Legal Ethics Cases After Midterms

7/26/2019 Legal Ethics Cases After Midterms

1/71

THIRD DIVISION

[G.R. No. 141617. August 14, 2001]

ADALIA B. FRANCISCO and MERRYLAND DEVELOPMENT CORPORATION,petitioners, vs. RITA C. MEJIA, as

Executrix of Testate Estate of ANDREA CORDOVA VDA. DE GUTIERREZ, respondent.

D E C I S I O N

GONZAGA-REYES,J.:

In this petition for review by certiorari, petitioners pray for the setting aside of the Decision of the

Court of Appeals promulgated on 13 April 1999 and its 15 December 1999 Resolution in CA-G.R. CV No.

19281.

As culled from the decisions of the lower courts and the pleadings of the parties, the factual

background of this case is as set out herein:

Andrea Cordova Vda. de Gutierrez (Gutierrez) was the registered owner of a parcel of land in Camarin,

Caloocan City known as Lot 861 of the Tala Estate. The land had an aggregate area of twenty-five (25)

hectares and was covered by Transfer Certificate of Title (TCT) No. 5779 of the Registry of Deeds of

Caloocan City. The property was later subdivided into five lots with an area of five hectares each and

pursuant thereto, TCT No. 5779 was cancelled and five new transfer certificates of title were issued in the

name of Gutierrez, namely TCT No. 7123 covering Lot 861-A, TCT No. 7124 covering Lot 861-B, TCT No.

7125 covering Lot 861-C, TCT No. 7126 covering Lot 861-D and TCT No. 7127 covering Lot 861-E.

On 21 December 1964, Gutierrez and Cardale Financing and Realty Corporation (Cardale) executed a

Deed of Sale with Mortgage relating to the lots covered by TCT Nos. 7124, 7125, 7126 and 7127, for the

consideration of P800,000.00. Upon the execution of the deed, Cardale paid Gutierrez P171,000.00. It was

agreed that the balance of P629,000.00 would be paid in several installments within five years from thedate of the deed, at an interest of nine percent per annum based on the successive unpaid principal

balances. Thereafter, the titles of Gutierrez were cancelled and in lieu thereof TCT Nos. 7531 to 7534 were

issued in favor of Cardale.

To secure payment of the balance of the purchase price, Cardale constituted a mortgage on three of

the four parcels of land covered by TCT Nos. 7531, 7532 and 7533, encompassing fifteen hectares of

land.[1]

The encumbrance was annotated upon the certificates of title and the owners duplicate

certificates. The owners duplicates were retained by Gutierrez.

On 26 August 1968, owing to Cardales failure to settle its mortgage obligation, Gutierrez filed a

complaint for rescission of the contract with the Quezon City Regional Trial Court (RTC), which wasdocketed as Civil Case No. Q-12366.

[2]On 20 October 1969, during the pendency of the rescission case,

Gutierrez died and was substituted by her executrix, respondent Rita C. Mejia (Mejia). In 1971, plaintiffs

presentation of evidence was terminated. However, Cardale, which was represented by petitioner Adalia

B. Francisco (Francisco) in her capacity as Vice-President and Treasurer of Cardale, lost interest in

proceeding with the presentation of its evidence and the case lapsed into inactive status for a period of

about fourteen years.

In the meantime, the mortgaged parcels of land covered by TCT Nos. 7532 and 7533 became

delinquent in the payment of real estate taxes in the amount of P102,300.00, while the other mortgaged

property covered by TCT No. 7531 became delinquent in the amount of P89,231.37, which culminated in

their levy and auction sale on 1 and 12 September 1983, in satisfaction of the tax arrears. The highestbidder for the three parcels of land was petitioner Merryland Development Corporation (Merryland),

whose President and majority stockholder is Francisco. A memorandum based upon the certificate of sale

was then made upon the original copies of TCT Nos. 7531 to 7533.
http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn1


2/71

On 13 August 1984, before the expiration of the one year redemption period, Mejia filed a Motion for

Decision with the trial court. The hearing of said motion was deferred, however, due to a Motion for

Postponement filed by Cardale through Francisco, who signed the motion in her capacity as officer-in-

charge, claiming that Cardale needed time to hire new counsel. However, Francisco did not mention the

tax delinquencies and sale in favor of Merryland. Subsequently, the redemption period expired and

Merryland, acting through Francisco, filed petitions for consolidation of title,[3]

which culminated in the

issuance of certain orders[4]

decreeing the cancellation of Cardales TCT Nos. 7531 to 7533 and the issuance

of new transfer certificates of title free from any encumbrance or third-party claim whatsoever in favor ofMerryland. Pursuant to such orders, the Register of Deeds of Caloocan City issued new transfer certificates

of title in the name of Merryland which did not bear a memorandum of the mortgage liens in favor of

Gutierrez.

Thereafter, sometime in June 1985, Francisco filed in Civil Case No. Q-12366 an undated Manifestation

to the effect that the properties subject of the mortgage and covered by TCT Nos. 7531 to 7533 had been

levied upon by the local government of Caloocan City and sold at a tax delinquency sale. Francisco further

claimed that the delinquency sale had rendered the issues in Civil Case No. Q-12366 moot and

academic. Agreeing with Francisco, the trial court dismissed the case, explaining that since the properties

mortgaged to Cardale had been transferred to Merryland which was not a party to the case for rescission,

it would be more appropriate for the parties to resolve their controversy in another action.

On 14 January 1987, Mejia, in her capacity as executrix of the Estate of Gutierrez, filed with the RTC of

Quezon City a complaint for damages with prayer for preliminary attachment against Francisco, Merryland

and the Register of Deeds of Caloocan City. The case was docketed as Civil Case No. Q-49766. On 15 April

1988, the trial court rendered a decision[5]

in favor of the defendants, dismissing the complaint for

damages filed by Mejia. It was held that plaintiff Mejia, as executrix of Gutierrezs estate, failed to establish

by clear and convincing evidence her allegations that Francisco controlled Cardale and Merryland and that

she had employed fraud by intentionally causing Cardale to default in its payment of real property taxes on

the mortgaged properties so that Merryland could purchase the same by means of a tax delinquency

sale. Moreover, according to the trial court, the failure to recover the property subject of the Deed of Sale

with Mortgage was due to Mejias failure to actively pursue the action for rescission (Civil Case No. 12366),

allowing the case to drag on for eighteen years. Thus, it ruled that -

xxx xxx xxx

The act of not paying or failing to pay taxes due the government by the defendant Adalia B. Francisco, as

treasurer of Cardale Financing and Realty Corporation do not, per se, constitute perpetration of fraud or an

illegal act. It do [sic] not also constitute an act of evasion of an existing obligation (to plaintiff) if there is no

clear showing that such an act of non-payment of taxes was deliberately made despite its (Cardales)

solvency and capability to pay. There is no evidence showing that Cardale Financing and Realty Corporation

was financially capable of paying said taxes at the time.

There are times when the corporate fiction will be disregarded: (1) where all the members or stockholders

commit illegal act; (2) where the corporation is used as dummy to commit fraud or wrong; (3) where the

corporation is an agency for a parent corporation; and (4) where the stock of a corporation is owned by

one person. (I, Fletcher, 58, 59, 61 and 63). None of the foregoing reasons can be applied to the incidents

in this case: (1) there appears no illegal act committed by the stockholders of defendant Merryland

Development Corporation and Cardale Financing and Realty Corporation; (2) the incidents proven by

evidence of the plaintiff as well as that of the defendants do not show that either or both corporations

were used as dummies by defendant Adalia B. Francisco to commit fraud or wrong. To be used as [a]

dummy, there has to be a showing that the dummy corporation is controlled by the person using it. The

evidence of plaintiff failed to prove that defendant Adalia B. Francisco has controlling interest in either orboth corporations. On the other hand, the evidence of defendants clearly show that defendant Francisco

has no control over either of the two corporations; (3) none of the two corporations appears to be an

agency for a parent (the other) corporation; and (4) the stock of either of the two corporation [sic] is not
http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn3


3/71

owned by one person (defendant Adalia B. Francisco). Except for defendant Adalia B. Francisco, the

incorporators and stockholders of one corporation are different from the other.

xxx xxx xxx

The said case (Civil Case No. 12366) remained pending for almost 18 years before the then Court of First

Instance, now the Regional Trial Court. Even if the trial of the said case became protracted on account of

the retirement and/or promotion of the presiding judge, as well as the transfer of the case from one sala to

another, and as claimed by the plaintiff that the defendant lost interest, (which allegation is unusual, so to

speak), the court believe [sic] that it would not have taken that long to dispose [of] said case had plaintiff

not slept on her rights, and her duty and obligation to see to it that the case is always set for hearing so

that it may be adjudicated [at] the earliest possible time. This duty pertains to both parties, but plaintiff

should have been more assertive, as it was her obligation, similar to the obligation of plaintiff relative to

the service of summons in other cases. The fact that Cardale Financing and Realty Corporation did not

perform its obligation as provided in the said Deed of Sale with Mortgage (Exhibit A) is very clear. Likewise,

the fact that Andrea Cordova, the contracting party, represented by the plaintiff in this case did not also

perform her duties and/or obligation provided in the said contract is also clear. This could have been the

reason why the plaintiff in said case (Exhibit E) slept on her rights and allowed the same to remain pending

for almost 18 years. However, and irrespective of any other reason behind the same, the court believesthat plaintiff, indeed, is the one to blame for the failure of the testate estate of the late Andrea Cordova

Vda. de Gutierrez to recover the money or property due it on the basis of Exhibit A.

xxx xxx xxx

xxx Had the plaintiff not slept on her rights and had it not been for her failure to perform her

commensurate duty to pursue vigorously her case against Cardale Financing and Realty Corporation in said

Civil Case No. 12366, she could have easily known said non-payment of realty taxes on the said properties

by said Cardale Financing and Realty Corporation, or, at least the auction sales that followed, and from

which she could have redeemed said properties within the one year period provided by law, or, have

availed of remedies at the time to protect the interest of the testate estate of the late Andrea Cordova

Vda. de Gutierrez.

xxx xxx xxx

The dispositive portion of the trial courts decision states -

WHEREFORE, in view of all the foregoing consideration, the court hereby renders judgment in favor of the

defendants Register of Deeds of Caloocan City, Merryland Development Corporation and Adalia B.

Francisco, and against plaintiff Rita C. Mejia, as Executrix of the Testate Estate of Andrea Cordova Vda. De

Gutierrez, and hereby orders:

1. That this case for damages be dismissed, at the same time, plaintiffs motion for reconsideration

dated September 23, 1987 is denied;

2. Plaintiff pay the defendants Merryland Development Corporation and the Register of Deeds the sum

of P20,000.00, and another sum of P20,000.00 to the defendant Adalia B. Francisco, as and for

attorneys fees and litigation expenses, and pay the costs of the proceedings.

SO ORDERED.

The Court of Appeals,[6]

in its decision[7]

promulgated on 13 April 1999, reversed the trial court, holdingthat the corporate veil of Cardale and Merryland must be pierced in order to hold Francisco and Merryland

solidarily liable since these two corporations were used as dummies by Francisco, who employed fraud in

allowing Cardale to default on the realty taxes for the properties mortgaged to Gutierrez so that Merryland
http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn6


4/71

could acquire the same free from all liens and encumbrances in the tax delinquency sale and, as a

consequence thereof, frustrating Gutierrezs rights as a mortgagee over the subject properties. Thus, the

Court of Appeals premised its findings of fraud on the following circumstances

xxx xxx xxx

xxx Appellee Francisco knew that Cardale of which she was vice-president and treasurer had an

outstanding obligation to Gutierrez for the unpaid balance of the real properties covered by TCT Nos. 7531

to 7533, which Cardale purchased from Gutierrez which account, as of December 1988, already amountedto P4,414,271.43 (Exh. K, pp. 39-44, record); she also knew that Gutierrez had a mortgage lien on the said

properties to secure payment of the aforesaid obligation; she likewise knew that the said mortgaged

properties were under litigation in Civil Case No. Q-12366 which was an action filed by Gutierrez against

Cardale for rescission of the sale and/or recovery of said properties (Exh. E). Despite such knowledge,

appellee Francisco did not inform Gutierrezs Estate or the Executrix (herein appellant) as well as the trial

court that the mortgaged properties had incurred tax delinquencies, and that Final Notices dated July 9,

1982 had been sent by the City Treasurer of Caloocan demanding payment of such tax arrears within ten

(10) days from receipt thereof (Exhs. J & J-1, pp. 37-38, record). Both notices which were addressed to

Cardale Financing & Realty Corporation c/o Merryland Development Corporation

and sent to appellee Franciscos address at 83 Katipunan Road, White Plains, Quezon City, gave warning

that if the taxes were not paid within the aforesaid period, the properties would be sold at public auction

to satisfy the tax delinquencies.

To reiterate, notwithstanding receipt of the aforesaid notices, appellee Francisco did not inform the Estate

of Gutierrez or her executrix about the tax delinquencies and of the impending auction sale of the said

properties. Even a modicum of good faith and fair play should have encouraged appellee Francisco to at

least advise Gutierrezs Estate through her executrix (herein appellant) and the trial court which was

hearing the complaint for rescission and recovery of said properties of such fact, so that the Estate of

Gutierrez, which had a real interest on the properties as mortgagee and as plaintiff in the rescission and

recovery suit, could at least take steps to forestall the auction sale and thereby preserve the properties and

protect its interests thereon. And not only did appellee Francisco allow the auction sale to take place, but

she used her other corporation (Merryland) in participating in the auction sale and in acquiring the very

properties which her first corporation (Cardale) had mortgaged to Gutierrez. Again, appellee Francisco did

not thereafter inform the Estate of Gutierrez or its executrix (herein appellant) about the auction sale, thus

precluding the Estate from exercising its right of redemption. And it was only after the expiration of the

redemption period that appellee Francisco filed a Manifestation in Civil Case No. Q-12366 (Exh. I, p. 36,

record), in which she disclosed for the first time to the trial court and appellant that the properties subject

of the case and on which Gutierrez or her Estate had a mortgage lien, had been sold in a tax delinquency

sale. And in order to further conceal her deceptive maneuver, appellee Francisco did not divulge in heraforesaid Manifestation that it was her other corporation (Merryland) that acquired the properties in the

auction sale.

We are not impressed by appellees submission that no evidence was adduced to prove that Cardale had

the capacity to pay the tax arrears and therefore she or Cardale may not be faulted for the tax delinquency

sale of the properties in question. Appellee Franciscos bad faith or deception did not necessarily lie in

Cardales or her failure to settle the tax deliquencies in question, but in not disclosing to Gutierrezs estate

or its executrix (herein appellant) which had a mortgage lien on said properties the tax delinquencies and

the impending auction sale of the encumbered properties.

Appellee Franciscos deception is further shown by her concealment of the tax delinquency sale of the

properties from the estate or its executrix, thus preventing the latter from availing of the right of

redemption of said properties. That appellee Francisco divulged the auction sale of the properties only


5/71

after such redemption period had lapsed clearly betrays her intention to keep Gutierrezs Estate or its

Executrix from availing of such right. And as the evidence would further show, appellee Francisco had a

hand in securing for Merryland consolidation of its ownership of the properties and in seeing to it that

Merrylands torrens certificates for the properties were free from liens and encumbrances. All these

appellee Francisco did even as she was fully aware that Gutierrez or her estate had a valid and subsisting

mortgage lien on the said properties.

It is likewise worthy of note that early on appellee Francisco had testified in the action for rescission of saleand recovery of possession and ownership of the properties which Gutierrez filed against Cardale (Civil

Case No. Q-12366) in her capacity as defendant Cardales vice-president and treasurer. But then, for no

plausible reason whatsoever, she lost interest in continuing with the presentation of evidence for

defendant Cardale. And then, when appellant Mejia as executrix of Gutierrezs Estate filed on August 13,

1984 a Motion for Decision in the aforesaid case, appellee Francisco moved to defer consideration of

appellants Motion on the pretext that defendant Cardale needed time to employ another

counsel. Significantly, in her aforesaid Motion for Postponement dated August 16, 1984 which appellee

Francisco personally signed as Officer-in-Charge of Cardale, she also did not disclose the fact that the

properties subject matter of the case had long been sold at a tax delinquency sale and acquired by her

other corporation Merryland.

And as if what she had already accomplished were not enough fraudulence, appellee Francisco, acting in

behalf of Merryland, caused the issuance of new transfer certificates of title in the name of Merryland,

which did not anymore bear the mortgage lien in favor of Gutierrez. In the meantime, to further avoid

payment of the mortgage indebtedness owing to Gutierrezs estate, Cardale corporation was

dissolved. Finally, to put the properties beyond the reach of the mortgagee, Gutierrezs estate, Merryland

caused the subdivision of such properties, which were subsequently sold on installment basis.

In its petition for certiorari, petitioners argue that there is no law requiring the mortgagor to inform

the mortgagee of the tax delinquencies, if any, of the mortgaged properties. Moreover, petitioners claim

that Cardales failure to pay the realty taxes,per se, does not constitute fraud since it was not proven that

Cardale was capable of paying the taxes. Petitioners also contend that if Mejia, as executrix of Gutierrezs

estate, was not remiss in her duty to pursue Civil Case No. 12366, she could have easily learned of the non-

payment of realty taxes on the subject properties and of the auction sale that followed and thus, have

redeemed the properties or availed of some other remedy to conserve the estate of Gutierrez. In addition,

Mejia could have annotated a notice oflis pendenson the titles of the mortgaged properties, but she failed

to do so. It is the stand of petitioners that respondent has not adduced any proof that Francisco controlled

both Cardale and Merryland and that she used these two corporations to perpetuate a fraud upon

Gutierrez or her estate. Petitioners maintain that the evidence shows that, apart form the meager share of

petitioner Francisco, the stockholdings of both corporations comprise other shareholders, and the

stockholders of either of them, aside from petitioner Francisco, are composed of different persons. As to

Civil Case No. 12366, petitioners insist that the decision of the trial court in that case constitutes res

judicatato the instant case.[8]

It is dicta in corporation law that a corporation is a juridical person with a separate and distinct

personality from that of the stockholders or members who compose it.[9]

However, when the legal fiction

of the separate corporate personality is abused, such as when the same is used for fraudulent or wrongful

ends, the courts have not hesitated to pierce the corporate veil. One of the earliest formulations of this

doctrine of piercing the corporate veil was made in the American case of United States v. Milwaukee

Refrigerator Transit Co.[10]

-

If any general rule can be laid down, in the present state of authority, it is that a corporation will be lookedupon as a legal entity as a general rule, and until sufficient reason to the contrary appears; but, when the

notion of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime,

the law will regard the corporation as an association of persons.
http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn10http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn8


6/71

Since then a good number of cases have firmly implanted this doctrine in Philippine

jurisprudence.[11]

One such case is Umali v. Court of Appeals[12]

wherein the Court declared that

Under the doctrine of piercing the veil of corporate entity, when valid grounds therefore exist, the legal

fiction that a corporation is an entity with a juridical personality separate and distinct from its members or

stockholders may be disregarded. In such cases, the corporation will be considered as a mere association

of persons. The members or stockholders of the corporation will be considered as the corporation, that is,

liability will attach directly to the officers and stockholders. The doctrine applies when the corporate fiction

is used to defeat public convenience, justify wrong, protect fraud, or defend crime, or when it is made as a

shield to confuse the legitimate issues, or where a corporation is the mere alter ego or business conduit of

a person, or where the corporation is so organized and controlled and its affairs are so conducted as to

make it merely an instrumentality, agency, conduit or adjunct of another corporation.

With specific regard to corporate officers, the general rule is that the officer cannot be held personally

liable with the corporation, whether civilly or otherwise, for the consequences of his acts, if he acted for

and in behalf of the corporation, within the scope of his authority and in good faith. In such cases, the

officers acts are properly attributed to the corporation.[13]

However, if it is proven that the officer has used

the corporate fiction to defraud a third party,[14]

or that he has acted negligently, maliciously or in bad

faith,[15]then the corporate veil shall be lifted and he shall be held personally liable for the particularcorporate obligation involved.

The Court, after an assiduous study of this case, is convinced that the totality of the circumstances

appertaining conduce to the inevitable conclusion that petitioner Francisco acted in bad faith. The events

leading up to the loss by the Gutierrez estate of its mortgage security attest to this. It has been established

that Cardale failed to comply with its obligation to pay the balance of the purchase price for the four

parcels of land it bought from Gutierrez covered by TCT Nos. 7531 to 7534, which obligation was secured

by a mortgage upon the lands covered by TCT Nos. 7531, 7532 and 7533. This prompted Gutierrez to file

an action for rescission of the Deed of Sale with Mortgage (Civil Case No. Q-12366), but the case dragged

on for about fourteen years when Cardale, as represented by Francisco, who was Vice-President and

Treasurer of the same,[16]lost interest in completing its presentation of evidence.

Even before 1984 when Mejia, in her capacity as executrix of Gutierrezs estate, filed a Motion for

Decision with the trial court, there is no question that Francisco knew that the properties subject of the

mortgage had become tax delinquent. In fact, as treasurer of Cardale, Francisco herself was the officer

charged with the responsibility of paying the realty taxes on the corporations properties. This was

admitted by the trial court in its decision.[17]

In addition, notices dated 9 July 1982 from the City Treasurer

of Caloocan demanding payment of the tax arrears on the subject properties and giving warning that if the

realty taxes were not paid within the given period then such properties would be sold at public auction to

satisfy the tax delinquencies were sent directly to Franciscos address in White Plains, Quezon City.[18]

Thus,

as early as 1982, Francisco could have informed the Gutierrez estate or the trial court in Civil Case No. Q-12366 of the tax arrears and of the notice from the City Treasurer so that the estate could have taken the

necessary steps to prevent the auction sale and to protect its interests in the mortgaged properties, but

she did no such thing. Finally, in 1983, the properties were levied upon and sold at public auction wherein

Merryland - a corporation where Francisco is a stockholder[19]

and concurrently acts as President and

director[20]

- was the highest bidder.

When Mejia filed the Motion for Decision in Civil Case No. Q-12366,[21]

the period for redeeming the

properties subject of the tax sale had not yet expired.[22]

Under the Realty Property Tax Code,[23]

pursuant

to which the tax levy and sale were prosecuted,[24]

both the delinquent taxpayer and in his absence, any

person holding a lien or claim over the property shall have the right to redeem the property within one

year from the date of registration of the sale.[25]However, if these persons fail to redeem the propertywithin the time provided, then the purchaser acquires the property free from any encumbrance or third

party claim whatsoever.[26]

Cardale made no attempts to redeem the mortgaged property during this

time. Moreover, instead of informing Mejia or the trial court in Q-12366 about the tax sale, the records
http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn11http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn19http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn19http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn19http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn21http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn21http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn21http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn23http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn23http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn23http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn24http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn24http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn24http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn26http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn25http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn24http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn23http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn22http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn21http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn20http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn19http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn18http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn17http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn16http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn15http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn14http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn13http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn12http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn11


7/71

show that Francisco filed a Motion for Postponement[27]

in behalf of Cardale - even signing the motion in

her capacity as officer-in-charge - which worked to defer the hearing of Mejias Motion for Decision. No

mention was made by Francisco of the tax sale in the motion for postponement. Only after the redemption

period had expired did Francisco decide to reveal what had transpired by filing a Manifestation stating that

the properties subject of the mortgage in favor of Gutierrez had been sold at a tax delinquency sale;

however, Francisco failed to mention that it was Merryland that acquired the properties since she was

probably afraid that if she did so the court would see behind her fraudulent scheme. In this regard, it is

also significant to note that it was Francisco herself who filed the petitions for consolidation of title andwho helped secure for Merryland titles over the subject properties free from any encumbrance or third-

party claim whatsoever.

It is exceedingly apparent to the Court that the totality of Francisos actions clearly betray an intention

to conceal the tax delinquencies, levy and public auction of the subject properties from the estate of

Gutierrez and the trial court in Civil Case No. Q-12366 until after the expiration of the redemption period

when the remotest possibility for the recovery of the properties would be extinguished .[28]

Consequently,

Francisco had effectively deprived the estate of Gutierrez of its rights as mortgagee over the three parcels

of land which were sold to Cardale. If Francisco was acting in good faith, then she should have disclosed

the status of the mortgaged properties to the trial court in Civil Case No. Q-12366 - especially after Mejia

had filed a Motion for Decision, in response to which she filed a motion for postponement wherein shecould easily have mentioned the tax sale - since this action directly affected such properties which were

the subject of both the sale and mortgage.

That Merryland acquired the property at the public auction only serves to shed more light upon

Franciscos fraudulent purposes. Based on the findings of the Court of Appeals, Francisco is the controlling

stockholder and President of Merryland.[29]

Thus, aside from the instrumental role she played as an officer

of Cardale, in evading that corporations legitimate obligations to Gutierrez, it appears that Franciscos

actions were also oriented towards securing advantages for another corporation in which she had a

substantial interest. We cannot agree, however, with the Court of Appeals decision to hold Merryland

solidarily liable with Francisco. The only act imputable to Merryland in relation to the mortgaged

properties is that it purchased the same and this by itself is not a fraudulent or wrongful act. No evidence

has been adduced to establish that Merryland was a mere alter ego or business conduit of Francisco. Time

and again it has been reiterated that mere ownership by a single stockholder or by another corporation of

all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the

separate corporate personality.[30]

Neither has it been alleged or proven that Merryland is so organized and

controlled and its affairs are so conducted as to make it merely an instrumentality, agency, conduit or

adjunct of Cardale.[31]

Even assuming that the businesses of Cardale and Merryland are interrelated, this

alone is not justification for disregarding their separate personalities, absent any showing that Merryland

was purposely used as a shield to defraud creditors and third persons of their rights .[32]

Thus, Merrylands

separate juridical personality must be upheld.

Based on a statement of account submitted by Mejia, the Court of Appeals awarded P4,314,271.43 in

favor of the estate of Gutierrez which represents the unpaid balance of the purchase price in the amount

of P629,000.00 with an interest rate of nine percent (9%) per annum, in accordance with the agreement of

the parties under the Deed of Sale with Mortgage,[33]

as of December 1988.[34]

Therefore, in addition to the

amount awarded by the appellate court, Francisco should pay the estate of Gutierrez interest on the

unpaid balance of the purchase price (in the amount of P629,000.00) at the rate of nine percent (9%) per

annum computed from January, 1989 until fully satisfied.

Finally, contrary to petitioners assertions, we agree with the Court of Appeals that the decision of the

trial court in Civil Case No. Q-12366 does not constitute res judicata insofar as the present case is

concerned because the decision in the first case was not a judgment on the merits. Rather, it was merelybased upon the premise that since Cardale had been dissolved and the property acquired by another

corporation, the action for rescission would not prosper. As a matter of fact, it was even expressly stated

by the trial court that the parties should ventilate their issues in another action.
http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn27http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn27http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn27http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn29http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn29http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn29http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn31http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn31http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn31http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn33http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn33http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn33http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn34http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn34http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn34http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn34http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn33http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn32http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn31http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn30http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn29http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn28http://sc.judiciary.gov.ph/jurisprudence/2001/aug2001/141617.htm#_edn27


8/71

WHEREFORE, the 13 April 1999 Decision of the Court of Appeals is hereby accordingly MODIFIED so as

to hold ADALIA FRANCISCO solely liable to the estate of Gutierrez for the amount of P4,314,271.43 and for

interest on the unpaid balance of the purchase price (in the amount of P629,000.00) at the rate of nine

percent (9%) per annum computed from January, 1989 until fully satisfied. MERRYLAND is hereby absolved

from all liability.

SO ORDERED.

THIRD DIVISION

[A.C. No. 4218. July 20, 2000]

ROMEO H. SIBULO, complainant, vs. ATTY. STANLEY R. CABRERA, respondent.

D E C I S I O N

PURISIMA,J.:

At bar is an administrative complaint against the respondent, Atty. Stanley Cabrera, for unethical

practice/conduct.

The facts that matter are as follows:

In a case, entitled "Brenda Sucaldito[1]

versus Reynaldo Marcelo, et al.",docketed as Civil Case No.

90-55209 before Branch 53 of the Regional Trial Court of Manila, defendant Reynaldo Marcelo

retained the services of the herein respondent as his lawyer. Subsequently, however, therespondent also entered his appearance as counsel for plaintiff Brenda Sucaldito in the same case,

without withdrawing his appearance as counsel for defendant Reynaldo Marcelo. In view of such

development Atty. Reyes Geromo, former counsel of Brenda Sucaldito, filed with the Manila

Regional Trial Court a motion to disqualify the respondent on the ground of unethical

conduct.[2]

Finding merit in the said motion, the trial court ordered the disqualification of

respondent in the case.[3]

Complainant Romeo Sibulo, an intervenor in the aforementioned Civil Case No. 90-55209, brought

the present administrative complaint against respondent, praying for the latters removal from or

suspension in the practice of law, on the ground of unethical practice/conduct.

In his Answer[4]

to the Complaint, respondent denied the wrongdoing alluded to him; theorizing

that "xxx I merely accepted a case from a plaintiff and at the same time I was the counsel as

intervenor of one of the defendants xxx."

This case was referred to the Integrated Bar of the Philippines (IBP) for investigation, report and

recommendation.[5]

Acting thereupon on April 7, 2000, the IBP came out with its Resolution No. XIV-000-163, which

reads:

"RESOLUTION NO. XIV-000-163
http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn1


9/71

Adm. Case No. 4218

Romeo E. Sibulo vs. Atty. Stanly Cabrera

RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and

Recommendation of the Investigating Commissioner of the above-entitled case, herein made part

of this Resolution/Decision as annex A; and, finding the recommendation fully supported by the

evidence on record and the applicable laws and rules, said recommendation is with

modificationthat Respondent be CENSUREDand FINEDOne Thousand Pesos (P1,000.00)."

[6]

The IBP Report,[7]

in part, found:

"The respondents answer is quite revealing. While he denies any unethical conduct on his

part, respondent seeks to justify what he did and of which he is charged by tongue-in-cheek

declaring that he did no wrong considering that I merely accepted a case from a plaintiff and

at the same time I was the counsel as intervenor of one of the defendants.

Nothing further need be said. For all his disclaimers and the affidavits of two (2) witnesses in

his favor, it is beyond cavil that Atty. Cabrera has violated Canon 15 and the subsequent

Rules of Code of Professional Responsibility. The complainants motives are not of

paramount interest. To our mind, Atty. Cabrera has lain himself open to the specifications

against him. Remarkably, he admits the same by his lame explanation.

From all the foregoing, we recommend that Atty. Stanley R. Cabrera be CENSURED by the

Honorable Supreme Court and ordered to fine a pay (sic) in such amount as the Honorable

Court may see fit."

Respondent has all but admitted the wrongdoing complained of, when he stated in his Answer that

he "merely accepted a case from a plaintiff and at the same time I [he] was the counsel as

intervenor of one of the defendants." Such a revelation is a categorical admission that he

(respondent) represented two conflicting interests, which representations or appearances are

prohibited by Rule 15.03 of Canon 15 of the Code of Professional Responsibility, which provides:

"CANON 15 - A LAWYER SHALL OBSERVE CANDOR, FAIRNESS, AND LOYALTY IN ALL HIS

DEALINGS AND TRANSACTIONS WITH HIS CLIENT.

xxx.....xxx.....xxx

Rule 15.03 - A lawyer shall not represent conflicting interests except by written consent of

all concerned given after a full disclosure of the facts."

Respondent was bound to faithfully represent his client in all aspects of subject civil case. When he

agreed to represent the defendant and later on, also the plaintiff in the same case, he could no

longer serve either of his said clients faithfully, as his duty to the plaintiff did necessarily conflict

with his duty to the defendant. The relation of attorney and client is based on trust, so that double

dealing which could sometimes lead to treachery, should be avoided.[8]

Considering the attendant facts and circumstances, the Court is of the sense that the amount of

fine recommended below is not commensurate with the wrong done by the respondent.

WHEREFORE,respondent is found GUILTYof unethical conduct for representing two conflicting

interests and is hereby FINED in the amount of TEN THOUSAND (P10,000.00) Pesos, with a warning

that a repetition of the same or similar acts will be dealt with more severely.
http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/AC_4218.htm#_ftn6


10/71

SO ORDERED.

Republic of the Philippines

Supreme Court

Manila

EN BANC

CLARITA J. SAMALA,

Complainant,

ADM. CASE NO. 5439

Present:

PUNO, C.J.,

QUISUMBING,

YNARES-SANTIAGO,

SANDOVAL-GUTIERREZ,

CARPIO,

AUSTRIA-MARTINEZ,

- versus - CORONA,

CARPIO MORALES,

CALLEJO, SR.,

AZCUNA,

TINGA,

CHICO-NAZARIO,

GARCIA, and

VELASCO, JR.,JJ.

ATTY. LUCIANO D. VALENCIA, Promulgated:

Respondent. _______________________

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

R E S O L U T I O N

AUSTRIA-MARTINEZ,J.

Before us is a complaint[1]

dated May 2, 2001 filed by Clarita J. Samala (complainant) against

Atty. Luciano D. Valencia (respondent) for Disbarment on the following grounds: (a) serving on two

separate occasions as counsel for contending parties; (b) knowingly misleading the court by submitting

false documentary evidence; (c) initiating numerous cases in exchange for nonpayment of rental fees; and

(d) having a reputation of being immoral by siring illegitimate children.
http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn1


11/71

After respondent filed his Comment, the Court, in its Resolution of October 24, 2001, referred the case to

the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation.[2]

The investigation was conducted by Commissioner Demaree Jesus B. Raval. After a series of hearings, the

parties filed their respective memoranda[3]

and the case was deemed submitted for resolution.

Commissioner Wilfredo E.J.E. Reyes prepared the Report and Recommendation[4]

dated January 12,

2006. He found respondent guilty of violating Canons 15 and 21 of the Code of Professional Responsibilityand recommended the penalty of suspension for six months.

In a minute Resolution[5]

passed on May 26, 2006, the IBP Board of Governors adopted and

approved the report and recommendation of Commissioner Reyes but increased the penalty of suspension

from six months to one year.

We adopt the report of the IBP Board of Governors except as to the issue on immorality and as to the

recommended penalty.

On serving as counsel for contending parties.

Records show that in Civil Case No. 95-105-MK, filed in the Regional Trial Court (RTC), Branch

272, Marikina City, entitled Leonora M. Aville v. Editha Valdez for nonpayment of rentals, herein

respondent, while being the counsel for defendant Valdez, also acted as counsel for the tenants Lagmay,

Valencia, Bustamante andBayuga[6]

by filing an Explanation and Compliance before the RTC.[7]

In Civil Case No. 98-6804 filed in the Metropolitan Trial Court (MTC), Branch 75, Marikina City,

entitled Editha S. Valdez and Joseph J. Alba, Jr. v. SalveBustamante and her husband for ejectment,

respondent represented Valdez against Bustamante one of the tenants in the property subject of the

controversy.Defendants appealed to the RTC, Branch 272, Marikina City docketed as SCA Case No. 99-341-

MK. In his decision dated May 2, 2000,[8]

Presiding Judge Reuben P. dela Cruz[9]

warned respondent to

refrain from repeating the act of being counsel of record of both parties in Civil Case No. 95-105-MK.

But in Civil Case No. 2000-657-MK, filed in the RTC, Branch 273, Marikina City, entitled Editha S. Valdez v.

Joseph J. Alba, Jr. and Register of Deeds of MarikinaCity, respondent, as counsel for Valdez, filed a

Complaint for Rescission of Contract with Damages and Cancellation of Transfer Certificate of Title No.

275500 against Alba, respondent's former client in Civil Case No. 98-6804 and SCA Case No. 99-341-MK.

Records further reveal that at the hearing of November 14, 2003, respondent admitted that in Civil Case

No. 95-105-MK, he was the lawyer for Lagmay (one of the tenants) but not

for Bustamante and Bayuga[10]

albeit he filed the Explanation and Compliance for and in behalf of the

tenants.[11]

Respondent also admitted that he represented Valdez in Civil Case No. 98-6804 and SCA Case

No. 99-341-MK against Bustamante and her husband but denied being the counsel for Alba although the

case is entitled Valdez and Albav. Bustamante and her husband, because Valdez told him to include Alba

as the two were the owners of the property[12]

and it was only Valdez who signed the complaint

for ejectment.[13]

But, while claiming that respondent did not represent Alba, respondent, however, avers

that he already severed his representation for Alba when the latter charged

respondent with estafa.[14]

Thus, the filing of Civil Case No. 2000-657-MK against Alba.

Rule 15.03, Canon 15 of the Code of Professional Responsibility provides that a lawyer shall not represent

conflicting interests except by written consent of all concerned given after a full disclosure of the facts.
http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn2


12/71

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.[15]

He may not also undertake to discharge

conflicting duties any more than he may represent antagonistic interests. This stern rule is founded on the

principles of public policy and good taste.[16]

It springs from the relation of attorney and client which is one

of trust and confidence. Lawyers are expected not only to keep inviolate the clients 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.[17]

One of the tests of inconsistency of interests is whether the acceptance of a new relation would preventthe full discharge of the lawyers duty of undivided fidelity and loyalty to the client or invite suspicion of

unfaithfulness or double-dealing in the performance of that duty.[18]

The stern rule against representation of conflicting interests is founded on principles of public policy and

good taste. It springs from the attorneys duty to represent his client with undivided fidelity and to maintain

inviolate the clients confidence as well as from the injunction forbidding the examination of an attorney as

to any of the privileged communications of his client.[19]

An attorney owes loyalty to his client not only in the case in which he has represented him but also after

the relation of attorney and client has terminated.

[20]

The bare attorney-client relationship with a clientprecludes an attorney from accepting professional employment from the clients adversary either in the

same case[21]

or in a different but related action.[22]

A lawyer is forbidden from representing a subsequent

client against a former client when the subject matter of the present controversy is related, directly or

indirectly, to the subject matter of the previous litigation in which he appeared for the former client.[23]

We held in Nombrado v. Hernandez[24]

that the termination of the relation of attorney and client provides

no justification for a lawyer to represent an interest adverse to or in conflict with that of the former

client. The reason for the rule is that the clients confidence once reposed cannot be divested by the

expiration of the professional employment.[25]

Consequently, a lawyer should not, even after the severance

of the relation with his client, 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 clients confidences acquired

in the previous relation.[26]

In this case, respondents averment that his relationship with Alba has long been severed by the act of the

latter of not turning over the proceeds collected in Civil Case No. 98-6804, in connivance with the

complainant, is unavailing. Termination of the attorney-client relationship precludes an attorney from

representing a new client whose interest is adverse to his former client. Alba may not be his original client

but the fact that he filed a case entitled Valdez and Albav. Bustamante and her husband, is a clear

indication that respondent is protecting the interests of both Valdez and Alba in the said case. Respondent

cannot just claim that the lawyer-client relationship between him and Alba has long been severed without

observing Section 26, Rule 138 of the Rules of Court wherein the written consent of his client is required.

In Gonzales v. Cabucana, Jr.,[27]

citing the case of Quiambao v. Bamba,[28]

we held that:

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 lawyersrespective retainers with each of them would affect the performance of the duty of

undivided fidelity to both clients.[29]
http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn29http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn28http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn15


13/71

Respondent is bound to comply with Canon 21 of the Code of Professional Responsibility which states that

a lawyer shall preserve the confidences and secrets of his client even after the attorney-client relation is

terminated.

The reason for the prohibition is found in the relation of attorney and client, which is one of trust and

confidence of the highest degree. A lawyer becomes familiar with all the facts connected with his clientscase. He learns from his client the weak points of the action as well as the strong ones. Such knowledge

must be considered sacred and guarded with care.[30]

From the foregoing, it is evident that respondents representation of Valdez and Alba

against Bustamante and her husband, in one case, and Valdez against Alba, in another case, is a clear case

of conflict of interests which merits a corresponding sanction from this Court. Respondent may have

withdrawn his representation in Civil Case No. 95-105-MK upon being warned by the court,[31]

but the

same will not exculpate him from the charge of representing conflicting interests in his representation in

Civil Case No. 2000-657-MK.

Respondent is reminded to be more cautious in accepting professional employments, to refrain from all

appearances and acts of impropriety including circumstances indicating conflict of interests, and to behave

at all times with circumspection and dedication befitting a member of the Bar, especially observing candor,

fairness and loyalty in all transactions with his clients.[32]

On knowingly misleading the court by submitting false documentary evidence.

Complainant alleges that in Civil Case No. 00-7137 filed before MTC, Branch 75 for ejectment, respondent

submitted TCT No. 273020 as evidence of Valdez's ownership despite the fact that a new TCT No. 275500

was already issued in the name of Alba on February 2, 1995.

Records reveal that respondent filed Civil Case No. 00-7137 on November 27, 2000 and presented TCT No.

273020 as evidence of Valdez's ownership of the subject property.[33]

During the hearing before

Commissioner Raval, respondent avers that when the Answer was filed in the said case, that was the time

that he came to know that the title was already in the name of Alba; so that when the court dismissed the

complaint, he did not do anything anymore.[34]

Respondent further avers that Valdez did not tell him the

truth and things were revealed to him only when the case for rescission was filed in 2002.

Upon examination of the record, it was noted that Civil Case No. 2000-657-MK for rescission of contract

and cancellation of TCT No. 275500 was also filed onNovember 27, 2000,[35]

before RTC, Branch

273, Marikina City, thus belying the averment of respondent that he came to know of Alba's title only in

2002 when the case for rescission was filed. It was revealed during the hearing before

Commissioner Raval that Civil Case Nos. 00-7137 and 2000-657-MK were filed on the same date, although

in different courts and at different times.

Hence, respondent cannot feign ignorance of the fact that the title he submitted was already cancelled in

lieu of a new title issued in the name of Alba in 1995 yet, as proof of the latter's ownership.

Respondent failed to comply with Canon 10 of the Code of Professional Responsibility which provides that

a lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall he mislead, or allow

the Court to be mislead by any artifice. It matters not that the trial court was not misled by respondent's
http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn35http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn34http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn33http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn32http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn31http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn30


14/71

submission of TCT No. 273020 in the name of Valdez, as shown by its decision dated January 8,

2002[36]

dismissing the complaint for ejectment. What is decisive in this case is respondent's intent in trying

to mislead the court by presenting TCT No. 273020 despite the fact that said title was already cancelled

and a new one, TCT No. 275500, was already issued in the name of Alba.

In Young v. Batuegas,[37]

we held that a lawyer must be a disciple of truth. He swore upon his admission to

the Bar that he will do no falsehood nor consent to the doing of any in court and he shall conduct himself

as a lawyer according to the best of his knowledge and discretion with all good fidelity as well to the courtsas to his clients.

[38]He should bear in mind that as an officer of the court his high vocation is to correctly

inform the court upon the law and the facts of the case and to aid it in doing justice and arriving at correct

conclusion.[39]

The courts, on the other hand, are entitled to expect only complete honesty from lawyers

appearing and pleading before them. While a lawyer has the solemn duty to defend his clients rights and is

expected to display the utmost zeal in defense of his clients cause, his conduct must never be at the

expense of truth.

A lawyer is the servant of the law and belongs to a profession to which society has entrusted the

administration of law and the dispensation of justice.[40]

As such, he should make himself more an

exemplar for others to emulate.

[41]

On initiating numerous cases in exchange for nonpayment of rental fees.

Complainant alleges that respondent filed the following cases: (a) Civil Case No. 2000-657-MK at the RTC,

Branch 272; (b) Civil Case No. 00-7137 at the MTC, Branch 75; and (c) I.S. Nos. 00-4439 and 01-036162 both

entitled Valencia v. Samala for estafa and grave coercion, respectively, before the Marikina City

Prosecutor.Complainant claims that the two criminal cases were filed in retaliation for the cases she filed

against Lagmay docketed as I.S. No. 00-4306 for estafa and I.S. No. 00-4318 against Alvin Valencia (son of

respondent) for trespass to dwelling.

As culled from the records, Valdez entered into a retainer agreement with respondent. As payment for his

services, he was allowed to occupy the property for free and utilize the same as his office pursuant to their

retainer agreement.[42]

Respondent filed I.S. Nos. 00-4439[43]

and 01-036162[44]

both entitled Valencia v. Samala for estafa and

grave coercion, respectively, to protect his client's rights against complainant who filed I.S. No. 00-

4306[45]

for estafa against Lagmay, and I.S. No. 00-4318[46]

against Alvin Valencia[47]

for trespass to dwelling.

We find the charge to be without sufficient basis. The act of respondent of filing the aforecited cases to

protect the interest of his client, on one hand, and his own interest, on the other, cannot be made the

basis of an administrative charge unless it can be clearly shown that the same was being done to abuse

judicial processes to commit injustice.

The filing of an administrative case against respondent for protecting the interest of his client and his own

right would be putting a burden on a practicing lawyer who is obligated to defend and prosecute the right

of his client.

On having a reputation for being immoral by siring illegitimate children.

We find respondent liable for being immoral by siring illegitimate children.
http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn42http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn42http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn42http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn45http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn44http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn43http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn42http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn41http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn40http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn39http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn38http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn37http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn36


15/71

During the hearing, respondent admitted that he sired three children by Teresita Lagmay who are all over

20 years of age,[48]

while his first wife was still alive. He also admitted that he has eight children by his first

wife, the youngest of whom is over 20 years of age, and after his wife died in 1997, he married Lagmay in

1998.[49]

Respondent further admitted that Lagmay was staying in one of the apartments being claimed by

complainant. However, he does not consider his affair withLagmay as a relationship[50]

and does not

consider the latter as his second family.[51]

He reasoned that he was not staying with Lagmay because he

has two houses, one in Muntinlupa and another in Marikina.[52]

In this case, the admissions made by respondent are more than enough to hold him liable on the charge of

immorality. During the hearing, respondent did not show any remorse. He even justified his transgression

by saying that he does not have any relationship with Lagmay and despite the fact that he sired three

children by thelatter, he does not consider them as his second family. It is noted that during the hearing,

respondent boasts in telling the commissioner that he has two houses - inMuntinlupa, where his first wife

lived, and in Marikina, where Lagmay lives.[53]

It is of no moment that respondent eventually

married Lagmay after the death of his first wife. The fact still remains that respondent did not live up to the

exacting standard of morality and decorum required of the legal profession.

Under Canon 1, Rule 1.01 of the Code of Professional Responsibility, a lawyer shall not engage in unlawful,

dishonest, immoral or deceitful conduct. It may be difficult to specify the degree of moral delinquency that

may qualify an act as immoral, yet, for purposes of disciplining a lawyer, immoral conduct has been defined

as that conduct which is willful, flagrant, or shameless, and which shows a moral indifference to the

opinion of respectable members of the community.[54]

Thus, in several cases, the Court did not hesitate to

discipline a lawyer for keeping a mistress in defiance of the mores and sense of morality of the

community.[55]

That respondent subsequently married Lagmay in 1998 after the death of his wife and that

this is his first infraction as regards immorality serve to mitigate his liability.

ACCORDINGLY, the Court finds respondent Atty. Luciano D. Valencia GUILTYof misconduct and

violation of Canons 21, 10 and 1 of the Code of Professional Responsibility. He is SUSPENDED from the

practice of law for three (3) years, effective immediately upon receipt of herein Resolution.

Let copies of this Resolution be furnished all courts of the land, the Integrated Bar of the Philippines as well

as the Office of the Bar Confidant for their information and guidance, and let it be entered in respondents

personal records.

SO ORDERED.

SECOND DIVISION
http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn55http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn55http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn55http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn55http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2007/jan2007/5439.htm#_ftn48


16/71

LYDIA CASTRO-JUSTO,

Complainant,

- versus -

ATTY. RODOLFO T. GALING,

Respondent.

A.C. No. 6174

Present:

CARPIO,

Chairperson,

BRION,

PEREZ,

SERENO, and

REYES,JJ.

Promulgated:

November 16, 2011

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

D E C I S I O N

PEREZ,J.:

Before us for consideration is Resolution No. XVIII-2007-196[1]

of the Board of Governors, Integrated Bar of

the Philippines (IBP), relative to the complaint[2]

for disbarment filed by Lydia Castro-Justo against Atty.

Rodolfo T. Galing.

Complainant Justo alleged that sometime in April 2003, she engaged the services of respondent Atty.

Galing in connection with dishonored checks issued by Manila City Councilor Arlene W. Koa (Ms.

Koa). After she paid his professional fees, the respondent drafted and sent a letter to Ms. Koa demanding

payment of the checks.[3]

Respondent advised complainant to wait for the lapse of the period indicated in

the demand letter before filing her complaint.

On 10 July 2003, complainant filed a criminal complaint against Ms. Koa for estafa and violation of Batas

Pambansa Blg. 22 before the Office of the City Prosecutor of Manila.[4]
http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2011/november2011/6174.htm#_ftn1


17/71

On 27 July 2003, she received a copy of a Motion for Consolidation[5]

filed by respondent for and on behalf

of Ms. Koa, the accused in the criminal cases, and the latters daughter Karen Torralba (Ms.

Torralba). Further, on 8 August 2003, respondent appeared as counsel for Ms. Koa before the prosecutor

of Manila.

Complainant submits that by representing conflicting interests, respondent violated the Code of

Professional Responsibility.

In his Comment,[6]

respondent

Date post:	02-Mar-2018
Category:	Documents
Upload:	careyssa-mae
View:	224 times
Download:	0 times

Legal Ethics Cases After Midterms

Documents