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Republic of the Philippines SUPREME COURT Manila EN BANC

A.M. No. 1625 February 12, 1990 ANGEL L. BAUT STA, complainant, vs. ATT!. RAMON A. GON"ALES, respondent. RESOLUT ON

PER CUR AM# In a verified complaint filed b An!el ". Bautista on Ma 1#, 1#$%, respondent Ramon A. &on'ales (as char!ed (ith malpractice, deceit, !ross misconduct and violation of la( er)s oath. Re*uired b this Court to ans(er the char!es a!ainst him, respondent filed on +une 1#, 1#$% a motion for a bill of particulars as,in! this Court to order complainant to amend his complaint b ma,in! his char!es more definite. In a resolution dated +une -., 1#$%, the Court !ranted respondent)s motion and re*uired complainant to file an amended complaint. /n +ul 10, 1#$%, complainant submitted an amended complaint for disbarment, alle!in! that respondent committed the follo(in! acts1 1. Acceptin! a case (herein he a!reed (ith his clients, namel , Alfaro 2ortunado, Nestor 2ortunado and Editha 2ortunado 3hereinafter referred to as the 2ortunados4 to pa all e5penses, includin! court fees, for a contin!ent fee of fift percent 60789 of the value of the propert in liti!ation. -. Actin! as counsel for the 2ortunados in Civil Case No. :;101<=, (herein Eusebio "ope', +r. is one of the defendants and, (ithout said case bein! terminated, actin! as counsel for Eusebio "ope', +r. in Civil Case No. :; 10<#7> =. ?ransferrin! to himself one;half of the properties of the 2ortunados, (hich properties are the sub@ect of the liti!ation in Civil Case No. :;101<=, (hile the case (as still pendin!> <. Inducin! complainant, (ho (as his former client, to enter into a contract (ith him on Au!ust =7, 1#$1 for the development into a residential subdivision of the land involved in Civil Case No. :;101<=, covered b ?C? No. ?;1#-#, claimin! that he ac*uired fift percent 60789 interest thereof as attorne )s fees from the 2ortunados, (hile ,no(in! full (ell that the said propert (as alread sold at a public auction on +une =7, 1#$1, b the Provincial Aheriff of "anao del Norte and re!istered (ith the Re!ister of Beeds of Ili!an Cit > 0. Aubmittin! to the Court of 2irst Instance of :ue'on Cit falsified documents purportin! to be true copies of CAddendum to the "and Bevelopment A!reement dated Au!ust =7, 1#$1C and submittin! the same document to the 2iscal)s /ffice of :ue'on Cit , in connection (ith the

complaint for estafa filed b respondent a!ainst complainant desi!nated as I.A. No. $01-#=%> %. Committin! acts of treacher and dislo alt to complainant (ho (as his client> $. Darassin! the complainant b filin! several complaints (ithout le!al basis before the Court of 2irst Instance and the 2iscal)s /ffice of :ue'on Cit > .. Beliberatel misleadin! the Court of 2irst Instance and the 2iscal)s /ffice b ma,in! false assertion of facts in his pleadin!s> #. 2ilin! petitions Ccleverl prepared 6so9 that (hile he does not intentionall tell a he, he does not tell the truth either.C Respondent filed an ans(er on Aeptember -#, 1#$% and an amended ans(er on November 1., 1#$%, den in! the accusations a!ainst him. Complainant filed a repl to respondent)s ans(er on Becember -#, 1#$% and on March -<, 1#$$ respondent filed a re@oinder. In a resolution dated March 1%, 1#.=, the Court referred the case to the /ffice of the Aolicitor &eneral for investi!ation, report and recommendation. In the investi!ation conducted b the Aolicitor &eneral, complainant presented himself as a (itness and submitted E5hibits CAC to CPPC, (hile respondent appeared both as (itness and counsel and submitted E5hibits C1C to C11C. ?he parties (ere re*uired to submit their respective memoranda. /n Ma 1%, 1#.. respondent filed a motion to dismiss the complaint a!ainst him, claimin! that the lon! dela in the resolution of the complaint a!ainst him constitutes a violation of his constitutional ri!ht to due process and speed disposition of cases. Epon order of the Court, the Aolicitor &eneral filed a comment to the motion to dismiss on Au!ust ., 1#.., e5plainin! that the dela in the investi!ation of the case (as due to the numerous re*uests for postponement of scheduled hearin!s filed b both parties and the motions for e5tension of time to file their respective memoranda.C 3Comment of the Aolicitor &eneral, p. -> Record, p. =%04. Respondent filed a repl to the Aolicitor &eneral)s comment on /ctober -%, 1#... In a resolution dated +anuar 1%, 1#.# the Court re*uired the Aolicitor &eneral to submit his report and recommendation (ithin thirt 6=79 da s from notice. /n April 11, 1#.#, the Aolicitor &eneral submitted his report (ith the recommendation that Att . Ramon A. &on'ales be suspended for si5 6%9 months. ?he Aolicitor &eneral found that respondent committed the follo(in! acts of misconduct1 a. transferrin! to himself one;half of the properties of his clients durin! the pendenc of the case (here the properties (ere involved> b. concealin! from complainant the fact that the propert sub@ect of their land development a!reement had alread been sold at a public auction prior to the e5ecution of said a!reement> and c. misleadin! the court b submittin! alle!ed true copies of a document (here t(o si!natories (ho had not si!ned the ori!inal 6or even the 5ero5 cop 9 (ere made to appear as havin! fi5ed their si!natures 3Report and Recommendation of the Aolicitor &eneral, pp. 1$;1.> Rollo, pp. <7=;<7<4. Respondent then filed on April 1<, 1#.# a motion to refer the case to the Inte!rated Bar of the Philippines 6IBP9 for investi!ation and disposition pursuant to Rule 1=#;B of the Revised Rules of Court. Respondent manifested that he intends to submit more evidence before the IBP. 2inall , on November -$, 1#.#, respondent filed a supplemental motion to refer this case to the IBP, containin! additional ar!uments to bolster his contentions in his previous pleadin!s.

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I. Preliminaril , the Court (ill dispose of the procedural issue raised b respondent. It is respondent)s contention that the preliminar investi!ation conducted b the Aolicitor &eneral (as limited to the determination of (hether or not there is sufficient !round to proceed (ith the case and that under Rule 1=# the Aolicitor &eneral still has to file an administrative complaint a!ainst him. Respondent claims that the case should be referred to the IBP since Aection -7 of Rule 1=#;B provides that1 ?his Rule shall ta,e effect on +une 1, 1#.. and shall supersede the present Rule 1=# entitled BIABARMEN? /R AEAPENAI/N /2 A??/RNEFA. All cases pendin! investi!ation b the /ffice of the Aolicitor &eneral shall be transferred to the Inte!rated Bar of the Philippines Board of &overnors for investi!ation and disposition as provided in this Rule e5cept those cases (here the investi!ation has been substantiall completed. ?he above contention of respondent is untenable. In the first place, contrar to respondent)s claim, reference to the IBP of complaints a!ainst la( ers is not mandator upon the Court 3Galdivar v. Aandi!anba an, &.R. Nos. $#%#7;$7$> Galdivar v. &on'ales, &.R. No. .70$., /ctober $, 1#..4. Reference of complaints to the IBP is not an e5clusive procedure under the terms of Rule 1=#;B of the Revised Rules of Court 3Ibid4. Ender Aections 1= and 1< of Rule 1=#;B, the Aupreme Court ma conduct disciplinar proceedin!s (ithout the intervention of the IBP b referrin! cases for investi!ation to the Aolicitor &eneral or to an officer of the Aupreme Court or @ud!e of a lo(er court. In such a case, the report and recommendation of the investi!atin! official shall be revie(ed directl b the Aupreme Court. ?he Court shall base its final action on the case on the report and recommendation submitted b the investi!atin! official and the evidence presented b the parties durin! the investi!ation. Aecondl , there is no need to refer the case to the IBP since at the time of the effectivit of Rule 1=#;B 3+une 1, 1#..4 the investi!ation conducted b the /ffice of the Aolicitor &eneral had been substantiall completed. Aection -7 of Rule 1=#;B provides that onl pendin! cases, the investi!ation of (hich has not been substantiall completed b the /ffice of the Aolicitor &eneral, shall be transferred to the IBP. In this case the investi!ation b the Aolicitor &eneral (as terminated even before the effectivit of Rule 1=#;B. Respondent himself admitted in his motion to dismiss that the Aolicitor &eneral terminated the investi!ation on November -%, 1#.%, the date (hen respondent submitted his repl memorandum 3Motion to Bismiss, p. 1> Record, p. =0=4. ?hirdl , there is no need for further investi!ation since the /ffice of the Aolicitor &eneral alread made a thorou!h and comprehensive investi!ation of the case. ?o refer the case to the IBP, as pra ed for b the respondent, (ill result not onl in duplication of the proceedin!s conducted b the Aolicitor &eneral but also to further dela in the disposition of the present case (hich has lasted for more than thirteen 61=9 ears. Respondent)s assertion that he still has some evidence to present does not (arrant the referral of the case to the IBP. Considerin! that in the investi!ation conducted b the Aolicitor &eneral respondent (as !iven ample opportunit to present evidence, his failure to adduce additional evidence is entirel his o(n fault. ?here (as therefore no denial of procedural due process. ?he record sho(s that respondent appeared as (itness for himself and presented no less than eleven 6119 documents to support his contentions. De (as also allo(ed to cross;e5amine the complainant (ho appeared as a (itness a!ainst him. II. ?he Court (ill no( address the substantive issue of (hether or not respondent committed the acts of misconduct alle!ed b complainant Bautista. After a careful revie( of the record of the case and the report and recommendation of the Aolicitor &eneral, the Court finds that respondent committed acts of misconduct (hich (arrant the e5ercise b this Court of its disciplinar po(er.

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?he record sho(s that respondent prepared a document entitled C?ransfer of Ri!htsC (hich (as si!ned b the 2ortunados on Au!ust =1, 1#$1. ?he document assi!ned to respondent one;half 61H-9 of the properties of the 2ortunados covered b ?C? No. ?;1#-#, (ith an area of -=#.%07 s*. mm., and ?C? No. ?;=7<1, (ith an area of $-.#7$ s*. m., for and in consideration of his le!al services to the latter. At the time the document (as e5ecuted, respondent ,ne( that the abovementioned properties (ere the sub@ect of a civil case 3Civil Case No. :;101<=4 pendin! before the Court of 2irst Instance of :ue'on Cit since he (as actin! as counsel for the 2ortunados in said case 3Aee Anne5 CBC of /ri!inal Complaint, p. 1-> Rollo, p. 1%4. In e5ecutin! the document transferrin! one;half 61H-9 of the sub@ect properties to himself, respondent violated the la( e5pressl prohibitin! a la( er from ac*uirin! his client)s propert or interest involved in an liti!ation in (hich he ma ta,e part b virtue of his profession 3Article 1<#1, Ne( Civil Code4. ?his Court has held that the purchase b a la( er of his client)s propert or interest in liti!ation is a breach of professional ethics and constitutes malpractice 3Dernande' v. Iillanueva, <7 Phil. $$< 61#-79> &o Beltran v. 2ernande', $7 Phil. -<. 61#<794. Do(ever, respondent notes that Canon 17 of the old Canons of Professional Ethics, (hich states that C3t4he la( er should not purchase an interests in the sub@ect matter of the liti!ation (hich he is conductin!,C does not appear an more in the ne( Code of Professional Responsibilit . De therefore concludes that (hile a purchase b a la( er of propert in liti!ation is void under Art. 1<#1 of the Civil Code, such purchase is no lon!er a !round for disciplinar action under the ne( Code of Professional Responsibilit . ?his contention is (ithout merit. ?he ver first Canon of the ne( Code states that Ca la( er shall uphold the Constitution, obey the laws of the land and promote respect for law and legal processC 6Emphasis supplied9, Moreover, Rule 1=., Aec. = of the Revised Rules of Court re*uires ever la( er to ta,e an oath to << obe the la(s 3of the Republic of the Philippines4 as (ell as the le!al orders of the dul constituted authorities therein.C And for an violation of this oath, a la( er ma be suspended or disbarred b the Aupreme Court 3Rule 1=., Aec. -$, Revised Rules of Court4. All of these underscore the role of the la( er as the van!uard of our le!al s stem. ?he trans!ression of an provision of la( b a la( er is a repulsive and reprehensible act (hich the Court (ill not countenance. In the instant case, respondent, havin! violated Art. 1<#1 of the Civil Code, must be held accountable both to his client and to societ . Parentheticall , it should be noted that the persons mentioned in Art. 1<#1 of the Civil Code are prohibited from purchasin! the propert mentioned therein because of their e5istin! trust relationship (ith the latter. A la( er is dis*ualified from ac*uirin! b purchase the propert and ri!hts in liti!ation because of his fiduciar relationship (ith such propert and ri!hts, as (ell as (ith the client. And it cannot be claimed that the ne( Code of Professional Responsibilit has failed to emphasi'e the nature and conse*uences of such relationship. Canon 1$ states that Ca la( er o(es fidelit to the cause of his client and he shall be mindful of the trust and confidence reposed in him.C /n the other hand, Canon 1% provides that Ca la( er shall hold in trust all mone s and properties of his client that ma come into his possession.C Dence, not(ithstandin! the absence of a specific provision on the matter in the ne( Code, the Court, considerin! the above*uoted provisions of the ne( Code in relation to Art. 1<#1 of the Civil Code, as (ell as the prevailin! @urisprudence, holds that the purchase b a la( er of his client)s propert in liti!ation constitutes a breach of professional ethics for (hich a disciplinar action ma be brou!ht a!ainst him. Respondent)s ne5t contention that the transfer of the properties (as not reall implemented, because the land development a!reement on (hich the transfer depended (as later rescinded, is untenable. No(here is it provided in the ?ransfer of Ri!hts that the assi!nment of the properties of the 2ortunados to respondent (as sub@ect to the implementation of the land development a!reement. ?he last para!raph of the ?ransfer of Ri!hts provides that1 ... for and in consideration of the le!al services of A??F. RAM/N A. &/NGA"EA, 2ilipino, married to "ilia Fusa , and a resident of -= Aunrise Dill, Ne( Manila, :ue'on Cit , rendered to our entire satisfaction, (e hereb , b these presents, do transfer and convey to the said ATTY. RAMON A. GON A!"#$ his heirs$ s%ccessor$ and assigns$ one; half 61H-9 of our ri!hts and interests in the abovedescribed propert , to!ether (ith all the

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improvements found therein 3Anne5 B of the Complaint, Record, p. -.> Emphasis supplied4. It is clear from the fore!oin! that the parties intended the transfer of the properties to respondent to be absolute and unconditional, and irrespective of (hether or not the land development a!reement (as implemented. Another misconduct committed b respondent (as his failure to disclose to complainant, at the time the land development a!reement (as entered into, that the land covered b ?C? No. ?;1#-# had alread been sold at a public auction. ?he land development a!reement (as e5ecuted on Au!ust =1, 1#$$ (hile the public auction (as held on +une =7, 1#$1. Respondent denies that complainant (as his former client, claimin! that his appearance for the complainant in an anti;!raft case filed b the latter a!ainst a certain &ilbert ?eodoro (as upon the re*uest of complainant and (as understood to be onl provisional. Respondent claims that since complainant (as not his client, he had no dut to (arn complainant of the fact that the land involved in their land development a!reement had been sold at a public auction. Moreover, the sale (as dul annotated at the bac, of ?C? No. ?;1#-# and this, respondent ar!ues, serves as constructive notice to complainant so that there (as no concealment on his part. ?he above contentions are unmeritorious. Even assumin! that the certificate of sale (as annotated at the bac, of ?C? No. ?;1#-#, the fact remains that respondent failed to inform the complainant of the sale of the land to Aamauna durin! the ne!otiations for the land development a!reement. In so doin!, respondent failed to live up to the ri!orous standards of ethics of the la( profession (hich place a premium on honest and condemn duplicitous conduct. ?he fact that complainant (as not a former client of respondent does not e5empt respondent from his dut to inform complainant of an important fact pertainin! to the land (hich is sub@ect of their ne!otiation. Aince he (as a part to the land development a!reement, respondent should have (arned the complainant of the sale of the land at a public auction so that the latter could ma,e a proper assessment of the viabilit of the pro@ect the (ere @ointl underta,in!. ?his Court has held that a la( er should observe honest and fairness even in his private dealin!s and failure to do so is a !round for disciplinar action a!ainst him 3Custodio v. Esto, Adm. Case No. 111=, 2ebruar --, 1#$., .1 ACRA 01$4. Complainant also char!es respondent (ith submittin! to the court falsified documents purportin! to be true copies of an addendum to the land development a!reement. Based on evidence submitted b the parties, the Aolicitor &eneral found that in the document filed b respondent (ith the Court of 2irst Instance of :ue'on Cit , the si!natories to the addendum to the land development a!reement namel , Ramon A. &on'ales, Alfaro ?. 2ortunado, Editha ?. 2ortunado, Nestor ?. 2ortunado, and An!el ". BautistaJ(ere made to appear as havin! si!ned the ori!inal document on Becember #, 1#$-, as indicated b the letters 6A&B.9 before each of their names. Do(ever, it (as onl respondent Alfaro 2ortunado and complainant (ho si!ned the ori!inal and duplicate ori!inal 6E5h. -9 and the t(o other parties, Edith 2ortunado and Nestor 2ortunado, never did. Even respondent himself admitted that Edith and Nestor 2ortunado onl si!ned the 5ero5 cop 6E5h. -;A9 after respondent (rote them on Ma -<, 1#$=, as,in! them to si!n the said &ero& copyattached to the letter and to send it bac, to him after si!nin! 3Re@oinder to Complainant)s Repl , pp. <;%> Rollo, pp. =-$;=-#4. Moreover, respondent ac,no(led!ed that Edith and Nestor 2ortunado had merel a!reed b phone to si!n, but had not actuall si!ned, the alle!ed true cop of the addendum as of Ma -=, 1#$= 3Respondent)s Aupplemental Motion to Refer this Case to the Inte!rated Bar of the Philippines, p. 1%4. ?hus, (hen respondent submitted the alle!ed true cop of the addendum on Ma -=, 1#$= as Anne5 CAC of his Manifestation filed (ith the Court of 2irst Instance of :ue'on Cit , he ,no(in!l misled the Court into believin! that the ori!inal addendum (as si!ned b Edith 2ortunado and Nestor 2ortunado. Auch conduct constitutes (illful disre!ard of his solemn dut as a la( er to act at all times in a manner consistent (ith the truth. A la( er should never see, to mislead the court b an artifice or false statement of fact or la( 3Aection -7 6d9, Rule 1=., Revised Rules of Court> Canon --, Canons of Professional Ethics> Canon 17, Rule 17.71, Code of Professional Responsibilit 4.

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Anent the first char!e of complainant, the Aolicitor &eneral found that no impropriet (as committed b respondent in enterin! into a contin!ent fee contract (ith the 2ortunados 3Report and Recommendation, p. .> Record, p. =#<4. ?he Court, ho(ever, finds that the a!reement bet(een the respondent and the 2ortunados, (hich provides in part that1 Ke the 32ortunados4 a!ree on the 078 contin!ent fee, provided, ou 3respondent Ramon &on'ales4 defra all e5penses, for the suit, includin! court fees. Alfaro ?. 2ortunado 3si!ned4 Editha ?. 2ortunado 3si!ned4 Nestor ?. 2ortunado 3si!ned4 C/ N2 /R ME Ramon A. &on'ales 3si!ned4 3Anne5 A to the Complaint, Record, p. <4. is contrar to Canon <- of the Canons of Professional Ethics (hich provides that a la( er ma not properl a!ree (ith a client to pa or bear the e5penses of liti!ation. 3Aee also Rule 1%.7<, Code of Professional Responsibilit 4. Althou!h a la( er ma in !ood faith, advance the e5penses of liti!ation, the same should be sub@ect to reimbursement. ?he a!reement bet(een respondent and the 2ortunados, ho(ever, does not provide for reimbursement to respondent of liti!ation e5penses paid b him. An a!reement (hereb an attorne a!rees to pa e5penses of proceedin!s to enforce the client)s ri!hts is champertous 3+BP Doldin! Corp. v. E.A. 1%% 2. Aupp. =-< 61#0.94. Auch a!reements are a!ainst public polic especiall (here, as in this case, the attorne has a!reed to carr on the action at his o(n e5pense in consideration of some bar!ain to have part of the thin! in dispute 3Aee Aampliner v. Motion Pictures Patents Co., et al., -00 2. -<- 61#1.94. ?he e5ecution of these contracts violates the fiduciar relationship bet(een the la( er and his client, for (hich the former must incur administrative sanctions. ?he Aolicitor &eneral ne5t concludes that respondent cannot be held liable for actin! as counsel for Eusebio "ope', +r. in Civil Case No. :;10<#7 (hile actin! as counsel for the 2ortunados a!ainst the same Eusebio "ope', +r. in Civil Case No. :;101<=. ?he Court, after considerin! the record, a!rees (ith the Aolicitor &eneral)s findin!s on the matter. ?he evidence presented b respondent sho(s that his acceptance of Civil Case No. :;10<#7 (as (ith the ,no(led!e and consent of the 2ortunados. ?he affidavit e5ecuted b the 2ortunados on +une -=, 1#$% clearl states that the !ave their consent (hen respondent accepted the case of Eusebio "ope', +r. 3Affidavit of 2ortunados, dated +une -=, 1#$%> Rollo, p. 1#.4. /ne of the reco!ni'ed e5ceptions to the rule a!ainst representation of conflictin! interests is (here the clients ,no(in!l consent to the dual representation after full disclosure of the facts b counsel 3Canon %, Canons of Professional Ethics> Canon 10, Rule 10.7=, Code of Professional Responsibilit 4. Complainant also claims that respondent filed several complaints a!ainst him before the Court of 2irst Instance and the 2iscal)s /ffice of :ue'on Cit for the sole purpose of harassin! him.

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?he record sho(s that at the time of the Aolicitor &eneral)s investi!ation of this case, Civil Case No. :; 1.7%7 (as still pendin! before the Court of 2irst Instance of :ue'on Cit , (hile the complaints for libel 6I.A. No. $%;0#1-9 and per@ur 6I.A. No. 0#1=9 (ere alread dismissed b the Cit 2iscal for insufficienc of evidence and lac, of interest, respectivel 3Report and Recommendation, pp. 1%;1$> Rollo, pp. <7-; <7=4. ?he Aolicitor &eneral found no basis for holdin! that the complaints for libel and per@ur (ere used b respondent to harass complainant. As to Civil Case No. :;1.7%7, considerin! that it (as still pendin! resolution, the Aolicitor &eneral made no findin! on complainants claim that it (as a mere plo b respondent to harass him. ?he determination of the validit of the complaint in Civil Case No. :;1.7%7 (as left to the Court of 2irst Instance of :ue'on Cit (here the case (as pendin! resolution. ?he Court a!rees (ith the above findin!s of the Aolicitor &eneral, and accordin!l holds that there is no basis for holdin! that the respondent)s sole purpose in filin! the aforementioned cases (as to harass complainant. &rounds %, . and # alle!ed in the complaint need not be discussed separatel since the above discussion on the other !rounds sufficientl cover these remainin! !rounds. ?he Court finds clearl established in this case that on four counts the respondent violated the la( and the rules !overnin! the conduct of a member of the le!al profession. A(orn to assist in the administration of @ustice and to uphold the rule of la(, he has Cmiserabl failed to live up to the standards e5pected of a member of the Bar.C 3Artia!a v. Iillanueva, Adm. Matter No. 1.#-, +ul -#, 1#.., 1%= ACRA %=., %<$4. ?he Court a!rees (ith the Aolicitor &eneral that, considerin! the nature of the offenses committed b respondent and the facts and circumstances of the case, respondent la( er should be suspended from the practice of la( for a period of si5 6%9 months. KDERE2/RE, findin! that respondent Attorne Ramon A. &on'ales committed serious misconduct, the Court Resolved to AEAPENB respondent from the practice of la( for AIL 6%9 months effective from the date of his receipt of this Resolution. "et copies of this Resolution be circulated to all courts of the countr for their information and !uidance, and spread in the personal record of Att . &on'ales. A/ /RBEREB. 'ernan$ (.).$ Narvasa$ Melencio*+errera$ (r%,$ -aras$ 'eliciano$ Gancayco$ -adilla$ .idin and (ortes$ )).$ conc%r. G%tierre,$ )r.$ #armiento$ Gri/o*A0%ino$ Medialdea$ Regalado$ )).$ too1 no part.