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THIRD DIVISION [A.C. No. 9537. June 10, 2013.] [Formerly CBD Case No. 09-2489] DR.

TERESITA LEE, complainant, vs. ATTY. AMADOR L. SIMANDO, respondent. PERALTA, J p: Before us is a Petition for Disbarment 1 dated July 21, 2009 filed by Dr. Teresita Lee (Dr. Lee) against respondent Atty. Amador L. Simando (Atty. Simando) before the Integrated Bar of the Philippines-Commission on Bar Discipline (IBP-CBD), docketed as CBD Case No. 09-2489, now A.C. No. 9537, for violation of the Code of Judicial Ethics of Lawyers. The facts of the case, as culled from the records, are as follows: Atty. Simando was the retained counsel of complainant Dr. Lee from November 2004 until January 8, 2008, with a monthly retainer fee of Three Thousand Pesos (Php3,000.00). 2 Sometime during the above-mentioned period, Atty. Simando went to see Dr. Lee and asked if the latter could help a certain Felicito M. Mejorado (Mejorado) for his needed funds. He claimed that Mejorado was then awaiting the release of his claim for informer's reward from the Bureau of Customs. Because Dr. Lee did not know Mejorado personally and she claimed to be not in the business of lending money, the former initially refused to lend money. But Atty. Simando allegedly persisted and assured her that Mejorado will pay his obligation and will issue postdated checks and sign promissory notes. He allegedly even offered to be the co-maker of Mejorado and assured her that Mejorado's obligation will be paid when due. Atty. Simando was quoted saying: "Ipapahamak ba kita, kliyente kita"; "Sigurado ito, kung gusto mo, gagarantiyahan ko pa ito, at pipirma din ako"; "Isang buwan lang, at hindi hihigit sa dalawang buwan ito, bayad ka na." 3 AIHDcC Due to Atty. Simando's persistence, his daily calls and frequent visits to convince Dr. Lee, the latter gave in to her lawyer's demands, and finally agreed to give Mejorado sizeable amounts of money. Respondent acted as co-maker with Mejorado in various cash loans, to wit: 4 Date: Amount November 11, 2006 Php400,000.00 November 24, 2006 November 27, 2006 December 7, 2006 December 13, 2006 200,000.00 400,000.00 200,000.00 200,000.00

Total:

Php1,400,000.00 =============

When the said obligation became due, despite Dr. Lee's repeated demands, Mejorado failed and refused to comply with his obligation. Since Atty. Simando was still her lawyer then, Dr. Lee instructed him to initiate legal action against Mejorado. Atty. Simando said he would get in touch with Mejorado and ask him to pay his obligation without having to resort to legal action. However, even after several months, Mejorado still failed to pay Dr. Lee, so she again asked Atty. Simando why no payment has been made yet. Dr. Lee then reminded Atty. Simando that he was supposed to be the comaker of the obligation of Mejorado, to which he replied: "Di kasuhan din ninyo ako!" 5 Despite complainant's repeated requests, respondent ignored her and failed to bring legal actions against Mejorado. Thus, in January 2008, complainant was forced to terminate her contract with Atty. Simando. Subsequently, complainant's new lawyer, Atty. Gilbert Morandarte, sent a demand letter dated June 13, 2008 to Atty. Simando in his capacity as the co-maker of some of the loans of Mejorado. In his Letter dated June 30, 2008, respondent denied his liability as a co-maker and claimed that novation had occurred because complainant had allegedly given additional loans to Mejorado without his knowledge. 6 Dr. Lee then accused Atty. Simando of violating the trust and confidence which she gave upon him as her lawyer, and even took advantage of their professional relationship in order to get a loan for his client. Worse, when the said obligation became due, respondent was unwilling to help her to favor Mejorado. Thus, the instant petition for disbarment against Atty. Simando. ADECcI On August 12, 2009, the IBP-CBD ordered respondent to submit his Answer on the complaint against him. 7 In his Answer 8 dated September 17, 2009, Atty. Simando claimed that complainant, who is engaged in lending money at a high interest rate, was the one who initiated the financial transaction between her and Mejorado. He narrated that complainant asked him if it is true that Mejorado is his client as she found out that Mejorado has a pending claim for informer's reward with the Bureau of Customs. When he affirmed that Mejorado is his client, complainant signified that she is willing to give money for Mejorado's financial needs while awaiting for the release of the informer's reward. Eventually, parties agreed that Mejorado will pay double the amount and that payment shall be made upon receipt by Mejorado of the payment of his claim for informer's reward. 9

Meanwhile, Atty. Simando stressed that Dr. Lee gave Mejorado a total of Php700,000.00 as an investment but he signed as co-maker in all the receipts showing double the amount or Php1,400,000.00. 10 Respondent claimed that complainant is a money-lender exacting high interest rates from borrowers. 11 He narrated several instances and civil cases where complainant was engaged in money-lending where he divulged that even after defendants had already paid their loan, complainant still persists in collecting from them. 12 Respondent asserted that he knew of these transactions, because he was among the four lawyers who handled complainant's case. 13 Respondent averred that from the time that Mejorado and Dr. Lee had become close to each other, the latter had given Mejorado additional investments and one (1) Silverado Pick-up at the price of P500,000.00 and fifty (50) sacks of old clothings. He claimed that the additional investments made by Dr. Lee to Mejorado were given without his knowledge. Atty. Simando further alleged that with Dr. Lee's investment of around P2 Million which included the Silverado Pick-up and the fifty (50) sacks of old clothings, the latter required Mejorado to issue five (5) checks with a total value of P7,033,500.00, an amount more than the actual value which Mejorado received. 14 DCESaI Atty. Simando added that while Dr. Lee and Mejorado agreed that the issued checks shall be presented to the bank only upon payment of his informer's reward, Dr. Lee presented the checks to the bank despite being aware that Mejorado's account had no funds for said checks. Atty. Simando further denied that he refused to take legal action against Mejorado. He claimed that complainant never instructed him to file legal action, since the latter knew that Mejorado is obligated to pay only upon receipt of his informer's reward. Finally, Atty. Simando insisted that he did not violate their lawyer-client relationship, since Dr. Lee voluntarily made the financial investment with Mejorado and that he merely introduced complainant to Mejorado. He further claimed that there is no conflict of interest because he is Mejorado's lawyer relative to the latter's claim for informer's reward, and not Mejorado's lawyer against Dr. Lee. He reiterated that there is no conflicting interest as there was no case between Mejorado and Dr. Lee that he is handling for both of them. 15 In her Reply dated October 30, 2009, Dr. Lee denied that what she entered into was a mere investment. She insisted that she lent the money to Mejorado and respondent, in his capacity as co-maker and the transaction was actually a loan. 16 To prove her claim, Dr. Lee submitted the written loan agreements/receipts which categorically stated that the money received was a loan with due dates, signed by Mejorado and respondent as co-maker. 17 She further claimed that she did not know Mejorado and it was respondent who brought him to her and requested her to assist Mejorado by

lending him money as, in fact, respondent even vouched for Mejorado and agreed to sign as co-maker. Complainant further emphasized that what she was collecting is the payment only of the loan amounting to One Million Four Hundred Thousand Pesos (Php1,400,000.00) which respondent had signed as co-maker. Thus, respondent's claim that his obligation was already extinguished by novation holds no water, since what was being collected is merely his obligation pertaining to the loan amounting to Php1,400,000.00 only, and nothing more. Finally, complainant lamented that respondent, in his comments, even divulged confidential informations he had acquired while he was still her lawyer and even used it against her in the present case, thus, committing another unethical conduct. She, therefore, maintained that respondent is guilty of violating the lawyer-client confidentiality rule. HaEcAC Both parties failed to appear during the mandatory conference on January 15, 2010. Both parties requested for resetting of the mandatory conference, however, both failed to agree on a certain date. Hence, the IBP, so as not to delay the disposition of the complaint, terminated the mandatory conference and instead required the parties to submit their respective position papers. 18 On March 18, 2010, the IBP-CBD found Atty. Simando guilty of violating the Code of Professional Responsibility. It recommended that respondent be suspended from the practice of law for six (6) months. On December 29, 2010, the IBP Board of Governors adopted and approved the Report and Recommendation of the IBP-CBD to suspend Atty. Simando from the practice of law for a period of six (6) months. Respondent moved for reconsideration. On March 10, 2012, the IBP Board of Governors granted respondent's motion for reconsideration for lack of sufficient evidence to warrant the penalty of suspension. The Resolution dated December 29, 2010 was reversed and the case against respondent was dismissed. RULING We reverse the ruling of the IBP Board of Governors. Jurisprudence has provided three tests in determining whether a lawyer is guilty of representing conflicting interest: 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. EACTSH 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. 19 In the instant case, we find substantial evidence to support respondent's violation of the above parameters, as established by the following circumstances on record: First, it is undisputed that there was a lawyer-client relationship between complainant and Atty. Simando as evidenced by the retainer fees received by respondent and the latter's representation in certain legal matters pertaining to complainant's business; Second, Atty. Simando admitted that Mejorado is another client of him albeit in a case claiming rewards against the Bureau of Customs; Third, Atty. Simando admitted that he was the one who introduced complainant and Mejorado to each other for the purpose of entering into a financial transaction while having knowledge that complainant's interests could possibly run in conflict with Mejorado's interests which ironically such client's interests, he is duty-bound to protect; SHTcDE Fourth, despite the knowledge of the conflicting interests between his two clients, respondent consented in the parties' agreement and even signed as co-maker to the loan agreement; Fifth, respondent's knowledge of the conflicting interests between his two clients was demonstrated further by his own actions, when he: (a)failed to act on Mejorado's failure to pay his obligation to complainant despite the latter's instruction to do so; (b)denied liability despite signing as co-maker in the receipts/promissory notes arising from the loan agreement between his two clients; (c)rebutted complainant's allegations against Mejorado and him, and even divulged informations he acquired while he was still complainant's lawyer.

Clearly, it is improper for respondent to appear as counsel for one party (complainant as creditor) against the adverse party (Mejorado as debtor) who is also his client, since a lawyer is prohibited from representing conflicting interests. He may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflict with that of his present or former client. Respondent's assertion that there is no conflict of interest because complainant and respondent are his clients in unrelated cases fails to convince. His representation of opposing clients in both cases, though unrelated, obviously constitutes conflict of interest or, at the least, invites suspicion of double-dealing. 20 Moreover, with the subject loan agreement entered into by the complainant and Mejorado, who are both his clients, readily shows an apparent conflict of interest, moreso when he signed as comaker. IEDHAT Likewise, respondent's argument that the money received was an investment and not a loan is difficult to accept, considering that he signed as co-maker. Respondent is a lawyer and it is objectionable that he would sign as co-maker if he knew all along that the intention of the parties was to engage in a mere investment. Also, as a lawyer, signing as a co-maker, it can be presupposed that he is aware of the nature of suretyship and the consequences of signing as co-maker. Therefore, he cannot escape liability without exposing himself from administrative liability, if not civil liability. Moreover, we noted that while complainant was able to show proof of receipts of various amounts of money loaned and received by Mejorado, and signed by the respondent as co-maker, the latter, however, other than his bare denials, failed to show proof that the money given was an investment and not a loan. It must be stressed that the proscription against representation of conflicting interests finds application where the conflicting interests arise with respect to the same general matter however slight the adverse interest may be. It applies even if the conflict pertains to the lawyer's private activity or in the performance of a function in a nonprofessional capacity. In the process of determining whether there is a conflict of interest, an important criterion is probability, not certainty, of conflict. 21 We likewise note that respondent offered several excuses in order to avoid payment of his liability. First, in his Answer to complainant's demand letter, he claimed there was novation which extinguished his liability; Secondly, he claimed that the amount received by Mejorado for which he signed as co-maker was merely an investment and not a loan. Finally, he alleged that it was agreed that the investment with profits will be paid only after Mejorado receives the payment for his claim for reward which complainant violated when she presented the checks for payment prematurely. These actuations of Atty. Simando do not speak well of his reputation as a lawyer. 22 Finally, we likewise find respondent guilty of violating Rule 21.01 of the Code of Professional Responsibility. 23 In his last-ditch effort to impeach the credibility of complainant, he divulged informations 24 which he acquired in confidence during the existence of their lawyer-client relationship. HaECDI

We held in Nombrado v. Hernandez 25 that the termination of the relation of attorney and client provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client. The reason for the rule is that the client's confidence once reposed cannot be divested by the expiration of the professional employment. Consequently, a lawyer should not, even after the severance of the relation with his client, do anything which will injuriously affect his former client in any matter in which he previously represented him nor should he disclose or use any of the client's confidences acquired in the previous relation. Accordingly, we reiterate that lawyers are enjoined to look at any representation situation from "the point of view that there are possible conflicts," and further, "to think in terms of impaired loyalty" that is to evaluate if his representation in any way will impair loyalty to a client. 26 WHEREFORE, premises considered, this Court resolves to ADOPT the findings and recommendation of the IBP in Resolution No. XIX-2010-733 suspending respondent Atty. Amador L. Simando for six (6) months from the practice of law, 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. Atty. Simando is DIRECTED to inform the Court of the date of his receipt of this Decision so that we can determine the reckoning point when his suspension shall take effect. This Decision shall be immediately executory. SO ORDERED. Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.

FIRST DIVISION [A.C. No. 6836. January 23, 2006.] LETICIA GONZALES, complainant, vs. ATTY. MARCELINO CABUCANA, respondent. SYLLABUS 1.LEGAL ETHICS; CODE OF PROFESSIONAL RESPONSIBILITY; PROHIBITION AGAINST REPRESENTING CONFLICTING INTEREST; ELUCIDATED. We find respondent guilty of violating Rule 15.03 of Canon 15 of the Code of Professional Responsibility. It is well-settled that a lawyer is barred from representing conflicting interests except by written consent of all concerned given after a full disclosure of the facts. Such prohibition is founded on principles of public policy and good taste as the nature of the lawyer-client relations is one of trust and confidence of the highest degree. 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. One of the tests of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyer's duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty. As we expounded in the recent case of Quiambao vs. Bamba, The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. It is of no moment that the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. It is enough that the opposing parties in one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyer's respective retainers with each of them would affect the performance of the duty of undivided fidelity to both clients. 2.ID.; ID.; ID.; VIOLATED IN CASE AT BAR. The claim of respondent that there is no conflict of interests in this case, as the civil case handled by their law firm where Gonzales is the complainant and the criminal cases filed by Gonzales against the Gatcheco spouses are not related, has no merit. The representation of opposing clients in said cases, though unrelated, constitutes conflict of interests or, at the very least, invites suspicion of double-dealing which this Court cannot allow. Respondent further argued that it was his brother who represented Gonzales in the civil case and not him, thus, there could be no conflict of interest. We do not agree. As respondent admitted, it was their law firm which represented Gonzales in the civil case. Such being the case, the rule against representing conflicting interests applies. As we explained in the case of Hilado vs. David: . . . [W]e . . . can not sanction his taking up the cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not necessarily to prevent any injustice to the plaintiff but to keep above reproach the honor and integrity of the courts and of the bar. Without condemning the respondent's conduct as dishonest, corrupt, or fraudulent, we do believe that upon the admitted facts it is highly inexpedient. It had the tendency to bring the profession, of which he is a

distinguished member, "into public disrepute and suspicion and undermine the integrity of justice." The claim of respondent that he acted in good faith and with honest intention will also not exculpate him as such claim does not render the prohibition inoperative. In the same manner, his claim that he could not turn down the spouses as no other lawyer is willing to take their case cannot prosper as it is settled that while there may be instances where lawyers cannot decline representation they cannot be made to labor under conflict of interest between a present client and a prospective one. Granting also that there really was no other lawyer who could handle the spouses' case other than him, still he should have observed the requirements laid down by the rules by conferring with the prospective client to ascertain as soon as practicable whether the matter would involve a conflict with another client then seek the written consent of all concerned after a full disclosure of the facts. These respondent failed to do thus exposing himself to the charge of double-dealing. 3.ID.; ID.; ID.; ID.; CANNOT BE IGNORED BY THE FILING OF AFFIDAVIT OF DESISTANCE. We note the affidavit of desistance filed by Gonzales. However, we are not bound by such desistance as the present case involves public interest. Indeed, the Court's exercise of its power to take cognizance of administrative cases against lawyers is not for the purpose of enforcing civil remedies between parties, but to protect the court and the public against an attorney guilty of unworthy practices in his profession. 4.ID.; ID.; ID.; ID.; PROPER PENALTY CONSIDERING THE MITIGATING CIRCUMSTANCES IN CASE AT BAR. In similar cases where the respondent was found guilty of representing conflicting interests a penalty ranging from one to three years' suspension was imposed. We shall consider however as mitigating circumstances the fact that he is representing the Gatcheco spouses pro bono and that it was his firm and not respondent personally, which handled the civil cases of Gonzales. As recounted by complainant herself, Atty. Edmar Cabucana signed the civil case of complainant by stating first the name of the law firm CABUCANA, CABUCANA, DE GUZMAN AND CABUCANA LAW OFFICE, under which, his name and signature appear; while herein respondent signed the pleadings for the Gatcheco spouses only with his name, without any mention of the law firm. We also note the observation of the IBP Commissioner Reyes that there was no malice and bad faith in respondent's acceptance of the Gatchecos' cases as shown by the move of complainant to withdraw the case. Thus, for violation of the Rule 15.03, Canon 15 of the Code of Professional Responsibility and taking into consideration the aforementioned mitigating circumstances, we impose the penalty of fine of P2,000.00.

RESOLUTION AUSTRIA-MARTINEZ, J p:

Before this Court is a complaint filed by Leticia Gonzales (Gonzales) praying that Atty. Marcelino Cabucana, (respondent) be disbarred for representing conflicting interests. On January 8, 2004, Gonzales filed a petition before the Integrated Bar of the Philippines (IBP) alleging that: she was the complainant in a case for sum of money and damages filed before the Municipal Trial Court in Cities (MTCC) of Santiago City, docketed as Civil Case No. 1-567 where she was represented by the law firm CABUCANA, CABUCANA, DE GUZMAN AND CABUCANA LAW OFFICE, with Atty. Edmar Cabucana handling the case and herein respondent as an associate/partner; on February 26, 2001, a decision was rendered in the civil case ordering the losing party to pay Gonzales the amount of P17,310.00 with interest and P6,000.00 as attorney's fees; Sheriff Romeo Gatcheco, failed to fully implement the writ of execution issued in connection with the judgment which prompted Gonzales to file a complaint against the said sheriff with this Court; in September 2003, Sheriff Gatcheco and his wife went to the house of Gonzales; they harassed Gonzales and asked her to execute an affidavit of desistance regarding her complaint before this Court; Gonzales thereafter filed against the Gatchecos criminal cases for trespass, grave threats, grave oral defamation, simple coercion and unjust vexation; notwithstanding the pendency of Civil Case No. 1-567, where respondent's law firm was still representing Gonzales, herein respondent represented the Gatchecos in the cases filed by Gonzales against the said spouses; respondent should be disbarred from the practice of law since respondent's acceptance of the cases of the Gatchecos violates the lawyer-client relationship between complainant and respondent's law firm and renders respondent liable under the Code of Professional Responsibility (CPR) particularly Rules 10.01, 1 13.01, 2 15.02, 3 15.03, 4 21.01 5 and 21.02. 6 On January 9, 2004, the IBP-Commission on Bar Discipline ordered Atty. Marcelino Cabucana, Jr. to submit his Answer to the complaint. 7 In his Answer, respondent averred: He never appeared and represented complainant in Civil Case No. 1-567 since it was his brother, Atty. Edmar Cabucana who appeared and represented Gonzales in said case. He admitted that he is representing Sheriff Gatcheco and his wife in the cases filed against them but claimed that his appearance is pro bono and that the spouses pleaded with him as no other counsel was willing to take their case. He entered his appearance in good faith and opted to represent the spouses rather than leave them defenseless. When the Gatchecos asked for his assistance, the spouses said that the cases filed against them by Gonzales were merely instigated by a high ranking official who wanted to get even with them for their refusal to testify in favor of the said official in another case. At first, respondent declined to serve as counsel of the spouses as he too did not want to incur the ire of the highranking official, but after realizing that he would be abdicating a sworn duty to delay no man for money or malice, respondent entered his appearance as defense counsel of the spouses free of any charge. Not long after, the present complaint was crafted against respondent which shows that respondent is now the subject of a 'demolition job.' The civil case filed by Gonzales where respondent's brother served as counsel is

different and distinct from the criminal cases filed by complainant against the Gatcheco spouses, thus, he did not violate any canon on legal ethics. 8 Gonzales filed a Reply contending that the civil case handled by respondent's brother is closely connected with the cases of the Gatchecos which the respondent is handling; that the claim of respondent that he is handling the cases of the spouses pro bono is not true since he has his own agenda in offering his services to the spouses; and that the allegation that she is filing the cases against the spouses because she is being used by a powerful person is not true since she filed the said cases out of her own free will. 9 The Commission on Bar Discipline of the IBP sent to the parties a Notice of Mandatory Conference dated March 1, 2004. 10 On the scheduled conference, only a representative of complainant appeared. 11 Commissioner Demaree Raval of the IBPCBD then directed both parties to file their respective verified position papers. 12 Complainant filed a Memorandum reiterating her earlier assertions and added that respondent prepared and notarized counter-affidavits of the Gatcheco spouses; that the high-ranking official referred to by respondent is Judge Ruben Plata and the accusations of respondent against the said judge is an attack against a brother in the profession which is a violation of the CPR; and that respondent continues to use the name of De Guzman in their law firm despite the fact that said partner has already been appointed as Assistant Prosecutor of Santiago City, again in violation of the CPR. 13 Respondent filed his Position Paper restating his allegations in his Answer. 14 On August 23, 2004, Commissioner Wilfredo E.J.E. Reyes issued an Order notifying both parties to appear before his office on October 28, 2004 for a clarificatory question regarding said case. 15 On the said date, only respondent appeared 16 presenting a sworn affidavit executed by Gonzales withdrawing her complaint against respondent. It reads: SINUMPAANG SALAYSAY TUNGKOL SA PAG-UURONG NG DEMANDA Ako, si LETICIA GONZALES, nasa tamang edad, Pilipino, may asawa, at nakatira sa Barangay Dubinan East, Santiago City, makaraang manumpa ayon sa batas ay nagsasabing : Ako ang nagdedemanda o petitioner sa CBD Case No. 04-1186 na may pamagat na "Leticia Gonzales versus Atty. Marcelino C. Cabucana, Jr." na kasalukuyang nahaharap sa Commission on Bar Discipline ng Integrated Bar of the Philippines

Ang pagkakahain ng naturang demanda ay nag-ugat sa dipagkakaintindihan na namamagitan sa akin at nina Mr. and Mrs. Romeo and Anita Gatcheco. Dahil sa aking galit sa naturang mag-asawa, idinawit ko si Atty. Marcelino C. Cabucana, Jr. sa sigalot na namamagitan sa akin at sa mag-asawang Gatcheco,gayong nalalaman ko na si Atty. Marcelino C. Cabucana ay walang nalalaman sa naturang di pagkakaintindihan. aEHADT Makaraang pag-isipang mabuti ang paghain ko ng demanda kontra kay Atty. Marcelino C. Cabucana, Jr., nakumbinsi ako na ang pagdedemanda ko kay Atty. Marcelino C. Cabucana, Jr. ay isang malaking pagkakamali dahil siya ay walang kinalalaman (sic) sa di pagkakaintindihan naming(sic) ng mag-asawang Gatcheco. Si Atty. Marcelino C. Cabucana, Jr. ay di ko rin naging abogado sa Civil Case No. 1-567 (MTCC Br. I Santiago City) na inihain ko kontra kay Eduardo Mangano. Nais kong ituwid ang lahat kung kaya't aking iniuurong ang naturang kasong inihain ko kontra kay Atty. Marcelino C. Cabucana, Jr. at dahil dito ay hindi na ako interesado pang ituloy and naturang kaso, at aking hinihiling sa kinauukulan na dismisin na ang naturang kaso. Ginawa ko ang sinumpaang salaysay na ito upang patotohanan sa lahat ng nakasaad dito. 17 Commissioner Reyes issued an Order dated October 28, 2004 requiring Gonzales to appear before him on November 25, 2004, to affirm her statements and to be subject to clarificatory questioning. 18 However, none of the parties appeared. 19 On February 17, 2005, only respondent was present. Commissioner Reyes then considered the case as submitted for resolution. 20 On February 24, 2005, Commissioner Reyes submitted his Report and Recommendation, portions of which are quoted hereunder: The Undersigned Commissioner believes that the respondent made a mistake in the acceptance of the administrative case of Romeo Gatcheco, however, the Commission (sic) believes that there was no malice and bad faith in the said acceptance and this can be shown by the move of the complainant to unilaterally withdraw the case which she filed against Atty. Marcelino C. Cabucana, Jr.

However, Atty. Cabucana is reminded to be more careful in the acceptance of cases as conflict of interests might arise. It is respectfully recommended that Atty. Marcelino C. Cabucana, Jr. (be) sternly warned and reprimanded and . . . advised to be more circumspect and careful in accepting cases which might result in conflict of interests. 21 On June 25, 2005, a Resolution was passed by the Board of Governors of the IBP, to wit: RESOLUTION NO. XVI-2005-153 CBD CASE NO. 03-1186 Leticia Gonzales vs. Atty. Marcelino Cabucana, Jr. RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the applicable laws and rules, and considering that respondent made (a) mistake in the acceptance of the administrative case of Romeo Gatcheco, Atty. Marcelino Cabucana, Jr. is hereby WARNED and REPRIMANDED and advised to be more circumspect and careful in accepting cases which might result in conflict of interests. 22 Before going to the merits, let it be clarified that contrary to the report of Commissioner Reyes, respondent did not only represent the Gatcheco spouses in the administrative case filed by Gonzales against them. As respondent himself narrated in his Position Paper, he likewise acted as their counsel in the criminal cases filed by Gonzales against them. 23 With that settled, we find respondent guilty of violating Rule 15.03 of Canon 15 of the Code of Professional Responsibility, to wit: Rule 15.03 A lawyer shall not represent conflicting interest except by written consent of all concerned given after a full disclosure of the facts. It is well-settled that a lawyer is barred from representing conflicting interests except by written consent of all concerned given after a full disclosure of the facts. 24Such prohibition is founded on principles of public policy and good taste as the nature of the lawyer-client relations is one of trust and confidence of the highest degree. 25 Lawyers are expected not only to keep inviolate the client's confidence, but also to avoid the appearance of treachery and double-dealing for only then can litigants be encouraged to entrust their secrets to their lawyers, which is of paramount importance in the administration of justice. 26

One of the tests of inconsistency of interests is whether the acceptance of a new relation would prevent the full discharge of the lawyer's duty of undivided fidelity and loyalty to the client or invite suspicion of unfaithfulness or double-dealing in the performance of that duty. 27 As we expounded in the recent case of Quiambao vs. Bamba, 28 The proscription against representation of conflicting interests applies to a situation where the opposing parties are present clients in the same action or in an unrelated action. It is of no moment that the lawyer would not be called upon to contend for one client that which the lawyer has to oppose for the other client, or that there would be no occasion to use the confidential information acquired from one to the disadvantage of the other as the two actions are wholly unrelated. It is enough that the opposing parties in one case, one of whom would lose the suit, are present clients and the nature or conditions of the lawyer's respective retainers with each of them would affect the performance of the duty of undivided fidelity to both clients. 29 The claim of respondent that there is no conflict of interests in this case, as the civil case handled by their law firm where Gonzales is the complainant and the criminal cases filed by Gonzales against the Gatcheco spouses are not related, has no merit. The representation of opposing clients in said cases, though unrelated, constitutes conflict of interests or, at the very least, invites suspicion of double-dealing which this Court cannot allow. 30 Respondent further argued that it was his brother who represented Gonzales in the civil case and not him, thus, there could be no conflict of interests. We do not agree. As respondent admitted, it was their law firm which represented Gonzales in the civil case. Such being the case, the rule against representing conflicting interests applies. As we explained in the case of Hilado vs. David: 31 . . . [W]e . . . can not sanction his taking up the cause of the adversary of the party who had sought and obtained legal advice from his firm; this, not necessarily to prevent any injustice to the plaintiff but to keep above reproach the honor and integrity of the courts and of the bar. Without condemning the respondent's conduct as dishonest, corrupt, or fraudulent, we do believe that upon the admitted facts it is highly inexpedient. It had the tendency to bring the profession, of which he is a distinguished member, "into public disrepute and suspicion and undermine the integrity of justice." 32 The claim of respondent that he acted in good faith and with honest intention will also not exculpate him as such claim does not render the prohibition inoperative. 33

In the same manner, his claim that he could not turn down the spouses as no other lawyer is willing to take their case cannot prosper as it is settled that while there may be instances where lawyers cannot decline representation they cannot be made to labor under conflict of interest between a present client and a prospective one. 34 Granting also that there really was no other lawyer who could handle the spouses' case other than him, still he should have observed the requirements laid down by the rules by conferring with the prospective client to ascertain as soon as practicable whether the matter would involve a conflict with another client then seek the written consent of all concerned after a full disclosure of the facts. 35 These respondent failed to do thus exposing himself to the charge of double-dealing. We note the affidavit of desistance filed by Gonzales. However, we are not bound by such desistance as the present case involves public interest. 36 Indeed, the Court's exercise of its power to take cognizance of administrative cases against lawyers is not for the purpose of enforcing civil remedies between parties, but to protect the court and the public against an attorney guilty of unworthy practices in his profession. 37 In similar cases where the respondent was found guilty of representing conflicting interests a penalty ranging from one to three years' suspension was imposed. 38 We shall consider however as mitigating circumstances the fact that he is representing the Gatcheco spouses pro bono and that it was his firm and not respondent personally, which handled the civil case of Gonzales. As recounted by complainant herself, Atty. Edmar Cabucana signed the civil case of complainant by stating first the name of the law firm CABUCANA, CABUCANA, DE GUZMAN AND CABUCANA LAW OFFICE, under which, his name and signature appear; while herein respondent signed the pleadings for the Gatcheco spouses only with his name, 39 without any mention of the law firm. We also note the observation of the IBP Commissioner Reyes that there was no malice and bad faith in respondent's acceptance of the Gatchecos' cases as shown by the move of complainant to withdraw the case. Thus, for violation of Rule 15.03, Canon 15 of the Code of Professional Responsibility and taking into consideration the aforementioned mitigating circumstances, we impose the penalty of fine of P2,000.00. WHEREFORE, Resolution No. XVI-2005-153 of the Integrated Bar of the Philippines is APPROVED with MODIFICATION that respondent Atty. Marcelino Cabucana, Jr. is FINED the amount of Two Thousand Pesos (P2,000.00) with a STERN WARNING that a commission of the same or similar act in the future shall be dealt with more severely. SO ORDERED. Panganiban, C.J., Ynares-Santiago, Callejo, Sr. and Chico-Nazario, JJ., concur.

EN BANC [A.C. No. 6160. March 30, 2006.] NESTOR PEREZ, complainant, vs. ATTY. DANILO DE LA TORRE, respondent. DECISION YNARES-SANTIAGO, J p: In a letter-complaint 1 dated July 30, 2003 addressed to then Chief Justice Hilario G. Davide, Jr., complainant Nestor Perez charged respondent Atty. Danilo de la Torre with misconduct or conduct unbecoming of a lawyer for representing conflicting interests. Perez alleged that he is the barangay captain of Binanuaanan, Calabanga, Camarines Sur; that in December 2001, several suspects for murder and kidnapping for ransom, among them Sonny Boy Ilo and Diego Avila, were apprehended and jailed by the police authorities; that respondent went to the municipal building of Calabanga where Ilo and Avila were being detained and made representations that he could secure their freedom if they sign the prepared extrajudicial confessions; that unknown to the two accused, respondent was representing the heirs of the murder victim; that on the strength of the extrajudicial confessions, cases were filed against them, including herein complainant who was implicated in the extrajudicial confessions as the mastermind in the criminal activities for which they were being charged. Respondent denied the accusations against him. He explained that while being detained at the Calabanga Municipal Police Jail, Avila sought his assistance in drafting an extrajudicial confession regarding his involvement in the crimes of kidnapping for ransom, murder and robbery. He advised Avila to inform his parents about his decision to make an extrajudicial confession, apprised him of his constitutional rights and of the possibility that he might be utilized as a state-witness. DIETcH Respondent claimed that when Ilo sought his assistance in executing his extrajudicial confession, he conferred with Ilo in the presence of his parents; and only after he was convinced that Ilo was not under undue compulsion did he assist the accused in executing the extrajudicial confession. The complaint was referred to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. 2 On August 16, 2005, the Investigating Commissioner submitted his report with the following recommendation: WHEREFORE, it is respectfully recommended that Atty. Danilo de la Torre be suspended for one (1) year from the practice of the legal profession for violation of Rule 15.03 of the Code of Professional Responsibility. RESPECTFULLY SUBMITTED. The Board of Governors of the IBP modified the recommendation by increasing the period of suspension to two years. In finding the respondent guilty of representing conflicting interests, the Investigating Commissioner opined that: In administrative proceedings, the complainant has the burden of proving, by substantial evidence, the allegations in his complaint. The complainant was able to prove by substantial evidence his charge against Atty. de la Tor[r]e. The respondent admitted that his services as a lawyer were retained by both Avila and Ilo. Perez was

able to show that at the time that Atty. de la Torre was representing the said two accused, he was also representing the interest of the victim's family. This was declared by the victim's daughter, Vicky de Chavez, who testified before Branch 63 of the Regional Trial Court of Camarines Sur that her family retained the services of Atty. Danilo de la Torre to prosecute the case against her father's killers. She even admitted that she was present when Atty. de la Torre met with and advised Avila and Ilo on one occasion. This is proof that the respondent consciously offered his services to Avila and Ilo despite the fact that he was already representing the family of the two accused's victim. It may not even be improbable that respondent purposely offered to help the accused in order to further his other clients' interest. The respondent failed to deny these facts or offer competent evidence to refute the said facts despite the ample opportunity given him. SCcHIE Under Rule 15.03 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 is therefore duty bound to refrain from representing two parties having conflicting interests in a controversy. By doing precisely the foregoing, and without any proof that he secured the written consent of both parties after explaining to them the existing conflict of interest, respondent should be sanctioned. We agree with the findings of the IBP except for the recommended penalty. There is conflict of interests 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. 3 There is a representation of conflicting interests if the acceptance of the new retainer will require the attorney to do anything 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. 4 The prohibition against representing conflicting interest is founded on principles of public policy and good taste. In 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. The nature of that relationship is, therefore, one of trust and confidence of the highest degree. It behooves lawyers not only to keep inviolate the client's confidence, but also to avoid the appearance of impropriety 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. 5 To negate any culpability, respondent explained that he did not offer his legal services to accused Avila and Ilo but it was the two accused who sought his assistance in executing their extrajudicial confessions. Nonetheless, he acceded to their request to

act as counsel after apprising them of their constitutional rights and after being convinced that the accused were under no compulsion to give their confession. aCTHEA The excuse proferred by the respondent does not exonerate him from the clear violation of Rule 15.03 of the Code of Professional Responsibility which prohibits a lawyer from representing conflicting interests except by written consent of all concerned given after a full disclosure of the facts. As found by the IBP, at the time respondent was representing Avila and Ilo, two of the accused in the murder of the victim Resurreccion Barrios, he was representing the family of the murder victim. Clearly, his representation of opposing clients in the murder case invites suspicion of double-dealing and infidelity to his clients. What is unsettling is that respondent assisted in the execution by the two accused of their confessions whereby they admitted their participation in various serious criminal offenses knowing fully well that he was retained previously by the heirs of one of the victims. Respondent, who presumably knows the intricacies of the law, should have exercised his better judgment before conceding to accused's choice of counsel. It did not cross his mind to inhibit himself from acting as their counsel and instead, he even assisted them in executing the extrajudicial confession. Considering that this is respondent's first infraction, disbarment as sought by the complaint is deemed to be too severe. Under the present circumstances, we find that a suspension from the practice of law for three years is warranted. WHEREFORE, Atty. Danilo de la Torre is found GUILTY of violation of Rule 15.03 of the Code of Professional Responsibility for representing conflicting interests. He is SUSPENDED for THREE YEARS from the practice of law, effective upon his receipt of this Decision. He is WARNED that a repetition of the same or similar acts will be dealt with more severely. Let copies of this Decision be entered in the record of respondent and served on the IBP, as well as on the Court Administrator who shall circulate it to all courts for their information and guidance. aCSTDc SO ORDERED. Panganiban, C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario and Garcia, JJ.,concur.

HEIRS OF LYDIO JERRY FALAME, namely: MELBA FALAME, LEO FALAME and JERRY FALAME, Complainants,

ADM. CASE NO. 6876 Present: CARPIO, J., Acting Chairperson, CARPIO MORALES, AZCUNA,* TINGA, and VELASCO, JR., JJ. Promulgated: March 7, 2008

first civil case, Lydio retained the services of respondent as his legal adviser and counsel for his businesses until Lydios death on 8 September 1996.[5] However, on 23 October 2000, in representation of spouses Raleigh and Noemi Falame, respondent filed a case against complainants allegedly involving the property subject of the first civil case, entitled Spouses Rally F. Falame and Noemi F. Falame v. Melba A. Falame, Leo A. Falame, Jerry A. Falame, Jr., Sugni Realty Holdings and Development Corporations, their representatives, agents and persons acting in their behalf and docketed as Civil Case No. 5568 (the second civil case) before the Regional Trial Court of Dipolog City, Branch 6. The complaint sought the declaration of nullity of the deed of sale, its registration in the registry of deeds, Transfer Certificate of Title No. 20241 issued as a consequence of the registration of the deed of sale, and the real estate mortgage on the said property. Alternatively, it prayed for specific performance and reconveyance or legal redemption and damages with preliminary injunction and restraining order.[6]

- versus ATTY. EDGAR J. BAGUIO, Respondent.

x----------------------------------------------------------------------------x RESOLUTION TINGA, J.: On Petition for Review[1] is the Resolution of the Integrated Bar of the Philippines (IBP) Board of Governors dismissing the disbarment complaint filed by the Heirs of Lydio Jerry Falame (complainants) against Atty. Edgar J. Baguio (respondent), docketed as CBD Case No. 04-1191. In their Complaint[2] against respondent, complainants alleged that on 15 July 1991, their father, the late Lydio Jerry Falame (Lydio), engaged the services of respondent to represent him in an action for forcible entry docketed as Civil Case No. A-2694 (the first civil case) and entitled Heirs of Emilio T. Sy, represented by Anastacia Velayo Vda. De Sy and Belen V. Sy vs. Lydio Jerry Falame, Raleigh Falame and Four (4) John Does, in which Lydio was one of the defendants.[3] Complainants recounted that respondent, as counsel for the defendants, filed the answer to the complaint in the first civil case. Subsequently, when the parties to the first civil case were required to file their respective position papers, respondent used and submitted in evidence the following: (1) a special power of attorney dated 1 July 1988 executed by Lydio in favor of his brother, Raleigh Falame, appointing the latter to be his attorney-in-fact; and (2) the affidavit of Raleigh Falame dated 23 July 1988, executed before respondent, in which Raleigh stated that Lydio owned the property subject of the first civil case.[4] Firstly, complainants maintained that by acting as counsel for the spouses Falame in the second civil case wherein they were impleaded as defendants, respondent violated his oath of office and duty as an attorney. Plainly, they contended that the spouses Falames interests are adverse to those of his former client, Lydio. [7] Secondly, complainants claimed that respondent knowingly made false statements of fact in the complaint in the second civil case to mislead the trial court. In so doing, respondent violated paragraph (d), Section 20 [8] of Rule 138 of the Rules of Court,[9] complainants asserted further. Lastly, complainants alleged that the second civil case is a baseless and fabricated suit which respondent filed as counsel for complainants uncle against the heirs of respondents deceased client. Specifically, they averred that respondent filed the case for the sole purpose of retaining, maintaining and/or withholding the possession of the subject property from complainants who are its true owners. Complainants concluded that respondent violated paragraph (g), Section 20[10] of Rule 138 of the Rules of Court.[11] In his Answer with Motion to Dismiss,[12] respondent controverted complainants allegations. He emphasizes that it was only Raleigh Falame who personally engaged his legal services for him and on Lydios behalf and that, in fact, it was Raleigh who paid him the attorneys fees. He also stated that he signed the jurat in Raleighs affidavit, which was submitted as evidence in the first civil case, believing to the best of his knowledge that there is good ground to support it. Insisting that he did not betray the confidence reposed in him by Lydio as the latters counsel in the first civil case, respondent maintained that he did not reveal or use any fact he acquired knowledge of during the existence of the attorney-client relation in the first civil case as he had never even conferred with nor talked to Lydio in the first place. Respondent likewise contended that he did not knowingly make any misleading or untruthful

Complainants claimed that even after the Municipal Trial Court of Dipolog City had ruled in favor of the defendants in the

statement of fact in the complaint in the second civil case and neither did he employ any means inconsistent with truth and honor in the hearing of the case. [13]

Respondent vigorously averred that Lydio had not retained him as counsel in any case or transaction. Stressing the long interval of twelve years separating the termination of the first civil case and his acceptance of the second civil case, respondent pointed out that the first civil case was not between Lydio and Raleigh but rather between the heirs of Emilio T. Sy on one hand and Lydio and Raleigh on the other where physical possession of property was at stake. Respondent further averred that in contrast the second civil case is one involving the spouses Raleigh and Noemi Falame as plaintiffs, and Melba, Leo and Jerry Jr., all surnamed Falame, and Sugni Realty Holdings and Development Corporation, as defendants a case which arose from the wrongful acts committed by Melba, Leo and Jerry Jr. after Lydios death.[14] Respondent maintained that since the second civil case was still pending before the trial court, the IBP had no jurisdiction over the instant administrative case. He added that complainants filed this administrative case when Raleigh could no longer testify in his own favor as he had died a year earlier. [15] In their Position Paper[16] dated 7 September 2004, in addition to their previous charges against respondent, complainants claimed that respondent violated Rule 15.03[17]of the Code of Professional Responsibility when he represented the cause of the spouses Falame against that of his former client, Lydio.[18] On 25 June 2005, the IBP Board of Governors passed Resolution No. XVI-2005167 adopting and approving Investigating Commissioner Winston D. Abuyuans report and recommendation for the dismissal of this administrative case, thus: [19] x x x The charge lacks specification as to what part of the lawyers oath was violated by the respondent and what confidence was disclosed. The complainants may have in mind the prohibition against disclosure of secret information learned in confidence, but there is no specification in the complaint what secret or information learned in confidence under Civil Case No. A-2694 was disclosed or will be disclosed by respondent in Civil Case No. 5568. In administrative complaints for disbarment or suspension against lawyers, the complainant must specify in the affidavit-complaint the alleged secrets or confidential information disclosed or will be disclosed in the professional employment (Uy v. Gonzalez, 426 SCRA 422; 431). In the absence of such specification, the complaint must fail. In the complaint, there is no specific charge against respondent for violation of Canon 15, Rule 15.03 of the Code of Professional Responsibility about the prohibition against

representation of conflicting interest. So, the allegation in paragraph 1, page 8 and 9 of complainants position paper stating: With all due respect, it is submitted that respondent violated Canon 15, Rule 15.03 of the Code of Professional Responsibility cannot be countenanced. The reason being that it is an elementary principle of due process to which the respondent is entitled that only those charged in the complaint can be proved by the complainants. A charge not specified in the complaint cannot be proved (Uy v. Gonzales, id.) x x x But still this charge will not proper for lack of sufficient bases. Civil Case No. 5568, which was commenced on 03 October 2000, or three years since the complainants became owners of Lydio Falames properties, is a suit against the complainants, not as representatives of Lydio Falame, but as owners of their respective aliquot interests in the property in question (Gayon v. Gayon, 36 SCRA 104; 107-108). The complainants are sued not on the basis of the acts, rights, obligations and interest of Lydio Falame on the material possession of the improvements found on Lot 345 litigated in Civil Case No. A-2694 nor even on such land itself, but rather on the facts alleged in the second amended and supplemental complaint which give rise to their cause of action against them. While the complainants could not specify under what circumstances the respondent committed [the] alleged breach of confidence, breach of secrecy or revelation of secret or confidential information[,] the respondent has shown that he did not commit any violation of such duties or obligations of an attorney. It is clear that only Raleigh Falame engaged the legal services of the respondent for his and Lydio Falames d efense in Civil Case No. A-2694. xxx The other allegations of the complainants that the respondent violated paragraph (d), Section 20 of Rule 139, Rules of Court, and his lawyers oath when he allegedly betrayed the trust and confidence of his former client by denying knowledge of the fact that the land was owned by Lydio Falame and when he did not disclose to the Court that at one time his present clients categorically declared and unconditionally recognized the full ownership of the late Lydio Falame and complainant Melba Falame over subject matter of both cases equally lacks evidentiary basis.

xxx It is beyond the competence of the complainants to conclude and is outside the jurisdiction of this Honorable Commission to rule as to whether or nor (sic) the complaint in Civil Case No.5568 is baseless or fabricated. It is only the Honorable Court which has the exclusive jurisdiction to determine the same and cannot be the subject of an administrative complaint against the respondent. xxx WHEREFORE, premises considered, it is respectfully recommended that this complaint be dismissed on grounds of prescription, the same having been filed four (4) years after the alleged misconduct took place and for lack of merit. RESPECTFULLY SUBMITTED.[20]

which in a criminal proceeding is barred by limitation, affect the disbarment proceeding x x x (5 AM. JUR. 434)[30] This doctrine was reaffirmed in the relatively recent case of Frias v. BautistaLozada[31] where the Court held that Rule VII, Section 1 of the Rules of Procedure of the CBD-IBP, which provides for a prescriptive period for the filing of administrative complaints against lawyers, should be struck down as void and of no legal effect for being ultra vires.[32] Prescinding from the unavailability of the defense of prescription, the Court concurs with the Investigating Commissioners opinion that some of the charges raised by complainants in their complaint are unsubstantiated. There is, however, sufficient basis to hold respondent accountable for violation of Rule 15.03 of the Code of Professional Responsibility. While this charge was not raised in the initiatory pleading, it was put forward in complainants position paper filed with the IBP and in the petition filed with the Court. In fact, respondent proffered his defenses to the charge in his position paper before the IBP and likewise in his comment before the Court. In his very first pleading before the IBP, the answer with motion to dismiss, he denied having Lydio as his client. Such absence of attorneyclient relationship is the essential element of his defense to the charge of conflict of interest, as articulated in his subsequent submissions. The Court, therefore, rules and so holds that respondent has been adequately apprised of and heard on the issue. In administrative cases, the requirement of notice and hearing does not connote full adversarial proceedings. Actual adversarial proceedings only become necessary for clarification when there is a need to propound searching questions to witnesses who give vague testimonies. Due process is fulfilled when the parties were given reasonable opportunity to be heard and to submit evidence in support of their arguments.[33] Rule 15.03 of the Code of Professional Responsibility provides: A lawyer shall not represent conflicting interests except by written consent of all concerned given after a full disclosure of the facts.

Dissatisfied, complainants filed the instant petition for review under Rule 45 of the Rules of Court reiterating their allegations in the complaint and their position paper.[21]They likewise assert that the IBP erred in holding that the instant administrative complaint had been filed out of time since it was filed on 16 January 2004, or three (3) years, four (4) months and sixteen (16) days after the second civil case was filed on 23 October 2000.[22] In addition, in their Consolidated Comment (should be Consolidated Reply),[23]complainants invoke the Courts ruling in Frias v. Bautista-Lozada[24] to support their contention that administrative complaints against members of the bar do not prescribe.[25] In his Comment,[26] respondent principally maintains that the charges imputed to him have never been proven by clear, convincing and satisfactory evidence which is the quantum of proof required in administrative cases against lawyers, and that complainants have the burden to prove their accusations as he enjoys the presumption of innocence.[27] Respondent likewise asserts that in accusing him of violation of Rule 15.03 of the Code of Professional Responsibility only in their position paper and in the instant petition, complainants infringed his right to due process and to be informed of the nature and cause of accusation against him.[28] There is merit in the petition. At the outset, the Court holds that the instant administrative action is not barred by prescription. As early as 1947, the Court held in Calo, Jr. v. Degamo,[29] to wit: The ordinary statutes of limitation have no application to disbarment proceedings, nor does the circumstance that the facts set up as a ground for disbarment constitute a crime, prosecution for

A lawyer may not, without being guilty of professional misconduct, act as counsel for a person whose interest conflicts with that of his present or former client.[34] The test is whether, on behalf of one client, it is the lawyers duty to contest for that which his duty to another client requires him to oppose or when the possibility of such situation will develop.[35] The rule covers not only cases in which confidential communications have been confided, but also those in which no confidence has been bestowed or will be used.[36] In addition, the rule holds even if the inconsistency is remote or merely probable or the lawyer has acted in good faith and with no intention to represent conflicting interests.[37]

The rule concerning conflict of interest prohibits a lawyer from representing a client if that representation will be directly adverse to any of his present or former clients. In the same way, a lawyer may only be allowed to represent a client involving the same or a substantially related matter that is materially adverse to the former client only if the former client consents to it after consultation. The rule is grounded in the fiduciary obligation of loyalty.[38] In the course of a lawyer-client relationship, the lawyer learns all the facts connected with the clients case, including the weak and strong points of the case. The nature of that relationship is, therefore, one of trust and confidence of the highest degree. [39] The termination of attorney-client relation provides no justification for a lawyer to represent an interest adverse to or in conflict with that of the former client. The clients confidence once reposed should not be divested by mere e xpiration of professional employment. Even after the severance of the relation, a lawyer should not do anything which will injuriously affect his former client in any matter in which he previously represented him nor should he disclose or use any of the cl ients confidences acquired in the previous relation.[40] In relation to this, Canon 17 of the Code of Professional Responsibility provides that a lawyer owes fidelity to the cause of his client and shall be mindful of the trust and confidence reposed on him. His highest and most unquestioned duty is to protect the client at all hazards and costs even to himself.[41] The protection given to the client is perpetual and does not cease with the termination of the litigation, nor is it affected by the party's ceasing to employ the attorney and retaining another, or by any other change of relation between them. It even survives the death of the client. [42] In the case at bar, respondent admitted having jointly represented Lydio and Raleigh as defendants in the first civil case. Evidently, the attorney-client relation between Lydioand respondent was established despite the fact that it was only Raleigh who paid him. The case of Hilado v. David[43] tells us that it is immaterial whether such employment was paid, promised or charged for. [44] As defense counsel in the first civil case, respondent advocated the stance that Lydio solely owned the property subject of the case. In the second civil case involving the same property, respondent, as counsel for Raleigh and his spouse, has pursued the inconsistent position that Raleigh owned the same property in common with Lydio, with complainants, who inherited the property, committing acts which debase respondents rights as a co-owner. The fact that the attorney-client relation had ceased by reason of Lydios death or through the completion of the specific task for which respondent was employed is not reason for respondent to advocate a position opposed to that of Lydio.[45] Precedents tell us that even after the termination of his employment, an attorney may not act as counsel against his client in the same general matter, even though, while acting for his former client, he acquired no knowledge which could operate to his clients disadvantage in the subsequent adverse employment.[46] And while complainants have

never been respondents clients, they derive their rights to the property from Lydios ownership of it which respondent maintained in the first civil case. For representing Raleighs cause which is adverse to that of his for mer client Raleighs supposed co-ownership of the subject property respondent is guilty of representing conflicting interests. Having previously undertaken joint representation of Lydio and Raleigh, respondent should have diligently studied and anticipated the potential conflict of interest. Accordingly, disciplinary action is warranted.[47] Heretofore, respondent is enjoined to look at any representation situation from the point of view that there are possible conflicts; and further, to think in terms of impaired loyalty that is to evaluate if his representation in any way will impair loyalty to a client.[48] Considering, however, that this is respondents first offense, the Court resolves to reprimand respondent, with admonition to observe a higher degree of fidelity in the practice of his profession.[49] WHEREFORE, respondent Atty. Edgar J. Baguio is found GUILTY of representing conflicting interests and meted out the penalty of REPRIMAND. He is further admonished to observe a higher degree of fidelity in the practice of his profession and to bear in mind that a repetition of the same or similar acts will be dealt with more severely. SO ORDERED.

EN BANC [G.R. No. 105938. September 20, 1996.] TEODORO R. REGALA, EDGARDO J. ANGARA, AVELINO V. CRUZ, JOSE C. CONCEPCION, ROGELIO A. VINLUAN, VICTOR P. LAZATIN, and EDUARDO U. ESCUETA, petitioners, vs. THE HONORABLE SANDIGANBAYAN, First Division, REPUBLIC OF THE PHILIPPINES, ACTING THROUGH THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, and RAUL S. ROCO, respondents. [G.R. No. 108113. September 20, 1996.] PARAJA G. HAYUDINI, petitioner, vs. THE SANDIGANBAYAN and THE REPUBLIC OF THE PHILIPPINES, respondents. Manuel G. Abello for petitioners. Roco Bunag Kapunan & Migallos for Raul S. Roco. Mario E. Ongkiko for Presidential Commission on Good Government.

which encourages a dynamic and fruitful exchange and flow of information. It necessarily follows that in order to attain effective representation, the lawyer must invoke the privilege not as a matter of option but as a matter of duty and professional responsibility. 2.ID.; ID.; AS A GENERAL RULE A LAWYER MAY NOT REFUSE TO DIVULGE THE IDENTITY OF HIS CLIENT; RATIONALE. As a matter of public policy, a client's identity should not be shrouded in mystery. Under this premise, the general rule in our jurisdiction as well as in the United States is that a lawyer may not invoke the privilege and refuse to divulge the name or identity of his client. The reasons advanced for the general rule are well established. First, the court has a right to know that the client whose privileged information is sought to be protected is flesh and blood. Second, the privilege begins to exist only after the attorney-client relationship has been established. The attorney-client privilege does not attach until there is a client. Third, the privilege generally pertains to the subject matter of the relationship. Finally, due process considerations require that the opposing party should, as a general rule, know his adversary. "A party suing or sued is entitled to know who his opponent is. He cannot be obliged to grope in the dark against unknown forces. 3.ID.; ID.; ID.; EXCEPTION; WHEN THE CLIENT'S IDENTITY IS PRIVILEGED. The general rule is, however, qualified by some important exception. 1) Client identity is privileged where a strong probability exists that revealing the client's name would implicate that client in the very activity for which he sought the lawyer's advice. 2) Where disclosure would open the client to civil liability, his identity is privileged. 3) Where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the client's name is privileged. Apart from these principal exceptions, there exist other situations which could qualify as exceptions to the general rule. For example, the content of any client communication to a lawyer lies within the privilege if it is relevant to the subject matter of the legal problem on which the client seeks legal assistance. Moreover, where the nature of the attorney-client relationship has been previously disclosed and it is the identity which is intended to be confidential, the identity of the client has been held to be privileged, since such revelation would otherwise result in disclosure and the entire transaction. Summarizing these exceptions, information relating to the identity of a client may fall within the ambit of the privilege when the client's name itself has an independent significance, such that disclosure would then reveal client confidences. 4.CONSTITUTIONAL LAW; BILL OF RIGHTS; EQUAL PROTECTION CLAUSE CONSTRUED. The equal protection clause is a guarantee which provides a wall of protection against uneven application of statutes and regulations. In the broader sense, the guarantee operates against uneven application of legal norms so that all persons under similar circumstances would be accorded the same treatment. ( Gumabon v. Director of Prisons, 37 SCRA 420 [1971]). Those who fall within a particular class ought to be treated alike not only as to privileges granted but also as to the liabilities imposed. . . . What is required under this Constitutional guarantee is the uniform operation of legal norms so that all persons under similar circumstances would be

SYLLABUS 1.LEGAL ETHICS; LAWYER-CLIENT RELATIONSHIP; BOUNDED BY RULES, ETHICAL CONDUCT AND DUTIES; RATIONALE. In the creation of lawyerclient relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the fiduciary duty to his client which is of a very delicate, exacting and confidential character, requiring a very high degree of fidelity and good faith, that is required by reason of necessity and public interest based on the hypothesis that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice. It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other professional in society. This conception is entrenched and embodies centuries of established and stable tradition. Considerations favoring confidentiality in lawyer-client relationships are many and serve several constitutional and policy concerns. In the constitutional sphere, the privilege gives flesh to one of the most sacrosanct rights available to the accused, the right to counsel. If a client were made to choose between legal representation without effective communication and disclosure and legal representation with all his secrets revealed then he might be compelled, in some instances, to either opt to stay away from the judicial system or to lose the right to counsel. If the price of disclosure is too high, or if it amounts to self incrimination, then the flow of information would be curtailed thereby rendering the right practically nugatory. The threat this represents against another sacrosanct individual right, the right to be presumed innocent is at once selfevident. Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spectrum of legal options which would otherwise be circumscribed by limited information engendered by a fear of disclosure. An effective lawyer-client relationship is largely between lawyer and client which in turn requires a situation

accorded the same treatment both in the privileges conferred and the liabilities imposed. As was noted in a recent decision: 'Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances, which if not identical are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding the rest. DECISION KAPUNAN, J p: These cases touch the very cornerstone of every State's judicial system, upon which the workings of the contentious and adversarial system in the Philippine legal process are based the sanctity of fiduciary duty in the client-lawyer relationship. The fiduciary duty of a counsel and advocate is also what makes the law profession a unique position of trust and confidence, which distinguishes it from any other calling. In this instance, we have no recourse but to uphold and strengthen the mantle of protection accorded to the confidentiality that proceeds from the performance of the lawyer's duty to his client. The facts of the case are undisputed. The matters raised herein are an offshoot of the institution of the Complaint on July 31, 1987 before the Sandiganbayan by the Republic of the Philippines, through the Presidential Commission on Good Government against Eduardo M. Cojuangco, Jr., as one of the principal defendants, for the recovery of alleged ill-gotten wealth, which includes shares of stocks in the named corporations in PCGG Case No. 33 (Civil Case No. 0033), entitled "Republic of the Philippines versus Eduardo Cojuangco, et al." 1 Among the defendants named in the case are herein petitioners Teodoro Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Concepcion, Rogelio A. Vinluan, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini, and herein private respondent Raul S. Roco, who all were then partners of the law firm Angara, Abello, Concepcion, Regala and Cruz Law Offices (hereinafter referred to as the ACCRA Law Firm). ACCRA Law Firm performed legal services for its clients, which included, among others, the organization and acquisition of business associations and/or organizations, with the correlative and incidental services where its members acted as incorporators, or simply, as stockholders. More specifically, in the performance of these services, the members of the law firm delivered to its client documents which substantiate the client's equity holdings, i.e., stock certificates endorsed in blank representing the shares registered in the client's name, and a blank deed of trust or assignment covering said shares. In the course of their dealings with their clients, the members of the law firm acquire information relative to the assets of clients as well as their personal and business circumstances. As members of the ACCRA Law Firm, petitioners and private respondent Raul Roco admit that they assisted in the organization and acquisition of the companies included in Civil Case No. 0033, and in keeping with the office practice, ACCRA lawyers acted as nominees-stockholders of the said corporations involved in sequestration proceedings. 2

On August 20, 1991, respondent Presidential Commission on Good government (hereinafter referred to as respondent PCGG) filed a "Motion to Admit Third Amended Complaint" and "Third Amended Complaint" which excluded private respondent Raul S. Roco from the complaint in PCGG Case No. 33 as party-defendant. 3Respondent PCGG based its exclusion of private respondent Roco as party-defendant on his undertaking that he will reveal the identity of the principal/s for whom he acted as nominee/stockholder in the companies involved in PCGG Case No. 33. 4 Petitioners were included in the Third Amended Complaint on the strength of the following allegations: 14.Defendants Eduardo Cojuangco, Jr., Edgardo J. Angara, Jose C. Concepcion, Teodoro Regala, Avelino V. Cruz, Rogelio A. Vinluan, Eduardo U. Escueta, Paraja G. Hayudini and Raul Roco of the Angara Concepcion Cruz Regala and Abello law offices (ACCRA) plotted, devised, schemed, conspired and confederated with each other in setting up, through the use of the coconut levy funds, the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM, COCOLIFE, COCOMARK, CIC, and more than twenty other coconut levy funded corporations, including the acquisition of San Miguel Corporation shares and its institutionalization through presidential directives of the coconut monopoly. Through insidious means and machinations, ACCRA, being the wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares representing roughly 3.3% of the total outstanding capital stock of UCPB as of 31 March 1987. This ranks ACCRA Investments Corporation number 44 among the top 100 biggest stockholders of UCPB which has approximately 1,400,000 shareholders. On the other hand, corporate books show the name Edgardo J. Angara as holding approximately 3,744 shares as of February, 1984. 5 In their answer to the Expanded Amended Complaint, petitioners ACCRA lawyers alleged that: 4.4.Defendants-ACCRA lawyers' participation in the acts with which their co-defendants are charged, was in furtherance of legitimate lawyering. 4.4.1.In the course of rendering professional and legal services to clients, defendants-ACCRA lawyers, Jose C. Concepcion, Teodoro D. Regala, Rogelio A. Vinluan and Eduardo U. Escueta, became holders of shares of stock in the corporations listed under their respective names in Annex 'A' of the expanded Amended Complaint as

incorporating or acquiring stockholders only and, as such, they do not claim any proprietary interest in the said shares of stock. 4.5.Defendant ACCRA-lawyer Avelino V. Cruz was one of the incorporators in 1976 of Mermaid Marketing Corporation, which was organized for legitimate business purposes not related to the allegations of the expanded Amended Complaint. However, he has long ago transferred any material interest therein and therefore denies that the 'shares' appearing in his name in Annex 'A' of the expanded Amended Complaint are his assets. 6 Petitioner Paraja Hayudini, who had separated from ACCRA law firm, filed a separate answer denying the allegations in the complaint implicating him in the alleged illgotten wealth. 7 Petitioners ACCRA lawyers subsequently filed their "COMMENT AND/OR OPPOSITION" dated October 8, 1991 with Counter-Motion that respondent PCGG similarly grant the same treatment to them (exclusion as parties-defendants) as accorded private respondent Roco. 8 The Counter-Motion for dropping petitioners from the complaint was duly set for hearing on October 18, 1991 in accordance with the requirements of Rule 15 of the Rules of Court. In its "Comment," respondent PCGG set the following conditions precedent for the exclusion of petitioners, namely: (a) the disclosure of the identity of its clients; (b) submission of documents substantiating the lawyer-client relationship; and (c) the submission of the deeds of assignments petitioners executed in favor of its clients covering their respective shareholdings. 9 Consequently, respondent PCGG presented supposed proof to substantiate compliance by private respondent Roco of the conditions precedent to warrant the latter's exclusion as party-defendant in PCGG Case No. 33, to wit: (a) Letter to respondent PCGG of the counsel of respondent Roco dated May 24, 1989 reiterating a previous request for reinvestigation by the PCGG in PCGG Case No. 33; (b) Affidavit dated March 8, 1989 executed by private respondent Roco as Attachment to the letter aforestated in (a); and (c) Letter of the Roco, Bunag, and Kapunan Law Offices dated September 21, 1988 to the respondent PCGG in behalf of private respondent Roco originally requesting the reinvestigation and/or re-examination of the evidence of the PCGG against Roco in its Complaint in PCGG Case No. 33. 10 It is noteworthy that during said proceedings, private respondent Roco did not refute petitioners' contention that he did actually not reveal the identity of the client involved in PCGG Case No. 33, nor had he undertaken to reveal the identity of the client for whom he acted as nominee-stockholder. 11

On March 18, 1992, respondent Sandiganbayan promulgated the Resolution, herein questioned, denying the exclusion of petitioners in PCGG Case No. 33, for their refusal to comply with the conditions required by respondent PCGG. It held: xxx xxx xxx ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e. their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client. This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein. 5.The PCGG is satisfied that defendant Roco has demonstrated his agency and that Roco has apparently identified his principal, which revelation could show the lack of cause against him. This in turn has allowed the PCGG to exercise its power both under the rules of Agency and under Section 5 of E.O. No. 14-A in relation to the Supreme Court's ruling in Republic v. Sandiganbayan (173 SCRA 72). The PCGG has apparently offered to the ACCRA lawyers the same conditions availed of by Roco; full disclosure in exchange for exclusion from these proceedings (par. 7, PCGG's COMMENT dated November 4, 1991). The ACCRA lawyers have preferred not to make the disclosures required by the PCGG. The ACCRA lawyers cannot, therefore, begrudge the PCGG for keeping them as party defendants. In the same vein, they cannot compel the PCGG to be accorded the same treatment accorded to Roco. Neither can this Court. WHEREFORE, the Counter Motion dated October 8, 1991 filed by the ACCRA lawyers and joined in by Atty. Paraja G. Hayudini for the same treatment by the PCGG as accorded to Raul S. Roco is DENIED for lack of merit. 12

ACCRA lawyers moved for a reconsideration of the above resolution but the same was denied by the respondent Sandiganbayan. Hence, the ACCRA lawyers filed the petition for certiorari, docketed as G.R. No. 105938, invoking the following grounds: I

2.The factual disclosures required by the PCGG are not limited to the identity of petitioners ACCRA lawyers' alleged client(s) but extend to other privileged matters. IV

The Honorable Sandiganbayan gravely abused its discretion in subjecting petitioners ACCRA lawyers who undisputably acted as lawyers in serving as nominee-stockholders, to the strict application of the law of agency. II The Honorable Sandiganbayan committed grave abuse of discretion in not considering petitioners ACCRA lawyers and Mr. Roco as similarly situated and, therefore, deserving of equal treatment. 1.There is absolutely no evidence that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s) for whom he acted as nominee-stockholder. 2.Even assuming that Mr. Roco had revealed, or had undertaken to reveal, the identities of the client(s), the disclosure does not constitute a substantial distinction as would make the classification reasonable under the equal protection clause. 3.Respondent Sandiganbayan sanctioned favoritism and undue preference in favor of Mr. Roco in violation of the equal protection clause. III The Honorable Sandiganbayan committed grave abuse of discretion in not holding that, under the facts of this case, the attorney-client privilege prohibits petitioners ACCRA lawyers from revealing the identity of their client(s) and the other information requested by the PCGG. 1.Under the peculiar facts of this case, the attorney-client privilege includes the identity of the client(s).

The Honorable Sandiganbayan committed grave abuse of discretion in not requiring that the dropping of party-defendants by the PCGG must be based on reasonable and just grounds and with due consideration to the constitutional right of petitioners ACCRA lawyers to the equal protection of the law. Petitioner Paraja G. Hayudini, likewise, filed his own motion for reconsideration of the March 18, 1991 resolution which was denied by respondent Sandiganbayan. Thus, he filed a separate petition for certiorari, docketed as G.R. No. 108113, assailing respondent Sandiganbayan's resolution on essentially the same grounds averred by petitioners in G.R. No. 105938. Petitioners contend that the exclusion of respondent Roco as party-defendant in PCGG Case No. 33 grants him a favorable treatment, on the pretext of his alleged undertaking to divulge the identity of his client, giving him an advantage over them who are in the same footing as partners in the ACCRA law firm. Petitioners further argue that even granting that such an undertaking has been assumed by private respondent Roco, they are prohibited from revealing the identity of their principal under their sworn mandate and fiduciary duty as lawyers to uphold at all times the confidentiality of information obtained during such lawyer-client relationship. cdasia Respondent PCGG, through its counsel, refutes petitioners' contention, alleging that the revelation of the identity of the client is not within the ambit of the lawyer-client confidentiality privilege, nor are the documents it required (deeds of assignment) protected, because they are evidence of nominee status. 13 In his comment, respondent Roco asseverates that respondent PCGG acted correctly in excluding him as party-defendant because he "(Roco) has not filed an Answer. PCGG had therefore the right to dismiss Civil Case No. 0033 as to Roco 'without an order of court by filing a notice of dismissal,'" 14 and he has undertaken to identify his principal. 15 Petitioners' contentions are impressed with merit. I It is quite apparent that petitioners were impleaded by the PCGG as co-defendants to force them to disclose the identity of their clients. Clearly, respondent PCGG is not

after petitioners but the "bigger fish" as they say in street parlance. This ploy is quite clear from the PCGG's willingness to cut a deal with petitioners the names of their clients in exchange for exclusion from the complaint. The statement of the Sandiganbayan in its questioned resolution dated March 18, 1992 is explicit: ACCRA lawyers may take the heroic stance of not revealing the identity of the client for whom they have acted, i.e., their principal, and that will be their choice. But until they do identify their clients, considerations of whether or not the privilege claimed by the ACCRA lawyers exists cannot even begin to be debated. The ACCRA lawyers cannot excuse themselves from the consequences of their acts until they have begun to establish the basis for recognizing the privilege; the existence and identity of the client.

paper corporations. Why do we say that? One: There are no really fixed sets of officers, no fixed sets of directors at the time of incorporation and even up to 1986, which is the crucial year. And not only that, they have no permits from the municipal authorities in Makati. Next, actually all their addresses now are care of Villareal Law Office. They really have no address on records. These are some of the principal things that we would ask of these nominees stockholders, as they called themselves. 16 It would seem that petitioners are merely standing in for their clients as defendants in the complaint. Petitioners are being prosecuted solely on the basis of activities and services performed in the course of their duties as lawyers. Quite obviously, petitioners' inclusion as co-defendants in the complaint is merely being used as leverage to compel them to name their clients and consequently to enable the PCGG to nail these clients. Such being the case, respondent PCGG has no valid cause of action as against petitioners and should exclude them from the Third Amended Complaint. II The nature of lawyer-client relationship is premised on the Roman Law concepts of locatio conductio operarum (contract of lease of services) where one person lets his services and another hires them without reference to the object of which the services are to be performed, wherein lawyers' services may be compensated byhonorarium or for hire, 17 and mandato (contract of agency) wherein a friend on whom reliance could be placed makes a contract in his name, but gives up all that he gained by the contract to the person who requested him. 18 But the lawyer-client relationship is more than that of the principal-agent and lessor-lessee. In modern day perception of the lawyer-client relationship, an attorney is more than a mere agent or servant, because he possesses special powers of trust and confidence reposed on him by his client. 19 A lawyer is also as independent as the judge of the court, thus his powers are entirely different from and superior to those of an ordinary agent. 20 Moreover, an attorney also occupies what may be considered as a "quasijudicial office" since he is in fact an officer of the Court 21 and exercises his judgment in the choice of courses of action to be taken favorable to his client. Thus, in the creation of lawyer-client relationship, there are rules, ethical conduct and duties that breathe life into it, among those, the fiduciary duty to his client which is of a very delicate, exacting and confidential character, requiring a very high degree of fidelity and good faith, 22 that is required by reason of necessity and public interest 23 based on the hypothesis that abstinence from seeking legal advice in a good cause is an evil which is fatal to the administration of justice. 24 It is also the strict sense of fidelity of a lawyer to his client that distinguishes him from any other professional in society. This conception is entrenched and embodies

This is what appears to be the cause for which they have been impleaded by the PCGG as defendants herein. (Italics ours) In a closely related case, Civil Case No. 0110 of the Sandiganbayan, Third Division, entitled "Primavera Farms, Inc., et al. vs. Presidential Commission on Good Government" respondent PCGG, through counsel Mario Ongkiko, manifested at the hearing on December 5, 1991 that the PCGG wanted to establish through the ACCRA that their "so called client is Mr. Eduardo Cojuangco"; that "it was Mr. Eduardo Cojuangco who furnished all the monies to those subscription payments in corporations included in Annex "A" of the Third Amended Complaint; that the ACCRA lawyers executed deeds of trust and deeds of assignment, some in the name of particular persons, some in blank. We quote Atty. Ongkiko: ATTY. ONGKIKO: With the permission of this Hon. Court. I propose to establish through these ACCRA lawyers that, one, their so-called client is Mr. Eduardo Cojuangco. Second, it was Mr. Eduardo Cojuangco who furnished all the monies to these subscription payments of these corporations who are now the petitioners in this case. Third, that these lawyers executed deeds of trust, some in the name of a particular person, some in blank. Now, these blank deeds are important to our claim that some of the shares are actually being held by the nominees for the late President Marcos. Fourth, they also executed deeds of assignment and some of these assignments have also blank assignees. Again, this is important to our claim that some of the shares are for Mr. Cojuangco and some are for Mr. Marcos. Fifth, that most of these corporations are really just

centuries of established and stable tradition. 25 In Stockton v. Ford, 26 the U.S. Supreme Court held: There are few of the business relations of life involving a higher trust and confidence than that of attorney and client, or generally speaking, one more honorably and faithfully discharged; few more anxiously guarded by the law, or governed by the sterner principles of morality and justice; and it is the duty of the court to administer them in a corresponding spirit, and to be watchful and industrious, to see that confidence thus reposed shall not be used to the detriment or prejudice of the rights of the party bestowing it. 27 In our jurisdiction, this privilege takes off from the old Code of Civil Procedure enacted by the Philippine Commission on August 7, 1901. Section 383 of the Code specifically "forbids counsel, without authority of his client to reveal any communication made by the client to him or his advice given thereon in the course of professional employment." 28 Passed on into various provisions of the Rules of Court, the attorney-client privilege, as currently worded provides: Sec. 24.Disqualification by reason of privileged communication. The following persons cannot testify as to matters learned in confidence in the following cases: xxx xxx xxx An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of, or with a view to, professional employment, can an attorney's secretary, stenographer, or clerk be examined, without the consent of the client and his employer, concerning any fact the knowledge of which has been acquired in such capacity. 29 Further, Rule 138 of the Rules of Court states: Sec. 20.It is the duty of an attorney: (e)to maintain inviolate the confidence, and at every peril to himself, to preserve the secrets of his client, and to accept no compensation in connection with his client's business except from him or with his knowledge and approval. This duty is explicitly mandated in Canon 17 of the Code of Professional Responsibility which provides that:

Canon 17.A lawyer owes fidelity to the cause of his client and he shall be mindful of the trust and confidence reposed in him. Canon 15 of the Canons of Professional Ethics also demands a lawyer's fidelity to client: The lawyer owes "entire devotion to the interest of the client, warm zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability," to the end that nothing be taken or be withheld from him, save by the rules of law, legally applied. No fear of judicial disfavor or public popularity should restrain him from the full discharge of his duty. In the judicial forum the client is entitled to the benefit of any and every remedy and defense that is authorized by the law of the land, and he may expect his lawyer to assert every such remedy or defense. But it is steadfastly to be borne in mind that the great trust of the lawyer is to be performed within and not without the bounds of the law. The office of attorney does not permit, much less does it demand of him for any client, violation of law or any manner of fraud or chicanery. He must obey his own conscience and not that of his client. Considerations favoring confidentiality in lawyer-client relationships are many and serve several constitutional and policy concerns. In the constitutional sphere, the privilege gives flesh to one of the most sacrosanct rights available to the accused, the right to counsel. If a client were made to choose between legal representation without effective communication and disclosure and legal representation with all his secrets revealed then he might be compelled, in some instances, to either opt to stay away from the judicial system or to lose the right to counsel. If the price of disclosure is too high, or if it amounts to self incrimination, then the flow of information would be curtailed thereby rendering the right practically nugatory. The threat this represents against another sacrosanct individual right, the right to be presumed innocent is at once selfevident. Encouraging full disclosure to a lawyer by one seeking legal services opens the door to a whole spectrum of legal options which would otherwise be circumscribed by limited information engendered by a fear of disclosure. An effective lawyer-client relationship is largely dependent upon the degree of confidence which exists between lawyer and client which in turn requires a situation which encourages a dynamic and fruitful exchange and flow of information. It necessarily follows that in order to attain effective representation, the lawyer must invoke the privilege not as a matter of option but as a matter of duty and professional responsibility. The question now arises whether or not this duty may be asserted in refusing to disclose the name of petitioners' client(s) in the case at bar. Under the facts and circumstances obtaining in the instant case, the answer must be in the affirmative.

As a matter of public policy, a client's identity should not be shrouded in mystery. 30 Under this premise, the general rule in our jurisdiction as well as in the United States is that a lawyer may not invoke the privilege and refuse to divulge the name or identity of his client. 31 The reasons advanced for the general rule are well established. First, the court has a right to know that the client whose privileged information is sought to be protected is flesh and blood. Second, the privilege begins to exist only after the attorney-client relationship has been established. The attorney-client privilege does not attach until there is a client Third, the privilege generally pertains to the subject matter of the relationship. Finally, due process considerations require that the opposing party should, as a general rule, know his adversary. "A party suing or sued is entitled to know who his opponent is." 32 He cannot be obliged to grope in the dark against unknown forces. 33 Notwithstanding these considerations, the general rule is however qualified by some important exceptions. 1)Client identity is privileged where a strong probability exists that revealing the client's name would implicate that client in the very activity for which he sought the lawyer's advice. In Ex-Parte Enzor, 34 a state supreme court reversed a lower court order requiring a lawyer to divulge the name of her client on the ground that the subject matter of the relationship was so closely related to the issue of the client's identity that the privilege actually attached to both. In Enzor, the unidentified client, an election official, informed his attorney in confidence that he had been offered a bribe to violate election laws or that he had accepted a bribe to that end. In her testimony, the attorney revealed that she had advised her client to count the votes correctly, but averred that she could not remember whether her client had been, in fact, bribed. The lawyer was cited for contempt for her refusal to reveal his client's identity before a grand jury. Reversing the lower court's contempt orders, the state supreme court held that under the circumstances of the case, and under the exceptions described above, even the name of the client was privileged. U.S. v. Hodge and Zweig, 35 involved the same exception, i.e. that client identity is privileged in those instances where a strong probability exists that the disclosure of the client's identity would implicate the client in the very criminal activity for which the lawyer's legal advice was obtained.

The Hodge case involved federal grand jury proceedings inquiring into the activities of the "Sandino Gang," a gang involved in the illegal importation of drugs in the United States. The respondents, law partners, represented key witnesses and suspects including the leader of the gang, Joe Sandino. In connection with a tax investigation in November of 1973, the IRS issued summons to Hodge and Zweig, requiring them to produce documents and information regarding payment received by Sandino on behalf of any other person, and vice versa. The lawyers refused to divulge the names. The Ninth Circuit of the United States Court of Appeals, upholding non-disclosure under the facts and circumstances of the case, held: A client's identity and the nature of that client's fee arrangements may be privileged where the person invoking the privilege can show that a strong probability exists that disclosure of such information would implicate that client in the very criminal activity for which legal advice was sought Baird v. Koerner, 279 F.2d at 680. While in Baird Owe enunciated this rule as a matter of California law, the rule also reflects federal law. Appellants contend that the Baird exception applies to this case. The Baird exception is entirely consonant with the principal policy behind the attorney-client privilege. "In order to promote freedom of consultation of legal advisors by clients, the apprehension of compelled disclosure from the legal advisors must be removed; hence, the law must prohibit such disclosure except on the client's consent." 8 J. Wigmore, supra Sec. 2291, at 545. In furtherance of this policy, the client's identity and the nature of his fee arrangements are, in exceptional cases, protected as confidential communications. 36 2)Where disclosure would open the client to civil liability, his identity is privileged. For instance, the peculiar facts and circumstances of Neugass v. Terminal Cab Corporation, 37 prompted the New York Supreme Court to allow a lawyer's claim to the effect that he could not reveal the name of his client because this would expose the latter to civil litigation. llcd In the said case, Neugass, the plaintiff, suffered injury when the taxicab she was riding, owned by respondent corporation, collided with a second taxicab, whose owner was unknown. Plaintiff brought action both against defendant corporation and the owner of the second cab, identified in the information only as John Doe. It turned out that when the attorney of defendant corporation appeared on preliminary examination, the fact was somehow revealed that the lawyer came to know the name of the owner of the second cab when a man, a client of the insurance company, prior to the institution of legal action, came to him and reported that he was involved in a car accident. It was apparent under the circumstances that the man was the owner of the second cab. The

state supreme court held that the reports were clearly made to the lawyer in his professional capacity. The court said: That his employment came about through the fact that the insurance company had hired him to defend its policyholders seems immaterial. The attorney in such cases is clearly the attorney for the policyholder when the policyholder goes to him to report an occurrence contemplating that it would be used in an action or claim against him. 38 xxx xxx xxx. All communications made by a client to his counsel, for the purpose of professional advice or assistance, are privileged, whether they relate to a suit pending or contemplated, or to any other matter proper for such advice or aid; . . . And whenever the communication made, relates to a matter so connected with the employment as attorney or counsel as to afford presumption that it was the ground of the address by the client, then it is privileged from disclosure. . . . It appears . . . that the name and address of the owner of the second cab came to the attorney in this case as a confidential communication. His client is not seeking to use the courts, and his address cannot be disclosed on that theory, nor is the present action pending against him as service of the summons on him has not been effected. The objections on which the court reserved decision are sustained. 39 In the case of Matter of Shawmut Mining Company, 40 the lawyer involved was required by a lower court to disclose whether he represented certain clients in a certain transaction. The purpose of the court's request was to determine whether the unnamed persons as interested parties were connected with the purchase of properties involved in the action. The lawyer refused and brought the question to the State Supreme Court. Upholding the lawyer's refusal to divulge the names of his clients the court held: If it can compel the witness to state, as directed by the order appealed from, that he represented certain persons in the purchase or sale of these mines, it has made progress in establishing by such evidence their version of the litigation. As already suggested, such testimony by the witness would compel him to disclose not only that he was attorney for certain people, but that, as the result of communications made to him in the course of such employment as such attorney, he knew that they were interested in certain transactions. We feel sure that under such conditions no case has ever gone to the length of compelling an attorney, at the instance

of a hostile litigant, to disclose not only his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a suit against his client. 41 3)Where the government's lawyers have no case against an attorney's client unless, by revealing the client's name, the said name would furnish the only link that would form the chain of testimony necessary to convict an individual of a crime, the client's name is privileged. In Baird vs. Korner, 42 a lawyer was consulted by the accountants and the lawyer of certain undisclosed taxpayers regarding steps to be taken to place the undisclosed taxpayers in a favorable position in case criminal charges were brought against them by the U.S. Internal Revenue Service (IRS). It appeared that the taxpayer's returns of previous years were probably incorrect and the taxes understated. The clients themselves were unsure about whether or not they violated tax laws and sought advice from Baird on the hypothetical possibility that they had. No investigation was then being undertaken by the IRS of the taxpayers. Subsequently, the attorney of the taxpayers delivered to Baird the sum of $12,706.85, which had been previously assessed as the tax due, and another amount of money representing his fee for the advice given. Baird then sent a check for $12,706.85 to the IRS in Baltimore, Maryland, with a note explaining the payment, but without naming his clients. The IRS demanded that Baird identify the lawyers, accountants, and other clients involved. Baird refused on the ground that he did not know their names, and declined to name the attorney and accountants because this constituted privileged communication. A petition was filed for the enforcement of the IRS summons. For Baird's repeated refusal to name his clients he was found guilty of civil contempt. The Ninth Circuit Court of Appeals held that, a lawyer could not be forced to reveal the names of clients who employed him to pay sums of money to the government voluntarily in settlement of undetermined income taxes, unsued on, and with no government audit or investigation into that client's income tax liability pending. The court emphasized the exception that a client's name is privileged when so much has been revealed concerning the legal services rendered that the disclosure of the client's identity exposes him to possible investigation and sanction by government agencies. The Court held:

The facts of the instant case bring it squarely within that exception to the general rule. Here money was received by the government, paid by persons who thereby admitted they had not paid a sufficient amount in income taxes some one or more years in the past. The names of the clients are useful to the government for but one purpose to ascertain which taxpayers think they were delinquent, so that it may check the records for that one year or several years. The voluntary nature of the payment indicates a

belief by the taxpayers that more taxes or interest or penalties are due than the sum previously paid, if any. It indicates a feeling of guilt for nonpayment of taxes, though whether it is criminal guilt is undisclosed. But it may well be the link that could form the chain of testimony necessary to convict an individual of a federal crime. Certainly the payment and the feeling of guilt are the reasons the attorney here involved was employed to advise his clients what, under the circumstances, should be done. 43 Apart from these principal exceptions, there exist other situations which could qualify as exceptions to the general rule. For example, the content of any client communication to a lawyer lies within the privilege if it is relevant to the subject matter of the legal problem on which the client seeks legal assistance. 44 Moreover, where the nature of the attorney-client relationship has been previously disclosed and it is the identity which is intended to be confidential, the identity of the client has been held to be privileged, since such revelation would otherwise result in disclosure of the entire transaction. 45 Summarizing these exceptions, information relating to the identity of a client may fall within the ambit of the privilege when the client's name itself has an independent significance, such that disclosure would then reveal client confidences. 46 The circumstances involving the engagement of lawyers in the case at bench, therefore, clearly reveal that the instant case falls under at least two exceptions to the general rule. First, disclosure of the alleged client's name would lead to establish said client's connection with the very fact in issue of the case, which is privileged information, because the privilege, as stated earlier, protects the subject matter or the substance (without which there would be no attorney-client relationship). The link between the alleged criminal offense and the legal advice or legal service sought was duly established in the case at bar, by no less than the PCGG itself. The key lies in the three specific conditions laid down by the PCGG which constitutes petitioners' ticket to non-prosecution should they accede thereto: (a)the disclosure of the identity of its clients; (b)submission of documents substantiating the lawyer-client relationship; and (c)the submission of the deeds of assignment petitioners executed in favor of their clients covering their respective shareholdings. From these conditions, particularly the third, we can readily deduce that the clients indeed consulted the petitioners, in their capacity as lawyers, regarding the financial

and corporate structure, framework and set-up of the corporations in question. In turn, petitioners gave their professional advice in the form of, among others, the aforementioned deeds of assignment covering their client's shareholdings. There is no question that the preparation of the aforestated documents was part and parcel of petitioners' legal service to their clients. More important, it constituted an integral part of their duties as lawyers. Petitioners, therefore, have a legitimate fear that identifying their clients would implicate them in the very activity for which legal advice had been sought, i.e., the alleged accumulation of ill-gotten wealth in the aforementioned corporations. Furthermore, under the third main exception, revelation of the client's name would obviously provide the necessary link for the prosecution to build its case, where none otherwise exists. It is the link, in the words of Baird, "that would inevitably form the chain of testimony necessary to convict the (client) of a . . . crime." 47 An important distinction must be made between a case where a client takes on the services of an attorney, for illicit purposes, seeking advice about how to go around the law for the purpose of committing illegal activities and a case where a client thinks he might have previously committed something illegal and consults his attorney about it. The first case clearly does not fall within the privilege because the same cannot be invoked for purposes illegal. The second case falls within the exception because whether or not the act for which the client sought advice turns out to be illegal, his name cannot be used or disclosed if the disclosure leads to evidence, not yet in the hands of the prosecution, which might lead to possible action against him. These cases may be readily distinguished, because the privilege cannot be invoked or used as a shield for an illegal act, as in the first example; while the prosecution may not have a case against the client in the second example and cannot use the attorney client relationship to build up a case against the latter. The reason for the first rule is that it is not within the professional character of a lawyer to give advice on the commission of a crime. 48 The reason for the second has been stated in the cases above discussed and are founded on the same policy grounds for which the attorney-client privilege, in general, exists. In Matter of Shawmut Mining Co., supra, the appellate court therein stated that "under such conditions no case has ever yet gone to the length of compelling an attorney, at the instance of a hostile litigant, to disclose not only his retainer, but the nature of the transactions to which it related, when such information could be made the basis of a suit against his client." 49 "Communications made to an attorney in the course of any personal employment, relating to the subject thereof, and which may be supposed to be drawn out in consequence of the relation in which the parties stand to each other, are under the seal of confidence and entitled to protection as privileged communications." 50 Where the communicated information, which clearly falls within the privilege, would suggest possible criminal activity but there would be not much in the information known to the prosecution which would sustain a charge except that

revealing the name of the client would open up other privileged information which would substantiate the prosecution's suspicions, then the client's identity is so inextricably linked to the subject matter itself that it falls within the protection. The Baird exception, applicable to the instant case, is consonant with the principal policy behind the privilege, i.e., that for the purpose of promoting freedom of consultation of legal advisors by clients, apprehension of compelled disclosure from attorneys must be eliminated. This exception has likewise been sustained in In re Grand Jury Proceedings 51 and Tillotson v. Boughner. 52 What these cases unanimously seek to avoid is the exploitation of the general rule in what may amount to a fishing expedition by the prosecution. There are, after all, alternative sources of information available to the prosecutor which do not depend on utilizing a defendant's counsel as a convenient and readily available source of information in the building of a case against the latter. Compelling disclosure of the client's name in circumstances such as the one which exists in the case at bench amounts to sanctioning fishing expeditions by lazy prosecutors and litigants which we cannot and will not countenance. When the nature of the transaction would be revealed by disclosure of an attorney's retainer, such retainer is obviously protected by the privilege. 53 It follows that petitioner attorneys in the instant case owe their client(s) a duty and an obligation not to disclose the latter's identity which in turn requires them to invoke the privilege. In fine, the crux of petitioner's objections ultimately hinges on their expectation that if the prosecution has a case against their clients, the latter's case should be built upon evidence painstakingly gathered by them from their own sources and not from compelled testimony requiring them to reveal the name of their clients, information which unavoidably reveals much about the nature of the transaction which may or may not be illegal. The logical nexus between name and nature of transaction is so intimate in this case that it would be difficult to simply dissociate one from the other. In this sense, the name is as much "communication" as information revealed directly about the transaction in question itself, a communication which is clearly and distinctly privileged. A lawyer cannot reveal such communication without exposing himself to charges of violating a principle which forms the bulwark of the entire attorney-client relationship. The uberrimei fidei relationship between a lawyer and his client therefore imposes a strict liability for negligence on the former. The ethical duties owing to the client, including confidentiality, loyalty, competence, diligence as well as the responsibility to keep clients informed and protect their rights to make decisions have been zealously sustained. In Milbank, Tweed, Hadley and McCloy v. Boon, 54 the US Second District Court rejected the plea of the petitioner law firm that it breached its fiduciary duty to its client by helping the latter's former agent in closing a deal for the agent's benefit only after its client hesitated in proceeding with the transaction, thus causing no harm to its client. The Court instead ruled that breaches of a fiduciary relationship in any context comprise a special breed of cases that often loosen normally stringent requirements of causation and damages, and found in favor of the client.

To the same effect is the ruling in Searcy, Denney, Scarola, Barnhart, and Shipley P.A. v. Scheller 55 requiring strict obligation of lawyers vis-a-vis clients. In this case, a contingent fee lawyer was fired shortly before the end of completion of his work, and sought payment quantum meruit of work done. The court, however, found that the lawyer was fired for cause after he sought to pressure his client into signing a new fee agreement while settlement negotiations were at a critical stage. While the client found a new lawyer during the interregnum, events forced the client to settle for less than what was originally offered. Reiterating the principle of fiduciary duty of lawyers to clients in Meinhard v. Salmon 56 famously attributed to Justice Benjamin Cardozo that "Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior," the US Court found that the lawyer involved was fired for cause, thus deserved no attorney's fees at all. The utmost zeal given by Courts to the protection of the lawyer-client confidentiality privilege and lawyer's loyalty to his client is evident in the duration of the protection, which exists not only during the relationship, but extends even after the termination of the relationship. 57 Such are the unrelenting duties required of lawyers vis-a-vis their clients because the law, which the lawyers are sworn to uphold, in the words of Oliver Wendell Holmes, 58 ". . . is an exacting goddess, demanding of her votaries in intellectual and moral discipline." The Court, no less, is not prepared to accept respondents' position without denigrating the noble profession that is lawyering, so extolled by Justice Holmes in this wise: Every calling is great when greatly pursued. But what other gives such scope to realize the spontaneous energy of one's soul? In what other does one plunge so deep in the stream of life so share its passions its battles, its despair, its triumphs, both as witness and actor? . . . But that is not all. What a subject is this in which we are united this abstraction called the Law, wherein as in a magic mirror, we see reflected, not only in our lives, but the lives of all men that have been. When I think on this majestic theme by eyes dazzle. If we are to speak of the law as our mistress, we who are here know that she is a mistress only to be won with sustained and lonely passion only to be won by straining all the faculties by which man is likened to God. We have no choice but to uphold petitioners' right not to reveal the identity of their clients under pain of the breach of fiduciary duty owing to their clients, because the facts of the instant case clearly fall within recognized exceptions to the rule that the client's name is not privileged information.

If we were to sustain respondent PCGG that the lawyer-client confidential privilege under the circumstances obtaining here does not cover the identity of the client, then it would expose the lawyers themselves to possible litigation by their clients in view of the strict fiduciary responsibility imposed on them in the exercise of their duties. LLphil The complaint in Civil Case No. 0033 alleged that the defendants therein, including herein petitioners and Eduardo Cojuangco, Jr. conspired with each other in setting up through the use of coconut levy funds the financial and corporate framework and structures that led to the establishment of UCPB, UNICOM and others and that through insidious means and machinations, ACCRA, using its wholly-owned investment arm, ACCRA Investments Corporation, became the holder of approximately fifteen million shares representing roughly 3.3% of the total capital stock of UCPB as of 31 March 1987. The PCGG wanted to establish through the ACCRA lawyers that Mr. Cojuangco is their client and it was Cojuangco who furnished all the monies to the subscription payment; hence, petitioners acted as dummies, nominees and/or agents by allowing themselves, among others, to be used as instrument in accumulating ill-gotten wealth through government concessions, etc., which acts constitute gross abuse of official position and authority, flagrant breach of public trust, unjust enrichment, violation of the Constitution and laws of the Republic of the Philippines. By compelling petitioners, not only to reveal the identity of their clients, but worse, to submit to the PCGG documents substantiating the client-lawyer relationship, as well as deeds of assignment petitioners executed in favor of its clients covering their respective shareholdings, the PCGG would exact from petitioners a link, "that would inevitably form the chain of testimony necessary to convict the (client) of a crime." III In response to petitioners' last assignment of error, respondents allege that the private respondent was dropped as party defendant not only because of his admission that he acted merely as a nominee but also because of his undertaking to testify to such facts and circumstances "as the interest of truth may require, which includes . . . the identity of the principal." 59 First, as to the bare statement that private respondent merely acted as a lawyer and nominee, a statement made in his out-of-court settlement with the PCGG, it is sufficient to state that petitioners have likewise made the same claim not merely out-ofcourt but also in their Answer to plaintiff's Expanded Amended Complaint, signed by counsel, claiming that their acts were made in furtherance of "legitimate lawyering." 60 Being "similarly situated" in this regard, public respondents must show that there exist other conditions and circumstances which would warrant their treating the private respondent differently from petitioners in the case at bench in order to evade a violation of the equal protection clause of the Constitution.

To this end, public respondents contend that the primary consideration behind their decision to sustain the PCGG's dropping of private respondent as a defendant was his promise to disclose the identities of the clients in question. However, respondents failed to show and absolutely nothing exists in the records of the case at bar that private respondent actually revealed the identity of his client(s) to the PCGG. Since the undertaking happens to be the leitmotif of the entire arrangement between Mr . Roco and the PCGG, an undertaking which is so material as to have justified PCGG's special treatment exempting the private respondent from prosecution, respondent Sandiganbayan should have required proof of the undertaking more substantial than a "bare assertion" that private respondent did indeed comply with the undertaking. Instead, as manifested by the PCGG, only three documents were submitted for the purpose, two of which were mere requests for re-investigation and one simply disclosed certain clients which petitioners (ACCRA lawyers) were themselves willing to reveal. These were clients to whom both petitioners and private respondent rendered legal services while all of them were partners at ACCRA, and were not the clients which the PCGG wanted disclosed for the alleged questioned transactions. 61 To justify the dropping of the private respondent from the case or the filing of the suit in the respondent court without him, therefore, the PCGG should conclusively show that Mr. Roco was treated as a species apart from the rest of the ACCRA lawyers on the basis of a classification which made substantial distinctions based on real differences. No such substantial distinctions exist from the records of the case at bench, in violation of the equal protection clause. The equal protection clause is a guarantee which provides a wall of protection against uneven application of statutes and regulations. In the broader sense, the guarantee operates against uneven application of legal norms so that all persons under similar circumstances would be accorded the same treatment. 62 Those who fall within a particular class ought to be treated alike not only as to privileges granted but also as to the liabilities imposed. . . . What is required under this constitutional guarantee is the uniform operation of legal norms so that all persons under similar circumstances would be accorded the same treatment both in the privileges conferred and the liabilities imposed. As was noted in a recent decision: 'Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances, which if not identical are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding the rest. 63 We find that the condition precedent required by the respondent PCGG of the petitioners for their exclusion as parties-defendants in PCGG Case No. 33 violates the lawyer-client confidentiality privilege. The condition also constitutes a transgression by respondents Sandiganbayan and PCGG of the equal protection clause of the Constitution. 64 it is grossly unfair to exempt one similarly situated litigant from prosecution without allowing the same exemption to the others. Moreover, the PCGG's

demand not only touches upon the question of the identity of their clients but also on documents related to the suspected transactions, not only in violation of the attorneyclient privilege but also of the constitutional right against self-incrimination. Whichever way one looks at it, this is a fishing expedition, a free ride at the expense of such rights. An argument is advanced that the invocation by petitioners of the privilege of attorneyclient confidentiality at this stage of the proceedings is premature and that they should wait until they are called to testify and examine as witnesses as to matters learned in confidence before they can raise their objections. But petitioners are not mere witnesses. They are co-principals in the case for recovery of alleged ill-gotten wealth. They have made their position clear from the very beginning that they are not willing to testify and they cannot be compelled to testify in view of their constitutional right against self-incrimination and of their fundamental legal right to maintain inviolate the privilege of attorney-client confidentiality.

EN BANC [Adm. Case No. 4349. December 22, 1997.]

It is clear then that the case against petitioners should never be allowed to take its full course in the Sandiganbayan. Petitioners should not be made to suffer the effects of further litigation when it is obvious that their inclusion in the complaint arose from a privileged attorney-client relationship and as a means of coercing them to disclose the identities of their clients. To allow the case to continue with respect to them when this Court could nip the problem in the bud at this early opportunity would be to sanction an unjust situation which we should not here countenance. The case hangs as a real and palpable threat, a proverbial Sword of Damocles over petitioners' heads. It should not be allowed to continue a day longer. While we are aware of respondent PCGG's legal mandate to recover ill-gotten wealth, we will not sanction acts which violate the equal protection guarantee and the right against self-incrimination and subvert the lawyer-client confidentiality privilege. LibLex WHEREFORE, IN VIEW OF THE FOREGOING, the Resolutions of respondent Sandiganbayan (First Division) promulgated on March 18, 1992 and May 21, 1992 are hereby ANNULLED and SET ASIDE. Respondent Sandiganbayan is further ordered to execute petitioners Teodoro D. Regala, Edgardo J. Angara, Avelino V. Cruz, Jose C. Conception, Victor P. Lazatin, Eduardo U. Escueta and Paraja G. Hayudini as partiesdefendants in SB Civil Case No. 0033 entitled " Republic of the Philippines v.Eduardo Cojuangco, Jr., et al." SO ORDERED. Bellosillo, Melo and Francisco, JJ ., concur.

LOURDES R. BUSINOS, complainant, vs. ATTY. FRANCISCO RICAFORT, respondent.

Rodolfo R. Paulino for complainant.

3248,18 September 1992, 214 SCRA 1, 12-13), reiterated in Fernandez vs. Grecia, (A.C. No. 3694,17 June 1993, 223 SCRA 425,434), this Court declared: A lawyer shall at all times uphold the integrity and dignity of the legal profession. The trust and confidence necessarily reposed by clients require in the attorney a high standard and appreciation of his duty to his clients, his profession, the courts and the public. The bar should maintain a high standard of legal proficiency as well as of honesty and fair dealing. Generally speaking, a lawyer can do honor to the legal profession by faithfully performing his duties to society, to the bar, to the courts and to his clients. To this end, nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession. Here respondent chose to forget that by swearing the lawyer's oath. he became a guardian of truth and the rule of law, and an indispensable instrument in the fair and impartial administration of justice - a vital function of democracy a failure of which is disastrous to society. 2.ID.; ID,; ANY DEPARTURE FROM THE PATH WHICH A LAWYER MUST FOLLOW AS DEMANDED BY THE VIRTUES OF HIS PROFESSION SHALL NOT BE TOLERATED BY THE COURT AS THE DISCIPLINING AUTHORITY; DISBARMENT OF RESPONDENT ATTORNEY IS WARRANTED IN CASE AT BAR. Any departure from the path which a lawyer must follow as demanded by the virtues of his profession shall not be tolerated by this Court as the disciplining authority. This is specially so, as here. where respondent even deliberately defied the lawful orders of the Court for him to file his comment on the complaint, thereby transgressing Canon 11 of the Code of Professional Responsibility which requires a lawyer to observe and maintain the respect due the courts. WHEREFORE, for dishonesty, grave misconduct, grossly unethical behavior in palpable disregard of Section 25 of Rule 138 of the Rules of Court, Rule 1.01 of Canon 1 and Rules 16.01, 16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility, aggravated by a violation of Canon 11 thereof, and consistent with the urgent need to maintain the esteemed traditions and high standards of the legal profession and to preserve undiminished public faith in the members of the Philippine Bar, the Court Resolves to DISBAR respondent ATTY. FRANCISCO RICAFORT from the practice of law. RESOLUTION PER CURIAM p: In a sworn complaint for disbarment dated 31 October 1994 but received by us on 21 November 1994, complainant Lourdes R. Businos charged respondent Atty. Francisco Ricafort, a practicing lawyer in Oas, Albay, with having committed the crime of estafa under Article 315 (1) (b) of the Revised Penal Code by misappropriating the sum of P32,000.00. Of this amount, P30,000.00 was entrusted to respondent for deposit in the bank account of complainant's husband, while P2,000.00 represented the amount respondent demanded from complainant supposedly for a bond in Civil Case No. 5814, when no such bond was required. prLL

SYNOPSIS Complainant charged respondent with having committed the crime of estafa for having misappropriated the sum of P32,000.00. Of this amount, P30,000.00 was entrusted to respondent for deposit in the bank account of respondent bank account of complainant's husband, while P2,000.00 represented the amount demanded from complainant supposedly for a bond in a civil case when no such bond is required. The Bar Confidant recommended that respondent be suspended from the practice of law for a period of one (1 ) year. The Supreme Court disregarded the recommendation of the Bar Confidant. According to the Court, respondent's transgressions manifested dishonesty and amounted to gross misconduct and grossly unethical which caused dishonor, not merely to respondent, but to the noble profession to which he belongs. Respondent forgot that by swearing the lawyer's oath, became a guardian of truth and the rule of law and an indispensable instrument in the fair and impartial administration of justice. The Court resolved to impose the extreme penalty disbarment. Respondent is disbarred from the practice of law.

SYLLABUS 1.LEGAL ETHICS; RESPECT OF LITIGANTS FOR THE PROFESSION IS INEXORABLY DIMINISHED WHENEVER A MEMBER OF THE BAR BETRAYS THEIR TRUST AND CONFIDENCE. Respondent's transgressions manifested dishonesty and amounted to grave misconduct and grossly unethical. behavior which caused dishonor, not merely to respondent, but to the noble profession to which he belongs, for it cannot be denied that the respect of litigants for the profession is inexorably diminished whenever a member of the Bar betrays their trust and confidence. This Court has been nothing short of exacting in its demand for integrity and good moral character from members of the Bar. In Marcelo vs. Javier (A.C. No.

In the resolution of 18 January 1995, we required respondent to comment on the complaint. Despite his receipt of a copy of the resolution, respondent did not comply, compelling us in the resolution of 17 July 1995 to require him to show cause why he should not be disciplinarily dealt with or held in contempt for such failure. Again respondent failed to comply. Hence in the resolution of 25 September 1996, we ordered him once more to file his comment within ten (10) days from notice, and within the same period, to pay a fine of P1,000.00 or suffer imprisonment of ten (10) days should he fail to so pay. In a Compliance and Motion dated 24 October 1996, respondent transmitted the fine of P1,000.00 by way of postal money order, but asked for five (5) days from date to file his comment. As respondent still failed to so file, we then declared, in the resolution of 2 December 1996, that respondent was deemed to have waived his right to file his comment, and referred the complaint to the Office of the Bar Confidant for reception of complainant's evidence and submission of a report and recommendation thereon. On 16 October 1997, the Bar Confidant, Atty. Erlinda C. Verzosa, submitted her Report and Recommendation, material portions of which read as follows: Respondent Atty. Francisco Ricafort stands charged with having misappropriated the sum of P30,000.00 intended for his clients as well as having deceived his clients into giving him the sum of P2,000.00 purportedly to be deposited as a bond in the case he was handling. Complainant Lourdes R. Businos is one of the heirs of Pedro Rodrigo who are the defendants in Civil Case No. 1584, apparently a case involving the properties of the late Pedro Rodrigo, father of herein complainant. Respondent was the counsel of record for the defendants in the said case. On July 10, 1994, complainant, representing her co-heirs, executed a special power of attorney, appointing and constituting respondent and/or Pedro Rodrigo, Jr. to be her true and lawful attorney-in-fact with the following powers: "1.To attend to and represent me, testify, or otherwise enter into compromise during the pre-trial stage or other proceedings in civil case No. 1584, entitled "Heirs of Rosano Rodrigo-Reantaso, vs. Heirs of Pedro Rodrigo Sr., et al." now pending before the Regional Trial Court, Branch 12, Ligao, Albay; "2.To demand, collect and receipt for any and all sums of money that may now be deposited in said court by the defendant Oas Standard High School or hereafter be deposited by said defendant, due and owing to me or said Heirs of Pedro Rodrigo, Sr., representing the rentals of

said defendant for the lease of the property involved in said case; and "3.To sign, authenticate, issue, and deliver any and all deeds, instruments, papers and other records necessary and pertinent to the above stated transactions." On August 10, 1994, the Regional Trial Court of Ligao, Albay, Br. 12 issued an order, directing the Clerk of Court "to release any and all deposits of rentals made in connection with this case (Civil Case No. 1584) to the defendants Heirs of Pedro Rodrigo through Lourdes Rodrigo Businos who were receiving the rentals from Oas Standard High School prior to the institution of this case." In a letter dated August 10, 1994, the Clerk of Court of RTC, Ligao informed herein complainant that respondent had already received the rental deposit of P25,000.00 on even date (see Annex "C" to the complaint). Respondent also received from Oas Standard High School on August 17, 1994 the sum of P5,000.00 as payment for rental of school site for the month of July 1994 (See Annex "D" to the complaint). The said sum was entrusted to respondent with an obligation on his part to deposit the same in the account of complainant's husband at PNB, Ligao Branch. Instead, however, of depositing the money, respondent convened the money to his own personal use, and despite several demands, he failed to return the same to complainant. She was thus constrained to file a criminal case for estafa and an administrative case for disbarment against him. Thus, on November 21, 1994, complainant filed the instant administrative case against respondent. Complainant further accuses respondent for demanding and receiving P2,000.00 from her which he said will be used for the bond in Civil Case No. 1584, but said amount was never used as intended since no bond was required in the said case. Thus, respondent merely pocketed the said amount. xxx xxx xxx Complainant, upon questioning by the undersigned, testified that: She authorized respondent to withdraw the money amounting to P35,000.00 representing the rental fee paid by Oas Standard High School from the Clerk of Court, with the instruction to deposit the same in her savings account at the PNB. After she was informed by the court that respondent had already withdrawn the money, she expected in vain to receive the money a week later in Tarlac as respondent failed to effect the deposit of the said sum in her

account. She demanded from him to give her the money, but he informed her that he had already spent the same. He promised, though, to pay her the said amount. (pp. 7-8, TSN, Reception of Evidence, April 18, 1997). She clarified that respondent withdrew only the sum of P30,000.00 from the Clerk of Court, while the P5,000.00 was withdrawn by respondent from Oas Standard High School (TSN, p. 8). Despite several demands, both from her and her lawyer, respondent failed to make good his promise to give her the money he withdrew from the Clerk of Court and Oas Standard High School (TSN, pp. 11-13). She was then constrained to file a criminal case for estafa and an administrative case against respondent sometime in November of 1994 to recover the money in question (TSN, pp. 14-16). On their third hearing of the estafa case sometime in 1995, respondent came with the money and paid complainant inside the courtroom (TSN, pp. 15, 19-20). Because of this development, she did not anymore pursue the estafa case against respondent (TSN, p. 17). She has no intention, however, of withdrawing the instant complaint (TSN, p. 18).

latter to make good his promise to pay the money he withdrew from the Clerk of Court and Oas Standard High School (See Annex "E" to the complaint). It bears emphasis that a lawyer, under his oath, pledges himself not to delay any man for money or malice and is bound to conduct himself with all good fidelity to his clients. He is obligated to report promptly the money of his clients that has come into his possession. He should not commingle it with his private property or use it for his personal purposes without his client's [sic] consent. He should maintain a reputation for honesty and fidelity to private trust (Daroy vs. Legaspi, 65 SCRA 304). Money collected by a lawyer in pursuance of a judgment in favor of his clients is held in trust and must be immediately turned over to them (Aya vs. Bigornia, 57 Phil. 8). Respondent, by converting the money of his clients to his own personal use without their consent, and by deceiving the complainant into giving him the amount of P2,000.00 purportedly to be used as a bond which was not required, is, undoubtedly, guilty of deceit, malpractice and gross misconduct. By so doing, he betrays the confidence reposed in him by his clients. Not only has he degraded himself but as an unfaithful lawyer he has besmirched the fair name of an honorable profession. His belated payment of the amount he illegally used and fraudulently obtained do not relieve him from any liability if only to impress upon him that the relation between an attorney and his client is highly fiduciary in its nature and of a very delicate, exacting and confidential character, requiring high degree of fidelity and good faith. In view of that special relationship, lawyers are bound to promptly account for money or property received by them on behalf of their clients and failure to do so constitutes professional misconduct (Daroy vs. Legaspi, supra). Moreover, his repeated failure to comply with the resolutions of the Court, requiring him to comment on the complaint indicate the high degree of irresponsibility of respondent. PREMISES CONSIDERED, it is respectfully recommended that respondent Atty. Francisco Ricafort be SUSPENDED from the practice of law for a period of ONE (1) YEAR. While the findings are in order, the penalty recommended is not commensurate to respondent's infractions.

She further testified that respondent demanded from her the sum of P2,000.00 for the bond required in the civil case. (TSN, p. 18). Respondent did not give her a receipt for the said amount. (TSN, p. 19). Respondent gave back the P2,000.00 to complainant. He paid complainant a total of P60,000.00 representing the money he withdrew from the Clerk of Court and Oas Standard High School, the P2,000.00 he got from complainant and attorney's fees, which he undertook to foot as a way of settlement. (TSN, p. 19). Although complainant failed to submit the original or certified true copies of the documents in support of her complaint against respondent, respondent's repeated failure to comply with several resolutions of the Court requiring him to comment on the complaint lends credence to the allegations of the complainant. It manifests his tacit admission thereto. We have no other alternative, therefore, but to accept the said documents at their [sic] face value. dctai There is no doubt that respondent is guilty of having used the money of his clients without their consent. As the evidentiary value of the documents should be given more weight than the oral testimony of complainant, we place the amount illegally used by respondent at P30,000.00 and not P35,000.00 as claimed by complainant. Respondent's illegal use of his client's money is made more manifest [by] his letters to complainant, all promising the

Plainly, respondent breached Section 25 of Rule 138 of the Rules of Court, Rule 1.01 of Canon 1 and Rules 16.01, 16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility, which read: SEC. 25.Unlawful retention of client's funds; contempt. When an attorney unjustly retains in his hands money of his client after it has been demanded he may be punished for contempt as an officer of the Court who has misbehaved in his official transactions; but proceedings under this section shall not be a bar to a criminal prosecution. CANON 1. A LAWYER SHALL UPHOLD THE CONSTITUTION, OBEY THE LAWS OF THE LAND AND PROMOTE RESPECT FOR LAW AND LEGAL PROCESSES. Rule 1.01. A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct. CANON 16 A LAWYER SHALL HOLD IN TRUST ALL MONEYS AND PROPERTIES OF HIS CLIENT THAT MAY COME INTO HIS POSSESSION Rule 16.01. A lawyer shall account for all money or property collected or received for or from the client. Rule 16.02. A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him. Rule 16.03. A lawyer shall deliver the funds and property of his client when due or upon demand. However, he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client. He shall also have a lien to the same extent on all judgments and executions he has secured for his client as provided for in the Rules of Court. Respondent's transgressions manifested dishonesty and amounted to grave misconduct and grossly unethical behavior which caused dishonor, not merely to respondent, but to the noble profession to which he belongs, for it cannot be denied that the respect of litigants for the profession is inexorably diminished whenever a member of the Bar betrays their trust and confidence. This Court has been nothing short of exacting in its demand for integrity and good moral character from members of the Bar. In Marcelo vs. Javier (AC. No. 3248, 18

September 1992, 214 SCRA 1, 12-13), reiterated in Fernandez v. Grecia, (AC No. 3694, 17 June 1993, 223 SCRA 425, 434), this Court declared: A lawyer shall at all times uphold the integrity and dignity of the legal profession. The trust and confidence necessarily reposed by clients require in the attorney a high standard and appreciation of his duty to his clients, his profession, the courts and the public. The bar should maintain a high standard of legal proficiency as well as of honesty and fair dealing. Generally speaking, a lawyer can do honor to the legal profession by faithfully performing his duties to society, to the bar, to the courts and to his clients. To this end, nothing should be done by any member of the legal fraternity which might tend to lessen in any degree the confidence of the public in the fidelity, honesty and integrity of the profession. Here, respondent chose to forget that by swearing the lawyer's oath, he became a guardian of truth and the rule of law, and an indispensable instrument in the fair and impartial administration of justice a vital function of democracy a failure of which is disastrous to society. LLphil Any departure from the path which a lawyer must follow as demanded by the virtues of his profession shall not be tolerated by this Court as the disciplining authority. This is specially so, as here, where respondent even deliberately defied the lawful orders of the Court for him to file his comment on the complaint, thereby transgressing Canon 11 of the Code of Professional Responsibility which requires a lawyer to observe and maintain the respect due the courts. WHEREFORE, for dishonesty, grave misconduct, grossly unethical behavior in palpable disregard of Section 25 of Rule 138 of the Rules of Court, Rule 1.01 of Canon 1 and Rules 16.01, 16.02 and 16.03 of Canon 16 of the Code of Professional Responsibility, aggravated by a violation of Canon 11 thereof, and consistent with the urgent need to maintain the esteemed traditions and high standards of the legal profession and to preserve undiminished public faith in the members of the Philippine Bar, the Court Resolves to DISBAR respondent ATTY. FRANCISCO RICAFORT from the practice of law. His name is hereby stricken from the Roll of Attorneys. This resolution shall take effect immediately and copies thereof furnished the Office of the Bar Confidant, to be appended to respondent's personal record; the National Office and the Albay Chapter of the Integrated Bar of the Philippines; the Philippine Judges Association; and all courts of the land for their information and guidance. SO ORDERED. Narvasa, C .J ., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Panganiban and Martinez, JJ ., concur.

money and explain the certification. 7 Respondent ignored her request. Thus, complainant filed the instant case. On August 22, 1994, we required respondent to file his comment. Respondent manifested that he had earlier filed his comment and submitted additional copies of said comment. 8 On November 28, 1994, we noted respondent's comment and required complainant to submit a reply. Upon the filing of complainant's reply, respondent filed a rejoinder. 9 Respondent, in the main, argued that his failure to prepare the memorandum was justified. He explained that complainant's family lawyer, Atty. Raymundo Ponteras, handled the prosecution of the case and the presentation of witnesses. Unfortunately, Atty. Ponteras died after the presentation of the last defense witness and his notes were lost. Complainant could not produce copies of the transcripts of stenographic notes while respondent's case folder were also lost by Atty. Ponteras who borrowed but failed to return it. Consequently, with nothing to aid him in the preparation of the memorandum, respondent was allegedly left with no recourse but simply to enter into an agreement with the opposing counsel to submit the case without memorandum. EaDATc On March 1, 1995, the Court referred the case to the Commission on Bar Discipline of the Integrated Bar of the Philippines for investigation, report and recommendation. Before the case could be heard, however, complainant died. Thus, the case was submitted for decision based on the records. The core issue for our resolution is whether respondent violated the Canons of Professional Responsibility in failing to file the required memorandum in Civil Case No. X-98 and for keeping the money order despite complainant's request for its return. In its Report and Recommendation dated January 5, 2004, the Commission found respondent liable for breach of his professional duties and recommended that respondent be reprimanded and warned. The Commission held that there was no sufficient justification for respondent's failure to file the memorandum. Regarding the money order, however, the Commission held that complainant's remedy was not to proceed administratively against respondent, who did not present the money order for payment, but to ask for a refund from the post office concerned. On February 27, 2004, the Board of Governors of the Integrated Bar of the Philippines adopted the Report and Recommendation as follows: RESOLVED to ADOPT and APPROVE, as it is hereby ADOPTED and APPROVED, the Report and Recommendation of the Investigating Commissioner of the above-entitled case, herein made part of this Resolution as Annex "A"; and, finding the recommendation fully supported by the evidence on record and the

THIRD DIVISION [A.C. No. 4285. May 2, 2006.] FLORENCIA M. SOMOSOT, complainant, vs. ATTY. ELIAS A. PONTEVEDRA, respondent. RESOLUTION QUISUMBING, J p: On July 28, 1994, complainant Florencia M. Somosot (now deceased) filed a verified complaint 1 against respondent Atty. Elias A. Pontevedra for neglect of duty and for professional misconduct for unlawfully keeping money belonging to her. It appears that complainant was one of the plaintiffs in Civil Case No. X-98, for reconveyance and recovery of possession, pending before the Regional Trial Court of Negros Occidental, Branch 59, San Carlos City. Respondent was complainant's counsel of record. On January 15, 1991, the trial court ordered the parties to submit their respective memoranda since the case that had been pending for already twenty-three years. 2Although the trial court apprised the parties of the importance of their memoranda to the resolution of the complex case, both of the parties' counsels did not comply with the order. Thus, on November 12, 1991, the trial court reiterated the order, giving the parties a fresh period of 15 days within which to comply. 3 Complainant repeatedly reminded respondent about the deadline, but respondent still failed to file a memorandum. Instead, respondent allegedly entered into an oral agreement with the opposing counsel that they would both forego with the filing of the memorandum. 4 After almost two years, complainant's daughter, Wilma S. Pones, sent respondent a money order for P1,000 as payment for the preparation of the memorandum. 5Since the period for filing had already lapsed, respondent took no action on complainant's request. Neither did he present the money order to the post office for payment. 6 Complainant later learned that the case had been submitted for decision without any memoranda. She asked for a certification to this effect from the trial court, then sent a letter to respondent through Wilma Pones asking respondent to return the

applicable laws and rules, and considering respondent's negligence in the performance of his professional duties towards his client, Atty. Elias Pontevedra is hereby REPRIMANDED and Warned that any similar or other complaint in the future for breach of his professional duties will be dealt with more severely.10 We agree with the IBP that respondent should be appropriately sanctioned. Canon 17 of the Code of Professional Responsibility provides that lawyers owe fidelity to the cause of their clients and must therefore be always mindful of the trust and confidence reposed in them. Under Canon 18, they are mandated to serve their clients with competence and diligence. 11 Specifically, they are not to "neglect a legal matter entrusted to [them], and [their] negligence in connection therewith shall render [them] liable." 12 Additionally, they are required to keep their client informed of the status of the latter's cases and to respond within a reasonable time to requests for information. 13 Before admission to the bar, lawyers subscribe to an oath to conduct themselves "with all good fidelity as well to the courts as to their clients." Failure to comply with these abiding precepts of ethical conduct renders counsel liable for violating the canons of his profession. In this case, respondent failed to exercise that degree of diligence required of him in the performance of his duties. While it was impossible for him to prepare a memorandum without the transcripts of stenographic notes and his case folder, and while respondent may have been constrained simply to enter into an agreement with the opposing counsel to submit the case for decision without memorandum, respondent failed to inform the trial court of said agreement. He should have filed a manifestation before the trial court informing it of the agreement instead of leaving the trial court waiting and wondering whether said memoranda will be filed at all. His omission not only gave complainant much anxiety, it also needlessly compounded the long delay in the resolution of the 23-year-old case. Worse, respondent did not inform complainant that the case had been submitted for decision without memorandum despite complainant's repeated requests for information regarding the status of her case. We remind respondent that by taking a client's cause, he covenants that he will exert all effort for its prosecution until its final resolution. 14 As we held in Parias v. Paguinto, 15 a lawyer should give adequate attention, care and time to his client's case. Once he agrees to handle a case, he should undertake the task with dedication and care. It is not enough that a lawyer possesses the qualification to handle the legal matter. He must also give adequate attention to his legal work. 16Utmost fidelity is demanded once counsel agrees to take the cudgels for his client's cause. 17 Moreover, respondent should have accounted for the money order. Having received the money order as payment for professional services that he was unable to render, respondent should have returned it when complainant's daughter demanded it from him so that complainant could ask for a refund from the issuing post office. As expressly

stated in Canon 16, a lawyer shall hold in trust all moneys and properties of his client that may come into his possession. He is required by Rule 16.03 of said canon to deliver such funds and property of his client when demanded. CHATEa However, considering the absence of any showing that respondent had acted with malice, bad faith, or other evil motive in failing to inform the trial court of the agreement to submit the case for decision and in failing to account for the money order, we deem the recommended penalty of reprimand sufficient penalty. 18 Complainant's prayer for damages is denied. A proceeding for suspension or disbarment is not in any sense a civil action where the complainant is a plaintiff and the respondent lawyer is a defendant. Disciplinary proceedings involve no private interest and afford no redress for private grievance. They are undertaken solely for the public welfare. As held in Rayos-Ombac v. Rayos, 19 the attorney is called upon to answer to the court for his conduct as an officer of the court. The complainant or the person who called the attention of the court to the attorney's alleged misconduct 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. WHEREFORE, respondent Atty. Elias Pontevedra is hereby REPRIMANDED and WARNED that the commission of the same or similar offense in the future will be dealt with more severely. He is ordered to return immediately the postal money order in the amount of P1,000.00 to complainant's heirs. SO ORDERED. Carpio, Carpio Morales, Tinga and Velasco, Jr., JJ., concur.

document which the Spouses Eustaquio prepared, and which complainants signed, was a deed of absolute sale and not a real estate mortgage. They also learned that Navarro R. Eustaquio (Navarro) had transferred the title over the 8.102-property to his name OCT No. P-11499 was canceled and Transfer Certificate of Title (TCT) No. T9926 3 in the name of Navarro was issued. Complainants engaged the services of respondent for the purpose of recovering their property. In a receipt 4 dated 18 November 1970, respondent acknowledged receipt of P1,200 from Francisca Angalan and her husband, Macario Capul (Capul), representing the full payment of his professional fees: "Received from Mr. MACARIO CAPUL and FRANCISCA RAFAEL CAPUL the sum of ONE THOUSAND TWO HUNDRED PESOS (P1,200.00) representing full payment of professional services in regard to recovery of Original Certificate of Title No. P-11499 in the name of Angalan (Samal)." Respondent filed a complaint 5 dated 13 April 1976 with the then Court of First Instance (CFI), now Regional Trial Court (RTC), Judicial Region XVI, Tagum, Davao stating that: DHCcST 2.. . . Angalan Samal and his children . . . are the original patentees of a certain parcel of land, situated in Ombay, Samal, Davao, covered under Original Certificate of Title No. P11499, of the Registry of Deeds of Davao, having acquired the same under HP-No. 65310, pursuant to the provisions of the Homestead Laws of the Public Land Law (C.A. 141); 3.. . . [O]n April 15, 1971, the herein original patentees . . . sold and conveyed said parcel of land covered by the aforesaid title to the herein defendants for the sum of FIFTEEN THOUSAND PESOS (P15,000.00) . . .; 4.. . . [U]nder the provisions of the Public Land Law, particularly Section 119 thereof and even on the face of the title of said property now under the name of the defendants . . . the herein plaintiffs have the right to repurchase said property within a period of five (5) years from the date of the conveyance; xxx xxx xxx 7.[A]s a matter of right under the law, the herein plaintiffs are entitled to the produce of the property at least beginning April 8, 1976; xxx xxx xxx

EN BANC [A.C. No. 7181. February 6, 2009.] MARIA ANGALAN, NENA ANGALAN, DIONICIO ANGALAN, MAGDALENA ANGALAN, FRANCISCA ANGALAN, INIS ANGALAN, ROSALINO ANGALAN, AND JOSEFINA ANGALAN, ALL OF WHOM ARE HEIRS OF ANGALAN SAMAL married to SANAAN SAMAL,complainants, vs. ATTY. LEONIDO C. DELANTE, respondent.

DECISION PER CURIAM p: This is a complaint filed by Maria, Nena, Dionicio, Magdalena, Francisca, Inis, Rosalino, and Josefina Angalan (complainants) against Atty. Leonido C. Delante (respondent) for gross violation of the Code of Professional Responsibility. ETIDaH Complainants are the heirs of Angalan Samal (Angalan) and Sanaan Samal (Sanaan). Complainants allege that they are illiterate and belong to the Samal Tribe. Angalan, Sanaan, and complainants owned a 9.102-hectare parcel of land in Barrio San Jose, Kaputian, Island Garden City of Samal, Davao del Norte. The property was covered by Original Certificate of Title (OCT) No. P-11499. 1 On 15 April 1971, Angalan and complainants borrowed P15,000 from Navarro R. Eustaquio and Arabella P. Eustaquio (Spouses Eustaquio). To secure the loan, Angalan and complainants mortgaged 8.102 hectares of the 9.102-hectare property and surrendered OCT No. P-11499 to the Spouses Eustaquio. The Spouses Eustaquio prepared a document 2 and asked Angalan and complainants to sign it. Angalan and complainants affixed their thumb marks on the document. When complainants tried to pay the loan and recover OCT No. P-11499 from the Spouses Eustaquio, the Spouses Eustaquio refused. Complainants learned that the

9.[B]y reason of unwarranted refusal on the part of the defendants to reconvey the property to plaintiffs, the latter have been constrained to engage, and in fact have engaged, the services of counsel . . . 6 Complainants and the Spouses Eustaquio entered into an amicable settlement. In the amicable settlement 7 dated 3 September 1977, the parties stated that: 1.. . . [T]he plaintiffs have offered to the defendant[s] the sum of P30,000.00 as repurchase price which the defendant[s accept]; 2.. . . [U]pon the signing hereof, the plaintiffs shall pay the defendant[s] the sum of P15,000.00 and for this purpose hereby authorize the defendants to collect the same from the Clerk of Court which amount had been deposited with this Honorable Court; Likewise, upon signing hereof the Deed of Reconveyance shall be immediately executed and delivered by the defendants to plaintiff[s]; AcHCED 3.. . . [W]hile the balance of P15,000.00 has not been paid, the defendant[s] shall continue to possess, and if necessary to gather the produce of the property, however, upon receipt of the defendant[s] of the balance of P15,000.00, said defendants together with [their] agent and/or worker, Alfredo Rabadon shall clear the area and turnover the same within fifteen (15) days from receipt [of] said balance. 8 In a Decision 9 dated 30 September 1977, the CFI approved the amicable settlement. Complainants did not have the P30,000 repurchase price for the property. Respondent advanced the P30,000 and, in return, complainants allowed respondent to possess the property and gather its produce until he is paid. In a letter 10 dated 10 January 1979 and addressed to the barrio captain of Umbay, Samal, Davao del Norte, respondent stated that: This will inform you that the Heirs of Angalan Samal have already redeemed their property through me from Mr. Navarro Eustaquio since September, 1978. In my capacity as counsel of the Heirs of Angalan Samal and owner of the money in redeeming the property, I have authorized Mr. Macario Capol to take over the possession of the property together with the harvesting of the matured coconuts.

When complainants tried to repay the P30,000 repurchase price and recover the property from respondent, respondent refused. Complainants learned that respondent transferred the title of the property to his name TCT No. T-9926 was canceled and TCT No. T-57932 11 in the name of respondent was issued. Complainants filed a complaint 12 dated 30 April 2004 with the RTC, Judicial Region XI, Branch 34, Davao City praying that (1) the deed of absolute sale prepared by the Spouses Eustaquio and signed by the complainants be declared void, (2) TCT No. T57932 be declared void, and (3) respondent be made to pay damages. The case was docketed as Civil Case No. 57-2004. In his answer 13 dated 29 December 2004, respondent stated that: STHAaD [In] 1971, ANGALAN (SAMAL) [now deceased) [sic] together with his son-in-law, MACARIO CAPUL, the latter being the town mate of herein defendant Delante in Danao, Cebu and who is married to the daughter of the late ANGALAN (SAMAL), came to herein defendant's office and sought for an advice to borrow money; . . . [T]he late ANGALAN (SAMAL) together with his children in company with MACARIO CAPUL, were directed by herein defendant to inform him why it was necessary for them to borrow money and for whatever [sic] purpose; after their story, herein defendant disagreed as to their justification in borrowing money which was for no other purpose except to have money on their own; xxx xxx xxx It is preposterous for plaintiff[s] to claim that they had [sic] engaged the professional services of herein defendant to file an annulment case since plaintiffs never came back apparently ashamed when they were driven out, but worse they had [sic] never paid the herein defendant a single centavo for purposes of filing an annulment case against co-defendant NAVARRO EUSTAQUIO; . . . [T]he transfer of said property consisting of 8.102 hectares under the name of herein defendants was not tainted with any deceit but effected legally by virtue of a valid deed of sale executed by defendants' [sic] spouses EUSTAQUIO in favor of herein defendants. xxx xxx xxx

[T]he absolute deed of sale, [sic] dated 15 April 1971, executed by herein plaintiffs in favor of defendants EUSTAQUIO, speaks for itself. It is a sale of real property and NOT a mortgage. xxx xxx xxx Contrary to the malicious and untruthful claim of the plaintiffs, the legal services of defendant Atty. LEONIDO DELANTE was never solicited by them. Plaintiffs only asked defendant from where they could borrow money, and after knowing that they just simply would [sic] like to borrow money without any concrete investments in mind to repay [sic] back [sic] any loan, defendant Atty. LEONIDO DELANTE drove them out of his office and told them to look for another person to help them; CSaIAc Defendant Atty. LEONIDO DELANTE later learned from MACARIO CAPUL, who is a friend and a town mate, and who is the husband of FRANCISCA ANGALAN CAPUL, that the plaintiffs had negotiated a sale with a certain NAVARRO EUSTAQUIO . . .; In September 1977, a former Filipino client of herein defendant DELANTE, who, and his family [sic] are now permanent residents of New York, was looking for a real property to build his retirement home, [sic] and he approached herein defendant, in which he was referred to defendant EUSTAQUIO [sic] ; Upon visiting the property of defendant EUSTAQUIO, he was so impressed of the location of the property and decided to buy the same, hence left the money to herein defendant DELANTE and to buy [sic] said property under defendant's name, with the understanding to turn over said property to him, as soon as he and his family shall have returned to the country; . . . [S]ince herein defendant is not interested over the said property as his own, he waited for his client from New York to come home and to get his property but after 11 years, his client decided not to come back anymore to the Philippines, and directed herein defendant to register the Deed of Sale over the property to [sic] his name and directed herein defendant to refund his client. 14

to the Integrated Bar of the Philippines (IBP) for investigation, report and recommendation. In a Notice dated 14 March 2007, Commissioner Salvador B. Hababag (Commissioner Hababag) directed complainants and respondent to appear before the IBP for a mandatory conference. The parties failed to appear at the mandatory conference. In an Order dated 16 May 2007, Commissioner Hababag directed the parties to submit their position papers. In a motion dated 4 April 2007 and filed with the RTC, respondent and complainants prayed that Civil Case No. 57-2004 be dismissed. Complainants filed with the Court a motion to withdraw the complaint for disbarment dated 4 April 2007 and an affidavit of desistance dated April 2007. TcIAHS In his position paper dated 2 July 2007, respondent stated that (1) Angalan and Capul went to his office in 1971 to seek advice about borrowing money; (2) his client from New York bought the property from the Spouses Eustaquio; and (3) complainants executed a motion to withdraw the complaint for disbarment and an affidavit of desistance. In a Report dated 15 October 2007, Commissioner Hababag found that respondent violated the Code of Professional Responsibility: The issue to resolve is whether or not respondent committed grave violation of [the] Code of Professional Responsibility when he bought the property of his client[s] without their knowledge, consent and against their will? Weighing evidence presented by both parties, respondent should be punished for his unprofessional and distasteful acts. xxx xxx xxx His vain attempt to salvage his malicious acts was too flimsy to gain belief and acceptance. It is unbelievable that a buyer would entrust his money intended for payment of a property but allowed that said property be registered under the name of another, specifically his lawyer, simply runs counter to ordinary human nature. (Emphasis supplied) Commissioner Hababag recommended that respondent be suspended from the practice of law for six months.

Complainants filed a complaint 15 dated 28 December 2005 with the Court charging respondent with gross violation of the Code of Professional Responsibility. In a Resolution 16 dated 3 July 2006, the Court required respondent to comment on the complaint and, in a Resolution 17 dated 4 December 2006, the Court referred the case

In a Resolution dated 22 November 2007, the IBP Board of Governors (Board) adopted and approved the Report with modification. The Board increased respondent's suspension from six months to one year. Pursuant to Section 12 (b), Rule 139-B of the Rules of Court, 18 the Board forwarded the case to the Court for final action. The Court sustains the findings of the IBP. Complainants and respondent presented two different sets of facts. According to complainants, they engaged the services of respondent for the purpose of recovering their property from the Spouses Eustaquio. In violation of the trust and confidence they reposed in him, respondent transferred the title over the property to his name. According to respondent, complainants did not engage his services. His client from New York was the one who bought the property from the Spouses Eustaquio. AHSaTI After a careful review of the records, the Court gives credence to complainants' version of the facts. Respondent's credibility is highly questionable. In his answer dated 29 December 2004 and filed with the CFI and in his position paper dated 2 July 2007 and filed with the IBP, respondent alleged that Angalan and Capul went to his office in 1971 to seek advice about borrowing money. According to respondent, complainants did not engage his services. In his answer, respondent stated that: It is preposterous for [complainants] to claim that they had [sic] engaged the professional services of herein defendant to file an annulment case since [complainants] never came back apparently ashamed when they were driven out . . .; xxx xxx xxx Contrary to the malicious and untruthful claim of [complainants], the legal services of defendant Atty. LEONIDO DELANTE was never solicited by them. Plaintiffs only asked defendant from where they could borrow money , and after knowing that they just simply would like to borrow money without any concrete investments in mind to repay back [sic] any loan, defendant Atty. LEONIDO DELANTE drove them out of his office and told them to look for another person to help them; Defendant Atty. LEONIDO DELANTE later learned from MACARIO CAPUL . . . that the plaintiffs had negotiated a sale

with a certain NAVARRO EUSTAQUIO. 19 (Emphasis supplied) The Court is not impressed. Angalan and complainants went to respondent's office not to seek advice about borrowing money but to engage his services for the purpose of recovering their property. This is obvious. First, after Angalan and complainants went to respondent's office, respondent filed a complaint with the CFI praying that the Spouses Eustaquio reconvey the property to Angalan and complainants. Second, in the complaint, respondent stated that, "by reason of unwarranted refusal on the part of the defendants to reconvey the property to plaintiffs, the latter have been constrained to engage, and in fact have engaged, the services of counsel ." Third, respondent issued a receipt to complainants stating that he "RECEIVED from Mr. MACARIO CAPUL and FRANCISCA RAFAEL CAPUL the sum of ONE THOUSAND TWO HUNDRED PESOS (P1,200.00) representing full payment of professional services in regard to the recovery of Original Certificate of Title No. P-11499 in the name of Angalan (Samal)." Fourth, in respondent's letter dated 10 January 1979 and addressed to the barrio captain of Umbay, Samal, Davao del Norte, he stated that he was the lawyer of complainants: ScCEIA This will inform you that the Heirs of Angalan Samal have already redeemed their property through me from Mr. Navarro Eustaquio since September, 1978.In my capacity as counsel of the Heirs of Angalan Samal and owner of the money in redeeming the property, I have authorized Mr. Macario Capol to take over the possession of the property together with the harvesting of the matured coconuts. 20 These clearly show that complainants engaged the services of respondent. In his answer, respondent alleged that complainants did not pay him his professional fees (which, according to him, they did not engage). He stated that, "[complainants] had never paid the herein defendant a single centavo for purposes of filing an annulment case against . . . NAVARRO EUSTAQUIO." The Court is not impressed. Complainants fully paid respondent his professional fees. This is obvious. In a receipt dated 18 November 1970, respondent stated that he "RECEIVED from Mr. MACARIO CAPUL and FRANCISCA RAFAEL CAPUL the sum of ONE THOUSAND TWO HUNDRED PESOS (P1,200.00) representing full payment of professional services in regard to the recovery of Original Certificate of Title No. P-11499 in the name of Angalan (Samal)." This clearly shows that complainants paid respondent his professional fees. In his answer and position paper, respondent alleged that his client from New York bought the property from the Spouses Eustaquio:

[I]n September 1977, a former Filipino client of herein respondent, who, and his family [sic] are now permanent residents of New York, was looking for a real property to build his retirement home, and he approached herein respondent, in which [sic] he was referred to Navarro Eustaquio; and upon visiting the property of Navarro Eustaquio, he was impressed of [sic] the location of the property and decided to buy the same, hence left the money to herein respondent and to buy [sic] said property under respondent's name, with the understanding to turn over said property to him, as soon as he and his family shall have returned to the country; aIAcCH . . . [S]ince herein respondent was not interested over the said property as his own, he waited for his client from New York to come home and to get his property but after 11 years, his client decided not to come back anymore to the Philippines, and directed herein respondent to register the Deed of Sale over the property under his name and directed herein respondent to refund his client. 21 The Court is not impressed. Complainants repurchased the property from the Spouses Eustaquio. This is obvious. First, complainants and the Spouses Eustaquio entered into an amicable settlement stating that complainants would repurchase the property from the Spouses Eustaquio: 1.. . . [T]he plaintiffs have offered to the defendant[s] the sum of P30,000.00 as repurchase price which the defendant[s accept]; 2.. . . [U]pon the signing hereof, the plaintiffs shall pay the defendant[s] the sum of P15,000.00 and for this purpose hereby authorize the defendants to collect the same from the Clerk of Court which amount had been deposited with this Honorable Court; Likewise, upon signing hereof the Deed of Reconveyance shall be immediately executed and delivered by the defendants to plaintiff[s]; 3.. . . [W]hile the balance of P15,000.00 has not been paid, the defendant[s] shall continue to possess, and if necessary to gather the produce of the property, however, upon receipt of the defendant[s] of the balance of P15,000.00, said defendants together with [their] agent and/or worker, Alfredo Rabadon shall clear the area and turnover the same within fifteen (15) days from receipt [of] said balance. 22 (Emphasis supplied)

Second, in his letter to the barrio captain, respondent stated that complainants repurchased the property from the Spouses Eustaquio: IaAScD This will inform you that the Heirs of Angalan Samal have already redeemed their property through me from Mr. Navarro Eustaquio since September, 1978. In my capacity as counsel of the Heirs of Angalan Samal and owner of the money in redeeming the property, I have authorized Mr. Macario Capol to take over the possession of the property together with the harvesting of the matured coconuts. 23 (Emphasis supplied)

These clearly show that complainants repurchased the property from the Spouses Eustaquio. Respondent's story about the client from New York is unbelievable. Respondent did not give any detail or proof to substantiate his story the name of the alleged client, an affidavit of the alleged client, the old passport of the alleged client showing immigration stamps, or any form of correspondence between him and the alleged client. The Court agrees with the observation of Commissioner Hababag that respondent's "vain attempt to salvage his malicious acts [is] too flimsy to gain belief and acceptance." In his position paper, respondent alleged that complainants executed a motion to withdraw the complaint for disbarment and an affidavit of desistance. This is immaterial. Section 5, Rule 139-B of the Rules of Court states that, "No investigation shall be interrupted or terminated by reason of the desistance, settlement, compromise, restitution, withdrawal of charges, or failure of the complainant to prosecute the same." Respondent violated Canons 16 and 17 of the Code of Professional Responsibility. Canon 16 states that lawyers shall hold in trust all properties of their clients that may come into their possession. Respondent should have held in trust TCT No. T9926 and returned the property to complainants upon demand. 24Instead of holding in trust the property of complainants, respondent (1) transferred the title of the property to his name, (2) refused to return the property to complainants, and (3) referred to complainants' charges as malicious and untruthful. Canon 17 states that lawyers shall be mindful of the trust and confidence reposed in them. Respondent should have been mindful of the trust and confidence complainants reposed in him. Complainants allege that they are illiterate and that the Spouses Eustaquio took advantage of them. Complainants engaged the services of respondent in the hope that he would help them recover their property. Instead of protecting the interests of complainants, respondent took advantage of complainants and transferred the title of the property to his name. HSTCcD

Considering the depravity of respondent's offense, the Court finds the recommended penalty too light. Violation of Canons 16 and 17 constitutes gross misconduct. 25Section 27, Rule 138 of the Rules of Court states that a member of the bar may be disbarred or suspended from his office as attorney by the Court for gross misconduct. In Hernandez v. Go, 26 the Court disbarred a lawyer for transferring the titles over the properties of his client to his name without the knowledge of his client. In Hernandez, the Court held that: Considering the depravity of respondent's offense, we find the penalty recommended by the IBP too light. It bears reiterating that a lawyer who takes advantage of his client's financial plight to acquire the latter's properties for his own benefit is destructive of the confidence of the public in the fidelity, honesty, and integrity of the legal profession. Thus, for violation of Canon 16 and Canon 17 of the Code of Professional Responsibility, which constitutes gross misconduct, and consistent with the need to maintain the high standards of the Bar and thus preserve the faith of the public in the legal profession, respondent deserves the ultimate penalty, that of expulsion from the esteemed brotherhood of lawyers. 27 A person who takes the 8.102-hectare property of his illiterate clients and who is incapable of telling the truth is unfit to be a lawyer. WHEREFORE, the Court finds Atty. Leonido C. Delante GUILTY of violating Canons 16 and 17 of the Code of Professional Responsibility. Accordingly, the Court DISBARS him from the practice of law and ORDERS that his name be stricken from the Roll of Attorneys. Let copies of this Decision be furnished the Office of the Bar Confidant, the Integrated Bar of the Philippines, and all courts all over the country. Let a copy of this Decision likewise be attached to the personal records of respondent. TEacSA SO ORDERED. Puno, C.J., Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, CarpioMorales, Azcuna, Tinga, Chico-Nazario, Velasco, Jr., Nachura, Leonardo-de Castro, Brion and Peralta, JJ., concur.

determine whether Maquera's acts or omissions which resulted in his suspension in Guam are likewise violative of his oath as a member of the Philippine Bar. 4 Pursuant to this Court's directive in its Resolution dated March 18, 1997, 5 the Bar Confidant sent a letter dated November 13, 1997 to the District Court of Guam requesting for certified copies of the record of the disciplinary case against Maquera and of the rules violated by him. 6 The Court received certified copies of the record of Maquera's case from the District Court of Guam on December 8, 1997. 7 EN BANC [B.M. No. 793 . July 30, 2004.] IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORY OF GUAM OF ATTY. LEON G. MAQUERA RESOLUTION TINGA, J p: May a member of the Philippine Bar who was disbarred or suspended from the practice of law in a foreign jurisdiction where he has also been admitted as an attorney be meted the same sanction as a member of the Philippine Bar for the same infraction committed in the foreign jurisdiction? There is a Rule of Court provision covering this case's central issue. Up to this juncture, its reach and breadth have not undergone the test of an unsettled case. In a Letter dated August 20, 1996, 1 the District Court of Guam informed this Court of the suspension of Atty. Leon G. Maquera (Maquera) from the practice of law in Guam for two (2) years pursuant to the Decision rendered by the Superior Court of Guam on May 7, 1996 in Special Proceedings Case No. SP0075-94, 2 a disciplinary case filed by the Guam Bar Ethics Committee against Maquera. The Court referred the matter of Maquera's suspension in Guam to the Bar Confidant for comment in its Resolution dated November 19, 1996. 3 Under Section 27, Rule 138 of the Revised Rules of Court, the disbarment or suspension of a member of the Philippine Bar in a foreign jurisdiction, where he has also been admitted as an attorney, is also a ground for his disbarment or suspension in this realm, provided the foreign court's action is by reason of an act or omission constituting deceit, malpractice or other gross misconduct, grossly immoral conduct, or a violation of the lawyer's oath. In a Memorandum dated February 20, 1997, then Bar Confidant Atty. Erlinda C. Verzosa recommended that the Court obtain copies of the record of Maquera's case since the documents transmitted by the Guam District Court do not contain the factual and legal bases for Maquera's suspension and are thus insufficient to enable her to Thereafter, Maquera's case was referred by the Court to the Integrated Bar of the Philippines (IBP) for investigation report and recommendation within sixty (60) days from the IBP's receipt of the case records. 8 The IBP sent Maquera a Notice of Hearing requiring him to appear before the IBP's Commission on Bar Discipline on July 28, 1998. 9 However, the notice was returned unserved because Maquera had already moved from his last known address in Agana, Guam and did not leave any forwarding address. 10 On October 9, 2003, the IBP submitted to the Court its Report and Recommendation and its Resolution No. XVI-2003-110, indefinitely suspending Maquera from the practice of law within the Philippines until and unless he updates and pays his IBP membership dues in full. 11 The IBP found that Maquera was admitted to the Philippine Bar on February 28, 1958. On October 18, 1974, he was admitted to the practice of law in the territory of Guam. He was suspended from the practice of law in Guam for misconduct, as he acquired his client's property as payment for his legal services, then sold it and as a consequence obtained an unreasonably high fee for handling his client's case. 12 In its Decision, the Superior Court of Guam stated that on August 6, 1987, Edward Benavente, the creditor of a certain Castro, obtained a judgment against Castro in a civil case. Maquera served as Castro's counsel in said case. Castro's property subject of the case, a parcel of land, was to be sold at a public auction in satisfaction of his obligation to Benavente. Castro, however, retained the right of redemption over the property for one year. The right of redemption could be exercised by paying the amount of the judgment debt within the aforesaid period. 13 At the auction sale, Benavente purchased Castro's property for Five Hundred U.S. Dollars (US$500.00), the amount which Castro was adjudged to pay him. 14 On December 21, 1987, Castro, in consideration of Maquera's legal services in the civil case involving Benavente, entered into an oral agreement with Maquera and assigned his right of redemption in favor of the latter. 15

On January 8, 1988, Maquera exercised Castro's right of redemption by paying Benavente US$525.00 in satisfaction of the judgment debt. Thereafter, Maquera had the title to the property transferred in his name. 16 On December 31, 1988, Maquera sold the property to C.S. Chang and C.C. Chang for Three Hundred Twenty Thousand U.S. Dollars (US$320,000.00). 17 On January 15, 1994, the Guam Bar Ethics Committee (Committee) conducted hearings regarding Maquera's alleged misconduct. 18 Subsequently, the Committee filed a Petition in the Superior Court of Guam praying that Maquera be sanctioned for violations of Rules 1.5 19 and 1.8(a) 20 of the Model Rules of Professional Conduct (Model Rules) in force in Guam. In its Petition, the Committee claimed that Maquera obtained an unreasonably high fee for his services. The Committee further alleged that Maquera himself admitted his failure to comply with the requirement in Rule 1.8(a) of the Model Rules that a lawyer shall not enter into a business transaction with a client or knowingly acquire a pecuniary interest adverse to a client unless the transaction and the terms governing the lawyer's acquisition of such interest are fair and reasonable to the client, and are fully disclosed to, and understood by the client and reduced in writing. 21 The Committee recommended that Maquera be: (1) suspended from the practice of law in Guam for a period of two [2] years, however, with all but thirty (30) days of the period of suspension deferred; (2) ordered to return to Castro the difference between the sale price of the property to the Changs and the amount due him for legal services rendered to Castro; (3) required to pay the costs of the disciplinary proceedings; and (4) publicly reprimanded. It also recommended that other jurisdictions be informed that Maquera has been subject to disciplinary action by the Superior Court of Guam. 22 Maquera did not deny that Castro executed a quitclaim deed to the property in his favor as compensation for past legal services and that the transaction, except for the deed itself, was oral and was not made pursuant to a prior written agreement. However, he contended that the transaction was made three days following the alleged termination of the attorney-client relationship between them, and that the property did not constitute an exorbitant fee for his legal services to Castro. 23 On May 7, 1996, the Superior Court of Guam rendered its Decision 24 suspending Maquera from the practice of law in Guam for a period of two (2) years and ordering him to take the Multi-State Professional Responsibility Examination (MPRE) within that period. The court found that the attorney-client relationship between Maquera and Castro was not yet completely terminated when they entered into the oral agreement to transfer Castro's right of redemption to Maquera on December 21, 1987. It also held that Maquera profited too much from the eventual transfer of Castro's property to him since he was able to sell the same to the Changs with more than US$200,000.00 in profit, whereas his legal fees for services rendered to Castro amounted only to US$45,000.00. The court also ordered him to take the MPRE upon his admission

during the hearings of his case that he was aware of the requirements of the Model Rules regarding business transactions between an attorney and his client "in a very general sort of way." 25 On the basis of the Decision of the Superior Court of Guam, the IBP concluded that although the said court found Maquera liable for misconduct, "there is no evidence to establish that [Maquera] committed a breach of ethics in the Philippines." 26 However, the IBP still resolved to suspend him indefinitely for his failure to pay his annual dues as a member of the IBP since 1977, which failure is, in turn, a ground for removal of the name of the delinquent member from the Roll of Attorneys under Section 10, Rule 139-A of the Revised Rules of Court. 27 The power of the Court to disbar or suspend a lawyer for acts or omissions committed in a foreign jurisdiction is found in Section 27, Rule 138 of the Revised Rules of Court, as amended by Supreme Court Resolution dated February 13, 1992, which states: Section 27.Disbarment or suspension of attorneys by Supreme Court, grounds therefor. A member of the bar may be disbarred or suspended from his office as attorney by the Supreme Court for any deceit, malpractice, or other gross misconduct in such office, grossly immoral conduct, or by reason of his conviction of a crime involving moral turpitude, or for any violation of the oath which he is required to take before admission to practice, or for a willful disobedience appearing as attorney for a party to a case without authority to do so. The practice of soliciting cases at law for the purpose of gain, either personally or through paid agents or brokers, constitutes malpractice. ECcaDT The disbarment or suspension of a member of the Philippine Bar by a competent court or other disciplinatory agency in a foreign jurisdiction where he has also been admitted as an attorney is a ground for his disbarment or suspension if the basis of such action includes any of the acts hereinabove enumerated. The judgment, resolution or order of the foreign court or disciplinary agency shall be prima facie evidence of the ground for disbarment or suspension(Emphasis supplied). The Court must therefore determine whether Maquera's acts, namely: acquiring by assignment Castro's right of redemption over the property subject of the civil case where Maquera appeared as counsel for him; exercising the right of redemption; and, subsequently selling the property for a huge profit, violate Philippine law or the standards of ethical behavior for members of the Philippine Bar and thus constitute grounds for his suspension or disbarment in this jurisdiction.

The Superior Court of Guam found that Maquera acquired his client's property by exercising the right of redemption previously assigned to him by the client in payment of his legal services. Such transaction falls squarely under Article 1492 in relation to Article 1491, paragraph 5 of the Civil Code of the Philippines. Paragraph 5 of Article 1491 28 prohibits the lawyer's acquisition by assignment of the client's property which is the subject of the litigation handled by the lawyer. Under Article 1492, 29 the prohibition extends to sales in legal redemption. The prohibition ordained in paragraph 5 of Article 1491 and Article 1492 is founded on public policy because, by virtue of his office, an attorney may easily take advantage of the credulity and ignorance of his client 30 and unduly enrich himself at the expense of his client. The case of In re: Ruste 31 illustrates the significance of the aforementioned prohibition. In that case, the attorney acquired his clients' property subject of a case where he was acting as counsel pursuant to a deed of sale executed by his clients in his favor. He contended that the sale was made at the instance of his clients because they had no money to pay him for his services. The Court ruled that the lawyer's acquisition of the property of his clients under the circumstances obtaining therein rendered him liable for malpractice. The Court held: . . . Whether the deed of sale in question was executed at the instance of the spouses driven by financial necessity, as contended by the respondent, or at the latter's behest, as contended by the complainant, is of no moment. In either case an attorney occupies a vantage position to press upon or dictate his terms to a harassed client, in breach of the "rule so amply protective of the confidential relations, which must necessarily exist between attorney and client, and of the rights of both". 32 The Superior Court of Guam also hinted that Maquera's acquisition of Castro's right of redemption, his subsequent exercise of said right, and his act of selling the redeemed property for huge profits were tainted with deceit and bad faith when it concluded that Maquera charged Castro an exorbitant fee for his legal services. The court held that since the assignment of the right of redemption to Maquera was in payment for his legal services, and since the property redeemed by him had a market value of US$248,220.00 as of December 21, 1987 (the date when the right of redemption was assigned to him), he is liable for misconduct for accepting payment for his legal services way beyond his actual fees which amounted only to US$45,000.00. Maquera's acts in Guam which resulted in his two (2)-year suspension from the practice of law in that jurisdiction are also valid grounds for his suspension from the practice of law in the Philippines. Such acts are violative of a lawyer's sworn duty to act with fidelity toward his clients. They are also violative of the Code of Professional Responsibility, specifically, Canon 17 which states that "[a] lawyer owes fidelity to the cause of his client and shall be mindful the trust and confidence reposed in him;"

and Rule 1.01 which prohibits lawyers from engaging in unlawful, dishonest, immoral or deceitful conduct. The requirement of good moral character is not only a condition precedent to admission to the Philippine Bar but is also a continuing requirement to maintain one's good's standing in the legal profession. 33 It bears stressing that the Guam Superior Court's judgment ordering Maquera's suspension from the practice of law in Guam does not automatically result in his suspension or disbarment in the Philippines. Under Section 27, 34 Rule 138 of the Revised Rules of Court, the acts which led to his suspension in Guam are mere grounds for disbarment or suspension in this jurisdiction, at that only if the basis of the foreign court's action includes any of the grounds for disbarment or suspension in this jurisdiction. 35 Likewise, the judgment of the Superior Court of Guam only constitutes prima facie evidence of Maquera's unethical acts as a lawyer.36 More fundamentally, due process demands that he be given the opportunity to defend himself and to present testimonial and documentary evidence on the matter in an investigation to be conducted in accordance with Rule 139-B of the Revised Rules of Court. Said rule mandates that a respondent lawyer must in all cases be notified of the charges against him. It is only after reasonable notice and failure on the part of the respondent lawyer to appear during the scheduled investigation that an investigation may be conducted ex parte. 37 The Court notes that Maquera has not yet been able to adduce evidence on his behalf regarding the charges of unethical behavior in Guam against him, as it is not certain that he did receive the Notice of Hearing earlier sent by the IBP's Commission on Bar Discipline. Thus, there is a need to ascertain Maquera's current and correct address in Guam in order that another notice, this time specifically informing him of the charges against him and requiring him to explain why he should not be suspended or disbarred on those grounds (through this Resolution), may be sent to him. Nevertheless, the Court agrees with the IBP that Maquera should be suspended from the practice of law for non-payment of his IBP membership dues from 1977 up to the present. 38 Under Section 10, Rule 139-A of the Revised Rules of Court, non-payment of membership dues for six (6) months shall warrant suspension of membership in the IBP, and default in such payment for one year shall be ground for removal of the name of the delinquent member from the Roll of Attorneys. 39 WHEREFORE, Atty. Leon G. Maquera is required to SHOW CAUSE, within fifteen (15) days from receipt of this Resolution, why he should not be suspended or disbarred for his acts which gave rise to the disciplinary proceedings against him in the Superior Court of Guam and his subsequent suspension in said jurisdiction. cDTaSH The Bar Confidant is directed to locate the current and correct address of Atty. Maquera in Guam and to serve upon him a copy of this Resolution. In the meantime, Atty. Maquera is SUSPENDED from the practice of law for ONE (1) YEAR or until he shall have paid his membership dues, whichever comes later.

Let a copy of this Resolution be attached to Atty. Maquera's personal record in the Office of the Bar Confidant and copies be furnished to all chapters of the Integrated Bar of the Philippines and to all courts in the land. SO ORDERED. Davide, Jr., C .J ., Puno, Panganiban, Quisumbing, Ynares-Santiago, SandovalGutierrez, Carpio, Austria-Martinez, Carpio Morales, Callejo, Sr., Azcuna and ChicoNazario, JJ ., concur.