ethics canon 16 and 17

8/10/2019 Ethics Canon 16 and 17

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LEGAL ETHICS CASES – CANON 16 & 17 1

1.

A.C. No. 2591 September 8, 2006

LETICIA ADRIMISIN, complainant,vs.ATTY. ROLANDO S. JAVIER, respondent.

D E C I S I O N

CARPIO, J.:

The Case

On 12 September 1983, Leticia Adrimisin ("complainant") filed acomplaint-affidavit1 with the Ministry of Justice seeking the disbarmentof Atty. Rolando S. Javier ("respondent") for deceit andmisrepresentation.

The Facts

Complainant alleges that on 12 July 1983, she was introduced by hercousin, Pablo Adrimisin, to respondent. She needed the help of a lawyerin having her son-in-law, Alfredo Monterde ("Monterde"), who wascharged with the crime of qualified theft, released from the CaloocanCity Jail. Complainant claims that respondent advised her to file a bailbond. Complainant informed respondent that her only money was P500.Complainant contends that respondent received the money, issued areceipt2 and promised that Monterde would be released from jail thefollowing day.

Complainant also alleges that respondent failed to keep his promise inhaving Monterde released. Complainant went to respondent's officeseveral times but it seemed that respondent was avoiding her. Monterdewas later released upon settlement of the case with his employer.Complainant claims that she demanded for the return of the P500 butrespondent failed to return this amount.

Respondent did not file any comment or answer. He only appeared inthe investigative hearings conducted by the Office of the SolicitorGeneral ("OSG"). Respondent, in his testimony, claims he was not hiredby complainant as legal counsel. Respondent alleges complainant onlyasked his help to secure a bail bond.3 Respondent admits hereceived P500 for the bail bond and called up Carlos Alberto ("Alberto"),an insurance agent.4 Respondent claims he gave the P500 to Alberto.

However, the amount was not sufficient to pay for thebond.5 Respondent denies that he promised to have Monterde releasedimmediately.6 Respondent claims he advised complainant to get backher money directly from Alberto.7

Alberto, the insurance agent, was presented during the hearing. Hetestified that on 20 July 1983, respondent came to him to secure a bailbond for qualified theft.8 Alberto showed a copy of the personal bailbond dated 20 July 1983, issued by Philippine Phoenix Surety &Insurance, Inc. ("Philippine Phoenix Surety") with a premium ofP940and costs of documentary stamps, notarial fees and clearances at P279for a total of P1,219.9 Alberto claimed he issued a genuine bond but itwas not filed in court because complainant failed to pay the

balance.10 He also testified that Pablo Adrimisin asked for the refund ofthe P500 but the amount could not be refunded due to expensesalready incurred and forfeiture of the remainder in favor of Alberto'soffice.11

The bail bond which was marked as Exhibit "1" contained a stamped"Limitation of Liability" clause. The clause states "Authorized limit of thebond shall not exceed P20,000 and it is not valid for theft and robberycases."12 The portion "Not valid for theft and robbery cases" wasdeleted with a marking pen but this cancellation was not signed orinitialed. Alberto was asked why the cancellation was unsigned. Albertoreplied that he had no knowledge on who made the stamp or thecancellation.13 When asked if it is the policy of Philippine Phoenix Suretynot to post personal bail bond with respect to theft and robbery cases, Alberto answered in the affirmative.14

Alberto also clarified that he is not connected with Philippine PhoenixSurety but he is an employee of the House of Bonds, which is thegeneral agent of the former .15

Mr. Alfredo Brigoli ("Brigoli"), General Manager of the House of Bonds,was also presented as one of respondent's witnesses. Brigoli explainedthat he gives Alberto 5 sets of pre-signed bail bond forms.16 However, intheft, robbery and drug cases, Alberto is required to seek his approvalbefore the bond is issued.

Brigoli testified that it was Alberto's daughter who called him up forapproval to issue a bond for qualified theft .17He informed Alberto'sdaughter to bring the original bond and its duplicate copies to his officein Intramuros for his signature, but the same was not done.18 Due to thelack of his signature, Brigoli claimed that the bond has not beenapproved. 19 Brigoli also testified that since the bond was not forwardedto his office, the same was not recorded and the payment was notremitted.

The OSG's Report and Recommendation

The OSG's Investigating Solicitor Antonio G. Castro heard the case and

submitted a Report and Recommendation ("Report"). The OSGrecommended that respondent be suspended from the practice of lawfor not less than one year. The Report reads:

The charge of deceit and misrepresentation against respondent hasbeen sufficiently established. Respondent himself admits that hereceived from complainant the sum of P500.00 for the bail bond ofcomplainant's son-in-law Alfredo Monterde; that he failed to secureMonterde's release from jail; and that he did not return the sumof P500.00 to complainant (pp. 9-20, tsn, March 14, 1985).

x x x x

Respondent's defense that he actually secured a bail bond forMonterde is a mere afterthought. Firstly, complainant confided tohim that she had no more money except P500.00. He would not,therefore, secure a bail bond with higher premium than P500.00.

Secondly, while he declared that the records of Monterde's case inthe Regional Trial Court in Caloocan City, Branch XXV, sala ofJudge Oscar Herrera showed that the recommended bailwas P8,000.00 (pp. 8-9, tsn, March 14, 1985), the personal bailbond, marked as Exhibit "1", which was allegedly prepared, wasforP9,400.00 (Exh. "1", p. 7, Folder of Exhs.).

Thirdly, respondent's witness, Alfredo Brigoli, the general managerof the AAF House of Bonds, admitted that Exhibit "1" was not finallyapproved. On cross-examination, he declared:

"Q Have you signed that as finally approved?

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A No, sir. When they called up asking for my signature onthe deleted portion of the bond, Mr. Alberto never came tomy office.

Q In other words that bond has not been finally approved.

A Not finally approved because there is no signature yet."

(p. 20, tsn, Sept. 30, 1985).

As held by this Honorable Court in Royong v. Oblena, 7 SCRA859, 868-869 (1963), "The respondent's misconduct, althoughunrelated to his office, may constitute sufficient grounds fordisbarment." And in Quingwa v. Puno, 19 SCRA 439, 445 (1967),it also held that, "Indeed, it is important that members of thisancient and learned profession of law must conform themselves inaccordance with the highest standards of morality."

Specifically, for deceit and misrepresentation, respondent may besuspended or disbarred (In re Paraiso, 41 Phil. 24, 25 [1920]) .20

The Court's Ruling

The Court finds respondent liable for violation of Canon 16 and Rule18.03 of the Code of Professional Responsibility ("Code"). The Codemandates every lawyer to hold in trust all moneys and properties of hisclient that may come into his possession.21 Consequently, a lawyershould account for the money received from a client.22 The Code alsoenjoins a lawyer not to neglect a legal matter entrusted to him,23 and hisnegligence in connection therewith shall render him liable.

Respondent himself admitted the receipt of P500 from complainant aspayment for the bail bond as shown in his testimony and in Exhibit "A".

By his receipt of the amount, respondent agreed to take upcomplainant's cause and owed fidelity to complainant and her cause,even if complainant never paid any fee. Lawyering is not a business. Itis a profession in which duty to public service, not money, is the primaryconsideration.24

Respondent claims that on 12 July 1983, he called up Alberto for theissuance of the bail bond but it took 8 days before the bail bond wasprepared. In failing to immediately secure the bail bond, respondentclearly neglected to exercise ordinary diligence or that reasonabledegree of care and skill required by the circumstances.

There were also irregularities in the personal bail bond. Firstly, it wasissued on 20 July 1983 but notarized sometime in 1984 as seen in theNotarial Certificate. The Court therefore agrees with OSG's finding thatrespondent's defense that he secured a bail bond was a mereafterthought. Furthermore, complainant filed her complaint on 12September 1983, which means that the bond was notarized only afterthe complaint was filed. Secondly, the bail bond was not valid for theftand robbery cases. Although there was a cancellation of such phrasethrough marking pen, the same was not countersigned, and hence thecancellation was void. Thirdly, the payment for the bond was notrecorded and neither was it remitted to the issuer of the bond. Thismeans that the bond was a mere piece of paper without any value for itfailed to serve its purpose.

Complainant demanded for the return of the P500 but respondent kepton insisting that complainant seek refund from Alberto. Respondent hasthe duty to account for the money entrusted to him by complainant.In Pariñas v. Paguinto,25 we held that "a lawyer shall account for allmoney or property collected from the client. Money entrusted to a

lawyer for a specific purpose, such as for filing fee, but not used forfailure to file the case must immediately be returned to the client ondemand." In the present case, money for the payment of the bond'spremium was not used for the purpose intended. Hence, respondentmust return the amount to complainant upon demand.

A lawyer's failure to return upon demand the funds held by him onbehalf of his client gives rise to the presumption that he has

appropriated the same for his own use in violation of the trust reposed inhim by his client. Such act is a gross violation of general morality as wellas of professional ethics. It impairs public confidence in the legalprofession and deserves punishment.26

This is not the first time respondent is found to have unlawfully withheldand misappropriated money. In Igual v. Javier ,27 the Court held thatrespondent had unjustifiably refused to return Igual's money upondemand and his absence of integrity was highlighted by his "half-bakedexcuses, hoary pretenses and blatant lies in his testimony before theIBP Committee on Bar Discipline." The Court suspended Javier from thepractice of law for a period of one month and ordered him to restitutethe amount of P7,000 to Igual. In that case, we reminded respondent

that he was "expected to always live up to the standards embodied inthe Code of Professional Responsibility for the relationship between anattorney and his client is highly fiduciary in nature and demands utmostfidelity and good faith." 28

We reiterate this reminder. Lawyers who convert the funds entrusted tothem are in gross violation of professional ethics and are guilty ofbetrayal of public confidence in the legal profession.29 Those who areguilty of such infraction may be disbarred or suspended from thepractice of law.30

WHEREFORE, we SUSPEND Atty. Rolando S. Javier from the practiceof law for SIX MONTHS effective upon finality of this Decision.

We ORDER respondent to restitute complainant Leticia Adrimisin theFive Hundred Pesos (P500) with legal interest computed from 12September 1983 until full payment. Respondent shall submit to theCourt proof of restitution within ten (10) days from payment.

Let copies of this resolution be furnished the Office of the Bar Confidantto be appended to respondent's personal record, and the Integrated Barof the Philippines. The Court Administrator shall furnish copies to all

courts of the land for their information and guidance.

2.

A.C. No. 7057 July 25, 2006

DAVID L. ALMENDAREZ, JR., complainant,vs.ATTY. MINERVO T. LANGIT, respondent.

D E C I S I O N

CARPIO, J.:

The Case

On 5 May 2004, David L. Almendarez, Jr. ("complainant") filed thiscomplaint-affidavit1 before the Integrated Bar of the Philippines (IBP),seeking the disbarment of Atty. Minervo T. Langit ("respondent") for actsunbecoming a lawyer.

The facts are undisputed:


































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Complainant, as attorney-in-fact of his mother Pura Lioanag Vda. de Almendarez, was the plaintiff in an ejectment case before the MunicipalTrial Court of Dagupan City, Branch 2 ("trial court"). Respondent servedas complainant's counsel. While the case was pending, defendantRoger Bumanlag ("Bumanlag") deposited monthly rentals for theproperty in dispute to the Branch Clerk of Court.

On 3 February 1994, the trial court rendered a decision in the ejectment

case based on a compromise agreement executed by complainant andBumanlag. On 18 December 1995, the trial court issued an alias writ ofexecution for the satisfaction of the decision. A court order 2 dated 2March 2000 granted the Omnibus Motion for Execution and Withdrawalof Deposited Rentals filed by respondent as complainant's counsel.Respondent filed a second motion for withdrawal of deposited rentals,which the trial court also granted on 16 March 2000.

Sometime in May 2003, complainant learned that respondent was ableto withdraw the rentals deposited by Bumanlag. Felicidad Daroy("Daroy"), Officer-in-Charge Clerk of Court, confirmed this tocomplainant who received from Daroy copies of the two withdrawal slipsdrawn from the trial court's savings account. One slip dated 10 March

2000 was for P28,000,3 and another slip dated 19 April 2000 wasfor P227,000.4 Thus, respondent received a total of P255,000, asevidenced by two receipts5 signed by him. The withdrawals were madethrough Daroy's authorized representative Antonia Macaraeg, but Daroypersonally delivered the money to respondent. Respondent did notinform complainant of these transactions.

Complainant, through his new counsel Atty. Miguel D. Larida, sentrespondent on 30 June 2003 a final demand letter for the accountingand return of the P255,000.6 Respondent failed to reply.

Hence, complainant filed this case for disbarment against respondentfor failing to account for complainant's funds. Complainant further

accuses respondent of neglecting to pursue the implementation of thewrit of execution issued in the ejectment case.

On 12 May 2004, IBP Director for Bar Discipline Rogelio A. Vinluan("IBP Director Vinluan") ordered respondent to submit his Answer to thecomplaint. Respondent did not file an answer despite receipt of thenotice.7

On 4 October 2004, IBP Investigating Commissioner Caesar R. Dulay("IBP Commissioner Dulay") notified the parties to appear before him fora mandatory conference on 15 November 2004, later reset to 17January 2005. Only complainant appeared at the conference, prompting

IBP Commissioner Dulay to order the conference terminated and todeclare that respondent had waived his right to participate in theproceedings. IBP Commissioner Dulay directed the parties to file theirrespective position papers. Complainant submitted his position paper on22 March 2005. Again, respondent took no action.

Findings and Recommendation of the IBP

On 8 June 2005, IBP Commissioner Dulay submitted his Report andRecommendation ("Report")8 with the finding that respondent failed toaccount for money he held in trust for complainant. The Reportconsidered complainant's evidence "clear and convincing" enough to justify disciplinary action against respondent for violation of Rule 16.01

of the Code of Professional Responsibility. IBP Commissioner Dulayrecommended that respondent be declared guilty of gross misconductand suspended for one year, aside from being ordered to render anaccounting of the money he had received.

In a Resolution9 dated 17 December 2005, the IBP Board of Governorsapproved the Report, with the modification that the penalty ofsuspension be increased to two years.

The Court's Ruling

We sustain the findings of the IBP.

Respondent committed a flagrant violation of his oath when he receivedthe sum of money representing the monthly rentals intended for hisclient, without accounting for and returning such sum to its rightfulowner. Respondent received the money in his capacity as counsel forcomplainant. Therefore, respondent held the money in trust forcomplainant. The Code of Professional Responsibility ("Code") states:

CANON 16 — A LAWYER SHALL HOLD IN TRUST ALLMONEYS AND PROPERTIES OF HIS CLIENT THAT MAYCOME INTO HIS POSSESSION.

Rule 16.01— A lawyer shall account for all money or propertycollected or received for or from the client.

Rule 16.03— A lawyer shall deliver the funds and property to hisclient when due or upon demand. However, he shall have a lienover the funds and may apply so much thereof as may benecessary to satisfy his lawful fees and disbursements, givingnotice promptly thereafter to his client. He shall also have a lien tothe same extent on all judgments and executions he has securedfor his client as provided for in the Rules of Court.

Respondent should have immediately notified complainant of the trialcourt's approval of the motion to withdraw the deposited rentals. Uponrelease of the funds to him, respondent could have collected any lien

which he had over them in connection with his legal services, providedhe gave prompt notice to complainant. A lawyer is not entitled tounilaterally appropriate his client's money for himself by the mere factthat the client owes him attorney's fees.10 In this case, respondent didnot even seek to prove the existence of any lien, or any other right thathe had to retain the money.

Respondent's failure to turn over the money to complainant despite thelatter's demands gives rise to the presumption that he had convertedthe money for his personal use and benefit. This is a gross violation ofgeneral morality as well as of professional ethics, impairing publicconfidence in the legal profession.11 More specifically, it rendersrespondent liable not only for violating the Code but also for contempt,

as stated in Section 25, Rule 138 of the Rules of Court:

SEC. 25. Unlawful retention of client's funds; contempt — Whenan attorney unjustly retains in his hands money of his client after ithas been demanded he may be punished for contempt as anofficer of the Court who has misbehaved in his officialtransactions; but proceedings under this section shall not be a barto a criminal prosecution.

Additionally, respondent failed to observe Canon 1712 of the Code,which obligates the lawyer to take up the cause of his client with entirezeal and devotion. It seems that after respondent received the

withdrawn deposits, he never contacted complainant again. He did notpursue the implementation of the writ of execution issued in theejectment case, to the prejudice of complainant. By his inaction,respondent violated the trust and confidence reposed in him. For inagreeing to be complainant's counsel, respondent undertook to take allsteps necessary to safeguard complainant's interest in the case.
















































The misconduct of respondent is aggravated by his unjustified refusal toheed the orders of the IBP requiring him to file an answer to thecomplaint-affidavit and, afterwards, to appear at the mandatoryconference. Although respondent did not appear at the conference, theIBP gave him another chance to defend himself through a positionpaper. Still, respondent ignored this directive, exhibiting a blatantdisrespect for authority. Indeed, he is justly charged with conductunbecoming a lawyer, for a lawyer is expected to uphold the law andpromote respect for legal processes.13 Further, a lawyer must observeand maintain respect not only to the courts, but also to judicial officersand other duly constituted authorities,14 including the IBP. Under Rule139-B of the Rules of Court, the Court has empowered the IBP toconduct proceedings for the disbarment, suspension, or discipline ofattorneys.

The relation of attorney and client is highly fiduciary, requiring utmostgood faith, loyalty, and fidelity on the part of the attorney. Respondentmiserably failed in this regard. Instead, he demonstrated a lack ofintegrity, care, and devotion required by the legal profession from itsmembers. Whenever a lawyer is no longer worthy of the trust andconfidence of the public, this Court has the right and duty to withdraw

his privilege as officer of the Court and member of the Bar .15

WHEREFORE, we find Atty. Minervo T. Langit GUILTY of violatingCanons 1, 11, 16, and 17 of the Code of Professional Responsibility.We SUSPEND respondent from the practice of law for two yearseffective upon finality of this Decision. We ORDER respondentto RESTITUTE, within 30 days from finality of this Decision,complainant'sP255,000, with interest at 12% per annum from 30 June2003 until fully paid. We DIRECT respondent to submit to the Courtproof of payment within 15 days from payment of the full amount.

Let copies of this Decision be furnished all courts, the Office of the BarConfidant, as well as the Integrated Bar of the Philippines, for their

notice and guidance.

3.

A.C. No. 4562 June 15, 2005

DANIEL MORTERA, TERESITA MORTERA, FERDINAND MORTERAand LEO MORTERA Complainants,vs.ATTY. RENATO B. PAGATPATAN, Respondent.

R E S O L U T I O N

CORONA, J.:

How far may a lawyer go to ensure that he gets paid?

The answer to this question is stated clearly in Canon 16 of the Code ofProfessional Responsibility for Lawyer s1and in decisions2 applying thesame, but it is apparently not plain enough to the respondent in thiscase. It therefore behooves us to make an example of him for theimprovement of the legal profession.

This disbarment case originated from the execution of a judgment in a

civil action for "rescission of contracts with a prayer for prohibitorymandatory injunction."3

In brief, the complainants, then the plaintiffs, sued their mother, oneRenato C. Aguilar and one Philip Arnold Palmer Bradfield for therescission of a contract of sale. They secured judgment under which

Aguilar was to pay them P155,000 for the property, which this Courtaffirmed.4

On April 15, 1994, respondent did the unthinkable. Under a secretagreement with Aguilar, he accepted P150,000 from the latter as partialpayment of the judgment sum, issuing a receipt for the amount .5 Hethen deposited the money in his personal bank account without theknowledge of complainants.6 Until now, respondent adamantly refuses

to surrender the money to complainants, despite the successive Ordersof the RTC and the Court of Appeals.7

For his part, respondent, in his comment8 admits his secret agreementwith and receipt of the money from Aguilar, interposing as his defensethe fact that the complainants and their mother owed him the money heappropriated for services previously rendered. They would not havepaid him his fees had he not done what he did.9 In support of hisargument, the respondent narrated his years of service as counsel forthe complainants and their mother. He alleged the amounts they owedhim although he presented no evidence of any agreement between himand the complainants for the exact amount of his compensation.

Respondent’s responsibility to the complainants is unequivocally statedin Canons 15 and 16 of the Code of Professional Responsibility. Thefour rules governing this situation were: he owed candor to hisclients;10 he was bound to account for whatever money he received forand from them;11 as a lawyer, he was obligated to keep his own moneyseparate from that of his clients;12 and, although he was entitled to a lienover the funds in order to satisfy his lawful fees,13 he was also bound togive prompt notice to his clients of such liens and to deliver the funds tothem upon demand or when due.

Respondent violated each and every one of these rules.

Respondent cited the need to protect the money from other personsclaiming to be heirs of Eusebio Monter a14and from the volatiletemperament of the complainants15 but did not present any evidence atall to prove either claim. Thus, these claims should be ignored.

Because the respondent admitted concealing his clients’ money, theonly question in our minds is how severe his punishment should be.

The Board of Governors of the Integrated Bar of the Philippinesresolved16 to suspend the respondent for one year.

We do not agree.

In Aldovino v. Pujalte,17 respondent Atty. Pedro C. Pujalte similarlyfaced disbarment charges for having withheld his clients’ money inviolation of Canon 16. Pujalte alleged a lien for his fees over thecontested amount but adduced no evidence of this supposed lien.

In disposing of that case, we said:

Respondent has no right to retain or appropriate unilaterally, as lawyer’slien, the sum of P250,000, as attorney’s fees. In fact, he did not adduceany proof of such agreement. His mere allegation or claim is not proof.Obviously, his failure to return the money to complainants upon demandgave rise to the presumption that he misappropriated it in violation of the

trust reposed on him. His act of holding on to their money without theiracquiescence is conduct indicative of lack of integrity and propriety. Hewas clinging to something not his and to which he had no right.

As a penalty for his infract ion, Atty. Pujalte was suspended for a year.










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However, in the more recent case of de Guzman Buado and Lising v.Layag 18 which involved a violation of Canons 15, 16 and 17, theCourt En Banc imposed the much heavier penalty of indefinitesuspension.

In that case, Atty. Eufracio Layag, the lawyer of the complainants Lisingand de Guzman, successfully prosecuted a case against InlandTrailways, Inc. (Inland). Pursuant to the judgment, Inland issued three

checks, one payable to Layag, one payable to Lising and one payableto de Guzman who had already passed away by then. Layag receivedall three checks from the deputy sheriff but did not inform thecomplainants. He then gave them to one Marie Paz Gonzales forencashment on the strength of a special power of attorney (SPA)purportedly executed by the late de Guzman appointing her as hisattorney-in-fact. This SPA authorized Gonzales to encash any check orbill of exchange received in settlement of the case. Even aftercomplainants learned of the issuance of the checks two years later anddemanded delivery of the proceeds, Layag refused to do so.

In imposing upon Layag the penalty of indefinite suspension, theCourt En Banc considered his years of experience as a lawyer, his

ignorance of the law, specifically the Civil Code, and his violation of notone but three Canons.

Even though, on its face, this case has more in commonwith Pujalte than with Layag , a one-year suspension seems too lenientfor a number of reasons.

First, the respondent in this case has been a practicing lawyer since197419 and even runs his own small law firm. For all his vastexperience, however, he claims that he has done nothing wrong byconcealing and withholding his clients’ money from them.20 Coming froma seasoned practitioner of the law, this attitude isinexcusable.lawphil.net

Second, the respondent had other means of recovering his fees, havingfiled a case for that purpose which was, however, dismissed for hisfailure to properly implead an indispensable party.21 In short, havingbotched his own effort to recover his fees, he sought to simply subvertboth law and proper procedure by holding on to the money.

Clearly, the respondent’s actuations were thoroughly tainted with badfaith, deceit and utter contempt of his sworn duty as a lawyer. Thus, aheavier penalty than a mere one-year suspension is definitely called for.

WHEREFORE, the IBP Board of Governors Resolution No. XV-2002-

223 in Administrative Case No. 4562, finding respondent liable forviolation of Canon 16 of the Code of Professional Responsibility ishereby AFFIRMED with the MODIFICATION that instead of a one-yearsuspension, Atty. Renato B. Pagatpatan is hereby SUSPENDEDfromthe practice of law for two years.

Respondent is further directed to turn over to the complainants, withinfive (5) days from receipt of this resolution, the P150,000 he received intheir behalf.

Respondent is also ORDERED to report to the Office of the BarConfidant his compliance herewith within 15 days from suchcompliance.

Let a copy of this Resolution be attached to the personal record of Atty.Renato B. Pagatpatan and copies furnished the Integrated Bar of thePhilippines and the Office of the Court Administrator for dissemination toall courts.

This Resolution is immediately executory.

4.

A.C. No. 8380 November 20, 2009

ARELLANO UNIVERSITY, INC. Complainant,vs.

ATTY. LEOVIGILDO H. MIJARES III, Respondent.

D E C I S I O N

PER CURIAM:

This disbarment case is about the need for a lawyer to account for fundsentrusted to him by his client.

The Facts and the Case

The facts are taken from the record of the case and the report andrecommendation of the Commission on Bar Discipline of the IntegratedBar of the Philippines (IBP).

Sometime in January 2004, complainant Arellano University, Inc. (theUniversity) engaged the services of respondent Leovigildo H. Mijares III,a member of the Bar, for securing a certificate of title covering a driedup portion of the Estero de San Miguel that the University had beenoccupying. The property was the subject of a Deed of Exchange datedOctober 1, 1958 between the City of Manila and the University.

In its complaint for disbarment against Mijares, the University allegedthat it gave him all the documents he needed to accomplish his work.

Later, Mijares asked the University for and was given P500,000.00 ontop of his attorney’s fees, supposedly to cover the expenses for"facilitation and processing." He in turn promised to give the moneyback in case he was unable to get the work done.

On July 5, 2004 Mijares informed the University that he alreadycompleted Phase I of the titling of the property, meaning that hesucceeded in getting the Metro Manila Development Authority (MMDA)to approve it and that the documents had already been sent to theDepartment of Environment and Natural Resources (DENR). TheUniversity requested Mijares for copies of the MMDA approval but heunjustifiably failed to comply despite his client’s repeated demands.Then he made himself scarce, prompting the University to withdraw all

the cases it had entrusted to him and demand the return ofthe P500,000.00 it gave him.

On November 23, 2005 the University wrote Mijares by registered letter,formally terminating his services in the titling matter and demanding thereturn of the P500,000.00. But the letter could not be served becausehe changed office address without telling the University. Eventually, theUniversity found his new address and served him its letter on January 2,2006. Mijares personally received it yet he did not return the moneyasked of him.

In his answer to the complaint, Mijares alleged that he and the

University agreed on a number of courses of action relating to theproject assigned to him: first, get the University’s application for asurvey plan which the DENR-NCR approved for a "facilitation cost"of P500,000.00; second, get a favorable MMDA endorsement for a"facilitation cost" of another P500,000.00; and, third, the titling of theproperty by the Land Registration Authority for a "facilitation cost" of stillanother P500,000.00.




















Mijares also alleged that the DENR-NCR Assistant Regional Directortold him that he needed to get a favorable endorsement from MMDAand that the person to talk to about it was Undersecretary CesarLacuna. Mijares later met the latter through a common friend. At theirmeeting, Mijares and Lacuna allegedly agreed on what the latter wouldget for recommending approval of the application. Later, Mijares said,he gave the P500,000.00 to Lacuna through their common friend onLacuna’s instruction.

Mijares next alleged that, after he received the money, Lacuna told himthat the University filed an identical application earlier on March 15,2002. Mijares claimed that the University deliberately withheld this factfrom him. Lacuna said that, because of the denial of that priorapplication, he would have difficulty recommending approval of thepresent application. It appeared that Lacuna endorsed the previousapplication to the Mayor of Manila on July 23, 2003 but the latter did notact on it.

Mijares finally alleged that he and Lacuna wanted to bypass the Mayorof Manila in the paper work but they were unable to arrive at a concreteplan. Mijares claimed that the University gave him only P45,000.00 as

his fees and that it was with the University’s conformity that he gavethe P500,000.00 to Lacuna.

The IBP designated Atty. Dennis B. Funa as Commissioner to conduct aformal investigation of the complaint. Despite numerous settings,however, Mijares failed to appear before the Commissioner and adduceevidence in his defense.

On October 17, 2008 Commissioner Funa submitted his Report andRecommendation1 in the case to the Integrated Bar of the Phillippines’Board of Governors. The Report said that the University did notauthorize Mijares to give P500,000.00 to the then MMDA DeputyChairman Cesar Lacuna; that Mijares had been unable to account for

and return that money despite repeated demands; and that he admittedunder oath having bribed a government official.

Commissioner Funa recommended a) that Mijares be held guilty ofviolating Rules 1.01 and 1.02, Canon 15, Rule 15.05, Canon 16, Rules16.01 and 16.03, and Canon 18, Rule 18.04 of the Code of ProfessionalResponsibility and meted out the penalty of disbarment; b) that he beordered to return the P500,000.00 and all the pertinent documents tothe University; and c) that Mijares’ sworn statement that formed part ofhis Answer be endorsed to the Office of the Ombudsman forinvestigation and, if warranted, for prosecution with respect to his shadydealing with Deputy Chairman Lacuna.

On December 11, 2008 the IBP Board of Governors passed ResolutionXVIII-2008-631, adopting and approving the InvestigatingCommissioner’s recommendation but modifying the penalty fromdisbarment to indefinite suspension from the practice of law andordering Mijares to return the P500,000.00 and all pertinent documentsto the University within six months from receipt of the Court’s decision.2

The Question Presented

The only question presented in this case is whether or not respondentMijares is guilty of misappropriating theP500,000.00 that his client, theUniversity, entrusted to him for use in facilitating and processing the

titling of a property that it claimed.

The Court’s Ruling

Section 27, Rule 138 of the Revised Rules of Court provides for thedisbarment or suspension of a lawyer for the following: (1) deceit; (2)malpractice; (3) gross misconduct in office; (4) grossly immoral conduct;(5) conviction of a crime involving moral turpitude; (6) violation of thelawyer’s oath; (7) willful disobedience of any lawful order of a superiorcourt; and (8) willfully appearing as an attorney for a party without

authority to do so.3

Every lawyer has the responsibility to protect and advance the interestsof his client such that he must promptly account for whatever money orproperty his client may have entrusted to him. As a mere trustee of saidmoney or property, he must hold them separate from that of his ownand make sure that they are used for their intended purpose. If notused, he must return the money or property immediately to his clientupon demand, otherwise the lawyer shall be presumed to havemisappropriated the same in violation of the trust reposed on him.4 Alawyer’s conversion of funds entrusted to him is a gross violation ofprofessional ethics.5

Here, respondent Mijares chose not to be heard on his evidence.Technically, the only evidence on record that the Court can consider isthe University’s evidence that he got P500,000.00 from complainant forexpenses in facilitating and processing its title application; that heundertook to return the money if he did not succeed in his purpose; thathe falsely claimed having obtained the MMDA approval of theapplication; and that he nonetheless refused to return the moneydespite repeated demands. Unopposed, this evidence supports thefinding of guilt of the Investigating Commissioner and the IBP Board ofGovernors.

Besides, even if the Court were to consider the defense that Mijares laidout in his answer, the same does not rouse sympathy. He claims that he

gave the P500,000.00 to Undersecretary Lacuna, with the University’sconformity, for a favorable MMDA endorsement to the Mayor of Manila.He also claims that, in a complete turnaround, Lacuna later said that hecould not provide the endorsement because, as it turned out, the MMDAhad previously given such endorsement of the University’s earlierapplication and the Mayor of Manila did not act on that endorsement.

But, if this were so, there was no reason for Mijares not to face theUniversity and make it see that it had no cause for complaint, havinggiven him clearance to pass on the P500,000.00 to Lacuna. Instead,Mijares kept silent. He did not deny that the University went all overtown looking for him after he could not return the money. Nor did he

take any action to compel Lacuna to hand back the money that theUniversity gave him. More, his not showing up to testify on his behalf atthe investigation of the case is a dead giveaway of the lack of merit ofhis defense. No evidence exists to temper the doom that he faces.

Even more unfortunate for Mijares, he admitted under oath havingbribed a government official to act favorably on his client’s application toacquire title to a dried-up creek. That is quite dishonest. The Court isnot, therefore, inclined to let him off with the penalty of indefinitesuspension which is another way of saying he can resume his practiceafter a time if he returns the money and makes a promise to shapeup.1avvphi1

The Court is also not inclined to go along with the IBP’srecommendation that the Court include in its decision an order directingMijares to return the P500,000.00 that the University entrusted to him.The University knowingly gave him that money to spend for "facilitation"and processing. It is not naïve. There is no legitimate expense called"facilitation" fee. This term is a deodorized word for bribe money. The

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Court will not permit the conversion of a disbarment proceeding into aremedy for recovering bribe money lost in a bad deal.

WHEREFORE, the Court finds respondent Leovigildo H. Mijares III, amember of the Bar, GUILTY of violation of Rules 1.01 and 1.02, Canon15, Rule 15.05, Canon 16, Rules 16.01 and 16.03, and Canon 18, Rule18.04 of the Code of Professional Responsibility and imposes on himthe penalty of DISBARMENT. He is, in addition, directed to return to

complainant Arellano University, Inc. all the documents in hispossession covering the titling matter that it referred to him.

Let the sworn statement of respondent Mijares, forming his Answer, beforwarded to the Office of the Ombudsman for whatever action it deemsproper under the circumstances.

5.

G.R. No. 161390 April 16, 2008

RAUL H. SESBREÑO, petitioner,

vs.HON. COURT OF APPEALS, PROVINCE OF CEBU, GOV. EDUARDOR. GULLAS, THE PROVINCIAL TREASURER, THE PROVINCIALAUDITOR, THE PROVINCIAL ENGINEER PATROCINIO BACAY(sued both in their official and personal capacities), respondents.

D E C I S I O N

NACHURA, J.:

For review is the Decision1 of the Court of Appeals (CA) dated July 23,2003 and its Resolution2 dated January 12, 2004 in CA-G.R. CV No.43287. The assailed decision reversed the decision3 of the RegionalTrial Court (RTC), Branch 6, Cebu City in Civil Case R-19022 insofar asthe RTC held the Province of Cebu liable for damages to petitioner RaulH. Sesbreño. The assailed resolution denied petitioner’s motion forreconsideration.

On January 26, 1970, Mrs. Rosario Sen and other camineros4 hired thepetitioner to prosecute Civil Cases Nos. R-109335 and R-11214,6 evidenced by an Agreement ,7 the terms of which read asfollows:

AGREEMENT

WE, the undersigned, hereby agree to pay Atty. Raul H.Sesbreño, thirty (30%) percent of whatever back salaries,damages, etc. that we may recover in the mandamus and othercases that we are filing or have filed against the Province of Cebu,the Provincial Governor, etc., whether or not the said cases will beamicably settled or decided by the courts by final judgment. Weshall take care of all expenses in connection with the said cases.8

During the pendency of the aforesaid cases or on April 17, 1979,petitioner registered his charging/retaining lien based on the Agreement.9

The camineros obtained favorable judgment when the Court of FirstInstance (now RTC) of Cebu ordered that they be reinstated to theiroriginal positions with back salaries, together with all privileges andsalary adjustments or increases.10 Aggrieved, the Commissioner ofPublic Highways and the District Engineer filed certiorari cases beforethis Court where the petitioner willingly rendered further legal assistanceand represented the camineros.

When respondent Eduardo R. Gullas (Gov. Gullas) assumed theposition of governor of Cebu, he proposed the compromise settlementof all mandamus cases then pending against the province whichincluded Civil Cases Nos. R-10933 and R-11214 handled by thepetitioner.

On April 21, 1979, the camineros, represented by the petitioner, and theprovince of Cebu, through then Gov. Gullas, forged a Compromise

Agreement ,11

with the following terms and conditions:

1. The respondent Province of Cebu represented in this act byGov. Eduardo R. Gullas, duly authorized by proper resolution ofthe Sanguniang Panlalawigan, hereby agrees to immediatelyappropriate and pay full backwages and salaries as awarded bythe trial court in its decision to all the private respondents-employees from and after July 1, 1968, the date of theirtermination, up to the date of the approval of the hereinCompromise Agreement by the Honorable Supreme Court, exceptfor those who are qualified for compulsory retirement whose backsalaries and wages shall be limited up to the effective date of theirretirement.

x x x x

9. That the amounts payable to the employees concernedrepresented by Atty. Raul H. Sesbreño is subject to said lawyer’scharging and retaining liens as registered in the trial court and inthe Honorable Court of Appeals.

x x x x

11. That upon request of the employees concerned, most ofwhom are in dire actual financial straits, the Province of Cebu is

agreeable to paying an advance of P5,000.00 to each employeepayable through their counsel, Atty. Raul H. Sesbreño, deductiblefrom the total amount that each will receive from the Province ofCebu, effective upon confirmation by the Honorable SolicitorGeneral, the Supreme Court and the Philippine National Bankwhere the JJ (now infrastructure funds) are now in deposit undertrust.12

Apparently, the camineros waived their right to reinstatement embodiedin the CFI decision and the province agreed that it immediately paythem their back salaries and other claims. This Court adopted saidcompromise agreement in our decision13 dated December 18, 1979.14

In view of the finality of the above decision, the camineros, through theirnew counsel (who substituted for the petitioner), moved for itsexecution. The court then ordered the issuance of a partial writ ofexecution directing the payment of only 45% of the amount due thembased on the computation of the provincial engineering office as auditedby the authority concerned.15 The court did not release the remaining55%, thus holding in abeyance the payment of the lawyer’s feespending the determination of the final amount of such fees.16 However,instead of complying with the court order directing partial payment, theprovince of Cebu directly paid the camineros the full amount of theiradjudicated claims.17

Thus, petitioner filed the complaint for Damages (Thru Breach ofContract) and Attorney’ s Fees against the Province of Cebu, theprovincial governor, treasurer, auditor, and engineer in their official andpersonal capacities, as well as against his former clients(the camineros).18

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Petitioner anchored his claim on the provision of the Civil Code,specifically Article 1919 thereof. He alleged that by directly payingthe camineros the amounts due them, the respondents inducedthe camineros to violate their written contract for attorney’s fees.20 Helikewise claimed that they violated the compromise agreement approvedby the Court by computing the camineros’ money claims based on theprovincial instead of the national wage rate which, consequently, yieldeda lower amount.21 Petitioner went on to say that although he was not aparty to the above contracts, by virtue of the registration of his charginglien, he was a quasi-party and thus, had legal standing to institute thecase below.22

On August 23, 1982, petitioner moved to dismiss the case againstthe camineros after he had entered into an agreement with them andsettled their differences.23 The case, however, proceeded against therespondents.

On October 18, 1992, the RTC rendered a decision in favor of thepetitioner and against the respondent province of Cebu, the pertinentportion of which reads:

Wherefore, for all the foregoing, judgment is rendered, orderingthe defendant Province of Cebu to pay the plaintiff the followingsums:

(a) P669,336.51 in actual damages; with interest of 12% perannum from date of demand until fully paid;

(b) P20,000.00 in moral damages;

(c) P5,000.00 in litigation expenses; and

(d) To pay the costs.24

While maintaining the validity of the compromise agreement, the trialcourt found that the petitioner’s money claims should have beencomputed based on the national and not the provincial rate of wagespaid the camineros. Accordingly, the court declared that the petitionerwas prejudiced to the extent of the difference between these two rates.The court further upheld the petitioner’s status as a quasi -partyconsidering that he had a registered charging lien. However, it did notgive credence to the petitioner ’s claim that the respondent publicofficials induced the camineros to violate their contract, and thus,absolved them from liability.

On appeal, the CA reversed the trial court’s decision and dismissed thecomplaint.25 The appellate court concluded that petitioner failed tosufficiently establish his allegation that the respondents inducedthe caminerosto violate the agreement for attorney’s fees and thecompromise agreement, and that he suffered damage due torespondents’ act of directly paying the camineros the amounts duethem.26

Hence, the instant petition. In his Memorandum, petitioner raises thefollowing issues:

1. RESPONDENT COURT OF APPEALS ERRED IN NOT AFFIRMING THE TRIAL COURT DECISION DUE TO LONG

DELAY IN DECIDING CA-G.R. CV NO. 43287.

2. RESPONDENT COURT OF APPEALS ERRED IN NOTDISMISSING THE APPEAL IN CA-G.R. CV NO. 43287 FORFAILURE TO PROSECUTE AND DUE TO THE FATALLY-DEFECTIVE APPELLANT’S BRIEF.

3. RESPONDENT COURT OF APPEALS ERRED INREVERSING THE TRIAL COURT DECISION BY DECLARINGTHAT THE TRIAL COURT SHOULD NOT FIX THE ATTORNEY’S FEES OF PETITIONER DESPITE THE FACTTHAT THE TRIAL COURT DECISION IS CLEAR THAT WHATWAS ADJUDGED WAS THE DECLARATION THAT THEREWAS BREACH OF THE COMPROMISE CONTRACT ANDDAMAGES ARE TO BE AWARDED THE PETITIONER.

4. RESPONDENT COURT OF APPEALS ERRED IN NOTDECLARING RESPONDENTS GULLAS, RESENTES, SANCHEZ AND BACAY AS PERSONALLY LIABLE AND THAT THEIRPERSONAL LIABILITY IS SOLIDARY WITH THAT OFRESPONDENT PROVINCE OF CEBU.

5. RESPONDENT COURT OF APPEALS ERRED IN NOTDECLARING THAT PRIVATE RESPONDENTS ARESOLIDARILY LIABLE TO PAY TO PETITIONER ACTUAL ORCOMPENSATORY, MORAL, EXEMPLARY, NOMINAL,TEMPERATE DAMAGES, LITIGATION EXPENSES AND LOSSOF EARNINGS AND INTERESTS.27

The petition is bereft of merit.

Petitioner insists that the CA should have affirmed the trial court’sdecision in view of the delay in resolving the case, and should havedenied the appeal because of the formal defects in the appellant’sbrief .28 Petitioner cites the cases of Malacora v. Court of Appeal s29 and Flora v. Pajarillag a30 where this Court held that anappealed case which had been pending beyond the time fixed by theConstitution should be "deemed affirmed."

We cannot apply the cited cases to the one at bench because they weredecided on the basis of Section 11 (2), Article X of the 1973Constitution, which reads:

SEC. 11. x x x

(2) With respect to the Supreme Court and other collegiateappellate courts, when the applicable maximum period shall havelapsed without the rendition of the corresponding decision orresolution because the necessary vote cannot be had, the judgment, order, or resolution appealed from shall be deemedaffirmed x x x.

That provision is not found in the present Constitution. The court, under

the 1987 Constitution, is now mandated to decide or resolve the case ormatter submitted to it for determination within specified periods.31 Evenwhen there is delay and no decision or resolution is made within theprescribed period, there is no automatic affirmance of the appealeddecision. The appellate court, therefore, cannot be faulted in notaffirming the RTC’s decision. While we do not tolerate delay in thedisposition of cases, we cannot dismiss appealed cases solely becausethey had been pending in court for a long period, especially when theappeal is highly meritorious as in the present case.

Likewise, we cannot agree with the petitioner that the appealed case bedismissed on account of the formal defects in respondent’s appellant’sbrief filed before the CA. The requirements laid down by the Rules ofCourt on the contents of the brief are intended to aid the appellate courtin arriving at a just and proper conclusion of the case.32 However,despite its deficiencies, respondent’s appellant’s br ief is sufficient inform and substance as to apprise the appellate court of the essentialfacts and nature of the case, as well as the issues raised and the lawsnecessary for the disposition of the same.33 Thus, we sustain the CA’s































































decision to rule on the merits of the appeal instead of dismissing it onmere technicality.

Now, on the main issue of whether or not respondents are liable fordamages for breach of contract.

Petitioner clarifies that he instituted the instant case for breach of thecompromise agreement and not for violation of the agreement for

attorney’s fees as mistakenly concluded by the appellate court. He alsocites Calalang v. De Borj a34 in support of his right to collect the amountsdue him against the judgment debtor (the respondents).35Lastly,petitioner argues that the respondent public officials acted beyond thescope of their authority when they directly paid the camineros theirmoney claims and failed to withhold the petitioner’s fees. There is,according to the petitioner, a showing of bad faith on the part of theprovince and the public officials concerned.

After a careful scrutiny of the record of the case, we find no compellingreason to disturb the appellate court’s conclusion. We would like tostress at this point that the compromise agreement had been validlyentered into by the respondents and the camineros and the same

became the basis of the judgment rendered by this Court. Its validity,therefore, had been laid to rest as early as 1979 when the Courtpromulgated its decision inCommissioner of Public Highways v.Burgos.36 In fact, the judgment had already been fully satisfied by therespondents. It was precisely this full satisfaction of judgment that gaverise to the instant controversy, based primarily on the petitioner’s claimthat he was prejudiced because of the following: 1) the wrongcomputation in thecamineros’ money claims by using the provincial andnot the national wage rate; and 2) the mode of satisfying the judgmentthrough direct payment which impaired his registered charging lien.

Petitioner’s claim for attorney’s fees was evidenced by an agreement forattorney’s fees voluntarily executed by the camineros where the latter

agreed to pay the former "thirty (30%) percent of whatever backsalaries, damages, etc. that they might recover in the mandamus andother cases that they were filing or have filed." Clearly, no fixed amountwas specifically provided for in their contract nor was a specified rateagreed upon on how the money claims were to be computed. The useof the word "whatever" shows that the basis for the computation wouldbe the amount that the court would award in favor of the camineros.Considering that the parties agreed to a compromise, the paymentwould have to be based on the amount agreed upon by them in thecompromise agreement approved by the court. And since thecompromise agreement had assumed finality, this Court can no longerdelve into its substance, especially at this time when the judgment hadalready been fully satisfied. We cannot allow the petitioner to questionanew the compromise agreement on the pretext that he suffereddamage. As long as he was given the agreed percentage of the amountreceived by the camineros, then, the agreement is deemed compliedwith, and petitioner cannot claim to have suffered damage.

Petitioner likewise claims that he was prejudiced by respondents’ act indirectly paying the camineros the amounts due them, as it renderedinutile the charging lien duly registered for his protection.

To insure payment of his professional fees and reimbursement of hislawful disbursements in keeping with his dignity as an officer of thecourt, the law creates in favor of a lawyer a lien, not only upon the

funds, documents and papers of his client which have lawfully come intohis possession until what is due him has been paid, but also a lien uponall judgments for the payment of money and executions issued pursuantto such judgments rendered in the case wherein his services have beenretained by the client.37 Section 37, Rule 138 of the Rules of Courtspecifically provides:

Section 37. Attorney’s liens. – An attorney shall have a lien uponthe funds, documents and papers of his client, which have lawfullycome into his possession and may retain the same until his lawfulfees and disbursements have been paid, and may apply suchfunds to the satisfaction thereof. He shall also have a lien to thesame extent upon all judgments for the payment of money, andexecutions issued in pursuance of such judgments, which he hassecured in a litigation of his client, from and after the time when heshall have caused a statement of his claim of such lien to beentered upon the records of the court rendering such judgment, orissuing such execution, and shall have caused written noticethereof to be delivered to his client and to the adverse party; andhe shall have the same right and power over such judgments andexecutions as his client would have to enforce his lien and securethe payment of his just fees and disbursements.

A charging lien is an equitable right to have the fees and costs due tothe lawyer for services in a suit secured to him out of the judgment orrecovery in that particular suit. It is based on the natural equity that theplaintiff should not be allowed to appropriate the whole of a judgment inhis favor without paying thereout for the services of his attorney in

obtaining such judgment.38

In this case, the existence of petitioner’s charging lien is undisputedsince it was properly registered in the records. The parties evenacknowledged its existence in their compromise agreement. However, aproblem arose when the respondents directly paid in full the camineros’money claims and did not withhold that portion which corresponds topetitioner’s fees.

When the judgment debt was fully satisfied, petitioner could haveenforced his lien either against his clients (thecamineros herein) oragainst the judgment debtor (the respondents herein). The clients, uponreceiving satisfaction of their claims without paying their lawyer, should

have held the proceeds in trust for him to the extent of the amount of hisrecorded lien, because after the charging lien had attached, the attorneyis, to the extent of said lien, regarded as an equitable assignee of the judgment or funds produced by his efforts.39 The judgment debtors maylikewise be held responsible for their failure to withhold fromthe camineros the amount of attorney’s fees due the petitioner.

In the instant case, the petitioner rightly commenced an action againstboth his clients and the judgment debtors. However, at the instance ofthe petitioner himself, the complaint against his clients was withdrawnon the ground that he had settled his differences with them. Hemaintained the case against respondents because, according to him,the computation of the camineros’ money claims should have beenbased on the national and not the provincial wage rate. Thus, petitionerinsists that the respondents should be made liable for the difference.

While the respondents may have impaired the petitioner’s charging lienby satisfying the judgment without regard for the lawyer’s right toattorney’s fees, we cannot apply the doctrine enunciated in Calalang v.Judge de Borja,40because of the peculiar circumstances obtaining in thiscase. In Calalang, this Court stressed that the judgment debtor may beheld responsible for his failure to withhold the amount of attorney’s feesin accordance with the duly registered charging lien.41 However, there isa disparity between the two cases, because, in this case, the petitionerhad withdrawn his complaint against the camineros with whom he had a

contract for legal services. The withdrawal was premised on asettlement, which indicates that his former clients already paid theirobligations. This is bolstered by the certification of the clerk of court thathis former clients had deposited their passbooks to ensure payment ofthe agreed fees. Having been paid by his clients in accordance with theagreement, his claim against the respondents, therefore, has no leg tostand on.




































Neither can the petitioner rely on Bacolod Murcia Milling Co., Inc. v.Henares, etc .42 where this court declared that satisfaction of the judgment, in general, does not by itself bar or extinguish the attorney’sliens, as the court may even vacate such satisfaction and enforce judgment for the amount of the lien.43 However, the satisfaction of the judgment extinguishes the lien if there has been a waiver, as showneither by the attorney’s conduct or by his passive omission.44 In theinstant case, petitioner’s act in withdrawing the case againstthe camineros and agreeing to settle their dispute may be considered awaiver of his right to the lien. No rule will allow a lawyer to collect fromhis client and then collect anew from the judgment debtor except,perhaps, on a claim for a bigger amount which, as earlier discussed, isbaseless.

Lawyering is not a moneymaking venture and lawyers are notmerchants. Law advocacy is not capital that yields profits. The returns itbirths are simple rewards for a job done or service rendered. It is acalling that, unlike mercantile pursuits which enjoy a greater deal offreedom from governmental interference, is impressed with a publicinterest, for which it is subject to state regulation.45

Considering that petitioner’s claim of higher attorney’s fees is baselessand considering further that he had settled his case as against hisformer clients, we cannot sustain his right to damages for breach ofcontract against the respondents, even on the basis of Articles 119146 or1311.47 Although we sustain his status to institute the instant case, wecannot render a favorable judgment because there was no breach ofcontract. Even if there was such a breach, he had waived his right toclaim against the respondents by accepting payment and/or absolvingfrom liability those who were primarily liable to him. Thus, no liability canbe imputed to the province of Cebu or to the respondent public officials,either in their personal or official capacities.

Lastly, we cannot ascribe bad faith to the respondents who directly paid

the camineros the amounts due them. The records do not show thatwhen they did so, they induced the camineros to violate their contractwith the petitioner; nor do the records show that they paid theirobligation in order to cause prejudice to the petitioner. The attendantcircumstances, in fact, show that the camineros acknowledged theirliability to the petitioner and they willingly fulfilled their obligation. Itwould be contrary to human nature for the petitioner to have acceded tothe withdrawal of the case against them, without receiving the agreedattorney’s f ees.

WHEREFORE, premises considered, the petition is hereby DENIED.The Decision of the Court of Appeals dated July 23, 2003 and itsResolution dated January 12, 2004 in CA-G.R. CV No. 43287are AFFIRMED.

6.

A.C. No. 6656 December 13, 2005

(formerly CBD-98-591)

BOBIE ROSE V. FRIAS, Complainant,vs.ATTY. CARMENCITA BAUTISTA LOZADA, Respondent.

R E S O L U T I O N

CORONA, J .:

In this disbarment case, we are faced with conflicting versions of theincidents surrounding the filing of the verified complaint1 for deceptionand malpractice allegedly committed by Atty. Carmencita BautistaLozada.

For her part, complainant Bobie Rose Frias alleged that respondentbecame her retained counsel and legal adviser in the early part of 1990.She entrusted to respondent documents and titles of properties in

November of that year. Sometime in December 1990, respondentpersuaded complainant to sell her house located at 589 Batangas East, Ayala Alabang Village, Muntinlupa City. Respondent allegedly acted asbroker as she was in need of money.

On December 7, 1990 respondent hastily arranged a meeting with herand a prospective buyer, Dra. Flora San Diego, in Valenzuela, Manila.She was allegedly made to sign a Memorandum of Agreement(MOA)2 without her having read it because "they had to reach the bankbefore it closed at 3:00 p.m."

When they arrived at the Security Bank branch in Valenzuela, SanDiego handed respondent P2M in cash andP1M in check, instead

of P3M in cash as the down payment3 indicated in the MOA.

Out of the P2M in cash, respondent took P1M as her commissionwithout complainant’s consent. When complainant protested,respondent promised to sign a promissory note later. The P1M checkwas later on dishonored by the bank because it was a stale check.

San Diego eventually backed out from the sale. However, sheconverted the aborted sale into a mortgage loan at 36% p.a. interest, asprovided for in the MOA.

Since the transaction between her and San Diego did not materialize,

complainant allegedly tried to recover from respondent the title4

to theproperty and other documents.5 Respondent, however, started avoidingher. Complainant recovered the documents placed inside an envelopeonly on May 6, 1991. On the same day, however, the envelope wasallegedly stolen from her Pajero. She reported the incident to thepolice.6 She also informed respondent about the incident, and the latterprepared an affidavit of loss.7 Complainant later offered this affidavit asevidence in a petition for issuance of a duplicate copy of the title shefiled in the RTC of Makati, Branch 142.8

A perjury case9 was then filed by San Diego against complainant on theground that the title to the property was never really lost (as alleged bycomplainant in the affidavit of loss) but was with San Diego all along.

San Diego maintained that complainant handed it to her on the day theysigned the MOA. Complainant denied these allegations. She insteadclaimed that the perjury case was filed by San Diego, with respondentas counsel, to coerce her (complainant) to assign the property to SanDiego and to abandon her claim of P1M from respondent.

San Diego also filed a case10 for the return of the P3M she paidcomplainant, at 36% p.a. interest. Complainant claimed that her failureto return the money to San Diego was by reason of respondent’s refusalto give back theP1M she took as commission. Complainant was thusconstrained to file a civil case against respondent. Despite the favorabledecision11 of the trial court, which was affirmed by the Court of Appeals12, respondent refused to return the money.

In her answer 13 to the disbarment complaint, respondent claimed that,although complainant was engaged in the buy-build-and-sell of realproperty, she represented her only in labor cases relative to the latter’soverseas recruitment business. Respondent denied that she persuadedcomplainant to sell the property in Ayala Alabang. Rather, it was



















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complainant who offered to sell or mortgage the property to respondent.Since respondent did not have enough money, complainant requestedher to sell or mortgage the property and offered her a loan, commissionand attorney’s fees on the basis of the selling price.

According to respondent, complainant confided that on October 29,1990 she offered the Alabang property to a certain Nelia Sta. Cruz.Complainant received P400,000 as earnest money in this transaction on

the condition that she would return the said amount to Sta. Cruz in twoweeks in case the latter decided not to proceed with the sale.14 The saidamount would in turn be used to buy another property.

Respondent also claimed that on December 4, 1990, she introducedcomplainant to another client, Dra. San Diego, as a prospective buyer.They visited the Alabang property to check on the house. It was therethat complainant offered the house to San Diego for either sale ormortgage. They then discussed the terms and conditions to becontained in the MOA.15 The agreement was thereafter signed inrespondent’s office in Valenzuela, Metro Manila on December 7, 1990,duly notarized by Atty. Manuel Aguinaldo.16 They then proceeded toPrudential Bank (not Security Bank as alleged in the complaint) to

withdraw P2M in cash. Upon receipt of P2M in cash and P1M checkdown payment, complainant gave San Diego the TCT.

Complainant then handed to respondent P900,000 as commission andloan, duly receipted in a promissory note.17 Complainant furtherentrusted P100,000 to respondent to be given to Nelia Sta. Cruz aspartial reimbursement of the P400,000 earnest money.18

Respondent maintained that when San Diego backed out from thetransaction, the latter demanded the return of only P2M, not P3M, asclearly stated in San Diego’s letter 19 to the complainant dated March 20,1991.

Respondent denied that complainant previously demanded the return ofthe P1M until the civil case against her was instituted. She expressedher willingness to pay the P900,000 plus the agreed interest, but notthe P1M plus interest baselessly demanded from her by complainant. Inan attempt to settle the controversy, respondent offered to paythe P900,000 to complainant in the presence of San Diego, socomplainant could in turn pay San Diego theP2M.

Respondent also denied that she prepared the affidavit of loss whichwas offered as evidence by complainant in the petition for issuance oflost title.

Respondent further denied that she represented San Diego in thecriminal cases of perjury and false testimony which the latter filedagainst complainant.

In a report and recommendation dated July 25, 2000, the IBPInvestigating Commissioner 20 found respondent guilty of dishonesty andmalpractice for concealing the identity of the person in actualpossession of complainant’s documents and for preparing an affidavit ofloss even if she knew that the documents were in San Diego’s custody. A suspension for six months from the practice of law was accordinglyrecommended.

A careful study of the records reveals that the IBP recommendationrelied solely on complainant’s self -serving and unsupported claims. Are-examination of the differing claims of the parties, however, disclosesthat, instead of the grounds relied on by the IBP, respondent should beheld accountable for certain serious violations of the Code ofProfessional Responsibility.

Canon 15.03 of the Code of Professional Responsibility provides:

A lawyer shall not represent conflicting interests except by writtenconsent of all concerned given after a full disclosure of the facts.

A lawyer may not, without being guilty of professional misconduct, actas counsel for a person whose interest conflicts with that of hispresent21 or former client.22 He may not also undertake to discharge

conflicting duties any more than he may represent antagonisticinterests. This stern rule is founded on the principles of public policy andgood taste.23 It springs from the relation of attorney and client which isone of trust and confidence.

The test of conflict of interest is whether the acceptance of a newrelation will prevent an attorney from the full discharge of his duty ofundivided fidelity and loyalty to his client or invite suspicion ofunfaithfulness or double-dealing in its performance.24 The conflict existsif the acceptance of the new retainer will require the attorney to performan act which will injuriously affect his first client in any matter in whichhe represented him and also whether he will be called upon in his newrelation to use against the first client any knowledge acquired through

their connection.25

In this case, respondent not only admitted that she represented bothcomplainant and San Diego in unrelated actions but also counseledboth of them in the sale of the Alabang property.

As their lawyer, she was duty-bound to protect both of their interests.She should have therefore refrained from jumbling their affairs. Yet sheintroduced complainant to another client of hers as a buyer of theproperty. She even had the temerity to broker the transaction. At thatearly stage, she should have realized that her role as their lawyer hadbeen seriously compromised. Since buyer and seller had evidentantagonistic interests, she could not give both of them sound legaladvice. On top of this, respondent’s obvious tendency then was to h elpcomplainant get a high selling price since the amount of her commissionwas dependent on it.

After several suits were filed as an offshoot of the transaction betweenher two clients, respondent found herself in a very tight situation. Although she denied that she represented any of them, her activeparticipation in the transaction was obvious and it clearly displayed anutter disregard of the rule against discharging inconsistent duties to herclients. The great likelihood was that she would be called upon to useagainst either the complainant or San Diego information acquiredthrough her professional connection with them.

Furthermore, her role as their counsel in the other unrelated cases wasalso compromised. Both parties had, at this point, become wary of hersince she had by then taken – for her own convenience – San Diego’sside by refusing to return the P900,000 to complainant until San Diegowas paid. It was not surprising therefore that complainant filed thisadministrative case because of the suspicion that respondent haddouble-crossed her.

The records further establish that respondent collected her fullcommission even before the transaction between complainant and SanDiego was completed. This unmasked respondent’s greed which shenow wants us so badly to ignore. Her integrity was placed in serious

doubt the moment her promised commission started motivating herevery move. Her behavior was, sad to say, simply distasteful.

Likewise, her act of borrowing money from a client was a violation ofCanon 16.04 of the Code of Professional Responsibility:




















































A lawyer shall not borrow money from his client unless the client’sinterests are fully protected by the nature of the case and byindependent advice.

A lawyer’s act of asking a client for a loan, as what respondent did, isvery unethical. It comes within those acts considered as abuse ofclient’s confidence. The canon presumes that the client isdisadvantaged by the lawyer’s ability to use all the legal maneuverings

to renege on her obligation.

Finally, respondent should be reminded that a lawyer should, at alltimes, comply with what the court lawfully requires.26 Here, respondentcontinues to disregard the final order of the Court of Appeals finding herliable for the P900,000 she received from complainant. We see no justification for her continued delay in complying with an order that haslong become final. Respondent adamantly insists that she andcomplainant should simultaneously settle their obligations. As a lawyer,she should have known that her obligation to complainant wasindependent of and separate from complainant’s obligation to the buyer.Her refusal to comply with the appellate court’s order is, ther efore, awillful disobedience to its lawful orders and must not be left unpunished.

WHEREFORE, respondent Atty. Carmencita Bautista Lozada is herebyfound guilty of violating Rule 15.03 and 16.04 of the Code ofProfessional Responsibility and of willfully disobeying a final andexecutory decision of the Court of Appeals. She ishereby SUSPENDED from the practice of law for a period of two (2)years from notice, with a STERN WARNING that a repetition of thesame or similar acts will be dealt with more severely.

Let copies of this Resolution be furnished all courts of the land, theIntegrated Bar of the Philippines, as well as the Office of the BarConfidant for their information and guidance, and let it be entered inrespondent’s personal records.

7.

A.C. No. 1526 January 31, 2005

NAZARIA S. HERNANDEZ (DECEASED), SUBSTITUTED BYLUCIANO S. HERNANDEZ, JR., complainant,vs.ATTY. JOSE C. GO, respondent.

D E C I S I O N

PER CURIAM:

For our resolution is the verified letter-complaint1 for disbarment against Atty. Jose C. Go dated June 23, 1975 filed by Nazaria S. Hernandez(now deceased). Both parties are from Zamboanga City.

The allegations in the letter-complaint are:

Sometime in 1961, complainant’s husband abandoned her and her son,Luciano S. Hernandez, Jr. Shortly thereafter, her husband’s numerouscreditors demanded payments of his loans. Fearful that the variousmortgage contracts involving her properties will be foreclosed andaware of impending suits for sums of money against her, complainantengaged the legal services of Atty. Jose C. Go, herein respondent.

Respondent instilled in complainant a feeling of helplessness, fear,embarrassment, and social humiliation. He advised her to give him herland titles covering Lots 848-A, 849-Q, and 849-P at Zamboanga City so

he could sell them to enable her to pay her creditors. He thenpersuaded her to execute deeds of sale in his favor without anymonetary or valuable consideration. Complainant agreed on conditionthat he would sell the lots and from the proceeds pay her creditors.

Complainant also owned Lots 2118, 2139, and 1141-A, likewise locatedin Zamboanga City, which were mortgaged to her creditors. When themortgages fell due, respondent redeemed the lots. Again, he convinced

her to execute deeds of sale involving those lots in his favor. As a result,respondent became the registered owner of all the lots belonging tocomplainant.

Sometime in 1974, complainant came to know that respondent did notsell her lots as agreed upon. Instead, he paid her creditors with his ownfunds and had her land titles registered in his name, depriving her of herreal properties worth millions.1a\^/phi1.net

In our Resolution dated September 24, 1975, respondent was requiredto file his comment on the complaint.

Instead of filing his comment, respondent submitted a motion to dismiss

on the ground that the complaint is premature since there is pendingbefore the then Court of First Instance of Zamboanga City Civil CaseNo. 17812f or recovery of ownership and declaration of nullity of deeds ofsale filed by complainant against him involving the subject lots.

On November 14, 1975, we issued a Resolution denying respondent’smotion and requiring him to submit his answer.

In his answer dated December 19, 1975, respondent denied theallegations in the instant complaint. He averred that he sold, in goodfaith, complainant’s lots to various buyers, including himself, for valuableconsideration. On several occasions, he extended financial assistance

to complainant and even invited her to live with his family. His childrenused to call her "Lola" due to her frequent visits to his residence. Heprayed that the complaint be dismissed for failure to state a cause ofaction.

On January 17, 1977, we referred the case to the Office of the SolicitorGeneral (OSG) for investigation, report, and recommendation.

It was only on March 13, 1990 or after 13 years, 1 month and 26 daysthat the OSG filed a motion to refer the instant case to the IBP for theretaking of the testimonies of complainant’s witnesses and thesubmission of its report and recommendation.

On April 4, 1990, we issued a Resolution referring the case to the IBPfor investigation, report, and recommendation.

The Report and Recommendation dated June 15, 2004 of Atty. Lydia A.Navarro, Commissioner of the IBP Commission on Bar Discipline, isquoted as follows:

"A careful examination and evaluation of the evidence submitted by theparties showed that all the properties of the complainant are presentlyowned by the respondent by virtue of several deeds of sale executed bythe complainant in favor of the respondent without monetaryconsideration except Lot 849-D situated in Tomas Claudio which was

returned by the respondent to the complainant on September 5, 1974.

It is evident from the records that respondent was the one whonotarized the documents involving the said properties redeemed orrepurchased by the complainant from her creditors which ended up inrespondent’s name like in the deed of sale executed by Victoriano




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Dejerano in favor of Nazaria Hernandez over Lots 1141-A-3-A and1141-A-3-B; deed of sale executed by Antonio Masrahon on September3, 1961regarding Lot No. 1141-A; deed of absolute sale executed byFrancisco Esperat over the Curuan properties on November 9, 1971and the cancellation of the mortgage executed by Alfonso Enriquez onJuly 18, 1964 over the Tomas Claudio properties.

The foregoing legal activities and operations of the respondent in

addition to his having discussed, advised and gave solutions tocomplainant’s legal problems and liabilities to her creditors and even requested her creditors for extension of time to pay complainant’saccounts constitute practice of law as legal counsel for consultationaside from representing complainant in other cases; a mute proof of alawyer-client relations between them, a fact also admitted by therespondent.

It is incumbent upon the respondent to have rendered a detailed reportto the complainant on how he paid complainant’s creditors withoutselling her properties. Instead of selling to buyers at higher price, hepaid them out of his own funds; then later on admitted that he was oneof the purchasers of complainant’s properties in utter disregard of their

agreement and no evidence was submitted by the respondentconcerning the value of the said sale of complainant’s properties.

As such, respondent did not adhere faithfully and honestly in hisobligation and duty as complainant’s legal adviser and counsel when hetook advantage of the trust and confidence reposed in him by thecomplainant in ultimately putting complainant’s properties in his nameand possession in violation of Canon 17 of the Code of ProfessionalResponsibility.

WHEREFORE, in view of the foregoing, the undersigned respectfullyrecommends that respondent Atty. Jose C. Go be suspended from thepractice of law for a period of six (6) months from receipt hereof and the

IBP Chapter where he is a registered member be furnished a copy ofthe same for implementation hereof, subject to the approval of theHonorable Members of the Board of Governors."

On July 30, 2004, the IBP Board of Governors passed Resolution No.XVI-2004-39 adopting and approving the Report of CommissionerNavarro with modification in the sense that the recommended penalty ofsuspension from the practice of law was increased from six (6) monthsto three (3) years.

We sustain the Resolution of the IBP Board of Governors finding thatrespondent violated the Code of Professional

Responsibility.l^vvphi1.net However, we have to modify itsrecommended penalty.1a\^/phi1.net

Canon 16 of the Code of Professional Responsibility, the principalsource of ethical rules for lawyers in this jurisdiction, provides:

"A lawyer shall hold in trust all moneys and properties of his clientthat may come into his possession."

Respondent breached this Canon. His acts of acquiring for himselfcomplainant’s lots entrusted to him are, by any standard, actsconstituting gross misconduct, a grievous wrong, a forbidden act, adereliction in duty, willful in character, and implies a wrongful intent andnot mere error in judgment.3 Such conduct on the part of respondentdegrades not only himself but also the name and honor of the legalprofession. He violated this Court’s mandate that lawyers must at alltimes conduct themselves, especially in their dealing with their clientsand the public at large, with honesty and integrity in a manner beyondreproach.4

Canon 17 of the same Code states:

"A lawyer owes fidelity to the cause of his client and he shall bemindful of the trust and confidence reposed in him."

The records show that complainant reposed such high degree of trustand confidence in herein respondent, that when she engaged hisservices, she entrusted to him her land titles and allowed him to sell her

lots, believing that the proceeds thereof would be used to pay hercreditors. Respondent, however, abused her trust and confidence whenhe did not sell her properties to others but to himself and spent his ownmoney to pay her obligations. As correctly observed by InvestigatingIBP Commissioner Lydia Navarro, respondent is duty-bound to render adetailed report to the complainant on how much he sold the latter’s lotsand the amounts paid to her creditors. Obviously, had he sold the lots toother buyers, complainant could have earned more. Records show thatshe did not receive any amount from respondent. Clearly, respondentdid not adhere faithfully and honestly in his duty as complainant’scounsel.

Undoubtedly, respondent’s conduct has made him unfit to remain in the

legal profession. He has definitely fallen below the moral bar when heengaged in deceitful, dishonest, unlawful and grossly immoral acts. Wehave been exacting in our demand for integrity and good moralcharacter of members of the Bar. They are expected at all times touphold the integrity and dignity of the legal profession5 and refrain fromany act or omission which might lessen the trust and confidencereposed by the public in the fidelity, honesty, and integrity of the legalprofession.6Membership in the legal profession is a privilege.7 Andwhenever it is made to appear that an attorney is no longer worthy ofthe trust and confidence of his clients and the public, it becomes notonly the right but also the duty of this Court, which made him one of itsofficers and gave him the privilege of ministering within its Bar, towithdraw the privilege.8 Respondent, by his conduct, blemished not only

his integrity as a member of the Bar, but also the legal profession.

Public interest requires that an attorney should exert his best efforts andability to protect the interests of his clients. A lawyer who performs thatduty with diligence and candor not only protects his client’s cause; healso serves the ends of justice and does honor to the bar and helpsmaintain the respect of the community to the legal profession.

It is a time-honored rule that good moral character is not only acondition precedent to admission to the practice of law. Its continuedpossession is also essential for remaining in the legal profession.9

Section 27, Rule 138 of the Revised Rules of Court mandates that alawyer may be disbarred or suspended by this Court for any of thefollowing acts: (1) deceit; (2) malpractice; (3) gross misconduct inoffice; (4) grossly immoral conduct; (5) conviction of a crime involvingmoral turpitude; (6) violation of the lawyer’s oath; (7) willful disobedienceof any lawful order of a superior court; and (8) willfully appearing as anattorney for a party without authority to do so.10

In Rayos-Ombac vs. Rayos ,11 we ordered the disbarment of lawyerwhen he deceived his 85-year old aunt into entrusting him with all hermoney and later refused to return the same despite demand. In Navarrovs. Meneses III ,12 we disbarred a member of the Bar for his refusal orfailure to account for the P50,000.00 he received from a client to settle a

case. In Docena vs. Limson ,13 we expelled from the brotherhood oflawyers, an attorney who extorted money from his client through deceitand misrepresentation. In Busiños vs. Ricafort ,14 an attorney wasstripped of his license to practice law for misappropriating his client’smoney.
























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Considering the depravity of respondent’s offense, we find the penaltyrecommended by the IBP too light. It bears reiterating that a lawyer whotakes advantage of his client’s financial plight to acquire the latter’sproperties for his own benefit is destructive of the confidence of thepublic in the fidelity, honesty, and integrity of the legal profession. Thus,for violation of Canon 16 and Canon 17 of the Code of ProfessionalResponsibility, which constitutes gross misconduct, and consistent withthe need to maintain the high standards of the Bar and thus preservethe faith of the public in the legal profession, respondent deserves theultimate penalty, that of expulsion from the esteemed brotherhood oflawyers.

WHEREFORE, respondent JOSE S. GO is found guilty of grossmisconduct and is DISBARRED from the practice of law. His name isordered STRICKEN from the Roll of Attorneys EFFECTIVEIMMEDIATELY.

Let copies of this Decision be furnished the Bar Confidant, theIntegrated Bar of the Philippines and all courts throughout the country.

8.

A.C. No. 7181 February 6, 2009

MARIA ANGALAN, NENA ANGALAN, DIONICIO ANGALAN,MAGDALENA ANGALAN, FRANCISCA ANGALAN, INIS ANGALAN,ROSALINO ANGALAN, AND JOSEFINA ANGALAN, ALL OF WHOMARE HEIRS OF ANGALAN SAMAL married to SANAANSAMAL, Complainants,vs.ATTY. LEONIDO C. DELANTE, Respondent.

D E C I S I O N

PER CURIAM:

This is a complaint filed by Maria, Nena, Dionicio, Magdalena,Francisca, Inis, Rosalino, and Josefina Angalan (complainants) against Atty. Leonido C. Delante (respondent) for gross violation of the Code ofProfessional Responsibility.

Complainants are the heirs of Angalan Samal (Angalan) and SanaanSamal (Sanaan). Complainants allege that they are illiterate and belongto the Samal Tribe. Angalan, Sanaan, and complainants owned a 9.102-hectare parcel of land in Barrio San Jose, Kaputian, Island Garden City

of Samal, Davao del Norte. The property was covered by OriginalCertificate of Title (OCT) No. P-11499.1

On 15 April 1971, Angalan and complainants borrowed P15,000 fromNavarro R. Eustaquio and Arabella P. Eustaquio (Spouses Eustaquio).To secure the loan, Angalan and complainants mortgaged 8.102hectares of the 9.102-hectare property and surrendered OCT No. P-11499 to the Spouses Eustaquio. The Spouses Eustaquio prepared adocument2 and asked Angalan and complainants to sign it. Angalan andcomplainants affixed their thumb marks on the document.

When complainants tried to pay the loan and recover OCT No. P-11499from the Spouses Eustaquio, the Spouses Eustaquio refused.

Complainants learned that the document which the Spouses Eustaquioprepared, and which complainants signed, was a deed of absolute saleand not a real estate mortgage. They also learned that Navarro R.Eustaquio (Navarro) had transferred the title over the 8.102-property tohis name — OCT No. P-11499 was canceled and Transfer Certificate of

Title (TCT) No. T-99263 in the name of Navarro wasissued.1avvphi1.zw+

Complainants engaged the services of respondent for the purpose ofrecovering their property. In a receipt4 dated 18 November 1970,respondent acknowledged receipt of P1,200 from Francisca Angalanand her husband, Macario Capul (Capul), representing the full paymentof his professional fees: "Received from Mr. MACARIO CAPUL and

FRANCISCA RAFAEL CAPUL the sum of ONE THOUSAND TWOHUNDRED PESOS (P1,200.00) representing full payment ofprofessional services in regard to recovery of Original Certificate of TitleNo. P-11499 in the name of Angalan (Samal)."

Respondent filed a complaint5 dated 13 April 1976 with the then Courtof First Instance (CFI), now Regional Trial Court (RTC), Judicial RegionXVI, Tagum, Davao stating that:

2. x x x Angalan Samal and his children x x x are the original patenteesof a certain parcel of land, situated in Ombay, Samal, Davao, coveredunder Original Certificate of Title No. P-11499, of the Registry of Deedsof Davao, having acquired the same under HP-No. 65310, pursuant to

the provisions of the Homestead Laws of the Public Land Law (C.A.141);

3. x x x [O]n April 15, 1971, the herein original patentees x x x sold andconveyed said parcel of land covered by the aforesaid title to the hereindefendants for the sum of FIFTEEN THOUSAND PESOS (P15,000.00)x x x;

4. x x x [U]nder the provisions of the Public Land Law, particularlySection 119 thereof and even on the face of the title of said propertynow under the name of the defendants x x x the herein plaintiffs havethe right to repurchase said property within a period of five (5) yearsfrom the date of the conveyance;

x x x x

7. [A]s a matter of right under the law, the herein plaintiffs are entitled tothe produce of the property at least beginning April 8, 1976;

x x x x

9. [B]y reason of unwarranted refusal on the part of the defendants toreconvey the property to plaintiffs, the latter have been constrained toengage, and in fact have engaged, the services of counsel x x x6

Complainants and the Spouses Eustaquio entered into an amicablesettlement. In the amicable settlement7 dated 3 September 1977, theparties stated that:

1. x x x [T]he plaintiffs have offered to the defendant[s] thesum of P30,000.00 as repurchase price which the defendant[saccept];

2. x x x [U]pon the signing hereof, the plaintiffs shall pay thedefendant[s] the sum of P15,000.00 and for this purposehereby authorize the defendants to collect the same from theClerk of Court which amount had been deposited with this

Honorable Court; Likewise, upon signing hereof the Deed ofReconveyance shall be immediately executed and deliveredby the defendants to plaintiff[s];

3. x x x [W]hile the balance of P15,000.00 has not been paid,the defendant[s] shall continue to possess, and if necessary to

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gather the produce of the property, however, upon receipt ofthe defendant[s] of the balance of P15,000.00, saiddefendants together with [their] agent and/or worker, AlfredoRabadon shall clear the area and turnover the same withinfifteen (15) days from receipt [of] said balance.8

In a Decision9 dated 30 September 1977, the CFI approved theamicable settlement.

Complainants did not have the P30,000 repurchase price for theproperty. Respondent advanced the P30,000 and, in return,complainants allowed respondent to possess the property and gather itsproduce until he is paid. In a letter 10 dated 10 January 1979 andaddressed to the barrio captain of Umbay, Samal, Davao del Norte,respondent stated that:

This will inform you that the Heirs of Angalan Samal have alreadyredeemed their property through me from Mr. Navarro Eustaquio sinceSeptember, 1978. In my capacity as counsel of the Heirs of AngalanSamal and owner of the money in redeeming the property, I haveauthorized Mr. Macario Capol to take over the possession of the

property together with the harvesting of the matured coconuts.1avvphi1

When complainants tried to repay the P30,000 repurchase price andrecover the property from respondent, respondent refused.Complainants learned that respondent transferred the title of theproperty to his name — TCT No. T-9926 was canceled and TCT No. T-5793211 in the name of respondent was issued.

Complainants filed a complaint12 dated 30 April 2004 with the RTC,Judicial Region XI, Branch 34, Davao City praying that (1) the deed ofabsolute sale prepared by the Spouses Eustaquio and signed by thecomplainants be declared void, (2) TCT No. T-57932 be declared void,and (3) respondent be made to pay damages. The case was docketedas Civil Case No. 57-2004. In his answer 13 dated 29 December 2004,respondent stated that:

[In] 1971, ANGALAN (SAMAL) [now deceased) [sic] together with hisson-in-law, MACARIO CAPUL, the latter being the town mate of hereindefendant Delante in Danao, Cebu and who is married to the daughterof the late ANGALAN (SAMAL), came to herein defendant’s office andsought for an advice to borrow money;

x x x [T]he late ANGALAN (SAMAL) together with his children incompany with MACARIO CAPUL, were directed by herein defendant toinform him why it was necessary for them to borrow money and for

whatever [sic] purpose; after their story, herein defendant disagreed asto their justification in borrowing money which was for no other purposeexcept to have money on their own;

x x x x

It is preposterous for plaintiff[s] to claim that they had [sic] engaged theprofessional services of herein defendant to file an annulment casesince plaintiffs never came back apparently ashamed when they weredriven out, but worse they had [sic] never paid the herein defendant asingle centavo for purposes of filing an annulment case against co-defendant NAVARRO EUSTAQUIO;

x x x [T]he transfer of said property consisting of 8.102 hectares underthe name of herein defendants was not tainted with any deceit buteffected legally by virtue of a valid deed of sale executed by defendants’[sic] spouses EUSTAQUIO in favor of herein defendants.

x x x x

[T]he absolute deed of sale, [sic] dated 15 April 1971, executed byherein plaintiffs in favor of defendants EUSTAQUIO, speaks for itself. Itis a sale of real property and NOT a mortgage.

x x x x

Contrary to the malicious and untruthful claim of the plaintiffs, the legalservices of defendant Atty. LEONIDO DELANTE was never solicited bythem. Plaintiffs only asked defendant from where they could borrowmoney, and after knowing that they just simply would [sic] like to borrowmoney without any concrete investments in mind to repay [sic] back [sic]any loan, defendant Atty. LEONIDO DELANTE drove them out of hisoffice and told them to look for another person to help them;

Defendant Atty. LEONIDO DELANTE later learned from MACARIOCAPUL, who is a friend and a town mate, and who is the husband ofFRANCISCA ANGALAN CAPUL, that the plaintiffs had negotiated asale with a certain NAVARRO EUSTAQUIO x x x;

In September 1977, a former Filipino client of herein defendantDELANTE, who, and his family [sic] are now permanent residents ofNew York, was looking for a real property to build his retirement home,[sic] and he approached herein defendant, in which he was referred todefendant EUSTAQUIO [sic]; Upon visiting the property of defendantEUSTAQUIO, he was so impressed of the location of the property anddecided to buy the same, hence left the money to herein defendantDELANTE and to buy [sic] said property under defendant’s name, withthe understanding to turn over said property to him, as soon as he andhis family shall have returned to the country;

x x x [S]ince herein defendant is not interested over the said property as

his own, he waited for his client from New York to come home and toget his property but after 11 years, his client decided not to come backanymore to the Philippines, and directed herein defendant to registerthe Deed of Sale over the property to [sic] his name and directed hereindefendant to refund his client.14

Complainants filed a complaint15 dated 28 December 2005 with theCourt charging respondent with gross violation of the Code ofProfessional Responsibility. In a Resolution16 dated 3 July 2006, theCourt required respondent to comment on the complaint and, in aResolution17 dated 4 December 2006, the Court referred the case to theIntegrated Bar of the Philippines (IBP) for investigation, report andrecommendation.

In a Notice dated 14 March 2007, Commissioner Salvador B. Hababag(Commissioner Hababag) directed complainants and respondent toappear before the IBP for a mandatory conference. The parties failed toappear at the mandatory conference. In an Order dated 16 May 2007,Commissioner Hababag directed the parties to submit their positionpapers.

In a motion dated 4 April 2007 and filed with the RTC, respondent andcomplainants prayed that Civil Case No. 57-2004 be dismissed.Complainants filed with the Court a motion to withdraw the complaint fordisbarment dated 4 April 2007 and an affidavit of desistance dated April2007.

In his position paper dated 2 July 2007, respondent stated that (1) Angalan and Capul went to his office in 1971 to seek advice aboutborrowing money; (2) his client from New York bought the property from












































the Spouses Eustaquio; and (3) complainants executed a motion towithdraw the complaint for disbarment and an affidavit of desistance.

In a Report dated 15 October 2007, Commissioner Hababag found thatrespondent violated the Code of Professional Responsibility:

The issue to resolve is whether or not respondent committed graveviolation of [the] Code of Professional Responsibility when he bought

the property of his client[s] without their knowledge, consent and againsttheir will?

Weighing evidence presented by both parties, respondent should bepunished for his unprofessional and distasteful acts.

x x x x

His vain attempt to salvage his malicious acts was too flimsy togain belief and acceptance. It is unbelievable that a buyer wouldentrust his money intended for payment of a property but allowedthat said property be registered under the name of another,specifically his lawyer, simply runs counter to ordinary humannature. (Emphasis supplied)

Commissioner Hababag recommended that respondent be suspendedfrom the practice of law for six months.

In a Resolution dated 22 November 2007, the IBP Board of Governors(Board) adopted and approved the Report with modification. The Boardincreased respondent’s suspension from six months to one year.

Pursuant to Section 12(b), Rule 139-B of the Rules of Court ,18 the Boardforwarded the case to the Court for final action.

The Court sustains the findings of the IBP.

Complainants and respondent presented two different sets of facts. According to complainants, they engaged the services of respondent forthe purpose of recovering their property from the Spouses Eustaquio. Inviolation of the trust and confidence they reposed in him, respondenttransferred the title over the property to his name. According torespondent, complainants did not engage his services. His client fromNew York was the one who bought the property from the SpousesEustaquio.

After a careful review of the records, the Court gives credence to

complainants’ version of the facts.

Respondent’s credibility is highly questionable. In his answer dated 29December 2004 and filed with the CFI and in his position paper dated 2July 2007 and filed with the IBP, respondent alleged that Angalan andCapul went to his office in 1971 to seek advice about borrowing money. According to respondent, complainants did not engage his services. Inhis answer, respondent stated that:

It is preposterous for [complainants] to claim that theyhad [sic] engaged the professional services of herein defendant tofile an annulment case since [complainants] never came backapparently ashamed when they were driven out x x x;

x x x x

Contrary to the malicious and untruthful claim of [complainants],the legal services of defendant Atty. LEONIDO DELANTE was

never solicited by them. Plaintiffs only asked defendant fromwhere they could borrow money, and after knowing that they justsimply would like to borrow money without any concrete investments inmind to repay back [sic] any loan, defendant Atty. LEONIDO DELANTEdrove them out of his office and told them to look for another person tohelp them;

Defendant Atty. LEONIDO DELANTE later learned from MACARIO

CAPUL x x x that the plaintiffs had negotiated a sale with a certainNAVARRO EUSTAQUIO.19 (Emphasis supplied)

The Court is not impressed. Angalan and complainants went torespondent’s office not to seek advice about borrowing money but toengage his services for the purpose of recovering their property. This isobvious. First, after Angalan and complainants went to respondent’soffice, respondent filed a complaint with the CFI praying that theSpouses Eustaquio reconvey the property to Angalan andcomplainants. Second, in the complaint, respondent stated that, "byreason of unwarranted refusal on the part of the defendants to reconveythe property to plaintiffs,the latter have been constrained to engage,and in fact have engaged, the services of counsel." Third,

respondent issued a receipt to complainants stating that he " RECEIVEDfrom Mr. MACARIO CAPUL and FRANCISCA RAFAEL CAPUL thesum of ONE THOUSAND TWO HUNDRED PESOS (P1,200.00)representing full payment of professional services in regard to therecovery of Original Certificate of Title No. P-11499 in the name ofAngalan (Samal)." Fourth, in respondent’s letter dated 10 January1979 and addressed to the barrio captain of Umbay, Samal, Davao delNorte, he stated that he was the lawyer of complainants:

This will inform you that the Heirs of Angalan Samal have alreadyredeemed their property through me from Mr. Navarro Eustaquio sinceSeptember, 1978. In my capacity as counsel of the Heirs of AngalanSamal and owner of the money in redeeming the property, I have

authorized Mr. Macario Capol to take over the possession of theproperty together with the harvesting of the matured coconuts.20

These clearly show that complainants engaged the services ofrespondent.

In his answer, respondent alleged that complainants did not pay him hisprofessional fees (which, according to him, they did not engage). Hestated that, "[complainants] had never paid the herein defendant asingle centavo for purposes of filing an annulment case against x x xNAVARRO EUSTAQUIO."

The Court is not impressed. Complainants fully paid respondent hisprofessional fees. This is obvious. In a receipt dated 18 November1970, respondent stated that he "RECEIVED from Mr. MACARIOCAPUL and FRANCISCA RAFAEL CAPUL the sum of ONETHOUSAND TWO HUNDRED PESOS (P1,200.00) representing fullpayment of professional services in regard to the recovery of OriginalCertificate of Title No. P-11499 in the name of Angalan (Samal)." Thisclearly shows that complainants paid respondent his professional fees.

In his answer and position paper, respondent alleged that his client fromNew York bought the property from the Spouses Eustaquio:

[I]n September 1977, a former Filipino client of herein respondent, who,

and his family [sic] are now permanent residents of New York, waslooking for a real property to build his retirement home, and heapproached herein respondent, in which [sic] he was referred toNavarro Eustaquio; and upon visiting the property of Navarro Eustaquio,he was impressed of [sic] the location of the property and decided tobuy the same, hence left the money to herein respondent and to buy
















[sic] said property under respondent’s name, with the understanding toturn over said property to him, as soon as he and his family shall havereturned to the country;

x x x [S]ince herein respondent was not interested over the saidproperty as his own, he waited for his client from New York to comehome and to get his property but after 11 years, his client decided not tocome back anymore to the Philippines, and directed herein respondent

to register the Deed of Sale over the property under his name anddirected herein respondent to refund his client.21

The Court is not impressed. Complainants repurchased the propertyfrom the Spouses Eustaquio. This is obvious. First, complainants andthe Spouses Eustaquio entered into an amicable settlement stating thatcomplainants would repurchase the property from the SpousesEustaquio:

1. x x x [T]he plaintiffs have offered to the defendant[s] the sumof P30,000.00 as repurchase price which the defendant[saccept];

2. x x x [U]pon the signing hereof, the plaintiffs shall pay thedefendant[s] the sum of P15,000.00 and for this purpose herebyauthorize the defendants to collect the same from the Clerk of Courtwhich amount had been deposited with this Honorable Court;Likewise, upon signing hereof the Deed of Reconveyance shall beimmediately executed and delivered by the defendants to plaintiff[s];

3. x x x [W]hile the balance of P15,000.00 has not been paid, thedefendant[s] shall continue to possess, and if necessary to gatherthe produce of the property, however, upon receipt of thedefendant[s] of the balance of P15,000.00, said defendants togetherwith [their] agent and/or worker, Alfredo Rabadon shall clear thearea and turnover the same within fifteen (15) days from receipt [of]said balance.22 (Emphasis supplied)

Second, in his letter to the barrio captain, respondent stated thatcomplainants repurchased the property from the Spouses Eustaquio:

This will inform you that the Heirs of Angalan Samal have alreadyredeemed their property through me from Mr. NavarroEustaquio since September, 1978. In my capacity as counsel of theHeirs of Angalan Samal and owner of the money in redeeming theproperty, I have authorized Mr. Macario Capol to take over thepossession of the property together with the harvesting of the maturedcoconuts.23 (Emphasis supplied)

These clearly show that complainants repurchased the property fromthe Spouses Eustaquio.

Respondent’s story about the client from New York is unbelievable.Respondent did not give any detail or proof to substantiate his story — the name of the alleged client, an affidavit of the alleged client, the oldpassport of the alleged client showing immigration stamps, or any formof correspondence between him and the alleged client. The Courtagrees with the observation of Commissioner Hababag thatrespondent’s "vain attempt to salvage his malicious acts [is] too flimsy togain belief and acceptance."

In his position paper, respondent alleged that complainants executed amotion to withdraw the complaint for disbarment and an affidavit ofdesistance. This is immaterial. Section 5, Rule 139-B of the Rules ofCourt states that, "No investigation shall be interrupted orterminated by reason of the desistance settlement compromise

restitution, withdrawal of charges, or failure of the complainant toprosecute the same."

Respondent violated Canons 16 and 17 of the Code of ProfessionalResponsibility. Canon 16 states that lawyers shall hold in trust allproperties of their clients that may come into their possession.Respondent should have held in trust TCT No. T-9926 and returned theproperty to complainants upon demand.24 Instead of holding in trust the

property of complainants, respondent (1) transferred the title of theproperty to his name, (2) refused to return the property to complainants,and (3) referred to complainants’ charges as malicious and untruthful.

Canon 17 states that lawyers shall be mindful of the trust andconfidence reposed in them. Respondent should have been mindfulof the trust and confidence complainants reposed in him. Complainantsallege that they are illiterate and that the Spouses Eustaquio tookadvantage of them. Complainants engaged the services of respondentin the hope that he would help them recover their property. Instead ofprotecting the interests of complainants, respondent took advantage ofcomplainants and transferred the title of the property to his name.

Considering the depravity of respondent’s offense, the Court finds therecommended penalty too light. Violation of Canons 16 and 17constitutes gross misconduct.25 Section 27, Rule 138 of the Rules ofCourt states that a member of the bar may be disbarred or suspendedfrom his office as attorney by the Court for gross misconduct.In Hernandez v. Go,26 the Court disbarred a lawyer for transferring thetitles over the properties of his client to his name without the knowledgeof his client. In Hernandez , the Court held that:

Considering the depravity of respondent’s offense, we find the penaltyrecommended by the IBP too light. It bears reiterating that a lawyer whotakes advantage of his client’s financial plight to acquire the latter’sproperties for his own benefit is destructive of the confidence of the

public in the fidelity, honesty, and integrity of the legal profession. Thus,for violation of Canon 16 and Canon 17 of the Code of ProfessionalResponsibility, which constitutes gross misconduct, and consistent withthe need to maintain the high standards of the Bar and thus preservethe faith of the public in the legal profession, respondent deserves theultimate penalty, that of expulsion from the esteemed brotherhood oflawyers.27

A person who takes the 8.102-hectare property of his illiterate clientsand who is incapable of telling the truth is unfit to be a lawyer.

WHEREFORE, the Court finds Atty. Leonido C. Delante GUILTY of

violating Canons 16 and 17 of the Code of Professional Responsibility. Accordingly, the Court DISBARS him from the practice of lawand ORDERS that his name be stricken from the Roll of Attorneys.

Let copies of this Decision be furnished the Office of the Bar Confidant, theIntegrated Bar of the Philippines, and all courts all over the country. Let a copyof this Decision likewise be attached to the personal records of respondent.





























ethics canon 16 and 17

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