Canon 15 - Illustrative Cases

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Compiled by: | TINA SIUAGAN

1 LEGAL ETHICS – ASSIGNED CASE READINGS

CANON 15

Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

A.C. No. 6711 July 3, 2007

MA. LUISA HADJULA, complainant,

vs.

ATTY. ROCELES F. MADIANDA, respondent.

D E C I S I O N

GARCIA, J.:

Under consideration is Resolution No. XVI-2004-472 of the Board

of Governors, Integrated Bar of the Philippines (IBP), relative to

the complaint for disbarment filed by herein complainant Ma.

Luisa Hadjula against respondent Atty. Roceles F. Madianda.

The case started when, in an AFFIDAVIT-COMPLAINT 1

bearingdate September 7, 2002 and filed with the IBP Commission on Bar

Discipline, complainant charged Atty. Roceles F. Madianda

with violation of Article 2092 of the Revised Penal Code and Canon

Nos. 15.02 and 21.02 of the Code of Professional Responsibility.

In said affidavit-complaint, complainant alleged that she and

respondent used to be friends as they both worked at the Bureau

of Fire Protection (BFP) whereat respondent was the Chief Legal

Officer while she was the Chief Nurse of the Medical, Dental and

Nursing Services. Complainant claimed that, sometime in 1998,

she approached respondent for some legal advice. Complainant

further alleged that, in the course of their conversation which wassupposed to be kept confidential, she disclosed personal secrets

and produced copies of a marriage contract, a birth certificate and

a baptismal certificate, only to be informed later by the

respondent that she (respondent) would refer the matter to a

lawyer friend. It was malicious, so complainant states, of

respondent to have refused handling her case only after she had

already heard her secrets.

Continuing, complainant averred that her friendship withrespondent soured after her filing, in the later part of 2000,

of criminal and disciplinary actions against the latter. What, per

complainant's account, precipitated the filing was when

respondent, then a member of the BFP promotion board,

demanded a cellular phone in exchange for the complainant's

promotion.

According to complainant, respondent, in retaliation to the filing of

the aforesaid actions, filed a COUNTER COMPLAINT3 with the

Ombudsman charging her (complainant) with violation of Section3(a) of Republic Act No. 3019,4 falsification of public

documents and immorality, the last two charges being based on

the disclosures complainant earlier made to respondent. And also

on the basis of the same disclosures, complainant further stated,

a disciplinary case was also instituted against her before the

Professional Regulation Commission.

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Complainant seeks the suspension and/or disbarment of

respondent for the latter's act of disclosing personalsecrets and

confidential information she revealed in the course of seeking

respondent's legal advice.

In an order dated October 2, 2002, the IBP Commission on Bar

Discipline required respondent to file her answer to the complaint.

In her answer, styled as COUNTER-

AFFIDAVIT,5 respondent denied giving legal advice to the

complainant and dismissed any suggestion about the existence of

a lawyer-client relationship between them. Respondent also stated

the observation that the supposed confidential data and sensitive

documents adverted to are in fact matters of common knowledge

in the BFP. The relevant portions of the answer read:

5. I specifically deny the allegation of F/SUPT. MA. LUISA C.

HADJULA in paragraph 4 of her AFFIDAVIT-COMPLAINT for

reason that she never WAS MY CLIENT nor we ever had any

LAWYER-CLIENT RELATIONSHIP that ever existed ever since and

that never obtained any legal advice from me regarding her

PERSONAL PROBLEMS or PERSONAL SECRETS. She l ikewise never

delivered to me legal documents much more told me some

confidential information or secrets. That is because I neverentertain LEGAL QUERIES or CONSULTATION regarding

PERSONAL MATTERS since I know as a LAWYER of the Bureau of

Fire Protection that I am not allowed to privately practice law and

it might also result to CONFLICT OF INTEREST. As a matter of

fact, whenever there will be PERSONAL MATTERS referred to me,

I just referred them to private law practitioners and never

entertain the same, NOR listen to their stories or examine or

accept any document.

9. I specifically deny the allegation of F/SUPT. MA. LUISA C.

HADJULA in paragraph 8 of her AFFIDAVIT-COMPLAINT, the truthof the matter is that her ILLICIT RELATIONSHIP and her illegal

and unlawful activities are known in the Bureau of Fire Protection

since she also filed CHILD SUPPORT case against her lover …

where she has a child ….

Moreover, the alleged DOCUMENTS she purportedly have shown

to me sometime in 1998, are all part of public records ….

Furthermore, F/SUPT. MA. LUISA C. HADJULA, is filing the instant

case just to get even with me or to force me to settle andwithdraw the CASES I FILED AGAINST HER since she knows that

she will certainly be DISMISSED FROM SERVICE, REMOVED FROM

THE PRC ROLL and CRIMINALLY CONVICTED of her ILLICIT,

IMMORAL, ILLEGAL and UNLAWFUL ACTS.

On October 7, 2004, the Investigating Commissioner of the IBP

Commission on Bar Discipline came out with aReport and

Recommendation , stating that the information related by

complainant to the respondent is "protected under the attorney-

client privilege communication." Prescinding from this postulate,

the Investigating Commissioner found the respondent to have

violated legal ethics when she "[revealed] information given to her

during a legal consultation," and accordingly recommended that

respondent be reprimanded therefor, thus:









WHEREFORE, premises considered, it is respectfully

recommended that respondent Atty. Roceles Madianda be

reprimanded for revealing the secrets of the complainant.

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

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and

APPROVED, the Report and Recommendation of the Investigating

Commissioner of the above-entitled case, herein made part of this

Resolution as Annex "A"; and , finding the recommendation fully

supported by the evidence on record and the applicable laws and

rules, and considering the actuation of revealing information given

to respondent during a legal consultation, Atty. Roceles Madianda

is hereby REPRIMANDED.

We AGREE with the recommendation and the premises holding it

together.

As it were, complainant went to respondent, a lawyer who

incidentally was also then a friend, to bare what she considered

personal secrets and sensitive documents for the purpose of

obtaining legal advice and assistance. The moment complainant

approached the then receptive respondent to seek legal advice, a

veritable lawyer-client relationship evolved between the two. Such

relationship imposes upon the lawyer certain restrictions

circumscribed by the ethics of the profession. Among the burdens

of the relationship is that which enjoins the lawyer, respondent in

this instance, to keep inviolate confidential information acquired or

revealed during legal consultations. The fact that one is, at the

end of the day, not inclined to handle the client's case is hardly of

consequence. Of little moment, too, is the fact that no formal

professional engagement follows the consultation. Nor will it make

any difference that no contract whatsoever was executed by the

parties to memorialize the relationship. As we said inBurbe v.

Magulta ,6 -

A lawyer-client relationship was established from the very first

moment complainant asked respondent for legal advise regarding

the former's business. To constitute professional employment, it is

not essential that the client employed the attorney professionally

on any previous occasion.

It is not necessary that any retainer be paid, promised, or

charged; neither is it material that the attorney consulted did not

afterward handle the case for which his service had been sought.

It a person, in respect to business affairs or troubles of any kind,

consults a lawyer with a view to obtaining professional advice or

assistance, and the attorney voluntarily permits or acquiesces with

the consultation, then the professional employments is

established.

Likewise, a lawyer-client relationship exists notwithstanding the

close personal relationship between the lawyer and the

complainant or the non-payment of the former's fees.

Dean Wigmore lists the essential factors to establish the existence

of the attorney-client privilege communication, viz:

(1) Where legal advice of any kind is sought (2) from a

professional legal adviser in his capacity as such, (3) the









communications relating to that purpose, (4) made in confidence

(5) by the client, (6) are at his instance permanently protected (7)

from disclosure by himself or by the legal advisor, (8) except the

protection be waived.7

With the view we take of this case, respondent indeed breached

his duty of preserving the confidence of a client. As found by the

IBP Investigating Commissioner, the documents shown and the

information revealed in confidence to the respondent in the

course of the legal consultation in question, were used as bases in

the criminal and administrative complaints lodged against the

complainant.

The purpose of the rule of confidentiality is actually to protect the

client from possible breach of confidence as a result of aconsultation with a lawyer.

The seriousness of the respondent's offense notwithstanding, the

Court feels that there is room for compassion, absent compelling

evidence that the respondent acted with ill-will. Without meaning

to condone the error of respondent's ways, what at bottom is

before the Court is two former friends becoming bitter enemies

and filing charges and counter-charges against each other using

whatever convenient tools and data were readily available.Unfortunately, the personal information respondent gathered from

her conversation with complainant became handy in her quest to

even the score. At the end of the day, it appears clear to us that

respondent was actuated by the urge to retaliate without perhaps

realizing that, in the process of giving vent to a negative

sentiment, she was violating the rule on confidentiality.

IN VIEW WHEREOF, respondent Atty. Roceles F. Madianda is

hereby REPRIMANDED and admonished to be circumspect in

her handling of information acquired as a result of a lawyer-client

relationship. She is alsoSTERNLY WARNED against a repetition

of the same or similar act complained of.

SO ORDERED.

Puno, (Chief Justice), Corona, Azcuna, Garcia, JJ., concur.

Sandoval-Gutierrez,J., on leave.










SUPREME COURT

Manila

THIRD DIVISION

A.C. No. 6591 May 4, 2005

MARISSA L. MACARILAY, complainant,

vs.

FELIX B. SERIÑA, respondent.

D E C I S I O N

PANGANIBAN, J.:

Failure to render the legal services agreed upon, despite the

undisputed receipt of an acceptance fee, is a clear violation of the

Code of Professional Responsibility. Negligence in attending to the

needs of a client and a deceitful cover-up of such carelessness

likewise constitute major breaches of the lawyer's oath.

The Case

Before us is a verified Complaint1 for "malpractice and/or gross

misconduct" against Atty. Felix B. Seriña, filed by Marissa L.

Macarilay with the Integrated Bar of the Philippines Commission

on Bar Discipline (IBP-CBD) on September 22, 2003.

The IBP-CBD, through Director Rogelio A. Vinluan, required

respondent to answer the charges.2 It thereafter held a

mandatory conference/hearing on January 13, 2004, during which

the parties were able to enter into a stipulation of facts as well as

to present and mark their documentary evidence.3 After they

submitted their respective Position Papers,4 the case was deemed

submitted for resolution.

The investigator of the case, Commissioner Leland R. Villadolid Jr.,

summarized the antecedents thus:

"Complainant's version of the facts pertinent to this case is as

follows:

"Sometime in year 2000, Complainant and one Jenelyn Balaoro

('Balaoro') bought a lot from one Albaria Mohammad

('Mohammad'). Complainant and Balaoro, however, could notregister the sale with the Register of Deeds and cause the transfer

of the title in their names because Mohammad failed

to surrender the owner's duplicate certificate of title for said lot.

Subsequently, Complainant learned from one Reina Ong ('Ong')

that Mohammad had mortgaged the said lot to a third party. Ong

advised Complainant to get a copy of the mortgage contract and

to do this the latter needs to have a contact in the Register of

Deeds. Sometime in January or February 2002, Ong introduced

Complainant to one Vic Paule ('Paule'), an employee of theRegister of Deeds of Quezon City, who advised Complainant to get

a lawyer to handle the case. Complainant allegedly gave

Paule P8,000.00 for the help the latter will give her in securing a

copy of the mortgage contract concerned. On March 18, 2002,

Complainant, Balaoro and Ong met with Paule at theStar Mall in

Mandaluyong and proceeded to the office of Respondent, the

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lawyer recommended by Paule. During said meeting, Complainant

consulted Respondent about the problem concerning the transfer

of the subject lot title in her and Balaoro's names and the latter

advised that the first thing [they have to do], is to file an adverse

claim with the Register of Deeds. Respondent, however, requiredan acceptance fee ofP20,000.00 before he could act on the

matter. Thus, on the same day, Complainant issued a check to

Respondent for P20,000.00 as payment of the acceptance fee.

Subsequently, Respondent asked Complainant for P3,000.00 as

notarization fee and P5,000.00 as filing fee for the adverse claim.

On April 5, 2002, Complainant and Balaoro went to Respondent's

office and paid said amounts. On the same day, Respondent

himself typed the affidavit of adverse claim in the presence of

Complainant and Balaoro and the latter subsequently signed thesame. On May 16, 2002, upon Respondent's advice, Complainant

gave Respondent another P20,000.00 in check as filing fee for the

suits to be filed against Mohammad.

"Towards the middle part of the year, Complainant inquired from

Respondent about the status of the case(s) against Mohammad

but the latter could not give any further developments other than

that the affidavit of adverse claim had already been filed with the

Register of Deeds. It appears that Respondent was having

problems about the fact that Mohammad's whereabouts are

unknown and Respondent was not sure what to do about it.

Subsequently, Complainant received assurance from Respondent

that the case against Mohammad was already filed in court

although Respondent could not identify the particular court except

that it was pending in the sala of one Judge Regala. Upon

verification with the courts and the fiscal'soffice [at] Quezon City,

Complainant learned that no case, whether criminal or civil, was

ever filed by Respondent against Mohammad. Complainant then

called Respondent regarding her findings and even suggested

service of summons by publication upon Mohammad, having

receiv[ed] advice from one Atty. Noel Sorreda ('Atty. Sorreda')that such manner of service is appropriate in view of the lack of

information regarding Mohammad's whereabouts. Respondent,

however, immediately got angry so Complainant did not insist on

her inquiries and suggestions.

"On March 24, 2003, upon Complainant's request, Atty. Sorreda

called Respondent to inquire about the specific branch where the

case against Mohammad was supposedly pending. Respondent

got angry and hung up the phone. Upon learning this,

Complainant authorized Atty. Sorreda to terminate the services of

Respondent on her behalf. Atty. Sorreda called Respondent a

second time but was able to talk only with presumably

Respondent's lady-receptionist or secretary whom Atty. Sorreda

requested to just relay to Respondent his message regarding the

termination of Respondent's services. On March 26, 2003, Atty.

Sorreda, upon Complainant's request, sent a letter to Respondent

confirming the verbal termination of services, and also asking for

the turnover of the pertinent documents that were with

Respondent. Subsequently, Complainant herself wrote

Respondent a letter affirming the contents of the earlier letter of

Atty. Sorreda. In a letter dated April 4, 2003, Respondent denied

the fact of his termination by Atty. Sorreda and invited

Complainant to his office to talk things over. Complainant

responded through Atty. Sorreda in a letter dated May 16, 2003

by reiterating the termination of Respondent's services and the





request for the turnover of documents. In a letter dated May 23,

2003, Respondent enclosed the documents requested. Since it

appears from the documents turned over that Respondent never

filed a suit against Mohammad, Complainant wrote Respondent

demanding the return of the money she paid for the anticipatedlegal services Respondent was supposed to render but which were

not actually rendered. Respondent's failure to respond to said

letter prompted Complainant [to] send a follow-up letter dated

July 16, 2003. Instead of returning the money, Respondent wrote

Complainant a letter dated July 14, 2003 denying receipt of any

amount from Complainant other than the P20,000.00 acceptance

fee and demanding payment of alleged unpaid attorney's fee

of P40,000 and fees for notarial services of P3,000.00 which

Respondent allegedly advanced for Complainant. Thus,Complainant filed the present administrative case for disciplinary

action, likewise praying for the return of the money she paid for

the anticipated legal services Respondent was supposed to render

but which were not actually rendered.

"On the other hand, Respondent's version of the facts pertinent to

this case is as follows:

"On March 16, 2002, Complainant, Balaoro and Ong went to

Respondent's office during which Complainant related toRespondent her various problems and cases. Respondent advised

Complainant that the solutions to her problem regarding

Mohammad consist of two (2) phases. The first phase consists of:

(1) having the notary public of the deed covering the sale of the

subject property sign the acknowledgment page (since although

the said deed contained the notarial seal of said notary, the latter

did not sign the same); (2) preparing a complaint in court to

compel Mohammad to surrender the owner's certificate of title;

and (3) executing an affidavit of adverse claim to cause its

inscription on the copy of the said title in the Registry of Deeds to

protect their interest. The second [phase] consists of: (1) filingthe complaint in court to compel Mohammad to surrender the

owner's duplicate certificate of title, to cause the cancellation of

said title and the issuance of another title in the names of

Complainant and Balaoro, and to cause the removal from said title

of the mortgage lien thereon in favor of Hernando and Nenita

Rosario; and (2) filing of a criminal complaint for estafa against

Mohammad. On the same day, Complainant engaged Respondent

to provide the legal services to pursue the foregoing remedies.

The parties' verbal agreement with respect to Respondent's fees isas follows: (1) payment of acceptance fee of P20,000.00; (2)

payment of attorney's fees of P15,000 after Respondent has

accomplished the first [phase] of the remedies; (3) payment of

attorney's fees of P15,000 after Respondent has accomplished the

second [phase] of the remedies; and (4) for hearings/follow-ups,

payment of per appearance fee of P3,000.00. Complainant paid

the acceptance fee by issuing Respondent a check dated March

18, 2002 covering P20,000.00.

"Thereafter, Respondent caused the notary public whose seal

appeared on the deed covering the sale of the subject property to

sign the acknowledgment page thereof, advancing the notarial fee

of P3,000.00 which Complainant failed to pay for which reason

said notary did not sign said deed. On April 5, 2002, Complainant

and Balaoro went to his office and signed the affidavit of adverse

claim, which Respondent prepared. On the same date,





Respondent requested Complainant and Balaoro to sign the civil

complaint and criminal complaint against Mohammad which

Respondent prepared but Complainant and Balaoro refused to

sign because according to the latter two the residence of

Mohammad in said complaints is already wrong sinceMohammad's whereabouts are already unknown. Complainant and

Balaoro promised to locate Mohammad's whereabouts and asked

Respondent to wait for such data. Thereafter, Respondent even

advised Complainant and Balaoro to locate Mohammad because

resorting to the remedy of complaint and summons by publication

is very expensive and should be resorted to only as a last

recourse. Respondent adds that even as late as January 8, 2003,

the civil and criminal complaints could not be filed because

Complainant herself wanted Respondent to amend the pleadingsby including an additional defendant or respondent and increasing

the claim, for damages.

"Respondent further claims that he also extensively gave legal

advise to Complainant with respect to the following matters: (1)

Complainant's litigation against spouses Casido to recover her

10% retention in architect's fee; (2) collection of P800,000.00

indebtedness of one Mrs. Dizon; and (3) recovery of

Complainant's investments in her 2001 and 2002 car transactions.

"Claiming that Complainant did not pay him any amount other

than the P20,000.00 acceptance fee, Respondent argues that

Complainant still owes him the following amounts: (1)

the P3,000.00 he paid to the notary public to sign the

acknowledgment page of the deed covering the sale of the

subject property; (2) theP200 he spent in the notarization,

registration and inscription of the affidavit of adverse claim; (3)

theP15,000.00 attorney's fees agreed upon for accomplishing the

first [phase] of Complainant's remedies relative to her problem

with Mohammad; and (4) an additional P40,000.00 for the legal

services he rendered with respect to Complainant's otherproblems. Respondent further claims that Complainant should pay

him the costs relative to the filing of this administrative case."5

Report of the Investigating Commissioner

In the investigating commissioner's opinion, respondent had been

remiss in attending to the cause of his client, inviolation of Rules

18.03 and 18.04 of the Code of Professional Responsibility.

Regarded as a mere afterthought was his defense that his failure

to file the civil and the criminal complaints was the fault ofcomplainant. It was noted that if she was indeed responsible for

the non-filing of the complaints, he should have pointed out this

fault at the earliest opportunity, which was in his April 4, 2003

letter. The commissioner further opined that this defense had

been invoked only in respondent's letter dated July 14, 2003, after

complainant demanded the return of the amounts she had paid.

While likewise rejecting respondent's claim for unpaid legal fees

amounting to P15,000, the commissioner upheld Balaoro's sworntestimony. It corroborated that of complainant, who had said that

the only agreement between her and respondent was the

acceptance fee of P20,000. His claim of P40,000 as consultation

fee for the advice he had allegedly given her concerning other

legal problems was also rejected for lack of evidence.









Commissioner Villadolid then wrote the following

recommendation:

"x x x [T]his Commissioner finds that Respondent violated Canons

17 and 18 of the CPR and recommends a penalty of reprimand orsuspension subject to the discretion of the Commission.

Further, considering that it is established from the records that

Respondent received a total of P48,000.00 from Complainant and

that the only legal service rendered by Respondent consists of the

notarization of the deed of sale covering the subject property and

the filing of the adverse claim, this Commissioner believes

that P8,000.00 is sufficient compensation for the services actually

rendered and thus recommends that Respondent be ordered to

pay Complainant P40,000.00 by way of restitution toComplainant."6

Acting on the above recommendation, the IBP board of governors

approved on July 30, 2004, the following Resolution:

"RESOLUTION NO. XVI-2004-386

CBD Case No. 03-1141

Marissa L. Macarilay vs.

Atty. Felix B. Seriña


APPROVED, with modification, the Report and

Recommendation of the Investigating Commissioner of the above-

entitled case, herein made part of this Resolution as Annex 'A';

and, finding the recommendation fully supported by the evidence

on record and the applicable laws and rules, and for respondent's

violation of Canons 17 and 18 of the Code of Professional

Responsibility by his failure to exercise due diligence in protecting

and attending to the interest of complainant after receiving

payment for the legal services he was supposed to render, Atty.

Felix B. Seriña is hereby SUSPENDED from the practice of lawfor six (6) months and Ordered to Pay complainant P40,000.00 by

way of Restitution."7

The Court's Ruling

We agree with the foregoing Resolution of the IBP board of

governors.

Administrative Liability

A lawyer-client relationship is highly fiduciary in nature;8 it is

delicate, exacting and confidential.9 It requires a high standard of

conduct and demands utmost fidelity, candor, fairness, and good

faith.10 The legal profession demands vigilance and attention

expected of a "good father of a family."11 Lawyers should adopt

the norm expected of people of good intentions. In brief, they

must always be protective of the interests of their clients as good

parents would be protective of their own families.12

Indeed, under their sacred oath, lawyers pledge not to delay anyperson for money or malice. They are bound to conduct

themselves according to the best of their knowledge and

discretion, with all good fidelity to their clients.13

These duties are further stressed in the Code of Professional

Responsibility, specifically in the following pertinent provisions:





































"CANON 15 – A lawyer shall observe candor, fairness and loyalty

in all his dealings and transactions with his clients.

"CANON 16 – A lawyer shall hold in trust all moneys and

properties of his client that may come into his possession.

x x x x x x x x x

"Rule 16.03 – A lawyer shall deliver the funds and property of his

client when due or upon demand. x x x.

"CANON 17 – A lawyer owes fidelity to the cause of his client and

he shall be mindful of the trust and confidence reposed in him.

"CANON 18 – A lawyer shall serve his client with competence and

diligence.

x x x x x x x x x

"Rule 18.03 – A lawyer shall not neglect a legal matter entrusted

to him and his negligence in connection therewith shall render him

liable.

"Rule 18.04 – A lawyer shall keep the client informed of the status

of his case and shall respond within a reasonable time to the

client's request for information."

Admittedly, respondent received the amount of P20,000 as

acceptance fee for the cases he had agreed to file on behalf of

complainant. Plainly, he was less than candid in his dealings with

his client; he displayed lack of honesty and fidelity to her cause.

Sufficiently established were the following acts: (1) despite his

receipt on May 16, 2002, of P20,000 for filing fees, he did not file

the cases he had agreed to handle; (2) he deceived complainant

when he lied by saying that a civil complaint had been filed in the

sala of one "Judge Regala" of the Regional Trial Court of Quezon

City; (3) respondent refused to return the money he had receivedfor the filing fees. These misrepresentations, lies and lapses

constituted a breach of his sworn duty as a lawyer and of the

ethical standards he was required to honor and observe.

Lawyers owe full devotion to the protection of the interests of

their clients, as well as warmth and zeal in the defense of the

latter's rights.14 Once they agree to handle a case, lawyers are

bound to give to it their utmost attention, skill and competence,

regardless of its significance.15 Public interest requires that they

exert their best efforts and use all their learning and ability in the

speedy prosecution or defense of the client's cause.16 Those who

perform that duty with diligence and candor not only safeguard

the interests of the client, but also serve the ends of

justice.17 They do honor to the bar and help maintain the

community's respect for the legal profession.18

Moreover, the lawyer-client relationship, being one of confidence,

requires lawyers to give the client timely, adequate and truthful

updates on the developments of the case.19 In this manner, thetrust and faith of clients in their counsel would remain unimpaired.

Indeed, respondent neglected a legal matter entrusted to him by

failing to file the complaints as he was supposed to. Unbelievable

is his claim that the complaints were ready as early as April 5,

2002, but that these were not filed anyway because complainant





























had refused to sign them, absent the correct address of the

defendant (Albaria Mohammad).

First , evidence abound that it was complainant who was insistent

that the cases be filed. She repeatedly inquired about the case,but respondent would not give her any clear answer. Later on, he

lied to her by saying that the complaint was pending in the sala of

one Judge Regala. His deception on top of his failure to file the

cases were raised in the letter dated March 26, 2003,20 written by

Atty. Noel Sorreda, her new counsel. In his April 4, 2003

reply,21 respondent did not mention anything about the complaints

that had allegedly been prepared as early as April 5, 2002.

Commissioner Villadolid aptly observed in his Report:

"x x x The fact that respondent's 4 April 2003 letter-response tosaid letter, as well as respondent's subsequent letter dated 23

May 2003, did not contain either gives further credence to

complainant's version of the facts. Notably, it was only in

respondent's letter dated 14 July 2003 that respondent raised

such defenses for the first time. Considering that said 14 July

2003 letter was in response to complainant's 28 June 2003 letter

demanding the return of certain amounts for legal services which

complainant believed respondent did not render, this

Commissioner is inclined to believe that such defenses are mereafterthought to defeat complainant's claim for the return of said

amounts."

Were it not for the vigilance of complainant in inquiring about the

status of her cases, she would not have known that the

complaints had not been filed at all. Respondent deliberately

withheld informing her of his inaction, notwithstanding her

repeated follow-ups. Thus, he is deemed to have wronged her

and effectively betrayed the trust she had placed in him.

Second , his alleged lack of knowledge of the correct address ofthe defendant is not a hindrance to the filing of a complaint.

Indeed, such address is material to the service of

summons22 which, however, presupposes that a complaint has

been properly filed in court. Furthermore, Section 14 of Rule 14 of

the Rules of Court23 provides for remedies when the defendant's

address is unknown. Thus, respondent should have nevertheless

filed the complaint, especially because complainant had already

given him payment for the filing fees. His attempt to cover up his

negligence by wrongfully shifting the blame to her cannot be

countenanced by this Court.

Finally , respondent should have returned the money to

complainant following his failure to file the cases.24 Where the

client gives money to the lawyer for a specific purpose -- such as

to file an action or to appeal an adverse judgment -- the latter

should, upon failure to do so, immediately return it to the

former.25 The unjustified withholding of funds belonging to the

client warrants the imposition of disciplinary action against the

lawyer.26

It was sufficiently proven that, all in all, complainant had paid

respondent P48,000:

"Similarly, a review of the records reveals that contrary to

Respondent's claim, in addition to the P20,000.00 covered by the

check dated 18 March 2002 which complainant paid during

































the parties' initial meeting, complainant made subsequent

payments to respondent. Balaoro confirms that when she and

complainant went back to respondent's office on 5 April 2002,

complainant paid respondent P3,000.00 and P5,000.00 in cash.

Another P20,000.00 was likewise paid to respondent as evidencedby the RCBC check dated 16 May 2002 issued by complainant to

respondent."27

Likewise established was the obvious fact that the only legal

service rendered by respondent consisted of the notarization of

the Deed of Sale covering the property purchased by complainant

and the filing of the adverse claim. We agree with Commissioner

Villadolid that P8,000 was sufficient compensation for the services

actually rendered. Hence, respondent must return to complainant

the balance of P40,000 plus legal interest.

The failure of respondent to discharge his duty properly

constitutes an infringement of ethical standards and of his oath.

Such failure makes him answerable not just to his client, but also

to this Court, to the legal profession, and to the general

public.28 The recommended penalty of suspension from the

practice of law for six months is in accordance with

jurisprudence.29

WHEREFORE, Atty. Felix B. Seriña is found GUILTY of violating

Canons 15, 16, 17 and 18 of the Code of Professional

Responsibility and is hereby SUSPENDED from the practice of law

for a period of six (6) months, effective upon his receipt of this

Decision. He is further ORDERED to return to Marissa L. Macarilay,

within thirty (30) days from notice, the amount of P40,000, with

interest at 6 percent per annum from May 16, 2002, until full

payment. Let copies of this Decision be furnished all courts as well

as the Office of the Bar Confidant, which is instructed to include a

copy in respondent's personal file.

SO ORDERED.

Sandoval-Gutierrez, Corona, Carpio-Morales, and Garcia,

JJ., concur.

















RULE 15.02

EN BANC

[G.R. No. 105938. September 20, 1996]

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

[G.R. No. 108113. September 20, 1996]

PARAJA G. HAYUDINI, petitioner, vs. THESANDIGANBAYAN and THE REPUBLIC OF THEPHILIPPINES, respondents.

D E C I S I O N

KAPUNAN, J .:

These cases touch the very cornerstone of every State's judicialsystem, upon which the workings of the contentious and

adversarial system in the Philippine legal process are based - the

sanctity of fiduciary duty in the client-lawyer relationship. The

fiduciary duty of a counsel and advocate is also what makes the

law profession a unique position of trust and confidence, which

distinguishes it from any other calling. In this instance, we have

no recourse but to uphold and strengthen the mantle of protection

accorded to the confidentiality that proceeds from the

performance of the lawyer's duty to his client.

The facts of the case are undisputed.The matters raised herein are an offshoot of the institution of the

Complaint on July 31, 1987 before the Sandiganbayan by the

Republic of the Philippines, through the Presidential Commission

on Good Government against Eduardo M. Cojuangco, Jr., as one

of the principal defendants, for the recovery of alleged ill-gotten

wealth, which includes shares of stocks in the named corporations

in PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of

the Philippines versus Eduardo Cojuangco, et al."[1]

Among the defendants named in the case are herein petitioners

Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C.

Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U.

Escueta and Paraja G. Hayudini, and herein private respondent

Raul S. Roco, who all were then partners of the law firm Angara,

Abello, Concepcion, Regala and Cruz Law Offices (hereinafter

referred to as the ACCRA Law Firm). ACCRA Law Firm

performed legal services for its clients, which included, among

others, the organization and acquisition of business associationsand/or organizations, with the correlative and incidental services

where its members acted as incorporators, or simply, as

stockholders. More specifically, in the performance of these

services, the members of the law firm delivered to its client

documents which substantiate the client's equity holdings, i.e.,

stock certificates endorsed in blank representing the shares

http://sc.judiciary.gov.ph/jurisprudence/1996/sept1996/105938.htm#_edn1








registered in the client's name, and a blank deed of trust or

assignment covering said shares. In the course of their dealings

with their clients, the members of the law firm acquire information

relative to the assets of clients as well as their personal and

business circumstances. As members of the ACCRA Law Firm,petitioners and private respondent Raul Roco admit that they

assisted in the organization and acquisition of the companies

included in Civil Case No. 0033, and in keeping with the office

practice,ACCRA lawyers acted as nominees-stockholders of the

said corporations involved in sequestration proceedings.[2]

On August 20, 1991, respondent Presidential Commission on Good

Government (hereinafter referred to as respondent PCGG) filed a

"Motion to Admit Third Amended Complaint" and "Third Amended

Complaint" which excluded private respondent Raul S.

Roco from the complaint in PCGG Case No. 33 as party-

defendant.[3] Respondent PCGG based its exclusion of private

respondent Roco as party-defendant on his undertaking that he

will reveal the identity of the principal/s for whom he acted as

nominee/stockholder in the companies involved in PCGG Case No.

33.[4]

Petitioners were included in the Third Amended Complaint on the

strength of the following allegations:

14. Defendants Eduardo Cojuangco, Jr., Edgardo J.

Angara, Jose C. Concepcion, Teodoro Regala, Avelino V. Cruz,

Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and

Raul Roco of the Angara Concepcion Cruz Regala and Abello law

offices (ACCRA) plotted, devised, schemed. conspired and

confederated with each other in setting up, through the use of the

coconut levy funds, the financial and corporate framework and

structures that led to the establishment of UCPB, UNICOM,

COCOLIFE, COCOMARK, CIC, and more than twenty other coconut

levy funded corporations, including the acquisition of San MiguelCorporation shares and its institutionalization through presidential

directives of the coconut monopoly. Through insidious means and

machinations, ACCRA, being the wholly-owned investment arm,

ACCRA Investments Corporation, became the holder of

approximately fifteen million shares representing roughly 3.3% of

the total outstanding capital stock of UCPB as of 31 March

1987. This ranks ACCRA Investments Corporation number 44

among the top 100 biggest stockholders of UCPB which has

approximately 1,400,000 shareholders. On the other hand,corporate books show the name Edgardo J. Angara as holding

approximately 3,744 shares as of February, 1984.[5]

In their answer to the Expanded Amended Complaint,

petitioners ACCRA lawyers alleged that:

4.4. Defendants- ACCRA lawyers’ participation in the acts with

which their co-defendants are charged, was in furtherance of

legitimate lawyering.

4.4.1. In the course of rendering professional and legal services

to clients, defendants-ACCRA lawyers, Jose C. Concepcion,

Teodoro D. Regala, Rogelio A. Vinluan and Eduardo U. Escueta,

became holders of shares of stock in the corporations listed under

their respective names in Annex ‘A’ of the expanded Amended

Complaint as incorporating or acquiring stockholders only and, as





















such, they do not claim any proprietary interest in the said shares

of stock.

4.5. Defendant ACCRA-lawyer Avelino V. Cruz was one of the

incorporators in 1976 of Mermaid Marketing Corporation, which

was organized for legitimate business purposes not related to the

allegations of the expanded Amended Complaint. However, he

has long ago transferred any material interest therein and

therefore denies that the ‘shares’ appearing in his name in Annex

‘A’ of the expanded Amended Complaint are his assets.[6]

Petitioner Paraja Hayudini, who had separated from ACCRA law

firm, filed a separate answer denying the allegations in the

complaint implicating him in the alleged ill-gotten wealth.[7]

Petitioners ACCRA lawyers subsequently filed their "COMMENT

AND/OR OPPOSITION" dated October 8, 1991 with Counter-

Motion that respondent PCGG similarly grant the same treatment

to them (exclusion as parties-defendants) as accorded private

respondent Roco.[8] The Counter-Motion for dropping petitioners

from the complaint was duly set for hearing on October 18,

1991 in accordance with the requirements of Rule 15 of the Rules

of Court.

In its "Comment," respondent PCGG set the following conditions

precedent for the exclusion of petitioners, namely: (a) the

disclosure of the identity of its clients; (b) submission of

documents substantiating the lawyer-client relationship; and (c)

the submission of the deeds of assignments petitioners executed

in favor of its clients covering their respective shareholdings.[9]

Consequently, respondent PCGG presented supposed proof to

substantiate compliance by private respondent Roco of the

conditions precedent to warrant the latter's exclusion as party-

defendant in PCGG Case No. 33, to wit: (a) Letter to respondent

PCGG of the counsel of respondent Roco dated May 24, 1989reiterating a previous request for reinvestigation by the PCGG in

PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by

private respondent Roco as Attachment to the letter aforestated in

(a); and (c) Letter of the Roco, Bunag, and Kapunan Law Offices

dated September 21, 1988 to the respondent PCGG in behalf of

private respondent Roco originally requesting the reinvestigation

and/or re-examination of the evidence of the PCGG against Roco

in its Complaint in PCGG Case No. 33.[10]

It is noteworthy that during said proceedings, private respondent

Roco did not refute petitioners' contention that he did actually not

reveal the identity of the client involved in PCGG Case No. 33, nor

had he undertaken to reveal the identity of the client for whom he

acted as nominee-stockholder.[11]

On March 18, 1992, respondent Sandiganbayan promulgated the

Resolution, herein questioned, denying the exclusion of petitioners

in PCGG Case No. 33, for their refusal to comply with the

conditions required by respondent PCGG. It held:

x x x.

ACCRA lawyers may take the heroic stance of not revealing the

identity of the client for whom they have acted, i.e. their principal,

and that will be their choice. But until they do identify their

clients, considerations of whether or not the





























privilege claimed by the ACCRA lawyers exists cannot even

begin to be debated. The ACCRA lawyers cannot excuse

themselves from the consequences of their acts until they have

begun to establish the basis for recognizing the privilege; the

existence and identity of the client.

This is what appears to be the cause for which they have been

impleaded by the PCGG as defendants herein.

5. The PCGG is satisfied that defendant Roco has demonstrated

his agency and that Roco has apparently identified his principal,

which revelation could show the lack of cause against him. This

in turn has allowed the PCGG to exercise its power both under the

rules of Agency and under Section 5 of E.O. No. 14-A in relation to

the Supreme Court's ruling in Republic v. Sandiganbayan (173SCRA 72).

The PCGG has apparently offered to the ACCRA lawyers the same

conditions availed of by Roco; full disclosure in exchange for

exclusion from these proceedings (par. 7, PCGG's COMMENT

dated November 4, 1991). The ACCRA lawyers have preferred

not to make the disclosures required by the PCGG.

The ACCRA lawyers cannot, therefore, begrudge the PCGG for

keeping them as party defendants. In the same vein, they cannot

compel the PCGG to be accorded the same treatment accorded to

Roco.

Neither can this Court.

WHEREFORE, the Counter Motion dated October 8, 1991 filed by

the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for

the same treatment by the PCGG as accorded to Raul S. Roco is

DENIED for lack of merit.[12]

ACCRA lawyers moved for a reconsideration of the above

resolution but the same was denied by the respondent

Sandiganbayan. Hence, the ACCRA lawyers filed the petition

forcertiorari , docketed as G.R. No. 105938, invoking the following

grounds:

I

The Honorable Sandiganbayan gravely abused its discretion in

subjecting petitioners ACCRA lawyers who undisputably acted aslawyers in serving as nominee-stockholders, to the strict

application of the law of agency.

II

The Honorable Sandiganbayan committed grave abuse of

discretion in not considering petitioners ACCRA lawyers and Mr.

Roco as similarly situated and, therefore, deserving of equal

treatment.

1. There is absolutely no evidence that Mr. Roco had revealed, or

had undertaken to reveal, the identities of the client(s) for whom

he acted as nominee-stockholder.

2. Even assuming that Mr. Roco had revealed, or had undertaken

to reveal, the identities of the client(s), the disclosure does not









constitute a substantial distinction as would make the

classification reasonable under the equal protection clause.

3. Respondent Sandiganbayan sanctioned favoritism and undue

preference in favor of Mr. Roco in violation of the equal protection

clause.

III


discretion in not holding that, under the facts of this case, the

attorney-client privilege prohibits petitioners ACCRA lawyers from

revealing the identity of their client(s) and the other information

requested by the PCGG.

1. Under the peculiar facts of this case, the attorney-client

privilege includes the identity of the client(s).

2. The factual disclosures required by the PCGG are not limited to

the identity of petitioners ACCRA lawyers' alleged client(s) but

extend to other privileged matters.

IV


discretion in not requiring that the dropping of party-defendantsby the PCGG must be based on reasonable and just grounds and

with due consideration to the constitutional right of petitioners

ACCRA lawyers to the equal protection of the law.

Petitioner Paraja G. Hayudini, likewise, filed his own motion for

reconsideration of the March 18, 1991 resolution which was

denied by respondent Sandiganbayan. Thus, he filed a separate

petition for certiorari, docketed as G.R. No. 108113, assailing

respondent Sandiganbayan's resolution on essentially the same

grounds averred by petitioners in G.R. No. 105938.

Petitioners contend that the exclusion of respondent Roco as

party-defendant in PCGG Case No. 33 grants him a favorable

treatment, on the pretext of his alleged undertaking to divulge the

identity of his client, giving him an advantage over them who are

in the same footing as partners in the ACCRA law firm. Petitioners

further argue that even granting that such an undertaking has

been assumed by private respondent Roco, they are prohibited

from revealing the identity of their principal under their sworn

mandate and fiduciary duty as lawyers to uphold at all times the

confidentiality of information obtained during such lawyer-client

relationship.

Respondent PCGG, through its counsel, refutes petitioners'

contention, alleging that the revelation of the identity of the client

is not within the ambit of the lawyer-client confidentiality

privilege, nor are the documents it required (deeds of assignment)

protected, because they are evidence of nominee status.[13]

In his comment, respondent Roco asseverates that respondentPCGG acted correctly in excluding him as party-defendant because

he "(Roco) has not filed an Answer. PCGG had therefore the right

to dismiss Civil Case No. 0033 as to Roco `without an order of

court by filing a notice of dismissal,'"[14] and he has undertaken to

identify his principal.[15]

Petitioners' contentions are impressed with merit.

















I

It is quite apparent that petitioners were impleaded by the PCGG

as co-defendants to force them to disclose the identity of their

clients. Clearly, respondent PCGG is not after petitioners but the

“bigger fish” as they say in street parlance. This ploy is quite

clear from the PCGG’s willingness to cut a deal with petitioners --

the names of their clients in exchange for exclusion from the

complaint. The statement of the Sandiganbayan in its questioned

resolution dated March 18, 1992 is explicit:

ACCRA lawyers may take the heroic stance of not revealing the

identity of the client for whom they have acted, i.e., their

principal, and that will be their choice. But until they do identify

their clients, considerations of whether or not the privilegeclaimed by the ACCRA lawyers exists cannot even begin to be

debated. The ACCRA lawyers cannot excuse themselves from the

consequences of their acts until they have begun to establish the

basis for recognizing the privilege; the existence and identity of

the client.

This is what appears to be the cause for which they have been

impleaded by the PCGG as defendants herein. (Underscoring

ours)

In a closely related case, Civil Case No. 0110 of the

Sandiganbayan, Third Division, entitled “Primavera Farms, Inc., et

al . vs. Presidential Commission on Good Government” respondent

PCGG, through counsel Mario Ongkiko, manifested at the hearing

on December 5, 1991 that the PCGG wanted to establish through

the ACCRA that their “so called client is Mr. Eduardo Cojuangco”;

that “it was Mr. Eduardo Cojuangco who furnished all the monies

to those subscription payments in corporations included in Annex

“A” of the Third Amended Complaint; that the ACCRA lawyers

executed deeds of trust and deeds of assignment, some in the

name of particular persons, some in blank.

We quote Atty. Ongkiko:

ATTY. ONGKIKO:

With the permission of this Hon. Court. I propose to establish

through these ACCRA lawyers that, one, their so-called client is

Mr. Eduardo Cojuangco. Second, it was Mr. Eduardo Cojuangco

who furnished all the monies to these subscription payments of

these corporations who are now the petitioners in thiscase. Third, that these lawyers executed deeds of trust, some in

the name of a particular person, some in blank. Now, these blank

deeds are important to our claim that some of the shares are

actually being held by the nominees for the late President

Marcos. Fourth, they also executed deeds of assignment and

some of these assignments have also blank assignees. Again, this

is important to our claim that some of the shares are for Mr.

Cojuangco and some are for Mr. Marcos. Fifth, that most of these

corporations are really just paper corporations. Why do we saythat? One: There are no really fixed sets of officers, no fixed sets

of directors at the time of incorporation and even up to 1986,

which is the crucial year. And not only that, they have no permits

from the municipal authorities in Makati. Next, actually all their

addresses now are care of Villareal Law Office. They really have

no address on records. These are some of the principal things





that we would ask of these nominees stockholders, as they called

themselves.[16]

It would seem that petitioners are merely standing in for their

clients as defendants in the complaint. Petitioners are being

prosecuted solely on the basis of activities and services performed

in the course of their duties as lawyers. Quite obviously,

petitioners’ inclusion as co-defendants in the complaint is merely

being used as leverage to compel them to name their clients and

consequently to enable the PCGG to nail these clients. Such being

the case, respondent PCGG has no valid cause of action as against

petitioners and should exclude them from the Third Amended

Complaint.

II

The nature of lawyer-client relationship is premised on the Roman

Law concepts of locatio conductio operarum (contract of lease of

services) where one person lets his services and another hires

them without reference to the object of which the services are to

be performed, wherein lawyers' services may be compensated

by honorarium or for hire,[17] andmandato (contract of agency)

wherein a friend on whom reliance could be placed makes a

contract in his name, but gives up all that he gained by thecontract to the person who requested him.[18] But the lawyer-

client relationship is more than that of the principal-agent and

lessor-lessee.

In modern day perception of the lawyer-client relationship, an

attorney is more than a mere agent or servant, because he

possesses special powers of trust and confidence reposed on him

by his client.[19] A lawyer is also as independent as the judge of

the court, thus his powers are entirely different from and superior

to those of an ordinary agent.[20]Moreover, an attorney also

occupies what may be considered as a "quasi-judicial office" since

he is in fact an officer of the Court[21]

and exercises his judgmentin the choice of courses of action to be taken favorable to his

client.

Thus, in the creation of lawyer-client relationship, there are rules,

ethical conduct and duties that breathe life into it, among those,

the fiduciary duty to his client which is of a very delicate, exacting

and confidential character, requiring a very high degree of fidelity

and good faith,[22] that is required by reason of necessity and

public interest[23] based on the hypothesis that abstinence from

seeking legal advice in a good cause is an evil which is fatal to the

administration of justice.[24]

It is also the strict sense of fidelity of a lawyer to his client that

distinguishes him from any other professional in society. This

conception is entrenched and embodies centuries of established

and stable tradition.[25] In Stockton v. Ford ,[26] the U.S. Supreme

Court held:

There are few of the business relations of life involving a highertrust and confidence than that of attorney and client, or generally

speaking, one more honorably and faithfully discharged; few more

anxiously guarded by the law, or governed by the sterner

principles of morality and justice; and it is the duty of the court to

administer them in a corresponding spirit, and to be watchful and

industrious, to see that confidence thus reposed shall not be used
















































to the detriment or prejudice of the rights of the party bestowing

it.[27]

In our jurisdiction, this privilege takes off from the old Code of

Civil Procedure enacted by the Philippine Commission on August

7, 1901. Section 383 of the Code specifically “forbids counsel,

without authority of his client to reveal any communication made

by the client to him or his advice given thereon in the course of

professional employment.” [28] Passed on into various provisions of

the Rules of Court, the attorney-client privilege, as currently

worded provides:

Sec. 24. Disqualification by reason of privileged communication. -

The following persons cannot testify as to matters learned in

confidence in the following cases:

x x x

An attorney cannot, without the consent of his client, be examined

as to any communication made by the client to him, or his advice

given thereon in the course of, or with a view to, professional

employment, can an attorney’s secretary, stenographer, or clerk

be examined, without the consent of the client and his employer,

concerning any fact the knowledge of which has been acquired in

such capacity.[29]

Further, Rule 138 of the Rules of Court states:

Sec. 20. It is the duty of an attorney:

(e) to maintain inviolate the confidence, and at every peril to

himself, to preserve the secrets of his client, and to accept no

compensation in connection with his client’s business except from

him or with his knowledge and approval.

This duty is explicitly mandated in Canon 17 of the Code of

Professional Responsibility which provides that:

Canon 17. A lawyer owes fidelity to the cause of his client and


Canon 15 of the Canons of Professional Ethics also demands a

lawyer's fidelity to client:

The lawyer owes "entire devotion to the interest of the client,

warm zeal in the maintenance and defense of his rights and the

exertion of his utmost learning and ability," to the end that

nothing be taken or be withheld from him, save by the rules of

law, legally applied. No fear of judicial disfavor or public

popularity should restrain him from the full discharge of his

duty. In the judicial forum the client is entitled to the benefit of

any and every remedy and defense that is authorized by the law

of the land, and he may expect his lawyer to assert every such

remedy or defense. But it is steadfastly to be borne in mind that

the great trust of the lawyer is to be performed within and not

without the bounds of the law. The office of attorney does not

permit, much less does it demand of him for any client, violation

of law or any manner of fraud or chicanery. He must obey his

own conscience and not that of his client.

Considerations favoring confidentiality in lawyer-client

relationships are many and serve several constitutional and policy

concerns. In the constitutional sphere, the privilege gives flesh to

















one of the most sacrosanct rights available to the accused, the

right to counsel. If a client were made to choose between legal

representation without effective communication and disclosure

and legal representation with all his secrets revealed then he

might be compelled, in some instances, to either opt to stay awayfrom the judicial system or to lose the right to counsel. If the

price of disclosure is too high, or if it amounts to self

incrimination, then the flow of information would be curtailed

thereby rendering the right practically nugatory. The threat this

represents against another sacrosanct individual right, the right to

be presumed innocent is at once self-evident.

Encouraging full disclosure to a lawyer by one seeking legal

services opens the door to a whole spectrum of legal options

which would otherwise be circumscribed by limited information

engendered by a fear of disclosure. An effective lawyer-client

relationship is largely dependent upon the degree of confidence

which exists between lawyer and client which in turn requires a

situation which encourages a dynamic and fruitful exchange and

flow of information. It necessarily follows that in order to attain

effective representation, the lawyer must invoke the privilege not

as a matter of option but as a matter of duty and professional

responsibility.

The question now arises whether or not this duty may be asserted

in refusing to disclose the name of petitioners' client(s) in the case

at bar. Under the facts and circumstances obtaining in the instant

case, the answer must be in the affirmative.

As a matter of public policy, a client’s identity should not be

shrouded in mystery.[30] Under this premise, the general rule in

our jurisdiction as well as in the United States is that a lawyer may

not invoke the privilege and refuse to divulge the name or identity

of his client.[31]

The reasons advanced for the general rule are well established.

First, the court has a right to know that the client whose

privileged information is sought to be protected is flesh and blood.

Second, the privilege begins to exist only after the attorney-client

relationship has been established. The attorney-client privilege

does not attach until there is a client.

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

relationship.

Finally, due process considerations require that the opposing party

should, as a general rule, know his adversary. “A party suing or

sued is entitled to know who his opponent is.” [32] He cannot be

obliged to grope in the dark against unknown forces.[33]

Notwithstanding these considerations, the general rule is however

qualified by some important exceptions.

1) Client identity is privileged where a strong probability exists

that revealing the client’s name would implicate that client in the

very activity for which he sought the lawyer’s advice.

In Ex-Parte Enzor ,[34] a state supreme court reversed a lower

court order requiring a lawyer to divulge the name of her client on

























the ground that the subject matter of the relationship was so

closely related to the issue of the client’s identity that the privilege

actually attached to both. In Enzor , the unidentified client, an

election official, informed his attorney in confidence that he had

been offered a bribe to violate election laws or that he hadaccepted a bribe to that end. In her testimony, the attorney

revealed that she had advised her client to count the votes

correctly, but averred that she could not remember whether her

client had been, in fact, bribed. The lawyer was cited for

contempt for her refusal to reveal his client’s identity before a

grand jury. Reversing the lower court’s contempt orders, the

state supreme court held that under the circumstances of the

case, and under the exceptions described above, even the name

of the client was privileged.

U.S. v. Hodge and Zweig ,[35] involved the same exception, i.e. that

client identity is privileged in those instances where a strong

probability exists that the disclosure of the client's identity would

implicate the client in the very criminal activity for which the

lawyer’s legal advice was obtained.

The Hodge case involved federal grand jury proceedings inquiring

into the activities of the “Sandino Gang,” a gang involved in the

illegal importation of drugs in the United States. The respondents,law partners, represented key witnesses and suspects including

the leader of the gang, Joe Sandino.

In connection with a tax investigation in November of 1973, the

IRS issued summons to Hodge and Zweig, requiring them to

produce documents and information regarding payment received

by Sandino on behalf of any other person, and vice versa. The

lawyers refused to divulge the names. The Ninth Circuit of the

United States Court of Appeals, upholding non-disclosure under

the facts and circumstances of the case, held:

A client’s identity and the nature of that client’s fee arrangements

may be privileged where the person invoking the privilege can

show that a strong probability exists that disclosure of such

information would implicate that client in the very criminal activity

for which legal advice was sought Baird v. Koerner , 279 F.2d at

680. While in Baird Owe enunciated this rule as a matter of

California law, the rule also reflects federal law. Appellants

contend that the Baird exception applies to this case.

The Baird exception is entirely consonant with the principal policybehind the attorney-client privilege. “In order to promote

freedom of consultation of legal advisors by clients, the

apprehension of compelled disclosure from the legal advisors must

be removed; hence, the law must prohibit such disclosure except

on the client’s consent.” 8 J. Wigmore, supra sec. 2291, at

545. In furtherance of this policy, the client’s identity and the

nature of his fee arrangements are, in exceptional cases,

protected as confidential communications.[36]

2) Where disclosure would open the client to civil liability, his

identity is privileged. For instance, the peculiar facts and

circumstances of Neugass v. Terminal Cab

Corporation ,[37] prompted the New York Supreme Court to allow

a lawyer’s claim to the effect that he could not reveal the

















name of his client because this would expose the latter to civil

litigation.

In the said case, Neugass , the plaintiff, suffered injury when the

taxicab she was riding, owned by respondent corporation, collided

with a second taxicab, whose owner was unknown. Plaintiff

brought action both against defendant corporation and the owner

of the second cab, identified in the information only as John

Doe. It turned out that when the attorney of defendant

corporation appeared on preliminary examination, the fact was

somehow revealed that the lawyer came to know the name of the

owner of the second cab when a man, a client of the insurance

company, prior to the institution of legal action, came to him and

reported that he was involved in a car accident. It was apparent

under the circumstances that the man was the owner of the

second cab. The state supreme court held that the reports were

clearly made to the lawyer in his professional capacity. The court

said:

That his employment came about through the fact that the

insurance company had hired him to defend its policyholders

seems immaterial. The attorney in such cases is clearly the

attorney for the policyholder when the policyholder goes to him to

report an occurrence contemplating that it would be used in anaction or claim against him.[38]

x x x xxx xxx.

All communications made by a client to his counsel, for the

purpose of professional advice or assistance, are privileged,

whether they relate to a suit pending or contemplated, or to any

other matter proper for such advice or aid; x x x And whenever

the communication made, relates to a matter so connected with

the employment as attorney or counsel as to afford presumption

that it was the ground of the address by the client, then it is

privileged from disclosure. xxx.

It appears... that the name and address of the owner of the

second cab came to the attorney in this case as a confidential

communication. His client is not seeking to use the courts, and

his address cannot be disclosed on that theory, nor is the present

action pending against him as service of the summons on him has

not been effected. The objections on which the court reserved

decision are sustained.[39]

In the case of Matter of Shawmut Mining Company ,[40] the lawyerinvolved was required by a lower court to disclose whether he

represented certain clients in a certain transaction. The purpose of

the court’s request was to determine whether the unnamed

persons as interested parties were connected with the purchase of

properties involved in the action. The lawyer refused and brought

the question to the State Supreme Court. Upholding the lawyer’s

refusal to divulge the names of his clients the court held:

If it can compel the witness to state, as directed by the order

appealed from, that he represented certain persons in the

purchase or sale of these mines, it has made progress in

establishing by such evidence their version of the litigation. As

already suggested, such testimony by the witness would compel

him to disclose not only that he was attorney for certain people,

but that, as the result of communications made to him in the

















course of such employment as such attorney, he knew that they

were interested in certain transactions. We feel sure that under

such conditions no case has ever gone to the length of compelling

an attorney, at the instance of a hostile litigant, to disclose not

only his retainer, but the nature of the transactions to which itrelated, when such information could be made the basis of a suit

against his client.[41]

3) Where the government’s lawyers have no case against an

attorney’s client unless, by revealing the client’s name, the said

name would furnish the only link that would form the chain of

testimony necessary to convict an individual of a crime, the

client’s name is privileged.

In Baird vs Korner ,[42] a lawyer was consulted by the accountantsand the lawyer of certain undisclosed taxpayers regarding steps to

be taken to place the undisclosed taxpayers in a favorable position

in case criminal charges were brought against them by the U.S.

Internal Revenue Service (IRS).

It appeared that the taxpayers’ returns of previous years were

probably incorrect and the taxes understated. The clients

themselves were unsure about whether or not they violated tax

laws and sought advice from Baird on the hypothetical possibility

that they had. No investigation was then being undertaken by the

IRS of the taxpayers. Subsequently, the attorney of the taxpayers

delivered to Baird the sum of $12,706.85, which had been

previously assessed as the tax due, and another amount of money

representing his fee for the advice given. Baird then sent a check

for $12,706.85 to the IRS in Baltimore, Maryland, with a note

explaining the payment, but without naming his clients. The IRS

demanded that Baird identify the lawyers, accountants, and other

clients involved. Baird refused on the ground that he did not

know their names, and declined to name the attorney and

accountants because this constituted privileged communication. Apetition was filed for the enforcement of the IRS summons. For

Baird’s repeated refusal to name his clients he was found guilty of

civil contempt. The Ninth Circuit Court of Appeals held that, a

lawyer could not be forced to reveal the names of clients who

employed him to pay sums of money to the government

voluntarily in settlement of undetermined income taxes, unsued

on, and with no government audit or investigation into that

client’s income tax liability pending. The court emphasized the

exception that a client’s name is privileged when so much hasbeen revealed concerning the legal services rendered that the

disclosure of the client’s identity exposes him to possible

investigation and sanction by government agencies. The Court

held:

The facts of the instant case bring it squarely within that

exception to the general rule. Here money was received by the

government, paid by persons who thereby admitted they had not

paid a sufficient amount in income taxes some one or more years

in the past. The names of the clients are useful to thegovernment for but one purpose - to ascertain which taxpayers

think they were delinquent, so that it may check the records for

that one year or several years. The voluntary nature of the

payment indicates a belief by the taxpayers that more taxes or

interest or penalties are due than the sum previously paid, if

any. It indicates a feeling of guilt for nonpayment of taxes,













though whether it is criminal guilt is undisclosed. But it may well

be the link that could form the chain of testimony necessary to

convict an individual of a federal crime. Certainly the payment

and the feeling of guilt are the reasons the attorney here involved

was employed - to advise his clients what, under thecircumstances, should be done.[43]

Apart from these principal exceptions, there exist other situations

which could qualify as exceptions to the general rule.

For example, the content of any client communication to a lawyer

lies within the privilege if it is relevant to the subject matter of the

legal problem on which the client seeks legal

assistance.[44] Moreover, where the nature of the attorney-client

relationship has been previously disclosed and it isthe identity which is intended to be confidential , the identity of

the client has been held to be privileged, since such revelation

would otherwise result in disclosure of the entire transaction.[45]

Summarizing these exceptions, information relating to the identity

of a client may fall within the ambit of the privilege when the

client’s name itself has an independent significance, such that

disclosure would then reveal client confidences.[46]

The circumstances involving the engagement of lawyers in thecase at bench, therefore, clearly reveal that the instant case falls

under at least two exceptions to the general rule. First, disclosure

of the alleged client's name would lead to establish said client's

connection with the very fact in issue of the case, which is

privileged information, because the privilege, as stated earlier,

protects the subject matter or the substance (without which there

would be no attorney-client relationship).

The link between the alleged criminal offense and the legal advice

or legal service sought was duly established in the case at bar, by

no less than the PCGG itself. The key lies in the three specific

conditions laid down by the PCGG which constitutes petitioners’

ticket to non-prosecution should they accede thereto:

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

(b) submission of documents substantiating the lawyer-client

relationship; and

(c) the submission of the deeds of assignment petitioners

executed in favor of their clients covering their respective

shareholdings.

From these conditions, particularly the third, we can readily

deduce that the clients indeed consulted the petitioners, in their

capacity as lawyers, regarding the financial and corporate

structure, framework and set-up of the corporations in

question. In turn, petitioners gave their professional advice in the

form of, among others, the aforementioned deeds of assignment

covering their clients’ shareholdings.

There is no question that the preparation of the aforestated

documents was part and parcel of petitioners’ legal service to their

clients. More important, it constituted an integral part of their

duties as lawyers. Petitioners, therefore, have a legitimate fear

that identifying their clients would implicate them in the very





















activity for which legal advice had been sought, i.e., the alleged

accumulation of ill-gotten wealth in the aforementioned

corporations.

Furthermore, under the third main exception, revelation of the

client's name would obviously provide the necessary link for the

prosecution to build its case, where none otherwise exists. It is

the link, in the words of Baird, “that would inevitably form the

chain of testimony necessary to convict the (client) of a...

crime."[47]

An important distinction must be made between a case where a

client takes on the services of an attorney for illicit purposes,

seeking advice about how to go around the law for the purpose of

committing illegal activities and a case where a client thinks hemight have previously committed something illegal and consults

his attorney about it. The first case clearly does not fall within the

privilege because the same cannot be invoked for purposes

illegal. The second case falls within the exception because

whether or not the act for which the advice turns out to be illegal,

his name cannot be used or disclosed if the disclosure leads to

evidence, not yet in the hands of the prosecution, which might

lead to possible action against him.

These cases may be readily distinguished, because the privilege

cannot be invoked or used as a shield for an illegal act, as in the

first example; while the prosecution may not have a case against

the client in the second example and cannot use the attorney

client relationship to build up a case against the latter. The

reason for the first rule is that it is not within the professional

character of a lawyer to give advice on the commission of a

crime.[48] The reason for the second has been stated in the cases

above discussed and are founded on the same policy grounds for

which the attorney-client privilege, in general, exists.

In Matter of Shawmut Mining Co., supra, the appellate court

therein stated that "under such conditions no case has ever yet

gone to the length of compelling an attorney, at the instance of a

hostile litigant, to disclose not only his retainer, but the nature of

the transactions to which it related, when such information could

be made the basis of a suit against his

client.” [49] "Communications made to an attorney in the courseof any personal employment, relating to the subjectthereof , and which may be supposed to be drawn out in

consequence of the relation in which the parties stand to each

other, are under the seal of confidence and entitled to protection

as privileged communications."[50] Where the communicated

information, which clearly falls within the privilege, would suggest

possible criminal activity but there would be not much in the

information known to the prosecution which would sustain a

charge except that revealing the name of the client would open

up other privileged information which would substantiate the

prosecution’s suspicions, then the client’s identity is so inextricably

linked to the subject matter itself that it falls within theprotection. The Baird exception, applicable to the instant case, is

consonant with the principal policy behind the privilege, i.e., that

for the purpose of promoting freedom of consultation of legal

advisors by clients, apprehension of compelled disclosure from

attorneys must be eliminated. This exception has likewise been

sustained in In re Grand Jury Proceeding s [51] and Tillotson v.

























Boughner .[52] What these cases unanimously seek to avoid is the

exploitation of the general rule in what may amount to a fishing

expedition by the prosecution.

There are, after all, alternative sources of information available to

the prosecutor which do not depend on utilizing a defendant's

counsel as a convenient and readily available source of

information in the building of a case against the

latter. Compelling disclosure of the client's name in circumstances

such as the one which exists in the case at bench amounts to

sanctioning fishing expeditions by lazy prosecutors and litigants

which we cannot and will not countenance. When the nature of

the transaction would be revealed by disclosure of an attorney's

retainer, such retainer is obviously protected by the privilege.[53] It

follows that petitioner attorneys in the instant case owe their

client(s) a duty and an obligation not to disclose the latter's

identity which in turn requires them to invoke the privilege.

In fine, the crux of petitioners' objections ultimately hinges on

their expectation that if the prosecution has a case against their

clients, the latter's case should be built upon evidence

painstakingly gathered by them from their own sources and not

from compelled testimony requiring them to reveal the name of

their clients, information which unavoidably reveals much aboutthe nature of the transaction which may or may not be

illegal. The logical nexus between name and nature of transaction

is so intimate in this case that it would be difficult to simply

dissociate one from the other. In this sense, the name is as much

"communication" as information revealed directly about the

transaction in question itself, a communication which is clearly

and distinctly privileged. A lawyer cannot reveal such

communication without exposing himself to charges of violating a

principle which forms the bulwark of the entire attorney-client

relationship.

The uberrimei fidei relationship between a lawyer and his client

therefore imposes a strict liability for negligence on the

former. The ethical duties owing to the client, including

confidentiality, loyalty, competence, diligence as well as the

responsibility to keep clients informed and protect their rights to

make decisions have been zealously sustained. InMilbank, Tweed,

Hadley and McCloy v. Boon ,[54] the US Second District Court

rejected the plea of the petitioner law firm that it breached its

fiduciary duty to its client by helping the latter's former agent in

closing a deal for the agent's benefit only after its client hesitated

in proceeding with the transaction, thus causing no harm to its

client. The Court instead ruled that breaches of a fiduciary

relationship in any context comprise a special breed of cases that

often loosen normally stringent requirements of causation and

damages, and found in favor of the client.

To the same effect is the ruling in Searcy, Denney, Scarola,

Barnhart, and Shipley P.A. v. Schelle r [55] requiring strict obligation

of lawyers vis-a-vis clients. In this case, a contingent fee lawyerwas fired shortly before the end of completion of his work, and

sought payment quantum meruit of work done. The court,

however, found that the lawyer was fired for cause after he

sought to pressure his client into signing a new fee agreement

while settlement negotiations were at a critical stage. While the

client found a new lawyer during the interregnum , events forced





















the client to settle for less than what was originally

offered. Reiterating the principle of fiduciary duty of lawyers to

clients in Meinhard v. Salmo n [56] famously attributed to Justice

Benjamin Cardozo that "Not honesty alone, but the punctilio of an

honor the most sensitive, is then the standard of behavior," theUS Court found that the lawyer involved was fired for cause, thus

deserved no attorney's fees at all.

The utmost zeal given by Courts to the protection of the lawyer-

client confidentiality privilege and lawyer's loyalty to his client is

evident in the duration of the protection, which exists not only

during the relationship, but extends even after the termination of

the relationship.[57]

Such are the unrelenting duties required of lawyers vis-a-vis theirclients because the law, which the lawyers are sworn to uphold, in

the words of Oliver Wendell Holmes,[58] "xxx is an exacting

goddess, demanding of her votaries in intellectual and moral

discipline." The Court, no less, is not prepared to accept

respondents’ position without denigrating the noble profession

that is lawyering, so extolled by Justice Holmes in this wise:

Every calling is great when greatly pursued. But what other gives

such scope to realize the spontaneous energy of one's soul? In

what other does one plunge so deep in the stream of life - so

share its passions its battles, its despair, its triumphs, both as

witness and actor? x x x But that is not all. What a subject is

this in which we are united - this abstraction called the Law,

wherein as in a magic mirror, we see reflected, not only in our

lives, but the lives of all men that have been. When I think on

this majestic theme my eyes dazzle. If we are to speak of the law

as our mistress, we who are here know that she is a mistress only

to be won with sustained and lonely passion - only to be won by

straining all the faculties by which man is likened to God.

We have no choice but to uphold petitioners' right not to reveal

the identity of their clients under pain of the breach of fiduciary

duty owing to their clients, because the facts of the instant case

clearly fall within recognized exceptions to the rule that the

client’s name is not privileged information.

If we were to sustain respondent PCGG that the lawyer-client

confidential privilege under the circumstances obtaining here does

not cover the identity of the client, then it would expose the

lawyers themselves to possible litigation by their clients in view ofthe strict fiduciary responsibility imposed on them in the exercise

of their duties.

The complaint in Civil Case No. 0033 alleged that the defendants

therein, including herein petitioners and Eduardo Cojuangco, Jr.

conspired with each other in setting up through the use of

coconut levy funds the financial and corporate framework and

structures that led to the establishment of UCPB, UNICOM and

others and that through insidious means and machinations,

ACCRA, using its wholly-owned investment arm, ACCRA

Investments Corporation, became the holder of approximately

fifteen million shares representing roughly 3.3% of the total

capital stock of UCPB as of 31 March 1987. The PCGG wanted to

establish through the ACCRA lawyers that Mr. Cojuangco is their

client and it was Cojuangco who furnished all the monies to the

















subscription payment; hence, petitioners acted as dummies,

nominees and/or agents by allowing themselves, among others, to

be used as instrument in accumulating ill-gotten wealth through

government concessions, etc., which acts constitute gross abuse

of official position and authority, flagrant breach of public trust,unjust enrichment, violation of the Constitution and laws of the

Republic of the Philippines.

By compelling petitioners, not only to reveal the identity of their

clients, but worse, to submit to the PCGG documents

substantiating the client-lawyer relationship, as well as deeds of

assignment petitioners executed in favor of its clients covering

their respective shareholdings, the PCGG would exact from

petitioners a link “that would inevitably form the chain of

testimony necessary to convict the (client) of a crime.”

III

In response to petitioners' last assignment of error, respondents

allege that the private respondent was dropped as party

defendant not only because of his admission that he acted merely

as a nominee but also because of his undertaking to testify to

such facts and circumstances "as the interest of truth may

require, which includes... the identity of the principal."[59]

First, as to the bare statement that private respondent merely

acted as a lawyer and nominee, a statement made in his out-of-

court settlement with the PCGG, it is sufficient to state that

petitioners have likewise made the same claim not merely out-of-

court but also in their Answer to plaintiff's Expanded Amended

Complaint, signed by counsel, claiming that their acts were made

in furtherance of "legitimate lawyering.” [60] Being "similarly

situated" in this regard, public respondents must show that there

exist other conditions and circumstances which would warrant

their treating the private respondent differently from petitioners in

the case at bench in order to evade a violation of the equalprotection clause of the Constitution.

To this end, public respondents contend that the primary

consideration behind their decision to sustain the PCGG's dropping

of private respondent as a defendant was his promise to disclose

the identities of the clients in question. However, respondents

failed to show - and absolutely nothing exists in the recordsof the case at bar - that private respondent actually revealed

the identity of his client(s) to the PCGG. Since the undertaking

happens to be the leitmotif of the entire arrangement between

Mr. Roco and the PCGG, an undertaking which is so material as to

have justified PCGG's special treatment exempting the private

respondent from prosecution, respondent Sandiganbayan should

have required proof of the undertaking more substantial than a

"bare assertion" that private respondent did indeed comply with

the undertaking . Instead, as manifested by the PCGG, only three

documents were submitted for the purpose, two of which were

mere requests for re-investigation and one simply disclosed

certain clients which petitioners (ACCRA lawyers) were themselveswilling to reveal. These were clients to whom both petitioners and

private respondent rendered legal services while all of them were

partners at ACCRA, and were not the clients which the PCGG

wanted disclosed for the alleged questioned transactions.[61]

















To justify the dropping of the private respondent from the case or

the filing of the suit in the respondent court without him,

therefore, the PCGG should conclusively show that Mr. Roco was

treated as a species apart from the rest of the ACCRA lawyers on

the basis of a classification which made substantial distinctionsbased on real differences. No such substantial distinctions exist

from the records of the case at bench, in violation of the equal

protection clause.

The equal protection clause is a guarantee which provides a wall

of protection against uneven application of statutes and

regulations. In the broader sense, the guarantee operates against

uneven application of legal norms so that all persons under similar

circumstances would be accorded the same treatment.[62] Those

who fall within a particular class ought to be treated alike not only

as to privileges granted but also as to the liabilities imposed.

x x x. What is required under this constitutional guarantee is the

uniform operation of legal norms so that all persons under similar

circumstances would be accorded the same treatment both in the

privileges conferred and the liabilities imposed. As was noted in a

recent decision: ‘Favoritism and undue preference cannot be

allowed. For the principle is that equal protection and security

shall be given to every person under circumstances, which if notidentical are analogous. If law be looked upon in terms of burden

or charges, those that fall within a class should be treated in the

same fashion, whatever restrictions cast on some in the group

equally binding the rest.[63]

We find that the condition precedent required by the respondent

PCGG of the petitioners for their exclusion as parties-defendants

in PCGG Case No. 33 violates the lawyer-client confidentiality

privilege. The condition also constitutes a transgression by

respondents Sandiganbayan and PCGG of the equal protectionclause of the Constitution.[64] It is grossly unfair to exempt one

similarly situated litigant from prosecution without allowing the

same exemption to the others. Moreover, the PCGG’s demand not

only touches upon the question of the identity of their clients but

also on documents related to the suspected transactions, not only

in violation of the attorney-client privilege but also of the

constitutional right against self-incrimination. Whichever way one

looks at it, this is a fishing expedition, a free ride at the expense

of such rights.

An argument is advanced that the invocation by petitioners of the

privilege of attorney-client confidentiality at this stage of the

proceedings is premature and that they should wait until they are

called to testify and examine as witnesses as to matters learned in

confidence before they can raise their objections. But petitioners

are not mere witnesses. They are co-principals in the case for

recovery of alleged ill-gotten wealth. They have made their

position clear from the very beginning that they are not willing to

testify and they cannot be compelled to testify in view of theirconstitutional right against self-incrimination and of their

fundamental legal right to maintain inviolate the privilege of

attorney-client confidentiality.

It is clear then that the case against petitioners should never be

allowed to take its full course in the Sandiganbayan. Petitioners

















should not be made to suffer the effects of further litigation when

it is obvious that their inclusion in the complaint arose from a

privileged attorney-client relationship and as a means of coercing

them to disclose the identities of their clients. To allow the case

to continue with respect to them when this Court could nip theproblem in the bud at this early opportunity would be to sanction

an unjust situation which we should not here countenance. The

case hangs as a real and palpable threat, a proverbial Sword of

Damocles over petitioners' heads. It should not be allowed to

continue a day longer.

While we are aware of respondent PCGG’s legal mandate to

recover ill-gotten wealth, we will not sanction acts which violate

the equal protection guarantee and the right against self-

incrimination and subvert the lawyer-client confidentiality

privilege.

WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions

of respondent Sandiganbayan (First Division) promulgated on

March 18, 1992 and May 21, 1992 are hereby ANNULLED and SET

ASIDE. Respondent Sandiganbayan is further ordered to exclude

petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V.

Cruz, Jose C. Concepcion,*Rogelio A. Vinluan, Victor P. Lazatin,

Eduardo U. Escueta and Paraja G. Hayuduni as parties-defendantsin SB Civil Case No. 0033 entitled "Republic of the Philippines v.

Eduardo Cojuangco, Jr., et al .".

SO ORDERED.

Bellosillo, Melo, and Francisco, JJ., concur.

Vitug, J., see separate opinion.

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

Davide, Jr. and Puno, JJ., see dissenting opinion.

Narvasa, C.J., and Regalado, J., joins Justice Davide in his dissent.

Romero, J., no part. Related to PCGG Commissioner when Civil

Case No. 0033 was filed.

Hermosisima, Jr., J., no part. Participated in Sandiganbayan

deliberations thereon.

Mendoza, J., on leave.









SUPREME COURT

Manila

SECOND DIVISION

A.C. No. 5108 May 26, 2005

ROSA F. MERCADO, complainant,

vs.

ATTY. JULITO D. VITRIOLO, respondent.

D E C I S I O N

PUNO, J.:

Rosa F. Mercado filed the instant administrative complaint against

Atty. Julito D. Vitriolo, seeking his disbarment from the practice of

law. The complainant alleged that respondent maliciously

instituted a criminal case for falsification of public document

against her, a former client, based on confidential

information gained from their attorney-client relationship.

Let us first hearken to the facts.

Complainant is a Senior Education Program Specialist of the

Standards Development Division, Office of Programs and

Standards while respondent is a Deputy Executive Director IV of

the Commission on Higher Education (CHED).1

Complainant's husband filed Civil Case No. 40537 entitled "Ruben

G. Mercado v. Rosa C. Francisco," forannulment of their marriage

with the Regional Trial Court (RTC) of Pasig City. This annulment

case had been dismissed by the trial court, and the dismissal

became final and executory on July 15, 1992.

2

In August 1992, Atty. Anastacio P. de Leon, counsel of

complainant, died. On February 7, 1994, respondent entered his

appearance before the trial court as collaborating counsel for

complainant.3

On March 16, 1994, respondent filed his Notice of Substitution of

Counsel,4 informing the RTC of Pasig City that he has

been appointed as counsel for the complainant, in substitution of

Atty. de Leon.

It also appears that on April 13, 1999, respondent filed a criminal

action against complainant before the Office of the City

Prosecutor, Pasig City, entitled "Atty. Julito Vitriolo, et al. v.

Rose Dela Cruz F. Mercado," and docketed as I.S. No. PSG 99-

9823, for violation of Articles 171 and 172 (falsification of public

document) of the Revised Penal Code.5 Respondent alleged that

complainant made false entries in the Certificates of Live Birth of

her children, Angelica and Katelyn Anne. More specifically,

complainant allegedly indicated in said Certificates of Live Birth

that she is married to a certain Ferdinand Fernandez, and that

their marriage was solemnized on April 11, 1979, when in truth,

she is legally married to Ruben G. Mercado and their marriage

took place on April 11, 1978.

























Complainant denied the accusations of respondent against her.

She denied using any other name than "Rosa F. Mercado." She

also insisted that she has gotten married only once, on April 11,

1978, to Ruben G. Mercado.

In addition, complainant Mercado cited other charges against

respondent that are pending before or decided upon by

other tribunals – (1) libel suit before the Office of the City

Prosecutor, Pasig City;6 (2) administrative case for dishonesty,

grave misconduct, conduct prejudicial to the best interest of the

service, pursuit of private business, vocation or profession without

the permission required by Civil Service rules and regulations, and

violations of the "Anti-Graft and Corrupt Practices Act," before the

then Presidential Commission Against Graft and Corruption;7 (3)

complaint for dishonesty, grave misconduct, and conductprejudicial to the best interest of the service before the Office of

the Ombudsman, where he was found guilty of misconduct and

meted out the penalty of one month suspension without

pay;8 and, (4) the Information for violation of Section 7(b)(2) of

Republic Act No. 6713, as amended, otherwise known as the Code

of Conduct and Ethical Standards for Public Officials and

Employees before the Sandiganbayan.9

Complainant Mercado alleged that said criminal complaint forfalsification of public document (I.S. No. PSG 99-9823) disclosed

confidential facts and information relating to the civil case for

annulment, then handled by respondent Vitriolo as her counsel.

This prompted complainant Mercado to bring this action against

respondent. She claims that, in filing the criminal case for

falsification, respondent is guilty of breaching their privileged and

confidential lawyer-client relationship, and should be disbarred.

Respondent filed his Comment/Motion to Dismiss on November 3,

1999 where he alleged that the complaint for disbarment was all

hearsay, misleading and irrelevant because all the allegations

leveled against him are subject of separate fact-finding bodies.

Respondent claimed that the pending cases against him are not

grounds for disbarment, and that he is presumed to be innocent

until proven otherwise.10 He also states that the decision of the

Ombudsman finding him guilty of misconduct and imposing upon

him the penalty of suspension for one month without pay is on

appeal with the Court of Appeals. He adds that he was found

guilty, only of simple misconduct, which he committed in good

faith.11

In addition, respondent maintains that his filing of the criminal

complaint for falsification of public documents against complainant

does not violate the rule on privileged communication

between attorney and client because the bases of the falsification

case are two certificates of live birth which are public documents

and in no way connected with the confidence taken during the

engagement of respondent as counsel. According to respondent,

the complainant confided to him as then counsel only matters offacts relating to the annulment case. Nothing was said about the

alleged falsification of the entries in the birth certificates of her

two daughters. The birth certificates are filed in the Records

Division of CHED and are accessible to anyone.12

































In a Resolution dated February 9, 2000, this Court referred the

administrative case to the Integrated Bar of the Philippines (IBP)

for investigation, report and recommendation.13

The IBP Commission on Bar Discipline set two dates for hearing

but complainant failed to appear in both. Investigating

Commissioner Rosalina R. Datiles thus granted respondent's

motion to file his memorandum, and the case was submitted for

resolution based on the pleadings submitted by the parties.14

On June 21, 2003, the IBP Board of Governors approved the

report of investigating commissioner Datiles, finding the

respondent guilty of violating the rule on privileged

communication between attorney and client, and recommending

his suspension from the practice of law for one (1) year.

On August 6, 2003, complainant, upon receiving a copy of the IBP

report and recommendation, wrote Chief Justice Hilario Davide,

Jr., a letter of desistance. She stated that after the passage of so

many years, she has now found forgiveness for those who have

wronged her.

At the outset, we stress that we shall not inquire into the merits of

the various criminal and administrative cases filed against

respondent. It is the duty of the tribunals where these cases arepending to determine the guilt or innocence of the respondent.

We also emphasize that the Court is not bound by any withdrawal

of the complaint or desistance by the complainant. The letter of

complainant to the Chief Justice imparting forgiveness upon

respondent is inconsequential in disbarment proceedings.

We now resolve whether respondent violated the rule on

privileged communication between attorney and client when he

filed a criminal case for falsification of public document against

his former client.

A brief discussion of the nature of the relationship between

attorney and client and the rule on attorney-client privilege that is

designed to protect such relation is in order.

In engaging the services of an attorney, the client reposes on him

special powers of trust and confidence. Their relationship is strictly

personal and highly confidential and fiduciary. The relation is of

such delicate, exacting and confidential nature that is required by

necessity and public interest.15 Only by such confidentiality and

protection will a person be encouraged to repose his confidence inan attorney. The hypothesis is that abstinence from seeking legal

advice in a good cause is an evil which is fatal to the

administration of justice.16 Thus, the preservation and protection

of that relation will encourage a client to entrust his legal

problems to an attorney, which is of paramount importance to the

administration of justice.17 One rule adopted to serve this purpose

is the attorney-client privilege: an attorney is to keep inviolate his

client's secrets or confidence and not to abuse them.18 Thus, the

duty of a lawyer to preserve his client's secrets and confidenceoutlasts the termination of the attorney-client relationship,19 and

continues even after the client's death.20 It is the glory of the legal

profession that its fidelity to its client can be depended on, and

that a man may safely go to a lawyer and converse with him upon

his rights or supposed rights in any litigation with absolute

assurance that the lawyer's tongue is tied from ever disclosing





































it.21 With full disclosure of the facts of the case by the client to his

attorney, adequate legal representation will result in the

ascertainment and enforcement of rights or the prosecution or

defense of the client's cause.

Now, we go to the rule on attorney-client privilege. Dean Wigmore

cites the factors essential to establish the existence of the

privilege, viz :

(1) Where legal advice of any kind is sought (2) from a

professional legal adviser in his capacity as such, (3) the

communications relating to that purpose, (4) made in confidence

(5) by the client, (6) are at his instance permanently protected (7)

from disclosure by himself or by the legal advisor, (8) except the

protection be waived.22

In fine, the factors are as follows:

(1) There exists an attorney-client relationship, or a prospective

attorney-client relationship, and it is by reason of this relationship

that the client made the communication.

Matters disclosed by a prospective client to a lawyer are protected

by the rule on privileged communication even if the prospective

client does not thereafter retain the lawyer or the latter declinesthe employment.23 The reason for this is to make the prospective

client free to discuss whatever he wishes with the lawyer without

fear that what he tells the lawyer will be divulged or used against

him, and for the lawyer to be equally free to obtain information

from the prospective client.24

On the other hand, a communication from a (prospective) client to

a lawyer for some purpose other than on account of the

(prospective) attorney-client relation is not privileged. Instructive

is the case of Pfleider v. Palanca ,25 where the client and his

wife leased to their attorney a 1,328-hectare agricultural land fora period of ten years. In their contract, the parties agreed, among

others, that a specified portion of the lease rentals would be paid

to the client-lessors, and the remainder would be delivered by

counsel-lessee to client's listed creditors. The client alleged that

the list of creditors which he had "confidentially" supplied counsel

for the purpose of carrying out the terms of payment contained in

the lease contract was disclosed by counsel, in violation of their

lawyer-client relation, to parties whose interests are adverse to

those of the client. As the client himself, however, states, in the

execution of the terms of the aforesaid lease contract between

the parties, he furnished counsel with the "confidential" list of his

creditors. We ruled that this indicates that client delivered the list

of his creditors to counsel not because of the professional relation

then existing between them, but on account of the lease

agreement. We then held that a violation of the confidence that

accompanied the delivery of that list would partake more of a

private and civil wrong than of a breach of the fidelity owing from

a lawyer to his client.

(2) The client made the communication in confidence.

The mere relation of attorney and client does not raise a

presumption of confidentiality.26 The client must intend the

communication to be confidential.27

































A confidential communication refers to information transmitted by

voluntary act of disclosure between attorney and client in

confidence and by means which, so far as the client is aware,

discloses the information to no third person other than one

reasonably necessary for the transmission of the information orthe accomplishment of the purpose for which it was given.28

Our jurisprudence on the matter rests on quiescent ground. Thus,

a compromise agreement prepared by a lawyer pursuant to the

instruction of his client and delivered to the opposing party,29 an

offer and counter-offer for settlement,30 or a document given by a

client to his counsel not in his professional capacity,31 are not

privileged communications, the element of confidentiality not

being present.32

(3) The legal advice must be sought from the attorney in his

professional capacity.33

The communication made by a client to his attorney must not be

intended for mere information, but for the purpose of seeking

legal advice from his attorney as to his rights or obligations. The

communication must have been transmitted by a client to his

attorney for the purpose of seeking legal advice.34

If the client seeks an accounting service,35 or business or personalassistance,36 and not legal advice, the privilege does not attach to

a communication disclosed for such purpose.

Applying all these rules to the case at bar, we hold that the

evidence on record fails to substantiate complainant's allegations.

We note that complainant did not even specify the alleged

communication in confidence disclosed by respondent. All her

claims were couched in general terms and lacked specificity. She

contends that respondent violated the rule on privileged

communication when he instituted a criminal action against her

for falsification of public documents because the criminalcomplaint disclosed facts relating to the civil case for annulment

then handled by respondent. She did not, however, spell out

these facts which will determine the merit of her complaint. The

Court cannot be involved in a guessing game as to the existence

of facts which the complainant must prove.

Indeed, complainant failed to attend the hearings at the IBP.

Without any testimony from the complainant as to the specific

confidential information allegedly divulged by respondent without

her consent, it is difficult, if not impossible to determine if therewas any violation of the rule on privileged communication. Such

confidential information is a crucial link in establishing a breach of

the rule on privileged communication between attorney and client.

It is not enough to merely assert the attorney-client

privilege.37 The burden of proving that the privilege applies is

placed upon the party asserting the privilege.38

IN VIEW WHEREOF, the complaint against respondent Atty.

Julito D. Vitriolo is hereby DISMISSED for lack of merit.

SO ORDERED.

Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

Tinga, J., out of the country.


















































SUPREME COURT

Manila

EN BANC

A.C. No. 927 September 28, 1970

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

vs.

POTENCIANO A. PALANCA, respondent.

R E S O L U T I O N

CASTRO, J.:

The respondent Atty. Potenciano A. Palanca was for sometime the

legal counsel of the complainant William C. Pfleider. According to

the complainant, he retained the legal services of Palanca from

January 1966, whereas the latter insists that the attorney-client

relationship between them began as early as in 1960.

At all events, the relations between the two must have attained

such a high level of mutual trust that on October 10, 1969,

Pfleider and his wife leased to Palanca a 1,328 hectare agricultural

land in Hinobaan, Negros Occidental, known as the Hacienda Asia,

for a period of ten years. In their contract, the parties agreed,

among others, that a specified portion of the lease rentals would

be paid to Pfleider, and the remainder would be delivered by

Palanca to Pfleider's listed creditors.

The arrangement worked smoothly until October 14, 1969 when

the rupture came with the filing by Pfleider of acivil suit (civil case

9187 of the CFI of Negros Occidental) against Palanca for

rescission of the contract of lease on the ground of alleged default

in the payment of rentals. In his answer to the complaint, Palanca

averred full satisfaction of his rental liabilities, and therefore

contended that the lease should continue. He also charged that he

had already been dispossessed of the hacienda by Pfleider and

the latter's goons at gunpoint and consequently had sufferedtremendous financial losses.

With this history in, perspective, we shall now consider the

administrative charges of gross misconduct in office brought by

Pfleider against Palanca. The indictment consists of four counts.

First count . In regard to a criminal case for estafa filed in

December 1965 by one Gregorio Uy Matiao against Pfleider, the

latter instructed Palanca to offer in settlement the sum of

P10,000, payable in installments, to Uy Matiao for the dismissal of

the case. After sometime, Palanca reported to Pfleider that the

offer has been rejected. Finally in October 1969, Palanca

supposedly informed Pfleider that he had succeeded in negotiating

the dismissal of the estafa case by leaving the sum of P5,000 with

the Dumaguete City Court where the action was then pending.





Sometime in December 1969, however, Pfleider was the object of

a warrant of arrest in connection with the same estafa case. It

turned out, charged the complainant Pfleider, that Palanca had

not deposited the sum of P5,000 with the Dumaguete City Court,

let alone communicated to Uy Matiao his earlier offer ofsettlement.

We have closely examined all the pleadings filed by the parties in

this case and the annexes thereto, and it is our view that the first

charge is devoid of merit. In support of his claim of alleged

assurance made by Palanca that theestafa case had already

been terminated, Pfleinder relies on certain letters written to him

by Palanca. Our own reading of these letters, however, belies his

claim. They contain nothing which might reasonably induce the

complainant to believe that the criminal action against him hadbeen finally settled by his attorney. On the contrary, the letters

merely report a continuing attempt on the part of Palanca to

secure a fair bargain for Pfleider. The letter-report of October 10,

1969, invoke by the complainant, states in no uncertain terms

that "I am bargaining this (referring to the estafa case) even for

P8,000.00 and I think they will agree. I'll finalize this and pay

Tingyan on Tuesday. I have already left in Dumaguete P5,000.00

to show them the color of our money and I will bring the balance

when I go there Tuesday."

Nothing in the above letter indicates that Palanca

had deposited the sum of P5,000 with the Dumaguete CityCourt.

What he did state is that he had left that sum in that City to

enable their adversaries to see "the color of our money." In this

connection, the veracity of the certification by Felicisimo T. Hilay,

Dumaguete branch manager of RCPI, that he (Hilay) had been

holding the sum of P5,000 during the early part of October in trust

for Pfleider and his lawyer, has not been assailed by Pfleider.

If Pfleider was the object of a warrant of arrest in December

1969, no substantial blame can be laid at the door of the

respondent Palanca inasmuch as the latter's services were

implicitly terminated by Pfleider when the latter sued his lawyer in

October of the same year. While the object of the suit is the

rescission of the contract of lease between the parties, the conflict

of interest which pits one against the other became incompatible

with that mutual confidence and trust essential to every lawyer-

client relation. Moreover, Pfleider fails to dispute Palanca's claim

that on October 26, 1968, Pfleider refused to acknowledge receipt

of a certain letter and several motions for withdrawal, includingPalanca's withdrawal as counsel in the estafa case.

Second count . Palanca had fraudulently charged the sum of

P5,000 (which he supposedly had left with the CityCourt in

Dumaguete) to his rental account with Pfleider as part payment of

the lease rentals of the Hacienda Asia.Third count . In the same

statement of account, Palanca falsely represented having paid, for

the account of Pfleider, one Samuel Guintos the sum of P866.50

when the latter would swear that he had received only the sum ofP86.50.

These two charges are anchored upon the same "Statement of

Disbursements" submitted by Palanca to Pfleider. It is our view

that this statement is but a memorandum or report of the

expenses which Palanca considered as chargeable to the account





of Pfleider. By its very tentative nature, it is subject to the

examination and subsequent approval or disapproval of Pfleider,

and any and every error which it contains may be brought to the

attention of Palanca for rectification or adjustment. Viewed in

relation to the contract of lease between Pfleinder and Palanca,this "statement" is but one aspect of the prestation required of

Palanca by the contract. Whatever breach he might have

committed in regard to this prestation would be but a civil or

contractual wrong which does not affect hisoffice as a member of

the Bar.

Final count . It is charged that the list of creditors which Pfleider

had "confidentially" supplied Palanca for the purpose of carrying

out the terms of payment contained in the lease contract was

disclosed by Palanca, in violation of their lawyer-client relation, toparties whose interests are adverse to those of Pfleider.

As Pfleider himself, however, in the execution of the terms of the

aforesaid lease contract between the parties, complainant

furnished respondent with a confidential list of his creditors." This

should indicate that Pfleider delivered the list of his creditors to

Palanca not because of the professional relation then existing

between them, but on account of the lease agreement. A violation

therefore of the confidence that accompanied the delivery of thatlist would partake more of a private and civil wrong than of a

breach of the fidelity owing from a lawyer to his client. Moreover,

Pfleider fails to controvert Palanca's claim that there is no such

thing as a "confidential" list of creditors and that the list of

creditors referred to by Pfleider is the same list which forms part

of the pleadings in civil case 9187 (the action for rescission of the

lease contract) now, pending between the complainant and the

respondent lawyer, and therefore is embraced within the category

of public records open to the perusal of persons properly

interested therein.

In sum, we are satisfied, and we so hold, that nothing in written

complaint for disbarment against Palanca and in his reply to

Palanca's answer supports a prima facie finding of

such misconduct in office by Palanca as would warrant further

proceedings in this case.

ACCORDINGLY, the complaint is hereby dismissed.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Fernando, Teehankee,

Barredo, Villamor and Makasiar, JJ., concur.

Zaldivar, J., took no part.

Concepcion, C.J., is on leave.





RULE 15.03


SUPREME COURT

EN BANC

A.C. No. 6632. August 2, 2005

NORTHWESTERN UNIVERSITY, INC., and BEN A.NICOLAS, Complainant,

vs.

Atty. MACARIO D. ARQUILLO, Respondent.

D E C I S I O N

PANGANIBAN, J .:

Representing conflicting interests is prohibited by the Code of

Professional Responsibility. Unless all the affected clients’ written

consent is given after a full disclosure of all relevant facts,

attorneys guilty of representing conflicting interests shall as a rule

be sanctioned with suspension from the practice of law.

The Case and the Facts

This administrative case stems from a sworn Letter-

Complaint1 filed with the Integrated Bar of the Philippines-

Commission on Bar Discipline (IBP-CBD) by Ben A.

Nicolas, acting for himself and on behalf of Northwestern

University, Inc. In that Letter-Complaint, Atty. Macario D. Arquillo

was charged with deceit, malpractice, gross misconduct and/or

violation of his oath as attorney by representing conflicting

interests. The material averments of the Complaint are

summarized by the IBP-CBD as follows:

"Herein [c]omplainants, Northwestern University, Inc. and Mr. Ben

A. Nicolas, accuses (sic) herein [r]espondent, Atty. Macario D.

Arquillo, of engaging in conflicting interest in a case before

the National Labor RelationsCommission, Regional Arbitration

Branch No. 1, San Fernando, La Union.

"Complainant alleges that in a consolidated case, herein

[r]espondent appeared and acted as counsels for both

complainants (eight out of the eighteen complainants therein) and

respondent (one out of the ten respondents therein).

"In a consolidation of NLRC Cases [Nos.] 1-05-1086-97, 1-05-

1087-97, 1-05-1088-97, 1-05-1091-97, 1-05-1092-97, 1-05-1097-

97, 1-05-1109-97, 1-05-1096-97 ("consolidated cases"), herein

[r]espondent appeared as counselfor complainants therein ,

Teresita A. Velasco, Gervacio A. Velasco, Mariel S. Hernando,

Virginio C. Rasos, Bonifacio S. Blas, Ronald A. Daoang, Luzviminda

T. Urcio and Araceli Quimoyog. In the very same consolidatedcase, [r]espondent was also the counsel of one of the

respondents therein, Jose G. Castro.

"Complainants, as their evidence, submitted the Motion to

Dismiss dated August 12, 1997 filed by Jose G. Castro,

represented by his counsel, herein [r]espondent filed before the

NLRC of San Fernando, La Union. Sixteen (16) days later or on

August 28, 1997, [r]espondent filed a Complainant’s

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Consolidated Position Paper, this time representing some of the

complainants in the very same consolidated case."2 (Citations

omitted)

Respondent failed to file his Answer to the Complaint despite a

June 24 1998 Order3 of the IBP-CBD directing him to do so. Even

after receiving five notices, he failed to appear in any of the

scheduled hearings. Consequently, he was deemed to have

waived his right to participate in the proceedings. Thereafter, the

complainants were ordered to submit their verified position paper

with supporting documents, after which the case was to be

deemed submitted for decision.4 In their Manifestation5 dated

August 30, 2004, they said that they would no longer file a

position paper. They agreed to submit the case for decision on the

basis of their Letter-Affidavit dated March 16, 1998, together withall the accompanying documents.

Report and Recommendation of the IBP

In his Report,6 Commissioner Dennis B. Funa found respondent

guilty of violating the conflict-of-interests rule under the Code of

Professional Responsibility. Thus, the former recommended the

latter’s suspension from the practice of law for a period of six (6)

months.

In Resolution No. XVI-2004-415 dated October 7, 2004, the Board

of Governors of the IBP adopted the Report and Recommendation

of Commissioner Funa, with the modification that the period of

suspension was increased to two (2) years.

On December 12, 2004, the Resolution and the records of the

case were transmitted to this Court for final action, pursuant to

Section 12(b) of Rule 139-B of the Rules of Court. On January 20,

2005, respondent filed a Motion for Reconsideration to set aside

Resolution No. XVI-2004-415. The IBP denied the Motion.

The Court’s Ruling

We agree with the findings of the IBP Board of Governors, but

reduce the recommended period of suspension to one year.

Administrative Liability of Respondent

The Code of Professional Responsibility requires lawyers to

observe candor, fairness and loyalty in all their dealings and

transactions with their clients.7 Corollary to this duty, lawyers shallnot represent conflicting interests, except with all the concerned

clients’ written consent, given after a full disclosure of the facts.8

When a lawyer represents two or more opposing parties, there is

a conflict of interests, the existence of which is determined by

three separate tests: (1) when, in representation of one client, a

lawyer is required to fight for an issue or claim, but is also duty-

bound to oppose it for another client; (2) when the acceptance of

the new retainer will require an attorney to perform an act thatmay injuriously affect the first client or, when called upon in a

new relation, to use against the first one any knowledge acquired

through their professional connection; or (3) when the acceptance

of a new relation would prevent the full discharge of an attorney’s

duty to give undivided fidelity and loyalty to the client or would
































invite suspicion of unfaithfulness or double dealing in the

performance of that duty.9

In the present case, Atty. Macario D. Arquillo, as counsel for

Respondent Jose C. Castro in NLRC Case Nos. I-05-1083-97 to I-

05-1109-97, filed a Motion to Dismiss those cases. Shortlythereafter, a position paper was filed by Atty. Arquillo as counsel

for several complainants in consolidated NLRC Case Nos. I-05-

1087-97, I-05-1088-97, I-05-1091-97, I-05-1092-97, I-05-1096-

97, I-05-1097-97, and I-05-1109-97. All the cases in the second

set were included in the first one, for which he had filed the

subject Motion to Dismiss. Furthermore, in his position paper for

the complainants, Atty. Arquillo protected his other client,

Respondent Jose C. Castro, in these words:

"3. More than lack of valid cause for the dismissal of

complainants, respondents, except Atty. Jose C. Castroand

Atty. Ernesto B. Asuncion, should be made accountable for not

according complainants their right to due process."10

In his two-page Motion for Reconsideration, Atty. Arquillo claims

that there was no conflict of interest in his representation of both

the respondent and the complainants in the same consolidated

cases, because all of them were allegedly on the same side.

Attaching to the Motion the Decision of Labor Arbiter Norma C.

Olegario on the consolidated NLRC cases, Atty. Arquillo theorizes

that her judgment absolved Castro of personal liability for the

illegal dismissal of the complainants; this fact allegedly showed

that there was no conflict in the interests of all the parties

concerned.

This Court does not agree. Atty. Arquillo’s acts cannot be justified

by the fact that, in the end, Castro was proven to be not

personally liable for the claims of the dismissed employees.

Having agreed to represent one of the opposing parties first, the

lawyer should have known that there was an obvious conflict ofinterests, regardless of his alleged belief that they were all on the

same side. It cannot be denied that the dismissed employees

were the complainants in the same cases in which Castro was one

of the respondents. Indeed, Commissioner Funa correctly

enounced:

"As counsel for complainants, [r]espondent had the duty to

oppose the Motion to Dismiss filed by Jose G. Castro. But under

the circumstance, it would be impossible since [r]espondent is

also the counsel of Jose G. Castro. And it appears that it was[r]espondent who prepared the Motion to Dismiss, which he

should be opposing [a]s counsel of Jose G. Castro, Respondent

had the duty to prove the Complaint wrong. But Respondent

cannot do this because he is the counsel for the

complainants. Here lies the inconsistency. The

inconsistency of interests is very clear.

"Thus it has been noted

‘The attorney in that situation will not be able to pursue, with

vigor and zeal, the client’s claim against the other and to properly

represent the latter in the unrelated action, or, if he can do so, he

cannot avoid being suspected by the defeated client of disloyalty

or partiality in favor of the successful client. The foregoing

considerations will strongly tend to deprive the relation of attorney













and client of those special elements which make it one of trust

and confidence[.]’ (Legal Ethics, Agpalo, p. 230, 4th ed.; In re De

la Rosa, 21 Phil. 258) "11

An attorney cannot represent adverse interests. It is a hornbook

doctrine grounded on public policy that a lawyer’s representation

of both sides of an issue is highly improper. The proscription

applies when the conflicting interests arise with respect to the

same general matter, however slight such conflict may be. It

applies even when the attorney acts from honest intentions or in

good faith.12

The IBP Board of Governors recommended that respondent be

suspended from the practice of law for two years. Considering,

however, prior rulings in cases alsoinvolving attorneys representing conflicting interests, we reduce

the suspension to one (1) year.13

WHEREFORE, Atty. Macario D. Arquillo is

found GUILTY of misconduct and is hereby SUSPENDED from the

practice of law for a period of one (1) year effective upon his

receipt of this Decision, with a warning that a similar infraction

shall be dealt with more severely in the future.

SO ORDERED.

Davide, Jr., C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-

Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr.,

Azcuna, Tinga, Chico-Nazario, and Garcia, JJ., concur.

Corona, J., on official leave.

LEGAL ETHICS ASSIGNED CASE READINGS


















SUPREME COURT

Manila

FIRST DIVISION

A.C. No. 6836 January 23, 2006

LETICIA GONZALES, Complainant,

vs.

ATTY. MARCELINO CABUCANA, Respondent.

R E S O L U T I O N

AUSTRIA-MARTINEZ, J.:

Before this Court is a complaint filed by

Leticia Gonzales (Gonzales) praying that Atty. Marcelino

Cabucana, (respondent) be disbarred for representing conflicting

interests.

On January 8, 2004, Gonzales filed a petition before

the Integrated Bar of the Philippines (IBP) alleging that: she was

the complainant in a case for sum of money and damages filedbefore the Municipal Trial Court in Cities (MTCC) of Santiago City,

docketed as Civil Case No. 1-567 where she was represented by

the law firmCABUCANA, CABUCANA, DE GUZMAN AND CABUCANA

LAW OFFICE, with Atty. Edmar Cabucana handling the case and

herein respondent as an associate/partner; on February 26, 2001,

a decision was rendered in the civil case ordering the losing party

to pay Gonzales the amount of P17,310.00 with interest

and P6,000.00 asattorney’s fees; Sheriff Romeo Gatcheco, failed

to fully implement the writ of execution issued in connection with

the judgment which prompted Gonzales to file a complaint against

the said sheriff with this Court; in September 2003, Sheriff

Gatcheco and his wife went to the house of Gonzales; they

harassed Gonzales and asked her to execute an affidavit of

desistance regarding her complaint before this Court; Gonzales

thereafter filed against the Gatchecos criminal cases for trespass,

grave threats, grave oral defamation, simple coercion and unjust

vexation; notwithstanding the pendency of Civil Case No. 1-567,

where respondent’s law firm was still representing Gonzales,

herein respondent represented the Gatchecos in the cases filed by

Gonzales against the said spouses; respondent should be

disbarred from the practice of law since respondent’s acceptance

of the cases of the Gatchecos violates the lawyer-client

relationship between complainant and respondent’s law firm and

renders respondent liable under the Code of Professional

Responsibility (CPR) particularly Rules

10.01,1 13.01,2 15.02,315.03,4 21.015 and 21.02.6

On January 9, 2004, the IBP-Commission on Bar

Discipline ordered Atty. Marcelino Cabucana, Jr. to submit his

Answer to the complaint.7

In his Answer, respondent averred: He never appeared and

represented complainant in Civil Case No. 1-567 since it was his

brother, Atty. Edmar Cabucana who appeared and represented

Gonzales in said case. He admitted that he is representing Sheriff

Gatcheco and his wife in the cases filed against them

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but claimed that his appearance ispro bono and that

the spouses pleaded with him as no other counsel was willing to

take their case. He entered his appearance in good faith and

opted to represent the spouses rather than leave them

defenseless. When the Gatchecos asked for his assistance, the

spouses said that the cases filed against them by Gonzales were

merely instigated by a high ranking official who wanted to get

even with them for their refusal to testify in favor of the said

official in another case. At first, respondent declined to serve as

counsel of the spouses as he too did not want to incur the ire of

the high-ranking official, but after realizing that he would be

abdicating a sworn duty to delay no man for money or malice,

respondent entered his appearance as defense counsel of the

spouses free of any charge. Not long after, the present complaint

was crafted against respondent which shows that respondent is

now the subject of a ‘demolition job.’ The civil case filed by

Gonzales where respondent’s brother served as counsel is

different and distinct from the criminal cases filed by complainant

against the Gatcheco spouses, thus, he did not violate any canon

on legal ethics. 8

Gonzales filed a Reply contending that the civil case handled by

respondent’s brother is closely connected with the cases of the

Gatchecos which the respondent is handling; that the claim ofrespondent that he is handling the cases of the spouses pro

bono is not true since he has his own agenda in offering his

services to the spouses; and that the allegation that she is filing

the cases against the spouses because she is being used by a

powerful person is not true since she filed the said cases out of

her own free will.9

The Commission on Bar Discipline of the IBP sent to the parties a

Notice of Mandatory Conference dated March 1, 2004.10 On the

scheduled conference, only a representative of complainant

appeared.11 Commissioner Demaree Raval of the IBP-CBD then

directed both parties to file their respective verified position

papers.12

Complainant filed a Memorandum reiterating her earlier assertions

and added that respondent prepared and notarized counter-

affidavits of the Gatcheco spouses; that the high-ranking official

referred to by respondent is Judge Ruben Plata and the

accusations of respondent against the said judge is an attack

against a brother in the profession which is a violation of the CPR;

and that respondent continues to use the name of De Guzman in

their law firm despite the fact that said partner has already beenappointed as Assistant Prosecutor of Santiago City, again in

violation of the CPR .13

Respondent filed his Position Paper restating his allegations in his

Answer.14

On August 23, 2004, Commissioner Wilfredo E.J.E. Reyes issued

an Order notifying both parties to appear before his office on

October 28, 2004 for a clarificatory question regarding said

case.15 On the said date, only respondent appeared16 presenting a

sworn affidavit executed by Gonzales withdrawing her complaint

against respondent. It reads:

SINUMPAANG SALAYSAY









































TUNGKOL SA PAG-UURONG NG DEMANDA

Ako, si LETICIA GONZALES , nasa tamang edad, Pilipino,

may asawa, at nakatira sa Barangay Dubinan East, Santiago

City , makaraang manumpa ayon sa batas ay nagsasabing:

Ako ang nagdedemanda o petitioner sa CBD Case No. 04-

1186 na may pamagat na "Leticia Gonzales versus Atty.

Marcelino C. Cabucana, Jr." na kasalukuyang nahaharap

sa Commission on Bar Discipline ng Integrated Bar of the

Philippines

Ang pagkakahain ng naturang demanda ay nag-ugat sa di-

pagkakaintindihan na namamagitan sa akin at nina Mr. and

Mrs. Romeo and Anita Gatcheco.

Dahil sa aking galit sa naturang mag-asawa, idinawit ko

si Atty. Marcelino C. Cabucana, Jr. sa sigalot na

namamagitan sa akin at sa mag-

asawang Gatcheco, gayong nalalaman ko na si Atty.

Marcelino C. Cabucana ay walang nalalaman sa naturang di

pagkakaintindihan .

Makaraang pag-isipang mabuti ang paghain ko ng

demanda kontra kay Atty. Marcelino C. Cabucana,Jr., nakumbinsi ako na ang pagdedemanda ko kay Atty.

Marcelino C. Cabucana, Jr. ay isang malaking pagkakamali

dahil siya ay walang kinalalaman (sic) sa d

pagkakaintindihan naming(sic) ng mag-asawang Gatcheco.

Si Atty. Marcelino C. Cabucana, Jr. ay di ko rin naging

abogado sa Civil Case No. 1-567 (MTCC Br. I Santiago

City) na inihain ko kontra kay Eduardo Mangano.

Nais kong ituwid ang lahat kung kaya’ t aking iniuurong ang

naturang kasong inihain ko kontra kay Atty. Marcelino C.

Cabucana, Jr. at dahil dito ay hindi na ako interesado pang

ituloy and naturang kaso, at aking hinihiling sa kinauukulan

na dismisin na ang naturang kaso.

Ginawa ko ang sinumpaang salaysay na ito upang

patotohanan sa lahat ng nakasaad dito .17

Commissioner Reyes issued an Order dated October 28, 2004

requiring Gonzales to appear before him on November 25, 2004,

to affirm her statements and to be subject to clarificatoryquestioning.18 However, none of the parties appeared.19 On

February 17, 2005, only respondent was present. Commissioner

Reyes then considered the case as submitted for resolution.20

On February 24, 2005, Commissioner Reyes submitted his Report

and Recommendation, portions of which are quoted hereunder:

The Undersigned Commissioner believes that the respondent

made a mistake in the acceptance of the administrative case of

Romeo Gatcheco, however, the Commission (sic) believes thatthere was no malice and bad faith in the said acceptance and this

can be shown by the move of the complainant to unilaterally

withdraw the case which she filed against Atty. Marcelino C.

Cabucana, Jr. However, Atty. Cabucana is reminded to be more

careful in the acceptance of cases as conflict of interests might

arise.






















It is respectfully recommended that Atty. Marcelino C. Cabucana,

Jr. (be) sternly warned and reprimanded and…advised to be more

circumspect and careful in accepting cases which might result in

conflict of interests.21

On June 25, 2005, a Resolution was passed by the Board ofGovernors of the IBP, to wit:

RESOLUTION NO. XVI-2005-153

CBD CASE NO. 03-1186

Leticia Gonzales vs.

Atty. Marcelino Cabucana, Jr.

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating


Resolution as Annex "A"; and, finding the recommendation fully

supported by the evidence on record and the applicable laws and

rules, and considering that respondent made (a) mistake in the

acceptance of the administrative case of Romeo Gatcheco, Atty.

Marcelino Cabucana, Jr. is hereby WARNED and REPRIMANDED

and advised to be more circumspect and careful in accepting

cases which might result in conflict of interests .

22

Before going to the merits, let it be clarified that contrary to the

report of Commissioner Reyes, respondent did not only represent

the Gatcheco spouses in the administrative case filed by Gonzales

against them. As respondent himself narrated in his Position

Paper, he likewise acted as their counsel in the criminal cases filed

by Gonzales against them.23

With that settled, we find respondent guilty of violating Rule 15.03

of Canon 15 of the Code of Professional Responsibility, to wit:

Rule 15.03 – A lawyer shall not represent conflicting interest

except by written consent of all concerned given after a full

disclosure of the facts.

It is well-settled that a lawyer is barred from representing

conflicting interests except by written consent of all concerned

given after a full disclosure of the facts.24 Such prohibition is

founded on principles of public policy and good taste as the

nature of the lawyer-client relations is one of trust and confidence

of the highest degree.25Lawyers are expected not only to keep

inviolate the client’s confidence, but also to avoid the appearance

of treachery and double-dealing for only then can litigants be

encouraged to entrust their secrets to their lawyers, which is of

paramount importance in the administration of justice.26

One of the tests of inconsistency of interests is whether the

acceptance of a new relation would prevent the full discharge of

the lawyer’s duty of undivided fidelity and loyalty to the client or

invite suspicion of unfaithfulness or double-dealing in theperformance of that duty.27

As we expounded in the recent case of Quiambao vs. Bamba ,28

The proscription against representation of conflicting interests

applies to a situation where the opposing parties are present





































clients in the same action or in an unrelated action. It is of no

moment that the lawyer would not be called upon to contend for

one client that which the lawyer has to oppose for the other

client, or that there would be no occasion to use the confidential

information acquired from one to the disadvantage of the other as

the two actions are wholly unrelated. It is enough that the

opposing parties in one case, one of whom would lose the suit,

are present clients and the nature or conditions of the lawyer’s

respective retainers with each of them would affect the

performance of the duty of undivided fidelity to both clients.29

The claim of respondent that there is no conflict of interests in

this case, as the civil case handled by their law firm where

Gonzales is the complainant and the criminal cases filed by

Gonzales against the Gatcheco spouses are not related, has nomerit. The representation of opposing clients in said cases, though

unrelated, constitutes conflict of interests or, at the very least,

invites suspicion of double-dealing which this Court cannot allow.30

Respondent further argued that it was his brother who

represented Gonzales in the civil case and not him, thus, there

could be no conflict of interests. We do not agree. As respondent

admitted, it was their law firm which represented Gonzales in the

civil case. Such being the case, the rule against representingconflicting interests applies.

As we explained in the case of Hilado vs. David :31

…[W]e… can not sanction his taking up the cause of the adversary

of the party who had sought and obtained legal advice from his

firm; this, not necessarily to prevent any injustice to the plaintiff

but to keep above reproach the honor and integrity of the courts

and of the bar. Without condemning the respondent’s conduct as

dishonest, corrupt, or fraudulent, we do believe that upon the

admitted facts it is highly inexpedient. It had the tendency to

bring the profession, of which he is a distinguished member, "into

public disrepute and suspicion and undermine the integrity of

justice."32

The claim of respondent that he acted in good faith and with

honest intention will also not exculpate him as such claim does

not render the prohibition inoperative.33

In the same manner, his claim that he could not turn down the

spouses as no other lawyer is willing to take their case cannot

prosper as it is settled that while there may be instances wherelawyers cannot decline representation they cannot be made to

labor under conflict of interest between a present client and a

prospective one.34Granting also that there really was no other

lawyer who could handle the spouses’ case other than him, stil l he

should have observed the requirements laid down by the rules by

conferring with the prospective client to ascertain as soon as

practicable whether the matter would involve a conflict with

another client then seek the written consent of all concerned after

a full disclosure of the facts.

35

These respondent failed to do thusexposing himself to the charge of double-dealing.

We note the affidavit of desistance filed by Gonzales. However,

we are not bound by such desistance as the present case involves

public interest.36 Indeed, the Court’s exercise of its power to take

cognizance of administrative cases against lawyers is not for the





































purpose of enforcing civil remedies between parties, but to protect

the court and the public against an attorney guilty of unworthy

practices in his profession.37

In similar cases where the respondent was found guilty of

representing conflicting interests a penalty ranging from one tothree years’ suspension was imposed.38

We shall consider however as mitigating circumstances the fact

that he is representing the Gatcheco spouses pro bono and that it

was his firm and not respondent personally, which handled the

civil case of Gonzales. As recounted by complainant herself, Atty.

Edmar Cabucana signed the civil case of complainant by stating

first the name of the law firm CABUCANA, CABUCANA, DE

GUZMAN AND CABUCANA LAW OFFICE, under which, his nameand signature appear; while herein respondent signed the

pleadings for the Gatcheco spouses only with his name,39 without

any mention of the law firm. We also note the observation of the

IBP Commissioner Reyes that there was no malice and bad faith in

respondent’s acceptance of the Gatchecos’ cases as shown by the

move of complainant to withdraw the case.

Thus, for violation of Rule 15.03, Canon 15 of the Code of

Professional Responsibility and taking into consideration the

aforementioned mitigating circumstances, we impose the penalty

of fine of P2,000.00.

WHEREFORE, Resolution No. XVI-2005-153 of the Integrated Bar

of the Philippines is APPROVED with MODIFICATION that

respondent Atty. Marcelino Cabucana, Jr. is FINED the amount of

Two Thousand Pesos (P2,000.00) with a STERN WARNING that a

commission of the same or similar act in the future shall be dealt

with more severely.

SO ORDERED.



















SUPREME COURT

Manila

SECOND DIVISION

ADM. CASE NO. 6876 March 7, 2008

HEIRS OF LYDIO "JERRY" FALAME, namely: MELBAFALAME, LEO FALAME and JERRY FALAME,petitioners,

vs.

ATTY. EDGAR J. BAGUIO, respondent.

R E S O L U T I O N

TINGA, J.:

On Petition for Review1 is the Resolution of the Integrated Bar of

the Philippines (IBP) Board of Governorsdismissing the disbarment

complaint filed by the Heirs of Lydio "Jerry" Falame

(complainants) against Atty. Edgar J. Baguio (respondent),

docketed as CBD Case No. 04-1191.

In their Complaint2 against respondent, complainants alleged that

on 15 July 1991, their father, the late Lydio "Jerry" Falame

(Lydio), engaged the services of respondent to represent him in

an action for forcible entrydocketed as Civil Case No. A-2694 (the

first civil case) and entitled "Heirs of Emilio T. Sy, represented by

Anastacia Velayo Vda. De Sy and Belen V. Sy vs. Lydio 'Jerry'

Falame, Raleigh Falame and Four (4) John Does ," in which Lydio

was one of the defendants.3

Complainants recounted that respondent, as counsel for the

defendants, filed the answer to the complaint in the first civil case.

Subsequently, when the parties to the first civil case wererequired to file their respective position papers, respondent used

and submitted in evidence the following: (1) a special power of

attorney dated 1 July 1988 executed by Lydio in favor of his

brother, Raleigh Falame, appointing the latter to be his attorney-

in-fact; and (2) the affidavit of Raleigh Falame dated 23 July

1988, executed before respondent, in which Raleigh stated that

Lydio owned the property subject of the first civil case.4

Complainants claimed that even after the Municipal Trial Court ofDipolog City had ruled in favor of the defendants in the first civil

case, Lydio retained the services of respondent as his legal

adviser and counsel for his businesses until Lydio's death on 8

September 1996.5

However, on 23 October 2000, in representation

of spouses Raleigh and Noemi Falame, respondent filed a case

against complainants allegedly involving the property subject of

the first civil case, entitled "Spouses Rally F. Falame and Noemi F.

Falame v. Melba A. Falame, Leo A. Falame, Jerry A. Falame, Jr.,

Sugni Realty Holdings andDevelopment Corporations, their

representatives, agents and persons acting in their behalf" and

docketed as Civil Case No. 5568 (the second civil case) before the

Regional Trial Court of Dipolog City, Branch 6. The complaint

sought the declaration of nullity of the deed of sale, its

51LEGAL ETHICS –ASSIGNED CASE READINGS

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registration in the registry of deeds, Transfer Certificate of Title

No. 20241 issued as a consequence of the registration of the deed

of sale, and the real estate mortgage on the said property.

Alternatively, it prayed for specific performance and reconveyance

or legal redemption and damages with preliminary injunction and

restraining order.6

Firstly, complainants maintained that by acting as counsel for the

spouses Falame in the second civil case wherein they were

impleaded as defendants, respondent violated his oath of

office and duty as an attorney. Plainly, they contended that the

spouses Falame's interests are adverse to those of his former

client, Lydio.7

Secondly, complainants claimed that respondent knowingly madefalse statements of fact in the complaint in the second civil case to

mislead the trial court. In so doing, respondent violated paragraph

(d), Section 208 of Rule 138 of the Rules of Court,9 complainants

asserted further.

Lastly, complainants alleged that the second civil case is a

baseless and fabricated suit which respondent filed as counsel for

complainants' uncle against the heirs of respondent's deceased

client. Specifically, they averred that respondent filed the case for

the sole purpose of retaining, maintaining and/or withholding thepossession of the subject property from complainants who are its

true owners. Complainants concluded that respondent violated

paragraph (g), Section 2010 of Rule 138 of the Rules of Court.11

In his Answer with Motion to Dismiss,12 respondent controverted

complainants' allegations. He emphasizes that it was only Raleigh

Falame who personally engaged his legal services for him and on

Lydio's behalf and that, in fact, it was Raleigh who paid him

the attorney's fees. He also stated that he signed the jurat in

Raleigh's affidavit, which was submitted as evidence in the first

civil case, believing to the best of his knowledge that there is

good ground to support it. Insisting that he did not betray the

confidence reposed in him by Lydio as the latter's counsel in the

first civil case, respondent maintained that he did not reveal or

use any fact he acquired knowledge of during the existence of the

attorney-client relation in the first civil case as he had never even

conferred with nor talked to Lydio in the first place. Respondent

likewise contended that he did not knowingly make any

misleading or untruthful statement of fact in the complaint in the

second civil case and neither did he employ any means

inconsistent with truth and honor in the hearing of the case.13

Respondent vigorously averred that Lydio had not retained him as

counsel in any case or transaction. Stressing the long interval of

twelve years separating the termination of the first civil case and

his acceptance of the second civil case, respondent pointed out

that the first civil case was not between Lydio and Raleigh but

rather between the heirs of Emilio T. Sy on one hand and Lydio

and Raleigh on the other where physical possession of property

was at stake. Respondent further averred that in contrast thesecond civil case is one involving the spouses Raleigh and Noemi

Falame as plaintiffs, and Melba, Leo and Jerry Jr., all surnamed

Falame, and Sugni Realty Holdings and Development Corporation,

as defendants —a case which arose from the wrongful acts

committed by Melba, Leo and Jerry Jr. after Lydio's death.14









































Respondent maintained that since the second civil case was still

pending before the trial court, the IBP had no jurisdiction over the

instant administrative case. He added that complainants filed this

administrative case when Raleigh could no longer testify in his

own favor as he had died a year earlier.15

In their Position Paper16 dated 7 September 2004, in addition to

their previous charges against respondent, complainants claimed

that respondent violated Rule 15.0317 of the Code of Professional

Responsibility when he represented the cause of the spouses

Falame against that of his former client, Lydio.18

On 25 June 2005, the IBP Board of Governors passed Resolution

No. XVI-2005-167 adopting and approving Investigating

Commissioner Winston D. Abuyuan's report and recommendationfor the dismissal of this administrative case, thus:19

x x x The charge lacks specification as to what part of the lawyer's

oath was violated by the respondent and what confidence was

disclosed. The complainants may have in mind the prohibition

against disclosure of secret information learned in confidence, but

there is no specification in the complaint what secret or

information learned in confidence under Civil Case No. A-2694

was disclosed or will be disclosed by respondent in Civil Case No.

5568. In administrative complaints for disbarment or suspensionagainst lawyers, the complainant must specify in the affidavit-

complaint the alleged secrets or confidential information disclosed

or will be disclosed in the professional employment (Uy v.

Gonzalez , 426 SCRA 422; 431). In the absence of such

specification, the complaint must fail.

In the complaint, there is no specific charge against respondent

for violation of Canon 15, Rule 15.03 of the Code of Professional

Responsibility about the prohibition against representation of

conflicting interest. So, the allegation in paragraph 1, page 8 and

9 of complainants' position paper stating: With all due respect, it

is submitted that respondent violated Canon 15, Rule 15.03 of the

Code of Professional Responsibility" cannot be countenanced. The

reason being that it is an elementary principle of due process to

which the respondent is entitled that only those charged in the

complaint can be proved by the complainants. A charge not

specified in the complaint cannot be proved (Uy v. Gonzales, id.)

x x x But still this charge will not proper for lack of sufficient

bases.

x x x

Civil Case No. 5568, which was commenced on 03 October 2000,

or three years since the complainants became owners of Lydio

Falame's properties, is a suit against the complainants, not as

representatives of Lydio Falame, but as owners of their respective

aliquot interests in the property in question (Gayon v. Gayon , 36

SCRA 104; 107-108). The complainants are sued not on the basis

of the acts, rights, obligations and interest of Lydio Falame on the

material possession of the improvements found on Lot 345litigated in Civil Case No. A-2694 nor even on such land itself, but

rather on the facts alleged in the second amended and

supplemental complaint which give rise to their cause of action

against them.

























53 LEGAL ETHICS ASSIGNED CASE READINGS

While the complainants could not specify under what

circumstances the respondent committed [the] alleged breach of

confidence, breach of secrecy or revelation of secret or

confidential information[,] the respondent has shown that he did

not commit any violation of such duties or obligations of an

attorney.

It is clear that only Raleigh Falame engaged the legal services of

the respondent for his and Lydio Falame's defense in Civil Case

No. A-2694.

x x x

The other allegations of the complainants that the respondent

violated paragraph (d), Section 20 of Rule 139, Rules of Court,

and his lawyer's oath when he allegedly betrayed the trust and

confidence of his former client by denying knowledge of the fact

that the land was owned by Lydio Falame and when he did not

disclose to the Court that at one time his present clients

categorically declared and unconditionally recognized the full

ownership of the late Lydio Falame and complainant Melba

Falame over subject matter of both cases equally lacks evidentiary

basis.

x x x

It is beyond the competence of the complainants to conclude and

is outside the jurisdiction of this Honorable Commission to rule as

to whether or nor (sic) the complaint in Civil Case No.5568 is

baseless or fabricated. It is only the Honorable Court which has

the exclusive jurisdiction to determine the same and cannot be

the subject of an administrative complaint against the respondent.

x x x

WHEREFORE, premises considered, it is respectfullyrecommended that this complaint be dismissed on grounds of

prescription, the same having been filed four (4) years after the

alleged misconduct took place and for lack of merit.

RESPECTFULLY SUBMITTED.20

Dissatisfied, complainants filed the instant petition for review

under Rule 45 of the Rules of Court reiterating their allegations in

the complaint and their position paper.21 They likewise assert that

the IBP erred in holding that the instant administrative complainthad been filed out of time since it was filed on 16 January 2004,

or three (3) years, four (4) months and sixteen (16) days after the

second civil case was filed on 23 October 2000.22 In addition, in

their Consolidated Comment (should be Consolidated

Reply),23 complainants invoke the Court's ruling in Frias v.

Bautista-Lozad a 24to support their contention that administrative

complaints against members of the bar do not prescribe.25

In his Comment,26 respondent principally maintains that the

charges imputed to him have never been proven by clear,

convincing and satisfactory evidence which is the quantum of

proof required in administrative cases against lawyers, and that

complainants have the burden to prove their accusations as he

enjoys the presumption of innocence.27 Respondent likewise

asserts that in accusing him of violation of Rule 15.03 of the Code





































54 LEGAL ETHICS ASSIGNED CASE READINGS

of Professional Responsibility only in their position paper and in

the instant petition, complainants infringed his right to due

process and to be informed of the nature and cause of accusation

against him.28

There is merit in the petition.

At the outset, the Court holds that the instant administrative

action is not barred by prescription. As early as 1947, the Court

held in Calo, Jr. v. Degamo ,29 to wit:

The ordinary statutes of limitation have no application to

disbarment proceedings, nor does the circumstance that the facts

set up as a ground for disbarment constitute a crime, prosecution

for which in a criminal proceeding is barred by limitation, affect

the disbarment proceeding x x x (5 Am. Jur. 434)30

This doctrine was reaffirmed in the relatively recent case of Frias

v. Bautista-Lozad a 31where the Court held that Rule VII, Section 1

of the Rules of Procedure of the CBD-IBP, which provides for a

prescriptive period for the filing of administrative complaints

against lawyers, should be struck down as void and of no legal

effect for being ultra vires .32

Prescinding from the unavailability of the defense of prescription,

the Court concurs with the Investigating Commissioner's opinion

that some of the charges raised by complainants in their

complaint are unsubstantiated.

There is, however, sufficient basis to hold respondent accountable

for violation of Rule 15.03 of the Code of Professional

Responsibility. While this charge was not raised in the initiatory

pleading, it was put forward in complainants' position paper filed

with the IBP and in the petition filed with the Court. In fact,

respondent proffered his defenses to the charge in his position

paper before the IBP and likewise in his comment before the

Court. In his very first pleading before the IBP, the answer with

motion to dismiss, he denied having Lydio as his client. Such

absence of attorney-client relationship is the essential element of

his defense to the charge of conflict of interest, as articulated in

his subsequent submissions.

The Court, therefore, rules and so holds that respondent has been

adequately apprised of and heard on the issue. In administrative

cases, the requirement of notice and hearing does not connote full

adversarial proceedings. Actual adversarial proceedings onlybecome necessary for clarification when there is a need to

propound searching questions to witnesses who give vague

testimonies. Due process is fulfilled when the partieswere given

reasonable opportunity to be heard and to submit evidence in

support of their arguments.33

Rule 15.03 of the Code of Professional Responsibility provides:

A lawyer shall not represent conflicting interests except by written

consent of all concerned given after a full disclosure of the facts.

A lawyer may not, without being guilty of professional misconduct,

act as counsel for a person whose interest conflicts with that of

his present or former client.34 The test is whether, on behalf of

one client, it is the lawyer's duty to contest for that which his duty

to another client requires him to oppose or when the possibility of

55 LEGAL ETHICS –ASSIGNED CASE READINGS
































such situation will develop.35 The rule covers not only cases in

which confidential communications have been confided, but also

those in which no confidence has been bestowed or will be

used.36 In addition, the rule holds even if the inconsistency is

remote or merely probable or the lawyer has acted in good faith

and with no intention to represent conflicting interests.37

The rule concerning conflict of interest prohibits a lawyer from

representing a client if that representation will be

directly adverse to any of his present or former clients. In the

same way, a lawyer may only be allowed to represent a client

involving the same or a substantially related matter that is

materially adverse to the former client only if the former client

consents to it after consultation. The rule is grounded in the

fiduciary obligation of loyalty.38 In the course of a lawyer-clientrelationship, the lawyer learns all the facts connected with the

client's case, including the weak and strong points of the case.

The nature of that relationship is, therefore, one of trust and

confidence of the highest degree. 39

The termination of attorney-client relation provides no justification

for a lawyer to represent an interest adverse to or in conflict with

that of the former client. The client's confidence once reposed

should not be divested by mere expiration of professional

employment. Even after the severance of the relation, a lawyer

should not do anything which will injuriously affect his former

client in any matter in which he previously represented him nor

should he disclose or use any of the client's confidences acquired

in the previous relation.40

In relation to this, Canon 17 of the Code of Professional

Responsibility provides that a lawyer owes fidelity to the cause of

his client and shall be mindful of the trust and confidence reposed

on him. His highest and most unquestioned duty is to protect the

client at all hazards and costs even to himself .41 The protection

given to the client is perpetual and does not cease with the

termination of the litigation, nor is it affected by the party's

ceasing to employ the attorney and retaining another, or by any

other change of relation between them. It even survives the death

of the client.42

In the case at bar, respondent admitted having jointly represented

Lydio and Raleigh as defendants in the first civil case. Evidently,

the attorney-client relation between Lydio and respondent was

established despite the fact that it was only Raleigh who paid him.The case of Hilado v. David 43tells us that it is immaterial whether

such employment was paid, promised or charged for.44

As defense counsel in the first civil case, respondent advocated

the stance that Lydio solely owned the property subject of the

case. In the second civil case involving the same property,

respondent, as counsel for Raleigh and his spouse, has pursued

the inconsistent position that Raleigh owned the same property in

common with Lydio, with complainants, who inherited the

property, committing acts which debase respondent's rights as a

co-owner.

The fact that the attorney-client relation had ceased by reason of

Lydio's death or through the completion of the specific task for

which respondent was employed is not reason for respondent to

56 LEGAL ETHICS –ASSIGNED CASE READINGS












































advocate a position opposed to that of Lydio.45 Precedents tell us

that even after the termination of his employment, an attorney

may not act as counsel against his client in the same general

matter, even though, while acting for his former client, he

acquired no knowledge which could operate to his client's

disadvantage in the subsequent adverse employment.46 And while

complainants have never been respondent's clients, they derive

their rights to the property from Lydio's ownership of it which

respondent maintained in the first civil case.

For representing Raleigh's cause which is adverse to that of his

former client —Raleigh's supposed co-ownership of the subject

property — respondent is guilty of representing conflicting

interests. Having previously undertaken joint representation of

Lydio and Raleigh, respondent should have diligently studied andanticipated the

potential conflict of interest. Accordingly, disciplinary action is

warranted.47 Heretofore, respondent is enjoined to look at any

representation situation from "the point of view that there are

possible conflicts"; and further, "to think in terms of impaired

loyalty" that is to evaluate if his representation in any way will

impair loyalty to a client.48Considering, however, that this is

respondent's first offense, the Court resolves to reprimand

respondent, with admonition to observe a higher degree of fidelity

in the practice of his profession.49

WHEREFORE, respondent Atty. Edgar J. Baguio is found GUILTY

of representing conflicting interests and meted out the penalty of

REPRIMAND. He is further admonished to observe a higher

degree of fidelity in the practice of his profession and to bear in

mind that a repetition of the same or similar acts will be dealt with

more severely.

SO ORDERED.

Carpio, Acting Chairperson Carpio-Morales, Azcun a * , Velasco, Jr.,

JJ., concur.
















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RULE 15.05

EN BANC

[A.C. No. 6424. March 4, 2005]

CONSORCIA S. ROLLON, complainant, vs. Atty. CAMILONARAVAL, respondent .

D E C I S I O N

PANGANIBAN, J .:

Lawyers owe fidelity to their clients. The latter’s money or other

property coming into the former’s possession should be deemedto be held in trust and should not under any circumstance be

commingled with the lawyers’ own; much less, used by

them. Failure to observe these ethical principles constitutes

professional misconduct and justifies the imposition of disciplinary

sanctions.

The Case and the Facts

Before us is a letter-complaint against Atty. Camilo Naraval, filed

by Consorcia S. Rollon with the Davao City Chapter of theIntegrated Bar of the Philippines (IBP) on November 29,

2001. The Affidavit[1] submitted by complainant alleges the

following:

“Sometime in October of 2000, I went to the office of Atty. Camilo

F. Naraval together with my son, Freddie Rollon, to seek his

assistance in a case filed against me before the Municipal Trial

Court in Cities Branch 6, Davao City entitled ‘Rosita Julaton vs.

Consorcia S. Rollon’ for Collection of Sum of Money with Prayer for

Attachment;

“After going over the documents I brought with me pertaining tothe said case, Atty. Naraval agreed to be my lawyer and I was

required to pay the amount of Eight Thousand Pesos (Php

8,000.00) for the filing and partial service fee, which amount was

paid by me on October 18, 2000, a copy of the Official Receipt is

hereto attached as Annex ‘A’ to form part hereof;

“As per the instruction of Atty. Naraval, my son, Freddie, returned

to his office the following week to make follow-up on said

case. However, I was informed later by my son Freddie that Atty.Naraval was not able to act on my case because the latter was so

busy. Even after several follow-ups were made with Atty.

Naraval, still there was no action done on our case;

“Sometime in November 29, 2001, I decided to withdraw the

amount I paid to Atty. Naraval, because of the latter’s failure to

comply with our mutual agreement that he will assist me in the

above-mentioned case;

“My son Freddie Rollon went to Atty. Naraval’s office that sameday to inform Atty. Naraval of our decision to withdraw the

amount I have paid and to retrieve my documents pertaining to

said case. Unfortunately, despite our several follow-ups, Atty.

Naraval always said that he cannot return the documents because

they were in their house, and that he could not give us back the

amount we paid him (Php 8,000.00) because he has no money;


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“Having failed to obtain any response, I decided to refer the

matter to Atty. Ramon Edison Batacan, IBP President of Davao

City and to Atty. Pedro Castillo, the Commissioner on Bar

D[i]scipline;

x x x x x x x x x.”

In an Order dated March 12, 2002,[2] the IBP Commission on Bar

Discipline (CBD), through Director Victor C. Fernandez, directed

respondent to submit his answer to the Complaint. The same

directive was reiterated in the CBD’s May 31, 2002 Order[3] issued

through Commissioner Jovy C. Bernabe. Respondent did not file

any answer despite his receipt of the Orders.[4]

Not having heard from him despite adequate notice, the CBD

proceeded with the investigation ex parte. Its Order[5] dated

November 11, 2002, issued through Commissioner Bernabe,

required complainant to submit her position paper within ten days

from receipt thereof, after which the case was to be deemed

submitted for resolution.

The CBD received complainant’s Position Paper[6] on December

10, 2002.

Report of the Investigating Commissioner

In his Report and Recommendation dated October 16, 2003,

Investigating Commissioner Acerey C. Pacheco recommended that

respondent be suspended from the practice of law for one (1)

year for neglect of duty and/or violation of Canons 15 and 18 of

the Code of Professional Responsibility. The Report reads in part

as follows:

“Canon 18 of the Code of Professional Responsibility requires

every lawyer to serve his client with utmost dedication,

competence and diligence. He must not neglect a legal matterentrusted to him, and his negligence in this regard renders him

administratively liable x x x.

“In the case at bar, the deplorable conduct of the respondent in

misrepresenting to the complainant that he will render legal

services to her, and after receiving certain amount from the latter

as payment for ‘filing fee and service fee’ did nothing in return,

has caused unnecessary dishonor to the bar. By his own conduct

the respect of the community to the legal profession, of which heswore to protect, has been tarnished.

x x x x x x x x x

“In fact, complainant claimed to have been shortchanged by the

respondent when he failed to properly appraised her of the status

of her case which she later on found to have become final and

executory. Apparently, the civil suit between Rosita Julaton and

the complainant have been decided against the latter and which

judgment has long become final and executory. However, despitefull knowledge by the respondent of such finality based on the

documents furnished to him, respondent withheld such vital

information and did not properly appraise the complainant. Thus,

respondent violated the mandate in Canon 15 x x x.” [7]

IBP Board of Governors’ Resolution





























On February 27, 2004, the IBP Board of Governors issued

Resolution No. XVI-2004-64 upholding the above-quoted

Report. The Board recommended the suspension of respondent

from the practice of law for two (2) years for violation of Rules 15

and 18 of the Code of Professional Responsibility and the

restitution of complainant’s P8,000.

The Court’s Ruling

We agree with the Resolution of the IBP Board of Governors.

Respondent’s Administrative Liability

Ordinarily, lawyers are not obliged to act either as advisers or as

advocates of any person who may wish to become their

client.[8]

They may decline employment and refuse to acceptrepresentation, if they are not in a position to carry it out

effectively or competently.[9] But once they agree to handle a

case, attorneys are required by the Canons of Professional

Responsibility to undertake the task with zeal, care and utmost

devotion.[10]

Acceptance of money from a client establishes an attorney-client

relationship and gives rise to the duty of fidelity to the client’s

cause.[11] Every case accepted by a lawyer deserves full attention,

diligence, skill and competence, regardless of importance.[12] The

Code of Professional Responsibility clearly states:

CANON 17 – A lawyer owes fidelity to the cause of his client and


CANON 18 - A lawyer shall serve his client with competence and

diligence.

Rule 18.03 - A lawyer shall not neglect a legal matter entrusted to

him and his negligence in connection therewith shall render him

liable.

Rule 18.04 - A lawyer shall keep his client informed of the status

of his case and shall respond within a reasonable time to the

client’s request for information.

Hence, practising lawyers may accept only as many cases as they

can efficiently handle.[13] Otherwise, their clients would be

prejudiced. Once lawyers agree to handle a case, they should

undertake the task with dedication and care. If they do any less,

then they fail their lawyer’s oath.[14]

The circumstances of this case indubitably show that after

receiving the amount of P8,000 as filing and partial service fee,

respondent failed to render any legal service in relation to the

case of complainant. His continuous inaction despite repeated

followups from her reveals his cavalier attitude and appalling

indifference toward his client’s cause, in brazen disregard of his

duties as a lawyer. Not only that. Despite her repeated demands,

he also unjustifiably failed to return to her the files of the casethat had been entrusted to him. To top it all, he kept the money

she had likewise entrusted to him.

Furthermore, after going through her papers, respondent should

have given her a candid, honest opinion on the merits and the

status of the case. Apparently, the civil suit between Rosita

































Julaton and complainant had been decided against the latter. In

fact, the judgment had long become final and executory. But he

withheld such vital information from complainant. Instead, he

demanded P8,000 as “filing and service fee” and thereby gave her

hope that her case would be acted upon.

Rule 15.05 of the Code of Professional Responsibility requires that

lawyers give their candid and best opinion to their clients on the

merit or lack of merit of the case, neither overstating nor

understating their evaluation thereof. Knowing whether a case

would have some prospect of success is not only a function, but

also an obligation on the part of lawyers.[15] If they find that their

client’s cause is defenseless, then it is their bounden duty to

advise the latter to acquiesce and submit, rather than to traverse

the incontrovertible.[16]

The failure of respondent to fulfill thisbasic undertaking constitutes a violation of his duty to “observe

candor, fairness and loyalty in all his dealings and transactions

with his clients.” [17]

Likewise, as earlier pointed out, respondent persistently refused to

return the money of complainant despite her repeated

demands. His conduct was clearly indicative of lack of integrity

and moral soundness; he was clinging to something that did not

belong to him, and that he absolutely had no right to keep or

use.[18]

Lawyers are deemed to hold in trust their client’s money and

property that may come into their possession.[19] As respondent

obviously did nothing on the case of complainant, the amount she

had given -- as evidenced by the receipt issued by his law office --

was never applied to the filing fee. His failure to return her

money upon demand gave rise to the presumption that he had

converted it to his own use and thereby betrayed the trust she

had reposed in him.[20] His failure to do so constituted a gross

violation of professional ethics and a betrayal of public confidence

in the legal profession.[21]

The Code exacts from lawyers not only a firm respect for law,

legal processes and the courts,[22] but also mandates the utmost

degree of fidelity and good faith in dealing with the moneys

entrusted to them pursuant to their fiduciary

relationship.[23] Respondent clearly fell short of the demands

required of him as a member of the bar. His inability to properly

discharge his duty to his client makes him answerable not just to

her, but also to this Court, to the legal profession, and to thegeneral public.[24] Given the crucial importance of his role in the

administration of justice, his misconduct diminished the

confidence of the public in the integrity and dignity of the

profession.[25]

WHEREFORE, Atty. Camilo Naraval is found GUILTY of violating

Rule 15.05 and Canons 16, 17 and 18 of the Code of Professional

Responsibility and is hereby SUSPENDED from the practice of law

for a period of two (2) years, effective upon his receipt of this

Decision. Furthermore, he is ORDERED TO RESTITUTE, within

thirty (30) days from notice of this Decision, complainant’s eight

thousand pesos (P8,000), plus interest thereon, at the rate of six

percent per annum, from October 18, 2000, until fully paid. Let

copies of this Decision be furnished all courts, the Office of the

















































Bar Confidant, as well as the National Office and the Davao City

Chapter of the Integrated Bar of the Phil ippines.

SO ORDERED.

Davide, Jr., C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval- Gutierrez, Carpio, Austria-Martinez, Corona, Callejo, Sr., Azcuna,

Tinga, Chico-Nazario, and Garcia, JJ., concur.

Carpio-Morales, J., on leave.





RULE 15.06


SUPREME COURT

Manila

EN BANC

A.C. No. 5829 October 28, 2003

DANIEL LEMOINE, complainant,

vs.

ATTY. AMADEO E. BALON, JR., respondent.

D E C I S I O N

PER CURIAM:

On December 17, 1999, complainant Daniel Lemoine, a French

national, filed a verified complaint1 against respondent Atty.

Amadeo E. Balon, Jr., for estafa and misconduct before the

Integrated Bar of the Philippines. The case, docketed as CBD Case

No. 99-679, was referred by the Commission on Bar Discipline to

an Investigator for investigation, report and recommendation.

The facts that spawned the filing of the complaint are as follows:

In early 1998, complainant filed a car insurance claim with the

Metropolitan Insurance Company (Metropolitan Insurance), the

insurer of his vehicle which was lost. As complainant encountered

problems in pursuing his claim which was initially rejected,2 his

friend, a certain Jesus "Jess" Garcia (Garcia), arranged for the

engagement of respondent’s services.

By letter3 of October 21, 1998 addressed to Elde

Management, Inc., "ATTN: Mr. Daniel Lemoine," under whose

care complainant could be reached, respondent advisedcomplainant, whom he had not before met, that for hislegal

services he was charging "25% of the actual amount being

recovered. . . payable upon successful recovery;" an advance

payment of P50,000.00 "to be charged [to complainant] to be

deducted from whatever amount [would] be successfully

collected;" P1,000.00 "as appearance and conference fee for each

and every court hearings, conferences outside our law office and

meetings before the Office of the Insurance Commission which

will be also charged to our 25% recovery fee;" and legal expenses"such as but not limited to filing fee, messengerial and postage

expenses . . . and other miscellaneous but related expenses," to

be charged to complainant’s account which would be reimbursed

upon presentation of statement of account.

The letter-proposal of respondent regarding attorney’ s fees does

not bear complainant’s conformity, he not having agreed

therewith.

It appears that Metropolitan Insurance finally offered to settlecomplainant’s claim, for by letter4 of December 9,1998 addressed

to it, respondent confirmed his acceptance of its offer to settle the

claim of complainant "in an ex-gratia basis of 75% of his policy

coverage which is therefore FIVE HUNDRED TWENTY FIVE

THOUSAND (P525,000.00) PESOS."


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A day or a few days before December 23, 1998 when complainant

left for France,5 he, on the advice of respondent, signed an

already prepared undated Special Power of Attorney6 authorizing

respondent and/or Garcia to bring any action against Metropolitan

Insurance for the satisfaction of complainant’s claim as well as to

"negotiate, sign, compromise[,] encash and receive payment"

from it. The Special Power of Attorney was later dated December

23, 1998 on which same date Metropolitan Insurance issued a

Chinabank Check No. 841172 payable to complainant in the

amount of P525,000.00 as full settlement of the claim.7 The check

was received by respondent.

In the meantime, complainant returned to the Philippines in early

January 1999 but left again on the 24th of the same month.8 On

inquiry about the status of his claim, Garcia echoed tocomplainant what respondent had written him (Garcia) in

respondent’s letter9 of March 26, 1999 that the claim was still

pending with Metropolitan Insurance and that it was still subject

of negotiations in which Metropolitan Insurance offered to settle it

for P350,000.00representing fifty percent thereof. In the same

letter to Garcia, respondent suggested the acceptance of the offer

of settlement to avoid a protracted litigation.

On December 6, 1999, on complainant’s personal visit to

the office of Metropolitan Insurance, he was informed that his

claim had long been settled via a December 23, 1998 check given

to respondent the year before.10Complainant lost no time in going

to the law office of respondent who was not around, however, but

whom he was able to talk by telephone during which he

demanded that he turn over the proceeds of his claim.11

Respondent thereupon faxed to complainant a December 7, 1999

letter12 wherein he acknowledged having in his possession the

proceeds of the encashed check which he retained, however, as

attorney’s lien pending complainant’s payment of his attorney’s

fee, equivalent to fifty percent (50%) of entire amount collected.

In the same letter, respondent protested what he branded as the

"uncivilized and unprofessional behavior" complainant "reportedly

demonstrated" at respondent’s office. Respondent winded up his

letter as follows, quoted verbatim :

We would like to make it clear that we cannot give you the

aforesaid amount until and unless our attorney’s fees will be

forthwith agreed and settled. In the same manner, should you be

barbaric and uncivilized with your approached, we will not hesitate

to make a proper representation with the Bureau of Immigrationand Deportation for the authenticity of your visa, Department of

Labor and Employment for your working status, Bureau of

Internal Revenue for your taxation compliance and the National

Bureau of Investigation [with] which we have a good network...

While it [is your] prerogative to file a legal action against us, it is

also our prerogative to file a case against you. We will rather

suggest if you could request your lawyer to just confer with us for

the peaceful settlement of this matter. (Underscoring and

emphasis supplied)

As despite written demands,13 respondent refused to turn over the

proceeds of the insurance claim and to acknowledge the

unreasonableness of the attorney’s fees he was demanding,








































complainant instituted the administrative action at bar on

December 17, 1999.

In his Complaint-Affidavit, complainant alleged that "[i]t appears

that there was ‘irregularity’ with the check," it having been

issued payable to him, but "and/or AMADEO BALON" was thereinintercalated after his (complainant’s) name.141awphi1.nét

Maintaining that respondent was entitled to only P50,000.00 in

attorney’s fees,15 complainant decried respondent’s continued

possession of the proceeds of his claim16and his

misrepresentations that the recoverythereof was fraught with

difficulties.17

In his Counter-Affidavit18 of February 18, 2000, respondent

asserted that his continued retention of the proceeds ofcomplainant’s claim is in lawful exercise of his lien for unpaid

attorney’s fees. He expressed readiness, however, to account for

and turn them over once he got paid fifty percent (50%) thereof,

he citing the so called contingent fee billing method of "no cure,

no pay" adopted by practicing lawyers in the insurance industry as

the basis of the amount of his attorney’s fees,19 which to him was

justified in the absence of an attorney-client contract between him

and complainant, the latter having rejected respondent’s letter-

proposal of October 21, 1998.20

Respondent also highlighted the value of the time and efforts he

extended in pursuing complainant’s claim and theexpenses he

incurred in connection therewith. He went on to assert that his

inability to contact complainant whose whereabouts he did not

know prompted him to encash the check and keep the proceeds

thereof in conformity with the Special Power of Attorney executed

in his favor.21

During the hearings conducted by the IBP Investigator,

complainant echoed his allegations in his Complaint-Affidavit and

stressed that he turned down as unreasonable respondent’sproposal in his October 21, 1998 letter that he be paid 25% of the

actual amount collected for his legal services.22 And he presented

documentary evidence, including the March 26, 1999 letter of

respondent informing his co-attorney-in-fact Garcia of the

supposedly still unrecovered claim and suggesting acceptance of

the purported offer of Metropolitan Insurance to settle

complainant’s claim at P350,000.00.

Explaining how his above-mentioned March 26, 1999 letter to

Garcia came about, respondent declared that it was made upon

Garcia’s request, intended for a certain Joel Ramiscal (Ramiscal)

who was said to be Garcia’s business partner.23

Respondent later submitted a June 13, 2001 Supplement24 to his

Counter-Affidavit reiterating his explanation that it was on Garcia’s

express request that he wrote the March 26, 1999 letter, which

was directed to the fax number of Ramiscal.1ªvvphi1.nét

Additionally, respondent declared that in the first week of May1999, on the representation of Garcia that he had talked to

complainant about respondent’s retention of fifty percent (50%)

of the insurance proceeds for professional fees less expenses,25 he

gave Garcia, on a staggered basis, the total amount of

P233,000.00 which, so respondent averred, is the amount of

insurance claim complainant is entitled to receive less attorney’s



















































fees and expenses.26 Thus, respondent claimed that he gave

Garcia the amount of P30,000.00 on May 31, 1999 at Dulcinea

Restaurant in Greenbelt, Makati; the amounts of P50,000.00,

P20,000.00 and P30,000.00 on different occasions at his

(respondent’s) former address through his executive secretary

Sally I. Leonardo; the amount of P20,000.00 at the office of his

(respondent’s) former employer Commonwealth

Insurance Company through his subordinate Glen V. Roxas; and

several other payments at Dulcinea, and at Manila

Intercontinental Hotel’s coffee shop sometime in October

1999.27 Respondent submitted the separate sworn statements of

Leonardo and Roxas.28

Explaining why no written memorandum of the turn over of

various payments to Garcia was made, respondent alleged thatthere was no need therefor since he very well knew Garcia who is

a co-Rotarian and co-attorney-in-fact and whom he really dealt

with regarding complainant’s claim.29

Respondent furthermore declared that he rejected complainant’s

offer to pay him P50,000.00 for his services, insisting that since

there had been no clear-cut agreement on his professional fees

and it was through him that Metropolitan Insurance favorably

reconsidered its initial rejection of complainant’s claim, he is

entitled to a contingent fee of 50% of the net proceeds thereof .30

Finally, respondent declared that he, in connection with his follow-

up of the insurance claim, incurred representation expenses of

P35,000.00, entertainment and other representation expenses on

various occasions of P10,000.00, and transportation and gasoline

expenses and parking fees of P5,000.00;31 and that his retention

of complainant’s money was justified in light of his apprehension

that complainant, being an alien without a valid working permit in

the Philippines, might leave the country anytime without settling

his professional fees.32

The Investigating Commissioner, by Report and

Recommendation33 of October 26, 2001, found respondent guilty

of misconduct and recommended that he be disbarred and

directed to immediately turn over to complainant the sum of

P475,000.00 representing the amount of the P525,000.00

insurance claim less respondent’s professional fees of P50,000.00,

as proposed by complainant.

The Board of Govenors of the Integrated Bar of the Philippines,

acting on the Investigator’s Report, issued Resolution No. XV-

2002-40134 on August 3,2002, reading:


APPROVED, the Report and Recommendation of the Investigating


Resolution/Decision as Annex "A"; and, finding the

recommendation fully supported by the evidence on record and

the applicable laws and rules, with modification, and considering

respondent’s dishonesty which amounted to grave misconduct andgrossly unethical behavior which caused dishonor, not merely to

respondent but the noble profession to which he belongs,

Respondent is hereby SUSPENDED from the practice of law for six

(6) months with the directive to turn over the amount of Five

Hundred Twenty Five Thousand (P525,000.00) Pesos to the









































complainant without prejudice to respondent’s right to claim

attorney’s fees which he may collect in the proper forum .

(Underscoring supplied)

The records of the case are before this Court for final action.

Respondent, by a Motion for Reconsideration35 filed with this

Court, assails the Investigating Commissioner’s Report and

Recommendation as not supported by clear, convincing and

satisfactory proof. He prays for the reopening of the case and its

remand to the Investigator so that Garcia can personally appear

for his (respondent’s) confrontation.

There is no need for a reopening of the case. The facts material to

its resolution are either admitted or documented.

This Court is in full accord with the findings of the IBP

Investigator that respondent violated the following provisions of

the Code of Professional Responsibility, to wit:

RULE 1.01 - A lawyer shall not engage in unlawful, dishonest,

immoral or deceitful conduct.

xxx

CANON 15 - A lawyer shall observe candor, fairness and loyalty inall his dealings and transactions with his clients.

RULE 15.06 - A lawyer shall not state or imply that he is able to

influence any public official, tribunal or legislative body.

xxx

CANON 16 - A lawyer shall hold in trust all moneys and properties

of his client that may come into his possession.

RULE 16.01 - A lawyer shall account for all money or property

collected or received for or from the client.

RULE 16.02 - A lawyer shall keep the funds of each client separate

and apart from his own and those of others kept by him.

RULE 16.03 - A lawyer shall deliver the funds and property of his

client when due or upon demand. However, he shall have a lien

over the funds and may apply so much thereof as may be

necessary to satisfy his lawful fees and disbursements, giving

notice promptly thereafter to his client. He shall also have a lien to

the same extent on all judgments and executions he has secured

for his client as provided for in the Rules of Court.

xxx

CANON 17 - A lawyer owes fidelity to the cause of his client and

he shall be mindful of the trust and confidence in him.

xxx

RULE 18.04 - A lawyer shall keep the client informed of the status

of his case and shall respond within a reasonable time to theclient’s request for information.

xxx

RULE 21.02 - A lawyer shall not, to the disadvantage of his client,

use information acquired in the course of employment, nor shall








he use the same to his advantage or that of a third person, unless

the client with full knowledge of the circumstances consents

thereto.

Specifically with respect to above-quoted provision of Canon 16 of

the Code of Professional Responsibility, the Filipino lawyer’sprincipal source of ethical rules, which Canon 16 bears on the

principal complaint of complainant, a lawyer must hold in trust all

moneys and properties of his client that he may come to possess.

This commandment entails certain specific acts to be done by a

lawyer such as rendering an accounting of all money or property

received for or from the client36 as well as delivery of the funds or

property to the client when due or upon demand.37 Respondent

breached this Canon when after he received the proceeds of

complainant’s insurance claim, he did not report it to complainant,who had a given address in Makati, or to his co-attorney-in-fact

Garcia who was his contact with respect to complainant.

In fact, long after respondent received the December 23,

1998 check for P525,000.00 he, by his letter of March 26, 1999 to

Garcia, had even the temerity to state that the claim was still

pending and recommend "acceptance of the 50% offer . . . which

is P350,000.00 pesos." His explanation that he prepared and sent

this letter on Garcia’s express request is nauseating. A lawyer, like

respondent, would not and should not commit prevarication,

documented at that, on the mere request of a friend.

By respondent’s failure to promptly account for the funds he

received and held for the benefit of his client, he committed

professional misconduct.38 Such misconduct is reprehensible at a

greater degree, for it was obviously done on purpose through the

employment of deceit to the prejudice of complainant who was

kept in the dark about the release of the check, until he himself

discovered the same, and has to date been deprived of the use of

the proceeds thereof.

A lawyer who practices or utilizes deceit in his dealings with his

client not only violates his duty of fidelity, loyalty and devotion to

the client’s cause but also degrades himself and besmirches the

fair name of an honorable profession.39

That respondent had a lien on complainant’s funds for his

attorney’s fees did not relieve him of his duty to account for

it.40 The lawyer’s continuing exercise of his retaining lien

presupposes that the client agrees with the amount of attorney’s

fees to be charged. In case of disagreement or when the client

contests that amount for being unconscionable, however, the

lawyer must not arbitrarily apply the funds in his possession to the

payment of his fees.41 He can file, if he still deems it desirable, the

necessary action or proper motion with the proper court to fix the

amount of such fees.42

In respondent’s case, he never had the slightest attempt to bring

the matter of his compensation for judicial determination so that

his and complainant’s sharp disagreement thereon could havebeen put to an end. Instead, respondent stubbornly and in bad

faith held on to complainant’s funds with the obvious aim of

forcing complainant to agree to the amount of attorney’s fees

sought. This is an appalling abuse by respondent of the exercise

of an attorney’s retaining lien which by no means is an absolute

































right and cannot at all justify inordinate delay in the delivery of

money and property to his client when due or upon demand.

Respondent was, before receiving the check, proposing a 25%

attorney’s fees. After he received the check and after complainant

had discovered its release to him, he was already asking for 50%,objection to which complainant communicated to him. Why

respondent had to doubly increase his fees after the lapse of

about one year when all the while he has been in custody of the

proceeds of the check defies comprehension. At any rate, it

smacks of opportunism, to say the least.

As for respondent’s claim in his June 2001 Supplement to his

Counter-Affidavit that he had on several occasions from May

1999 to October 1999 already delivered a total of P233,000.00 out

of the insurance proceeds to Garcia in trust for complainant, this

does not persuade, for it is bereft of any written memorandum

thereof. It is difficult to believe that a lawyer like respondent could

have entrusted such total amount of money to Garcia without

documenting it, especially at a time when, as respondent alleged,

he and Garcia were not in good terms.43 Not only that. As stated

earlier, respondent’s Counter-Affidavit of February 18, 2000 and

his December 7, 1999 letter to complainant unequivocally

contained his express admission that the total amount of

P525,000.00 was in his custody. Such illogical, futile attempt to

exculpate himself only aggravates his misconduct. Respondent’s

claim discredited, the affidavits of Leonardo and Roxas who,

acting allegedly for him, purportedly gave Garcia some amounts

forming part of the P233,000.00 are thus highly suspect and merit

no consideration.

The proven ancillary charges against respondent reinforce the

gravity of his professional misconduct.

The intercalation of respondent’s name to the Chinabank check

that was issued payable solely in favor ofcomplainant as twice

certified by Metropolitan Insurance44

is clearly a brazen act offalsification of a commercial document which respondent resorted

to in order to encash the check.

Respondent’s threat in his December 7, 1999 letter to expose

complainant to possible sanctions from certain government

agencies with which he bragged to have a "good network" reflects

lack of character, self-respect, and justness.

It bears noting that for close to five long years respondent has

been in possession of complainant’s funds in the amount of overhalf a million pesos. The deceptions and lies that he peddled to

conceal, until its discovery by complainant after about a year, his

receipt of the funds and his tenacious custody thereof in a grossly

oppressive manner point to his lack of good moral character.

Worse, by respondent’ s turnaround in his Supplement to his

Counter- Affidavit that he already delivered to complainant’s friend

Garcia the amount of P233,000.00 which, so respondent claims, is

all that complainant is entitled to, he in effect has declared that he

has nothing more to turn over to complainant. Such incredibleposition is tantamount to a refusal to remit complainant’s funds,

and gives rise to the conclusion that he has misappropriated

them.45

















In fine, by respondent’s questioned acts, he has shown that he is

no longer fit to remain a member of the noble profession that is

the law.

WHEREFORE, respondent Atty. Amadeo E. Balon, Jr., is found

GUILTY of malpractice, deceit and gross misconduct in thepractice of his profession as a lawyer and he is hereby

DISBARRED. The Office of the Clerk of Court is directed to strike

out his name from the Roll of Attorneys and to inform all courts

and the Integrated Bar of the Philippines of this Decision.

Respondent is ordered to turn over to complainant, Daniel

Lemoine, the amount of P525,000.00 within thirty (30) days from

notice, without prejudice to whatever judicial action he may take

to recover his attorney’s fees and purported expenses incurred in

securing the release thereof from Metropolitan Insurance.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Quisumbing,

Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-

Morales, Callejo, Sr., Azcuna, and Tinga, JJ., concur.

Ynares-Santiago, J., on leave.





RULE 15.07


SUPREME COURT

Manila

SECOND DIVISION

A.C. No. 4380 October 13, 1995

NICANOR GONZALES and SALUD B.PANTANOSAS, complainants,

vs.

ATTY. MIGUEL SABACAJAN, respondent.

REGALADO, J.:

This resolves the administrative case filed by Nicanor Gonzales

and Salud B. Pantanosas against Atty. Miguel Sabacajan on

February 14, 1995, 1 the verified complaint wherefor alleges:

xxx xxx xxx

4. That sometime in October, 1994, complainants were informed

by the Register of Deeds of Cagayan de Oro City that the

complainants' owner's duplicate of title covering their lands,

Transfer Certificate of Title Nos. T-91736 and T-91735 were

entrusted to the office secretary of the respondent who in torn

entrusted the same to respondent;

5. That respondent admitted and confirmed to the complainants

that their titles are in his custody and has even shown the same

(to) the complainant Salud B. Pantanosas but when demanded

(sic ) to deliver the said titles to the complainant in a formal

demand letter, marked as ANNEX "A," respondent refused and

continues to refuse without any justification to give their titles

(and) when confronted, respondent challenged the complainants

to file any case in any court even in the Honorable Supreme

Court;

6. That respondent's dare or challeng(e) is a manifestation of his

arrogance taking undue advantage of his legal profession over the

simplicity, innocence and ignorance of the complainants, one of

whom is his blood relative, his aunt, for which complainants

shudder with mental anguish;

7. That due to his challeng(e), the complainants sent a letter to

the Honorable Supreme Court for enlightenment, copy of which is

attached as ANNEX "B", for which the Honorable Supreme Court

required 19 legible copies of a verified complaint;

8. That in spite of repeated demands, request(s) and pleas

towards (sic ) respondent, respondent still fail(ed) and stubbornly

refused without justification to surrender the said titles to the

rightful owners, the complainants here(in), which act istantamount to willful and malicious defiance of legal and moral

obligations emanating from his professional capacity as a lawyer

who had sworn to uphold law and justice, to the prejudice and

damage of the complainants; 2

xxx xxx xxx





On March 22, 1995, the Court required respondent to comment

on the foregoing complaint. In his unverified "Answer" thereto,

respondent admitted having met Salud Pantanosas but claims

that, to his recollection, "Nicanor Gonzales/Serdan" has never

been to his office. Respondent likewise denied that he challenged

anyone to file a case in any court, much less the Supreme Court.

He also claims that he referred complainant Pantanosas to his

client, Mr. Samto M. Uy of Iponan, Cagayan de Oro City, for

whom he worked out the segregation of the titles, two of which

are the subject of the instant case. 3

Respondent likewise denies complainants' allegation that he is

arrogant, in contrast to the innocence, simplicity and ignorance of

said complainants. He contends that the truth of the matter is that

complainants have been charged with a number of criminal andcivil complaints before different courts. He also asserts that he

was holding the certificates of title in behalf of his client, Samto

M. Uy. 4

Atty. Sabacajan stresses, by way of defense, that "the instant

action was chosen precisely to browbeat him into delivering the

Certificates of Title to them without said certificates passing the

hands of Mr. Samto Uy with whom the complainants have some

monetary obligations." 5

In its resolution dated June 26, 1995, 6 for internal administrative

purposes the Court referred this case to the Office of the Bar

Confidant for the corresponding evaluation, report and

recommendation.

From the foregoing proceedings taken on this matter, the Court

finds that respondent admitted having taken possession of the

certificates of title of complainants but refused to surrender the

same despite demands made by the latter. It follows, therefore,

that it was incumbent upon him to show that he was legally

justified in doing so. Instead, all he did was to inform this Court

that "his obligation to deliver the certificates to Mr. Samto Uy

excludes the delivery of said certificates to anyone else." 7

Respondent attached some certifications to his "Answer" to

support his contention that complainants are notorious characters.

However, the certifications indicate that most of the cases stated

therein, especially those involving fraud, have been dismissed.

With respect to those still pending, there is no indication as to the

identity of the party who instituted the same, aside from theconsideration that the remedy thereon is judicial in nature. At any

rate, these aspersions on the character of complainants have no

bearing on the misconduct of respondent charged in the present

case.

Respondent likewise submitted xerox copies of certain certificates

of title in an effort to explain why he kept the certificates of title

of complainants, that is, supposedly for the purpose of subdividing

the property. However, an examination of the same does not

show any connection thereof to respondent's claim. In fact, the

two sets of certificates of title appear to be entirely different from

each other.

As a lawyer, respondent should know that there are lawful

remedies provided by law to protect the interests of his client. The





records do not show that he or his client have availed of said

remedies, instead of merely resorting to unexplained, if not curt,

refusals to accommodate the requests of complainants. Also, he

cannot be unaware of the imposable sanctions on a counsel who

resorts to unlawful means that would cause injustice to the

adversaries of his client.

The Court accordingly finds that respondent has not exercised the

good faith and diligence required of lawyers in handling the legal

affairs of their clients. If complainants did have the alleged

monetary obligations to his client, that does not warrant his

summarily confiscating their certificates of title since there is no

showing in the records that the same were given as collaterals to

secure the payment of a debt. Neither is there any intimation that

there is a court order authorizing him to take and retain custodyof said certificates of title.

Apparently, respondent has disregarded Canon 15, Rule 15.07 of

the Code of Professional Responsibility which provides that a

lawyer shall impress upon his client the need for compliance with

the laws and principles of fairness. Instead, he unjustly refused to

give to complainants their certificates of titles supposedly to

enforce payment of their alleged financial obligations to his client

and presumably to impress the latter of his power to do so.

Canon 19, Rule 19.01 ordains that a lawyer shall employ only fair

and honest means to attain the lawful objectives of his client and

shall not present, participate in presenting, or threaten to present

unfounded charges to obtain an improper advantage in any case

or proceeding. Respondent has closely skirted this proscription, if

he has not in fact transgressed the same.

On the foregoing considerations, the Court desires and directs

that respondent should forthwith return the certificates of title of

complainants. To ensure the same, he should be placed undersuspension until he presents to the Court proof of receipt by

complainants of their respective copies of Certificates of Title Nos.

T-91735 and T-91736 or a judicial order or document authorizing

or justifying the retention of possession thereof by respondent or

his aforenamed client.

WHEREFORE, Atty. Miguel Sabacajan is hereby SUSPENDED from

the practice of law until he can duly show to this Court that the

disputed certificates of title have been returned to and the receipt

thereof duly acknowledged by complainants, or can present a

judicial order or appropriate legal authority justifying the

possession by him or his client of said certificates. He is further

WARNED that a repetition of the same or similar or any other

administrative misconduct will be punished more severely.

Let a copy of this resolution be spread on the personal records of

respondent and have copies thereof furnished to the Integrated

Bar of the Philippines and duly circularized to all courts in the

country.

SO ORDERED.

Narvasa, C.J., Puno, Mendoza and Francisco, JJ., concur.





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