A.C. No.

6174 November 16, 2011

LYDIA CASTRO-JUSTO, Complainant
vs.
ATTY. RODOLFO T. GALING, Respondent.
PEREZ, J.:

Facts: Before us for consideration is Resolution No. XVIII-2007-1961 of the Board of Governors, Integrated Bar of
the Philippines (IBP), relative to the complaint2 for disbarment filed by Lydia Castro-Justo against Atty. Rodolfo T.
Galing.

Complainant Justo alleged that sometime in April 2003, she engaged the services of respondent Atty. Galing in
connection with dishonored checks issued by Manila City Councilor Arlene W. Koa (Ms. Koa). After she paid his
professional fees, the respondent drafted and sent a letter to Ms. Koa demanding payment of the
checks.3 Respondent advised complainant to wait for the lapse of the period indicated in the demand letter before
filing her complaint.

On 10 July 2003, complainant filed a criminal complaint against Ms. Koa for estafa and violation of Batas Pambansa
Blg. 22 before the Office of the City Prosecutor of Manila.4

On 27 July 2003, she received a copy of a Motion for Consolidation5 filed by respondent for and on behalf of Ms.
Koa, the accused in the criminal cases, and the latter’s daughter Karen Torralba (Ms. Torralba). Further, on 8
August 2003, respondent appeared as counsel for Ms. Koa before the prosecutor of Manila.

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

In his Comment,6 respondent denied the allegations against him. He admitted that he drafted a demand letter for
complainant but argued that it was made only in deference to their long standing friendship and not by reason of a
professional engagement as professed by complainant. He denied receiving any professional fee for the services he
rendered. It was allegedly their understanding that complainant would have to retain the services of another lawyer.
He alleged that complainant, based on that agreement, engaged the services of Atty. Manuel A. Año.

To bolster this claim, respondent pointed out that the complaint filed by complainant against Ms. Koa for estafa and
violation of B.P. Blg. 22 was based not on the demand letter he drafted but on the demand letter prepared by Atty.
Manuel A. Año.

Respondent contended that he is a close friend of the opposing parties in the criminal cases. He further contended
that complainant Justo and Ms. Koa are likewise long time friends, as in fact, they are "comares" for more than 30
years since complainant is the godmother of Ms. Torralba.7 Respondent claimed that it is in this light that he
accommodated Ms. Koa and her daughter’s request that they be represented by him in the cases filed against them
by complainant and complainant’s daughter. He maintained that the filing of the Motion for Consolidation which is a
non-adversarial pleading does not evidence the existence of a lawyer-client relationship between him and Ms. Koa
and Ms. Torralba. Likewise, his appearance in the joint proceedings should only be construed as an effort on his
part to assume the role of a moderator or arbiter of the parties.

He insisted that his actions were merely motivated by an intention to help the parties achieve an out of court
settlement and possible reconciliation. He reported that his efforts proved fruitful insofar as he had caused Ms. Koa
to pay complainant the amount of ₱50,000.00 in settlement of one of the two checks subject of I.S. No. 03G-19484-
86.

Respondent averred that the failure of Ms. Koa and Ms. Torralba to make good the other checks caused a lot of
consternation on the part of complainant. This allegedly led her to vent her ire on respondent and file the instant
administrative case for conflict of interest.

In a resolution dated 19 October 2007, the Board of Governors of the IBP adopted and approved with modification
the findings of its Investigating Commissioner. They found respondent guilty of violating Canon 15, Rule 15.03 of the
Code of Professional Responsibility by representing conflicting interests and for his daring audacity and for the
pronounced malignancy of his act. It was recommended that he be suspended from the practice of law for one (1)
year with a warning that a repetition of the same or similar acts will be dealt with more severely.8

We agree with the Report and Recommendation of the Investigating Commissioner,9 as adopted by the Board of
Governors of the IBP.

It was established that in April 2003, respondent was approached by complainant regarding the dishonored checks
issued by Manila City Councilor Koa.

It was also established that on 25 July 2003, a Motion for Consolidation was filed by respondent in I.S. No. 03G-
19484-86 entitled "Lydia Justo vs. Arlene Koa" and I.S. No. 03G-19582-84 entitled "Lani C. Justo vs. Karen
Torralba". Respondent stated that the movants in these cases are mother and daughter while complainants are
likewise mother and daughter and that these cases arose out from the same transaction. Thus, movants and
complainants will be adducing the same sets of evidence and witnesses.

Respondent argued that no lawyer-client relationship existed between him and complainant because there was no
professional fee paid for the services he rendered. Moreover, he argued that he drafted the demand letter only as a
personal favor to complainant who is a close friend.

We are not persuaded. A lawyer-client relationship can exist notwithstanding the close friendship between
complainant and respondent. The relationship was established the moment complainant sought legal advice from
respondent regarding the dishonored checks. By drafting the demand letter respondent further affirmed such
relationship. The fact that the demand letter was not utilized in the criminal complaint filed and that respondent was
not eventually engaged by complainant to represent her in the criminal cases is of no moment. As observed by the
Investigating Commissioner, by referring to complainant Justo as "my client" in the demand letter sent to the
defaulting debtor10, respondent admitted the existence of the lawyer-client relationship. Such admission effectively
estopped him from claiming otherwise.

Likewise, the non-payment of professional fee will not exculpate respondent from liability. Absence of monetary
consideration does not exempt lawyers from complying with the prohibition against pursuing cases with conflicting
interests. The prohibition attaches from the moment the attorney-client relationship is established and extends
beyond the duration of the professional relationship.11 We held in Burbe v. Atty. Magulta12 that it is not necessary
that any retainer be paid, promised or charged; neither is it material that the attorney consulted did not afterward
handle the case for which his service had been sought.13

Under Rule 15.03, Canon 15 of the Code of Professional Responsibility, "[a] lawyer shall not represent conflicting
interests except by written consent of all concerned given after a full disclosure of the facts." Respondent was
therefore bound to refrain from representing parties with conflicting interests in a controversy. By doing so, without
showing any proof that he had obtained the written consent of the conflicting parties, respondent should be
sanctioned.

The prohibition against representing conflicting interest is founded on principles of public policy and good taste.14 In
the course of the lawyer-client relationship, the lawyer learns of the facts connected with the client’s case, including
the weak and strong points of the case. The nature of the relationship is, therefore, one of trust and confidence of
the highest degree.15

It behooves lawyers not only to keep inviolate the client’s confidence, but also to avoid the appearance of treachery
and double-dealing for only then can litigants be encouraged to entrust their secrets to their lawyers, which is of
paramount importance in the administration of justice.16

The case of Hornilla v. Atty. Salunat17 is instructive on this concept, thus:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The 1aw p++i1

test is ‘whether or not in behalf of one client, it is the lawyer’s duty to fight for an issue or claim, but it is his duty to
oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he
argues for the other client.’18 This rule covers not only cases in which confidential communications have been
confided, but also those in which no confidence has been bestowed or will be used.19 Also, there is conflict of
interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously affect
his first client in any matter in which he represents him and also whether he will be called upon in his new relation to
use against his first client any knowledge acquired through their connection.20 Another test of the inconsistency of
interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance
thereof.21

The excuse proffered by respondent that it was not him but Atty. Año who was eventually engaged by complainant
will not exonerate him from the clear violation of Rule 15.03 of the Code of Professional Responsibility. The take-
over of a client’s cause of action by another lawyer does not give the former lawyer the right to represent the
opposing party. It is not only malpractice but also constitutes a violation of the confidence resulting from the
attorney-client relationship.

Considering that this is respondent’s first infraction, the disbarment sought in the complaint is deemed to be too
severe. As recommended by the Board of Governors of the IBP, the suspension from the practice of law for one (1)
year is warranted.

Accordingly, the Court resolved to SUSPEND Atty. Rodolfo T. Galing from the practice of law for one (1) year, with a
WARNING that a repetition of the same or similar offense will warrant a more severe penalty. Let copies of this
Decision be furnished all courts, the Office of the Bar Confidant and the Integrated Bar of the Philippines for their
information and guidance. The Office of the Bar Confidant is directed to append a copy of this Decision to
respondent’s record as member of the Bar.

SO ORDERED.
G.R. No. 181359 August 5, 2013

SPOUSES CLEMENCIO C. SABITSANA, JR. and MA. ROSARIO M. SABITSANA, Petitioners,

vs.
JUANITO F. MUERTEGUI, represented by his Attorney-in-Fact DOMINGO A. MUERTEGUI, JR., Respondent.

DECISION

DEL CASTILLO, J.:

A lawyer may not, for his own personal interest and benefit, gamble on his client's word, believing it at one time and
disbelieving it the next. He owes his client his undivided loyalty.

Assailed in this Petition for Review on Certiorari1 are the January 25, 2007 Decision2 of the Court of Appeals (CA)
which denied the appeal in CA-G.R. CV No. 79250, and its January 11, 2008 Resolution3 denying petitioner’s
Motion for Reconsideration.4

Factual Antecedents

On September 2, 1981, Alberto Garcia (Garcia) executed an unnotarized Deed of Sale5 in favor of respondent
Juanito Muertegui6 (Juanito) over a 7,500-square meter parcel of unregistered land (the lot) located in Dalutan
Island, Talahid, Almeira, Biliran, Leyte del Norte covered by Tax Declaration (TD) No. 1996 issued in 1985 in
Garcia’s name.7

Juanito’s father Domingo Muertegui, Sr. (Domingo Sr.) and brother Domingo Jr. took actual possession of the lot
and planted thereon coconut and ipil-ipil trees. They also paid the real property taxes on the lot for the years 1980
up to 1998.

On October 17, 1991, Garcia sold the lot to the Muertegui family lawyer, petitioner Atty. Clemencio C. Sabitsana, Jr.
(Atty. Sabitsana), through a notarized deed of absolute sale.8 The sale was registered with the Register of Deeds on
February 6, 1992.9 TD No. 1996 was cancelled and a new one, TD No. 5327,10 was issued in Atty. Sabitsana’s
name. Although Domingo Jr. and Sr. paid the real estate taxes, Atty. Sabitsana also paid real property taxes in
1992, 1993, and 1999. In 1996, he introduced concrete improvements on the property, which shortly thereafter were
destroyed by a typhoon.

When Domingo Sr. passed away, his heirs applied for registration and coverage of the lot under the Public Land Act
or Commonwealth Act No. 141. Atty. Sabitsana, in a letter11 dated August 24, 1998 addressed to the Department of
Environment and Natural Resources’ CENRO/PENRO office in Naval, Biliran, opposed the application, claiming that
he was the true owner of the lot. He asked that the application for registration be held in abeyance until the issue of
conflicting ownership has been resolved.

On April 11, 2000, Juanito, through his attorney-in-fact Domingo Jr., filed Civil Case No. B-109712 for quieting of title
and preliminary injunction, against herein petitioners Atty. Sabitsana and his wife, Rosario, claiming that they bought
the lot in bad faith and are exercising acts of possession and ownership over the same, which acts thus constitute a
cloud over his title. The Complaint13 prayed, among others, that the Sabitsana Deed of Sale, the August 24, 1998
letter, and TD No. 5327 be declared null and void and of no effect; that petitioners be ordered to respect and
recognize Juanito’s title over the lot; and that moral and exemplary damages, attorney’s fees, and litigation
expenses be awarded to him.

In their Answer with Counterclaim,14 petitioners asserted mainly that the sale to Juanito is null and void absent the
marital consent of Garcia’s wife, Soledad Corto (Soledad); that they acquired the property in good faith and for
value; and that the Complaint is barred by prescription and laches. They likewise insisted that the Regional Trial
Court (RTC) of Naval, Biliran did not have jurisdiction over the case, which involved title to or interest in a parcel of
land the assessed value of which is merely ₱1,230.00.

The evidence and testimonies of the respondent’s witnesses during trial reveal that petitioner Atty. Sabitsana was
the Muertegui family’s lawyer at the time Garcia sold the lot to Juanito, and that as such, he was consulted by the
family before the sale was executed; that after the sale to Juanito, Domingo Sr. entered into actual, public, adverse
and continuous possession of the lot, and planted the same to coconut and ipil-ipil; and that after Domingo Sr.’s
death, his wife Caseldita, succeeded him in the possession and exercise of rights over the lot.

On the other hand, Atty. Sabitsana testified that before purchasing the lot, he was told by a member of the
Muertegui family, Carmen Muertegui Davies (Carmen), that the Muertegui family had bought the lot, but she could
not show the document of sale; that he then conducted an investigation with the offices of the municipal and
provincial assessors; that he failed to find any document, record, or other proof of the sale by Garcia to Juanito, and
instead discovered that the lot was still in the name of Garcia; that given the foregoing revelations, he concluded
that the Muerteguis were merely bluffing, and that they probably did not want him to buy the property because they
were interested in buying it for themselves considering that it was adjacent to a lot which they owned; that he then
proceeded to purchase the lot from Garcia; that after purchasing the lot, he wrote Caseldita in October 1991 to
inform her of the sale; that he then took possession of the lot and gathered ipil-ipil for firewood and harvested
coconuts and calamansi from the lot; and that he constructed a rip-rap on the property sometime in 1996 and 1997.

Ruling of the Regional Trial Court

On October 28, 2002, the trial court issued its Decision15 which decrees as follows:

WHEREFORE, in view of the foregoing considerations, this Court finds in favor of the plaintiff and against the
defendants, hereby declaring the Deed of Sale dated 2 September 1981 as valid and preferred while the Deed of
Absolute Sale dated 17 October 1991 and Tax Declaration No. 5327 in the name of Atty. Clemencio C. Sabitsana,
Jr. are VOID and of no legal effect.

The Provincial Assessor and the Municipal Assessor of Naval are directed to cancel Tax Declaration No. 5327 as
void and done in bad faith.

Further, Atty. Clemencio C. Sabitsana, Jr. is ordered to pay plaintiff Juanito Muertigui, represented by his attorney-
in-fact Domingo Muertigui, Jr. the amounts of:

a) ₱30,000.00 as attorney’s fees;

b) ₱10,000.00 as litigation expenses; and

c) Costs.

SO ORDERED.16

The trial court held that petitioners are not buyers in good faith. Petitioner Atty. Sabitsana was the Muertegui family’s
lawyer, and was informed beforehand by Carmen that her family had purchased the lot; thus, he knew of the sale to
Juanito. After conducting an investigation, he found out that the sale was not registered. With this information in
mind, Atty. Sabitsana went on to purchase the same lot and raced to register the sale ahead of the Muerteguis,
expecting that his purchase and prior registration would prevail over that of his clients, the Muerteguis. Applying
Article 1544 of the Civil Code,17 the trial court declared that even though petitioners were first to register their sale,
the same was not done in good faith. And because petitioners’ registration was not in good faith, preference should
be given to the sale in favor of Juanito, as he was the first to take possession of the lot in good faith, and the sale to
petitioners must be declared null and void for it casts a cloud upon the Muertegui title.

Petitioners filed a Motion for Reconsideration18 but the trial court denied19 the same.

Ruling of the Court of Appeals

Petitioners appealed to the CA20 asserting that the sale to Juanito was null and void for lack of marital consent; that
the sale to them is valid; that the lower court erred in applying Article 1544 of the Civil Code; that the Complaint
should have been barred by prescription, laches and estoppel; that respondent had no cause of action; that
respondent was not entitled to an award of attorney’s fees and litigation expenses; and that they should be the ones
awarded attorney’s fees and litigation expenses.

The CA, through its questioned January 25, 2007 Decision,21 denied the appeal and affirmed the trial court’s
Decision in toto. It held that even though the lot admittedly was conjugal property, the absence of Soledad’s
signature and consent to the deed did not render the sale to Juanito absolutely null and void, but merely voidable.
Since Garcia and his wife were married prior to the effectivity of the Family Code, Article 173 of the Civil
Code22 should apply; and under the said provision, the disposition of conjugal property without the wife’s consent is
not void, but merely voidable. In the absence of a decree annulling the deed of sale in favor of Juanito, the same
remains valid.

The CA added that the fact that the Deed of Sale in favor of Juanito was not notarized could not affect its validity. As
against the notarized deed of sale in favor of petitioners, the CA held that the sale in favor of Juanito still prevails.
Applying Article 1544 of the Civil Code, the CA said that the determining factor is petitioners’ good faith, or the lack
of it. It held that even though petitioners were first to register the sale in their favor, they did not do so in good faith,
for they already knew beforehand of Garcia’s prior sale to Juanito. By virtue of Atty. Sabitsana’s professional and
confidential relationship with the Muertegui family, petitioners came to know about the prior sale to the Muerteguis
and the latter’s possession of the lot, and yet they pushed through with the second sale. Far from acting in good
faith, petitioner Atty. Sabitsana used his legal knowledge to take advantage of his clients by registering his purchase
ahead of them.

Finally, the CA declared that Juanito, as the rightful owner of the lot, possessed the requisite cause of action to
institute the suit for quieting of title and obtain judgment in his favor, and is entitled as well to an award for attorney’s
fees and litigation expenses, which the trial court correctly held to be just and equitable under the circumstances.
The dispositive portion of the CA Decision reads:

WHEREFORE, premises considered, the instant appeal is DENIED and the Decision dated October 28, 2002 of the
Regional Trial Court, 8th Judicial Region, Branch 16, Naval, Biliran, is hereby AFFIRMED. Costs against
defendants-appellants.

SO ORDERED.23

Issues

Petitioners now raise the following issues for resolution:

I. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE REGIONAL TRIAL COURT DID NOT
HAVE JURISDICTION OVER THE CASE IN VIEW OF THE FACT THAT THE ASSESSED VALUE OF THE
SUBJECT LAND WAS ONLY ₱1,230.00 (AND STATED MARKET VALUE OF ONLY ₱3,450.00).

II. THE COURT OF APPEALS ERRED IN APPLYING ART. 1544 OF THE CIVIL CODE INSTEAD OF THE
PROPERTY REGISTRATION DECREE (P.D. NO. 1529) CONSIDERING THAT THE SUBJECT LAND WAS
UNREGISTERED.

III. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE COMPLAINT WAS ALREADY
BARRED [BY] LACHES AND THE STATUTE OF LIMITATIONS.

IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE REGIONAL TRIAL
COURT ORDERING THE PETITIONERS TO PAY ATTORNEY’S FEES AND LITIGATION EXPENSES TO
THE RESPONDENT.24

Petitioners’ Arguments

Petitioners assert that the RTC of Naval, Biliran did not have jurisdiction over the case. They argue that since the
assessed value of the lot was a mere ₱1,230.00, jurisdiction over the case lies with the first level courts, pursuant to
Republic Act No. 7691,25 which expanded their exclusive original jurisdiction to include "all civil actions which involve
title to, or possession of, real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty thousand pesos (₱20,000.00) or, in civil actions in Metro Manila, where such
assessed value does not exceed Fifty thousand pesos (₱50,000.00) exclusive of interest, damages of whatever
kind, attorney’s fees, litigation expenses and costs."26 Petitioners thus conclude that the Decision in Civil Case No.
B-1097 is null and void for lack of jurisdiction.

Petitioners next insist that the lot, being unregistered land, is beyond the coverage of Article 1544 of the Civil Code,
and instead, the provisions of Presidential Decree (PD) No. 1529 should apply. This being the case, the Deed of
Sale in favor of Juanito is valid only as between him and the seller Garcia, pursuant to Section 113 of PD 1529;27 it
cannot affect petitioners who are not parties thereto.

On the issue of estoppel, laches and prescription, petitioners insist that from the time they informed the Muerteguis
in writing about their purchase of the lot, or in October 1991, the latter did not notify them of their prior purchase of
the lot, nor did respondent interpose any objection to the sale in their favor. It was only in 1998 that Domingo Jr.
showed to petitioners the unnotarized deed of sale. According to petitioners, this seven-year period of silence and
inaction on the Muerteguis’ part should be taken against them and construed as neglect on their part to assert their
rights for an unreasonable length of time. As such, their action to quiet title should be deemed barred by laches and
estoppel.

Lastly, petitioners take exception to the award of attorney’s fees and litigation expenses, claiming that since there
was no bad faith on their part, such award may not be considered just and equitable under the circumstances. Still,
an award of attorney’s fees should remain the exception rather than the rule; and in awarding the same, there must
have been an express finding of facts and law justifying such award, a requirement that is absent in this case.

Petitioners thus pray for the reversal of the questioned CA Decision and Resolution; the dismissal of the Complaint
in Civil Case No. B-1097; the deletion of the award of attorney’s fees and litigation expenses in respondent’s favor;
and a declaration that they are the true and rightful owners of the lot.

Respondent’s Arguments

Respondent, on the other hand, counters that a suit for quieting of title is one whose subject matter is incapable of
pecuniary estimation, and thus falls within the jurisdiction of the RTC. He likewise insists that Article 1544 applies to
the case because there is a clear case of double sale of the same property to different buyers, and the bottom line
thereof lies in petitioners’ lack of good faith in entering into the subsequent sale. On the issue of laches/estoppel,
respondent echoes the CA’s view that he was persistent in the exercise of his rights over the lot, having previously
filed a complaint for recovery of the lot, which unfortunately was dismissed based on technicality.
On the issue of attorney’s fees and litigation expenses, respondent finds refuge in Article 2208 of the Civil
Code,28 citing three instances which fortify the award in his favor – petitioners’ acts compelled him to litigate and
incur expenses to protect his interests; their gross and evident bad faith in refusing to recognize his ownership and
possession over the lot; and the justness and equitableness of his case.

Our Ruling

The Petition must be denied.

The Regional Trial Court has jurisdiction over the suit for quieting of title.

On the question of jurisdiction, it is clear under the Rules that an action for quieting of title may be instituted in the
RTCs, regardless of the assessed value of the real property in dispute. Under Rule 63 of the Rules of Court,29 an
action to quiet title to real property or remove clouds therefrom may be brought in the appropriate RTC.

It must be remembered that the suit for quieting of title was prompted by petitioners’ August 24, 1998 letter-
opposition to respondent’s application for registration. Thus, in order to prevent30 a cloud from being cast upon his
application for a title, respondent filed Civil Case No. B-1097 to obtain a declaration of his rights. In this sense, the
action is one for declaratory relief, which properly falls within the jurisdiction of the RTC pursuant to Rule 63 of the
Rules.

Article 1544 of the Civil Code does not apply to sales involving unregistered land.

Both the trial court and the CA are, however, wrong in applying Article 1544 of the Civil Code. Both courts seem to
have forgotten that the provision does not apply to sales involving unregistered land. Suffice it to state that the issue
of the buyer’s good or bad faith is relevant only where the subject of the sale is registered land, and the purchaser is
buying the same from the registered owner whose title to the land is clean. In such case, the purchaser who relies
on the clean title of the registered owner is protected if he is a purchaser in good faith for value.31

Act No. 3344 applies to sale of unregistered lands.

What applies in this case is Act No. 3344,32 as amended, which provides for the system of recording of transactions
over unregistered real estate. Act No. 3344 expressly declares that any registration made shall be without prejudice
to a third party with a better right. The question to be resolved therefore is: who between petitioners and respondent
has a better right to the disputed lot?

Respondent has a better right to the lot.

The sale to respondent Juanito was executed on September 2, 1981 via an unnotarized deed of sale, while the sale
to petitioners was made via a notarized document only on October 17, 1991, or ten years thereafter. Thus, Juanito
who was the first buyer has a better right to the lot, while the subsequent sale to petitioners is null and void, because
when it was made, the seller Garcia was no longer the owner of the lot. Nemo dat quod non habet.

The fact that the sale to Juanito was not notarized does not alter anything, since the sale between him and Garcia
remains valid nonetheless. Notarization, or the requirement of a public document under the Civil Code,33 is only for
convenience, and not for validity or enforceability.34 And because it remained valid as between Juanito and Garcia,
the latter no longer had the right to sell the lot to petitioners, for his ownership thereof had ceased.

Nor can petitioners’ registration of their purchase have any effect on Juanito’s rights. The mere registration of a sale
in one’s favor does not give him any right over the land if the vendor was no longer the owner of the land, having
previously sold the same to another even if the earlier sale was unrecorded.35 Neither could it validate the purchase
thereof by petitioners, which is null and void. Registration does not vest title; it is merely the evidence of such title.
Our land registration laws do not give the holder any better title than what he actually has.36

Specifically, we held in Radiowealth Finance Co. v. Palileo37 that:

Under Act No. 3344, registration of instruments affecting unregistered lands is ‘without prejudice to a third party with
a better right.’ The aforequoted phrase has been held by this Court to mean that the mere registration of a sale in
one’s favor does not give him any right over the land if the vendor was not anymore the owner of the land having
previously sold the same to somebody else even if the earlier sale was unrecorded.

Petitioners’ defense of prescription, laches and estoppel are unavailing since their claim is based on a null and void
deed of sale. The fact that the Muerteguis failed to interpose any objection to the sale in petitioners’ favor does not
change anything, nor could it give rise to a right in their favor; their purchase remains void and ineffective as far as
the Muerteguis are concerned.

The award of attorney’s fees and litigation expenses is proper because of petitioners’ bad faith.
Petitioners’ actual and prior knowledge of the first sale to Juanito makes them purchasers in bad faith. It also
appears that petitioner Atty. Sabitsana was remiss in his duties as counsel to the Muertegui family. Instead of
advising the Muerteguis to register their purchase as soon as possible to forestall any legal complications that
accompany unregistered sales of real property, he did exactly the opposite: taking advantage of the situation and
the information he gathered from his inquiries and investigation, he bought the very same lot and immediately
caused the registration thereof ahead of his clients, thinking that his purchase and prior registration would prevail.
The Court cannot tolerate this mercenary attitude. Instead of protecting his client’s interest, Atty. Sabitsana
practically preyed on him.

Petitioner Atty. Sabitsana took advantage of confidential information disclosed to him by his client, using the same to
defeat him and beat him to the draw, so to speak. He rushed the sale and registration thereof ahead of his client. He
may not be afforded the excuse that he nonetheless proceeded to buy the lot because he believed or assumed that
the Muerteguis were simply bluffing when Carmen told him that they had already bought the same; this is too
convenient an excuse to be believed. As the Muertegui family lawyer, he had no right to take a position, using
information disclosed to him in confidence by his client, that would place him in possible conflict with his duty. He
may not, for his own personal interest and benefit, gamble on his client’s word, believing it at one time and
disbelieving it the next. He owed the Muerteguis his undivided loyalty. He had the duty to protect the client, at all
hazards and costs even to himself.38

Petitioner Atty. Sabitsana is enjoined to "look at any representation situation from the point of view that there are
possible conflicts, and further to think in terms of impaired loyalty, that is, to evaluate if his representation in any way
will impair his loyalty to a client."39

Moreover, as the Muertegui family’s lawyer, Atty. Sabitsana was under obligation to safeguard his client's property,
and not jeopardize it. Such is his duty as an attorney, and pursuant to his general agency.40

Even granting that Atty. Sabitsana has ceased to act as the Muertegui family's lawyer, he still owed them his
loyalty. The termination of attorney-client relation provides no justification for a lawyer to represent an interest
1âwphi1

adverse to or in conflict with that of the former client on a matter involving confidential information which the lawyer
acquired when he was counsel. The client's confidence once reposed should not be divested by mere expiration of
professional employment.41 This is underscored by the fact that Atty. Sabitsana obtained information from Carmen
which he used to his advantage and to the detriment of his client.

from the foregoing disquisition, it can be seen that petitioners are guilty of bad faith in pursuing the sale of the lot
despite being apprised of the prior sale in respondent's favor. Moreover, petitioner Atty. Sabitsana has exhibited a
lack of loyalty toward his clients, the Muerteguis, and by his acts, jeopardized their interests instead of protecting
them. Over and above the trial court's and the CA's findings, this provides further justification for the award of
attorney's fees, litigation expenses and costs in favor of the respondent.

Thus said, judgment must be rendered in favor of respondent to prevent the petitioners' void sale from casting a
cloud upon his valid title.

WHEREFORE, premises considered, the Petition is DENIED. The January 25, 2007 Decision and the January 11,
2008 Resolution of the Court of Appeals in CA-G.R. CV No. 79250 are AFFIRMED. Costs against petitioners.

SO ORDERED.

A.C. No. 9395 November 12, 2014

DARIA O. DAGING, Complainant,

vs.
ATTY. RIZ TINGALON L. DAVIS, Respondent.

RESOLUTION

DEL CASTILLO, J.:

This administrative complaint for disbarment arose from an Affidavit Complaint1 filed by Daria O. Daging
(complainant) before the Integrated Bar of the Philippines (IBP), Benguet Chapter,2 against Atty. Riz Tingalon L.
Davis (respondent).

Antecedents

Complainant was the owner and operator of Nashville Country Music Lounge. She leased from Benjie Pinlac
(Pinlac) a building spaGe located at No. 22 Otek St., Baguio City where she operated the bar.

Meanwhile, complainant received a Retainer Proposal3 from Davis & Sabling Law Office signed by respondent and
his partner Atty. Amos Saganib Sabling (Atty. Sabling). This eventually resulted in the signing by the complainant,
the respondent and Atty. Sabling of a Retainer Agreement4 dated March 7, 2005.
Because complainant was delinquent in paying the monthly rentals, Pinlac terminated the lease. Together with
Novie Balageo (Balageo) and respondent, Pinlac went to complainant's music bar, inventoried all the equipment
therein, and informed her that Balageo would take over the operation of the bar. Complainant averred that
subsequently respondent acted as business partner of Balageo in operating the bar under her business name,
which they later renamed Amarillo Music Bar.

Complainant likewise alleged that she filed an ejectment case against Pinlac and Balageo before the Municipal Trial
Court in Cities (MTCC), Branch 1, Baguio City. At that time, Davis & Sabling Law Office was still her counsel as their
Retainer Agreement remained subsisting and in force. However, respondent appeared as counsel for Balageo in
that ejectment case and filed, on behalf of the latter, an Answer with Opposition to the Prayer for the Issuance of a
Writ of Preliminary Injunction.5

In his Comment,6 respondent denied participation in the takeover or acting as a business partner of Balageo in the
operation of the bar. He asserted that Balageo is the sole proprietress of the establishment. He insisted that it was
Atty. Sabling, his partner, who initiated the proposal and was in fact the one who was able to convince complainant
to accept the law office as her retainer. Respondent maintained that he never obtained any knowledge or
information regarding the business of complainant who used to consult only Atty. Sabling. Respondent admitted
though having represented Balageo in the ejectment case, but denied that he took advantage of the Retainer
Agreement between complainant and Davis and Sabling Law Office. Thus:

3.a Prior to the engagement of the Complainant of the DAVIS and SABLING LAW OFFICE as her retainer,
Novie Balageo was already one of the Clients of Respondent in several cases;

3.b Sometime in the last week of the month of May 2005, while Respondent was in his office doing some
legal works, Novie Balageo called up Respondent informing the latter that his assistance is needed for
purposes of conducting an inventory of all items at the former Nashville Country Music Lounge;

3.c Respondent [asked] Novie Balageo [the purpose of] the inventory [to which] the latter x xx responded x
xx that she entered into a lease contract with the present administrator of the building, Benjie Pinlac;

3.d Respondent, to his disbelief requested Novie Balageo to go [to] the LAW OFFICE for further clarification
of the matter. Thereafter, Respondent was later informed that the business of Complainant was taken over
and operated by Mr. Benjie Pinlac for seven days. Furthermore, Mr. Benjie Pinlac offered the said place to
Novie Balageo which the latter readily accepted;

3.e [Left] with no recourse, Respondent requested one of his staff to assist Novie Balageo in conducting an
inventory. Furthermore, Respondent never acted as partner of Novie Balageo in operating the former
Nashville Country Music Lounge;

3.f When Complainant filed the civil case for Ejectment against Novie Balageo and Benjie Pinlac,
Respondent represented the former thereof without taking advantage of the retainership contract between
the DA VIS and SABLING LAW OFFICE [and] Complainant as Respondent has no knowledge or
information of any matters related by complainant to Atty. Sabling regarding the former' s business;

3.g While the Complaint was pending, respondent was xx x informed by Novie Balageo and Benjie Pinlac of
the truth of all matters x x x which x x x Respondent [was unaware of];

3.h However, for the interest of justice and fair play, x x x Respondent [deemed it prudent] to xx x withdraw
as Counsel for Novie Balageo. Hence, Respondent filed his Motion to Withdraw As Counsel. x x x

3.i The civil case was subsequently dismissed for lack of jurisdiction over the [Complaint's] subject matter. x
x x7

On October 15, 2008, the Investigating Commissioner rendered a Report and Recommendation8 finding respondent
guilty of betrayal of his client's trust and for misuse of information obtained from his client to the disadvantage of the
latter and to the advantage of another person. He recommended that respondent be suspended from the practice
oflaw for a period of one year.

On December 11, 2008, the IBP Board of Governors adopted and approved the Report and Recommendation of the
Investigating Commissioner.9 Upon motion of the respondent, it reduced the penalty imposed to six months
suspension considering that there is no proof that respondent actually handled any previous legal matters involving
complainant.10

Our Ruling

It is undisputed that complainant entered into a Retainer Agreement dated March 7, 2005 with respondent's law
firm. This agreement was signed by the respondent and attached to the rollo of this case. And during the
subsistence of said Retainer Agreement, respondent represented and defended Balageo, who was impleaded as
one of the defendants in the ejectment case complainant filed before the MTCC of Baguio City. In fact, respondent
filed on behalf of said Balageo an Answer with Opposition to the Prayer for the Issuance of a Writ of Preliminary
Injunction dated July 11, 2005. It was only on August 26, 2005 when respondent withdrew his appearance for
Balageo.

Based on the established facts, it is indubitable that respondent transgressed Rule 15.03 of Canon 15 of the Code
of Professional Responsibility. It provides:
1âw phi 1

Rule 15.03 -A lawyer shall not represent conflicting interests except by written consent of all concerned given after a
full disclosure of the facts.

"A lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose interest
conflicts with that of his present or former client."11 The prohibition against representing conflicting interests is
absolute and the rule applies even if the lawyer has acted in good faith and with no intention to represent conflicting
interests.12 In Quiambao v. Atty. Bamba,13 this Court emphasized that lawyers are expected not only to keep inviolate
the client's confidence, but also to avoid the appearance of treachery and double-dealing for only then can litigants
be encouraged to entrust their secrets to their lawyers, which is of paramount importance in the administration of
justice.14

Respondent argues that while complainant is a client of Davis & Sabling Law office, her case is actually handled
only by his partner Atty. Sabling. He was not privy to any transaction between Atty. Sabling and complainant and
has no knowledge of any information or legal matter complainant entrusted or confided to his law partner. He thus
inveigles that he could not have taken advantage of an information obtained by his law firm by virtue of the Retainer
Agreement. We are not impressed. In Hilado v. David,15 reiterated in Gonzales v. Atty. Cabucana, Jr.,16 this Court
held that a lawyer who takes up the cause of the adversary of the party who has engaged the services of his law
firm brings the law profession into public disrepute and suspicion and undermines the integrity of justice. Thus,
respondent's argument that he never took advantage of any information acquired by his law finn in the course of its
professional dealings with the complainant, even assuming it to be true, is of no moment. Undeniably aware of the
fact that complainant is a client of his law firm, respondent should have immediately informed both the complainant
and Balageo that he, as well as the other members of his law firm, cannot represent any of them in their legal tussle;
otherwise, they would be representing conflicting interests and violate the Code of Professional Responsibility.
Indeed, respondent could have simply advised both complainant and Balageo to instead engage the services of
another lawyer.

The penalty for representing conflicting interests may either be reprimand or suspension from the practice of law
ranging from six months to two years.17 We thus adopt the recommendation of the IBP Board of Governors.

WHEREFORE, the Court ADOPTS and AFFIRMS the January 15, 2012 Resolution of the Integrated Bar of the
Philippines Board of Governors. Atty. Riz Tingalon L. Davis is found GUILTY of violating Rule 15.03, Canon 15 of
the Code of Professional Responsibility and is hereby SUSPENDED from the practice of law for a period of six (6)
months effective upon receipt of this Resolution. He is warned that a commission of the same or similar offense in
the future will result in the imposition of a stiffer penalty.

Let a copy of this Resolution be entered into the records of Atty. Riz Tingalon L. Davis and furnished to the Office of
the Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the
Philippines, for their information and guidance.

Atty. Riz Tingalon L. Davis is DIRECTED to inform the Court of the date of his receipt of this Resolution.

SO ORDERED.

A.C. No. 10548 December 10, 2014

CAROLINE CASTANEDA JIMENEZ, Complainant,

vs.
ATTY. EDGAR B. FRANCISCO, Respondent.

DECISION

MENDOZA, J.:

This refers to the Resolutions of the Integrated Bar of the Philippines, Board of Governors (IBP-BOG), dated
January 3, 20131 and March 22, 2014,2 adopting and approving the findings of the Commission on Bar Discipline
(CBD) which found Atty. Edgar 8. Francisco (Alty Francisco) administratively liable for multiple violations of the Code
of Professional Responsibility (CPR) and recommended the penalty of suspension of one (1) year from the practice
of law.

On September 6, 2007, the CBD received a complaint, dated July 14, 2007,3 filed by Caroline Castañeda Jimenez
(complainant)against Atty. Francisco for multiple violations of the CPR. On October 24, 2007, Atty. Francisco filed
his Answer.4 On June 26, 2009, the mandatory conference was held and terminated. Only the counsel for Atty.
Francisco appeared. The notice of the said conference addressed to complainant was returned with the notation
"unknown at the given address." No new address was provided by the complainant. Both parties wererequired to
submit their respective position papers. For this purpose, Atty. Francisco adopted his Answer. The Antecedents

Mario Crespo, otherwise known as Mark Jimenez (Jimenez), filed a complaint for estafa against complainant, her
sister Rosemarie Flaminiano, Marcel Crespo, Geraldine Antonio, Brenda Heffron, Magdalena Cunanan, and Isabel
Gonzalez.5 The said complaint was docketed as IS No. 074314 with the Office of the City Prosecutor of Makati City.
Jimenez alleged that he was the true and beneficial owner of the shares of stock in Clarion Realty and Development
Corporation (Clarion), which was incorporated specifically for the purpose of purchasing a residential house located
in Forbes Park, Makati City (Forbes property). The incorporators and original stockholders of Clarion were as
follows:

Thomas K. Chua - ₱500,000.00

Teresita C. Alsua - ₱500,000.00

Myla Villanueva - ₱249,998.00

Edgar B. Francisco - ₱1.00

Soledad Gamat - ₱1.00

Simultaneous with the drafting of Clarion’s Articles of Incorporation, the above-named stockholders, except for Myla
Villanueva (Myla), executed a deed of assignment of their respective shares in favor of complainant, who was then
Jimenez’s common-law partner.Clarion’s total capitalization was only ₱5,000,000.00. Thus, in order to achieve its
purpose of purchasing the Forbes property, Clarion simulated a loan from the complainant in the amount of
₱80,750,000.00. Thereafter, Clarion purchased the Forbes property in the amount of ₱117,000,000.00 from
Gerardo Contreras. To effect the sale, Myla handed a check in the said amount which was funded entirely by
Jimenez. The sale, however, was undervalued. In the deed of sale, it was made to appear that the Forbes property
was purchased for ₱78,000,000.00 only. Further, the money used as the purchase price was not reflected in the
books of Clarion.

On July 19, 2001, Thomas Chua and Teresita Alsua assigned their shares in Clarion to Jimenez by virtue of a deed
of trust. On the other hand, Myla’s 249,997 shares were transferred to complainant based on a deed of assignment.
The remaining one (1) share was transferred to Ma. Carolina C. Crespo. These transactions appeared in Clarion’s
General Information Sheet (GIS)filed with the Securities and Exchange Commission (SEC). Resultantly, the
subscribed shares of Clarion were as follows:

Mark Jimenez - P 500,000.00

Caroline Jimenez - P 749,997.00

Ma. Carolina C. Crespo - P 1.00

Edgar B. Francisco - P 1.00

Soledad Gamat - P 1.00

On November 5, 2002, Jimenez transferred all his shares to complainant by another deed of assignment, making
her the holder of Clarion shares amounting to ₱1,249,997.00.

According to Jimenez’s complaint, while he was in prison in the United States in 2004, he learned from Atty.
Francisco that his son, Marcel Crespo (Marcel), approached the complainant and threatened her, claiming that the
United States Internal Revenue Service (IRS)was about to go after their properties. Marcel succeeded in persuading
complainant to transfer her nominal shares in Clarion to Geraldine Antonio, through another deed of assignment.
Again, this was reflected in Clarion’s GIS for the year 2004.

Thereafter, Jimenez was informed by Atty. Francisco that, through fraudulent means, complainant and her co-
respondents in the estafa case, put the Forbes property for sale sometimein August 2004. The said property was
eventually sold to Philmetro Southwest Enterprise Inc. (Philmetro)for the amount of ₱118,000,000.00 without
Jimenez’s knowledge. This sale was again undervalued at ₱78,000.000.00 per the deed of sale. Atty. Francisco
relayed to Jimenez that he was the one who received the payment for the sale of the Forbes property and that he
handed all the proceeds thereof to Rosemarie Flaminiano in the presence of complainant.

Jimenez’s complaint for estafa was based on complainant’s alleged participation in the fraudulent means in selling
the Forbes property which was acquired by Clarion with Jimenez’s money. Complainant was duty bound to remit all
the proceeds of the sale to Jimenez as the true and beneficial owner. Complainant and her co-respondents,
however, misappropriated and converted the fundsfor their personal use and benefit.
In support of Jimenez’s complaint for estafa, Atty. Francisco executed an affidavit reiterating its factual
averments.6 A perusal of this affidavit likewise would show the following claims and admissions, among other things,
of Atty. Francisco:

1. Sometime in August 2004, complainant called him, asking for assistance in the documentation of the sale
of the Forbes property owned by Clarion. Atty. Francisco asked her if she had secured permission from
Mark Jimenez and complainant answered in the affirmative.

2. The Board of Directors of Clarion issued a resolution authorizing him to negotiate the sale of the property.

3. For purposes of the sale, he opened an account with Security Bank, San Francisco Del Monte branch.
When the cash payment was deposited, he withdrew the amount and handed the same to Rosemarie
Flaminiano in the presence of complainant.

4. All transfers of shares were caused without any consideration. The transfer taxes, however, were paid.

5. When Mark Jimenez returned to the Philippines, he was able to confirm that the sale of the Forbes
property was without his knowledge and approval. The proceeds of the sale had already been farmed out to
different corporations established by complainant and her sister.

6. The frequent changes in stockholdings were premeditated in order to steal the money of Mark Jimenez.

The Complaint

Complainant was shocked upon reading the allegations in the complaint for estafa filed by Jimenez against her. She
felt even more betrayed when she read the affidavit of Atty. Francisco, on whom she relied as her personal lawyer
and Clarion’s corporate counsel and secretary of Clarion. This prompted her to file a disciplinary case against Atty.
Francisco for representing conflicting interests. According to her, she usually conferred with Atty. Francisco
regarding the legal implications of Clarion’s transactions. More significantly, the principal documents relative to the
sale and transfer of Clarion’s property were all prepared and drafted by Atty. Francisco or the members of his law
office.7 Atty. Francisco was the one who actively participated in the transactions involving the sale of the Forbes
property. Without admitting the truth of the allegations in his affidavit, complainant argued that its execution clearly
betrayed the trust and confidence she reposed on him as a lawyer. For this reason, complainant prayed for the
disbarment of Atty. Francisco.

The Respondent’s Position

In his Answer,8 Atty. Francisco replied that Jimenez initially engaged his services in 1998 for the incorporation of
Clarion for the purpose of purchasing a residential house in Forbes Park, where he intended to live with his long-
time partner, the complainant; that the original incorporators and stockholders of Clarion held their respective shares
in trust for Jimenez; that the subsequent changes in the ownership of Clarion shareholdings were also pursuant to
Jimenez’s orders; and that as the corporate secretary and legal counsel of Clarion, he prepared all the legal
documentation togive effect to the said transfers and, ultimately, to the purchase of the Forbes property.

Atty. Francisco further stated that sometime in 2004, Jimenez was imprisoned in the United States for excessive
contributions to the Democratic Party; that during this time, Jimenez’s son, Marcel, and the complainant, asked him
again to changethe ownership of Clarion shares in order to avoid the attachment of Jimenez’s properties in a tax
evasion case; that he acceded to the request on the belief that this was in accordance with Jimenez’s wishes; and
that as a result, almost 100% of Clarion’s ownership was transferred in the name of Geraldine Antonio.

Atty. Francisco also claimed that, thereafter, complainant tasked him to talk to prospective buyers and to negotiate
the sale of the Forbes property until it was sold for ₱118,000,000.00; that Marcel and complainant led him to believe
that Jimenez had knowledge of the sale as they were in constant communication with him; that all these
representations, however, turned out to be false when Jimenez returned tothe Philippines and discovered that the
proceeds of the sale were coursed through other corporations set up by complainant and her sister; that Jimenez
likewise learned of the successive sale of his other properties, including Meridian Telekoms Inc., by the members of
his family; and that this led to the filing of the estafa case against the complainant and the others. As a witness to
the fraud committed against Jimenez, Atty. Francisco executed the affidavit narrating the facts and circumstances
surrounding the said transactions.

Atty. Francisco mainly argued thathe violated neither the rule on disclosures of privileged communication nor the
proscription against representing conflicting interests, on the ground that complainant was not his client. He was the
lawyer of Jimenez and the legal counsel of Clarion, but never of the complainant. He might have assisted her in
some matters, but these were all under the notion that Jimenez had given him authority to do so. Further, though he
acted as legal counsel for Clarion, no attorney-client relationship between him and complainant was formed, as a
corporation has a separate and distinct personality from its shareholders. While he admitted that the legal
documentation for the transfer of shares and the sale of the Forbes property were prepared by him and notarized by
the members of his law firm, he averred that these acts were performed in his capacity as the corporate secretary
and legal counsel ofClarion, and not as a lawyer of complainant. Therefore, he served no conflicting interests
because it was not a "former client" and a "subsequent client" who were the opposing parties in litigation.

He opined that assuming that complainant was indeed his client, the rule on privileged communication does not
apply to his case. Here, complainant failed to allege, muchless prove, the requisites for the application of the
privilege. When Atty. Francisco denied being her lawyer, the complainant should have established, by clear and
convincing evidence, that a lawyer-client relationship indeed existed between them. Complainant failed to do this.

Arguing that the execution of his affidavit in the estafa case was but a truthful narration of facts by a witness, Atty.
Francisco cited Gonzaga v. Cañete,9 where the Court ruled that "the fact that one of the witnesses for the defendant
had been formerly the lawyer for the defendant in this suit was no ground for rejecting his testimony." In this case,
he merely attested to the fraudulent acts of complainant, in the course of which, he defended and served Jimenez
as a client. This was likewise pursuant to the rule that unlawful and illegal motives and purposes were not covered
by the privilege. It was just unfortunate that he fell for the ploy of complainant.

The Findings of the Investigating Commissioner

In the Commissioner’s Report,10 dated November 7, 2011, the Investigating Commissioner, Atty. Jose I. dela Rama,
Jr. (Investigating Commissioner),found Atty. Francisco guilty of violations of the CPR and recommended that he be
suspended for one (1) year from the practice of law. Initially, the Investigating Commissioner noted that the
subsequent affidavit of desistance executed by Jimenez in the estafa case did not affect the investigation conducted
by the CBD as it was not an ordinary court which accepted compromises or withdrawals of cases. After weighing on
the claims of the parties, the Investigating Commissioner concluded that nothing in the records would show that a
lawyer-client relationship existed between Atty. Francisco and Jimenez.11 The circumstances would show that Atty.
Francisco was an original incorporator and shareholder of Clarion. He was also the legal counsel and corporate
secretary of the said corporation, the articles of incorporation of which did not include Jimenez as an original
incorporator. He became a stockholder only in 2001, when Jimenez acquired shares from Thomas Chua and
Teresita Alsua. Jimenez’s participation in Clarion affairs again stopped when he assigned the entirety of his shares
in favor of complainant.

Granting that Jimenez really owned 100% of Clarion as alluded to by Atty. Francisco, the report stated that it would
appear that the latter permitted misrepresentations as to Clarion’s ownership to be reported to the SEC through its
GIS. The Investigating Commissioner also pointed out Atty. Francisco’s clear admission that the transfer of shares
within Clarion were "without any consideration," ran counter to the deeds of assignment that he again admittedly
executed as corporate counsel. Worse, Atty. Francisco admitted to have simulated the loan and undervalued the
consideration of the effected sale of the Forbes property, which displayed his unlawful, dishonest, immoral, and
deceitful conduct in violation of Canon 1 of the CPR. Further, when he executed the affidavit containing allegations
against the interest of Clarion and complainant, the Investigating Commissioner held that Atty. Francisco violated
the rule on privileged communication and engaged in an act that constituted representation of conflicting interests in
violation of Canons 15 and 21 of the CPR.

In its January 3, 2013 Resolution,12 the IBP-BOG adopted and approved, in toto, the findings and recommendation
of the CBD against Atty. Francisco.

The respondent received a copy of the said resolution on March 26, 2013 and moved for its reconsideration.13

Atty. Francisco appealed to the compassion of the IBP-BOG, reasoning out that the penalty of suspension of one (1)
year is too severe considering that in his more than three decades of practice, he had never been involved in any
act that would warrant the imposition of disciplinary action upon him. It was only in 2007, when his client, Jimenez,
experienced a difficult crisis involving his children and common-law partner that he experienced a major upheaval in
his professional life. He apologized for his not being too circumspect in dealing with the relatives of Jimenez.

As to the charges against him, Atty. Francisco reiterated that his participation in the execution of the documents
pertaining to the sale of the Forbes property were all connected to his capacity as Clarion’s corporate secretary and
legal counsel, not to mention his ties with his client and friend, Jimenez. He admitted that he owed fidelity to Clarion
and Jimenez, but denied that this duty extended to the incorporators and shareholders of Clarion. Thus, when
complainant sought advice in her capacity as a shareholder in Clarion, no fiduciary duty arose on his part. In his own
words, Atty. Francisco insisted that "Carol is not Clarion and vice versa."14

Attached to Atty. Francisco’s motion for reconsideration was an affidavit executed by Jimenez, stating that he had
retained the legal services of Atty. Francisco since 1999. Espousing Atty. Francisco’s defenses, Jimenez asserted
that Atty. Francisco’s law firm was in charge of all the companies he owned in the Philippines.He directed Atty.
Francisco to execute all the documentation to show his ownership of these companies, including Clarion. These
documents were in the possession of complainant for safekeeping. When Jimenez ran for Congress in 2001,Atty.
Francisco personally assisted him in the filing ofhis certificate of candidacy and the proceedings before the electoral
tribunals. While he was in prison in the United States, it was Atty. Francisco who visited and told him that his
children, Myla and Marcel, were then facilitating the sale of one of his companies, Meridian Telekoms, Inc., without
his knowledge. He asked Atty. Francisco to keep quiet about his children’s betrayal and to wait until he could go
home. When he filed the criminal cases against his children and complainant, the latter even filed a frivolous
kidnapping case against Atty. Francisco. According to Jimenez, the people who committed crimes against him were
now exhausting all possible means to keep Atty. Francisco silent and to prevent the latter from performing his duties
as a lawyer.

In its March 22, 2014 Resolution,15 the IBP-BOG denied the respondent’s motion for reconsideration.

No petition for review was filed with the Court.

The Court’s Ruling

Violations of Canons 1 and 10

of the CPR and the Lawyer’s Oath

Canon 1 and Rule 1.01 of the CPR provide:

CANON 1 – A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND
PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES.

Rule 1.0 – A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

Canon 1 clearly mandates the obedience of every lawyer to laws and legal processes. To the best of his ability, a
lawyer is expected to respect and abide by the law and, thus, avoid any act or omission that is contrary thereto. A
lawyer’s personal deference to the law not only speaks of his character but it also inspires respect and obedience
tothe law, on the part of the public.

Rule 1.0, on the other hand, states the norm of conduct to be observed by all lawyers.

Any act or omission that is contraryto, or prohibited or unauthorized by, or in defiance of, disobedient to, or
disregards the law is "unlawful." "Unlawful" conduct does not necessarily imply the element of criminality although
the concept is broad enough to include such element.16 To be "dishonest" means the disposition to lie, cheat,
deceive, defraud or betray; be unworthy; lacking in integrity, honesty, probity, integrity in principle, fairness and
straight forwardness17 while conduct that is "deceitful" means the proclivity for fraudulent and deceptive
misrepresentation, artifice or device that is used upon another who is ignorant of the true facts, to the prejudice and
damage of the party imposed upon.18

Membership in the legal profession is bestowed upon individuals who are not only learned in law, but also known to
possess good moral character. Lawyers should act and comport themselves with honesty and integrity in a manner
beyond reproach, inorder to promote the public’s faith in the legal profession.19 "To say that lawyers must at all times
uphold and respect the law is to state the obvious, but such statement can never be over emphasized. Considering
that, of all classes and professions, [lawyers are] most sacredly bound to uphold the law, it is imperative that they
live by the law."20

When Atty. Francisco was admitted to the Bar, he also took an oath to "obey the laws," "do no falsehood," and
conduct himself as a lawyer according to the best of his knowledge and discretion.21

In the facts obtaining in this case, Atty. Francisco clearly violated the canons and his sworn duty. He is guilty of
engaging in dishonest and deceitful conduct when he admitted to having allowed his corporate client, Clarion, to
actively misrepresent to the SEC, the significant matters regarding its corporate purpose and subsequently, its
corporate shareholdings. In the documents submitted to the SEC, such as the deeds of assignment and the GIS,
Atty. Francisco, in his professional capacity, feigned the validity of these transfers of shares, making it appear that
these were done for consideration when, in fact, the said transactions were fictitious, albeit upon the alleged orders
of Jimenez. The Investigating Commissioner was correct in pointing out that this ran counter to the deeds of
assignment which he executed as corporate counsel. In his long practice as corporate counsel, it is indeed safe to
assume that Atty. Francisco is knowledgeable in the law on contracts, corporation law and the rules enforced by the
SEC. As corporate secretary of Clarion, it was his duty and obligation to register valid transfers of stocks.
Nonetheless, he chose to advance the interests of his clientele with patent disregard of his duties as a lawyer.
Worse, Atty. Francisco admitted to have simulated the loan entered into by Clarion and to have undervalued the
consideration of the effected sale of the Forbes property. He permitted this fraudulent ruse to cheat the government
of taxes. Unquestionably, therefore, Atty. Francisco participated in a series of grave legal infractions and was
content to have granted the requests of the persons involved.

Despite assertions that these were in accordance to Jimenez’s wishes, or pursuant to complainant’s
misrepresentations, the Court cannot turn a blind eye on Atty. Francisco’s act of drafting, or at the very least,
permitting untruthful statements to be embodied in public documents. If the Court allows this highly irregular practice
for the specious reason that lawyers are constrained to obey their clients’ flawed scheming and machinations, the
Court would, in effect, sanction wrongdoing and falsity. This would undermine the role of lawyers as officers of the
court.

Time and again, the Court has reminded lawyers that their support for the cause of their clients should never be
attained at the expense of truth and justice. While a lawyer owes absolute fidelity to the cause of his client, full
devotion to his genuine interest, and warm zeal in the maintenance and defense of his rights, as well as the exertion
of his utmost learning and ability, he must do so only within the bounds of the law. It needs to be emphasized that
the lawyer's fidelity to his client must not be pursued at the expense of truth and justice, and mustbe held within the
bounds of reason and common sense. His responsibility to protect and advance the interests of his client does not
warranta course of action propelled by ill motives and malicious intentions.22

In the same vein, Atty. Francisco’s admissions show that he lacks candor regarding his dealings. Canon 10 of the
CPR provides that, "[a] lawyer owes candor, fairness and good faith to the court." Corollary thereto, Rule 10.0 of the
CPR provides that "a lawyer shall do no falsehood, nor consent to the doing of any in Court, nor shall he mislead or
allow the Court to be misled by an artifice." Lawyers are officers of the court, called upon to assist in the
administration of justice. They act as vanguards of our legal system, protecting and upholding truth and the rule
oflaw. They are expected to act with honesty in all their dealings, especially with the court.23

From the foregoing, Atty. Francisco clearly violated his duties as a lawyer embodied in the CPR, namely, to avoid
dishonest and deceitful conduct, (Rule 1.01, Canon 1) and to actwith candor, fairness and good faith (Rule 10.01,
Canon 10). Also, Atty. Franciso desecrated his solemn oath not to do any falsehood nor consent to the doing of the
same.

Rule on Conflicting Interests and

Disclosure of Privileged
Communication

With respect to Atty. Francisco’s alleged representation of conflicting interests and disclosure of privileged
communication, the Court deviates from the findings of the IBP-BOG.

Rule 15.03, Canon 15 of the CPR provides that, "[a] lawyer shall not represent conflicting interests except by written
consent of all concerned given after a full disclosure of the facts."24 "The relationship between a lawyer and his/her
client should ideallybe imbued with the highest level of trust and confidence. This is the standard of confidentiality
that must prevail to promote a full disclosure of the client’s most confidential information to his/her lawyer for an
unhampered exchange of information between them. Needless to state, a client can only entrust confidential
information to his/her lawyer based on an expectation from the lawyer of utmost secrecy and discretion; the lawyer,
for his part, is duty-bound to observe candor, fairness and loyalty in all his dealings and transactions withthe client.
Part of the lawyer’s duty in this regard isto avoid representing conflicting interests…"25 Thus, even if lucrative fees
offered by prospective clients are at stake, a lawyer must decline professional employment if the same would trigger
a violation of the prohibition against conflict of interest.

In Quiambao v. Bamba,26 the Court discussed the application of the rule on conflict of interest in this wise:

In broad terms, lawyers are deemed to represent conflicting interests when, in behalf of one client, it is their duty to
contend for that which duty to another client requires them to oppose. Developments in jurisprudence have
particularized various tests to determine whether a lawyer’s conduct lies within this proscription. One test is whether
a lawyer is duty-bound to fight for an issue or claim in behalf of one client and, at the same time, to oppose that
claim for the other client. Thus, if a lawyer’s argument for one client has to be opposed by that same lawyer in
arguing for the other client, there is a violation of the rule.

Another test of inconsistency of interests is whether the acceptance of a new relation would prevent the full
discharge of the lawyer’s duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or
double-dealing in the performance of that duty. Still another test is whether the lawyer would be called upon in the
new relation to use against a former client any confidential information acquired through their connection or previous
employment.

The proscription against representation of conflicting interest applies to a situation where the opposing parties are
present clients in the same actionor in an unrelated action. It is of no moment that the lawyer would not be called
upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no
occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions
are wholly unrelated. It is enough that the opposing parties in one case, one of whom would lose the suit, are
present clients and the nature or conditions of the lawyer’s respective retainers with each of them would affect the
performance of the duty of undivided fidelity to both clients.

From the foregoing, it is obvious that the rule on conflict of interests presupposes a lawyer-client relationship. The
purpose of the rule is precisely to protect the fiduciary nature of the ties between an attorney and his client.
Conversely, a lawyer may not be precluded from accepting and representing other clients on the ground of conflict
of interests, if the lawyer-client relationship does not exist in favor of a party in the first place.

In determining whether or not Atty. Francisco violated the rule on conflict of interests, a scrutiny of the parties’
submissions with the IBP reveals that the complainant failed to establish that she was a client of Atty. Francisco.

First, complainant’s claim of being Atty. Francisco’s client remains unsubstantiated, considering its detailed
refutation. All that the complaint alleged was that Atty. Francisco was Clarion’s legal counsel and that complainant
sought advice and requested documentation of several transfers of shares and the sale of the Forbes property. This
was only successful in showing that Atty. Francisco, indeed, drafted the documents pertaining to the transaction and
that he was retained as legal counsel of Clarion. There was no detailed explanation as to how she supposedly
engaged the services of Atty. Francisco as her personal counsel and as to what and how she communicated with
the latter anent the dealings she had entered into. With the complaint lacking in this regard, the unrebutted answer
made by Atty. Francisco, accompanied with a detailed narrative of his engagement as counsel of Jimenez and
Clarion, would have to prevail.

Second, there is a stark disparity inthe amount of narrative details presented by the parties. Atty. Francisco’s claim
thathe was the counsel of Clarion and Jimenez, and not of the complainant, was clearly established in a sworn
statement executed by Jimenez himself. Complainant’s evidence pales in comparison with her claims of being the
client of Atty. Francisco couched in general terms that lacked particularity of circumstances.

Third, noteworthy is the fact that complainant opted not to file a reply to Atty. Francisco’s answer. This could have
given her opportunity to present evidence showing their professional relationship. She also failed to appear during
the mandatory conference with the IBP-CBD without even updating her residential address on record. Her
participation in the investigation of the case apparently ended at its filing.

In suspension or disbarment proceedings, lawyers enjoy the presumption of innocence, and the burden of proof
rests upon the complainant to clearly prove the allegations in the complaint by preponderant evidence.
Preponderance of evidence means that the evidence adduced by one side is, as a whole, superior to or has greater
weight than that of the other. It means evidence which is more convincing to the court as worthy of belief than that
which is offered in opposition thereto. Under Section 1 of Rule 133, in determining whether or not there is
preponderance of evidence, the court may consider the following: (a) all the facts and circumstances of the case; (b)
the witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they
are testifying, the nature of the facts towhich they testify, the probability or improbability of their testimony; (c) the
witnesses’ interest or want of interest, and also their personal credibility so far as the same may ultimately appear in
the trial; and (d) the number of witnesses, although it does not mean that preponderance is necessarily with the
greater number.27

Markedly, Atty. Francisco could have prevented his entanglement with this fiasco among the members of Jimenez’s
family by taking an upfront and candid stance in dealing with Jimenez’s children and complainant. He could have
been staunch in reminding the latter that his tasks were performed in his capacity as legal counsel for Clarion and
Jimenez. Be that as it may, Atty. Francisco’s indiscretion does not detract the Court from finding that the totality of
evidence presented by the complainant miserably failed to discharge the burden of proving that Atty. Francisco was
her lawyer. At most, he served as the legal counsel of Clarion and, based on the affirmation presented, of Jimenez.
Suffice it to say, complainant failed to establish that Atty. Francisco committed a violation of the rule on conflict of
interests.

Consequently, the rule on lawyer-client privilege does not apply. In Mercado v. Vitriolo,28 the Court elucidated on the
factors essential to establish the existence of the said privilege, viz:

In fine, the factors are as follows:

(1) There exists an attorney-client relationship, or a prospective attorney-client relationship, and it is by reason of
this relationship that the client made the communication.

Matters disclosed by a prospective client to a lawyer are protected by the rule on privileged communication even if
the prospective client does not thereafter retain the lawyer or the latter declines the employment. The reason for this
is to make the prospective client free to discuss whatever he wishes with the lawyer without fear that what he tells
the lawyer will be divulged or used against him, and for the lawyer to be equally free to obtain information from the
prospective client. xxx

(2) The client made the communication in confidence.

The mere relation of attorney and client does not raise a presumption of confidentiality. The client must intend the
communication to be confidential.

A confidential communication refers to information transmitted by voluntary act of disclosure between attorney and
client in confidence and by means which, so far as the client is aware, discloses the information to no third person
other than one reasonably necessary for the transmission of the information or the accomplishment of the purpose
for which it was given.

Our jurisprudence on the matter rests on quiescent ground. Thus, a compromise agreement prepared by a lawyer
pursuant to the instruction of his client and delivered to the opposing party, an offer and counter-offer for settlement,
or a document given by a client to his counsel not in his professional capacity, are not privileged communications,
the element of confidentiality not being present.

(3) The legal advice must be sought from the attorney in his professional capacity.
The communication made by a client to his attorney must not be intended for mere information, but for the purpose
of seeking legal advice from his attorney as to his rights or obligations. The communication must have been
transmitted by a client to his attorney for the purpose of seeking legal advice.

If the client seeks an accounting service, or business or personal assistance, and not legal advice, the privilege
does not attach to a communication disclosed for such purpose.

[Emphases supplied]

Considering these factors in the case at bench, the Court holds that the evidence on record fails to demonstrate the
claims of complainant. As discussed, the complainant failed to establish the professional relationship between her
and Atty. Francisco. The records are further bereft of any indication that the "advice" regarding the sale of the
Forbes property was given to Atty. Francisco in confidence. Neither was there a demonstration of what she had
communicated to Atty. Francisco nor a recital of circumstances under which the confidential communication was
relayed. All that complaint alleged in her complainant was that "she sought legal advice from respondent in various
occasions."29 Considering that complainant failed to attend the hearings at the IBP, there was no testimony as to the
specific confidential information allegedly divulged by Atty. Francisco without her consent. It is, therefore, difficult, if
not impossible, to determine if there was any violation of the rule on privileged communication. As held in Mercado,
such confidential information is a crucial link in establishing a breach of the rule on privileged communication
between attorney and client. It is not enough to merely assert the attorney-client privilege.30 It cannot be gainsaid
then that complainant, who has the burden of proving that the privilege applies, failed in this regard.

The Penalty

A member of the Bar may be penalized, even disbarred or suspended from his office as an attorney, for violating of
the lawyer’s oath and/or for breaching the ethics of the legal profession as embodied in the CPR,31 for the practice of
law is a profession, a form of public trust, the performance of which is entrusted to those who are qualified and who
possess good moral character.32 The appropriate penalty on an errant lawyer depends on the exercise of sound
judicial discretion based on the surrounding facts.33

Under Section 27, Rule 138 of the Revised Rules of Court, a member of the Bar may be disbarred or suspended on
any of the following grounds: (1) deceit; (2) malpractice or other gross misconduct in office; (3) grossly immoral
conduct; (4) conviction of a crime involving moral turpitude; (5) violation of the lawyer's oath; (6) willful disobedience
of any lawful order of a superior court; and (7) willful appearance as an attorney for a party without authority. A
lawyer may be disbarred or suspended for misconduct, whether in his professional or private capacity, which shows
him to be wanting in moral character, honesty, probity and good demeanor, or unworthy to continue as an officer of
the court.

While the Court finds no violation of the rule on conflict of interests and disclosure of privileged communication, the
acts of Atty. Francisco, in actively and passively allowing Clarion tomake untruthful representations to the SEC and
in other public documents, still constitute malpractice and gross misconduct in his office as attorney, for which a
suspension from the practice of law for six (6) months is warranted.

WHEREFORE, the Court finds Atty. Edgar B. Francisco GUILTY of violation of Canons 1 and 10 of the Code of
Professional Responsibility for which he is SUSPENDED from the practice of law for a period of six (6) months,
effective upon receipt of this Decision, with a STERN WARNING that a commission of the same or similar offense in
the future will result in the imposition of a more severe penalty.

Let a copy of this Decision be entered into the records of Atty. Edgar B. Francisco and furnished to the Office of the
Clerk of Court, the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts in the Philippines,
for their information and guidance.

Atty. Francisco is DIRECTED to inform the Court of the date of his receipt of this Decision so that the Court can
determine the reckoning point when his suspension shall take effect.

SO ORDERED.

A.C. No. 10567 February 25, 2015

WILFREDO ANGLO, Complainant,

vs.
ATTY. JOSE MA. V. VALENCIA, ATTY. JOSE MA. J. CIOCON, ATTY. PHILIP Z. DABAO, ATTY. LILY UYV
ALENCIA, ATTY. JOEY P. DE LA PAZ, ATTY. CRIS G. DIONELA, ATTY. RAYMUNDO T. PANDAN, JR.,* ATTY.
RODNEY K. RUBICA,** and ATTY. WILFRED RAMON M. PENALOSA, Respondents.

DECISION

PERLAS-BERNABE, J.:
This is an administrative case stemming from a complaint-affidavit1 dated December 4, 2009 filed by complainant
Wilfredo Anglo (complainant) charging respondents Attys. Jose Ma. V. Valencia (Atty. Valencia), Jose Ma. J. Ciocon
(Atty. Ciocon ), Philip Z. Dabao (Atty. Dabao ), Lily Uy-Valencia (Atty. Uy-Valencia), Joey P. De La Paz (Atty. De La
Paz), Cris G. Dionela (Atty. Dionela), Raymundo T. Pandan, Jr. (Atty. Pandan, Jr.), Rodney K. Rubica (Atty.
Rubica), and Wilfred Ramon M. Penalosa (Atty. Penalosa; collectively, respondents) of violating the Code of
Professional Responsibility (CPR), specifica1ly the rule against conflict of interest.

The Facts

In his complaint-affidavit, complainant alleged that he availed the services of the law firm Valencia Ciocon Dabao
Valencia De La Paz Dionela Pandan Rubica Law Office(law firm), of which Attys. Valencia, Ciocon, Dabao, Uy-
Valencia, De La Paz, Dionela, Pandan, Jr., and Rubica were partners, for two (2) consolidated labor cases2 where
he was impleaded as respondent. Atty. Dionela, a partner of the law firm, was assigned to represent complainant.
The labor cases were terminated on June 5, 2008 upon the agreement of both parties.3

On September 18, 2009, a criminal case4 for qualified theft was filed against complainant and his wife by FEVE
Farms Agricultural Corporation (FEVE Farms) acting through a certain Michael Villacorta (Villacorta). Villacorta,
however, was represented by the law firm, the same law office which handled complainant’s labor cases. Aggrieved,
complainant filed this disbarment case against respondents, alleging that they violated Rule 15.03, Canon 15 and
Canon 21 of the CPR,5 to wit:

CANON 15 – A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS.

xxxx

RULE 15.03 – A lawyer shall not represent conflicting interests except by written consent of all concerned given
after a full disclosure of the facts.

xxxx

CANON 21 – A LAWYER SHALL PRESERVE THE CONFIDENCES AND SECRETS OF HIS CLIENT EVEN
AFTER THE ATTORNEY-CLIENT RELATION IS TERMINATED.

In their defense,6 respondents admitted that they indeed operated under the name Valencia Ciocon Dabao Valencia
De La Paz Dionela Pandan Rubica Law Office, but explained that their association is not a formal partnership, but
one that is subject to certain "arrangements." According to them, each lawyer contributes a fixed amount every
month for the maintenance of the entire office; and expenses for cases, such as transportation, copying, printing,
mailing, and the like are shouldered by each lawyer separately, allowing each lawyer to fix and receive his own
professional fees exclusively.7 As such, the lawyers do not discuss their clientele with the other lawyers and
associates, unless they agree that a case be handled collaboratively. Respondents claim that this has been the
practice of the law firm since its inception. They averred that complainant’s labor cases were solely and exclusively
handled by Atty. Dionela and not by the entire law firm. Moreover, respondents asserted that the qualified theft case
filed by FEVE Farms was handled by Atty. Peñalosa, a new associate who had no knowledge of complainant’s labor
cases, as he started working for the firm after the termination thereof.8 Meanwhile, Atty. Dionela confirmed that he
indeed handled complainant’s labor cases but averred that it was terminated on June 13, 2008,9 and that
complainant did not have any monthly retainer contract.10 He likewise explained that he did not see the need to
discuss complainant’s labor cases with the other lawyers as the issue involved was very simple,11 and that the latter
did not confide any secret during the time the labor cases were pending that would have been used in the criminal
case with FEVE Farms. He also claimed that the other lawyers were not aware of the details of complainant’s labor
cases nor did they know that he was the handling counsel for complainant even after the said cases were closed
and terminated.12 The IBP’s Report and Recommendation

In a Report and Recommendation13 dated September 26, 2011, the IBP Commissioner found respondents to have
violated the rule on conflict of interest and recommended that they be reprimandedtherefor, with the exception of
Atty. Dabao, who had died on January 17, 2010.14 The IBP found that complainant was indeed represented in the
labor cases by the respondents acting together as a law firm and not solely by Atty. Dionela. Consequently, there
was a conflict of interest in this case, as respondents, through Atty. Peñalosa, having been retained by FEVE
Farms, created a connection that would injure complainant in the qualified theft case. Moreover, the termination of
attorney-client relation provides no justification for a lawyer to represent an interest adverse to or in conflict with that
of the former client.15

In a Resolution16 dated February 12, 2013, the IBP Board of Governors adopted and approved the IBP
Commissioner’s Report and Recommendation with modification. Instead of the penalty of reprimand, the IBP Board
of Governors dismissed the case with warning that a repetition of the same or similar act shall be dealt with more
severely.

Complainant filed a motion for reconsideration17 thereof, which the IBP Board of Governors granted in its
Resolution18 dated March 23, 2014 and thereby (a) set aside its February 12, 2013 Resolution and (b) adopted and
approved the IBP Commissioner’s Report and Recommendation, with modification, (1) reprimanding the
respondents for violation of the rule on conflict of interest; (2) dismissing the case against Atty. Dabao in view of his
death; and (3) suspending Atty. Dionela from the practice of law for one year, being the handling counsel of
complainant’s labor cases.

The Issue Before the Court

The essential issue in this case is whether or not respondents are guilty of representing conflicting interests in
violation of the pertinent provisions of the CPR.

The Court’s Ruling

Rule 15.03, Canon 15 and Canon 21 of the CPR provide:

CANON 15 – A LAWYER SHALL OBSERVE CANDOR, FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS.

xxxx

RULE 15.03 – A lawyer shall not represent conflicting interests except by written consent of all concerned given
after a full disclosure of the facts.

xxxx

CANON 21 – A LAWYER SHALL PRESERVE THE CONFIDENCES AND SECRETS OF HIS CLIENT EVEN
AFTER THE ATTORNEY-CLIENT RELATIONSHIP IS TERMINATED.

In Hornilla v. Atty. Salunat,19 the Court explained the concept of conflict of interest in this wise:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The 1âw phi 1

test is "whether or not in behalf of one client, it is the lawyer’s duty to fight for an issue or claim, but it is his duty to
oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he
argues for the other client." This rule covers not only cases in which confidential communications have been
confided, but also those in which no confidence has been bestowed or will be used. Also, there is conflict of
interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously affect
his first client in any matter in which he represents him and also whether he will be called upon in his new relation to
use against his first client any knowledge acquired through their connection. Another test of the inconsistency of
interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance
thereof.20

As such, a lawyer is prohibited from representing new clients whose interests oppose those of a former client in any
manner, whether or not they are parties in the same action or on totally unrelated cases. The prohibition is founded
on the principles of public policy and good taste.21 In this case, the Court concurs with the IBP’s conclusions that
respondents represented conflicting interests and must therefore be held liable. As the records bear out,
respondents’ law firm was engaged and, thus, represented complainant in the labor cases instituted against him.
However, after the termination thereof, the law firm agreed to represent a new client, FEVE Farms, in the filing of a
criminal case for qualified theft against complainant, its former client, and his wife. As the Court observes, the law
firm’s unethical acceptance of the criminal case arose from its failure to organize and implement a system by which
it would have been able to keep track of all cases assigned to its handling lawyers to the end of, among others,
ensuring that every engagement it accepts stands clear of any potential conflict of interest. As an organization of
individual lawyers which, albeit engaged as a collective, assigns legal work to a corresponding handling lawyer, it
behooves the law firm to value coordination in deference to the conflict of interest rule. This lack of coordination, as
respondents’ law firm exhibited in this case, intolerably renders its clients’ secrets vulnerable to undue and even
adverse exposure, eroding in the balance the lawyer-client relationship’s primordial ideal of unimpaired trust and
confidence. Had such system been institutionalized, all of its members, Atty. Dionela included, would have been
wary of the above-mentioned conflict, thereby impelling the firm to decline FEVE Farms’ subsequent engagement.
Thus, for this shortcoming, herein respondents, as the charged members of the law firm, ought to be
administratively sanctioned. Note that the Court finds no sufficient reason as to why Atty. Dionela should suffer the
greater penalty of suspension. As the Court sees it, all respondents stand in equal fault for the law firm’s deficient
organization for which Rule 15.03, Canon 15 and Canon 21 of the CPR had been violated. As such, all of them are
meted with the same penalty of reprimand, with a stern warning that a repetition of the same or similar infraction
would be dealt with more severely.

As a final point, the Court clarifies that respondents' pronounced liability is not altered by the fact that the labor
cases against complainant had long been terminated. Verily, the termination of attorney-client relation provides no
justification for a lawyer to represent an interest adverse to or in conflict with that of the former client. The client's
confidence once reposed should not be divested by mere expiration of professional employment.22
WHEREFORE, respondents Attys. Jose Ma. V. Valencia, Jose Ma. J. Ciocon, Lily Uy-Valencia, Joey P. De La Paz,
Cris G. Dionela, Raymundo T. Pandan, Jr., Rodney K. Rubica, and Wilfred Ramon M. Penalosa are found GUILTY
of representing conflicting interests in violation of Rule 15.03, Canon 15 and Canon 21 of the Code of Professional
Responsibility and are therefore REPRIMANDED for said violations, with a STERN WARNING that a repetition of
the same or similar infraction would be dealt with more severely. Meanwhile, the case against Atty. Philip Dabao is
DISMISSED in view of his death.

Let a copy of this Resolution be furnished the Office of the Bar Confidant, to be appended to respondents' personal
records as attorneys. Further, let copies of this Resolution be furnished the Integrated Bar of the Philippines and the
Office of the Court Administrator, which is directed to circulate them to all courts in the country for their information
and guidance.

SO ORDERED.

April 20, 2016

A.C. No. 7110

ARTHUR S. TULIO, Complainant,

vs.
ATTY. GREGORY F. BUHNAGIN, Respondent.

DECISION

PERALTA, J.:

Before us is a Complaint for Disbarment filed by Arthur S. Tulio (Tulia) against respondent Atty. Gregory F.
Buhangin (Atty. Buhangin), docketed as A.C. No. 7110 for Gross Dishonesty in violation of the Lawyer's Oath and
the Code of Professional Responsibility.

In his Complaint dated March 8, 2006, 1 Tulio narrated that he became acquainted with Atty. Buhangin even during
the time when he was a surveyor and not yet a lawyer. He alleged that as a surveyor then, Atty. Buhangin was the
one who prepared survey plans for the complainant in connection with the estate left by his mother. Eventually,
when he became a lawyer, Tulio sought his legal advice concerning a property owned by his mother which was then
transferred in the names of third parties.

On June 29, 2000, by virtue of Tulio's agreement with his siblings, Atty. Buhangin prepared and notarized a Deed of
Waiver of Rights dated June 29, 2000 which was signed by all of his siblings in his favor. Thereafter, Tulio engaged
the services of Atty. Buhangin to represent him in filing a case for specific performance and damages which was
docketed as Civil Case No. 4866-R entitled "Heirs of Angeline S. Tulia, represented by Arthur S. Tulia vs. fleirs of
Artemio E. Patacsil, represented by Lennie Ayuste" before the Regional Trial Court of Baguio City, Branch
3.2 Through his efforts, Tulio claims that he and the defendants in Civil Case No. 4866-R agreed to a settlement and
that he exclusively paid the defendants.

On December 10, 2005, to Tulio's surprise, Atty. Buhangin represented his siblings and filed a complaint against
him over legal matters which he had entrusted to him. The complaint was docketed as Civil Case No. 6185-R
pending before the Regional Trial Court of Baguio City, Branch 7 and entitled "Deogracias S. Tulia, et.al. vs.
Arthur S. Tulia" for rescission of the deed of waiver of rights which he himself prepared and notarized. Tulio further
averred that Atty. Buhangin made misrepresentations in the complaint since he knew beforehand that his siblings
waived their rights in his favor over the parcel of land covered by TCT No. 67145 even before Civil Case No. 4866-R
was filed.

On January 2, 2006, Tulio immediately filed a Motion to Disqualify3 Atty. Buhangin for his unethical conduct in gross
violation of his duties and responsibilities as a lawyer. Subsequently, on January 11, 2006, Atty. Buhangin filed a
Motion to Withdraw4 as counsel. It was stated in the said motion that Atty. Buhangin: "due to conflict of interest,
undersigned respectfully requests that he be allowed by this If onorable Court to withdraw his appearance in this
case as counsel for the plaintiff."

Complainant alleged that the actions of Atty. Buhangin were deliberate and intentional in order to serve his own
personal interests against his interests as his client, hence, constitutes gross dishonesty in violation of his oath and
responsibility as a lawyer and notary public.

Thus, the instant complaint for disbarment against Atty. Buhangin.

On April 5, 2006, the Court resolved to require Atty. Buhangin to file his Comment relative to the complaint filed
against him. 5

In compliance, Atty. Buhangin submitted his Comment6 on January 12, 2007, where he admitted that indeed he had
been engaged as legal counsel of the Estate of Angeline Tulio, represented by the heirs of Angeline Tulio which
included among others Deogracias S. Tulio, Gloria TulioBucaoto, Tita Tulio-Guerrero, Anthony Tulio and
complainant Tulio. He, however, asserted that his legal representation was neither personal nor directed in favor of
complainant Tulio alone but instead in the latter's capacity as an heir of Angeline Tulio. Atty. Buhangin disputed
Tulio's claim that the latter personally engaged his services as legal counsel for Civil Case No. 4866-R and insisted
that his legal representation was made for and in behalf of the heirs of Angeline Tulio. Atty. Buhangin alleged that

Tulio abused the confidence lodged upon him by his siblings by executing the deed of waiver of rights in his favor,
for the purpose of depriving the other heirs of Angeline Tulio their lawful shares in the estate of their mother.

He maintained that there was no conflict of interest when he filed the complaint for the declaration of nullity of the
waiver of rights as he was in fact merely protecting the interests of the other heirs of Angeline Tulio.

On February 14, 2007, the Court then resolved to refer the instant case to the Integrated Bar of the Philippines for
investigation, report and recommendation/ decision. 7

Mandatory conferences between the parties were set on July 24, 2007 and September 3, 2007. However, only
complainant appeared without counsel, while Atty. Buhangin failed to appear in both instances despite prior notice.
Thus, the IBP, in its Order dated September 3, 2007, directed Atty. Buhangin to show cause why he should not be
given anymore the chance to participate in the proceedings before the Commission. Both parties were likewise
directed to submit their verified Position Papers. Again, only Tulio submitted his Position Paper while Atty. Buhangin
failed anew to comply with the Order of the Commission.

In his Position Paper dated October 9, 2007, Tulio refuted Atty. Buhangin's allegation that he represents the heirs of
Angeline Tulio, and that his legal representation is not personal to him alone. Tulio pointed out that in his motion to
withdraw as counsel, Atty. Buhangin had, in fact, admitted that he is withdrawing from the case due to conflict of
interest. Tulio likewise denied that he meant to defraud and deprive his siblings of their shares. He asserted that it
was actually Atty. Buhangin who drafted, prepared and even notarized the deed of waiver of rights, thus, if he knew

the same to be fraudulent, why then would he prepare and even notarize, the same.

To prove that he had, in fact, engaged the legal services of Atty. Buhangin for his own benefit and personal interest,
Tulio submitted the correspondences made and prepared by Atty. Buhangin prior to the institution of Civil Case No.
4866-R addressed to Rebecca F. Patacsil which were dated August 29, 2000 and October 16, 2000, respectively.
Thus, Tulio maintains that Atty. Buhangin violated his lawyer's oath and the Code of Professional Responsibility
when he acted as counsel for his siblings in Civil Case No. 6185-R.

In its Report and Recommendation, the IBP-CBD found Atty. Buhangin to have violated not only his lawyer's oath
but also the Code of Professional Responsibility, and recommended that he be meted the penalty of suspension for
two (2) months.

The IBP-CBD found Atty. Buhangin guilty of violating the rule on conflict of interest since it believed that in Civil
Case No. 4866-R, there was indeed an attorney-client relationship existing between Tulio and Atty. Buhangin, and
not between the latter and the heirs of Angeline Tulio. It further held that when Atty. Buhangin filed a complaint
against Tulio in representation of his other siblings over legal matters which the former entrusted to him, he clearly
violated the trust and confidence reposed to him by his client.

In a Notice of Resolution No. XX-2013-599 dated May 11, 2013, the IBP-Board of Governors adopted and
approved in toto the Report and Recommendation of the IBP-CBD.

No motion for reconsideration has been filed by either party.

RULING

We concur with the findings of the IBP-CBD except as to the imposable penalty.

Rule 15.03 of the Code reads:

Canon 15 - A lawyer shall observe candor, fairness and loyalty in all his dealings and transactions with his clients.

Rule 15 .03 - A lawyer shall not represent conflicting interests except by written consent of all concerned given after
a full disclosure of the facts.

Under the afore-cited rule, it is explicit that a lawyer is prohibited from representing new clients whose interests
oppose those of a former client in any manner, whether or not they are parties in the same action or on totally
unrelated cases. The prohibition is founded on the principles of public policy and good taste. It behooves lawyers
not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing
for only then can litigants be encouraged to entrust their secrets to their lawyers, which is of paramount importance
in the administration of justice. 8
In Hornilla v. Atty. Salunat, 9 the Court discussed the concept of conflict of interest, to wit:

There is conflict of interest when a lawyer represents inconsistent interests of two or more opposing parties. The test
is "whether or not in behalf of one client, it is the lawyer's duty to fight for an issue or claim, but it is his duty to
oppose it for the other client. In brief, if he argues for one client, this argument will be opposed by him when he
argues for the other client." This rule covers not only cases in which confidential communications have been
confided, but also those in which no confidence has been bestowed or will be used. Also, there is conflict of

interests if the acceptance of the new retainer will require the attorney to perform an act which will injuriously affect
his first client in any matter in which he represents him and also whether he will be called upon in his new relation to
use against his first client any knowledge acquired through their connection. Another test of the inconsistency of
interests is whether the acceptance of a new relation will prevent an attorney from the full discharge of his duty of
undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in the performance

thereof. 10

The rule prohibiting conflict of interest was fashioned to prevent situations wherein a lawyer would be representing a
client whose interest is directly adverse to any of his present or former clients. In the same way, a lawyer may only
be allowed to represent a client involving the same or a substantially related matter that is materially adverse to the
former client only if the former client consents to it after consultation. The rule is grounded in the fiduciary obligation
of loyalty. Throughout the course of a lawyer-client relationship, the lawyer learns all the facts connected with the
client's case, including the weak and strong points of the case. Knowledge and information gathered in the course of
the relationship must be treated as sacred and guarded with care. It behooves lawyers not only to keep

inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing, for only then can
litigants be encouraged to entrust their secrets to their lawyers, which is paramount in the administration of justice.
The nature of that relationship is, therefore, one of trust and confidence of the highest degree.

Hornilla case provides an absolute prohibition from representation with respect to opposing parties in the same
case. In other words, a lawyer cannot change his representation from one party to the latter's opponent in the same
case, as in this case.

Atty. Buhangin's allegation that he represents for and in behalf of the Heirs of Angeline Tulio and not personal or
exclusive to complainant cannot be given any credence. First, Atty. Buhangin himself admitted in his Motion

to Withdraw that he was withdrawing his appearance in Civil Case No. 6185 against Tulio due to conflict of
interest. Secondly, it cannot be denied that there was an exclusive attorney-client relationship between Tulio and
Atty.

Buhangin as evidenced by the demand letters which Atty. Buhangin prepared specifically as counsel of
Tulio. Thirdly, as correctly observed by the IBP, other than his bare assertion that he was representing the estate
and

the Heirs of Angeline Tulio, Atty. Buhangin failed to satisfactorily show any circumstance that he was actually
representing the Heirs of Angeline Tulio and not solely for Tulio.

Also, we take note that in both Civil Case No. 4866-R (Heirs of Angeline S. Tulia represented by Arthur S. Tulia vs.
1-feirs of Artemio Patacsil) and Civil Case No. 6185-R (Deogracias S. Tulia, et.al. vs. Arthur Tulia), the subject
property under dispute, particularly TCT No. T-67145, is one and the same. This is also the same subject property
of the Deed of Waiver of Rights which the plaintiffs in Civil Case No. 6185-R have executed and signed in favor of
Tulio, which Atty. Buhangin later on used against Tulio. Clearly, the series of Atty. Buhangin's actions in protecting

the rights and interest of Tulio over the subject property before and after the filing of Civil Case No. 4866-R, to the
preparation of the Deed of Waiver of Rights in favor of Tulio runs counter and in conflict to his subsequent filing

of Civil Case No. 6185-R and his imputation of fraud against Tulio. There is no question that Atty. Buhangin took an
inconsistent position when he filed Civil Case No. 6185-R against Tulio whom he has defended and protected as

client in the past. Even if the inconsistency is remote or merely probable or even if he has acted in good faith and
with no intention to represent conflicting interests, it is still in violation of the rule of conflict of interest.

Atty. Buhangin's subsequent withdrawal of his appearance as counsel in Civil Case No. 6185-R came too late as by
the mere filing of the complaint against Tulio, it manifested his disloyalty and infidelity to Tulio as his client. That the
representation of conflicting interest is in good faith and with honest intention on the part of the lawyer does not
make the prohibition inoperative. 11

Canon 17 of the Code of Professional Responsibility provides that a lawyer owes fidelity to the cause of his client
and shall be mindful of the trust and confidence reposed on him. His highest and most unquestioned duty is to
protect the client at all hazards and costs even to himself. The protection given to the client is perpetual and does
not cease with the termination of the litigation, nor is it affected by the party's ceasing to employ the attorney and
retaining another, or by any other change of relation between them. It even survives the death of the client. 12

Likewise, Atty. Buhangin's conduct in the course of the proceedings before the IBP is also a matter of concern.
Despite due notices, he failed to attend all the mandatory conferences set by the IBP. He also ignored the

IBP's directive to file his position paper. Indubitably, because of Atty. Buhangin's refusal to comply with the orders
and directives of the IBP, the case which was filed in 2006 dragged on for several years. Clearly, this conduct runs
counter to the precepts of the Code of Professional Responsibility and violates the lawyer's oath which imposes
upon every member of the Bar the duty to delay no man for money or malice. 1avvphi 1

In Ngayan v. Atty. Tugade, 13 we ruled that [a lawyer's] failure to answer the complaint against him and his failure to
appear at the investigation are evidence of his flouting resistance to lawful orders of the court and illustrate his
despiciency for his oath of office in violation of Section 3, Rule 138 of the Rules of Court.

Atty. Buhangin's failure to submit his position paper without any valid explanation is enough reason to make him
administratively liable since he is duty-bound to comply with all the lawful directives of the IBP, not only

because he is a member thereof, but more so because IBP is the Courtdesignated investigator of this case. 14 As an
officer of the Court, respondent is expected to know that a resolution of this Court is not a mere request but

an order which should be complied with promptly and completely. This is also true of the orders of the IBP. 15

We would have merely affirmed the recommended penalty by the IBP-CBD on Atty. Buhangin, i.e., suspension from
the practice of law for two (2) months. However, considering that aside from his violation of the rule on conflict of
interest, he has also shown wanton disregard of the IBP' s orders which caused undue delay in the resolution of this
case and we deemed it appropriate to modify and increase the recommended penalty of suspension from the
practice of law from two (2) months to six ( 6) months.

WHEREFORE, respondent Atty. Gregory F. Buhangin is hereby held GUILTY of representing conflicting interests in
violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility. Accordingly, he is
hereby SUSPENDED from the practice of law for a period of six (6) months, with a WARNING that a repetition of
the same or similar acts in the future will be dealt with more severely.

Let copies of this Decision be furnished the Office of the Bar Confidant, to be appended to Atty. Buhangin's personal
record. Further, let copies of this Decision be furnished the Integrated Bar of the Philippines and the Office of the
Court Administrator, which is directed to circulate them to all the courts in the country for their infonnation and
guidance.

SO ORDERED.

A.C. No. 9310 February 27, 2013

VERLEEN TRINIDAD, FLORENTINA LANDER, WALLY CASUBUAN, MINERVA MENDOZA, CELEDONIO

ALOJADO, ROSENDO VILLAMIN and AUREA TOLENTINO, Complainants,
vs.
ATTY. ANGELITO VILLARIN, Respondent.

RESOLUTION

SERENO, J.:

Before this Court is a consolidated administrative complaint against herein respondent, Angelita Villarin, for
allegedly harassing complainants through the demand letters he sent to them.

The facts are as follows:

The instant case stemmed from a Complaint for specific performance filed with the Housing and Land Use
Regulatory Board (HLURB) by the buyers of the lots in Don Jose Zavalla Subdivision against the subdivision's
owner and developer- Purence Realty Corporation and Roberto Bassig.

In the final adjudication of that case on 11 October 2000, the HLURB ordered the respondents therein to accept the
payments of the buyers under the old purchase price. These buyers included some of the complainants in the
instant case, to wit: Florentina Lander, Celedonio Alojado, Aurea Tolentino and Rosendo Villamin.

The HLURB ordered the owner and the developer to deliver the Deeds of Sale and the Transfer Certificates of Title
to the winning litigants. The Decision did not evince any directive for the buyers to vacate the property.
Purence Realty and Roberto Bassig did not appeal the Decision, thus making it final and executory. Thereafter, the
HLURB issued a Writ of Execution.1 It was at this point that respondent Villarin entered his special appearance to
represent Purence Realty.2 Specifically, he filed an Omnibus Motion to set aside the Decision and to quash the Writ
of Execution3 for being null and void on the ground of lack of jurisdiction due to the improper service of summons on
his client. This motion was not acted upon by the HLURB.4

On 4 December 2003, respondent sent demand letters to herein complainants.5 In all of these letters, he
demanded that they immediately vacate the property and surrender it to Purence Realty within five days from
receipt. Otherwise, he would file the necessary action against them.

True enough, Purence Realty, as represented by respondent, filed a Complaint for forcible entry before the
Municipal Trial Court (MTC) against Trinidad,6 Lander,7 Casubuan8 and Mendoza.9 Aggrieved, the four complainants
filed an administrative case against respondent.10 A month after, Alojado, Villamin and Tolentino filed a disbarment
case against respondent.11

As found by the Integrated Bar of the Philippines (IBP)12 and affirmed by its Board of Governors,13 complainants
asserted in their respective verified Complaints that the demand letters sent by Villarin had been issued with malice
and intent to harass them. They insisted that the letters also contravened the HLURB Decision ordering his client to
permit the buyers to pay the balance of the purchase price of the subdivision lots.

Considering that these two actions were related, Villarin moved for the consolidation of the administrative cases,
and his motion was granted by the IBP commissioner.14

In his Position Paper,15 Villarin denied the allegations of harassment and claimed that no malice attended the
sending of the demand letters. He narrated that when he inquired at the HLURB, he was informed that his client did
not receive a summons pertinent to the Complaint for specific damages. With this information, he formed the
conclusion that the HLURB Decision was void and not binding on Purence Realty. Since his client was the lawful
owner of the property, respondent issued the ejectment letters, which were indispensable in an action for unlawful
detainer. Moreover, he insisted that the addressees of the letters were different from the complainants who had filed
the case with the HLURB.

Hence, the pertinent issue in this consolidated case is whether respondent should be administratively sanctioned for
sending the demand letters despite a final and executory HLURB Decision directing, not the ejectment of
complainants, but the payment of the purchase price of the lots by the subdivision buyers.

Prefatorily, this Court affirms the factual finding of the IBP16 that of complainants herein, only Florentina Lander,
Celedonio Alojado, Aurea Tolentino and Rosendo Villamin were listed as the subdivision lot buyers who were
parties to the HLURB case; and that Verleen Trinidad, Wally Casubuan and Minerva Mendoza were non-parties
who could not claim any right pursuant to the Decision in that case.

Proceeding to the contested demand letters, we adopt the recommendation of the IBP board of governors that the
issuance thereof was not malicious.17 According to its Report,18 respondent counsel merely acted on his legal theory
that the HLURB Decision was not binding on his client, since it had not received the summons. Espousing the belief
that the proceedings in the HLURB were void, Villarin pursued the issuance of demand letters as a prelude to the
ejectment case he would later on file to protect the property rights of his client.

As the lawyer of Purence Realty, respondent is expected to champion the cause of his client with wholehearted
fidelity, care, and devotion.19 This simply means that his client is entitled to the benefit of any and every remedy and
defense20 – including the institution of an ejectment case – that is recognized by our property laws. In Legarda v.
Court of Appeals, we held that in the full discharge of their duties to the client, lawyers shall not be afraid of the
possibility that they may displease the general public.21

Nevertheless, the Code of Professional Responsibility provides the limitation that lawyers shall perform their duty to
the client within the bounds of law.22 They should only make such defense only when they believe it to be honestly
debatable under the law.23 In this case, respondent’s act of issuing demand letters, moved by the understanding of a
void HLURB Decision, is legally sanctioned. If his theory holds water, the notice to vacate becomes necessary in
order to file an action for ejectment.24 Hence, he did not resort to any fraud or chicanery prohibited by the
Code,25 just to maintain his client’s disputed ownership over the subdivision lots.

Even so, respondent cannot be considered free of error. The factual findings of the IBP board of governors reveal
1âwphi1

that in his demand letter, he brazenly typified one of the complainants, Florentina Lander, as an illegal occupant.
However, this description is the exact opposite of the truth, since the final and executory HLURB Decision had
already recognized her as a subdivision lot buyer who had a right to complete her payments in order to occupy her
property. Respondent is very much aware of this ruling when he filed an Omnibus Motion to set aside the HLURB
Decision and the appurtenant Writ of Execution.

Given that respondent knew that the aforementioned falsity totally disregarded the HLURB Decision, he thus
advances the interest of his client through means that are not in keeping with fairness and honesty. What he does is
clearly proscribed by Rule 19.01 of the Code of Professional Responsibility, which requires that a lawyer shall
employ only fair and honest means to attain lawful objectives. Lawyers must not present and offer in evidence
any document that they know is false.26

Considering the present circumstances, we agree with the 14 May 2011 Resolution of the IBP board of governors
that the penalty of reprimand with a stern warning is appropriate. Notably, no motion for reconsideration27 was filed
by either of the parties. Thus, by virtue of the rules for disbarment of attorneys, the case is deemed terminated.28

WHEREFORE, in view of the foregoing, respondent Atty. Angelito Villarin is REPRIMANDED with a warning that a
repetition of the same or a similar act shall be dealt with more severely.

SO ORDERED.

Adm. Case No. 9612 March 13, 2013

JOHNNY M. PESTO, Complainant,

vs.
MARCELITO M. MILLO, Respondent.

DECISION

BERSAMIN, J.:

An attorney who conceals his inefficiency and lack of diligence by giving wrong information to his client regarding
the matter subject of their professional relationship is guilty of conduct unbecoming an officer of the Court. He
thereby violates his Lawyer's Oath to conduct himself as a lawyer according to the best of his knowledge and
discretion with all good fidelity as well to the courts as to his client. He also thereby violates Rule 18.03, Canon 18 of
the Code of Professional Responsibility, by which he is called upon to serve his client with competence and
diligence.

Antecedents

In this administrative case, Johnny Pesto (Johnny), a Canadian national, charged Atty. Marcelito M. Millo with
conduct unbecoming an officer of the Court, misleading his client, bungling the transfer of title, and incompetence
and negligence in the performance of his duty as a lawyer.

Johnny averred that in May 1990, his wife Abella Pesto (Abella) retained the services of Atty. Millo to handle the
transfer of title over a parcel of land to her name, and the adoption of her niece, Arvi Jane Dizon;1 that Johnny and
Abella gave to Atty. Millo the amounts of ₱14,000.00 for the transfer of title2 and ₱10,000.00 for the adoption
case;3 that Atty. Millo thereafter repeatedly gave them false information and numerous excuses to explain his
inability to complete the transfer of title; that Atty. Millo likewise made them believe that the capital gains tax for the
property had been paid way back in 1991, but they found out upon their return to the country in February 1995 that
he had not yet paid the tax; that when they confronted him, Atty. Millo insisted that he had already paid the same,
but he could not produce any receipt for the supposed payment; that Atty. Millo reluctantly returned to Abella the
amount of ₱14,000.00 only after he stormed out of Atty. Millo’s office in exasperation over his stalling tactics; and
that Atty. Millo then further promised in writing to assume the liability for the accrued penalties.4

Likewise, Johnny blamed Atty. Millo for letting the adoption case be considered closed by the Tarlac office of the
Department of Social Welfare and Development (Tarlac DSWD) due to two years of inaction. He stated that Atty.
Millo made him and his wife believe that an interview with the Tarlac DSWD had been scheduled on February 14,
1995, but when they arrived at the Tarlac DSWD they were dismayed to be told that no such interview had been
scheduled; that adding to their dismay, Atty. Millo could not be reached at all; that it was only upon reaching home in
Quezon City when he received word from Atty. Millo that a hearing had again been scheduled on February 23, 1995
at 10:00 a.m.; that when they went to the hearing, Atty. Millo could not be found; and that they learned after an hour
of waiting in the courthouse in Tarlac that Atty. Millo had requested the hearing to be moved to the afternoon without
their knowledge.5

Exasperated by Atty. Millo’s neglect and ineptitude, Johnny brought this administrative complaint in the Integrated
Bar of the Philippines (IBP) on March 14, 1995, praying for disciplinary action to be taken against Atty. Millo, and
seeking the refund of ₱15,643.75 representing the penalties for the non-payment of the capital gains tax, and of the
₱10,000.00 given for the adoption case. Being a resident of Canada, he constituted one Tita Lomotan as his
attorney-in-fact to represent him during his and his wife’s absence from the country.

On July 10, 1995, the IBP ordered Atty. Millo to file his answer.6 Although an extension of the period to file was
granted at his instance,7 he filed no answer in the end.8 He did not also appear at the hearings despite due notice.9

In the meantime, the IBP required Johnny through Lomotan to engage a counsel. The proceedings were held in
abeyance to await the appropriate motion from Johnny’s counsel.10
The administrative matter did not move for several years. The long delay prompted Johnny to write to the President
of the IBP on October 28, 1998.11 It was only on April 2, 2001, however, that the IBP Commission on Bar Discipline
(IBP-CBD) scheduled another hearing on June 29, 2001.12 At that hearing, Atty. Millo appeared through a
representative, and presented a manifestation/motion,13 whereby he claimed that Johnny had meanwhile died, and
that Abella would be withdrawing the complaint against him.

On October 11, 2001, the IBP-CBD, through Commissioner Victoria Gonzalez-De los Reyes, deemed the case
submitted for resolution.14

On October 4, 2010, Investigating Commissioner Victor C. Fernandez, to whom the case had been meanwhile
transferred, submitted a report and recommendation, whereby he found Atty. Millo liable for violating Canon 18 of
the Code of Professional Responsibility, and recommended his suspension from the practice of law for six months.15

In Resolution No. XX-2011-235 adopted on November 19, 2011,16 the IBP Board of Governors affirmed the findings
of Investigating Commissioner Fernandez, but lowered the suspension to two months; and ordered Atty. Millo to
return the amount of ₱16,000.00, to wit:

RESOLVED to ADOPT and APPROVE, as it is hereby unanimously ADOPTED and APPROVED, with modification,
the Report and Recommendation of the Investigating Commissioner in 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 finding respondent guilty of the charges level(led) against him, Atty. Marcelito Millo is
hereby SUSPENDED from the practice of law for a period of two (2) months and is ordered to return the amount of
₱16,000.00 to complainant.

On March 27, 2012, Atty. Millo moved for a reconsideration, stating that he had honestly believed that Abella had
already caused the withdrawal of the complaint prior to her own death; that he had already caused the preparation
of the documents necessary for the transfer of the certificate of title, and had also returned the ₱14,000.00 paid by
Johnny; that the adoption case had been finally granted by the trial court; that he had lost contact with Johnny and
Abella who resided in Canada; that Juan Daquis, Abella’s brother, could have confirmed that the charge had arisen
from a simple misunderstanding, and that Abella would cause the withdrawal of the complaint, except that Daquis
had meanwhile died in November 2011.17

On June 9, 2012, the IBP Board of Governors denied Atty. Millo’s motion for reconsideration.18

Ruling

We affirm Resolution No. XX-2011-235, but modify the penalty.

Every attorney owes fidelity to the causes and concerns of his clients. He must be ever mindful of the trust and
1âw phi 1

confidence reposed in him by the clients. His duty to safeguard the clients’ interests commences from his
engagement as such, and lasts until his effective release by the clients. In that time, he is expected to take every
reasonable step and exercise ordinary care as his clients’ interests may require.19

Atty. Millo’s acceptance of the sums of money from Johnny and Abella to enable him to attend to the transfer of title
and to complete the adoption case initiated the lawyer-client relationship between them. From that moment on, Atty.
Millo assumed the duty to render competent and efficient professional service to them as his clients. Yet, he failed to
discharge his duty. He was inefficient and negligent in going about what the professional service he had assumed
required him to do. He concealed his inefficiency and neglect by giving false information to his clients about having
already paid the capital gains tax. In reality, he did not pay the capital gains tax, rendering the clients liable for a
substantial financial liability in the form of penalties.

Without doubt, Atty. Millo had the obligation to serve his clients with competence and diligence. Rule 18.03, Canon
18 of the Code of Professional Responsibility, expressly so demanded of him, to wit:

CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxxx

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection therewith
shall render him liable.

A serious administrative complaint like this one should not be taken for granted or lightly by any respondent
attorney. Yet, Atty. Millo did not take the complaint of Johnny seriously enough, and even ignored it for a long period
of time. Despite being given several opportunities to do so, Atty. Millo did not file any written answer. He thereby
forfeited his right and chance to reasonably explain the circumstances behind the charges against him. Had the
complaint been untrue and unfair, it would have been quite easy for him to refute it quickly and seasonably. Indeed,
a refutation was the requisite response from any worthy and blameless respondent lawyer. His belated and terse
characterization of the charge by claiming that the charge had emanated from a mere "misunderstanding" was not
sufficient. He did not thereby refute the charge against him, which omission indicated that the complaint had
substance. It mattered little now that he had in the meantime returned the amount of ₱14,000.00 to the clients, and
that the application for adoption had been eventually granted by the trial court. Such events, being not only post
facto, but also inevitable from sheer passage of time, did not obliterate his liability based on the neglect and
ineptitude he had inflicted on his clients. The severe lesson that he must now learn is that he could not ignore
without consequences the liberal opportunity the Court and the IBP allowed him to justify his neglect and ineptitude
in serving his clients’ concerns. Towards him the Court now stays its hand of leniency, lest the Court be unfairly
seen as too willing to forego the exaction of responsibility upon a lawyer as neglectful and inept as he had been
towards his clients.

It even seems very likely that Atty. Millo purposely disregarded the opportunity to answer the charges granted to him
out of a desire to delay the investigation of the complaint until both Johnny and Abella, being residents in Canada,
would have already lost interest in prosecuting it, or, as happened here, would have already departed this world and
be no longer able to rebut whatever refutations he would ultimately make, whether true or not. But the Court is not
about to condone such selfish disregard. Let it be emphasized to him and to others similarly disposed that an
attorney who is made a respondent in a disbarment proceeding should submit an explanation, and should meet the
issue and overcome the evidence against him.20 The obvious reason for the requirement is that an attorney thus
charged must thereby prove that he still maintained that degree of morality and integrity expected of him at all times.

Atty. Millo made his situation even worse by consistently absenting himself from the scheduled hearings the IBP had
set for his benefit. His disregard of the IBP’s orders requiring his attendance in the hearings was not only
irresponsible, but also constituted utter disrespect for the Judiciary and his fellow lawyers. Such conduct was
absolutely unbecoming of a lawyer, because lawyers are particularly called upon to obey Court orders and
processes and are expected to stand foremost in complying with orders from the duly constituted
authorities.21 Moreover, in Espiritu v. Ulep,22 the Court saw the respondent attorney’s odious practice of repeatedly
and apparently deliberately not appearing in the scheduled hearings as his means of wiggling out from the duty to
explain his side. A similar treatment of Atty. Millo’s disregard is justified. Indeed, he thereby manifested evasion, a
bad trait that no worthy member of the Legal profession should nurture in himself.

Surprisingly, Atty. Millo claimed that his belated response to the charge was due to the assurances of Abella that
she would be withdrawing the complaint. The Court disbelieves him, however, and treats his claim as nothing but a
belated attempt to save the day for himself. He ought to remember that the withdrawal of an administrative charge
for suspension or disbarment based on an attorney’s professional misconduct or negligence will not furnish a ground
to dismiss the charge. Suspension or disbarment proceedings that are warranted will still proceed regardless of the
lack or loss of interest on the part of the complainant. The Court may even entirely ignore the withdrawal of the
complaint, and continue to investigate in order to finally determine whether the charge of professional negligence or
misconduct was borne out by the record.23 This approach bespeaks the Court’s consistent view that the Legal
Profession is not only a lofty and noble calling, but also a rare privilege reserved only for the deserving.

Verily, disciplinary proceedings against attorneys are unlike civil suits where the complainants are the plaintiffs and
the respondent attorneys are the defendants. They neither involve private interests nor afford redress for private
grievances. They are undertaken and prosecuted solely for the public welfare, for the purpose of preserving the
courts of justice from the official ministration of persons unfit to practice law before them. Every attorney is called to
answer for every misconduct he commits as an officer of the Court. The complainant or any other person who has
brought the attorney’s misconduct to the attention of the Court is in no sense a party, and has generally no interest
in the outcome except as all good citizens may have in the proper administration of justice.24

The IBP Board of Governors recommended suspension from the practice of law for two months as the penalty to be
imposed. The recommended penalty is not well taken. We modify the penalty, because Atty. Millo displayed no
remorse as to his misconduct, and could not be given a soft treatment. His professional misconduct warranted a
longer suspension from the practice of law because he had caused material prejudice to the clients’ interest.25 He
should somehow be taught to be more ethical and professional in dealing with trusting clients like Johnny and
Abella, who were innocently too willing to repose their utmost trust in his abilities as a lawyer and in his
trustworthiness as a legal professional. He should remember that misconduct has no place in the heart and mind of
a lawyer who has taken the solemn oath to delay no man for money or malice, and to conduct himself as a lawyer
according to the best of his knowledge and discretion. Under the circumstances, suspension from the practice of law
for six months is the condign and commensurate penalty for him.

The Court notes that Atty. Millo already returned the ₱14,000.00 received for the transfer of title. Although he ought
also to refund the amount of ₱15,643.75 representing the penalty for the late payment of the capital gains tax, the
Court cannot order him to refund that amount because it is not a collection agency.26 The Court may only direct the
repayment of attorneys fees received on the basis that a respondent attorney did not render efficient service to the
client. Consequently, Atty. Millo should refund the ₱10,000.00 given in connection with the adoption case, plus
interest of 6% per annum, reckoned from the finality of this decision.

WHEREFORE, the Court FINDS and HOLDS Atty. MARCELITO M. MILLO guilty of violating Canon 18, Rule 18.03
of the Code of Professional Responsibility and the Lawyer’s Oath; SUSPENDS him from the practice of law for a
period of six months effective from notice, with the STERN WARNING that any similar infraction in the future will be
dealt with more severely; ORDERS him to return to the heirs of Johnny and Abella Pesto within ten days from notice
the sum of ₱10,000.00, plus legal interest of 6% per annum reckoned from the finality of this decision until full
payment; and DIRECTS him to promptly submit to this Court written proof of his compliance within thirty days from
notice of this decision.

Let copies of this decision be furnished to the Office of the Bar Confidant, to be appended to Atty. Marcelito M.
Millo's personal record as an attorney; to the Integrated Bar of the Philippines; and to the Office of the Court
Administrator for dissemination to all courts throughout the country for their information and guidance.

SO ORDERED.

A.C. No. 10537 February 3, 2015

REYNALDO G. RAMIREZ, Complainant,

vs.
ATTY. MERCEDES BUHAYANG-MARGALLO, Respondent.

RESOLUTION

LEONEN, J.:

When an action or proceeding is initiated in our courts, lawyers become the eyes and ears of their clients. Lawyers
are expected to prosecute or defend the interests of their clients without need for reminders. The privilege of the
office of attorney grants them the ability to warrant to their client that they will manage the case as if it were their
own. The relationship between an attorney and client is a sacred agency. It cannot be disregarded on the flimsy
excuse that the lawyer accepted the case only because he or she was asked by an acquaintance. The professional
relationship remains the same regardless of the reasons for the acceptance by counsel and regardless of whether
the case is highly paying or pro bono.

Atty. Mercedes Buhayang-Margallo’s (Atty. Margallo) inaction resulted in a lost appeal, terminating the case of her
client not on the merits but due to her negligence. She made it appear that the case was dismissed on the merits
when, in truth, she failed to file the Appellant’s Brief on time. She did not discharge her duties of candor to her client.

This court resolves the Petition for Review1 filed by Atty. Margallo under Rule 139-B, Section 12 of the Rules of
Court, assailing the Resolution of the Board of Governors of the Integrated Bar of the Philippines.

In the Resolution2 dated March 21, 2014, the Board of Governors of the Integrated Bar of the Philippines affirmed
with modification its earlier Resolution3 dated March 20, 2013. In its delegated capacity to conduct fact finding for
this court, it found that respondent Atty. Margallo had violated Canon 17 and Canon 18, Rules 18.03 and 18.04 of
the Code of Professional Responsibility.4 Consequently, the Board of Governors recommended that Atty. Margallo
be suspended from the practice of law for two (2) years.5

In the Complaint6 filed on January 20, 2010 before the Commission on Bar Discipline of the Integrated Bar of the
Philippines, complainant Reynaldo Ramirez (Ramirez) alleged that he engaged Atty. Margallo’s services as legal
counsel in a civil case for Quieting of Title entitled "Spouses Roque v. Ramirez."7 The case was initiated before the
Regional Trial Court of Binangonan, Rizal, Branch 68.8

According to Ramirez, Atty. Margallo contacted him on or about March 2004, as per a referral from a friend of
Ramirez’s sister.9 He alleged that Atty. Margallo had offered her legal services on the condition that she be given
30% of the land subject of the controversy instead of attorney’s fees.10 It was also agreed upon that Ramirez would
pay Atty. Margallo ₱1,000.00 per court appearance.11

On October 19, 2006, the Regional Trial Court promulgated a Decision adverse to Ramirez.12 Atty. Margallo advised
him to appeal the judgment. She committed to file the Appeal before the Court of Appeals.13

The Appeal was perfected and the records were sent to the Court of Appeals sometime in 2008.14 On December 5,
2008, the Court of Appeals directed Ramirez to file his Appellant’s Brief. Ramirez notified Atty. Margallo, who replied
that she would have one prepared.15

On January 8, 2009, Ramirez contacted Atty. Margallo to follow up on the Appellant’s Brief. Atty. Margallo informed
him that he needed to meet her to sign the documents necessary for the brief.16

On several occasions, Ramirez followed up on the status of the brief, but he was told that there was still no word
from the Court of Appeals.17

On August 26, 2009, Atty. Margallo informed Ramirez that his Appeal had been denied.18 She told him that the Court
of Appeals’ denial was due to Ramirez’s failure to establish his filiation with his alleged father, which was the basis
of his claim.19 She also informed him that they could no longer appeal to this court since the Decision of the Court of
Appeals had been promulgated and the reglementary period for filing an Appeal had already lapsed.20
Ramirez went to the Court of Appeals. There, he discovered that the Appellant’s Brief was filed on April 13, 2009
with a Motion for Reconsideration and Apologies for filing beyond the reglementary period.21

Ramirez alleged that Atty. Margallo had violated Canon 17 and Canon 18, Rules 18.03 and 18.04 of the Codeof
Professional Responsibility.22 By way of defense, Atty. Margallo argued that she had agreed to take on the case for
free, save for travel expense of ₱1,000.00 per hearing. She also claimed that she had candidly informed Ramirez
and his mother that they only had a 50% chance of winning the case.23 She denied ever having entered into an
agreement regarding the contingent fee worth 30% of the value of the land subject of the controversy.

Atty. Margallo asserted that she would not have taken on the Appeal except that the mother of Ramirez had begged
her to do so.24 She claimed that when she instructed Ramirez to see her for document signing on January 8, 2009,
he ignored her. When he finally showed up on March 2009, he merely told her that he had been busy.25 Her failure to
immediately inform Ramirez of the unfavorable Decision of the Court of Appeals was due to losing her client’s
number because her 8-year-old daughter played with her phone and accidentally erased all her contacts.26

Mandatory conference and findings of the Integrated Bar of the Philippines

The dispute was set for mandatory conference on June 3, 2010.27 Only Ramirez appeared despite Atty. Margallo
having received notice.28 The mandatory conference was reset to July 22, 2010. Both parties then appeared and
were directed to submit their position papers.29 Commissioner Cecilio A.C. Villanueva recommended that Atty.
Margallo be reprimanded for her actions and be given a stern warning that her next infraction of a similar nature
shall be dealt with more severely.30 This was based on his two key findings. First, Atty. Margallo allowed the
reglementary period for filing an Appellant’s Brief to lapse by assuming that Ramirez no longer wanted to pursue the
case instead of exhausting all means possible to protect the interest of her client.31 Second, Atty. Margallo had been
remiss in her duties as counsel, resulting in the loss of Ramirez’s statutory right to seek recourse with the Court of
Appeals.32

In the Resolution33 dated March 20, 2013, the Board of Governors of the Integrated Bar of the Philippines adopted
and approved the recommendation of the Commission on Bar Discipline. The Board of Governors resolved to
recommend a penalty of reprimand to Atty. Margallo with a stern warning that repetition of the same or similar act
shall be dealt with more severely. Ramirez seasonably filed a Motion for Reconsideration on July 16, 2013.34 In the
Resolution dated March 21, 2014, the Board of Governors granted Ramirez’s Motion for Reconsideration and
increased the recommended penalty to suspension from practice of law for two (2) years.35

On August 20, 2014, Atty. Margallo filed a Petition for Review under Rule 139-B, Section 12 of the Rules of
Court.36 She alleged that the recommended penalty of suspension was too severe considering that she had been
very careful and vigilant in defending the cause of her client. She also averred that this was the first time a
Complaint was filed against her.37 Ramirez thereafter filed an undated Motion to adopt his Motion for
Reconsideration previously filed with the Commission on Bar Discipline as a Comment on Atty. Margallo’s Petition
for Review.38 In the Resolution39 dated October 14, 2014, this court granted Ramirez’s Motion. Atty. Margallo filed her
Reply40 on October 6, 2014.

This court’s ruling

The Petition is denied for lack of merit.

The relationship between a lawyer and a client is "imbued with utmost trust and confidence."41 Lawyers are expected
to exercise the necessary diligence and competence in managing cases entrusted to them. They commit not only to
review cases or give legal advice, but also to represent their clients to the best of their ability without need to be
reminded by either the client or the court. The expectation to maintain a high degree of legal proficiency and
attention remains the same whether the represented party is a high-paying client or an indigent litigant.42

Canon 17 and Canon 18, Rules 18.03and 18.04 of the Code of Professional Responsibility clearly provide:

CANON 17 - A LAWYER OWES FIDELITY TO THE CAUSE OF HIS CLIENT AND HE SHALL BE MINDFUL OF
THE TRUST AND CONFIDENCE REPOSED IN HIM.

CANON 18 - A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE. Rule 18.03 - A
lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection there with shall render him
liable.

Rule 18.04 - A lawyer shall keep the client informed of the status of his case and shall respond within a reasonable
time to client’s request for information.

In Caranza Vda. De Saldivar v. Cabanes, Jr.,43 a lawyer was suspended after failing to justify his absence in a
scheduled preliminary conference, which resulted in the case being submitted for resolution. This was aggravated
by the lawyer’s failure to inform his client about the adverse ruling of the Court of Appeals, thereby precluding the
litigant from further pursuing an Appeal. This court found that these actions amounted to gross negligence
tantamount to breaching Canons 17 and 18 of the Code of Professional Responsibility:
The relationship between an attorney and his client is one imbued with utmost trust and confidence. In this light,
clients are led to expect that lawyers would be ever-mindful of their cause and accordingly exercise the required
degree of diligence in handling their affairs. Verily, a lawyer is expected to maintain at all times a high standard of
legal proficiency, and to devote his full attention, skill, and competence to the case, regardless of its importance and
whether he accepts it for a fee or for free.

....

Case law further illumines that a lawyer’s duty of competence and diligence includes not merely reviewing the cases
entrusted to the counsel’s care or giving sound legal advice, but also consists of properly representing the client
before any court or tribunal, attending scheduled hearings or conferences, preparing and filing the required
pleadings, prosecuting the handled cases with reasonable dispatch, and urging their termination without waiting for
the client or the court to prod him or her to do so.

Conversely, a lawyer’s negligence in fulfilling his duties subjects him to disciplinary action. While such negligence or
carelessness is incapable of exact formulation, the Court has consistently held that the lawyer’s mere failure to
perform the obligations due his client is per se a violation.44 (Emphasis supplied, citations omitted)

Respondent Atty. Margallo was unjustifiably remiss in her duties as legal counsel to Ramirez.

The lack of communication and coordination between respondent Atty. Margallo and her client was palpable but was
not due to the lack of diligence of her client. This cost complainant Ramirez his entire case and left him with no
appellate remedies. His legal cause was orphaned not because a court of law ruled on the merits of his case, but
because a person privileged to act as counsel failed to discharge her duties with the requisite diligence. Her
assumption that complainant Ramirez was no longer interested to pursue the Appeal is a poor excuse. There was
no proof that she exerted efforts to communicate with her client. This is an admission that she abandoned her
obligation as counsel on the basis of an assumption. Respondent Atty. Margallo failed to exhaust all possible means
to protect complainant Ramirez’s interest, which is contrary to what she had sworn to do as a member of the legal
profession. For these reasons, she clearly violated Canon 17 and Canon 18, Rules 18.03 and 18.04 of the Code of
Professional Responsibility.

A problem arises whenever agents, entrusted to manage the interests of another, use their authority or power for
their benefit or fail to discharge their duties. In many agencies, there is information assymetry between the principal
and the entrusted agent. That is, there are facts and events that the agent must attend to that may not be known by
the principal.

This information assymetry is even more pronounced in an attorney client relationship. Lawyers are expected not
only to be familiar with the minute facts of their cases but also to see their relevance in relation to their causes of
action or their defenses. The salience of these facts is not usually patent to the client. It can only be seen through
familiarity with the relevant legal provisions that are invoked with their jurisprudential interpretations. More so with
the intricacies of the legal procedure. It is the lawyer that receives the notices and must decide the mode of appeal
to protect the interest of his or her client.

Thus, the relationship between a lawyer and her client is regarded as highly fiduciary. Between the lawyer and the
client, it is the lawyer that has the better knowledge of facts, events, and remedies. While it is true that the client
chooses which lawyer to engage, he or she usually does so on the basis of reputation. It is only upon actual
engagement that the client discovers the level of diligence, competence, and accountability of the counsel that he or
she chooses. In some cases, such as this one, the discovery comes too late. Between the lawyer and the client,
therefore, it is the lawyer that should bear the full costs of indifference or negligence. Respondent Atty. Margallo’s
position that a two-year suspension is too severe considering that it is her first infraction cannot be sustained. In
Caranza Vda. De Saldivar, we observed:

As regards the appropriate penalty, several cases show that lawyers who have been held liable for gross negligence
for infractions similar to those of the respondent were suspended for a period of six (6) months. In Aranda v. Elayda,
a lawyer who failed to appear at the scheduled hearing despite due notice which resulted in the submission of the
case for decision was found guilty of gross negligence and hence, suspended for six (6) months. In Heirs of Tiburcio
F. Ballesteros, Sr. v. Apiag, a lawyer who did not file a pre-trial brief and was absent during the pre-trial conference
was likewise suspended for six (6) months. In Abiero v. Juanino, a lawyer who neglected a legal matter entrusted to
him by his client in breach of Canons 17 and 18 of the Code was also suspended for six (6) months. Thus,
consistent with existing jurisprudence, the Court finds it proper to impose the same penalty against respondent and
accordingly suspends him for a period of six (6) months.45 (Emphasis supplied, citations omitted)

Caranza Vda. De Saldivar did not leave the clients without procedural remedies. On the other hand, respondent
Atty. Margallo’s neglect resulted in her client having no further recourse in court to protect his legal interests. This
lack of diligence, to the utmost prejudice of complainant Ramirez who relied on her alleged competence as counsel,
must not be tolerated. It is time that we communicate that lawyers must actively manage cases entrusted to them.
There should be no more room for an inertia of mediocrity.
Parenthetically, it is this court that has the constitutionally mandated duty to discipline lawyers.46 Under the current
rules, the duty to assist fact finding can be delegated to the Integrated Bar of the Philippines. The findings of the
Integrated Bar, however, can only be recommendatory, consistent with the constitutional powers of this court. Its
recommended penalties are also, by its nature, recommendatory. Despite the precedents, it is the Integrated Bar of
the Philippines that recognizes that the severity of the infraction is worth a penalty of two-year suspension. We read
this as a showing of its desire to increase the level of professionalism of our lawyers.

This court is not without jurisdiction to increase the penalties imposed in order to address a current need in the legal
profession. The desire of the Integrated Bar of the Philippines to ensure a higher ethical standard for its members'
conduct is laudable. The negligence of respondent Atty. Margallo coupled with her lack of candor is reprehensible.

WHEREFORE, the Petition for Review is DENIED. The Recommendations and Resolution of the Board of
Governors of the Integrated Bar of the Philippines dated March 21, 2014 is ACCEPTED, ADOPTED AND
AFFIRMED. Atty. Mercedes Buhayang-Margallo is hereby SUSPENDED from the practice of law for two (2) years,
with a stern warning that a repetition of the same or similar act shall be dealt with more severely. This decision is
immediately executory. SO ORDERED.

March 18, 2015

A.C. No. 10672

EDUARDO A. MAGLENTE,* Complainant,

vs.
ATTY. DELFIN R. AGCAOILI, Respondent.

DECISION

PERLAS-BERNABE, J:.

Before the Court is an administrative complaint1 dated May 9, 2006 filed by complainant Eduardo A. Maglente
(complainant), before the Integrated Bar of the Philippines (IBP), against respondent Atty. Delfin R. Agcaoili, Jr.
(respondent), praying that the latter be directed to return the amount of P48,000he.00 that received from the former.

The Facts

Complainant, as President of "Samahan ng mga Maralitang Taga Ma. Corazon III, Incorporated'' (Samahan),
alleged that he engaged the services of respondent for the purpose of filing a case in order to determine the true
owner of the land being occupied by the members of Samahan.2 In connection therewith, he gave respondent the
aggregate amount of P48,000.00 intended to cover the filing fees for the action to be instituted, as evidenced by a
written acknowledgment executed by respondent himself.3 Despite the payment, respondent failed to file an action in
court. When confronted, respondent explained that the money given to him was not enough to fully pay for the filing
fees in court.4 Thus, complainant asked for the return of the money, but respondent claimed to have spent the same
and even demanded more money.5 Complainant further alleged that when he persisted in seeking restitution of the
aforesaid sum, respondent told him to shut up because it was not his money in the first place.6 Hence, complainant
filed this administrative complaint seeking the return of the full amount he had paid to respondent.

In his defense,7 respondent denied spending complainant’s money, explaining that he had already prepared the
initiatory pleading and was poised to file the same, when he discovered through the Clerk of Court of the Regional
Trial Court of Antipolo City that the filing fee was quite costly. This prompted him to immediately relay such
information to complainant who undertook to raise the amount needed. While waiting, however, the instant
administrative case was filed against him.8

The IBP’s Report and Recommendation

In a Report and Recommendation9 dated October 3, 2012, the IBP Investigating Commissioner found respondent
guilty of violating Rule 16.01 of the Code of Professional Responsibility (CPR), and accordingly, recommended that
he be: (a) meted with the penalty of Censure, with a warning that a repetition of the same will be met with a stiffer
penalty; and (b) directed to account for or return the amount of 48,000.00 to complainant.10

The Investigating Commissioner found that respondent clearly received the amount of 48,000.00 from complainant,
which was intended to answer for the filing fees of a case he was supposed to file for the Samahan, but which he
failed to do so.11 In this relation, the Investigating Commissioner observed that had respondent prepared the
complaint and performed research works, as he claimed, then he could have kept a reasonable amount for his effort
under the doctrine of quantum meruit, but unfortunately, he could not present any proof in this respect.12

In a Resolution13 dated May 11, 2013, the IBP Board of Governors adopted and approved the aforesaid Report and
Recommendation, with modification increasing the recommended penalty from Censure to suspension from the
practice of law for a period of three (3) months. Aggrieved, respondent moved for reconsideration14 which was,
however, denied in a Resolution15 dated May 3, 2014.

The Issue Before the Court

The essential issue in this case is whether or not respondent should be held administratively liable for the acts
complained of.

The Court’s Ruling

After a judicious perusal of the records, the Court concurs with the findings of the IBP, except as to the penalty to be
imposed upon respondent. 1âwphi1

It must be stressed that once a lawyer takes up the cause of his client, he is duty-bound to serve the latter with
competence, and to attend to such client’s cause with diligence, care, and devotion, whether he accepts it for a fee
or for free. He owes fidelity to such cause and must always be mindful of the trust and confidence reposed upon
him.16 Therefore, a lawyer’s neglect of a legal matter entrusted to him by his client constitutes inexcusable
negligence for which he must be held administratively liable for violating Rule 18.03, Canon 18 of the CPR,17 which
reads:

CANON 18 – A LAWYER SHALL SERVE HIS CLIENT WITH COMPETENCE AND DILIGENCE.

xxxx

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection [therewith]
shall render him liable.1âwphi 1

In the instant case, it is undisputed that complainant engaged the services of respondent for the purpose of filing a
case in court, and in connection therewith, gave the amount of 48,000.00 to answer for the filing fees. Despite the
foregoing, respondent failed to comply with his undertaking and offered the flimsy excuse that the money he
received from complainant was not enough to fully pay the filing fees.

Furthermore, respondent also violated Rules 16.01 and 16.03, Canon 16 of the CPR when he failed to refund the
amount of 48,000.00 that complainant gave him despite repeated demands, viz.:

CANON 16 – A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY
COME INTO HIS POSSESSION.

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

xxxx

Rule 16.03 – A lawyer shall deliver the funds and property of his client when due or upon demand. x x x.

Verily, when a lawyer receives money from the client for a particular purpose, the lawyer is bound to render an
accounting to the client showing that the money was spent for the intended purpose. Consequently, if the money
was not used accordingly, the same must be immediately returned to the client.18 A lawyer’s failure to return the
money to his client despite numerous demands is a violation of the trust reposed on him and is indicative of his lack
of integrity,19 as in this case.

Clearly, respondent failed to exercise such skill, care, and diligence as men of the legal profession commonly
possess and exercise in such matters of professional employment,20 and hence, must be disciplined accordingly.

Having established respondent’s administrative liability, the Court now determines the proper penalty to be imposed.

Jurisprudence provides that in similar cases where lawyers neglected their clients’ affairs and, at the same time,
failed to return the latter’s money and/or property despite demand, the Court meted out the penalty of suspension
from the practice of law. In Segovia-Ribaya v. Lawsin,21 the Court suspended the lawyer for a period of one (1) year
for his failure to perform his undertaking under his retainership agreement with his client and to return the money
given to him by the latter.22 Similarly, in Meneses v. Macalino,23 the same penalty was imposed on a lawyer who
failed to render any legal service to his client as well as to return the money he received for such purpose.24 In view
of the foregoing, the Court finds it appropriate that respondent be meted with the penalty of suspension from the
practice of law for a period of one (1) year.

Finally, the Court sustains the directive for respondent to account for or return the amount of 48,000.00 to
complainant. It is well to note that "while the Court has previously held that disciplinary proceedings should only
revolve around the determination of the respondent-lawyer’s administrative and not his civil liability, it must be
clarified that this rule remains applicable only to claimed liabilities which are purely civil in nature– for instance, when
the claim involves moneys received by the lawyer from his client in a transaction separate and distinct [from] and not
intrinsically linked to his professional engagement."25 Since the aforesaid amount was intended to answer for filing
fees which is intimately related to the lawyer- client relationship between complainant and respondent, the Court
finds the return thereof to be in order.26

WHEREFORE, respondent Atty. Delfin R. Agcaoili, Jr. (respondent), is found GUILTY of violating Rules 16.01 and
16.03 of Canon 16, and Rule 18.03 of Canon 18 of the Code of Professional Responsibility. Accordingly, he is
hereby SUSPENDED from the practice of law for a period of one (1) year, effective upon his receipt of this Decision,
with a STERN WARNING that a repetition of the same or similar acts will be dealt with more severely.

Furthermore, respondent is ORDERED to return to complainant Eduardo A. Maglente the amount of 48,000.00 he
received from the latter within ninety (90) days from the finality of this Decision. Failure to comply with the foregoing
directive will warrant the imposition of a more severe penalty.

Let a copy of this Decision be attached to respondent’s record in this Court as attorney. Further, let copies of this
Decision be furnished the Integrated Bar of the Philippines and the Office of the Court Administrator, which is
directed to circulate them to all the courts in the country for their information and guidance.

SO ORDERED.

ESTELA M. PERLAS-BERNABE