PHILIPPINE JURISPRUDENCE FULL TEXT

The Lawphil Project - Arellano Law Fon!ation

A"C" No" #$%& 'arch &$( %$$)
*UN SI+N, -A+ .S" ATT-" LE+NARD+ A" AURELI+
Rep/lic o0 the Philippine1
SUPREME COURT
'anila
FIRST DI.ISI+N
A.C. No. 7023 March 30, 2006
BUN SIONG YAO, Co2plainant(
31"
ATTY. LEONARDO A. AURELIO, Re1pon!ent"
D E C I S I + N
YNARES-SANTIAGO, J.:
+n No3e2/er 44( %$$5( a co2plaint-a00i!a3it
4
wa1 0ile! a6ain1t Att7" Leonar!o A" Arelio /7 *n
Sion6 -ao /e0ore the Inte6rate! *ar o0 the Philippine1 8I*P9 1ee:in6 0or hi1 !i1/ar2ent 0or alle6e!
3iolation1 o0 the Co!e o0 Pro0e11ional Re1pon1i/ilit7"
The co2plainant alle6e! that 1ince 4;<# he retaine! the 1er3ice1 o0 re1pon!ent a1 hi1 per1onal
law7er= that re1pon!ent i1 a 1toc:hol!er an! the retaine! con1el o0 Solar Far21 > Li3elihoo!
Corporation an! Solar Te?tile Fini1hin6 Corporation o0 which co2plainant i1 a 2ajorit7
1toc:hol!er= that co2plainant prcha1e! 1e3eral parcel1 o0 lan! 1in6 hi1 per1onal 0n!1 /t were
re6i1tere! in the na2e o0 the corporation1 pon the a!3ice o0 re1pon!ent= that re1pon!ent( who
wa1 al1o the /rother in-law o0 co2plainant 1 wi0e( ha! in 4;;; a !i1a6ree2ent with the latter an!
therea0ter re1pon!ent !e2an!e! the retrn o0 hi1 in3e1t2ent in the corporation1 /t when
co2plainant re01e! to pa7( he 0ile! ei6ht char6e1 0or e1ta0a an! 0al1i0ication o0 co22ercial
!oc2ent1 a6ain1t the co2plainant an! hi1 wi0e an! the other o00icer1 o0 the corporation= that
re1pon!ent al1o 0ile! a co2plaint a6ain1t co2plainant 0or alle6e! non-co2pliance with the
reportorial re@ire2ent1 o0 the Secritie1 an! E?chan6e Co22i11ion 8SEC9 with the +00ice o0 the
Cit7 Pro1ector o0 'an!al7on6 Cit7 an! another co2plaint with the +00ice o0 the Cit7 Pro1ector
o0 'ala/on Cit7 0or alle6e! 3iolation o0 Section #A o0 the Corporation Co!e= that re1pon!ent al1o
0ile! a 1i2ilar co2plaint /e0ore the +00ice o0 the Cit7 Pro1ector o0 San Jo1e Del 'onte( *lacan"
Co2plainant alle6e! that the 1erie1 o0 1it1 0ile! a6ain1t hi2 an! hi1 wi0e i1 a 0or2 o0 hara112ent
an! con1titte1 an a/1e o0 the con0i!ential in0or2ation which re1pon!ent o/taine! /7 3irte o0 hi1
e2plo72ent a1 con1el" Co2plainant ar6e! that re1pon!ent i1 6ilt7 o0 repre1entin6 con0lictin6
intere1t1 when he 0ile! 1e3eral 1it1 not onl7 a6ain1t the co2plainant an! the other o00icer1 o0 the
corporation( /t al1o a6ain1t the two corporation1 o0 which he i1 /oth a 1toc:hol!er an! retaine!
con1el"
Re1pon!ent clai2e! that he han!le! 1e3eral la/or ca1e1 in /ehal0 o0 Solar Te?tile Fini1hin6
Corporation= that the 0n!1 1e! to prcha1e 1e3eral parcel1 o0 lan! were not the per1onal 0n!1
o0 co2plainant /t pertain to Solar Far21 > Li3elihoo! Corporation= that 1ince 4;;; he wa1 no
lon6er the con1el 0or co2plainant or Solar Te?tile Fini1hin6 Corporation= that he ne3er 1e! an7
con0i!ential in0or2ation in pr1in6 the cri2inal ca1e1 he 0ile! /t onl7 1e! tho1e in0or2ation
which he o/taine! /7 3irte o0 hi1 /ein6 a 1toc:hol!er"
He 0rther alle6e! that hi1 re@e1t1 0or copie1 o0 the 0inancial 1tate2ent1 were i6nore! /7 the
co2plainant an! hi1 wi0e hence he wa1 con1traine! to 0ile cri2inal co2plaint1 0or e1ta0a thr
conceal2ent o0 !oc2ent1= that when he wa1 0rni1he! copie1 o0 the 0inancial 1tate2ent1( he
!i1co3ere! that 1e3eral parcel1 o0 lan! were not incl!e! in the /alance 1heet o0 the corporation1=
that the 0inancial 1tate2ent1 in!icate! that the corporation1 100ere! lo11e1 when in 0act it pai!
ca1h !i3i!en!1 to it1 1toc:hol!er1( hence( he 0ile! a!!itional co2plaint1 0or 0al1i0ication o0
co22ercial !oc2ent1 an! 3iolation o0 reportorial re@ire2ent1 o0 the SEC"
+n Jl7 4;( %$$A( the In3e1ti6atin6 Co22i11ioner
%
1/2itte! a Report an! Reco22en!ation
&

0in!in6 that 0ro2 4;<# p to 4;;;( re1pon!ent ha! /een the per1onal law7er o0 the co2plainant
an! incorporator an! con1el o0 Solar Far21 > Li3elihoo! Corporation" Howe3er( in 4;;;
co2plainant !i1contine! a3ailin6 o0 the 1er3ice1 o0 re1pon!ent in 3iew o0 the a!2i11ion o0 hi1
8co2plainant 19 1on to the /ar= he al1o !i1contine! pa7in6 !i3i!en!1 to re1pon!ent an! e3en
conceale! 0ro2 hi2 the corporation1 0inancial 1tate2ent1 which co2pelle! the re1pon!ent to
0ile the 2ltiple cri2inal an! ci3il ca1e1 in the e?erci1e o0 hi1 ri6ht1 a1 a 1toc:hol!er"
The in3e1ti6atin6 co22i11ioner 0rther note! that re1pon!ent i1 6ilt7 o0 0or2 1hoppin6 when he
0ile! i!entical char6e1 a6ain1t the co2plainant /e0ore the +00ice o0 the Cit7 Pro1ector o0 'ala/on
Cit7 an! in the +00ice o0 the Cit7 Pro1ector o0 San Jo1e !el 'onte( *lacan" It wa1 al1o o/1er3e!
that re1pon!ent wa1 re2i11 in hi1 !t7 a1 con1el an! incorporator o0 /oth corporation1 0or 0ailin6
to a!3i1e the o00icer1 o0 the corporation( which he wa1 inci!entall7 a 2e2/er o0 the *oar! o0
Director1( to co2pl7 with the reportorial re@ire2ent1 o0 the SEC an! the *rea o0 Internal
Re3ene" In1tea!( he 0ile! ca1e1 a6ain1t hi1 client1( there/7 repre1entin6 con0lictin6 intere1t1"
The in3e1ti6atin6 co22i11ioner reco22en!e! that re1pon!ent /e 11pen!e! 0ro2 the practice o0
law 0or a perio! o0 1i? 2onth1
5
which wa1 a!opte! an! appro3e! /7 the I*P *oar! o0 ,o3ernor1"
Be a6ree with the 0in!in61 an! reco22en!ation o0 the I*P"
Be 0in! that the pro0e11ional relation1hip /etween the co2plainant an! the re1pon!ent i1 2ore
e?ten1i3e than hi1 prote1tation1 that he onl7 han!le! i1olate! la/or ca1e1 0or the co2plainant 1
corporation1" A1i!e 0ro2 /ein6 the /rother-in-law o0 co2plainant 1 wi0e( it appear1 that e3en
/e0ore the inception o0 the co2panie1( re1pon!ent wa1 alrea!7 pro3i!in6 le6al 1er3ice1 to the
co2plainant( th1C
C+''" NA.ARR+C
Ba1 there a 0or2al !e1i6nation or 7o where onl7 calle! pon to !o 1oD
ATT-" AURELI+C
Bell( I n!er1tan! in or!er to 1how to the e2plo7ee1 that the7 ha3e la/or law7er an! at that ti2e I
went to the o00ice at lea1t hal0 !a7 e3er7 wee: /t that wa1 ct 1hort" An! 1o when there are
ca1e1 that crop-p in3ol3in6 la/or then the7 calle! 2e p"
? ? ? ?
ATT-" +LEDANC
Bill con1el !en7 that he wa1 the per1onal law7er o0 the co2plainant lon6 /e0ore he joine! the
co2pan7D
ATT-" AURELI+C
-e1( with re1pect to the /on!ar7 !i1pte /etween hi1 lan! an! hi1 nei6h/or /t the 1/ject
2atter o0 all the ca1e1 I 0ile! the7 all re3ol3e! aron! the Financial State2ent o0 the %
corporation1" I ne3er !e3ol3e1 an7 in0or2ation with re1pect to la/or ca1e1 an! the 'ERALC+
ca1e with re1pect to /on!ar7 !i1pte( nothin6 I 1e!"
ATT-" +LEDANC
Ba1 he not al1o the law7er at that ti2e o0 co2plainant when he incorporate! the 1econ!
corporation in 4;;%D
ATT-" AURELI+C
Bell( I wa1 the one 1/2itte! the corporate paper1 an! I thin: a0ter that I ha3e nothin6 to !o with
the SEC re@ire2ent1 re6ar!in6 thi1 corporation" J1t to 1/2it the incorporation paper1 to the
SEC an! an7wa7 the7 ha3e alrea!7 !one that /e0ore" The7 ha3e alrea!7 create! or e1ta/li1he!
the 0ir1t corporation wa7 /ac: /e0ore the 1econ! corporation 1tarte! an! there wa1 no in1tance
where I !ealt with the Financial State2ent o0 the corporation with re1pect to it1 0ilin6 with the SEC"
ATT-" +LEDANC
'7 onl7 @e1tion i1 whether he incorporate! an! there0ore wa1 aware o0 the corporate 2atter1
in3ol3in6 Solar Far21D
ATT-" AURELI+C
A1 a 1toc:hol!er I 2 aware"
ATT-" +LEDANC
A1 a law7erD
ATT-" AURELI+C
Bell( a1 a 1toc:hol!er I 2 aware"
? ? ? ?
ATT-" +LEDANC
-o are not the one who 0ile! "
ATT-" AURELI+C
I wa1 the one who 0ile! the corporate paper /t that 1 all the participation I ha! with re1pect to
the re@ire2ent o0 the SEC with re1pect to the corporation"
C+''" NA.ARR+C
So( 7o acte! a1 le6al con1el o0 the corporation e3en /e0ore the initial 1ta6e o0 the
incorporationD
ATT-" AURELI+C
There are two 8%9 corporation1 in3ol3in6 in thi1 ca1e( -or Honor( an! the 0ir1t wa1 I thin: Solar
Te?tile an! thi1 wa1 "
C+''" NA.ARR+C
-o were alrea!7 the le6al con1elD
ATT-" AURELI+C
No( thi1 wa1 create! /e0ore I /eca2e a 1toc:hol!er"
C+''" NA.ARR+C
Bho wa1 then the le6al con1el /e0ore o0 SolarD
'R" -A+C
Si7a pa rin pero hin!i pa 1i7a 1toc:hol!er"
ATT-" +LEDANC
*eca1e( -or Honor( he happen1 to /e the /rother-in-law o0 the wi0e o0 the co2plainant an! he
i1 the h1/an! o0 the wi0e o0 her 1i1ter 1o that 1 wh7 he wa1 8ina!i/le9 other le6al 2atter1
e3en /e0ore the corporation that wa1 0or2e! an! he /eca2e al1o a 1toc:hol!er an! in 0act he
char6e the corporation certain a2ont1 0or pro0e11ional 1er3ice ren!ere! it i1 part o0 the
Re1oltion o0 the +00ice o0 the Cit7 Pro1ector o0 'ala/on a1 anne? to the co2plaint 1o he cannot
1a7 that he onl7 pre1ente!( that he onl7 0ile! the paper1 at SEC an! a1i!e 0ro2 that when the
corporation( the Solar Far21 wa1 alrea!7 0or2e! an! the propert7 which he i1 now @e1tionin6
wa1 prcha1e! /7 co2plainant" He wa1 the one who ne6otiate! with the /7er( he wa1 alwa71
with the co2plainant an! preci1el7 acte! a1 co2plainant 1 per1onal law7er" The trth o0 the
2atter he i1 @e1tionin6 the /on!ar7 an! in 0act co2plainant ha! 1r3e7 con!cte! in 1ai!
parcel o0 lan! which he /o6ht with the a11i1tance an! le6al a!3ice o0 re1pon!ent an! in 0act
co2plainant 6a3e hi2 onl7 a cop7 o0 that 1r3e7" Hi2 alone" An! he 1e! thi1 particlar cop7 to
in1i1t1 that thi1 propert7 alle6e!l7 /elon6 to the corporation when in trth an! in 0act he wa1 0ll7
aware that it wa1 the co2plainant 1 per1onal 0n!1 that were 1e! to pa7 0or the whole area an!
thi1 wa1 1pporte! /7 the 1toc:hol!er1 who a!2itte! that the7 were aware that the parcel o0 lan!
which he clai21 !oe1 not appear in the Financial State2ent o0 the corporation wa1 prcha1e! /7
the co2plainant 1/ject to rei2/r1e2ent /7 the *oar! an! 1hol! the corporation 0inall7 ha3e
100icient 0n! to co3er the pa72ent a!3ance /7 co2plainant then the propert7 will /e tran10erre!
to the corporation" All o0 the1e 0act1 he wa1 pri37 to it( -or Honor( 1o he cannot 1a7 that an! he
i1 al1o a 1toc:hol!er /t the 0act i1( prior to the incorporation an! !rin6 the ne6otiation he wa1
the per1onal con1el o0 the co2plainant"
A
It appear1 that the partie1 relation1hip wa1 not j1t pro0e11ional( /t the7 are al1o relate! /7
a00init7" The !i1a6ree2ent /etween co2plainant 1 wi0e an! the re1pon!ent a00ecte! their
pro0e11ional relation1hip" Co2plainant 1 re01al to !i1clo1e certain 0inancial recor!1 pro2pte!
re1pon!ent to retaliate /7 0ilin6 1e3eral 1it1"
It i1 e11ential to note that the relation1hip /etween an attorne7 an! hi1 client i1 a 0i!ciar7 one"
)

Canon 4# o0 the Co!e o0 Pro0e11ional Re1pon1i/ilit7 pro3i!e1 that a law7er owe1 0i!elit7 to the
ca1e o0 hi1 client an! 1hall /e 2in!0l o0 the tr1t an! con0i!ence repo1e! on hi2" The lon6-
e1ta/li1he! rle i1 that an attorne7 i1 not per2itte! to !i1clo1e co22nication1 2a!e to hi2 in hi1
pro0e11ional character /7 a client( nle11 the latter con1ent1" Thi1 o/li6ation to pre1er3e the
con0i!ence1 an! 1ecret1 o0 a client ari1e1 at the inception o0 their relation1hip" The protection
6i3en to the client i1 perpetal an! !oe1 not cea1e with the ter2ination o0 the liti6ation( nor i1 it
a00ecte! /7 the part7E1 cea1in6 to e2plo7 the attorne7 an! retainin6 another( or /7 an7 other
chan6e o0 relation /etween the2" It e3en 1r3i3e1 the !eath o0 the client"
#

Notwith1tan!in6 the 3eracit7 o0 hi1 alle6ation1( re1pon!ent 1 act o0 0ilin6 2ltiple 1it1 on 1i2ilar
ca1e1 o0 action in !i00erent 3ene1 con1titte1 0or2-1hoppin6( a1 correctl7 0on! /7 the
in3e1ti6atin6 co22i11ioner" Thi1 hi6hli6ht1 hi1 2oti3e1 rather than hi1 ca1e o0 action"
Re1pon!ent too: a!3anta6e o0 hi1 /ein6 a law7er in or!er to 6et /ac: at the co2plainant" In !oin6
1o( he ha1 ine3ita/l7 tiliFe! in0or2ation he ha1 o/taine! 0ro2 hi1 !ealin61 with co2plainant an!
co2plainant 1 co2panie1 0or hi1 own en!"
Law7er1 21t con!ct the21el3e1( e1peciall7 in their !ealin61 with their client1 an! the p/lic at
lar6e( with hone1t7 an! inte6rit7 in a 2anner /e7on! reproach"
<
Law7er1 cannot /e allowe! to
e?ploit their pro0e11ion 0or the prpo1e o0 e?actin6 3en6eance or a1 a tool 0or in1ti6atin6 ho1tilit7
a6ain1t an7 per1on 2o1t e1peciall7 a6ain1t a client or 0or2er client" A1 we 1tate! in 'arcelo 3"
Ja3ier( Sr"C
;
A law7er 1hall at all ti2e1 phol! the inte6rit7 an! !i6nit7 o0 the le6al pro0e11ion" The tr1t an!
con0i!ence nece11aril7 repo1e! /7 client1 re@ire in the attorne7 a hi6h 1tan!ar! an! appreciation
o0 hi1 !t7 to hi1 client1( hi1 pro0e11ion( the cort1 an! the p/lic" The /ar 1hol! 2aintain a hi6h
1tan!ar! o0 le6al pro0icienc7 a1 well a1 o0 hone1t7 an! 0air !ealin6" ,enerall7 1pea:in6( a law7er
can !o honor to the le6al pro0e11ion /7 0aith0ll7 per0or2in6 hi1 !tie1 to 1ociet7( to the /ar( to the
cort1 an! to hi1 client1" To thi1 en!( nothin6 1hol! /e !one /7 an7 2e2/er o0 the le6al 0raternit7
which 2i6ht ten! to le11en in an7 !e6ree the con0i!ence o0 the p/lic in the 0i!elit7( hone1t7 an!
inte6rit7 o0 the pro0e11ion"
4$
8E2pha1i1 1pplie!9
In 12( we 0in! that re1pon!entE1 actation1 a2ont to a /reach o0 hi1 !t7 to phol! 6oo! 0aith
an! 0airne11( 100icient to warrant the i2po1ition o0 !i1ciplinar7 1anction a6ain1t hi2"
BHEREF+RE( re1pon!ent Att7" Leonar!o A" Arelio i1 or!ere! SUSPENDED 0ro2 the practice
o0 law 0or a perio! o0 SIX 8)9 '+NTHS e00ecti3e pon receipt o0 thi1 Deci1ion" Let a cop7 o0 thi1
Deci1ion /e 0rni1he! the +00ice o0 the *ar Con0i!ant an! the Inte6rate! *ar o0 the Philippine1"
The Cort A!2ini1trator i1 !irecte! to circlate thi1 or!er o0 11pen1ion to all cort1 in the contr7"
S+ +RDERED"
CONSUELO YNARES-SANTIAGO
A11ociate J1tice
E CONCURC
ARTEMIO !. PANGANIBAN
Chie0 J1tice
Chairper1on
MA. ALICIA AUSTRIA-MARTINE"
A11ociate J1tice
ROMEO #. CALLE#O, SR.
A11cociate J1tice
MINITA !. C$ICO-NA"ARIO
A11ociate J1tice
%oo&'o&()
4
Rollo( pp" 4-4$"
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L7!ia A" Na3arro"
&
Rollo( pp" 4<#-4;A"
5
Id. at 4;A"
A
I!" at 4A;-4)<"
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S2aoan6 3" J!6e( Re6ional Trial Cort o0 ,i2/a( Ne3e Ecija( *r" &4( ,"R" No"
#<4#&( +cto/er %)( 4;;%( %4A SCRA 4&)( 45&"
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,enato 3" Silapan( 5A& Phil" ;4$( ;4# 8%$$&9"
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De ,F2an 3" De Dio1( A"C" No" 5;5&( Janar7 %)( %$$4( &A$ SCRA &%$( &%5"
;
A"C" No" &%5<( Septe2/er 4<( 4;;%( %45 SCRA 4"
4$
I!" at 4%-4&"
The Lawphil Project - Arellano Law Fon!ation