Dominion Insurance Corp. v CA (GEN) 376 SCRA 239 Feb. 6, 2002 Pardo, J.

FACTS: Rodolfo Gu eva rra cla imed to h ave advanced P156, 473.90 in his capacity as ma n a g e r o f D o m i n i o n I n s u r a n c e C o r p . t o s a t i s f y certa in claims filed b y th e p etitioners clien ts. He t h e n i n s t i t u t e d a c o m p l a i n t f o r s u m o f m o n e y agains t the petitioner. The petition er denied an y liability to p la in tiff and ass erted a cou ntercla im of P249,672.53, representing premium that Guevarra failed to pay. The RTC ruled in favor of Guevarra and ordered the petition er to pa y h im th e sum he claims. The CA affirmed the decision of the RTC. ISSUE: WON Guevarra acted within his authority as agent for petitioner? HELD: NO. The S pecia l Power of Attorn e y en tered in to by petition er and Gu eva rra wou ld sh ow that they intended to enter into a principalagent r e l a t i o n s h i p . D e s p i t e t h e w o r d s p e c i a l i n t h e document, the contents reveal that what was c o n s t i t u t e d w a s a c t u a l l y a g e n e r a l a g e n c y . T h e agency comprises a ll th e b usiness of th e p rincipa l bu t cou ch ed in g eneral terms; hen ce it is limited only to acts of administration. T h u s , t h e g e n e r a l a g e n c y c o n s t i t u t e d d o e s n o t w a r r a n t t h e p a y m e n t o r s e t t l e m e n t o f c l a i m s a s they specifically require a Special Power of Attorney as provided by Art. 1878 of the Civil Code. Bu t a s provid ed by the Memoran dum of Management Agreement, Guevarra was authorized to pa y the claim b ut th e p aym ent sha ll come from the revolving fund or collection in his possession. Having deviated from the instructions of the p rin cipal, th e expenses that Gu eva rra in cu rred in the settlement of the claims of the insured may not be reimb urs ed from Dominion in accorda nce with Art. 1918 of the Civil Code. Nevertheles s, un der A rt. 1236, to the ex ten t tha t the obligation of the petitioner ha s been e x t i n g u i s h e d , G u e v a r r a m a y d e m a n d f o r reimbursement from his principal AMON TRADING CORPORATION and JULIANA MARKETING, P e t i t i o n e r s, G.R. No. 158585 Present: PUNO, Chairman, AUSTRIA-MARTINEZ, CALLEJO, SR., TINGA, and CHICO-NAZARIO, JJ.

- versus -

HON. COURT OF APPEALS and TRI-REALTY DEVELOPMENT AND CONSTRUCTION CORPORATION, R e s p o n d e n t s.

Promulgated: December 13, 2005 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x CHICO-NAZARIO,

This is an appeal by certiorari from the Decision[1] dated 28 November 2002 of the Court of Appeals in CA-G.R. CV No. 60031, reversing the Decision of the Regional Trial Court of Quezon City, Branch 104, and holding petitioners Amon Trading Corporation and Juliana Marketing to be solidarily liable with Lines & Spaces Interiors Center (Lines & Spaces) in refunding private respondent Tri-Realty Development and Construction Corporation (Tri-Realty) the amount corresponding to the value of undelivered bags of cement. The undisputed facts: Private respondent Tri-Realty is a developer and contractor with projects in Bulacan and Quezon City. Sometime in February 1992, private respondent had difficulty in purchasing cement needed for its projects. Lines & Spaces, represented by Eleanor Bahia Sanchez, informed private respondent that it could obtain cement to its satisfaction from petitioners, Amon Trading Corporation and its sister company, Juliana Marketing. On the strength of such representation, private respondent proceeded to order from Sanchez Six Thousand Fifty (6,050) bags of cement from petitioner Amon Trading Corporation, and from Juliana Marketing, Six Thousand (6,000) bags at P98.00/bag. Private respondent, through Mrs. Sanchez of Lines & Spaces, paid in advance the amount of P592,900.00 through Solidbank Managers Check No. 0011565 payable to Amon Trading Corporation, and the amount of P588,000.00 payable to Juliana Marketing, through Solidbank Managers Check No. 0011566. A certain Weng Chua signed the check vouchers for Lines & Spaces while Mrs. Sanchez issued receipts for the two managers checks. Pri vate respondent likewise paid to Lines & Spaces an advance fee for the 12,050 cement bags at the rate of P7.00/bag, or a total of P84,350.00, in consideration of the facilitation of the orders and certainty of delivery of the same to the private respondent. Solidbank Managers Check Nos. 0011565 and 0011566 were paid by Sanchez to petitioners. There were deliveries to private respondent from Amon Trading Corporation and Juliana Marketing of 3,850 bags and 3,000 bags, respectively, during the period from April to June 1992. However, the balance of 2,200 bags from Amon Trading Corporation and 3,000 bags from Juliana Marketing, or a total of 5,200 bags, was not delivered. Private respondent, thus, sent petitioners written demands but in reply, petitioners stated that they have already refunded the amount of undelivered bags of cement to Lines and Spaces per written instructions of Eleanor Sanchez. Left high and dry, with news reaching it that Eleanor Sanchez had already fled abroad, private respondent filed this case for sum of money against petitioners and Lines & Spaces. Petitioners plead in defense lack of right or cause of action, alleging that private respondent had no privity of contract with them as it was Lines & Spaces/Tri-Realty, through Mrs. Sanchez, that ordered or purchased several bags of cement and paid the price thereof without informing them of any special arrangement nor disclosing to them that Lines & Spaces and respondent corporation are distinct and separate entities. They added that there were purchases or orders made by Lines & Spaces/Tri-Realty which they were about to deliver, but were cancelled by Mrs. Sanchez and the consideration of the cancelled purchases or orders was later reimbursed to Lines & Spaces. The refund was in the form of a check payable to Lines & Spaces. Lines & Spaces denied in its Answer that it is represented by Eleanor B. Sanchez and pleads in defense lack of cause of action and in the alternative, it raised the defense that it was only an intermediary between the private respondent and petitioners.[2] Soon after, though, counsel for Lines & Spaces moved to withdraw from the case for the reason that its client was beyond contact. On 29 January 1998, the Regional Trial Court of Quezon City, Branch 104, found Lines & Spaces solely liable to private respondent and absolved petitioners of any liability. The dispositive portion of the trial courts Decision reads:

Wherefore, judgment is hereby rendered ordering defendant Lines and Spaces Interiors Center as follows: to pay plaintiff on the complaint the amount of P47,950.00 as refund of the fee for the undelivered 5,200 bags of cement at the rate of P7.00 per bag; the amount of P509,600.00 for the refund of the price of the 5,200 undelivered bags of cement at P98.00 per bag; the amount of P2,000,000.00 for compensatory damages; as well as the amount of P639,387.50 as attorneys fees; and to pay Amon Trading and Juliana Marketing, Inc. on the crossclaim the sum of P200,000.00 as attorneys fees.[3] Private Respondent Tri-Realty partially appealed from the trial courts decision absolving Amon Trading Corporation and Juliana Marketing of any liability to TriRealty. In the presently assailed Decision, the Court of Appeals reversed the decision of the trial court and held petitioners Amon Trading Corporation and Juliana Marketing to be jointly and severally liable with Lines & Spaces for the undelivered bags of cement. The Court of Appeals disposedWHEREFORE, premises considered, the decision of the court a quo is hereby REVERSED AND SET ASIDE, and another one is entered ordering the following: Defendant-appellee Amon Trading Corporation is held liable jointly and severally with defendant-appellee Lines and Spaces Interiors Center in the amount of P215,600.00 for the refund of the price of 2,200 undelivered bags of cement. Defendant-appellee Juliana Marketing is held liable jointly and severally with defendant-appellee Lines and Spaces Interiors Center in the amount of P294,000.00 for the refund of the price of 3,000 undelivered bags of cement. The defendant-appellee Lines and Spaces Interiors Center is held solely in the amount of P47,950.00 as refund of the fee for the 5,200 undelivered bags of cement to the plaintiff-appellant Tri-Realty Development and Construction Corporation. The awards of compensatory damages and attorneys fees are DELETED. The cross claim of defendants-appellees Amon Trading Corporation and Juliana Marketing is DISMISSED for lack of merit. No pronouncement as to costs.[4]

Pained by the ruling, petitioners elevated the case to this Court via the present petition for review to challenge the Decision and Resolution of the Court of Appeals on the following issues: I. II. WHETHER OR NOT THERE WAS A CONTRACT OF AGENCY BETWEEN LINES AND SPACES INTERIOR CENTER AND RESPONDENT; WHETHER OR NOT PETITIONERS AND RESPONDENT HAS PRIVITY OF CONTRACT.[5]

At the focus of scrutiny is the issue of whether or not the Court of Appeals committed reversible error in ruling that petitioners are solidarily liable with Lines & Spaces. The key to unlocking this issue is to determine whether or not Lines & Spaces is the private respondents agent and whether o r not there is privity of contract between petitioners and private respondent. We shall consider these issues concurrently as they are interrelated. Petitioners, in their brief, zealously make a case that there was no contract of agency between Lines & Spaces and private respondent.[6] Petitioners strongly assert that they did not have a hint that Lines & Spaces and Tri-Realty are two different and distinct entities inasmuch as Eleanor Sanchez whom they have dealt with just represented herself to be from Lines & Spaces/Tri-Realty when she placed her order for the delivery of the bags of cement. Hence, no privity of contract can be said to exist between petitioners and private respondent.[7] Private respondent, on the other hand, goes over the top in arguing that contrary to their claim of innocence, petitioners had knowledge that Lines & Spaces, as represented by Eleanor Sanchez, was a separate and distinct entity from Tri-Realty.[8] Then, too, private respondent stirs up support for its contention that contrary to petitioners' claim, there was privity of contract between private respondent and petitioners.[9] Primarily, there was no written contract entered into between petitioners and private respondent for the delivery of the bags of cement. As gleaned from the records, and as private respondent itself admitted in its Complaint, private respondent agreed with Eleanor Sanchez of Lines & Spaces for the latter to source the cement needs of the former in consideration of P7.00 per bag of cement. It is worthy to note that the payment in managers checks was made to Eleanor Sanchez of Lines & Spaces and was not directly paid to petitioners. While the managers check issued by respondent company was eventually paid to petitioners for the delivery of the bags of cement, there is obviously nothing from the face of said managers check to hint that private respondent was t he one making the payments. There was likewise no intimation from Sanchez that the purchase order placed by her was for private respondents benefit. The meeting of minds, therefore, was between private respondent and Eleanor Sanchez of Lines & Spaces. This contract is distinct and separate from the contract of sale between petitioners and Eleanor Sanchez who represented herself to be from Lines & Spaces/Tri-Realty, which, per her representation, was a single account or entity. The records bear out, too, Annex A showing a check voucher payable to Amon Trading Corporation for the 6,050 bags of cement received by a certain Weng Chua for Mrs. Eleanor Sanchez of Lines & Spaces, and Annex B which is a check voucher bearing the name of Juliana Marketing as p ayee, but was received again by said Weng Chua. Nowhere from the face of the check vouchers is it shown that petitioners or any of their authorized representatives received the payments from respondent company. Also on record are the receipts issued by Lines & Spaces, signed by Eleanor Bahia Sanchez, covering the said managers checks . As Engr. Guido Ganhinhin of respondent Tri-Realty testified, it was Lines & Spaces, not petitioners, which issued to them a receipt for the two (2) managers checks. ThusQ: And what is your proof that Amon and Juliana were paid of the purchases through managers checks?

A: Lines & Spaces who represented Amon Trading and Juliana Marketing issued us receipts for the two (2) managers checks we paid to Amon Trading and Juliana Marketing Corporation. Q: I am showing to you check no. 074 issued by Lines & Spaces Interiors Center, what relation has this check to that check you mentioned earlier?

A: Official Receipt No. 074 issued by Lines & Spaces Interiors Center was for the P592,900.00 we paid to Amon Trading Corporation for 6,050 bags of cement. Q: A: Q: A: Now there appears a signature in that receipt above the printed words authorized signature, whose signature is that? The signature of Mrs. Eleanor Bahia Sanchez, the representative of Lines and Spaces. Why do you know that that is her signature? She is quite familiar with me and I saw her affix her signature upon issuance of the receipt.[10] (Emphasis supplied.)

Without doubt, no vinculum could be said to exist between petitioners and private respondent. There is likewise nothing meaty about the assertion of private respondent that inasmuch as the delivery receipts as well as the purchase order were for the account of Lines & Spaces/Tri-Realty, then petitioners should have been placed on guard that it was private respondent which is the principal of Sanchez. In China Banking Corp. v. Members of the Board of Trustees, Home Development Mutual Fund[11] and the later case of Romulo, Mabanta, Buenaventura, Sayoc and De los Angeles v. Home Development Mutual Fund,[12] the term and/or was held to mean that effect shall be given to both the conjunctive and and the disjunctive or; or that one word or the other may be taken accordingly as one or the other will best effectuate the intended purpose. It was accordingly ordinarily held that in using the term "and/or" the word "and" and the word "or" are to be used interchangeably. By analogy, the words Lines & Spaces/Tri-Realty mean that effect shall be given to both Lines & Spaces and Tri-Realty or that Lines & Spaces and TriRealty may be used interchangeably. Hence, petitioners were not remiss when they believed Eleanor Sanchezs representation that Lines & Spaces/Tri-Realty refers to just one entity. There was, therefore, no error attributable to petitioners when they refunded the value of the undelivered bags of cement to Lines & Spaces only. There is likewise a dearth of evidence to show that the case at bar is an open-and-shut case of agency between private respondent and Lines & Spaces. Neither Eleanor Sanchez nor Lines & Spaces was an agent for private respondent, but rather a supplier for the latters cement needs. The Civil Code defines a contract of agency as follows: Art. 1868. By the contract of agency a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. In a bevy of cases such as the avuncular case of Victorias Milling Co., Inc. v. Court of Appeals,[13] the Court decreed from Article 1868 that the basis of agency is representation. . . . On the part of the principal, there must be an actual intention to appoint or an intention naturally inferable from his words or actions and on the part of the agent, there must be an intention to accept the appointment and act on it, and in the absence of such intent, there is generally no agency. One factor which most clearly distinguishes agency from other legal concepts is control; one person - the agent agrees to act under the control or direction of another - the principal. Indeed, the very word "agency" has come to connote control by the principal. The control factor, more than any other, has caused the courts to put contracts between principal and agent in a separate category.

Here, the intention of private respondent, as the Executive Officer of respondent corporation testified on, was merely for Lines & Spaces, through Eleanor Sanchez, to supply them with the needed bags of cement. Q: A: Q: Do you know the defendant Lines & Spaces in this case? Yes, sir. How come you know this defendant?

A: Lines & Spaces represented by Eleanor Bahia Sanchez offered to supply us cement when there was scarcity of cement experienced in our projects.[14] (Emphasis supplied) We cannot go along the Court of Appeals disquisition that Amon Trading Corporation and Juliana Marketing should have required a special power of attorney form when they refunded Eleanor B. Sanchez the cost of the undelivered bags of cement. All the quibbling about whether Lines & Spaces acted as agent of private respondent is inane because as illustrated earlier, petitioners took orders from Eleanor Sanchez who, after all, was the one who paid them the managers checks for the purchase of cement. Sanchez represented herself to be from Lines & Spaces/Tri-Realty, purportedly a single entity. Inasmuch as they have never directly dealt with private respondent and there is no paper trail on record to guide them that the private respondent, in fact, is the beneficiary, petitioners had no reason to doubt the request of Eleanor Sanchez later on to refund the value of the undelivered bags of cement to Lines & Spaces. Moreover, the check refund was payable to Lines & Spaces, not to Sanchez, so there was indeed no cause to suspect the scheme. The fact that the deliveries were made at the construction sites of private respondent does not by itself raise suspicion that petitioners were delivering for private respondent. There was no sufficient showing that petitioners knew that the delivery sites were that of private respondent and for another thing, the deliveries were made by petitioners men who have no business nosing around their clients affairs. Parenthetically, Eleanor Sanchez has absconded to the United States of America and the story of what happened to the check refund may be forever locked with her. Lines & Spaces, in its Answer to the Complaint, washed its hands of the apparent ruse perpetuated by Sanchez, but argues that if at all, it was merely an intermediary between petitioners and private respondent. With no other way out, Lines & Spaces was a no-show at the trial proceedings so that eventually, its counsel had to withdraw his appearance because of his clients vanishing act. Left with an empty bag, so to speak, private respondent now puts the blame on petitioners. But this Court finds plausible the stance of petitioners that they had no inkling of the deception that was forthcoming. Indeed, without any contract or any hard evidence to show any privity of contract between it and petitioners, private respondents claim against petitioners lacks legal foothold. Considering the vagaries of the case, private respondent brought the wrong upon itself. As adeptly surmised by the trial court, between petitioners and private respondent, it is the latter who had made possible the wrong that was perpetuated by Eleanor Sanchez against it so it must bear its own loss. It is in this sense that we must apply the equitable maxim that as between two innocent parties, the one who made it possible for the wrong to be done should be the one to bear the resulting loss.[15] First, private respondent was the one who had reposed too much trust on Eleanor Sanchez for the latter to source its cement

needs. Second, it failed to employ safety nets to steer clear of the rip-off. For such huge sums of money involved in this case, it is surprising that a corporation such as private respondent would pay its construction materials in advance instead of in credit thus opening a window of opportunity for Eleanor Sanchez or Lines & Spaces to pocket the remaining balance of the amount paid corresponding to the undelivered materials. Private respondent likewise paid in advance the commission of Eleanor Sanchez for the materials that have yet to be delivered so it really had no means of control over her. Finally, there is no paper trail linking private respondent to petitioners thereby leaving the latter clueless that private respondent was their true client. Private respondent should have, at the very least, required petitioners to sign the check vouchers or to issue receipts for the advance payments so that it could have a hold on petitioners. In this case, it was the representative of Lines & Spaces who signed the check vouchers. For its failure to establish any of these deterrent measures, private respondent incurred the risk of not being able to recoup the value of the materials it had paid good money for. WHEREFORE, the present petition is hereby GRANTED. Accordingly, the Decision and the Resolution dated 28 November 2002 and 10 June 2003, of the Court of Appeals in CA-G.R CV No. 60031, are hereby REVERSED and SET ASIDE. The Decision dated 29 January 1998 of the Regional Trial Court of Quezon City, Branch 104, in Civil Case Q-92-14235 is hereby REINSTATED. No costs.

FIRST DIVISION G.R. No. 149353 June 26, 2006 JOCELYN B. DOLES, Petitioner, vs. MA. AURA TINA ANGELES, Respondent. DECISION AUSTRIA-MARTINEZ, J.: This refers to the Petition for Review on Certiorari under Rule 45 of the Rules of Court questioning the Decision1 dated April 30, 2001 of the Court of Appeals (CA) in C.A.-G.R. CV No. 66985, which reversed the Decision dated July 29, 1998 of the Regional Trial Court (RTC), Branch 21, City of Manila; and the CA Resolution2 dated August 6, 2001 which denied petitioners Motion for Reconsideration. The antecedents of the case follow: On April 1, 1997, Ma. Aura Tina Angeles (respondent) filed with the RTC a complaint for Specific Performance with Damages against Jocelyn B. Doles (petitioner), docketed as Civil Case No. 97-82716. Respondent alleged that petitioner was indebted to the former in the concept of a personal loan amounting to P405,430.00 representing the principal amount and interest; that on October 5, 1996, by virtue of a "Deed of Absolute Sale",3 petitioner, as seller, ceded to respondent, as buyer, a parcel of land, as well as the improvements thereon, with an area of 42 square meters, covered by Transfer Certificate of Title No. 382532,4 and located at a subdivision project known as Camella Townhomes Sorrente in Bacoor, Cavite, in order to satisfy her personal loan with respondent; that this property was mortgaged to National Home Mortgage Finance Corporation (NHMFC) to secure petitioners loan in the sum of P337,050.00 with that entity; that as a condition for the foregoing sale, respondent shall assume the undue balance of the mortgage and pay the monthly amortization of P4,748.11 for the remainder of the 25 years which began on September 3, 1994; that the property was at that time being occupied by a tenant paying a monthly rent of P3,000.00; that upon verification with the NHMFC, respondent learned that petitioner had incurred arrearages amounting to P26,744.09, inclusive of penalties and interest; that upon informing the petitioner of her arrears, petitioner denied that she incurred them and refused to pay the same; that despite repeated demand, petitioner refused to cooperate with respondent to execute the necessary documents and other formalities required by the NHMFC to effect the transfer of the title over the property; that petitioner collected rent over the property for the month of January 1997 and refused to remit the proceeds to respondent; and that respondent suffered damages as a result and was forced to litigate. Petitioner, then defendant, while admitting some allegations in the Complaint, denied that she borrowed money from respondent, and averred that from June to September 1995, she referred her friends to respondent whom she knew to be engaged in the business of lending money in exchange for personal checks through her capitalist Arsenio Pua. She alleged that her friends, namely, Zenaida Romulo, Theresa Moratin, Julia Inocencio, Virginia Jacob, and Elizabeth Tomelden, borrowed money from respondent and issued personal checks in payment of the loan; that the checks bounced for insufficiency of funds; that despite her efforts to assist respondent to collect from the borrowers, she could no longer locate them; that, because of this, respondent became furious and threatened petitioner that if the accounts were not settled, a criminal case will be filed against her; that she was forced to issue eight checks amounting to P350,000 to answer for the bounced checks of the borrowers she referred; that prior to the issuance of the checks she informed respondent that they were not sufficiently funded but the latter nonetheless deposited the checks and for which reason they were subsequently dishonored; that respondent then threatened to initiate a criminal case against her for violation of Batas Pambansa Blg. 22; that she was forced by respondent to execute an "Absolute Deed of Sale" over her property in Bacoor, Cavite, to avoid criminal prosecution; that the said deed had no valid consideration; that she did not appear before a notary public; that the Community Tax Certificate number on the deed was not hers and for which respondent may be prosecuted for falsification and perjury; and that she suffered damages and lost rental as a result. The RTC identified the issues as follows: first, whether the Deed of Absolute Sale is valid; second; if valid, whether petitioner is obliged to sign and execute the necessary documents to effect the transfer of her rights over the property to the respondent; and third, whether petitioner is liable for damages. On July 29, 1998, the RTC rendered a decision the dispositive portion of which states: WHEREFORE, premises considered, the Court hereby orders the dismissal of the complaint for insufficiency of evidence. With costs against plaintiff. SO ORDERED. The RTC held that the sale was void for lack of cause or consideration:5 Plaintiff Angeles admission that the borrowers are the friends of defendant Doles and further admission that the checks issued by these borrowers in payment of the loan obligation negates [sic] the cause or consideration of the contract of sale executed by and between plaintiff and defendant. Moreover, the property is not solely owned by defendant as appearing in Entry No. 9055 of Transfer Certificate of Title No. 382532 (Annex A, Complaint), thus: "Entry No. 9055. Special Power of Attorney in favor of Jocelyn Doles covering the share of Teodorico Doles on the parcel of land described in this certificate of title by virtue of the special power of attorney to mortgage, executed before the notary public, etc." The rule under the Civil Code is that contracts without a cause or consideration produce no effect whatsoever. (Art. 1352, Civil Code). Respondent appealed to the CA. In her appeal brief, respondent interposed her sole assignment of error: THE TRIAL COURT ERRED IN DISMISSING THE CASE AT BAR ON THE GROUND OF [sic] THE DEED OF SALE BETWEEN THE PARTIES HAS NO CONSIDERATION OR INSUFFICIENCY OF EVIDENCE.6 On April 30, 2001, the CA promulgated its Decision, the dispositive portion of which reads: WHEREFORE, IN VIEW OF THE FOREGOING, this appeal is hereby GRANTED. The Decision of the lower court dated July 29, 1998 is REVERSED and SET ASIDE. A new one is entered ordering defendant-appellee to execute all necessary documents to effect transfer of subject property to plaintiff-appellant with the arrearages of the formers loan with the NHMFC, at the latters expense. No costs. SO ORDERED. The CA concluded that petitioner was the borrower and, in turn, would "re-lend" the amount borrowed from the respondent to her friends. Hence, the Deed of Absolute Sale was supported by a valid consideration, which is the sum of money petitioner owed respondent amounting to P405,430.00, representing both principal and interest.

The CA took into account the following circumstances in their entirety: the supposed friends of petitioner never presented themselves to respondent and that all transactions were made by and between petitioner and respondent;7 that the money borrowed was deposited with the bank account of the petitioner, while payments made for the loan were deposited by the latter to respondents bank account;8 that petitioner herself admitted in open court that she was "re-lending" the money loaned from respondent to other individuals for profit;9 and that the documentary evidence shows that the actual borrowers, the friends of petitioner, consider her as their creditor and not the respondent.10 Furthermore, the CA held that the alleged threat or intimidation by respondent did not vitiate consent, since the same is considered just or legal if made to enforce ones claim through competent authority under Article 133511 of the Civil Code;12 that with respect to the arrearages of petitioner on her monthly amortization with the NHMFC in the sum of P26,744.09, the same shall be deemed part of the balance of petitioners loan with the NHMFC which respondent agreed to assume; and that the amount of P3,000.00 representing the rental for January 1997 supposedly collected by petitioner, as well as the claim for damages and attorneys fees, is denied for insufficiency of evidence.13 On May 29, 2001, petitioner filed her Motion for Reconsideration with the CA, arguing that respondent categorically admitted in open court that she acted only as agent or representative of Arsenio Pua, the principal financier and, hence, she had no legal capacity to sue petitioner; and that the CA failed to consider the fact that petitioners father, who co-owned the subject property, was not impleaded as a defendant nor was he indebted to the respondent and, hence, she cannot be made to sign the documents to effect the transfer of ownership over the entire property. On August 6, 2001, the CA issued its Resolution denying the motion on the ground that the foregoing matters had already been passed upon. On August 13, 2001, petitioner received a copy of the CA Resolution. On August 28, 2001, petitioner filed the present Petition and raised the following issues: I. WHETHER OR NOT THE PETITIONER CAN BE CONSIDERED AS A DEBTOR OF THE RESPONDENT. II. WHETHER OR NOT AN AGENT WHO WAS NOT AUTHORIZED BY THE PRINCIPAL TO COLLECT DEBT IN HIS BEHALF COULD DIRECTLY COLLECT PAYMENT FROM THE DEBTOR. III. WHETHER OR NOT THE CONTRACT OF SALE WAS EXECUTED FOR A CAUSE.14 Although, as a rule, it is not the business of this Court to review the findings of fact made by the lower courts, jurisprudence has recognized several exceptions, at least three of which are present in the instant case, namely: when the judgment is based on a misapprehension of facts; when the findings of facts of the courts a quo are conflicting; and when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, could justify a different conclusion.15 To arrive at a proper judgment, therefore, the Court finds it necessary to re-examine the evidence presented by the contending parties during the trial of the case. The Petition is meritorious. The principal issue is whether the Deed of Absolute Sale is supported by a valid consideration. 1. Petitioner argues that since she is merely the agent or representative of the alleged debtors, then she is not a party to the loan; and that the Deed of Sale executed between her and the respondent in their own names, which was predicated on that pre-existing debt, is void for lack of consideration. Indeed, the Deed of Absolute Sale purports to be supported by a consideration in the form of a price certain in money16 and that this sum indisputably pertains to the debt in issue. This Court has consistently held that a contract of sale is null and void and produces no effect whatsoever where the same is without cause or consideration.17 The question that has to be resolved for the moment is whether this debt can be considered as a valid cause or consideration for the sale. To restate, the CA cited four instances in the record to support its holding that petitioner "re-lends" the amount borrowed from respondent to her friends: first, the friends of petitioner never presented themselves to respondent and that all transactions were made by and between petitioner and respondent;18 second; the money passed through the bank accounts of petitioner and respondent;19 third, petitioner herself admitted that she was "re-lending" the money loaned to other individuals for profit;20 and fourth, the documentary evidence shows that the actual borrowers, the friends of petitioner, consider her as their creditor and not the respondent.21 On the first, third, and fourth points, the CA cites the testimony of the petitioner, then defendant, during her cross-examination:22 Atty. Diza: q. You also mentioned that you were not the one indebted to the plaintiff? witness: a. Yes, sir. Atty. Diza: q. And you mentioned the persons[,] namely, Elizabeth Tomelden, Teresa Moraquin, Maria Luisa Inocencio, Zenaida Romulo, they are your friends? witness: a. Inocencio and Moraquin are my friends while [as to] Jacob and Tomelden[,] they were just referred. Atty. Diza: q. And you have transact[ed] with the plaintiff? witness: a. Yes, sir. Atty. Diza: q. What is that transaction? witness: a. To refer those persons to Aura and to refer again to Arsenio Pua, sir. Atty. Diza: q. Did the plaintiff personally see the transactions with your friends? witness: a. No, sir. Atty. Diza: q. Your friends and the plaintiff did not meet personally? witness: a. Yes, sir. Atty. Diza: q. You are intermediaries? witness: a. We are both intermediaries. As evidenced by the checks of the debtors they were deposited to the name of Arsenio Pua because the money came from Arsenio Pua. xxxx Atty. Diza: q. Did the plaintiff knew [sic] that you will lend the money to your friends specifically the one you mentioned [a] while ago? witness:

a. Yes, she knows the money will go to those persons. Atty. Diza: q. You are re-lending the money? witness: a. Yes, sir. Atty. Diza: q. What profit do you have, do you have commission? witness: a. Yes, sir. Atty. Diza: q. How much? witness: a. Two percent to Tomelden, one percent to Jacob and then Inocencio and my friends none, sir. Based on the foregoing, the CA concluded that petitioner is the real borrower, while the respondent, the real lender. But as correctly noted by the RTC, respondent, then plaintiff, made the following admission during her cross examination:23 Atty. Villacorta: q. Who is this Arsenio Pua? witness: a. Principal financier, sir. Atty. Villacorta: q. So the money came from Arsenio Pua? witness: a. Yes, because I am only representing him, sir. Other portions of the testimony of respondent must likewise be considered:24 Atty. Villacorta: q. So it is not actually your money but the money of Arsenio Pua? witness: a. Yes, sir. Court: q. It is not your money? witness: a. Yes, Your Honor. Atty. Villacorta: q. Is it not a fact Ms. Witness that the defendant borrowed from you to accommodate somebody, are you aware of that? witness: a. I am aware of that. Atty. Villacorta: q. More or less she [accommodated] several friends of the defendant? witness: a. Yes, sir, I am aware of that. xxxx Atty. Villacorta: q. And these friends of the defendant borrowed money from you with the assurance of the defendant? witness: a. They go direct to Jocelyn because I dont know them. xxxx Atty. Villacorta: q. And is it not also a fact Madam witness that everytime that the defendant borrowed money from you her friends who [are] in need of money issued check[s] to you? There were checks issued to you? witness: a. Yes, there were checks issued. Atty. Villacorta: q. By the friends of the defendant, am I correct? witness: a. Yes, sir. Atty. Villacorta: q. And because of your assistance, the friends of the defendant who are in need of money were able to obtain loan to [sic] Arsenio Pua through your assistance? witness: a. Yes, sir. Atty. Villacorta: q. So that occasion lasted for more than a year? witness: a. Yes, sir. Atty. Villacorta: q. And some of the checks that were issued by the friends of the defendant bounced, am I correct? witness: a. Yes, sir. Atty. Villacorta: q. And because of that Arsenio Pua got mad with you? witness: a. Yes, sir.

Respondent is estopped to deny that she herself acted as agent of a certain Arsenio Pua, her disclosed principal. She is also estopped to deny that petitioner acted as agent for the alleged debtors, the friends whom she (petitioner) referred. This Court has affirmed that, under Article 1868 of the Civil Code, the basis of agency is representation.25 The question of whether an agency has been created is ordinarily a question which may be established in the same way as any other fact, either by direct or circumstantial evidence. The question is ultimately one of intention.26 Agency may even be implied from the words and conduct of the parties and the circumstances of the particular case.27 Though the fact or extent of authority of the agents may not, as a general rule, be established from the declarations of the agents alone, if one professes to act as agent for another, she may be estopped to deny her agency both as against the asserted principal and the third persons interested in the transaction in which he or she is engaged.28 In this case, petitioner knew that the financier of respondent is Pua; and respondent knew that the borrowers are friends of petitioner. The CA is incorrect when it considered the fact that the "supposed friends of [petitioner], the actual borrowers, did not present themselves to [respondent]" as evidence that negates the agency relationshipit is sufficient that petitioner disclosed to respondent that the former was acting in behalf of her principals, her friends whom she referred to respondent. For an agency to arise, it is not necessary that the principal personally encounter the third person with whom the agent interacts. The law in fact contemplates, and to a great degree, impersonal dealings where the principal need not personally know or meet the third person with whom her agent transacts: precisely, the purpose of agency is to extend the personality of the principal through the facility of the agent.29 In the case at bar, both petitioner and respondent have undeniably disclosed to each other that they are representing someone else, and so both of them are estopped to deny the same. It is evident from the record that petitioner merely refers actual borrowers and then collects and disburses the amounts of the loan upon which she received a commission; and that respondent transacts on behalf of her "principal financier", a certain Arsenio Pua. If their respective principals do not actually and personally know each other, such ignorance does not affect their juridical standing as agents, especially since the very purpose of agency is to extend the personality of the principal through the facility of the agent. With respect to the admission of petitioner that she is "re-lending" the money loaned from respondent to other individuals for profit, it must be stressed that the manner in which the parties designate the relationship is not controlling. If an act done by one person in behalf of another is in its essential nature one of agency, the former is the agent of the latter notwithstanding he or she is not so called.30 The question is to be determined by the fact that one represents and is acting for another, and if relations exist which will constitute an agency, it will be an agency whether the parties understood the exact nature of the relation or not. 31 That both parties acted as mere agents is shown by the undisputed fact that the friends of petitioner issued checks in payment of the loan in the name of Pua. If it is true that petitioner was "re-lending", then the checks should have been drawn in her name and not directly paid to Pua. With respect to the second point, particularly, the finding of the CA that the disbursements and payments for the loan were made through the bank accounts of petitioner and respondent, suffice it to say that in the normal course of commercial dealings and for reasons of convenience and practical utility it can be reasonably expected that the facilities of the agent, such as a bank account, may be employed, and that a sub-agent be appointed, such as the bank itself, to carry out the task, especially where there is no stipulation to the contrary.32 In view of the two agency relationships, petitioner and respondent are not privy to the contract of loan between their principals. Since the sale is predicated on that loan, then the sale is void for lack of consideration. 2. A further scrutiny of the record shows, however, that the sale might have been backed up by another consideration that is separate and distinct from the debt: respondent averred in her complaint and testified that the parties had agreed that as a condition for the conveyance of the property the respondent shall assume the balance of the mortgage loan which petitioner allegedly owed to the NHMFC.33 This Court in the recent past has declared that an assumption of a mortgage debt may constitute a valid consideration for a sale.34 Although the record shows that petitioner admitted at the time of trial that she owned the property described in the TCT, 35 the Court must stress that the Transfer Certificate of Title No. 38253236 on its face shows that the owner of the property which admittedly forms the subject matter of the Deed of Absolute Sale refers neither to the petitioner nor to her father, Teodorico Doles, the alleged co-owner. Rather, it states that the property is registered in the name of "Household Development Corporation." Although there is an entry to the effect that the petitioner had been granted a special power of attorney "covering the shares of Teodorico Doles on the parcel of land described in this certificate,"37 it cannot be inferred from this bare notation, nor from any other evidence on the record, that the petitioner or her father held any direct interest on the property in question so as to validly constitute a mortgage thereon38 and, with more reason, to effect the delivery of the object of the sale at the consummation stage.39 What is worse, there is a notation that the TCT itself has been "cancelled."40 In view of these anomalies, the Court cannot entertain the possibility that respondent agreed to assume the balance of the mortgage loan which petitioner allegedly owed to the NHMFC, especially since the record is bereft of any factual finding that petitioner was, in the first place, endowed with any ownership rights to validly mortgage and convey the property. As the complainant who initiated the case, respondent bears the burden of proving the basis of her complaint. Having failed to discharge such burden, the Court has no choice but to declare the sale void for lack of cause. And since the sale is void, the Court finds it unnecessary to dwell on the issue of whether duress or intimidation had been foisted upon petitioner upon the execution of the sale. Moreover, even assuming the mortgage validly exists, the Court notes respondents allegation that the mortgage with the NHMFC was for 25 years which began September 3, 1994. Respondent filed her Complaint for Specific Performance in 1997. Since the 25 years had not lapsed, the prayer of respondent to compel petitioner to execute necessary documents to effect the transfer of title is premature. WHEREFORE, the petition is granted. The Decision and Resolution of the Court of Appeals are REVERSED and SET ASIDE. The complaint of respondent in Civil Case No. 97-82716 is DISMISSED. SO ORDERED. FIRST DIVISION

LETICIA GONZALES, A.C. No. 6836 Complainant, Present: PANGANIBAN, C.J., Chairman, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO, and CHICO-NAZARIO, JJ. Promulgated: ATTY. MARCELINO CABUCANA,

- versus -

Respondent.

January 23, 2006

x----------------------------------------------------------- x 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 filed before the Municipal Trial Court in Cities (MTCC) of Santiago City, docketed as Civil Case No. 1-567 where she was represented by the law firm CABUCANA, 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 as attorneys fees; Sheriff Romeo Gatcheco, failed to fully implement the writ of execution issued in connection with the judgme nt 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 respondents 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 respondents acceptance of the cases of the Gatchecos violates the lawyer-client relationship between complainant and respondents law firm and renders respondent liable under the Code of Professional Responsibility (CPR) particularly Rules 10.01,[1] 13.01,[2] 15.02,[3] 15.03,[4] 21.01[5] 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 but claimed that his appearance is pro 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 respondents brother served as counsel is different and distinct from the criminal cases filed by com plainant 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 respondents brother is closely connected with the cases of the Gatchecos which the respondent is handling; that the claim of respondent 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 been appointed 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 appeared[16] 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 magasawang 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 di 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 kayat 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 clarificatory questioning.[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 that there 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 andadvised to be mo re 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 of Governors 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 Commissioner of the above-entitled case, herein made part of this Resolution as Annex A; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that respondent 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.[25] Lawyers are expected not only to keep inviolate the clients confidence, but also to avoid the appearance of treachery and do uble-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 o f 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.[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 lawyers 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 no merit. 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 representing conflicting 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 h is 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 respondents 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 where lawyers cannot decline representation they cannot be made to labor under conflict of interest between a present client and a prospective one.[34] Granting also that there really was no other lawyer who could handle the spo uses case other than him, still 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 thus exposing 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 Courts exercise of its power to take cognizance of administrative cases against lawyers is not for the purpose o f 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 to three 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 name and 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 respondents 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.