[A.M. No. 3216. March 16, 1992.

]
DOMINGA VELASCO ORDONIO, Petitioner, v. ATTY. JOSEPHINE PALOGAN EDUARTE,

This is a complaint for the disbarment of respondent Atty. Josephine Palogan-Eduarte originally filed with
this Court on April 18, 1988. On August 10, 1989, the Commission on Bar Discipline of the integrated Bar of
the Philippines, to which the case was referred for investigation, submitted a report confirming in substance
the charge of violation of Art. 1491 of the Civil Code and part of the Oath of Office of a lawyer and
recommending the suspension of herein Respondent.chanrobles.com : virtual law library

The evidence discloses that on July 18, 1983, Antonia Ulibari filed with the RTC, Branch XXII, Cabagan,
Isabela, Civil Case No. 391 for annulment of a document (known as Affidavit of Adjudication of the Estate
of Felicisimo Velasco and Quitclaim Thereof) against her children. The case was handled by Atty.
Henedino Eduarte, herein respondent’s husband, until his appointment as RTC judge on October 26, 1984.
His wife, Atty. Josephine Palogan-Eduarte, took over. On August 22, 1985, decision in Civil Case No. 391
was rendered in favor of Antonia Ulibari. Except for Dominga Velasco-Ordonio, one of the children of
Antonia Ulibari and complainant in the instant case, the rest of the defendants did not appeal. On June 13,
1987, while Civil Case No. 391 was pending appeal in the Court of Appeals, Antonia Ulibari conveyed
some parcels of her land to her children in the form of deeds of absolute sale, prepared and notarized by
herein Respondent. Significantly, on the same day, Antonia Ulibari also conveyed 20 hectares of land to
herein respondent and her husband as their Attorney’s fees for legal services rendered. All the titles of the
lands subject of the deeds of absolute sale and the deed of conveyance however remained in the name of
Antonia Ulibari.chanroblesvirtualawlibrary

On April 4, 1988, Dominga Velasco-Ordonio filed this complaint for disbarment against herein respondent
on the basis of an affidavit executed by her mother Antonia Ulibari on March 2, 1988 stating that affiant
never conveyed the subject parcel of land to respondent as her attorney’s fees and that deeds of absolute
sale executed in favor of her children were not known to her (and that she received to consideration
therefor).

On August 10, 1989, the Investigating Commissioner submitted a report finding the charges to be true and
recommending a one-year suspension of the respondent from the practice of law.

The first issue to be resolved is whether Antonia ulibari was defrauded into signing the Deed of
Conveyance transferring to her lawyer (herein respondent) the subject parcel of land containing 298,420
square meters as the latter’s attorney’s fees. It is clear from Antonia Ulibari’s affidavit and deposition that
she never conveyed the said land to her lawyer as attorney’s fees.chanrobles law library : red

Even granting for the sake of argument that Antonia Ulibari knowingly and voluntarily conveyed the subject
property in favor of the respondent and her husband, the respondent, in causing the execution of the Deed
of Conveyance during the pendency of the appeal of the case involving the said property, has violated Art.
1491 of the Civil Code which prohibits lawyers from "acquiring by assignment property and rights which
may be the object of any litigation in which they may take part by virtue of their profession."cralaw
virtua1aw library

In the case at bar, the property (which includes the more than 20 hectares of land allegedly conveyed to the
respondent) was already in actual litigation first in the lower court and then in the Court of Appeals.
Whether the deed of conveyance was executed at the instance of the client driven by financial necessity or
of the lawyer is of no moment (In re: Atty. Melchor E. Ruste, 70 Phil. 243). "In either case, an attorney
occupies a vantage position to press upon or dictate him terms to a harassed client, in breach of the rule so
amply protective of the confidential relations, which must necessarily exist between attorney and client, and
of the rights of both." The act constitutes malpractice, even if the lawyer had purchased the property in
litigation. (Hernandez v. Villanueva, 40 Phil. 775; In re: Calderon, 7 Phil. 427). We agree with the
Investigating Commissioner’s opinion that the prohibition applies when the lawyer has not paid money for it
and the property was merely assigned to him in consideration of legal services rendered at a time when the
property is still the subject of a pending case.

For having improperly acquired the subject property, under the foregoing circumstances, respondent has
violated not only Art. 1491 of the Civil Code but also Rule 10 of the Canons of Professional Ethics which
provides that "the lawyer should not purchase any interests in the subject matter of the litigation which he is
conducting."cralaw virtua1aw library

The last issue to be resolved is whether respondent violated any law in preparing and notarizing the deeds
of absolute sale in mixing it appear that there were considerations therefor, when in truth there were none
so received by the seller. In her answer, respondent admitted that Antonia Ulibari did not actually sell the
parcels of land to her children for the considerations stated in the deeds of sale and that she (respondent)
"utilized the form of deed of sale as the most convenient and appropriate document to effect the transfer of
the parcels of land to Antonia Ulibari’s children in accordance with her wish that said parcels of land be
given to them."cralaw virtua1aw library

In so doing, respondent has manifestly violated that part of her oath as a lawyer that she shall not do any
falsehood. Not only that. In preparing the documents which do not reflect the true transaction, respondent
has likewise violated Rule 10.01 of the Code of Professional Responsibility which
provides:jgc:chanrobles.com.ph

"Rule 10.01. A lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall be
mislead, or allow the court to be misled by any artifice."cralaw virtua1aw library

ACCORDINGLY, for having violated Article 1491 of the Civil Code, respondent is hereby ordered
suspended from the practice of law for a period of six (6) months, and, for having stated falsehoods in the
four (4) deeds of absolute sale she prepared and notarized in violation of the lawyer’s oath and Rule 10.01
of the Code of Professional Responsibility, respondent is also ordered suspended from the practice of law
for a period of another six (6) months, resulting in a total period of one year, effective from the date this
judgment becomes final.

SUSPENSION ORDERED.

A.C. No. 5829. October 28, 2003]

DANIEL LEMOINE, complainant, vs. ATTY. AMADEO E. BALON, JR., respondent.

FACTS:
Lemoine is a French national who filed an insurance claim with Metropolitan Insurance.His friend
Jesus Garcia arranged for the engagement of Balon’s services as his counsel Balon advised Lemoine that
he was charging 25% of the actual amount to being recovered payable upon successful recovery. An
advance payment of P50,000 to be deducted from whatever amount would be successfully collected.
P1,000 as appearance and conference fee for each and every court hearing and legal expenses and other
miscellaneouswill be charged to Lemoine’s account which would be reimbursed upon presentment of
account. Lemoine never gave his consent as to the fee.

Lemoine signed an undated Special Power of Attorney authorizing Balon to bring any action against
Metropolitan Insurance for the satisfaction of Lemoine’s claim as well as to negotiate, sign, compromise,
encash and receive payments Metropolitan Insurance offered tosettle Lemoine’s claim and Balon confirmed
his acceptance of the offer December 1998, Metropolitan Insurance issued a China Bank check payable to
Lemoine in the amount of P525,000 which was received by Balon. When Lemoine asked Balon as to the
status of the case, Balon answered that Metropolitan Insurance was offering P350,000 for settlement which
Lemoine suggested that Balon accept to avoid litigation.December 1999, Lemoine visited the office of
Metropolitan Insurance to ask on the status of the case and it answered that the case was long settled via a
check given to Balon.
Balon acknowledge that he is in possession of the check and that he is keeping the check as attorney’s
lien pending Lemoine’s payment of his attorney’s fee equivalent to 50% of the entire amount collected. He
also threatened Lemoine that he will not hesitate to make proper representation with the Bureau of
Immigration and Deportation, DOLE and BIR if Lemoine will make any trouble to Balon and that he has
good network with the mentioned agencies. Balon later claimed that he gave P233,000 to Garcia on the
representation of Lemoine. No written memorandum of the turn-over was made because Garcia was a co-
Rotarian and co-attorney of Balon. Balon was in possession of the said check for 5 years

ISSUE:
W/N Balon violated the Code of Professional Responsibility

HELD:
YES! And he was ordered disbarred by the SC

The lawyer’s continuing exercise of his retaining lien presupposes that the client agrees with the amount of
attorney’s fees to e charged. In case of disagreement, however, the lawyer must not arbitrarily apply the
funds in his possession to the payment of his fees. He can file the necessary action with the proper court to
fix the feesBefore receiving the check, he proposes a 25% attorney’s fees, after receiving the check, he
was already asking for 50%.Under the Code of Professional Responsibility, a lawyer shall not engage in
unlawful acts , must observe fairness.

LEONILA J. LICUANAN, Complainant, v. ATTY. MANUEL L. MELO, Respondent.

SYLLABUS

1. LEGAL ETHICS; ATTORNEYS; BREACH OF PROFESSIONAL ETHICS; COUNSEL DISBARRED

FROM THE PRACTICE OF LAW. — The actuations of respondent in retaining for his personal
benefit over a one-year period, the amount of P5,220.00 received by him on behalf of his
client, the complainant herein, depriving her of its use, and withholding information on the
same despite inquiries made by her is glaringly a breach of the Lawyer’s Oath to which he
swore observance, and an evident transgression of the Canons of Professional Ethics.
Respondent’s unprofessional actuations considered, we are constrained to find him guilty of
deceit, malpractice and gross misconduct in office. He has displayed lack of honesty and good
moral character. He has violated his oath not to delay any man for money or malice,
besmirched the name of an honorable profession and has proven himself unworthy of the
trust reposed in him by law as an officer of the Court. He deserves the severest punishment.

An affidavit-complaint, dated November 11, 1981, was filed by Leonila J. Licuanan with the
Office of the Court Administrator on 5 February 1982 against respondent, Atty. Manuel L.
Melo, for breach of professional ethics, alleging that respondent, who was her counsel in an
ejectment case filed against her tenant, failed to remit to her the rentals collected by
respondent on different dates over a twelve-month period, much less did he report to her the
receipt of said amounts. It was only after approximately a year from actual receipt that
respondent turned over his collections to complainant after the latter, through another
counsel, acquired knowledge of the payment and had demanded the same.

In his Comment on the complaint, respondent admitted having received the payment of
rentals from complainant’s tenant, Aida Pineda, as alleged in the complaint, but explained
that he kept this matter from the complainant for the purpose of surprising her with his
success in collecting the rentals.

We forwarded the case to the Office of the Solicitor General, for investigation, report and
recommendation. Hearings were conducted and the parties presented their respective
evidence.chanroblesvirtualawlibrary
After investigation, the Solicitor General submitted the following Findings and
Recommendation:

"The issue to be resolved is whether there was unreasonable delay on the part of the
respondent in accounting for the funds collected by him for his former client, the complainant
herein, for which unprofessional conduct respondent should be disciplined.

"A lawyer, under his oath, pledges himself not to delay any man for money or malice and is
bound to conduct himself with all good fidelity to his clients. Under paragraph 11 of the
Canons of Legal Ethics, he is obligated to report promptly the money of client that has come
to his possession and should not commingle it with his private property or use it for his
personal purpose without his client’s consent viz:chanrob1es virtual 1aw library

‘Money of the client or other trust property coming into the possession of the lawyer should
he reported promptly, and except with the client’s knowledge and consent should not be
commingled with his private property or be used by him.

And paragraph 32 of the Canons of Legal Ethics further requires a lawyer to maintain a
reputation for honesty and fidelity to private trust:chanrob1es virtual 1aw library

‘. . . But above all, a lawyer wilt find his highest honor in a deserved reputation for fidelity to
private trust and to public duty, as an honest man and as a patriotic and loyal citizen.’

"In the instant case, respondent failed to observe his oath of office. It is undisputed that the
relation of attorney and client existed between Licuanan and Melo at the time the incident in
question took place. The records disclose that on August 8, 1979, respondent, as Licuanan’s
attorney, obtained judgment in Licuanan’s favor against Aida Pineda whereby the latter was
directed by the City Court of Manila to pay Licuanan all her monthly rentals from October,
1978 and succeeding months thereafter.

"When several months had elapsed without them hearing a word from Pineda, respondent
decided to send her a letter on February 4, 1980, demanding that she pay the monthly rental
of her apartment otherwise he will be constrained to take the necessary legal action against
her to protect the interest of his client (Exhibit ‘A’, p. 8, record). On February 11, 1980,
Pineda yielded to the demand of Melo. She went to respondent’s office and paid him
P3,060.00 for which respondent gave her a receipt for the said amount representing her
rental payments for October, 1978 to February, 1980 at the rate of P180.00 per month
(Exh.’B’, p. 9, ibid.) At the end of March 31, 1980, Pineda again went back to respondent and
paid the rentals of her apartment for the months of March and April, 1980 in the sum of
P360.00 (Exh.’C’ p. 10, ibid.). Not only that, respondent again received from Pineda on June
30, 1980 rental payments covering the months of May, June and July, 1980 in the total sum
of P540.00 (Exh.’D’, p. 11, ibid.). And, on September 29, 1980, he received and issued
Pineda a receipt for P540.00 covering rental payments for the months of August, September
and October, 1980. (Exh.’E’, ibid.). After four months had elapsed, or on January 23, 1981,
he collected again from Pineda the total sum of P720.00 covering the months of October,
November, December 1980 and January 1981 (Exh.’F’, p. 12, ibid.).

"During the entire twelve-month period that respondent had been receiving the said rental
payments of Pineda, he did not bother inform or report to complainant about the said
payments and instead unnecessarily retained the money. He allowed the money to
accumulate for a year and kept complainant in the dark as to the process of the case. He did
not even attempt to tell her about the money that had come into his possession
notwithstanding the fact that complainant used to call him and inquire regarding the case
(pp. 4-15, tsn., Sept. 10, 1985).
"It was only when Atty. Ponciano B. Jacinto, the new counsel retained by complainant, wrote
respondent a letter on May 4, 1981, advising him to surrender the money to complainant that
he accounted for it (Exh.’H’, p. 15, ibid.). But this was rather late because as early as April
27, 1981, complainant, not knowing that respondent had been receiving the rental payments
of Pineda, instituted an administrative case against her (Aida Pineda) before the Chief of the
Philippine Tuberculosis Society accusing her of ‘moral turpitude’ arising from her alleged
failure to pay the rent of her apartment as ordered by the City Court of Manila in Civil Case
No. 037276 and claiming that she has ignored and refused to pay her just obligation Exh.’G’,
p. 14, ibid.).

"This led therefore Pineda to bring an action against her (Licuanan) for damages before the
then Court of First Instance of Manila, for she allegedly suffered mental anguish, besmirched
reputation, wounded feelings and social humiliation arising from the unfounded administrative
case Licuanan filed against her (Aida Pineda), since is borne out by the records, she had been
paying her obligation religiously to the lawyer of Licuanan, herein respondent (pp. 48-52,
record). Clearly, this unfortunate incident would not have happened had respondent been
only true to his oath as a lawyer, i.e., to be honest and candid towards his client.

"Thus, we find it hard to believe respondent’s defense that he kept the money of complainant
for a year merely because he wanted to surprise her with his success in collecting the rental
payments from Pineda. On the contrary, it is very much discernible that he did not surrender
immediately the money to complainant because he was using it for his own benefit. Common
sense dictates that by unnecessarily withholding the money of complainant for such length of
time, respondent deprived her of the use of the same. It is therefore too credulous to believe
his explanation, which is flimsy and incredible. respondent’s actuation casts doubt on his
honesty and integrity. He must know that the ‘highly fiduciary’ and ‘confidential relation’ of
attorney and client requires that the attorney should promptly account for all funds and
property received or held by him for the client’s benefit, and failure to do so constitutes
professional misconduct, as succinctly held by the Honorable Supreme Court in case of
Fermina Legaspi Daroy, Et Al., v. Atty. Ramon Chaves Legaspi, Adm. Case No. 936, July 25,
1975, 65 SCRA 304, to wit:chanrob1es virtual 1aw library

‘A lawyer, under his oath, pledges himself not to delay any man for money or malice and is
bound to conduct himself with all good fidelity to his client. He is obligated to report promptly
the money of his clients that has come into his possession. He should not commingle it with
his private property or use it for his personal purposes without his client’s consent. He should
maintain a reputation for honesty and fidelity to private trust (Pars. 11 and 32, Canons of
Legal Ethics).

Money collected by a lawyer in pursuance of a judgment in favor of his clients is held in trust
and must be immediately turned over to them (Aya v. Bigonia, 57 Phil. 8, 11).

x x x

A lawyer may be disbarred for any deceit, malpractice or other gross misconduct in his office
as attorney or for any violation of the lawyer’s oath (Ibid, sec. 27).

The relation between an attorney and his client is highly fiduciary in its nature and of a very
delicate, exacting and confidential in character, requiring a high degree of fidelity and good
faith (7 Am. Jur. 2d 105). In view of that special relationship, ‘lawyers are bound to promptly
account for money or property received by them on behalf of their clients and failure to do so
constitutes professional misconduct. The fact that a lawyer has a lien for fees on money in his
hands collected for his clients does not relieve him from the duty of promptly accounting for
the funds received. (Emphasis supplied).’

"In fine, we are convinced that respondent is guilty of breach of trust reposed in him by his
client. Not only has he degraded himself but as an unfaithful lawyer he has besmirched the
fair name of an honorable profession (In re Paraiso, 41 Phil. 24, 25; In re David, 84 Phil. 627;
Manaloto v. Reyes, Adm. Case No. 503, October 29, 1965, 15 SCRA 131). By his deceitful
conduct, he placed his client in jeopardy by becoming a defendant in a damage suit; thus,
instead of being a help to his client, he became the cause of her misery. He, therefore,
deserves a severe punishment for it. (Aya v. Bigornia, 57 Phil. 8, 11; In re Bamberger, April
17, 1924, 49 Phil. 962; Daroy, Et Al., v. Atty. Ramon Chaves Legaspi, supra.).

"Clearly, respondent is guilty of professional misconduct in the discharge of his duty as a

lawyer.

RECOMMENDATION

"WHEREFORE, we respectfully recommend that respondent be suspended from the practice of

law for a period of not less than one (1) year, and that he be strongly admonished to strictly
and faithfully observe his duties to his clients." (pp. 78-85, Rollo)

We find the foregoing findings well considered and adopt the same but differ with the
recommendation.

The actuations of respondent in retaining for his personal benefit over a one-year period, the
amount of P5,220.00 received by him on behalf of his client, the complainant herein,
depriving her of its use, and withholding information on the same despite inquiries made by
her is glaringly a breach of the Lawyer’s Oath to which he swore observance, and an evident
transgression of the Canons of Professional Ethics particularly:jgc:chanrobles.com.ph

"11. DEALING WITH TRUST PROPERTY

"The lawyer should refrain from any action whereby for his personal benefit or gain he abuses
or takes advantage of the confidence reposed in him by his client.

"Money of the client or collected for the client of other trust property coming into the
possession of the lawyer should be reported and accounted for promptly, and should not
under any circumstance be commingled with his own or be used by him." **

Indeed, by his professional misconduct, respondent has breached the trust reposed in him by
his client. He has shown himself unfit for the confidence and trust which should characterize
an attorney-client relationship and the practice of law. By reason thereof complainant was
compelled to file a groundless suit against her tenant for non-payment of rentals thereby
exposing her to jeopardy by becoming a defendant in a damage suit filed by said tenant
against her. By force of circumstances, complainant was further compelled to engage the
services of another counsel in order to recover the amount rightfully due her but which
respondent had unjustifiedly withheld from her.chanrobles virtual lawlibrary

Respondent’s unprofessional actuations considered, we are constrained to find him guilty of

deceit, malpractice and gross misconduct in office. He has displayed lack of honesty and good
moral character. He has violated his oath not to delay any man for money or malice,
besmirched the name of an honorable profession and has proven himself unworthy of the
trust reposed in him by law as an officer of the Court. He deserves the severest punishment.

WHEREFORE, consistent with the crying need to maintain the high traditions and standards of
the legal profession and to preserve undiminished public faith in attorneys-at-law, the Court
Resolved to DISBAR respondent, Atty. Manuel L. Melo, from the practice of law. His name is
hereby ordered stricken from the Roll of Attorneys.

Copies of this Resolution shall be circulated to all Courts of the country and spread on the
personal record of respondent Atty. Manuel L. Melo.
A.C. No. 2614 May 21, 1991

MAXIMO DUMADAG, petitioner, vs. ERNESTO L. LUMAYA, respondent.

RESOLUTION

PER CURLAM:

Respondent Atty. Ernesto L. Lumaya of Banganga, Davao Oriental is administratively charged with
unethical practices, conflict of interest and disloyalty to client by Maximo Dumadag in a sworn letter-
complaint dated 22 December 1983. Respondent was complainant's counsel in Civil Case No. 148 before
the RTC of Banganga, Davao Oriental, filed against spouses Jose and Jesusa Avellanosa, involving the
sale of a parcel of land. Civil Case No. 148 was terminated via a compromise agreement which
provided, inter alia, that not later than 1 October 1979, the Avellanosas would pay Dumadag the amount of
P4,644.00 and in turn Dumadag would execute in favor of the Avellanosas a deed of reconveyance of the
land. However, in case of failure of the Avellanosas to make full payment of the P4,644.00 within the
stipulated period, Dumadag would be entitled to obtain possession of the land. The compromise
agreement, prepared by respondent, was approved by the trial court. The Avellanosas failed to comply with
their undertaking under the compromise agreement to pay complainant the amount of P4,644.00 not later
than 1 October 1979, which necessitated the filing by Dumadag of a motion for execution.

According to complainant, he asked his then counsel, herein respondent, to prepare and file the
appropriate motion for execution; however, the latter failed to do so. It was through the assistance of the
court stenographer, Mr. Eleuterio Catubig, that complainant himself signed and filed the motion and later
obtained the writ of execution.

When the writ of execution was issued, Deputy Sheriff Rogelio Dongiapon, according to the complainant,
instead of serving the same on the Avellanosas, connived with respondent attorney by selling a one (1)
hectare portion of the land subject of Civil Case No. 148 to one Eleonora Astudillo to satisfy complainant's
claim out of the proceeds of the sale, without however Dumadag's knowledge and consent. The Deed of
Sale between the Avellanosas and Astudillo, dated 14 September 1981, was notarized by respondent
attorney and stated that the "parcel of land, together with all the improvements found and existing thereon,
(is) free from liens and encumbrances, whatsoever. "It expressly stated on its face "That this Deed of Sale
is executed also to satisfy finally the claim of Maximo Dumadag in Civil Case No. 148 of the CFI of
Banganga, Davao Oriental."

After the sale to Astudillo, or on 16 June 1983, Deputy Sheriff Rogelio Dongiapon made a Sheriff's Return
of Service which stated:

Respectfully returned to MR. JAIME B. TOROBA, Officer-in-Charge, Office of the Clerk of Court,
this Court, the original copy of the Writ of Execution in Civil Case No. 148, with the information that
said Writ of execution was partially satisfied the defendants Jose R. Avellanosa and Jesusa N.
Avellanosa having paid the amount of FOUR THOUSAND THREE HUNDRED FORTY FOUR
(P4,344. 00) Philippine Currency to Atty. Ernesto L. Lumaya, plaintiff's counsel in the above entitled
case in November, 1981, with the balance of P300.00 which the defendants Jose R. Avellanosa and
Jesusa N. Avellanosa have not paid up to this moment. (Emphasis ours)

The said amount of P4,344.00, according to complainant, was not delivered to him by respondent attorney,
even after the former made a demand on the latter.

After respondent's comment and complainant's reply had been filed, the case was referred to the Office of
the Solicitor General for investigation, report and recommendation. Actual investigation and hearings were
conducted by Provincial Fiscal Arnulfo M. Agleron of Mati, Davao Oriental, who submitted a report to the
Office of the Solicitor General (OSG). Based on said report, the OSG prepared and submitted its own
report, including therewith a complaint for disbarment against respondent attorney, pursuant to Sec. 4, Rule
139 of the Rules of Court.
While respondent later filed an answer to the OSG — prepared complaint against him, he however, did not
appear at the earlier investigation despite due notice. We will nonetheless consider his answer as well as
comment prior to the referral of the case to the OSG.

Respondent claims that it was the presiding judge in Civil Case No. 148 who played an active role in the
settlement proceedings between Dumadag and the Avellanosas, and that it is unfortunate, according to
respondent, that there are no written records to prove this fact, but that it was agreed that Jose Avellanosa
would pay Dumadag the amount of P4,644.00 in installments, which he did, and that complainant Dumadag
claimed and received the money each time payment was made by Jose Avellanosa; thru herein
respondent. His (respondent's) mistake according to him, was that he merely noted at the back of his own
copy of the judgment by compromise the sums paid, all in the total amount of P3,000.00, and all taken by
complainant Dumadag, without any receipts. All his (respondent's) records of the case, according to
respondent, were also taken by Dumadag from his office when he became a provincial board member.

Respondent also denies having been asked by Dumadag to file a motion for execution in Civil Case No.
148 or having received from him a cow or P700.00; however he was promised one cow since he paid the
expenses in Civil Case No. 148.

Anent the sale by the Avellanosas to Eleonora Astudillo, the same, according to respondent, was a private
sale, Dumadag was not a party thereto. Respondent also claims that he was not aware that a motion for
execution had been filed in Civil Case No. 148 by Dumadag when the Deed of Sale between the
Avellanosas and Astudillo was presented to him for notarization, and that he did not see any cash change
hands as he was informed that it was just a ratification of an earlier verbal sale. He notarized the deed of
sale without intention to cause any damage. Respondent however admits that in a later case, Civil Case
No. 283 (where the validity of the sale from the Avellanosas to Astudillo was assailed by Dumadag), it was
disclosed that from the P7,000.00 actually realized from the sale of the land to Astudillo, the sheriff
deducted P1,605.00 for his expenses, with the balance being given to the vendors (Avellanosas), because
Dumadag had already been paid by the Avellanosas thru their lawyer, herein respondent.

In the Court's resolution of 16 April 1990, respondent was required to answer the OSG
complaint.1âwphi1 Respondent's answer merely reiterates his earlier explanation and further states:

The truth of the matter was that the DEED OF SALE WAS ALREADY Prepared when SHERIFF
Dongiapon, the spouses Avellanosa and Maxima Astudillo came to my Office for the Notarization of
that DEED OF SALE. What respondent did was only to ask whether the signatures are their and
that the consideration was paid but did not go over the contents. All of the parties affirmed their
signature and informed respondent that the consideration was paid in installments. At that time
respondent never was informed that the proceeds was for the final satisfaction of Mr. Dumadag's
claim. Respondent knew it only when Mr. Dumadag came to claim the money of course I have to tell
the truth and I told him, Maximo Dumadag, that I have never received any money from Sheriff
ROGELIO DONGIAPON and I did not even know that there was a petition for the issuance of a writ
of execution that he filed because I was never asked by him. Mr. Maximo Dumadag told me that he
will file a case against me if I will not give the money . . .

For the reasons that respondent's acts constitute lack of fidelity, loyalty and devotion to his client's cause,
unethical practice and a violation of his lawyer's oath, the OSG recommends respondent's suspension from
the practice of law for not less than five (5) years.

In the case of Licuanan vs. Melo (Adm. Case No. 2361 — February 9, 1989) a lawyer was disbarred for
retaining for his personal benefit for over a one (1) year period, the amount of P5,220.00 received by him in
behalf of his client, thereby compelling the latter to file a groundless collection suit which exposed said
client to a damage countersuit.

While not exactly identical with the Licuanan case, herein complainant Dumadag had to file a separate civil
case (No. 283 — for annulment of sale, damages and attorney's fees) to recover the amount of P4,344.00
from his previous counsel, herein respondent, Atty. Lumaya.
Under the Code of Professional Responsibility, Canon 16 —

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

Rule 16.02 — A lawyer shall keep the funds of each client separate and apart from his own and
those of others kept by him.

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

Both parties failed to apprise this Court of the final disposition of Civil Case No. 283, even as the Court took
note of the RTC decision in said case where a finding was made that the land earlier sold by the
Avellanosas to Dumadag is separate and distinct from the one (1) hectare portion sold by the Avellanosas
to Astudillo. However, the RTC in its decision also ordered co-defendant (herein respondent) Atty. Lumaya
to pay the plaintiff (herein complainant) the sum of P4,344.00 he (Atty. Lumaya) had received from Deputy
Sheriff Rogelio Dongiapon for herein complainant.

Therefore, even a respondent consistently denied liability to Dumadag, his former client, the records
abundantly point to his receipt of and failure to deliver the amount of P4,344.00 to his client, the herein
complainant, a clear breach of the canons of professional responsibility.

ACCORDINGLY, the Court hereby SUSPENDS Atty. Ernesto Lumaya INDEFINITELY from the practice of
law effective from date of his receipt of this resolution.

Let this resolution be served personally on the respondent at his given address of record and entered in his
record as attorney. Let the IBP and the Court Administrator be furnished also a copy of this resolution for
their information and guidance as well as for circularization to all courts in the country.

QUILBAN V ROBINOL

PER CURIAM; April 10, 1989

NATURE

ADMINISTRATIVE CASES in the Supreme Court. Disbarment.

FACTS
- The Colegio de San Jose, through its administrator, Father Federico Escaler, sold a land to the Quezon City
Government as the site for the Quezon City General Hospital but reserved an area of 2,743 square meters as a
possible development site. Squatters, however, settled in the area since 1965 or 1966. In 1970, the Colegio,
through Father Escaler gave permission to Congressman Luis R. Taruc to build on the reserved site a house for
his residence and a training center for the Christian Social Movement. Seeing the crowded shanties of squatters,
Congressman Taruc suggested to Father Escaler the idea of donating or selling the land cheap to the squatters.
Congressman Taruc then advised the squatters to form an organization and choose a leader authorized to
negotiate with Father Escaler. Following that advice, the squatters formed the "Samahang Pagkakaisa ng Barrio
Bathala", with Bernabe Martin as President.
- But instead of working for the welfare of the Samahan, Martin went to one Maximo Rivera, a realtor, with
whom he connived to obtain the sale to the exclusion of the other Samaban members. The land was ultimately
sold to Rivera at a cheap price of PI5 per square meter or a total consideration of P41,961.65. The prevailing
price of the land in the vicinity then was P1 00 to P1 20 per square meter. Father Escaler had been made to
believe that Rivera represented the squatters on the property.
- In 1972, thirty-two heads of families of the Samahan filed the case against Rivera, et. al. The CFI, however,
dismissed the case.
- To prosecute the appea in the CAl, the Samahan members hired as their counsel Atty. Santiago R. Robinol for
which the latter was paid P2,000.00 as attorney's fees on. Atty. Robinol was also to be given by the members a
part of the land, subject matter of the case, equal to the portion that would pertain to each of them. What was
initially a verbal commitment on the land sharing was confirmed in writing.
- On 14 November 1978, the Court of Appeals reversed the CFI Decision and ruled in favor of the plaintiffs.
- To raise the amount of P41,961.65 ordered paid by the Court of Appeals, plus expenses for ejectment of the
non-plaintiffs occupying the property, conveyance, documentation, transfer of title etc., the five officers of the
Samahan collected, little by little, P2,500.00 from each head of family. The Treasurer, Luis Agawan, issued the
proper receipts prepared by Atty. Robinol.
- On 18 May 1979, the sum of P68,970.00 was turned over to Atty. Robinol by the officers; on 31 May 1979 the
amounts of P1,030.00 and P2,500.00 respectively; and on 2 June 1979, the sum of P2,500.00, or a total of
P75,000.00.
- After almost a year, the five officers discovered that no payment had been made to Rivers. When queried, Atty.
Robinol replied that there was an intervention filed in the civil case and that a Writ of Execution bad not yet
been issued by the CFI of Quezon City. However, it turned out that the motion for intervention had already been
dismissed. After confronting Atty. Robinol with that fact, the latter gave other excuses, which the officers
discovered to have no basis at all.
- On 6 March 1980, 21 out of 32 plaintiffs arrived at a "first consensus" to change their counsel, Atty. Robinol.
The officers of the Samahan thereafter approached Atty. AnacIeto R. Montemayor, who agreed to be their
counsel, after he was shown the document containing the consensus of the Samahan members to change Atty.
Robinol as their lawyer. Upon Atty. Montemayor's advice, the officers sent Atty. Robinol a letter informing the
latter of their decision to terminate his services and demanding the return of the P75,000.00 deposited with
him. Atty. Robinol turned deaf ears to the demand. A subsequent letter of the same tenor was similarly
disregarded by Atty. Robinol.
- On 20 March 1980, Atty. Montemayor formally entered his appearance in a civil case as counsel for the
plaintiffs, vice Atty. Robinol, on the strength of the authority given him by plaintiffs in said civil case through
the five officers. Atty. Montemayor then filed on 20 March 1980 a Motion for Execution praying that the
defendants and/or the Clerk of Court be directed to execute a deed of conveyance in favor of the plaintiffs. At
the hearing of the Motion for Execution, Atty. Robinol manifested that he had no objection to the appearance of
and his substitution by Atty. Montemayor.
- Because Atty. Robinol, however, still questioned the first consensus, another document labelled the a second
consensus" was signed by 21 plaintiffs during a meeting held for the purpose on 24 November 1980 to the
effect that they had decided to change Atty. Robinol as their counsel because he had delayed paying for their
land notwithstanding the Decision of the Court of Appeals in their favor.
- Administrative Case No. 2144: On 15 April 1980 the Samahan officers filed this Administrative Complaint
before this Court requesting the investigation of Atty. Robinol for refusal to return the P75,000.00 and praying
that the Court exercise its power of discipline over members of the Bar unworthy to practice law.
- Administrative Case No. 2180: Atty. Robinol filed a complaint for Disbarment against Atty. Anacleto R.
Montemayor for alleged gross unethical conduct unbecoming of a lawyer in that Atty. Montemayor readily
accepted the case without his (Robinol's) formal withdrawal and conformity and knowing fully well that there
was no consensus of all the plaintiffs to discharge him as their counsel.
- Court referred administrative cases to the Sol. Gen. who recommended: 1. That Atty. Santiago R. Robinol be
suspended for three months for refusing to deliver the funds of the plaintiffs in his possession, with the
warning that a more severe penalty will be imposed for a repetition of the same or similar act, and that he be
ordered to return to the plaintiffs, the sum of P75,000.00. 2. That the case against Atty. Anacleto R.
Montemayor, be dismissed, since he has not committed any misconduct imputed to him by Atty. Robinol.

ISSUES
1. WON Atty. Robinol should be suspended
2. WON Atty. Montemayor should be disbarred

HELD
1. YES
Reasoning Atty. Robinol has, in fact, been guilty of ethical infractions and grave misconduct that make him
unworthy to continue in the practice of the profession. After the CA had rendered a Decision favorable to his
clients and he had received the latter's funds, suddenly, he had a change of mind and decided to convert the
payment of his fees from a portion of land equivalent to that of each of the plaintiffs to P50,000.00, which he
alleges to be the monetary value of that area. Certainly, Atty. Robinol had no right to unilaterally appropriate
his clients' money not only because he is bound by a written agreement but also because, under the
circumstances, it was highly unjust for him to have done so. His clients were mere squatters who could barely
eke out an existence. They had painstakingly raised their respective quotas of P2,500.00 per family with which
to pay for the land only to be deprived of the same by one who, after having seen the color of money, heartlessly
took advantage of them.
- Atty. Robinol has no basis to claim that since he was unjustly dismissed by his clients he had the legal right to
retain the money in his possession. Firstly, there was justifiable ground for his discharge as counsel. His clients
had lost confidence in him for he had obviously engaged in dilatory tactics to the detriment of their interests,
which he was duty-bound to pro. tect. Secondly, even if there were no valid ground, he is bereft of any legal
right to retain his clients' funds intended for a specific purpose-the purchase of land. He stands obliged to
return the money immediately to their rightful owners.
- The Court agrees with the Solicitor General that complainants' evidence on this is the more credible. And that
he had, in fact, received the total sum of P75,000-00. Inevitable, therefore, is the conclusion that Atty. Robinol
has rendered himself unfit to continue in the practice of law. He has not only violated his oath not to delay any
man for money and to conduct himself with all good fidelity to his clients. He has also brought the profession into
disrepute with people who had reposed in it full faith and reliance for the fulfillment of a life-time ambition to
acquire a homelot they could call their own.
2. NO
Reasoning In so far as Atty. Montemayor is concerned, we agree with the findings of the Solicitor General that
he has not exposed himself to any plausible charge of unethical conduct in the exercise of his profession when
he agreed to serve as counsel for the plaintiffs.There is no doubt that clients are free to change their counsel in
a pending case at any time (Section 26, Rule 138, Rules of Court) and thereafter employ another lawyer who
may then enter his appearance. In this case, the plaintiffs in the civil suit below decided to change their lawyer,
Atty. Robinol, for loss of trust and confidence. That act was well within their prerogative. In so far as the
complaint for disbarment filed by Atty. Robinol against Atty. Montemayor is concerned, therefore, the same is
absolutely without merit.
Disposition
- Atty. Santiago R. Robinol is hereby DISBARRED for having violated his lawyer's oath to delay no man for
money, broken the fiduciary relation between lawyer and client, and proven himself unworthy to continue in
the practice of law. By reason of his unethical actuations, he is hereby declared to have forfeited his rights to
attorney's fees and is ordered to return the amount of P75,000.00 to the plaintiffs.
- Administrative Case No. 2180 against Atty. Anacleto R. Montemayor for disbarment is hereby DISMISSED for
lack of merit.

Rubias vs Batiller (1973)

Facts:
- Francisco Militante claimed that he owned a parcel of land located in Iloilo. He filed with
the CFI of Iloilo an application for the registration of title of the land. This was opposed
by the Director of Lands, the Director of Forestry, and other oppositors. The case was
docked as a land case, and after trial the court dismissed the application for
registration. Militante appealed to the Court of Appeals.
- Pending that appeal, he sold to Rubias (his son-in-law and a lawyer) the land.
- The CA rendered a decision, dismissing the application for registration.
- Rubias filed a Forcible Entry and Detainer case against Batiller.
- In that case, the court held that Rubias has no cause of action because the property in
dispute which Rubias allegedly bought from Militante was the subject matter of a land
case, in which case Rubias was the counsel on record of Militante himself. It thus falls
under Article 1491 of the Civil Code. (Hence, this appeal.)

Issue: Whether the sale of the land is prohibited under Article 1491.

Held: YES. Article 1491 says that “The following persons cannot acquire any purchase, even
at a public or judicial auction, either in person or through the mediation of another…. (5)
Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other
officers and employees connected with the administration of justice, the property and rights
in litigation or levied upon an execution before the court within whose jurisdiction or territory
they exercise their respective functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyesr, with respect to the property and rights which may be
the object of any litigation in which they may take part by virtue of their profession.” The
present case clearly falls under this, especially since the case was still pending appeal when
the sale was made.

Issue: Legal effect of a sale falling under Article 1491?

Held: NULL AND VOID.CANNOT BE RATIFIED.

Manresa considered such prohibited acquisitions (which fell under the Spanish Civil
Code) as merely voidable because the Spanish Code did not recognize nullity. But our Civil
Code does recognize the absolute nullity of contracts “whose cause, object or purpose is
contract to law, morals, good customs, public order or public policy” or which are “expressly
prohibited or declared void by law” and declares such contracts “inexistent and void from the
beginning.” The nullity of such prohibited contracts is definite and permanent, and cannot be
cured by ratification.
The public interest and public policy remain paramount and do not permit of
compromise or ratification. In this aspect, the permanent disqualification of public and judicial
officers and lawyers grounded on public policy differs from the first three cases of guardians
agents and administrators (under Art 1491). As to their transactions, it has been opined that
they may be “ratified” by means of and in “the form of a new contract, in which case its
validity shall be determined only by the circumstances at the time of execution of such new
contract.” In those cases, the object which was illegal at the time of the first contract may
have already become lawful at the time of the ratification or second contract, or the intent, or
the service which was impossible. The ratification or second contract would then be valid from
its execution; however, it does not retroact to the date of the first contract.
Decision affirmed.

FACTS:
On August 31, 1964, Domingo Rubias, a lawyer, filed a suit to recover the ownership and
possession of certain portions of a lot located in Barrio General Luna, Barotac Viejo, Iloilo, which he bought
from his father-in-law, Francisco Militante in 1956. The lot was occupied by Isaias Batiller, who illegally
entered said portions of the lot on two occasions—in 1945 and 1959. Rubias also prayed for damages and
attorney’s fee. Meanwhile, in his answer, Batiller claims that he and his predecessors-in-interest have
always been in actual, open, and continuous possession since time immemorial under claim and ownership
of the portions of the lot in question. Batiller claims that due to the allegations, he has suffered moral
damages in the amount of P2,000 and a sum of P500 for attorney’s fees.

ISSUE:
What is the status of the sale?

RULING:
The stipulated facts and exhibits of record indisputably established plaintiff’ s lack of cause of action and
justified the outright dismissal of the complaint. Plaintiff’s claim of ownership to the land in question was
predicated on the sale thereof for P2,000.00 made in 1956 by his father-in-law, Francisco Militante, in his
favor, at a time when Militante’s application for registration thereofhad already been dismissed by the Iloilo
land registration court and was pending appeal in the Court of Appeals. Hence, there was no right or title to
the land that could be transferred or sold by Militante’s purported sale in 1956 in favor of plaintiff.
Manifestly, then plaintiff’s complaint against defendant, to be declared absolute owner of the land and to be
restored to possession thereof with damages was bereft of any factual or legal basis. Article 1491 of our Civil
Code (like Article 1459 of the Spanish Civil Code) prohibits in its six paragraphs certain persons, by reason
of the relation of trust or their peculiar control over the property, from acquiring such property in their
trust or control either directly or indirectly and "even at a public or judicial auction," as follows:
(1) guardians; (2) agents; (3) administrators; (4)public officers and employees; judicial officers and
employees, prosecuting attorneys, and lawyers; and (6) others especially disqualified by law.
 [ Adm. Case No. 632, June 27, 1940 ]

IN RE ATTORNEY MELCHOR E. RUSTE, RESPONDENT.

LAUREL, J.:
By virtue of an administrative complaint filed by Mateo San Juan against Melchor E. Ruste on February 27,
1934, to which the respondent made answer on March 15, 1934, this Court, by resolution of December 1,
1934, referred the case to the Solicitor-General for report. The reference brought forth the following formal
complaint filed by the Solicitor-General against the respondent on March 26, 1935:

"Comes now the undersigned Solicitor-General of the Philippine Islands in the above entitled
administrative case, and pursuant to the provisions of Rule 5 of the rules concerning disbarment or
suspension of attorneys-at-law, to this Honorable Supreme Court, respectfully alleges:

"1. That in cadastral case No. 6, G. L. R. O. Record No. 483 of the Court of First Instance of Zamboanga, the
respondent, Melchor E. Ruste, appeared for and represented, as counsel, Severa Ventura and her husband,
Mateo San Juan, the herein complainant, who claimed lot No. 3765; and as a result of said cadastral
proceedings, an undivided eleven-twentieth (11/20) share of said lot was adjudicated by said court to said
claimants;

"2. That there was no agreement between the respondent and his said clients as to the amount of his fees;
but that they paid to him upon demand on different occasions the sums of P30 and P25 as attorney's fees;

"3. That after said payments, the respondent again demanded of the complainant and his wife as additional
fees the sum of P25, but they had no money to pay him, and so he asked them to execute in his favor a
contract of lease, and a contract of sale, of their share in said lot No. 3764 in order that he may be able to
borrow or raise said sum of P25;

"4. That in accordance with said respondent's request, the complainant and his wife executed on September
22, 1930, a contract of lease, whereby in consideration of P100, they leased to him their coconut and banana
plantation in said lot No. 3764 for a term of five years, and also a deed of sale, whereby in consideration of
P1,000, they sold and transferred to him their undivided eleven-twentieth (11/20) share in said lot No.
3764, although, in fact and in truth, neither of the considerations mentioned in said contracts of lease and
sale were ever received by them;

"5. That on March 21, 1931, the respondent executed a deed of sale, whereby in consideration of P370 he
sold and transferred to Ong Chua said undivided eleven-twentieth (11/20) share in lot No. 3764 excluding
the house and its lot, occupied by the complainant and his wife; and on March 28, 1931, the respondent
executed another deed of sale, whereby in consideration of the same amount of P370 paid to him by the
same Ong Chua, he sold and transferred to the latter the same undivided eleven-twentieth (11/20) share in
lot No. 3764, but already including said house and its lot;

"6. That by virtue of the sale to him, Ong Chua has taken possession of said eleven-twentieth share in lot
No. 3764;

"7. That notwithstanding said second deed of sale, the respondent obtained authority from Ong Chua to
allow the complainant and his wife to continue living in said house for a period of two years without paying
any rent,;

"8. That on October 10,1933, however, the respondent notified the complainant and his wife in writing that
the said house still belonged to the respondent, and requires said spouses to pay, the sum of P40.50,
representing ten months' rental in arrears, and thereafter a monthly rental of P1.50; and

"9. That the respondent did not turn over to the complainant and his wife the amount of P370 paid by Ong
Chua nor any part thereof.
"Wherefore, the undersigned prays that disciplinary action be taken against the respondent."

To the foregoing complaint, the respondent, on April 23, 1935, interposed the following answer

By resolution of this court of April 24, 1935, the said formal complaint and answer were referred to the
judge of First Instance of Zamboanga for investigation, report, and recommendation. After various
hearings and postponements, transpiring between August 3, 1935 and October 18, 1939, the Honorable
Catalino Buenaventura, then presiding over the Court of First Instance of Zamboanga, elevated the record
of the case to this court. On October 31, 1939, the case was included in the January, 1940 calendar, and at
the hearing thereof on February 1, 1940, the respondent submitted the case without oral argument, and the
memorandum presented by the Solicitor-General, recommending the dismissal of the complaint filed
against the respondent, was ordered attached to the record.

From a perusal of the entire record, particularly of the formal complaint filed by the Solicitor-General
against the respondent attorney, we gather the following material charges formulated against the latter, to
wit, (1) that he engineered the execution in his favor, by the spouses Mateo San Juan and Severa Ventura, of
the contract of lease, Exhibit A, and of the deed of sale, Exhibit B, covering the property in question; (2) that
he did not turn over the considerations therefor to the said spouses; (3) that he likewise deeded the same
property to one Ong Chua, for P370, without paying the spouses the said ,purchase price, and (4) that he
required the spouses to pay P40.50 for ten months' rental in arrears, and thereafter a monthly rental of
P1.50 for the house occupied by the said spouses.

Sometime in July, 1930, the respondent acted as counsel for the complainant and his wife when the latter
laid claim of ownership upon lot No. 3764 in case No. 6, G. L. R. O., Cadastral Record 483 of the Court of
First Instance of Zamboanga, eleven-twentieth of said lot having been eventually adjudicated to the wife,
Severa Ventura, on December 20, 1933. On September 22, 1930, that is, during the pendency of said
cadastral case, the spouses purportedly leased a part of said lot to the respondent for P100, which lease was
cancelled and superseded by a deed of sale executed on the same date, whereby the said spouses, in
consideration of P1,000, conveyed eleven-twentieth of the same land in favor of the respondent. This is
also the finding of the Solicitor-General in his report submitted in this case:

The property being thus in suit, which the respondent was waging on behalf of his clients, his acquisition
thereof by the deed of sale, Exhibit B, constitutes malpractice. (Hernandez vs. Villanueva, 40 Phil., 775; In
re Calderón, 7 Phil. 427.) Whether the deed of sale in question was executed at the instance of the spouses
driven by financial necessity, as contended by the respondent, or at the latter's behest, as contended by the
complainant, is of no moment. In either case an attorney occupies a vantage position to press upon or
dictate his terms to a harrassed client, in breach of the "rule so amply protective of the confidential
relations, which must necessarily exist between attorney and client, and of the rights of both."
(Hernandez vs. Villanueva, supra.)

There is evidence to show that the respondent has failed to account to the aggrieved spouses for the various
amounts received by him on account of the transactions effected by him pertaining to the portion of lot No.
3764. However, as the evidence is conflicting and the statements of the of the parties are contradictory on
this point, it is believed that the determination of the exact amount due them by the respondent should
better be elucidated and determined in an appropriate action which the complaint and his spouse may
institute against the respondent for this purpose.

For having imporperly acquired the property referred to in Exhibits A and B, under the above
circumstances, which property was then the subject matter of a judicial proceeding, in which he was
counsel, the respondent is found guilty of malpractice and is hereby suspended for a period of one year,
reserving to the complainant and his spouse such action as may be proper for the recovery of such amount
or amounts as may be due from the respondent. So ordered.