. Cancellation of business license to operate due to violations of laws.

These are reserved for future actions in case of failure to pay the above amounts as settlements in the National Labor
Relations Commission (NLRC).1

Believing that the contents of the letter deviated from accepted ethical standards, complainant filed an administrative complaint2 with
the Commission on Bar Discipline of the Integrated Bar of the Philippines (IBP). Respondent filed an Answer with Impleader (Motion to
Dismiss and Counterclaims)3 claiming that Atty. Emmanuel A. Jocson, complainant's legal counsel, also played an important part in
imputing the malicious, defamatory, and fabricated charges against him. Respondent also pointed out that the complaint had no
certification against forum shopping and was motivated only to confuse the issues then pending before the Labor Arbiter. By way of
counterclaim, respondent asked for damages and for the disbarment of Atty. Jocson. Respondent also asked the IBP to endorse the
prosecution of Atty. Jocson for Usurpation of Public Functions 4 and for violation of the Notarial Law.5

A mandatory conference was held on 6 December 2005 but respondent failed to appear. 6 Both parties were thereafter required to
submit their position papers.

The Report and Recommendation7 of Investigating Commissioner Milagros V. San Juan found that complainant, failed to file his
position paper and to comply with Administrative Circular No. 04-94 requiring a certificate against forum shopping and, accordingly,
recommended the dismissal of the complaint against respondent. On 26 May 2006, the IBP Board of Governors adopted and approved
the Report and Recommendation of the Investigating Commissioner.8 On 10 July 2006, the IBP Commission on Bar Discipline
transmitted to the Supreme Court the notice of said Resolution and the records of the case. 9 Thereafter, on 18 August 2006,
respondent filed with the IBP a Motion for Reconsideration (for Modification of Decision)10 reiterating his claim of damages against
complainant in the amount of four hundred million pesos (P400,000,000.00), or its equivalent in dollars, for filing the "false, malicious,
defamers [sic], fraudulent, illegal fabricators [sic], malevolent[,] oppressive, evasive filing [of] a groundless and false suit."11

Complainant thereafter filed this Petition for Review (of the Resolution of the IBP Commission on Bar Discipline) 12alleging that he
personally submitted and filed with the IBP his position paper, after serving a copy thereof on respondent by registered mail. He further
alleges that he was deprived of his right to due process when the IBP dismissed his complaint without considering his position paper
and without ruling on the merits thereof.

Complainant accordingly prays for the reversal and setting aside of the 26 May 2006 Resolution 13 of the IBP Board of Governors and
the remand of the case to the IBP Commission on Bar Discipline for proper adjudication and disposition on the merits.

Based on the records, there is truth to complainant's assertion that he filed his position paper on 21 December 2005, after serving a
copy of the same to respondent. The IBP stamp on the front page of said document shows that it was received by the IBP on 21
December 2005. The registry receipt attached to the same document also shows that it was sent by registered mail to respondent on
the same date. 14

Complainant, however, omitted to offer any explanation in his petition before this Court for his failure to attach a certification against
forum shopping in his complaint against respondent.

pg. 84
The requirement of a certification against forum shopping was originally required by Circular No. 28-91, dated 8 February 1994, issued
by this Court for every petition filed with the Court or the Court of Appeals. Administrative Circular No. 04-94, made effective on 1 April
1994, expanded the certification requirement to include cases filed in courts and quasi-judicial agencies below this Court and the Court
of Appeals. Ultimately, the Court adopted paragraphs (1) and (2) of Administrative Circular No. 04-94 to become Section 5, Rule 7 of
the

1997 Rules of Civil Procedure.15 Said rule states that a violation thereof would constitute contempt of court and be cause for the
summary dismissal of both petitions without prejudice to the taking of appropriate action against the counsel of the party concerned.16

The Investigating Commissioner and the IBP Board of Governors took against complainant his failure to attach the certification against
forum shopping to his complaint and consequently dismissed his complaint. This Court, however, disagrees and, accordingly, grants
the petition. However, a remand of the case to the IBP would unduly prolong its adjudication.

The Court's determination is anchored on the sui generis nature of disbarment proceedings, the reasons for the certification against
forum shopping requirement, complainant's subsequent compliance with the requirement, and the merit of complainant's complaint
against respondent.

The Court, in the case of In re Almacen,17 dwelt on the sui generis character of disciplinary proceedings against lawyers, thus:

Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial
of an action or a suit, but is rather an investigation by the Court into the conduct of one of its officers. Not being intended
to inflict punishment, it is in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor
therein. It may be initiated by the Court motu proprio. Public interest is its primary objective, and the real question for
determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the
exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an
officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest
administration of justice by purging the profession of members who by their misconduct have proved themselves no
longer worthy to be entrusted with the duties and responsibilities pertaining to the office of an attorney. In such
posture, there can thus be no occasion to speak of a complainant or a prosecutor.18 [Emphasis supplied]

In view of the nature of disbarment proceedings, the certification against forum shopping to be attached to the complaint, if one is
required at all in such proceedings, must refer to another administrative case for disciplinary proceedings against the same respondent,
because such other proceedings or "action" is one that necessarily involves "the same issues" as the one posed in the disbarment
complaint to which the certification is supposedly to be attached.

Further, the rationale for the requirement of a certification against forum shopping is to apprise the Court of the pendency of another
action or claim involving the same issues in another court, tribunal or quasi-judicial agency, and thereby precisely avoid the forum
shopping situation. Filing multiple petitions or complaints constitutes abuse of court processes, 19 which tends to degrade the
administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of
the courts.20 Furthermore, the rule proscribing forum shopping seeks to promote candor and transparency among lawyers and their
clients in the pursuit of their cases before the courts to promote the orderly administration of justice, prevent undue inconvenience upon
the other party, and save the precious time of the courts. It also aims to prevent the embarrassing situation of two or more courts or
agencies rendering conflicting resolutions or decisions upon the same issue.21

It is in this light that we take a further look at the necessity of attaching a certification against forum shopping to a disbarment complaint.
It would seem that the scenario sought to be avoided, i.e., the filing of multiple suits and the possibility of conflicting decisions, rarely
happens in disbarment complaints considering that said proceedings are either "taken by the Supreme Court motu proprio, or by the
Integrated Bar of the Philippines (IBP) upon the verified complaint of any person." 22 Thus, if the complainant in a disbarment case fails
to attach a certification against forum shopping, the pendency of another disciplinary action against the same respondent may still be
ascertained with ease. We have previously held that the rule requiring a certification of forum shopping to accompany every initiatory
pleading, "should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective or the goal of
all rules of procedure—which is to achieve substantial justice as expeditiously as possible." 23

At any rate, complainant's subsequent compliance with the requirement cured the supposed defect in the original complaint. The
records show that complainant submitted the required certification against forum shopping on 6 December 2006 when he filed his
Comment/Opposition to respondent's Motion to Dismiss the present petition.

Finally, the intrinsic merit of complainant's case against respondent justifies the grant of the present petition. Respondent does not deny
authorship of the threatening letter to complainant, even spiritedly contesting the charge that the letter is unethical.

Canon 19 of the Code of Professional Responsibility states that "a lawyer shall represent his client with zeal within the bounds of the
law," reminding legal practitioners that a lawyer's duty is not to his client but to the administration of justice; to that end, his client's
success is wholly subordinate; and his conduct ought to and must always be scrupulously observant of law and ethics.24 In particular,
Rule 19.01 commands 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 criminal charges to obtain an improper advantage in any case or
proceeding." Under this Rule, a lawyer should not file or threaten to file any unfounded or baseless criminal case or cases against the
adversaries of his client designed to secure a leverage to compel the adversaries to yield or withdraw their own cases against the
lawyer's client.25

In the case at bar, respondent did exactly what Canon 19 and its Rule proscribe. Through his letter, he threatened complainant that
should the latter fail to pay the amounts they propose as settlement, he would file and claim bigger amounts including moral damages,
as well as multiple charges such as tax evasion, falsification of documents, and cancellation of business license to operate due to
violations of laws. The threats are not only unethical for violating Canon 19, but they also amount to blackmail.

Blackmail is "the extortion of money from a person by threats of accusation or exposure or opposition in the public prints,…obtaining of
value from a person as a condition of refraining from making an accusation against him, or disclosing some secret calculated to operate
pg. 85
to his prejudice." In common parlance and in general acceptation, it is equivalent to and synonymous with extortion, the exaction of
money either for the performance of a duty, the prevention of an injury, or the exercise of an influence. Not infrequently, it is extorted by
threats, or by operating on the fears or the credulity, or by promises to conceal or offers to expose the weaknesses, the follies, or the
crime of the victim.26

In Sps. Boyboy v. Atty. Yabut, Jr.,27 we held that "[a]n accusation for blackmail and extortion is a very serious one which, if properly
substantiated, would entail not only respondent's disbarment from the practice of law, but also a possible criminal prosecution."28 While
the respondent in Boyboy was exonerated for lack of evidence, the same may not be said of respondent in the present case for he
admits to writing the offensive letter.

In fact, respondent does not find anything wrong with what he wrote, dismissing the same as merely an act of pointing out massive
violations of the law by the other party, and, with boldness, asserting that "a lawyer is under obligation to tell the truth, to report to the
government commission of offenses punishable by the State." 29 He further asserts that the writing of demand letters is a standard
practice and tradition and that our laws allow and encourage the settlement of disputes.

Respondent's assertions, however, are misleading, for it is quite obvious that respondent's threat to file the cases against complainant
was designed to secure some leverage to compel the latter to give in to his client's demands. It was not respondent's intention to point
out complainant's violations of the law as he so gallantly claims. Far from it, the letter even contains an implied promise to "keep silent"
about the said violations if payment of the claim is made on the date indicated.

Indeed, the writing of demand letters is a standard practice and tradition in this jurisdiction. It is usually done by a lawyer pursuant to the
principal-agent relationship that he has with his client, the principal. Thus, in the performance of his role as agent, the lawyer may be
tasked to enforce his client's claim and to take all the steps necessary to collect it, such as writing a letter of demand requiring payment
within a specified period. However, the letter in this case contains more than just a simple demand to pay. It even contains a threat to
file retaliatory charges against complainant which have nothing to do with his client's claim for separation pay. The letter was obviously
designed to secure leverage to compel complainant to yield to their claims. Indeed, letters of this nature are definitely proscribed by the
Code of Professional Responsibility.

Respondent cannot claim the sanctuary provided by the privileged communication rule under which a private communication executed
in the performance of a legal duty is not actionable. The privileged nature of the letter was removed when respondent used it to
blackmail complainant and extort from the latter compliance with the demands of his client.

However, while the writing of the letter went beyond ethical standards, we hold that disbarment is too severe a penalty to be imposed
on respondent, considering that he wrote the same out of his overzealousness to protect his client's interests. Accordingly, the more
appropriate penalty is reprimand.

WHEREFORE, premises considered, the petition is granted. The 26 May 2006 Resolution of the IBP Board of Governors is hereby
REVERSED and SET ASIDE. Respondent Atty. Lolito G. Aparicio is hereby found liable for violation of Rule 19.01 of Canon 19 of the
Code of Professional Responsibility, and is accordingly meted out the penalty of REPRIMAND, with the STERN WARNING that a
repetition of the same or similar act will be dealt with more severely.

SO ORDERED.

pg. 86