OVERGAARD V.

VALDEZ (DISBARMENT)


Lawyer Valdez committed multiple violations of the canons of the Code of Professional
Responsibility by having taken full retainer's fee and not having done anything regarding
Complainant Overgaard's cases to the latter's prejudice and dismay.

Rule 139, Sec. 27 Grounds for DISBARMENT/suspension:

deceit

malpractice or other gross misconduct in such office

grossly immoral conduct

conviction of a crime involving moral turpitude

violation of the lawyer's oath

willful disobedience of any lawful order of a superior court

willful appearance as an attorney for a party without authority
Respondent Valdez had indubitably fallen below the exacting standards demanded of
members of the bar.
The Code of Professional Responsibility provides that:

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

A lawyer shall observe candor, fairness, and loyalty in all his dealings and transactions with
his client.

A lawyer owes fidelity to the cause of his client and shall be mindful of the trust and
confidence reposed in him.

A lawyer shall serve his client with competence and diligence.

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

A lawyer is required to keep the client informed of the status of his case and to respond
within a reasonable time to the client's request for information.

A lawyer shall account for all money and property collected or received for and from the
client.
Respondent Valdez did exactly the opposite.
The PRACTICE OF LAW IS NOT A RIGHT, BUT A PRIVILEGE. It is granted only to those of
good moral character. The Bar must maintain a high standard of honesty and fair
dealing. Lawyersmust conduct themselves beyond reproach at all times, whether they are
dealing with their clients or the public at large, and a violation of the high moral standards
of the legal professionjustifies the imposition of the appropriate penalty, including
suspension and disbarment.
In this case, SC finds that suspension for 3 years recommended by the IBP is not sufficient
punishment for the unacceptable acts and omissions of Respondent Valdez. For violating
elementary principles of professional ethics and failing to observe the fundamental duties of
honesty and good faith, respondent has proven himself unworthy of membership in this
noble profession.
DISBARRED.
EN BANC
[A.C. NO. 7902 : September 30, 2008]
TORBEN B. OVERGAARD, Complainant, v. ATTY. GODWIN R. VALDEZ, Respondent.
D E C I S I O N
PER CURIAM:
Complainant seeks the disbarment of Atty. Godwin R. Valdez from the practice of law for
gross malpractice, immoral character, dishonesty and deceitful conduct. The complainant
alleges that despite receipt of legal fees in compliance with a Retainer Agreement, the
respondent refused to perform any of his obligations under their contract for legal services,
ignored the complainant's requests for a report of the status of the cases entrusted to his
care, and rejected demands for return of the money paid to him.
On December 16, 2005, the complainant, Torben B. Overgaard, a Dutch national, through
his business partner John Bradley, entered into a Retainer Agreement
1
with the respondent,
Atty. Godwin R. Valdez. For the amount of PhP900,000.00, the complainant engaged the
services of the respondent to represent him as his legal counsel in two cases filed by him
and two cases filed against him, all pending in Antipolo City; including a dismissed
complaint which was appealed before the Department of Justice. The Agreement stipulated
that fees would cover acceptance and attorney's fees, expenses of litigation, other legal
incidental expenses, and appearance fees.
2

The cases filed by the complainant included a complaint for Estafa, Grave Threats, Coercion,
Unjust Vexation and Oral Defamation
3
pending before the Office of the City Prosecutor of
Antipolo and a civil case for Mandamus, Injunction with prayer forTemporary Restraining
Order and Damages
4
which is on trial at Branch 71, Regional Trial Court of Antipolo City.
On the other hand, the cases filed against the complainant included a criminal case for
Other Light Threats at Branch 2 of the Municipal Trial Court of Antipolo,
5
and violation of
Section 5(a) of Republic Act No. 9262, the Anti-Violence Against Women and Their Children
Act of 2004
6
before the Family Court of Antipolo City. A complaint for Illegal Possession of
Firearms was also filed against Torben Overgaard which was dismissed by the City
Prosecutor of Antipolo City. This was appealed to the Department of Justice by way of
Petition for Review.
7

Upon the execution of the Retainer Agreement, the complainant paid the respondent
USD16,854.00 through telegraphic bank transfer,
8
as full payment for the services to be
rendered under the Agreement. The respondent then assured the complainant that he would
take good care of the cases he was handling for the complainant.
9

On April 11, 2006, four months after the execution of the Retainer Agreement, the
complainant, through his business partner John Bradley, demanded from the respondent a
report of the action he had taken with respect to the cases entrusted to him. However,
despite his continued efforts to contact the respondent to inquire on the status of the cases,
he was unable to reach him; his phone calls were not answered and his electronic mails
were ignored.
10

The complainant had no knowledge of the developments of the cases that the respondent
was handling for him. Upon his own inquiry, he was dismayed to find out that the
respondent did not file his entry of appearance in the cases for Other Light Threats and
Violation of Section 5(a) of the Anti-Violence Against Women and Children Act.
11
The
respondent also did not inform him that he was entitled to prepare a Counter-Affidavit to
answer the complaint for Other Light Threats. The complainant had no knowledge that there
had already been arraignments for the criminal cases against him, and that there were
already warrants of arrest
12
issued for his failure to attend the arraignments. He was
constrained to engage the services of another lawyer in order to file a Motion to Lift the
Warrant of Arrest in the case for Other Light Threats,
13
and an Omnibus Motion to Revive
the Case and Lift the Warrant of Arrest in the case for Violation of Section 5(a) of the Anti-
Violence Against Women and Their Children Act.
14

The complainant alleges that the respondent did not do a single thing with respect to the
cases covered under the Retainer Agreement. Not only did the respondent fail to enter his
appearance in the criminal cases filed against the complainant, he also neglected to file an
entry of appearance in the civil case for Mandamus, Injunction and Damages that the
complainant filed. The respondent also did not file a Comment on the complaint for Illegal
Possession of Firearms which was dismissed and under review at the Department of
Justice.
15

Due to the above lapses of the respondent, on November 27, 2006, the complainant wrote
the respondent and demanded the return of the documents which were turned over to him,
as well as the PhP900,000.00 that was paid in consideration of the cases he was supposed
to handle for the complainant.
16
However, complainant was unable to get any word from the
respondent despite repeated and continuous efforts to get in touch with him.
Hence, on December 28, 2006, Torben Overgaard was constrained to file an administrative
complaint against Atty. Godwin R. Valdez before the Integrated Bar of the Philippines,
alleging that the respondent engaged in unlawful, dishonest, immoral and deceitful
conduct.
17
Despite the order to submit an Answer to the complaint against him,
18
the
respondent failed to comply. A Mandatory Conference was set on September 21, 2007,
19
but
the respondent failed to attend despite being duly notified.
20
This prompted the Commission
on Bar Discipline to issue an Order declaring the respondent in default for failure to submit
an Answer and failure to attend the Mandatory Conference.
21
The investigation proceeded
ex parte.
The complainant submitted his position paper on October 5, 2007,
22
with a prayer that the
respondent be disbarred from the practice of law, and to be ordered to return the amount of
PhP900,000.00. A Clarificatory Hearing was scheduled on December 11, 2007,
23
and again,
it was only the complainant who was in attendance; the respondent failed to attend the
hearing despite notice. The case was then submitted for resolution based on the pleadings
submitted by the complainant and the hearings conducted.
24

Integrated Bar of the Philippines (IBP) Investigating Commissioner Antonio S. Tria, to whom
the instant disciplinary case was assigned for investigation, report and recommendation,
found the respondent guilty of violating Canon 15, Canon 16, Rule 16.01, Canon 17, Canon
18, and Rule 18.04 of the Code of Professional Responsibility. In his Report dated January
29, 2008, he recommended that respondent be suspended from the practice of law for a
period of three (3) years. The IBP Board of Governors, through Resolution No. XVIII-2008-
126, dated March 6, 2008, approved the recommendation of Commissioner Tria, and further
ordered the complainant to return the PhP900,000.00 to the complainant within 60 days
from receipt of the notice.
We agree. We find the respondent Atty. Godwin R. Valdez to have committed multiple
violations of the canons of the Code of Professional Responsibility.
The appropriate penalty to be imposed on an errant attorney involves the exercise of sound
judicial discretion based on the facts of the case. Section 27, Rule 138 of the Rules of Court
provides, viz:
Sec. 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 of any lawful order of a superior court, or for corruptly or willfully
appearing as an attorney for a party to a case without authority to do so. The practice of
soliciting cases for the purpose of gain, either personally or through paid agents or brokers,
constitutes malpractice.
Under Section 27, Rule 138 of the Revised Rules of Court, a member of the Bar may be
disbarred or suspended on any of the following grounds: (1) deceit; (2) malpractice or other
gross misconduct in office; (3) grossly immoral conduct; (4) conviction of a crime involving
moral turpitude; (5) violation of the lawyer's oath; (6) willful disobedience of any lawful
order of a superior court; and (7) willful appearance as an attorney for a party without
authority. A lawyer may be disbarred or suspended for misconduct, whether in his
professional or private capacity, which shows him to be wanting in moral character,
honesty, probity and good demeanor, or unworthy to continue as an officer of the court.
The respondent has indubitably fallen below the exacting standards demanded of members
of the bar. He did not merely neglect his client's cause, he abandoned his client and left him
without any recourse but to hire another lawyer. He not only failed to properly handle the
cases which were entrusted to his care, he refused to do a single thing in connection with
these cases. He did not file any pleading to defend his client; he did not even enter his
appearance in these cases. Moreover, he disregarded the complainant's letters and
electronic mails and rejected the complainant's phone calls. All the complainant was asking
for was a report of the status of the cases but the respondent could not be reached no
matter what the complainant did to get in touch with him. After receipt of the full amount of
fees under the Retainer Agreement, he simply disappeared, leaving the client defenseless
and plainly prejudiced in the cases against him. Warrants of arrest were even issued against
the complainant due to the respondent's gross and inexcusable negligence in failing to
ascertain the status of the case and to inform his client of the arraignment. It was not a
mere failure on the respondent's part to inform the complainant of matters concerning the
cases, it was an unmistakable evasion of duty. To hide from the complainant, avoid his
calls, ignore his letters, and leave him helpless is unforgivable; and to commit all these acts
and omissions after receiving the full amount of legal fees and after assuring the client of
his commitment and responsibility violates the Code of Professional Responsibility.
Canon 1, Rule 1.01 of the Code of Professional Responsibility states that "a lawyer shall not
engage in unlawful, dishonest, immoral or deceitful conduct." Deceitful conduct involves
moral turpitude and includes anything done contrary to justice, modesty or good
morals.
25
It is an act of baseness, vileness or depravity in the private and social duties
which a man owes to his fellowmen or to society in general, contrary to justice, honesty,
modesty, or good morals.
26
Representing to the complainant that he would take care of the
cases filed against him,
27
assuring the complainant that his property involved in a civil case
would be safeguarded,
28
and then collecting the full amount of legal fees of PhP900,000.00,
only to desert the complainant after receipt of the fees, were manifestly deceitful and
dishonest.
The relationship of an attorney to his client is highly fiduciary. Canon 15 of the Code of
Professional Responsibility provides that "a lawyer shall observe candor, fairness and loyalty
in all his dealings and transactions with his client." Necessity and public interest enjoin
lawyers to be honest and truthful when dealing with his client. A lawyer owes fidelity to the
cause of his client and shall be mindful of the trust and confidence reposed in
him.
29
However, instead of devoting himself to the client's cause, the respondent avoided
the complainant, forgot about the cases he was handling for him and ostensibly abandoned
him. The client reposed his trust in his lawyer with full faith that the lawyer would not
betray him or abscond from his responsibilities. By assuring the complainant that he would
take care of the cases included in the Retainer Agreement, and even accepting fees, the
respondent defrauded the complainant when he did not do a single thing he was expected
to do.
A lawyer shall serve his client with competence and diligence.
30
A lawyer shall not neglect a
legal matter entrusted to him, and his negligence in connection therewith shall render him
liable.
31
Respondent should indeed be held liable, for he was not just incompetent, he was
practically useless; he was not just negligent, he was indolent; and rather than being of
help to the complainant, he prejudiced the client. Respondent's inaction with respect to the
matters entrusted to his care is obvious; and his failure to file an answer to the complaint
for disbarment against him and to attend the hearings in connection therewith, without any
explanation or request for resetting, despite proper notice from the IBP, is clear evidence of
negligence on his part.
The Code of Professional Responsibility further provides that a lawyer is required to keep
the client informed of the status of his case and to respond within a reasonable time to the
client's request for information.
32
The respondent did the opposite. Despite the
complainant's efforts to consult him and notwithstanding numerous attempts to contact
him, simply to ask for an update of the status of the cases, the respondent was able to
avoid the complainant and never bothered to reply.
After months of waiting for a reply from the respondent, and discovering that the
respondent had been remiss in his duties, the complainant demanded the return of the
documents he had turned over to the respondent. He also demanded the return of the
money he had paid for the legal services that were not rendered and expenses of litigation
which were not incurred. However, the respondent rejected the complainant's demands.
Rule 16.01, Canon 16 of the Code of Professional Responsibility, provides that "a lawyer
shall account for all money and property collected or received for and from the client." The
complainant paid $16,854.00 to the respondent via telegraphic bank transfer. This was
considered as complete payment for the PhP900,000.00 that was stipulated as the
consideration for the legal services to be rendered. However, since the respondent did not
carry out any of the services he was engaged to perform, nor did he appear in court or
make any payment in connection with litigation, or give any explanation as to how such a
large sum of money was spent and allocated, he must immediately return the money he
received from the client upon demand. However, he refused to return the money he
received from the complainant despite written demands, and was not even able to give a
single report regarding the status of the cases.
Acceptance of money from a client establishes an attorney-client relationship and gives rise
to the duty of fidelity to the client's cause. Money entrusted to a lawyer for a specific
purpose - such as for filing fees - but not used for failure to file the case, must immediately
be returned to the client on demand.
33

In Sencio v. Calvadores,
34
the respondent lawyer Sencio was engaged to file a case, which
he failed to do. His client demanded that he return the money which was paid to him but he
refused. Sencio similarly failed to answer the complaint and disregarded the orders and
notices of the IBP on many occasions.
35
The respondent lawyer was ordered to return the
money that he received from the complainant with interest at 12% per annum from the
date of the promulgation of the resolution until the return of the amount.
36

The practice of law is not a right, but a privilege. It is granted only to those of good moral
character.
37
The Bar must maintain a high standard of honesty and fair dealing.
38
Lawyers
must conduct themselves beyond reproach at all times, whether they are dealing with their
clients or the public at large,
39
and a violation of the high moral standards of the legal
profession justifies the imposition of the appropriate penalty, including suspension and
disbarment.
40

The respondent demonstrated not only appalling indifference and lack of responsibility to
the courts and his client but also a wanton disregard for his duties as a lawyer. It is
deplorable that members of the bar, such as the respondent, betray not only the trust of
their client, but also public trust. For the practice of law is a profession, a form of public
trust, the performance of which is entrusted to those who are qualified and who possess
good moral character.
41
Those who are unable or unwilling to comply with the
responsibilities and meet the standards of the profession are unworthy of the privilege to
practice law. We must protect the administration of justice by requiring those who exercise
this function to be competent, honorable and reliable in order that the courts and clients
may rightly repose confidence in them.
In this case, we find that suspension for three years recommended by the IBP is not
sufficient punishment for the unacceptable acts and omissions of respondent. The acts of
the respondent constitute malpractice and gross misconduct in his office as attorney. His
incompetence and appalling indifference to his duty to his client, the courts and society
render him unfit to continue discharging the trust reposed in him as a member of the bar.
We could not find any mitigating circumstances to recommend a lighter penalty. For
violating elementary principles of professional ethics and failing to observe the fundamental
duties of honesty and good faith, the respondent has proven himself unworthy of
membership in this noble profession.
IN VIEW WHEREOF, respondent Atty. Godwin R. Valdez is hereby DISBARRED and his name
is ordered STRICKEN from the Roll of Attorneys. He is ORDERED to immediately return to
Torben B. Overgaard the amount of $16,854.00 or its equivalent in Philippine Currency at
the time of actual payment, with legal interest of six percent (6%) per annum from
November 27, 2006, the date of extra-judicial demand. A twelve percent (12%) interest per
annum, in lieu of six percent (6%), shall be imposed on such amount from the date of
promulgation of this decision until the payment thereof. He is further ORDERED to
immediately return all papers and documents received from the complainant.
Copies of this Decision shall be served on the Integrated Bar of the Philippines, the Office of
the Bar Confidant and all courts.
SO ORDERED.



















THIRD DIVISION

PHILIPPINE NATIONAL CONSTRUCTION CORPORATION,
Petitioner,



G.R. No. 160965

Present:

QUISUMBING, J.,
*

YNARES-SANTIAGO, J.,

- versus -




MARIA NYMPHA MANDAGAN,
Respondent.
Chairperson,
AUSTRIA-MARTINEZ,
NACHURA, and
TINGA, JJ.
**


Promulgated:

July 21, 2008
x------------------------------------------------------------------------------------x


DECISION

NACHURA, J.:





For resolution is a Petition for Review on Certiorari
[1]
under Rule 45 of the 1997 Rules of Civil Procedure
seeking the review and the reversal of the Decision
[2]
dated May 29, 2002 and the Resolution
[3]
dated November
10, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 63166.

Petitioner Philippine National Construction Corporation (PNCC) hired respondent Maria Nympha Mandagan
on December 16, 1995, as Legal Assistant, with the rank of Assistant Manager, on probationary status while she
was waiting for the results of the Bar examinations. Respondent was assigned to the corporate legal division
where she performed research work, drafted legal opinions, served as a member of a management collective
bargaining agreement (CBA) negotiating panel, and handled litigation, mostly labor cases. On June 16, 1996, after
successfully hurdling the Bar examinations, respondent was issued a regular appointment by petitioner.

On June 2, 1998, petitioner issued a memorandum
[4]
to respondent requiring her to show cause in writing
why no disciplinary action should be taken against her for committing acts violative of the PNCC Code of Employee
Discipline, to wit:

1. Engaging in private law practice which is in violation of Section 6(a), Section 6(b)(26)
and Section 11 of the PNCC Code of Employee Discipline;

2. Using the companys official address as your address for your private case which is
not only in violation of Section 8(A)(1) of the PNCC Code on Employee Discipline but is
prejudicial to the best interests of the PNCC; and

3. Representing a client who has a pending case against PNCC which is not only
prejudicial to the interests of the company but is in violation of the ethics of your
profession.
[5]


This memorandum was served on respondent on the eve of June 3, 1998 at her residence.

On June 4, 1998, in reply, respondent wrote a strongly worded memorandum
[6]
stating that she took
offense at the manner of service of the office memorandum. According to her, the June 2, 1998 memorandum
was merely a scheme intended to terminate her from employment. She said it was sparked by the incident
on March 30, 1998 in which she was seen with then PNCC Corporate Comptroller Renato R. Ramirez, who was able
to enter the PNCC compound despite being unauthorized to do so, he having filed a constructive dismissal case
against petitioner.

On June 9, 1998, respondent submitted another memorandum
[7]
denying the charges against her,
claiming that the case she handled was only an accommodation, accepted by her upon the request and authority
of then PNCC President Melvin Nazareno and Mr. Ramirez, and that she was on leave at every scheduled hearing
of the said case. She explained that she had the distinct impression that the lawyers of the PNCC Legal Division can
take on accommodation cases. She cited as an example Atty. Glenna Jean Ogan who, appearing as counsel
for PNCC employee Fabian Codera, was even provided with a service vehicle and considered on official time
during hearings. She further explained that when a petition for the annulment of judgment was filed with the
regional trial court (RTC) assailing the final and executory decision in the ejectment case in favor of Mr. Ramirez,
she desisted from representing the latter. She said that she signed, as counsel of record, the petition
for certiorari filed before the CA only for the purpose of terminating it. She also claimed that there was no conflict
of interest between Ramirezs labor and ejectment cases since the former was still pending resolution.

Petitioner, thereafter, conducted a clarificatory hearing.

Later, petitioner, thru then PNCC President and Chief Executive Officer Rogelio L. Luis, sent respondent a
letter
[8]
dated June 15, 1998 notifying her that her explanation in both memoranda and her statements during the
clarificatory conference were inconsistent, unacceptable, and, by themselves, admission of the truth of the
charges against her. As a consequence, her employment would be terminated effective at the close of office hours
on June 19, 1998 for violations of the PNCC Code of Employee Discipline and for loss of trust and confidence.

On October 28, 1998, respondent initiated a complaint
[9]
for illegal dismissal against petitioner and four (4) of
its corporate officers.

In a Decision
[10]
dated July 15, 1999, Labor Arbiter (LA) Edgardo M. Madriaga dismissed the complaint for
being unmeritorious, stating that petitioner was justified in dismissing respondent for loss of trust and confidence
for handling the constructive dismissal case of Mr. Ramirez against PNCC, in a conflict of interest with her
employer. Petitioner was, however, directed to pay respondent separation pay in accordance with law.

Aggrieved, respondent appealed the said Decision to the National Labor Relations Commission (NLRC). In the
Resolution
[11]
promulgated July 31, 2000, the NLRC Second Division denied the appeal for lack of merit. While
affirming in toto the Decision of LA Madriaga, the NLRC, however, declared that the allegation of conflict of
interest was baseless as respondent was able to refute the same by documentary evidence that the labor case of
Mr. Ramirez against petitioner was represented by another counsel. The dismissal of respondent was upheld on
the ground that she failed to adduce documentary evidence to show that her appearance in the ejectment case of
Mr. Ramirez was with the authority and approval of then PNCC President Nazareno and Mr. Ramirez. By reason
thereof, the NLRC gave more credence to the theory of petitioner that she violated the PNCC Code of Employee
Discipline on moonlighting and using company property for personal purposes. Respondents motion for
reconsideration was, likewise, denied in a Resolution
[12]
dated November 8, 2000.

Respondent thus went to the CA via a special civil action for certiorari under Rule 65 of the Rules of
Court. This time, the tide turned in her favor. In its Decision
[13]
dated May 29, 2002, the CA annulled the Decision
and Resolutions of the LA and the NLRC, respectively, for lack of sufficient proof that respondent did engage in the
private practice of law since there was only a single case involved which had the corresponding authorization from
her superiors. Finding the dismissal of respondent illegal, the CA ordered petitioner to pay respondent separation
pay, in lieu of reinstatement, in view of their already strained relations, and full backwages from date of dismissal
until the finality of its Decision.

Petitioner moved for the reconsideration of the CA Decision insisting inter alia that respondents handling of
even only a single non-PNCC case already constituted a violation of the PNCC Code of Employee Discipline, since
moonlighting is strictly prohibited under existing company rules and regulations.

The CA, in its assailed Resolution dated November 10, 2003, denied petitioners motion for lack of merit,
citing Office of the Court Administrator v. Atty. Misael M. Ladaga
[14]
which held that an isolated appearance did not
constitute private practice of law, especially when done with the permission of superiors.

Hence, this petition assigning the following errors:

I

THE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED THAT HEREIN RESPONDENT DID NOT
VIOLATE ANY COMPANY POLICY OR REGULATION WHEN SHE HANDLED A PRIVATE CASE AND
USED COMPANY TIME AND FACILITIES FOR SUCH UNAUTHORIZED OUTSIDE ENGAGEMENT.


II

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FOUND NO VALID CAUSE TO TERMINATE THE
EMPLOYMENT OF HEREIN RESPONDENT, A MANAGERIAL EMPLOYEE, FOR VIOLATION OF
COMPANY RULES, BREACH OF TRUST, AND/OR LOSS OF CONFIDENCE.

III

THE COURT OF APPEALS GRAVELY ERRED WHEN IT ANNULLED THE RESOLUTIONS OF THE NLRC
AND GRANTED HEREIN RESPONDENTS PETITION FINDING THE NLRC TO HAVE COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION.
[15]



In a nutshell, petitioner contends that the CA erred in holding that respondents dismissal was illegal when it
ruled that respondent did not violate the PNCC Code of Employee Discipline on moonlighting and personal use of
company time and property despite undisputed and overwhelming evidence to the contrary. It posits that
respondent readily admitted rendering services outside PNCC in her pleadings and her taking advantage of office
time and property was shown by using the address of PNCC for her personal cases and utilizing her leave credits to
attend hearings. It further claims that the CA gravely erred in reversing the findings of both the LA and the NLRC
despite existing jurisprudence to the effect that their findings are entitled to great weight and respect, nay
conclusiveness, when buttressed by substantial evidence. This is in addition to the fact that the case cited by the
CA is not on all fours with the present case. It also asserts that respondents fault-finding cannot exculpate her
from her misdeeds. In view of these, petitioner insists that, as employer who is given a wide latitude in
determining who among its managerial employees are entitled to its trust and confidence, and also taking into
consideration its findings of her alleged frequent tardiness and absences, her not being able to get along well with
her co-employees, and her
misrepresentations in the resume she submitted to Malacaang to get a favorable endorsement for promotion, it
is only justified in dismissing respondent from employment.

The petition is without merit.

In petitions for review before this Court, as a general rule, only questions of law are allowed. An exception to
this is when the findings of the administrative agencies below and the appellate court differ, as in the case at
bar.
[16]
Thus, an independent evaluation of the facts of this case is called for, especially considering that, while the
LA and the NLRC both found respondents dismissal valid and legal, the bases for their findings are also
different.
[17]
Hence, the claim of petitioner that these findings are conclusive upon us is incorrect.

Petitioner dismissed respondent from employment because she was found guilty of the charges against
her. It found respondent to have engaged in private law practice in violation of Sections 6(a)(b)(26) and 11 of the
PNCC Code of Employee Discipline.
[18]
It also found her to have used the companys official address for her private
case in violation of Section 8(A)(1) of the same Code, which is also prejudicial to its best interests. Finally, it found
her to have represented a client who had a pending case against PNCC. The pertinent sections of the Code are
quoted hereunder:

SECTION 6. Conduct and Behavior
a. An employees conduct in the performance of his duties should be beyond reproach and
free from the appearance of impropriety.

x x x


b. x x x
26) Moonlighting or rendering services for another employer without the knowledge or
approval of Management.

SECTION 8. Company Property.

A. The following acts shall constitute violation of this section:

1) Using Company property, equipment or materials for personal use or purpose.

SECTION 11. Conflict of Interest.

a. The following act shall constitute violation of this section:

1) Engaging, participating or involving oneself, directly or indirectly, in any transaction,
undertaking, or business enterprise, where such engagement, participation, or involvement
is in conflict with, or is improper or undesirable in the interest of the Company.
[19]



The imposable penalties for the said offenses within a 12-month period are as follows: a) for moonlighting a 5-
day suspension for the first offense, a 15-day suspension for the second offense, and dismissal on the third
offense; b) for the use of company property for personal purposes suspension to dismissal, depending on the
gravity of the offense; and c) for committing acts constituting conflict of interest reprimand to dismissal
depending on the gravity of the offense.

According to petitioner, respondent failed to substantiate her claim that her appearance in the ejectment
case of Mr. Ramirez was upon his and former PNCC President Nazarenos authority and directive, since she did not
present any documentary evidence to prove the same. To support its position that respondent was without the
proper authority, it presented a handwritten note from Atty. Hoover Abling, former Head of the Legal Division of
PNCC, stating that her appearance was without his prior authority and clearance.
We must stress, however, that in termination cases, the burden of proof rests upon the employer to show
that the dismissal of the employee is for just or authorized cause. Failure to do so would mean that the dismissal is
not justified. This is consonant with the guarantee of security of tenure in the Constitution
[20]
and reiterated in the
Labor Code.
[21]
A dismissed employee is not required to prove his innocence of the charges leveled against him by
his employer. Likewise, the determination of the existence and sufficiency of a just cause is to be exercised with
fairness and in good faith and after observing due process.

Thus, we agree with the CA that petitioner failed to show by clear and convincing evidence that respondent
was indeed guilty of moonlighting as defined under the PNCC Code of Employee Discipline, i.e., rendering services
for another employer without the knowledge OR approval of management. In the manner in which the rule is
phrased, since the words knowledge and approval are separated by the disjunctive OR, it is evident that even
knowledge alone by the management of PNCC of the alleged moonlighting is tantamount to an implied approval
and is sufficient to exonerate respondent from liability.

Therefore, it cannot be said that her appearance in the ejectment case of PNCC Corporate Comptroller
Ramirez was without the knowledge of management considering that the former PNCC top officers were the ones
who asked her to do so. Moreover, when she filed her application for leave of absence during one of her hearings,
she specifically stated in the leave form that her absence was due to the filing of the ejectment complaint for Mr.
Ramirez, and this application was approved by petitioner.

We also find the handwritten note of the former head of the Legal Division, Atty. Hoover Abling,
presented by petitioner to refute respondents allegation of approval from the top management of PNCC, to be of
questionable probative value in light of respondents revelation that Atty. Abling himself appeared as counsel
before the Metropolitan Trial Court of Manila, Branch 3, in the criminal case for violation of Batas Pambansa Blg.
22
[22]
filed against the wife of Jose Z. Gregorio, employee of PNCC. From the proceedings before the LA to its
pleadings before this Court, the petitioner has consistently kept silent about the matter.

It may also be mentioned that respondent proffered documentary evidence in the form of an exchange of
correspondence showing that another member of the Legal Division, Atty. Glenna Jean Ogan, was hired by the very
same Mr. Ramirez to handle his annulment case for a fee.
[23]
Again, this Court notes that petitioner tried to dodge
this allegation by simply claiming that respondents name-dragging will not exculpate her from her misdeeds.

The CA, thus, did not err in citing Office of the Court Administrator v. Atty. Misael M. Ladaga
[24]
because
the June 2, 1998 Memorandum enumerated among the violations committed by respondent the private practice
of law. In the cited case, we held that private practice of law does not refer to an isolated court appearance but
contemplates a succession of acts of the same nature habitually or customarily holding ones self to the public as a
lawyer.

As to the charge that respondent made personal use of company property, the only evidence submitted by
petitioner were copies of the complaint filed before the MTC, Paraaque City and copies of the pleadings and
resolutions in the CA case, showing that her mailing address corresponded to the companys address. As
respondent pointed out, there was no proof from petitioner as to her use of any other properties belonging to the
company. It is safe to assume that respondent received personal mail using the address of petitioner because,
since it pertained to the same ejectment suit which the former top PNCC officers authorized her to litigate, the
handling of the said case would be more convenient. As there is no express prohibition under the PNCC Code of
Employee Discipline as to the use of the companys address to receive personal mail, and, more importantly, there
is no clear and convincing proof presented by petitioner as to the prejudice it suffered from such respondents act,
the charge of violation of the PNCC Code of Employee Discipline, Sec. 8(A)(1) should fall.

With respect to petitioners claim that respondents appearance in the same ejectment case was in conflict
with the interests of the company, the NLRC correctly found that she was able to refute the allegation by
submitting evidence that the constructive dismissal case of Mr. Ramirez was handled by Saguisag &
Associates.
[25]
The petitioners assertion is, thus, belied by the record.

We likewise disagree with petitioners position that, in addition to the ascribed violations of the PNCC Code
of Employee Discipline, it was justified in terminating respondent from employment because of her alleged
frequent tardiness and absences, her inability to get along with some of her co-workers, and her
misrepresentations in the resume she submitted to Malacaang. The respondent properly concluded that the
claim of frequent absences and tardiness due to attendance to her private cases, and her inability to get along well
with some co-workers were not amply substantiated, as they were, in fact, rebutted by her performance rating for
the period July 1996 to April 1997 indicating that she was [p]roficient in the duties of her position.
[26]
Anent her
alleged misrepresentations in her resume submitted to Malacaang to gain a favorable endorsement for
promotion, we note that this was raised by petitioner for the first time in the proceedings before the LA, the same
not being included in the charges enumerated in the June 2, 1998 Memorandum. In other words, these causes
were merely an afterthought, resorted to by petitioner in a futile attempt to justify its decision to terminate
respondents employment on the ground of loss of trust and confidence.

Long recognized is the right of employers to dismiss employees by reason of loss of trust and confidence,
particularly in cases of personnel occupying positions of responsibility. The burden of proof required in labor
cases, however, must be amply discharged. Ordinarily, with respect to managerial employees, the mere existence
of a basis for believing that such employee has breached the trust of his employer would be enough, such as when
there is a reasonable ground to believe that the employee concerned is responsible for the purported misconduct,
and the nature of his participation therein renders him unworthy of trust and confidence demanded by hi s
position.
[27]


Be that as it may, we must stress herein that to be a valid ground for dismissal, the loss of trust and
confidence must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if
it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. Loss of trust and confidence must rest on substantial
grounds and not on the employers arbitrariness, whims, caprices or suspicion, otherwise, the employee would
forever remain at the mercy of the employer. The employer, thus, carries the burden of clearly and convincingly
establishing the facts upon which loss of confidence in the employee is made to rest.
[28]


Loss of trust and confidence as a ground of dismissal has never been intended to afford an occasion for
abuse because of its subjective nature. It should not be used as a subterfuge for causes which are illegal,
improper, and unjustified. It must be genuine, not a mere afterthought intended to justify an earlier action taken
in bad faith. Let it not be forgotten that what is at stake is the means of livelihood, the name, and the reputation
of the employee. To countenance an arbitrary exercise of that prerogative is to negate the employees
constitutional right to security of tenure.
[29]


However, it should be remembered that petitioner is a government-owned and controlled corporation. The
handling by the lawyers in its employ of cases of its employees, whether for a fee or not, and despite the
knowledge and approval of management, while not absolutely prohibited is, nonetheless, discouraged, as it
could only breed corruption and cause distraction from the very duties that the lawyers were precisely hired
for. The fact that a number of lawyers in petitioners employ have handled private cases, obviously with the
tolerance of petitioner, does not validate the practice or make it an acceptable rule of conduct. A wrong done by
many does not make a right.

In light of the foregoing, we find that respondent, although not entirely faultless, was indeed illegally
dismissed from employment by petitioner. Consequently, she is entitled to reinstatement without loss of seniority
rights and other privileges, and to full backwages, inclusive of allowances, and other benefits or their monetary
equivalent, computed from the time of the withholding of the employees compensation up to the time of actual
reinstatement. If reinstatement is not possible due to the strained relations between the employer and the
employee, separation pay should instead be paid the employee equivalent to one month salary for every year of
service, computed from the time of engagement up to the finality of this decision.

WHEREFORE, the Decision dated May 29, 2002 and the Resolution dated November 10, 2003 of the Court of
Appeals in CA-G.R. SP No. 63166 are AFFIRMED .

SO ORDERED.



ANTONIO EDUARDO B. NACHURA
Associate Justice


WE CONCUR:


LEONARDO A. QUISUMBING
Associate Justice



CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice



DANTE O. TINGA
Associate Justice








A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.



CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division



C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer
of the opinion of the Court.



REYNATO S. PUNO
Chief Justice

SECOND DIVISION

[G.R. No. 165035 : February 03, 2010]

MARTIN ORTEGA AND MORETO DEVANADERA,PETITIONERS, VS. ZENAIDA
ANGELES, DOING BUSINESS UNDER THE NAME AND STYLE F & Z GENERAL
MERCHANDISE, RESPONDENT.

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated 03 February
2010:

G.R. No. 165035: MARTIN ORTEGA and MORETO DEVANADERA,petitioners, versus
ZENAIDA ANGELES, doing business under the name and style F & Z General
Merchandise, respondent.

Before the Court is a petition for review on certiorari
[1]
assailing the Decision
[2]
dated 24
October 2003 and Resolution
[3]
dated 20 August 2004 of the Court of Appeals (CA) in CA-
G.R. SP No. 73724.

Respondent Zenaida Angeles (Angeles) is engaged in the business of buying unproductive
coconut trees made into finished lumber for sale to interested parties. Sometime in 1996,
Angeles engaged the services of Pablo Royo to buy unproductive coconut trees from Pedro
Pisano (Pisano). Pisano applied with the Philippine Coconut Authority (PCA) for a Permit to
Cut coconut trees in Barangay Pook, Rizal, Laguna. After the alleged grant of the application
for permit to cut, Pisano applied for a Permit to Transport the finished lumber to the place of
destination. The PCA allegedly issued the permit to transport. On 29 May 1996, Angeles
paid for the full consideration of the 18 coconut trees.

On 2 June 1996, the finished coconut lumber, with an estimated volume of 3,600 board feet
worth P21,600.00, was confiscated by petitioners Martin Ortega (Ortega),
the barangay captain, Moreto Devanadera and Marcial Vista, town councilors, and
several barangay officials.

Angeles presented the necessary permits to the barangay officials but Ortega declared that
the permits were fictitious. Angeles then sought the help of police officials, deputized by the
PCA to assist in the implementation of Republic Act No. 8048 (RA 8048) or the Coconut
Preservation Act of 1995.

The Chief of Police inspected the coconut lumber and required permits. Upon presentation of
the permits, the police chief took the side of Angeles. However, Ortega still refused to
release the coconut lumber.

On 6 June 1996, Angeles filed a Complaint
[4]
for Damages with Application for Issuance of
Writ of Preliminary Mandatory Injunction with the Municipal Circuit Trial Court (MCTC) of
Nagcarlan-Rizal, Laguna.

In their Answer with Counterclaim dated 18 July 1996, petitioners interposed special
and affirmative defenses: (I) that as Punong Barangay, Ortega, as well as the
other barangay officials, was clothed with authority under the Local Government Code to
execute and enforce laws and ordinances applicable within the barangay; (2) that there
were no existing permits from the PCA in violation of RA 8048; (3) that Ortega and the
other barangay officials gathered and placed the lumber in the Barangay Plaza; (4) that the
lumber was transported from the place of confiscation to the plaza using Councilor Moreto
Devanadera's vehicle; (5) that the lumber was turned over to the Rizal Station of the
Philippine National Police (PNP-Rizal Station); and (6) that Angeles should make
representations with the PNP-Rizal Station for the release of the lumber.

The PCA filed a Motion for Leave to Intervene which was granted by the MCTC in its Order
dated 19 August 1996. The PCA filed its Answer in Intervention dated 9 October 1996
substantially adopting petitioners' defenses. However, PCA never appeared or presented any
evidence in support of the intervention.

Angeles then filed her Reply and Answer to the Counterclaim. On 22 November 1996, the
MCTC denied Angeles' prayer for injunction. Angeles filed a Motion for Reconsideration
which was denied by the MCTC in its Order dated 21 January 1997.

On 7 February 2002, the MCTC decided the case in favor of Angeles.
[5]
The dispositive
portion states:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants Martin Ortega and Moreto Devanadera ordering the latter to jointly and severally
[pay] the former the following amounts, to wit:

1. P21,000.00 as actual damages;
2. P60,000.00 as moral damages;
3. P10,000.00 for and as attorney's fees; and
4. P5.000.00 for court appearances.

Plus cost of suit.

SO ORDERED.
[6]


Petitioners filed an appeal
[7]
with the Regional Trial Court (RTC) of San Pablo, Laguna,
Branch 29. The RTC directed the parties to file their respective appeal memoranda within 30
days upon receipt of notice.

On 2 April 2002, petitioners filed a Motion for Extension of Time to File Appeal Memorandum
which was granted by the RTC on 3 April 2002. On 9 April 2002, the RTC likewise granted
the motion of Angeles for extension of time to file her memorandum. On 6 May 2002,
respondent filed her appeal memorandum within the 30 day period granted by the RTC.

On 8 August 2002, the RTC dismissed the appeal for failure of petitioners to submit an
appeal memorandum within the reglementary period required by the Rules.
[8]


On 15 August 2002, petitioners filed a Motion for Reconsideration with Motion to Admit
Appeal Memorandum which was denied by the RTC, in its Order
[9]
dated 8 October 2002.

Petitioners then filed a petition for review with the CA. On 24 October 2003, the appellate
court dismissed the case for lack of merit.

Petitioners filed a Motion for Reconsideration which was denied by the CA in a Resolution
dated 20 August 2004.

Hence, this petition.

The issue is whether the appellate court erred in the application of law and jurisprudence in
ruling that the negligence of petitioners' former counsel bound petitioners.

Petitioners submit that this Court has in many instances relieved the parties from the gross
negligence of their counsel and insist that the present case is one of those exceptions.

On the other hand, respondent maintains that petitioners slept on their right to submit the
required memorandum and only took action when the RTC dismissed the appeal on 8
August 2002, or four months after the motion for extension to submit appeal memorandum
was granted by the RTC on 3 April 2002.

The petition lacks merit.

In deciding against petitioners, the appellate court made the following
findings:
[10]

Generally, the negligence of counsel binds his client (De Liano vs. Court of Appeals. 370
SCRA 349) except where the reckless or gross negligence of the counsel deprives the client
of due process of law (Ang mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus, H.S.K. sa
Bansang Pilipinas, Inc. vs. Iglesia ng Dios Kay Cristo Hesus, Haligi at Suhay ng
Katotohanan, 372 SCRA 171). This is not the case here. The right to appeal is not a part of
due process (Villanueva vs. CA, Supra, and Tan vs. CA, Ibid.).

Records of the case reveal that petitioners were given more than ample time to file their
appeal memorandum. The excuse of the petitioners' counsel that he was suffering from
vertigo is flimsy and lame. It should be noted that on April 3, 2002, petitioners filed a
Motion for Extension of Time to File Appeal Memorandum which the Court granted in its
Order of even date. However, despite of that they never did until the Court dismissed the
appeal on August 8, 2002. A lawyer, shall not, after obtaining extensions of time to file
pleadings, memoranda or briefs, let the period lapse without submitting the same or
offering an explanation for his failure to do so (Tan vs. Lapak, 350 SCRA 74). Quod quis ex
culpa sua damnum sentire. He who suffers injury through his own fault, is not considered as
suffering damage.

We agree with the appellate court's observations and find no reversible error. The RTC, as
affirmed by the CA, correctly dismissed the appeal. Section 7(b), Rule 40 of the Rules of
Court expressly authorizes the dismissal of an appeal filed with the RTC for failure of the
appellant to file a memorandum within the period required by the Rules of Court.

Section 7(b), Rule 40 of the Rules of Court states:
Sec. 7. Procedure in the Regional Trial Court. -
xxx
(b) Within fifteen (15) days from such notice, it shall be the duty of the appellant to submit
a memorandum which shall briefly discuss the errors imputed to the lower court, a copy of
which shall be furnished by him to the adverse party. Within fifteen (15) days from receipt
of the appellant's memorandum, the appellee may file his memorandum.Failure of the
appellant to file a memorandum shall be a ground for dismissal of the appeal.
(Emphasis supplied)

Petitioners' plea for liberality in applying the Rules with regard to the submission of the
appeal memorandum deserves scant consideration. The records show that petitioners
already filed a Motion for Extension of Time to File Appeal Memorandum which was granted
by the RTC. Thus, petitioners were given enough time from 3 April to 8 August 2002 or
more than 120 days to comply with the directive of the court. However, without any
explanation from petitioners or their counsel for the delay or failure to file their appeal
memorandum, the RTC was constrained to dismiss the appeal.

Thus, the failure to file an appeal memorandum within the period required by the Rules can
only be attributed to petitioners. Such omission is an inexcusable negligence which cannot
be countenanced. The right to appeal is a statutory right
[11]
and a party who seeks to avail
of the right must faithfully comply with the rules absent any compelling reason that justifies
the exercise of this Court's discretion to set aside procedural rules in the interest of
substantial justice.

WHEREFORE, we DENY the petition. The Decision dated 24 October 2003 and Resolution
dated 20 August 2004 of the Court of Appeals in CA-G.R. SP No. 73724 are AFFIRMED.

SO ORDERED.

WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Arturo D. Brion, Mariano
C. Del Castillo, Roberto A. Abad and Jose P. Perez, Members, Second Division, this 3
rd
day
of February, 2010.
Very truly yours,

(Sgd.) MA. LUISA L. LAUREA
Clerk of Court